Orders of the Day — Japanese Competition.

– in the House of Commons on 21st March 1934.

Alert me about debates like this

Motion made, and Question proposed, "That this House do now adjourn."—[Sir F. Thomson.]

10.4 p.m.

Photo of Mr Eric Bailey Mr Eric Bailey , Manchester, Gorton

I rise to speak of a matter which is regarded as of the greatest importance to Lancashire although it has not attained quite the same prominence or indeed anything like the same prominence in other parts of the country. I refer to the question of Japanese competition which has been pressing with increasing severity upon the people of that part of the country. The Government have now been in office for roughly two and a-half years and during that period, whether they be to blame or not, little or nothing has been done to check this growing menace in our export market. Some of us feel very seriously about this question, and we have felt compelled as far as we can to try and bring it into prominence and to get vigorous action on the part of the Government, and indeed on the part of some of our own colleagues. Before I ask the Minister to deal with some specific questions and proposals which we will put forward, I should like to deal with two criticisms that have been made by a few of our colleagues and by the Minister himself. First of all, it is said that we have been precipitate in conducting an agitation against the Government's inaction—because that is the only way in which we can describe their attitude on this question. We have been accused of being precipitate; we might have waited a little longer. Then we have been accused of having brought forward no constructive proposals whereby this matter might be dealt with. That accusation was made against us by the President of the Board of Trade in the last Debate, when he was good enough to tell us that the only practical proposal which had been brought forward was that of the hon. Member for Oldham; and recently we have been accused by one of the Lancashire Members, who, like ourselves, represents a small group. I would like to deal with those two Government criticisms before putting forward our specific proposals.

With regard to our being precipitate, we waited for two years before we began an agitation of any kind, either in Lancashire or in this House, and it was only when, last July, the Lancashire Members asked that this matter might be dealt with in the Debate on the Adjournment for the Recess, and when not a single Cabinet Minister attended the Debate—a thing to which, as a matter of fact, we are very used—it was only then that those of us who feel strongly on this question felt that we were bound to take a path which would produce greater activity on the part of the Government. Since then, during the whole course of the negotiations, or discussions, between the Japanese and the British industrialists, we have deliberately refrained from raising this matter on the Floor of the House, because, however little we believed in the methods by which the Government were approaching this question, we did not want it to be laid upon our shoulders, even by ourselves, that any words of ours had hindered in the slightest degree the successful issue of those discussions. We were patient. But we were always told by our colleagues that, while they agreed with our proposals as to the abrogation of the most-favoured-nation Clause, we were too precipitate—we have always been too precipitate—and that the time for action would come if the discussions broke down.

In Manchester, the Minister gave what was very like a specific promise that there would be drastic action if the negotiations failed. Now they have failed, and they were bound to fail, because we went into them with our hands tied behind our backs, without a single negotiating point in the hands of our negotiators. The Government left the industrialists to themselves in this matter, whereas on previous occasions they have initiated the negotiations. Why has there been that distinction? The negotiations having failed, we say that the time has come when we can no longer be patient, when we can no longer refrain from expressing a point of view which, even if it finds but a small echo in this House, awakes the deepest feelings in that part of the world from which we come. When it came to a question of our having again either to acquiesce in the policy of delay or withdraw from the group of Members with whom we had been associated, we preferred the course of withdrawal. We consider that the time has come when, if there is to be action, it must be taken quickly.

With regard to the criticism as to our lack of constructive proposals, one can only say that we have put our proposals a good many times before the House, but, when the President of the Board of Trade has replied to the Debate, he has never told us once why our proposals were not constructive. In fact, he has never met our argument, but has always done one of two things. He has told us that we were hampering the situation, that the time was inopportune. That was one of his favourite counters. The other course, which he has adopted even more frequently, has been to express in powerful language his admiration for the people of Lancashire. He has generally occupied most of his time in telling the House what a very fine spirit the people of Lancashire have, and that the spirit which made our forefathers great still prevails there. We agree, but what we want to know is, what are the Government going to do on this question to enable the people of Lancashire to keep their end up, and utilise that spirit which made their fathers great in getting themselves prosperous? That is what we have never heard. We are criticised by the Government for a lack of constructive proposals, and we are criticised by two of our hon. Friends—who are still our hon. Friends in spite of this temporary severance—for a lack of constructive proposals. We cannot criticise either their proposals or those of the Government for not being constructive, because we have never heard from them any proposals, constructive or otherwise. What we have heard have simply been vague words and platitudes.

I wish that the President of the Board of Trade could have been here, because in our view, in spite of the smallness of the attendance in the House, this is a matter of great importance. To treat it as being otherwise may be a tactical mistake, but that is not for me to say. I should like to ask one question, and I should like that question to be specifically answered, if possible, by whoever replies to this Debate, because it deals with the whole question of our criticism of these discussions—now negotiations—between the two Governments. Is it or is it not a fact that the Japanese negotiators had already been conducting negotiations with our Dominions, or some of our Dominions, before their discussions with us broke down? Is it also a fact that that was done behind our backs? If either one or the other of these questions be answered in the affirmative. I would ask, further, do the Government think that it is proper, not to say safe, to pursue the same old policy of negotiation?

