Unionist Fiscal Policy
THE disagreements in the Cabinet may have been, and probably have been, exaggerated, but there is no doubt that there is a wide division of opinion in the Party about Safeguarding.. The fact that 200 Union- ist Members of Parliament appealed to the Prime Minister to extend the Safeguarding policy speaks for itself. If Safeguarding were applied, as a large number of Unionists desire, to the industries which are demonstrably interlocked with other industries, Safeguarding would pass out of the region to which it has hitherto been confined, and would become a definite part of a Protectionist policy. Now, Mr. Baldwin, although he is known to be a Protectionist, is pledged against the introduction of general tariffs during the lifetime of the present Government. The safe- guarders frankly admit the validity of the Prime Minister's pledge, but they interpret it more conveniently than he does. But although they think that Safeguarding within the terms of the pledge could even now be extended to many other industries—to the iron and steel industry, for examplethey are chiefly concerned, not with the little that can be done while the present Parliament survives, but with a programme for the next election. It was with his eye on the next election that Sir William Joynson-Hicks made a speech last Saturday which has put the fat in the fire.
Sir William Joynson-Ilicks said that the Government were approaching the time when they would have to consider the development of their fiscal policy. He then quoted figures to show that Safeguarding had been a great success, and suggested that it was the real solution of unemployment. Was it any wonder, he asked, that the iron and steel trade was restive ? One of the greatest shipowners had said to him, " If you only gave Safe- guarding for iron and steel you would have 100,000 more men employed in twelve months." In the Home Secre- tary's view the " mouldy shibboleths of the Manchester School " had been proved wrong, and if the Conservative Party wanted a policy which would do something more than they had been able to do so far in dealing with the horrible black patch of unemployment they would have to consider very seriously an expansion of Safeguarding. It will be seen that verbally and in form the Home Secretary's speech did not contain a declaration of policy. He can say plausibly, or even justifiably, that he merely asked for thought and inquiry. Nevertheless, such a speech coming after the Prime Minister's uncompromising rejection of the plea for an immediate Safeguarding of iron and steel was highly inopportune, and was in spirit an act of disloyalty.
Nobody denies that extraordinarily attractive promises of prosperity can be made to individual industries through a tariff. At least for a short time competition would be reduced, prices might be raised and wages might follow on the heels of prices. But in this matter the long view is the only one that counts, and it is almost certain that ultimately the total amount of employment in the country would be reduced by tariffs. The present Safeguarding policy represents a reasonable compromise. No industry can be given the benefit of a Safeguarding tariff unless it proves that it is efficient, that it is injured by unfair foreign competition, and that the tariff will not harm other home industries. The bias has always been against granting a tariff. Out of about fifty industries that have applied for tariffs only nine have got them. The iron and steel trade, which is the centre of Safeguarding discussion at the moment, obviously could not be given a tariff under the conditions just described. The truth is that you cannot define a manufactured article. It is easy to say, " Let in raw materials free but tax the foreign finished article." What is a finished article, whether it be manufactured at home or abroad ? The finished article of one trade is the raw material of another. When Mr. Joseph Chamberlain's Tariff Reform campaign was in full swing it was said that the manu- factured doors and window-frames which were imported from abroad ought to be taxed in order to save the British carpentering industry. The argument had only to be used for almost the whole building trade to rise indignantly and point out that houses could not conceivably be built at the•current prices unless ready-made doors and window- frames were imported. This interlocking affects most industries in the land. Man cannot live to himself alone, When there was a demand that cheap foreign sugar should be taxed in order to save the British sugar refineries apparently a strong case could be made for the unhappy workers who from one refinery after another were being turned into the streets. The cheap foreign sugar, how- ever, became the basis of new confectionery and biscuit trades, and so forth, which employed three or four times the number of men who had been thrown out of employ- ment by the closing down of the refineries.
Mr. Joseph Chamberlain was in the habit of pointing to the " adverse balance " of trade, telling his audiences that to that extent we were " bleeding to death " and asking them how long they were going to " take it lying -down." When the War came, however, the financial test came. The country which had been bleeding to death was able to finance allies and friends who, according to Mr. Chamberlain's argument, ought to have reached by that time a position of great wealth. The United States, it may be said, which was able to finance us all, was a Protectionist country. True. But the analogy between the United States and a European country is quite unreal. The United States is a world in itself, with a population of 120,000,000 people, and within that world there are no trade restrictions whatever.
The depressed industries in Great Britain are notoriously the heavy industries. How would they be helped by Protection ? Would a tariff help coal ? Of course not. We do not import coal. Would a tariff help shipping ? Hardly a shipowner would say so. The shipowners like full ports, which make business. Would Protection help cotton ? Certainly not. The only likely result would be that the machinery for the mills provided by the pro- tected iron and steel industry would be more expensive.
And Protection could not, of course, be considered apart from ideas of developing the Empire as a whole. New preferences would have to be given to the Dominions. The difficulty there is that the bulk of what we import from the Dominions is agricultural produce. Those who think that they can safely put a tax on foreign food in order to help the Dominions and protect British industry in general must be living in a fool's paradise. Mr. Joseph Chamberlain always admitted that his whole Tariff Reform scheme depended upon taxing food, but when the cry " Your food will cost you more " became prevalent, Tariff Reform was doomed.
Is there the slightest reason to suppose that his experi- ence would be reversed if a new attempt were made ? The present Government have a huge majority, but they have not got even now a majority of votes, and they certainly could not count upon getting any sort of majority if all those who can hardly make both ends meet were moved by the dread of a dearer loaf.
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