HC Deb 16 June 1932 vol 267 cc538-69

Motion made, and Question proposed, That a sum, not exceeding £33,525, 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, 1933, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Dominion Affairs."—[£16,700 has been voted on account.]


I think there will be general agreement that, although we are discussing the Departmental Vote, the main topic of our discussion should not be confined to the ordinary departmental matters, but rather that the House of Commons should have an opportunity of discussing, very fully and frankly, the forthcoming Ottawa Conference. I do not think that anyone in any party will minimise the importance of that Conference. It is true to say that throughout the length and breadth of the British Empire there was probably no conference that was ever held that was looked forward to with more hope—I trust with more justifiable hope—than this particular Conference. Let us keep in mind that it is practically the first Conference held for purely economic purposes. There have been many Imperial Conferences. In the natural and inevitable development of the British Commonwealth of Nations political questions always loom large, but those of us who took part in the last Imperial Conference felt that we had reached a position where we could say, with truth, that so far as the main political differences that existed in the Dominions were concerned every Dominion felt that it had reached the stage of absolute equality, and so removed from the arena of future Imperial Conferences those political differences that had hitherto divided us.

It is not only the first Economic Conference, but the first Conference convened by one of our fellow-Dominions, held in the capital of one of our Dominions, and, unfortunately, at a time when the economic position of the world is such that it has never been worse. All these facts make it incumbent upon those taking part in the Conference not to minimise in the least its importance and to endeavour not to disappoint the great mass of people who pin their faith to it.

Many explanations are given to-day as to the cause of the economic sickness of the world. We are told that War Debts and Reparations are the primary cause. Others do not hesitate to attribute our difficulties to questions of currency and monetary policy, while others lay down quite clearly and definitely that in their judgment the whole problem is one of over-production. Whatever may be said, no one will minimise the tremendous importance which War Debts and Reparations must inevitably play before there is any world recovery, while no one will challenge the position that the monetary and currency problem is a factor to be fairly and adequately considered. But when we come to the question of over-production, I do not think that it can be justified. I would rather say that, coupled with the other difficulties, under-consumption and not overproduction plays an all-important part. Since the War, science has developed and the power and efficiency of machinery are such that the productive capacity of the world has increased tremendously.

While that is true, it is equally true to say that by tariffs quotas, exchange restrictions, and by every other device of State ingenuity, the world has been building up barriers which render freer trade almost impossible. If that position be the broad statement of fact, then I put it to the House that our fundamental object ought to be to go to Ottawa, where we are meeting our fellow Dominion statesmen on absolute terms of equality, representing, be it observed, one-quarter of the population of the world, all classes, all creeds, and all politics and see how we can direct our energies to getting more trade and freer trade. If we succeed in that object, if we get more trade and freer trade, with all the diverse interests which are connected with the British Empire, what an example it will be to the world if we can say that we have adjusted our differences, consolidated our forces and devised ways and means whereby there shall be freer trade and more trade within the Empire, and by that means all of us, representing the British Commonwealth, equally directing our efforts to getting freer trade and more trade throughout the world.

I put it to the Committee that that short statement of our ideal is one that no one can challenge. I am quite aware that when I talked of trade barriers and tariffs, there was the sort of response which says. "Yes, but how does that square with your tariffs and your preferences"? [Interruption.] I anticipate that I have correctly interpreted the situation. My answer, and the answer of the Government, is that no member of this Government ever supported any tariff because he thought it was a solution of the world's problems, but we did support them, and we support them now, because experience shows, my experience in the last Government showed, that when we sent the late lamented Willie Graham to negotiate abroad, doing his best to break down the barriers I have indicated, he found it impossible unless he had a weapon such as the other peoples held. I say that as clearly indicating what I mean by freer trade and the breakdown of tariff barriers. But there is no one who has given any attention to this subject who would attempt for one moment to minimise the difficulties which confront us. It certainly is not an easy task.

To-day we have many of our Dominions which have developed, and rightly developed, what are called secondary industries. These industries compete in world markets with our industries, and in order to foster and develop according to their own views these secondary industries, they have put up tariff barriers which render it very difficult for our own industries to compete with them. Further- more, we must keep clearly in mind that, so far as those particular interests are concerned, the problem which faces us in Ottawa is not to assume for one moment that they have no right to develop their country. That is an impossible position, and one that we have no right to take up. But it is our duty fairly, frankly and honestly to face the facts.

Let us for the moment consider the diverse interests of the Dominions themselves. Australia and Canada are very concerned with an outlet for their prime commodities. To Canada, wheat is the all-important factor. To Australia, wool and meat are much more important. New Zealand is mainly interested in butter and cheese. Then you have Australia and New Zealand both interested in meat. When you come to South Africa, neither wheat nor meat is a main factor, but maize and fruit are. [An HON. MEMBER: "And gold."] At the moment it will be agreed that there is not such a market for gold as for the other things with which we are dealing. What I want to put to the Committee is this: While I am mentioning the differences in the particular interests of the Dominions, I come to India, which is a factor that must never be lost sight of. You find her not only interested in, but competing very seriously with, our own markets in pig iron and other things which vitally affect our own trade.

That short statement of fact gives to the Committee a very brief picture of the different interests and the difficulties with which we are faced. Just as Canada, New Zealand, South Africa and Australia said—and rightly said—"We must by the very nature of things look after our own interests"—that has been very clearly demonstrated by all the Dominion Premiers—"and our next concern is the interests of the British Commonwealth," so I put it that when we approach these problems we must equally not be unmindful of our own obligations to our own industries. When I say "our own industries" I am not forgetting agriculture. I dare say many hon. Members were as surprised as I was to see the figures made public the other day, showing that there is greater wealth in our own agriculture than in the agriculture of any of our Dominions. That is a most important fact to keep in mind.

Anyone who views these questions dispassionately must admit straightaway that this seems at first sight an insoluble problem. If with these diverse interests we were sitting round a table with representatives of foreign countries, trying to reconcile differences and agree upon a common policy, taking the view that our job was above all to get some common outlook on these problems, frankly I say that I would look upon the task as almost impossible. Having stated the difficulties, having shown the diverse interests, are we not justified in asking—black as it may appear, difficult ass it may look to reconcile these particular interests—what are the factors that give us encouragement and hope? I first answer that question by saying that we must remember that we shall be meeting the representatives of our own kith and kin. Whatever may be said about any of the Dominions, do not let us forget that there are there to-day in large numbers and in their representatives men who realise that they are blood of our blood, that they are themselves vitally interested and anxious, keeping in mind that the British Commonwealth as a whole is greater than any section of it.

