EXPORTS TO CHINA

HC Deb 10 May 1951 vol 487 cc2183-219

5.18 p.m.

Sir H. Shawcross

I was talking about Hong Kong. I sometimes do wish that those who criticise the policy that the Hong Kong Government have pursued had familiarised themselves with the position of Hong Kong. That is what has always got to be borne in mind in considering the policy—the trade policy—that that Colony has pursued. Even if they only considered its geographical position, that would help them to realise some of the difficulties that have to be encountered.

Hong Kong is a great international entrepôt port through which supplies have moved into and out of China from all over the world. I say from all over the world because it is not only the United Kingdom that exports to Hong Kong. Of Hong Kong's total imports 22 per cent. come from China; 10 per cent. come from the United Kingdom; 17 per cent.—I am taking the figures for last year—come from the United States of America. That entrepôt trade, and the local industries which are based on importing raw materials and making them up and then exporting the products, is the life blood of Hong Kong, and without it it could not possibly maintain its economy or support its population of 2,500,000 people. In particular it depends on China for a considerable part of its food supply, particularly fresh foods which could not easily be obtained from elsewhere; and its water supply, although not, as I mistakenly said the other day, coming actually from Chinese territory comes from the mainland and is extremely vulnerable in its situation.

Moreover, 95 per cent. of the population are Chinese, many of them recent refugees and almost all maintaining close personal ties with China. It must be clearly realised by those who criticise Hong Kong policy in regard to trade with China that any serious food shortage, or any considerable unemployment in Hong Kong would provide opportunities for economic and political difficulties of a most serious kind. A military victory against Communism at the front door is of no good if Communism is infiltrating through the back door owing to economic, social and political difficulties.

In spite of the obviously high degree to which Hong Kong's economy depends on trade with China the Hong Kong Government have imposed a total prohibition on the export to China of over 200 items of industrial equipment, such as a wide range of machine tools, steel products of particular strategic importance, copper, brass, cobalt, aluminium, zinc, nickel, rubber tyres and tubes, many chemicals, including sulphur and sulphuric acid, certain types of railway rolling stock and a large range of specialised radio and electrical equipment. All this in addition to the obvious things like arms, aircraft and munitions. The full effect of these restrictions, is not yet shown in our last trade returns which have reached London—but I am told that the provisional figures for April show a very large drop in volume compared with earlier months.

A great deal of publicity has been given to statements said to have been made by General MacArthur about Hong Kong's trade with China. I cannot think his statement has been full reported. At all events I am sure he would wish the full facts to be known. First of all I should point out that the document from which General MacArthur was quoting was, apparently, a secret document, specially furnished at fortnightly intervals by the Hong Kong Government to the United States authorities as part of the system of keeping a careful watch and statistical check upon exports to China.

It would be difficult to find better evidence of our desire to co-operate closely with the U.S. authorities in the application of these controls and in supplying them fully with information of what was going on than the production of that document which fortnight by fortnight was handed by our authorities to the authorities of the Supreme Commander in that theatre of war. I do not find this fact referred to in the reports published over here of General MacArthur's statements to the Senate Committee.

General MacArthur, if correctly reported, seems perhaps not to have fully appreciated the nature of some of the information in the document itself. He referred by name to a number of items on this so-called strategic list, as I think it was called, but he did not mention the smallness of the quantities of many of the items involved. Thus he referred to petroleum, diesel oils, fuel oils, gasoline, kerosene and lubricants. Certainly they were on the list. His recital of the fact caused very naturally great anxiety. What he does not seem to have pointed out at any rate, so far as the reports over here are concerned is that the list showed nil quantities as having been exported to China. In fact all exports of that kind had been prohibited as long ago as July, 1950.

Other items he quoted had been prohibited, as he might perhaps have been able to ascertain before he made his statement. Others again, although on the list, are not ordinarily regarded as being of strategic importance, such, for instance, as fertilisers, hand tools and insecticides. These are the things to which he has specifically referred. Of the remaining items to which he specially referred, many were not—I do not say all—being exported in quantities which can be regarded as strategically significant. I do not want to reduce the thing to an absurdity—but in the list for the period 19th February to 4th March from which the General was apparently quoting, he chose to select cameras. The list showed one camera exported to China over that period.

Having said that, let me agree that the total figures for Hong Kong exports to China have been high in the first quarter of this year as compared with last year as a whole—£43 million as compared with £91 million for the previous year. It does not follow, as I have been pointing out, that in those exports was anything in sufficient quantity to have any strategic importance, but looking at the list as a whole, I am not prepared to say there were not a few items which it would have been better to restrict more stringently. That has now been done.

But while it is very easy for people to say: "Impose still more restrictions," I do beg them to have in mind these considerations: First, the need to refrain from measures which would cause serious economic hardship and consequent political difficulties in Hong Kong. Second, the need to ensure by way of trade the supply of foodstuffs and raw materials to maintain Hong Kong's economy and which can only be obtained from China—exactly the kind of consideration which no doubt led General MacArthur himself to allow Japan's exports to China in 1950 to build up from a monthly average of just over half a million dollars in the first half of the year to a monthly average of nearly 3½ million in the last quarter of last year. Third, there is the need to refrain from action which might cause a widening of the field of conflict in Asia.

Subject to all these considerations—and in spite of all those difficulties—and they are very real and cogent difficulties which do not arise for the U.S. but which do for us—we intend, as I have said, not only to support the proposals which the U.S. are putting before the Additional Measures Committee of the U.N. and to march along with the rest of the U.N. in this matter—indeed, we are far ahead of all of them apart from the U.S.A.—not only that, but we have been reviewing with the Governor of Hong Kong what further steps can be taken without waiting for the United Nations to make sure that no Hong Kong exports are sent to China which might assist China in any way at all to build up the strength or military potential of her country.

Mr. Churchill

And rubber.

Sir H. Shawcross

Rubber is clearly included.

Mr. Harold Davies

I am sorry to interrupt my right hon. and learned Friend. The figures of Japanese exports to Hong Kong are of importance, but according to the "Oriental Economist" the exports direct from Japan to China have increased from 5,600 million yen to 13,000 million yen this year, and they were a quid pro quo in so far as we could also see the secret strategic list of exports in that direction.

Sir H. Shawcross

It is very difficult to get out all these figures, and I am not in a position to confirm that one. I can only give the figures for last year. My own impression does not agree with that of my hon. Friend, but I am not pretending to be in a position to give accurate figures for the last three months of Japan's China trade, or say whether they have gone up or down. I am giving figures up to the time when the United States imposed an embargo as from America in regard to exports to China, and I am not in a position to go beyond it.

I finish what I fear has been an over-long speech on a subject of some great importance, not only to this country but elsewhere, by expressing the hope that the statement I am now concluding will not only clear up misunderstandings here, but will fully allay the anxieties in the United States of America—anxieties which we very readily understand, but which we think were largely based on a lack of adequate information. We in this country have never been backward in supporting the cause of freedom and in protecting the reign of law and democracy, and we are not backward now.

5.31 p.m.

Mr. Clement Davies (Montgomery)

I do not intend to intervene for more than a few moments. I should like to begin by congratulating the right hon. and learned Gentleman the President of the Board of Trade and thanking him for his full and very clear statement, which I hope will go a long way to allay anxieties both here and elsewhere. If I may say so to the right hon. and learned Gentleman, it was worthy of the highest traditions, not of his present office, but of the Bar. [An HON. MEMBER: "A pat on the back."] If we can give somebody a pat on the back, why should we not do so? Why not be generous when you can be generous?

