Orders of the Day — Import Duties Bill.

– in the House of Commons on 16th February 1932.

Alert me about debates like this

Order read for resuming Adjourned Debate on Amendment to Question [15th February], "That the Bill be now read a Second time."

Which Amendment was, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."

Question again proposed, "That the word 'now' stand part of the Question."

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

Those of us who have fought successful and unsuccessful campaigns in favour of fiscal reform in this country are much gratified to-day that at last we are about to see a definite Measure for the defence of British trade and employment placed upon the Statute Book. I should like to pay my tribute of gratitude to the Chancellor of the Exchequer and the President of the Board of Trade for the assiduous work which they have done in preparing this plan and for the eloquence with which they have expounded it to the House of Commons, Might I also be allowed to add a meed of admiration to the President of the Board of Trade for his speech last week, and the exhibition he gave us of his skill in riposte. I do not say that the Bill in its present form meets all our views or satisfies all our desires. There are many Amendments which we might have chosen to make, but it does one thing quite definitely; it gets rid for ever of the illusion that a free market in this country with restricted markets in all other countries constitutes a system of Free Trade. It also unequivocally establishes the principle that we should retaliate upon any country which discriminates against us. In fact, from the evidence which we have had even to-day we may conclude that it will compel freer trade than this country has enjoyed at any time during the last two generations.

We accept this Measure as a beginning. The Home Secretary said that it was really Protection. I do not shrink at the word. We should not have been content with this Measure if it had given us nothing but a general undiscriminating 13 per cent. duty. Like the Home Secretary I do not consider that this duty will greatly affect the balance of trade, but I accept the Measure as the basis upon which there will be built up a scientific system which is going to be evolved by the Import Duties Advisory Committee. If the Home Secretary had also accepted it, he might have realised the aspirations of the poet by rising on stepping stones of his dead self to higher things. I am sorry that he did not do so. I hoped until the last moment that the dissentient section of the Cabinet would have been content, in the emergency with which we were faced, to subordinate their views to those of the majority, but I fear that there are shadows behind the Home Secretary's throne.

I read an account of a meeting in Lancashire where the Chairman asked the innocent question whether Samuel was to anoint David or David was to anoint Samuel. I dare say that is a matter which concerns both those distinguished people. I appreciate his position, and I feel no resentment in any form as to the attitude which he took in the House. I am glad to think that he is a philosopher. When the Home Secretary takes to writing essays to philosophical journals he writes on philosophy with a verve and clarity which is very unusual in such periodicals. I read not long ago a disquisition by him which greatly rejoiced me. It began with the intriguing sentence "I was led by politics to philosophy," and the subject of the article was the "Relativity of Free Will." It was an interesting essay upon the amount of free will an individual might suppose himself to have, surrounded as he inevitably is with great and predetermining forces. That was subsequently followed by one on the "Dual Standard of Conduct." The House will realise that by study at least the Home Secretary had put himself in a position to play the difficult and ambiguous part which his insistent colleagues have forced upon him.

4.0 p.m.

With regard to this Advisory Committee, which is the centre of the Government scheme, one must ask how they are to perform the functions which have been entrusted to them? Are they going to be snowed under and suffocated from birth by innumerable petitions from all the industries of the country concerned as they will be about the fate which is to be meted out to them? There is first to be placed upon them the duty of considering whether the abnormal imposts recently established are to be retained or modified or reduced to the level of the 10 per cent. duty under this Bill. I do not know how long it will take the Committee to deal with these matters, but it is apparent that it will take some time to reach decisions. Then there lurks behind a very formidable question in relation to the iron and steel trade. Here is an industry in regard to which there have been four Committees or Commissions during as many years. Committees have sat and occupied interminable tracts of time, heard innumerable witnesses and presented reports. I am not at all sure that we have seen any of those reports. No Government has had the courage up to now to tell us what decisions the Committees have arrived at.

Is this new Imports Committee to go through all this question afresh, and, if so, how long is it going to take to do it? Is it going to take as long as these various Committees to arrive at a conclusion? I confess I could have hoped, after all that has been done, that the Government would have had the courage to deal with this question themselves, rather than to pass it on to another Committee. But as they have not done that, there is this formidable industry for the consideration of this new body. And not only this one, but the great variety of other trades which will require to be dealt with by the Committee. I ask, Are we to have a separate investigation by this Committee into each of these trades? If that is to be the procedure, it is obvious that no time will be enough for the purpose but that only eternity will suffice, and that in the meantime you will have the trade of the country kept in a perpetual state of suspense. Uncertainty kills industry worse than any other thing, and I would beg of the Government to take means whereby rapid conclusions can be arrived at.

I venture, with great humility, to make a suggestion. I am in favour of this Committee, and it is not because I think that it will be unfruitful that am putting forward these criticisms, but I do venture to suggest to the Government that the Committee should be in a position to take a wide sweep of British trade, and to arrive at some general test. I very humbly put forward the test of the amount of work which has been contributed to any particular commodity that is imported; that duty should be graded upon a principle of that kind; and that on such a system as that, without all the elaborate investigation which would otherwise be required, the Committee should frame a tariff. They will have ready to their hands the fruits of the labours of many enthusiastic and expert people who have been investigating this topic over a period of years, and whose schemes, I suppose, would be of immense value to such a Committee. No doubt they may make, under the plan I am suggesting, some errors, and such errors may do some injury, but of one thing I am perfectly certain. and that is that the errors they may make will never do so much injury as perpetual delay and hopeless attempts to arrive at preliminary perfection.

There are many other items in this Bill which deserve notice. There is the matter of the Dominions, which is a point of principle. Most of the other points are of the nature of Committee points. Somebody will want to know, I am sure, why it is that the farmer should have to pay an import duty on his maize when he has no protection for his meat, and I must say, for myself, I have deep sympathy with the difficulties in which the farmer is placed in that respect. I am also sure, in my own mind, from such inquiries as I have been able to make, that there is a very large margin for the importing meat trade to work upon which might easily take the form of an import duty on the commodity, without in any way justifying a rise in the price of meat. Other people, I have no doubt, will desire to take notice of the system of drawbacks which the Bill provides. I am not sure that the Financial Secretary to the Treasury entirely convinced me yesterday that it was quite fair to give no drawback upon the initial duties, but to confine it to the additional duties which may be imposed.

Then others will want to know, I am sure, why drawbacks should be confined to those imports which go out from this country in the same shape or form. That is a matter with which, I think, other countries have succeeded in dealing on a plan more suited to the needs of the manufacturers. Then some will want -to know, I should think, whether it is practicable to impose your duty upon the value of the commodity when it arrives here. I am not sure that in every case it will be found that that is a suitable method to apply. Some, too, will ask why it is that Dutch-grown rubber is to escape an import duty when there is far more produced than we require by British planters in the East. Others will raise questions, no doubt, with regard to the number of items in the list of exemptions. I should like, with great respect, to suggest that in dealing with the exemption list a not unfair criterion to apply would be this: If our country does not produce a commodity and the Empire also produces none of it, or if the Empire and the home country together do not produce enough of a commodity to supply the needs of the British manufacturer, then prima facie in such a ease the commodity should be exempt from duty. I should deprecate in this great matter our getting off on the wrong foot.

We can apply, even in the short space at our disposal, a certain number of scientific ideas, and I would remind the House of this fact, that while Free Traders have commonly argued the fiscal case upon the basis that everything in tariff countries is subject to duty, even so rabid a tariff country as the United States allows two-thirds of its importations to arrive in their territory free of duty. We wish to devise some plan by which we can get our raw materials as cheaply as possible, and defend the manufacturers of our goods to the extent which is reasonable. I can give an illustration of what I mean by contrast. My illustration is meant to show what ought not to be done in this country and yet has been done. I take the case of raw real silk—the silk as it comes from the silk worm, with no manufacturing process upon it. We in this country at present are taxing that commodity at a rate which is 28 per cent. of the value. See what that does. It immediately puts us, as far as our manufactured products are concerned, at a disadvantage compared with every other country, because, as far as I know, there is no other country in the world which taxes raw real silk. Ought we not in such a case to let in the raw silk free from duty, and if we are losing revenue by that, cannot we regain it, as I am sure we can, by putting an extra duty upon the manufactured article which comes into this country? I give that as an illustration of the kind of thing I mean. I think that from the beginning the House should try to shape this Measure so that it can give us the greatest amount of benefit, and put us to the least possible disadvantage.

I turn from these details of this particular Measure to the principles that lie behind it, and I would assure the House, at the very outset, that I do not propose to occupy much time upon that branch of the case. We have had not merely arguments over a period of at least 30 years, with which everybody now is familiar, but, in addition, we have had a general argument in this House last week. I would, however, for a moment like to refer to the Liberal Amendment on the Order Paper. It is true, that we cannot. discuss it, but it forms the basis of the arguments which are put forward by some Liberals, and I would like the House to remember the form which that Amendment takes. I am not going to read the actual Amendment in all the fine flavour of its fruity phraseology, but I will give, if I may, syncopated headlines of this Amendment. The tariffs, we are told, which are to be set up by this Bill will cripple our export trade, and consequently create unemployment. They will affect adversely British credit, raise the cost of living to wage-earners, destroy the traditional control of the House of Commons in finance and taxation, and threaten the welfare of the Empire and the peace and security of the world. I am sorry that the gentlemen who composed this lyric did not carry it a little further. They might have said, with equal truth, that these tariffs would produce eruptions in Vesuvius, earthquakes in Japan and tornadoes in the West Indian islands.

Let me deal with the first item of this criticism of the Import Duties Bill. It says that the tariffs will [...]ripple our export trade, and consequently create unemployment. I am going to direct attention, for a moment or two, to that particular count in the indictment, because I find, even in the minds of those who are supporting this Bill, a hesitancy in regard to the effect which the Government's proposals will have upon exports, and some puzzlement as to whether the export trade, even if it does not suffer and disadvantage from these Measures, may yet obtain no advantage. That is a proposition which I entirely controvert. I think it is founded upon a complete fallacy. It is based upon the old glib argument that imports pay for exports. Of course, there is a very real sense in which that is true, but it is not true at all in the superficial and ignorant way in which it is used by those who put forward Amendments like this.

I am not going to deal to-day with the theoretical part of this argument. I want rather to direct the House's attention to the facts. The kind of assertion in this Amendment is entirely out of consonance with reality. If you look at the theory you find that it is founded upon the idea that you always have some sort of stable ratio between imports and exports. What has happened? In the year 1913 our visible exports paid for 82 per cent. of our imports. In the year 1929 our visible exports paid for only 71 per cent. of our imports. In the year 1931 our visible exports paid for only 52 per cent. of our imports. I have no doubt someone will say that I have taken no account of invisible exports. But if they are taken into account they make the Free Traders' case still worse, because in the year 1913 not only was 82 per cent. of our imports paid for by our visible exports, but we had a margin of £250,000,000 to invest, and we did invest it abroad. In the year 1931, after taking the two categories of exports together, according to the Board of Trade figures, we were £120,000,000 to the bad. It is absurd to say that we cannot readjust that ratio of exports and imports without doing damage to our trade. We can indeed. The only way in which we can not only benefit our trade but save ourselves from the trouble which an unbalanced trade will bring, is by making just such a readjustment.

Let us get back to something like the ratio of 1913, when our visible exports paid for 82 per cent. of our imports and when we had such a large margin for investment. Surely the rule that exports and imports pay for each other was just as applicable in 1913 as in 1931. Let us design our policy so as to get back to the ratio of prosperous years, when we were building up our finance and were able to make savings.

But there is another element to which we have to pay attention, and that is the character of our imports. The most disquieting feature of all our trade returns in recent years has been the extent to which we have been combining an increase in the purchase of manufactured articles and a decline in the purchase of raw materials. For a manufacturing country, dependent upon its export of manufactures for its survival, it is suicide to allow a continuance of the process that went on between 1924 and 1931. We purchased, in 1931, £70,000,000 more of manufactured goods than in 1924, but we purchased £12,000,000 less of raw material and we exported £187,000,000 less of manufactured goods. There is the core of the trouble from which this country has been suffering. It is there that we have to make the readjustment that will put us in a better shape as a manufacturing country.

So far from a tariff destroying or doing injury to our export trade, it forms the most excellent basis for the export trade. It is upon the security of a home market that you can build your best exports. Why? Sometimes when I see in the newspapers the reports of speeches by people who argue upon these matters I come to the conclusion that while they do lip service to the theories of business they know very little about the application of them. Is it not obvious that your best method of obtaining an export trade is by having cheap prices? Cheap prices depend upon cheap costs. The greatest factor to-day in reducing costs, in a period when such a vast amount of machinery is employed, is to be able to spread your overhead costs over the largest amount of material that you produce. But in order to have that large production you must have a large market. It is the certainty of the home market that enables you to sell at prices which compete with those of your rivals in other countries. It was only by such a method that America, with all its vitality, was able to build up an export trade which began to threaten our own, and it was by that method that Germany has been enabled not merely to approach figures which we thought were very high but has outdistanced us in the export market.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

This is an interesting point. The right hon. Gentleman has given us the particulars of 1913, to which he referred with some satisfaction. How does he apply the principle to which he has given vent, to the figures for 1913?

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

I am not certain that I follow the question.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

The idea that it is necessary to have protective duties before you can have a satisfactory trade balance.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

You may be in a position at some particular time to make your sales before your rivals have begun to indulge in effective competition with you. In 1913 we were in a very much stronger position, but we have been gradually declining in the capacity to meet competitive trade, and we have suffered while they have adopted methods which by relying on the security of their home markets have enabled them to export their surpluses abroad.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Yet America has 12,000,000 of unemployed.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

Let me give a simple illustration from the speech of the chairman of the Woolworth Company. I believe he is an Englishman by birth, who has spent all his life in America, and his business depends on selling goods cheaply. At the last annual meeting of his company he was able to announce that now they were buying the great bulk of their goods in this country, and he added this: Our experience is that if instead of giving the British manufacturer odd fragments of uncertain business one is prepared to offer him the same kind of treatment which the importer is compelled to give to the foreign factory, such as orders for large and definite quantities, close co-operation and prompt cash, he can produce goods even at our low price limit, which would astonish those who have some kind of feeling that our British manufacturers are trudging along with no enterprise or organisation. Having regard to the prospect of these Import Duties, he said: I am convinced that if we did not import anything from abroad we have in our vast range of British-made goods, comprising as it does the great bulk of the articles we deal in, sufficient for our needs and sufficient to maintain our trade. That is the whole philosophy and practice of those maxims of trade which enable you to sell cheaply, and by selling cheaply to hope to maintain your markets. I have perhaps dwelt too long on that topic. Let me make one or two observations upon the change in the situation during the last two months. All that I have said is apposite to the condition of things that existed before the monetary crisis arose, but every one of these views is emphasised by the crisis with which we have been met. If it was necessary to take such, action as I have described in order to better our trade when we were on the gold standard, it is very much more necessary to our balance of trade now that we are off the gold standard. It is plain that if you had your trade in such an unbalanced condition as to have imports largely in excess of what you are selling, then the disaster to your monetary standard might become very severe. That is a thing which we wish to avoid.

So far as I am concerned, I would like to make it plain that with the tariff and with a balanced Budget I have no fear with regard to the stability of sterling. I noticed in. the speeches of the Chancellor of the Exchequer and the President of the Board of Trade some slight anxiety with regard to sterling being kept at a level which would ensure its being able to purchase as much as it does to-day. That is a very natural anxiety, but if in the condition in which we are now with a tariff and a balanced Budget you were to find the value of your sterling depreciating so that prices rose, then I am afraid you would have to accept that as one of the inevitable conditions of your economic problem, because your sterling would be getting lower only because your industries were not able to support it at a higher level. In my view it is possible to make too much, at the moment, of the necessity of keeping sterling at its present level. I shall not be unduly disturbed if it drops below the level at which it stands to-day. The fact is that sterling ought not to be higher in his country than a level at which the industries of the country are able to support the enormous burden of debt which the War has laid on our shoulders. In that condition we are in a healthy state. In any other position we are living in a world of unreality and disaster might easily overtake us.

4.30 p.m.

So far as prices are concerned, I should be not at all afraid at the present time of some slight rise, because it must be remembered that wholesale prices have to rise to a considerable extent before retail prices ought to be affected. If we take a comparison with the year 1928, which now forms the most usual year of comparison in such calculations, we shall find that, though our wholesale prices have fallen by 25 per cent., retail prices, which affect the cost of living, have only fallen by 11½ per cent. Accordingly, wholesale prices could rise to an appreciable extent before retail prices should be affected at all. I venture with great diffidence to suggest to the Chancellor of the Exchequer and the President of the Board of Trade that they should not be too anxious upon the matter of the precise value of the pound sterling in relation to external currencies or even to the wholesale prices which are in existence in this country. As far as I can judge from the trend of events, though I do not profess to have any skill in the matter, there is no need for any perturbation about the pound sterling. I think the drift of the world is towards a lower gold value and a further appreciation of the pound; and I think we ought to direct our policy now with a view to the clear interest of trade. If I am not impertinent, I venture to suggest that the time has even now arrived when we could quite safely lower the Bank Rate and when we could also take off the restrictions which apply to the export of sterling. I do not see how our foreign customers are to buy if we continue to restrict exchange.

I apologise for the length of time which I have occupied. We have been going through a period of grave misfortune, of trouble and difficulty in this country, and we are by no means through it yet; but when you look round the world you find that there is no other country which you need envy. Great Britain is the steadiest country in the world. In the prevailing obscurity the character of the British people has shone like a lamp in the dark. All our critics who predicted our decline and fall have been con- founded. They underestimated the fibre of our people. There is no panic-hoarding in this country such as you find in some other countries where it was supposed that the conditions were much more stable: and so far as our institutions are concerned, while banks have been crumbling in the two countries where gold has been most accumulated, no single British bank has suffered a quiver. These are testimonies to the character and stability of this country. Even out of our misfortune I think we can derive some compensation. The British race throughout the world has been drawing closer together. Vicissitude has sounded a note no less compelling than the trumpets of war in 1914. We of the British Commonwealth of Nations are gathering together to take counsel with each other and to provide mutual support and strength.

We are on the verge, I think, of great events. The provisions of this Bill, in which special recognition has been given for the first time on any adequate scale to the position of our Dominions and Colonies have struck a chord which has vibrated through every British community in the globe. The year 1932 may well be a year that will be written in starry letters in the records of our race. There is an opportunity now which we must not miss, because if we miss it now, it will never occur again. I believe that the whole British Race is keyed up to take full advantage of the chances which are given to us. Not in vain-glory nor in any spirit of undue pride, do we all recognise the great part which the British Empire is called upon to play in reclaiming a disordered and distracted world. The opportunity is ours and the responsibility is also ours. Let us not fail our Destiny. Let us, under the hand of Providence, go forward with courage and, above all, with vision.

Photo of Mr David Grenfell Mr David Grenfell , Gower

The right hon. Gentleman the Member for Hillhead (Sir R. Horne) commenced his address from a high level of philosophic learning which he generously invited the Home Secretary to share with him, but not fully content with his lone companion on those heights he came down with impressive condescension to take notice of the Bill and to point out how imperfect it was, probably because the right hon. Gentleman himself was not consulted by its authors. His eloquence, however, was reserved for his criticism of the Liberal Amendment, and he then, to our surprise, went on to advocate the gospel of cheapness so often contemptuously attributed to Liberal Free Traders. He dealt in a manner, which was quite beyond my measure, I confess, with the effect of our departure from the Gold Standard and to judge from the expressions of hon. Members opposite, they must have felt as I did, in the terms of the old saying, "A plague on your philosophy." The right hon. Gentleman was not content to stay very long in the region of philosophical examination, and before he finished he tried to redress his position in the debate by resorting to that kind of sentiment which people who do not use philosophical language would describe as "clap-trap."

During the various debates which have taken place on this subject in the last fortnight, we have heard from the Chancellor of the Exchequer, from the Home Secretary, from the President of the Board of Trade contradictory expressions of opinion regarding the nature of the Bill now before us. Those of us who came here to hear a doctors' mandate are disappointed to find that the doctors disagree. Instead of a conference of professional men, we find a council of witch doctors proceeding by a process of demon formula to the exorcism of the demon of depression. The chief witch doctor has given the order for the preparation of the potion and has retired. The potion is to consist of a body of 10 per cent. general tariff to which is to be added an unknown quantity of additional duties at the discretion of the inner circle of medicine men, with a further addition of strong stuff for specially hard cases subject to the pleasure of the President of the Board of Trade who is a distinguished novitiate of the cult. But it is laid down that for use among friends, the chiefs of friendly tribes shall take out the most dangerous drugs. This prescription when blended is to be bottled and labelled "For immediate use. Will not keep."

The Lord President of the Council has exercised his undoubted influence in this House to ensure as easy a passage as possible for this Measure. I do not think that he believes in this quack remedy. He is not dogmatic enough even to make a strong recommendation of this stuff, but, he says "There has been an Election. This is a record majority; it must do something, and, why not this Bill? The Tories will not be happy till they get it and the others had better take it with a good grace." The right hon. Gentleman tells us that we have to take this medicine for two years and if at the end of that time we are still alive we can break the medicine bottle and kick the doctor. Apparently he thinks that we may get better or that we may, on the other hand contract some other illness in the meantime which will cause us to forget our present trouble.

When the Chancellor of the Exchequer was speaking in an earlier Debate on this subject, I felt that what was wrong was not so much the prescription which he offered, as the diagnosis of the complaint. I willingly concede to the right hon. Gentleman that he must have felt great satisfaction and pride at having placed the final stone on the work of his father's lifetime, but I felt that he did not do justice to himself, in his examination of the world economic situation to which this Bill is intended to apply. In the lifetime of the right hon. Gentleman's father, when the House of Commons was discussing a similar proposal 30 years ago, there was no question of an adverse balance of trade; there was no world depression; there was no loss of invisible exports and the right hon. Gentleman, I feel sure, would admit that he overstated the case. After the figures submitted by the hon. and gallant Member for North-East Bethnal Green (Major Nathan) even the Chancellor of the Exchequer must, I feel sure, modify his estimate of the loss which he said we had sustained in the last two years in invisible exports. The right hon. Gentleman appears to dissent from that statement. I am not so concerned with the measure of the falling off in invisible exports as with the character and source of the invisible exports. Before I ever thought of coming to this House, I remember attending meetings organised by Tariff Reformers, 25 and 30 years ago, and then it was always complained that we were importing year by year so much more than we were exporting. It was said that we were living beyond our means. That argument was used on hundreds of platforms.

I remember the quotation made by one of Dickens' characters—I do not re member which—to the effect that if your expenditure was more than your income, the result was unhappiness. I remember, too, without any pretence to economic knowledge, that as a young man, when I lived in a coal-mining district, I could satisfy myself that there was no great mystery with regard to the disparity between imports and exports. A ton of coal sent from a Bristol Channel port to South America was carried in a British ship, exchanged for a cargo of wheat in the River Plate, came back with wheat in the same British ship, and by the time that that cargo of wheat got back to Cardiff, Bristol, or Swansea, it was twice the value of the original cargo which had gone out. That disparity of 100 per cent. only exists in bulk cargoes, I know; it depends partly on the distance which the cargo has to be carried and partly on the nature of the cargo, but a great deal of the export trade of this country carried in British ships does double in value by the time it returns to our ports.

The bulk of our invisible exports, however, does not come from our shipping only. The right hon. Gentleman did not analyse these invisible exports. He did say there was a falling off from £482,000,000 to £296,000,000, a drop of £186,000,000, from 1929 to 1931. I will leave it to the hon. Member for North-East Bethnal Green, who is more competent than I, to examine the actual bearings of this fall on the balance, but I want to examine the kind of sources from which the invisible exports come. Ever since the fifties of the last century—and happily we can remind ourselves that this period coincides with the advent of Free Trade practice—we have exported large quantities of goods to all foreign markets; we have sent manufactured goods to all the corners of the globe; we have exported capital to build tens of thousands of miles of railroads in every one of our large Colonies; we have lent money to foreign Governments, to municipalities, and to corporations for their own purposes; we have provided the capital for the cultivation and irrigation of land and for the reclamation and development of land everywhere; we have provided capital for the opening of mines of copper, tin, silver, and gold all over the world; we have provided the capital for plantations of tea, sugar, coffee, and cocoa, every year regularly.

While we were under Free Trade we were prosperous enough to be able to lend £50,000,000, or £60,000,000, or £100,000,000 regularly year by year for the development of all parts of the world. I am not an authority on the subject, but let me say to the Chancellor of the Exchequer that the argument used when this campaign was in its earlier stages, when the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) was in this House and the Chancellor of the Exchequer was not, in the days when the tariff campaign was at its height, there was a Debate in this House on the Address, and strangely enough it was exactly 23 years ago to-day, on the 16th February, 1909. The late Lord Balfour had complained because our capital was going abroad, and the late Lord Oxford, then Mr. Asquith, replied: When the right hon. Gentleman tells us we shall never get to the root of this matter until, by some means or other, we prevent British capital from going into foreign markets, I begin to think he has made some progress in that long, difficult and untractable process of self-education, which the House and the country have now witnessed with so much interest for the last five years. British capital goes abroad, and thereby. apparently, unemployment is caused in this country. What is the British capital that goes to foreign countries? Where does it come from? By whom was it produced? Vs hat form does it take? It is not in the shape of gold or of paper, as the right hon. Gentleman used to know, and as I think be knows still. it goes in the shape of materials for the railways and docks of Argentina and other countries, which again, in their turn, employ British labour as well as foreign labour, and add enormously to the international track between the different countries, and create reciprocal and additional employment in this country." — [OFFICIAL REPORT, 16th February, 1909: col. 45, Vol. 1.] The right hon. Member for West Birmingham two days afterwards moved an Amendment to the Address to introduce Tariff Reform. I think it was the first Amendment that was moved in this House after the right lion. Gentleman's father had launched his campaign. In moving the Amendment, he charged the Government with doing everything it could to frighten capital out of the country. In those days it was deemed by the Tory party to be a crime to send capital out of the country. Some 23 years have passed. The right hon. Member for West Birmingham is in attendance at the House, and though he is not here at the moment, I should like to congratulate him on the 23rd anniversary of his speech. In the intervening period an average of £200,000,000 has been received in interest and repayment of invested capital every year. From £4,000,000,000 to £5,000,000,000 worth of goods of all kinds have come into the United Kingdom to balance the invisible exports of previous years under this special account.

But that is not the whole story of invisible exports, because there is the shipping. Our shipping has earned for us an enormous sum of money each year, and although the balance is now apparently on the wrong side, does anybody in this House believe that we would have owned half the shipping of the globe had it not been for our invisible exports? Would we have developed the large carrying trade, would we have owned the large shipping interest that we have owned? It is due to the right hon. Gentleman to call attention to the falling away of invisible exports, and it is very proper that it should be done here, because it has a very marked effect on our shipping interest. A question was answered in the House yesterday, showing that 2,000,000 tons of British shipping are laid up, lying idle at the entrances to our ports, sheltering from the open weather, not being used, but costing money for every day of idleness. The shipbuilding industry is working only to about one-third of its capacity. The figures given yesterday were a most astounding revelation of the unemployment tragedy which has overtaken this industry, but the Government are doing nothing in this Bill. Indeed, they are doing worse than nothing; they are tackling the question entirely from the wrong end. They are doing everything they can, not to drive capital out of this country, but to prevent the capital that found a way out of this country from being repaid. They are putting in obstacle in the way of trade and imperilling the security of the large mass of foreign investments which we still hold in every country in the world.