Therefore, we are fortified and justified in our belief and knowledge that in approaching these difficult problems with all their diverse interests, we start right away with the tremendous advantage of good will on our side. But the Committee will naturally assume that if we are to deal with these diverse interests, one thing above all was to see that in the preparations, in the arrangements for the Conference, every step was taken in advance to ensure success. My first observation on that is that I, personally, took the same view with regard to this Conference as I took for a long period of years with industrial conferences and negotiations. During the whole 30 years of my negotiations with employers I never made a successful agreement unless the ground was very clearly laid out in advance. In other words, the best agreements are made when you have them in your pocket before you announce them. I do not mind confessing that I had many in my pocket before I announced them.


And something up your sleeve as well.

4.0 p.m.


It was because my hon. Friend has experienced so often how much I had up my sleeve that he was very reluctant to come to me. At all events, I would put it to the Committee clearly and definitely that if with all these difficulties we merely waited until the Conference took place, there would be no possible hope of success. But we did not wait. The Cabinet appointed a sub-committee within a week of taking office. It was composed of the Lord President of the Council, the Chancellor of the Exchequer, the Secretary of State for the Colonies, the Secretary of State for Foreign Affairs, the President of the Board of Trade, the Minister of Agriculture, the Secretary of State for War and myself. That Sub-committee clearly indicated the view of the Cabinet as to the importance of the Conference. But, in addition to that, they appointed a Departmental Committee. They had also various Sub-committees, and, for the first time, they are taking to this Conference industrial advisers who speak not only for capital and labour, but for practically every industry in the country. I have been compelled to answer from time to time various trade interests. The Committee will be interested to know that the actual trade bodies met. I do not mean a casual meeting but a conference arranged, at which one or other Minister took part, and where views were fully and frankly exchanged with the following bodies: the corn and flour trade, which met several times; the Association of British Chambers of Commerce, the Trades Union Congress, the British Committee on Empire Trade, the wool textile trade, the cotton industry, the Co-operative Congress and the Parliamentary Committee, the National Food Canning Council, the Welsh tinplate manufacturers, the Manchester Chamber of Commerce, the motor industry as a whole, the Imported Meat Trade Association, and the Millers Corn Trades and Cooperative Society combined in connection with the wheat quota. The Minister of Agriculture also met the farming interests,,and my right hon. Friend the Colonial Secretary has had conferences with the British Empire Producers Asso- ciation, the Joint East Africa Board, the West Indian Committee, the Ceylon Association in London as well as representatives of West Africa, Malaya and other interests.

I put to the Committee, on that statement of fact, this proposition, that whatever Members may say in this House, and whatever particular view they may represent, no one will deny that, in the matter of trying to ascertain the views and the desires of all the possible trades that are likely to be affected, every step was taken by the Government to meet the situation. In addition to all those deputations, from the day that the industrial advisers were appointed the Government met them frankly, and discussed the whole situation with them. They are meeting daily, and themselves meeting the particular trade interests for whom they will be called to speak at Ottawa, and it is only fair to say that it is a tribute both to their selection and their work and public spirit, that men conducting big businesses, responsible business men as they are, should throw themselves so whole-heartedly into this business with a view of meeting and helping the Government to make it a success. Therefore, I submit that, so far as the trade representation and so far as the attempt and the effort to ascertain every point of view are concerned, the Government can at least claim that they have done their best.

I said earlier that we were very anxious that we should explore the ground in advance, and try to get some agreement before Ottawa, because I want to make it clear at this stage that we do not view the Ottawa Conference as a sort of Disarmament Conference which is going on for a very long time. We have definitely come to the conclusion that, so far as we are concerned—and we know that we are speaking for the Dominions as well when we say this—we must prove ourselves businesslike and not have a long-drawn out Conference. If, therefore, all these subjects were to be discussed without preparation beforehand, and in some cases agreement, it would be generally accepted that the task would be hopeless.

In addition to what I have outlined in our preparations, we sent out a questionnaire to every industry. We said to them: "Give us a list of the goods which you export to the Dominions. Show us what the tariff barriers against you are, how they compare with foreign, tariffs, what is the value of the Preference given to you, and keep in mind that there are secondary industries in the Dominions which must be considered. Set out what, in your judgment, is a fair competitive basis, having regard to all those facts." We have in our possession and have sent to our own trade commissioners in every Dominion—they have been meeting for months the trade commissioners of those Dominions—the schedules and all that could be required from our point of view, and equally the Dominions have submitted their lists to them. That interchange has been going on not only in the Dominions but in London as well, and the Committee will agree that that was a very businesslike way of getting to work. Then the Indian delegation, the importance of which no one can minimise, and I certainly will not minimise, has been here some weeks, and they themselves are daily conducting negotiations on the same basis. We have asked the Dominions to send their schedules. The same kind of discussion is taking place at the moment in London. So it will be seen that, as far as preparatory work is concerned, nothing that we could possibly do has been left undone. If the other Dominions are as ready—and I hope that they are as ready as we are as far as the preparation of our case is concerned—then the Conference most certainly will not fail for that particular reason.

The Committee would naturally like to know what is the agenda. Here, again, we are in this difficulty. Canada is the convening body. Canada is responsible for the agenda. It is open to any other Government attending to submit their views and their desires with regard to the agenda. When it is remembered that all the Dominions must be consulted—and, indeed, only yesterday, to my knowledge, one Dominions sent in their suggestions—no one can condemn the Canadian Government because of the absence of a complete agenda at this moment. It is due, and must be due, from the nature of things, to the distances which separate us and the number of others that must be consulted. So that while it is impossible at this moment to say definitely what is the agenda, we can at least quite clearly indicate the broad, general lines of subjects that we know will be discussed.