We entered into this matter together in June, 1950, when South Korea was invaded. We entered upon it, not merely to defend South Korea and the South Korean people, but for a far deeper and greater reason—the maintenance of the rule of law. If we are to maintain the rule of law, those of us who believe in it, must do our very utmost to keep together and try to avoid misunderstandings, and, certainly, to avoid criticisms as much as we possibly can.

Incidentally, while I am paying that compliment to the right hon. and learned Gentleman, may I say that it was only right and proper that this matter should have been raised, as it was by the Opposition Front Bench, so that we could have this statement in full? What I do ask for—and I am assured that what I am asking for is also the intention of the Government—is that, whether it was so in the past or not, there shall be the fullest co-operation between all the countries that are defending the rule of law and which are determined to maintain as long as they possibly can, the freedom of each one of us.

May I end with this comment? Much has been said about our position with regard to Hong Kong; much has also been said with regard to exports from Japan. Let there be no recriminations between us, if we can possibly avoid them. This is a moment when we should really all be working together for a one common object which we all desire—the maintenance of our own way of life and our own freedom against any aggressor, wherever he may be.

5.35 p.m.

Mr. Mott-Radclyffe (Windsor)

Certainly, this debate is extremely important, and the President of the Board of Trade has just made a very important statement, which I think will be welcomed on all sides of the Committee. There has been widespread misunderstanding about exports to China, and this misunderstanding has existed both in this country and on the other side of the Atlantic. I think that the Government themselves are very largely to blame for that misunderstanding and for failing to make the position perfectly clear a great deal sooner.

Let us, first of all, take the case of the list which the right hon. and learned Gentleman gave in a Written Answer to the hon. Member for Northfield (Mr. Blackburn) on 30th April. There was a misunderstanding about what was included under the heading "Vehicles (including ships, locomotives and aircraft)." I do not think, therefore, that we in this House, certainly not the back benchers, still less the public outside, could be blamed for thinking that, where the heading reads, "Vehicles (including aircraft)," it really meant aircraft. The right hon. and learned Gentleman has since made this clear; he explained that that was merely a technical classification in the Trade and Navigation accounts, and no aircraft were exported.

Mr. Adams

Would not the hon. Gentleman agree that the figure of £71,000 clearly indicated that neither aircraft nor sea-going craft could possibly have been involved?

Mr. Mott-Radclyffe

Of course, I agree that it could not have meant anything very substantial, but most of us are not so much concerned about the size of what was exported, as about the principle involved.

Then, of course, the Minister of Defence did not make matters easier in the middle of the week, and the Prime Minister himself clearly knew as much about this question as he had known about the appointment of an American Admiral as Supreme Commander, Atlantic.

Mr. James Hudson (Ealing, North)

But my right hon. Friend denied very explicitly the statement made.

Mr. Mott-Radclyffe

The President of the Board of Trade has now put the position in the right perspective, but this information should not have had to have been wrung out of the Government as the result of questions and speeches from this side. It should have been given by the Government themselves months ago on their own initiative. Of course, it has not only resulted in misunderstanding at home, which would be serious enough, but, what is far more serious, there has been misunderstanding in the United States. Whether that misunderstanding was well-founded or ill-founded, it is fairly clear from the remarks made by General Marshall that the Joint Chiefs of Staff were, at any rate until today, when they will be able to read the report of the right hon. and learned Gentleman's speech, considerably disturbed about the goods exported from Great Britain and from our Colonial Territories to China.

What I should like to ask the right hon. and learned Gentleman is what steps have been taken up to now to explain Britain's own particular difficulties, first of all, in official circles in Washington, and secondly, to the American public outside? One would have thought, from the size of our Information Services in America, that we really should have been able to explain, one way or another, our particular difficulties in relation to Hong Kong, the kind of goods that were being exported, and to have assured the United States that, in actual fact, nothing that would do very great damage, with the possible exception of rubber, was being exported to China at all. Our own unilateral action in recognising the Communist Government of China has caused quite enough difficulty in our relations with America without adding fuel to the flames by further misunderstanding over trade with China.

The Government ought long ago to have explained their apparent inaction. Once again they have taken decisions too late. Why, for instance, was it only during the last four weeks that the export of rubber from Malaya to China was limited to 2,500 tons a month when the figures, as the right hon. and learned Gentleman said, for the first quarter of the year were so abnormally high? Why is it only today that the export of rubber from British territories is now to be more or less completely eliminated? The Korean war has been going on quite a long time.

It is perfectly true that neither India nor Ceylon nor Indonesia are prepared to toe the line in imposing any such embargo. It is equally true that even if we do not export any rubber at all——

Sir H. Shawcross

I am loath to interrupt the hon. Member, but I hope in that phrase he used he is not suggesting that any of these countries are under any kind of obligation to toe the line. They do not toe the line to us. We have expressed, in the statement I made today, our hope about the position they may take up in these matters. The United Nations will consider the matter in due time, but there really is not any question of anybody toeing the line, either ourselves or any other foreign country.

Mr. Mott-Radclyffe

Perhaps the phrase "toeing the line" was not a happy one. I understood the position to be that, as a result of various conversations which have taken place and suggestions made by His Majesty's Government and by the United States Government, neither India, nor Ceylon, nor Indonesia, felt able to fall into line with any suggestion of placing an embargo upon the exports of rubber to China. If I am wrong in that view, I hope the right hon. and learned Gentleman will correct me.

Sir H. Shawcross

Yes, I would not like the hon. Gentleman to be under that impression. I have expressed the hope we have that these countries will feel it possible to take up a particular position in regard to this matter and not supply rubber in the place of ourselves, but I would not like to go beyond that.

Mr. Mott-Radclyffe

It is a fact that the actual quantity of rubber which can be exported, both from Siam and Indonesia, would be sufficient for China's total consumption leaving aside any other source——

Sir H. Shawcross

Yes.

Mr. Mott-Radclyffe

—but, in spite of that, it has seemed to a great many hon. Gentlemen in all quarters of this Committee, and to a large section of the population outside, highly anomalous that at a time when British troops are defending rubber plantations in Malaya against Communists, the product of those plantations should be freely exported to China to support the Communist régime which, in its turn, is supporting the bandits who are making attacks upon the rubber plantations in Malaya.

I believe that in these tortuous and difficult days it is impossible to overestimate the importance of Anglo-American relations. We have our point of view over certain things and the United States have theirs, and we must each try to understand the other. That is why many of us, at any rate on this side of the Committee, regret that not merely during the course of the war in Korea but during all the preceding years since the end of the second great war, the only two men who really counted for the defence of the free world—the British Prime Minister and the American President—have met on only one occasion. We have been handicapped by the unfortunate fact that for the last months of his life the late Foreign Secretary was gravely ill. We are handicapped now by having a Foreign Secretary who is perhaps happier answering questions about the price of coffee at the Festival Exhibition than—[HON. MEMBERS: "Withdraw!"] I only want to say one more thing to His Majesty's Government. When they find themselves beginning to differ from the United States on any really big issue, as this one is, they must make their attitude perfectly clear and do everything possible to explain it, not only in official circles but to the American public, before, and not after, the misunderstanding arises.

5.45 p.m.