The real trouble with invisible exports is due to a cause to which tariffs very largely contribute. The real cause is the enormous depression in world prices, in the price of all primary products, agricultural products, plantation products, metals and so on, a depression in prices which has caused a reduction in the earnings of our capital abroad; and the Government are now trying to adopt methods which must mean lower prices still. To close one more door and destroy one more market must mean a further fall in prices and further difficulty in raising world prices, the one thing that is necessary to save not only our foreign investments but our present production in every part of the world. Indeed, so much has investment abroad been jeopardised that many countries have declared a moratorium. Australia some time ago would have gone into default had it not been for very special measures that were taken by our own Government and by other creditors. Australia is not alone. There have been Brazil, Austria, Hungary, Newfoundland— default spreading everywhere because of low world prices and because of obstacles in the way of realising the goods in the markets of the world at their proper value.

I will now come to the Bill, because I do not intend to speak very long, but I would like briefly to examine this general tariff of 10 per cent., which its authors say is not to be a protective tariff. The right hon. Gentleman himself has said that this is not Protection. There may be a measure of Protection in this Bill, but it is not here. He said that this is mainly a revenue tariff. if so, if this 10 per cent. general tariff is not protective, then it is not going to create snore employment in this country. The first result of this Bill will be to add to the cost of living and therefore to lessen the home demand; the second result will be that it will add to the cost of production and lessen the demand for our goods abroad; and the third result will be that it will raise a revenue of £30,000,000 to relieve the direct taxpayer. Apparently this gives very great joy to the Chancellor of the Exchequer, even though it does not quite satisfy the Home Secretary. I should like to know what Lord Snowden thinks of that part of the Bill, quite apart from the merits of the Bill as a fiscal measure. I should like to recall to the House a statement of Lord Snowden's, made, it is true, as far back as 1908, but it must have represented his opinion for many, many years, because I have heard him in this House give vent to precisely the same view. He then said: To my mind, the social problem with which we have to deal is the more equal distribution of wealth. The question of social reform, in my view, is a question of making the rich poorer and the poor richer. There is no way in which you can equalise the distribution of wealth except by doing that. 5.0 p.m.

That is what Lord Snowden said 24 years ago. Some Members of this House will excuse him because he was younger then and more disposed to extravagant speech, but those of us who regret the passing of age and of his exuberant Socialist spirit would much prefer Philip drunk to Philip sober.

I now turn to examine the Advisory Committee—the big three or the big six; I am not quite sure what the number will be. I was interested last night when the Noble Lord the Member for Aldershot (Viscount Wolmer) suggested that the right hon. Member for West Birmingham might be the chairman of this Committee. I thought that that would not be fair as he has not an impartial mind on this subject, and that, if the case for tariffs is as strong as it looks, why not make the Home Secretary chairman, and accomplish two things—get the advantage of his impartial mind, and possibly, before the end of the inquiry, convert him and bring him within the fold. This Committee is to be given extraordinary powers, and from the experience of other countries it will not be able to withstand all the lobbying, all the gerrymandering, and all the corruption that is brought about in a Protectionist system. The Committee is to be given dangerously wide and strong powers. A body of people should never be asked to undertake the responsibilties of the Government itself.

There is, it is said, a redeeming feature, because, however high these additional duties may run in the first instalment or the second instalment, however high the scale carries the duties, we are to do justice to the Dominions. There is to be a conference in Ottawa next summer, and we are to send a very skilful negotiator and conciliatory representative of this Government to deal with the Dominions. I remember that he was present at a conference of the kind some time ago, and the only result of it was that he added one more word to the vocabulary of Parliamentary usage. In his usual breezy way he described the proposals of the people with whom he had been closeted as "humbug." The right hon. Gentleman will not have an easy job. I do not know exactly the nature of his task. I do not know whether he is to offer a uniform schedule for all the Dominions. Are Canada, Australia and South Africa to be subjected to the same treatment for the same commodities, or are there to be varying scales for the various Dominions'? If so, there is difficulty in store even for that skilful negotiator, the Secretary of State for Dominion Affairs, and I should not be surprised if, before he has finished the Conference, he will mutter sotto voce the word "humbug" many times.

There is also to be a foreign preference. The right hon. Gentleman the First Commissioner of Works was not far wrong when in an interview he gave to a foreign newspaper he said that foreign countries, too, are to have a preference, which we originally thought was to be confined to the Dominions. Discriminative duties are the most pernicious and dangerous part of the Bill, and I believe that they will lead us into great strife and controversy, and possibly economic warfare with people who are now our friends. The whole Bill is a very complicated and dangerous Measure. It is a leap in the dark, a kind of hit or miss, a thing that may or may not work. Nobody knows what the result will be. I would like to ask the Chancellor of the Exchequer and the members of the Government, whether they be for or against the Measure, if they have counted the cost of its failure to attain its objects—a cost counted in a fall in the standard of living, further unemployment, loss of foreign investments, and, worst calamity of all, the return of a Labour Government to this House?

The Division to-night will be on party lines. There are some Liberals in the House who are Tories and do not know it. Tories have always been monotheistic; they have always had one god and one article of faith; they are economic Sinn Feiners. The Labour party in the House is small to-day; it is subject to criticism, attack and abuse, but we have at least one virtue, that of consistency in this matter. Though we are small in the House, we are strong and eager in the country. We repudiate this Measure. There can be no scientific tariff. The only system which is worthy of science is one which will permit consumption to balance production. That balance can only be maintained by removing all obstacles from the path of trade. Our field is the world. Economic barriers must be levelled so that the goods men produce can pass freely and abundantly for use by all.

Photo of Sir Archibald Sinclair Sir Archibald Sinclair , Caithness and Sutherland

We have listened to a very remarkable and eloquent speech from the hon. Member for Glamorgan (Mr. D. Grenfell). There are some parts of it with which I agree, and some parts, as, for instance, when he implied that his party was the only consistent defender of Free Trade, with which he will not expect me to ex- press such whole-hearted agreement. He will not expect me to criticise those passages at any length. I want to come to the main subject which is before the House. Nothing but an overwhelming sense of public duty would impel me to rise from this bench to oppose the proposals of a Government of which I am a Member. That I shall speak as I feel hound to do, I owe to my responsibility as a Member of this House, than which there is no responsibility in our public life more real and fundamental.

My right hon. and gallant Friend the Financial Secretary to the Treasury, in his speech introducing the Bill yesterday, referred to me as representing a minority of my own party. I am not quite sure how important he thought that point was, but I should be quite prepared to accept the valuation which might be put upon it by the Whips of his own party. If, however, his complaint is that I have the honour to speak from this Box, I would refer him to those leaders of his own party to whose generosity and sense, right or wrong, of the needs of the national situation, my position here is due. Some speakers in these Debates have suggested that those of us who are Liberals and Free Traders should never have joined or supported this Government. But we joined on those conditions. We made it clear from the first that we were prepared to consider the imposition of tariffs for specific pur poses or for the period of the emergency, if found to be necessary after full, searching, impartial and expert inquiry. We declared in our own manifesto, which was-published in the earliest days of the election campaign: Whatever emergency measures might be found to be necessary to deal with the immediate situation, freedom of trade is the only permanent basis for our economic prosperity and for the welfare of the Empire and of the world. Protection has not saved those countries which have adopted it from more acute unemployment than ourselves. Taxation on the staple foods of the people has always been opposed by the Liberal party, and would lay fresh burdens on those least able to bear them. No one said to us then, "That is not fair; we do not want your support on those terms." On the contrary, they said, "We want all the Free Trade and Liberal support we can get; Protection is not the issue." My right hon. Friend the Chancellor of the Exchequer, on the eve of the poll at Dudley on 26th October, said: All these matters"— that is tariffs and preference— are going to be examined carefully, thoroughly, exhaustively, impartially by the National Government when it is formed again. But you have not got to decide tomorrow whether you are going to have a tariff or Free Trade. The Lord President of the Council, on 20th October, at Leeds, said: After all, what is the fundamental issue? It is not Socialism, it is not individualism, it is not Free Trade. It is not Protection. The Prime Minister, on 21st October, at Tamworth, said: The election does not give instructions to apply, but it does give instructions to examine, in relation to trade problems, as to how and if we can consider tariffs advantageous. So we went round; I went round, and we all went round, urging those with whom we had influence and every audience which we addressed to give wholehearted support to National Government candidates—to Liberal and Free Trade National Government candidates if such were available, but, if not, to National Labour and Conservative candidates. One hon. Member did me the honour to circulate to his constituents by the thousand a leaflet containing an extract of a speech which I made in that sense. There is no doubt about the response which the Liberals and Free Traders of the country gave to our appeal.

Now we are confronted with proposals for the taxation of foodstuffs, and for the protection of industries, not as the result of searching and expert inquiry; not confined to branches of agriculture, or to industries for which a special case may exist, or as part of a constructive scheme of reorganisation; not confined, either, to the emergency, but constituting a permanent and formidable system of Protection, We are here representing millions of Liberals and Free Traders who are not less intelligent, certainly not less patriotic than the Conservative supporters of hon. Members behind me, men and women with a full understanding of the reality of the world crisis, anxious to contribute to their utmost to a solution, but unable to approve the departure signalised by the introduction of this Bill. They believed that there were greater issues before the country than this old controversy of Free Trade and Protection. If we have responded to the initiative of our colleagues in the Government, if we have accepted the generous conditions which they have offered to us, to the junior Members of the Government, and to the rank and file of our party—conditions of freedom of speech and vote on this Bill—we have done it in the belief that those larger issues do exist and that it is indispensable to maintain the unity of the National Government—not, I would assure, the Noble Lord the Member for Horsham (Earl Winterton) that we individually are indispensable, but that the National Government as a symbol of the unity of the nation, reinforcing our national representatives in every field of national and international activity, is indispensable. It is in that belief that we retained our positions in the Government.

Nevertheless, we are bound not only by our convictions but by our loyalty to those whose support we have obtained, and still mean to secure for the National Government no other and even greater issues, to offer determined and unequivocal opposition to the proposals contained in this Bill. Let me first say a word about the effect of these proposals on an industry in which I, and I believe the great majority of Members in all parts of the House, are deeply interested. This is not the occasion, and I do not intend, to discuss the agricultural policy of the Government, but I may be permitted to discuss the effect of this Bill upon agriculture. I am not going to reproach the Government for putting meat and bacon in the free list. I would say that no Government could survive in this country if it taxed those staple articles of the people's diet; but livestock farming is and will always remain in this country the backbone of agriculture. It is the kind of farming for which this country, with its cool, moist climate and the best grass the world, and consequently the best livestock, is pre-eminently suitable, and we shall always remain pre-eminently a. livestock raising country. Yet under this Bill the livestock farmers not only have to go without Protection—of that I do not complain—but have put upon them an additional burden by the taxation of feeding stuffs and fertilisers. I am glad that cotton seed, linseed and rape seed have been put into the free list, but there are a whole list of other feeding stuffs, of cereal by-products to which the Bill applies.

The feeding stuffs other than grain not included in the free list amount to a total of nearly 1,000.000 tons, of which nearly 600,000 tons are imported from foreign sources, to the value of £3,500,000. A 10 per cent, duty on them will be a very serious matter for the agricultural industry. Then there are the fertilisers, of which over 200,000 tons are imported, and the imports from imperial sources are only one-twentieth of the total. Besides these there are the cereal feeding stuffs, of which maize is infinitely the most important. No less than 34,000,000 cwts. are imported, 28,000,000 cwts. coming from foreign sources. This would mean a taxation of something over £1,000,000 to 21,500,000 on feeding stuffs and fertilisers. I feel convinced that the Government will see the force of the objection to putting this taxation on these raw materials of the farming industry. But it has always been my profound conviction that farmers who look to Protection to provide a solution for the difficulties of agriculture are gravely and disastrously mistaken. Let them look at other protected countries. Let them look at Australia, a great new country, capable of infinite development, with half the population in five great cities. The farmers there feel the brunt of the Protection system to such an extent that there is a formidable and growing movement in the State of Western Australia to cut adrift from the Dominion and form a separate Dominion of the Crown on a Free Trade basis. The same movement exists in the Western States of Canada, and as we go through the United States of America, France and Germany we see the legislatures concerned about the disastrous state of farming in those countries.

If we want to find prosperous farming we must go to the low tariff countries, and first of all to Free Trade Denmark. Only last July the Ninth International Dairy Congress met in Copenhagen, where Mr. Thomas MadsenMygdal, a former Prime Minister and leader of the Farmers' Party, delivered a lecture in which he declared that the supreme position of Denmark in dairy and pig farming was due, among other reasons, in the first place to "the system of free trade and consequent competition." Why is it that the farming industry comes off so badly in a Protectionist country? Because the control of the tariff lies in the hands of powerful industrial organisations in the capital of the country. The interests of the farmers go to the wall, and particularly will that be so in the case of this, the most highly industrialised of all countries, where only seven men out of every 100 earn their living upon the land. I am profoundly convinced that no Government in this country will ever be more determined to give a fair deal to agriculture than is this Government. There will never be a more sympathetic and a more knowledgable Minister of Agriculture than the present Minister. He is a Protectionist, and there I part company with him, but he and those concerned with him in dealing with the problems of agriculture are doing the best they can on Protectionist lines, and I warn the farmers of this country, so far as my voice can reach them, that they are making a great mistake if they think that some other Government will come in and give them all that Protection which they believe they require, give them prosperity at the expense of the masses of the consumers, who represent 93 out of every 100 people in the country.

Turning to the general aspect of these proposals, first let me refer to the declaration of the Chancellor of the Exchequer, in the clear and masterly speech in which he expounded these proposals in Committee of Ways and Means. He rightly said that they represent no compromise between the majority of the Government and Free Traders, and I am sure we all agree; and we can be glad that there was no feeble, unsatisfactory compromise, which would have given away the case for Free Trade and have resulted in a bad and inefficient system of Protection. But if there is no compromise between them and us, these proposals are, in fact, a compromise—between different schools of Protection.

These proposals are directed to four main objectives. First, there is the encouragement of our home trade by the protection of the home market. Second, there is the constitution of the Empire as a self-contained economic unit, a very different objective, as my right hon. Friend the Member for South Molton (Mr. G. Lambert) realises. He has shaken the dust of the Free Trade tabernacle from his feet, but he does not seem particularly happy in the Protectionist tabernacle, and yesterday afternoon he came down and in indignant and in what seemed to me to be bewildered accents, raised the cry "Britain first." Third, there is the encouragement of our export trade by reciprocal bargains with foreign countries for tariff reductions. This policy can make very little headway if, before we approach foreign countries to enter into negotiations, we have tied our hands by binding agreements with the Dominions and if, behind the other parts of the tariff wall, there have grown up, as they will like mushrooms in a night, great vested interests. The fourth object is to obtain revenue, and it seems to me this object commends itself even more to my right hon. Friend the President of the Board of Trade than it does to the Chancellor of the Exchequer. It is quite obvious, however, that the more goods we keep out, the more we take from Imperial rather than from foreign sources, and the more bargains we are able to make with foreign countries for the reduction or abolition of our tariffs, the less revenue there will be.

The late Lord Melchett once said, and the Lord President of the Council has frequently quoted him, both in this House and in the country, that industry can flourish on Free Trade or it can flourish on Protection, but not on uncertainty. Knowing as we do that in the dialectical armoury of my right hon. Friend there are many weapons, I have never been able to understand his peculiar preference for this boomerang, because it is obvious that we shall have one schedule of tariff duties from now until the Ottawa Conference, another schedule after the Ottawa Conference, and a third schedule when the bargains with foreign countries have been struck. The Advisory Committee will be getting to work meantime, and putting big tariffs on some articles and removing other articles to the free list, and the manufacturer who has been looking forward to the certainty of Protection will find that duties are being arbitrarily increased, diminished or withdrawn, and will realise that the only system which gives certainty is Free Trade, for which Lord Melchett's aphorism is one of the soundest and strongest arguments.

Of all the schools of Protectionist thought which I have mentioned, the one with which, naturally, I feel most in sympathy is that which desires to increase our export trade by lowering foreign tariffs. Unfortunately, the history of retaliatory tariffs is not encouraging. My right hon. Friend the Financial Secretary to the Treasury admitted, I think, that that was true as regards foreign countries, but he said that we are in a very much stronger position. Unfortunately the Balfour Committee, a committee of men of great practical experience and the highest credentials, who sat for a very long time considering the problems of British industry, and published their conclusions at no inconsiderable length, in a series of volumes, strongly condemned any system of attempted bargaining by duties here. They say: Experience shows conclusively that it cannot in the long run lead and as a matter of historical interest it has not led, to a reduction in the general level of tariffs. They know that if we put on a certain tariff and industries grow up behind the shelter of that tariff wall, it is very difficult to justify a demand upon some industry to abandon the Protection which it has received during those years in order that some other industry—not itself—should obtain advantages in a foreign market. Therefore, there are great difficulties in this course of action; but I am far from saying that for that reason we should not attempt it, and, indeed, for my part, I believe that there is in the present economic and political situation an opportunity for using such tariffs as we have, reinforced by the prospect of further legislation for the prohibition or exclusion of luxury goods for the increase of our influence in the councils of the world not only in the direction of economic but also of military disarmament and political appeasement, and to unite in an influential group the low tariff countries of the world.

5.30p.m.

I am amazed at the references by the Financial Secretary to the Treasury to the passage on this subject in the speech of my right hon. Friend the Home Secretary as being very bellicose. Such proposals would be a lead towards economic peace for which the nations are hungrily waiting at the present time. Let me refer again to what I said just now about the difficulties. It will need deliberate preparation and the concentration of all the resources of our economic and political diplomacy on this one objective and a steady aim. If, instead of that, we are to dissipate our energies over four different objectives, nothing will be achieved. Time will be wasted, opportunities missed, and obstructive vested interests will be created which will bar the approach to foreign countries. Sorrowfully, I have to admit that the school with which I am most in sympathy has come worst out of this compromise.

To sum up this part of my argument: Here are four different policies. The country has never decided which it wants, or whether it wants any of them. Success in any direction requires concentration of effort and resources on a clearly defined objective. This House has never decided which objective it desires to select, and it is my contention that until the main lines have been discussed and laid down by this House, this Bill ought not to be passed. How far can these proposals be defended as necessary to secure either the balance of our Budget or the balance of our international payments? We have not yet had any discussion on the budgetary position. We have not yet heard for what financial purposes the yield of these duties is required. Nevertheless, the President of the Board of Trade spoke the other night of the revenue which was to be derived from these proposals and linked it up with the need for lightening the burden of the direct taxpayer.

I would venture to appeal to the House to face this issue squarely, seriously and objectively, before it makes up its mind and before the policy of the Government is framed. I do not want to make party capital out of it, I would prefer to approach it from the standpoint of my Noble Friend the Member for Lanark (Lord Dunglass) who made such a brilliant, closely-argued and effective maiden speech yesterday. He said, with evident sincerity, that neither he nor any of his friends would go on with these proposals for a moment if they thought that they were going to add to the burdens on the shoulders of the poor. I accept that, and I will approach the question from that common ground. In my view, it would be unfair and disastrous if money raised by the taxation of the necessaries of life of the poorest of our people were to be used to reduce the burdens of the direct taxpayers. ln answering that argument, the Noble Lord said, quite fairly, that the Government's policy must be considered as a whole, and that it was not fair to single out one aspect and criticise that only. If this policy resulted in greater employment at trade union rates of wages, instead of merely the receipt of unemployment benefit and benefit from public assistance committees, the working classes would be much better off, even if they had to be taxed on their food, than they were at the present time.

But in the first place, there is not in this House a supporter of this policy so ardent and rash that he would venture to prophesy that it would result in the immediate future, let us say in the forthcoming financial year, in the absorption of the greater part of our unemployed. Obviously, therefore, it is impossible to justify the imposition of additional burdens on the great mass of the unemployed, and on other classes of workers, on grounds that will apply only to a small minority at best, in the next 12 months. I agree that direct taxation is too high at the present time, but surely it is better that the direct taxpayer should bear a little longer the burdens that he has, until he gains the relief which is coming, relief from the policy of ruthless and rigid economy, which my right hon. Friend the Chancellor of the Exchequer in this Government is pursuing, relief, too, from the success of the Government's constructive proposals which, if they result in reviving industry, must result in expanding revenue. If it does not result in reviving industry, there is no benefit to the unemployed. Surely it is better that the direct taxpayer should await the results of the effect of the policy of revival of industry and trade, rather than that new burdens should be added to those now being borne by people below the Income Tax level against which they will only be able to set off the problematic benefits of this policy.

I am hoping that my hon. Friends will realise how serious these burdens are likely to be on the people affected. Take the Ministry of Labour index, which is impartial, and in which an allowance is made of 60 per cent. in calculating the cost of living. What Member of this House spends two-thirds of his income, or even a fraction of that proportion on food? The importance of food in the Budget of a household varies in inverse ratio to the means of the household. The poorer the household the greater the proportion of the income which is spent on food. Let us face the fact that food taxes are a kind of surtax, but graduated the wrong way round, and falling with the most severity on the smallest incomes. Nor is it open to us to use the argument that we are only bringing the cost of living back to 1928 or 1929. We used that argument quite legitimately to justify the cuts which we made in the unemployment benefit. We cannot go on using it.

This brings me to a consideration which, I know, will weigh heavily with hon. Members in every part of the House, the pledges which this Government and its immediate predecessor the first National Government gave to the country during the grave national crisis in August and September of last year. It was then stated that the fundamental principle of the Government's proposals in dealing with the financial crisis must be equality of sacrifice. It was indeed difficult to make the sacrifice equitable, but we made an honest attempt, and I think the results were undoubtedly approved overwhelmingly, and endorsed by the people at the last General Election. The Measures did involve serious sacrifices, sacrifices by the direct taxpayers, by teachers, police and many other interests, sacrifices also for the unemployed men and their families, who are the chief victims of the industrial depression for which they are themselves in no way to blame. Having exacted those sacrifices on the one hand from these classes, and on the other from the direct taxpayer, on the principle of equality of sacrifice, surely it is out of the question for this House to turn round, six or eight months later, and upset the balance of sacrifices by shifting, by the taxation of food, and other necessaries of life, burdens from the shoulders of the direct taxpayers on to those of the working class. I feel sure I am speaking the minds of hon. Members in all parts of the House— Horn. MEATBERS: "No!"]—if hon. Members will let me finish my sentence—I am speaking the mind of hon. Members in all parts of the House in saying that to the maintenance of that principle of equality of sacrifice, the honour of this House and of this Government is pledged.

Let us then consider how far these proposals will assist, and how far they are necessary in dealing with the adverse balance of payments in order to buttress sterling, and how far if at all it is necessary to control imports over and above the drastic methods which have been already adopted. The Chancellor of the Exchequer informed the Committee of Ways and Means last week that the adverse balance in 1931 was £113,000,000. That figure was the result of a series of very difficult and complicated calculations, depending upon a number of uncertain factors which, as Mr. MacRosty showed in his article in "Lloyds Bank Monthly," may vary as much as 10 per cent. One thing is certain, that the adverse visible balance in 1931 fell, that is to say, improved, by £21,000,000, over 1930. Moreover, in January of this year it improved by a further £14,000,000. At that rate our adverse balance will be wiped off long before the end of this year. Indeed, can the opposite assumption be correct? If it is possible to assert that this adverse balance persists, this alleged maleficent influence dominating the whole of our economic position, how comes it that my right hon. Friend the President of the Board of Trade was able to say the other evening that "our trade has kept up to a surprisingly high level, while the rest of the world"— the Protectionist world—"has grown poorer and poorer "Then he went on to say: Every week the French balances are going down in the City of London. We are able to stand the strain quite well."—[OFFICIAL REPORT, 9th February, 1932; col. 693, Vol. 261.] And we are able, on the authority of the Chancellor of the Exchequer, to look forward, not with certainty but with confident hope, to a balanced Budget; to pay for all those importations last year, including the abnormal ones, without any symptoms of weakness in the exchange. Nay, further, we can pay back the £50,000,000 that the Bank of England borrowed last autumn, without a flicker on that delicate indicator of our national position. Far be it from me to prophesy the effect of the new economic policy of the United States of America, but it is not likely to depress our exchange. Therefore, I say that the case is not established, on grounds of necessity.

Even if we were to assume that the figure of £113,000,000 is the adverse trade balance with which we must reckon in the coming year—I do not want to chop logic on this Bill. I would rather be proved wrong, and that the Free Trade case was false than that by this Measure, which we all know is bound to pass through this House, additional injury was done to the trade of this country—how far—and I ask the House to face this question—will this Bill be effective in redressing the balance? Let us note the Chancellor's statement that while our imports have remained practically stationary during the two years, our exports have declined by nearly 38 per cent. and that nearly the whole amount of the difference between our favourable balance in 1929 and our unfavourable balance in 1931 was accounted for by the shrinkage of our invisible exports, amounting to £188,000,000, that is to say a falling off in the yield of our foreign investments. To-day an hon. Member opposite was referring to the decline in our shipping and our insurance, due to a, shrinkage in the world trade. Yet it is now proposed to do exactly what we criticise the United States for doing to its War debtors, to put up barriers against the goods which our foreign debtors are sending in payment of our debt, and of the interest on our securities. The Chancellor of the Exchequer says that, unfortunately, invisible exports are one of the three sets of figures which it is least possible for the Government to influence. Unfortunately, that is not the case. These proposals are calculated not to ease, but to increase, the strain upon our balance of payments just where it is weakest—the yield from our shipping and from our foreign investments.

From the standpoint of redressing the balance of payments, they cannot ameliorate, and must aggravate the situation. If all that is wanted is what the President of the Board of Trade called the "slimming" process, what is the justification for the introduction of this great measure of fiscal revolution? As the President of the Board of Trade says, there is nothing permanent. It "can be varied from time to time according to the constitution of the House and the opinion of the electors." That is true, and it will be varied, but two factors will prevent it being done without a long struggle—the bargains with the Dominions, which every Government will be in honour bound to keep, and the growth of those vested interests. That kind of hypnotism will lull only the most willing patients to sleep. The president of the Board of Trade and the Chancellor of the Exchequer tell us that there is nothing so terrible about this Measure after all—that we shall enter into the comity of low-tariff countries. A low-tariff country with a general tariff of 10 per cent., plus the effect of the depreciation of sterling, which cannot be reckoned at less than 20 per cent. —a low-tariff country when, under the provisions of Clause 3, the new Tariff Advisory Committee can recommend tariffs of any amount up to 100 per cent. or more. Those solitary skyscrapers to which my right hon. and gallant Friend the Financial Secretary to the Treasury referred yesterday—the Sugar Duty of 133 per cent., and the Petrol Duty of 100 per cent. —will soon have companions, and, perhaps, competitors; and, although I have no doubt whatever about the sincerity of the declarations of my two right hon. Friends, the Chancellor of the Exchequer and the President of the Board of Trade, that it is not the intention of the Government at the present time to embark upon a policy of high Protection, there is not in this Bill a single safeguard which will enable any supporter of these proposals to declare that we are ranging ourselves among the low-tariff countries. As regards the duties under Clause 3—duties on articles of a kind which are being produced or are likely within a reasonable time to be produced in the United Kingdom in quantities which are substantial in relation to United Kingdom consumption "— if I may use an American expression in regard to the duties on these articles, "the sky is the limit." The truth is that we have in this Bill the complete structure of a permanent Protectionist system. [Interruption.] Apparently, I am supported in that statement, and it is supported by the very eloquent and powerful speech of my right hon. Friend the Member for Hillhead (Sir R. Horne), in which he said that, while a 10 per cent. duty was not enough, he rejoiced in it as a beginning. There is the main girder of the 10 per cent. general tariff, plus the exchange depreciation, upon which is to be reared, according to the recommendations of the Advisory Committee, a superstructure of selective tariffs to a height unregulated by any provision in this Bill. Then, below, the foundations are to be laid securely in Imperial preferential agreements. Nor is this structure innocent of armaments. There is, in addition, our well known friend the tarif de combat, the fighting tariff, which has proved such a lethal weapon in the hands of militant economists in every country. The President of the Board of Trade says that we can regard all this with equanimity. He depicts it as a temporary, flimsy structure, a kind of Hollywood set which can be whisked away without the slightest embarrassment or detriment to industry in a few years' time. Do not let us deceive ourselves. In fact, it is a powerful and formidable engine of economic warfare. This economic warfare, this blind scramble for a share of a dwindling world trade, is all on the wrong tack. It postpones recovery, and obscures the need of patient, thoughtful constructive work, There were two remarkable passages in the Report of the International Bankers' Committee, which met recently at Basle, to which I would for a moment direct the attention of the House. The Report says: With trade lines open, labour now idle in one country could be at work producing goods to exchange for goods which would be produced by labour now idle in another country.…But the trade barriers stand between, and both remain idle. This Bill will multiply those barriers. These experts, whose opinions we are now recommending to foreign countries, go on to say: The nations of the world are contending each for a disproportionate share of dwindling world trade. With a different policy they could share with one another an expanding world trade. This is the same policy, the same bad policy, which lies at the root of all the distresses of the world to-day. There is another policy, a policy of healing, of appeasement, of reconstruction, which His Majesty's Government are actively pursuing in many fields. This is the policy to which I pledge my active support—the constructive reorganisation of industry, making British production cheaper and more efficient, economy in public expenditure, appeasement in the Far East, appeasement and constitutional reform in India, military and economic disarmament, a vigorous handling of reparations, War debts and currency problems. These are the fields in which we can labour resolutely, loyally and effectively, and, by the fruits of our labours, hope to repay the confidence of the nation.

