FOREIGN OFFICE.

HC Deb 29 July 1930 vol 242 cc330-412

Motion made, and Question proposed, That a sum, not exceeding £120,930, be granted to His Majesty to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs."—[NOTE: £75,000 has been voted on account.]

Mr. CHURCHILL

After the extremely important and deeply agitating matters which have engaged the House for the last two hours, it may require an effort of special concentration for the Committee to contract their attention to such a topic as the state of affairs in Egypt. Nearly 600 persons were killed and wounded in the streets of Cairo and Alexandria during the last fortnight. The riots which took place led to a great destruction of property. A virtual state of siege has been proclaimed in Cairo by the Government. The British troops have been held in readiness, strictly confined within their barracks. British ships have hastened across the Mediterranean; the Queen Elizabeth is at Alexandria, the Ramilles at Port Said, and another vessel at Suez. The state of the foreign communities has been such as to cause the greatest anxiety, and has led to complaints by them to their Governments, with severe censure of His Majesty's Government in almost all the newspapers of Europe. That is the state of affairs in Egypt to-day.

Is it not providential that the British troops had not in fact been withdrawn from Cairo before this situation developed? Imagine that the treaty which it was vainly sought to negotiate had come into operation and full fruition, and that you had had the events which took place in Alexandria 10 days ago, with the expectation of far greater commotion in Cairo itself—imagine such a situation occurring and there being no British ships nearer than the Canal. Obviously the Government would have had to give orders for the troops to march from the Canal to Cairo, or for Lord Thomson's armoured cars to be sent to Cairo, at the same time as the Socialist Government were compelled to order the battleships of the Mediterranean Fleet to appear off the different Egyptian ports.

That is the situation which has now been disclosed in Egypt. Let me ask the Committee to contrast it with the position a year ago. A year ago Egypt was tranquil. There had been great trouble four years before, but the country had been reduced to tranquillity and there was a complete calm. A foreigner could walk about the streets of Cairo by day or night as safely as he could walk about London. Nothing could exceed the tranquillity of Egypt a year ago. But I quite admit that there was one important circumstance in the condition of Egypt a year ago which could not possibly be left where it was. It was impossible to allow Egypt to continue in a condition in which all the work of a Parliamentary assembly was suspended. It was clearly necessary for the Egyptian Government and the Egyptian authorities, or their British friends and advisers, to cooperate by every means in their power to reconstruct and revive suitable institutions which would enable a legislative assembly to be called into being to act as a counterpoise and corrective to the powers of the Court and afford adequate expression for the wishes and will of the people. That was a task which clearly lay before the Egyptian Government and before His Majesty's Government a year ago.

For that task they were well circumstanced by the tranquillity which prevailed in the country. They were also well circumstanced by the fact that, both Mahmud Pasha, the then Prime Minister and the then High Commissioner, Lord Lloyd, were anxiously and hopefully looking forward to the construction of those constitutional institutions which would have the effect of providing a proper and adequate foundation for Egyptian Government, and one much broader and more capable of progress than either the present dispensation or a pure protectorate such as has existed in the past. That was the position then—tranquillity and the possibility of constructive work. I have described what the situation has been reduced to today. We ask the Government how has this great change from peace and the hope of progress to the present riot and certainty of increasing strife, been brought about in the course of a single year? Who is responsible for it? What is the responsibility of the Government for it, and what are the particular acts which have led to this degeneration in the state of affairs?

Let me retell the tale to the Committee. A year ago, almost to a day, His Majesty's Government laid their hands strongly and vehemently upon Egyptian affairs. They procured—they provoked—the resignation of the then High Commissioner. They procured that resignation in such a way as to cause the maximum of disturbance in Egypt and throughout the East; in such a way as to give the greatest possible encouragement to subversive forces and forces antagonistic to the Anglo-Egyptian connection. They procured that resignation in such a way as to strip Lord Lloyd's successor of almost every vestige of that influence so precious to Great Britain in the conduct of her affairs with Egypt. That was the first step. The next step was to inaugurate negotiations with the Egyptian Government with the object of reaching a treaty, the main purpose of which was to be the evacuation of Cairo and Alexandria by British troops, and the withdrawal of those troops to the Sudan and the Canal. This step, I must explain, overlapped the dismissal of the High Commissioner. Before the High Commissioner was provoked into resignation, if I may use that expression, negotiations were far advanced between the Foreign Secretary and Mahmud Pasha, who was visiting England on other matters; and although we were assured a year ago that those negotiations were then only at their first, initiatory stage, as a matter of fact a few weeks later we were confronted with a draft agreement which obviously had been arrived at a considerable time before.

Mahmud Pasha took the draft agreement. He had not expected to negotiate such a treaty, but, being well received, being, as the Government described him, "a most reasonable man," finding himself agreeably entertained by the Government, the negotiations prospered and he took the draft agreement back to Egypt. Not until he reached Paris did His Majesty's Government open to him the full intention of their policy. When in Paris he was informed that the agreement must be ratified by an Egyptian Parliament elected upon a basis of manhood suffrage. If I am asked to specify the disastrous step of the government which has produced such evil conditions in Egypt, that is the step which I select. From it all these evils have flown and from it, I predict, a long series of evils and embarrassments will continue to flow.

This was a grave interference in the internal affairs of Egypt and it was a mad interference. The election of a Parliament on manhood suffrage in Egypt! Why, even in this powerful country, with generations of prescription and tradition behind it—this country which even now preserves the strong remains of a well-knit political structure—our affairs have not prospered with the wide extensions of the franchise which have been give[...]. But to pretend that the peasants of the Nile Valley, the fellaheens, the slaves of centuries, the slaves of yesterday—aye and, but for the British influence, the slaves of to-morrow—to pretend that the Egyptian fellaheens, 92 per cent., or it is even said 95 per cent. of whom are illiterate, and therefore unable to have the protection of the ballot, could be made the electoral foundation of representative institutions similar to those which exist in Germany, France, Great Britain and the United States, is the veriest farce and the most contemptible casting aside of the duty of mental effort of which it is possible to conceive. It is so easy to say, "Have a general election on a universal franchise and let things rip." That was the contribution which was presented to Mahmud Pasha when he left these shores and arrived in Paris.

I need scarcely say that this decision in the first place destroyed altogether any prospects of negotiating a reasonable treaty. In the next place it destroyed the tranquillity of Egypt, and it destroyed, there and then, Mahmud Pasha, "the reasonable man," the man whom the Government had used so intimately to bring a treaty forward once again between Great Britain and Egypt. The broken instrument was cast aside. Mahmud Pasha did not even take the trouble to make an attempt at carrying on. As soon as he got back to Egypt he asked that a successor should be appointed and disappeared. A stop-gap Government was brought in under Adley Pasha to provide for the installation, after a general election, as to the result of which there was no doubt, of the Wafd party caucus in power. The Wafd made the elections. Although not actually the Government they were obviously the great authority and power, and backed, as was believed, by the influence and good wishes of the British Government, they made the elections most effectively. No one else was allowed to stand at all. Those who voted were dragooned in accordance with the powerful machinery which this corrupt and fanatical caucus is able to employ.

Brutal violence was used where necessary, but in fact there was uncommonly little violence because it was not necessary. Not a single one of the Liberals of the moderate middle element, without which you will not build up the necessary instruments of self-government in that country, not a single one of those very representatives upon whom Lord Milner's report counted so much to serve as the foundation for a future assembly and government, dared to present himself at the poll. They were simply swept aside, and this complete destruction of all the moderate elements resulted from the decision of the Government and from their interference in Egyptian affairs in dictating to Mahmud Pasha the character of the electoral law under which he was to hold the elections. I shall, no doubt, be told that I have said all this before. It is quite true that I am almost using the notes of a speech which I delivered nine months ago. On 23rd December, I said: Mahmud has gone, and now you are face to face with Nahas Pasha… In a few months therefore, His Majesty's Government have annihilated all those Liberal elements in Egypt on which the Milner Report counted in an especial degree. … They have produced a profound degeneration in the Egyptian situation, and Egyptian society and encouraged a struggle between the Wafd and the Court the end of which cannot be predicted. Long before the five years are up events will occur which will afford evidence of the need of the British troops in Cairo. I do not know how long will be the life of His Majesty's Government but I believe that they will live long enough to reap some at lease of the wrath and evil and folly that they have sown."—[OFFICIAL REPORT, 23rd December, 1929; cols. 2008–2009, Vol. 233.] I repeat those words without hesitation, hoping that they may receive more consideration now than they did when I first used them in the House of Commons. The Wafd came to power as a result of the elections. When they came into power they put into operation what is called the spoils system of which we heard the other day from the Treasury Bench—a vigorous spoils system. They dismissed great masses of officials and put in their own special trusted agents. The mudirs of eight or nine provinces were replaced by the sworn adherents of this secret political society. Only consider the effect of that. If the present régime, the Sidky Pasha régime, lasts in Egypt, it is inevitable that these newly appointed agents of the Wafd should be in their turn removed and replaced by other governors acting in loyal accord with the new régime. Consequently, you will have the whole provincial government administration of Egypt subjected to one disturbance after another to the cruel injury of the fellaheen population.

Negotiations were now resumed with Nahas Pasha, and, as I think, in conditions which rendered them doomed to certain failure. I tried to explain to the House of Commons in December why it was impossible to have any settlement with the Egyptian Nationalists on the basis which the Government had prescribed, and I think rightly prescribed. Although I thought that they were most foolish in offering to move our troops from Cairo, I thought they were wise in the strict attitude which they adopted on the Sudan. I ventured to point out that no Egyptian party would be able to agree sincerely to a settlement which practically excluded Egypt from the Sudan. I said then: To talk about conciliating Egypt and gratifying Egyptian sentiment and brushing away all causes of friction and suspicion, without conceding them at least an equal share in the administration of the Sudan, is folly. No one can pretend that these causes of dispute will be removed by anything short of that; either you must be prepared to concede the full Egyptian claim about the Sudan, or you must be prepared to face a continued quarrel with all those forces in Egypt at whose behest we are now to evacuate Cairo."—[OFFICIAL REPORT, 23rd December, 1929; col. 2002, Vol. 233.] I remember being mocked by some of those who are sitting now upon those benches, though there were more hon. Members there then; I suppose that they are outside discussing the agitating events of this afternoon. I remember being mocked when I pointed out that you would not get a settlement with Egypt on the basis which the Government—quite properly, in my opinion—adopted in regard to the Sudan. You will not get an Egyptian Government which will take the responsibility for cutting the connection to such a large extent between Egypt and its southern province for which such immense sacrifices have been made by Egypt in the past. What follows? The negotiations failed. I think that it is creditable to the Wafd leaders and Nahas Pasha that they acted in a straightforward manner, and that they did not simply take the agreement for what it was worth, and then proceed to use it to get more. Anyone could have told you beforehand that these negotiations, for the sake of which such disturbances were made, were foredoomed to be wrecked on that point, provided that the representatives of the Egyptian Government acted with sincerity, which they did. The Treaty was rejected, so that the whole elaborate process, the costly process of getting rid of Lord Lloyd, of negotiating with Mahmud and the betrayal—I can use no other word—of Mahmud, of the interference with the electoral law in Egypt by the Egyptian Government on the direction of the British Government—

The PRIME MINISTER

Who interfered?

Mr. CHURCHILL

The right hon. Gentleman interfered by directing that there should be a reference of the Treaty to Parliament elected without a change in the electoral law. The installation of Adly Pasha and his caretaker Government in power, the installation of the Wafd in power, the resumed negotiations, the sittings up day and night and the goings on that were heard of in the Foreign Office—for the whole of this elaborate and wearisome pilgrimage the Government had nothing whatever to show. In the end they had nothing to show for nine months of disquieting intervention and interference in the course of Egyptian affairs. But though the Government had nothing to show, the consequences of their action remained. We see them now—two live autocracies facing one another in Egypt. There is an oriental court entrenched by the practical necessities of law and order, facing a corrupt and fanatical caucus which is armed with a Parliament falsely professing to represent some definite expression of the wishes and interests of the people. That is the situation which His Majesty's Government have managed to create. They have segregated Egyptian politics into two extreme categories. It is marvellous how so much mischief could have been scientifically produced. They have segregated and divided Egypt into its two most extreme aspects, and now, having got them at the opposite corners of the ring as it were, His Majesty's Government declare absolute impartiality—like in the general strike, when we were asked to adopt absolute impartiality between the fire and the fire brigade.

They have declared absolute impartiality, but it is not a passive impartiality. The Government are backing both sides. They sent their warships to Alexandria and other ports, to encourage the Government. They made a declaration that the electoral law with its manhood suffrage basis is not to be altered, in order to encourage the Opposition. Both are given their fair, even-handed support. What is it you are doing in Egypt? Is it a prize fight which you are promoting on the brilliantly illuminated stage of Cairo? Is it a fight in which you want to make sure that both sides have an absolutely even chance and are capable of realising the utmost combativeness which is in them, and that there is no danger of a premature termination of the fight or no risk of the spectators complaining that they have not been adequately entertained? Is that the policy? If not, what is it? Is it a scenario of a film that you are making upon the banks of the Nile of Charles I and Oliver Cromwell in an Egyptian setting? Is that what you are doing? Such a spectacle has never been presented to the Chancelleries of Europe as the spectacle of the Government, having first of all created these opposing forces and cleared the arena for their conflict, making quite sure that each shall be kept in the highest possible condition and furnished with all that is necessary to carry that conflict to the most severe and hard-fought-out conclusion.

I warn the Government that we are not by any means at the end; we are only at the beginning of this conflict. They have started the conflict, and one cannot tell what form it will take before it is finished. We are told that there should be no interference with the internal affairs of Egypt. The interference has been incessant. There has been interference at every point, and in a manner calculated to promote strife, to foment strife and to protract strife, and the result is that, needlessly and wantonly, Egypt has been cast into confusion and disorder. The Prime Minister and his colleagues have found that it is impossible to disentangle Great Britain from Egyptian affairs. You cannot withdraw to the Canal and to the Sudan, and shrug your shoulders and allow matters to take what course they will in the intervening areas. You cannot possibly do it. British influence must be used to guide and aid Egypt. His Majesty's Government have been forced to interfere. Why have they been forced to interfere? Just because their influence has fallen so low. They have lowered the influence of their representatives in Egypt, and they have lowered the influence which this Parliament, by a consistent policy, has exercised over Egypt, to a point to which it has never fallen since we were concerned with the affairs of that country.

When influence is gone interference emerges—naked, blind and crude. Interference in the shape of the movements of ships and the influence of troops is what the Government have been forced to rely upon. We have to restore British influence. It is a plant of slow growth. It is very difficult to cultivate. You struck it a fatal blow a year ago when, in a rough and almost insulting manner, you struck the High Commissioner from his position—[Laughter.] The hon. Gentleman laughs, but we are paying for it. It may be laughable to the hon. Gentleman, but we and all those who are living in Egypt are paying the price of this action. Six hundred casualties in a fortnight, volleys of musketry firing into the crowd and bullets piercing one human body after another are not things to laugh at. We may be wrong in our view of the remedy, and the Government of course may be right, but, at any rate, these are matters which Parliament ought to discuss. I am no party with those who say that the House of Commons should not discuss these grave matters affecting the oriental interests and policies of the Crown. We have to restore our influence, and to use an influence weighty, because it is not unsupported; an influence discreet, because it deals with matters in the early stages; an influence faithful, because it has no other object but the well-being and tranquillity of the country.

We have to restore that influence so that we can make one side concede and another forbear. We have to try to recreate the conditions which were so laboriously and slowly gathered together in the four years preceding the change of Government, and which were so wantonly squandered on the morrow of the accession to power of the party opposite. It is no use waiting until life has been lost and until foreign residents are in danger and appeal for help to their Governments, and when the British Government come in with force of arms, as they have been forced to do on this occasion. It is no use doing that. In our relations with Egypt we must try and make a good job of it, and make things work out well for the general interest of the country, and we must work behind the scenes with all the influence we can towards the achievement of such ends. We must pursue our policy so as to bend the boughs while they are still twigs. All that has been cast aside. We are now back to 1922. The 1922 Declaration specifically provides for the welfare of Egypt, that is to say, of its people, being one of the first steps we must take into consideration. We cannot divest ourselves of the care for the welfare of the population.