Mr. Sydney Silverman (Nelson and Colne)

I do not intend to follow the hon. Member for Windsor (Mr. Mott-Radclyffe) except, if he will allow me, to say, with respect, that it is a pity he should have spoiled a moderate and reasonable speech by a cheap gibe of which I am sure he will be ashamed when he reads it in HANSARD tomorrow.

Nobody, whatever his views about the general background and the general politics of this matter, can fail to share what must be the unanimous view of the House and of the country that, while hostilities are proceeding in which our men are engaged, it would be an absurd and a wicked thing that we should supply those with whom they are in conflict with any of the means of carrying on the war. I think the debate has been an extremely useful one, if only because it has enabled my right hon. and learned Friend the President of the Board of Trade to dispose, I hope for ever, of that controversy. He has established that in a very difficult situation we have done at least as well as anybody else in that regard.

My justification for intervening for a minute or two is the opening part of the speech made by the Leader of the Opposition, who referred to more general matters. It would be a great pity if this debate, which of necessity can only be a short one, should come to an end without anyone taking the opportunity of urging His Majesty's Government now to take a new and a constructive initiative for bringing this unhappy business in Korea to an end—unhappy for Korea, I think everybody will admit; fraught with the gravest dangers to the peace of the world, as I think nobody denies.

Must we go on with this affair, in which the real sufferers are the people whom we intervened to save? So that by this time I suppose there is not a Korean who cares anything for either side and whose view of the whole matter would not be, "A plague on both your houses." It ought not to be impossible for that new initiative to be taken. My right hon. and learned Friend said that if the Chinese were prepared to negotiate on reasonable lines, we should be prepared to consider very sympathetically any suggestions they had to make.

I hope my right hon. and learned Friend will admit that it is not an unreasonable thing to say, if one is invited to negotiate, "First, please recognise that I am there." I understand that the Chinese made it perfectly clear last September that their conditions for a cease fire were simple and reasonable enough. First, that they should be recognised by those with whom they are negotiating. There can be nothing unreasonable about that, nothing with which we can disagree. Secondly, that the negotiations should be on the basis of the unity and independence of Korea.

There is nothing there that we can disagree about. We may disagree about how it is to be done; we cannot disagree with the proposition, because it is the proposition of the United Nations itself. And then, that after that cease fire, there should be a conference in which all matters arising out of that situation in the Far East might be discussed among the Powers most nearly concerned—one of them, the admission of the correct Chinese representatives into the institutions of the United Nations; another of them the position of Formosa.

No one can suppose for a moment that there is anything in any of those conditions, on which there could have been a cease fire last September, with which this country disagrees. The reason why negotiations on that basis and at that stage proved to be impossible were, first, the complete refusal—I think a 100 per cent. vote in the Senate—by the United States of America to recognise China at all, and the position in Formosa, which is obviously a matter of the greatest offence and danger to China in Chinese eyes, and in respect of which the United States have at no time obtained, and have at no time sought, any United Nations authority of any kind; about which we said last July that we would not associate ourselves with it and about which President Truman said at the same time that it would come to an end as soon as fighting in Korea ceased.

All those are matters which cannot be held to be unreasonable things about which to negotiate, and as far as the Chinese are concerned, I say they have done everything that can be expected of them in the way of putting forward proposals on the basis of which reasonable discussions could take place.

Mr. Harmar Nicholls (Peterborough)

What is the hon. Member's reaction to the fact that they refused to recognise our recognition?

Mr. Silverman

They did not refuse to do anything of the kind. Their position is a perfectly simple one: "We are, under international law, the Government of China. The United Nations Charter provides that the Government of China's representative shall hold certain places in its institutions, and that is what we want." If we were in that position, that is what we would be saying, too. There is nothing unreasonable in that, and the only thing that stands in the way is the disagreement with the United States of America, about which I must say one or two sentences before I conclude.

People in this House sometimes accuse me of being anti-American. I am nothing of the kind. I agree entirely with the Leader of the Opposition that the recognition of facts is not a detriment to the prestige of any country—either us, the United States, or anybody else. The fact of the matter is that if we are claiming to be conducting our operations in Korea in order to uphold the rule of law, then as my right hon. and learned Friend has said, under the rule of law the present Government of China is entitled to recognition; and so long as the United States of America do not recognise it, the United States of America are in conflict with international law. We are continuing this conflict now side by side with the U.S.A., a conflict which goes on only because of the refusal of the U.S.A. to do what is obviously the right thing in law and the right thing in fact.

It seems to me that it is possible to put too high a price on an alliance with any country, no matter how economically or otherwise dependent upon her one might be. There is a point at which reasonable agreement and concession become appeasement. There is a point at which one ceases to be an ally and becomes a satellite. The point at which those things occur is the point at which we continue to sacrifice our own people's rights and continue a situation fraught with the utmost danger to the peace of the world in order to maintain something which we have ourselves declared we do not believe.

My right hon. Friends are quite right in what they have done about the supply of strategic materials while the hostilities continue, but let them not be content with that. Let them take the responsibility that rests upon them. Let them take the initiative for which the free peoples of the world would be grateful, and an initiative and a responsibility which might well succeed. Let them take their courage in both hands and say that we are going to make a new effort now to bring this absurd and dangerous, bloody and tragic conflict to an early end on a basis which has been open to us since September last.

5.55 p.m.

Mr. Pickthorn (Carlton)

I shall be as brief as I can, but I must spare a minute, not to apologise exactly, but to explain to the right hon. and learned Member for Montgomery (Mr. C. Davies), who I am sorry is not now present, that he half heard an interjection of mine and thought it had an intention which it did not have. I was in no way rebuking or reprehending him nor, indeed, following the practice of patting hon. Gentlemen, or even right hon. Gentlemen, opposite on the back. It is sometimes a very good practice, although personally when I do it, I always like to have a poisoned poignard in the other hand. The right hon. and learned Gentleman misunderstood me, and thought I had said something which I did not say.

I begin with the right hon. and learned Member in another sense also. He argued that what we are really concerned with here is the defence of the rule of law. It is, indeed, a peculiar, almost unique, happiness for the House that, being concerned with a matter of the rule of law as it is entwined in the practical interchange of goods, we have as President of the Board of Trade one who has hardly forgotten how to be Attorney-General.

If the new kind of rule of law, the new kind of diplomatic arrangements which one can shortly characterise by saying "United Nations," does not provide more peace or more justice, or the appearance of more peace, justice and humanity, than the old methods of the concert of Europe provided, then the new kind of international arrangement is bound to break down, and is bound to break down with a result far more harmful that would have been if it had not come into existence.

I come to the main point to which I ask the President of the Board of Trade to pay attention. We all agree—it is what every speaker has said, I think—that it is important that this matter should not cause us to get across the United States of America; there should not be quarrels and bickerings. Indeed, it is more important now than probably most hon. Members know, because I expect most of them have not seen the tape and have not seen the long and elaborate attack on the United States Government over the matter of stockpiling which was delivered earlier this afternoon by one of the retiring Ministers, the right hon. Member for Huyton (Mr. H. Wilson).

We all agree with the practical importance of that matter. The main point on which I invite the attention of the right hon. and learned Gentleman is this. His whole argument, for the first half of his speech, was that the recognition of China is a matter of recognition of facts. I respectfully and humbly agree. But what I want the President of the Board of Trade to ask himself, and his right hon. Friends, to consider, is whether the same argument does not mean that we have now landed ourselves in a logical and theoretical position where really there cannot be any right line before us.

