HC Deb 18 October 1932 vol 269 cc27-146

Considered in Committee.

[SIR DENNIS HERBERT in the Chair.]


Motion made, and Question proposed, That it is expedient—

  1. (a) to make provision, more especially in connection with the Agreements made at the Imperial Economic Conference held at Ottawa and an Announcement made at that Conference on behalf of His Majesty's Government in the United Kingdom, for Imperial preferences, whether as respects the whole or any part of the British Empire, and whether in respect of duties charged under any Resolutions of this House having for their object the fulfilment of the Agreements aforesaid or duties under the Import Duties Act, 1932, or any other duties (including provisions for the abolition or reduction by order of the Treasury, either generally or in the case of any country, of any preference for which provision is made by any Act of the present Session for giving effect to the Resolutions aforesaid);
  2. (b) to empower the Board of Trade, in the circumstances contemplated in the Agreement made between His Majesty's Government in the United Kingdom and His Majesty's Government in Canada, by order to prohibit the importation of goods of a class or description grown, produced, or manufactured in a foreign country;
  3. (c) to empower the Board of Trade, for the purpose of giving effect to certain provisions of the Agreements made between His Majesty's Government in the United Kingdom and His Majesty's Governments in the Commonwealth of Australia and in New Zealand respectively, to regulate the importation of certain frozen and chilled meat;
  4. (d) for the purpose of giving effect to certain of the provisions of the Agreement made between His Majesty's Government in the United Kingdom and His Majesty's Government in Canada to amend the law with respect to the importation of Canadian cattle;
  5. (e) to make such other provision as may appear necessary or expedient for the purpose of giving effect to any of the Agreements aforesaid."

4.0 p.m

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I hope that, after all the numerous questions and answers on the subject, there is now no doubt in the minds of the Committee as to the procedure which is to be followed. We cannot introduce the Bill which is to implement the Agreements arrived at at Ottawa until we have obtained from the Committee of Ways and Means the series of Resolutions which are on the Order Paper to-day. When I sit down I propose to move the first of those Resolutions, and I dare say you, Sir Dennis, will then think it appropriate to give some ruling as to whether the Debate should be allowed to range over the whole of the Resolutions or whether each Resolution should be taken separately. In the meantime, I desire to make to the Committee a statement, and remembering the many opportunities which will arise later on in the discussions not only of the Resolutions but of the Bill, to elucidate any details which may be obscure or not fully understood.

I do not think that it will be necessary for me this afternoon to spend too much time in what I may call a purely expository statement. I do not propose to enter into any great detail, but I do want to try to put before the Committee what I conceive to be the real significance and importance of the Conference which was held at Ottawa. After all, we have to remember that although it is possible for the House to alter any one of the agreements there arrived at, that alteration cannot be effective without destroying the agreements. Consequently, what really has to be considered to-day is whether the agreements as a whole do present a result which it is desirable for this House to approve.

In estimating what may arise and what may be the consequences of the Imperial Economic Conference, I think that one must consider, first, what are the conditions under which that Conference was held. The time is long past when any country can suppose itself to be indifferent to what is going on in other countries. The operations of finance and commerce are no longer merely national. They are international. They are so closely entwined that it is impossible that any disturbance of the system in any part of the world should not have its reactions upon every other part. Even the depression and the adversities of small nations in Europe may have an adverse effect upon the trade, and may lock up the financial resources of nations more powerful, more populous, more wealthy than themselves, and we see, if we look across the water, that even the largest of countries, the country with the most, varied resources at its disposal, with huge accumulated wealth and an enormous population—even a unit such as that cannot expect to remain prosperous when all the rest of the world is in the trough of depression. But while it is true that the fall of one country into the bogs and quagmires of adversity is apt to pull other countries down with it till the whole world is in the same condition, so it is equally true that that country which can first place its feet upon firm ground and withdraw itself from the slough, and then hold out a hand to others to help them one by one to stand beside it, can lead the way to a recovery which is confined not to its own borders but which may extend to the whole world. If that be true of a single country, surely it is still more true of a group of nations, and I do not think that anybody would deny that a united British Empire can exercise a more powerful force than the sum of all the forces that can be contributed by each nation acting independently.

Therefore, the success of the Ottawa Conference, if it should result in increased prosperity for a united British Empire, is the largest contribution that that Empire can make towards the restoration of the prosperity of the world. I may add to that that there was something more in the minds of those of us who went to Ottawa. It was, of course, an Economic Conference, as was stated in the words of the Gracious Message which was sent to it by His Majesty the King at its opening. The delegates there were gathered in conference to explore the means by which they may promote the prosperity of the Peoples of this great Empire. But it was, I am sure, in the minds not only of the British delegation, but of all those who were present at the Conference, that, differing as the people of the Empire may in race, in religion, in colour, in language and in the conditions under which they live, yet there are certain aims and ideals which are common to all of them—ideals of peace, justice and freedom, and that if we believe that, as we surely do, then it must be to the advantage not only of ourselves but of the whole of humanity that the British Empire should grow in strength, in power and in unity. I noticed this morning in the daily Press an interview with a great American industrialist who had recently come over here, and he made some comments upon what had taken place at Ottawa. I would like to read to the Committee these words uttered yesterday by Mr. Charles M. Schwab: The Ottawa Agreements are going to hit America. They are going to hit my own concerns, especially in the Canadian market. We must take a wide view. If the British Empire prospers under those agreements, America and all the rest of the world must prosper in the long run. There is something truly statesmanlike in those words uttered by one who is not a member of the British Empire, and I only wish that all our own citizens would take an equally wide, far-sighted view of what is likely to be the most important consequence of our labours and efforts at Ottawa. I do not suppose that there is any difference in the Committee as to the desirability of promoting the unity of the British Empire, but perhaps we do part company when we begin to consider how that unity is best to be achieved. There are those, I know, who are of opinion that the ties which bind the British Empire together are of so delicate a nature that they should be left entirely to the operations of sentiment, and that any idea of strengthening them by means of material considerations is so dangerous that it would be better to leave it alone altogether.