We hold no brief for any party in Egypt, and it would be a pity if British parties were to ally themselves in such a way, but we have enduring obligations to secure that good and peaceful conditions of life and labour should come to the peasantry in whose interests we were originally drawn into the country—[Laughter.] Everything that Great Britain has done is a source of scorn and mockery to a certain class of citizens, but they, in turn, are held in well-deserved contempt by the overwhelming majority of the people of this country. We cannot lose confidence in our mission, either in Egypt or elsewhere in the East, to serve faithfully the interests of the mass of the population; and far better should we concentrate our attention on that than be drawn into these intricate politics and intrigues with the politically minded section of the community. The Government's policy, judged by its results, has made Egypt a worse place for every class and every race to live in than it was this time last year. They have inflamed all passions. They have complicated every difficulty. They have armed every hatred, and they leave us with a future of weakness and embarrassment, the end of which no man can foresee.

6.0 p.m.

The PRIME MINISTER

I have listened for half an hour or thereabouts to the most highly coloured and inaccurate chapter in history to which a Front Bench politician has ever given voice. The right hon. Gentleman knows perfectly well that during the period of peace and tranquillity to which he referred Parliamentary institutions in Egypt were suspended. He has forgotten that he and his own Government gave instructions—at least they were not instructions, but advice: we never gave instructions either—of precisely the same character in 1926 that we gave in 1929. Because we gave that advice in 1929 he wishes to put at our door all the untoward events that have since happened in Egypt. In 1926 Lord Lloyd, seeing the impossibility of carrying on longer without a restoration of the Parliamentary régime, which had been suspended in 1924, proposed to advise the Egyptian Government to conduct elec- tions on the present electoral law, the law which the right hon. Gentleman has attempted to hold up to scorn, that is, universal manhood suffrage, and his proposal was approved by the then Government, What is the good of this sort of debating talent being wasted on the most futile display of harmless fireworks? Egypt is a problem, and nobody ought to know it better than those who preceded us. When the right hon. Gentleman comes down to the situation to-day he is no better on his facts. We saw a lurid picture of Cairo empty of troops five years after the Treaty had been ratified. The right hon. Gentleman has apparently forgotten two very important things. First of all, he has forgotten that it was not British troops which were employed in Egypt the other day. I say the right hon. Gentleman has apparently forgotten that, for his arguments amounted to nothing if he had not forgotten it.

Mr. CHURCHILL

I stated clearly that they had been strictly confined to barracks.

The PRIME MINISTER

Then what is the meaning of that? The situation is handled in Cairo, and in Alexandria by troops. The right hon. Gentleman says that if the Treaty had been put into operation, or, at least, five years after it had been put into operation, there would have been no troops there; but, as a matter of fact, the troops themselves were not affected by any provision of the Treaty. That is the first point. The second point is that the British troops now in Cairo were confined to barracks. He said so. As a matter of fact, the occupation of Cairo, so far as the events of the last few days were concerned, had no effect on the methods by which the riots were put down. But that is not the whole story. The British troops were confined to barracks in Cairo, and, therefore, the barracks in Cairo were not in action; but, if the Treaty had been put into operation, within five years after its ratification, according to the provisions of the Treaty, those barracks would have been used by Egyptian troops. If barracks tenanted by troops in Cairo are essential to the maintenance of law and order in Egypt the Treaty makes better provision for the maintenance of law and order by the use of barracks in Cairo than the right hon. Gentleman himself provided in his time. You cannot have it both ways.

Mr. CHURCHILL

You cannot have it that way.

The PRIME MINISTER

The fact of the matter is that all this talk about British troops being necessary in Cairo in order to maintain law and order in Egypt has again and again been proved, and never more effectively than by recent events, to be a mere fiction—[HON. MEMBERS: "Oh!"]—a mere fiction of a rather swollen Imperialistic imagination.

Mr. HORE-BELISHA

Why have you sent warships there?

The PRIME MINISTER

In the ordinary way when one hare is run down somebody tries to jump another one, and—but there is one point I cannot leave over, the great turning point in the history of the relations between Egypt and ourselves. The right hon. Gentleman says that when Mahmud was here never a word was uttered about a Parliamentary regime, that we never said a word to him that the existing system of autocracy was not a sufficiently broad foundation for a Treaty between Egypt and ourselves. Who told the right hon. Gentleman that? That is not the case. He says that Mahmud never had that whispered in his ear until he got to Paris. That is not the case. Mahmud and everybody concerned knew perfectly well that when a Treaty between Egypt and Great Britain is to be made, taking out the four reserved points, that Treaty cannot be delivered except by a Government that has got at any rate a very large measure of support in Egypt. I again refer to the fact that in 1926 the Government of which the right hon. Gentleman was a member recognised that fact. If he now wishes to argue that in the transition stage between autocracy and Parliamentary Government we shall run the risk of unsettling the tranquility of autocracy, which he apparently imagines ought to remain permanently in Egypt, I say we must even face that risk, if the relations between Egypt and ourselves are to be placed on the foundation that we have again and again pledged ourselves to put them upon.

The fact of the matter is that these events did not arise out of the circumstances to which the right hon. Gentleman refers—that is, the events of the last few days. They arose out of circumstances which we prefer to regard, and which I think we are perfectly right in regarding, as arising out of the internal affairs of Egypt. We are not entitled to carry out the policy which the right hon. Gentleman says we ought to. In one of his sentences he said that our mission was to go up the Nile Valley to protect the fellaheen. What becomes of all the bargains we have made with Egypt, and all the declarations that Egypt was a self-governing and independent country? Is that reserved in one of the four points? Will the right hon. Gentleman, with all his imaginative ingenuity, squeeze that responsibility into any one of the four points? He cannot. He knows perfectly well that if the fellaheen in the Nile Valley are to be protected it is their own Government which will protect them, and if their own Government fails to protect them they will have to bear exactly the same responsibility as the electors of this country would have to bear in the same position.

Our mission in Egypt is confined now—not by us, but I think is rightly confined—to the safeguarding of four specific points, and one of those points is our responsibility for foreign life and property in Egypt. To refuse to accept that responsibility would be criminal folly. The right hon. Gentleman referred to something else which is quite inaccurate. He told us that we had had representations, official representations, that there has been a great feeling of unsettlement among foreign nations over what has happened. He has been absolutely misinformed. No such thing has taken place.

Mr. CHURCHILL

I never said "official representation."

The PRIME MINISTER

Really—

Mr. CHURCHILL

The right hon. Gentleman very ingeniously restates his propositions in a form which leads them further away from their original intentions every time. I never said that the Government had had official representations. What I said was that there had been bitter complaints by the foreign community in Egypt, and that the foreign newspapers in almost every country concerned had been very scathing in their comments—or something like that.

The PRIME MINISTER

I think the right hon. Gentleman should be very sparing in any authority which he places in those. Would he be very much surprised if many of these attacks were rather less concerned with matters arising out of Egypt and were made in order to weaken—made in the ordinary sort of way which nobody complains of, but which everybody understands, and therefore gives them their proper value—were made, not for the purpose of making legitimate complaints, but just for the purpose of weakening the prestige and authority of this country wherever it finds itself mixed up with occurrences like those we have here? First of all, the official complaints never raised the point at all—beyond just the recognition of the fact that disturbances had taken place, and nothing more; one of the purely formal, proper diplomatic forms, without making complaints of any kind whatever. So far as complaints from communities are concerned—I suppose the right hon. Gentleman means the Egyptian communities—so far as I know, and I have asked, we know nothing whatever about them.

What happened was this. There were riots, there were disturbances. There was talk that a new constitution was to be promulgated. There were difficulties in the way, purely internal Egyptian difficulties. As the result of those internal evolutions disturbances happened, very serious disturbances. One of our responsibilities under the four reserved points is that we must see to it that foreign life and property are protected. Now there is room for difference as to how that responsibility is to be exercised. The hon. Member for Devonport (Mr. Hore-Belisha) raised his new hare about the warships. It was in accordance with that responsibility that warships were asked to go to Alexandria to stand by, and that will be done again and again whenever the circumstances may necessitate and so long as there is no agreement on that particular reserved point. I am glad to say that owing to the state of affairs in Egypt to-day the warships have found it possible to leave.

What have we done to remind Egypt both of our interest and of our neutrality? We told Mahmud last year exactly the same thing as the Government of 1926 decided should be communicated to the responsible members of the Egyptian Government. Our circumstances were slightly different, because the draft Treaty came in, but we told him that in our view an attempt made to get sanction for an agreement, such as developed later into the Treaty, after an election which was conducted on a constitution and a franchise Which were narrower and less liberal than the constitution which then existed, would be a great blunder. We never asked that a change of constitution should take place. We never interfered with this franchise, which the right hon. Gentleman makes so light of, because it happens to be manhood franchise. We simply said if you had any chance of getting an agreement between Egypt and ourselves, our judgment leads us to this conclusion that that attempt that you are going to make ought not to be preceded by an attempt to cook your registers, to narrow your franchise, and give every one of your political opponents a chance of saying, and acting if they came into power, that this agreement, as a matter of fact, was effected behind the backs of the Egyptian people, and that the Egyptian people were in no way responsible for carrying it out. That is the advice given to Mahmud which the right hon. Gentleman says was the turning point of British policy. I will repeat it again and again should the circumstances arise.

What have we done in regard to our interests and our neutrality? We have said that if there is an attempt to change the constitution as it now exists we ought not to be used as tools for the alteration of the constitution, and that it is not to be given out that it is done with our consent, our connivance, or with our approving knowledge. We have said it is purely an Egyptian question. It belongs to that field of Egyptian political activities where the Egyptians rule without interference by us; it is their own affair, and they can do what they like. We have warned them in this connection that if in the change of the constitution the conditions of law and order should so deteriorate in Egypt that foreign life and property would be put into jeopardy then our responsibility under that reserved subject would be taken up by us, and we should have to interfere. That is the position.

Mr. CHURCHILL

Interfere in the matter of keeping law and order, or interfere in the guidance of policy?

The PRIME MINISTER

Interfere in the matter of keeping law and order. That is very important, and I am exceedingly obliged to the right hon. Gentleman. No sooner were the words out of my mouth than I saw I might be held to have said something which was never in my mind when I uttered the words. It is one of the great difficulties that one has to face, especially in a foreign debate, unless one has written out every word of the speech. Unfortunately I have not had time to do it. It is a very great danger that one standing as I do now runs in all these foreign debates, especially when they are more or less informal. We are blamed for having warned Nahas Pasha as well as the responsible Government. Sometimes the very narrow strip of legal interpretation of an obligation may save you from censure of a legalistic character, and land you in very serious trouble in reality, and what our advisers and the Government felt was that this was no case for red tape.

What is the situation? Now the Opposition agitating against the present Government is in fact the majority. If Parliament were sitting it would be the ruling authority in Parliament. It is embarking upon a political agitation (I say political, now, at any rate advisedly), designedly or undesignedly—God forbid that I should say—I am an objective spectator—the result of which has been the events of the last week or so. Is it desirable, is it wise, is it the right thing to be so objective that that political machinery will be allowed to work and work, and produce perhaps event after event which will involve us on account of this obligation to which I have referred without saying to the political party responsible, "You must share your responsibilities" if the results are such as may happen, and which as a matter of fact have happened? There we left it. I believe it was a very wise decision to take, although, on strictly legalistic lines, it may have somewhat exceeded the letter of the law or the letter of the bond.

Therefore our position is that Egypt is free to govern itself within the limitations of the four reservations. Within those limitations, and as long as those reservations are not brought into question, we have no business to interfere with Egyptian affairs. We have offered a fair chance for a settlement of those reservations. There is an Egyptian agreement in existence which was negotiated and by that we stand. There is one outstanding point. By that we stand. As soon as Egypt is prepared to come to an agreement with us upon those lines, we are ready to effect it.

Mr. LLOYD GEORGE

Perhaps I may be allowed to express my regret, and the regret of all Members of this House, that owing to ill-health the Foreign Secretary is unable to take part in this debate. Nevertheless we are very glad that the Prime Minister has taken part in this very important discussion. It is very difficult to conduct a discussion of this kind without the danger of something being said that might be mischievous under the state of things which now exists in Egypt. I was glad to hear the statement of the Prime Minister that the Government were fully alive to their responsibilities under the reservations of the treaty to protect the lives and property not merely of our own nationals, but of the nationals of other countries under the Declaration of 1922.

This is very vital, because there is no doubt that unless that duty is discharged, and discharged effectively, there are countries that will see that their nationals are not massacred, and that might not only endanger the independence of Egypt but mean the substitution of the Government of another country. Therefore, it was very important, from the point of view of our own nationals, and from the point of view of our position in Egypt and the whole of the East, that the Prime Minister and the Foreign Secretary acted very promptly in ordering warships to Egypt. It was found to be unnecessary to call our troops out. The Prime Minister is very sanguine that it will not be necessary, and I hope he is right in that respect. I would like to point out that the policy which would justify the Government in using warships for the protection of life and property is also a policy that would justify them in using troops, if it were necessary, and if the Egyptian Government found itself unable to cope with the difficulties.

There is one point which I would like to make. The Prime Minister was very clear in his statement that we ought not to interfere in the internal affairs of Egypt. I am not quite so sure that some of the declarations which the Prime Minister has made will not land him in interference. The statement which the right hon. Gentleman made the other day was, in my judgment, a very serious interference with the internal rights of the Egyptians. After all, the kind of franchise, and the basis on which you elect your Parliament, is one of the primary rights of any country. I do not agree with what was said in 1926. I think it is a great mistake for us to use what power we have in a way which would increase the rivalry between the two parties in Egypt. We must not give the impression that we are taking sides upon the question of the franchise, or upon the question of how you should elect the Parliament of Egypt. It must not be forgotten that, after all, Egypt is not accustomed to Parliamentary government, and it is not accustomed to democracy. Egypt does not understand democracy; it has taken this country hundreds of years to understand it.

In 1870 we had universal education, but it was 50 years after that that universal suffrage was granted to the people of this country. In Egypt you have a peasantry of which quite 95 per cent. are illiterate. They are not merely illiterate, but they have not had the sort of practice which our own people have had in local self-government, where we choose freely our local governors, and as far as the Central Government of Egypt is concerned, they have not consulted the people for thousands of years. It is no use applying our ideas in Egypt without our experience. I do not want to make any charge of corruption against any party in Egypt, but there is no doubt that the fellaheen do not exercise the franchise as freely as we do in this country. The local bureaucracy there is not an independent bureaucracy, but a political one. It is appointed by political parties, and it is dismissed by political parties. The fellaheen are very much under the domination of the officials there, and those officials undoubtedly exercise their power and authority to, I will riot say compel, but to guide—I do not like to use the word "herd"—the fellaheen to the poll. It is no use saying that you are getting at the mind of the Egyptian peasant. After all, you do get at the mind of this country more or less in an election. A Government is either popular or unpopular. Opinion sways this way and that way, for reasons which have sometimes appeared to us to be very inadequate. [Interruption.] They may be quite reasonable, but they are reasons that dominate the individual. They do not merely dominate the group, but they dominate the individual, and, if you talk to him, you will find what is influencing him. That is not the case in Egypt; they are just marched to the poll, and you are not getting representation.

There is trouble in Egypt. I think it will emerge all right, but 1 do hope we are not going to interfere unless there is danger to the lives and property of foreigners and of our own nationals. I think that that is very important. I had the pleasure of meeting Mahmoud Pasha when he was here. I thought he was a man of singular ability and great independence. I also had the privilege of meeting at the Foreign Office, when the Prime Minister also was there, the late leaders. They seemed to me to be very able men, and they belonged to the most honoured profession in the world, that is to say, the legal profession. I am told, also, that the present ruler of Egypt is a singularly able man, and it must not be imagined that he is merely a man of autocratic ideas. I am not an apologist of him at all; I have simply been making some inquiries. As a matter of fact, he was a follower of Zaghloul; he was one of the men who went into exile with Zaghloul; but he is clearly not an autocrat; he is probably a nationalist.

That is their business, and I hope we shall not interfere with responsible Egyptians thinking oat their own problems of Government for themselves. We more or less indicated to them, "Here you have the most perfect system in the world, universal suffrage. We not merely mean to confer the blessings of universal suffrage upon you, but we mean to insist that you shall take it"; and, although the right hon. Gentleman said that he had been giving advice, in substance it was an indication to Mahmoud Pasha that the terms of the Treaty very largely depended, or rather, the attitude of the Government depended, upon his acceptance of universal suffrage. I think that that is a mistaken attitude in a case of this kind. It goes rather far. I do not know to what extent we have a right to force western ideas of democracy and Government upon the East. It is very much older than Europe, and the biggest ideas in the world have come from the East. There is a great deal in what the Easterner thinks about the occidental, namely, that, although we are wise in practical affairs, the deepest things of life he understands better than we do. We say to him, "We are so much wiser than you, although we are much younger in experience of Government, and, therefore, you must take our ideas of Government." That seems to me to be a vice which is extending. I would put this to the Prime Minister, because, although he did not say to-day that he is going, not to impose universal suffrage upon them—because he certainly would not do that—but that he is going to impress it upon them, what he did say, I think, was that, if he thought that the denial of universal suffrage is going to interfere with law and order, then, under Reservation (1), he would interfere. I think that that is rather—

The PRIME MINISTER

I should have let that go if it were merely for this country, but I do not like it to go to Egypt. I did not mean that at all. I am not going to lay down a formula, I am not going to lay clown a rule, but what I did say was this, that if, in a given set of circumstances, we were advised, and were convinced that our advice was sound, that a great political change—I am not imposing anything, but, if any great political change were going to be made, in those circumstances the Government, whatever Government was in power, would be perfectly right in saving "We are sure that our responsibilities for foreign life and property will have to be undertaken at once." That is what we did, and in that spirit we did it, and in that method of handling affairs. Beyond that I am not going to say I shall go at the present moment.

