HC Deb 08 November 1948 vol 457 cc1292-303

Motion made, and Question proposed, That the Silk Duties (No. 1) Order, 1948 (S.I., 1948, No. 1814), dated 31st July 1948, a copy of which was delivered to the Votes and Proceedings Office on 3rd August, 1948, in a former Session of Parliament, be approved."—[Mr. Glenvil Hall.]

4.22 p.m.

Mr. Lennox-Boyd (Mid-Bedford)

I take it, Sir, that it will be in Order to deal with this order and the following orders on the Order Paper together. There are also some orders which are not subject to the affirmative Resolution procedure, against which we put down a Prayer last Session, and I understood that it would be possible for us to refer to these as well as to those which are subject to the affirmative Resolution procedure.

Mr. Speaker

These matters must all come before us as one, so to speak, and I think it would be better to discuss them together.

Mr. Lennox-Boyd

The orders are the one which has just been moved, No. 1814, and the other two on the Order Paper are Nos. 1813 and 1816. Orders which are not subject to the affirmative Resolution procedure are Nos. 1811, 1812 and 1815. All the Orders result from the Geneva agreements. Many of them involve the complete elimination of Imperial Preference on the various commodities listed in the schedules to these orders. I realise that a general discussion on Imperial Preference would be out of Order. We have just had an Imperial Conference. Immense problems and opportunities face the British Empire today. There are the questions of defence, development, the priority of capital and of labour, and trade. Millions of people in the world are looking to the British Empire to give a lead which will help the world out of its difficulties. They are looking for inspiration and guidance, but what many of us find has emerged from the Conference have been the apologies for the use of the word "British" in describing Imperial citizenship—and now those orders.

They are the first Parliamentary orders to be laid before the House after the Imperial Conference. We have never claimed, and should not dream of doing so, that duties on imported foreign articles should never be changed. Indeed, it has been one of the strongest arguments in favour of the tariff system that they gave us a bargaining weapon with which to negotiate desirable agreements with other countries. What is true of tariffs in general is true also of preferences, and we do not support the view that preferential rates between different parts of the Empire must never be varied. But if they are to be reduced, as they are reduced under these orders, we claim that we and our fellow citizens of the Empire ought to be the judges of whether the duties should be maintained or increased.

By the agreements made at Geneva and, later, at Havana, we are precluded from maintaining some preferences, from increasing any of them and from starting any new ones at all. While the Government are rightly accepting Marshall Aid to help to bring about the greater union of Western Europe, we are doing our best by these orders to break up the great trading and Imperial unit of the British Empire, which is the best illustration in the world of nations working together for common and decent purposes.

There is one other matter of general importance, which is relevant to these orders. The present Geneva agreements are in force under a protocol which provides for our withdrawal from them after 60 days' notice. Eventually, presumably, the Government will agree to Article 31, under which we shall not be able to withdraw from these agreements before June, 1951, and, thereafter, after only six months' notice. The Government have promised not to implement the Havana Charter without presenting it to Parliament, so that there can be a full discussion upon it, but they have made no such promise about the Geneva agreements. It is therefore possible for the Government, step by step, to bring the terms of the Havana Charter into line with the Geneva agreements, and so avoid Parliamentary approval being required at all.

Since these orders were issued we have had a Command Paper, No. 7544, which is an account of the most recent session of the Conference on Trade and Employment at Geneva, the session that came to an end in September last. In this Paper there is a blank acceptance of Chapters 1 to 6 and Chapter 9 of the Havana Charter. So we are bound to this Charter, or to those chapters of it, until June, 1951, without the Charter coming before this House for discussion. This is despite the Government's assurance that the Charter would not be implemented without Parliamentary approval. Merely by the process of bringing the Havana Charter and the Geneva agreements into line, we find that the country has been committed to those chapters until June, 1951, without Parliamentary discussion. I hope that the hon. Gentleman who replies for the Government will deal with that point.

