New Clause — (Amendment to 22 Geo. 5, c. 8, s. 3.)

Orders of the Day — Finance Bill. – in the House of Commons on 11th June 1934.

Alert me about debates like this

Sub-section (2) of Section three of the Import Duties Act, 1932, shall be amended by inserting the words "and in particular of providing employment" after the words "national interest."—[Mr. Amery.]

Brought up, and read the First time.

10.20 p.m.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I beg to move, "That the Clause be read a Second time."

No apology is required for drawing attention to the vital subject of unemployment in its bearing upon the Finance Bill. We can all recognise the great diminution in unemployment that has taken place in the last 18 months, and in his Budget Speech the Chancellor of the Exchequer pointed out that: The improvement in the condition of the country is due almost entirely to the expansion of the home market and to the greater part of that market which has been secured by our own people."—[OFFICIAL REPORT, 17th April, 1934; col. 904, Vol. 288.] In other words, the improvement in our situation has been due almost entirely to the reduction of foreign competitive imports in our home market by the operation of a tariff. We had an interesting illustration of that in our discussions last Friday, and I could give a great many figures, but it will be enough for my purpose to point out that if we compare the figures of this year with those of 1931, and in order to compare like with like bring the prices of 1931 to the 1933 level, we get a reduction in imports of competing manufactures—and I exclude for that purpose non-ferrous metals and oils—from £169,000,000 to a little over £96,000,000. That is a very important reduction. A very striking fact, however, is that that process of reduction, which began with the operation of the tariff as worked out by the Advisory Committee in the course of the year 1932, is coming to an end and has been succeeded during all the earlier months of this year by a very remarkable increase in the imports of competing manufactures. There has been, of course, also a very satisfactory increase in the imports of raw materials and of those articles which, though they are classified with manufactured imports, are definitely of a non-competitive character and partake more of the nature of raw materials or semi-raw materials—I mean oils and non-ferrous metals.

But, taking the competitive manufactures, the increase has been most striking, and I hope the Committee will pardon me if I give them just a few figures. In the category of pottery and glass, the increase as between the imports of the first three months of last year and the first three months of this year has been in the nature of 50 per cent.; in the case of iron and steel, the increase has been 50 per cent., of cutlery and hardware about 25 per cent., of electrical goods 23 per cent., of machinery over 50 per cent., of silk yarns for manufacture 40 per cent., and of vehicles 50 per cent. In fact, over the whole category of our imports of manufactures the figures for the first three months of this year as compared with the first three months of last year show an increase of some 25 per cent., and the figures for the first four months certainly do not show any great change in that respect.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I would call the right hon. Gentleman's attention to the fact that he is not entitled on this Clause to use arguments that would have been in order on his previous Clause— Sub-section (1) of section three of the Import Duties Act, 1932, shall have effect as if at the end there were added the words 'being a rate deemed by the Committee sufficient to prevent the substantial importation of goods capable of being produced efficiently and in adequate quantities in the United Kingdom.' —if that had been in order.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I naturally bow to your Ruling, Captain Bourne, but I was referring to these figures purely as showing their effect on the problem of unemployment. I was not suggesting precisely what method the Advisory Committee should employ in reference to this drop in unemployment. I think the figures I have given are significant as showing that the employment that might have gone to industries and workers in this country is by the present operation of our tariffs going to our foreign competitors. To that extent, without in any sense trespassing upon your Ruling, I would submit that it has a bearing upon the Amendment to note that the employment situation has been seriously affected by the very substantial increase in imports in the last few months.

I do not wish to weary the Committee with figures. I have a whole sheet of figures in respect of more detailed aspects of this question that show even more remarkable increases ranging from 50 per cent. to 185 per cent. over a large number of industries, not specialised industries, but ordinary products of our staple industries. It may very well be that in any one particular case there are special circumstances to warrant such an increase of importation, but when we find it extended over every class of manufactured goods it seems to indicate clearly that certain general influences are at work prejudicing the employment of our people. I suggest that the course of circumstances inside and outside this country in the last 18 months offer some explanation of that change in the situation. When our present tariff system took shape more than 18 months ago we were helped in this country not only by the tariff duties——

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

We cannot have a general discussion on tariffs on this new Clause. The scope of the right hon. Gentleman's proposed Clause is strictly limited to what the Advisory Committee may take into account in making a recommendation. I must ask the right hon. Gentleman to keep to the strict limitations of his own new Clause.