We should very much like to hear the view of the Government on another matter. The Japanese were in this country for six months before they could be prevailed upon to commence discussion. We were always hearing bulletins about the impetuous Mr. Okada's regret that, like a horse kept on a curb, he was not able to go into these negotiations because he had not received his full instructions. When he did receive them, after six months, he misunderstood the terms of our invitation. I should like to know the Government's view on that subject. Do they think that that misunderstanding was a genuine misunderstanding? Were their invitations framed in such ambiguous language that the Japanese could be mistaken? How was it that the Japanese were allowed to be in this country for six months without knowing the subjects about what they were going to talk, and the terms of reference? The conclusion to which the man in the street came—and in this case he is not far wrong—is that, both on the Japanese and the British side, the negotiations were nothing more than a smoke screen to conceal from the public the necessity of action. It was obvious that the Japanese were playing. What would have been thought of a British delegation which had kept the country that invited it waiting for six months before Britain gave its terms of reference? No words would have been too bad. I do not want to use too strong language but I cannot help thinking that for some reason or other the Government are anxious to avoid facing this question.

The policy that we have urged can be put under two main heads. First of all, we have urged that the most-favoured-nation clause existing in commercial treaties between this country and Japan should be abrogated. We recognise that the main problem is not in the home market of this country as far as the textile trade is concerned and that the abrogation of the most-favoured-nation clause in the commercial treaty between this country and Japan would have no effect upon the foreign market, but how can we ask our Dominions and Crown Colonies to abrogate the clause in their treaties with Japan, which it is vital to us should be abrogated, if we are not prepared to abrogate our own similar treaty ourselves? The second cardinal point of our policy is that it should be the duty of the Government to persuade our Dominions and similarly—I do not like to use the word "enforce," but induce our Crown Colonies to take similar action. After all, most of the Dominions and Crown Colonies have a heavy balance of trade in their favour. They are given exceptional advantages in our market—free entry and protection from their rivals. What more could they ask? If they did, we should probably give it them. The Government ought in the future to do what it can, as it ought in the past to have done what it could, to get the Dominions and Crown Colonies to abrogate the most-favoured-nation clause in order that they might put such duties against Japanese goods as would persuade the Japanese to come to a commercial arrangement. That is what the Indian Government did. They had trade negotiations with Japan, and they gave notice to abrogate the most-favoured-nation clause. Until the notice expired nothing was done. Within a few weeks of its expiry a treaty was negotiated. The Government should not have waited until negotiations failed. They should have given notice to terminate the treaty and should have persuaded the Dominions to do the same. It may be that, if they had done so, the negotiations would have been a little more fruitful.

But that is past. We should be only too willing to forgive them their mistakes if they would assure us that they will pursue a more active policy and will not leave it to some far distant date when some more negotiations shall have been entered upon and again broken down. I do not want to overstate the case. We realise the difficulties that would lie in their way in obtaining any action on the part of the Dominions and Crown Colonies, but what we complain of is that they have not tried to surmount those difficulties. When Jamaica wanted to put on duties to deal with the depreciation of the Japanese currency in our favour, the British Government, which should have encouraged them, said to Jamaica, "No, you must not do it." We want to know why the British Government take that attitude. How can we believe that they are pursuing an energetic policy in regard to the Dominions and Colonies in this matter, when the only specific instance which we know shows that their policy has run contrary to the direction in which we are working? Until these most-favoured-nation clauses have expired, we ask that they try to secure quotas in the Dominion markets. Is it unreasonable?

Our third proposal is that, in negotiating trade treaties with foreign countries, the Government should not give quotas to those foreign countries without receiving quotas from them. We recognise to the full that you cannot, in the complicated mechanism of international trade, get an exact reciprocity of trade. That is obvious even to a Protectionist, and certainly it ought to be obvious to an ex-Free Trader like the President of the Board of Trade. We say that the Government might at any rate, where the countries with whom they are negotiating trade agreements can reasonably buy from us and ought reasonably to buy from us, and where they used to buy from us until this cheap menace started, see to it that at least in return for the quotas which we give to them they ought to give quotas to us. In regard to the negotiations which have already been arranged, it is merely crying over spilt milk, and we wish to indulge in no recriminations. In the words of the Psalmist we have been preaching to the "deaf adder" and so far she has "stopped her ears." We hope that in regard to this matter in the future they will adopt a policy which is perhaps a little less international and a little more British.

There are important negotiations to be conducted with Holland and with France which will include the very important market of the Dutch East Indies. We ask that before any permanent arrangement is made with Holland in the matter of trade there should be a definite term in the arrangement securing a reasonable share of the Dutch market in the Dutch East Indies for the British textile trade. We do not for one moment want to exclude Japan. We want a reasonable arrangement with Japan, but our view is, and has been, that until there can be put into the negotiations with Japan bargaining weapons on our side as well as on theirs no reasonable arrangement can be made. While it remains a question of their saying what they will and will not do, and of any action we can take being in some far distant future, we say that nothing can be done. We hope that there will be quotas in trade treaties if they are negotiated at all. It has been done in other treaties. It is all very well talking about the incalculable value of good will and upon loosening international trade. We appreciate all those things, but we do not see why all the loosening should be done on our side and none on the other side.

There is another matter to which we attach considerable importance. It is a technical matter, and a fact which every merchant in Manchester knows. It is all very well for the President of the Board of Trade to get up and say, as he did, that if we gave specific instances he would deal with them. I was very glad to hear him say that, but I should like to ask whether, if we can show specific instances of infringement by Japanese traders of British trade marks and designs, the one matter in which we are their superiors, will the Government promise that they will do something—more than mere words—in the form of action, and that they will treat it definitely as something of which they will take serious notice. I do not say belligerent notice, but serious notice.