Mr. LLOYD GEORGE

If the Prime Minister is satisfied with just that sentence, then it might not be very mischievous, but I think there is an indication that the British Government, while the Egyptians are trying in their own way, which is the oriental way, to solve their own difficulties, not necessarily by Parliamentary means, but by means which they understand probably very much better, may intervene and say, "We disapprove of what you are doing, and we do so because we are responsible for law and order." I hope that we shall allow them, I will not say to fight it out, but to work out their salvation in their own way. The responsible leaders of opinion in Egypt are thinking out their problems. They are not necessarily the leaders of one party or another, and I think that, if they are left alone, always provided that there is no peril which will compel us to intervene, it will be very much better. At any rate, however, it is a salutary warning to us, when we come to deal with a population which is oriental, of the perils which are involved in forcing western institutions upon a people who are quite unaccustomed to them, who do not even comprehend them, but who have deeply rooted in their hearts, through the tradition of centuries, another method of government. When you put a Parliamentary institution upon them, it will really be not Parliamentary, but will be the substitution of one autocracy for another.

Mr. MILLS

Have they not had four elections already?

Mr. LLOYD GEORGE

I know, and this is the present condition of things.

Mr. THURTLE

There is a breach of Parliamentary control now.

Mr. LLOYD GEORGE

I do not know; I do not want to argue that, because it would look as if I were interfering in the quarrel. At any rate, they have gone so far as to suspend the meeting of Parliament for three months. After all, Nahas Pasha was not dismissed; he himself went, very likely because he had difficulties which he would rather leave other people to deal with. At any rate, the only plea that I want to put is that the Government here shall not seek, either directly or indirectly, to impose a basis of election upon the Egyptian people which their wisest leaders in their hearts believe is thoroughly inapplicable to them.

Mr. NOEL BAKER

The debate this afternoon, like several debates in recent times, has shown us that the right hon. Gentleman the Member for Epping (Mr. Churchill) has become in some sense the Leader, and certainly the spokesman, of his party in questions that relate to international affairs. It has also shown that there is a profound divergence between the policy which the right hon. Gentleman advocates and the policy which is being pursued to-day, and which has been pursued in recent times—indeed, ever since the War—by His Majesty's Government in this country. We heard in the Disarmament debate that the right hon. Gentleman was opposed to the policy of reduction by agreement, which every Government in this country has professedly pursued. We hear this afternoon that he differs from the whole of the policy of 1922, the policy of real Egyptian independence and the settlement of outstanding points by agreement, to which not only our Government, but the Government of which he himself was a member, has been committed.

We are prepared to admit that that is not a difference of purpose, but a difference of method. We are prepared to recognise that the purpose of the right lion. Gentleman, and of all those in his party on the other side of the House, is really the same as ours—that they are not guilty of what we call Imperialism in any sinister significance of the word, but that we are all agreed on the main objective that we have in view, namely, a prosperous and well-governed Egypt, in which the interests of foreigners shall be secure, in which Egypt shall be safe from invasion, in which there shall be created an efficient Egyptian administration, manned, guided and controlled by Egyptians representing and acting for the Egyptian nation as a whole. I hope, therefore, that hon. Members opposite will believe that I, for one, have no desire to accuse them of any jingoistic wish to keep Egyptians in subjection, or wave the British flag on foreign soil; but there is, in regard to that common object, a profound difference of opinion as to how it should be achieved.

Lord Grey, I think, said a little while ago that there were being pursued with regard to Egypt two particular policies, the policy of Lord Lloyd and the policy which His Majesty's Government up to the present time have adopted; and he said that those two policies are not only fundamentally different, but are mutually exclusive, that we must choose between them, and that there is no compromise that can be made between them. The policy which the Prime Minister has explained this afternoon, and which the Secretary of State for Foreign Affairs has explained very frequently in recent times, is, in the first place, the policy of 1922, of accepting, not in form but as a reality, the independence of the Egyptian nation as a member of the society of States; and, secondly, and as a necessary consequence of that acceptance of Egyptian independence, what Lord Grey called a clean sweep in internal interference in Egyptian information, and absolute neutrality in Egyptian politics. With great deference to the right hon. Gentlemen who have spoken from the other side, I maintain that it is that clean sweep in regard to interference, that absolute neutrality in Egyptian politics, which the Government up to the present time have pursued, and, so far, that second point in the policy has been universally accepted. Lord Curzon said in 1924 that it was a commonplace which we could accept; Lord Grey said not long ago that the whole purport of the Declaration of 1922 was to give up our rights to interfere in the internal affairs of Egypt. It seems to me, therefore, a necessary consequence of the acceptance of Egyptian independence, and a consequence which is not only in our interests but in the interests of Egypt as well.

The third point in that policy, and one which is equally an essential consequence of the acceptance of Egyptian independence, is the settlement by agreement of the four outstanding points, the protection of foreigners, the defence of the Canal, the Sudan, and the protection of Egypt from foreign invasion. That is an essential consequence because, in the first place, in the declaration of 1922 we made as solemn a pledge as it is possible for any nation to make that the outstanding points would be so settled; and because, in the second place, as history has shown, and as everyone knows, we may be compelled to intervene in Egyptian affairs in such a way that, although we only do so to protect foreign rights and foreign life and property, the effective independence of Egypt will be imperilled. It is the ambiguity of the present situation, the uncertainty, the lack of legal basis for the present position, which is the real cause of the danger in Egypt and the real cause why we may be compelled to intervene in such a way that the independence of Egypt will be imperilled.

That is the first policy. The alternative is the policy that has been stated frequently by Lord Lloyd, which has been stated again to-day by the right hon. Gentleman the Member for Epping (Mr. Churchill), and to which apparently he is now committing the party for which he speaks. It is the policy of not formally repudiating the declaration of independence but of, nevertheless, retaining in our hands effective control over the machinery of Egyptian Government; of being ready to intervene in a decisive manner in Egyptian affairs whenever we think it is necessary to do so; and of making no settlement of those four outstanding points with regard to which there is ambiguity—the retention in our hands, that is to say, not for a short time, but for an indefinite period—the right hon. Gentleman said it quite openly—of absolute power in regard to these four spheres of national government. I hope that is not an unfair summary of the policy for which the right hon. Gentleman the Member for Epping stands.

The first of these policies is the policy which the present Government have sought to pursue, as we think, with vigour but with forbearance. It is the policy which the late Government sought to pursue in their negotiations with the Parliamentary Government of Sarwat Pasha, who was elected on the Parliamentary franchise to which exception has been taken, a policy pursued by them, as we think, spasmodically and with dangerous reservations, but which, nevertheless, in its essential principles is precisely the same as the policy for which the Government now stand. The second policy has been described to us in its actual effect by Lord Lloyd. He told us it means getting effective control of the Egyptian army, effective control of the Egyptian police, maintaining the so-called European bureau. I am convinced that on Lord Lloyd's conditions it would in all probability be impossible to settle by agreement the outstanding four points. If this were so, we should remain without any agreed legal basis for the protection of foreigners, which is so important. That would mean inevitably that we must be prepared at any moment to intervene in Egyptian affairs, exactly as Lord Lloyd himself intervened when he prevented Zaghloul Pasha from becoming Prime Minister in 1926. It means in addition, as Lord Lloyd and the right hon. Gentleman have said, intervening to protect the fellaheen from exploitation. That was not the policy of the late Government. It is the policy of the right hon. Gentleman for Epping as stated today. I thought he stated it with great moderation and great clarity. He said definitely that he wanted the British Government to prevent the fellaheen from becoming slaves in the future. He said he wanted us to help to restrict the Egyptian suffrage, to protect the fellaheen by taking their vote and establishing a plutocracy. With great deference to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), the whole of his argument was simply that.

I do not believe that any case can be made against the Government that they have intervened over the suffrage, but if we are discussing the merits of the franchise as it exists to-day, I should like to call into question some of the arguments that have been used on the other side. When did this country ever deny to illiterates the right to vote? I have seen elections in countries where there is a very high percentage of illiterates on the roll. I have seen those elections held in such a way that there is no doubt that the ballot was secret and that they gave a reasonably satisfactory democratic verdict as the result of the poll that was taken. The right hon. Gentleman wants us—in his speech he made it quite plain—not only to intervene in Egyptian politics, but he wants us never to settle the questions that are outstanding between our nation and the Egyptian people. That is the inevitable conclusion of the argument that he used, because he said it would always be impossible, in his opinion, for us to reach agreement with the Egyptian representatives in regard to the Sudan and, therefore, it was a mistake ever to try, ever to start negotiations with people with whom we should not be able to agree. I call that policy, for which the right hon. Gentleman spoke, a policy of Crown colony government. I know quite well that hon. Members opposite sincerely believe that it is the right way to carry to its proper conclusion the work which Lord Cromer so admirably began. I am the last person in the world to deny the benefits that Lord Cromer brought to Egypt. Lord Cromer created that prosperous nation which now desires to be free. But although hon. Members opposite believe honestly that all they desire is to carry out Lord Cromer's policy as he began it, in fact their policy is not Cromerism; and certainly it is not practical politics. It is not in the spirit of the policy of Lord Cromer.

What was the policy of Lord Cromer? From first to last it was a policy of governing Egypt with the co-operation of the Egyptians. From the very beginning, the whole system was designed to train the Egyptians for governing themselves, to bring them into the machinery of administration as fast and as widely as he could. Let us remember that, after all, we did not create the Egyptian Government as we created the Government, let us say, of India or the Sudan. It was created half a century before we went there. We did not desire that our occupation should be permanent. We remember very well Lord Salisbury's protest against acting as bailiff for the bond-holders. We know that Gladstone offered to come out in 1887. We know Lord Cromer's methods. He never governed through British officials acting as a governmental authority. The British officials were advisers to the Egyptians. We know, too, that Sir William Hayter, a distinguished legal adviser to the Egyptian Government has stated that before the War great changes were taking place and that Egyptians, such as Zaghloul, whom Lord Cromer made Minister of Education, were exercising great practical control in their country's affairs. We remember very well that Lord Kitchener accelerated the process of change by creating the Legislative Assembly and, if he had had his way, he would have done what he could to abolish the institution of European advisers.

I want to submit to hon. Members opposite that the whole of that policy depended upon securing the willing cooperation of those Egyptians who were able to speak for the nation and that, therefore, this policy which is advocated from the Opposition benches is not Cromerism, but is in contradiction to the very spirit for which Lord Cromer stood.

I want to submit also that it is literally impossible in present conditions to carry through. There is a great new fact in world affairs which we sometimes think hon. Members opposite are liable to forget, and that is the nationalism of the Eastern nations which we in Europe have done so much to create. Even the leader of the Liberal party seemed not to appreciate that nationalism in Egypt is a real force that goes right down to the very root of the nation and moves the simplest peasant, and that the secret of the power of the nationalist party lies just there, that there is a passionate desire on the part of every Egyptian citizen, however humble, to be a member of an independent and self-governing nation. Even before the War, nationalism in Egypt existed. It was the very glory of our British system that we had been able in so short a time to create a nation that wanted to be free. The War had enormously strengthened that movement. In that War we were fighting for the weaker nations. We were fighting to make the world safe for democracy, to protect nations whose integrity had been violated in contravention of international law. We were fighting to break up the Imperialist Empires of the world in Europe and elsewhere. We were fighting for the 14 points and, in so doing, we brought in millions of Orientals who fought on our side, including 1,000,000 of the Egyptian nation.

We not only smashed the prestige of Europe in the rest of the world among what we used to call the subject peoples, but we created this new force of nationalism with the tremendous power that it now wields. These nationalists believe we are pledged to carry out this policy of independence and negotiation. They have not only the pledge of the 14 points and the pledge of the Milner report. We remember very well that, although the Cabinet here turned down the Milner report, Lord Allenby always insisted that it must be taken as a binding offer to the Egyptian people. But we have also the actual pledge of the declaration of 1922 itself. There the thing is crystal clear: The British Protectorate over Egypt is terminated and Egypt is declared to be an independent sovereign State. 7.0 p.m.

We must allow words to have their meaning, but he went on to say that the four reserved points were only reserved until such time as it might be possible by free discussion and friendly accommodation to conclude agreements in regard thereto. Can we be surprised if a nation which has suffered as the Egyptian nation suffered in the War and passed through such events as took place in 1921 should regard that as binding? If we tried to call it in question we should be doing much to sacrifice the good will which we have gained. It was Lord Curzon who said in 1923, speaking to the Imperial Conference, that the British Government had done everything in their power to encourage the belief throughout the world that this country was never untrue to its word. He said that was the basis of our moral authority, a moral authority which the British Empire had long exerted and would long continue to exert in the affairs of mankind.

I submit also that the events for the last 10 years prove overwhelmingly that no other policy than this policy of independent negotiation has any chance of direct success. We only once came within measurable distance of the Crown Colony government which hon. Members opposite are now reviving, and that was in 1919. But that led to the terrible explosion which took place in Egypt. Lord Curzon said at that time that if the policy of settlement was refused it would lead to disaster, and that explosion which took place was the inevitable result of the rejection of a policy for which he stood. At every stage in the last 10 years the policy of force has proved to be wholly futile to solve the Egyptian problem or even to achieve the purpose for which it was intended. In 1919–22 we had absolute control, we had a Protectorate, we had a great occupying force, we had martial law, and it was in that period that the great campaign of murder of British citizens took place.

I submit, on the other hand, not only that that policy is bound to fail, but also that the other policy has been proved by history to have been a success. Take, for example, the Milner report, of which the right hon. Gentleman the Member for St. Marylebone (Sir R. Rodd) was so distinguished an author. We know that was not accepted by either side, and yet we know that the mere fact of the publication of the Milner report did a great deal to bring about pacification in Egypt, where formerly chaos and disorder had existed. We know that the Declaration of 1922 was not accepted by some of the Egyptian people, and yet it established the Egyptian Government. If we come to the present day we know that the recent Treaty negotiations have not yet reached agreement, although we believe they will. But they have led to an immense improvement in the relations between the Egyptians and the British people, and that is the reason why, in the recent crisis, there has been no anxiety in regard to the safety of foreigners in Egypt. We believe that our policy works, and has been proved to work, because it takes into account and works through the passionate nationalism of the Egyptian people, and because it honours the pledges which we have made. We believe that the policy of the Front Opposition Bench must fail because it flouts the nationalism of the Egyptian people and dishonours the pledges to which we have put our hands.

I recognise that it is very natural for some people to have doubts. No doubt foreign communities who lived through the events of 1921 have doubts to-day. But so did the foreign community of the British Concession in Hankow in 1926, and yet the right hon. Gentleman the Member for West Birmingham (Sir Austen Chamberlain) had the courage, in spite of opposition from the British community there, to make a Treaty with regard to Hankow and to give up the British Concession, with the result that to-day the foreign population of Hankow is as safe and as happy and prosperous as it has ever been, and, instead of having a Russian adviser with a Nationalist Government, we have a British adviser and a friendly White Government. Of course there are risks in our policy. There are always risks inherent in the introduction of democracy among an illiterate Oriental people. We do not deny it, but we have seen that process carried through in a number of cases. We have seen Greece, Bulgaria, Serbia, and others grow up into strong and free Republics, and I beg hon. Members opposite, and I beg this Committee to consider that this is not a question in which we can just acquiesce and take no risks.

There are always risks in everything you do in regard to public affairs. The difficulty of the Conservative party at the last Election was that there is no such thing as "Safety First." It is always a choice. We know the risks of their policy. Do they dispute that they have risks? We know those risks. We have seen the condition of Egypt in 1921, and the Milner Report describes those risks to us, and we know that Lord Curzon, when his Cabinet rejected his proposals, said they would make of Egypt another Ireland. Since we have to choose between the risks I prefer the risk of a policy founded on agreement, on trust and on mutual understanding, and we on this side choose it with confidence, because we know that those are the great creative forces in the world to-day.