Photo of Mr Morgan Jones Mr Morgan Jones , Caerphilly

On a point of Order. Some of my hon. Friends and I have been wondering how this new Clause comes to be in order at all. The purpose of it, as we understand, is to alter Sub-section (2) of Section 3 of the Import Duties Act, 1932. As I understand it, it is not a proposal to alter the incidence of any duties. It is merely to alter the terms of reference to the committee which was set up to operate the Import Duties Act. How, therefore, does the proposed new Clause come in order in connection with the Finance Bill?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I think it is in order as we have made amendments to the Import Duties Act in the Finance Bill, but, as the hon. Gentleman truly observes, the only effect of this proposed Clause is slightly to enlarge the meaning of the words "advisable in the national interest," which are the present governing terms. Any question that goes beyond that would be out of order as it would require a fresh Financial Resolution.

Photo of Mr Morgan Jones Mr Morgan Jones , Caerphilly

As I understand the purpose of this new Clause, it is merely to alter the terms of reference under which the committee operates. Surely it follows that the only way to make an alteration of that sort would be by an alteration of the Act itself and not in the Finance Bill.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

My answer to that is that we have made small amendments to the Import Duties Act in the Finance Bill. I do not regard this proposed Clause as going as far as an alteration in the terms of reference. I regard it as explanatory of certain things which the committee have to take into account, but not an extension of its terms of reference. If it were a substantial Amendment, it would go outside the Finance Bill.

Photo of Mr Morgan Jones Mr Morgan Jones , Caerphilly

I am sorry to persist, but this is a matter of importance. As I gather from your Ruling, you now take the view that this is merely explanatory of the functions of the Advisory Committee. Am I not, therefore, entitled to take the point that if we want to define or to explain the functions of the Committee the appropriate place to do that would be upon a Motion to alter the Import Duties Act and its terminology and not the Finance Bill? There is no proposal here, I submit, to alter the financial incidence of the Import Duties Act.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The Committee have passed Clause 11, which alters Sub-section (7) of Section 2 of the Import Duties Act, 1932, which had sole reference to the functions of the Advisory Committee. As that Clause was not challenged on the ground of Order I cannot now hold that what is now proposed is out of order.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I will endeavour, within the somewhat narrow lines to which I am confined, at any rate to draw attention to this consideration, that when the Advisory Committee were dealing with their problems some time ago, in considering the employment aspect of their recommendations, they also had to take into account certain other factors of the situation, such as the effect upon employment in this country of the depreciation of sterling as compared with the currencies of other countries, and that factor undoubtedly influenced, and perhaps modified, the recommendations which they might have otherwise have made. Since they took that aspect of the situation into consideration I imagine that the effect of our going off the Gold Standard has in itself somewhat worn off; but, apart from that, other countries have taken measures which have very largely, if not wholly, counteracted that aspect of the situation in its bearing upon employment. There are countries which have gone altogether off their previous standards—I would refer to Japan, to Czechoslovakia and Austria; and other countries which have depreciated their exchanges very heavily, with undoubted effect upon the employment situation and upon that consideration which the Advisory Committee bad to give both 18 months ago, and we hope will continue to give, to the situation. So, too, other Governments, some by all-round scaling down of wage rates, salaries, mortgages, rents and other considerations—as in the case of Germany and Belgium—or by such devices as the use of the scrip mark, have very directly affected the employment position in this country; and it seems to me that all those considerations do affect the position of the Advisory Committee when they view the whole situation of industry and employment in this country.

The object of this Clause, putting it within its narrowest limits, is to urge upon the Advisory Committee the special importance of the employment aspect of their recommendations, and, in bringing it to their mind, to bring also to their mind the various other aspects which are emphasised for us in this remarkable increase of foreign competitive manufactures prejudicial to employment in our own industries. It is from that point of view that I would urge the matter upon the consideration of the Government, in the hope that they may accept this Clause and thereby remind the Advisory Committee of their responsibility. The Import Duties Advisory Committee were appointed to shelter the imposition of tariffs from purely political influence, and the, committee have in every way met that very reasonable purpose. It is with great satisfaction that we can say that our tariff is based purely on the merits of each case, without any political lobbying or pressure upon the Government.