There is one other matter to which we attach great importance and it is this. There has recently been negotiated a treaty between India and Japan by which the Japanese are to send 400,000,000 square yards maximum of piece goods to India, and Japan will take 1,500,000 bales of Indian cotton. That trade treaty has not yet been ratified, and in view of the Japanese attitude towards us it might well be that it ought not to be ratified. What is the position in regard to India? This morning I was talking to one of the biggest shippers in the Indian trade; a man who is in no way in sympathy with the opponents of the White Paper. I believe that he belongs to the party of the right hon. Member for Darwen (Sir H. Samuel). He has had about 40 years' experience in India. He said that this question of India not taking our Lancashire exports was related to the fact that India must get rid of her raw cotton. From whoever will take their raw cotton they will willingly in return buy piece goods. It is simply a quid pro quo. India says: "You take our raw materials and we will allow you to import a certain quantity of made-up goods." That is what it amounts to. Lancashire has not taken the raw materials from India in any quantity, and Japan has.

There are many ways in which one could criticise the managers of the trade in Lancashire, but if we want to rebuild we must be constructive. It is no use criticising them for failing to take this Indian cotton. If we took half the amount of Indian cotton that Japan is going to take we should secure at least another 200,000,000 square yards of exports of Lancashire goods to India—Japan is going to import 400,000,000 square yards—and that would add 5 per cent. to our export trade. It is no use criticising Lancashire for failure in the past nor is it any use blinking the fact that on their own they will not buy Indian cotton in sufficient quantities to make it worth India's while not to ratify the agreement with Japan; but if the Government will come to our assistance to a far less extent than they have done in the case of sugar-beet, which industry only employs about 10,000 people, directly and indirectly, and to a far less extent than they have done in the case of the shipping industry—I refer to the Cunard Agreement—we could purchase 750,000 bales of cotton from India and add 5 per cent. to the productivity of the Lancashire cotton trade. Is that a matter which the Government are considering? Have they any financial proposals in the matter?

While my friends and I are the keenest opponents of subsidies, on principle, we do not see why, when the hat is going round, the greatest of industries, certainly the greatest of our exporting industries, should not get a small morsel. Like the Syro-Phoenician woman, the crumbs that fall from the rich man's table would be all that we would ask. We do not ask for a gigantic sum such as that given to the sugar-beet industry, nor do we ask for £9,000,000 as in the case of the Cunard Agreement—the total export trade in cotton is only £56,00,000—but if we were granted one or two millions a year we should be able to buy half the number of bales of cotton that Japan has agreed to take, we should be able to increase our export trade in Lancashire by 5 per cent., and the Government would save in dole over and over again their capital outlay. If ever there was a case that deserved assistance from the State this is one. We have a considerable number of other proposals which we have put forward and which we intend to put forward, but the five that I have mentioned are the main proposals.

I do not wish at this late hour to worry the House any longer, and I will conclude by saying two things. Although we are taking this matter up in a somewhat critical attitude we do so with regret. We claim to be as loyal supporters of the Government as any in the House, and if our pressure is successful it may be that we shall avert a very big electoral disaster in Lancashire in two years time. There may be some who think that our pressure is misdirected, or if it is succeessful that it will do harm to our party. Those who come here and tell the Government the truth are doing a good deal more to help the national cause than those—I will not question their motives, because I treat them as being sincere as I hope they treat us as being sincere—who take a different attitude. I think that we are really serving the national cause. I can assure the Government that if they can give us any valid arguments to show that our proposals are not practicable or constructive we are ready to drop them, and if they can put forward constructive proposals themselves we shall be the first to consider them on their merits and support them. If, for instance, the small group of Members who are concerned with our collieries, and who sympathise with us to some extent, can put forward any constructive proposals we will consider them with the greatest measure of sympathy. This is far too serious a question for bickerings and factions. It is a question which demands insistent action, and we are prepared to consider sympathetically any constructive proposals for action from whatever quarter they may come.

10.32 p.m.

Sir NAIRNE STEWART SANDEMAN:

I am sure that there are no Lancashire Members who do not agree to a certain extent and have the greatest sympathy with what the hon. Member for Gorton (Mr. Bailey) has said in his attempt to ameliorate the position in Lancashire. But some of us feel that they are going about it in entirely the wrong way. Some of them have not been in the House very long and their leader is not present at the moment; that might put them at a slight disadvantage. We also know that the Lancashire Members require a little bit of ginger—

Photo of Mr Linton Thorp Mr Linton Thorp , Nelson and Colne

Who does the hon. Member consider their leader?

Sir N. STEWART SANDEMAN:

I thought it was the hon. Member for Macclesfield (Mr. Remer).

Photo of Mr Eric Bailey Mr Eric Bailey , Manchester, Gorton

I do not want to enter into a family argument, but I must point out that the hon. Member for Nelson and Colne (Mr. Thorp) is our chairman and that the hon. Member for Macclesfield (Mr. Remer) is at an important industrial dinner.

