Orders of the Day — Safeguarding of Industries (Customs Duties) Bill.

– in the House of Commons on 16th December 1925.

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Order for Third Reading read.

Photo of Sir Robert Chadwick Sir Robert Chadwick , Wallasey

I beg to move, "That the Bill be now read the Third time."

As we are now entering upon the concluding stage of this long series of Debates, I may perhaps be permitted to make a brief survey of the ground we have traversed and draw a. few conclusions. In the first place, although we have been dealing with a subject on which feelings run very deep, I am sure that I may, on behalf of my right hon. Friend and I hope on behalf of hon. Members on this side of the House, say that they appreciate the generous spirit in which the Debate has been conducted by the Opposition. It is true that we have been denounced and excommunicated by the great high priests of Free Trade, and we have been stung by the waspish satire of my hon. and gallant Friend in the corner up there, but we have not been diverted from the narrow path of rectitude.

The specific duties under consideration have been to a great extent submerged in the wider issue of general Protection, which has never been contemplated, and, it I may say so respectfully, I feel that the main credit which has accrued as a result of these proceedings is to the Chairman in the very difficult task of keeping hon. Members opposite anywhere near the lines of debate. In any circumstances, we in this country have not had sufficient experience of import duties in our time to enable us to bring this subject on to a more secure foundation of argument than, on the one side, theory and, on the other side, hypothesis. But it has been very interesting, and indeed very remarkable, to contrast the uniform soundness of the speeches that have fallen from hon. Members on this side of the House with, if I may so call it, the poverty that has manifested itself in the speeches that have fallen from hon. Gentlemen opposite. I am, of course, excepting my own part in the Debate. Speech after speech from this side of this House has been closely reasoned and based on economic practice and the record of fact, and I think I am not wrong in saying that they have been almost invariably met by sheer fatuity.

On several occasions we have been challenged, notably by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), when he defied my right hon. Friend to point to one single industry where an import duty had increased the volume of employment. I can give facts, as we have all along been able to do, and I can give full justification in those facts for the imposition of these duties. I find, for instance, as the result of restriction of foreign competition since 1914, and during a period of an import duty since 1921, that these conditions have brought to the fine chemical industry marked improvement in the volume of home trade, in the variety of our products, in the quality of our products, in the reduction of the price of our products, in the extension of our potential resources, and in a very great increase in capital investment. All that information is available to the right hon. Gentleman. That also applies to certain other industries. One might refer to the motor-car industry. It will be said that the motor-car trade is in a period of prosperity, and I do not want to press it; but it remains a fact that disaster has not come to the motor-car trade such as been predicted by hon. Members opposite. Then the development in the silk trade is very remarkable indeed—

Photo of Sir Robert Chadwick Sir Robert Chadwick , Wallasey

— by foreign manufacturers coming to this country, and developing their trade in this country.

Photo of Sir Robert Chadwick Sir Robert Chadwick , Wallasey

On the general question of policy we have met the theories of hon. Members opposite with facts. We have met their contention that the duties will increase prices by pointing out to them the fact that in large ranges of fine chemicals prices have shown a marked reduction, production has increased, and the industry has developed. We refuse to admit the contention that a duty is necessarily a charge on the consumer where there is an alternative untaxed supply. Rather do we say that prices will tend to reduce on account of the stimulus to trade.

Hon. Members opposite have completely failed to establish the point which they have so much stressed, that import duties are the crutches of inefficiency, in view of the great efficiency which has enabled highly protected countries to flood our markets with their goods. Throughout these Debates the unreality and inconsistency of the Socialist party has been beyond belief. They are never tired of proclaiming themselves to be the specially ordained champions of the workers and the unemployed. We are imposing duties to help certain industries which are languishing under fierce foreign protected competition. The question of Free Trade does not arise. Where are we enjoying free interchange of trade? We are in a condition of fettered trade. I submit that the inconsistency of hon. Members opposite passes understanding;.

At any given moment hon. Members opposite will plunge into action for reasons which they believe to be adequate, and with a perfectly sincere belief that they are doing the beat for mankind. With their eyes open, they will plunge into action knowing for a certainty that such action will mean immeasurable loss to the industry concerned and a set-back to the country, and when we are trying to bring about an improvement in employment, after a most exhaustive examination, and urged by the pleading of the workers themselves, they oppose us.

What are their alternatives? The Leader of the Opposition, the right hon. Member for Aberavon (Mr. Ramsay MacDonald), says, "Make roads." "Electrify the country," says the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). I notice the right hon. Member for Carmarthen (Sir A. Mond) present to-day, and also the right hon. Member for West Swansea (Mr. Runciman), whom I may congratulate on his courageous leadership of the remnant of his party. They say, "Put a pick into the hands of the gentle, delicate man who has been brought up all his life to make gloves. Send such a man out on to the roads. Tear him away from his home. Send him anywhere, but for Heaven's sake do not reinstate him in the profession or trade he knows, because it is conceivable that his wife or some- body else's wife may have to pay an extra sixpence or shilling a pair for the gloves that he makes." Hon. Members opposite tell us that this is the thin end of the wedge. If that be so, let hon. Members bear in mind that the mallet is in the hands of the electorate of this country. Should it prove to be a wedge which is serving a good purpose, perhaps hon. Members opposite may choose, in good time, to drive it home. We are carrying out faithfully and to the letter the undertaking given by the Prime Minister, to do which we were sent here.

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

I beg to move to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."

I must congratulate the Parliamentary Secretary on being at last relieved from what I am sure he him found a wearisome, if not a thankless job. We on this side of the House have enjoyed the discussion as it has gone on. We have stood up for the rights of the House of Commons to discuss seriously, as far as one side of the House can discuss it, any proposition with regard to the imposition of taxes upon the people. We are now at the last stage of this contest, and I take the opportunity of expressing, for the last time, our protest against and our objection to this Bill and to the whole scheme of this legislation. I am afraid that we cannot expect at this last Lour to convert any hon. Members opposite, but we may appeal to the country, and in addressing that appeal to make a serious attempt to explain what we consider to be the position. We think this Bill unsound in principle. We think it is based on insufficient investigation and upon evidence which, in so far as it has been given to this House, is quite inadequate to support the case. We think it cannot possibly achieve its ostensible object in reducing unemployment. We think—and this is the vice which runs through all Protectionist legislation—it will impose a burden upon the consumer, whether large or small, which must necessarily be out of proportion to the relatively small sum which the Exchequer will receive from the duties. Let me take these points in order.

We say that the legislation is unsound in principle. Customs duties have to be justified, but whether they can be justified or not, they are irritating to all those who are concerned in trade, and they inevitably and invariably exercise a certain amount of hampering effect upon trade. They are bad things in themselves. If they are to be imposed at all, they have to be justified up to the hilt. There is another thing about this Bill which I regard with very great apprehension, and that is the effect upon our relations with other countries. I do not want to pretend that this country has not the right in every sense to impose what Customs duties it pleases. I do not want to suggest that this Bill in any way infringes the most-favoured-nation clause in respect of any particular country. I do not want to suggest that it is likely to lead to war, or even to lead to retaliation in the way of Customs duties, but it is not unfair to say—this is not unsupported by a certain amount of evidence—that already it has produced an effect upon the minds of some countries, one country in particular, which we shall find inconvenient as time goes on in the negotiations which are bound to take place.

The light hon. Gentleman who preceded me at the Board of Trade knows very well what are the grievances of traders in this country against the Customs duties and Customs regulations of some other countries. Not that we can have any right to complain or that we do complain of any particular duty, but in regard to the administration of those duties and the classification of goods and in the way that imports are treated by the Customs administration of those countries the traders of this country have had a great deal to complain of, and it has been the function of the Board of Trade to do what it can to obtain some redress for our traders against those regulations and that administration. The right hon. Gentleman succeeded in introducing into the Anglo-German Treaty a year ago words which bind the Germans and bind us to carry out, in the spirit as well as in the letter, certain agreements with regard to specific duties and with regard to the spirit and the administration of the duties.

I cannot help feeling—I hope I am wrong—that in the step which this Government has taken in dealing with Customs duties and the regulations which are necessarily implied in legislation of this kind, for instance, the taxing of an article in respect of a very tiny amount of the dutiable article which it contains, they are doing that against which we have complained to foreign Customs houses over and over again. We are now doing that ourselves to an increasing degree. We are going to hamper negotiations in regard to any future complaints which our traders may make. We fear that this Bill will not merely affect the trade in the articles referred to in the Bill, but that it will necessarily to some extent—I do not want to exaggerate —militate against our export trade in other articles.

When I said that the Bill was unsound in principle, I referred to something more than the point I have already made. I cannot help feeling that the argument by which the Bill has been supported is entirely wrong. Those who have supported the Bill seem to have done so on the ground that imports are in some way, from their very nature, objectionable and evil things. Over and over again hon. Members have spoken of imports as being a case of wickedness, almost a case of evil from which we ought to be protected They have declared, in tones of indignation, as if it were an obvious evil, that there are imports into this country of such and such articles. We on this side of the House protest against the assumption that imports into this country are evil things. This country has grown and prospered because we have 'had large imports. The simple fact is that without large imports into this country we could not possibly have had the large exports upon which so much of our prosperity and employment depend. Over and over again the implication from the other side has been that imports are necessarily an evil which should be restricted as far as possible.

Hon. Member after hon. Member on the other side—sometimes not very careful in the language they used—hailed with joy the prospect that this Bill would diminish imports into this country. We on our side believe that it will be a loss and an evil if the imports into this country are diminished. Fortunately this Bill is a very little one. I do not pretend it is going to bring down the total volume of imports to any enormous extent, but hon. Members opposite have expressed their regret that the scope of the Bill is not larger and that it does not seek to impede more imports coming into this country.

I do not need to repeat the varying definitions which have been given of the conditions under which a Safeguarding duty can be applied. The definition of abnormal imports seems to vary from committee to committee, from article to article, and, sometimes, from one part of a report to another part. Moreover, none of these committees appears to have considered the effect of the duty upon the consumers. They practically refused to hear any evidence from or on behalf of the consumers, and no consideration seems to have been given to the effect upon price. Hon. Members opposite scoff at the idea that the effect of import duties is to increase the price of the article concerned, and without any investigation, as far as I can discover, into this matter, it has been gaily taken for granted that there is not going to be any increase in price. The hon. Gentleman who moved the Motion for the Third Reading of the Bill seemed to assert that, normally, import duties would not increase prices. He said he gave the House facts and suggested that we gave nothing but hypotheses or theories in return. Well, we have had a very large experience of import duties in this country—a larger experience, I would remind the hon. Gentleman, in volume, than any other country, though possibly not extending over so long a period of time—and, so far as I have been able to examine the history of the effect of import duties in this country, that effect, demonstratively and obviously, has always been to raise the price of the article to the consumer above what it would otherwise have been.

Photo of Sir Harry Foster Sir Harry Foster , Portsmouth Central

Articles we cannot ourselves produce.

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

On the contrary, it has raised the price to the consumer of ail articles, including articles which we do produce. When I hear that doubted, as I frequently do in this House, I yearn to make the acquaintance of those manufacturers who are eager for a duty without any regard to its effect on the price of the commodity. Surely it must be known to hon. Members that the manufacturers themselves welcome an increase of price. As a matter of fact, what they complain of is not the entry of the foreign articles but the entry of the foreign articles at a price lower than that which they wish to charge or would otherwise charge.

Photo of Mr George Pilcher Mr George Pilcher , Penryn and Falmouth

What about the motor car industry?

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

If I went into the case of the motor car industry I could prove my point from that alone, but it is impossible to deal with the motor car industry in this connection within the short time which I can occupy, because there is not a standardised motor car, and the cost of production varies constantly from one type of car to another and from one year to another. To deal with motor cars in the aggregate will prove no proposition in regard to the price of motor cars. If the hon. Member really suggests that the way to get motor cars at 2½d. is to add on a duty, I am willing to try a duty to that extent, but I am sure the hon. Member does not believe that you can bring down the price by adding on a duty.

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

I am not going to be led aside into a discussion on that point. It is bad logic to compare the prices in one period with the prices in another without taking all the other relative factors into account, but we have had a great deal of bad logic in these Debates. I have heard economic discussions in various places, high and low, but never until coming into this House have I heard such preposterous economic logic and such preposterous economic ideas. We say this Bill is unsound in principle for another big reason. It is that no regard seems to have been paid to the effect of these duties—and of import duties in general— upon the export trade of the country. The committees seemed to have confined their attention to the export of the articles with which the duty was to deal. The notion that these import duties would have any possible result upon the volume or value of the exports of the country generally—not on the exports of the particular articles concerned, but on the export of other articles—does not seem to have been brought before any of the committees and is not alluded to in any one of their Reports, and, practically speaking, it has not been alluded to by the President of the Board of Trade or the hon. Gentleman who moved the Third Reading of the Bill. I know it will not be accepted by hon. Members opposite, and I am afraid they will not be able to understand it, but I must assert, once more, definitely and dogmatically, that you cannot restrict the volume and value of imports into a country without necessarily and inevitably exercising a restrictive influence on the volume and value of the exports from that country.

Consequently, anyone who sets about putting import duties upon certain articles with a view to restricting or diminishing the import of those articles into a country, is whether he likes it or not, whether he knows it or not, whether he believes it or not, whether he understands it or not, necessarily and inevitably doing something which tends to reduce and restrict the exports of that country. Those duties may not necessarily or even probably restrict the exports of the same articles. They may have that effect upon the exports of any other articles. The precise effect cannot be predicted at the time. If hon. Members opposite seek to understand how this can be, I refer them to the hon. Member for Ilford (Sir F. Wise) who has more than once explained lucidly to this House that the credit which the foreigner has in this country by reason of imports coming into this country from abroad, can be taken away to his own country or any other country only in the shape of goods.

Photo of Hon. Charles Rhys Hon. Charles Rhys , Romford

May I ask the right hon. Gentleman how he reconciles this statement with his own statement in the country that the Labour party are prepared to exclude altogether goods made abroad by sweated labour?