I propose to give the Committee all the information at my disposal in that particular connection. The first of all questions to be discussed is that of trade; in other words, what steps can we usefully take as between one Dominion and another for the mutual advantage of each other's trade? That, by the nature of things, covers a very wide range of subjects. That, everyone will see, raises quite definitely and clearly the question of tariffs, and with the question of tariffs the question of Imperial Preference. I said earlier that there was justification for the opinion that the good will which we know can be mobilised among our fellow-Dominions was in itself an asset, but I am entitled, speaking for the British Government, to say that we ourselves made a great contribution to that good will by our own action. We did not ask whether a Dominion was on gold or sterling. We did not ask for any bargains. We did not say, "Will you reciprocate?" We said that we looked upon this Conference as being so important, that when there was a change in the fiscal system of this country, as a contribution, as a gesture, as a genuine effort not only to create good will but the right atmosphere for that Conference, without any bargain of any sort or kind, we gave free entry from the Dominions to our markets. No one can minimise the importance of that. No one will attempt to say that we were not justified, because we believe it was a gesture on our part which will be reciprocated.

In connection with the question, of trade as far as Preference and tariffs are concerned, there is an equally important question which, I think, not only requires serious consideration, but must be explored. Although there are secondary industries in many of our Dominions, by an agreement whereby manufacturers can meet, in the Dominions, those who are engaged in industry there, and themselves come to an agreement as to what can be made in this country better, more cheaply and with less cost to both sides, there ought to be a real attempt at a rationalisation scheme as between one Dominion and another.

Here let me remind the Committee of another part of our preparations. We have already sent, and there are in Canada at this moment—some of them have been there for weeks—representatives of business interests. They are not meeting the Government, because these things cannot be done by Governments. These things can only be done by the representatives of the industries meeting their fellow-representatives and discussing matters between themselves. The steel trade and other trades are at this moment engaged in an interchange of views to see how far some process of rationalisation can be carried out. I look with considerable hope for the success of a scheme of that kind. That broad, general outline covers what I would call the trade questions that must arise. I do not want anybody to get up and ask, "Does it include timber?" or "Does it include motors? "or" Does it include something else?" The broad outline which I have drawn covers, in the main, every item of any particular industry.

Vice-Admiral TAYLOR

Before the right hon. Gentleman leaves the question of trade, will he say whether all these preparations and all these lists and so on also apply to the Colonial Empire? He only mentioned the Dominions.


I do not know whether I had perhaps better tell my hon. and gallant Friend what we are talking about.


It was a perfectly proper question.


I am making it quite clear that this is a Dominions question so that there will be no doubt. My hon. and gallant Friend, I take it, intends to ask me what are we doing on the Colonial side. I have first to say that in Ottawa we shall be meeting and discussing with those who are masters of their own situation—in other words it will be the Dominions—but undoubtedly no one could minimise the importance of the Colonial side of the question and my right hon. Friend the Colonial Secretary has been dealing daily with the Colonial side of the question. But I would ask hon. Members not to mix it up with the Dominions side, because when you are dealing with the Colonial side you are dealing with an entirely different problem, and with different powers and responsibilities from those with which you are dealing in the case of the Dominions. I hope that my hon. and gallant Friend will keep that in mind.


Are the Government keeping them in separate compartments as the right hon. Gentleman described it just now?


Separate compartments so far as this Conference is concerned. For instance, the interests of the Colonies will be represented by the Colonies Secretary and there must be, by the nature of things, questions which will cut across these considerations. There is, for instance, the question of sugar, which cannot be considered separately and apart from the Dominions, and there are many other such questions. All I want to make clear is that this is a Dominions' Conference, but undoubtedly the Colonial aspect of the question must, of necessity, be taken into consideration.

Vice-Admiral TAYLOR

I understood that this was an Imperial Conference, and surely the Colonial Empire is a very important part of the Empire. The right hon. Gentleman has specifically stated that India is being included in the Conference, and I cannot understand how it is that the remainder of the Colonial Empire, which is of such vast importance, is not also definitely included.


I had better try to tell my hon. and gallant Friend, because it is obvious that he is anxious to know, and seeing that there are so many statements from the organ which he is following in this interrogation, I had better make it quite clear. He said it was an Imperial Conference. That is quite right, but there has never been an Imperial Conference at which all the Colonies were represented. The Colonies are governed under an entirely different constitutional position. Some are governed by mandate. But I need not go into all these details, because I am sure that my hon. and gallant Friend knows them. This Conference is an adjourned Conference from the last Imperial Conference. Those who attended the last Imperial Conference are now to attend the adjourned Conference. I hope that my hon. and gallant Friend will keep that in mind. Mr. Bennett sent his invitations to all those who were present at the last Conference and this, as I say, is merely an adjourned Conference for economic purposes.

Having made that clear, I would proceed to show the Committee that so far as trade and all those questions which are directly and indirectly connected with trade are concerned, they would come under the first broad category which I have indicated. The next group of questions comes into the category of monetary and financial questions, and that undoubtedly must include the whole question of currency. Here, again, no one will assume for a moment that a Conference meeting as we are meeting can hope in a few weeks to settle this important and very debatable subject on which inside and outside Parliament there are diverse views and very strong opinions. That does not mean that the Government are attempting in any way to shirk the matter or run away from a discussion. On the contrary, I want to assure the House quite clearly and definitely that this matter is not only on the agenda, but that it takes a very important and prominent place on the agenda.


Has it been prepared for in the same way as the right hon. Gentleman says the other questions have been prepared for?


If my right hon. and gallant Friend means to ask, have the Government discussed the matter and sought advice and obtained opinions in order to be in a position to state a view, the answer is "yes," but I want to indicate clearly and definitely on this and other matters—and I am sure my right hon. and gallant Friend would like to occupy not a few hours but a few months on these matters and he could do so—that so far as the Government are concerned they have realised the importance of the subject and as I have said it is a subject matter for the agenda.


Have you got it in your pocket or up your sleeve?


I do not think I have anything more than silver at the moment in my pocket.


Hear, hear!


But not so much as my right hon. Friend. Having dealt with what I have called the broad general trade situation and the currency question, I have also indicated that so far as rationalisation is concerned no one will under-estimate the value of our method in dealing with that side of the question. Here let me say that I hope, above all, that one result of this Conference will be to set up some body representing the whole of the Empire which will not have to wait for three years before they can meet again. I think the change in world conditions and the change of relationships in the British Commonwealth as it is to-day all justify the hope and belief that there may emerge from this Conference some machinery representing all the Dominions, so that they may be able to be in daily contact and not be compelled to wait for three years for the usual Conferences to take place. We advocated that policy before, and we shall advocate it again.

4.30 p.m.