Sir N. STEWART SANDEMAN:

I do not want to bring any bitterness into this Debate and I will leave it at that. Speaking as one of the ordinary members of the Lancashire Committee we consider that the Japanese position should be considered with the greatest care and that it will be a great mistake to rush in suddenly. Lots of people rush in suddenly and do not always make the best of it. We have listened to the hon. Member for Gorton for half an hour and most of that time was taken up by asking questions of the Government and very little in making proposals which will really help to elucidate the position, which we quite realise is difficult and requires very careful handling indeed. Negotiations may have lasted far too long to satisfy some Members of the House. The hon. Member said that the Lancashire people have been extremely patient. I agree with all that. But why not have a little more patience? After all, who has been negotiating during the last year? The members of a very influential Manchester group, to whom I had the pleasure of listening to-day. If those hon. Members who have so lately retired from the Lancashire group had heard about the difficulties of the position as several of the Lancashire and Cheshire groups have heard of them, I think they would be a little more chary as to what they say, and in expressing opinions as to what could be done at the present time without taking very grave risks. I shall not put it any higher than that. But we were all convinced that the risks we were running were considerable, and that every single stone must be turned as long as there is the slightest chance of getting something under it. Otherwise we are running our heads into a very dangerous position indeed.

I for one am content to wait a little longer after what I have heard in the last two days. I yield to no one in my desire to see employment increasing in Lancashire, and to see the Japanese menace tackled in the proper way, but it will not be done by antagonising Japan at this moment. We have to be extraordinarily careful because there are other interests concerned all over the country, and not only in Lancashire. If we antagonise Japan what about our tinplate trade? [Interruption.] I am not a bit afraid of antagonising Japan, but if the hon. Gentleman who interrupts would think a little about it and take the trouble to find out what the position is, he would not try to get me roused into saying things which would probably please his idea of antagonising Japan. I am not going to be drawn in that way at the present time because I consider that the position in Lancashire is far too serious for risks to be taken.

What are the constructive proposals of hon. Members? That is what I would like to know. They refer to the most-favoured-nation Clause. Have they really studied what the abrogating of it means? Suppose that we do abrogate it. It is no good doing that with one country. We have to get other countries to abrogate their treaties too. To say that we are going to do away with it will land us nowhere, unless we can get our friends to do likewise. What about Australia? Australia is very worried indeed about Japan. As a matter of fact she sells a very great proportion of her wool clip to Japan and she does not wish to have trouble with Japan. There are the various other Dominions. Of course they would make no agreement at Ottawa, but we can do very little unless the Governor puts his foot down, and I hope he will. The various Colonies might do something. But that is not going to cure our difficulties at all. It might help, but it would be only a palliative.

I am at a loss to know what are the suggestions that a certain small group of Lancashire Members put up. At the present time I would much rather give the President of the Board of Trade an opportunity to find out exactly what he can get from the Japanese Ambassador. It may be that where the commercial interests fail to find a common line, the President of the Board of Trade working with the Legation in Japan can do something. It means a little patience. Let us wait until we find out the exact position, and if nothing is done, if we are certain that the Government are showing a weak-kneed attitude—and I do not think they are—I am certain that all Lancashire Members will join to do their best to see that the interests of Lancashire are well looked after.

10.41 p.m.

Photo of Mr Linton Thorp Mr Linton Thorp , Nelson and Colne

I have some hesitation about intervening in this Debate because I know that the person who says "I told you so" is apt to be unpopular. As long ago as November last, when an Amendment was put down to the Address dealing with this subject I warned the President of the Board of Trade that in all probability these negotiations were foredoomed to failure. When this question of competition in the cotton trade has been raised we have always been told by the President of the Board of Trade—who, I regret, has not thought it worth while to be present this evening—that we should wait until the negotiations came to an end. They have come to an end. I understand that the other evening my hon. Friend the Member for Macclesfield (Mr. Remer) was guilty of a bull in saying that they had come to an end before they had begun. My hon. Friend was approximately correct because the negotiations never did begin. The Japanese representatives and our representatives were unable to agree on the geographical limits to be covered in the negotiations. The hon. Member for Prestwich (Sir N. Stewart Sandeman) has been good enough to criticise us for going about things in the wrong way. The main complaint that we have to make against the Government and a great many Lancashire Members is that they have not been going about the matter at all.

It is usual if you have an agreement with a person which can only be terminated by certain notice, that notice should be served and that, at the same time, a notification should be sent to the effect that you are prepared to consider and negotiate a new agreement. What possible objection was there to that course? This matter has been before the Government for 11 months. Had they 11 months ago adopted the policy which we have advocated there would now only be one month during which the cotton trade would be exposed to this intensive foreign competition. What is the position to-day? If the Government—and in my wildest dreams I do not imagine they will do so—were to denounce the most-favoured-nation clause to-night it will be 12 months before the treaty comes to an end. The Lancashire trade will be exposed to unfair Japanese competition for a further period of 12 months as from the date on which notice is given.

The hon. Member for Gorton (Mr. Bailey) put forward some proposals which have not met with the approval of the hon. Member for Prestwich. Assume for argument's sake that the proposals are all nonsense, and that none of them is of the slightest value. Assume that they cannot, for political or other reasons, be put into operation. Surely, it is better to put forward some proposals that are of no value than to say, "Let us go on with some negotiations so as to avoid putting forward any proposals at all." That is the attitude of the Government. The fact remains that at the last Election many of us went through our constituencies and saw the people unemployed in the streets—in my own constituency there are over 30 per cent. unemployed—and we told them to support the National Government, and that that Government would do something to restore the prosperity of the cotton trade.