That does not mean that the Government or Parliament are not entitled to bring before the Advisory Committee the broad, general aspect of the employment situation, in its bearings upon recommendations of the committee. We are not suggesting pressure on the Advisory Committee with regard to any particular duty, but it is within the rights and duties of the House of Commons and of the Government, where a general situation indicates that employment in this country is in grave danger and that action by the Advisory Committee is required, to give the Advisory Committee a recommendation of a general character to take prompt action. That is what we are asking of the Government. It is by employment that this Government will stand or fall. The reduction that has taken place in unemployment during the last 18 months has been very satisfactory, but we have only come down to a little below the figures of 1931 when this Government took office. We know that there was an adverse situation in the first year, here and in the world outside, before our tariff system could come into effect. Those things will not be considered——

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The right hon. Gentleman is again straying beyond the limits of the discussion.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I shall not continue the matter further except to say that the single question of employment is the most serious one that is before the country, and that it is being gravely prejudiced by certain facts to which I have drawn attention. It is desirable that this situation should be brought to the attention of the Advisory Committee, and it is for that reason that I hope the Chancellor of the Exchequer will see his way to accept this Clause.

10.39 p.m.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

I want to add a word or two to the speech made by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery). I quite recognise the narrow limits within which, necessarily, this discussion is confined; it is directed to the question of what should be the sailing orders of the Import Duties Advisory Committee. I want to put before the Chancellor the view that the change in instructions is not only advisable but absolutely necessary, owing to the complete change of the character of the competition with which industry in this country has had to deal during the last two years. The Import Duties Act was, no doubt, wisely worded in the situation as it existed in 1932, but I submit to the Chancellor that that situation has absolutely changed in the two years' interval. We are now in a situation in which we see, as between the various industrial countries of Europe, a scramble for employment. Everywhere there is an unemployment problem; the Government of every country is engaged upon that one paramount question above every other on which its life depends—whether it can find employment for its own people. In these circumstances, I consider that my right hon. Friend is not only justified in moving this Clause, but that he was bound to call the attention of the Government to the matter, in order that they might state, in the general instructions which they put before the Advisory Committee, that their guiding principle in considering every question that comes before them should be that now, when employment in this country hangs in the balance, and when it is a question whether we are going to be able to continue to reduce unemployment or not, they must devote their attention on every question that comes before them, first and foremost to considering whether it will give increased employment in this country.

It is on these general lines that I hope the Chancellor will regard this Clause. It can do no harm, and I believe it can do a great deal of good as a general indication from the House of Commons that, whatever other national questions there may be—and national questions are of varying degrees of importance—the one outstanding question which this Government and the whole country have to keep constantly before their eyes, and which must be the guiding principle of every decision of the Import Duties Advisory Committee, is, will it or will it not reduce unemployment in this country?

10.43 p.m.

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

Looking casually at the wording of this proposed new Clause, it seems harmless enough. It almost seems as though one who is not entirely enamoured of the system of import duties could accept it with pleasure, because many of us believe that, the more you examine the effect of tariffs upon employment, the more sure you are not to get any more tariffs. But, having heard the explanation of the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), and in particular the few-remarks added by the hon. Member for Barnstaple (Sir B. Peto), I am inclined to wonder whether the Clause is necessary at all. The Section of the Import Duties Act which this Clause is designed to amend already says that the committee must take into account the national interest. The hon. Baronet has just told us that they must take into account first and foremost the question of increased employment. I should have thought that the greater would include the less, and that, if any further direction were required by the Import Duties Advisory Committee, merely drawing their attention to this question of employment by the Debate to-night would be all that is required, without making any alteration in the Section.