I, myself, in a speech made a little time ago, expressed the view that those ties had in recent years worn dangerously thin in places. I noticed that the late Home Secretary commented in rather scornful terms on that observation—that exactly the same thing was said by Mr. Joseph Chamberlain 30 years ago, and the inference was that this was a bogy which was raised from time to time by those who advocated Imperial Preference in order to frighten people into the acceptance of their views. If I may say so, my right hon. Friend, unintentionally no doubt, misrepresented what Mr. Joseph Chamberlain did say 30 years ago. He used to quote with approval a phrase used by Sir Wilfrid Laurier that either we must come closer together or we should drift further apart. That was not a statement of existing conditions. It was a prophecy of what would take place in the future if certain things were not done. What I said was that the prophecy, in my opinion, had been fulfilled, and that the result of not taking the steps which were advocated at that time had been that there had arisen a number of points on which diversity of views and of interests had come about which had grown, and were continuing to grow, and would continue to grow unless at this stage we did something to reverse the current.

If anyone doubts the truth of that statement I would ask him to consider the position in India to-day and compare it with what it was in 1903. Can anyone say that the ties which bind India to Great Britain are closer to-day than they were in 1903, or that the difficulties, political and otherwise, between us, have not grown more acute in the course of the last 30 years? Or, if India is thought to be an exceptional case, I would remind the Committee that it is in the last 30 years that the competition between the manufacturers and agricultural producers in Canada and in Australia with those in the old country has grown up. It is common knowledge to-day that Canada to a great extent has become dependent upon American finance, that in the absence of any preferential arrangement with the United Kingdom she might find it extremely difficult to refuse a new offer of reciprocity from her great neighbour on the South, which would have definitely linked their fortunes together and to that extent cause a divergence again between Canada and Great Britain. Then, again, consider the events in South Africa where, the Committee will remember, not so many years ago a treaty was concluded between the Union and Germany, under which the Union bound itself not to give any preference to Great Britain without also extending it to Germany, a treaty which was viewed with great anxiety in this country, not only on account of its actual terms, but because it was felt that it again marked a divergence from the path of Imperial unity.

All these instances which I have given show that we were approaching a danger point in the history of the Empire; and I suggest, therefore, that the first test which you have to apply to the agreements that were arrived at in Ottawa is, what was their effect upon the future course of Imperial relations? Have these agreements, in fact, changed the direction and altered the tendency to which I have drawn attention? Did the delegates who came there from the various Dominions and from India—did they go away with embittered feelings, feeling that they had only encountered difficulties and friction in their discussions? Did they go away feeling that in future it would be better that each country should go its own road and give up the idea of Imperial unity? Did the Conference, on the contrary, result in a better understanding all round of one another's difficulties? Did it result in a perception of the advantages which were to be attained by each from mutual co-operation? Did it result in a determination to continue the task which had been so well begun? Did the delegates feel at the end that they saw a definite prospect, by closer trading relations with one another, of attaining a new strength and new security for all the countries of the Empire? There is only one possible answer to a question of that kind.

I would like again to call the attention of the Committee to the resolution which was adopted unanimously by the Conference at its concluding meeting. It is in a few words, and perhaps I may be allowed to read it: The nations of the British Commonwealth having entered into certain Agreements with one another for the extension of mutual trading by means of reciprocal preferential tariffs, this Conference takes note of these Agreements and records its conviction that by the lowering or removal of barriers among themselves, provided for in these Agreements, the flow of trade between the various countries of the Empire will be facilitated, and that by the consequent increase of purchasing power of their peoples the trade of the world will also be stimulated and increased. Further, I would call particular attention to the succeeding paragraph: This Conference regards the conclusion of these Agreements as a step forward which should in future lead to further progress and will utilise protective duties to ensure that the resources and industries of the Empire are developed on sound economic lines. There is no uncertainty about the words of that resolution. They strike a note of hope and confidence, and anyone who cannot see that such a unanimity of aim, such a determination to pursue in common the advantages of mutual trade is bound to bring in its train a similar community of thought and action in other matters, must either be blind or else must be wilfully hiding his eyes. The Conference did not confine itself to mere expressions of opinion. There are many points in the Agreements which show how the helm of the ship has been put over, and how all the vessels of the Empire are now being directed upon a common course. I shall allude to some of them again later, but perhaps I may now draw attention to certain features of the Agreements which are particularly significant, think, because they tend to show how in these discussions we have put a check upon those fissiparous tendencies of which I have given several examples already.

Take India as the first example. For the first time India has recognised definitely the principle of Imperial preference. I would like to take this opportunity of paying my tribute to Sir Atul Chatterjee and the very able members of the delegation for the extremely helpful spirit in which they treated the whole negotiations, and for the way in which, not only in dealing with their own agreements, but in all the more general questions which we had to discuss at Ottawa, they so frequently made valuable contributions to our conversations. Under the new arrangements which, subject to the ratification of the Legislature, we have agreed upon, India has given us preferences which cover no less than 26 per cent. of her imports into that country.

As for Canada and Australia, the two Dominions which, of course, are the most industrialised of all, the Committee will remember that for some time they have been pursuing a policy of fostering their own industries. No one would for one moment suggest that they have not a perfect right to do so, and that indeed a further development of those industries is quite inevitable and proper for both those countries. But the policy which they have pursued in the past has been one of very high protection, and in giving that protection to their industries they have protected them not only against foreign competition but also against the competition of the manufacturers of this country. It will be found that in our Agreements with them they have given up the idea that their home markets are to be reserved entirely to the home manufacturer, and they have adopted three fresh principles which are of the utmost importance to this country.

First of all, they undertake that they will not in future protect uneconomic industries, those industries which have not got a reasonable chance of making a success; secondly, that they will so adjust their existing tariffs and so frame any new ones that in articles which they desire to make themselves the British manufacturer shall have a fair competitive chance with the Dominion manufacturer; and, thirdly, that the decision, or rather that the investigation as to how that principle is to be applied shall be taken entirely out of politics, party or otherwise, and shall be entrusted to something in the nature of an impartial tariff commission.

