Clause 1. — (New Power to Charge Protective Duties.)

Part of the debate – in the House of Commons at 12:00 am on 18th December 1957.

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Photo of Mr John Cronin Mr John Cronin , Loughborough 12:00 am, 18th December 1957

I should like to express my full concurrence with the excellent arguments adduced by my hon. Friend the Member for Islington, East (Mr. E. Fletcher) with his usual splendid legal acumen. I should like to draw attention to a few considerations which may enhance the desirability of this Amendment.

There is now, both in the short-term and in the long-term future, a very real danger of unemployment. In the short-term we are menaced by the possibility of an American recession with a rather sinister fall in the prices of primary commodities, which makes it likely that the primary producing countries will not be able to afford our exports, thus causing unemployment in our export manufacturing industries. There is also the Government's present economic and fiscal policy, particularly the Bank Rate and the diminution of investment, which is seriously hampering industry. On top of that, unhappily, with the Government's present economic policy we are menaced by the constant possibility of some serious balance of payments crisis which might cause serious unemployment again.

In the long term we must bear in mind that if there is some substantial agreement about disarmament between the Western countries and the Communist countries there may be a big decrease in the United States' anxiety to keep a careful eye on the economic future of Western Europe, with a consequent increase in unemployment. It is also possible in the long-term future that the primary producing countries will become more or less saturated with capital goods for export. Probably the most serious of all is a great diminution in investment in this country which will certainly be destructive of our competitive power in years to come. All these factors may cause a serious diminution of employment both in the short-term and in the long-term future.

There are only certain rather circumscribed cases in which a tariff can substantially help employment. I think we are all generally familiar with the fallacy that simply by raising a tariff one can prevent unemployment. We all know this happened in the 'thirties, and that by raising a tariff we got retaliatory tariffs in other countries with a consequent fall in employment, including employment in our export manufacturing industries. Therefore, as a means to prevent unemployment of a general nature, the powers given by this Bill would not be very helpful.

I think, however, that the important principle here, which was mentioned by the President of the Board of Trade earlier as well as by the hon. Member for Ormskirk (Mr. Glover), is that this Bill gives us a very important bargaining position. If it is written in the Bill quite clearly that these powers can be used to maintain full employment, countries which may be tempted to raise tariffs against us will be warned off, fearing reprisals. To add these words to subsection (2) will have a tremendous psychological effect. The very best thing in bargaining is to let one's opposite number know exactly what one is bargaining with, and I can think of no better way to make it clear than to insert these words in the principal, dominating subsection of the Bill.

Of course, as my right hon. Friend the Member for Battersea, North (Mr. Jay) pointed out, the powers conferred by the Bill will be very valuable in preventing localised unemployment, such as he mentioned has occurred in Dundee, or as has occurred, for instance, in Northern Ireland and in Lancashire. Obviously, one can always use the power of increasing a tariff to relieve localised unemployment. It is desirable also that the powers should be used to maintain employment in industries such as agriculture and horticulture where there are non-economic reasons for maintaining a high level of employment, where it is important from a strategic standpoint to maintain high standards of skill. The powers are limited, and the principal effect of the Bill is largely psychological as far as preventing other countries from raising their tariffs goes.

I commend to the President also the good effect which the insertion of these key words may well have upon the general mistrust which people have for the Government today. It is, of course, no part of the Opposition's business to assist the Government electorally, but when the general mistrust by the country of the Government is causing widespread industrial unrest and serious economic dangers, then an enlightened Opposition such as exists on this side must, obviously, help the Government. I earnestly beg the President to insert these very words to make it clear beyond all doubt that the Government are concerned about full employment. The unions regard the Government with considerable doubt and suspicion. As the last few by-elections have shown, the country regards the Government with similar doubt and suspicion. Here is a way by which the Government can, beyond any doubt, make it clear that they are concerned about full employment.

I hope that the President will accept the Amendment. Whether he accepts it or not will be a real test of what sort of Minister the President of the Board of Trade is. Will he accept the obvious political implications or will he reject the Amendment merely because it has not passed the somewhat exacting test of having been thought of by his own Department? I hope that he will accept it. If he does not, I have no doubt that my right hon. and hon. Friends will divide against him.