Photo of Sir Samuel Storey Sir Samuel Storey , Sunderland

As this is the first occasion upon which I have had the privilege of addressing the House, I must ask the indulgence of hon. Members for a maiden speech, particularly as I have the misfortune to follow the eloquent and able defence of his position, to which we have just listened, by the Secretary of State for Scotland. I sit in this House as one of the representatives of a great industrial constituency, which, depending, as it mainly does, upon shipbuilding and marine engineering for its livelihood, is unlikely to benefit directly to any great extent from the provisions of this Bill. But it is a remarkable fact that for more than a generation—ever since my grandfather, the first Member of the Liberal party holding an official position in that party to cut adrift from the political associations of a lifetime and fight for the policy of Joseph Chamberlain, faced his constituents again and won one of the earliest victories for Tariff Reform at the polls—it is remarkable that, during all those years, that great industrial constituency has only twice voted against a policy of tariffs.

The people of Sunderland know that if we were to substitute, for a policy of indiscriminate imports, a policy of selecting our imports, things would be very different for them. They know that if, instead of importing manufactured goods, comparatively small in bulk and coming for the most part short distances, as from the Continent, probably in foreign vessels, we were to substitute raw materials, greater in bulk, coming from the four corners of the world and tarried in British ships; if we were to increase our exports by means of Imperial Preference; and if, too, we were to increase our exports of coal by using the bargaining power which we propose to take to ourselves—if we were to do these things, we should be doing something to bring back prosperity to shipping, and to bring nearer the time when the hammers will ring in the shipyards of the Wear once more.

I am not at all certain that the provision in this Bill that goods consigned to shipyards will come in free of duty will be of any great benefit to the shipbuilding industry. The arrangement which has been in force for some time between steel-makers and shipbuilders has ensured that very little foreign steel is used in British shipyards; but, even if a great deal were used, and even if it came in free of duty, as it would under the proposals of this Bill, the shipbuilding industry would be in no better position than it is at the present time to compete for orders. Therefore, I hope that, when we come to settle the details of our tariff policy, we shall be able to grant some small measure of preference to goods carried in British vessels, and to secure for British shipping the carrying trade between the various parts of our Empire. I hope, too, that, when we come to consider the use to which we shall put the bargaining power which we are taking under this Bill, we shall endeavour to persuade those countries which discriminate against our shipping to remove their restrictions, and to persuade those countries which prohibit their nationals from building ships abroad to relax their prohibition in our favour. By such means as this we can bring back prosperity to both shipping and shipbuilding.

With the free list as outlined in this Bill, and with the general provisions of the Bill, I am entirely in agreement, but I should like to offer a word or two of criticism about one of the items included in it of which I am myself a. consumer. After listening last night to the explanation of the Minister of Pensions about newsprint, I entirely fail to see why newsprint has been included in the free list. When we remember that during 1930 British mills only worked at 79 per cent. of their full output, and when we remember that, if they had produced the whole of the tonnage imported from countries outside the Empire, they would still only have been working at 94 per cent. of their full output, it is hard to realise why newsprint has been put on the free list. As one who has always bought English-made paper—I can remember but one or two small parcels of foreign paper, bought during the War and post-War famines, ever being used in the production of my newspapers—I should welcome the exclusion of newsprint from the free list.

6.0 p.m.

The Minister of Pensions last night seemed to suggest that there was a fear that, unless foreign imports of newsprint were allowed, the production of newsprint would be in the hands of mills controlled by certain groups of newspaper proprietors. When we look at the figures, I do not think that that case can be made out. It is true that three-fourths of the output of British mills is from mills connected with newspaper groups, but those mills belong to three separate newspaper groups, and they themselves only use one-third of that output. The remaing two-thirds has to be sold in the open market, where it has to meet the competition of their rivals, the competition of the free mills in this country, and the competition of paper produced in Canada. When we remember that there is a possible increased output in Canada of no less than 1,000,000 tons pere annum, it would seem ridiculous to say it is necessary to import 120,000 tons from countries outside the Empire. Canadian producers of newsprint can provide all the competition that is necessary to see that the price in this country is a reasonable one without allowing foreign countries to sell their newsprint here at £2 to £3 per ton below the price they get in their home markets. We should profit from the lesson of the United States, where the power of the Press was sufficient to ensure that newsprint was placed upon the free list, and where newspaper proprietors now find that they are nearly completely in the hands of foreign producers.

As a consumer of newsprint who has nothing to do with any of the newspaper groups, I want to see it possible for British mills, particularly those that are free from the control of newspaper proprietors, to produce remuneratively, and I hope the Government will not be deterred by the fear of any Press agitation from giving them a reasonable measure of protection. The Minister of Pensions told us last night that representations had been made by a large number of newspaper proprietors. I think I ought to tell the House that, when this matter was discussed by the Newspaper Society, which represents the whole of the provincial newspaper proprietors, there was such an equal division of opinion that the society decided to take no official action. These representations have been organised, and are led by that source of hidebound fiscal prejudice in Manchester from which hon. Members below the Gangway draw their daily sustenance. I hope the Government will reconsider this question and will remove newsprint from the category from which it can only be removed later by fresh legislation, and placing it under the revenue tariff will allow the whole case to be argued before the Tariff Advisory Committee.

I welcome this Bill as a great step forward. To me it is the product of that great body of national opinion throughout the country which is represented in the constitution of the National Government. I think I am voicing the opinions of many, particularly among the new Members, when I say we are glad that the Government have produced a Bill which appeals to men of moderate opinion in all parties. I welcome the play of opinion, even the criticism, of the very various elements in the Government and in the House. I only regret that we have not been. able to carry with us the Home Secretary and his friends. Intervening in the Debate the other night the Home Secretary said he wished to God he was asleep. I wish to Gad he was awake—awake to the dawn of a new era, awake to the folly of trying to perpetuate the policy of Cobden and Bright in the light of entirely new circumstances, awake to that basic principle of Liberalism, which he professes to lead, which is to adapt the policy of the time to suit the circumstances of the time. This Bill is an honest endeavour to adapt the policy of the time to the circumstances of the time. To me it is one of the first fruits of national unity. I believe national unity has achieved much, and is achieving and will achieve more. I believe that out of national unity will spring Empire unity, and that Empire unity will secure to us our rightful position in meeting the world problems which lie across our path. As a link in the chain of unity I welcome this Bill.

Photo of Major Goronwy Owen Major Goronwy Owen , Caernarvonshire

I am sure the House will wish me to offer its congratulations to the hon. Member on the very excellent maiden speech that he has just delivered, and I am sure it will look forward to future contributions from him on the same level. I am glad of the opportunity to rise to oppose this Bill. I have listened to many speeches of varying character in these Debates and I think I have read every one, but the most remarkable of all to me is that which the President of the Board of Trade delivered last Tuesday. I regret that he is not in his place, but I am sure he will realise that I have no personal animosity towards him of any kind. I have always regarded him as one of the clearest thinkers and speakers in the House of Commons, but his speech of last Tuesday has compelled me to alter my opinion with regard to the clarity of his views and the logic of his arguments. He said: What we propose in the policy which commend to the House to-day is not a surgical operation but a slimming process. In commending these proposals to the House to-day. I do so mainly as a director of slimming. It is seldom that we associate flippancy with the President of the Board of Trade, but rarely, I think, has a more flippant statement been made. At the same time he said: I am still a Free Trader. It is quite impossible in my opinion that he should be both a director of slimming and a Free Trader. The essential principle of Free Trade, after all, is that every assistance possible should he given to encourage the freeest and largest volume of international trade. The aim of the Government proposals is deliberately to restrict still further the interchange of commodities, a process which has already drastically reduced the trade of the whole world. The Free Traders aim is to encourage and to nourish international trade. The right hon. Gentleman's aim, as a slimmer, is to reduce the opportunities upon which trade can expand and industry can grow. I have always understood that slimming is a temporary expedient and that, if carried too far, it generally results in the death of the patient. But the Government tariff is a policy not of a temporary but of a permanent character. I should like to ask the right hon. Gentleman, to whom is he going to apply the process of slimming? Is he going to apply it to the trade of the country, which is already so reduced, or to a certain section of the community whose sufferings and privations are already sufficiently heavy? He also claimed that nothing in life is permanet. Nothing in this life is permanent. We all agree on that. Nevertheless, he knows perfectly well that such a full-blooded tariff as he commended to the House will continue to grow long after the present need for a tariff has ceased to exist. That has been the experience of all other countries, and I fail to see why in our own case there should be any different result. It was very noticeable that he mainly confined himself to the 10 per cent. tariff. In reply to an argument used by the Home Secretary on the previous Thursday he said: I do not disagree with his judgment of the 10 per cent, tariff that it will not redress the balance of trade. Nobody ever said that it would. It will only contribute to that end. Here is an important point, and practically the only occasion on which he referred to it in the whole of his speech: The additional duties will fill up the gap which the 10 per cent, tariff is not sufficient to do." —[0FricrAt, REROWR, 9th February, 1932; col. 701, 'Vol. 261.] In another part of his speech he explained that he was in favour of a low tariff. The right hon. Gentleman in the last six months has changed very considerably in his views with regard to the economic policy of the country, and his tariff supporters behind him may yet see him in favour of a high tariff. He will probably, one of these days, join the right hon. Gentleman the Member for Hillhead (Sir R. Horne), who accepts these tariffs as a basis for a higher and a heavier tariff on manufactured and even semi-manufactured goods.

A great deal has been said in the course of these Debates with regard to the necessity of maintaining the pound sterling, and very gloomy pictures have been painted of the •dreadful calamities that would occur if there were a further depreciation in sterling exchange. The right hon. Gentleman devoted a great part of his speech to that subject the other day. I should like to ask him and his colleagues on that side of the House this very simple question: How do they explain the recent maintenance of sterling in spite of the large withdrawal of foreign deposits, and in spite of the accumulation by the Bank of England of large stacks of foreign exchange? If an adverse balance of payment, as he and those on that side of the House insist, took place and is taking place, how was it possible for the Bank of England to pay off £50,000,000 within the last few months without any adverse effect whatever on sterling exchange, while at the same time, to use the right hon. Gentleman's own words, every week the French balances are going down in the City of London? If our adverse balance of trade is as bad as all that, surely it must follow that there will be some effect, at any rate, on sterling exchange. I do not think that a Member on that side of the House, and not one of the Ministers, has ever attempted to explain to the House that problem, but the right hon. Gentleman admits that tariffs will not stimulate exports.

What are the purposes of these tariffs? Briefly, the purposes, as I understand them, are twofold, namely, to produce revenue, and, secondly, to protect the industries of this country which, it is asserted, are suffering from unfair competition at the hands of the foreigners. The right hon. Gentleman estimates that the Treasury will get nearly £30,000,000 in revenue from these new duties. Both he and the Chancellor of the Exchequer at the same time assert that the consumer will not shoulder any of the burdens of these new duties. Who, then, is going to pay? If the consumers in this country of the food, raw material, semi-manufactured and fully manufactured goods are not going to pay, does the right hon. Gentleman expect that the manufacturers of these goods are going to pay these duties? They will produce £30,000,000! If they are going to produce £30,000,000, where is the protection for the long suffering industries of this country? Of course, nothing of the kind is going to happen. It will be the consumer of the goods upon which the duties are imposed who will have to pay. It is an old and well-established principle of the Liberal party, of which the right hon. Gentleman has long been an ornament, that the broadest shoulders should bear the heaviest burden, but if I understood aright his argument the other day. the inference to be drawn from it is that the burden is to be shifted from the shoulders of the Income Tax payer and to he applied to that portion of the community which has already undergone the most severe surgical operation. There are times when most of us use phrases and words which we afterwards regret, and I cannot help thinking that the right hon. Gentleman would have gladly never have uttered the word "slimming" in this connection.

I will turn to the Bill itself. It proposes to authorise three classes of duties. There is, first of all, a general ad valorem duty of 10 per cent., then we have the additional duties to be determined by the Treasury after recommendations by the Committee, and, thirdly, we have the retaliatory measures in respect of foreign discrimination to be applied by the Board of Trade apparently without reference to the Committee or to the Treasury. The right hon. Gentleman will correct me if I am wrong. We were told that this was going to be a scientific tariff, but a more complicated tariff-making machine it would be impossible to devise. Parliament's function: That is merely nugatory. All we have to do in this House is to authorise the procedure contemplated in general terms. That is all this House has to do with this Measure—well, yes, we have to confirm Orders made by the Treasury and the Board of Trade. That is as far as the functions of this House go with regard to the Bill, and no further.

The real tariff-making rests, not with the House of Commons, but with the Committee which is to make recommendations to the Treasury, with the Treasury itself, which can accept or reject the Committee's advice but cannot impose tariffs in excess of those recommended, and, thirdly, with the Board of Trade which can fix retaliatory duties. The Bill, in effect, practically abrogates the functions of Parliament and hands them over to two Departments of State. This is, indeed, a grave departure from Constitutional procedure. The only precedents we have are the recent Abnormal Importations Act and the Horticultural Products Act. Again my right hon. Friend is responsible partly for those Measures. Hitherto taxation has been the most jealously guarded of all House of Commons privileges, and now Parliament is asked merely to confirm automatically the decisions of Government Departments. After all, the business of the House will be so heavy that when an Order is placed upon the Table there will be no time for the House to consider it, and, in effect, all that the House is able to do will be to give an automatic confirmation to the duties which are imposed, not by the House of Commons, but by a Department of State.

There is the further objection to this method, that even assuming that the proposed Committee consist of judicially-minded persons, it does not follow that it will be impartial and free from political pressure. All it does is to recommend, and in the case of the retaliatory measures, it has no voice whatever. The scheme as foreshadowed in this Bill offers undoubtedly the maximum degree of uncertainty, as my right hon. Friend the Secretary of State for Scotland pointed out in his very excellent speech. Importers will not know until the Treasury has received the Committee's findings and approved them which range of duties it is proposed to impose upon particular commodities, and even then it will appear that there will remain the possibility of interference by the Board of Trade in respect of foreign discrimination. The whole structure of this procedure which the right hon. Gentleman and the Government commend to the House is one of the most complicated and most difficult methods by which tariffs can be imposed, and is in direct contradiction to all the functions, powers and constitutional procedure of this House. I stand here to-day to oppose this Bill with all the strength that I possess, and I mean to oppose it to the very end. This country has grown great under the policy of Free Trade. It is now going to join in the mad economic nationalism which is so often referred to in the course of these Debates.

Photo of Mr John Gretton Mr John Gretton , Burton

The hon. and gallant Member for Carnarvon (Major Owen) has spoken his opinions upon a very clear and definite issue, and he has no doubt as to the course he is going to take. He left the House in no doubt as to his feelings. The right hon. and gallant Gentleman the Member for Caithness (Sir A. Sinclair) still leaves it mysterious to us how Members of the present Cabinet can remain Ministers of the Crown while the Government of which they are Members are supporting a Measure for which they prophesy disaster. We are amazed at the fact that they can make the speeches they do with sincerity and force and still remain Members of a Government which is carrying out the mandate which they so vigorously denounce. I suppose that they will leave us with another Liberal mystery. The Bill does not impose a tariff; it only imposes an all-round revenue duty of 10 per cent. upon commodities imported from abroad. It astonishes me, when I hear speeches in this House, and read articles dealing with this question, that it. appears to be thought by some persons that this is a proposal to impose an all-round duty of 10 per cent. upon everything imported into this country. No duty whatever is proposed by the Bill on anything which is imported from our own Crown Colonies or from the Dominions until the end of the present year after the Ottawa Conference has been held to clear up outstanding questions at issue as to Empire preference. There are no Excise Duties to balance Customs. Therefore, the Bill imposes no duty upon anything produced in the United Kingdom. With all this free market, surely the Government should not be accused of seeking to endeavour to impose a 10 per cent. tax upon every commodity whether food or otherwise.

A great deal of criticism may be levelled at the proposals which we are now asked to adopt, but at any rate they are a step along the road which we are bound to take or we must continue the road of decline which we have been pursuing for so many years. Since the termination of the War the general tendency of the export trade of all the large exporting countries of the world has been for them to maintain themselves or to increase it, until the end of 1929ߝ30. During the whole of that period there was a general tendency to a small increase, but this country's business has been going down steadily. We have had, as the years have passed, a less proportion of the whole trade of the world than we had at the beginning of the century. So much for our export trade. It has gone back under the old system until we are now at a stage where everyone expects to rely entirely upon invisible exports which, in fact, cannot accurately be estimated. We see our factories standing idle, or half filled with work, or working without profit hoping for the turn of the tide. Unfortunately, even now there is an increase in the number of the unemployed, which is a vast burden upon our finances and a great danger to our social system. The Bill is an attempt to turn that tide and to balance our trade. It is a Bill, upon the foundations of which we can build a tariff, though I agree with the hon. and gallant Member for Carnarvon it is a very clumsy and dilatory method. Everything will depend upon the composition of the Advisory Committee which it is proposed to set up under the Bill, a committee of five or six members. The experience of such committees has been that it has not been possible to find men of experience who know business methods and methods of production and can understand readily and easily, by the experience they have gained, the questions put before them for their consideration.

6.30 p.m.

One finds that those who are appointed on these Commissions are generally either men who have experience in examining accounts, such as accountants, or economists, a most dangerous type of man, professors, or lawyers. None of them are really practical men with experience of business. The difficulty is to find first-rate men who have the confidence of the commercial and the manufacturing world. These gentlemen will have to examine, first of all, the abnormal commodities which come under the Abnormal Importations Act, which expires in May. Something will have to be done in that direction. They will have to examine every one of the trades which asks for greater protection. The 10 per cent. duty will not be protective except in those cases where such a duty will turn the scale of production and find more employment in this country.

When one looks at foreign tariffs or the tariffs in our own Empire one finds, after the experience of years, that there is a large measure of similarity between them. The duties are highest on the finished articles or commodities. On the hilly finished commodities the tariff sometimes amounts to 40 or 50 per cent., and it varies between 25 and 30 per cent. in the majority of cases. No one in this country wants a high protective tariff, but what we do need, in order to hold our own in the world, is a moderate tariff which will give reasonable protection to efficient industries but will not bolster up protective industries which are not efficient. We want enough of a tariff to balance the scale against the competition of other nations which is unfair, often of a dumping character, consequent upon the dumping of surplus goods here which they can afford to sell at a cheap rate. because they have markets elsewhere.

We want a tariff which will produce revenue as well as a tariff that will protect efficient industry. The tariff which was drawn up by the late Professor Hewins, who had great knowledge of this subject, and whose untimely death we all deplore, was calculated to bring in a revenue of at least £40,000,000 a year, and in the circumstances of a full volume of trade a little more. In the drawing up of the tariff, I. am afraid that there will be long delay. The five gentlemen will have to go through an innumerable range of trades and businesses, including agriculture, and they cannot be expected to do their work thoroughly in a short time, even if the tariff should be an experimental one. Meanwhile, we have upwards of 2,500,000 persons registered as unemployed, and it is our duty to rescue them from that unfortunate position and bring them into work at the earliest possible moment. Other nations in setting up their tariffs have drawn up a scale fairly high, and one which can be adjusted to the varied and the chancing circumstances. Of course, no tariff can be said to be perfect; you cannot have a perfect tariff, but other nations have drawn up their tariffs on a high scale and have lowered it to those countries which give them protection on favourable terms. We are beginning on a 10 per cent. basis and have to build upwards. I think that is a very unfortunate, very clumsy and very dilatory process.

I would call attention to a serious omission from the Bill. There is no antidumping Clause. Every other tariff scheme has such a Clause. We need such a Clause in order to deal with the importation of goods which are sent here, especially from Russia, with the avowed intention of wrecking our business as far as possible and upsetting our markets.[Interruption.] It is so. We are not to deal with these matters by means of anti-dumping duties but have to wait for some other measures. It is a very unfortunate circumstance. I do not want to delay the House by going over the whole of my criticisms, but I would like to call attention to the free. list. It is very astonishing to some of us to see that rubber is on the free list. During the War I had something to do with rubber, as a member of the Rubber Committee. There was no real shortage for the purposes of the War, and when peace was established a scheme was introduced, which some of us thought a very bad scheme, for restricting the output of rubber plantations in the British Empire over a long period. The result of that restriction, which has been carried out, has been an enormous growth in the rubber industry of the Dutch East Indies, while the rubber industry in our own Empire has suffered enormously through the prolonged restriction. I am much astonished to see rubber, therefore, in the free list, especially as we are told that the Advisory Committee cannot take from the free list any commodity after this Bill has gone through, and that there will have to be special legislation to adjust any errors that are made in the free list. I have here particulars of the production of rubber in the British Empire and of the amount imported from other countries, and I maintain that there is an immensely strong case for taking rubber off the free list and giving some help to Empire-produced rubber.

There are other points in connection with the free list with which I might deal, but I will only refer to one other commodity, namely, maize. Only a very small quantity is brought across the seas from the British Empire. Yesterday the right hon. Member for South Molton (Mr. Lambert) produced figures which, according to my information are correct, showing that of 53,000,000 cwts. of maize consumed in Great Britain and Northern Ireland 48,000,000 cwts. come from Argentina. The quantity produced for export in different parts of the Empire, our Dominions and Colonies, is triflingly small as compared with the enormous importation from the Argentine. I would suggest that maize, at any rate until the next season's crop, ought to be put on the free list in order to give time for negotiations to take place with the Dominions. I will not go into the question of the exchange and so forth.

With all its defects, disappointed as I am with the Government's proposals of only a 10 per cent. revenue duty to begin with, and with machinery which is dilatory and may be inadequate to make a proper scale of tariffs, I support the Bill, because on it I believe that it is possible to build a system of duties which will develop our Empire trade, encourage production and the interchange of commodities, food and raw materials between the different parts of the Empire and go far to develop in the mother country and in our Dominions overseas a great economic unit almost entirely self-sustaining, if need be, and far more able to resist the shocks of foreign calamities and trade depression than our present system. I shall go into the Lobby to support the Bill because it is a step forward in those principles which I have held so long. I have always been a moderate Protectionist. I have never seen the arguments of Free Trade, which are the arguments of theory and not of practice in these modern times. I hope that in Committee such Amendments will be made as will lead to a considerable improvement in the machinery and structure of the Bill.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Stockport

In rising to address it for the first time, I beg the House to extend to me its indulgence. Especially do 1 appreciate the privilege of being able to take part in a Debate of such importance as this one. A week ago last Thursday I had the privilege of listening to my right hon. Friend the Chancellor of the Exchequer, when he informed the House of the proposals which he intended to bring forward to alter the fiscal system from one of Free Trade, which had actually been in practice one of free imports, to a system of moderate Protection. Since then I have been north to my constituency and I found that the Chancellor of the Exchequer's proposals had brought renewed hope to many of the businesses in the industrial borough that I have the honour to represent. Several hon. Members have suggested that there has been an undue delay on the part of the Government in bringing forward this Bill. I do not agree with them It was most essential that due consideration should be given to the important and far-reaching effects which any alteration in our fiscal system is bound to entail. I want to congratulate them on the speed with which they have brought the Bill before the House of Commons.

During our Debates many criticisms have been passed, but the one to which I take most exception is the suggestion of hon. Members opposite that this is a Bill for taking money from the poor in order to lighten the burden of taxation on the rich. Nothing could be more false than a statement of that nature. If tariffs were not put into operation, if these steps were not taken, the adverse balance of trade would still remain, indeed, it would get worse, and there would be a further depreciation of currency which the poorest would feel most. Hon. Members opposite are always telling us that tariffs will raise prices and increase the cost of living, but they close their eyes and remain completely blind to the fact that if we do not take steps to prevent a further depreciation of currency that is exactly the one thing which will happen. The Home Secretary himself said that if we do not take steps to right the adverse balance of trade it would have a deleterious effect on the value of sterling, although he qualified it by saying that it would not be catastrophic. Many hon. Members do not accept that view; they think it would be catastrophic as far as the workers are concerned.

As a new Member, I am prone to be swayed by the powerful and masterful addresses which it is my pleasure to listen to in this House, and as the Home Secretary developed his argument I had one or two doubts; but whatever doubts I had they were removed when the Home Secretary informed us of the alternative proposals he would put into operation to deal with the grave state of our industries, with the 2,750,000 men and women out of work, with the urgent necessity to right the balance of trade, and I was glad that I did not listen to the siren call of the right hon. Gentleman's arguments. I have no doubt that by the time the Commission he suggested should be put into operation completed its inquiries, by the time industries had submitted their schemes and the consumers had been consulted, the adverse balance of trade would have gone from bad to worse, and it would have been too late. Hon. Members opposite have also suggested that instead of tariffs decreasing they will increase unemployment. I have noticed that recently they have taken a great deal of interest in the question of unemployment, and I admire them for their courage and their nerve. They say that tariffs will increase unemployment. Their record as a Government in office is that in two and a-quarter years they increased unemployment one and a-half times. I would remind them of the words: Why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye? Let me say one word about an industry which is an important one in my own constituency—the hat industry. The effect of this Bill upon that industry will be very good. In case I am considered selfish let me point out that this is also an important industry in Luton and Denton and many other industrial areas. The proposals of the Chancellor of the Exchequer have brought a brighter prospect to this industry. In 1921 we imported £366,000 worth of felt hats and goods and exported three times that amount. In 1929 our imports had risen to £2,200,000 worth and our exports were only £1,700,000. Under a system of Free Trade, instead of exporting three times the amount of our imports of felt hats and goods we are now only exporting two-thirds. Take the case of Czechoslovakia, one of the principal rivals of this industry, who are dumping their goods into our markets not only by means of shipments but by parcel post, of which there is no record to be found in the trade navigation returns, we say to them, "We welcome your goods; we are a Free Trade country, because we know that you will give us fair play in return." I will tell the House what they gave us in return. A few days ago I received a letter from the secretary of the British Felt Hat Manufacturers Federation to this effect: Dear Sir, —You will have heard of the action of the Czechoslovakian Government in totally prohibiting the import of British felt hats into their country. Is it not time, to use the words of the Chancellor of the Exchequer, to arm ourselves with an instrument which shall at least be as effective as those which may be used to discriminate against us in foreign markets." —[OFFICIAL REPORT, 4th February, 1932; eel. 287, Vol. 261.] Yet the Home Secretary has suggested that now is the time that we should set an example and instead of raising tariffs should decrease them. Surely the present, state of affairs is the result of having set an example to the remainder of the world which instead of following they have abused. In Clause 3 provision is made for additional Customs to be charged on articles of a kind which are being produced or are likely within a reasonable time to be produced in the United Kingdom in quantities which are substantial in relation to United Kingdom consumption. That Clause will give the greatest encouragement to our manufacturers and industrialists to make goods in this country, in British factories with British hands, which were previously made abroad. As far as the hat industry is concerned I know that they are laying down new plant and machinery in the hope of the assistance they expect to get from these proposals. I welcome these proposals. I feel that in many a factory and industry it will he recognised that there is now a Government in office which is out to help and assist them and to restore the confidence that has been lacking for a long time. I feel that in many a home there will be a better prospect, more hope of finding work, after many months of idleness; and I feel that we have a Government in power that is prepared to act courageously without fear or favour in the noble task of restoring prosperity to this nation.