I venture to say that that change of policy on the part of those two great Dominions, with the enormous possibilities for the future increase of British trade with them—that change of policy alone, if we were able to bring back nothing else would have fully justified us in our endeavours to obtain closer trading relations.


Would the right hon. Gentleman tell us whether the tariff commission is to he made up, say in the case of Canada, of only Canadian representatives; that is to say, will any British representative be sitting with the Canadian representatives in determining these questions?


That seems to me a very extraordinary question. I should not have thought that anyone would suggest that the representative of another country should sit as a member of a tariff board to decide what tariff Canada should adopt; but I can tell the right hon. Gentleman that British interests have been assured that they shall have an opportunity of presenting their case to the Canadian tariff board. If the question is meant to be a suggestion that there will not be impartiality on the part of the Canadian tariff board, I hope we shall not start with any hypothesis of bad faith, because the Governments of Canada and the rest of the Dominions are as honourable as our own, and in putting their hands to Agreements such as those which are contained in this Blue Book I am certain that they can be relied upon to carry them out in the spirit as well as in the letter.

Again, I would point to a passage on page 11 of Command Paper 4174, which deals with commercial relations with foreign countries, and under which it will be seen that the Conference approved of the resolutions, stating: That it was their policy that no treaty obligations into which they might enter in future should be allowed to interfere with any mutual preferences which Governments of the Commonwealth might decide to accord to each other, and that they would free themselves from existing treaties, if any, which might so interfere. They would in fact take all the steps necessary to implement and safeguard whatever preferences might be so granted. 4.30 p.m.

This afternoon we have had some questions as to how that provision was going to be interpreted by the British Government. We have already taken steps to fulfil that Agreement by our denunciation of the Trade Agreement with Russia. Also, the South African Union have begun to take steps to free themselves from their obligations under the South African and German Treaty and, under this statement of policy, no treaty will be concluded by them in the future which would in any way frustrate the intention of the preferences which have been arrived at as a result of the Agreement.

Again, there is another feature of these Agreements on which I would like to lay especial stress, and it is that for the first time the whole of the Colonial Empire has been brought into these negotiations. That is a new departure. Not only is it going to give great advantages to many of the Colonies, which will thus obtain preferences in the Dominions which will be of value to them, but I attach great importance to it because it emphasises to everybody that partnership in the Empire does not merely bring advantages in trading relations with Great Britain, but that it extends also to those countries which are to be found in the whole of the tropical regions of the world and which therefore can offer to the more temperate countries something which we cannot supply them from Great Britain. My right hon. Friend the Secretary of State for the Colonies who has, with great foresight and imagination, visualised the trade of the whole Colonial Empire as one which is worthy of encouragement and capable of great development, took an active part in these negotiations, and I think we all felt that we were under a debt of gratitude to him for the persistence and ability with which he put forward the interests of the Colonial Empire.

Lastly, while I am on this point, I would call attention to the fact that the Conference set up a committee to consider the means of facilitating economic consultation and co-operation between the several Governments of the Commonwealth and an examination of what alterations or modifications, if any, in the existing machinery for such co-operation within the Commonwealth are desirable. That is not a permanent committee. It is a committee set up for a particular purpose, but it marks the determination of the Conference that they are not going to rest upon their laurels; that they are not going to remain satisfied with what was actually achieved at Ottawa, but are going persistently to pursue investigation into how further they can open the clogged channels of trade between the various members and how they can improve the machinery which leads to further co-operation. The broad conclusion that I draw then is this: That, apart altogether from any immediate advantages which we may get by the alteration of the Dominion tariffs, the general trend and tendency of the Agreements which we concluded last August was to the lowering of inter-Imperial tariffs and to further mutual cooperation in trade.

I would like to examine a little more particularly how these Agreements are going to affect the people and the industries of this country. We recognised from the first that the results must be necessarily more rapid in their operation in the case of the Dominions than they could be here, but, on the other hand, it is evident that the value of the new preferences which we are obtaining from the Dominions will continue to grow as the purchasing power of the Dominions increases. Therefore, any help that we can give them towards the extension and development and the greater prosperity of their production must, in the long run, inure to our ad- vantage, and now that we have made these preferential arrangements with them I think we may fairly claim that the concessions which we gave them with regard to such commodities as wheat, butter, cheese, eggs or fruit, were made in the interests of our own industrial population.

But there is another aspect of the concessions which is perhaps even more important. They are here as the price that we pay for certain advantages in selling our manufactures in the Dominions markets. During the whole of our negotiations we had very constantly in our minds that we were representing not only manufacturers but also agricultural interests, and, accordingly, our policy—a policy to which the Dominions not only took no exception, but in which I may say they cordially concurred—was that in all agricultural matters our first care should be to help our home farmers and our second to try to give an expanding share of the import market to the Dominions. I think I may fairly-state that, not only by the Agreements into which we ourselves entered but also by the opportunities which were offered of conversation or association between representatives of the home farmers and those who came from the various Dominions, we did lay at Ottawa the foundation of a real Imperial agricultural association. I am confident that what was begun there will, in the future, bring perhaps even greater benefits to agriculture in this country than it does to our industrial community.

Take as an example what I think is the most important part of our agricultural discussions, namely, the arrangement that we made about meat. The meat problem centres round the industry in mutton and lamb in which the prices have fallen to a level which is far below the cost of production either in this country or in any of the sheep-producing countries of the world. One cannot attribute that fall to the general fall which has taken place in commodity prices or the general shrinkage in purchasing power because it goes far beyond that. Whereas the fall in general commodity prices since 1929 has been about 25 per cent. the price of English mutton has fallen from 11.95d. in 1929 to 6.75 to-day and lamb has fallen from 14.11 to 7.5.


Not in the butchers' shops.