If it is necessary when a set of men have, in practice, control of a country, that you are then bound to recognise them as the Government, it surely must be true also that where a Government is conducting military operations against you, you should recognise that as a state of war. Until almost the day before yesterday—certainly before the United Nations came into existence—that would have been universally agreed. Right hon. Gentlemen opposite have by their change of language gone a longish way towards admitting it, because six months ago we used to hear about Chinese volunteers in Korea and that sort of thing. In the recent two or three weeks there has been no reluctance on the part of the Prime Minister or of the right hon. and learned Gentleman now at the Board of Trade to say that "China" is "conducting military operations," "partaking in unlawful aggression," and so on. Therefore, that a state of facts is in existence which hitherto would almost always have been taken to produce in law a state of war is not, I think, any longer debatable.

That I think is far more important than to decide exactly how much rubber, if any, we have let go through. I agree that that is of very great importance. And it is of very great importance to decide what would or would not endanger Hong Kong, but, with respect to the right hon. Gentleman and, I am sure, with the most itimate reasons for caring at least as much as he does about the safety of Hong Kong and the people there, I am bound to say that I thought it was a very dangerous exaggeration of the weight that ought to be on Hong Kong in these calculations that he permitted himself.

It might well be that it was necessary to run the greatest risks that Hong Kong would be cut off from half her water supply and threequarters of her food supply even that Hong Kong might become untenable, and it might even be that that might be necessary and the right thing to do; and I thought that the latter half of the argument of the right hon. and learned Gentleman went very far towards assuming that that must be a decisive factor. I have every reason, public and personal, for being particularly tender about Hong Kong and the people there, and I beg the right hon. and learned Gentleman to consider that he was over-calling that argument.

To go back to the main point which I wished to put into the air of politics—if not in the minds of hon. and right hon. Gentlemen opposite—we shall continually be in situations where there is no right line to be taken, and out of which we shall scramble, if we do scramble, only as we are scrambling out of this one, at the cost of very considerable disagreements and frictions with those whom we all agree to be necessary allies; and we shall go on doing those things until there has been an attempt to think out systematically what happens when the United Nations is at war with a State. In those circumstances, are all these States which are co-operating under the direction of the United Nations at war with that State, or are they not?

I take it that there is no doubt that in the old days, if we were at war with a State, any of His Majesty's lieges who continued in commerce and amity with that State or its members, would have been guilty of high treason or some lesser crime. It is no use thinking that we can continually tumble into the sort of situation we have been in, in this regard, in the last few weeks, and continually scramble out of it with more or less of disagreement and friction, without in the long run our getting into a position in which we shall not be able to defend ourselves.

6.4 p.m.

Mr. Richard Adams (Wandsworth, Central)

I listened with very great attention to the right hon. Gentleman the Member for Woodford (Mr. Churchill), and I thought that he said, among many other things, two very surprising things. First, he declared himself in favour of fixed elections, from which we understand that he wants the next General Election deferred until February, 1955.

The second surprising thing was in connection with what he said about exports from Japan to China. He said that he wanted to establish the principle that the right to export to an enemy country should be in proportion to the burden of fighting borne. If the right hon. Gentleman cares to think that over tomorrow morning, he will find that it follows logically from his argument that if one is fully engaged in fighting an enemy one should be able to export as much as one likes to him, but if one is completely at peace with the enemy one should not be allowed to export anything at all to him. That only goes to show how fallacious the right hon. Gentleman's argument was.

We have had a number of observations, speeches and inferential Questions on the subject of exports to China during the last few days. We have had comments and observations from the Opposition, we have had them from the hon. Member for Northfield (Mr. Blackburn), we have had the contribution of General MacArthur in America, and only yesterday we had the contribution of Senator Wiley and others in the Senate. Those comments and observations have all been one way—namely what this country has been doing and ought to be doing at the present time.

The right hon. Gentleman the Member for Woodford spent all his time today saying what we should do in a common cause. I want to redress the balance by making a few factual observations on what has been happening in other parts of the world. I make these observations in no spirit of recrimination. I merely give these facts and figures so that we in this country can have a balanced outlook on what has been happening in the export trade to China during recent months.

As my right hon. and learned Friend the President of the Board of Trade said, it is very difficult to define what are strategic war materials. I should say that today all materials are potential war materials. The other day bicycles were mentioned. It is apparent to me that in a time of stress bicycles might become strategic materials. During the last war the right hon. Gentleman the Member for Woodford spent much time and money in playing about with wood pulp and ice. I do not venture to suggest what he might be able to do if he were told that he could only have two million bicycles with which to play around.

In considering the war materials available to China today. I want to erect two back-cloths as a background against which we can look at what has been happening in recent months. The first back-cloth is the United States Lend Lease Aid to China up to 30th June, 1949. Up to that time the United States had sent to China no less than 1,600,000 dollars worth of aid, including war ordnance stores 271 million dollars, aircraft 231 million dollars, tanks, and other vehicles 190 million dollars and miscellaneous military stores 147 million dollars.

The second back-cloth is that of United States exports to China. The United States exported goods worth 56 million dollars to China in 1939, 465 million dollars in 1946, 353 million dollars in 1947, 273 million dollars in 1948 and 83 million dollars in 1949. And the figure in 1950 was 38 million dollars, compared with a mere 10 million dollars from this country. During 1947 and 1948 America was supplying 80 per cent. or more of China's requirements in commercial aircraft, motors and spare parts, radios, acids, including nitric and sulphuric acid, cameras and films. I suggest to the Committee that against the background of these enormous supplies over the years since the war General MacArthur is like a man who complains about the loss of water from a faulty dripping tap when he has himself left a tap running full on for several days and nights.

To turn to what has been happening in recent months, I invite the Committee to consider United States exports to Asia in January of this year as compared with January, 1950. United States exports to the whole of Asia in January this year amounted to 141 million dollars, and that was 20 million dollars more than in January, 1950. To Western Asia she sent 34 million dollars, compared with 25 million dollars in January, 1950, an increase of 9 million dollars. To South and South-Eastern Asia, which includes India, Burma, Thailand and other countries surrounding China, she sent 66 million dollars' worth of goods as compared with 48 million dollars' worth in 1950. This represents 18 million dollars' worth of goods more sent in January this year, six months after the war in Korea started, than in the corresponding month six months before the war started.

In Eastern Asia itself, which contains China and Hong Kong as its main importers, her exports dropped from 49 million dollars to 42 million dollars, a reduction of only 7 million dollars, even though there was a drop of 13 million dollars in her exports to China and Hong Kong. One might well wonder how it was that the United States was able to send 20 million dollars' worth of goods more to Asia six months after the war in Korea began as compared with six months before it started.

For a moment, I want to turn to the United States exports to China itself. Between January and September last year, her exports were running at 34 million dollars compared with 64 million dollars in 1949, a drop of 30 million dollars. But what happened in October, after the war with Korea had started? The exports in the month of October rose to 955,000 dollars as compared with 261,000 dollars in October, 1949—an increase of four times the amount of exports to China from the United States in October last year.

In November of last year the exports from the United States to China rose to 2,800,000 dollars as against only 550,000 dollars in November, 1949. In other words, in November last year the United States sent to China five times the amount of exports that she sent her in the previous year. If we take the exports from the United States to China from July to December last year—that is, after the fighting had started in Korea—they totalled no less than 16 million dollars compared with exports from this country of a mere 10 million dollars for the whole year. And that included no less than 13 million lb. of scrap rubber during 1950.