Sir RENNELL ROOD

I will endeavour not to detain the Committee very long, but there are really three points on which I would like to speak to-night. I regret that any special direction should have been given or any restriction placed on the discussion on the Vote for the Foreign Office because we so seldom have the opportunity of voicing certain ideas which I think ought to be put before the Committee. I am, however, very glad that the question of Egypt is among those matters on which I can speak tonight, because I have long waited for an opportunity to draw attention to a point of considerable importance. I sought to do so during the discussion on the Optional Clause, but I failed to find an opportunity. During the debate on the Adjournment of the House last December, the question of the bearing of the Optional Clause on the Egyptian issue was raised by one or two speakers, but it was really raised rather in a general sense, and no reference was made to the reservations which, to my mind, are really, so far as Egypt is concerned, a serious consideration in this question. Even the bearing of the Optional Clause on the Egyptian situation did not lead to a very satisfactory answer. The point is rather a close and difficult one to follow, but I should be very glad if I might have the attention of the Committee for a few moments.

It will be within the knowledge of the Committee that when the Declaration of 1922 regarding the future status of Egypt was made, Notes were at the same time despatched to foreign Powers which made it perfectly clear to them that we should consider any foreign intervention in the Egyptian question as unfriendly acts. That was tantamount to publicly announcing that until certain conditions which had been put forward to the Egyptian Government had been fulfilled, and while we were still in military occupation of the country, we considered the question of Egypt to be a domestic question. In the case of the Optional Clause of the Covenant, His Majesty's Government were no doubt perfectly right in reserving questions of an internal and domestic nature, but unfortunately an addition is made to these reservations. It in fact reserves disputes with regard to questions which, by international law, fall exclusively within the jurisdiction of the United Kingdom. I shall no doubt be told that this phraseology is derived from the Covenant of the League of Nations itself. That is quite true, but as it is used in the Covenant it has rather a descriptive than a precise or a restricting value. The addition of the words "by international law" appear to my mind not only to vitiate the value of the reservation but to constitute a serious diminution of sovereignty, inasmuch as the decision to decide what is a domestic and internal question is thereby taken out of our hands.

What is international law, and how far has international law led us to determine what does or does not fall within the jurisdiction of a particular State? The sanction of international law has hitherto been the extent to which its principles are generally accepted by the Society of Nations, but it must be remembered that, with the establishment of the Permanent Court of International Justice, international law will now have a new sanction in decisions given by that Court, and that to all who have adhered to it the Permanent Court will in future make international law. That is not merely an opinion of my own. Let me quote one of the most eminent living authorities in international law, the Registrar of that Permanent Court, the celebrated Swedish international lawyer, Mr. Ake Hammerskjold, who, in a recent lecture given to the International Institute of Foreign Affairs, said: Acceptance of the Optional Clause. … means at any rate, acceptance of the obligation to appear before the Court, upon arraignment by another State, in order to answer, if not on the merits, at least as to the existence of reservations applicable in particular cases; and to acquiesce in the award rendered by the Court, firstly on this point, and secondly, should the Court overrule the plea to the jurisdiction based on the reservation, on the merits of the dispute also. I raise this question particularly in relation to Egypt, because its bearing is extremely important, and it has a very much wider, and more far-reaching bearing also. I am not for a moment imputing to the Government or the Secretary of State for Foreign Affairs a double dose of original sin for having landed us in this very unfortunate position. But I do suggest that, to satisfy a sentimental opinion in this country in favour of the Optional Clause, the right hon. Gentleman has not given sufficient consideration to all the implications of the reservation. By signing the Optional Clause with a reservation couched in these terms, we are henceforth deprived of the exclusive right of determining for ourselves what is or is not an internal or domestic issue, and we have turned that decision over to the International Court.

That is one point which I wish to raise to-day, and if the Committee will bear with me for a moment, I would like to turn now to the actual position in Egypt. The view of hon. Members on both sides have been pretty freely ventilated on former occasions, and the fact that the subject has been selected for discussion at the present moment appears to me to show that it has been raised with the idea of drawing attention to the more recent actions of the Secretary of State for Foreign Affairs who, for reasons that we all very much regret, is unable to be here to-day to justify or defend his policy.

I certainly see points for question and for criticism, but I shall endeavour to put them with great moderation, because I realise that when internal questions arise in a country whose independence we fully recognise things may be said in this House which may only render far more difficult the position of the men who are trying to preserve order in an extremely difficult and complicated situation. The attitude which His Majesty's Government claim to have adopted in this matter is one of non-intervention and impartiality in the internal affairs which must be settled by the Egyptians themselves. So far so good. What we have to consider, in reviewing the action of the Government, is how far have they acted, and are they acting, with strict impartiality?

When, a year ago, the terms of the Treaty were being discussed with the then Egyptian Prime Minister, agents of the Egyptian Opposition were very active in London and in continual contact with Members of the Labour Government. These agents appeared, I have reason to know, to be extremely well informed as to the progress of those negotiations, and they certainly did not learn anything about them from the then Egyptian Prime Minister, who, as it is generally understood, was contemplating certain modifications, not in the general system of election in Egypt, but in the distribution of constituencies. That those contacts had their influence appears to be undoubted, and the fact may be presumed from the speech which was delivered by the Under-Secretary of State for Foreign Affairs at Welwyn on 9th August last, in which he announced that the Secretary of State for Foreign Affairs had made it a condition that Parliamentary Government in Egypt which had been destroyed by Lord Lloyd should be restored and moreover that there was to be no change in the electoral system. We are all familiar with what then took place—the resignation of the then Egyptian Prime Minister and the return of the Opposition, always in a majority, to power. What is happening now? There does not seem to have been any difficulty, from the utterances which we have heard in this House, in finding out with which groups in Egypt the sympathies of hon. Gentlemen opposite lie. They are perfectly entitled to their sympathies. It is a very natural thing, and a typically British thing, to be convinced that what is good for us must equally be good for other people. They do not, I am sure, doubt for a moment that our Parliamentary system, the result of many centuries of evolution, shaped by the particular character of the British people, can almost immediately be assimilated without difficulty by an Eastern people without Parliamentary experience and tradition and without any system of controls or sanctions to keep the machine in order.

The simple, illiterate, submissive peasant class in Egypt who comprise the overwhelming mass of the population have always, since the beginning of time, been dominated by a small pre-potent or intelligent minority from the time of the Shepherd Kings to the days of the Khedives and Pashas. Under the long British control in Egypt, many of these old tyrannies disappeared. I am convinced, having lived there for eight years and knowing something about the subject, that if a more satisfactory system of education had been possible, consistent with the race against bankruptcy which was so laboriosuly won, the natural cleverness of the Egyptian people would have been turned to excellent account along sound—by which I mean practical, and certainly not political—lines. As it is, the results accomplished of recent years have been very remarkable, especially in female education, from which I hope great things in Egypt. But with the removal of control and the opportunities which have been offered to a very small group of the intelligentsia in Egypt by the introduction of a full-grown system of Parliamentary Government in a soil which really nobody could think was completely ready to receive it new and perhaps more insidious tyrannies than those which have gone before menace the country.

Any impartial observer in Egypt during the past few years could have no doubt whatever that an Egyptian Tammany has been constituted which has endeavoured to control, and has largely succeeded in controlling at certain times, the administrative machinery of the country and replacing any officials who were not entirely subservient to it by officials of its own. Efforts to introduce legislation which would permanently consolidate the position of a close oligarchy masquerading as democracy has already twice led to conflicts, one of which is acute at the present time, or recently has been acute. I keep in contact with Egypt and I have very good information that this acute conflict is wholly unnecessary. The measures brought into the Egyptian Parliament were not confirmed by the King, but would if reintroduced have come into force automatically in six months. Instead of waiting there was started what, I am sorry to say, has been a very serious and a somewhat bloody conflict in the country. What, in these circumstances, has been the attitude of His Majesty's Government, and how far have their professions of impartiality been carried out? We have seen a note of warning addressed to the present Egyptian Prime Minister, who has been called upon by the King of Egypt to deal with a very critical situation. But we have seen simultaneously a message addressed to the Leader of the Opposition, who seems to have been as pleased to receive it as the Prime Minister was surprised and disconcerted by the note which reached him.

I have my own views upon the matter, but, rightly or wrongly, we have recognised the independence of Egypt, and in those circumstances it seems to be anomalous and also unprecedented that views should be exchanged with, or communications addressed to, any but the Government called into office by the Sovereign of that country. All that I can say is that from my knowledge of Egypt any other course could hardly fail to be interpreted in that country as an indication of sympathy and partiality. Our influence in the East has hitherto been due to our complete single-mindedness and straightforwardness, and any action which can be interpreted there as giving any colour to the slightest suspicion of intrigue will be disastrous to this most valuable asset.

I wish to say a few words regarding the position in Russia. Repeated attempts have been made from this side to elicit information from the Government as to the production of certain commodities in that country by forced or prison labour at prices with which producers in other countries cannot possibly compete. The replies from the Government have not appeared to be very convincing or very sincere. The Assistant Under-Secretary of the Treasury of the United States has been far more communicative. He is reported to have stated that embargoes are likely to be placed upon other commodities entering the United States beside that of wood pulp, on which an embargo has already been placed, and that inquiries are being made into the conditions under which several commodities are now being produced in Russia. Are we making any similar effort to inform ourselves?

The whole question of trade between this country and Russia has become an extremely difficult one for this reason. The Government there have a virtual monopoly of trade and have enforced a system which results in production under conditions with which workers in no other country can possibly compete. The Government have taken credit to themselves for having by their policy secured the placing of certain very important orders by Russia; orders facilitated, shall I say financed, by guarantees to the producers which we have to furnish ourselves because all ready money available in Russia is required for other purposes. Of the purchases made on behalf of the Soviet State there is one in particular for which credit could not be obtained, at any rate in this country, and that is the purchase of arms and warlike material, which, according to my information, has invariably been paid for in cash both in this country and elsewhere and which is being accumulated at a rate which is causing serious preoccupation on the Continent. The credits which we give for the acquisition of other commodities merely help to liberate resources which are being used to provide warlike material, not to mention propaganda. and other occupations of that Government. For what purpose is this warlike material being collected?

Mr. R. A. TAYLOR

Will the right hon. Gentleman tell us from what countries these armaments are being imported into Russia?

Sir R. RODD

Some have been bought in this country. I do not think that it would be advisable to say what are the other countries. I do not wish to in valve myself into difficulties with any other countries, but I am prepared privately to inform the hon. Member afterwards. What is the Meaning also of certain movements of ships with which those who have to watch the distribution of forces have, for some weeks at any rate, been familiar? Though I have long ceased to take any active part in diplomacy, I retain many associations and I am not altogether uninformed about the trend of opinion in other countries. I am aware of the very grave misgiving which exists as to what these movements and this accumulation or warlike material may portend. What I ask is, is our optimistic Government alive to the preoccupations which are undoubtedly affecting other countries? I do not suppose that I shall receive an answer to that question, but as an old and experienced watcher of the political sky I must say that I also recognise indications which cause me grave misgivings. There are portions of this old Europe where we know that a small spark readily produces a great conflagration. I have felt it to be my duty to bring forward this point, which reaches me from a source in the accuracy of which I have confidence, although I am not able to disclose it here. I think it is right that the Government should keep a vigilant eye on what is going on in Eastern Europe and I conclude that warning with the Roman words videant consules!

Mr. R. A. TAYLOR

The hon. Member who has just spoken has had long experience as a diplomatic servant of the State and, naturally, the House pays much attention to any views which he expresses, particularly in regard to the countries of which he has personal knowledge. It is, however, extraordinary how often the diplomats have been proved to be wrong. Throughout the whole of the last ten years most of the predictions and opinions expressed in relation to Russia by those who hold the views which the hon. Member has expressed to-day, have been consistently wrong. I would like the hon. Member to give us more information about the somewhat alarming purchases of armaments by Russia, to which he alluded. I understood him to say, in response to my interjection, that some of these armaments have been purchased in Great Britain. If my memory serves me correctly, it is impossible to export armaments from Great Britain without an export licence, and I have yet to learn that there have been any export licences granted for the export of armaments to Russia of a character likely to give rise to any public concern. If Russia is purchasing munitions of war in this country, that might very easily be stopped if the people who are supplying them were not willing to execute the orders. The hon. Member promised to give us private information but refrained from giving publicity to the source of supply of these great accumulations of war materials. I should be very interested to learn from what countries these huge supplies have been obtained. In any case Russia is not the only nation that is buying armaments in the modern world to-day. I take it that in relation to her population she will from time to time undoubtedly make a certain amount of purchases, but no information has yet been disclosed to the House which would justify the people of this country, and particularly those who are engaged in trade with Russia, in suffering from any lack of confidence in the execution of orders, because of this new armament scare.

We are often told that the Labour Government have done nothing to honour their pledges. We are told that not only from the Opposition benches, but often hon. Members on this side of the House have indulged in that criticism. I want to thank the Government and to express my appreciation of the success that has attended them in their efforts in the realm of foreign policy, and particularly for the success which has so far attended their handling of the Anglo-Russian problem. During the period, less than nine months, that has elapsed since the Russian Ambassador presented his credentials, we have reached such a stage that in October next the Committee is to meet to consider the debt settlement in relation to the difficulties outstanding between Great Britain and Russia. That is a very great contrast to the four and a-half years of inactivity during which the late administration made no attempt to protect the interests of those small investors who lost money and property as a result of the upheaval in Russia. We sincerely hope that those who speak for Russia at the forthcoming conference will realise the importance which this question bears to the whole future of Anglo-Russian relations. Many of us are not so much concerned with debts in the sense of securing our pound of flesh, but certainly in relation to those debts contracted in the normal course of trade and those debts arising from investments in pre-War Russian Government and municipal loans. It does strike a fatal blow at that confidence which must exist between nations, if they are to live together in amity and concord, if debts of that character are to be repudiated as a general principle, because operations involving long term credits, which require certain years before they are brought to final fruition, cannot take place if there is lack of confidence as to the fulfilment of obligations entered into.

In saying that, I do not want for one moment to minimise our responsibility for the very serious economic loss and even the very serious loss of life that resulted in Russia through our policy of intervention in the internal affairs of Russia. Russia, quite clearly, has a proper and rightful claim in relation to damage done to her during the period of intervention. Whilst it would be quite unreasonable to expect her to recognise in full or agree to pay the Czarist War debts, and whilst we desire fully to recognise any claims that she may have. it is a fundamental principle of international good will and an essential basis of international trade that it should be recognised that debts contracted in the ordinary normal course of trade should be honoured, as far as it is possible for those who have contracted them to do so.

I need hardly remind the House that the full responsibility for the delay in bringing about a settlement of this matter has not rested with Russia, because Russia on her part recognised in the Trade Agreement of 1921 the principle of payment of compensation for those particular classes of debts. The inactivity and refusal of the Conservative administration to proceed to a conference to settle this issue is one of the reasons why we have had no settlement up to the present time. One may safely say that in so far as there has been a real case against Russia in relation to propaganda, the effect of the renewing of diplomatic relationships by giving us the machinery to discuss these difficulties as and when they arise, has had the effect of causing a subsidence in the propaganda against the British Empire, and I think that in that connection Russia has made a hopeful contribution towards a settlement of our difficulties.

The restoration of diplomatic and trade relationships has brought considerable benefit to certain areas which have a special interest in the development of Russian trade. In the nine months from the 1st August last year to the 25th June this year the Russian trade organisations in this country, including in that term the co-operative societies, have placed orders to the extent of £13,000,000, as against £6,000,000 in the corresponding period of last year. Those orders have already brought considerable employment to our engineering, electrical and chemical industries. In those industries orders to the extent of £6,000,000 have been given, as against orders to the amount of £2,000,000 in the same period of last year, and in the Lincolnshire towns, where workmen have been employed on these orders and where the traders have got the advantage of the circulation of money, we appreciate the action of the Government in dealing so ably with this very difficult problem of Anglo-Russian relations.

I want to ask the Under-Secretary whether he and his Department will consider how far some orientation of the present policy is necessary if we are to get the full trade benefits from the renewal of relationships which appear to me to be possible, provided that we adopt a policy which meets the difficulties of the situation. One of the great difficulties in dealing with orders from Russian trading organisations is the fact that there is in this country, and has been since 1924, a credit barrage which has operated in the form of refusing accommodation for Anglo-Russian trade transactions, or refusing accommodation to firms engaged in operations which in the normal course of business would be readily forthcoming if the orders were from some other country. From the evidence at my disposal I am driven to the conclusion that it is not a matter of the refusal to give accommodation because of ordinary commercial reasons but is rather part of a policy designed to hamper the development of this particular trade. That means that firms engaged in this particular class of enterprise have had to mortgage right up to the hilt of their resources in order to give terms which are somewhat competitive with other traders in Germany and particularly in the United States. One of the reasons why a larger volume of Russian trade has not been forthcoming has been the difficulty of giving credits which are reasonable and proper, in relation to the nature of the transaction, to Russian buyers, credits which are similar in kind to those which they receive from German and American sellers.