I am talking of wholesale prices. In 1930 fat sheep were selling in England and Wales at 60 per cent. above pre-War levels and last month at 14 per cent. below the levels which obtained in the year before the War. That is a very calamitous state of affairs. It is clear that if it went on much longer sheep farmers must be completely ruined, not only in this country but in all countries where sheep-raising forms one of the staple industries. That would not be in the interests of the consumer. As has already been pointed out to-day, he is not getting the benefit of this fall. It is quite certain that if the sheep farmers were to shut down and reduce their operations, as assuredly they will soon have to do unless something is done for them, we should find a rise in prices which would speedily he reflected in the butchers' shops. Therefore the problem that was before us was "how are we to find some means of raising the wholesale prices of mutton and lamb once again to a reasonable level?" While mutton and lamb formed the kernel of the problem, yet we had to take into account the fact that the prices of all kinds of meat are interrelated; that when one kind of meat is cheap, it does to a certain extent displace other kinds and that therefore you could not completely solve your problem by dealing with the central feature of it alone.

What was the cause of this exceptional and disastrous fall in the wholesale prices of mutton and lamb? That question is not very difficult to answer because you have only to look at the figures of imports during the last few years and you will see how they are related to the fall in price. In 1929 the imports of mutton and lamb in thousands of cwts. were 5,631 and the value was £19,000,000. That works out at an average price per cwt. of £3 7s. In 1931, two years later, the 5,600 had risen to 7,100. The value, however, had gone down to £18,250,000, an average value per cwt. of £2 11s. Taking the first nine months of the present year the imports were 5,705 which is at the rate of 7,607 for the 12 months. The value was £13,000,000 and the average per cwt. was only £2 6s.

The conclusion is obvious. What you have to do if you are to restore the prices which have been ruined by this excessive increase in importation into a market of which the capacity was not increasing is to regulate the supply of imports until you reach some reasonable relation between what the market can take and what is going to be offered to it. A duty on foreign meat would be useless for this purpose, in the first place because the foreigner would pay the duty and send in the meat just the same and, in the second place, because the excess was not coming from the foreigner. The excess was coming from the Dominions. If you take the 12 months which ended in June last and compare it with the average of the five preceding years, you will find that New Zealand increased her exports of mutton and lamb to this country by no less than 30 per cent. and Australia increased hers by 80 per cent. It is therefore perfectly clear that if you were to have any sort of arrangement which would offer a reasonable chance of raising wholesale prices, you must get the Dominions to play their part by regulating the supply, and it was the recognition on their part of the necessity of that course which led them to make the arrangement which is set out in the Blue Paper.

Fortunately, this problem is not nearly so complicated as the problem in the case of articles which are sold in many markets. There is only one market for surplus mutton and lamb, and that is the United Kingdom, and there are only four main sources of supply. You have the home farmer, you have the Australian farmer, the New Zealand farmer, and the Argentine; and what we hoped for was that it might be possible that the producers in these four cases would come together and make a voluntary arrangement among themselves under which they would regulate their supply according to an agreed programme and consequently obtain the required rise in wholesale prices. Of course, such an arrangement would have to be subject to the approval of the British Government, and it would have to be subject to the general lines of policy which the British Government might lay down, but in any case it was clearly not possible to work out and carry to a conclusion so large an arrangement as that in the time that we had at our disposal at Ottawa. What we did do, therefore, was to come to a temporary arrangement with the Dominions which were interested, which was to last for 18 months and which the Committee will find set out in the Declaration of the United Kingdom, attached to Schedule H which follows upon the Australian Agreement.

Without going into any details now, I may just mention that this temporary programme provides for, first of all, a progressive reduction in the imports of foreign mutton and lamb into this country during the 18 months; secondly, a fall in the importation of chilled beef which is not to exceed the figures of the year which ended in June last, a year in which, I may mention, the imports to this country of chilled beef were only 93 per cent. of the average of the five preceding years; a standstill on the importation of Dominions mutton and lamb, and only a moderate increase in the importation of Dominions frozen beef. That is the arrangement, and I am happy to say that, although I do not imagine the producers in and exporters from the Argentine are particularly enthusiastic about the arrangement, they have at any rate agreed to work it, and I am very pleased indeed to think that they are accepting the position in so practical and helpful a spirit. Under this programme, the importations of mutton and lamb should go back to what I might call normal rates in 1934 and there should be a gradual rise in the wholesale prices of these articles, but it will be observed that under Article 8 the British Government have reserved the power to remove the restriction if it should appear that at any time the producers are not able to meet the reasonable requirements of the consumers in this country.

This is admittedly an experimental plan. It remains to be seen how far it will be able to achieve the results that we desire, but for my part I believe that it contains at any rate the elements that are necessary towards the successful solution of one of the most difficult problems that this country has to face. During the period of experiment we shall be considering and consulting with others as to the possibility of making a permanent scheme, and if we find, as I hope and believe we shall find, that it has enabled us to get over the major difficulty in the case of mutton and lamb, the market for which is in this country, then it will have proved an object lesson which we may find extremely useful when we come to deal with the more complicated problem of the commodities which are sold in world markets.

I have asked the Committee to judge of the results of Ottawa by the broad tendencies which are to be found in our Agreements. At the same time we were successful in bringing back a series of immediate improvements in the preferential tariffs against this country, which are of substantial value at once to our industry and to our employment and which in time are bound to grow larger and larger. I think we have reason to be very grateful to the late Home Secretary and his friends, who went about frightening the people of this country so much as to the alleged worthlessness of the schedules when they were published that when the public really saw what was in them they were full of enthusiasm and were glad that we had been able to make such substantial gains at once.

I am not going, as I have said before, into any great detail, but perhaps I may just call attention to some of the salient features of these schedules. In the case of Canada, over 40 per cent. of the imports from the United Kingdom will enjoy in the future lower duties than have been given formerly, and goods which in 1931 amounted to over 8,000,000 dollars will now be admitted free of duty altogether into Canada. That includes a number of lines of steel and iron, chemicals, and other important industries. In the case of Australia, we have agreed upon a formula applicable to all goods which are not competitive as between Australian manufacturers and British manufacturers, under which increased preference will be given in every case to the British import.