In dealing with, this side of the question, I would like to draw attention to what I believe to be a mistaken view with regard to the value of Empire trade. One frequently hears the arguments that from, our point of view it does not matter whether we spend a pound in Canada, Australia, New Zealand, South Africa or the Irish Free State—that it is just the same as if we spent it in a. foreign country. I do not think that is a fair statement. I do not think we have' a right to approach the problem in that way. Speaking for myself, I have no hesitation in saying that I would look with despair upon the growing population in this country—a small island with a high standard of living—I say that unless there was some outlet for our population I would absolutely despair of the future. We are entitled to look ahead and to see what is the natural and obvious outlet for our people. Where can our people hope to make good? Where can they meet their own people? I submit that the only possible outlet is the British Empire itself. In that connection, I wonder how many Members when they study the live register and examine our unemployment figures realise what a factor migration to the Dominions is. Do they realise that in the past 10 years no fewer than l,450,000 people, or an average of 145,000 per year, left these shores, and that, for the first time in our experience, in 1931, not 145,000 left, but 37,000 returned? Look what a tremendous factor that is in our unemployment problem. Therefore, I suggest that if we are going to take a long view, if we are to face the facts, as we know them, of our population to-day and all the possibilities of the future, it is our duty to say that the one way of securing some genuine outlet is to do all that we can, immediately, to restore the prosperity of all our Dominions. I have indicated the very wide scope which these discussions will take. I can conceive of nothing that is of moment at this time that will not be on the agenda, but, as I say, we want to make it a real business body and a practical body.

The Committee will be entitled to say right away, "If that is the agenda, and if those are the problems that you are going to discuss, if you are going to take such a wide range as you have indicated, what is the Government's policy?" I answer straight away that if I am asked what we are going to do on meat, on wheat, on timber, or on anything else, there will be no reply. Neither would any other Member, if he was conducting his business and was asked such a question, give a reply. The answer I give, and the policy that the Government have decided upon, is this, that we go there absolutely free and unfettered; we go there with an open mind, prepared to examine every question on its merits, prepared to approach the problems not unmindful of our own responsibilities and our own obligations, but all the time keeping in mind the wider, bigger view of the situation. That is the task that confronts us at Ottawa. If we can show by our example that the Dominions of the British Commonwealth, representing, as I said earlier, a fourth of the world, by common agreement can reconcile these divergent interests and help each other, what an example that in itself will be to the world. It is a great task, it is a difficult task, it is a worthy task. So far as the Government are concerned, they hope they will not be unworthy of so glorious a responsibility.


The right hon. Gentleman the Secretary of State for Dominion Affairs has given us the long awaited statement as regards the Government's policy at Ottawa, a policy which, I understand, is the policy of the free hand. The Government had a mandate, they say, for a free hand at the last election, and apparently they are in the same state of uncertainty still as to what to do with it. At least, they are not prepared to trust this Committee by telling them the lines upon which they propose to proceed. No one would have expected the right hon. Gentleman to deal with a long list of commodities and to say how each might be dealt with, but I think the Committee was entitled to expect that we should have had some outline or indication of the policy of the Government, at least upon the more important matters which are bound to be discussed at the Ottawa Conference. There is no statement as regards policy on the monetary situation. We are left completely and absolutely in the dark.


The open mind.


It is the open mind policy, and the open mind is generally a mind that has nothing in it. The right hon. Gentleman told us one thing with which we profoundly agree, namely, that the Ottawa Conference is a conference of great importance. It is of great importance, because it not only holds out to some people great hopes, but to others great dangers, and we hope to have some answers to some of the questions that must occur to everybody's mind with regard to the inter-relation of the Ottawa Conference with that which is proceeding to-day at Lausanne. We are anxious to know how far the Ottawa Conference is to override the Lausanne Conference. After all, the right hon. Gentleman's statement that the Ottawa Conference is going to be conducted on the same basis as a discussion between a trade union and employers does not fill everybody with the greatest hope as regards its outcome. He has told us that it has always been his practice to have agreements in his pocket before he goes to these conferences, and I gather from his remarks that he has got some there now. He nods his head, by which I presume that I am right. If he has, it is a little unfortunate to go to a conference of the Empire with some sort of agreement in your pocket which presumably—


I did not nod my head in acquiescence; I was dozing.


The right hon. Gentleman, like so many of his colleagues after and during his speech, was dozing. But the ground upon which the right hon. Gentleman is embarking is a ground which is indeed fraught with difficulty. Anybody who has read the Prime Minister's speech which he made this morning at Lausanne will appreciate how extraordinarily difficult it is to inject into world conferences some conference such as the Ottawa Conference. Let me remind the Committee of what the Prime Minister said this morning: I repeat that in this failure"— and he was dealing with what be had expressed as the complete and catastropic failure of the whole world— there is no France, no Italy, no Germany, no America, no Great Britain apart from the rest of the nations. There is nothing smaller than a world, there is nothing less than a system, which is crumbling at our feet. The right hon. Gentleman is here apparently, with his colleagues, going to set up a microcosm which is much smaller than the world, and one of the anxieties which we have is the anxiety as regards the interaction of Lausanne and Ottawa. Let me also remind the right hon. Gentleman of another danger, of which he is very conscious himself. It has been said often enough, and he has said this afternoon, that we rely upon the good feeling and the friendship between our kith and kin in the Dominions for those ties which have often been said to be far stronger than any trade or economic ties; and there is a serious danger and liability that those delicate ties may be broken by bargaining. If the right hon. Gentleman could spare his attention for a moment, I would be glad to remind him of the very apt words which he used in discussing this matter in the Debate which took place in this House on the 27th November, 1930, after the Economic Conference, when the right hon. Gentleman the Lord President of the Council was moving a Vote of Censure upon the right hon. Gentleman the Secretary of State for the Dominions. Speaking of Colonial and Imperial preferences, he said: Do not let us forget the (history of the preferences in this country as well as in the Dominions. There is no exception to the rule that they were given because they felt they had an obligation, they felt they wanted to help us, that it was due to us. That is the spirit in which all the preferences were given, and, when you reduce these preferences to a mere bargain, I am quite certain that it will have nothing but disastrous results."—[OFFICIAL REPORT, 27th November, 1930; cols. 1555-6, Vol. 245.] That is the opinion of the right hon. Gentleman, but I understand that he is now proceeding to Ottawa to bargain. That Debate is one which, I am sure, will repay all Members of this Committee to read, in view of the expressions of opinion of so many Members of the Cabinet upon important points of principle. The Home Secretary, for instance, made a very clear and distinguished speech on the whole subject of preferences. The Lord Privy Seal wound up the Debate with a very striking speech, from which perhaps I may quote one sentence to the Committee. Referring to the present Lord President of the Council, he said: The right hon. Gentleman this afternoon charged us with lack of vision. We have the vision to see through these proposals. If a policy of this sort were adopted— he was speaking of Imperial preference— it would qualify us for the inside of a lunatic asylum."—[OFFICIAL REPORT, 27th November, 1930; col. 1657, Vol. 245.] I understand that the noble Lord is now acquiescing in this policy, and perhaps he thinks he has reached the inside of a lunatic asylum. It shows the danger which may occur if we are going to allow this huckstering as regards Imperial preference. The auction mart is not generally looked upon as the best place for cementing friendships. There used to be an old saying that you should never buy a horse from a friend, and that illustrates perhaps the danger if one embarks upon discussions of Imperial preference unless one has beforehand some clear and definite policy which one proposes to pursue; and as far as we can see at the moment, the Government have no such policy.