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

I am not going to reply to that point, because I have not four hours in which to speak. Whatever may be my views on that point, they do not affect the truth of the proposition which I now make. Put it down that I was wrong on that occasion if you like. The proposition which I am now making has not been considered by any one of these committees. So far as we know it has not been considered by the Board of Trade. It has not been revealed to hon. Members opposite. They have not been asked to take it into account. I come to the third point. We say this Bill is ill-conceived and unsound because it will not and cannot achieve its ostensible object. I take it that the object of hon. Members quite genuinely is to reduce the number of unemployed. It is difficult to prophesy, but I do not think I am making a dangerous prophecy if I say that no Bill of this sort can possibly reduce the number of unemployed. The whole thing is founded on a misconception, and if that be the real object of the Bill then, again, it is unsound in principle because it cannot do what it purports to do. Take the whole range of employment dealt with in the Bill by the three duties, namely, the manufactures of cutlery, gloves and gas mantles. Consider the figures which the committees themselves give as to the number of men unemployed in those industries. What do they come to? Several thousands here and several thousands there and in the aggregate not 20,000. The number of unemployed in the country is 1,250,000, and all this Bill pretends to seek to do is to relieve unemployment in these three industries to the extent possibly of 10,000 or 20,000.

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

It is worth doing, of course, but you have to take into account the other effects of the Bill. What is the advantage of putting 10,000 men into work, if the effect of the Measure upon the export trade of this country is to put out of work a much larger number? I suggest that any economist would say that such is bound to happen. I do not pretend to give a number, but any improvement in employment which you can make by this means, in these three small industries, is almost certain to be far outweighed by the effect upon employment in the great exporting industries. Remember the difference in volume. A reduction of unemployment in these three industries by 50 per cent. , which would be an enormous gain, would only affect a few thousand men, while a reduction of trade in our great exporting industries by only 1 per cent. would represent a far larger number of cotton operatives, coal minors and iron workers out of employment. Theoretically it may be possible for this Bill, small as it is, to affect employment in the trades definitely concerned, but that effect is certain to be far outweighed by the diminution of employment in our great exporting industries. That being so, we have a right to complain that no consideration has been given to that effect of the Bill by the committees, and that no estimate has been made of the effect which it will have on all these industries.

Moreover, there has been no inquiry by there committees into the causes of the unemployment which they deplore. There is one extreme and curious case, and that is in the Cutlery Report. We are told that the unemployment in the manufacture of razors is extreme and acute, and that out of 800 men normally employed 700 are out of work. The hon. Member who preceded me seemed to complain that the Labour party, while professedly eager to do something for the unemployed, nevertheless, opposed this proposal. Why should we accept any Bill which comes forward if the hon. Members who bring it forward have not sufficient logic to connect the fact of unemployment with the remedy which they propose? Take these 700 men in Sheffield who are out of work. Does any hon. Member suppose that putting a duty on razors will replace those 700 men in work? Hon. Members must know that these 700 razor makers are out of work not because of the importation of German or American razors but because people have ceased to use the articles which these men call razors. Unless hon. Members believe that this Bill is going to induce the male population of this country to give up the safety razor and revert to the use of the cumbersome implement of our forefathers, I suggest it is a mockery to tell those 700 unemployed makers of razors that this Rill is going to reduce their unemployment. Will any hon. Member say that anything in the Bill will reduce the unemployment among these men? As a matter of fact that is typical, although, of course, it is an extreme case, of many of the cases to which hon. Members have referred. It is quite true that when people are unemployed in normal industries, and another article comes in from abroad, they say that the importation is the cause of their unemployment. In some cases the article that comes in from abroad is a different article from that which they have been making. The article very often has not been made in this country at all, or not made in the same way. Even though the articles from Germany may be of other varieties and qualities than we have been making, we are to try to keep out the substituted articles.

It is not in the case of safety razors even suggested that it is possible to keep them out, but notwithstanding that, we can foresee that hon. Members and their candidates will go down to the electors and say that this Bill has been passed in order to prevent unemployment. They know that in the aggregate it can have only the slightest effect on the million and a quarter unemployed. I doubt whether anyone can really believe that it will have any effect at all. It is not calculated to achieve its object. There is no sort of agreement, as to whether it is going to keep out an article or as to whether it is merely going to add something to the price Every experience shows that import duties do not keep out the articles on which they are put. At the present time we have hostile tariffs against British goods in all directions, and my recollection is that, in the last five and twenty years our exports have gone on increasing. In spite of the hostile tariffs, the complaint has always been, with the United States, that, make their tariffs what they will, they could not keep out British goods. Goods rise over the tariff, and the consumer pays the bill.

I must not run on with all that too long, but there is a further point that, in so far as these articles do come in, they are going to increase the price of the commodity on the entire consumption, and not merely on the articles that come in. The special evil is that they will increase the price of all the competing articles, in this country. That is the object of a good many of the people who promote this kind of legislation. They merely want to increase prices. There may be good reason for an increase in their own returns But the effect of an import duty does not stop there. Increased prices, which they seek mean a burden on the whole community, far out of proportion to what is saved. If we had had the advantage of the presence of the Chancellor of the Exchequer at these Debates a little more frequently, we might, have asked him, how he reconciled, with his former statement, putting such a burden on the community in order to get such an miserable trickle as will be got out of this Bill.

Worse than that, it is not only a tax on the ordinary consumers, but on other industries. This is not a scientific tariff. I sometimes wish it was a scientific tariff. I suppose that would be deliberately framed so as to tax those consumers who consume in final consumption, and it would carefully exempt the raw material. It would carefully exempt all the tools and implements and components which are used in the manufacture of other articles. If it does not do that, how can we say that it is going to promote an increased trade, or how can we evade the conclusion that it cannot fail to diminish our export trade? Unfortunately, this Bill, because it is not a scientific tariff, I suppose, actually imposes an extra cost on the production in other industries. Amendment after Amendment to exclude those articles, those implements, which were used in other industries, has been rejected by the serried ranks opposite. The tailor? knife will cost more. The garment workers—and I would remind the House that garment-making is one of our large export trades, employing vastly more people than the whole of the cutlery trade in Sheffield, and an export trade which is still sufficiently alive to be worth considering—you are going to increase the expense of making these garments for export, by increasing the cost of the knives, and so on, which are used in their production.

I wonder what the agricultural industry will say, if Bill after Bill is brought in to increase the price of the articles they use, without any prospect whatsoever of a Bill to add anything to the price of the articles that they sell. I suppose in agriculture, knives are used of various kinds. Shears are used. I do not profess to know what a secateur is? I imagine a secateur is used for cutting things, by horticulturists. In fact, the cutlery trades in Sheffield serve practically all our industries with the tools and instruments by which these are carried on, and admittedly these tools are to be made more expensive by the Bill.

There is a worse aspect of the matter; a good many of these tools, not being great machines, are owned and used by the individual workers in the independent handicrafts. The woman who sings the "Song of the Shirt," her implements are going to cost her more, Her scissors are going to cost her more, and so with all the badly paid workers in these industries. The little cobbler and all the rest of them are going to pay more for their tools because of this duty. The mechanic's kit of tools is going to cost him more. Sometimes we are told that this will not be the case because an increase in production will enable a deduction in overhead charges, and hon. Members have been very glib about that argument on overhead charges. Have they forgotten, I wonder, the trades to which these duties relate? Two out of the three, cutlery and glass, have the stigma of being largely conducted by outworkers, homeworkers. The cutlery that we buy from some big manufacturer at Sheffield, as we imagine, is really made by individual artisans, each working on his own account, with his own wheel, by his own power.

There can be here no question of a great reduction in costs by overhead charges. I do not know whether hon. Members realise that out of 10,000 people in the cutlery trade there are about 1,700, according to the medical officer in Sheffield, who are employed in tenement factories. Perhaps I may be allowed to explain what is a tenement factory. A tenement factory, or a factory tenement, is where many, or perhaps most of the good blades of Sheffield are made. There is no capitalist enterprise; the individual working cutler rents a place in a factory, where he gets power and light and heat supplied, and where he works at his own forge a blade, and when he has forged it, he takes it round to the so-called manufacturers, whose place is decorated by a name and perhaps with "Manufacturers for His Majesty the King" and all the rest of it. These individual producers will not find any reduction of overhead charges, and the duty will inevitably be added to the price of the articles. You cannot escape from it.

Why is this done? The Bill is brought in because hon. Members at the Election said something about the safeguarding of industries. They said: "We undertake not to bring in protective duties, but we are going to safeguard industries." There is the underlying feeling that Members of the Protectionist party think that it will be a good cry to go on at the Election. There are Members, how many I do not pretend to estimate, but a very large proportion, who really believe in a general protective tariff on all manufactured articles.

Photo of Mr Sidney Webb Mr Sidney Webb , Seaham

Yes, they really believe in it. I am glad that one hon. Member has the candour to admit it. I have heard a good many honourable Members who want a Protective tariff, and their leader will not let them ask for it. What a calamity for a great party! They want a full-blooded tariff, and their leader will not let them ask for it, and they are trying to do what they can in a small way in the name of the Safeguarding of Industries. I respect the man who believes in a Protective tariff. At any rate, he puts his heart into it. He really imagines that he sees all round, and that he has really got a scientific proposition, but has any single supporter of these duties any confidence as to their reverberations and reactions, which is just what a scientific tariff does seek to consider? There is some lack of candour in it. I do not want to end on a harsh note, but I cannot help remembering how, on this very question just 80 years ago, we were told, by no mean authority, that a Conservative Government was "an organised hypocrisy."

Photo of Sir Alfred Mond Sir Alfred Mond , Carmarthen

I am not surprised that the right hon. Member who spoke last has suffered some amazement in having to listen during these Debates to economic arguments that would puzzle any student in an economic school of any kind, and any country. He will have to learn to be patient on the subject of Protection and Free Trade. Those of us who, like myself, took part in this controversy now many years ago, and thought we had finally established, by common consent, certain verities, also were surprised to find younger Members of the House who apparently had not taken the trouble to go back to those days repeating exactly the same fallacies which we finally destroyed at that period. The hon. Member who introduced this Bill from the Government Bench referred to my absence from these Debates. Really, if all the economic knowledge I am to obtain is the extraordinary farrago of economic fallacies that he propounded at that Table, I really do not know why I should spend my time in coming here at all. A Minister, representing the Board of Trade, and standing at that Table, and with a solemn voice announcing that import duties reduce prices! If he would go and speak to any person living in a protected country, I do not care which it is, there is not a single consumer who would not assure you how much their cost of living is increased by protective duties. After all, if the hon. Member believes that, why did not he and his party put a duty on foodstuffs? What is the sacrosanct difference which they always make?

5.0 P.M.

Again, the hon. Member seems to think that, by restricting trade and producing scarcity, you can increase the volume of commerce and employment. It is not for the purpose of dealing with those subjects that I rise this afternoon. If he complains that some of us have not been taking part in these Debates, I might say that the right hon. Member for West Swansea (Mr. Runciman), and those associated with him, have been sufficiently capable of destroying the arguments he has adduced. [HON. MEMBERS: "Mr. Lloyd George!"] He has been employed more usefully than in taking part in a Debate like this. We might retort, with some truth, that the Chancellor of the Exchequer, who, after all, is responsible as Chancellor for this Bill which he himself in his speech last week referred to as a Finance Bill, has only taken part in the Debate once. Even then he did not deal specifically with a single item, while he has not graced the House very much with his presence during the Debate.

It was really the intervention of the Chancellor of the Exchequer the other day which has induced me at this stage of the proceedings to offer a few remarks in reply to a particular section of the speech which he made. The Chancellor of the Exchequer, it was obvious, did not share the Protectionist views of his colleague who spoke to-day. If his speech meant anything, it meant a warning that the end of his patience had come, that Safeguarding Bills were not going to be more plentiful, and that general tariffs were out of the question. The concluding passage of his speech made it quite clear that, as far as he nails any colours to the mast—and he: has an ability for hauling them up and down that many of us envy—he, at any rate, made up his mind that this Parliament had no right to deal with a general tariff. The right hon. Gentleman believes in the evolution of what I might call the safeguarding principle. He stated, quite rightly, the principle of the Safeguarding of Industries Bill of 1921, with which I was at one time concerned. I do not in the least wish to escape from any responsibility that I took at that time. What was the principle of that Measure? It was, as he said, that the duties should be exceptional, that they should be temporary, and that they should be duties discriminating against particular countries, and not be duties of a general character. What reference has that to the Bill we are discussing to-day? There is no one single item on which that Safeguarding Bill of 1921 was based which exists to-day. An hon. Member has quoted the words, And if the home trade is cut away, the export trade will follow. That is not a principle of the Bill, that is an ex cathedra statement of my own. I think that is a self-evident proposition. I do not see what it has to do with the question I am trying to place before the House, that the present Bill has no relation to the Bill of 1921. Let me read again what the Chancellor said. He said, quite rightly: The duties should be exceptional; secondly, that they should be temporary; and, thirdly, that they should be duties discriminating against particular countries." —[OFFICIAL REPORT, 9th December, 1925; col. 611, Vol. 189.] Why? We first brought in that Bill—I have looked up my speeches, and I emphasised it in every speech—to deal with the extraordinarily disturbed state of the exchanges and to counteract the bounty given by a depreciated currency. This Bill does nothing of the kind. You have duties against Germany which is on a gold basis, against America which is on a gold basis, against countries with stable exchanges. You have got general duties —the very thing we tried to avoid—duties which have no relation whatever to exchange, duties which are justified on no principle which we laid down in 1921. Therefore the Chancellor of the Exchequer cannot possibly derive any satisfaction or argument from that point. How did we arrive at a duty of 33⅓ per cent. which has been mechanically and slavishly followed in this Bill? We discussed in the Committee, of which I was a member at that time, how we could deal with the depreciated and depreciating exchanges. The figure of 33⅓ per cent. was the average figure which officials of the Board of Trade then advised us was the best figure they could arrive at as the difference between the internal exchange of a depreciated country and our own exchange. Now it is made a general figure. Why? Mr. Joseph Chamberlain's general figure was 10 per cent. , and everybody thought it was a high tariff then. This is a 33⅓ per cent. average on everything. Did anybody ever advocate on behalf of the Tariff Reform League that we should have ad valorem duties of 33⅓ per cent.? Did anybody, if they examined the tariff schedules of Protectionist countries, ever call that a moderate tariff? It, is really a prohibitive tariff. It is remarkable that it is taken so calmly when it is transposed from very different conditions to a Bill dealing with the matter in an entirely different way.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

If the right hon. Member had been hero during the Debates, he would have heard some of his colleagues state that the duty would not be high enough to do any good.

Photo of Sir Alfred Mond Sir Alfred Mond , Carmarthen

I have read the reports of the Committee proceedings, and I can imagine that there are industries in which nothing but prohibition could do any good. I am rather interested when I think that at the time when the Act of 1921 was being discussed there was no one here more meticulously anxious about his Free Trade soul than the Chancellor of the Exchequer. At that time I had to act in the capacity of a kind of fiscal father confessor to him, and it was only really on my assuring him, as I could honestly do, that that Measure was not a general tariff but dealt with an abnormal state of matters that he somewhat reluctantly acquiesced.