As to details, Order No. 1814 deals with silk duties. Hitherto, we have had a preference of one-sixth on all Empire silk goods coming into the United Kingdom. Now, over a wide range, these duties are being reduced and in certain cases are being wholly eliminated—this at the time when we are trying to encourage the growth of industry in the Dominions so that we can spread the potential assets of the British Empire more sensibly throughout the whole Imperial field. Order No. 1812 reduces the duty on motor cycles coming into Great Britain, and Order No. 1813 removes altogether Imperial Preference on motor cycles coming here, and also abolishes the preference given hitherto to Canada, Australia and other Dominions on agricultural machinery. We know the value of these industries, particularly agricultural machinery, in Canada and Australia, and the need to encourage them where they exist and start them where they do not exist. This is an absurd moment in our history, at a time when we need to keep closer together, to do away with the one—third preference which would help these industries.

Order No. 1816 raises an important point. By it we see the completion of the replacement of the system of ad valorem duties by specific duties. We on this side are not wedded to any particular theory about the best way to apply these duties, whether on value or by a form of specific duty. If the general levels of duties rise, then obviously it is to the advantage of the British Empire as a trading unit that we should have ad valorem duties, and if the duties fall a specific duty is the best protection for the Empire producer. We have a case in regard to tobacco, where there is a specific duty. Here the general tariff on imported tobacco has risen so sharply that the preference, despite the best intentions, has fallen from 25 per cent. to under 3 per cent.

So we are not wedded to any particular form, but it is important to realise that Order No. 1816 replaces all ad valorem duties by specific duties. The commodities affected are Empire fruits. In different parts of the Empire, including the Murray River and the Swan River district in Australia, quite flourishing townships have been built up by producing fruits for the British market. This order should sound to those townships a sombre note of warning of what is likely to happen if no successful protest is raised against orders of this kind.

All these orders are based on the Government's acceptance of the view of non-discrimination, which is quite at variance with the whole principle of Marshall Aid, where it is urged that nations with kindred interests should get together in closer association. Are we then as a country wedded to the view that the British Empire and Western Europe have got to restrict their trade to levels equal to the trade we can afford to do with the United States? If that is so, no recovery can be found either for the United Kingdom or for Western Europe.

This view is challenged by many people in the Empire, and it may well be that in the course of the next year or 18 months many new voices will be raised in protest against this view. For ourselves as a party we made our position perfectly plain at the great annual conference of the Conservative Party which took place during the Summer Recess. We pledged ourselves to do our utmost to secure a denunciation of the Geneva Trade Treaty and the non-ratification of the Havana Charter in so far as they limit or contemplate the limitation of the preferential system.

Because these orders do no more than carry out the agreement that the Government entered into, which agreement we think was wrong, we do not propose to divide the House against them tonight. We issue, however, the clear warning that these orders, in our view, spring from an act which was falsely conceived at the start. They cannot be a permanent part of our Imperial machinery and they will be altered as soon as the opportunity arises.

4.35 p.m.

The Secretary for Overseas Trade (Mr. Bottomley)

I was very glad to hear from the hon. Member for Mid-Bedford (Mr. Lennox-Boyd) that it was not the intention of the Opposition to divide the House upon this matter. Indeed, if the Opposition had persisted in it I should have had the feeling that that course was not in the best interests of the House as a whole. He knows as well as I know that these items have been discussed very fully by the House, and I was a little surprised to hear him say that the Geneva Agreement on Trade and Tariffs had not been endorsed by the House as such. It was fully debated, as I know full well because it was one of the first items with which I had to deal from this Box. It was a matter which caused me a great deal of anxiety and worry as it was not familiar to me at the time. Everybody will be aware that there was a very full discussion before a decision was come to by this House.

Mr. Lennox-Boyd

I cannot have made myself clear, because what I was saying was that the Havana Charter has not been discussed by the House. The Government undertook that it should be, but with the process of bringing it into line with the Geneva Agreements, which have been discussed, it looks as if we have rather missed the opportunity of discussing that Charter.