As to the rest, the tariffs will be reviewed by the Tariff Board, which is already in existence, and indeed that review has already begun, and substantial reductions in the tariffs on British goods have already been made. In addition to that, prohibitions on certain British imports which existed have been abolished, and surcharges and primages which have been found very hampering to British trade have already been removed from an extended list of goods. In the case of New Zealand, wherever there is an existing duty upon British imports, that duty is going to be reduced by an amount which varies from 5 to 12½ per cent.; and in South Africa we have an increased preference on goods the imports of which were valued in 1931 at over £6,000,000. India I have already mentioned, but I may say that the preference, which includes such important articles as woollens, hardware, heavy chemicals, building and engineering materials, and boots and shoes, covers goods the value of which in 1931 amounted to nearly £29,000,000.

Putting all that together, I think I am justified in claiming that we have brought back with us solid advantages for the manufacturing industries of this country which will be put into immediate effect, but I repeat once again that the value of what we did at Ottawa is not to be judged by its immediate effects and cannot be estimated unless we take into account the tendencies, the trends, and the increased purchasing power, which will increase the value of the preferences we have got.

I understand that these Agreements are going to be vehemently opposed by that minority section of the Liberals which now sits below the Gangway on my right. That does not disturb me very much, because I am quite satisfied that the country, which is not fettered to-day by old fiscal prejudices, will take a wider view than they, and that the people of this country are not going to be either frightened or bullied out of the enjoyment of what we have been able to get for them at Ottawa by any bogies which may be put up by Liberal Free Traders. I do not think it will be desirable that I should try to anticipate criticism from them until they have had an opportunity of formulating it, but I would venture to address to my right hon. Friend one word of friendly warning. Do let him be very careful not to make himself ridiculous. Nothing looks more ridiculous than for a man to make a public prophecy one day and to have that prophecy falsified the next, and I would therefore suggest to him that he should abstain from prophecies and that in particular he should beware of two. Let him not suggest that the cost of living is going to be increased by the Ottawa Agreements or that the Ottawa Agreements are going to make it impossible for us to negotiate fresh commercial treaties with foreign countries. He may remember, perhaps, that on the 4th February last he said: Now 10 per cent. is to be added to the cast of flour, rice, margarine, condensed milk, tinned salmon, and all those things which are the clay-to-day food of the working class people."—[OFFICIAL REPORT 4th February, 1932; col. 324, Vol. 261.] At that time the cost-of-living index was 47; to-day, seven or eight months after, it has come down to 41. Therefore, I say to him, "Keep off prophecy," and I do hope that he will address himself, not to niggling details, but rather to the broader issues which I have tried to put before the Committee. Do not let the Committee think that the question before us this afternoon and during the next few days is whether or not it would have been better to stick to Norwegian cod-liver oil. Let it not even think that the question is now whether we should have Protection or Free Trade, for that question has been settled. The question is rather whether, after consideration of the results achieved at Ottawa, Parliament is going to translate into reality the vision of a strong, united, and prosperous Empire, which, by its own strength and by its own example, will be able to lend a helping hand to a distressful world.

5.0 p.m.


I think, perhaps, before the discussion proceeds, that it may be useful if I can get the approval, or otherwise, of the Committee to the course which I suggest with regard to the Debate. I gather from what has taken place at Question Time that it will probably meet with the approval of the Committee. It is that we should follow the same course as was adopted in the case of the Resolutions dealing with the Import Duties Act in February last, that is, the course analogous to the Budget Debates. If the Committee approve of that, it will mean that there will be a general discussion on the Resolution which has been moved by the Chancellor of the Exchequer; that discussion will range over all the Ways and Means Resolutions which are on the Order Paper. When the Debate conies to an end, all the Resolutions will be put one after the other without further debate, leaving the Resolutions to be considered separately on the Report stage. I hope that that will meet with the approval of the Committee generally.


At what stage of the proceedings will there be a discus- sion on the import of bacon and pig products, which was not dealt with by the Chancellor?


The question of what the Chancellor referred to in his speech does not affect the suggested arrangement. The Debate will range over the whole of the matters which are dealt with in the Ways and Means Resolutions.


In assenting to the suggested arrangement, I hope that it is to be understood that it will not preclude any discussion upon the Procedure Motion which is to be moved to-morrow, and that we shall not be taken to be assenting also to the principle of that Motion.


That is necessarily so, because the Procedure Motion is to be moved in the House and not in Committee of Ways and Means.


I took it for granted that the course you have suggested would be agreeable to the right hon. Gentleman and his friends, as it is agreeable to us. Of course, the Procedure Motion is entirely different. When the Chancellor of the Exchequer opened his speech, he said that all parties were agreed on bringing about as far as possible closer agreement and closer economical arrangements with the Dominions. So far as we are concerned, that is correct, but, as the right hon. Gentleman said, we disagree fundamentally on the methods. I will not trouble the Committee by bringing those forward to-day, but I would suggest to the right hon. Gentleman that, if he is at all interested in our views, he might consult with his right hon. Friend the Prime Minister, and, when he has a spare hour, read our proposals in "Labour and the Nation", in the drawing up of which the Prime Minister had so important a share. We want a united Commonwealth of British Nations, and we want it, not for the purpose of dominating the rest of the world, or to stand aloof in any way from the rest of the world; we want a British Commonwealth of Nations which shall within itself carry on its business in a co-operative manner as laid down in "Labour and the Nation", and not in the competitive way which we are discussing this afternoon. From that we all hope—and there was a time when the Prime Minister hoped—that we shall be able to lead on to international co-operation. That is the fundamental difference between ourselves and the Chancellor of the Exchequer.