To-day he has moved on from that position, at any rate to this extent, that when one looks through these documents and reports one finds a reference to one of the most difficult, and most controversial subjects, unfair competition. Unfair competition has always been, of course, one of the standard phrases of those asking for Protective duties. Every manufacturer considers all competition unfair, as is his natural bent of mind; every consumer considers all competition most reasonable. What standard is set up for unfair competition? It is assumed apparently that if any country has its working population working longer hours and at lower wages, then that is unfair-competition. That overlooks the fact that on the whole low wages and long hours means higher cost of production. The country which now threatens the industrial supremacy of the world is the United States, with high wages, short hours and great efficiency. [HON. MEMBERS: "High tariffs!"] High tariffs merely hamper their export trade. The leading manufacturers in America to whom I have spoken, like the heads of the big steel trusts, are themselves realising that if ever they wish to increase their export trades they must decrease their tariffs. [HON. MEMBERS: "Why?"] If my hon. Friends have not yet grasped the idea that tariffs are an impediment to exports, I cannot stop and explain it to them.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

Will the right hon. Gentleman give me an instance of a country which has gone in for a complete policy of Protection, which has reduced its exports or its imports?

Photo of Sir Alfred Mond Sir Alfred Mond , Carmarthen

Then the hon. and gallant Member's argument is, that a tariff has no effect at all. If it does not reduce either exports or imports, then its economic effect is nil. There is nothing more foolish and nothing more unfair than for Committees to recommend duties of this character on the ground of so-called unfair competition. Let me take another point, the comparison of taxation, which has also been stressed by these Committees, the point that we are more heavily taxed than people in other countries. That is also a question almost impossible to establish and a question of the most controversial character. Anyone who has taken the trouble for years past to endeavour to establish a comparison of taxation between this country and any other country must have found the task almost beyond them. Local taxation as well as State taxation is on a completely different basis. In every Protectionist country a large revenue is derived from import duties, and every citizen of these countries thinks himself heavily taxed. I find my French friends saying, when it is suggested that they are not heavily taxed, "But you live in a Free Trade country. You are not taxed on everything you buy. We are taxed on everything we buy. The amount of our taxation is quite as high as yours with your Income Tax." Any comparison of that kind is also going to be entirely misleading. As a matter of fact the scientific tariff, that dream which I have heard discussed and advocated now for something like 20 years, is an impossibility. It has never been constructed, it never will be constructed, it cannot be constructed. No country has yet ever endeavoured to construct it. Good lobbyists, large vote-getters, such are the elements from which tariffs are created in Protectionist countries, and from which they will be created in this country if it ever comes to a tariff here.

There is another point raised by the Chancellor of the Exchequer with which I would like to deal. He dramatically asks "Does anybody question the right of the Government to impose any taxation it thinks fit?" What I want to ask the Government is this: Are these duties meant to be taxes in a revenue sense at all? If they are not, what is the point of the argument he is trying to enforce? What revenue is expected through these duties? Obviously, if they produce a revenue, they do not safeguard; and if they safeguard, they do not produce a revenue. We should like to know which they are intended to do. [HON. MEMBERS: "Both!"] They cannot do both. I do not believe they are meant to be taxes in the revenue sense, and, if so, the argument which the Chancellor of the Exchequer has adduced, that the Government have a right to include these duties in the Finance Bill, whenever they like, without inquiry, and almost without argument, seems to me untenable.

I would also ask, if this argument is sound, why this new-fangled title of the Bill to which we are giving a Third Reading to-day? It is not a Finance Bill. The Tight hon. Gentleman was very anxious indeed to challenge hotly any attack on his consistency. His argument-reminded me rather of the fable of the fox who lost his tai] and who discovered that other foxes had lost their tails too. He discovered, therefore, that) the tailless fox was the only true specimen of the breed. The right hon. Gentleman's position on this question is not so much of national as of personal interest, however. Although he made it amusing to us the other day, he did not seriously deal with the underlying and more important aspects of this question. When the Safeguarding of Industries Act, 1921, was first discussed, a statement was made by the Board of Trade that the iron and steel industries were in danger of going out of existence, unless duties of this kind were imposed in their favour. Fortunately, depressed though they are, our iron and steel industries still exist.

I would like to ask the Government whether they propose that these interests, these large and vital industries, should or should not come under the scope of the Safeguarding Measure, and, if they do not, why not. Is safeguarding meant to be a serious remedy, or a kind of farce? Is it seriously believed in, or is it merely a sop thrown to the wolves, like the hon. and gallant Member for Bournemouth (Sir H. Croft), running behind the Conservative sleigh and chasing through the woods the reluctant Government, who are escaping from his tariff jaws by the sacrifice of little bits of food in order to stop him on the way? If it is merely that, then, of course, we can understand somewhat the apparently light-hearted and non-serious way in which this whole matter has been dealt with from the Government Benches.

But there is a very much bigger and more important point which has to be made. Agriculture seems to be the stepchild of all Governments. Agriculture is one of our depressed industries. Agriculture has been abandoned even by the most ardent Protectionists. Exposed to the fiercest competition of all the countries in the world, having to accept the lowest world prices, with all the surplus shot on to these shores, it is at the same time demanded that it should subsidise industry by means of raising prices owing to import duties. There is scarcely an article in this Bill or in the other Hills which does not directly affect the farmer, the farmer's wife, the farmer's daughter, or the farmer's sweetheart. Articles of clothing, articles of household use, articles of use in every farm and every agricultural labourer's cottage are being made dearer by these duties, and I am amazed at the party opposite, which has always rather prided itself on standing up for the landed interests, and which contains so many county members, patiently acquiescing in this gross unfairness which is being perpetrated at the expense of the most harassed industrial class, namely, the farmers of this country. It is useless to say that the amounts are small. They are large enough, they are cumulative in their effect, and they keep on growing and growing.

Hon. and right hon. Members opposite seem to have a special "down" on women, which is most ungallant of them. They tax their blouses, their stockings, their gloves, And their lace, and all their duties are designed to make their raiment more costly. [An HON. MEMRER: "In order to give work to their young men"!] The young men will have to pay for these articles. As a matter of fact, the whole tendency of these duties is to lay a greater burden on those things, and especially on agriculture, which receives no kind of compensating advantage. [An HON. MEMBER: "What about hops"?] Hops are a very small crop indeed in the agricultural produce of this country. There is a fundamental reason why these duties, which are apparently regarded as trivial, which certainly will not revolutionise our industries, which certainly will not even microscopically affect unemployment, are so inopportune at the present moment. There is no doubt, to those who are following the trend of events, that there is a movement on foot to-day on the Continent of Europe in the direction of Free Trade, more universal, more deep-rooted than it has been for many years. Necessity is forcing the populations of those countries, who have been economically depressed, to reconsider economic conditions, and they have more and more come to the conclusion that the abolition of tariff barriers and the free interchange of goods is the only way of restoring economic stability.

I heard only to-day that even in Germany industrial magnates, who formerly were certainly advocates of tariffs in favour of their own industries, are turning in a Free Trade direction. The question of a Customs Union for Europe is beginning to loom on the horizon, yet this is the moment we choose to drop Free Trade. We have kept alive and held aloft the torch of Free Trade economics throughout the world all these years, and the moment when our teaching has at last begun to bear fruit is the moment when we are going to hand over the result of generations of practice to those who have always been opposed to it and who are opponents of it still. It seems to me, looking at it from a wider, larger, world point of view, to be the most foolish proceeding.

If hon. Members opposite really believed that a general tariff would produce the results which they imagine, it would be their duty to proceed with it. One Election should not have made them so faint-hearted. But if we are to believe in the sincerity—and I do not doubt it for one moment—of the pledge of the Prime Minister, if we are to take, at its face value, the speech of the Chancellor of the Exchequer, we know that for the next few years, at any rate, that is not their intention, nor are they going to proceed on that basis. Why, then, smirch —that is all you can call it—the bright shield of our Free Trade faith and practice with these miserable little duties? Why hamper your Customs, increase your officials, interfere with your commerce, harass your traders, and inflict duties on your consumers to achieve, finally, neither a proof nor a disproof of the theory, neither an improvement nor a worsening of the industrial position of your country?

Photo of Sir Harry Foster Sir Harry Foster , Portsmouth Central

Whatever one may have thought of some of the statements of the right hon. Gentleman the Member for Seaham (Mr. Webb) who moved the Amendment, at least, he has set an example in this Debate which I hope will be followed, in which case it will be peculiar to a fiscal Debate, namely, the moderation, the courtesy, and the good temper with which he directed his arguments. Generally, these debates seem to generate a kind of, I will not call it odium theologium, but an odium fiscalatus, and I do not think we, on either side, and whatever our feelings may be, advance our respective causes by indulging in an odium of that kind. The right hon. Baronet the Member for Carmarthen (Sir A. Mond), who courteously gave way when I reminded him of a statement of his in this House in 1921, was, I observe, quite unable to answer the challenge of my hon. and gallant Friend the Member for Bournemouth. (Sir H. Croft) on a very particular and specially important point which he was enunciating. The challenge delivered to him was whether he would instance in this House any country which had got a general protective tariff and which had suffered or was suffering to-day either in its ex- ports or its imports. I assume that the right hon. Baronet did not answer because he was unable to answer.

I am glad to have this opportunity, the first I have taken during these Debates, of saying a word in support of the Third Reading of this Bill, not because the Bill itself is going to exercise any great effect upon our trade—admittedly, it is very restricted in its operations and surrounded by any number of safeguards —but because it is the first step in that course of duty which, as it appears to me, was have perhaps made as long a study as the right hon. Baronet of this question, and with which perhaps I have been as familiar in the last five and twenty years as he has, is the first duty of any Government responsible for the welfare of an industrial State, namely, to help forward, to stimulate, and to promote within its own borders production, for the employment of its own people, of those articles which its own people can produce.

I remember the exceedingly wise course pursued by Prince Bismarck when the German Empire was formed, how he threw over those Free Trade prejudices and inclinations in which he had previously indulged, and how he laid down to the German people that which produced such an enormous fruit, as the right hon. Baronet will, I am sure, acknowledge. Prince Bismarck said in effect: "That which my people require and that which my people can produce, that I will help them in producing by protecting their home market. In regard to that which they require and cannot produce. I will either put it on a free list, or I will put on a tariff for revenue-purposes." The right, hon. Baronet-challenged the Chancellor of the Exchequer in connection with the question of the old and, as I should have supposed, worn-out dogma that you cannot have it both ways, that either you are going to get a revenue, in which case you will not get employment, or you are going to get employment, in which case you will not get a revenue. That is a very specious argument, but there is absolutely nothing in it

If the right hon. Baronet had been in the House a few days ago, he would have heard a most apt answer by the Financial Secretary to the Treasury, who in a few sentences exposed the fallacy of that argument. If I can put it into one or two sentences, I will reproduce it for the benefit of the right hon. Baronet. What my right hon. Friend said was this: "Of course, you cannot have it both ways, if you mean you can only have it either one way or the other. So far as your tariff stops imports, to that extent it increases employment in your country; so far as it does not stop those imports, to that extent it helps the revenue." Of course, as the right hon. Baronet said, whatever tariff you put on, there are certain people who will even pay that higher duty, in order to get the. goods they want, and, admittedly, in that case they will pay the tax; but the argument that in every case in which you put on a tariff or a tax you are putting the burden on the consumer, I venture with all respect to tell the right hon. Gentleman, high economic authority as I know he is, that that will not bear examination. It is quite true that in this country, until recent days, our only experience of the effect of a tax upon imported articles was that in every case the consumer ultimately bore not only the tax, but even the expense of financing that tax in the hands of the importer, and why? Because we rigidly, under our so-called Free Trade system, levied our revenue on imports from those articles which we did not and could not produce ourselves—tea, coffee, sugar, cocoa, tobacco, arid so on.

Of course, in all those cases, there being no home-made competing article, the whole of the burden imposed on that article imported from abroad fell upon the consumer, but in cases where you have a home-made, untaxed article produced within the borders of the tariff-protected country, experience has shown —I will give an instance in a moment, which, I am sure, the right hon. Gentleman will acknowledge is worth some consideration—that the effect, in the first place, is to reduce the cost of production within your own borders, because you have stimulated production, you have protected your home market, and thereby you have increased the production of your factories, and, by increasing the production, you have manifestly reduced the cost of production, and the internal competition between one manufacturer and another has kept down the price to the consumer, and if the foreigner still wants to enjoy the use of our market for the goods he sends in, he has to pay either the whole, or at least part, of the tax I said I would give an instance, and I think it is one worth mentioning, because it is not a question of to-day, or of yesterday or a recent experience. As long ago as 1866, nearly 60 years ago, one of our own Colonies, the Colony of Victoria, created a tariff for the protection of their home market, and, after that tariff had been in operation, not for five years, but for a whole generation, in October, 1893, the Governor in Council of Victoria appointed a board to inquire into the effect of the fiscal system of Victoria upon industry and production, upon the employment of the people and other matters. The board conducted an inquiry throughout the whole of the Colony. They took exhaustive evidence on every industry, and they presented to Parliament their full report on the 30th April, 1895, with all the evidence. That is 30 years ago. They pointed out the extent to which the duties levied had helped industry and production, and afforded employment to the people. Then came this pregnant-statement on the vexed question—and I call the attention of the right non. Gentleman to this in view of his argument— As to whether goods have been made dearer or cheaper by the imposition of protective duties, we have received a great deal of evidence. It is an established fact that such goods are, as a rule, cheaper to the public than they were before the imposition of such duties, and that recent increases of rates have not, except in isolated cases, been followed by corresponding increases in the prices to the public. Those documents are all available at the offices of the Agent-General for Victoria. I myself have a full set of copies of the report and the whole of the evidence. That report was a unanimous report, after nearly three years exhaustive inquiry in every industry in the State of Victoria, and if hon. Gentlemen read that report and it is brought to their knowledge that, after a generation of experience, the result of that independent public inquiry was to show that the effect of a tariff was to reduce prices to the consumer, not to increase them, I think the moment they have really mastered that statement for themselves, and ascertained it is a fact, they can hardly, as honourable and straightforward people, stand up in this House, or anywhere else, and say that the effect of a tariff is to throw a burden upon the consumer in the country where the tariff prevails.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

Why not have a general tariff, then?

Photo of Sir Harry Foster Sir Harry Foster , Portsmouth Central

I hope we shall have a general tariff on scientific lines—most certainly I do. Most certainly the Prime Minister himself to-day believes that is the wise course. There is no disguising that fact. The Prime Minister has not altered his opinion. We have not altered our opinion because of a pledge to which we are all bound.