Mr. Bottomley

That is a point on which I must satisfy the hon. Gentleman and show him that the orders coming into operation now will not have the effect which he forecasts. Let me deal here with the orders which he has mentioned. In the first case, there is the question of the decision to eliminate Imperial Preference on motor cycles and motor tricycles and agricultural tractors. The track-laying types of tractor do not come into the matter. Before, under the Imperial Preference system there was a duty charged on these goods from Commonwealth countries at a preferential rate of two-thirds of the full duty paid by foreign countries. In order that we could play our part in building up multilateral trade, there were full consultations with the Dominions concerned, and it was with their approval that we agreed in this particular case to do away with the existing preference. We were not able to do away with it at the time of the Geneva Agreement, because our position was such that we had to get further authority, which we secured ultimately in the Finance Act of this year. Because of this we reserved the right at Geneva to delay putting the concession into force until a later date. In view of the fact that the House considered this matter and came to a decision on it, we were hoping that these orders would go through without any difficulty at all.

From now on motor cycles and tricycles whether they come from Commonwealth or foreign countries will be chargeable at 22½ per cent. ad valorem. The House is entitled to know what is involved. Let me just give a few particulars. In the case of motor cycles and motor tricycles, in the 1935 to 1939 period only 13 cycles were imported into this country while the number of agricultural tractors was 63.

Mr. Oliver Stanley (Bristol, West)

From all sources or from Dominion sources?

Mr. Bottomley

Dominion sources. The reduced duties on these articles is not of such a nature as to cause any great anxiety. It was Canada, to which the hon. Member for Mid-Bedford referred, that readily agreed that these concessions could be made. Therefore, this was one of our contributions to help to get some agreement on these matters at Geneva.

The other item which has been mentioned is the Silk Duties Order. In connection with the silk duties we have changed the specific rates for stockings so that the duty will be chargeable on a dozen pairs of stockings rather than on weight as before. Under the agreement reached at Geneva instead of the old rate of 10s. per lb. there will be a new rate of 12s. per dozen pairs, the equivalent of about 18s. per lb. The preference on Commonwealth silk and artificial silk goods was previously fixed by statute. Therefore we had to reserve the right at Geneva to delay putting the concession into force until September because we needed to get the necessary legislation for the Treasury to alter these rates. The Treasury can now fix these rates under the Finance Act, 1948.

There is another item, mentioned in the Ottawa Duties (Geneva Agreement) Order, namely, rice in the husk. The previous duty on rice in the husk was two-thirds of a penny per lb., but the new rate will make it the equivalent of 6s. per cwt. Two-thirds of a penny per lb. is 6s. 2d. and two-thirds of a penny per cwt., and we think that it is much better for commerce, to have the round figure of 6s. rather than 6s. 2d. and two—thirds of a penny. That is the only change that has been necessitated in this case. It is a facilitating item rather than an alteration of substance.

The Finance Act, 1939, did reduce the duty upon another item that comes within these orders, and that is patent leather. That Act reduced the duty from 15 per cent. ad valorem to a rate of 7½ per cent. for the duration of the 1938 agreement with the United States. Then the agreement was suspended as a result of the Geneva talks, but we said that we would agree that the old 7½ per cent. rate would apply. The present order really confirms the old agreement. Again, I would say that permission was given by the House for the Treasury to do this, in the Finance Act of this year. I think that we on this side of the House are just as anxious as are hon. Members opposite to look after the interests of the United Kingdom. We feel that in proposing these orders we are playing our part towards the development of multilateral trade and the removal of unnecessary restrictions. In those circumstances we are pleased to know, as has been indicated, that hon. Gentlemen opposite will accept these orders.

4.42 p.m.

Mr. Hopkin Morris (Carmarthen)

I look upon these orders as a move in the right direction, but I do not think they matter very much. I do not think that the Empire will be much assisted by an import of 13 tricycles and 69 tractors, or ruined by the exclusion of them. I think this is an indication, although rather apologetic, that the Government are moving in the direction of multilateral trade. The sooner they move in that direction the better it will be for the prosperity of this country. The Empire is not going to be built up on small preferences on tractors and tricycles imported at this tiny rate. Indeed, the Government could have made a preference by putting on a duty slightly lower than 221 per cent. It would not have helped or hindered anybody and it would have made no difference. The orders are quite trivial, but as far as they go, I hope that they are an indication that the Government intend to go further in this direction, and I welcome the orders for that reason.