I listened to the Chancellor's speech very attentively, but I was not able to gather that he expects from these arrangements any great benefits for the people of this country, at least for some time to come. He is relying on tendencies to benefit the unemployed and the traders of Great Britain. It is certain, as was obvious from the very first, that the Dominions have driven a bargain which has given them a tremendous gain right away without our people gaining anything at all. I want to make one or two things quite clear. I and my friends cannot associate ourselves with the notion that there is in the world to-day anything like Free Trade in the old accepted sense of the word. The trade of the world is dominated very largely by trusts and monopolies within which men who call themselves Free Traders and men who call themselves something else manage to work together for the purpose of exploiting some parts of the world and the markets of the world. At one end of the Thames Embankment there is the great Unilever House which, together with the International Supply Stores and the Co-operative Society, very largely controls the whole of the foodstuffs of the country, with the exception of wheat. At the other end we have the Imperial Chemical combine which takes jolly good care to crush out competitors and in every way to smash Free Trade. We are under no delusions about that, and there is nothing in these proposals at Ottawa that interferes with that sort of monopoly or would break it down.

We are told that these Agreements are to lead to better relationships, but I am not going to prophesy because that is always dangerous. What is happening to-day in the Parliaments of Australia and Canada is proof that in both those countries there is considerable opposition to the proposals. Mr. Mackenzie King made even more bitter speeches against the proposals than the right hon. Gentleman, the Member for Darwen (Sir H. Samuel) or any other speaker in this country. Mr. Scullin in Australia has taken the same line, and, as far as I understand their speeches, their object is to put the trade of their countries first all the time. Mr. Scullin has said that he looks forward to the industries which they can establish in Australia being heavily protected against any imports from any parts of the world. That is reported in the "Times" to-day. The right hon. Gentleman was shocked when I asked him who were the people who are to man the various commissions which are to determine whether an industry may be competed with or not. I cast no aspersions on any Canadian business man or any persons in Canada or Australia who may form part of these commissions, but blood is thicker than water, and it is difficult when you are trying to decide whether an industry—[Interruption.] It would be difficult for me, though it might not be for the Prime Minister, sitting in London to decide, without having a prejudice in favour of my own people, whether a particular industry should be competed with or not. What I think about myself I think about people in Canada.

So far as I can understand the Chancellor's speech and this Blue Book, I cannot see whence any new work for our people in this country is to come at all. I would ask anyone who is to speak for the Government to answer this perfectly simple question. If we do not buy wood from Russia, but buy it instead from Canada, does not that mean that we will not send to Russia certain goods that at present we are sending there, but that we will send perhaps some entirely different goods to Canada? That process will not increase employment or trade one iota. I would like to hear the President of the Board of Trade on that point. I want someone to tell me how these proposals are going to increase trade. I can see that they will change trade, like a woman who goes shopping. She may shop here to-clay and to-morrow may go into the next street. She has not increased the volume of trade; she has just shifted it from one place to another.

It may be due to my lack of intelligence, but after listening very attentively to the right hon. Gentleman, I did not gather that he could put his finger on any place and say, "Here trade will be increased; here employment will be increased." That is really the condemnation of the whole of this policy. Nothing has been done at Ottawa, so far as I can gather, to deal with any great development of either Canada or Australia. All that the Government are doing is to shift trade. Had they gone to Ottawa and said, "We are prepared to raise a great loan in order to develop the undeveloped portions of your Dominions," there might have been something to be said for them, but I understand that the whole question of migration or development has been shelved altogether, and instead this trumpery set of proposals is brought forward. For the life of me I cannot understand how the Prime Minister can be supporting them, because many times I have sat at his feet listening to him on subjects such as this, and so far as I can remember he has always taken the view, in his speeches and his writings, that we gain nothing by simply shifting business about from one place to the other, but that what the world needs is an expanding consumption of goods which are being produced. The right hon. Gentleman spoke just now about the difference between wholesale prices and retail prices, but I would point out that there is nothing in these proposals to deal with the intermediate people who are scooping up the profits. The right hon. Gentleman the President of the Board of Trade is a great authority on transport. Perhaps he can tell us whether these exorbitant profits are going to the shipowners who carry the goods. Somebody is getting them. I should have thought that the gentlemen at Ottawa who were oppressed and depressed because of the fall in wholesale prices and the high rate, relatively, of retail prices, would have set their minds to discover how that came about. Nobody opposite has ever told us, because if they were to start telling us a lot of their friends would have to be improved out of existence. Not a single proposition in these arrangements they are making deals with that matter at all, though until it is dealt with we shall make no progress whatever.

Now I want to say a word about India. I do not agree that the people who were said to represent. India at Ottawa did represent even the business side of the community there. They were not chosen by any body representative of Indian business men in India. I received a number of resolutions from chambers of com- merce, and Indian business people generally, protesting against the kind of delegation that was being sent to speak in their name. I am very doubtful indeed if the arrangements which have been come to will be accepted by Indians themselves. On that matter I am expressing my doubts, and time will very soon prove whether I am right or not. There is no sense in any one saying that the Indian people have agreed to this. They have not agreed to it, because they have never been asked, and there is no authority in India at present to speak in the name of India from either a business or an industrial point of view.

On the question of this House being bound for a number of years by what has been done, I have taken the trouble to get the opinion of people who understand the constitutional and legal position, and I am told that it is impossible for one Parliament to bind another Parliament. We cannot to-day pass a Resolution to give effect to all that is contained in this Command Paper and fix it on the necks of the British people for five or 10 years. The electorate of this country has a right to say at the next election that the whole of these things shall be cancelled. I know that people will say, "Yes, but the Government have entered into a Treaty, and it is a very serious thing to upset the sacredness of Treaties." But we should remember that Parliament is embarking on an entirely new and novel policy which has never been before the electorate. I think that neither the Prime Minister, nor the Lord President of the Council, nor the Chancellor of the Exchequer will say that at the last election the electors gave them a mandate to do what is being done now. I know it is said they gave them what has been called a "doctor's mandate," but they did not give them a mandate for quackery. [Interruption.] I mean fiscal quackery. You have called it that many a time. The sort of nonsensical rubbish the Prime Minister is now supporting he has denounced as fiscal quackery over and over again, and I am only using his own language. The nation thought they were electing a set of men more wise than anybody else, but discovered very soon that they were scattered in all directions.