Brigadier-General Sir HENRY CROFT

What has the hon. Member in mind.

Mr. TAYLOR

I have in mind the German Government scheme under which credits were available from two and a half years to four years according to the class of goods and in relation to certain transactions in America where credit has been up to four and five years duration. At the present time the only machinery we have which can help manufacturers in our depressed industries to deal with this difficulty is the machinery controlled by the export credits department, under which each individual transaction is submitted to a particular committee who may either refuse or accept the proposal according to their judgment. Whilst, theoretically, each transaction is considered on its merits what really happens is that the committee responsible for dealing with these applications absolutely decline to give any consideration whatever to a proposal in relation to Russian credit if the period exceeds more than 12 months.

Sir H. CROFT

What credit does the Russian Government give us?

Mr. TAYLOR

I am not interested in that matter.

Mr. WOMERSLEY

Is the hon. Member aware that they want cash in advance.

Mr. TAYLOR

I have noticed that hon. Members opposite always laugh when the question of Russian trade is mentioned, but I want to ask them to look at the problem a little more calmly and perhaps they will see that it is to the mutual advantage of both countries that a change should take place. The only justification for this machinery is the fact that it will help to restore trade and promote employment and, therefore, I want the Under-Secretary to face up to this issue, and if possible give me an answer, why his Department are exercising no pressure in the direction of securing an easement of the situation. Suppose a firm in Lincoln which for many years prior to the War and since has done a considerable volume of trade with Russia comes along with a contract, on a basis satisfactory to both sides, involving perhaps £200,000 or £250,000 but requiring some 18 months or two years before final payment is made. I want to ask whether the time has not arrived when the policy of the Committee which controls the granting of these credits should not be sufficiently oriented so that each individual transaction can be considered on its merits, with a view to helping manufacturers and placing men in employment. There you have works with capital and skill and everything ready for the application of labour, and if this barrier could be removed it would be possible to place a considerable number of men in employment without any new legislation.

When the Overseas Trade Act was passed it was clearly laid down that credits up to five years might be granted for certain of the heavy industries, and all I am asking is that these individual transactions shall be considered on their merits. At the present time I have evidence that orders of a substantial character have been offered to several firms in the steel trade on the basis of one-third of the total cost in 12 months, another third in 18 months, and the final third at the end of 24 months. As far as the shipbuilding industry is concerned, orders are available on the basis of credits extending from one to six years. So far as the general engineering and electrical industry is concerned, orders which can be placed almost immediately are available with credit terms varying from 12 months to five years. As far as the machine-tool industry is concerned, orders could be placed in this country on the basis of one-third in 12 months, the next third in 18 months and the final third at the end of two years. That does not seem to be unreasonable, having regard to the character of the product required. If you consider the normal shipbuilding equipment, or the equipment for an electrical power station or the equipment for a new factory, in the ordinary normal course of things no country buys them on absolutely cash terms.

If it is a case of selling abroad in India or South America the normal course by which these transactions are financed is for a loan to be raised for periods of 15 and 20 years, the proceeds being used for buying this kind of capital equipment, repayment taking place as the new productive power becomes effective. In regard to our own municipalities, if we want to lay down a new power station we have to raise a loan in order to get the money to pay for the transaction, and repay the cost of the new station over a period of years. Certainly, in relation to the demand for these particular classes of goods it is impossible for Great Britain to get that share of the market that is available through the expanding industrial activity of Russia unless we can evolve some form of credit machinery which will enable us to sell goods at prices which Russia is willing to pay and which will enable us to compete with our competitors. It is argued that there is no need for any special trade agreement or any use of credits under the export credits scheme in regard to Russian trade. It is said by hon. Members opposite that the money derived from Soviet trade in this country shows a very great balance in favour of Russia, and that if she would use the total volume of credits she has got by her imports into Great Britain there would be no necessity for any credits to enable her to make purchases for capital construction, and so on. I want to deal with that matter and to see exactly what happens in regard to the credits raised by the imports of Russian goods into Great Britain.

The DEPUTY-CHAIRMAN (Mr. Dunnico)

I am very reluctant to stop the hon. Member because technically he is quite in order on this Vote. I understand that the Minister in charge of the Overseas Department is really attached with the Foreign Office and to some extent responsible to the Foreign Secretary whose salary is included in this Vote.

Sir AUSTEN CHAMBERLAIN

Is not this subject dealt with by the Secretary of the Department of Overseas Trade, who has a certain relationship with the Board of Trade and the Foreign Office?

The DEPUTY-CHAIRMAN

That is my difficulty. I understand that the Minister who controls this section is in- directly under the control of the Foreign Office, and because of that I am rather reluctant to intervene, but I think there must be a limit. We cannot go into too great detail.

Mr. LLOYD GEORGE

I agree that there seems to be some difficulty in this matter. It is quite obvious that this is a subject which should be discussed, and it is difficult for hon. Members who are interested if they are to be ruled in one part of their observations. I quite see your point that we cannot go into considerable detail, but there must surely be some way by which we can discuss general policy, and I rather gather from your ruling that, so long as we do not enter into too much detail, general questions of policy might be referred to on this Vote.

The DEPUTY-CHAIRMAN

The fact that I have allowed the hon. Member to go as far as I have, indicates that I am reluctant to be too strict in my Ruling. I feel that the Foreign Office is to some extent responsible for policy and as long as hon. Members do not go into too great detail I am prepared to allow the discussion to proceed.

8.0 p.m.

Mr. TAYLOR

I am obliged to you for your Ruling, but I was induced to go into these matters by the interjections of hon. Members opposite. I was dealing with the point as to the situation created by Russian imports into this country, and I was hoping to use it as an argument to induce the Under-Secretary to pay immediate and responsible attention to the possibility of negotiating a new trade agreement with Russia, on similar lines to that which was successfully negotiated and completed by Germany under which a credit of 300,000,000 marks was made available for financing long-term operations. Almost every country with which Great Britain does business has a favourable trade balance—favourable in the sense that the credits raised by her imports into Britain are greater than the volume of goods which she buys from Britain. That must necessarily be so, because Great Britain has to receive some £350,000,000 a year in the form of invisible exports and payments due for shipping, banking and so on; and those payments have to come into this country in the form of goods.

When Russia has paid for purchases, whatever cash is paid for the purchases the balance of the money derived from the sale of Russian goods in this country is very largely used for the purchases of raw materials on the London market. Purchases of hides, purchases of cotton, purchases of jute, purchases of tea, purchases of sugar, and so on, are made on the London market, and incidentally have the effect of transferring the purchasing power from Britain to those countries which produce foodstuffs and raw materials. Certain parts of the British Empire benefit by these purchases. From these purchases by Russia they derive the purchasing power with which to place orders in Britain, say for oil engines for power stations, or for any other of the manufactured goods which they buy from this country. Therefore, because the money is not spent direct in this country it does not in the least mean that it is not finally available for the purchase of British goods. Then, of course, payment has to be made to our shipping companies, and for the banking and insurance services which we render. The staffs who are employed in the Soviet trading organisations in this country have to be paid for, and it is a very noticeable fact that, since the resumption of diplomatic relations with Russia, the larger part of the shipping used by Soviet Russia for the transport of her goods has been diverted from the Swedes and Norwegians to British ship-owners. I believe that in the last navigation year some £2,750,000 was paid by the Russians for shipping services, 75 per cent. of which was paid to the Norwegians and the Swedes. Since the resumption of diplomatic relations between this country and Russia, the position has been entirely reversed, and now that large proportion is being paid to Britain. Therefore, in reckoning the total balance sheet between the two countries, when we come to analyse the matter in detail it is not true to say that the total volume of Russian imports into Britain represents a sum which is available for the purchase of British goods in Britain to be exported to Rsssia.

In this matter of a possible new trade agreement, or an alteration in the policy of the Export Credits Department, there arises the question as to whether or not Russia can be trusted. I think the best test we can apply is the test of the post-revolution experience of the transactions carried out by the Russian trading organisations. I have not heard of a single case where a single British trader has lost a penny by doing business with any Russian trading organisation. Certainly in my own constituency the experience has been that they have met their commitments promptly, and that from the financial point of view there has been no difficulty on that side. Therefore, we have, first of all, the experience which has been built up, and, secondly, we have the test as to whether further default or repudiation would really pay Russia in present day circumstances. We must not overlook, in this connection, the fact that the confidence now enjoyed by Russian trading organisations in this and other countries has been built up slowly and very painfully over the last 12 years, and that, from that point of view alone, it would not pay them, apart from any other considerations, to default on any of their purchases, because a single default would destroy this confidence which it has taken so many years to evolve.

A third consideration which I would commend to the Committee in this connection is the fact that at the present time, and, so far as one can see, in the future, for all practical purposes in connection with credits Russia's economy is very dependent upon the sale of certain exports abroad, and, in view of her increasing dependence on the sale of exports abroad, it is extremely unlikely that she will default in any of her payments. I hope my hon. Friend whose Department is supposed to exist for the purpose of promoting the maximum development of Britain's overseas trade, will pay attention to this particular aspect of the problem, and I venture to express the hope that, in the forthcoming debt negotiations, both those who represent Britain and Russia may take a reasonable view and that we may get a settlement of this very difficult question which will commend itself both to British opinion and to Russia as being equitable to both sides, and thus help to remove one of the greatest difficulties in the normal development of trading relations between the two countries.

Mr. LLOYD GEORGE

I do not propose to intervene for more than one or two minutes, but I should like to emphasise the point which has been put with such great force by the hon. Member who has just sat down, who urged the Government to reconsider the terms upon which credit is accorded to British goods to Russia. Let me say at once that I am not considering in the least the interests of Russia in this respect, but entirely the interests of our own trade. Here we are with very serious unemployment figures. Our iron and steel industries are suffering greatly. Yet there is no doubt at all that there is a very great demand from Russia for goods of the very quality which we can produce, and which we can produce better than any other country in the world. We had this under consideration at the time of the Genoa Conference. It is no use now going into the reasons why it failed, but one of the matters we considered was that of increasing the allowances in regard to export credits, and trade facilities. I was very strongly in favour of it at the time, as were those who were with me at the Genoa Conference—which failed for reasons which are quite irrelevant to this particular consideration.

I believe there is a prospect of getting very considerable business from Russia, and I do not think we ought to mix up the question of business with the considerations which I know my right hon. Friend will be urging with his usual earnestness and force in a very short time about propaganda and things of that kind. We cannot really begin to discriminate between our customers on the basis of our approval or disapproval of their methods of government. If we did our export trade would drop very much more seriously than it has done within recent months. This is not the only autocracy in the world where liberty has been completely crushed, and with whom we are still doing very good business. I should like to see the business with Russia expanded.

It is very difficult to know what is happening in Russia. I have done my best honestly to find out from people of all ways of thinking as to what is happening, and I cannot get two men to agree. I sometimes meet a man, who may be supposed to know how things are going, who says that things are going badly. I have met others who tell me that we are going to have a very great surprise in regard to what is going to happen in Russia. I will not say that I do not attach importance, because I do, to the statements made by the Russian Ministers themselves. Ministers naturally emphasise the aspect of their administration which is most favourable to their own country; but on the whole, when they come to give figures, I do not think they are quite manufactured, and I believe the figures which they might give as to the progress which is being made in industrial developments and in agricultural production would be a great eye-opener as to what is happening in Russia. There is no doubt that there has been an enormous increase in the production of grain, and that there is a still greater industrial revolution going on. They are short of machinery and of other goods which are produced by Germany and the United States of America. They cannot produce them in Russia. They have not got the skilled workmen. That is one of the things of which they are really short, and they are sending to America and elsewhere, for the purposes of training their workmen in order to build up the kinds of commodities which now they can only get here or in America or Germany.

During the next few years, before they have trained their men, they have got to buy those goods in one of three or four countries. Why should not that country be ours? Do not let us mix up the question of propaganda in this matter. If the Soviet wants to buy these things, we want to sell them. Our workmen are out of jobs, and if they can put stuff of this kind into Russia, my own opinion is that they will get paid. All our experience, at any rate during the time I had something to do with it, was that whenever there were orders of that kind, they were paid for. In that connection, I was impressed with the argument of the hon. Member who has just sat down: It is not in their interests not to pay. The Russians are very able men. I dealt with Russians during the War, and I dealt with Russians after the War, and as far as capacity is concerned there is no comparison between the two groups from a business point of view, and I am sure it would be worth the Government's while to give consideration to this matter, and if the hon. Gentleman who repre- sents the Department is not able to give an answer to it, I hope that at any rate he will not bar the door, or will give such an answer as will make it impossible for the Government to reconsider the position. I hope he will consider whether something more cannot be done in the way of giving credit for an extended period, so that when it comes to a question of whether an order should go to Germany or to the United States of America or to us, our industrial concerns will find themselves in a position in which they can go in with their machinery on its merits without being handicapped by better terms being given by our competitors. I strongly urge that upon the hon. Gentleman.

Captain EDEN

For my part I do not propose to follow the right hon. Gentleman in his dissertation on Russian trade, but endorse the right hon. Gentleman's judgment that we should be ill-advised to mingle political and commercial matters in our relations with Russia. That is one reason why I regret that we have been so inconsistent in our attitude towards the Soviets and did not adopt the same attitude as did the United States of America. If we had we should not now find ourselves in the very difficult position of at one moment lecturing the Soviet Government for its political misdemeanours, the gravity of which no one doubts, and at another moment holding out our hand to try to receive trade from the self-same Government. There has been that inconsistency in the past and is so to-day. However, I do not now desire to speak about trade with Russia, but, as this is one of the rare occasions on which a Foreign Office Vote is discussed, to say one or two things about matters concerning our foreign policy. The first is this. I am sorry the Under-Secretary is not here, but I hope the representative of the Board of Overseas Trade will convey this to him.

As I understand it, when the right hon. Gentleman the Foreign Secretary, whose absence we regret, goes to Geneva, one of the things he proposes to do is to give his approval to certain very important Amendments to the Covenant of the League. I have asked questions about this once or twice, and I have been told in reply that we shall have an opportunity to discuss this matter before the actual decision is ratified. That is really of no value at all. It is shutting the door after the steed has bolted. If discussion is to be of any value it must be before the Foreign Secretary gives an undertaking on behalf of the British Government. The Foreign Secretary's reply was rather curious. It seemed to imply that this House was not fully qualified to discuss Amendments to the Covenant of the League, and that if we did discuss such Amendments we should get into confusion. I do not agree with the right hon. Gentleman. I think that this House is quite as capable of discussing these matters as of discussing Amendments to any Bill.

I understand that this matter is to be raised in another place to-morrow. My object in referring to it to-day is to emphasise the importance with which at least some of us on these benches regard these Amendments. We believe them to constitute new commitments by this country. I should not like the present Government to go down to history as the one that has done nothing but create new committees and new commitments. For it to gain such a reputation would be a pity. I hope that the Foreign Secretary will be very chary of signing these new commitments until the House has had an opportunity of expressing approval of them, and that the right hon. Gentleman will not tell us that we must be satisfied with a plain "Yes" or "No" to ratification. These are just such Amendments as might well be altered by this House.

Another matter to which I wish to refer relates to Egypt. It seems to me that the Government should persist, throughout the present anxious period in Egypt, in maintaining a policy of strict neutrality—neutrality in fact, deed and word. I gathered from the Prime Minister's speech that that is what the Government is attempting to do. Unhappily it is not altogether what it has done, in two respects at least. I share with an hon. Friend who has spoken regret at the terms of the Note recently sent to the Egyptian Government. I am sure that what was meant was to imply neutrality, but I am sure that that was not the effect of the Note. I suggest that the right hon. Gentleman should follow carefully the precedents set by the late Government and the late Foreign Secre- tary. There is naturally a temptation for hon. Members, with their political persuasions, not to wish to be placed in a position which would be deemed to be hostile to Parliamentary government in Egypt. If neutrality is to mean anything at all it must mean the refraining from any kind of interference with the constitution of Egypt or with any attempt which the Egyptian people may make to change it. We have nothing more to do with the setting up of Parliamentary government than with the setting up of autocracy in Egypt, provided that the four reserved points remain untouched.