Perhaps, however, one might imagine, on examining the Clause a little further, that something may have happened in the case of applications which have been made by various trades to the Import Duties Advisory Committee and which have not met with a favourable impression. Despite the denials of the right hon. Gentleman, I maintain, and I think that this Committee, if they examine the matter impartially, are bound to agree, that the insertion of an instruction of this kind is undoubtedly applying pressure to the members of the Advisory Committee, and attempting to force them to take into special consideration some factors which they have not been in the habit of taking into consideration hitherto.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

May I ask the hon. Member how he reconciles that suggestion with the fact that, as he has stated, general instructions are already given in the Act?

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

Merely because one wonders why, if these instructions have not always been carried out, it is necessary to draw the attention of the Committee to them now. All these cases that are submitted to the Tariff Advisory Committee, as far as one can judge from their reports and recommendations, have taken into consideration every relevant factor. It does not require me to remind a National Government that one of the objects of the Tariff Advisory Committee was to fulfil the Government's policy as expressed in the Import Duties Act. The addition of this instruction brings it rather beyond the intention of the original Act, which was to balance trade, if such a thing could possibly be done, and balance our exchanges with other countries. This is an addition which would bring the purpose of the Import Duties Act altogether and entirely within the old Conservative policy of Protection. The right hon. Gentleman has endeavoured to prove that it is necessary now to give the Tariff Advisory Committee power to take this matter into consideration when arriving at further restrictions and duties. His reason was that the imports of competitive manufactured article from abroad are increasing, and I think he gave us a number of percentages. He said that because of these increases there was a deleterious effect on employment. In the same breath he congratulated the Government upon the increase in employment generally. I do not think there is any denying that He says that unemployment is decreasing, and, in the same breath, that imports are increasing, and they have a deleterious effect on employment. He cannot have it both ways even when arguing a thing of this kind. If you are going to argue that tariffs have increased employment and at the same time that imports of foreign manufactured goods have increased——

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

That seems to be the exact point at which I stopped the right hon. Gentleman.

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

I will leave that argument, though I should very much like to develop it. The object of the Clause seems to be that, if the Tariff Advisory Committee were given this instruction, they would be able to consider the effect on employment in the case of every duty or every restriction that they recommend. If they gave the fullest consideration to this fact every time they came to recommend a duty or a restriction, I wonder whether they would find themselves able to make very many. After all, the restriction of an import may mean a slight increase in one locality or in one trade, but inevitably it reduces employment in another. Hon. Members may think I am speaking without knowledge of the facts, but I have come to-day from Liverpool and have been in conversation in the train with men engaged in shipping and in im- porting and exporting in that seaport. Their statements as to the effects of the duties upon employment in Liverpool were very remarkable. I know for a certain fact that there are far more people in that city to-day on public assistance than there were 12 months ago. The same complaint is made with regard to other trades. If you reduce imports, obviously, with the present state of financial difficulty with regard to exchange and other things, you are bound to restrict exports. You cannot expect them to go up; you cannot expect people to accept your goods unless they are able to pay for them. The United States is a good example of that.

Lieut.-Colonel SANDEMAN ALLEN:

May I ask the hon. Gentleman by how much the exports of the port of Liverpool have been reduced as a result of tariffs?

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

What I said was that employment had been reduced, and it is employment that we are considering in this Clause. I made the statement that unemployment had gone up there, and I believe that to be a true statement. [HON. MEMBERS: "No!"] The figures will show.

Photo of Mr David Reid Mr David Reid , Down

Could the hon. Gentleman quote to us the figures that were given this morning in the newspaper in the prospectus of the Mersey Docks Board in announcing the issue of new capital?

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

I do not know the figures. All I know is that a member of the Financial Committee of the Liverpool Council, who ought to know what he is talking about, told me the other day that the amount the city of Liverpool had to find in additional rates for unemployment in the port of Liverpool ran into several thousands of pounds a week.

Photo of Mr John Remer Mr John Remer , Macclesfield

Is the hon. Member aware of the great imports of timber into the Mersey ports due to tariffs?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The hon. Member appears to me to have gone completely away from the subject of the Amendment.