There are two points on this that I wish to make. One is that it cannot be said that India has agreed to these arrangements; and the second is that we have no power to bind the British people for more than this Parliament. We can hind them for this Parliament, but at the next election they can break away from these agreements, and already in the Dominions we are being told by leading speakers of the Oppositions there that they intend to break away from them. It is no use talking as if even we had something fixed with the Dominions. Then we come to the Colonies. I see the Secretary of State for the Colonies is here. Perhaps when he speaks in the discussion he will tell us whether the people of the Colonies have been consulted in this matter. So far as I understand things, they have not been consulted at all. [Interruption.] Well, you have probably consulted the Governors, but there was not time for you to consult anyone else, because you signed the Agreements and came home.

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)

The right hon. Gentleman has been good enough to put a question to me. I was in consultation with the Governments of every Colony for months before I went to Ottawa, and discussed with them in advance both what I should ask for and what I should give.


Certainly, but you never consulted the people of the Colonies. [Interruption.] Well, it is all very well to shrug your shoulders, but the unhappy people in the Colonies will have to pay the tariffs, and it seems to me that is a sufficient ground for the people to repudiate what you have done in their name, quite without any authority whatever, constitutional or otherwise. Then it has been argued that this policy will lead to the lowering of tariff walls all round. I read the "Times" to-day and I find that Mr. Lyons, the Prime Minister of Australia, is boasting that they have raised the tariffs on 400 articles in order to take a little bit off to give us a preference. That is what you call "leading to the lowering of tariffs." I really do not understand how right hon. Gentlemen opposite can make any such statement. The fact is that if we go in for this sort of policy it will inevitably lead to other nations following our example.

I come now to the question of Russia. When I was First Commissioner of Works many questions were put to me about the use of Russian timber, and the present First Commissioner of Works, if he consults the files and consults his officers, will know that they advised me, as I told the House in answer to questions, that timber such as Canada could send would not replace and could not replace the timber which we got from Scandinavia and from Russia. I was also informed that it was extremely difficult to make sure that the American soft woods coming through Canada did not come forward as Canadian woods. This is something as to which there need be no discussion on the facts. The Office of Works were very emphatic to me that it would be a very costly business for their building arrangements if we stopped taking timber from Scandinavia and Russia. The quality and the life of the timber for building purposes was infinitely superior. Now we are told that without any investigation whatsoever we are to give notice to cancel the trading agreement in order that we may be free to deal with something that may not be there, namely, dumping. Everybody knows that what Canada wanted was to have the advantage of the markets without Russian competition. When we come to the question of cheapness and the question of dumping, what really is meant? I think this country dumps when it wants to, just as much as any other country. [Interruption.] Yes, but the difference with Russia is this, as I think Mr. Bennett or someone else said, that in the case of a country which is organised on a nationalised basis it is very difficult to compare their costs with the costs prevailing in a country like ours, where we have to pay rent, profit and interest to people who do practically nothing at all. I should have thought that the right hon. Gentleman, being a good Socialist, would want to assist a Socialist Government in carrying on a Socialist experiment.

I hope we are going to have a public inquiry into this business of Russian dumping, and the charges made against Russia generally. I have heard the Noble Lady and others speak on this subject, and I know the sort of statements that have been made, but up to the present none of them have been brought to the test of proof, and before ever we cancel our trade with Russia, which at present is very profitable to our people—because millions of pounds' worth of trade has been done and not a, penny has been endangered—we ought to have a real public inquiry, so that the public may know why such a step is being taken.

Vice-Admiral TAYLOR

Will Russia submit to that public inquiry?

5.30 p.m.


The people who are making statements may be called upon to give their evidence, and I think that then it will be proved that it is no evidence at all. If what the hon. Gentleman says is correct, the Government have taken their decision without having had any inquiry into the matter. So far as I can judge, there will be no immediate benefit to any worker or trader in this country, and it is simply a shifting over of business. I should have thought that during the Recess, and during the 12 months that the present Government have been in existence, they would not have had their eyes on the ends of the earth, but would have faced the terrible problem of unemployment and the terrible condition of British agriculture. The latest figures show conclusively that less land is now under cultivation, and fewer men are employed and, generally speaking, the condition of agriculture has gone from bad to worse.

Side by side with that state of things there are tens of thousands of acres of land lying derelict, and thousands of acres which need saving from flooding. There are millions of people out of work, and the only thing that happens, so far as the Government are concerned, is that they have gone out to Ottawa to see how they can help our friends in the Dominions to shift trade from one place to another. I want to enter my very strongest protest against British agriculture being left where it is. I know it will be said that the Government have made some arrangements for organising the supply of certain articles such as foodstuffs, which we hope to develop in this country, but while we are hoping, talking, and arguing about tariffs and Free Trade, people in this country are starving, and the greatest asset that the nation possesses in natural wealth is depreciating and getting out of cultivation. These propositions which the House of Commons is to spend two or three weeks discussing will not bring a shred of prosperity or of peace or contentment to anyone in this country. Perhaps that is too extreme, and I may be told that certain trades may benefit. We are told that 5,000 or 6,000 men have been employed in new industries in this country. That is perfectly true, but 30,000 men have been added to the unemployed dock workers. That is proved without a shadow of a doubt by the figures of the Ministry of Labour.

The world to-day is looking for a lead from this country, and from the Prime Minister because of his past. People have thought that from a Socialist of his standing there would have come a lead in the direction of international co-operation and international good will. I am certain that we shall enter the World Economic Conference prejudiced and hindered by these proposals, and any chance that we may have had of bringing about international co-operation is almost at an end. What is the matter with the world? The Chancellor of the Exchequer talked this afternoon of the depression round the world. What is the matter with our own country and with the world? Only this, that mankind has not yet done what the Prime Minister has over and over again in his career said must be done, and that is to find a way to consume the quantity of products resulting from the ever-increasing productive power of the world. That is what we have to do, and it is nonsense to think that putting on tariffs and cutting a bit off here and there to improve one country at the expense of another will increase consumption. Will some hon. Member who speaks after me say in what way this will increase consumption? If the Minister of Agriculture speaks let him tell me in what way these proposals will benefit British agriculture.