4.44 p.m.

Mr. William Shepherd (Bucklow)

The Parliamentary Secretary has told us that the alterations embodied in these orders are not in themselves substantial. He might even have said that whatever loss they involve us in, they also bring about some sort of corresponding gain. That is a proposition that some of us might have found it fairly easy to support. We are not concerned about these individual orders, but about the principle which lies behind them. That principle is that this country can accept an extension of multilateral trade. We find it objectionable that the right hon. Gentleman brings forward orders and makes agreements at Geneva when the Government are in fact denying the very arrangements that they have brought about.

The Government are, with these orders, paying lip service to the conception of an extension of multilateral trade, but the Board of Trade have been active during the past 12 months in fixing up the greatest number of bilateral trading agreements that this country has ever known. That is the truth of the present position. All that we on this side of the House want to say is that we shall take no part in paying lip service to a principle which we know we cannot possibly implement. If we are prepared to take the stand that this country is in precisely the same position as any other country on the Continent of Europe, and that we have no special trading difficulties, our problem of recovery being comparable with that of France, Belgium or Holland, we can make these agreements without any twinge of conscience.

On the other hand, if we know that this country is, largely because of circumstances outside our own control, in a position where much more will be needed to put us solvent in 10 years' time than is the case in France, Belgium or Holland, we shall have some doubt about accepting these Motions or subscribing to a principle from which we know we shall be driven by the inexorable trends of trade development in the next five or 10 years.

It is impossible for us in this country, by the ordinary development of trade, to put ourselves in five years' time into a position where we shall be able to face everybody in the world. We have lost a large volume of our invisible exports and no one imagines that we shall be able to make good our enormous deficit of invisible exports unless we take special steps to protect our own position. If we place ourselves at the mercy of every country in the world and take no special steps to protect ourselves and our own interests, we shall be doing no service to the country.

All that I object to is that the hon. Gentleman stands at that Box and pays lip service to a principle which he knows we shall be prevented from implementing in the long run by the very conditions of world trade. I make that protest against the hon. Gentleman's attitude. It would have been much more honest of His Majesty's present Administration to say to the nations at Havana: "Our problems are special problems. We want to help the world in trade matters. We have shown in many ways our anxiety to play our part in a world organisation so as to put the world in a better position than it is in today, but we have special responsibilities and difficulties because of our precarious position economically. We cannot subscribe to the principles of multilateral trade which will deny our taking steps to safeguard our own interests. We say, finally, that if we, as a great trading nation, fail to maintain our position, we shall do much more harm to world trade as a whole than by any reluctance to subscribe to principles which we know are not practical in the long run."

4.48 p.m.

Mr. James Hudson (Ealing, West)

I have been astonished at the claims that have been made from the opposite Benches. Hon. Gentlemen opposite have accused the Government of paying lip service to a principle. I wish that the other side had paid any sort of service to any sort of principle. It does not seem to be clear from their speeches what the principle is, particularly in view of the applause that has come from some hon. Gentlemen opposite while the speeches have been going on.

I agree with the principle that we ought to be working for the establishment of multilateral trade, but I would remind hon. Gentlemen who spoke from the Front Bench opposite that the intention of instrument after instrument to which our signature has been given—international instruments—has been, in every direction possible, to get rid of restrictions in order that such trade might be made possible. I shall not weary the House by attempting to go over the list of agreements at which we have arrived with America and with other nations upon this point. At any rate, the Government have been proceeding carefully in a difficult world to make good that principle. They have accepted at Geneva, with the willing agreement of members of the Dominions and the member-States of the Commonwealth, certain radical alterations about which there ought to be no complaint from the other side at all, because of what the right hon. Gentleman described as decisions made at the important Conservative conference at Llandudno—I am glad to think that anybody in this House believes that it was important; I am glad to think there is anything left out of the wreckage that hon. Members can still talk about. Even when they come here tonight to talk about the necessity of standing by the principles of preference, they are uncertain whether, after the important lead given to them at Llandudno, they should divide the House or not.