Photo of Mr Aled Roberts Mr Aled Roberts , Wrexham

I have done my very-best to keep to the point. As I said when I started, I hope that the Chancellor of the Exchequer will not find it necessary to apply this indirect pressure through the Import Duties Advisory Com- mittee, and that he will resist the Clause. I only wish that the scope of the Clause had been a little wider.

10.53 p.m.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

I will not follow the hon. Gentleman—I should be out of order if I did so—at any length in his arguments on tariffs in general, but will merely deal with his main point that to reduce imports you must reduce exports. In the very brief period since the tariff has been introduced imports have been reduced in volume by something like 25 per cent. and exports show a considerable increase compared with the export position of the rest of the world.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I observe that the hon. and gallant Member has not given way.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

I desire to limit my remarks to the narrow but very vital point of employment and to say at once on behalf of a large number of supporters of the Government who have made a study of this question that in the inception of the tariff policy we felt that His Majesty's Government had imposed duties at such a level as not to give the best results to the employment of the people of this country. Our minds were all on the balance of trade and of the Budget. Now, however, in every quarter of the House we have come to the conclusion that the supreme issue of our day is the employment of our people. From that point of view we are justified on this occasion in endeavouring to stress this point above all others. It is quite incorrect to say that there is any endeavour by any of the hon. or right hon. Gentlemen who have spoken this evening to question the wisdom of the Advisory Committee in its dealings with any particular industry. That has not been suggested for a moment, and I hope that never in this House shall we hear from any quarter criticism of the Advisory Committee with regard to any industry, because that would lead us along paths which have been criticised in other countries and which everybody knows are unhealthy.

The point raised by my right hon. Friend is that the whole level of imports has suddenly remarkably increased, with the result that it has had very serious potential disadvantages to the employment of the people of this country. Last year, I think I am right in saying, we imported £140,000,000 worth of manufactured goods in spite of the tariff representing the employment of some hundreds of thousands of our countrymen had we been able to deflect that manufacture to our own mills and factories. If you eliminate all the partial raw materials, oil, fats and metals, you will find that, even so, there was an employment capacity of £100,000,000 of exports coming into this country of manufactured goods. That being the case, we submit that our supreme consideration ought to be, how is our tariff being directed to the best advantage in the employment of our people? I desire to say this with all the emphasis that I can, because I know that it is felt by many in this House that Parliament did in fact fail in its duty at the time. I do not mean deliberately failed. We were acting in a very great hurry. Emergency legislation had to be passed through as we were running straight on to the rocks, and everybody knows that. Those measures were carried, and we all congratulate His Majesty's Government on the courage with which they acted, but it is possible that at that time we were not considering the ultimate bearing of the great question we are considering in this particular Clause.

Were we fair to the industrialists of this country? Were we fair to the country as a whole, and, above all, were we fair to the Advisory Committee when we gave that committee no real indication at what policy we were aiming? Surely, we ought to have told the Advisory Committee that we were out either for a protective tariff, or a revenue tariff, or a tariff which would give the greatest amount of employment to our people, always subject to the fact that it did not create worse effects on our industries, which might conceivably happen. It is because of that fact that we bring this Clause before the committee this evening. I hope that the Chancellor of the Exchequer will give his very earnest consideration to this subject. There is alarm in many parts of the country to see that importers are riding over the tariff in so many directions. The increase in the first three months of this year compared with last of one quarter must represent a very big employment figure to the people of this country. It is not only to-day that that increase is very alarming, but I think it will be admitted that the results may not be seen in full for some months.

If the tariff was adequate from the employment giving point of view two years ago, clearly it is not adequate to-day. If we can give this advice, as it is our duty to do in this House, to the Advisory Committee, that we desire above everything else that the general consideration shall be the employment of our people, I believe we shall be doing something for the country and really carrying out the views expressed on all benches. I beg the hon. Gentleman behind me to realise that there is no catch in the words which we desire to see inserted, but that we should have one supreme idea in the next several years in this country until we have solved this terrible problem, and that we should be actuated by a policy which will be the best for our fellow-men in the distress from which we are suffering at the present time.

11 p.m.