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

It has fallen to me to congratulate the hon. and gallant Member for Stockport (Captain Dower) on his first appearance in addressing the House. He has shown great sincerity and great belief in the present Government and in the policy they are now pursuing, but I must say that a great deal of what he has said in the latter part of his speech is a dream which will never be realised. The right hon. and gallant Member for Burton-on-Trent (Colonel Gretton) put the case for Protection as a solution for the problem, but unlike the hon. and gallant Member for Stockport he was very dissatisfied with the Government's proposals. The hon. and gallant Member for Stockport is the only speaker yet who has expressed his satisfaction. The right hon. and gallant Member for Burton-on -Trent said that a 10 per cent. tax is too light to be efficient as a tariff and he anticipated that it would be raised to a higher figure. The right hon. and gallant Member further pointed out that tariffs were put on in order to prevent goods coming into this country, and then went on to say that this would give employment to the unemployed in our industries. May I point out that the largest proportion of unemployed men in this country to-day do not belong to the industries which will be affected by these proposals.

7.0 p.m.

The right hon. and gallant Member for Burton-on-Trent also said that the 10 per cent. tariff will be very valuable from revenue point of view. May I point out that if the first part of his argument is accomplished, that is, if goods are prevented from coming into this country. there cannot be anything for the Treasury-from such a tariff. My mind is not sufficiently receptive to take in the argu merit which is advanced in this connection. If, on the one hand, you prevent goods coming in in order to give more employment at home, it means that you cannot get any revenue from such a tariff, and if you turn the argument round you cannot provide work for the unemployed. If tariffs were a solution for unemployment the Government would have a very strong case, but not one speaker on the Government side, not even the right hon. Member for Hillhead (Sir R. Horne), has been able to prove that in any country tariffs have been a solution for unemployment. As a matter of fact, if we look at the returns from various foreign countries we find that unemployment, instead of decreasing in tariff countries, is steadily increasing. To-day in Germany you have over 6,000,000 unemployed. In France, which used to be quoted as an example, there are 2,000,000 unemployed, and tile numbers are increasing. In the great tariff continent of America there are practically untold millions of unemployed. Nobody can give us a proper estimate of the total number of unemployed in that country. That is the position in every country where you have got tariffs. When it is suggested that tariffs will considerably reduce the number of our unemployed, I ask why it is then that these countries have a growing number of unemployed.

My second point has reference to the revenue coming to the Treasury from these duties, which has been estimated—and I assume it was a low estimate—at £30,000,000. That £30,000,000 has to be paid by somebody and, if you are to relieve the direct taxpayer, then it must come from the indirect taxpayer. The £30,000,000 to be realised from these tariffs will not be paid by the foreign exporter or by the merchant who receives the goods in this country or by the wholesaler or retailer. The consumer, who receives the articles last, will have to bear the whole burden of this indirect taxation. The Secretary of State for Scotland truly said that the poorer the home the more serious will be the tax upon the home. Take a working-class home with an income of £2 a week—and there are hundreds of thousands of men to-day earning less—and assume a family of five, a man, his wife and three children. Practically every penny of that £2 is spent in rent and on foodstuffs and necessaries of life. That means that family is underfed, and that they will feel the full blast of the taxes to be imposed by this new tariff.

However anxious the House may outwardly be not to lower the standard of life of the workers in this country, they know perfectly well in the depths of their hearts that that cannot be avoided and that tariffs must have that effect. The Chancellor of the Exchequer told us the other night that Members on these benches had stated that this Bill made no provision for the workers in this country, and he replied that it was going to provide work. Can anybody tell us definitely that it will-provide them with work? How is it going to provide them with work if you still allow the goods to come in? If you do not allow the gods to come in, you cannot get the revenue. You cannot have it both ways. If it is going to provide our people with work, why has it not provided the people with work in France, in Germany, and in the Dominions?

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

If the hon. Member will come down to the West Riding of Yorkshire, he will see how it is providing people with work?

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

Is the hon. Member sure it will provide them with work?

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

But the Bill has not come into force yet.

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

I can give the hon. Member a great number of instances, from my own observation, of mills which have benefited by the Abnormal Importations Act.

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

The hon. Member differs from some of the other speakers. The right hon. Member for Hillhead, in his speech, said that Great Britain was the most steadfast country in the world. I take it that he believes that that is so because this Bill is about to be passed. If this Bill is responsible for providing all these people in Yorkshire with work; why go any further? If it has caused Britain to be the most steadfast country in the world, why go any further? As a matter of fact, the hon. Member knows perfectly well that he cannot speak with authority as to what this Bill will do.

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

I did not say I could. I was talking about the Abnormal Importations Act.

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

Yes, but we are not talking about that. My next point is that the cost of living of the workers and of the people of this country will automatically rise. That is admitted by everybody who spoke, even those who spoke in favour of the Bill, though they said it would only rise slightly. Is it not a fact that the cost of living is bound to rise?

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

I did not want to refer to what the hon. and gallant Gentleman said because it was a maiden speech, and one does not want to get into a controversy with a Member who has just made his maiden speech. I want to be as kind and gentle to him as I possibly can. If the cost of living rises to the worker, as I honestly believe it will, will anybody give me an assurance that wages will advance to meet the additional cost of living? An hon. Member behind me says it will be better than being on the dole, but the man on the dole will have to meet the increased cost of living as well. An unemployed man will only have his 15s. 3d.to spend. When an unemployed man's wife goes into a shop, the shopkeeper does not ask whether her husband is employed or unemployed, but all the time he is wondering whether he will be paid for the goods he is owed. Whether a man is employed or unemployed, his wife will have to meet the additional cost of living. There is not a Member of this House of the employing class who is prepared to give us any assurance that, if the cost of living rises, wages will rise to meet the increase.

When the right hon. Member for Hill-head was speaking, the hon. Member for Mossley (Mr. A. Hopkinson) interjected a remark about the year 1913, and the right hon. Gentleman retorted that this country was in a much stronger position then than now. But the advocates of tariffs were just as pronounced in their views then as they are now. They were no slacker then in their endeavours to persuade the people of this country to go in for a tariff policy than they are now. They tried at various elections with all the power they possessed to induce the people of the country to give them the power when returned to impose tariffs. Every time they tried that they were defeated at the polls, and at the last General Election—I entirely agree with the Secretary of State for Scotland—the country did not give the National Government a mandate to impose Tariff Reform and, more especially, to tax the food of the people. I heard some of the strong men of the Government broadcasting, and every one of them made it clear that we were in an emergency, that it was necessary that there should be national unity, and that alone could take the country out of its difficulties.

The question of tariffs was to be examined, but the Prime Minister specially emphasised that there would be no taxation of the people's food. There are not 150 Members in this House who were returned here with a mandate to put taxes on food. [Hon. MEMBERS: "Free hand!"] Hon. Members know perfectly well that they got here by a side wind and by telling the people that the country was in a. state of bankruptcy. Yet, three weeks after the new Government took office, we were told by the Chancellor of the Exchequer that there was never any fear so far as the financial stability of the country was concerned, that the Budget would balance, and that our financial position was extremely satisfactory. I agree with the Secretary of State for Scotland that they were elected as a National Government to see this country through this time of difficulty which hon. Members had themselves created, because these difficulties are only imaginary. They are, therefore, taking advantage of the panic that they have created in the minds of the people of the country to impose on the people something which they know perfectly well they would not otherwise get a mandate to do.

My last point is in regard to the Colonies. I say frankly that every man in this country ought to have a sympathetic and kindly feeling towards the Colonies and Dominions. We are called the Mother country. A mother may be extraordinarily kind to her two or three unruly boys, but the time may come when they become masters. While we have every reason to be sympathetic to our Colonies as to our children, we may spoil them by our kindness and we may make it possible for them to become our masters. If we give them a preference under this Bill I would like to think that the Colonies would reciprocate by giving us the privileges that we are giving them. That would be only right. They do give us some slight preference. I noticed the Minister of Pensions in his speech last night emphasised that point. But I understand that is not a question of preference alone to the Colonies. We are giving them a free right for their goods to enter this country without any tax being imposed at all. But they are not doing that with us. If they are giving us any preference they are giving us the benefit of only a slightly lower tax than that put on foreign goods. If there is to be that great unity of purpose, Empire Free Trade and all the rest, I would like it to be genuine Free Trade. Then there might be some argument in saying that ours is a great Empire and that we shall be able to hold our own against all the countries of the world.

I look forward with some fear and trembling to the results of this Bill. The tariffs that are imposed on foreign goods will have a drastic effect on the lives of the people of this country, but there is another fear in my mind, and that is that the employers and manufacturers of this country will take advantage of the tax by raising the price of their goods, and the housewives who have to go into the markets to buy the necessaries of life will be faced not only with the tax on the foreign imports but with what in effect is a tax on the goods produced in our own country. I can foresee the workers going more deeply into poverty as the years go by. Many hon. Members say that this is the first step towards an earthly paradise, but, instead of it being the first step to an earthly paradise it is a step towards a deeper industrial hell than the people are in to-day.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

The hon. Member has pleaded for his cause and has asked the House to oppose the Bill. He has said that in his opinion the Bill will increase the poverty of the working classes. I agree that the test of the Bill must he whether it is ultimately in the interest of the working classes. I suggest that if the Bill be given a chance, if the Government continue in their present policy, the state of Great Britain in coming years may very well be much better than it is this evening. I rise to support the Bill, and I do so more readily, for in July last, in this House and elsewhere, I advocated the formation of a National Government. I realised then that party Governments were bringing Britain nearly to bankruptcy, and that if we succeeded in securing the establishment of a National Government at Westminster old party cries and old party feelings must be put on one side. I rejoice that my hopes of July last have matured, and if I am not very much mistaken the life of the National Government may well be continued after the next General Election.

This Measure has been advocated to enable this country to redress her balance of trade and to relive the burdens on industry. I support it for those reasons. I suggest that those who oppose the Bill should bring forward a concrete alternative policy. The days of negation have gone and mere opposition in, our hour of crisis is not in keeping with the desires of the people of this country. If there is an alternative policy it should be submitted to the House. I have not yet heard anyone suggest such a policy. But here is one: Wages are too high to enable our manufacturers to withstand foreign competition. If hon. Members wish to maintain the present position of the country they must lower the wages of our people. No one suggests that; I do not suggest it. But this Bill, by giving some measure of protection to our home manufacturers, might enable our manufacturers more successfully to resist, foreign competition in this country.

That is one aspect of the problem, but not the only one. There are also the crushing burdens on industry. Many a time during the last 10 years I have pointed out in this House how our manufacturers are unable to face foreign competition because of the high direct taxation placed on industry by successive Governments. These taxes have been placed on their shoulders year after year and Britain's industry is crippled by them. I welcome the introduction of the Bill because it may have the effect of easing the burden on our industries. I support the Bill also because it is the policy of the Prime Minister. The Prime Minister's policy throughout the erisis commands my support and wins my admiration. The present composition of the House of Commons is very largely due to the character and courage of the Prime Minister in pre-election times. If we cast our minds back to the position four weeks before the General Election, we know that few of us could have anticipated that the right hon. Gentleman and others would have been able to carry vast masses of the electors with them in the great mining and industrial areas of the country.

This Bill has been described as a great experiment, I think, by the Lord Privy Seal. The success of the experiment will be very largely determined by the composition of the advisory committee. The men whom the Government choose to sit on the advisory committee will fill a very large place in the public life of Great Britain during the next few years. Much will depend on their character and their ability. I purposely use the word "character," for, judging by what goes on in other countries, the log-rolling and the political pressure, unless the Prime Minister and the Government are able to choose men of character and of ability, we may witness here the scenes which are prevalent in other countries. I referred also to "ability." It will be indeed a difficult task, with the best intentions in the world, to choose what items are to go on the free list, and to determine the rate of duty to be recommended to the Treasury for submission to this House. I therefore appeal very strongly to the Prime Minister and the Government to choose carefully and wisely the men who are to be placed on this advisory committee.

On one other subject I wish to touch. The Chancellor of the Exchequer is now in his place. This Bill by itself may do much to help this country, but further action will require to be taken to enable Great Britain to recover her position in the world. Since 1918 this country has been extraordinarily lavish in her social services, her education costs and her many forms of Government activity, and the result has been that these burdens have depressed industry and created unemployment. My appeal to the Chancellor of the Exchequer is that when this Bill becomes law he will bend his energies to reduce Government expenditure, so that the burden of taxation which presses so heavily not only on direct taxpayers, but on unemployed workers and every class of the community, may be lightened. This is not the occasion to dwell on that subject, but it is my earnest hope that when this Bill becomes law the whole of the energies in every Department of the State will be bent to the reduction of expenditure and the lightening of the burdens on industry.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

In asking the indulgence of the House on making my maiden speech, if I am not too presumptuous I would like to pay a tribute to the profound impression which the speeches of the President of the Board of Trade have made upon me since I have been a Member of the House. Once he sat for any constituency. Ecclesiasticus says, If thou discern a wise man, let thy feet wear steps at his door. If I could have a schoolmaster, I should choose the President of the Board of Trade, but, having no qualification to follow in that high tradition, I rather follow the other wisdom contained in the Book of Ecclesiasticus, If ancient men are in place, use not many words. 7.30 p.m.

I would not, above all things, be controversial in my maiden speech, but there is one statement of the Secretary of State for Scotland which I feel ought not to go uncontradicted. He referred to Denmark as a Free Trade country. If the right hon. and gallant Gentleman were to pay a visit, as a salesman, to Denmark, he would find that on entering his hotel he would be approached by the police almost immediately. They would ask him what he was doing, and when he said that he was going to sell foreign goods there they would charge him 100 kroner for a licence which would last for one year. In addition every Danish tradesman who wishes to sell foreign goods in Denmark must be licensed and must pay 100 kroner for the licence, and these licence payments amount to a quite substantial revenue tariff.

I wish to speak briefly of how by this Measure we can hope to benefit one of the great basic industries of this country, the industry of the constituency which I represent, namely, the cotton industry. That industry can benefit very greatly from this Measure—much more than would appear at first sight as I shall try to show. In Lancashire we are up against three great problems to-day. First there is the problem of substitutes for cotton goods. As to that we can do nothing. We have no control over that difficulty. Then there is the problem of home production in many different countries, and, finally, the problem of foreign competition. The two last mentioned difficulties ought, properly, to be linked together, because foreign competition in almost every case has grown up out of a prosperous home industry fostered and sheltered by a tariff. I have attended a tea party in my constituency at which 12 different nationalities were represented. There was an Italian, a Turk, a Syrian, a Portuguese, and, I think, though I will not swear, a man from Uruguay.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

I do not think so. I do not know if these foreign gentlemen were Liberals. But all those young men were in Oldham in order to inspect, and some of them to take away textile machinery to be used in their own lands to compete against the textile production of Lancashire. Contrast chat situation with the reception which was accorded to the British Economic Mission from this country to the Far East. That Mission, which included two very excellent and useful trade union members, arrived at Tokio. They were received with photographs and flowers; they were led to the best hotel; they were clothed in scarlet and other delights; they were taken to theatres and reviews and they were introduced to the Emperor of Japan himself. They were treated as King Solomon treated the Queen of Sheba, or as Queen Elizabeth treated the ambassadors of the King of Spain. They went away from that country having seen everything but the one thing which they went to see, and that was the cotton industry of Japan. That they were not allowed to see, because the Japanese Cotton Spinners' Association forbade all their members to show them the cotton mills of Japan. I wish to quote from the report of the Mission to show ho Japanese competition with our Lancashire cotton goods is actually run, and I shall proceed from that to show how this Measure may help Lancashire. I quote first a reference to the conditions of Japan's export trade made by the late Mr. Inouye, the late Finance Minister of Japan, who said: Measures for the development of trade are particularly important in a country which has just returned to free gold"— As Japan then had— and as one of such measures it has been decided to bring into effect the export indemnification system. In cases where banks have bought bills covering the export of goods to districts where there is no market for Japanese goods yet, or where there are believed to be obstacles to such trade, and the incurring of losses through the dishonouring of bills is likely, the Government will indemnify such banks to a certain extent under the proposed system, so that the banks can purchase such bills without fear of loss. This arrangement, it is hoped, will greatly forwad the export trade. In other words they subsidised their exports. What did Labour in Japan think of that I proposal? This is what the report of the Mission says on that point: It is as though Japan as a nation from the statesman down to the ordinary citizen realises that with the extraordinary degree of progress she has made in all Departments of human activity during the past 60 years, it is impossible that the standard of living of the great bulk of her people, which at present is very Low and based on a rice diet, should be allowed to lag behind without risk of national schisn. There is a lesson for us, I think, in the views of the Japanese people. What then did Capital in Japan think of these proposals? Again I quote from the report of the Mission—and this is the last extract which I shall give to the House from that illuminating document, a document full of lessons to our industries which need reorganisation: Cost, which to the British manufacturer and merchant, is a primary consideration is quite secondary to the Japanese and … is some part of the explanation of why we found Japanese goods selling in 'Malaya at prices in some cases below production costs; and it accounts also for many phases of Japanese life and mentality which are different from ours. Looked at in the hard light of reasons one would say that in the long run it could not but lead to disaster. That is what we are up against—a subsidised export trade competing in foreign markets against us and realising the necessity of getting those foreign markets even by selling below production costs. But the British textile industry is not the only industry which is on the borderline of collapse. The Japanese textile industry is also on the border-line of collapse because for years they have gone on subsidising exports, and they may not be able to do so much longer. The sphere of Japanese influence extends through China, India and Burma. It extends to the Dutch East Indian Colonies, right up the coast of Africa and to many of our British Dominions. I see my right hon. Friend the Chancellor of the Exchequer in his place. I have pre pared a memorandum on this subject, and I think it would be unfair not to give him the chance of putting it in the waste paper basket and writing to me to sag that he will waste no time in reading is but I shall not go into those matters now.

If we can hold Japanese competition it our own Dominions, especially in South Africa, India, Burma and the Malay States, it is quite possible that the Japanese cotton industry will collapse like a pricked bubble. That may sound a very aggressive piece of nationalism, but I submit that we are living in an age of aggressive nationalism, and that we have too long been the only country to adopt an international outlook in these matters. Only by adopting a national outlook ourselves are we likely to lead again towards a more international outlook on the part of others. If I am told that "two blacks do not make a white," I would reply that "Humpty Dumpty sat on a wall," and that the Lancashire cotton industry is near to having a great fall. This Bill is a great measure of construction such as we were returned to perform. In the words of a modern poet, who is thought by some of us modern poets to be a very great one indeed, Mr. T. S. Elliot: Consequently, we rejoice, having to construct somethingUpon which to rejoice. I would say that there is no other cause for rejoicing in my constituency to-day.

Photo of Mr Frank Griffith Mr Frank Griffith , Middlesbrough West

I begin by congratulating the hon. Member for Oldham (Mr. Crossley) most warmly on his really admirable effort, and I say that in no formal sense. This has been a very festival of maidens, and he has been among the brightest and best of the lot. I wish to make one reference to a speech which came from the Labour benches a short time ago the author of which has, unfortunately, left his place. He said that the National Government has been swept into its place by a side wind. He would have to admit that it was a pretty considerable breeze, and, if he seeks the origin of that breeze, it must be found in the bad counsels which ruled in his own party. It is ironical that, at this time, the defence of Free Trade should be undertaken from those benches opposite, because, if Free Trade has been brought, as I am afraid it has for the present at any rate, to a very low pitch in this country, the responsibility lies more than anywhere else with the leaders of the Labour party. They were confronted with a crisis which they refused to face upon a Free Trade basis. The result was, quite inevitably, that that crisis had to be faced upon some kind of Protectionist basis. I do not see any way out of it. I regret it as much as anybody in this country, but from the moment when that great refusal was made it seemed to me that some kind of limitation of imports became necessary.

I am not going to pretend to any measure of great indignation with hon. Members of the Conservative party, who, having this admirable opportunity presented to them, as it were, on a plate, are seeking to make the best of it. I can only follow along the lines of my own pledges to my own constituents and what I myself consider to be right, and those considerations inevitably lead me to vote against the Bill. I am much surprised at the attitude taken by some of my Liberal friends. I should be perfectly prepared to find them saying that these are exceptional times and that, as a temporary Measure, to redress the balance of trade, we have to indulge in some measure of limitation of imports. Confining themselves to the balance of trade, they might, following the persuasions of the President of the Board of Trade, have managed to bring themselves to vote for this Bill, but what I cannot understand is that they seem not only to have changed their view with regard to the immediate emergency, but to have swallowed the whole bag of tricks, the whole series of arguments against which they have been fighting for years, to become all at once supporters of Protection for the security of our industries, for the sake of revenue, and for every other purpose which is claimed for it.

If this is a genuine conversion, anybody is entitled to change his mind, but this is not a state of things that suddenly emerged in August, 1931. If Protection as a programme has these merits now, it had them during all the years in which they were fighting against it, and they really should be coming here to stand in the white sheet of repentance instead of appearing with an air of slightly bewildered complacency, as if they had found some gift put into their hands, and saying "What a fine thing this is, after all." I have great sympathy with Members of the Conservative party, who have been fighting for this year after year, only to find the whole limelight taken by such recent converts. There seems to be a considerable amount of joy in Birmingham over one Free Trader that changes his views, so much so that everybody else is forgotten.

When I listened to the speeches which were made on the Financial Resolutions, I seemed to see a foreshadowing of two different Bills. There was the Bill foreshadowed by the President of the Board of Trade, in that most ingenious speech, in which he almost persuaded us that, although this might be some slight lapse from fiscal morality, at any rate it would be only a very little one and could be atoned for afterwards by a lifetime of rigorous respectability. It seemed to me that the whole of his argument was directed to the 10 per cent. revenue tariff, upon the basis of which we might still be regarded almost as a Free Trade nation, certainly among the low-tariff peoples. But then one came to the magnificent speech, in which everybody delighted, with which this subject was introduced to the House by the Chancellor of the Exchequer. It was obvious that that speech was directed to a very different Bill from that of which we heard from the President of the Board of Trade. He said, in that moving peroration—I cannot give his exact words—that he was there to put the crown upon the life-work of his illustrious father. That moved everyone, but, if the Bill that we now have before us is sufficient to do that, it is obviously not also the harmless little Measure outlined by the President of the Board of Trade.

When one looks at this Bill and at its contents, it is still doubtful which of the two Bills this really is. As far as the 10 per cent. revenue tariff is concerned, there is the picture presented by the President of the Board of Trade, but there is the indefinite capacity of building upon that humble foundation that is provided by the additional duties, and I can only suppose that if it was anticipated that the Advisory Committee was going to make only rare and occasional buildings upon the basis of the 10 per cent., this Measure would not receive at all, or at any rate would be long re- ceiving, the approval of the right hon. Member for Sparkbrook (Mr. Amery) and those others who really believe in Protection. But obviously, whatever this policy is in its beginning, the Protectionist feeling in this House is quite sufficiently strong to make it a strong measure of Protection in the end, and there has been no attempt to conceal that fact from the Free Traders in this House. Therefore, if they support this Bill, they do it after due warning, and they have no business to complain of what may happen afterwards.

So much really is being left to this Tariff Committee. They are to decide, in effect, in the first place at any rate, on the whole question as to whether this is the low-tariff Bill of the President of the Board of Trade or the high-tariff Bill which seemed to be the ideal of the Chancellor of the Exchequer, and I have no doubt that they will be most able and intelligent men, but it seems to me that the responsibility that is being put upon them is one which Parliament has no right to delegate to that degree. A doctors' mandate has been given, and the doctors are delegating their mandate to a set of specialists, who, I am afraid, will treat the patient for the wrong disease, and I do not think this power should be parted with so readily by Parliament, which is, after all, responsible to the nation. Even if this committee consisted of Julius Caesar, Napoleon Bonaparte, Lenin, and Mussolini together, with perhaps Uncle Tom Cobleigh thrown in, for the sake of the Parliamentary Secretary to the Board of Trade, I am afraid they would find their capacities taxed to the utmost by what is put upon them.

I treat the final decision, which everyone has to make for himself on a matter of this kind, as a very grave one, because I was returned here as a supporter of the National Government. I say frankly that I was returned here by a great many Conservative votes, and that I recognise; and I recognise my obligations to all those who supported me as a supporter of the National Government, but at the same time I made it perfectly clear to those who voted for me, whether Liberal, Conservative, or Labour voters, that there was one point upon which I must be absolutely firm, and that was that there should be no taxation of food. Hon. Members are quite at liberty to argue, if they can persuade themselves of the fact, that you can tax food without raising its price. That question, however, is academic for a great many of us, because whether it be so or not, we have promised to the electors that we would not expose them even to the risk of that, and that pledge has been taken, not by Liberals alone, not by Members of the Labour party alone, but by Members of the Conservative party as well. They have to square with their own consciences how they will meet this question, and it is not for me to say how they will do it.

I have to consider my own point of view, and I cannot say that the things which are left out of this free list are not food. I recognise the enormous importance of the exceptions that have been made, and I am very grateful for them, but none the less the things that remain are not merely food, they are the food of the people, the food of the humblest homes, and that is what I have to consider. As to the argument against the raising of prices, I wish I could be convinced that there would be no raising of prices, but the whole of this Bill is constructed on the supposition that there will be that raising of prices if these taxes are put on, because otherwise why should we have that very significant exception—I do not know who can have suggested it—that iron and steel, when it is consigned to a shipyard, shall not be liable to be taxed? Surely such a precaution would be needless if there was to be no raising of prices as a result of the Bill.

Therefore, one has to treat this question of the taxation of food with the utmost seriousness. As was pointed out from the bench opposite, the items that really enter into the working-class budget are rent and food before anything else. They account for an enormous amount of it, and therefore, if you are going to take one of the most important components and raise the price of living there, it will have a very serious effect on those who are at present subjected to the means test, because if you come to think of it, when you are dealing with the people who are under the means test, you know at least that they are people who have no margin at all. It may be speculative with regard to others, but these people have been subjected to a special committee, which, after examining all their circumstances, has arrived at just that income which is sufficient to pull them through somehow, with no margin at all. I do not think that that is an unfair description of what the means test is. If that be so, then how can this be faced by the National Government?