If we look at the United States exports to Hong Kong, we find that they were higher in October and November last year than they were in the corresponding months of the previous year. Included in the exports to Hong Kong direct from United States in November—12 million dollars worth—there were petrol products 261,000 dollars, metal products 552,000 dollars, machinery 828,000 dollars, chemicals and pharmaceuticals 5,900,000 dollars and miscellaneous stores, including cameras and films, 1,800,000 dollars. The United States actually moved more materials into Hong Kong during last November than we supplied to the whole of China during the whole of last year.

Exports from the United States to Japan also increased after the war in Korea commenced. Between January and September last year they were down by no less than 66 million dollars to 305 million dollars. For the month of October, however, they amounted to 36 million dollars, an additional four million dollars compared with October, 1949. In November they went up to 35 million dollars, an increase of no less than 11 million dollars over the figure for the previous November, and even in December the exports were running at 42 million dollars as compared with 38 million dollars in December, 1949. In other words, the exports of the United States to Japan in three months after the war had started in Korea, exceeded those of the corresponding period of the previous year by no less than 19 million dollars.

I now turn to the exports from Japan to China and Hong Kong. The figures I have given so far have been drawn from the published statistics of the Department of Commerce in the United States, and those I am going to give now are drawn from the Mitsubishi Economic Survey, which is an official publication in Japan authorised by the United States Government. This particular copy was published in April of this year.

Major Legge-Bourke (Isle of Ely) rose——

Mr. Adams

I cannot give way, because I have only three or four minutes left and I want to get a bit more material over. I am going to quote from this Economic Survey published with the permission of the American authorities in Japan, just two short quotations. In its report on foreign trade in 1950 it says, in regard to the export trade from Japan: The principal export commodities were iron and steel and machinery. The second quotation I want to make reports a …rapid increase in exports to China and Hong Kong since the outbreak of hostilities in Korea. The figures that they give show that Japan exported to China between January and October of last year an average of 1.4 million dollars a month. In November, however, long after the war in Korea had been going on, those exports from Japan to China rose to 4.7 million dollars, and in the month of December, despite the fact that an embargo was placed on the sixth day of that month, the exports were 2.9 million dollars. The total exports from Japan to China last year were no less than 22 million dollars compared with the exports of this country, about which numerous complaints have been made, of less than 10 million pounds.

I should like the Committee now to take note of this very simple comparison. If we take the exports from Japan to China in the three months—December of last year and January and February of this year—they come to 4.3 million dollars, whereas the exports from this country for the three months January to March amount to 3.6 million. Japan also exported to China and Hong Kong between January and October of last year no less than 45 million dollars' worth of goods.

There are many other figures that I should give, but I have to sit down in a minute or two so I will have to omit them. I should like, however, to give the exports from Japan to Hong Kong. Between January and May, 1950, the exports from Japan to Hong Kong were running at 2,900 million yen, and at that rate the figure for the whole year would have been 7,000 million yen. From June to September, after the war in Korea had started, no less than 5,843 million yens' worth of goods were exported from Japan to Hong Kong, equal to a yearly rate of 17,500 million yen. In other words, 16 million dollars' worth of trade was done during that short period after the war in Korea had started, and the rate of exports were more than doubled.

As I said at the beginning, I have not given these facts and figures in any spirit of recrimination, but simply to show that when arguments are being conducted in a glass house great care should be taken by all sides. Some irresponsible people talk about applying economic sanctions to China or about an economic and naval blockade of China, but it must be remembered that more than two-thirds of its frontiers are surrounded by great land masses. Such a suggestion, if carried out, would, therefore, only stop up one tiny hole in a great sieve.

Like my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), I suggest putting the events of these last few months on one side, while recognising that there have been faults not all on one side. We should like, for instance, to see the right hon. Gentleman the Member for Woodford and the hon. Member for Northfield drawing attention to some of the facts which I have had to skip through so quickly this evening. In conclusion, may I say that it is time we put mutual recriminations on one side and got down to solving by diplomacy a real and lasting settlement of the troubles in the Far East?

6.18 p.m.

Mr. Blackburn (Birmingham, Northfield)

The facts given by the hon. Member for Wandsworth, Central (Mr. Adams), if facts they be, are not under our control. But the facts to which I shall refer in the five minutes at my disposal are certainly under our control. We have had a farrago of mistakes from the Government Front Bench from the moment—[Interruption.] I have only five minutes. Do hon. Members opposite want to gag me?

The President of the Board of Trade told us that from the 7th or 9th of April exports of rubber had been curtailed by this country, but the position was this—and I am quoting from "The Times" of Wednesday, 9th May—as given in a statement emanating from the Hong Kong Government. The facts are that 3,265 tons of rubber were received by China in April, and that Hong Kong, which sells most of its rubber imports to China, received 5,846 tons, a total, almost all of which went to China, of 9,000 tons to the value of £5 million odd. That is for last month alone.

Let us take the statement made on 29th January, 1951, in the House, when the Under-Secretary of State for Foreign Affairs said: We are imposing restrictions on the export of strategic materials at present. [HON. MEMBERS: 'Rubber?'] Including Rubber."—[OFFICIAL REPORT, 29th January, 1951; Vol. 483, c. 572.] The hon. Member for Monmouth (Mr. P. Thorneycroft) and the hon. Member for Hornsey (Mr. Gammans) were largely responsible for raising this matter. The next day the Under-Secretary got up and admitted he made a mistake. He said: Although we keep a close watch on the movement of rubber, we do not, in fact, subject natural rubber to export control on purely strategic grounds."—[OFFICIAL REPORT, 30th January, 1951; Vol. 483, c. 730.] Then, on 6th February, the Prime Minister himself said: As regards rubber, I understand there is not a great amount going."—[OFFICIAL REPORT, 6th February, 1951; Vol. 483, c. 1526.] Let me give the Committee the facts as to what was "going" and the price. I confirmed these figures with the Colonial Office this morning, but they can be checked by hon. Members through references to HANSARD. HANSARD reported on 12th April the exports of rubber from the Federation of Malaya and Singapore to China as 77,624 tons in 1950 and an estimate of 46,500 tons in the first quarter of 1951. HANSARD of 25th April reported exports to China between July, 1950, and March, 1951, as 120,000 tons. That means that in the first six months of 1950, before the war started, only 4,000 tons or rubber were exported to China. In the month of February, when the Prime Minister said: As regards rubber, I understand there is not a great amount going. the figures show that twice or three times as much rubber was going there for that one month alone, as compared with the whole of the first six months of 1950. There is no point in the right hon. and learned Gentleman the President of the Board of Trade smiling. He has been proved wrong before.

Let me turn to the question of profits made as a result of the war. The profits made out of this war would make Sir Basil Zaharoff turn in his grave in envy. The average price of rubber in March, 1950, was 1s. 4½d.; the average price one year afterwards was 5s. 5d.

Mr. Emrys Hughes (South Ayrshire)

Private enterprise.

Mr. Blackburn

We will deal with that. The price had risen to four times as much as it was a year ago.

I have only one minute left at my disposal, but I wish to repeat a statement I made on 7th May in the House, which the former Attorney-General immediately denied. I said: …that no less than £100 million of exports have gone to China since the start of this war in Korea.…"—[OFFICIAL REPORT, 7th May, 1951; Vol. 487, c. 1604.] The fact is that, on the right hon. and learned Gentleman's own figures, vastly more than £100 million of exports have gone to China since the start of the war in Korea. I have no further time left, but I will take the Adjournment which I have later in the month, to prove these facts.