Photo of Mr Robert Boothby Mr Robert Boothby , Aberdeenshire and Kincardineshire Eastern

Has the hon. Gentleman the authority for saying that the Prime Minister still holds that view?

Photo of Sir Harry Foster Sir Harry Foster , Portsmouth Central

I am going to answer by reading these words: If we go pottering along as we are, we shall have grave unemployment with us to the end of time. The only way of fighting this subject is by protecting the home market. It is vital to our progress that neither our employers nor workmen shall be unfairly exposed to the merciless attacks of foreign competitors sheltered behind walls of their own high tariffs.

Photo of Captain William Benn Captain William Benn , Leith

Can the hon. Gentleman state with authority that that is the present policy of the Government?

Photo of Sir Harry Foster Sir Harry Foster , Portsmouth Central

No, but if I had been allowed to develop what I was going to say, I should have come to that point. At the present moment, and as the result of the very definite pledge given by the Prime Minister at the last election, this Government and this party are pledged not, directly or indirectly, to attempt to introduce a general tariff. The Prime Minister has meticulously observed, even to the detriment of safeguarding, that pledge both in the letter and in the spirit. We are hindered and hampered even in these small proposals in the extreme anxiety of the Government not by one hair's breadth to depart from the letter or the spirit of that pledge, but we are strongly hoping and believing, what some hon. Members opposite are fearing, that the effect of this safeguarding of certain industries, always given fair-play, always provided the pitch is not queered, will be so manifest, that it will so prove the wisdom of a scientific tariff, it will so truly prove that it increases employment, without putting a burden upon the consumer, that there will arise from the consumers and from the workpeople themselves, a demand for the extension of the blessings of safeguarding. And so by that process, by a process of education which the Prime Minister himself has laid down as a necessity of his advocating again anything in the nature of a general tariff, namely, the conviction of our own people, not by theory, but by actual experience, practical knowledge of the facts, then the demand will come, and the pressure will come, from the electors themselves for a general scientific tariff.

The right hon. Gentleman who moved the Amendment said—and, I think, said quite logically and quite fairly—that while he respected a 3nan who said he was a Protectionist, and did not run away from the term, he had not so much respect for the man who, holding these views, was afraid to express them. What has always puzzled me is why any man on either side of the House should be afraid of, or should shy at, the term "Protection." We think it right to protect our homes by police, by fire brigades, by sanitary inspectors, and other measures. We think it right to protect the country by means of the armed forces of the Crown. We think it right to protect our labour. We do not mind protection as applied to labour conditions, hours of employment, rates of wages, the general conditions under which the industry is carried on. But it is a terrible thing to say you want to protect your trade and industry. I think it is the first duty of the Government, as I said before, to do everything in its power, by whatever name you like to call it, to protect its industries, its workpeople and its producers. We have heard a good deal, of course, in this Debate, as we have heard before, of the use of the term "Free Trade," and some people are very fond of saying, "I am a Free Trader." They have no right to such an expression. They have no right to claim they are Free Traders, because we in this country do not know what Free Trade means. We have never had, and we are further off to-day than we were in Cobden's time from Free Trade— the free interchange of commodities—I use Cobden's own definition—between nation and nation, or, as the hon. Member for Hillsborough. (Mr. A. V. Alexander) said the other night, the breaking-down of the barriers between: nation and nation. That is Free Trade.

Our own experience to-day is absolutely foreign to anything Cobden advocated or recommended. Cobden never suggested that we should freely open our markets and our ports to the imports of the world, while allowing the rest of the world to erect barriers against our own manufactures. He was never such a foolish man or such a bad economist as to make such a suggestion. It is quite true, as even the right hon. Member who moved the Amendment admitted, that for a long while we suffered nothing in respect of tariffs in foreign countries, for the simple reason that at that time we were the monopolists of manufacture, and the countries of the world erected their own tariffs for the purpose of their own revenue, and not with the slightest idea of shutting out British goods- It is not because of Free Trade, but in spite of Free Trade, and because of our own ability to supply the rest of the needs of, he world, that we attained the position we did; that is all changed, and what we are here proposing is to safeguard a few industries exposed to unfair competition. This is all we are able to do under the pledges which have been given. The worst that hon. Members opposite can be afraid of is that we are going to prove that their theory is unsound, and that what we are doing will have been proved to have been beneficial to the trade which we are safeguarding so that other trades, one after another, will ask us to extend the same benefits to them. That is what we are hoping to do. There is nothing inconsistent in this with the pledge of the Prime Minister. Quite the contrary, in our helping these industries.

I want, however, to ask the Government to consider, first, the removal of some of the hindrances which exist at the present moment, so that fair play shall be given to those industries that have been safeguarded. One of the great hindrances that exists in our constitutional system is the necessity of going through all this paraphernalia of an inquiry, a report, recommendations by the Government, the introduction of Financial Resolutions, and a long debatable Bill, all of which gives the fullest opportunity, as we found in the motor and piano trades—which is at once taken advantage of—to queer the pitch of the industry which is going to be safe guarded by rushing in large quantities of foreign articles before the Act comes into operation. We saw that last March. Some of us on the Terrace saw large quantities of pianos and motor cars being brought in by water. So serious did the matter become that the Chancellor of the Exchequer himself, when questioned, said he was watching, and he was going to consider what could be done and what action could be taken. He was taking note of these things with a view to seeing whether they could not be covered by the duty. He, of course, found it was not within his power to do so. The effect was that our revenue was deprived of a substantial sum. [HON. MEMBERS: "£1,000,000."] I am informed it was so stated in the House at the time. The revenue was deprived of a very large sum and our workpeople were deprived of the work which would have been given to them if these things had been made in this country instead of being imported.

One of the things I do ask the Government to consider—this is a matter for the Chancellor of the Exchequer himself— with a view to protecting out' revenue and preventing the queering the pitch— is that once it has been decided that an industry should be safeguarded that a much shorter method should be found, if necessary by some change in our procedure—as in the case of tea, cocoa, and other exciseable articles — before it becomes public property, to see that the revenue will not be done out of the sums that should go to it. The other change that I advocate is that there should be a much simpler procedure in connection with safeguarding, and that the Government should not be made afraid by taunts about the pledges they have given. They should, so far as they feel it right, adopt a simpler procedure than to-day. On behalf of a good many traders I do urge on the Government, that if they can they should simplify their procedure. I do not think that these industries ought to be treated in the same way as a highly conscientious and scrupulous schoolmaster would deal with his own sons who happened to be at his school.

Some of us have had experience in this regard. The strong desire to avoid anything like an accusation of favouritism in the case of a son who has committed some offence would lead, perhaps, to his being punished more heavily than the ordinary boy in the school. We who are supporting the Government in connection with this safeguarding policy do not think our industries should be treated more severely than justice requires. A scrupu- lous desire to respect pledges need not lead the Government to be under the slightest imputation. I thank the House for the extreme patience with which they have listened to me. I hope hon. Gentlemen opposite will be disappointed in regard to the result of this Safeguarding Bill. If that be so, I trust it will have that convincing effect upon them that they will not mind having been proved to be wrong: that they will not be like a certain Free Trader who said he would rather see the Kingdom perish than see Free Trade proved to be wrong;

Photo of Mr Robert Dennison Mr Robert Dennison , Birmingham King's Norton

One thing that would appear to emerge from the Debates to which one has listened in recent times is that the Government have evidently made up their mind to cling to tariffs. We on these benches—at all events, I, speaking for myself—are not unmindful of the fact that we have had considerable experience of Free Trade and that Free Trade has not brought us all the boons that we expected it would do. In the light of these things during the past few years, we feel no objection to sitting down and examining the whole position from the view of how trade is affected by foreign competition. Speaking, however, as a member of my own trade union, we are affected by the low standard of wages and the conditions of employment in other parts of the world, but I do not find anything in this Safeguard Bill that is going to help us very much. On the contrary, from all I can see the Safeguarding Bill will give to a certain number of people who are persistent enough in their advocacy, the chance to make money out of the safeguarding of their industry.

May I remind hon. Members that we had a statement made from the other side of the House only a couple of days ago that since the application had taken place for the protection of the glove industry there has been imported into this country supplies that will meet the requirements of consumers for years. We already know that since the application for the safeguarding of the gas mantle industry there has been a three years' supply of gas mantles from abroad come into this country; some of this by the people who have been urging safeguarding upon the Government. That is the kind of thing which is going on. Only the other day a gentleman, whom I knew very well, stopped me in the street. He is engaged in the button trade. His association is going to make application for safeguarding purposes. He asked me particularly to see that I supported the application, and that he would make it worth my while. If you have this kind of thing at the thin end of the wedge of safeguarding, what is going to happen in the course of the next twelve months or two years? I have no objection to sitting down and examining the whole position. I have no objection to inquire whether Free Trade has been good or bad in the past, or whether it will be good or bad in the future. I am satisfied that these proposals will not help us.

Take the case of the procedure, which the hon. Gentleman who preceded me spoke about. Let us see what really-happened. One manufacturer quite recently made an application for safeguarding under the White Paper procedure. The first intimation to the consumers— that is the public—that there had been an application was an announcement which appeared in the Board of Trade "Gazette" in October. Three or four days later another announcement appeared in the "Gazette" that evidence would be taken in respect of the application 10 days later. The result was that those who were going to be affected by the safeguarding proposal suffered considerably because of the lack of time to prepare any case to rebut the evidence, submitted in favour of the application. There, has been a very justifiable suspicion created in the country that this safeguarding consists of a great deal of gerrymandering. It is a pity that there should be this lack of confidence in any committee that may be set up, or any legislation passed, for dealing with such important matters.

6.0 P.M.

One other point. I think it is quite justifiable to complain as to the composition of the committees set up under the White Paper procedure. The President of the Board of Trade, who appears to have absolute discretion in the appointment of these committees, is said to be impartial. On numerous occasions during the present year he has advocated a tariff policy, and ho is assumed to be acting impartially in the appointment of these committees of inquiry! With the exception of only one Labour leader, I do not know that a single Labour leader has been appointed to one of these Safeguarding committees. That gentleman is well known as having strong leanings towards Tariff Reform. We think we can justify the position that the Committee expect, and the President of the Board of Trade would be disappointed, if they did not put forward the proposals he desires for Safeguarding, whether or not the evidence warranted it. I say that is fatal to any Government. If the Government are going to continue their Safeguarding policy, I urge them to revise the whole of the machinery under which they do it, and give opportunities for everyone to hear the evidence submitted, and for Members of the House of Commons to be supplied with copies of the evidence in order that they may realise their responsibilities when they come to vote. I am opposed to the Bill for the reasons stated, among many others, and I hope we shall be able to carry our opposition to the extent of killing the Bill.

Captain GROOKSHANK:

In the course of the Debates on the various stages of this Bill we have heard many experts— business people, economists, trade union leaders, Tariff Reformers even; but we have heard very little of the point of view of the average man, the common or garden person, who does not go very deeply into this subject, but who is faced with the question of whether or not he ought to support a policy of this kind. The vast mass of the electorate do not go into the intricacies of the Protectionist or the Free Trade argument. They know that at the last Election we on this side of the House said quite definitely that we would do what we could to safeguard efficient industries under certain conditions. We welcome the Bill because it is doing that; it is one of the first stops in that direction, and we welcome it also because it enshrines the principle of Imperial preference, to which our party are absolutely pledged. The right hon. Gentleman the Member for Seaham (Mr. Webb) said just now he did not think the Bill would achieve its object. We differ; we think it will, but that is a matter of opinion which time can only prove. The Liberal party have fought a good battle, but they are wedded to the dogma of Free Trade—I am afraid, in the words of the marriage service, "For better or worse, for richer or poorer," and that leaves them cold, very cold sometimes, as to the state of employment and whether or not there is some way of helping industry in this country.

I was left quite unmoved by the appeals of the right hon. Baronet just now regarding the agricultural interest when I remember that only a very short time ago the Liberal candidate at Bury St. Edmund's was advocating an import duty on malting barley. I suppose he had none of the present leaders of the Party to show him the way in which he ought to go. The right hon. Gentleman the Member for West Swansea (Mr. Runciman) has spoken a great deal from the shipping point of view, but he has never made a point which is worth while making, and that is that the particular commodities dealt with in this Bill happen to be things which take up very little bulk, and therefore are not important as far as shipping is concerned; safety razor blades or gloves cannot take up very much room.

The average man in the street does not really believe there are any great eternal verities on this subject. He likes rather to put the Bill to the rough and ready test—knowing how bad employment is at the present time—of whether by its means something can be done to improve employment. That is what is going to be the justification for this Measure. All I would say to hon. Members opposite is that we, like they, are somewhat circumscribed in what we can do.

The Prime Minister and the party on this side of the House put ourselves under a self-denying ordinance not to introduce a general tariff at the present time. The party opposite are under an ordinance, not a self-denying one, but one imposed upon them by the electorate, not to remedy unemployment by Socialism—they have not the opportunity. Cannot they join with us in trying to make this Bill work? Is it too late to appeal to them not to press their opposition to a Division on Third Reading? They know the Bill will become law in a few days' time. Cannot they let it go through now, and try to make it work? It has been represented in the course of the Debate that it is bound to raise the cost of living, and increase the price of the tools in various trades. Would it not be better for them not to go out of their way to look for difficulties and possible small expenses—they can only be very small in the aggregate —and to say, "The Conservative party have brought in this Bill. We have tried to bring in Votes of Censure on them because they do nothing for unemployment. On the first occasion when they bring forward a constructive measure, is it in anybody's interest to block it at the last moment?"

In particular, I appeal to them to try to make this Bill work. Many of them have no dogmatic theories on the fiscal situation of this country. Let them tell their people, as we will tell our people, that this Bill makes a definite contribution to the solution of our problem. Let us try to make it work. The time may come when further steps will be proposed in this House, and then we shall have the experience coming from this Bill. I hope the policy the Government have taken in hand will not be allowed in any way to deflect them from their sure and certain purpose of doing all they can to solve the unemployment problem.