My right hon. Friend the Member for Darwen (Sir H. Samuel) has, I believe, some 40 per cent. still unemployed in his constituency. What have the Government done for them? I will tell the House what they have done so far as my constituency is concerned, and I say it with some degree of feeling. Four factories have been closed down since this Government came into operation and none has been opened. Yet we are told to wait for these negotiations, to wait for the result of them. If we are wrong in being impatient, if we are wrong in urging upon the Government to do something for the cotton trade, surely there is, if not some explanation, some excuse for our speaking plainly when we realise that one-third of our operatives are unemployed in our constituencies. If the conversion of this country from a Free Trade country to a tariff protected country were right, surely it should have had more effect than it has had so far as the cotton trade is concerned.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

It has at least increased the production for the home market by 300,000,000 yards.

Photo of Mr Linton Thorp Mr Linton Thorp , Nelson and Colne

It may have done that, but it has not had the effect of stopping the sale in Manchester of Japanese-made goods which ought to have been made in England. I have in my possession a small overall suitable for a girl of six or eight years of age, which is being sold in Manchester at one penny a piece.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

The quantity has been reduced to one-eighth of the quantity two years ago.

Photo of Mr Linton Thorp Mr Linton Thorp , Nelson and Colne

In other words, this overall is being sold in Manchester at a price which is less than the raw cotton would cost to the manufacturers in the north of England. If that is going to be the effect of the conversion of this country from Free Trade to tariffs, I would advise the National Government to take other steps to put the matter upon a fair basis. The position is summed up in almost a word. It is that the balance of trade between this country and Japan is approximately evenly balanced. I believe I am right in saying that for the first time for a very long time the credit is slightly in favour of the Japanese this year. The fact of the matter is that cotton and the cotton industry, the biggest exporting industry that we have, is being butchered to make a holiday for the steel and iron trade. I have no objection whatever to the steel and iron trade being prosperous. On the contrary, I am glad that they should be prosperous. I am glad that they have a pot in which they can dip their spoon. All we are asking is that the cotton trade should be allowed to get its spoon into the pot now and again.

My hon. Friend the Member for Gorton has adumbrated what we consider our policy. It may be all wrong, but do for goodness' sake let us know what the Government policy is on this subject. We do think that at any rate something ought to be done. I remember on the Motion for the Address the President of the Board of Trade was invited to go and visit, not the merchants in Manchester, but the manufacturers in Lancashire, and to ask them what their views are upon this subject. We have been criticised on the ground that our views are not shared by the people who are authoritatively informed in Manchester. If the President of the Board of Trade would consult the manufacturers he would ascertain that this is a matter of vital importance to the trade and ought to be dealt with promptly by the Government, and that the Government should not shelter behind either a prolongation of the existing negotiations or a resuscitation of them in order to postpone dealing with what is admitted, and what we all agree to be, an extremely difficult problem.

10.50 p.m.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

I should like to reply to the hon. and learned Gentleman. I do not think I have ever listened to a speech which contained so little knowledge of the facts and so little knowledge of the intentions of the Government. He started by attacking the tariff policy of the Government, saying that they had done nothing for the cotton trade. He and the hon. Member for Gorton (Mr. Bailey) attacked the Trade Agreement, and went on with the general assumption that by cancelling the most-favoured-nation clause in our Treaty with Japan it would immediately strike out this competition. None of these assumptions is accurate. The home market has been enormously expanded by the tariff policy of the Government. Large numbers of cotton towns, including Bolton, and even Oldham, have had unemployment reduced. Then we come to the export trade. Admittedly two-thirds of the production is now for export. We have the assumption that by cancelling the most-favoured-nation clause in the case of Japan, we can immediately gain a large amount of trade. Where are you to gain it, and where do we administer the territory for such markets? West Africa and a few small islands. Up to now Japan has not exported any great quantity to West Africa. There is also the point of the Trade Agreements. Is the hon. Member quite certain that in the Trade Agreement with Denmark we do not get good terms under the Danish licensing system, or that in the Trade Agreement with the Argentine we do not get extremely good terms of currency exchange? Has he studied the trade figures in these Agreements, and does he know that in the first year of the Argentine Agreement trade has gone up by 35,000,000 square yards? Has he studied the Ottawa Agreement and the general increase that has taken place, and, if so, why does he not put the case for as well as against the Government? He criticises the Government for instituting the negotiations, and he criticises the industry for participating in them.

Photo of Mr Eric Bailey Mr Eric Bailey , Manchester, Gorton

I never criticised the industry for participating in them. I criticised the Government for leaving it to the industry to conduct these negotiations instead of themselves taking the first hand in them.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

May I first of all say how glad I am to see the hon. Member for Macclesfield (Mr. Remer) come in and take his seat over there? It reminds me of the ghost returning in "Hamlet". It is perfectly true that there is a case on both sides. It is perfectly true that, if we had not taken a certain line of action, or adopted a certain line of thought, we might be freer to take other action now. But it all depends on what that action is. The whole supposition, on our going into negotiations, was that we could act in a really wide sphere, whereas by acting under discrimination we could only act in the very smallest sphere imaginable, covering about one-fifteenth of our export market only. It is only on that ground that the Government, I think, took the right course in insisting on negotiations. But there is just one other point. Are the hon. Member for Gorton and the hon. and learned Member for Nelson and Colne (Mr. Thorp) quite sure that the action of the Government up to now was not entirely in sympathy with the wishes of the responsible leaders of the trade?