The fact of the matter is that a vastly greater amount of rubber has gone to China than so far has been disclosed, and it seems to me that it is high time we in this country faced up to these facts and brought this to an end, in view of the great extent to which our personal honour is involved. Above all, there is the need for America and ourselves to come together in order to stop something which I believe is contributing to a future war, and to help to safeguard the peace of the world.

6.25 p.m.

Mr. Maclay (Renfrew, West)

The hon. Member for Northfield (Mr. Blackburn) has made certain charges which must be cleared up sooner or later, and I hope they will be cleared up this evening, because if not, we shall have to revert to them later. Some of the figures which he has given are new, as for instance the question of exports to Hong Kong and exports through Hong Kong to China.

Sir H. Shawcross

What is new? The hon. Gentleman says there is something new in the figures just quoted by the hon. Member for Northfield. What is new in them?

Mr. Maclay

What I am trying to get clear is the figures given to this House. It is not my quarrel, although I am perfectly prepared to pick it up.

Sir H. Shawcross

But the hon. Member is a responsible member of this House.

Mr. Maclay

I understand that this is a matter for His Majestys Government and the hon. Member for Northfield. It is not for us to distinguish between who is responsible——

Sir H. Shawcross

I am asking the hon. Member what figures are new so that I can deal with them. The hon. Member is winding up for the Opposition.

Mr. Churchill

Is the right hon. and learned Gentleman entitled to say which members of the Opposition are to be considered responsible for it and which are not? Promotion has gone to the head of the right hon. and learned Gentleman.

Mr. Maclay

There is undue sensitivity on the Government Front Bench today. What I was trying to say was that the hon. Member for Northfield has given figures, given by the Government, for exports through Hong Kong to China. In addition there are figures of rubber sent to Hong Kong, which had not been given by the Government.

Sir H. Shawcross

I dealt with that point when the right hon. Gentleman the Member for Woodford (Mr. Churchill) was speaking, and I say it was totally untrue.

Mr. Maclay

I am sorry, but I did not know there was a positive denial.

Sir H. Shawcross

Surely the right hon. Gentleman actually rose in the course of my speech in order to clarify the point. I said that my information from the Colonial Office, supported by the rubber trade bible, showed it to be totally untrue.

Mr. Maclay

If the President of the Board of Trade says that he has satisfied himself that that is so, then we are finished with it. If there had not been all this fuss we could have been finished with it three minutes ago.

Obviously we are very glad indeed that the Government have finally stopped the shipment of rubber. Also we are glad to learn that even more efforts are going to be made to work closely with the United States on agreed lines. Those are two matters we have wanted to see done for a long time, and the substance of my speech is bound to be the efforts we on this side of the House have made for months and months, to get certain things cleared up, and to find out what on earth was going on. Now at long last what we want has been done. Unfortunately, like so many other actions of our present Government it is late and much mischief has been done.

I am not going into the figures of the exports of rubber into Hong Kong. I really think that they can get badly out of proportion. What matters is the effect of the Government's handling of the situation on Britain's reputation in the world, and on our Anglo-American traditions of friendship which are, I submit once more, about the most important things today for the free world. Whatever the merits of the argument may be on blockade, economic sanctions or the other great issues which have been under discussion, there has never been any doubt about the necessity of preventing to the best of our ability, obvious strategic materials getting into the hands of people who are actively fighting against United Nations troops, including our own.

There were certain objectives which should have been absolutely clear. The first was to define "strategic materials." It should not have been a case of realisation after the event. The second should have been to agree a list of strategic materials with our major ally, the United States. I know that this might not have been easy, but what I am suggesting now is the minimum, if we were not to have endless trouble. Even this afternoon the President of the Board of Trade has admitted that our list is not agreed with the United States. I think that was his statement. I noted with very great care that he said that we accepted responsibility for our list and that it was not an agreed list. There were consultations with the United States, and all that, but the fact remains that we have not got agreement and if we had, there would not have been all this fuss about rubber. We have never been able to find out for months past from one right hon. Gentleman or another whether rubber was regarded as a strategic material. I will support that statement by quotations.

The third objective was to persuade other members of the United Nations to act in concert with us. Before there was any hope of doing that, there really had to be substantial agreement between Britain and the United States. The next and exceedingly important objective was to make certain that the methods of control were not only effective but were seen to be effective. The fifth objective, and the most obvious one of the whole lot, was to take every possible step to see that the appropriate—I use the word deliberately—publicity was given to everything that we were doing.

Not on one of those objectives have the Government succeeded in doing a single thing until this afternoon when we have made some progress. That is the major part of our charge. As I said a little time ago, I shall not go into the great policy issues because there is not time and because they have already been covered this afternoon. But I want to look into the handling by the Government Front Bench of this situation. It is not through lack of worry on the part of the Opposition that this situation has been allowed to arise. Apart from the general debate last September, the first question on the subject which I can trace was asked as far back as 18th October. It starts the whole story. On that occasion, my hon. and gallant Friend the Member for Portsmouth, West (Brigadier Clarke) asked the Secretary of State for the Colonies: If he will take steps to ensure that all trade in materials of potential war value between Hong Kong and Communist China is stopped. The reply came through from the Colonial Minister: Control over the exports from Hong Kong to all destinations of a list of strategic materials similar to those whose export from the United Kingdom is controlled has been introduced."—[OFFICIAL REPORT, 18th October, 1950; Vol. 478, c. 2039.] That sounded not too bad. Something appeared to be happening.

What happens next? May I point out that between 29th January and the end of April no fewer than 16 Questions were asked by hon. Members on this side of the House, most of them touching on rubber. After the somewhat optimistic statement in October, I can find nothing until 29th January. Then the Under-Secretary of State for Foreign Affairs made the statement to which the hon. Member for Northfield (Mr. Blackburn) has just referred. Of course, that had to be followed up by a contradiction. When the Minister came back to the House he said that he had been wrong and that he had not realised what the position of rubber was. That theme was picked up by the Prime Minister. I must give this quotation in full. The Prime Minister said, on 6th February: It is the general policy of His Majesty's Government to watch, and in appropriate cases to control, the export of all strategic goods and materials…. As regards rubber, I understand there is not a great amount going—not much beyond the ordinary demands of that country."—[OFFICIAL REPORT, 6th February, 1951; Vol. 483, c. 1527 and 1528.] That statement on 6th February has to be considered in the light of what we now know was happening.

There is still worse to come. That formula: "watching closely and in appropriate cases controlling" appears time and time again from the most astonishing variety of Ministers. It is the one thing upon which they were unanimous. The Minister of State for the Colonies used it on 14th February; the President of the Board of Trade on 15th February and the Secretary for Overseas Trade on 13th March. All had the same formula that they were watching like mad; and now we know what was happening while they were watching.

Now we get to the recent events which immediately led up to the present debate. The Minister of Defence—I see that he is not here but I make no departure from what I propose to say—showed that he did not know what strategic materials were and had no idea that rubber was involved. He permitted himself, in one of those rash moods that I think he sometimes regrets afterwards, to make by implication a most grave charge against private traders. His actual words were: It is quite impossible for me to say what private exporters might send to China."—[OFFICIAL REPORT, 2nd May, 1951; Vol. 487, c. 1202.] That was a most astonishing thing for a responsible Minister to say and I hope that the Minister who will reply tonight will make it dead clear that every suggestion and recommendation of the British Government or British Colonial Governments has been honoured up to the hilt by British merchants all over the world. I think it will be impossible to find a case of a shipment where a British merchant has not acted in accordance with the advice of his Government—if he could get it.