Photo of Mr Samuel Viant Mr Samuel Viant , Willesden West

The hon. Member who has just spoken has sought in a persuasive manner to get the assent of Members on the Labour benches to allowing this Bill to pass its Third Heading unchallenged. Not for one moment could I entertain any such idea. To mo the Bill is nothing but. a sham—even to its very title. Knowing the views of the electorate of this country towards Protection, those responsible for the Bill very carefully considered the ways and means by which they could impose the principle of Protection without the electorate understanding what was being done. I can readily understand the average elector agreeing to safeguard industry. The very term itself appeals to the average man or woman. Of course they are very desirous of safeguarding the industry in which they are engaged. This Bill will, however, be futile for that purpose. We are not going to safeguard our industries by imposing taxes upon imported articles. The only way to do it is to put our best brains into our industries. I have been associated with a few industries in my experience, and I feel that our problem to-day is a psychological one. The mass of the British people are far too averse to change. The psychology that is prepared to stick to old things, to do as one's father or as one's grandfather did, is responsible for the Tory party having a majority at the last election; and the same psychology is responsible for our inefficiency in industry. It is no uncommon thing to find machinery that has been in a factory not for five or 10 years but for 20 or 30 years. A certain sentiment towards that machinery has grown up among those responsible for the factory, and to suggest to them the need for scrapping the machinery is like suggesting they ought to part with every drop of their own blood. If we are to meet foreign competition we must be prepared to adopt changes, we must become amenable to change, but not a change that means the erection of tariff walls, not a change which will ultimately create greater national antipathies, as this scheme will.

I regret some trade unionists should have lent themselves to supporting proposals of this kind. I am old enough to remember the subtle methods adopted by friends of the party opposite when they endeavoured to foist Protection upon this country before. They sent their paid propagandists into our trade union branches. At that time I was associated with an industry that suffered considerably from the importation of foreign joinery, and the Tariff Reform agitators came into our trade union branches and played upon the national antipathies, sentiments and interests of our men, endeavouring to get their support for Protection on the ground that it would keep this foreign-made joinery out of the country. We had to take into consideration the effect of this competition upon our trade, and we devised a tar better method than that, and it was incorporated into a treaty which we are attempting to operate to-day under the auspices of the International Labour Office. We met the situation by sending our representatives into those countries where this joinery was being made. They found out the conditions, and eventually we got those engaged in making the joinery to organise into trade unions. The result has been that we have levelled up the conditions abroad, and now we have an understanding between the organised workers in those countries and our own trade unions by which a stamp is placed upon the joinery made in those countries, and it is recognised by our trade unions. These articles are now being made under fairer trade union conditions, and this has been brought about by the members of our trade union, and it is action of this kind that makes it impossible for foreigners to exploit our interests on those lines.

I am afraid we shall have to proceed in that way in order to meet the subtle devices of the Protectionists of the day. I deny that these duties mean more employment. During the Lebate I asked the President of the Board of Trade what he thought the effect of these duties would be upon the trades of pattern-making, joiners and shipwrights, but he made no reply. A pattern-maker to-day has to expend as an initial expenditure between £70 and £80 for tools, and now it is suggested that we should put a tax of 33⅓ per cent. on that expenditure. Occasionally new tools have to be supplied. That will mean an increased expenditure on tools which must automatically have its reflex upon the cost of production. How is that going to benefit our consumers?

Take the building trade where sharp-edged tools are much in use. The same effect is going to operate there. Right through the whole of society these taxes are going to have their reflex in increased cost of living and an increase in the price of commodities in general. The argument has been used by hon. Members opposite that this policy might increase the price, but on the other hand they contend that it will mean more employment. It is only going to mean more employment for the unemployed when the Government are prepared to get down to rock bottom methods and provide goods in the form they are now produced at a price that can be paid for them. The averags pattern-maker and joiner to-day is prepared to purchase standard tools made in America simply because of their better finish and their better edge and greater adaptability to the function they are expected to perform. When our manufacturers are prepared to get down to these rock bottom methods then you will regain your markets, but if you still adhere to the old-fashioned methods of the past you will make no progress.

In one factory I know of they went along successfully for 35 years with the same old machinery, but in the end the result was that their trade gradually went down until that firm had little or none of their former prosperity. Then the younger men came along into that business, and put in more up-to-date machinery and adopted a better organisation, and the trade gradually came back. I make this statement to the House. I want it to be understood that, as far as I am concerned, I consider this Bill instead of being in any way a solution of the unemployed problem it is nothing but a sham, and it does not bear the hall-mark in such a way that I could recommend it to my electors. For these reasons I shall oppose the Third Heading of this Bill.

Photo of Mr Gordon Hall Caine Mr Gordon Hall Caine , Dorset Eastern

I should like to make one or two observations on the general Debate. In the first place, I wish to take this opportunity of thanking the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), who in his speech has given me as a Protectionist a great deal of encouragement for supporting these and other duties. The right hon. Gentleman told us that there is a great movement abroad in favour of universal Free Trade, and this I think shows that the Conservative Government have done more for that principle of universal Free Trade in 12 months by their safeguarding duties than the so-called Free Traders have done in a generation.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Does the hon. Member support this Bill as a Protectionist?

Photo of Mr Gordon Hall Caine Mr Gordon Hall Caine , Dorset Eastern

Yes, I do so because I believe the only way you can get universal free trade is by taking steps to protect your own industries, then you have something to bargain with, and by which you can secure Free Trade. One of the most remarkable things in Germany with regard to this duty on cutlery is the way the German industrialists are talking about it and declaring that it is going to ruin their trade. I have heard that argument inside and outside this House from a great many hon. Members when they try to explain the theory of Free Trade versus Protection. I have also heard the right hon. Gentleman the Member for West Swansea (Mr. Runciman) who is a great business man whether inside or outside this House, use the same argument, and naturally as a young manufacturer myself I listen to him with the very greatest respect. I understand and indeed I know that the right hon. Gentleman is very interested in shipping, and of course I cannot imagine that these two small duties which are now suggested would have any considerable effect upon shipping. The right hon. Gentleman the Member for West Swansea is also a banker, and the one Amendment which came from the Opposition which gave me any moment for pause, because I think it must be admitted that many of the Amendments were purely obstructionist Amendments—[HON. MEMBERS: "No"]— well I will call them purely dilatory Amendments—the one which really did make me pause, and I think rightly, was the one which suggested that the period of the operation of the Bill might be shortened from five years to one year. Perhaps there is something to be said for that argument because we renew our duties and taxes yearly, and in that way these matters might come up for reconsideration at yearly periods. I should, however, like as a manufacturer to answer that point, and to show that five years is only a reasonable period which the Government could put upon these duties. The right, hon. Gentleman the Member for West Swansea is a banker—

Photo of Mr Gordon Hall Caine Mr Gordon Hall Caine , Dorset Eastern

Yes, a bank director. In. business, there are two sources from which business men can borrow money, one is the British public and the other the banks, and from these sources we can obtain capital for new machinery. Supposing that I went to the right hon. Gentleman the Member for West Swansea as a bank director and said to him, "My business is getting in a bad way and I want to instal some new machinery, and I want you to advance me some money for this purpose." He would at once say, "What security have you to offer?" I should reply, "I have got Protection for my trade for one year, and the question of further Protection is coming up again in one year's time." The right hon. Gentleman would probably say, "I am a banker and not a gambler." If we admit that we are behind in our machinery then if we are going to put on a protective tariff we shall have to give it a sufficient run to enable manufacturers to bring their machinery up-to-date, and have a period sufficiently long to repay them for their new expenditure.

I was very sorry to hear one or two speakers call into question the action of the President of the Board of Trade by saying that he had packed these committees. I am one of those who took the opportunity during the sittings of the various committees which were open to the public to go and hear their deliberations and hear the witnesses that came before them, and whether we believe In their recommendations, or not I think we ought to thank the committees for the very excellent work they have done in analysing these questions. To suggest for a moment that the President of the Board of Trade has packed them with his own friends or supporters is practically saying that the President ought to be impeached, and that he is not worthy of the position he occupies. It is simply calling the men and women who have served on the committees mere puppets.

The danger of that sort of attack in the House of Commons is that, when hon. Members who make that sort of attack upon public-spirited men and women who serve voluntarily on these committees come into office, they will not be able to get a single business man or business woman in the City of London to sit on any committees, because these people are not going to be pilloried in that way for their public services. I have lived and worked in various Protectionist countries such as America and France, and I have spent some time in Germany. I know that we say as Protectionists that we are unable to compete with countries where they work under sweated labour conditions. We are told that this takes place in Protectionist countries. We are asked, why does this sweated labour take place? My reply is that Protection alone does not cover the whole ground. Let us look at the situation for a moment. In America it is the stock argument of the Protectionist that you have high machinery efficiency to begin with and high wages. In Germany you have high machinery efficiency and very low wages, while in Australia you have high wages and high machinery efficiency. On the other hand, you have in France low wages and low machinery efficiency, and therefore it seems to me that the mere question of Protection alone does not cover the whole question. Every country is to be judged upon the standard of living which its workers demand.

In America, as I have every reason to know, the workers demand, and quite rightly, a good standard of life, and they are paid wages up to as much as even a dollar an hour for a 44-hour week. In Germany, as I also have reason to know, the workers are prepared to work in some cases for as little as the equivalent of 6d. an hour, and are willing to work 10 hours a day, and even seven days a week. That would go to show that, as far as Germany is concerned at any rate, they do not ask for the same standard of living as prevails in America. In this country there is a tendency, and a very good tendency, and one which we as manufacturers are really glad to see, although we are frequently discredited by hon. Gentlemen on the Labour benches —there is a, tendency towards a higher standard of living in this country. Speaking, as I have said, as a manufacturer, I should like to give that standard of life; but when we have to compete, as we frequently have to compete, and as the cutlers have to compete, with rates of wages and hours of labour with which it is impossible to compete, then I say that the only result of not allowing these safeguarding duties to go through would be, either to crush the industry itself out of existence, or to put manufacturers in the position of having to turn round and ask their workers to take lower wages.

Hon. Gentlemen on the Labour benches frequently say that, if they are given a chance to put the whole thing right all over Europe, there will be higher wages and better conditions for all types of workers. Good luck to them! I hope they will do it; I hope they will improve the conditions in Germany; I hope they will be able to educate the people in Germany, France, Spain, Norway, Italy, and all those countries where, as they know, and as I know, the workers are paid at lower rates of wages and work longer hours; but, until that is done, it is unfair to ask the manufacturer to try and keep his works open when he has to meet that sort of competition, or to ask the worker to compete with it. When hon. Members on the Labour benches are able to convince the foreign workers that they ought to ask for the same rates of wages and the same working hours as my workers, I, at any rate, for one, shall be willing to withdraw my claim for a protective duty

Photo of Captain William Benn Captain William Benn , Leith

I would like to attempt to reply to some of the points which have been put by the hon. Member for East Dorset (Mr. Gaine), but, before doing so, I would like in a general way to say that I am sure those who have taken part in these Debates will regret that they have come to an end, because we have had some very interesting controversies. Speaking for myself, and I think for some others on those benches, we have been grateful to the President of the Board of Trade and to the Parliamentary Secretary for the courtesy with which they have met us in Debate, and, speaking for myself, I think I may say I have enjoyed these Debates, because they have done a great deal to illuminate the subject under discussion.

This is about the fourth effort that has been made since the War to correct some manifest ills by this sort of legislation, and the President of the Board of Trade was associated with every stage of those efforts. They have all been failures. The original one was made immediately after the War, when there was the policy of import and export restrictions. It was not confined to this country. If you went to Hungary, or Austria, or various other countries, you would find them all tinkering with the same useless tools, which I am glad to say they very quickly abandoned. That was followed by a Bill which never saw a Second Reading in this House— the Exports and Imports Bill, I think, was its title, and it was commonly called an Anti-Dumping Bill. It was still-born. In this connection I would remind hon. Members that, if any manufacturer now can show that goods are 'being dumped into this country he can secure a duty under the Safeguarding of Industries Act. That is very often overlooked, It is sometimes supposed that the Safeguarding of Industries Act has been repealed, but it has not been repealed at all. It is still on the Statute Book, and it contains a provision which says that if it can be shown that there is real dumping— that is to say, the sale of goods below the cost of production at their place of manufacture— a duty of 33⅓ per cent. can be obtained. It is extremely striking that, in spite of all the complaints about dumping, no one has ever come forward to establish a case under that section, which is still the law of the land.

That was followed by the Safeguarding of Industries Act, which many of us opposed very strenuously to the limit of our strength and numbers in this House, and also outside. The opposition was much more powerful outside, because some of the most powerful opponents did not secure admission to this House in 1918. I listened to the speeches which were then made by my right hon. Friend the Member for Carmarthen (Sir A. Mond). He explained why he thought it was going to be necessary, but he did not show that it was necessary. I heard all his speeches in the House, and by that time, I think, the right hon. Gentleman the President of the Board of Trade had joined the Government. The case for the Safeguarding of Industries Act was that the depreciation of the exchanges was going to mean a great flood of goods into this country from countries where the exchange was depreciated; but that did not turn out to be the case, because, although a depreciated exchange appears to be an export bounty on the goods of the country where it exists, the internal conditions of a country with a depreciated exchange are so bad that export in bulk is impossible. That is the reason why Germany to-day, although its exchange is now stabilised, does not prove to be really a formidable competitor, because, for one thing, as is indicated in the Annual Report of the Commissioners on Reparation Schemes, her money is borrowed at the rate of 12 per cent. or 13 per cent. That is one of the results of bankruptcy, and most firms there are very severely handicapped in their export trade.

Now we have this present Measure. I do not want to paint the iniquities of this Measure in colours that are too bright, or to magnify its rather slender proportions. It is quite a small thing, but it is supported by many hon. Gentlemen opposite because they think it is an earnest of what is to come. That is why we oppose it. "Avoid beginnings in evil" is, I think, written in the Scriptures. We oppose it on that ground. In some respects, undoubtedly, it breaks the Prime Minister's pledges. I do not like to make charges of pledge-breaking generally, and particularly against the Prime Minister, whom I have always regarded as one of the most sympathetic and attractive figures in public life, but it is the fact that, whereas the questions proposed for the committees were not answered in the affirmative in these cases, and whereas it was represented as being a Safeguarding of Industries Act, it is being utilised now in preserving what are called key industries. It is quite easy to show that the key industry business is only another form of the Safeguarding of Industries Act, however defective it may have been for the purpose when it was originally introduced.

One of the arguments used by the hon. Member for East Dorset was that it was "something to bargain with." I think it used to be called the " big revolver " theory. When, however, we put down an Amendment which sought to provide that these duties should only be applied against a country which had not ratified the Labour Convention, we were told that it was impossible on account of treaty obligations. Again, is the hon. Member for East Dorset aware—of course he is—that we have just made a Trade Treaty with Germany, which the President of the Board of Trade agrees will be very good for our trade? We made that Treaty as a Free Trade nation, while the French, who have "something to bargain with," are obliged to make shift with a temporary modus vivendi. I do not see how tariffs, in these circumstances, can be shown to be something to bargain with, because we have nothing in any case that can possibly be used in that way.