Photo of Mr Linton Thorp Mr Linton Thorp , Nelson and Colne

Our main complaint is not the action of the Government, but the inaction of the Government.

Photo of Mr Anthony Crossley Mr Anthony Crossley , Oldham

I was referring to a specific action of the Government—the action of the Government in instituting these negotiations. Is he quite sure that that action of the Government was not in complete keeping with the wishes of the responsible leaders of the trade? Because, if it was, then the whole case of those six or seven Members who sit there, and who will not even give the Government 10 days after the breakdown of these trade negotiations in which to make up their minds on the action that is now to be forthcoming, and who think that the Government should have gone bull-headed for discrimination in the little area where it was possible, without consulting the wishes of the trade, falls to the ground; and that is all I have to say.

10.58 p.m.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

These are great days for Free Traders. But to come to the specific point, I think it is only fair and right that the Members of the little group opposite should know once and for all why in Lancashire, and particularly in the cotton industry, we regard them as an unmitigated nuisance. The reason is this. These negotiations with the Japanese delegation in this country depended for any sort of success on our maintaining a courteous attitude towards those negotiations and the Japanese. The one and only hope we had of getting any useful result was through the good will and the common sense of the people with whom we were negotiating, and when hon. Members come down to this House and speak in public as they do here, and outside, about unfair Japanese competition, they are doing everything possible to wreck any useful result from any negotiations we may have with them.

What is this unfair competition? In these days we are accustomed to call anything unfair competition if it is successful. The Japanese, admittedly owing to certain circumstances in their country which we do not possess, have in some respects beaten us in some parts of the cotton trade, and we know we are beaten; but they have not done it in an unfair way. They have done it perfectly honestly and openly, by extraordinary ability and by the industry of their own people. [HON. MEMBERS: "Low wages and depreciating the yen!"] Low wages, we are told. The wages and the benefits that are given to cotton workers in Japan are such as to raise the standard of living of the people concerned to a height they never dreamed of attaining before the Japanese cotton millowners introduced their system. They are better off, happier and freer than they have ever been under the Japanese cotton mills system.

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Margesson.]

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

I have not many more remarks to make, but this is the point: We know that we have to deal with this competition, and the way to deal successfully with it is not with the offensive rudeness which, I am sorry to say, has been shown by certain little insignificant groups in this House, and in the country outside.

11.1 p.m.

Photo of Colonel John Broadbent Colonel John Broadbent , Ashton-under-Lyne

I want to impress upon the House the great gravity of this question as it affects Lancashire. It is not with them only a bread-and-butter question, but a matter of life and death. It is not out of any spirit of antagonism to the Japanese nation that I speak. I well know that the Japanese during our great trouble were our faithful allies. I cannot agree with the hon. Member for Mossley (Mr. Hopkinson) that the Japanese have been perfectly fair in their competition with this country. I would like to know whether he considers that the copying of trade marks is a fair way of getting trade, because I do not. Whether I belong to an insignificant group or not, I believe that the copying of trade marks should be stopped with a very firm hand.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Those people whose trade marks are infringed have their remedies.

HON. MEMBERS:

Where?

Photo of Colonel John Broadbent Colonel John Broadbent , Ashton-under-Lyne

Their remedies are such that they cannot put them into operation, and therefore it is rather misleading to the House to make such suggestions. The hon. Member for Middleton and Prestwich (Sir N. Stewart Sandeman) referred to other interests in the country. I know that other interests might be affected if the agreement in regard to the most-favoured-nation clause was abrogated. At the same time, the Australians do a good deal of trade in wool with the Japanese. Now that the Japanese have occupied a territory against the findings of the League of Nations and against the Lytton Report, and that they further and further occupy that land which everyone knows is very suitable for the production of wool and for the rearing of sheep, in a very short time that Australian market will be gone, because the wool will undoubtedly be produced in Manchukuo.

I would like to impress upon the House that this is not a bread-and-butter question, but a question of the life-blood of Lancashire about which we are now speaking. We are willing to work with anyone. I am sorry that the trade union leaders in the cotton industry have not realised that this was interfering with the standard of living of our people. We in Lancashire have felt the full blast of Japanese competition. It will spread to other places, the Midlands, the Potteries, and up and down the country, and I regret that on an important question which affects Lancashire to such an extent there is only one representative of the Labour party present.

11.5 p.m.

Photo of Mr John Colville Mr John Colville , Midlothian and Peeblesshire Northern

Hon. Members have raised several points, some of which I can answer and some of which, for reasons which, I think, the House will appreciate, I cannot. On the question of unfair trade competition in the narrower sense of copying trade marks, the House may be aware that about three weeks ago instructions were sent to His Majesty's Ambassador at Tokyo to renew representations to the Japanese Government, and to enable him to reinforce his argument the Ambassador was furnished with particulars of complaints. As an hon. Member has said, there is a remedy which ought to be applicable, but we are not sure that due regard has been paid to it, so we are making diplomatic representations, which is the proper course. An announcement has appeared in the Press to the effect that the Japanese Government have introduced a Bill which includes provisions against unfair trading enabling them to deal with complaints from foreign governments. I have not yet seen the text, and I wish to wait for evidence of its application before commenting, but it is an indication that the Japanese Government is moving in the right direction.