There is another thing which is causing the greatest concern at this moment in London and in other parts of the world. Firms have written in to the Board of Trade in the past—I hope that the new incumbent will be better in this respect—trying to get clear guidance on what they should and should not do, and they have not been able to get it. That is quite definite. I can support it with facts.

We now come to the Prime Minister's last statement to the House which was definitely surprising. He came to the rescue of the Minister of Defence, and when he was answering a supplementary question whether he considered rubber to be a strategic material. He gave this reply, after the subject of rubber had for months and months been becoming more acute both in this House and internationally: It might or might not be. We have in fact an absolute prohibition at the present time on rubber.—[OFFICIAL REPORT, 3rd May, 1951; Vol. 487, c. 1434.] He did correct that statement. He said: With regard to the exports of rubber, they have been the subject of export licensing since 9th April, to prevent undue and enlarged quantities being sent to any particular destination. But there has not been and cannot be, I think, an absolute prohibiton to see that no rubber whatever gets to China."—[OFFICIAL REPORT, 3rd May, 1951; Vol. 487, c. 1437.] That looks rather odd, only a week ago, now that we have today's decision. [Interruption.] The only way it reads suggests that the Prime Minister may have intended to say that it was an extremely difficult thing to stop any rubber getting into China, but that is not the implication of his answer, as anyone interested in the matter can see by reading it. The whole point in this dreary list—and I must be very quick now—in regard to this critical subject, is that any Government really sensitive to what was going on in the world and to what could flare up into a real danger, would have spotted that rubber would have to be watched carefully.

Which one of all those Ministers whom I have mentioned is really responsible? Dead seriously—my whole speech is dead serious but this point is more serious than the rest—will the Minister, when he replies, be able to tell us who accepts prime responsibility in this question of strategic raw materials? Is it the Foreign Office, is it the President of the Board of Trade, is it the Colonial Office, is it—heaven forbid—the Minister of Defence, is it—? One can go on because we have had all these people answering questions on this subject, and in a matter as critical as this there really must be one man who will provide the same answer to everything.

One does not want to be too extreme about certain things in a debate like this, but I feel so strongly about this that I must say it. There may be room for argument as to whether this Government has the right to carry on from the domestic point of view; but I ask calmly and reasonably whether, with international tension as high as it is, with the international relations of the United Kingdom, the Commonwealth and the United States of such absolutely vital importance, is it not essential that Britain should have a Government which is properly organised, which knows what is happening, which has time to "feel" what is happening in the world. Ministers at present have no time to feel what is happening—they get reports sent in, read them in a hurry, and rush off to a meeting to decide what to do about resigning Ministers.

Can this kind of Government possibly give the world the lead which Britain ought to be giving at this moment? The main case against the Government is not so much whether relatively small amounts of rubber ought or ought not to be stopped. The real case is, once again, that the way in which the situation has been handled has done very serious mischief to Britain's reputation throughout the world.

6.42 p.m.

The Minister of State for Colonial Affairs (Mr. John Dugdale)

Both the Leader of the Opposition and the hon. Member for Renfrew, West (Mr. Maclay) have talked as if the Government have in some way behaved in a lighthearted manner. [HON. MEMBERS: "Light-headed."] I wish to explain in a few words some of the considerations involved, which I think have not been fully appreciated as yet by hon. Members opposite. The Leader of the Opposition said, if I took his words down correctly, "Try to put yourself in the position of others with whom you have to deal." He said, "Think of the Belgians, the Dutch, the Norwegians; they are in a difficult position." He implied that they were nearer to the danger zone and, therefore, that they had to be particularly careful, and that we had to think about them.

I would ask him at the same time to remember that we also have to think of the people of Hong Kong and Malaya, who are already in the front line. That is a point we must never cease to remember in respect of all these considerations. As the President of the Board of Trade stated earlier in the debate, His Majesty's Government have come to the conclusion that the quantity of rubber sent from British colonial and dependent territories to China during the first four months of this year is sufficient to meet the legitimate needs of that country for the whole of this year. They have, therefore, decided to request the Governments of the Federation of Malaya, Singapore, North Borneo and Sarawak to prohibit any further export of rubber from their territories to China for the rest of the year. The Governments will also be requested to limit shipments to Hong Kong to the quantities which the Governor of Hong Kong states are required for the legitimate needs of the rubber manufacturing industry in that territory.

That, as I say, has been done in spite of the fact that we realise that it makes great difficulties indeed for the people of the territories concerned. It is all very well for us to talk about this matter from our point of view. It is not we ourselves here who will have to lose this trade, have to bear this deprivation, but the people of Malaya and Hong Kong. We must realise the position from their point of view.

Mr. Brendan Bracken (Bournemouth, East and Christchurch)

May I interrupt for a moment——

Hon. Members

The right hon. Gentleman has just come in.

The Deputy-Chairman (Colonel Sir Charles MacAndrew)

The Minister has given way to the right hon. Gentleman.

Mr. Bracken

Over a year ago the right hon. Gentleman declared in the House that there was no necessity to reinforce our troops in Malaya at a time when it was clear to everyone that the troops in Malaya were in great peril. What does the right hon. Gentleman know about Malaya?

Mr. Dugdale

That is a very cheap observation. I do not think that the right hon. Gentleman has taken a very active interest during this debate. He has presumably now come in to make that remark. So far as what I said last year is concerned, I said that at that time the number of troops there was sufficient. Their numbers have certainly had to be reinforced. Nothing is permanent in war, and we have naturally to make alterations in our plans from time to time as war proceeds. That applies to any country making war.

The decision which my right hon. and learned Friend announced today is a grave one. I do not want in any way to minimise its gravity both to Malaya and to Hong Kong. I do not think it is right that it should be minimised. We realise that we are asking them to make a unique sacrifice, but we also realise that they will agree with us that it is wrong in principle and in practice for us to supply what is in fact a raw material vital to the prosecution of war by the Communists. The Communist war in Malaya and in Korea is, as they realise just as well as we do, one. Anything that helps the Communists in Korea to win is obviously a blow to all those gallant men and women who are today fighting so magnificently against Communism in Malaya.

His Majesty's Government pledge themselves to do two things. First, to take over all outstanding contracts. Second, to do all in their power to persuade those countries, such as Ceylon and Indonesia, which so far have not imposed an embargo, to do so at the earliest possible moment. That is something that we owe to the people of Malaya, and is something which should be stated here.

There has been some criticism from time to time from hon. Members opposite of Hong Kong and Malaya on the grounds that they were giving aid and comfort to the enemy in Korea. I wish to say in the strongest possible terms that His Majesty's Government are deeply appreciative of the sacrifices that the people of both countries have made in the common cause. It is easy to criticise when one is a long distance away. The position appears very different when one is right in the front line, as they are.

We are not asking Malaya and Hong Kong to take action which we ourselves are not taking. Our decision to ban the export of war materials and a number of materials which might, though not munitions of war, help in the prosecution of the war, has been one that has hurt a number of people in the United Kingdom. But we have thought it right to take it in spite of its effect on British industry.