The right hon. Gentleman said that this country had made a great gesture with regard to Colonial and Imperial preferences, without conditions. I do not understand that that was made without conditions. I was always under the impression that the somewhat curious date which was put in was in order that immediately after the Ottawa Conference, if there were no response by the Dominions, the preferences might be withdrawn. The right hon. Gentleman agrees with me, but surely that is the worst form of threat. That indeed is huckstering and bargaining. We offer to give certain preferences, and providing we get a quid pro quo, they will go on. I am not objecting to that method, if one is going to bargain, but it is idle to say that it is a gesture and that we do not ask anything in return. We may as well face the facts, as I understand them, in the Government's mind. They have allowed a period during which certain Dominion produce comes in untaxed, in the hope that the Dominions will give a corresponding or some corresponding benefit for British goods, and it is just as much a matter of bargaining whether you do it beforehand or whether you say afterwards: "We shall withdraw the preferences, because you have not done anything for us." We trust that whatever the Government do they will look at this problem in its world aspect, and that they will not merely look at it in the narrow and localised setting of the British Empire alone. May I remind the right hon. Gentleman of a passage which appeared in a recent article in the "Economist." Dealing with this question of Imperial preference, they say: Tariffs and preferences are designed, whether in return for corresponding fiscal advantages or for wider reasons, to divert trade from one channel to another. In general, this must tend to the reduction of the world's wealth. It is that feature, the necessary diminution in the totality of the exchange facilities which is brought about by a system of this sort, which constitutes a danger unless the utmost care is exercised to see what reaction it will have, not upon other Imperial trade, but upon other trade of this country and the Dominions. In other words, you must put it in its setting of world trade before you can judge the efficacy of any particular tariff or preference. The thing in which we and every country arc primarily concerned is an increase in the facility of exchange of goods and an increase in the world consuming power. I cannot agree with the analysis of the reasons for the economic difficulties which the right hon. Gentleman gave. I agree that underconsumption is one of the fundamental causes of the difficulties, but I do not agree with his suggested cure for underconsumption. Under-consumption largely arises from the maldistribution of the receipts for the sale of commodities.

Be that as it may, can we look forward to Ottawa in the hope that it will not put fresh impediments in the way of world exchange facilities? If it succeeds in only putting fresh impediments in the way, that is to say, if we have to raise our tariff as the result of arrangements made at Ottawa, or if colonial tariffs are raised and not reduced, Ottawa will not only be no advance along the line of increasing consumption and increasing facilities for trade, but will rather be a retrograde step. The President of the Federation of Chambers of Commerce of the British Empire, speaking last week, said: The world was looking for a lead out of the present chaos from the British Empire. If Ottawa failed to take the necessary step to enable us to give that lead, the outlook would inded be black. I understand that the right hon. Gentleman agrees with that.


I said the same thing.


The right hon. Gentleman quite rightly said the same thing. I want to know how an agreement of Imperial preference is going to help, for instance, the Argentine, Scandinavia, or the United States to add to their trade. How are we to get a net increase in world trade if we divert, say, the wheat trade from the Argentine to Canada, or if we divert some other primary or secondary commodity from being supplied from a foreign country to being supplied from one of the Dominions? It is really no good, either from the world point of view or from the local point of view, if we penalise our best customers in order to try and force trade into political or racial channels, which are not necessarily related in any way, to the natural economic channels. There is no particular reason why the natural flow of the world's goods should be from one country to another because they speak the same language. Therefore, one has to consider carefully what that natural economic flow is and not to disturb it unless we can substitute something better. Let me take the example of the coal trade, which is of vital importance to this country. Taking the first four months of 1930 and 1932, the export trade fell from 19,500,000 tons to 13,000,000 tons. The sole Dominion importer on any scale is Canada, apart from the Irish Free State, which imported about 750,000 tons, so far as one can find from the trade returns. Canada in 1930 took 118,000 tons, and in 1032, 200,000 tons. That is a mere drop in the ocean. How are we to revive the coal industry in this country by taking away or diverting trade in, say dairy products, from Scandinavia to New Zealand? Scandinavia is one of the best customers for British coal. Practically all the British export coal is being sold either in South America or on the Continent of Europe. To take coal as an example, how are we to arrange any tariffs whatever at Ottawa which will in any way assist the development or redevelopment of the coal export trade of this country? On the other hand, they may have a vitally detrimental effect upon that trade. Trade channels which are naturally aligned between this country and Scandinavia, or any other foreign country, may be diverted by arrangements with regard to certain goods, with the result that the coal trade will lose its customers without any corresponding advantages.

We should like to know, particularly as regards the coal trade, what ideas the right hon. Gentleman has as to the possibility of any compensating advantage at Ottawa for any diversion of trade from countries which are at present absorbing our coal. That is a matter of prime importance.