Photo of Mr Morgan Jones Mr Morgan Jones , Caerphilly

The right hon. Gentleman opposite and his supporters, with great dexterity, have introduced the subject of imports and tariffs. I do not propose to follow them along that line of argument, except to say that the conclusions they have drawn from the figures regarding employment are not the conclusions which some of us would draw. More than that I need not say on that matter. I shall vote against the Clause for one simple reason. I ventured to raise a point of Order as to the relevancy of the proposed new Clause to the Finance Bill, and you gave your Ruling, which, of course, I accepted, but I still suggest that we must repudiate every effort made to raise discussion on this Finance Bill in relation to the functions of the Import Duties Advisory Committee. Let us have a frontal attack, if such an attack is to be made, and if we are to amend the Import Duties Act. Let it be done properly and formally in relation to that Act, but I submit that this is not the appropriate time to have a discussion upon that matter, and for that reason I shall vote against the proposed Clause.

11.2 p.m.

Mr. CHAMBERLAIN:

I hope that I shall be able to keep within the limit of your Ruling. The Clause which has been moved by my right hon. Friend raises the question of the connection between tariffs and employment. I cannot understand the position of the hon. Member for Wrexham (Mr. Aled Roberts) who does not seem to appreciate the fact that employment does not merely depend upon the value of goods consumed but upon their nature. You may very easily have a very considerable transfer of manufacture from the foreigner to this country which will not diminish the amount of imports which may be expressed in other kinds of goods but which may add very greatly to employment in this country. Apart from that consideration, I wish to examine the particular proposal of my right hon. Friend and, first of all, to consider the purpose of it.

I listened to my right hon. Friend very carefully and I noticed that he said the purpose of his Amendment was to remind the Import Duties Advisory Committee of their responsibilities. What are the responsibilities of the Import Duties Advisory Committee. Under Section 3 (2) of the Import Duties Act it is laid down that: In deciding what recommendation, if any, to make for the purposes of this Section, the Committee shall have regard to the advisability in the national interest of restricting imports into the United Kingdom and the interests generally of trade and industry in the United Kingdom. You cannot possibly have regard to the interests of trade and industry generally in the United Kingdom if you are at the same time to leave out considerations of employment. In fact, the words which my right hon. Friend desires to insert are really covered by the instructions which have already been given to the Import Duties Advisory Committee, and I submit that if we were to insert the proposed words for the purpose of reminding the Committee of their responsibilities the implication must necessarily be that they require to be reminded what their responsibilities are. I wish to say that, in my judgment, they do not require reminding of those responsibilities, and that they are carrying them out to the best of their ability in the action which from time to time they are taking.

I am not denying for one moment that there has been a very considerable in- crease in the imports into this country in the first four months of this year. I am not denying that that to some extent makes a new situation and one which will have to be very carefully watched. What I do say is that it seems to me that it is premature at least at this stage of the proceedings to put words into Section 3 (2) of the Import Duties Act which I cannot help thinking must imply a certain reflection upon the way in which the Committee has hitherto carried out its duties. Let us examine for a moment the present position in regard to employment. It is not the case that the increase of certain goods, manufactured or otherwise, has been accompanied by a corresponding diminution of employment. I have some figures and should like to give the Committee one or two instances. Take, for example, carpet making. There has been an increase in the imports of carpets during the first four months of this year as compared with the similar period last year of over 55 per cent., a very large and apparently serious increase, but at the same time there has been a decrease of unemployment in the carpet trade of nearly 6 per cent.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

Do I understand that in the view of the right hon. Gentleman the diminution of six per cent. in unemployment is due to the increase in imports of 55 per cent.?

Mr. CHAMBERLAIN:

I certainly do not intend to convey any such conclusion. What I was endeavouring to point put was that up to the present there had not been a decrease of employment, as might be inferred from the speech of the hon. and gallant Member. That is not an isolated case. Take iron and steel, one of the cases mentioned by the hon. and gallant Member, there has been an increase of 69 per cent. in the imports of iron and steel, but at the same time there has been a decrease in unemployment of nearly 18 per cent. These are facts, and the inference I draw is that it is premature to assume that the Import Duties Advisory Board is not having due regard to the question of employment. I can give other instances. Take nails, washers, bolts and nuts, there has been an increase of 117 per cent. in imports in the first four months, and a decrease of unemployment of 12.3 per cent.