Then he referred to Germany, and he is delighted with this Bill, because it is said that it will ruin the trade of the Germans. That is a very narrow and, I think, a false view of trade. Good trade here does not mean bad trade elsewhere. Good trade here means good trade elsewhere, and good trade elsewhere means good trade here. Trade is the interchange of goods to the profit of both parties concerned; it cannot possibly exist on any other basis. I do not take the same patriotic delight in the information that the trade of Germany is going to be ruined by this Bill. While the hon. Member was in Germany, did he inquire into the influences governing the new German tariff, or why it was found necessary by the German Government to promise a cost-of-living inquiry at the same time as they introduced the new tariff, and whether they met the opposition of their Socialist party by promising them that by a certain date, and then by some later date, they would reduce the cost of living?

He spoke of our pillorying the Committees. I am sure that none of us would wish to say anything disrespectful of the ladies and gentlemen who, at the invitation of the Board of Trade, undertook these inquiries. Many useful Committees have made inquiries on Tariff Reform at one time and another. That we do not complain of, but what we do complain of is that the President of the Board of Trade has attempted to shelter himself behind the reports of these Committees. If he had said, "I propose a tariff," he would have been quite entitled to do so; the Chancellor of the Exchequer is entitled to do so, and he could justify it in the House. What we complain about is that he said, "I have had a judicial inquiry, here is the report of that inquiry, and nothing more need be said in defence of the proposal I put forward." That is the gravamen of our charge against these Committees; it is not any charge against those who desire to render public service.

Photo of Mr Gordon Hall Caine Mr Gordon Hall Caine , Dorset Eastern

It has been said on more than one occasion, both from the Liberal benches and from the Labour benches, that these Committees were packed, and I think the natural interpretation of that is that they were committees of partisans.

Photo of Captain William Benn Captain William Benn , Leith

I repeat that charge. If it be a crime to be a partisan, some of us here are, indeed, extreme criminals. The point is that they are not judicial. The old Safeguarding of Industries Committee was judicial. It had its rules laid down in the Statute, and, if it made a finding, we were partly responsible for that finding, because we passed the Act. These committees are nothing of the kind. They are not even appointed from a panel; they are appointed by the President of the Board of Trade, and the President of the Board of Trade is not entitled to come here and say, "Here is the finding of an impartial, judicial, statutory committee." That is the charge that we made, and to that we adhere.

One word, in conclusion, about this Bill. A great deal of play has been made by the hon. Member for East Dorset about the anxiety of the British manufacturer to defend himself against sweated labour conditions abroad. But every proposal that we have made for attempting to improve labour conditions abroad has been met either with a negative or a non possumus. We have urged the Government, by making Amendments to this Bill, to be more active both by example and by precept in getting European nations to adopt the Labour Conventions, but they will not move; they will do nothing. When we said we were concerned about the status of workmen in Germany, we wore told that we cared more about other countries than our own, but it must be perfectly well known that to raise the labour standard all over Europe would be the best service we could render to the labour standard of this country, and to our own success as a manufacturing nation.

Furthermore, the hon. Member for East Dorset will at least grant mo this point, that no duties can improve the labour standard. If you attempt to prevent the import of goods, you make those goods dearer, and, if the exporter who sends them finds that there is a duty on them, he may conceivably—especially if he is called upon to pay the tax, as hon. Gentlemen opposite think he is—further reduce the wages of his workers in the endeavour to pay this tax. In any case, no device of this kind can improve their conditions; it is in other directions that you must look. An hon. Member who spoke from the Labour benches spoke about international co-operation between trade unions, and everything of that kind is to the good of our workers. Furthermore, the Government themselves have it in their hands by a more active prosecution of the recommendations of the Geneva Conventions, to do something to this end. The Bill is now going through, and I dare say it will secure a considerable majority in this House— [HON. MEMBERS: "Hear, hear!"] — it does not require a prophet to notice that. Little industries may be singled out for little special favours, and they may benefit thereby, but it is supported on grounds which mean that at heart the party opposite are Protectionists and are committed to a policy of Protection which they have not the courage to put into operation at the moment, but which if they do put into operation would bring much harder conditions upon the workers and the consumers in this country.

Photo of Mr Eugene Ramsden Mr Eugene Ramsden , Bradford North

I am quite in accord with one thing that was said by the right hon. Gentleman who moved the Amendment, that during the course of these Debates there has been a great deal of bad logic heard in this House. But I think it is only fair to remind the House that most of the speeches have been made by Members on the other benches who are opposed to this Measure. There is one thing which apparently is not well understood on that side. We are told about the evil effects which will come to us by restricting imports, but it is well to remember that there are two different kinds of imports, those which are useful and essential and those which are not. If we restrict the imports of certain manufactured goods we should be quite easily compensated for that, if in their place we import a rather increased quantity of raw material which can be used here and which will find employment for our own people. The right hon. Gentleman feared that the effect of any safeguarding duty would be to decrease the export of our manufactured goods. I happen myself to be engaged in the export trade, and I feel that, far from doing harm to the export of British manufactured goods, these duties will in many cases help us to increase our export trade.

We have found by experience that one of the reasons why we have lost our export trade is that we have lost the basis of it, that is the home trade, which makes it possible. If we could regain our home trade it would help us to build up that export trade which is so necessary to us. I listened to the speech of the right hon. Gentleman below the Gangway with a very great deal of regret. I am very much in favour of such Measures as this, and it is partly as the result of the very interesting speeches he has made in the past that I have arrived at such conclusions. It was certainly with very great regret that I heard him speak to the contrary to-day. He said he did not see the difference between the tax of 33⅓ per cent. which we are imposing in these duties and a 10 per cent. ad valorem tax which had been advocated some years ago. I see a very great difference indeed, because in this case we only try to impose this 33⅓ per cent. on a very restricted number of articles and in the taxes which were proposed it was to be an average of 10 per cent. on the whole lot. If one looks at the Board of Trade returns, one would find that at the end of the year the revenue derived would be a very different one indeed. I sincerely hope that these taxes we are going to impose will be of great benefit to these trades, and will find employment for a large number of people.

Photo of Mr Walter Runciman Mr Walter Runciman , Swansea West

The speech which has just been made is that, no doubt, of a sincere Protectionist, who believes that the general volume of trade can be increased by the imposition of duties. I do not know whether I can usefully argue with the hon. Member on that subject. It is a theory which has often been propounded and frequently exploded. What strikes me most as I have listened to the Debates during the last week or two has been that all the old fallacies which were brought forward in the time of Mr. Joseph Chamberlain have been repeated again and again. I remember in those days looking back to the Annual Register, to the controversies of 1830 to 1845, and exactly the same fallacies were then propounded. They have been met and answered, but they crop up from time to time. One of the reasons is that they sound so simple and obvious. One of the simplest and most obvious, which has been repeated again and again in the course of these discussions, is that if you impose a duty on imports you of necessity benefit the trade that is immediately concerned. That benefit spreads throughout the whole range of industry and, in fact, increases the general prosperity of internal trade. That, of course, cannot be true if it were applied to all industries, because it would pro tanto reduce the purchasing power of the country, and by a general rise in prices all round, as we have known from recent experience, we should actually diminish instead of increase our resources. But when it is applied, as in this case, to only one or two industries it is true—and we have never denied it—that the industries concerned must of necessity obtain a sporadic benefit.

An hon. Member below me asked whether there was not much to be said for increasing the period over which these benefits should be granted. I believe if you increased the period you would indeed be giving to that one industry an advantage over other industries, you would indeed be imposing a burden on the consumer for a longer period than if the 12 months that we suggested had been adopted, but that would not in any degree help to add to the general volume of trade. The period during which prices are to be kept up must mean that the amount which people have available for spending on these commodities is reduced. The necessity under which we all labour nowadays of making ends meet applies to the whole of the people. They can only afford to spend a certain amount, and in so far as you make prices rise, especially artificially, you tend to diminish their consuming capacity, and by diminishing their consuming capacity you naturally diminish the consuming power they have for the benefit of other larger and more staple industries. The policy of the Government might be extended to a large number of trades, but I see no anxiety on their part to extend the number. They are burning their fingers one after the other. They are hardly likely to go as far as they have been invited by those who have spoken from the Conservative benches to-day. Every one of those speeches has been a full-blooded Protectionist speech. They have not been safeguarding speeches within the Prime Minister's meaning. They have been Protectionist speeches, made to ginger up the President of the Board of Trade while he was here, or his excellent colleague during his absence.

The desire of the Protectionist is to get away from this footling little policy of dealing with one minor trade after another and to go in for a larger scientific tariff. The hon. Member for Portsmouth (Sir H. Foster) wanted a general tariff on scientific grounds. My right hon. Friend the Member for Carmarthen (Sir A. Mond) quite truly said there never had been a scientific tariff in any country in the world, neither in this country in the old Protectionist days, in the United States, nor in Germany, where science is worshipped. The truth is that there never will be a scientific policy in this country, but certainly this way of selecting industries is the most unscientific and most unsatisfactory that ever entered into the heads of Ministers of the Crown.

Let me take one or two extraordinary anomalies which will occur to the mind of anyone who examines these duties. This new tariff, which is not scientific, is to put a duty on knives. It is not to put a duty on forks unless they happen to be carving forks. It does not put a duty upon spoons. There is to be no duty upon steel, although surely the steel makers have just as great a claim on the generosity and the ingenuity of the Government as the cutlers. The steelmakers have a much larger number of unemployed and, if there is anything to be said for this method of increasing the amount of work for the benefit of the unemployed, steel ought to have come before knives.

Then I turn to another group of taxes There are to be taxes upon gloves. There are to be no taxes upon hats or other garments. There is nothing scientific in selecting gloves in preference to other articles. There is an inquiry sitting at present to deal with the worsted industry. I presume our Protectionist colleagues will look forward with some satisfaction to the possibility of that Committee recommending that there should be an import duty upon worsted goods. They might wish it to be extended far outside the range of worsted cloths. In every one of the major industries, there is a far greater body of unemployment than there is amongst the glove makers or the cutlers. What can be the justification for taking these minor things and leaving the larger ones on one side? If it is good enough for cutlery and gloves it is good enough for steel and for woollens. If it is good enough for these manufacturing industries it ought to be good enough for agriculture. At present one of our most grave problems is that the number of people employed on the land is going down instead of up. If the Protectionist doctrine is right there ought to be an import duty on butter and grain. Hon. Members opposite do not recommend that. Their theory falls down directly they come to anything that is likely to be unpopular at the poll.

The general theory of Protection, as it is expounded in this House, turns largely on the export trade. The hon. Member who spoke last, who is engaged in the export trade, thought a general tariff would tend to increase our export trade. He did not favour the House with his reasons for holding that view. I know there are many hon. Members here who believe that if you have an import duty you will by that means add to the security of the home manufacturer and he will be able to sell his goods abroad at a lower price than he is selling them to his customers at home and by that means he will capture the export trade. If he is going to expound that to the consuming class of this country he will give little satisfaction by confessing that the foreigner is to get the cheaper article while we are to be charged dearer, and that is the way our export trade is to be expanded. Surely nothing more unreasonable was ever put forward by those who have had anything to do with the protection of industries. The idea that our export trade can be favoured by a Protectionist system is supported in some quarters by the knowledge that the export trade of some Protectionist countries has certainly gone up within the last generation. It has gone up, no doubt, in some cases since the War. But why should it not do so? The general trade of the world has expanded and is expanding. I am glad to think that during the last three years we have seen a considerable expansion, and I hope it will go on expanding more and more. We do not want these countries to cease to export. We want them to do a larger export and a larger import. We want that to go on over the general range of commerce.

7.0 P.M.

Let me give a most striking, and perhaps a most awkward illustration for Tariff Reformers, taken direct from the cotton trade. There is no great manufacturing industry in this country which can excel the cotton trade in importance. The whole of the teeming population of Cheshire and Lancashire is directly or indirectly dependent upon the cotton trade. If Protection is such a remarkable thing for fostering export trade, how does it happen that in the United States, which is Protectionist, where the raw cotton is grown, exports are only about 5 per cent. of her output? In the case of cotton, the United States only exports 5 per cent. of her manufactured goods, while we in the United Kingdom export no less than 80 per cent. of our manufactured goods. Hon. Members overlook the fact that we have to draw that raw material from the United States, and that it has to be carried across the ocean and distributed in Lancashire, and that in the case of some cloths we can actually send it back to the United States to be sold at lower rates than they can manufacture it themselves. They are dying to get our markets and would like our foreign customers to buy their cloth. But they cannot manufacture it as cheaply, because under a protective system they have raised prices all round, and we can beat them hollow in the export trade of the world because of their protective system. [An HON. MEMBER: ''That is why they are so rich!"] No. They do not grow rich by a small export trade.

Let us take another illustration. I will refer to shipbuilding because I know something about it. I hope the House will not think that I am adopting a schoolmaster's attitude if I talk about shipbuilding, but I must talk about something of which I know. What has happened with regard to shipping? Shipbuilding and shipping are co-related industries. They are not the same thing, but if you take shipbuilding first, we are, and still remain, the greatest shipbuilding country in the world. The Americans have enormous plants and great open spaces along their waterways and great possibilities of building their ships more cheaply than we can here. But I venture to say that there is not a single shipyard in the United States chat we cannot beat with our shipyards in the United Kingdom, because their cost of equipment and production is so high owing to their protective system as compared with ours under our Free Trade system. In Germany they have smaller wages, and we can still hold our own against the Germans.

Shipping is one of the great export trades. What is earned by the shipping of the United Kingdom in foreign trades is one of our invisible exports, yet it is not so very invisible. The great earnings of British shipping are due not only to our nautical sense, but to our having had for three generations in this country the advantage of obtaining our supplies, from the hull and machinery down to the last pot of paint, more cheaply than you can get them in any other country in the world. That is why America with its protective system and higher prices all round fails. During the last war America built an enormous mercantile marine. Most of it is lying rotting, while we in this country who have not adopted this higher artificial range of prices all round are able to beat them. That, with cotton, I couple together as being two of the most important industries in the world.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

Is it not a fact that we led all the world to a greater extent in shipping and cotton before we adopted Free Trade?

Photo of Mr Walter Runciman Mr Walter Runciman , Swansea West

No, in the first half of the nineteenth century the American mercantile marine was comparable with our own. Let me make one general statement with regard to these discussions and this policy as a whole. I believe it is based on an entirely wrong mental attitude, and that attitude is one of warfare. The whole language of these discussions is that we are in hostility to the rest of the world. It is based on theories of antagonism, while the real truth is that trade is not warfare but the exchange of goods and services for goods and services. Why one country buys the goods is because it wants them, and another country sells the goods because it can produce them. We are great customers for all the world, but when we carry through our transactions we have not won a battle. We have given what is required find what we can produce best to the country which has bought it because it requires it.