That is the mistake which the present Government is making. It was rather emphasised by the speech of the hon. Member for Coventry (Mr. Noel Baker). What he said about the value of Parliamentary institution may be absolutely correct and true, as I am sure he believed it to be, but that is not our business if we mean to maintain neutrality in face of the present Egyptian situation. I think that the Government has to make up its mind about that. I say frankly that I read that Note in this way: That there was the reflection that the Government would not be used to break up the constitutional machine in Egypt, that that was put in as a sop to hon. Members behind the Government, and to counterbalance that a Note was sent to the leader of the Opposition as well as to the Prime Minister of Egypt. That is how I read what the Government did, and that is without doubt how it was read in Egypt. It was a profound mistake to send that Note to any but those who are responsible in Egypt. I would advise the Government, in their future relations on this subject, to confine their Notes to those who are directly responsible.

I welcomed the Prime Minister's reference to his realisation of the responsibility of this country for the protection of the lives of foreigners. I welcomed it, not because I doubted that the Government ever lost sight of it, but because there are plenty of people who would be eager to pretend that the Government had lost sight of it. The Prime Minister's expression of opinion at this time should be distinctly helpful and salutary in Egypt. The only other thing I have to say about Egyptian affairs is this: I am old-fashioned enough—perhaps I may say that I have seen something of the different peoples of the East—to be as sceptical as the right hon. Member for Carnarvon Boroughs of these experiments in Parliamentary government amongst Eastern nations. I think them something of an impertinence. Here, whatever our faults and failings may be—they are certainly considerable enough—this democracy of ours has grown on our own soil. There the plant is exotic, of a foreign growth which may not be suitable to the temperament, condition and historic past of the people.

Nothing could be more harmful to the future of the British position in the East and to the real benefit of the nations concerned than that the British Government should appear to be weighted on one side or the other in the internal disputes in countries which we have declared to be independent, or even that we should throw that weight on the side which the Government of the day here believes to be that which should receive their support. Neutrality must be real. I do not believe it has been real up to date. I believe there was some justification for the remarks of the right hon. Member for Epping (Mr. Churchill), that the Government had actually done harm by the weight that they threw on one side of the scale. Let neutrality be real, and I do not believe that hon. Members on these benches will have any criticism to make on that score.

I must apologise for travelling from one part of the world to another. On Saturday last the Prime Minister made a speech which filled me, as it must have filled other hon. Members who read it, with very considerable astonishment. He was talking about the peace of the world and foreign relations and disarmament, and he wound up with this sentence: He claimed that the Labour Government had set the feet of the world far more clearly upon the road of peace than ever they had been in the history of the world.

HON. MEMBERS

Hear, hear!

Captain EDEN

Do hon. Members really believe that too? If so, the position is infinitely more serious than I appreciated from the Prime Minister's own statement. For one moment I shall have to analyse the position. This speech of the Prime Minister is incidentally in direct contrast to the speech which he himself made in this House not very long ago at the conclusion of the negotiations for the Naval Agreement. It is natural that when we step from this House to the platform the actions of our own party should appear in a rather rosier colour than they do in debate here. I am afraid that the motive power must have been strong for so extravagant a statement as that of the Prime Minister. The Government's case is so weak that where it has done comparatively well the right non. Gentleman needs to emphasise it. The Prime Minister in his statement certainly led the world to think, or led us to think, that he believed the feet of the world were set upon the path of peace. I am not an alarmist. But the right hon. Gentleman himself told us in this House, on the conclusion of the Naval negotiations, that he was anxious about the position in Europe. I do not think there is any straightforward observer who can be otherwise. In fact the work of the Naval Conference is only half finished, and it has been left in a position of considerable anxiety for us. When we read that the Prime Minister made a speech like that, which would seem to imply complete Satisfaction with the existing state of internal affairs—[HON. MEMBERS: "That's an exaggeration"!] I will read the last sentence of the speech again: He claimed that the Labour Government had set the feet of the world far more clearly upon the road of peace than ever they had been in the history of the world. The Under-Secretary when he replies can say if that is or is not a gross exaggeration of the present state of affairs. So far from the feet of the world being more firmly set upon the paths of peace the position in Europe to-day is infinitely more anxious than it was a year ago. [HON. MEMBERS: "Oh!"] I can justify my statement and I think nobody who has made a candid examination of present conditions can deny it. Few people will deny that the outcome of the Naval Disarmament Conference was to leave the feelings between some of the Powers more exacerbated than they were before. I propose to ask the Government what steps they are now taking to complete the work of that naval agreement? What is being done to push matters further? The speech to which I have just referred left on me the impression that all was well, and that no further effort was called for. If that impression be wrong I shall be glad to have it corrected but I think it is a pity that the House of Commons should disperse for the Recess leaving the impression that we were content to leave the work of the Naval Conference half done when that work, so far, leaves this country in a particularly anxious situation. [HON. MEMBERS: "Why?"] Surely hon. Members are aware of the terms of the agreement? They must know that our future naval programme is dependent on the programmes of France and Italy.

That is why I say that the agreement leaves us in an anxious position. That is why I ask the Under-Secretary to tell us if he has any information as to the present state of negotiations between France and Italy, how those negotiations are progressing, and whether we may look forward to any announcement of a naval agreement between those countries in the near future. I am anxious to see progressive international naval disarmament but I am not prepared to express satisfaction with the present state of affairs and that is why I have read with anxiety a speech which might be so interpreted. I believe that the hon. Member who spoke a short time ago from this side was not exaggerating when he said that there were points on the horizon in Europe which made for anxiety, though I do not know the information on which that statement was based. We all desire peace and we all share the hope that the Government will be successful in improving international relations but they will only be successful if they face the existing facts; they will not be successful if they hide their heads ostrich-like in the sand while congratulating themselves on achievements which are not really to their credit.

Miss PICTON-TURBERVILL

This debate so far has centred mainly around Egypt and Russia but as the debate is on the Foreign Office Vote I propose to speak more generally on the work of that Department of the Government. Though some of us who sit on the back benches week after week, month after month have been here for one year only, yet we have progressed several stages in the art of distinguishing those speeches which have substance in them from those speeches in which there is no substance. I feel that there has been very little substance in the attacks made on the Foreign Office this afternoon. [Laughter.] If the hon. Member opposite who laughs had the time to sit on the back benches and listen continually it is just possible that he might become more expert in detecting what has and what has not substance. We who sit on the back benches after listening silently for so long would be almost mentally deficient if we did not become a little expert in the matter.

If the attacks made on the Government in the course of this debate had been in relation to unemployment of which we have heard so much there would at least be a certain amount of substance in the statement that we have shared in a world depression, and hon. Members opposite could pretend to think—although in their heart of hearts they do not think it—that unemployment in this country is due to the policy of the Government. But to point to the various parts of the world where there is trouble and then to turn to the Foreign Office and say, "What are you doing about it"—has indeed little substance in it. We have been told about embarrassments in Egypt and it has been suggested that these are due to the actions of the present Government. I think some of the hon. Members opposite get so excited with their verbosity that they do not realise how little substance there has been to-day in their attacks on the Government. To what are the embarrassments in Egypt due? Are we not aware that all over the world in various countries there is a desire for self-determination? We often said in years gone by we went through the War to secure, self-determination for small nations. Does not everybody know that the troubles in the Eastern part of the world are largely due to the natural desire of nations to secure self-determination, and we have always declared this is right for the smaller nations. If there can be no more potent charge brought against the Foreign Office than to point to the various nations of the world where trouble exists and to say, "What are you doing about it"? then indeed the criticism must be small.

Let me speak of the foreign policy of His Majesty's Government in the last year which has added to the prestige of the nation and raised its standard in the eyes of the world. Does not everybody know that when this Government came into office there was a naval race, perhaps a silent race, nevertheless a real naval race going on between this country and America? That is now almost old history, so many things have happened since. When the Prime Minister went to America he did, indeed, set a new pace in the movement towards the peace of the world. Never has a Prime Minister had such a reception as our Prime Minister had in America last year and a now era and a more hopeful outlook for peace was the result of that visit. As regards the foreign policy of our own nation, never had a Chancellor of the Exchequer such a reception in England as our Chancellor of the Exchequer had last year. Indeed never has a Cabinet Minister, since the days when Disraeli came back from Berlin, had such a reception in this country as the Chancellor of the Exchequer.

Then I turn to the prestige of His Majesty's Government in Geneva and throughout the world. It was the policy of the Foreign Secretary which led to the signing of the Optional Clause in reference to the Court of International Justice. That was another step towards permanent world peace and I am amazed that the hon. and gallant Member opposite should see so little in those steps that were made towards permanent peace. Not only did our action in calling upon the other nations of the world lead to the signing of the Optional Clause, but our Foreign Secretary also brought forward and spoke in favour of a general act of arbitration. An Englishman who is a keen supporter of the League of Nations Union coming back from Geneva after attending successive Conferences there told me that the stock of Great Britain was never higher than it was last year after the policy of the present Government had been declared. He told me that he had no politics and belonged to no party but I feel convinced that he is a Conservative. My experience is that the man who says that he has no politics is always a Conservative, but this gentleman honestly said to me that our stock had gone up as the result of the actions of the present Government at Geneva, and that once again he was proud of being an Englishman.

A well-known American passing through England last year told me that when the Labour party came into power with our Prime Minister, a flame of hope ran through America for permanent peace. Hon. Members may smile, but these things are true. I am aware that hon. Members do not like to hear these facts, but they are true nevertheless. The work of the Government has prepared the way for peace where the late Government failed. What have we got in front of us now? The Preparatory Commission for general disarmament, in which the late Government entirely failed. It was suspended for two years owing to the policy of the late Government and now it will be renewed. Hon. Members opposite speak more often about the prestige of this country than we do, but I am not ashamed to speak of the prestige of our country; I am proud of it. Nations to-day have confidence in His Majesty's Government, because they know that their policy is free from any attempt of tyranny be it ever so skilfully veiled; they know it is free from desire to dominate other nations of the world, and they realise that the present Government are pursuing a policy which will eventually lead to the permanent peace of the world.

Mr. WARDLAW-MILNE

The hon. Member for The Wrekin (Miss Picton-Turbervill) will forgive me if I do not follow her in her vehement praise of her Front Bench. In the early part of her speech she made some remarks with which I have a great deal of sympathy. I gathered that it was the criticism of a back bencher of the long and not always interesting speeches which we hear from the Front Bench. If that had been her theme, she would have had a great deal of agreement from this side, but when she went on to say how perfect everything is under a Socialist Government, she will realise that I am not to be expected fully to agree with her point of view. I wish to confine myself to two subjects. One of these was the matter which was referred to by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in dealing with the speech which had pre- ceded his on the subject of Russian debts and Russian trade possibilities. The right hon. Gentleman made the curious statement that we should at once dissociate future political agreements with Russia from the question of trade with Russia. I utterly and entirely disagree with that view, because I feel perfectly confident that it would not be possible to build up a satisfactory trade organisation with Russia, or, indeed, with any other country, unless it be built up on the basis of good will and mutual trust.

A further important point is that the political aspect, particularly in connection with propaganda, is part of a definite agreement which has been made between this country and the Russian Soviet Government, and if the right hon. Gentleman's remark is to be taken as any indication that the time has come to bring that agreement to an end, I can assure him that he will meet with the strongest opposition from Members on this side, and probably from some on all sides of the House. It is useless for Members to say that Russian propaganda is declining. So far as I can see, there is no sign of that. There are hon. Members here who have had put into their hands in the last few weeks productions, particularly of the A.I.V., sent out from Russia in German and English, containing the most bitter attacks on this country, in connection with India. It would be hopeless to consider a permanent satisfactory trading agreement with Russia unless it be on the understanding, which has been laid down in definite agreements between this country and Russia, that this propaganda against the British Empire and the British race should cease.

The other points I want to raise are in connection with Egypt. I am in entire agreement with some of the recent actions of the Government in connection with that country, but I am certain that, unfortunately, their previous actions have led to some extent to the present situation there. There can be little doubt that their activities have been based on goodwill towards Egypt and have been made with excellent intentions, but I am afraid that there has been a great lack of knowledge behind them. The Government have not declared definitely at any time during the last year really where they stood, and the one thing above all others that is necessary in dealing with eastern nations is that we should make our position absolutely clear. As regards the future, I welcome the Prime Minister's declaration to-day, but it is essential that we should go even a little further than he has done in making clear what our position is. I know that the matter is an extraordinarily difficult one, and the last thing I want to do is to make it any more difficult for the Government; on the contrary, I want if possible to help by saying where the difficulty actually lies. The Government made a very bad mistake in sending a warning to the leader of a political party which was not in power. I am sure that the intention was excellent, but the immediate results have not been excellent, for this message has been taken as some form of support for the political view held by that party.

The Prime Minister said that it was essential that we should make clear that we do not intend to interfere with the internal affairs of Egypt. We all agree with that. At the same time, he made it perfectly clear that there must be no question of our leaving aside for a moment our responsibility under the four reserved points. We all agree with that. But are we all equally clear what we mean in connection with these two statements? If I may put it in another way, exactly how far do we mean to go in support of our position in regard to the four reserved points, and yet not interfere with the internal affairs of Egypt? The Prime Minister found it necessary to send warships to Alexandria, presumably, if it had been necessary, to land troops therefrom. It is difficult for the ordinary person to see that it may be permissible and necessary to land troops from warships in order to keep the peace, and yet not permissible to use the troops which we have in barracks in Cairo. It is because of these difficulties that I want the Government to consider very carefully where they stand. I want them to make it clear to Egypt how far we are prepared to go, and how far we should refuse to go. For example, take the position of foreigners, their prosperity, their trading arrangements and everything connected with them. All these people are dependent upon us under one of these four reserved points. It is perfectly clear that an Egyptian Government can affect them in a way which at first sight may not call for our interference.

Quite recently there has been in power in Egypt a Government which has dissipated practically all the financial reserves it had inherited. Within a few months that Government has curtailed the credit of the country and seriously interfered with its resources. Last January it inherited a carefully built-up reserve of some £40,000,000 odd. About a third of that money has been spent on buying cotton and in trying to support the cotton market; they have failed in that and are now in the difficult position of having to decide whether to spend more money in order to keep up prices or, alternatively, to stop that procedure and face the loss. They spent nearly £15,000,000 in buying up part of their own National Debt, a most dangerous proceeding for any Government. The result is that there are exhausted reserves and very little money in the Treasury. What is the position, if it be held, as it can be held, that these actions seriously interfere with the livelihood of foreigners? These are points for the Government here to consider, and while I wish to make it clear that I do not want to add to the difficulties of the Government, I think it is essential that we should make it clear exactly how we stand; what we are prepared to see happen in Egypt without our interference; to what extent we think that internal matters are apart; and to what extent we shall feel it necessary to interfere if and when it should become desirable for us to do so in support of the obligations we have under the four reserved points.

There is one last question I wish to ask the Under-Secretary. It is reported in the newspapers that the new trooping programme will provide four battalions to go to the East, only two of which are to remain in Egypt. It looks as if there is to be a net reduction of two battalions in the Egyptian garrison. Shortly, the position is that some of these new battalions are going to Palestine and some to Egypt. It seems that four are to be removed from Egypt and only two are to replace them. I wish to know whether that is a reduction of troops in Egypt or not, because it is difficult to follow from the trooping programme exactly what is happening.

Mr. MILLS

I must express myself as in disagreement with those who have initiated the debate on Egypt and who blame the Labour Government for the stand they have been compelled to make. The speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), which in some respects was helpful and constructive, was in relation to Egypt of a character which may do us infinite harm. The fact is that the Labour Government have been endeavouring, within the limited time at their disposal, to give effect to the general feeling that has prompted this party right from its very beginnings. The Opposition, in spite of all they have had to say about the Government, must admit that throughout the whole of the negotiations with both Russia and Egypt the Government have maintained a standard which puts them beyond criticism in regard to their safeguarding of our national rights. As one who visited Egypt some years ago I profoundly regret that the Egyptian delegation did not take advantage of the treaty that was open to them. If they could have heard the volume of Conservative cheers on the day it was announced that negotiations had broken down they would have had the first real idea of what they had missed by their failure to get a settlement at the moment. They could have left other points open for future consideration. Nahas Pasha, the Leader of the Delegation, and the Leader of the Parliamentary group, at least paid a tribute to the Foreign Secretary of Great Britain, and stated that although the negotiations had broken down they went away feeling convinced that the friendship of the British people could at last be relied upon by the people of Egypt. That is a distinct step forward, and I am only hoping that the forces of constitutional progress at work in Egypt will meet with success.