There has been a tendency, too, in some quarters—not in this country—to make light of the role played by Hong Kong and Malaya in the campaign against Communism. The spotlight has been concentrated on Korea. People have tended to forget what is being done in these other countries. Such an attitude is grossly unfair. My right hon. and learned Friend gave an extract from the list of some 200 items of industrial equipment on the exportation of which to China, Hong Kong has imposed a total prohibition. That is a fine record for a country which is right on the frontier of China and is dependent to such a peculiar extent on food and raw materials which can be obtained only from China.

In this connection I should like to add a further example. No later than 27th April new legislation was brought into force in Hong Kong to prevent evasion of the restrictions. Those regulations provide for, among other things, the control over the movements of strategic materials in the Colony itself, for heavier penalties for contravention of the regulations, for seizure of conveyances found illegally transporting such materials, and that the burden of proof should be laid on the accused that smuggling was not being attempted. Those are very stringent provisions indeed which Hong Kong has introduced in recent weeks.

I turn to Malaya. In this war with the Communists the people of Malaya, and in particular the rubber producers themselves—this is a point which must be emphasised—have suffered very heavy casualties. Many of them are smallholders. A very large number of people who will be affected by the decision announced today are smallholders. They are working very hard day in and day out to produce rubber, and they will suffer considerably. Here I should like once more to pay a tribute to the steadfastness with which they have faced these dangers and continued to supply the world with a commodity which is essential to civilised life as we know it today.

Mr. Niall Macpherson (Dumfries)

If the supplies which the right hon. Gentleman says have been going to China are prevented from going there, is the right hon. Gentleman suggesting that those supplies will not be bought by other parts of the world? In what way will the smallholders in Malaya suffer?

Mr. Dugdale

The Government have said that they will pre-empt purchases on all contracts at present outstanding. As regards future contracts, it means the loss of a market the rubber producers had before. They fear that it could, added to various other tendencies, lead to a downward movement in the price of rubber, and they have natural grounds for fearing that. But I am sure that the rubber producers and their fellow citizens in Malaya will understand that what we are asking them to do is to deprive the Communists, who are our enemies in that other war, of a commodity which is essential for them if they are to carry on the struggle.

These two countries have played as great a part in the campaign against Communism as any country in the world, just as great as the part that has been played by this country, or, indeed, I may add, by the U.S.A. Their deeds should receive just recognition from all those who are fighting Communism whether by military or economic action.

It is because I think that this should be put on record, and because I realise the difficulties that they will have to face as a result of today's decision, that I have spoken in these terms, not with a view to making any party or political point in the House, but simply to express the view that we here should realise what we are calling upon our friends, indeed in many cases our relatives, in these Colonies to do. We are asking them to do much; we should realise that they have already done much, and we should be thankful.

6.53 p.m.

Mr. Shinwell

With your permission, Sir Charles, and with that of the Committee, I should like to make a personal statement. In the course of the speech by the right hon. Gentleman the Member for Woodford (Mr. Churchill), I interrupted him because of some disagreement with what he said. My impression of what he said was that I am alleged to have said—the right hon. Gentleman will correct me if I am wrong in that impression—something calculated to discredit General MacArthur. That was my impression. I resented it because I could not remind myself of anything that I had said which was derogatory to the General.

The right hon. Gentleman was good enough to convey to me a report from "The Times" of 23rd April. However, in the statement which the right hon. Gentleman made, he appeared to have overlooked the context of the setting in which the speech was made and the matter with which I was dealing. Perhaps I may have the permission of the Committee to read a rather longer extract from "The New York Times" of 23rd April. The heading of their report is "Shinwell optimistic on outlook in Korea." It states: Defence Minister Emanuel Shinwell said today that the removal of General of the Army Douglas MacArthur gave the United Nations and representatives of the Chinese Communist Government a new chance to negotiate peace in Korea. That was the subject with which I was dealing. The report continued: Addressing his constituents here, Mr. Shinwell said: 'It might be that, with the removal of General MacArthur from the Korean atmosphere, conditions may improve but we cannot tell. I am bound to say that I regret that the Peiping Government is not more responsive to the suggestions that have been made to negotiate peace in Korea. I think that opportunity has been present for some considerable time, but here again is the opportunity for the United Nations representatives and the representatives of the Peiping Government to gather together to bring this Korean affair to an end'. That was the statement I made and my submission is that there is nothing in that statement that was derogatory to General MacArthur. Certainly, there was nothing I said which seemed to imply that I was casting some doubt on the capacity of General MacArthur to conduct military operations, because that was not in my mind. I was dealing exclusively with the prospect of re-opening negotiations with a view to promoting peace through United Nations in Korea. And "The Times" report, a somewhat shorter report, I should imagine conveys the same impression.

It may be that my impression of what the right hon. Gentleman said to me, or about me, was wrong, and if so I ask that I should be forgiven for gaining a wrong impression. On the other hand, it may be that the right hon. Gentleman, having seen the shorter report, thought I had said something which was calculated both to throw discredit on General MacArthur in the military sphere, and also to disturb our relations with the United States. That was indeed far from my mind.

Mr. Churchill

I think it is a good thing that the right hon. Gentleman has made this statement to the House, and has made it clear that he did not wish in any way to reflect on the military capacity of General MacArthur. I do not think I misquoted his actual words. I see that they were in the "Glasgow Herald" report: It may be with the removal of General MacArthur from the Korean atmosphere the situation there might improve but we cannot tell. Then followed what he said about regretting that the Peking Government were not more responsive. And the Press Association report is: It may be that with the removal of General MacArthur from Korea the atmosphere might improve, but we cannot tell. And in "The Times," which was the report I had in my mind, it said: It may be that with the removal of General MacArthur the situation would improve. What I said was that he had said that now, perhaps, things will go better in Korea, once General MacArthur had been dismissed—[HON. MEMBERS: "No."]—well, wait a minute. Then the right hon. Gentleman got up and, I am bound to say, he did seem completely to misunderstand the words which had just come out of my mouth and the House had listened to, because he said that I had assented that he had declared that the dismissal of General MacArthur should be brought about because it would be of advantage to us. I said nothing of the sort. I said absolutely nothing of the sort. I am sorry that he should not be able to follow the absolutely plain English of what I said. Then he was very angry and I repeated that he had said "perhaps things will now go better in Korea since General MacArthur had been removed."

These are, I think, perfectly fair and straightforward quotations from what was published in the public Press. Then the right hon. Gentleman said a lot of hard things—how I should be ashamed of myself, and all that. Well I am bound to say, on that, that I consider it is a very good thing he has made it clear—as it certainly was not clear to those who read the papers and who cannot have verbatim reports—that he was not referring to General MacArthur's military capacity; and what he meant by what he said was that he hoped better conditions for negotiations would be established now that General MacArthur was no longer on the spot, acting, as it were, in a political capacity.

If that was what he meant, it is a good thing that that should be known in the United States; but I do not accept the slightest reproach for what I said in quoting him. I have given the fullest quotations both from what I said and what appeared in the Press where anyone could read it. I think that the remarks the right hon. Gentleman has just made remove from my mind any unfavourable impression I might have derived from his anger and from his telling me that I ought to be ashamed of myself. I expunge them entirely from my mind, and I hope that any impression which may have got abroad in the United States and done harm through this misinterpretation of his words, will also be removed by what he said.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again"—[Mr. Wilkins]—put and agreed to.

Committee report Progress; to sit again Tomorrow.