This theory of Protection or safeguarding has been likened by hon. Gentlemen opposite to a household in which we safeguard against burglary, fire and attack. But trade is not burglary: it is an exchange. It is giving an equivalent for an equivalent. It is not an attack, because we are doing service by exchanging. If the trade of this country is to be greatly improved, especially in the industries where there is most unemployment and where misery is walking in our streets—in the shipbuilding trade, in the engineering trade, in the coal trade—in no one of these can Protection lift a finger to ease the pain. There are some outside influences that can be brought to bear on the world that could lead to an improvement in trade. I think we should facilitate exchange. I suggested the other day to the President of the Board of Trade that he should go round with the oil-can. I hope he will not think that is too humble an occupation. One of the best services he could render to the country, which would enable him to crown his name with renown, would be to sweep away all these restrictions and give this country free ports and Free Trade.

Photo of Mr Ronald McNeill Mr Ronald McNeill , Canterbury

I am afraid, if I were to attempt in this concluding stage of these debates, to sweep up the crumbs of the banquet, they would be found exceedingly stale crumbs, for the debates have ranged over more than a week. They began with three separate duties now included in this Hill. They had to go to the Committee of Ways and Means, then Report, then the Second Reading of this Bill, then Committee, and now the Third Heading. In all those stages of this legislation, I think exactly the same arguments were used. I have the reports, and, although complaints were made of my absence on some occasions, I perhaps know what, was said just as well as anyone in the Mouse, because I have made a diligent, study of the reports. At one time the Opposition complained that they spied strangers, and at another time they complained that they could not spy the Treasury, and it was complained that the Chancellor of the Exchequer by his absence was clearly showing that he was indifferent, if not hostile, to this legislation. But there has been another very significant absentee. It was complained that, this being a Finance Bill, it should never have been left in the hands of my right hon. Friend, but the leading of the Liberal Opposition has come from his opposite number. It is quite true that, so far as the greater opposition is concerned, the ex-Chancellor of the Exchequer has taken a conspicuous part. But where is the ex-Chancellor of the Exchequer belonging to the Liberal party— an ex-Chancellor of the Exchequer, an ex-Prime Minister? A week of important Debates which the Liberal party, such as they are, tell us is going to be the "ruination of the country," and not a word from the Leader of the Liberal party. He is so busy, apparently, with the fiscal system of his party that he has no time to give to the fiscal system of the country.

One complaint has been frequently reiterated, and repeated, I think, a few minutes ago by the hon. and gallant Member for Leith (Captain W. Benn), that the use which has been made of these consultative or advisory committees has meant that the Government have surrendered their responsibility with regard to taxation, and I think I even heard it said that they were making the House of Commons do the same. A great deal was made of that point by the ex-Chancellor of the Exchequer (Mr. Snowden). He has proved himself one of the straightest and strictest elders of the kirk of Free Trade. A very austere man is my right hon. Friend, a Gamaliel at whose feet even the most pert disciple from Leith might be glad to sit. But having studied his speeches—he is always polite, much more polite that I can possibly be, but, if he will not mind my saying so, there seems to be in his style a little what I might call acidulated urbanity—I should like, if I may, to paraphrase what appears to be the meaning of his speeches. To put it quite bluntly, this is what the right hon. Gentleman meant, though he was too polite to say so: "If you do not agree with me, you are an idiot."

At the very outset of his contributions to these Debates he told us that the Government would have supported a certain Amendment if only they could understand the matter that they were talking about; if only they could understand the effect of tariffs. On another occasion the right hon. Gentleman actually moved to report Progress. Why? In order that my right hon. Friend the President of the Board of Trade might learn the meaning of the Resolution, and in order that he might have time to get a typewritten explanation to use. As for the idiocy of my right hon. Friend the President of the Board of Trade, it was nothing to the idiocy of those very able persons whom he employed on the Safeguarding Committees, because the right hon. Gentleman said of the Reports of those Committees: They were painful exhibitions of incompetence, of economic fallacies and of ignorance of the rudimentary conditions of foreign trade.

Photo of Mr Ronald McNeill Mr Ronald McNeill , Canterbury

Has the right hon. Gentleman got an exhaustive knowledge of foreign trade? When I reflect upon the right hon. Gentleman's speeches, I cannot help saying to myself: "How delightful it would be if, like the right hon. Member for Colne Valley, one could come forward in the House of Commons and, with perfect sincerity, contrast the conspicuous imbecility of one's fellow creatures with the unparalleled splendour of one's own intellectual equipment." The right hon. Gentleman has come forward as the very high priest of the good, old, solid Free Trade doctrine. What does he think of the scheme of the hon. Member for Bow and Bromley (Mr. Lansbury)?

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

I am not a high priest, thank God.

Photo of Mr Ronald McNeill Mr Ronald McNeill , Canterbury

Very far from it. The hon. Member for Bow and Bromley is not content with duties. He wants to exclude altogether imports coming into this country which have been produced by inferior labour conditions abroad.

Photo of Mr Ronald McNeill Mr Ronald McNeill , Canterbury

Very well. I tremble to think what language will be applied to the hon. Member for Bow and Bromley by his right hon. Friend. The hon. Member must be not only on a lower plane than the Government, but also on a lower plane than the Committees. What is going to happen to the working classes of this country—we have been told by hon. and right hon. Gentlemen above and below the Gangway opposite that their prosperity, their very existence depends upon absolutely free imports —if the hon. Member for Bow and Bromley gets his way? I do not know how many hon. Members opposite will agree with him. The hon. Member for Bow and Bromley and those who think with him on this matter are not going to be content with a small duty, but they are going to keep out, no matter what the result may be upon the class for whom the right hon. Member for Colne Valley speaks, all goods produced by inferior labour conditions abroad.

After making a study of the speeches of hon. Members opposite. I have come to the conclusion that the most interesting feature of these Debates has been their contradictions. It is true that, all through there has been a delightfully harmonious little party of Liberals in the corner below the Gangway opposite—harmonious, I suppose on account of the absence of their leader. If hon. Mem- bers have looked at the Amendment Paper, they will have seen all down one page and down another page Amendments standing in the names of Liberal Members. Sometimes it has been a trio, sometimes a quintette, and occasionally even a septet, and by that time the party is exhausted. There we have had these little combinations, and they have been all the time trilling away on their little tune, with absolutely wearisome reiteration, and even up to the very last moment before I rose we had the same tune sung again in perfect harmony by my right hon. Friend the Member for West Swansea (Mr. Runciman).

But in spite of the sameness, there have been variations on the theme. At one time they said, "Thirty-three and a third percent.! Pooh! That's nothing. That is not going to effect your purpose. That is no good. It is far too small. It will never bridge the gap between the foreign price and the home price." It was so insufficient that they moved time after time to reduce the 33⅓ per cent. to 5 per cent. In one sentence we were told that these duties are paltry, pettifogging and piffling, and the next moment we were told that their effect is going to be so tremendous that they are going to destroy the Dawes Scheme, to dissipate the precious spirit of Locarno, to destroy our relations with Germany and even to imperil the peace of Europe! These same duties, which were too utterly piffling to keep out imports, will be fatally effective in keeping out reparations.

Why these proposals really offend hon. Gentlemen opposite, as has been shown by speech after speech, is because they think that they are violating the doctrine, and striking at what they think to be the impregnable rock of Free Trade. I wonder whether the right hon. Member for West Swansea (Mr. Runciman), who is one of the great pillars of Free Trade, and his friends, accept the proposition which I am about to make. I hope they will. I do not want to misrepresent them. I believe that what they say is: "The more imports we have the better. They cannot be too cheap. Think only of the consumer, and let the producer go hang." I want to ask them, in all seriousness, what they would say to a slight alteration. Instead of bringing into this country, as is now happening, cheap German knives, or cheap Czechoslovakian gloves, and selling them in this country, goods which are produced, as the hon. Member for Bow and Bromley put it, by sweated labour, or, at all events, by inferior conditions, at lower wages and longer hours, suppose you were to bring the German workers and the Czecho-slovakian workers here, and get them to work in this country for those longer hours and lower wages, to produce the goods here.

What would hon. Members opposite say to that proposition? I do not believe for one moment, and I should thoroughly agree with them, that hon. Members would tolerate that I am certain that the trade unions of the country would not tolerate it. Why not? To keep them out is every whit as much a violation of Free Trade doctrine as to keep out the product. Not only that, but it would be actually less mischievous from the point of view of the British worker to let foreign workers in, because, if you brought the German worker here, and set him to work in or near Sheffield to make knives, he would not cut the British cutler out of his job one whit more than by the knife itself coming in from Germany. On the other hand, you would get, at least, this advantage, that you would have his wages spent in this country, and to that extent you would do what hon. Gentlemen opposite so often lay stress upon as an important element in regard to employment, you would be increasing purchasing power in this country. Therefore, of the two operations, to bring in cheap knives and cheap gloves is more harmful to the British workman than if you bring the foreign worker here to work long hours in producing those articles.

I do not suppose that any hon. Gentleman below the Gangway opposite would deny for one moment that that is the proper teaching of Free Trade. Does any hon. Gentleman opposite deny that? [Mr. FISHER: "Yes!"] The most learned of them does deny it. All I can say is that I am surprised, because, learned as the. right hon. Member is, it is not unfair to say that even he has very largely derived his economic doctrine and knowledge from what used to be called the orthodox economists. I remember very well, and I am sure he knows, a passage from a lecture by Henry Fawcett, who was one of the great leaders of that teaching, and who pointed out that no Free Trader could object to cheap labour being brought into this country, and that if he was wanting to build a house in this country, and was wanting to bring cheap workmen here to build his house cheaper than he could do it by British labour, and was prevented from doing that, he was every whit as much taxed as if a duty were put upon his broad or his salt.

The fact is that these leaders of what is called Free Trade are never logical in this matter. They talk a great deal about logic, but they are never logical. As far as pure economic theory is concerned, I am, and always have been, just as much a Free Trader as any of them. I subscribe to every word of the doctrine which was formulated in the brilliant speech of the Noble Lord the hon. Member for Oxford University (Lord Hugh Cecil). What hon. Members opposite leave out of mind is—whether they like it or whether they do not—that, one of the main premises of the whole Free Trade argument is gone. They cannot restore it. Unlimited imports, unlimited competition of commodities, I agree, produce the greatest aggregate of national wealth, on one condition and one condition only. All the great teachers of Free Trade say that that is only true if wages are as unfettered as prices and if labour is as free as commodities. None know better than the party opposite that wages are not, cannot, and ought not to be as unfettered as prices, and that labour is not free in that sense, and ought not to be free. The trade union movement destroyed the economic freedom—in that sense—of labour. It is for that reason that, as everybody knows. Cobden detested the trade unions, and said we could not live under them.

What I submit to the House is that just as there is a difference between pure and applied mathematics, so there is a corresponding difference between pure and applied economics. In pure mathematics no account is taken of friction or radiation or a number of other disturbing factors which have to be taken into account as soon as you come to make any practical experiment in applied mathematics. So it is in economics. The theory which has been propounded by the right hon. Gentleman the Member for West Swansea, the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), the hon. and gallant Member for Leith (Captain Benn) and the right hon. Gentleman the Member for Colne Valley is perfectly sound were it not that they leave out one element. Just as friction and radiation are left out of pure mathematics, so they leave out the human element in this problem. It is precisely because the Free Trade economics of the 19th century did leave out the human element that they were denounced and trounced and scorned by great social prophets like Carlyle. Kingsley and Ruskin. And it is for that reason that we are attached to this policy.

Here may I say that hon. and right hon. Gentlemen opposite are totally wrong in saying that this policy is the same thing as a general tariff. It is not. I quite agree with the Free Trade argument taken in the abstract, that if labour is displaced by the crushing and destruction of an industry through foreign competition it is, in theory, only a change in the direction of labour. It is quite true that where one industry is destroyed in that way, you will probably find, after a few years, that while the one industry has disappeared, more labour is employed elsewhere. That argument, however, leaves out the transition period. The theorists never take account of the fact that, although that argument is true as an abstract proposition, the actual men and women who are displaced when an industry is destroyed must, in the interval, go on to the dole, or to the poor-house, or live upon charity. They cannot go on in their own industry.

We do not want by this policy to make a complete alteration in the whole fiscal system of the country. We do want, when we find that in a particular industry particular people, owing to exceptional circumstances, are being or are likely to be deprived of their occupation and wages, to do an exceptional thing in order to prevent that deprivation. You cannot, whether you like it or not. have real Free Trade. You cannot subject labour— and no party want'-' to subject labour—to free competition as hon. Members desire to have free competition in commodities. You cannot have labour as the theorists would have it, on exactly the same footing of freedom of competition and elasticity, as commodities. You cannot buy labour in the cheapest market, and that is what you must do in order to have real Free Trade. Therefore, since we are in fact safeguarding labour against the importation of cheap foreign labour, we stultify ourselves unless we also safeguard them against the introduction, in certain special exceptional circumstances, of the products of foreign labour. That is the policy which is embodied in this Bill, and the policy which we are asking the House to sanction. We are not going to be deterred from it, not even by the harmony of the Liberal sextet. We are not going to be deterred from it even by the most fulminating ex cathedra pronouncements of the Pontifex Maximus opposite.

I wish to refer in particular to one Amendment which was constantly brought forward and argued with immense insistence by hon. Gentleman opposite. Time after time; they urged that, apart from the principle of these duties, apart from the amounts of these duties, the period for which they are to be imposed was intolerable. Five years! There was an Amendment to reduce it to 18 months. If hon. and right hon. Gentlemen opposite really believe in their case, five years should suit them admirably. It will not be long before the end of that period when we shall have a General Election. Think of the plethora of promises which we are offering to hon. Gentlemen opposite! The hon. Member for Don Valley (Mr. T. Williams), with that great ingenuity which they all display in picking out little individual instances from the Schedules, discovered that a pruning-knife was subject to duty.

He said a duty on pruning-knives would disturb our trade in preserves. He will be able, just before the five years elapse, to go to the country on the emancipation of jam. Not only that. He has a still better case: he discovered that there was also somewhere buried in these Schedules a hop-knife, and that the duty on that article would be an indirect tax upon beer. He will be able to promise the emancipation of beer. Vote for Labour, jam and beer.