Photo of Mr William Gritten Mr William Gritten , Hartlepools, The

May I ask what deduction the right hon. Gentleman draws from these two sets of figures?

Mr. CHAMBERLAIN:

I have already answered that question. The deduction I draw is that it is premature to suppose that the Import Duties Advisory Committee is not paying attention to the question of employment and that there is no necessity to amend their terms of reference. I have something further to say. The Import Duties Advisory Committee is amending and adjusting the duties from time to time, and indeed in quite recent weeks there have been additions to duties in a number of cases, including iron and steel, glassware, typewriters and aluminium products. My suggestion to the Committee is, do not let us throw any sort of doubt upon the competence or desire of the Import Duties Advisory Committee to carry out what they have always conceived to be their duty—namely, to act in the interests of trade and industry generally. The hon. and gallant Member may rest assured that the significance of the increase in imports is not lost upon them and that we may safely wait a little longer before thinking it necessary to amend their instructions or assume that they are not fully competent to carry out their duties with regard to employment in this country.

11.10 p.m.

Photo of Mr David Mason Mr David Mason , Edinburgh East

I think we must congratulate the right hon. Gentleman the Chancellor of the Exchequer on an admirable speech. Really we rejoice at the right hon. Gentleman's reply to the hon. Baronet the Member for Bournemouth (Sir H. Croft). The hon. Baronet seems to be distressed at the increase in imports. How does the hon. Baronet suggest that these imports are paid for?

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

If I answered the question I should be out of order, but I will say that the whole of that argument has gone by the board. My belief is that if we had kept out the manufactured goods that came into this country last year our employment figures would have been improved by something like 300,000.

Photo of Mr David Mason Mr David Mason , Edinburgh East

Would the hon. Baronet tell us how those goods that came into this country were paid for? Obviously they were paid for by people abroad drawing from this country goods and services.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member had better not carry that argument too far on this Clause.

Photo of Mr David Mason Mr David Mason , Edinburgh East

I think I may still keep within your Ruling if I show that those figures have had an effect on employment. Obviously the more we import from abroad the more we export, and the more employment there is here. It seems impossible to convince hon. Gentlemen opposite. The Chancellor may have partially convinced them. He has said that there has been an increase in these imports, but that it has not led to a decrease of employment, though a decrease of employment is what the new Clause is based upon. As the Chancellor has said, the test is employment, and by that test he will judge it. The Chancellor is confident that the Import Duties Advisory Committee will use their discretion, and he says that their instruction is to be guided by the amount of unemployment. We could not improve on the answer which the Chancellor has given. Experience in the past has shown us that when the imports into this country were greatest employment here was greatest.

But it is impossible to teach hon. Gentlemen opposite. What will convince the hon. Baronet? Does he want to stop all imports into this country? How in the name of common sense could we conduct foreign trade then? Does the hon. Baronet suggest that we should only export? Has he such an elementary knowledge of these matters as to suggest that our trade should be one-sided? He complains of these imports and I presume wishes to stop them. How is the trade of the country to be carried on, if we stop them? He mentioned various articles the imports of which he said affected employment in those particular trades, but we must have regard to the trade of the country as a whole, and we have the Chancellor's statement that unemployment is not increasing and that we are not coming to the parlous state contemplated by the hon. Baronet. We are entitled to be guided by the Chancellor's statement.

11.16 p.m.

Photo of Brigadier-General Sir William Alexander Brigadier-General Sir William Alexander , Glasgow Central