The Trade Agreements are not directed to Japanese competition, but several hon. Members, especially the hon. Member for Gorton (Mr. Bailey), who introduced the discussion, said that under the Trade Agreements the Government had not endeavoured sufficiently to meet the position of Lancashire. The hon. Member for Gorton (Mr. Bailey) said the Government had stopped its ears, but I think his eyes must have been blinded to the actual results. In every case where we have made an agreement there has been an improvement in the exportation of cotton piece goods to the markets concerned. I do not over-rate this, but we are securing a larger share of the markets. In the case of Sweden, for the six months ending in December, 1932, our exports of cotton piece goods in square yards were 7,159,000. In the corresponding six months of 1933, when the agreement had begun to tell, the figure was 10,535,000. In Norway, where the increase is not so great, it is still observable. The corresponding figures are 7,272,000 and 7,861,000. In Denmark, to which I think my hon. Friend referred without giving the figures, the comparative figures are 15,395,000 and 23,157,000—a distinct upward movement. In the Argentine the figures are 66,086,000 and 79,600,000. In Finland the comparison is not quite the same, because the agreement only became operative at the end of the year, but, taking the two months, January and February, 1932 and 1933, we find that 14,000 went up to 32,000. I contend that in every case the right movement is shown, and therefore I think my hon. Friend should at least study the Trade Agreements made by the Government, which he supports, before making speeches on public platforms and elsewhere in relation to the effect of the agreements.

Again, it has been suggested that the tariff policy of the Government has not had regard to the question of Lancashire, but I would like, in passing, to point out that in 1931 81,500,000 square yards of cotton piece goods were imported into this country, whereas in 1933 the quantity had diminished to 20,000,000. If my hon. Friend suggests that in the absence of any such limitation Lancashire would be better off as regards goods for the home market, I fancy he is working on a wrong basis.

Photo of Mr John Colville Mr John Colville , Midlothian and Peeblesshire Northern

Three hon. Members to-night have suggested that, at a Debate of this nature, the President of the Board of Trade should have been here. Let me say that those hon. Members might have had an opportunity, as supporters of the Government, of having a very frank discussion with my right hon. Friend yesterday on this subject, but they elected not to take it. For reasons which I have explained, such a discussion necessarily would have had to be private, but they might at least have had the opportunity of having such a frank discussion and of hearing the views of my right hon. Friend.

Photo of Mr Eric Bailey Mr Eric Bailey , Manchester, Gorton

Would my hon. and gallant Friend allow me—

Photo of Mr John Colville Mr John Colville , Midlothian and Peeblesshire Northern

Not at this stage. Let me explain the reasons why a public announcement of the type that certain hon. Members were seeking to-night cannot possibly be made. The position is this: On the 16th of this month, my right hon. Friend the President of the Board of Trade saw the Japanese Ambassador, and put to him very frankly the position which had arisen on the failure of the industrial negotiators to reach agreement, and, in fact, even to reach a geographical basis for such an agreement. Let there be no doubt about it; the position was put with absolute frankness by my right hon. Friend, and, equally, the Ambassador was in no doubt as to the exact nature of the position which had arisen. He undertook to communicate at once with his Government on the subject. I submit, and I think the House will agree, that obviously it is quite impossible to adopt the suggestion of certain hon. Members, and make a public statement as to the action which the Government may take, while the situation arising from the breakdown—I do not avoid that word—of the industrial negotiations is under review by the two Governments. Such a course would be folly in the opinion of the Government. But that does not mean that the Government are not fully alive to the gravity of the situation. They are giving it the very gravest consideration. We have no intention of standing with arms folded and allowing matters to take a course detrimental to our interests. To make any pronouncement, while this grave matter is under the review of the Governments of the two great countries concerned, would be an unwise course to adopt.

11.15 p.m.

Photo of Major Henry Procter Major Henry Procter , Accrington

I am very pleased to hear that at long last the Government have taken action, but this representation to the Japanese Government was only made a few weeks ago, whereas we have been insisting for many months that steps should be taken. Very valuable time has been lost. We regard this competition as unfair competition but the hon. Member for Moseley does not—

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Might I correct, Mossley, not Moseley.

Photo of Major Henry Procter Major Henry Procter , Accrington

I apologise for giving the hon. Member a wrong designation by implication. The hon. Member does not regard this competition as unfair. Even one of his supporters, the hon. Member for Prestwick (Sir N. Stewart Sandeman) could supply cases of the use of facsimile copies of Lancashire labels, as issued in Manchester and elsewhere. Does he not regard it as unfair competition that a country before going off the Gold Standard, should lay up in its factories and warehouses raw cotton and pay for it in depreciated yen, so that they were able to capture our markets and sell their goods at a price at which we could not buy the raw article. Then the hon. Member spoke of the wonderful rise in the standard of life of the Japanese workers. Is that the ideal that he has for the Lancashire worker? Is 6s. 10d. the allowance that he offered, when he stood as a supporter of the Government, to the people of his constituency?

Photo of Mr Ernest Pickering Mr Ernest Pickering , Leicester West

Where does the hon. and gallant Gentleman get his figures from if he says that represents the Japanese wage?

Photo of Major Henry Procter Major Henry Procter , Accrington

The hon. Member ought to know the wages in Japan.

Photo of Major Henry Procter Major Henry Procter , Accrington

Then why ask me? Are we only to be able to carry on the cotton industry by reducing wages to their level?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Does the hon. and gallant Gentleman want answers to all these questions?