One of the dangers at Ottawa has been illustrated by a report which has just come out, namely, the 21st report on Imperial Industrial Co-operation, and also by the statement which the right hon. Gentleman has made this afternoon. I criticise that report, not because Sir Sydney Chapman is its chairman, though one knows that he is a great authority upon tariffs, but because of its general outlook and recommendations. The whole basis of their suggestion is that we must leave it to individual industries here and in the Dominions to deal with one another, and that when agreement has been made between industries, the Government is to come in and assist in the implementing of them by the imposition of tariffs. That seems to us what Lord Snowden of Ickornshaw would describe as capitalism run mad. We are apparently to take out of the hands of the Government the question of which industries it is desirable should have inter-Dominion arrangements. We are to put it into the hands of private vested interests, although the committee say in their report: Whereas the industrial representatives are primarily looking to the welfare of their own industries, Governments must look primarily to the general well-being of their countries. We believe that the primary concern in any inter-Imperial arrangements should be the general well-being of the countries, and not the well-being of particular industries. If the right hon. Gentleman and his colleagues who go to Ottawa approach the problem from the point of view of allowing private enterprise and capital to make what bargains it likes for its own profit, irrespective of or disregarding the general well-being of the country, we see nothing but tragedy in the results. It is clearly apparent that if any good is to flow from such an arrangement as may be come to at Ottawa, it is because it will lead to some element of economic planning in the world which will begin in some degree to bring order out of chaos; but, if it is left to this, that or the other industry, irrespective of the national well-being, to arrive at arrangements which are profitable to a particular industry, we shall not arrive at order out of chaos, but make chaos and capitalism doubly chaotic. We hope that the right hon. Gentleman will give us a specific and clear answer as to whether the Government at Ottawa intend to proceed upon the basis of inter-governmental arrangements or inter-industrial arrangements.

It must be apparent, too, that the conscious and definite management and arrangement of industry by communities has become essential. This system of pseudo-socialisation which the Government have introduced, this system of tariffs and preferences, is an awkward and inefficient device for properly bringing about social control. But, still, one might describe it as a sort of blundering step along the right road. If it is so described, one must recognise it as experimental. It is of great importance that no long-term agreements of any sort should be entered into at Ottawa. They must be looked upon as trials of this completely new system as far as this country is concerned, and, if we once get to tying people down to hard and fast arrangements, we shall inevitably come up against trouble, discussion, and recrimination when one or other Dominion finds that it wants to bring about an alteration of the circumstances. The right hon. Gentleman said that the last Imperial Conference had settled all political difficulties in the Empire. We shall hear from him perhaps to-morrow how true that statement is.

5.0 p.m.

I hope that he will see that at Ottawa, in view of the fact that future Governments may take different views about the arrangements that should be made, that these future Governments will be free to depart from any arrangements which are made, and that he will not attempt to bind this country to experiments which may possibly turn out badly. Perhaps the most vital question of all for this country is the attitude of the Government to the taxation of food. That is a matter on which there are differences of opinion. The right hon. Member for Sparkbrook (Mr. Amery) holds a view quite different from the one that I hold, but is there any reason why we should not discuss it and have it out on the Floor of the House? Surely the House is capable of deciding. We have skated round this problem on six occasions since the Government came into power, but it is always presented to us in such a way that it cannot be properly discussed and no vote can be taken on it. Now the right hon. Gentleman gets up and says, "If anybody asks me a question about wheat and meat I shall not answer it." I quite appreciate that when the right hon. Gentleman has an open mind and a free hand he would be very embarrassed if he had to answer it, but that hardly seems to us to be a satisfactory state of affairs, especially, since so far as one can understand from discussions which have taken place in Dominion Parliaments, particularly in Australia, a promise has been made by this Government of a quota to Australia.


A quota of what?


I do not know of what, but Dr. Earle, in a speech made on 18th February in the Australian Parliament, said Great Britain was prepared to give the Dominions certain quotas for wheat and other commodities.


The hon. and learned Gentleman cannot be unaware of the fact that I announced in this House months ago on behalf of the Government that we were prepared to offer a wheat quota. That was a public offer made in this House.


Of course, I recollect the occasion, but I did not appreciate that it had got so far as a statement that we were prepared to "give" it, because I presume that that implies that there has already been some arrangement as regards the quota. If the right hon. Gentleman tells me there has not been, I am satisfied. I can only quote what I have seen in the Empire Parliamentary Report as regards Dr. Earle's statement. There is also the statement made by the right hon. Gentleman to-day as regards the importance of meat and wheat to the Dominions, and if we cast our minds back a very few days we remember that wheat and meat, which had been specifically put on the Free List in the Import Duties Act, can now be removed from the Free List at the discretion of the committee of three—a provision which was made in the Finance Bill. I would like the right hon. Gentleman to tell us whether it is the policy of His Majesty's Government to go to Ottawa with an offer to tax wheat and meat if the Dominions want it. That is a vital question to millions of people in this country, and one to which we are entitled to have an answer on their behalf, because we believe there is nothing more certain to disrupt the British Empire than a proposal to make the people of this country pay a tax on meat and wheat in order to subsidise or assist Dominion farmers. [Interruption.] An hon. and gallant Gentleman says "Rubbish." I ask him to put that proposal forward in the industrial areas of the north, and they will say the same thing: "Rubbish." There may be great difficulties in the Dominions, everybody sympathises with the difficulties of the Dominion farmers, but one must recollect the extraordinarily strong views which have been taken by Members of His Majesty's Government upon this matter. For instance, the President of the Board of Trade, who is now at Lausanne, said at the time of the Imperial Conference in 1926, on the question of food taxation and Imperial Preference: If we examine in detail the kind of proposals that are to be made for preference to British trade with the Dominions we are driven back to the view held by a very clear-sighted man 25 years ago, Mr. Joseph Chamberlain, that preference to be effective must involve taxes on food and raw materials. Those are the things in which the Dominions are mainly interested to this day. And, of course, precisely the same applies at this day. Over 60 per cent, of our imports from the Dominions come under the head of food and raw materials. If there is to be a preference on these it means a tariff on the same goods imported from foreign countries. That is inconceivable. I cannot imagine even the maddest of mad tatters embarking on such proposals. Had the President of the Board of Trade been here I would have offered him the gift of a hat in order that he might assume that role.


That speech was made six years ago.


I said it was made in 1926. Is the hon. Member suggesting that any of the facts have altered since 1926?


World conditions have changed profoundly since that speech was made.