The right hon. Member for Carnarvon Boroughs rather belittled their Parliament and the methods by which it had been obtained. We cannot stop the growth of the ability in backward races to govern themselves, and in spite of blunders they will eventually arrive at the status of other nations. The best answer to the right hon. Gentleman is that already there have been four elections. It is all very well to say that in the first election people were led up to the polling booths and were rather coerced into voting a certain way, but in spite of the hostile influence exercised in every village they scored a victory, securing 90 per cent. of support in favour of their policy. Though blunders may be made by the Egyptian people in their struggles towards the goal, yet they have displayed a real sense of national ability which we ought to help them still further to develop.

Regarding the work of the Foreign Secretary, I wish to pay my tribute to to him for the initiative he has displayed in furthering an important international aspect of the work at Geneva, the General Act of Arbitration. It will be interesting to hear the comments of those who are to follow as to what part the Conservative Government played towards achieving that step during the five years they had in office. I assert that the work of the Foreign Secretary has definitely paved the way for a Parliament of Europe, if not for a Parliament of the world: it is distinctly nearer fruition than it has ever been. The hon. Members opposite, in criticising this Government, have suggested that we are always belittling the British Empire and all that goes to make it up. Those who have followed the work of the British Empire Delegation at the League of Nations Union are well aware that the present Foreign Secretary has done more than any of his predecessors in bringing together the British Empire Delegation for discussion and securing agreement on points that come up.

I intervened in this debate primarily on account of the state of unemployment in the division I represent and in the division which the right hon. Member for West Woolwich (Sir K. Wood) represents, that is to say, on the lower bank of the Thames, in Woolwich, where I am a councillor and where I am one of the constituents of my right hon. Friend. On the Kentish side of the Thames we rely very largely not on British markets but on world markets. I am speaking of the firms which exist along the banks of the Thames like the Western Electric Company, Callender's Cable Works and Hall's Pump Works, and Vickers at Erith and Dartford. These are all exporting firms which could not provide employment for their work-people for another month if they de- pended on the internal markets. They depend upon the export trade, and in that respect I claim that whatever the hon. Member for Kidderminster (Mr. Wardlaw-Milne) may say about the danger of having trade relations with people who mix up their trade with propaganda, the whole history of these great trading concerns is that they set aside all political disagreements in the pursuit of trade the world over.

In 1921 I went to Russia and saw it at its worst. I met some of the people who are now the leaders of that country. I was not impressed with their philosophy or their ideas of communism, but I do say that, whether one agrees or disagrees with such men as Stalin or Gandhi, if you include China, Russia and Egypt, those countries represent nearly 900,000,000 people whom we should regard not from the colour of the ties of their respective governments, but purely from the point of view of the units of their various populations, and we should see how far we can correlate their needs with our waste energy. The greatest exports from Russia are largely raw materials, and there is an increasing need in Russia for manufactured articles. On this point I hope the concluding words of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) will be accepted by the Government, and especially by the Secretary for the Overseas Trade Department. The right hon. Gentleman the Member for Carnarvon Boroughs, speaking with the responsibility of an ex-Prime Minister of this country, has definitely said: Never mind about the propaganda side which goes on between every Government in the world. It goes on in the Primrose League in Britain and the Communist party in Russia. Do appreciate the fact that our competitors with greater capital resources are giving more extended credits, and by the simple use of that process are getting in at our expense. That is my point. To-day we have thousands of skilled engineers in this country who have become skilled after 10 years of working. The manipulating of tools to a thousandth part of an inch can only come by a sense of touch. It is no good giving those people work on the roads, because that will destroy their efficiency as engineers for another two years. The proper thing to do is to give to each man the job to which he has been accustomed. If we can look upon the opening up of avenues of trade with Russia as a possible solution of unemployment it will be invaluable.

9.0 p.m.

My closing words are that so far as the propaganda of the Russian Government is concerned, I wish that the Foreign Secretary would put a stop to those supplies, and he could do as easily as the previous Government could have done but did not do so because they preferred the more spectacular method of burglary to get hold of documents. The Government could stop the supplies which result in propaganda in this country. The hon. and gallant Member for Warwick and Leamington (Captain Eden) spoke about "grovelling for orders." The Government are not grovelling for orders. A guarantee for three years has been asked for, and it is only a question of giving the necessary backing. If the Government will give more assistance in that direction I believe that we shall obtain even greater results.

Sir KINGSLEY WOOD

We have had a most interesting debate, and certainly one of the most interesting speeches is that which has been made by the hon. Member for Dartford (Mr. Mills). It is quite true that the hon. Member is a constituent of mine in the West Woolwich Division, and I am very grateful to him for the support which he has always given to me, in fact I regard my return to Parliament as being in no small degree due to his efforts. One of the most pathetic portions of the hon. Member's speech was that in which he endeavoured to find something to put to the credit of the present Secretary of State for Foreign Affairs, and after looking round a long way, he came to the conclusion that the crowning achievement of the Foreign Secretary was that he had brought the British Empire Delegation at Geneva closer together. What an extraordinary statement. As if it was ever necessary in this connection for any Foreign Secretary to make any efforts to bring the Dominions and ourselves and their representatives closer together.

I wish to address a few questions to the Secretary for the Overseas Trade Department upon a matter which has been constantly spoken of in our debates, and which was alluded to by the hon. Member for Dartford—I refer to our relations with Soviet Russia. I think it is as well, in view of the speech made by the hon. Member for Dartford, to recall to the Committee the exact position, so far as this country and Soviet Russia are concerned. The hon. Member for Dartford said that one country after another indulged in propaganda, and therefore we ought not to treat this matter very seriously. That is not the position of the Government. I recall to the Committee the position which was taken up by the present Government at the beginning of their term of office on the question of our relationship with Soviet Russia. That is what the Prime Minister said in 1924: His Majesty's Government means that these undertakings regarding propaganda shall be carried out both in the letter and in the spirit and it cannot accept the contention that whilst the Soviet Government undertake obligations a political body as powerful as this is should be allowed to conduct propaganda and support it with money which is in direct violation of the official agreement with Soviet Russia, which either has or has not the power to make such agreement. If it has the power it is its duty to carry them out, and see that other parties are not deceived. If it has not this power, and if responsibilities which belong to the State in other countries are in Russia in the keeping of private or irresponsible parties, the Soviet Government ought not to make an agreement which it knows it cannot carry out. The Prime Minister, not only in 1924, but at the beginning of his present term of office, said that he intended to see that that undertaking, that pledge, and that interpretation of our agreement with Soviet Russia were carried out strictly, both in the letter and in the spirit. The questions which I desire to address to the Under-Secretary are based on that agreement, and that agreement alone. Apart altogether from whether it was wise or unwise of the Foreign Secretary to enter into an agreement of that sort, I say that, if such an agreement has been entered into, it is at any rate the duty of the Government, either to see that it is carried out, or to come to the House and say quite frankly that it was an undertaking which they had found it impossible to get fulfilled.

Mr. MATTERS

Which would you do?

Sir K. WOOD

The hon. Member must address that question to his own Government; it certainly is not my responsibility. It is a most extraordinary atti- tude to take to ask me what I would do in respect of an agreement which I myself never made. It is an extraordinary question to address to someone who is in no responsible position so far as that agreement is concerned. What I am asking the Under-Secretary is where he stands to-day as regards that agreement. Only yesterday—and one of the purposes for which I rise to-night is to endeavour to find out the position—I asked the Secretary of State for Foreign Affairs whether he could make a statement in regard to the position, because a few months ago he thought of a very wonderful expedient for dealing with this question. He said that 500 questions had been put to him in this House about breaches of the agreement in relation to propaganda, and that that was becoming intolerable—

Mr. MUGGERIDGE

Alleged breaches.

Sir K. WOOD

He said that it was becoming intolerable, and that he must set up what he calls machinery to investigate the allegations which are being made. That is a very convenient device. No one has told us what this machinery is. I suspect that it is some sort of committee set up at the Foreign Office. It is a most mysterious investigation, and, from the day on which it was set up, no one has been able to find out either what this committee is doing or how this piece of machinery is functioning—whether they have made any investigation at all, or what is the exact position of the matter. Some months have passed. There has been ample time for this machinery to work, and a full opportunity to test all the allegations that have been made so constantly as to the breaches, as we allege, of the agreement which has been entered into by the British Government and Soviet Russia.

Is it not very surprising that this machinery has been set up at all? Is not the very fact that the Foreign Secretary has had to set up this machinery an admission that there is a prima facie case for investigation as to the bona fides of the Soviet Government, and as to whether they are in fact keeping their solemn obligations with this country or not? Is it not very difficult to see why this machinery has been set up at all, unless as a sort of smoke screen by the Government behind which they can hide with respect to the obligations into which Soviet Russia has entered with them?

I put it to the Under-Secretary that the Secretary of State himself does not deny, and has not denied during his whole tenure of office since the agreement was signed, that the agreement has been broken, and that breaches in respect of propaganda have been constantly committed by the Soviet Government. Did not the Foreign Secretary himself say in this House that he had never denied that propaganda was going on, and that he was not going to try to persuade the House that it was not going on; and did he not also say in the same connection, only a few months ago, before he thought of this device, that the Government had not denied that there was a good deal with which they were dissatisfied? Is it not the fact—I invite the Under-Secretary to deny it—that it was obvious from the very first, from the moment that the ink was dry on the agreement, that the Soviet Government did not intend to honour its undertaking in the sense in which the British Government interpreted the agreement; and is it not the fact that, ever since the agreement was signed, the Government have been put in a most humiliating and degrading position with regard to it?

The Government have been driven back step by step. In November, the Secretary of State for Foreign Affairs said that he had an undertaking, and he repeated the undertaking to the House, that the Soviet Government would not be allowed in any way or at any time to indulge in propaganda. We now have the admissions of the Foreign Secretary, and his abject withdrawal from the position which he once occupied, and we now have this miserable expedient of so-called machinery to examine into the position. I do not think that many Members of the public would, perhaps, complain if it simply meant humiliation for the Foreign Secretary himself, but it is humiliating for this country, and it certainly lets down Great Britain before the world, when an agreement of this character and with these solemn obligations is entered into, and when, ever since the pen was put to paper—there is no doubt about it—that agreement has been wantonly and flagrantly broken.

Probably few Members of the House would dispute that, ever since that agreement was signed, propaganda has gone on unceasingly in all parts of the world. You have only to look at the official communiqué which was issued by the Government of India as to the events there. To use the words of the present Chancellor of the Exchequer, wherever there is a chance Soviet Russia is stirring up trouble. Even since this machinery was supposed to have been established by the present Government, there is direct and indirect evidence, from the Russian Press and from Communist publications, that during the last few months the agents of the Soviet Government have been endeavouring to interfere and make trouble.

The hon. Member for Lincoln (Mr. R. A. Taylor) has certainly not endeavoured to defend this side of the Treaty, and few people can, but he has endeavoured to put before the Committee that it would be to the advantage of this country from the point of view of trade if we could have direct relationship with Russia. That, of course, does not dispose of the fact that an agreement has been entered into and has been flagrantly broken, and I do not think he has ever answered the proposition that has been put forward again and again that America, which has entered into no such relationships with Soviet Russia as we have done, has been able to trade quite freely with her. I am very sceptical about the advantages and the intentions of Soviet Russia as far as trade is concerned, and I recall many speeches that have been made by the hon. Member for Lincoln and others in days gone by as to the advantage that would accrue to this country if we only entered into proper relationships with Russia.

A few months ago it was not a question of asking this House to give further credit to Russia. It was stated again and again that, if we would only enter into proper trade and diplomatic relationships, we should have an immeasureable advantage in a comparatively short time. I suppose no one talked more about the advantage to this country, so far as agricultural machinery is concerned, than the hon. Member, and yet only yesterday we were informed by the Parliamentary Secretary to the Board of Trade exactly what has taken place. The hon. Gentleman has asked what was the total value of exports of agricultural machinery to Soviet Russia during November, December and January last. The reply was: The total declared value of the exports of agricultural machinery and parts thereof manufactured in Great Britain and Northern Ireland and registered during the period from 1st November, 1929, to 30th June, 1930, inclusive, as consigned to the Soviet Union (Russia) amounted to £14,527."—[OFFICIAL REPORT, 28th July, 1930; col. 19, Vol. 242.]

Mr. R. A. TAYLOR

Is the right hon. Gentleman aware that the two principal agricultural machinery factories in Lincoln were both closed last October?

Sir K. WOOD

I am not at all surprised to hear it, and I should not be surprised to hear that more had closed down. Whatever excuses are made, and whatever happens to Lincoln, and however many factories are closed down, the fact remains that, after all that was going to be done, the amount of agricultural machinery purchased by Soviet Russia during this period was £14,527, a miserable result justifying none of the statements the hon. Member has made. History repeats itself. He now comes forward and makes exactly the same kind of speech that he made week after week and month after month, and the burden of his speech to-night was that if only we would do something more, only give them longer credits, things would be better. I prefer to take facts as I find them, and it is a most miserable and unsatisfactory result.

It is a very favourite device of the Soviet Russian authorities, so far as I can see, to go about the country talking about all the orders that they are going to give us. I know no more illuminating illustration of the position than the recent history of the purchase of 3,000,000 pairs of footwear that the Soviet Government have said they were about to purchase. The Parliamentary Secretary to the Board of Agriculture the other day made a speech in the country and, endeavouring to withdraw attention from the actual facts concerning the Government of the day and their successes, referred to the purchase of these 3,000,000 pairs of boots and said to the assembled multitude: The Government have entered into diplomatic negotiations with Russia and you in a district such as this, interested in the manufacture of boots, will be pleased to hear that Mr. Arthur Henderson, the Foreign Secretary, told me that, as a direct result of negotiations with Russia, an order for 3,000,000 pairs of boots has been placed in this country, and it is certain some of this trade will come to the Thornbury Division, There is a sequel to that, which we had yesterday, and the hon. Gentleman the Secretary to the Overseas Trade Department will be familiar with this. He was asked this question: Whether the Soviet delegation has placed with other British boot and shoe manufacturers the order for 3,000,000 pairs of footwear not accepted by the Northamptonshire boot and shoe manufacturers? A very self-sacrificing attitude on the part of the Northamptonshire boot and shoe manufacturers. He was asked whether those gentlemen who had been promised by the Noble Lord these 3,000,000 pairs of boots, whether this order had been placed and the Secretary to the Overseas Trade Department, who is a straight and truthful man, gave this reply: No, Sir, not so far as I am aware."—[OFFICIAL REPORT, 28th July, 1930; col. 20, Vol. 242.] Then the question was asked, whether the hon. Gentleman was aware of this speech and what was done. I am sorry to say, such is the knowledge of the hon. Gentleman of the statements of his colleagues, that he was unable to throw any light on the circumstance.

This is an illustration, not only of the methods of the Government in going down to a constituency which is very hardly hit by unemployment at the present time—as are most other constituencies in this country—and holding out to them some prospect of an order of 3,000,000 pairs of boots, that is bad enough, but of the methods of the Soviet Government so far as trade in this country is concerned. I do not think anyone in this House believes in this order of 3,000,000 pairs of boots and shoes. I do not think anyone believes that the Northamptonshire people turned it down. I do not think anyone believes that it was ever offered to the boot and shoe manufacturers in the Thornbury Division. No, this is an illustration of the sort of baits that are held out to people in this country if they will only give the Soviet Government still further credit. Actually, in this case, it was found on investigation that the only justification for his statement in respect of these 3,000,000 pairs of boots was that, in five years' time, after the boots and shoes were delivered, the money might be paid. I do not believe that even the Under-Secretary of State would like to do business on those terms. Seriously, however, is it not a monstrous thing that members of the Government should go about spreading these statements when there is no justification for them; is it not a more monstrous thing still that ideas and suggestions of this kind should be held out so far as trade is concerned?