I submit, as the hon. Gentleman has said, that this principle has been agreed to. It has been agreed to by the House, it has been agreed to at Geneva. Everybody should welcome the general effort to get rid of restrictions, where we can make it; even such restrictions as have offered a temporary and slight advantage to the Dominions, especially when the Dominions agree, because the process now at work of bringing us back to the development of multilateral trade in the world is one that this House should steadily set its face towards. I am glad, therefore, that the Government persist in the orders now before the House.

4.51 p.m.

Mr. A. Edward Davies (Burslem)

I rise to support the orders before us today and I do so for the good reasons adumbrated by the hon. Member for West Ealing (Mr. J. Hudson) and the hon. and learned Member for Carmarthen (Mr. Hopkin Morris). It is surely a counsel of perfection that multilateral trade is a practical policy today, and we recognise the point of view of hon. Gentlemen opposite. In a world where economies are topsy-turvy there has to be a great deal of bilateral trading, there has to be any amount of individual negotiation, but surely the aim of this great trading nation, and of all men of goodwill, is to secure the freest possible exchange of the commodities in the world? As my hon. Friend has rightly said, what is the use of our complaining about the tariffs which are keeping out so many of our own excellent products from the Western Hemisphere if we are not prepared to examine what have been conceded today to be very minor preferences? In fact I was amazed when the Minister told us the details of the trade that had been transacted in terms of agricultural machinery and, what is more, told us that this was no high-handed act of our own but one which had been done as a result of free consultation with the Dominions and the countries which constitute this Empire.

If hon. Gentlemen opposite think that hon. Members on these Benches are prepared to sell out the British Empire, as we are so often charged with doing, and that we have no regard to, for instance, the potentialities of Africa and to some of our friends in Asia who are still part of the British Commonwealth of Nations; if they think that we have no regard to the value which is to be derived from co-operative trading and development, they are mistaken indeed. We and the House generally have backed up before the principle of working together with these great countries and have given our capital to develop them. We see no conflict between the development of the Empire and the re-establishment of trade in Europe, putting nations in Europe on their feet. That has been generally agreed. Therefore today, if there are some out-moded preferences or tariffs which we can examine, if there is some adjustment to be made, if there is some bargain to be struck with the view that ultimately there shall be, if not a complete abolition of these preferences and tariffs between the great trading countries of the world, at least there shall be a minimum of them—it is a goal towards which we should be striving constantly. And that is all the Government have in mind today. There is no Janus-faced attitude in this matter. The Government did not go with one point of view to Havana and take another when they saw a chance of making a deal in Europe in terms of bilateral trade. The Government deal with the situation as they find it, and they do their best in the light of their experience and knowledge.

From that point of view I think we should support the reasonable proposal before the House today, and not regard it as being the prelude to the breaking up of the Empire.

Question put, and agreed to.

Resolved: That the Silk Duties (No. 1) Order, 1948 (S.I., 1948, No. 1814), dated 31st July, 1948, a copy of which was delivered to the Votes and Proceedings Office on 3rd August, 1948, in a former Session of Parliament, be approved.

Resolved: That the Import Duties (Imperial Preference) Order, 1948 (S.I., 1948, No. 1813), dated 31st July, 1948, a copy of which was delivered to the Votes and Proceedings Office on 3rd August, 1948, in a former Session of Parliament, be approved."—[Mr. Bottomley.]

Resolved: That the Ottawa Duties (Geneva Agreement) Order, 1948 (S.I., 1948, No. 1816), dated 31st July, 1948, a copy of which was delivered to the Votes and Proceedings Office on 3rd August, 1948, in a former Session of Parliament, be approved."—[Mr. Bottomley.]