I agree with the hon. Gentleman that capitalism has disintegrated since that day, but that does not assist his argument. There is no reason why one should be less like a mad hatter now if one proposes that which was then inconceivable, a tax on food and raw materials. The President of the Board of Trade, speaking at St. Ives, said he would never stand for a tax on wheat and meat. I presume he still stands in the same position. He is a gentleman of honour, and he will no doubt support us as regards this matter; but we should like to hear from the right hon. Gentleman who will reply whether we are right in assuming that wheat and meat will not be a matter of bargaining so far as the taxation of supplies coming from foreign countries is concerned. It is difficult to see that a coal miner can get any conceivable benefit out of preferences, from the Dominions.


Oh yes. If we could sell a million tons more steel as a result of preferences from the Dominions that would materially benefit coal miners.


The hon. Member did not quite catch what I said. The coal miner can get no conceivable benefit by preferences from the Dominions.


I have given an instance.


The hon. Member is dealing with coal sold at home. I know his argument quite well—that there will be an increase in the sales of steel, and that more coal will be used in making that steel; but one has got to look at the thing in sections, and for the moment I am dealing with the export trade. There is no possible hope of any of the lost export trade in coal coming back through any arrangement at Ottawa. It is a matter of only a few hundred thousand tons in the case of Canada or any other Dominion. If the Ottawa Conference leads to a general revival of trade in this country or in the Dominions, of course there will be a benefit; but we shall not get a benefit if it leads to an equal decline in the trade between this country and foreign countries. That is why I am asking the right hon. Gentleman to give us an assurance that in the discussions at Ottawa the position of this country vis-a-vis foreign countries will not be left out, that it will not be dealt with as an isolated problem but as a problem in a world setting; because we believe that merely swopping over trade from one channel to another is more likely to do harm than good.

Brigadier-General Sir HENRY CROFT

Would the hon. and learned Gentleman apply that argument about swopping over to a foreign country to Yorkshire or Lancashire?


Or from a rat shop to a union shop?


I do not think that is dealing with the same question. What the hon. Baronet put to me was whether the change-over of manufacture from a foreign country, say Germany, to Yorkshire benefited this country, and my answer is that I cannot tell him as regards specific goods. In my view it is just as likely to do harm as to do good. It is impossible to say. If it so reduces the purchasing power of Germans for some other commodity which is more important, coal or anything else, it may do harm. Of this I am certain, that any barrier put up in order to bring about the swop-over will, in the long run, tend to diminish world trade and to diminish world consuming power. I think the hon. Baronet agrees with me that one of the greatest forces in bringing about the diminution in world trade at the present time is to be found in tariff barriers. It has been said over and over again by nearly every statesman, and the right hon. Gentleman said it this afternoon. If one looks at the Empire as an isolated unit one is probably going to set up tariff barriers, for instance on meat and wheat, which are going to be a fresh clog. If the right hon. Gentleman will tell us that the only thing done at Ottawa will be to reduce tariffs we shall be satisfied that he will make some step in the direction of getting rid of tariff barriers, but I think he would hardly be able to give us that assurance.

There was one other matter about which the right hon. Gentleman spoke which I wish to mention, and nothing more, and that is the finance and monetary policy which is going to be discussed. Again we have no statement and no lead—a joke from the right hon. Gentleman about what he had in his pocket, silver or something, was all the indication of the policy of His Majesty's Government. Surely they have some ideas regarding finance and monetary policy. Are they going for a sterling bloc, an Empire bloc, an Empire currency, or trying to remonetise silver—what are they going to do? Or are they going to Ottawa to say, "We have got a free hand, is there anything you can suggest that we might do to improve conditions?" If the right hon. Gentleman cannot be more constructive on monetary policy people will begin to assume that the mind of the Government is in such a muddle that they really are afraid to make any suggestions. I ask whoever will reply to the Government to give us some little indication as regards what they are going to do, how they are going to deal with South Africa and the gold standard, what suggestions have been made and are going to be made.

Finally, let me say that we believe that this system of Empire Preference is one which is of the most extreme danger to the Empire, that unless it is handled with great caution by the Government and not by industries it will do more harm than good to Empire relations. Also, unless it is borne in mind that this country has got to have the widest possible market for its highly specialised productions we shall find ourselves being automatically restricted to narrow markets which, with our type of production, will not be sufficient to support the population. If that is so I am afraid the right hon. Gentleman's immigration policy will do little or no good. The right hon. Gentleman said nothing of it, but there are other means of encouraging trade in its natural channels, without trying to force it into unnatural channels. There are inter-Imperial marketing schemes which might well be embarked upon. I am not suggesting that the Government have not thought of it. I suggest that it is an important and vital part of the matter. We should not be planning for the present stabilisation of conditions, but for progress in the future, which must mean keeping the whole position fluid, and we must not come down to any hard-and-fast rules. In the good feeling between different parts of the Empire I believe there is a tremendous fund of potential market. That, in our opinion, can be developed enormously by organised plans of controlled marketing under Government auspices. The trade commissioners at the present time are performing some part of these functions, but only a very small part, and until we can get to a system where one can have export and import boards dealing in a rationalised way with the industries of the different countries, and of the different Empire countries, we fear that this Imperial question will lack a solution.

There is no doubt that the time is coming rapidly when not only the Empire, but the whole world will be driven by sheer economic necessity to come down to planning and organising its industrial life. If the river of commerce is to remain navigable, steps have to be taken to deal with the floods and the droughts. The locks and weirs of social control have to be built, and then those weirs and locks have to be regulated to maintain an even flow of water in the channel. It may be that Ottawa will be the first step in this direction, if the Government remember that they are responsible for the well-being of the whole nation and not merely for the prosperity of the industrialists, and that, above all, they enter on this Conference with a firm determination to do nothing that will further cut down world trade by the imposition of fresh tariffs. We think the Empire must be visualised as one great and important unit in the wide association of nations which, the Prime Minister has said to-day, must be considered as a whole if we are to get out of the difficulties in which the world now finds itself. If an arrangement is made on those lines, it maybe that when we see it, it will be one that we shall be able to welcome. At the present time, we have the greatest doubts as to the policy of the Government, if indeed they have a policy at all.