I want the Under-Secretary of State to tell us to-night exactly what the position is so far as the Foreign Office is concerned. We want to know what it is that this machinery, which is supposed to be investigating these allegations of propaganda, has been doing. As a matter of fact, and I think this is pretty self-evident, it wants no committee of investigation to examine into these matters. The Government of India has issued an official communiqué as to what is happening there, and we know what is happening in most parts of the world. We know, so far as propaganda is concerned, the statements which are appearing in the official papers of the Russian Soviet Government. Why, then, has this machinery been set up? I do not think there is much doubt about it. It was set up to endeavour to save the face of the Government, which has entered into a foolish agreement of this kind, which it knows it cannot possibly sustain and which, at the present moment, is doing nothing but degrade this country and the Government in the eyes of the world.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Dalton)

This discussion to-night on the Foreign Office Vote which is nearly at an end has been abbreviated by certain matters to which I need make no further reference now, and will be further truncated by the requirements of the Vote of Supply at 10 o'clock. I am sorry that this truncation has to take place, because I know that there are Members in all parts of the House who would have been glad and able to make valuable contributions to the discussion. Even so, however, the discussion has ranged over a wide field. The earlier part of the discussion, on Egypt, does not call for anything further from me. The Prime Minister, replying at an earlier stage of the Debate, made very clear the policy of the Government in regard to Egypt and claimed, I think justifiably, that that policy had been successful in so far as the despatch of warships to Egyptian waters had had a calming effect on the ebullient spirits who might otherwise have caused trouble there. He claimed, moreover, that British troops had not been called on, and that there had been no need to call on them to take over the duty which properly belonged to the Egyptian army and the Egyptian police, a duty which that army and police had proved perfectly capable of fulfilling in an adequate and efficient manner. Nor need I spend further time in repeating the arguments already adduced by the Prime Minister in support of the communication addressed by His Majesty's Government to the Leaders of both the parties in the constitutional conflict now raging in Egypt. Nor need I say anything further on the subject of that electoral law which, far from being imposed, as the right hon. Member for Epping (Mr. Churchill), would have led an ill-informed House to believe, by His Majesty's present Government on a reluctant Egyptian people, has been the law of Egypt since 1924; was supported by the high authority of Lord Lloyd, in 1926, as being the most suitable for Egyptian conditions, and under which two general elections have already been held. There is, however, one minor point raised in connection with Egypt by the hon. Member for Kidderminster (Mr. Wardlaw-Milne), on which I have consulted my hon. Friend the Financial Secretary to the War Office. That is the question of trooping movements in relation to the British garrison in Egypt. The hon. Member for Kidderminster inquired whether there was any intention to deplete the British contingents now in Egypt. My hon. Friend assures me that there is no such intention and that, whatever changes take place in the disposition of particular units, the total strength of the British forces in Egypt will remain for the present undiminished. The hon. Gentleman who put that question is not here now, but I hope I have reassured him on that point.

May I pass from Egypt to consider the question of Russia, to which a number of hon. Members have addressed themselves? I must be somewhat careful, Mr. Young, in the light of the Ruling of your pre- decessor in the Chair, as to the degree of detail upon which I embark in connection with the question of trade credits. Mr. Dunnico has ruled that that is a matter which we may touch only, as it were, in passing, and no too heavily, in the debate on the Foreign Office Vote. I think my hon. Friend the Member for Lincoln (Mr. R. A. Taylor) knows that we at the Foreign Office sympathise very strongly with his desire to see a stimulus given to British export trade with Russia; that we believe that large masses of unemployed men and machines, particularly in the engineering and other constructional industries, could be set at work provided that our export trade with the Russian market could be stimulated. He knows, I think, that that is our view. At the same time we do not yet live, unhappily perhaps, in a state of Socialism as regards finance, and it is therefore not possible for much to be done in this matter unless some degree of benevolence is created in private business circles. That leads me to two further points. In the first place, I am informed by my hon. Friend the Secretary to the Overseas Trade Department (Mr. Gillett), that the question of possible extensions of the credit facilities under the Export Credits Scheme is now—if I may use a catch phrase applicable at any rate, on this occasion—under active consideration. I am glad to hear from him that that is so. On the other hand, as my hon. Friend the Member for Lincoln himself pointed out—and I hope that the echo of this may be transmitted to Moscow—it is quite evident that if, in the debt negotiations which are to begin in the autumn, the Soviet Government should show a disposition to make a common sense settlement—I will revert in a moment to the question of debt negotiations—those who are well acquainted with the psychology of the City of London assure me that that might have some effect on the conditions under which they would afford credit to Soviet Russia. For the moment, I do not think, without the risk of being called to order by you, Mr. Young, I can go into any further detail with regard to export credits.

The question of Soviet propaganda however, gives more unquestioned latitude on a Vote for the Foreign Office. The right hon. Gentleman has taken a deep and an expert interest in this matter and of the 500 or 600 questions put to us, perhaps 30 per cent. have been put by him. He has been of undoubted assistance to the Government in directing their attention to obscure paragraphs in newspapers printed in the Russian tongue which otherwise we should not have thought it worth while to seek out and translate. He has indeed provided much raw material upon which our machinery of inquiry can operate. He has, perhaps, done a little to prolong its useful days. But, as my right hon. Friend the Foreign Secretary has on several occasions informed the House, we are, on the one hand, not satisfied that the Soviet Government have fully carried out the pledge which they gave us when we signed the Protocol for the resumption of relations. We are not satisfied. My right hon. Friend has never pretended that he is satisfied with the state of affairs as regards propaganda.

On the other hand, we are not satisfied with a great deal of the evidence supplied to us from the benches opposite. A considerable amount of that evidence does not, I think, bear examination, but largely out of courtesy to the Opposition in this House we deemed it right to set up an expert committee to examine the evidence which they were so kindly furnishing to us in such great quantities that inquiry has been poceeding. It has not yet been completed, but I am authorised to say that it is nearing completion. I trust that at a comparatively early date my right hon. Friend the Foreign Secretary will be able to come to a decision, to use the words which he has already used in answering questions in the House, as to what action, if any, will be appropriate to be taken in the light of the results of that inquiry. My right hon. Friend has given an undertaking that he will inform the House of any action which he may deem it desirable to take as a result of this inquiry. The Session is now approaching the end. The Recess will soon be upon us. But I should be somewhat surprised—though here I venture into the realm of prophecy—if the right hon. Gentleman were to put down a question to the Foreign Office for the first day of next Session, and if we could not then give him an answer.

Sir K. WOOD

Is the hon. Gentleman sure that he will then be in a position to answer it?

Mr. DALTON

Yes, I can assure the right hon. Gentleman upon that point, so far as anything in this uncertain life is sure. I have endeavoured to answer the right hon. Gentleman frankly about Soviet propaganda. I have said that we are not satisfied either with all the conduct of the Communist International or with all the evidence furnished by the Conservative party, and in consequence we have felt it right to go into the matter in some detail, and we hope before long to report what action, if any, it is deemed necessary to take. We cannot commit ourselves to publish the report of such an inquiry. It would be quite impossible to carry on foreign affairs, as the right hon. Gentleman my predecessor will surely know, if we were compelled to publish all reports of inquiries of this character. But if the report should be such as would seem to require action by my right hon. Friend, that action will be reported to this House and may be made the subject of debate in the House.

As far as Russia is concerned, it is perhaps as well, in a debate of this kind, for the representative of the Foreign Office to summarise what has been done and compare it with what was done in preceding years. The resumption of relations with Russia was a leading issue at the General Election. Everyone voting for me or for any of my hon. Friends knew that they were voting for the resumption of relations with Russia, with all the risks and with all the difficulties which that policy might entail. Those who voted for members of the Liberal party knew that that was intended on their part also. When the decision was taken by this House to resume relations, it was taken by a very substantial majority. Nor is there any evidence that that policy of resuming relations with Soviet Russia is now thought to be wrong by any except those who have always been opposed to it. No one who voted in favour of resuming relations with Soviet Russia has changed his mind in the light of recent experience.

It was on 20th December of last year that the Soviet Ambassador presented his credentials and relations were for- mally resumed, and since that time the value of these resumed relationships has been shown in more ways than one. To begin with, and perhaps the most obvious of all, we now have the advantage of an Ambassador in Moscow, a Commercial Councillor in Moscow, and of accurate and reliable information from Moscow in place of having to rely upon the Riga correspondent of the "Times" newspaper and other substitutes for exact knowledge. Members in all parts of the House will agree that there are great advantages in having a reliable staff of dispassionate observers, both of political and economic events, stationed in Moscow at the present time. Then there is the advantage which we possess here in having a Soviet Ambassador and staff who can come at short notice and discuss verbally in the Foreign Office any questions which may arise between the two countries.

Those are what I may call the most obvious advantages of the resumption of the relations broken off by the Conservative Government in 1927. But over and above that, there has been signed, and there has come into force, a Temporary Commercial Agreement between the two countries which gives the requisite legal basis for the development of Anglo-Russian trade, as to which I will, in a moment, quote some statistics. Further, we have a Temporary Fisheries' Agreement which was signed on 22nd May, 1930, which has secured to British fishermen the right to fish in the disputed area between three and 12 miles from the north coast, an advantage which was not available to them under the previous administration. I have heard no complaints from any representative of a constituency which has fishing interests about that agreement; on the contrary, there has been considerable satisfaction in many quarters representing all sections of opinion that that agreement has been signed.

Negotiations are also going on at the present time for the conclusion of an agreement regarding the application of previous treaties and conventions. That, perhaps, does not sound a very important matter, but I am assured by our expert advisers in the Foreign Office that if these negotiations can be brought to a conclusion it will be extremely useful and helpful in many ways to regularise and to settle a number of doubtful points arising out of past treaties, many of which have fallen into decay or about which there is a doubt as to whether they still apply. Furthermore, we have succeeded in doing a thing which our predecessors never succeeded in doing, great as were their sympathies with the British bondholders in Russia. We are often spoken of as the enemies of capitalists, and particularly at election times as the enemies of small capitalists. Nevertheless, we have arranged, as a result of patient and persistent negotiations, for a joint committee to to be set up, with agreed terms of reference between ourselves and the Soviet Government, to discuss all questions of debts, claims and counter-claims, public and private, outstanding between the two countries. That committee is due to meet on the 2nd October next. Between now and then a considerable amount of useful preparatory work will be carried out which I hope will enable the committee, when it meets, to get on rapidly with the consideration of a rather difficult problem. If there be any gratitude among bondholders, I hope that they will take note of the fact that it was a Labour Government and not a Conservative Government which took them one step nearer to the goal of their desires.

Sir K. WOOD

One step nearer!

Mr. DALTON

One step nearer. The right hon. Gentleman's friends could not negotiate at all, or make any advance, because they were responsible for breaking off relationships with Soviet Russia, as a result of which the hopes of the bondholders fell to zero. Seriously, I do hope that these negotiations will have some fruitful result. As I said in regard to the speech of the hon. Member for Lincoln (Mr. R. A. Taylor), there is no doubt that, human nature being what it is, in the City of London and elsewhere, a satisfactory and common-sense settlement of this matter would have a very helpful repercussion on the volume of Anglo-Russian trade. I hope that the negotiations will be entered into without too much theological argument on either side. I trust that it will not be necessary to press a demand that the debts shall, as a matter of metaphysics, be admitted to exist and to be binding, nor, on the other hand, that the Soviet Government shall feel any philosophical difficulty about agreeing to make payments. I hope and I believe that the matter will be treated as a practical business transaction and that successful attempts will be made to secure the adoption of some scheme which will give satisfaction to both parties. If such a scheme can be carried through, I am sure that the result will be beneficial all along the line.

May I say a few words about the figures of trade with Russia? It is well known that orders are given before trade takes place. I only repeat that platitude in order to draw the attention of the Committee to the fact that there seems sometimes to be a divergence between various estimates of British trade with Russia. Orders are given but those orders do not, of course, issue in the form of exports or imports until some considerable time after they have been given, and after the work has begun. Some of the figures quoted in regard to orders are exceedingly encouraging, and suggest that already there is a distinct upward move in trade, which will certainly move upwards still faster if an agreement can be come to on the question of debts. Leaving the question of orders, and coming to the question of exports and imports, the figures are naturally smaller, but it is worth while noting that the British exports to the Soviet Union, excluding re-exports, have gone up very considerably. In the eight months ending the 30th June, 1929, the exports were of the value of £1,980,000, whereas in the corresponding period ending the 30th June, 1930, the figure was £3,260,000. Hon. Members who are always claiming, and they have my sympathy in so claiming, that the Soviet Union should spend more money in purchasing our goods will, I think, be satisfied that the rate of increase is substantial.

Sir K. WOOD

Does it include arms and munitions?

Mr. DALTON

It includes the exports of all produce and manufactures of Great Britain and Northern Ireland. The right hon. Gentleman is, surely, quite neutral as between various British trading interests and would like to see them all expanding their trade pari passu. I have endeavoured to answer the questions that have been raised with regard to trade and debts, I have dealt with the point in regard to propaganda, and I have given to the Committee some idea of the definite achievements which have been accomplished since relations with Soviet Russia were formally renewed as late as December last.

Sir K. WOOD

Can the hon. Member say anything about the order for 3,000,000 pairs of boots?

Mr. DALTON

No, Sir. I should be going far outside the Rules of Order as laid down by the Chair if I discussed in detail a purely commercial transaction which comes within the province of my hon. Friend the Secretary for Overseas Trade. Several hon. Members have raised other questions and I will reply to some of the points which they put. The hon. and gallant Member for Warwick and Leamington (Captain Eden) spoke about disarmament, and thought that the Prime Minister, in a recent speech, had painted in too glowing colours the present state of the world. I am sure that the Prime Minister would entirely agree with the statement that I am about to make, that the recent Naval Conference, although it succeeded beyond the hopes of some pessimists, fell short of our hopes and aspirations in so far that it failed to bring into the main Treaty the French and Italian Governments. None the less, we did secure what our predecessors, With all their efforts, failed to secure at Geneva in 1927. We did secure a complete Three-Power Treaty, limiting precisely every type of warship in the three greatest and most powerful navies of the world. Therefore, some credit is due to His Majesty's present Government for what they have achieved in that respect. None the less, the Conference fell short of our hopes and our efforts.

It has frequently been stated by the Prime Minister and my right hon. Friend the Foreign Secretary that we are most anxious to do anything that we can to help to bring the Franco-Italian discussions, now proceeding, to a satisfactory conclusion. After the hopeful gestures which have been made from both sides in regard to the laying down of no further warships in the next few months, up to the end of this year—gestures which we certainly welcome as being made in the true spirit of international friendship—and after the discussions that are now proceeding, we shall be very disappointed if we do not succeed in bringing France and Italy within the sphere of complete agreement regarding naval limitation. In November next there is to be a meeting of the Preparatory Disarmament Commission at Geneva, and these naval matters, if not settled before then, as we hope they will be, will be able to be brought up there, where the whole matter can be surveyed so far as concerns the general framework within which the Disarmament Treaty must ultimately be made. I hope that we may at the November meeting of the Preparatory Disarmament Commission pave the way for the still more important Disarmament Conference which is to take place subsequently.

The right hon. Member for Marylebone (Sir R. Rodd), whom we always listen to with great interest and respect in view of his ripe experience in foreign affairs, put a question about the Optional Clause. In a sense that is water that has passed under the bridge, because our signature of the Optional Clause has now been ratified by His Majesty after debate in this House and ratified also by His Majesty in respect of most of the Dominions. But there is no doubt that in taking this important step we do submit, and I am proud to believe that we submit—and I believe that the general body of enlightened public opinion in this country would desire to submit—in the future to the same rules in the international field as we have submitted to for so long on the football field and the cricket field, where we are willing to accept the decision of the referee or the umpire on any point which may be in dispute.

The whole principle of international arbitration is that we are willing, in a dispute with some other country, to accept the decision of an impartial third party. If you are going to preserve the right to put your own interpretation on domestic jurisdiction you may make complete nonsense of the whole principle of compulsory arbitration. You will be getting back, under another form to the pernicious old formula of "honour and vital interests" which was a serious blot on so many arbitration treaties in the pre-War period. His Majesty's Government believe that, subject to the various reservations which we have formulated, it is not only wise but right to accept an impartial third party judgment in preference to the risk of an armed outbreak, in which millions of young men may meet a premature death. This is a risk of peace far less grave than those risks of war which those who are afraid of these developments prefer to face.

May I pass to a final word suggested by the speech of the right hon. Member for Marylebone and by the speech of the hon. and gallant Member for Leamington (Captain Eden). They warned us that there were still dangers of war. The right hon. Gentleman referred particulaly to Eastern Europe, and no intelligent student of the international field can be unaware of these things. They must give us cause for considerable hesitation as to the future of this and other countries. But that is why His Majesty's Government is all the more determined, having signed the Covenant of the League of Nations, having signed the Kellogg Pact, having signed the Optional Clause and having signed the London Naval Treaty, to go forward and make these things real bulwarks of a peace which shall endure. We do not under-estimate the difficulties or the dangers. We do not under-estimate the risks, but we believe, as I said just now, that this pacific policy of peaceful settlement, of arbitration, of international agreements in one form or another, carries risks of peace, which are as dust in the balance compared with those risks of war which have beset us in the years gone by.

It being Ten of the Clock, the CHAIRMAN proceeded, pursuant to Standing Order No. 15, to put severally the Questions, That the total amounts of the Votes outstanding in the several Classes of the Civil Estimates, including Supplementary Estimates, and the total amounts of the Votes outstanding in the

Estimates for the Navy (including a Supplementary Estimate), Army, Air and Revenue Departments, be granted for the Services defined in those Classes and Estimates.