The party below the Gangway will not be left out. My hon. and gallant Friend the Member for Leith (Captain Bonn)—I hope he will allow use quite respectfully to compliment him upon the series of eloquent and able speeches he has made and I do so quite sincerely— will not be loft without hope. Before the end of the five years when we are going to the country he will he able to captivate all the fishwives of the Forth by promising them a removal of the bounty on chilblains. As for us, we shall, when that time comes, point to the complete fulfilment of the election pledges of the Prime Minister. We shall, I hope, be able to point also to the beneficent results of the policy which we are adopting to-day, and notwithstanding the admirable election cries which hon. Gentlemen opposite will have at their disposal — if they really believe all that they have, said—we shall accept their challenge without a shadow of misgiving.

Question put. "That the word 'now' stand part of the Question."

The House divided: Ayes, 245; Noes, 132.

Division No. 499.]AYES.[7.42 p.m.
Acland-Troyte, Lieut.-ColonelBriscoe, Richard GeorgeCraik, Rt. Hon, Sir Henry
Agg-Gardner, Rt. Hon. Sir James T.Brooke, Brigadier-General C. R. I.Croft, Brigadier-General Sir H.
Albery, Irving JamesBrown, Brig.-Gen. H. C.(Berks, Newb'y)Crooke, J. Smedley (Deritend)
Allen, J. Sandeman (L'pool, W. Derby)Buckingham, Sir H.Crookshank, Col. C. de W. (Berwick)
Applin, Colonel R. V. K.Bull, Rt. Hon. Sir William JamesCrookshank, Cpt. H. (Lindsey, Gainsbro)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Burman, J. B.Cunliffe, Joseph Herbert
Atholl, Duchess ofBurton, Colonel H. W.Curzon, Captain Viscount
Baldwin, Rt. Hon. StanleyCadogan, Major Hon. EdwardDavidson, J. (Hertf'd, Hemel Hempsf'd)
Balfour, George (Hampsteed)Caine, Gordon HallDavidson, Major-General Sir John H.
Barclay-Harvey, C. M.Campbell, E. T.Davies, Dr. Vernon
Barnston, Major Sir HarryCautley, Sir Henry S.Davies, Maj. Geo. F.(Somerset, Yeovil)
Benn, Sir A. S. (Plymouth, Drake)Cayzer, Maj. Sir Herbt. R.(Prtsmth. s.)Dawson, Sir Philip
Bennett, A. J.Chadwick, Sir Robert BurtonDean, Arthur Wellesley
Berry, Sir GeorgeChamberlain, Rt. Hon. N. (Ladywood)Dixey, A. C.
Betterton, Henry B.Charteris, Brigadier-General J.Drews, C.
Birchall, Major J. DearmanChurchill, Rt. Hon, Winston SpencerEden, Captain Anthony
Bird, E. R. (Yorks, W. R., Skipton)Clarry, Reginald GeorgeEdmondson, Major A. J.
Blundell, F. N.Clayton. G. C.Elliott, Captain Walter E.
Boothby, R. J. G.Cobb, Sir CyrilElveden, Viscount
Bourne, Captain Robert CroftCope, Major WilliamErskine, Lord (Somerset, Weston-S-M.)
Bowater, Sir T. VansittartCowan, Sir Wm. Henry (Islington, N.)Erskine, James Malcolm Monteith
Bowyer, Capt. G. E. W.Craig, Capt. Rt. Hon. C. C. (Antrim)Everard, W. Lindsay
Boyd-Carpenter, Major A.Craig, Ernest (Chester, Crewe)Fairfax. Captain J. G.
Falle, Sir Bertram G.Kidd, J. (Linlithgow)Russell, Alexander West (Tynemouth)
Fielden, E. B.King, Captain Henry DouglasRye, F. G.
Finburgh, S.Kinloch-Cooke, Sir ClementSalmon, Major I.
Fleming, D. P.Lamb, J. Q.Samuel, A. M. (Surrey, Farnham)
Ford, P. J.Lane-Fox, Colonel George R.Samuel, Samuel (W'dsworth, Putney)
Forestler-Walker, Sir L.Lister, Cunliffe-, Rt. Hon. Sir PhilipSandeman, A. Stewart
Foster, Sir Harry S.Locker-Lampson, G. (Wood Green)Sanders, Sir Robert A.
Fremantle, Lieut.-Colonel Francis E.Loder, J. de V.Sanderson, Sir Frank
Gadie, Lieut.-Col. AnthonyLooker, Herbert WilliamSassoon, Sir Philip Albert Guttave D.
Galbraith, J. F. W.Luce, Major-Gen. Sir Richard HarmanSavery, S. S.
Ganzoni, Sir JohnLumley, L. R.Scott, Sir Leslie (Liverp'l. Exchange)
Gates, PercyLynn, Sir Robert J.Shaw, R. G. (Yorks. W.R., Sowerby)
Gault, Lieut.-Col. Andrew HamiltonMacAndrew, Charles GlenShaw, Lt. Col. A. D. Mcl. (Renfrew, W.)
Gilmour, Lt.-Col. Rt. Hon. Sir JohnMacdonald, Capt. P. D. (I. of W.)Sheffield, Sir Berkeley
Glyn, Major R. G. C.MacDonald, R. (Glasgow, Cathcart)Shepperson, E. W.
Goff, Sir ParkMacintyre, IanSimms, Dr. John M. (Co. Down)
Gower, Sir RobertMcLean, Major A.Skelton, A. N.
Grant, J. A.Macmillan, Captain H.Slaney, Major P. Kenyon
Grattan-Doyle, Sir N.Macnaghten, Hon. Sir MalcolmSmith, R. W. (Aberd'n & Kinc'dine, C.)
Greene, W. P. CrawfordMcNeill, Rt. Hon. Ronald JohnSprot, Sir Alexander
Grotrian, H. BrentMacquisten, F. A.Stanley, Lord (Fylde)
Guinness, Rt. Hon. Walter E.Maitland, Sir Arthur D. Steel-Stanley, Hon. O. F. G. (Westm'eland)
Gunston, Captain D. W.Makins, Brigadier-General E.Steel, Major Samuel Strang
Hacking, Captain Douglas H.Malone, Major P. B.Storry Deans, R.
Hall, Lieut.-Col. Sir F. (Dulwich)Manningham-Buller, Sir MervynStreatfeild, Captain S. R.
Hall, Capt. W. D'A. (Brecon & Rad.)Margesson, Captain D.Stuart, Crichton-, Lord C.
Hannon, Patrick Joseph HenryMason, Lieut. Col. Glyn K.Stuart, Hon. J. (Moray and Nairn)
Harland, A.Merriman, F. B.Sueter, Rear-Admiral Murray Fraser
Harrison, G. J. C.Mayer, Sir FrankSykes, Major-Gen. Sir Frederick H.
Hartington, Marquess ofMilne, J. S. WardlawTasker, Major R. Inigo
Harvey, G. (Lambeth, Kennington)Mitchell, S. (Lanark, Lanark)Thomson, F. C. (Aberdeen, South)
Haslam, Henry C.Mitchell, W. Foot (Saffron Walden)Thomson, Rt. Hon. Sir W. Mitchell-
Hawke, John AnthonyMoore, Sir Newton J.Turton, Edmund Russborough
Headlam, Lieut.-Colonel C. M.Morrison, H. (Wilts, Salisbury)Vaughan-Morgan, Col. K. P.
Henderson, Capt. R.R.(Oxf'd, Henley)Morrison-Bell, Sir Arthur CliveWaddington, R.
Henderson, Lieut.-Col. V. L. (Bootle)Nail, Lieut.-Colonel Sir JosephWard, Lt.-Col. A.L.(Kingston-on-Hull)
Heneage, Lieut.-Col. Arthur P.Neville, R. J.Warner, Brigadier-General W. W.
Hennessy, Major J. R. G.Newton, Sir D. G. C. (Cambridge)Warrender, Sir Victor
Herbert, Dennis (Hertford, Watford)Nichotson, Col. Rt. Hon, W. G. (Ptrsf'ld.)Waterhouse, Captain Charles
Hills, Major John WalterNield, Rt. Hon. Sir HerbertWatts, Dr. T.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.Oakley, T.Wells, S. R.
Hogg, Rt. Hon. Sir D. (St. Marylebone)O'Connor, T. J. (Bedford, Luton)White, Lieut.-Colonel G. Dairymple
Hohler, Sir Gerald FitzroyOman, Sir Charles William C.Williams, Com. C. (Devon, Torquay)
Holland, Sir ArthurOrmsby-Gore, Hon. WilliamWilliams, Herbert G. (Reading)
Holt, Captain H. P.Pease, William EdwinWilson, R. R. (Stafford, Lichfield)
Hope, Capt. A. O. J. (Warw'k, Nun.)Percy, Lord Eustace (Hastings)Winby, Colonel L. P.
Hope, Sir Harry (Forfar)Perring, William GeorgeWindsor-Clive, Lieut.-Colonel George
Hopkins, J. W. W.Peto, Basil E. (Devon, Barnstaple)Winterton, Rt. Hon. Earl
Horne, Rt. Hon. Sir Robert S.Philipson, MabelWise, Sir Fredric
Howard, Captain Hon. DonaldPilcher, G.Wolmer, Viscount
Hudson, Capt. A. U. M. (Hackney, N.)Power, Sir John CecilWomersley, W. J.
Hudson, R. S. (Cumberland, Whiteh'n)Pownall, Lieut.-Colonel AsshetonWood, B. C. (Somerset, Bridgwater)
Hume, Sir G. H.Preston. WilliamWood, E. (Chest'r, Stalyb'dge & Hyde)
Hurst, Gerald B.Price, Major C. W. M.Wood, Sir Kingsley (Woolwich, W.)
Jackson, Lieut.-Colonel Hon. F. S.Radford, E. A.Woodcock, Colonel H. C.
Jackson, Sir H, (Wandsworth, Cen'l)Raine, W.Yerburgh, Major Robert D. T.
James, Lieut.-Colonel Hon. CuthbertRamsden, E.
Jephcott, A. R.Rees, Sir BeddoeTELLERS FOR THE AYES.—
Jones, G. W. H. (Stoke Newington)Remnant, Sir JamesCommander B. Eyres Monsell and
Kennedy, A. R. (Preston)Roberts, E. H. G. (Flint)Colonel Gibbs.
NOES.
Adamson, Rt. Hon. W. (Fife, West)Connolly, M.Greenall, T.
Alexander, A. V. (Sheffield, Hillsbro')Cove, W. G.Greenwood, A. (Nelson and Colne)
Ammon, Charles GeorgeCowan, D. M. (Scottish Universities)Griffiths, T. (Monmouth, Pontypool)
Baker, J. (Wolverhampton, Bilston)Crawfurd, H. E.Grundy, T. W.
Baker, WalterDalton, HughGuest, J. (York, Hemsworth)
Barker, G. (Monmouth, Abertillery)Davies, Evan (Ebbw Vale)Hall, F. (York. W.R., Normanton)
Barnes, A.Davies, Ellis (Denbigh, Denbigh)Hardie, George D,
Barr, J.Davies, Rhys John (Westhoughton)Harris, Percy A.
Batey, JosephDay, Colonel HarryHartshorn, Rt. Hon. Vernon
Beckett, John (Gateshead)Dennison, R.Hayday, Arthur
Benn, Captain Wedgwood (Leith)Edwards, John H. (Accrington)Henderson, Right Hon. A. (Burnley)
Bowerman, Rt. Hon. Charles W.England, Colonel A.Henderson, T. (Glasgow)
Briant, FrankEvans, Capt. Ernest (Welsh Univer.)Henn, Sir Sydney H.
Broad, F. A.Fenby, T. D.Hirst, G. H.
Brown, James (Ayr and Bute)Fisher, Rt. Hon. Herbert A. L.Hirst, W. (Bradford, South)
Buchanan, G.Forrest, W.Hopkinson, A. (Lancaster, Mossley)
Cape, ThomasGarro-Jones, Captain G. M.Hore-Belisha, Leslie
Charleton, H. C.Gibbins, JosephHudson, J. H. (Huddersfield)
Clynes, Rt. Hon. John R.Gillett, George M.Hutchison, Sir Robert (Montrose)
Collins, Sir Godfrey (Greenock)Gosling, HarryJohn, William (Rhondda, West)
Compton, JosephGraham, D. M. (Lanark, Hamilton)Jones, Henry Haydn (Merioneth)
Jones, Morgan (Caerphilly)Pethick-Lawrence, F. W.Thorne, G. R. (Wolverhampton, E.)
Jones, T. I. Mardy (Pontypridd)Ponsonby, ArthurThorne, W. (West Ham, Plaistow)
Kelly, W. T.Potts, John S.Thurtle, E.
Kennedy, T.Richardson, R. (Houghton-le-Spring)Tinker, John Joseph
Kirkwood, D.Riley, BenTownend, A. E.
Lansbury, GeorgeRitson, J.Trevelyan, Rt. Hon. C. P.
Lawson, John JamesRunciman, Rt. Hon. WalterViant, S. P.
Lee, F.Saklatvala, ShapurjiWalsh, Rt. Hon. Stephen
Livingstone, A. M.Scurr, JohnWatts-Morgan, Lt.-Col. D. (Rhondda)
Lowth, T.Shiels, Dr. DrummondWebb, Rt. Hon. Sidney
MacDonald, Rt. Hon. J. R.(Aberavon)Short, Alfred (Wednesbury)Wedgwood, Rt. Hon. Josiah
Mackinder, w.Sitch, Charles H.Welsh, J. C.
MacLaren, AndrewSmillie, RobertWhiteley, W.
Maclean, Nell (Glasgow, Govan)Smith, Ben (Bermondsey. Rotherhithe)Wiggins, William Martin
March, S,Smith, H. B. Lees- (Keighley)Wilkinson, Ellen C.
Mond, Rt. Hon. Sir AlfredSmith, Rennie (Penistone)Williams, C. P. (Denbigh, Wrexham)
Montague, FrederickSnell, HarryWilliams, David (Swansea, E.)
Morris, R. H.Snowden, Rt. Hon. PhilipWilson, R. J. (Jarrow)
Morrison, R. C. (Tottenham, N.)Stephen, CampbellWindsor, Walter
Murnin, H.Stewart, J. (St. Rollox)Wright, W.
Naylor, T. E.Sutton, J. E.Young, Robert (Lancaster, Newton)
Oliver, George HaroldTaylor, R, A.
Palin, John HenryThomas, Rt. Hon. James H. (Derby)TELLERS FOR THE NOES.—
Parkinson, John Allen (Wigan)Thomson, Trevelyan (Middleabro, W.)Mr. Warne and Mr. Hayes

Question put, and agreed to.