As I listened to the depressing vaticinations of the hon. and learned Member for East Bristol (Sir S. Cripps), there flashed across my mind a picture by the late Phil May, in which a murderer in the dock was being asked what he thought of the speech of the brilliant counsel who was endeavouring to save his life, and replied: "Melancholy bloke, ain't he? "Well, as I listened to the gloomy speech of the hon. and learned Member, with the word "danger" occurring every two or three sentences, and with its repetition of fears, doubts and dangers to be apprehended, I felt a little in the same way. A perfectly innocent suggestion of the Report on Industrial Relations that rationalising agreements between industries should be confirmed by legislation, that is, that legislation should be adjusted to make these agreements workable, he misrepresented as some sort of dark conspiracy between the Governments and capitalism to over-ride national interests and oppress suffering humanity. Right through the speech ran the haunting doubt that all we could do at Ottawa was going to cut across and interfere with what we were doing at Lausanne. We were going to make difficulties for world trade.

Let me ask the hon. and learned Member, What does he really mean I Does he mean that the whole idea of Empire co-operation by preference is wrong? If so, why does he not come out into the open and challenge the whole principle of conferring together? His whole attitude was that of one willing to wound but afraid to strike. That cannot be said of the speech of the Dominions Secretary. Right through the speech of the Dominions Secretary, whatever might be said about the lack of definiteness and detail in it, no doubt was left in the minds of the House as to the main, object for which the Government stands, for which the House of Commons stands, and, I believe, the country stands. That objective is, if I may use the words of the Dominions Secretary, "To make more trade and freer trade in the Empire"; in other words, to establish an effective system of mutual co-operation between the different parts of the Empire, and to make the Empire in fact the unity of which the hon. and learned Gentleman spoke just now. That policy is, in one aspect, a revival of the ancient historical policy of this country, the policy under which our Colonial Empire was built up and flourished amazingly in past centuries, up to the moment when, in an access of theoretic folly, we checked the growing development of the Empire, nearly 90 years ago.

It is the same policy which has been urged upon this country at every Dominions Conference, from the first conference in 1887 onwards, by every leading statesman in the Empire. It is the policy urged by Sir John Macdonald and by Sir Wilfrid Laurier on the conservative and Liberal sides in Canada; by Jan Hofmeyr the Dutchman and Cecil Rhodes the Englishman in South Africa; by Alfred Deakin in Australia and by Richard Seddon in New Zealand, the policy which was in later years advocated in this country by Joseph Chamberlain and Alfred Milner. I would add that all those who advocated it urged it not merely as a policy of economic development but equally and essentially as a policy of Imperial unity. They regarded it as the expression in the economic field of that sense of responsibility and interest in each other's well-being that every member of the Empire ought to show to every other. Since the Conference of 1926, it has been clear to the whole world that the unity of this Empire depends, not on restrictive control from the centre, but upon the free voluntary co-operation of all its members. I want to ask whether there is any field in which we can co-operate more effectively than the field which covers the prosperity and welfare of our countries, the well-being of every home and the bread of our peoples? That is one aspect of the policy to which the Government of this country are committed.

There is another aspect arising out of the immediate crisis in the affairs of the whole world—and here I will answer the hon. and learned Member for East Bristol—bearing directly upon the solution of that crisis, not only for ourselves but for the whole world. The essence of that crisis has been a breakdown of an international monetary and financial system which only worked as long as this country had the financial strength to control and sustain it, a system which has broken down under the growing pressure of economic nationalism outside. It is not so much Reparations or Debts, as the immense economic power of the United States, a power wielded in a purely national and irresponsible spirit, which has distorted and wrecked the monetary standard of the world and has well-nigh wrecked humanity. The Gold Standard has collapsed, and nothing that we can do at Lausanne or anywhere else is going to put Humpty-Dumpty back on his wall in any near future. Yet the world cannot go on without some effective scheme of financial and monetary co-operation, something better than gradually breaking up the world into small mutually-exclusive compartments.

The only immediate and practical solution of that difficulty lies for those nations which can work together and who are associated by geographical proximity, or by historic unity, or by common sentiments and common ideas, and who have sufficient territory to be able to build up a complementary and more or less self-contained system, to get together and form themselves into groups large enough to enable them to get things right for themselves, in the first instance, pending an effective restoration of the world economic system. For our nation and the nations of the British Empire, that is what we can do at Ottawa. If we succeed, we shall point out the way to others how to set their own house in order. I believe the representatives of the Empire at Ottawa are destined not only to find prosperity for our own people but also to indicate the way in which others may find prosperity in a better rationalisation of the world.

5.30 p.m.

At this Conference, our delegates should go first and foremost as representatives of the common interests of the whole Empire. It is only if we all approach the problem in that spirit that we shall arrive at a successful conclusion. It is perfectly true that each body of representatives goes with a duty and responsibility towards specific interests which each has got to watch over. In our ease, they are going to watch over, not one but, at any rate, three, great specific interests. They are going there in order to advance and promote the interests of the United Kingdom as a great manufacturing country, to see what we can do to find markets for our industries which will be secure, adequate and steadily expanding. But they are also going as the representatives of the United Kingdom as still the greatest agricultural country in the Empire, a country which, as the Dominion Secretary reminded us, produces every year some £300,000,000 worth of agricultural produce, £25,000,000 worth more than either Australia or Canada. It is essential that our delegates should go to Ottawa regarding agricultural Britain as something much more than a matter of mere Departmental concern. They should regard it as ranking separately, equal with any Dominion, and entitled with any Dominion to have its voice heard in pressing for an adequate recognition of the supreme importance of agriculture as the foundation of the future prosperity of this country and of the Empire. Again, it will be part of the duty of our delegation to watch over and advance the interests and claims of the Colonial Empire. I confess that I could not quite understand the rather confused exposition of that point made by the Dominions Secretary. The Colonial Empire has always been represented at these conferences in the past, through the Secretary of State for the Colonies. On this occasion the Secretary of State will not only be present at Ottawa himself, but he has had wide consultation with all who are best able to advise him, and he is taking most competent advisers with him. I have every expectation that he, at any rate, will see to it that the point of view and the interests of the Colonies are fully maintained at Ottawa. Those interests are not merely confined to the enlargement of trade between ourselves and the Colonies; that might possibly be done here at home; it is also a question of the immense possibilities of mutual trade between the Colonies and the Dominions. Canada, for instance, a growing industrial country, and one purely in the northern zone, will naturally want to have her own south as well as her own west. She has a tropical Empire ready made for her economic purposes in the British Colonies, and it is to Canada's interest, the interest of the Colonies—

Whereupon, the GENTLEMAN USHER OF THE BLACK ROD being come with a Message, The CHAIRMAN left the Chair.

Mr. SPEAKEEresumed the Chair.

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