I came here with great hopes of the success of the National Government. In many respects I have those hopes still, and it is for that very reason that I am so much distressed at finding that this Bill has been in this one respect made one which I cannot possibly support in this House. I say so with the greatest regret. It is not very much use—and I should be unduly taking up the time of the House, if I were to do so—to go into the old theoretical arguments with regard to Free Trade and Protection. They have been stated sufficiently in this Debate already, and I have been putting only my personal point of view. I agree with many hon. Members of the Conservative party in this at least, that we have—I am sorry for it—passed out of the sphere of argument and into the domain of practice. We have set a light to the train, and it is not much good arguing at length what the result of the explosion will be, because we shall very soon know, and the whole country will know. I hope from the bottom of my heart that the results will be most favourable. I have fought this doctrine all my life, but I have never been more anxious in my life to be proved wrong. It does not matter to this country if I or 10,000 like me are proved to be wrong, provided that the trade of the country can be set right, but I cannot see that happening along this path; and, as everybody must judge for himself, I must, with the greatest reluctance, record my vote against this Bill.

8.0 p.m.

Photo of Mr John Hills Mr John Hills , Ripon

No one, whatever his opinions may be, can object to the speech of the hon. Member for West Middlesbrough (Mr. K. Griffith) when he said that since this Bill taxes food, and he objects to taxing food, he is hound to vote against it. I, like him, shall not try to re-argue this long and over-debated question. I made up my mind on it a good many years ago. I came into politics at the instigation of Mr. Joseph Chamberlain, to support his policy. I believe in it still, and I now see it come to fruition, but, while I do not want to argue the whole question, I want to say a few things to the Labour party and also to my Liberal colleagues. The Labour party have a plan. They are not content to leave things as they are, and they put forward the plan of national reconstruction. Though I do not agree with it, I recognise it as being an attempt to meet the existing circumstances. I disagree with it entirely. I believe that it would do more harm than good, and I cannot accept it. When I come to the Liberals, I find that they have no plan and that they want to leave things as they are. I listened to the closely reasoned and admirable speech of my hon. and gallant Friend the Member for North-East Bethnal Green (Major Nathan). According to him, all is for the best in the best of all possible worlds: the adverse balance of trade is not such a serious matter; the pound is very steady; and we, who thought we were in a rather bad way with 2,750,000 people unemployed, the fall in trade and the adverse trade balance, still constituted an oasis in a desert. I am sure about the desert, but I am not quite so sure about the oasis. I think that my hon. and gallant Friend will find that the oasis is an arid spot. My complaint against the speeches of Liberal Members is that they do not attempt to meet existing circumstances or provide a remedy for the evils which we see around us.

I accept Protection and this Bill as part of that ordered reconstruction of our economic life which, to use a phrase which was quoted by the Leader of the Opposition yesterday, has been too long wanted. It is an economic and intellectual revolution. It is a new way of looking at our life and at our trade; a new way of looking at our international relations. Whatever may be said by hon. Gentlemen opposite, I believe that ordered State planning of this sort is the only way in which we can preserve our wages, our standard of life and our social services. Unless we carry this Measure, all these are in grave danger.

I accept the Bill and welcome it, but there are two points on which I want to criticise it. I agree with the criticisms which have been made of the Import Duties Advisory Committee. I do not think that that body can possibly get through the work in the time, and there is great danger that it will do it in a hurried fashion. We who are supporters of this industrial revolution are very nearly concerned to see that it is a success. It has got to be a success, but I do not believe that there is time to do it.

Photo of Mr Reginald Banks Mr Reginald Banks , Swindon

You want about a dozen committees.

Photo of Mr John Hills Mr John Hills , Ripon

I agree, but let my hon. and learned Friend put himself in the place of the chairman of that committee. If I were chairman, I should say, "I cannot assess the exact rates of duty for this enormous range of articles. The steel trade alone will take me at least a year to assess, so I will put a comparatively high duty on two or three grades, graded according to the amount of labour in the article, and then I will go round and reduce or modify those duties where required." I should like to see this system turned round, for I do not believe you can do it this way, but, given time and an immediate moderately high tariff, action is feasible. I want to know what the terms of reference to the committee are. Are they to take into consideration the efficiency of an industry? I know that you cannot expect industry to make itself efficient, and to reorganise itself, as the steel industry admittedly requires, until they have Protection. Until then they cannot find the capital, and the capital will not be found unless the lender knows that the Protection is permanent. Therefore, it is all the more important that we who support this Measure should see that the Bill is made acceptable to the general opinion of the country and is made of such a character that it can be permanent.

I am not afraid of profiteering. I do not believe that prices will rise or that the danger lies there in the least, because it must be recognised that if prices are raised, it does away with the advantage of the tariff. If the price becomes so high that the foreigner can produce more cheaply, pay the duty and leap over your tariff wall, all the Protection goes. Protection depends on producing in large quantities at cheap prices. May quote an example? The duties on textiles in the West Riding of Yorkshire are far more than we shall see under this Bill —at least I expect so. Prices have not been raised, and yet employers are making profit, for the simple reason that they are running on full load. That is the point to which speakers like my hon. Friend the Member for West Middlesbrough and hon. Members opposite do not give full weight. The last thing we want to do is to raise prices, unless those prices are absurdly low and uneconomic. We want to give the market to the manufacturer to enable him to obtain money and improve his works—and a great deal of improvement is still required in our works in all parts of the country—and then to allow him to produce at full capacity, and get his profits in that way.

I am glad to see the Minister of Agriculture present for I am very much afraid that agriculture is not getting the full benefit of the scheme. I want to see the reconstruction of our industrial life from top to bottom, but I want agriculture to share in it. I do not see that the countryside will receive that regeneration which it must get unless agriculture is to go under altogether. The position of wheat and of the wheat-growing districts is to be fairly well regulated. Foreign-flour, apart from the flour from its Dominions and Colonies, is to pay the tax of 10 per cent., and we shall have the quota. So far so good, but flour is not the only cereal. Barley and certain horticultural products, we are told, are under consideration, and they may get the quota. But I see no provision in this Bill to prevent the dumping of products at a price that will destroy the industry. My right hon. Friend the Minister of Agriculture knows very well what has been happening lately. Barley particularly is being dumped from Russia at a price that is now 3s. 5d. per cwt.…a price to which no English or foreign grower can possibly compete. It comes here at that price, and its cheapness does no good to anybody, but it drives out of cultivation a large part of our land. All arable land is not fit for wheat growing, and I do not think that you can leave out barley altogether. I therefore express the earnest hope that we shall find that something will be done for barley when we see the details of the system.

I lay down the general proposition, which I think those on this side of the House will accept, that we ought to protect products where we can produce enough of them or could produce enough to be self-supporting; but that, where we cannot, and are obliged to import a large amount, we should have the quota or some comparable system. We are more than self-supporting in potatoes. We could be self-supporting, though we are very far from it now, in bacon. These are important articles which the farmer produces. You have given the industrialists protection, but you are leaving the farmer out. I admit that we have not yet the whole scheme, but I submit that it is impossible to impose a system of industrial protection and to leave out agriculture. The price of bacon has fallen from between 70s. and 90s. per cwt. to 47s. That, again, is a result of dumping from Soviet Russia. It results in our getting cheap bacon, and I agree that cheapness is an excellent quality, but we get that cheapness too dearly if we destroy production and the productive life of the country, because that reacts on all classes, and especially on those who are least able to protect themselves.

I do not know whether the House realises the grave position of agriculture, not only in the arable parts of the country, but in the stock-raising districts. I hear bitter complaints and grave objections from my constituencies that there is not a tax on foreign meat, and yet feeding stuffs will be taxed. A great many of our producers and farmers have been driven from arable to stock-raising and dairying, and they are naturally more than anxious—they are alarmed about the future. I know very well that the Minister wants to help, but does he really think that a Bill which does not give some protection to certain standard articles and makes no provision against dumping goes far enough? He has said that he has set up inquiries. We have had inquiries before; we have had marketing talked about in this House until we are tired of hearing of it; and the Home Secretary has talked about increasing the productivity of the soil. All those things may be good in themselves, but what the farmer wants is some security that the prices he gets will be an adequate return for the capital and labour he has employed, and that he has not got. So I hope most earnestly that when the Minister of Agriculture speaks be will give us a hope that we shall get rather more than we are offered at present. Further, I wish to know whether there is to be an agricultural member on the Imports Advisory Committee. Agriculture is a subject of which one requires a good deal of knowledge, and I hope there will be an agricultural member on the committee; indeed, I would rather like to see a special committee set up for agriculture.

We are at a crisis in agriculture. I know that a crisis has often been talked about, but it really exists now. The prices at which foreign products are thrown on our markets are such that the British farmer cannot compete against them. I do not believe that any hon. Members opposite want agriculture to go under—I know they do not, and they have their remedy; but it is we who now have to carry the burden, we who have to find the remedy, and I trust it will be found. But I have not in the least exaggerated the seriousness of the situation, or the alarm with which farmers view it. I hope that when the Minister of Agriculture speaks he will tell us that something more is to be done to safeguard this great industry.

Photo of Mr John McGovern Mr John McGovern , Glasgow Shettleston

I had not intended to speak in this Debate until I heard a remark last evening concerning the hon. Member for Bridgeton (Mr. Maxton); and in case there should be any misapprehension as to his views on this question of tariffs I decided, in his absence, to seek to intervene. A new Member of this House, the hon. Member for South Lanark (Lord Dunglass) delivered a well reasoned speech, lucid and good tempered, and I congratulate him on it, and hope at the same time that any experience which he and the other new Members derive from membership of the House during the next few years will fit them to take their places in commercial life at the next General Election. I do not want to be hypocritical and I am bound to admire their talents, but I would prefer their absence to their presence. In that speech the hon. Member said: The time is ripe I think for the hon. Member for Bridgeton (Mr. Maxton) to make a personal contribution to this historic Debate. I have heard him say several times in this house that the sooner we had a tariff the better." —[OFFICIAL. REPORT, 15th February, 1932; col. 1382, Vol. 261.] He expected, he added later, to see the hon. Member for Bridgeton in the Division Lobby with himself. It is true that the hon. Member for Bridgeton, in common with the rest of us who sit on this bench, is anxious to see the tariff period come and go, as we expect to make progress as a result of the tariff. We believe the people of this country, as the Lord President of the Council said last week, voted to a large extent for the National Government because they hoped and believed that it would find them employment instead of doles. I think that was a reasonable statement to make. We believe that the unemployed, the shopkeeping class and the professional class, whose standards are being reduced owing to the industrial depression, are anxious for any scheme that may bring employment and prosperity. I am not going to say that the great mass of the people apply reason to the question whether this tariff will bring them employment or not, but they want to make the experiment. Just as they made the experiment of having a Labour Government, they are prepared to give a trial to a system of tariffs, hoping that it will bring employment and prosperity. They take the view that no position can be worse than that in which they find themselves to-day, and believing that an ounce of practical demonstration is worth a, ton of theory they are prepared to experiment with tariffs.

Recognising that there is an overwhelming majority for tariffs in this House, and that we are going to have tariffs, the hon. Member for Bridgeton says, as I say, "Then let us get tariffs." Let us see the effect of those tariffs, and it will prepare the ground for what we believe to be the final and decisive struggle for the overthrow of the capitalist system of society. We believe it stands in the way, that the people have got to go through the period of tariffs, and therefore we are prepared for it. We will accept tariffs, while not supporting them, and in the end we are convinced that they will bring us one step further on the road to progress, although the results may be rather unhappy to the people.

Listening to the discussions on tariffs I would say, without presumption, or without appearing impertinent, that it seems to me the hon. Members on the Labour benches have become too keen over the discussion and appear as the defenders of Free Trade instead of putting forward the alternative scheme of Socialism. We are told by the Liberals that Free Trade is what we ought to depend upon, while the Tariff Reformers say a change in the fiscal system is essential. I do not blame either of those schools of thought, because they are united on one thing. They are united in favour of the retention of the present commercial system, and desire to bring about adjustments that will bolster up that system and allow it to evolve and to remain on a permanent basis. If I am to take anything away from this discussion it is this, that in tariff countries, in pre-War days and before the acute industrial depression came, tariffs gave prosperity to the tariff countries; and in the days of prosperity, in pre-War days, Free Trade gave prosperity to the non-tariff countries. Therefore, the tariff countries and the non-tariff countries had their periods of industrial progress and prosperity before the acute economic crisis took place in this country and in the world. I lived for two years in a tariff country, Australia, and I heard it continually being asserted at that time, which was in 1923–1924, that the people there would be much better under the system of complete Free Trade, because that would stimulate affairs in their country. At that time, before unemployment had developed to the extent it has in the world to-day, I saw unemployed demonstrations outside Parliament in Sydney, and I assisted in addressing unemployed demonstrations in Sydney. I saw unemployed men being offered outside the Stock Exchange as good specimens of humanity for a wage of £3 or £4 a week, and there were no bidders. I heard the discussion between the political sections, the Liberals and the tariff school, as to what was best for industry in that country. The argument here is that, tariffs having proved a failure and having brought about distress and unemployment and despair in America and in other countries, we have to embrace the policy that has brought about that despair. The result is that we have the failure of Free Trade and the failure of Tariffs; we have to embrace both, and to have the benefits and the ills of each system.

I have listened to the disagreement of the Liberal Members of the Cabinet. If I were desirous of paying a tribute to the Home Secretary and to the Secretary of State for Scotland, I would say that, as oratorical performances, their speeches could scarcely he excelled. They were splendid debating speeches that I and many hon. Members, I am sure, would desire to take as models for our performances, if we had the ability. But I am not concerned about the oratorical powers and the debating points as between those two schools. I see one thing as the question is being discussed on that Front Bench, and that there is disunity on the question of Tariffs and Free Trade, and that when it comes to something that is essential to the defence of the capitalist order of society there is a closing of the ranks and complete harmony and unity, in order to repel and to attack the forces of the working class outside. I do not desire to anticipate the results of to-morrow's Debate, but I can see that the disunity of to-night will change to complete unity to-morrow, in connection with the means test and the imposition of hardships on the working class of this country.

I am rather amused. I think that for the Home Secretary and the Secretary a State for Scotland to appear in the role that they have adopted during this Debate, that of defenders of the poor, is the greatest joke that has been perpetrated on a long-suffering House of Commons. They appear as defenders of the working-class, after they have robbed the working-class of everything which they possessed. Those right hon. Gentlemen are defending the working-class against the imposition of a 10 per cent. tariff on foodstuffs, which may add a little to the sufferings of the poor. Is there any question that, if you were to take a 10 per cent. tariff as an alternative to the means test, the 10 pea cent. tariff would not be preferred a hundred times as an alternative to the application of that hellish means test that is being applied to working-class homes to-day; homes to which we are told, on the one hand, tariffs are going to bring prosperity, and, homes which, on the other hand, we are told are to be anxiously defended from tariffs; homes into which children are born in every industrial area to-day, in surroundings in which the gas or the electricity is cut off, and the landlord is knocking at the door and sending summonses, while there is scarcely a crust of bread in the home, no nourishment, nothing to bring comfort and happiness.

8.30 p.m.

After the smug Home Secretary and Secretary of State for Scotland have perpetrated that on the working-class, they come here in the guise of defenders of the poor and lowly in working-class ranks. No, I am not prepared to accept them as defenders; they are part and parcel of a common policy of aggression on the working-class; they belong to a front bench of British gangsters, and they are only divided as to the method to be followed in the fiscal system. The new hon. Member for Sunderland (Mr. Storey) spoke about the Home Secretary. He said: I wish to God that the Home Secretary was awake. I want to tell him, in turn, that there is no question as to whether the Home Secretary is awake or not; the country will soon be awake and alive to that which is being put across it, rand it will be anxious for retribution. I have pointed out in connection with tariffs that we believe that an ounce of practical demonstration is worth a ton of theory. I do not believe, and I have not believed for the last 10 or 12 years, that this Assembly will ever solve the difficulties of the working-class. I believe that those difficulties, either under tariffs or Free Trade, are bound to increase, and I believe that finally the working-clans will be compelled to take the matter into their own hands, in order to get out of their suffering and despair when the industrial machine completely breaks down, and to take charge of and direct the machine and the distribution of the goods they produce, along their line and along their channel.

I am reminded in this Debate, when the Liberals disagree with the Tariff Reformers and the Tariff Reformers disagree with the Free Traders, of that old farmer in the North of Scotland who went down to sell some pigs in the market. He met there a friend and, after they had disposed of their pigs, the first farmer asked the friendly farmer to go with him to the local hotel for a drink. When they got to the hotel, and after he had had a drink, he said to the friendly farmer: "Do y'ken Mackay?"

"Ye mean the mon at the neebourin' farm ower the burn?" asked the friendly farmer. "Aye, that's him," said the first farmer. "Whit's wrang wi'him I "asked the second farmer. "Och, I ken somethin' that no' sa guid aboot him. He's an awfu' drinker." "I didna' think Mackay was a drinker!" "Och aye," said the first farmer, "Mac is a great drinker. Ye ken last market day? After we had selt oor cattle we went doon to the hotel, and he sat there before me, drinkin' an' drinkin' an' drinkin', until I could scarcely see him." I believe the same is true of our Liberals and our Tories with their fiscal theories. They can see the faults of the other side, but they cannot see their own, and they keep weltering about from one political theory to another, in the hope that they may be able to adjust things and that they will be able to bring about success.

What is the position to-day? It is not a question of tariffs or Free Trade. In every country in the world, other assemblies are meeting, and they are all discussing how they are going to increase their exports and stop their imports. They all want to sell; they all want to send goods out of the country to get rid of their glut; but they are not prepared to buy the goods of other countries. The markets are glutted, but the workers cannot buy the goods because they have no work, and, therefore, have no money. That is the problem. It is only a simple question of the distribution of the goods that are glutting the markets of the world. That is all.

Photo of Mr Dennis Herbert Mr Dennis Herbert , Watford

I must remind the hon. Member that this is a question of tariffs or Free Trade, and he must not elaborate too much his alternative, which has nothing whatever to do with the Bill.

Photo of Mr John McGovern Mr John McGovern , Glasgow Shettleston

Yes, Sir; I am very anxious both to conform to the rules of Debate and to accept your Ruling. If I seemed to get away, I only did so because we are asked continually, "What is your alternative?" The Home Secretary gave their alternatives, and, surely, if they are entitled to do so, I also am entitled to give the alternative from the Socialist point of view.

Photo of Mr Dennis Herbert Mr Dennis Herbert , Watford

The hon. Member is quite entitled to do that, but not to elaborate his alternative.

Photo of Mr John McGovern Mr John McGovern , Glasgow Shettleston

I only want to say that we view this question of tariffs from a rather detached point of view. If I were convinced that Tariff Reform would put into employment the working class of this country, no hidebound political theories would prevent me from supporting the Bill. It would not matter what my party or my associates thought; if I believed that tariffs could bring employment to the working class of this country, 1 should deem it to be more important, even than my Socialist theories, to remedy the distress from which the working class is suffering.

I think that there is a great deal too mach discussion with regard to this Bill. It may be said that I am taking part in it, but that is because it has been decided to go on according to a certain programme. Since the introduction of the Bill, every supporter of the National Government who has spoken, except, think, one to-day, has said, "I am delighted to support the application of tariffs, but"— Every person has a "but." It is always, "If you would only exempt this particular item; if you would only exempt raw materials; if you would only exempt materials used in shipbuilding; if you would only exempt feeding stuffs for cattle; if you would only give us the right to reclaim on something that is going to be exported." I never saw or read of a Bill, either from inside or outside this House, that was damned so well by its supporters as this Bill has been.

It is said that this tax is going to be paid by the foreigner. If the Government were to say to me, and to the House and the country, "We believe that tariffs will raise prices, but they will find employment for the people," I could understand it, because even the raising of a price, if it did find employment, would be preferable to the present state of things. But when the Government say that the tariff is going to be paid by the foreigner, they are treating us like school children. The tariff is not going to be paid by the foreigner. If it is going to be paid by the foreigner, why only a 10 per cent. tariff? Why not a 100 per cent. tariff? According to that reasoning, we could make a tariff pay for our National Debt; we could simply pass our burdens on to the foreigner, get him to pay our National Debt, and we could go scot free. To treat us in that way is to treat us as school children, and not as grown-up persons. I do not claim that we have all the intelligence or reason in the world. We have only a, very limited quantity. There are some things that we can follow, but we cannot follow that method of reasoning at all.

We know, therefore, that this tariff is going to be passed on to the consumer. If it is not, why the cries that are going round the country? Why the letters and telegrams from commercial concerns asking that this or that shall be exempted? Is it not because they fear that under the tariff prices will rise? Some hon. Members say—it was said by one hon. Member last night,— "I am in favour of keeping out goods that are produced under sweated conditions." Where is the guarantee in this Bill that goods made under such conditions will be kept out? Can any Member show me where any attempt is made to specify goods produced under sweated conditions, or in countries that have not the same standard as this country? If it were possible to show me that, I would even be prepared to support part of that proposal which would not menace the standard of our working class in this country, because I do not believe that we are entitled to welcome into this country goods that are produced under unfair conditions. At one time my predecessor, the right hon. John Wheatley, was asked, when he said he was in favour of the exclusion of sweated goods, how he would do it, and his reply was, "What is your Navy for?" The Navy was there, he said, to sink the beats that would attempt to land goods that were produced under unfair conditions. I quite agree that anything that would menace the standard of life of the working class should be completely excluded from this country. Here, however, a 10 per cent. tariff is imposed on sweated goods, they are allowed to come in, and they can still compete and undermine, if you like, your Western standards, coming from the markets of the East. So far as you are believers in the continuation of the present system, you ought not to permit that.

I welcome this Measure in the same way that my hon. Friend the Member for Bridgeton welcomed it. As he said, it is leading our way, it is leading along our road, and, therefore, I am pleased to see the tariffs which it is intended to put across the country being put across at the earliest possible moment, because I know that within a very short period there will be a further crisis in this country. The consuming powers of the workers cannot be satisfied because they have not the purchasing power to buy the goods, and the same is true of the working class in every country. It is not a question of tariffs; it is a question of lack of purchasing power, which conditions are making worse, and I can see nothing but disaster overtaking the present system. I have said before, and I say again, that it has outlived its usefulness. It needs to be destroyed in order that we may march on to a higher stage of civilisation. Capitalism has performed its function; Socialism is the next stage in human progress. We have brought about the organisation of the production of the means of life; we have to settle the ownership and the distribution of those goods in order to allow the machine to continue smoothly on its way. Those deluded people who voted for tariffs and a National Government last October will come our way as surely as to-morrow's sun will rise and set. They will come along the line of reason and progress and turn from that reaction and despair to Socialism and progress to bring about a real civilised State.

Photo of Mr Gervais Rentoul Mr Gervais Rentoul , Lowestoft

In the speech which we have just heard there is a good deal with which many of us on this aide would be inclined to agree. Certainly for one, would be prepared to accept the test that the hon. Member suggested with regard to the efficacy of these proposals, namely: Will they or will they not provide more employment for our own people? I think that is a test which none of us need hesitate to apply and accept. We are all in theory in favour of brevity of speech, although practice does not always coincide with theory. On this occasion, when I know that so many others wish to address the House, I realise the importance of compressing one's remarks to the utmost extent, but I cannot refrain from expressing my own pride and satisfaction that, through the turn of fortune, I should find myself a Member of this House at a time when so great and far-reaching a change is being made in our fiscal system, a change in which I have always believed, and which I have endeavoured to advocate throughout the whole of my political life hitherto. The very first political meeting I remember attending was one of Mr. Joseph Chamberlain's great gatherings in 1903, and the first political speech I ever made was in support of the proposition that his proposals would redound to the best interests of the country. Yet, while whole-heartedly beliving in that policy, I have never been able to regard it as a matter of fundamental principle. It has always seemed to me to be a question of pure expediency as to what was best in the interest of this country in the circumstances of a particular kind. In other words, it was a matter of weighing up the balance of advantage.

I have always felt that it was deplorable that it should ever have been approached from a mere party standpoint. Indeed, it is surprising to find some Members opposite on the Socialist benches still adopting that attitude in spite of the fact that many of the most enlightened trade union leaders and others have declared in favour of the necessity of some measure of protection for our own workers. Nevertheless, we have had throughout the course of these discussions many of the old arguments brought out again which have become so familiar during the past 20 years, that this is going to raise the price of the article to the consumer in all cases and that it is going to injure the shipbuilding industry, although I should have thought those who are engaged in these industries are probably in a better position than anyone else to express a reliable opinion as to the effect of the proposals. I well remember that in that speech of Mr. Joseph Chamberlain's so long ago he expressed his own view very definitely that the policy he was then advocating would never be realised as a mere party question. He said he would not prophesy, but he would predict that, when Protection came, as undoubtedly it would, it would come as part of a national policy and because it coincided with the interests, the aspirations, and the desires of the great majority of the people. It has taken 29 years to win the required measure of support, but it has been done, because there is no doubt that these proposals are in accord with the wishes of the overwhelming majority of the country.

It is true that there are many points in the Bill which may require further consideration in detail. I will only mention one, namely, the exemption which is proposed in Clause 11 in favour of the shipbuilding industry. I cannot help feeling that, in the interest of the iron and steel industry, it would be better if this matter were left to the decision of the Advisory Committee; in other words, that the question should not be pre-judged at this early stage in the present abnormal conditions of both the shipbuilding and the iron and steel industry.

But I do not want to discuss that particular matter. I thought probably the real reason why Mr. Joseph Chamberlain thought it improbable that his proposals could be carried as a party Measure—and he was, after all, a very astute and experienced politician—was because he realised the amount of misrepresentation and prejudice to which they might give rise. We have had a good deal of that in the course even of these discussions in the past few days—suggestions that the rich are being relieved at the expense of the poor, and especially misrepresentations with regard to the proposed taxation of foodstuffs. We all realise that the cry of "dear food" has been a most damaging one. It has probably been worth hundreds of thousands of votes to our political opponents and to Free Traders during the past 10 or 20 years, although I have never been able to understand why, in principle at all events, it is more reprehensible to tax foodstuffs if it is in the general interest of the country to do so than to tax any other essential commodity. However, that propaganda, carried on even at the recent General Election with so much intensity, has very largely defeated itself. People are certainly no longer frightened by it to the same extent that they were in the past, and I hope the Government will not be deterred from pursuing its course because of any fears of that kind. Taxation of certain foods where we can produce them ourselves is in the highest national interest, and it is just to say a word on this aspect of the matter that I have risen, because I do not want to discuss the whole tariff question.

In the course of these Debates, we have heard a very great deal about certain foodstuffs, about wheat, meat, and so forth, but not a word up to now have we heard with regard to another most essential foodstuff, namely, fish, and I want to use this brief opportunity to express the gratitude and the gratification that are felt by the fishing industry at the measure of protection that is now being afforded them. For the first time the fishing industry has made itself heard in a practical sense by the Government. For the first time some definite practical steps are being taken to give that industry, to which we owe so much, and which from time immemorial has been the basis of our sea power, some definite degree of assistance. The proposal to put a 10 per cent. tax on foreign-caught fish will give our own fishermen a certain degree of preference to which they are entitled in our own home market. It is a step in the right direction, but, at the same time, the matter will have to be further considered in order that that protection may be made fully effective for its purpose, which is, or ought to be, to keep out foreign-caught fish when ample British supplies are available. For that purpose the duty may have to be substantially increased. It may have to be doubled or even trebled. There is no reason why it should not be, because here, at all events, there can be no suggestion of any shortage of supplies or inferior quality. If an increase of price were foreshadowed, it would not be more than a very small amount, and certainly I do not think that any hon. Member will suggest that the men who face so much hardship and who produce this essential foodstuff amid circumstances of so much danger and with such splendid endurance should not receive a reasonable reward for their labour.

