Orders of the Day — Import Duties Bill.

Part of the debate – in the House of Commons at on 16 February 1932.

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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.