Photo of Major Henry Procter Major Henry Procter , Accrington

I am not giving way. We believe the Government have not been as successful in the case of the cotton industry as they have been in the case of other great industries. That is our complaint. The President of the Board of Trade has many duties. He has to explore the markets of the whole world. All trades are under his consideration but the cotton industry has come to such a state that it requires the undivided attention of the best man we can get in the country. We have a Minister of Mines and a Minister of Agriculture. Surely the time has come when someone should give his entire attention to the cotton trade, upon which so much depends? We have been accused of making no constructive proposals. Over 12 months ago, when these negotiations were first mooted, I asked whether the Government intended to let the trade simply come together or whether they were going to assist. We were told that the Government were going to step outside the ring and simply come in if they were called. We prophesied that these negotiations would fail, and the Government, after nearly 12 months, have now to come in and straighten out the tangle. Surely we were right in saying that they ought to have given notice 12 months ago to terminate the agreement? If they had done so it would have been a mere formality and would have given no offence at all. To-day if it is done it may disturb our peaceful relations with Japan.

Have the Government made any representations to our Dominions that they should act with us to stem what we regard as the greatest challenge to western civilisation that has been known in all history? We know that it is only in the British Empire that we can act. The other nations of the world will have to act just as we are doing in order to preserve their own standards. I have not heard that any representation has been made to Australia or to the various other Dominion Governments. I am glad to see that one Dominion has acted in a way that has been very efficacious. I refer to South Africa. They have put a duty of 1½d. per yard on Japanese goods, and they have tried to keep out the Hood of Japanese stuff which has been coming into the country. Therefore, I ask, on behalf of the people of Lancashire, that the Government should pursue their negotiations and make provisions in advance. They should make representations throughout the whole of the Empire, so that we may make a united stand. It is certain that as the Japanese are weaving their cotton they are also weaving the destiny of this great Empire.

11.24 p.m.

Photo of Colonel Sir Joseph Nall Colonel Sir Joseph Nall , Manchester Hulme

At this late hour I can only speak for a few moments, and I must ask the indulgence of the House if I am unable to complete what I wish to say. But I do not want to let this Debate pass without offering a few observations on what has been said. On the main cause of the matter raised by my hon. Friends, as they well know, I and many others find ourselves generally in agreement with them. We differ from them really on a matter of detail and of procedure. I think my hon. Friends will agree that the real matter with which they are concerned is the very considerable depression in the cotton trade. That is really the subject matter of all this agitation.

Where I and some of my hon. Friends disagree with them is that arising from that main fundamental issue, they concentrate the whole argument on the one matter of Japanese competition without informing the public at large as they proceed that in fact the whole export production of Japan is only equal to one-third of the slump in Lancashire exports, and that if the whole Japanese export were stopped to-morrow there would still be two-thirds of the Lancashire slump to be dealt with, and its corresponding depression still remaining with us. That is why I suggest that if this matter is not dealt with tactfully and very fully explained to the public at large, a very considerable number of people will be apt to be entirely misguided and led to believe that the whole trouble in the cotton trade will at once be put right if we can shut out the business with Japan. That would be an entirely misleading and ultimately a most disastrous conclusion for the people of Lancashire to arrive at. This short Debate to-night, while it may be deprecated on some grounds, will at least have been useful if it has enabled my hon. Friends to state their case in their way and the Government to reply in the way the Secretary to the Overseas Trade Department has replied. I want to say this in fairness to the case for Lancashire trade, that the Government must not presume that all the right is on their side and all the wrong on the side of my hon. Friends.

The Government are on rather thin ice in this matter. Their present attitude and their present intentions are good enough, but this trouble has mainly arisen from the fact that two years ago they did not make a move. That is due to the fact that the Board of Trade to-day and during the past two years retains and maintains that mentality and outlook of the Free Trade era which is long past. This kind of trouble will recur and go on recurring unless the Board of Trade reorganises itself and readjusts its out- look and gets itself into line with the wholly changed conditions under which the export and import trade of this country has to be conducted to-day and for some years to come. I say with great respect to my right hon. and hon. Friends and the Government that that is the real fundamental cause of these unfortunate controversies which are arising on this matter. I believe that the present condition of Lancashire would be very considerably mitigated if the Board of Trade put its house in order and got better advice. Equally I believe that if my hon. Friends will content themselves with the expression of their case they have presented to-night and will accept what has been said from the Government Bench as the genuine expression of the Government's intention to get a move on and deal with this matter on its merits, then the Debate will have served its purpose and we may at least give the Government 10 days more which are now necessary before they decide on the next move that is to be made. The Free Trade outlook and the Free Trade attitude of the Board of Trade must go. The Board of Trade must put its house in order.

Photo of Mr John Colville Mr John Colville , Midlothian and Peeblesshire Northern

The Board of Trade are engaged from morning to night in carrying out the very reverse policy.

Photo of Colonel Sir Joseph Nall Colonel Sir Joseph Nall , Manchester Hulme

I know that is said, but one cannot get away from the fact that two years ago action might have been taken and was not taken and that certain action is being taken to-day. I do not in the least criticise the hon. and gallant Gentleman or his administration, for what he is now trying to do but I want him and the President of the Board of Trade to see that this kind of thing does not recur time after time on different aspects of the trade situation, and that we may feel assured that as the next few months emerge and as time goes on, the Board of Trade will be more ready to respond to the changed conditions in which we live.

It being Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.