What is the situation at the present time? About 20 per cent. of the fish which is marketed in this country to-day is foreign caught. In the last 10 years it has increased from 928,000 cwts. to no less than 2,500,000 cwts., while in the same period British landings have declined from 12,000,000 cwts. to just over 7,000,000. Yet in courage, enterprise and efficiency the British fishing industry is second to none. At the same time, it cannot compete on equal terms with foreign countries for certain very definite reasons. First, the building and equipment of vessels in other countries is less costly than it is here, the expenses of maintenance and the operating costs are cheaper, taxation is, of course, a good deal lower, and, furthermore, foreign fishermen are definitely encouraged by their Governments to develop their export trade to Great Britain. In some cases substantial financial assistance is given towards this purpose. We know that many countries have protective duties. France and Spain, I might mention as examples, have imposed heavy duties against British-caught fish. Other countries are taking definite steps to exploit the one free market that lies relatively near, and are beginning to dump their fish here in increasing quantities. Foreign fishing vessels, I would remind the House, spend a very small proportion of the amount received for their fish in this country. It goes abroad.

9.0 p.m.

The hon. Member who spoke last said that it was an insult to the intelligence of the House to suggest that the tax is paid by the foreigner. Here, at all events, is one instance where that is undoubtedly the case, or will be. A tax upon foreign-caught fish, I suggest, cannot be passed on to the consumer for the very simple reason that all fish brought into this country is sold at auction on the quayside. That is to say, the price is fixed by the purchaser, And not by the vendor. Therefore, fish bearing the tax will have to be sold in direct competition with fish that is untaxed, and a tax would certainly not commend the fish more to the purchaser than if it were untaxed. Consequently, the duty in those circumstances would have to be met by the foreigner if he desired to sell his fish at all in our ports. There is no reason to anticipate that the tax, or a considerably higher one, would raise the price to the consumer in any way. There would, I frankly admit, have to be a small increase of price in the price obtainable by the British producer. To that extent it would be necessary, because of the manner in which the present prices have been depressed by over-production below the cost of production. But it is a striking fact—and I would call the attention of the House to this point—that the extent to which our markets in regard to fish are overstocked to-day corresponds almost exactly to the quantity that is being brought in by foreign producers. The reason why I suggest that no increase to the consumer would be necessary or justifiable is that certainly to-day, in spite of the abnormally low prices which are being obtained for fish at the ports, the consumer is certainly not getting the advantage. That is a fact of which everyone should be aware. In any case, an increase from the present average price, which is a little over 2d. a lb. to 2id. a lb. is an absolute minimum if British fishermen are to have a reasonable deal in the matter at all.

There is no attempt in regard to the fishing industry to bolster up something which is inefficient. Equally, the fishing industry is not one which by any internal reorganisation can make itself independent. I am very glad that the Government have recognised the importance of the fishing industry, as I say, for the first time for many years, and are holding out a helping hand to some of the most gallant of our race. As a result of these proposals—and I think that it is distinctly encouraging—already steps are being taken to build new trawlers in this country. If the tax is increased, as I hope it will be, then work in this direction will really commence. This is only a first step. A good deal more is needed, but the fishing industry is satisfied for the moment, because it has sufficient confidence in its own case to be prepared to submit it to the Advisory Committee. It is vital that that committee, not only in the interests of the fishing industry, but in the interests of the country as a whole, should get to work immediately. Time is of the essence of the contract, as we must all realise. Speed is essential; delay would be fraught with danger. The Government are to be congratulated, not only upon the simplicity of their proposals, but upon their flexibility, and I trust, therefore, that they will press on with them with the utmost speed and in the best interests, as I believe, of the country and of the Empire.

Photo of Mr John Burnett Mr John Burnett , Aberdeen North

I wish, in the first place, to crave the indulgence which the House so generously grants to those Members who go through the ordeal of addressing it for the first time. We sit here and listen with profit and interest, and sometimes, like the wedding guest in the "Ancient Mariner," because We cannot choose but hear, and we also occasionally do our marathon down to the Division Lobby. But the time comes sooner or later when the new Member has to rise and address the House, and I feel that I cannot break silence on a better occasion than upon the subject of a Measure which so vitally concerns the industrial constituency which I represent. It has been suggested that Members on this side of the House obtained their seats by keeping a discreet silence on the subject of tariff reform. So far as I am concerned I deny that absolutely. I endeavoured to put tariff reform forward as a direct alternative to Socialism, as a policy which would mean that we should oust the foreigner from the position which he had gained in our home markets, and which would give employment and a living wage of £2 10s. to many people who at the present time are struggling along on a pittance of 15s. 3d.

The vital issue before us is the question of employment, and we have to consider the matter in all its aspects. We all deplore the unemployment which exists to-day. It has been suggested that we are taxing the poor for the benefit of the rich. That is the last intention that we have. We want to get a solution of this problem. We are a National Government and we have to try all the remedies that we can. We want to try tariff reform and every other possible remedy, and it is upon the success that we achieve that we shall afterwards be judged. We welcome this Measure as a breaking of ground. I agree with the hon. and gallant Member for Keighley (Captain Watt) that we should have liked something more. We feel that 10 per cent. is good for revenue purposes but that it does not meet the difficulties of dumping, forestalling and the unevenness of wages. We want something national in our trade, not international. It is said that we are suffering from over production 'and that the demand is not sufficient to meet the supply of commodities. We tariff reformers hold that the demand exists and that a considerable portion of that demand is being met by the foreigner who is ousting our men from work. That is a serious position and one which we must remedy.

The question in regard to the newsprint mills concerns us very much, and we are disappointed that newsprint has not been placed on the list of articles to be taxed. Our newsprint mills at the present time are only working 73 per cent. of their capacity all over the country. We want to do something that will raise that to 100 per cent. Our newsprint mills have to compete against entirely uneconomic competition. Newsprint is coming from Canada and Newfoundland at rates with which we cannot compete. It is because they are running their mills at full power and are able nearly to pay their expenses in their own markets that they can send their goods to our market at the price that they will fetch. I read in the Paper World the other day a statement that The price received by some of the Canadian and Newfoundland newsprint suppliers for paper delivered in London is fully £2 per long ton less than the price paid for the same paper delivered in New York and for home consumption. English mills could, if given an opportunity, supply from their existing plant, and without increasing the price—as long as no tax was placed upon the raw material—the entire home demand for newsprint. We must have some tax that will enable our newsprint mills to meet this severe competition. The Parliamentary Secretary to the Board of Trade said that an ounce of practice was worth a ton of theory. We note that in our wrapping paper mills the employment recently increased from 73 per cent. to a 100 per cent. capacity. That was immediately after and as a direct consequence of the Abnormal Importations (Customs Duties). Those mills are now working full time, they have taken on a number of additional men and have ordered more machinery. What will happen if at the end of the Abnormal Imports (Customs Duties) they have to go down to a flat rate of 10 per cent. duty? We fear that their plant will lie as idle as it does in our jute and linen mills of the North-East of Scotland. We are glad that raw flax and hemp are included in the free list, because the people at the linen mills were rather anxious.

The hon. Member who spoke last mentioned foreign-caught fish. That is a very difficult question and one that is vital to us in Aberdeen. I agree with what he said about the importance of our British fishermen being able to bring in their fish and land them free from foreign competition, but we have another question to consider. We depend in Aberdeen upon a plentiful supply of fish, and 35 per cent. of our landings are from Ice-land. The Iceland waters are fished 95 per cent. by foreign trawlers. Those trawlers land their catches in Aberdeen and it is upon that supply that our curing industry depends. There are 5,000 men directly or indirectly in that industry. But there is another side to the question. We have 270 fishing boats, with 10 men on board each boat. Then there are subsidiary industries, such as net mending, net making and the repairing of boats. Those have to be considered also. We have these two sides of the question to consider, both important, and what I would ask is that the Government should carefully look into the matter before coming to a hasty decision. I do not want to press one side of the question more than the other.

What I have said has not been in any spirit of captious criticism. We welcome this Bill as a Measure for which we have long wished and which has been long delayed. Free Trade has been a good friend to us in the past and has enabled us to gain the world's markets when there were not high tariffs against us. We look upon. Free Trade as a memory and as an old friend. In the words of the poet: Old friends grow dim, like lamps in noisome air;Love them for what they are; nor love thorn less|Because they are not what they were.

Photo of Mr Gordon Macdonald Mr Gordon Macdonald , Ince

My first and my pleasant duty is to extend my sincerest congratulations to the hon. Member for North Aberdeen (Mr. Burnett) on his speech. It is always a rather difficult task to make a maiden speech, and some of us who had the experience not so very long ago have very happy recollections of getting it over. He referred to the question of newsprint. I am rather surprised that this matter has been raised again to-day after the reply of the Minister of Pensions last night, which I thought would have ended the discussion. The Minister of Pensions told us why newsprint is in the list of exemptions. He said: This is a question which affects between 6,000 and 7,000 newspapers and periodicals. Two-thirds of the imports come from Canada and Newfoundland and one-third from foreign sources, chiefly Finland, Norway and Sweden. The problem is not so simple as it appears. Three large newspaper groups own three-quarters of the newsprint resources in this country, with resources available for them in Canada and Newfoundland. On the other hand, certain periodicals and a great mass of small newspapers are not so favourably placed, and while certain newspapers advocate a duty on imports urgent representations have been made to the President of the Board of Trade by the proprietors of a very large number of newspapers in all parts of the country."—[01-FiciAL REPORT, 16th February, 1932; col. 1421, Vol. 261.] I have been informed to-day that this question is being raised again owing to pressure from Lords Rothermere and Beaverbrook. They own and control the large bulk of the paper-producing mills in this country and in Canada, and if they could only get newsprint outside the list of exemptions they could also control newspapers throughout this country. I hope that the contribution of the Minister of Pensions last night will carry due weight with the Chancellor of the Exchequer and that he wilt not agree to newsprint being taken out of the list of exemption. To-day is a great day in British history; a great day in many ways. We have had from the Government Front Bench exceptionally able speeches against the Measure brought in by the Government. I say without any reflection on any Member of the Government that the ablest speeches from that Box have been made by those who are opposed to this Bill.

I want to compliment the Tory party on having got themselves into the position of being able to bring a Bill of this kind before the House of Commons. They have shown exceptional subtlety. In August last they were able to divide the Labour party, and soon afterwards they were able, under somebody's leadership, to divide the Liberal party. Then they were able to get an election on a policy very nebulous, very vague and, indeed, misleading. As a result of that election they were able to have 16 people in the Government pledged to Protection, and were thus able to get a four-to-one majority for Protection. Then they put a life-long Liberal to champion Protection at that box in the person of the President of the Board of Trade, and as his lieutenant another life-long Liberal, the Parliamentary Secretary to the Board of Trade, and were thus able to say to the country that as these proposals were being supported by Liberals they must be a good thing for the country. It is true that the official position of the Chancellor of the Exchequer compelled that right hon. Gentleman to come to that Box. He did so; and we find on this fancy Bill a few names; two erstwhile Labour leaders, two erstwhile Liberal leaders, and four real Conservative leaders. If the leaders of any party are deserving of compliments for having manoeuvred their party into a strong position it is the leaders of the Tory party.

The Financial Secretary to the Treasury tells us that the Bill is backed by uncommon authority, and he bases that statement on the suggestion that behind this Bill there is the closest scrutiny and investigation by the Cabinet. Frankly, we on this side do not believe that statement. We do not believe that the Bill is the outcome of close scrutiny or thorough investigation. We believe that the Bill is the outcome of this one simple fact, that in this House 75 per cent. of its Members are pledged to Protection. The "uncommon authority" behind this Bill is not investigation or scrutiny, but the fact that never before has the Conservative party had such a proportion of strength. I do not blame the Conservative party. I think the electors of the country realised the risk they were running. It is true that some people said one thing and other people another thing, but I do not think that this Government ought to be blamed for bringing in this Measure. They told the country quite straight that tariffs were a possibility, and the people voted knowing that tariffs were a possibility. They preferred to run the risk of tariffs rather than the panic portrayed by Viscount Snowden.

Photo of Mr David Mason Mr David Mason , Edinburgh East

Not a general tariff.

Photo of Mr Gordon Macdonald Mr Gordon Macdonald , Ince

It may be that people have different conceptions, but I do not think that any member of the Opposition has the right to say that the electors of this country were not prepared to accept tariffs in preference to what they heard on the wireless and elsewhere during the election. Viscount Snowden in his last venomous and vindictive speech denied the right of the Labour party to claim to be the defenders of Free Trade. I suppose he grants that right to the Liberal party; a majority of whom support this Bill. Surely Viscount Snowden is not going to claim that he is the great defender of Free Trade. He more than any man living made it possible for 75 per cent. of Members of this House to be Protectionists. I do not think the Home Secretary has shown himself a great defender of Free Trade. His speeches ar far more cogent and convincing than those of Viscount Snowden, but he must take part of the blame for having filled this House with 75 per cent. Protectionists. What he did was very much like what Viscount Snowden did when he tried to get the electors of this country so befuddled—

Photo of Mr Dennis Herbert Mr Dennis Herbert , Watford

I do not know what the hon. Member is going to say, but I must remind him that we cannot discuss in this House what is said in another place.

Photo of Mr Gordon Macdonald Mr Gordon Macdonald , Ince

I bow to your Ruling at once. I deliberately kept the other place out. The Home Secretary cannot claim to be a great defender of Free Trade as his actions during the election helped the electors to accept the statements put forward on behalf of the National party and vote for it.

As regard the Bill itself, our objection is that we do not think it will do what it sets out to do. The question is, will this Bill bring about an improvement in the industrial life of the country? Those who think it will are quite entitled to support the Bill inside and outside the House, but we claim that those who do not think it will ought to be granted the same right. The Bill does not touch the problem confronting the country. That problem is, how are we going to distribute the enormous potential output of modernised and mechanised industry? In what way does this Bill deal with that problem? It does not aim at a better distribution or say that the wealth of this nation shall be better divided. All that the Bill says is that certain things are being made in other countries and sold in this country and that it would be better for the people of this country that those things should be made and sold in this country. Hon. Gentlemen opposite say they will put on a 10 per cent. tariff in order to achieve that. They say it is a beginning. As long as they tell us it is a beginning, and we know that there is the possibility of the 10 per cent. being multiplied two or three times, we know where we are.

9.30 p.m.

Why are these goods coming into this country and being sold here? The reason is that they are cheaper. What earthly reason can there be why somebody in some other country should be able to produce a certain article in that country and send it here and sell it cheaper than we can produce and sell here? [HON. MEMBERS: "Lower wages and lower taxes!"] Hon. Members say it is because the wages are lower. Why are the workers in that other country getting lower wages than are paid in this country? It is simply because they are unable to resist the attacks of the employers. Will any hon. Member get up and say that the workers in the other countries enjoy low wages? They accept low wages because they are unable to get higher wages. If as a result of any tariff you shut these goods out, what happens? Those workers are unable to resist the attack of the employers and will be unable to resist future attacks. You are going to lower the standard of living in those other countries, and that will enable them, in spite of tariffs, to send goods into this country. What do we meet then? What the miners met in 1926. They ask, "How can you expect to continue working at the present wages when the workers on the Continent are working for so much less? You must accept reductions or otherwise industry must close." In the process the workers of all countries are having their standard of living reduced. We say frankly that if it is low wages, longer hours and worse conditions in the other countries which enable them to send goods into this country and sell them more cheaply than we can produce them here, tariffs will not deal effectively with the difficulty. It may for a temporary period make an improvement in some industries, but from the permanent paint of view it will fail to improve the standard of living of the worker.

We are asked to put forward our alternative policy. The Chancellor of the Exchequer knows better than anybody else that this is not the occasion for the Opposition to do that. I remember, as a very new Member, the right hon. Gentleman standing here and when he was asked by someone on our side to put forward his alternative policy, he said that that was not the occasion for it to be done. We have our own alternative constructive policy. We say that the underlying assumption of tariffs all the time is that it is possible for one country to secure real prosperity by a method which, of necessity, means the impoverishment of the workers of another country. We deny the possibility of any country in the world securing real prosperity by any method which in any way handicaps another country. That is our case against tariffs. We say that the amount of goods produced throughout the world to-day is sufficient to meet human needs and that the only way of handling the matter is by some international arrangement. It may be said that they are trying to get one, and that this Bill will help to get it. I do not believe it will. I do not think to go to a conference now and try to secure an international arrangement or agreement would be a more difficult task than it will be when this Bill has been passed. I notice that the Belgian delegate at the Geneva Disarmament Conference said something like this—I am quoting from the "Manchester Guardian" of last Friday: 'Belgium,' added M. Hymans, 'is a small country with no natural frontiers, no mountains or valleys and of no great extent, but we are situated at one of the complex points of Europe. We have reduced our military expenses and have only one-line defence works. Therefore, security for us is the big consideration. We are prepared to support any measure calculated to strengthen the authority of the League of Nations, but, unfortunately, while we are sitting here and talking and organising political peace, economic war is being organised abroad, giving rise to a dangerous state of nervous tension. Only loyal collaboration can save civilisation from disaster.' There is no loyal collaboration in this Bill. For us to be attending the Disarmament Conference in a political sphere and at the same time to be discussing a Bill like this is nothing but sheer hypocrisy. Turning to the exemption list, we in the mining industries have gone through it very carefully. There is one item which affects the mining industry and that is wooden pit-props. We realise that the exemption of that item will be of great benefit to the mining industry, but I would like the Chancellor of the Exchequer to remember that the mining industry at the moment is ever increasing its use of steel for the purposes for which wooden props are used. Its trams are also made of steel and also the winding-gear and machinery generally. Here is an industry which the Chancellor knows cannot afford to be burdened at all. It is a struggling industry. It has struggled with some success since 1926. Is it not possible in the list of exemptions to put other materials which are used in the mining industry in order to prevent that industry being handicapped any further?

We do not believe that this Bill will do any good to the workers of this country. We do not believe that it will find work for them. If it does, for every person for whom it does find work it will put at least one other person out of employment. We do not believe that it will increase the purchasing power of the people, and that is the only real and potential market for this country. We agree with one of the weekly papers, the "Economist," that the Bill will increase the cost of living all round. I remember that the Financial Secretary to the Treasury, in a humorous part of his speech—it must have been in a humorous part—tried to show that the foreigner would pay this tax. One of my hon. Friends below the Gangway retorted: "If that is the case, why not put on a 100 per cent. tax?" The foreigner will not pay; it will be a tax paid by the workers of this country. If the Chancellor of the Exchequer is thinking, as is stated in the Press, of taking 6d. off the Income Tax in anticipation of the revenue derived under this Bill, we hope that he will do nothing of the kind. As the Secretary for Scotland said, if the Chancellor is in the position that he can help anyone, he ought to help those who are most heavily burdened, and he should consider restoring the unemployment benefit first. We are not asking too much when we ask that those who pay Income Tax should continue to pay a little more so that those who are too poor to pay Income Tax may get a little relief. The "Economist" said: According to Mr. Runciman's own estimate the Treasury will get nearly £30,000,000 of revenue from the new duties. Who is going to pay? The only people who will pay are the consumers in this country of the food, raw materials, semi-raw materials and manufactured goods upon which the duties are imposed. The Bill will not only not find increased employment. It will increase the cost of living for the vast mass of the workers. The economic problem will remain unsolved even when the Bill has become law. We see no hope for the solution of that problem until this country comes to some international arrangement and agreement with other countries, many of them protectionist countries and confronted with the same problem. For these reasons we shall give the most resolute opposition possible to the Bill.

Photo of Mr John Wallace Mr John Wallace , Dunfermline District of Burghs

I listened carefully this afternoon to the speech of the Secretary of State for Scotland. I was particularly interested to hear his point of view regarding the Bill. I shall not follow his point regarding the propriety of a Minister of the Crown remaining a Member of the Government with whose policy he disagrees. That is beyond my province and concerns a man's own conscience. But my right hon. Friend made some very strong statements regarding tariffs, to which I would like to refer. There are three schools of thought on the question of this tariff policy. The first has been stated by the Home Secretary and the Secretary of State for Scotland. The case against tariffs was very ably stated by the Home Secretary, who represents a certain section of Liberal Members of the House. That is one point of view. Then we have the predominating Conservative point of view, which regards this Measure as likely to usher in a new era of prosperity. Conservatives, or a good many of them, express the conviction that under the leadership of my right hon. Friend the President of the Board of Trade this country is about to emerge from the wilderness and to enter into possession of a promised land flowing with milk and honey, or other commodities of a more or less innocuous kind.

There is a third point of view, and that is the point of view of the Liberals with whom I have the honour to be associated in this House. We do not agree with the Home Secretary, and we do not altogether share the optimism of the Con- servative party, but the appeal of the Secretary for Scotland this afternoon did not attract us. His policy of doctrinaire adherence to Free Trade, his policy of laissez-faire so far as unemployment is concerned, failed to attract us, and we have come to the conclusion that at this time in our country's history, when the economic outlook is so serious, we are wise to take what the Lord President of the Council called a great but justifiable experiment, and we sincerely believe that that experiment will be in the best interests of the country. Why have we taken that point of view? What do we hope to gain? What objects do we think may be achieved? My time is very limited and I shall give an answer in a few sentences.

I know something about the industrial life of this country, and if we compare the position to-day with that of 10 years ago even, we find a, very striking contrast. Ten years ago our manufacturers were full of hope and comfort and were eager to make arrangements for development and expansion in the future. What is the position to-day? There is gloom and depression, and many industrialists whom I meet would be only too glad if they could do what is impossible in these days, that is, realise their assets, put the money in Government stocks and live on a very much smaller but more reliable income. That is impossible, but that is their point of view at the moment. We in this country rightly protect certain interests of our workers in regard to hours of labour and wages, but we leave our doors wide open to goods produced in foreign countries under conditions of labour and working hours which would not be tolerated in this country for a single moment. I am very much surprised to find that my hon. Friends opposite see no relevance in that particular point of view.

An hon. Member who spoke a few minutes ago hopes that tariffs may come along in order that there may be a great clash of interests in this country, and he hopes that the people will take the matter into their own hands. He seems to forget that the people of this country took the matter into their hands last October, and that there was a very stricken field left behind as a result. What they did then I am sure they would be prepared to do again. I believe that this Measure will increase employment in this country. If I did not believe that, should not be supporting it. I have a small example of what it is possible to do under the Bill. Already, as we know, factory sites are being inquired for in this country, and I am glad to have been able to assist, to some extent, in my own constituency, in getting a new factory, which was contracted for last week, for the manufacture of silk in Dun fermline. It is said that an ounce of practice is worth a ton of theory, and that is my small contribution to the ounce of practice.

I believe that the passing of this Bill will result, not only in increasing revenue but in giving employment. To a certain type of mind that seems an extraordinary paradox, but it has never been a paradox to me. We all know that a certain quantity of goods will come into this country and that upon those goods there will be a revenue tariff. We also know that a certain quantity of goods will be kept out of the country and we believe that as a result, employment will be increased in this country. For those reasons, and leaving unsaid many things which I should like to have said, had time permitted, I have much pleasure in giving every support to this Bill so well introduced by my right hon. Friend the President of the Board of Trade.

Duchess of ATHOLL:

The speech to which we have just listened is one of several excellent maiden speeches heard this evening.

Duchess of ATHOLL:

I beg the hon. Member's pardon. His speech belonged, however, to another equally distinguished group of speeches, namely, those made by Liberals which have been notable for the readiness and the complete absence of prejudice with which they have approached this subject. It is a subject which was for long one of great controversy, but it has in the last year or two assumed an aspect of such urgency that many people who were formerly strong Free Traders are now reconsidering the whole position. I wish to emphasise what has already been said by several speakers as to the absence from the Bill—which, on the whole, I warmly support—of any provision for the prevention of dumping. It may be said that the word "dumping" is used rather loosely and that I should explain exactly what I mean by it. I say at once that by "dumping" I do not mean the importation into this country of commodities in abnormal quantities; I mean the sale in this country of commodities at prices lower than those which obtain in the country of origin.

It is notorious that we have suffered in this country at different times and are suffering at present from dumping of that kind from different quarters. For instance, I understand that French flour is being sold here at about 16s. a sack, the price of which in France is about 54s. a sack. That seems to be a clear case of dumping. Then we know only too well how many imports from Soviet Russia are being sold at prices far below the prices obtaining in Russia. We had about a year ago a Parliamentary reply which was extremely illuminating as to the prices in Russia, of various very important commodities which were being imported into this country. When we compare those prices with the prices shown in our Board of Trade returns we find the most amazing and terrible contrasts. For instance, butter was coming into this country in 1931 at an average price of 97s. a cwt., or 10½d. a pound, while the price in Russia varied from 3s. a pound to £8s. Eggs were being imported, in 1930, at an average price of 8¾d. a dozen and, in 1931, at an average price of 7½a dozen when the price in Russia was from 1s. 6d. to 13s. a dozen. In the case of bacon, the final figures for which I only received to-day, we find that in 1931 it was being imported at an average of less than 5d. a pound, whereas it was being sold in Russia in December, 1930, at from 2s 7d. to 11s. 7d. a pound. I could give far more of these figures which show clear cases of dumping—and dumping of an unparalleled kind.

This is not the mere dumping into this country of a surplus after satisfying the needs of the country of origin. It is dumping, at the expense of the people who have produced the commodities, of goods which ought to be kept in the country of origin for their own use. A 10 per cent. tariff will not prevent dumping of that kind. At any rate, we cannot be sure that it will do so. We have seen prices of goods from Soviet Russia drop by much more than 10 per cent. year after year. Oats which in 1929 were sent here at an average price of 5.8s. a cwt. dropped in 1930 to 4.3s. and in 1931 to 3.7s. Butter in the same years fell from 158s. a cwt. to 121s. and then to 97s. Poultry fell from 91s. a cwt. in 1930 to 69s. a cwt. in 1931. All these are drops of much more than 10 per cent. at a time. Bacon fell from 82s. a cwt. in 1930 to 46s. in 1931; sawn timber from 94s. a load in 1930 to 61s. a load in 1931, while pit props fell from 47s. in 1930 to 39s. in 1931. A 10 per cent. tariff will not stop falls in price of that kind. It is true that the Bill will allow the Advisory Committee to impose higher duties, but I understand that that can only be done where a foreign country discriminates against us—a point which does not arise in this particular case—or else where there is hope that home production may increase to meet substantially the British consumption within a reasonable time. Conceivably Clause 12 might be applied to the agricultural imports I have mentioned, but it seems to me that the procedure of the Advisory Committee is bound to take some time. There may be many commodities, the claims of which to higher duties will have to be examined, and in the meantime the harm will go on and the farmers of this country will continue to suffer from wholly unfair competition. Moreover, in the case of timber we could not expect within a reasonable time to be able to supply a substantial amount of our own demand in this country. Therefore I think it clear that unless the Bill is amended, special steps outside the Bill will have to be taken to prevent dumping such as I have described. I would remind the House that even so distinguished a protagonist of Free Trade as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) said a year ago that dumping was a monster which Free Trade was never meant to carry on its back. I cannot say how far he has acted upon this principle since, but he was evidently genuinely convinced of the danger of dumping when he made that speech.

I must remind my right hon. Friend the Lord President of the Council of his pronouncement during the election, when he said that agriculture must be protected from dumping. I venture to say that there was no pronouncement made in the election that brought so much new hope and confidence to the whole of the agricultural community as did that pronouncement of my right hon. Friend, and I would most emphatically say that I owe a great deal of the support that I received in an unprecedentedly generous measure in my constituency on this issue from the fact that I repeated that pronouncement at every meeting that I addressed. Yet we find that bacon is on the free list, and that means that the bacon industry is left exposed to this dumping, which has been of a very heavy and damaging nature. We are promised, I gladly remember, some limitation of imports provided the industry can organise itself, but I submit that a quota system will not relieve us from the damage caused by dumping unless quotas are given to countries other than dumping countries on such a scale as to shut out products from the dumping countries altogether, and therefore it does not seem to me that a quantitative arrangement by itself offers the probability of much improvement for the bacon industry.