I do not propose to make any comments on the remarks of the hon. Member for East Edinburgh (Mr. D. Mason) except to say that I am sorry that his migration from the West of Scotland to the South has not yet eliminated the brain-fog of Free Trade from his mind. The Chancellor of the Exchequer said that the Import Duties Advisory Committee, in their endeavour to provide employment, had performed their duties with competence. As a manufacturer and representing a large body of manufacturers, I desire to say that the manufacturers of this country are satisfied generally with the work of the Advisory Committee. One thing which manufacturers have received from the committee is security over a certain period, in their respective industries. When the committee makes a decision, after careful consideration, in which the manufacturers receive nothing more on balance than the fair turn of the scales in their favour, they are sure of security for some time to come. I have no "grouse" against the Import Duties Advisory Committee and a very large proportion of the increased imports of manufactured goods in the first three months of the year has been due not to any action of the Committee hut to the queering of the Committee's pitch by the Board of Trade. Decisions made without consultation with industry and inefficiency in use of bargaining power have brought things to a position in which we cannot expect anything else except serious competition from oversea nations. In view of what I am going to say, I would like to justify my position. I am going to deal with one or two articles and I think I can enlighten hon. Members as to some of the trade agreements and their influence upon employment. I spoke very strongly against the German trade agreement——

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I hope the hon. and gallant Member is not proposing to discuss the trade agreements. I do not object to a reference to them, as far as he has gone already, but I must draw the line somewhere.

Photo of Brigadier-General Sir William Alexander Brigadier-General Sir William Alexander , Glasgow Central

I shall try to keep within the ambit of the proposed new Clause. A number of articles which are being imported into this country, and which can very well be manufactured here and would provide employment here, have, owing to the reduction of duties below those recommended by the Advisory Committee, caused increased importations from the Continent to a very large extent, and in the particular in- dustries to which I refer the products concerned are absolutely vital to this country in the case of emergency or war. Some of those articles were so vital in past days that we had to expend millions of money in erecting plant in Canada, France, and America for the production of those goods Plants were erected also in this country which have since been scrapped. Private enterprise since the War has built up, at the expense of millions of money, production capacity for those vital elements, and yet we find to-day these plants working at 30 per cent. of capacity, and foreign countries, on account of the benefits that we have given to them on those vital products of war, are importing into this country 40 per cent. of the consumption of this country.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I am afraid I cannot allow the hon. and gallant Member to continue on this line. He seems to be arguing on the question of national interest. This Clause does not proper to alter the words "national interest" at all.

Photo of Brigadier-General Sir William Alexander Brigadier-General Sir William Alexander , Glasgow Central

I will only say that it would be to the benefit of the industries and employment of this country if political elements were eliminated from the discussion of these serious industrial problems, and if the Government would take into consideration what the Advisory Committee recommend and bring into the picture the benefit of the commercial brains of this country for the good of employment.

11.23 p.m.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I wish to say a word in reference to what the Chancellor of the Exchequer has said. The object of the proposed new Clause was certainly not to find any fault with the methods or procedure of the Advisory Committee. I think this Committee is satisfied with the methods adopted, and I think the business world generally has been satisfied as to the complete fairness of the Advisory Committee's actions. The object was in order, within the limits of your Ruling, to draw attention to a serious situation of a general character which may require action more prompt and more comprehensive than that which in the normal course of events the Advisory Committee might take. The limits of the Ruling which your predecessor in the Chair has given has made it difficult to say much on this question, but we have been able to say something about the seriousness of a situation, which has not yet reflected itself in any increasing unemployment figures, but which we believe, if it continues and is not promptly dealt with, may either lead to an increase of unemployment or at any rate to a check in that salutary and, admirable reduction of unemployment which we have witnessed during the last 18 months, and which is so serious and important if the Government are to justify themselves.

I will close with one reference to what the Chancellor himself said in his speech on the Second Reading of the Finance Bill, when he pointed out that we are not likely in any future that we can foresee to see a return of international trade on a level such as we have known even in comparatively recent years. Our main hope, he declared, lies in the development of Empire trade and in the strengthening of the home market; and in relation to that home market he pointed out that he by no means regarded the limit of expansion of employment had been reached. As the Chancellor of the Exchequer has assured the Committee that this situations is being watched by His Majesty's Government and that he is not unalive to the seriousness of the implications of the figures, even if they have not been reflected in increased unemployment in particular industries, I do not wish to press the Amendment to a division. I would only express the hope that the Government will give the closest attention to this matter and will convey to the Advisory Committee the general seriousness of this situation and the need of prompt and comprehensive action. I beg to ask leave to withdraw the Motion.

Hon. MEMBERS:

No!

Question, "That the Clause be read a Second time," put, arid negatived.