Then, again, I cannot help regretting the fact that pit props are on the free list. Pit props are one of the earliest returns from a policy of afforestation. The forests of this country were cut down ruthlessly during the War. One of the first demands that came to the afforested districts was for a supply of pit props for the mines after the outbreak of war. They gave generously, and it seems to be inconsistent with the adoption of the policy of afforestation by the State that they should be left without protection. I do not pretend that the forests of this country can supply all the pit props that our mines need. They would have to be supplemented from British Columbia or other Empire sources, and I should like to see them supplemented also from Sweden, Finland, or Latvia.

Finally, there is a special point that I wish to make to my Liberal colleagues. I notice that one of the grounds on which they object to the Bill is that in their opinion it would contract the world's purchasing power. If they will look at the Board of Trade returns, they will see at once how seriously the purchasing power of many other countries is suffering because of the fact that we have a free market here into which dumped goods have been admitted in the last few years. The losses experienced by Canada because of our purchases of Russian wheat and timber, the losses of Australia, the United States and the Argentine, because of our purchases of Russian wheat, the losses experienced by the Irish Free State because of our purchases of Russian eggs, butter and poultry, the losses suffered by Sweden, Finland and the United States because of our purchases of Russian timber, and the losses experienced by Denmark and Holland through our purchases of Russian butter and bacon—all these losses have been enormous. The prices of all these commodities have been ruthlessly forced down by the dumping of corresponding commodities from Russia. It has caused millions of losses to producers in these countries and the unemployment of hundreds of thousands of workmen.

10.0 p.m.

The Financial Secretary to the Treasury last week stated how the West African manganese industry had been severely injured by the dumping of Soviet manganese abroad. A year ago the United States Congress was told that the American manganese industry had been destroyed by the dumping of Soviet manganese and that the United States had suffered seriously from the dumping of Russian wheat, oil, and timber. When hon. Members opposite talk about unemployment in the United States, as they are quite entitled to do, it seems to me to be one very important reason for the unemployment there that that great country is suffering from competition especially in primary products dumped abroad by Soviet Russia., many of which come on to our own market. [An HON.MEMBER: "What about the American tariff?"] Hon. Members have not so far seen beyond the American tariff. They cite the United States as a country with a high tariff, which they think is able to protect it against foreign competition, and they do not realise how a highly protected country like that may be injured on the markets of another country which freely admits dumped products into its ports. That is a case which I do not think has been made clear, but it is clear to anyone who studies our Board of Trade returns that millions of money have been lost not only by this country but by other countries, because of our purchases of these dumped Russian products.

Though I think that every country is entitled to think of itself first, I do not think it is enough in these days for every country to think of itself alone. I do not think it is enough for this country to think either of itself alone or of Imperial economics alone. We have also to think of international economics, and I feel that we have a great duty to the world in this matter, because we have the biggest purchasing market in the world. Therefore, we must consider whether we shall continue to allow dumped products to come in, because we owe something to the whole world in this matter. I venture to hope that the Government will not feel that they have done everything that should be done for British industry and employment, or for Empire industry and employment, or for other countries, to get on to their feet again, when they have passed this great Measure, but that they will proceed to consider how this evil of dumping on our great purchasing market can be prevented.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

In the course of these Debates we have had a large number of very interesting speeches and a good number of maiden speeches. The Noble Lady the Member for the Kinross and Western Division (Duchess of Atholl) has raised a very interesting point, on which I should like to say a word or two before I come to some more general remarks. I have never been one of those who approve of unrestricted dumping, but, if the Noble Lady wants to know of a man who has publicly announced that he welcomes it, she must go to the Cabinet, to the Noble Lord, Lord Snowden, who has publicly welcomed dumping in my hearing. I was interested to find that the Noble Lady has very great sympathy with the Russians, because the whole of her complaint is that the rest of the world are not giving the Russians enough for their goods. Really, the Russians will not object, I am sure, to receiving more for their goods from these other countries to which the Noble Lady referred. Pit props are not bought by miners, but by mine owners, who are not in the Labour party, but in the Conservative party and the Liberal party.

So the Noble Lady need not wait for the Government to enforce this Bill, but should take advantage of the great national sentiment which has united all the people on the other side and brought in the Liberals to help, and get them to apply their political principles to their trading principles. There will then be no more Russian goods and no more dumped goods. If the Noble Lady is not satisfied with that, she can go a little further and take comfort from the fact that this country is dumping coal abroad. We have held out to us the prospect that under this Bill we shall be able to extend the area of dumping, for several authorities on the other side of the House have pointed out that if we want to increase our sales abroad, we must sell cheaply, and that one way to do that is to get a secure market at home with no competition so that they will have a market in which they can sell their goods high over here and send the surplus to sell cheaply in order to compete in neutral markets abroad.

Duchess of ATHOLL:

I am sorry to hear that we are engaged in dumping, and, if it is coal that is dumped, I imagine that that is due to the Act passed by the Labour Government.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

The Noble Lady does not seem to know that that was a scheme put up by the coalowners. It was their scheme. If the Noble Lady and I are agreed that we do not want dumping; and if she realises that I agree with her in that, I shall get her to agree with me that we want an ordered economy and to carry on our economic operations in the interests of the community, and not in the private interests of people who forget their patriotism when they think they can buy cheaply somewhere or sell cheaply somewhere.

I hope that we shall often hear some of those hon. Members who have made their maiden speeches in this Debate, but there was one incident in the Debate which I hope we shall not see again. That was the extraordinary Punch and Judy show business put up by the Home Secretary and the Financial Secretary to the Treasury. We had the spectacle of two Ministers side by side on the Treasury Bench, jumping up and down like Punch and Judy knocking each other down and backwards and forwards, disputing about what occurred in. the councils of the Government before they produced their proposals to the House. I may be very old-fashioned, but I think that that is rather beneath the dignity of this House.

It was very interesting in the course of the Debate to see how the various reasons given for this Measure rose and sank in value. The further we get away from the election, the less the great cause of saving the nation in a crisis comes forward. The first and ostensible reason for this Measure was the fulfilment of the national mandate and the achievement of the balance of payments or the balance of trade. That is receding into the background now. It was mentioned in passing, but not with very great enthusiasm, by the Chancellor of the Exchequer. By the time we got down to the Minister of Pensions, we got away from any of the national crisis ideas and got back to the old Tariff Reform controversy. I thoroughly enjoyed the speech of the Minister of Pensions; it was a very charming and naive speech. He said that the 10 per cent. was mainly a revenue tariff, and, when he came to the additional duties, he said that they would do something to redress the balance of trade. It does not show very great enthusiasm for this Measure when we are told that all Liberals can support it because they will be saving the nation in a crisis by overturning our whole fiscal system, and that from the point of view of the balance of trade it is just something that may redress it a little. The right hon. and gallant Gentleman was too modest, for while he said that this was designed to meet the national emergency, he knew very well that the Government were taking the opportunity of putting in force their ordinary party policy.

After such statements, one need not deal seriously with the claim that this Measure is intended to deal with a crisis concerned with the balance of trade. As I dare say that there are still some who believe in that pretext, however, it may be just as well to glance at it. This country, after all, is still a great creditor country. Do we want to have our debts paid? Some Members are very keen on getting Russian debts paid. We have very heavy investments in the Argentine. There have been heavy lendings to Germany, and our banks are heavily involved. Do we want that money ever to come back? Do we want to have the interest on that money? If so, how are we going to get it back? We cannot get it back in gold unless it is from the United States or France—at least not in any great measure. We have to get it back in goods or sterling.

Suppose we go all out for this tariff, and suppose the President of the Board of Trade or the Chancellor is sufficiently squeezed by the back benches to put on a pretty high tariff directed against Germany. Germany has the greatest difficulty at the present time in making her payments. We shall either bring about her complete collapse, or we shall have to refuse exports from Germany and so sacrifice a considerable portion of our trade. I suppose that the Government have thought about the Argentine, because meat is on the free list. If we have bacon, we can have it in the only way that people can pay for it, that is either in goods or services. This balance of trade is going to be upset in another way. We have a chorus of joy all round the House at the idea that foreigners are coming over to this country to plant industries here. Does that mean that we are to get foreign capital here? Is that coming from abroad? In what form is it coming—in the form of gold or in the form of imports? If we have a large import capital in that way, it means the import of goods and the balance of trade will be upset again.

Let us take another point. What about exports? The Minister of Pensions very modestly said that the Lord President of the Council had already dealt with that question far better than he could. He is over-modest. The Lord President of the Council really made no attempt to deal with the question of exports. He suggested that by Protection we should get a much larger production and therefore would manage to export more cheaply, but he left out of account who were going to buy our products and how they were going to pay. If we are to keep out the goods of the rest of the world as far as possible, I want to know in what particular form they are going to pay us for our manufactures.

The next suggestion was Imperial Preference. The Lord President did not enlarge upon it, but the Minister for Pensions came out very strongly on the subject. He, and Members all over the House, especially those who have followed Lord Beaverbrook, think there is going to be a largely extended market for British goods in the Dominions. I hope that by the time we come to the Ottawa Conference they will not find their enthusiasm cooling down. The Dominions have very large urban populations and have not the least idea of allowing goods from this country to cut out their own products. That is not a wicked view of someone who is against the Dominions. It is what the Prime Ministers of the Dominions said quite frankly when they were attending the last Imperial Conference. Then, when we come to striking a bargain with the Dominions, we shall come up against the interests of British agriculture. Are we to protect British agriculture against imports from the Dominions, or not? The Dominions are quite frank about that. They say, "We will give you a preference, but will look after our own people first." Is that the line the Government intend to take? [HON. MEMBERS: "Hear, hear!"] There are some cries of "Hear, hear." [HON.MEMBERS: "All hear, hears!"]

It will be found that the field of operations is not quite so wide as is thought. I have discussed these matters with representatives of all the Dominions. When we have taken away the rather large field in which each of the Dominions intends to protect its home industries there is yet the field in which they already grant preferenes to our manufacturers, who however do not take advantage of them. That was the complaint I had from Prime Minister of the Dominions after Prime Minister. They said, "When we give a preference to your manufacturers they do not take advantage of it, they send us the wrong things." How are we going to get over that difficulty unless we undertake some form of control, such as we have not got at present, with a proper reorganisation of our export trade and our industries. Further, when these hon. Members have laid down the Empire as their economic unit, on strict Beaver-brook lines, they will find it is crossed by trade agreements. A representative of the Dominions was over here fixing up a loan and imagined that it would be spent over here, but found that agreements had been made by our manufacturers here not to intrude into the territory of that Dominion, which had been handed over to American manufacturers. We shall not only have to break our trade agreements, which are so dear to the heart of the hon. Member for South Croydon (Mr. H. Williams) but tear up some of the gentlemanly agreements and other agreements made by our capitalist interests.

When all that has been done there is still a great danger of causing friction. Only recently there was serious trouble between two of our great Dominions over the question of butter. I am afraid that when we get away from the atmosphere of good will and come down to businesslike bargaining between the Dominions we shall do, in the economic sphere, what we have done in the political sphere. As soon as we begin to try to define the political relationships of the various parts of the Empire it is found that the more we try to link them up the more the links come asunder. Hon. and right hon. Members in all parts of the House were not particularly keen on the Pact of Westminster, which was to set the coping stone on the work of knitting up the Empire but ended in leaving the chain rather weaker. In the same way, when we try to substitute agreements and business bargains for friendliness we shall quite as likely come to a quarrel as to an agreement.

The next point is as to the bargaining beyond the Dominions. I should like to have a little more information about that. It is not quite clear to me what is the procedure. I should like to know whether we are going to Ottawa first to make agreements with the Dominions, or whether agreements will be made, before we go to Ottawa, with some of those other favoured communities. Apparently, there is to be a circle of the Empire and a circle of the more friendly nations. I have heard complaints from some of the back benches that this was only a little low tariff, a little vessel that was being tided in by the President of the Board of Trade. The little vessel is a three decker at least; I am not sure that it is not a four-decker. You are first of all going to have protection for your home production. The experience of our Dominions shows that once you embark upon tariffs, your home producers demand protection against the Empire. There will then be a ring round the Empire. There will be another ring against the friendly foreigner. There will be a ring against the ordinary foreigner, and there will be a specially strong ring against the foreigner who discriminates against you. You will find that your little boat has become a very big boat.

So much for the argument about the balance of trade and Imperial Preference. There is another argument about which we have heard nothing from Members on the Front Bench, and that is the argument that used to be crystallized at election times in three words: "Work for all." It is surprising how the provision of work is at election time always the chief reason for having tariffs, and how it has slipped into the background in the explanations of this Bill. There is not a new note on that by the Financial Secretary to the Treasury. The most he can tell us is that we have had a very hard reminder of the facts in the rise of the unemployment figures that has recently taken place. We know that the deficiency of our Unemployment Fund will have to be carried sooner or later directly by the Treasury. That leads him on, not to the wonderful description of how tariffs are going to put everybody back to work, but to the use of tariffs as a revenue instrument for raising money, perhaps for relieving the unemployed, perhaps for relieving the direct taxpayer. That point, which was at first regarded as quite a minor point, has now become one of the major points. In all the Press there is intelligent anticipation that we are going to have 6d. off the Income Tax by spreading the burden round, on to the workers and the rest of the community.

Our main complaint with regard to the scheme outlined in this Bill is the absolute lack of plan. If hon. Members want to see how illogical it is, they ought to look at the free list. Take the question of agriculture. I understand from all the experts that the economic movement in this country in agriculture would be away from cereal cultivation, and towards animal products. That is what the authorities tell us must happen. But the position in the free list works entirely the other way. We know that the Government propose to introduce a quota for wheat. They are going to allow it in free. They are also going to tax feeding-stuffs. It seems, therefore, that, so far from helping the change in agriculture from cereal cultivation to animal products, their plan will work entirely the other way. The Noble Lord the Member for Aldershot (Viscount Wolmer) seemed to be a little disturbed about those provisions.

There are some other extremely illogical provisions of which I should like some explanation. I notice that foreign paintings and sculpture are to be taxed. Is it hoped to attract foreign painters to Chelsea, or is it just an oversight that foreign works of art are to be excluded? It seems that we may have our minds contaminated with a foreign poem, but must not have a picture or a piece of sculpture. The question of pit props has already been raised; and why should we admit unset precious stones? Are they a raw material of the jewellery industry, or a necessity that must be kept in this country to sustain the balance of trade? One cannot gather from this Schedule the slightest idea of any plan.

10.30 p.m.

Again, as regards new industries coming to this country, there is a total disregard of any idea of planning. I gather that the idea of many Members is that, where you have a foreign product competing with a British product, the foreign capitalist should be allowed to come over here and set up a factory. But will not that factory compete with the industrialists who are already here? Does it not mean that there is going to be a double productivity, while there will be no increase whatever of purchasing power? At the same time, you are going to lay waste some productive centre abroad, and to lay waste the purchasing power of a certain part of that community. It is sheer economic waste all round. We on these benches hold that this Measure is entirely irrelevant to the circumstances in which we find ourselves. The best description of it that I have seen comes from a Conservative paper, the "Statist." Its verdict on the Government plan is this: And so the major economic issue has again been shelved, and the countries concerned turn in upon themselves, each seeking, with childlike belief in the efficacy of tariffs and exchange control, to arrive at an independent solution of its difficulties. Everyone who has followed this Debate will realise that "childlike" is just the word that fits the arguments which have been put forward in this House. Such arguments appeal to people who are full of sentiment and have not thought out the matter. A good deal of time has been wasted to-night — [Interruption] — so perhaps it does not matter if I waste another couple of minutes in trying to show up the inconsistencies of Liberal Members. I do not intend to follow up that question, but I would point out that all Liberal Members must take their full share of responsibility. They took the step that rendered the introduction of these proposals into the House possible, and they cannot slip out of their responsibility. Something has been said with regard to the Labour party's attitude, and some Members have taken up a lot of time in trying to demonstrate that the Labour party was not in favour of laissez faire. Whoever said that they were? We have never professed to be in favour of laissez faire. We say that tariffs are merely a weapon like any other weapon, and a Socialist Government might use a tariff under certain conditions. I have always said so. A Socialist Government might use a tariff, if it pleased, to protect a nationalised industry. It might use it to protect even an industry in private hands provided it was insured that wages, hours and conditions, profits and so forth were properly controlled in the national interest.

I do not think that, tariffs are at all the best way of dealing with these matters. We here are out, as everyone knows, for more State control. Our complaint about this Bill is that it is such an inefficient Bill and that this Government, which should be trying to restore the economic life of the nation is throwing away its power of control "free gratis and for nothing." It is going to give advantages to all kinds of industries against the national interest, It is a very elementary point. If you choose to give an advantage to one particular industry, you give it an advantage. If you license the brewers and give them a monopoly, you give them an advantage. But the State takes care to see that it gets some of that advantage for itself. What is being done in this Bill is to give advantages to particular interests without seeing that those interests are not going to profiteer at the expense of the community. That is the great reason for our objection to this Bill. Instead of moving on lines that are being advocated not only by Socialists but by economists of various views in various countries, you are merely bolstering up the inefficient, profiteering, capitalist system.

We have our remedy, which I cannot put forward at present.[Interruption.] Members who are new to the House may not realise that I should not be allowed to do so. But we have put it forward, and we shall continue to put it forward. The short point is that we do not believe that this Measure is directed to dealing with what has been called the national emergency. We believe it will intensify, and not solve, the international crisis, that it is not going to lead to a more ordered economy but is going to raise up a host of vested interests which will make it all the more difficult when the time comes and the nation decides that it ought to take the path of reason and leave this lunatic system behind and bring about a corporate commonwealth.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

We have now been debating the general principles of this Bill for five days, and, though I am afraid there are still a number of Members who have not had an opportunity of putting their particular point of view, still I do not think it can be said that the discussion at this stage of the Bill has been unduly compressed, while there certainly have been opportunities given for a great number of maiden speeches, many of which appeared to me to show a high proportion of individuality and originality on the part of the speakers. The Government have every reason to be satisfied with the manner in which the Debate has been conducted. Indeed, I think that our only difficulty has been, as far as the official Opposition is concerned, that there has been so little to answer. The speech with which the Leader of the Opposition opened the case hardly touched upon the Bill at all. It resolved itself into a general attack upon the capitalist system, which the right hon, Gentleman said was responsible for the death of hundreds of children, for starvation in the streets, and the fact that thousands of people have nowhere to live in America or in this country. It seemed to be going a little beyond the facts, but I am glad to think that the right hon. Gentleman is now directing those accusations, which he used particularly to point to me personally, generally to the capitalist system.

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

Only against you as the agent of that system.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

With regard to the speech to which we have just listened, I think that it will be agreed that the concluding confession and admissions on the part of the hon. Member have completely justified Lord Snowden, who said in another place that he would just as soon entrust the safeguarding of Free Trade to my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) as he would to the Labour party. I hope that the attitude adopted by the hon. Member towards the Empire and to trading relations within the Empire is not characteristic of the party for which he is speaking. There seems to him to be no hope of any satisfactory arrangement. He anticipated nothing but suspicion and quarrels arising out of the conversations which are to take place at Ottawa, and he told us that every time he conversed with representatives of the Dominions over here on the subject of trade relations, he found them unsympathetic.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

Oh, no, I must correct the right hon. Gentleman. I never said that I found them unsympathetic. I said that they always made it perfectly clear that it was their intention to protect their own people first, naturally. I said that they complained that our people over here did not take up the preference. I did not suggest for a moment that they were not sympathetic.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

The conclusion which I drew, and which, I think, the House must have drawn, from what the hon. Member said, was that they got no encouragement from his conversations, or any idea that they could come to a. satisfactory arrangement. A great deal depends upon the spirit in which you undertake these conversations. It is not surprising, after the experience which the representatives of the Dominions had with the last Labour Government, that it was not much use to pursue conversations with representatives of that party, but to-day the proposals which the Government have put forward have been welcomed with enthusiasm by every Dominion throughout the world. The other day I had a letter from a prominent and influential member of one of the Dominions who has held high office there. Writing to me after the opening Debate upon the discussion of the Ways and Means Resolution, he said: A new Empire was born yesterday, and henceforth we can proceed together in harmony and unity with the hope of ensuring the satisfactory outcome of our conversations. I turn from the speech of the hon. Member to another which was delivered from the Front Opposition Bench by the hon. Member for Ince (Mr. G. Macdonald), a speech which seemed to me to be full of sincerity and conviction. It was a fair and frank speech. The hon. Member said that the Government had made it perfectly clear during the election that tariffs might be adopted as a result of their examination of the problem before the country. He said the country had fully realised that that might be the case and, realising it, they had deliberately voted for the Government. He came to the conclusion, therefore, quite contrary to those who talk about a breach of faith, that the Government are fully justified in the proposals they are bringing forward. He said that his party did not agree with the Bill because they did not believe that it would carry out what it was intended to do, and he proceeded to define what it was intended to do. Ire said that what it ought to do was to correct the unemployment which might arise from the mechanisation and rationalisation of industry. That is not what this Bill is intended to do. We have never said that the Bill will do that any more than Socialism will. What we have said, and what we are able to maintain, is that in so far as the Bill does what it is intended to do, namely, to make more employment for our people in this country, in that respect it will mitigate the effects which undoubtedly arise from the use of laboursaving devices and organisation in modern factories.

The hon. Member went on to argue that the effect of shutting out imports from other countries would be to lower the standard of life of the workers in those countries, that that would result in those workers having to accept low wages, and that, consequently, they would be better able to compete with the people in this country. He added that the effect of that will be that our standard of wages will be lowered. I think I have given a fair account of his argument. Surely, he has forgotten what is happening now. That is exactly what is happening under Free Trade. It is a fact that our standard of wages in this country cannot be maintained if we are to be subjected to the unrestricted competition of people living in other countries whose standard is already lower than our own. It is, therefore, not to lower, but to protect the standard of living of our people that these proposals are brought forward.

The hon. Member went on to say that our proposals are likely to increase the cost of living. I have already given reasons why we believe that that will not be the result of our proposals. They have been very carefully chosen in such a way that we think we are safe in saying that they will not raise the cost of living more than a few points in the index number. But I wish to warn the House that the present cost of living is artificially low, that many articles are to-day being sold at prices which are well below the cost of production, and that inevitably, and very likely before very long, the cost of living must rise as the cost of primary commodities rises. What our proposals will do will be to arm the people of this country with a higher income so that they can meet that increased cost of living when it comes. That will be the result of our proposals, and riot as the hon. Member suggests.

If I turn to the Opposition below the Gangway on this side of the House and select for comment the speech of the hon. and gallant Member for North-East Bethnal Green (Major Nathan), it is because he directed some of his observations to me personally and challenged some of the figures which I gave to the House. He even went so far as to accuse me of being disingenuous because in my calculations about the balance of payments he said that I had disregarded the export of gold. When he accuses me of being disingenuous I suppose he means that I concealed the fact that there had been in certain years an export of gold, because if I had disclosed the figures they would have had the effect of injuring the argument which I was trying to present to the House.

I wonder whether the hon. and gallant Member has thought out the actual implication of the export of gold and its relation to the problem which we have to meet Gold is not an article which is produced in this country. If we export gold we do it in order partially and temporarily to bridge the gap which exists by reason of the excess of imports over exports, but we make that bridge at the expense of our stocks of gold. I wonder whether the hon. Member is ingenuous enough to suppose that we can go on indefinitely bridging the gap in that way? With regard to the figures of the surplus in 1929, the hon. and gallant Member was good enough to suggest that I had probably overlooked the corrected figures issued by the Board of Trade, which he said were considerably different from those which I had given. I frankly admit that the hon. and gallant Member was at a disadvantage, because I have access to information which I know is not in his possession, and, therefore, the position is exactly the opposite. The Board of Trade are in the habit of correcting the figures of the balance of trade in the light of new information which comes to them from time to time, and since issuing those corrected figures the Board of Trade have again corrected them and the new corrected figures are identical to those that I gave to the House and will be found in the next issue of the "Board of Trade Journal." With regard to the estimate made in the "Economist" of the invisible exports in 1931, I would remind the hon. and gallant Member that that estimate was made in, December, 1931, actually before the end of the year. There was an estimate of a lower figure of £301,000,000 and a larger figure of £356,000,000, a margin of no less than £55,000,000. According to the latest information of the Board of Trade the larger figure is far too high and the lower one is much nearer the truth. The lower figure of £301,000,000 is almost exactly the same as the figure I quoted, £296,000,000.

I come now to the interesting speech delivered this afternoon by my right hon. Friend the Secretary of State for Scot- land, a very eloquent and at times impassioned speech, and a speech which appeared to me to be unexceptionable in tone and taste. It differed in many respects from the speech of the Home Secretary, and, in particular, I do not find in it any support of the Home Secretary's Protection proposals which in fact, although nominally only temporary would necessarily be subject to the same influences which the Secretary of State for Scotland said would bear upon the proposals brought forward by the Government and which must necessarily make them permanent in character. If the argument of my right hon. Friend here was intended to be one for the rejection of the Bill I cannot help observing that by the majority of those present it appeared to be regarded as an additional argument in favour of the Bill.

I have only one further comment to make upon the right hon. Gentleman's speech. In so far as it was a criticism of details, obviously the Bill would be open to amendment in Committee; in so far as it was a caveat against any reduction of direct taxation, that is a Budget matter, and it is premature to discuss it at this stage; in so far as it was a restatement of the old stock arguments against Protection in general, it comes. too late. All three of our dissentient colleagues have delivered their souls, and have placed their views before the House. These three speeches are now recorded, embalmed and enshrined in the pages of the OFFICIAL REPORT, but, unlike the mummies of the Egyptian Kings, they are nut sealed up. On the contrary, they are, and will remain, available for inspection by anybody as long as they have the curiosity to turn them up. But as far as this House is concerned, I venture to suggest, in a phrase which is familiar on the Continent, that we may now pass to the Order of the Day. I would remind hon. Members that in a fortnight this Bill will be part of the law of the land in the form it finally takes when it leaves this House. Two weeks from to-day the first clearings from the Custom House will result in the beginning of the flow of revenue into the Exchequer. Two weeks from to-day all arguments about the effect of a tariff upon the industrial system of this country will be merged into the facts which we may see for our- selves. It seems to me that this House is to-day no longer interested in the old arguments for and against tariffs; what concerns this House, as a body of practical men and women, is how to fashion this Measure in such a way that it shall be effective for its purpose.

The few observations I want to make will be directed, from that point of view, to one or two matters which came up in the course of the Debate. We had a powerful speech a few minutes ago from my Noble Friend the Member for Perth and Kinross (Duchess of Atholl) on the subject of dumping. My Noble Friend said a 10 per cent. tariff was not going to be sufficient to stop dumping. I agree. That dumping is a serious menace in this country, and that it has resulted in a dislocation of prices which has occasioned widespread injury to trade, I agree also, but I ask my Noble Friend, what duty would be sufficient to stop dumping? If it is carried beyond a certain point, does it not seem clear enough that a system of import duties cannot be sufficiently effective to stop it? Is it not clear you must proceed by some other method? The method of prohibition and licence might be effective for the purpose, but that certainly could not be embarked upon in this Bill, and it would require a careful survey of existing treaties and conventions before such a decision was come to.

The second point, which was raised in an interesting speech for the hon. Member for Newcastle East (Sir R. Aske) yesterday, was whether there should not be a system of free ports in this country. The hon. Member quoted the case of the free ports on the Continent, in Germany, Scandinavia and elsewhere, but particularly the port of Hamburg, and he seemed to think that the system of free ports was one almost of universal application in Protectionist countries. But that is not at all the case. What are the two great competitors of the Port of Hamburg on the Continent? They are Antwerp and Rotterdam, and neither of those is a free port. The question has been discussed at great length in France, and France has rejected the free port system. The United States is another instance of a Protectionist country which has preferred not to adopt the system of free ports.

It must be remembered that in this country the conditions which have grown up in our ports have grown up in such a way as not to make them readily adaptable to the system of free ports. Take London, for example. To have a free port you must have a large area which must be enclosed by a Customs barrier. That might be possible if all the docks were adjoining one another and if all the goods which were to be re-exported came to the same wharf as that from which they were to be re-shipped, but as a matter of fact the terminal ports of the shipping lines of this country are so arranged that frequently goods go out by a different port from that to which they come in. Further, in passing from port to port those goods will have to come under the jurisdiction of the Customs. Even in a single port the docks are not so arranged that you can enclose them with a Customs barrier. You would have a system of disconnected free zones, and it would be necessary for supervision by the Customs to take place as goods passed from one zone to another.

I do not think I need labour this point, but I would add this: I am not at all sure that it has been realised what extension of facilities has been given by the Customs authorities, especially since the introduction of the Abnormal Importations Bill. It is now possible for quite a number of processes to be carried out in the warehouses—processes of sorting, repacking, bottling, reconditioning and so forth—and I think hon. Members may rest assured that there will be little, if any, check or inconvenience caused to the re-export or the entrepot trade by the arrangement now carried out by the Customs.

11.0 p.m.

I pass to what is, perhaps, the subject of most interest to hon. Members, and that is the question of the free list. There are two kinds of criticism upon the free list. One criticism is that it contains articles which ought not to be there, and the other is of exactly the opposite kind, that there are articles which ought to be in the free list but which are not found there. In dealing with this question I want to point out that it really is not possible to lay down hard and fast rules as to what should or should not be in the free list. I would remind the House of what I said upon the subject when speaking in Committee of Ways and Means. I said then that we bad in this Bill a number of objects to attain, that it was very difficult to find any measure which would advance one of those objects without having some counter effect upon one of the other objects, and that in fact it would be necessary in each case to weigh advantages or disadvantages. That is the test which one has to apply to the question of the free list. You cannot say on the one hand that every article which is used as a material of industry, or which is used by agriculture for one purpose or another, is to come in free; nor on the other hand can you say that because you desire to get revenue out of these proposals everything which comes into this country must be taxed. You have to take each article upon its merits and you have to consider the advantages on the one side or the other. The question whether any particular article should go into the free list or not is not one of principle, but one simply and solely of expediency. While there are certain articles as to which one can say at once that these ought to ought not to go into the free list, there is, nevertheless, a long list of other articles, many of which perhaps we have never heard of, on which there is something to be said for their going into the free list, and because of that fact we realised that it would not be possible for the Government or this House in the short time available to get the materials which are necessary for coming to a final judgment on this matter. Therefore we inserted that Sub-section in Clause 1 which provides that on the recommendation of the Advisory Committee, the Treasury may add articles to the free list which are not actually in the free list, in the Bill as it stands. [HON. MEMBERS: "The six months."] I am coming to the question of the six months. We have provided that that shall not take place until after six months and we have two reasons for that. One is that, as has been pointed out by many hon. Members, the Committee will have a great deal to do. It is going to have a very big task. If it were to be overwhelmed at the very beginning of its work by demands that every kind of article should be put into the free list it would have no time to attend to duties which we think are even more important.

There is a second and very important reason. In our opinion, a little experience of the actual working of this Measure will give us very valuable information as to the real effects of the proposals upon industry and upon the question of whether articles should or should not go into the free list. You may have an article which is produced, in part, in foreign countries, and also produced, in part, in this country or again it may be produced in the Colonies or one of the Dominions. We cannot tell what the effect of the 10 per cent, may be on the price of that article. There may be no alteration in the price at all. That depends no doubt on the relative proportions which are produced in home or Empire countries and the proportion which is produced abroad. There are also certain articles the production of which can be very rapidly increased. It may be that where a substantial portion is already produced at home or in the Empire then the result of the 10 per cent. on the foreign production, may be to increase the production of the home or Empire article. That again has to be taken into consideration.

There is a third possibility which ought not to be left out of account. There are additional duties to be imposed. If those additional duties are imposed on the finished manufactured article they may well enable the manufacturer to bear the 10 per cent, tax upon his raw material, which may be of considerable benefit in other directions. Therefore I would ask the House to observe that there is very considerable freedom and elasticity in the arrangements that we propose, but I think I may add this. It will be noticed that the provision which we have made allows for additions to the free list but not for subtraction from it. If we are going to consider the question of articles which should not be in the free list, or if the free list is to be considerably extended during the passage of the Bill through Committee, then I think, it is worth considering whether we should not also extend the discretion of the Committee so as to make it possible not only to put things into the free list but to take things out of the free list.

Then I want to say a word about agriculture, because I know that there is a very large number of hon. Members who are particularly concerned about agriculture and who are not altogether satisfied with the treatment of agriculture under the Bill. Agriculture has been so long depressed, it has suffered so many disappointments in the past, that I do not think anybody can be surprised if it is still anxious and if it is even a little suspicious about any new proposals, but, on the other hand, I must say that 1 think some of the comments upon the position of agriculture under the Government's proposals have been not altogether justified. If we cast our minds back again to 12 months ago, what farmer in February of last year could possibly have expected that to-day he would see given to him not only a certain 10 per cent., but also a possible additional duty upon oats, eggs, poultry, butter, milk, cheese, canned meat, in addition to a. promise of a quota system which will give him a guaranteed price and a secure market for his wheat, and further assistance in other directions provided that proper arrangements for organisation are made 1 Surely there is occasion for something more than the intense disappointment which has been voiced in some quarters.

It may be that in the course of our proceedings in Committee we shall have powerful and convincing arguments for still further concessions to the agricultural community. I am not by any means closing my mind to the possibility of alterations in. Committee in the Schedule or in other parts of the Bill, but I do ask hon. Members to recollect that agriculture has got certain and definite benefits from this Bill and that we have to consider a great many things before we finally make up our minds what is to be our course on any particular item. If we are going to achieve the advantages we hope to get by the lowering of tariff barriers, whether in foreign countries or in the countries of the Empire, we must not throw away all our cards before we start our conversations. We must keep something in hand.

The last point on which I want to detain the House is the question of the Advisory Committee. I am not disposed to differ from those who feel that the work of the Committee will be the touchstone by which the success or failure of this experiment is to be judged. To find men of the right calibre who are willing to undertake a task of such an onerous character and such heavy responsibility is not going to be an easy matter, but I have confidence that such men can and will be found, and that there will be no time lost in getting to work upon their task. My right hon. Friend the Member for Hillhead (Sir R. Home), in a very eloquent and helpful speech earlier in the day, expressed some regret that the Government had not, as he said, had the courage to take the question of a tariff on iron and steel into their own hands. Let the House consider what the character of this Committee is to be. If it is to command the general confidence of the public, it must be an independent body, and if we had said that we were going to take out of their hands the decision as to what is perhaps the most fundamental industry in the country, the industry which most affects other industries, we should have been handicapping that independence and making it extremely difficult for this body to carry out their duties according to their own ideas.

We thought it better to leave full discretion to the Committee, but we agreed that in this case time is of the essence of the contract. I am not going now to attempt to lay down any procedure which

the Committee will be requested to follow. I think that, too, must be part of the discretion allowed to the Committee. I will say that I can hardly conceive it possible that a committee of this kind, having the task before it which it will have, will not begin by making a rapid survey of the whole field of industry in order that it may produce some kind of classification of industry and formulate some sort of principles on which their subsequent recommendations will be based. Do not let the House forget that the ultimate responsibility for the decisions that are finally taken after the Committee has made its recommendations will rest not with the Committee, but with the Government. The Government will not shirk that responsibility. We know very clearly and definitely what it is we want to do. We believe that in these proposals we have an instrument which will be effective for our purpose, and what we ask the House now to do is to give us the signal "all clear," so that we may at once start upon our task of restoring our prosperity.

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

The House divided: Ayes, 451; Noes, 73.

Division No. 62.]AYES.[11.12 p.m.
Acland-Troyte, Lieut.-ColonelBird, Sir Robert B. (Wolverh'pton W.)Castlereagh, Viscount
Adams, Samuel Vyvyan T. (Leeds, W.)Blaker, Sir ReginaldCastle Stewart, Earl
Agnew, Lieut.-Com. P. G.Blindell, JamesCautley, Sir Henry S.
Ainsworth, Lieut.-Colonel CharlesBoothby, Robert John GrahamCayzer, Maj. Sir H. R.(Prtsmth., S.)
Albery, Irving JamesBorodale, Viscount.Cayzer, Sir Charles (Chester, City)
Alexander, Sir WilliamBoulton, W. W.Cazalet, Thelma (Islington, E.)
Allen, Sir J. Sandnman (Liverp'l, W.)Bowater, Col. Sir T. VansittartCecil. Rt. Hon. Lord Hugh
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)Bower, Lieut.-Com. Robert TattonChalmers, John Rutherford
Allen, William (Stoke-on-Trent)Bowyer, Capt. Sir George E. W.Chamberlain,Rt.Hn.Sir J.A.(Birm.,W.)
Allen, Lt.-Col. Sir William (Armagh)Boyce, H. LeslieChamberlain, Rt. Hn. N.(Edgbaston)
Amery, Rt. Hon. Leopold C. M. S.Bracken, BrendanChapman, Col. R.(Houghton-le-Spring)
Anstruther-Gray, W. J.Braithwaite, Maj. A. N. (Yorks, E. R.)Chapman, Sir Samuel (Edinburgh, S.)
Appin, Lieut.-Col. Reginald V. K.Braithwaite, J. G.(Hillsborouoh)Chorlton, Alan Ernest Leofric
Aske, Sir Robert WilliamBriscoe, Capt. Richard GeorgeChotzner, Alfred James
Astbury, Lieut.-Com. Frederick WolfeBroadbent, Colonel JohnChristie, James Archibald
Astor, Maj. Hn. John J.(Kent, Dover)Brocklebank, C. E. R.Clarke, Frank
Astor, Viscountess (Plymouth, Sutton)Brown, Col. D. C.(N'th'l'd., Hexham)Clarry, Reginald George
Atholl, Duchess ofBrown, Ernest (Leith)Clayton, Dr. George C.
Balley, Eric Alfred GeorgeBrown,Brig.-Gen.H. C.(Berks.,Newb'y)Clydesdale, Marquess of
Baldwin, Rt. Hon. StanleyBrowne, Captain A. C.Cobb, Sir Cyril
Baldwin-Webb, Colonel J.Buchan, JohnCollins, Sir Godfrey
Balfour, George (Hampstead)Buchan-Hepburn, P. G. T.Colman, N. C. D.
Balfour, Capt. Harold (I. of Thanet)Bullock,-Captain MalcolmColvllie. Major David John
Baintel, LordBurghley, LordConant, R. J. E.
Banks, Sir Reginald MitchellBurgin, Dr. Edward LeslieCook, Thomas A.
Barclay-Harvey, C. M.Burnett, John GeorgeCooke, James D.
Barrie, Sir Charles CouparBurton, Colonel Henry WalterCooper, A. Duff
Barton, Capt. Basil KelseyButt, Sir AlfredCourthope, Colonel Sir George L.
Beauchamp, Sir Brograve CampbellCadogan, Hon, EdwardCroft, Brigadier-General Sir H.
Beaumont, M. W. (Bucks., Aylesbury)Caine, G. R. Hall-Crooke, J. Smedley
Beaumont, Hon. R.E.B. (Portsm'th, C.)Campbell, Edward Taswell (Bromley)Crookshank, Col. C. de Windt (Bootle)
Benn, Sir Arthur ShirleyCampbell, Rear-Adml. G. (Burnley)Crookshank, Capt. H. C.(Gainsb'ro)
Betterton, Rt. Hon. Sir Henry B.Campbell-Johnston, MalcolmCroom-Johnson, R. P,
Bevan, Stuart James (Hotborn)Caporn, Arthur CecilCross, R. H.
Birchall, Major Sir John DearmanCarver, Major William H.Crossley, A. C.
Bird, Ernest Roy (Yorks., Skipton)Cassels, James DaleCruddas, Lieut.-Colonel Bernard
Dalkeith, Earl ofHeadlam, Lieut-Col. Cuthbert M.Maitland, Adam
Davies, Edward C. (Montgomery)Henderson, Sir Vivian L.(Chelmsford)Makins, Brigadier-General Ernest
Davies, Maj. Geo. F.(Somerset,Yeovil)Heneage, Lieut.-Colonel Arthur P.Manningham-Buller, Lt.-Col. Sir M.
Davison, Sir William HenryHepworth, JosephMarjoribanks, Edward
Dawson, Sir PhilipHillman, Dr. George B.Marsden, Commander Arthur
Denman, Hon. R. D.Hills, Major Rt. Hon. John WallerMartin, Thomas B.
Denville, AlfredHoare, Lt.-Col. fit. Hon. Sir S. J. G.Mason, Col. Glyn K.(Croydon, N.)
Despencer-Robertson, Major J. A. F.Hope, Capt. Arthur O. J.(Aston)Mayhew, Lieut.-Colonel John
Dickie, John P.Hope, Sydney (Chester, Stalybridge)Meller, Richard James
Dixey, Arthur C. N.Hore-Belisha, LeslieMerriman, Sir F. Boyd
Donner, P. W.Hornby, FrankMillar, Sir James Duncan
Doran, EdwardHorne, Rt. Hon. Sir Robert S.Mills, Sir Frederick (Leyton, E.)
Drewe, CedricHorobn, Ian M.Mills, Major J. D. (New Forest)
Duckworth, George A. V.Horsbrugh, FlorenceMilne, Charles
Dugdale, Captain Thomas LionelHoward, Tom ForrestMilne, John Sydney Wardlaw-
Duggan, Hubert JohnHowitt, Dr. Alfred B.Mitchell, Harold P.(Br'tf'd & Chisw'k)
Duncan, James A. L.(Kensington, N.)Hudson, Capt. A. U. M.(Hackney,N.)Mitchell, Sir W. Lane (Streatham)
Dunglass, LordHudson, Robert Spear (Southport)Mitcheson, G. G.
Eady, George H.Hume, Sir George HopwoodMolson, A. Hugh Elsdale
Eales, John FrederickHunter, Dr. Joseph (Dumfries)Monsell, Rt. Hon. Sir B. Eyres
Eastwood John FrancisHunter, Capt. M. J.(Brigg)Moore, Lt.-Col. Thomas C. R.(Ayr)
Eden, Robert AnthonyHunter-Weston, Lt.-Gen. Sir AylmerMoore-Brabazon, Lieut.-Col. J. T. C.
Edge, Sir WilliamHurd, Percy A.Moreing, Adrian C.
Edmondson, Major A. J.Hurst, Sir Gerald B.Morris, John Patrick (Salford, N.)
Elliot, Major Rt. Hon. Walter E.Hutchison, W. D.(Essex, Romford)Morris, Owen Temple (Cardiff, E.)
Ellis, Robert GeoffreyInskip, Rt. Hon. Sir Thomas W. H.Morris-Jones, Dr. J. H.(Denbigh)
Elliston, Captain George SampsonIveagh, Countess ofMorrison, William Shephard
Elmley, ViscountJackson, Sir Henry (Wandsworth, C.)Moss, Captain H. J.
Emmott, Charles E. G. C.James, Wing-Com. A. W. H.Muirhead, Major A. J.
Emrys-Evans, P. V.Jennings, RolandMunro, Patrick
Entwistle, Cyril FullardJesson, Major Thomas E.Nail, Sir Joseph
Erskine, Lord (Weston-super-Mare)Joel Dudley J. BarnatoNation, Brigadier-General J. J. H.
Erskine-Boist, Capt. C. C.(Blackpool)Johnston, J. W.(Clackmannan)Newton, Sir Douglas George C.
Essenhigh, Reginald ClareJones, Sir G. W. H. (Stoke New'gton)Nicholson, Godfrey (Morpeth)
Evans, Capt. Arthur (Cardiff, S.)Jones, Lewis (Swansea, West)Nicholson, O. W.(Westminster)
Everard, W. LindsayKer, J. CampbellNicholson, Rt. Hn. W. G.(Petersf'd)
Falle Sir Bertram G.Kerr, Hamilton W.Normand, Wilfrid Guild
Fermoy, LordKimball, LawrenceNorth, Captain Edward T.
Fielden, Edward BrocklehurstKirkpatrick, William M.Nunn, William
Fleming, Edward LascellesKnatchbull, Captain Hon. M. H. R.O'Connor, Terence James
Ford, Sir Patrick J.Knebworth, ViscountO'Donovan, Dr. William James
Fraser, Captain IanKnight, HolfordOman, Sir Charles William C.
Fremantle, Lieut.-Colonel Francis E.Knox, Sir AlfredO'Neill, Rt. Hon. Sir Hugh
Fuller, Captain A. E. G.Lamb, Sir Joseph QuintonOrmiston, Thomas
Galbraith, James Francis WallaceLambert, Rt. Hon. GeorgeOrmsby-Gore, Rt. Hon. William G. A.
Ganzoni, Sir JohnLatham, Sir Herbert PaulPalmer, Francis Noel
Gault, Lieut-Col. A. HamiltonLaw, Sir AlfredPatrick, Colin M.
Gibson, Charles GranvilleLaw, Richard K.(Hull, S.W.)Peake, Captain Osbert
Gillett, Sir George MastermanLeckie, J. A.Pearson, William G.
Gilmour, Lt.-Col. Rt. Hon. Sir JohnLeech, Dr. J. W.Peat, Charles U.
Glossop. C. W. H.Lees-Jones, JohnPenny, Sir George
Gluckstein, Louis HallePerkins, Walter R. D.
Glyn, Major Ralph G. C.Leigh, Sir JohnPeters, Dr. Sidney John
Goff, Sir ParkLeighton, Major B. E. P.Petherick, M.
Goldie, Noel B.Lennox-Boyd, A. T.Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Goodman, Colonel Albert W.Levy, ThomasPotter, John
Gower, Sir RobertLewis, OswaldPowell, Lieut.-Col. Evelyn G. H.
Graham, Fergus (Cumberland, N.)Liddail, Walter S.Pownall, Sir Assheton
Grattan-Doyle, Sir NicholasLindsay, Noel KerProcter, Major Henry Adam
Graves, MarjorieLister, Rt. Hon. Sir Philip Cunliffe-Pybus, Percy John
Greaves-Lord, Sir WalterLlewellin, Major John j.Raikes, Henry V. A. M.
Greene, William P. C.Llewellyn-Jones, FrederickRamsay, Capt. A. H. M.(Midlothian)
Grenfell, E. C.(City of London)Lloyd, GeoffreyRamsay, T. B. W.(Western Isles)
Gretton, Colonel Rt. Hon. JohnLocker-Lampson, Rt. Hn.G.(Wd.Gr'n)Ramsbotham, Herwald
Grimston, R. V.Locker-Lampson, Com. O.(H'ndsw'th)Ramsden, E.
Gritten. W. G. HowardLockwood, John C.(Hackney, C.)Rankin, Robert
Guinness, Thomas L. E. B.Lockwood, Capt. J. H.(Shipley)Ratcliffe, Arthur
Gunston, Captain D. W.Loder, Captain J. de VereReed, Arthur C.(Exeter)
Guy, J. C. MorrisonLumley, Captain Lawrence R.Reid, David D.(County Down)
Hacking, Rt. Hon. Douglas H.Lymington, ViscountReid, William Alan (Derby)
Hales, Harold K.Lyons, Abraham MontaguRemer, John R.
Hall, Lieut.-Col. Sir F. (Dulwich)Mabane, WilliamRentoul, Sir Gervals S.
Hall, Capt. W. D'Arcy (Brecon)MacAndrew, Maj. C. G. (Partick)Renwick, Major Gustav A.
Hamilton, Sir George (Ilford)MacAndrew, Capt. J. O. (Ayr)Reynolds, Col. Sir James Philip
Hammersley, Samuel S.McCorquodale, M. S.Rhys, Hon. Charles Arthur U.
Hanbury, CecilMacDonald, Malcolm (Bassetlaw)Roberts, Sir Samuel (Ecclesall)
Henley, Dennis A.Macdonald, Sir Murdoch (Inverness)Robinson, John Roland
Hannon, Patrick Joseph HenryMacdonald, Capt. P. D.(I. of W.)Rodd, Rt. Hon. Sir James Rennell
Harbord, ArthurMcEwen, J. H. F.Ropner, Colonel L.
Hartington, Marquess ofMcKie, John HamiltonRosbotham, S. T.
Hartland, George A.McLean, Major AlanRoss, Ronald D.
Harvey, George (Lambeth,Kenn'gt'n)McLean, Dr. W. H. (Tradeston)Ross Taylor, Walter (Woodbridge)
Harvey, Major S. E. (Devon, Totnes)Macmillan, Maurice HaroldRuggles-Brise, Colonel E. A.
Haslam, Henry (Lindsay, H'ncestle)Macpherson, Rt. Hon. James I.Runciman, Rt. Hon. Walter
Haslam, Sir John (Bolton)Magnay, ThomasRunge, Norah Cecil
Russell, Alexander West (Tynemouth)Spears, Brigadier-General Edward L.Turton, Robert Hugh
Russell Hammer Field (Sheffield,B'tside)Spencer, Captain Richard A.Vaughan-Morgan, Sir Kenyon
Russell, Richard John (Eddisbury)Stanley, Lord (Lancaster, Fylde)Wallace, Captain D. E. (Hornsey)
Rutherford, Sir John HugoStanley, Hon. O. F. G. (Westmorland)Wallace, John (Dunfermine)
Salmon, Major IsidoreSteel-Maitland, Rt. Hon. Sir ArthurWard, Lt.-Col. Sir A. L. (Hull)
Salt, Edward W.Stewart, William J.Ward, Irene Mary Bewick (Wallsend)
Samuel, Sir Arthur Michael (F'nham)Stones, JamesWard, Sarah Adelaide (Cannock)
Sandeman, Sir A. N. StewartStorey, SamuelWarrender, Sir Victor A. G.
Sanderson, Sir Frank BarnardStourton, Hon. John J.Waterhouse, Captain Charles
Sassoon, Rt. Hon. Sir Philip A. G. D.Strauss, Edward A.Watt, Captain George Steven H.
Savery, Samuel ServingtonStrickland, Captain W. F.Wayland, Sir William A.
Scone, LordStuart, Hon. J. (Moray and Nairn)Wedderburn, Henry James Scrymgeour-
Selley, Harry R.Sueter, Rear-Admiral Murray F.Wells, Sydney Richard
Shaw, Helen B. (Lanark, Bothwell)Sugden, Sir Wilfrid HartWeymouth, Viscount
Shaw, Captain William T. (Forfar)Summersby, Charles H.Whiteside, Borras Noel H.
Shepperson, Sir Ernest W.Sutcliffe, HaroldWhyte, Jardine Bell
Simmonds, Oliver EdwinTate, Mavis ConstanceWilliams, Charles (Devon, Torquay)
Simon, Rt. Hon. Sir JohnTaylor, Vice-Admiral E. A.(Pd'gt'n,S.)Williams, Herbert G. (Croydon, S.)
Skelton, Archibald NoelTempleton, William P.Wills, Wilfrid D.
Smiles, Lieut.-Col. Sir Walter D.Thom, Lieut.-Colonel John GibbWilson, Clyde T. (West Toxteth)
Smith, Sir Jonah W. (Barrow-In-F.)Thomas, Rt. Hon. J. H. (Derby)Wilson, G. H. A. (Cambridge U.)
Smith, Louis W. (Sheffield, Hallam)Thomas, James P. L. (Hereford)Windsor-Clive, Lieut.-Colonel George
Smith, R. W. (Ab'rd'n & Kinc'dine,C.)Thomas, Major L. B. (King's Norton)Winterton, Rt. Hon. Earl
Smith-Carington, Neville W.Thompson, LukeWise, Alfred R.
Smithers, WaldronThomson, Sir Frederick CharlesWithers, Sir John James
Somervell, Donald BradleyThorp, Linton TheodoreWomersley, Walter James
Somerville, Annesley A. (Windsor)Titchfield, Major the Marquess ofWorthington, Dr. John V.
Somerville, D. G. (Willesden, East)Todd, Capt. A. J. K. (B'wick-on-T.)Young, Rt. Hon. Sir Hilton (S'v'noaks)
Soper, RichardTouche, Gordon Cosmo
SotherOn-Estcourt, Captain T. E.Train, JohnTELLERS FOR THE AYES.
Southby, Commander Archibald R. J.Tryon, Rt. Hon. George ClementCaptain Margesson and Mr. Shakespeare.
NOES.
Adams, D. M. (Poplar, South)Grundy, Thomas W.Mander, Geoffrey le M.
Attlee, Clement RichardHall, F. (York, W.R., Normanton)Mason, David M. (Edinburgh, E.)
Batey, JosephHall, George H. (Merthyr Tydvil)Maxton, James
Bernays, RobertHamilton, Sir R. W.(Orkney & Zetl'nd)Morris, Rhys Hopkin (Cardigan)
Bevan, Aneurin (Ebbw Vale)Harris, Sir PercyNathan, Major H. L.
Brant, FrankHicks, Ernest GeorgeOwen, Major Goronwy
Brown, C. W. E. (Notts., Mansfield)Hirst, George HenryParkinson, John Allen
Buchanan, GeorgeHoldsworth, HerbertPickering, Ernest H.
Cape, ThomasHopkinson, AustinPrice, Gabriel
Cocks, Frederick SeymourJanner, BarnettRea, Walter Russell
Cove, William G.Johnstone, Harcourt (S. Shields)Roberts, Aled (Wrexham)
Cowan, D. M.Jones, Henry Haydn (Merioneth)Salter, Dr. Alfred
Cripps, Sir StaffordJones, Morgan (Caerphilly)Samuel, Rt. Hon. Sir H. (Darwen)
Curry, A. C.Kirkwood, DavidSinclair, Maj. Rt. Hn. Sir A. (C'thnees)
Daggar, GeorgeLansbury, Rt. Hon. GeorgeThorne, William James
Davies, David L. (Pontypridd)Lawson, John JamesTinker, John Joseph
Davies, Rhys John (Westhoughton)Logan, David GilbertWatts-Morgan, Lieut.-Col. David
Edwards, CharlesLunn, WilliamWedgwood, Rt. Hon. Josiah
Evans, R. T. (Carmarthen)Macdonald, Gordon (Ince)White, Henry Graham
Foot, Dingle (Dundee)McEntee, Valentine L.Williams, Dr. John H. (Llanelly)
Foot, Isaac (Cornwall, Bodmin)McGovern JohnWilliams, Thomas (York, Don valley)
George, Major G. Lloyd (Pembroke)McKeag, WilliamWood, Sir Murdoch McKenzie (Banff)
Graham, D. M. (Lanark, Hamilton)Maclean, Rt. Hon. Sir D. (Corn'll N.)Young, Ernest J. (Middlesbrough, E.)
Grenfell, David Rees (Glamorgan)Maclean, Nell (Glasgow, Govan)
Griffith, f. Kingsley (Middlesbro', W.)Mallalieu, Edward LancelotTELLERS FOR THE NOES.
Mr. John and Mr. Groves.

Resolution agreed to.