The one thing and the only thing which is needed, and which statesmen, economists, and all of us should consider, is to find out why it is that in the midst of plenty people should starve, why when there is abundance people should go without. It is of no use telling me that you want better relationships with the Colonies and Dominions. I want better relationships with all the peoples of the world, and I believe that you will get them only when you get away from the old principle of putting barriers between nations, when we break all the barriers down and sweep away the insane com- petition of money markets and monopolists, and in their place establish true co-operation.


The Committee has long been accustomed to the methods pursued in the House by the Leader of the Opposition, and nobody in the present circumstances would expect him to give a testimonial to the Prime Minister, the Chancellor of the Exchequer, or the Lord President of the Council. The right hon. Gentleman says that he can find no good in anything that has happened at Ottawa. My opinion is that he finds no good, or prospect of good in anything which emanates from the present Government. That is not the attitude of the great mass of public opinion in this country towards the conclusions reached at Ottawa. I believe that in every branch of public life, and in every phase of our industrial activity, there has been a wide appreciation of the sound foundations laid at Ottawa as the beginning of a new outlook in the development of our Imperial relationships.

I am sure the Committee would like to acknowledge gratefully the careful, comprehensive and illuminating speech made this afternoon by the Chancellor of the Exchequer. The Leader of the Opposition has asked repeatedly what will come to the working people of this country from the Ottawa Conference. The right hon. Gentleman was in office for a considerable time, and he had ample opportunities for making proposals to the Government of which he was a member. I do not think he can say that, at any time during the period when he was a responsible Minister, he made any contributions which can be quoted to his credit, as having found employment for the people of this country. He charges the present Government with having done nothing at Ottawa. I ask him whether it is not something to have brought together at a Conference all that is best in the thoughts of our Dominions and Colonies to devise schemes for a closer relationship of imperial marketing, and for giving opportunities to manufacturers in this country of a wider sphere of salesmanship overseas, at the same time giving to our own people in all parts of our dominions a preferential position in our market for their raw materials and foodstuffs. Is not that the beginning of an era which all of us who have dreamed of a united Empire have been looking forward to for a generation?

The right hon. Gentleman always infuses into his speeches a certain element of fire and force, and he has inquired ardently and energetically, why something has not been done for agriculture? The Chancellor of the Exchequer, in addressing the House, made it clear that all through the discussions at Ottawa the principle was observed that the agriculture of this country should have the first consideration of British statesmanship in relation to these proposals. I know of my own personal knowledge and intimate association with agricultural questions for a long time past that everything that the Leader of the Opposition has said with regard to agriculture is quite true. Where would he begin? Where would he start his great process for the improvement of the agricultural situation in this country? What happened at Ottawa was that, all through the deliberations, the interests of agriculture were kept before the Conference by the delegation from the United Kingdom and that view was accepted quite frankly and in the most friendly spirit by the delegations from the Dominions. The Leader of the Opposition, in his attack, gave no credit to the delegation from this country for the difficulties with which they were confronted at Ottawa. I believe that no delegation from this country to any Conference had a more difficult and embarrassing series of problems to face than the United Kingdom delegation had to face at Ottawa, and they faced them with courage, with resolution and with success. If the right hon. Gentleman would only read dispassionately, fairly and in that judicial temperament which is always marked in this House, the proceedings of the Conference in the two Blue Books which have been issued, I think he would agree that more credit is due to the delegation than he is inclined to give to it this afternoon.

The Committee, I think, was particularly interested in what the Chancellor of the Exchequer said in regard to meat. There is no doubt that there is great disturbance among the farming community of this country as to the policy to be pursued by the Government in relation to the importation of meat. The livestock industry of Great Britain is one of our greatest national assets; its value far exceeds that of any other branch of food production. Therefore His Majesty's Government, in dealing with the matter of the import of meat, and its limitation or arrangement and quantitative imports, must constantly keep in mind the extent to which our farming community depends for its future prosperity on a revival of the livestock industry of the nation.

In the Schedules which have been submitted to the House there are several matters of great interest to every hon. Member who is concerned with the prosperity of our Dominions overseas. For instance, there is the duty of 10 per cent. on maize. Imagine what that means to the great maize-growing community in South Africa. I had something to do with agricultural problems in South Africa a great many years ago, and am glad to have played some part in developing the export of maize from South Africa to this country; and nothing can help a very large section of the farming community on the South African veldt more than the preferential treatment of maize coming from that great Dominion into tidy, country. In the case of dairy produce, as to which preferential arrangements have been made, we are conferring a distinct advantage, not merely upon the particular Dominions concerned, but upon the people of this country. I am satisfied that the late Minister of Agriculture has done an immense amount of useful work in directing the attention of our farming community to the expansion of enterprise in the direction of greater production of dairy produce, and the preferential arrangements which are set forth in this Resolution will have a distinct advantage in encouraging progress along that line.

I am glad to observe that substantial rates of duty are to be attached to condensed milk and milk powder. It has always been difficult to understand in this House why milk powder or condensed milk should be imported into this country at all. Having regard to our own production of these commodities, surely it ought to be possible for our farming community to provide all the substances of that nature that we require for our own purposes. I think that perhaps on certain subjects, like those of linseed and cod liver oil, the late Home Secretary may have something to say. I am not sure that the late Secretary for Mines would not be interested in the question of cod liver oil, and he might possibly extend his helpful support to the late Home Secretary in making clear to the community how dangerous it was to put a duty upon a commodity like cod liver oil.

I am glad to think that those of us in this House who have fought for Imperial Preference and closer Empire relationships for the last 30 years have seen the day when these Resolutions have been brought before the House, and all of us who are associated with Birmingham are proud to feel that the statesman who submits these Resolutions to us is the son of the man who first taught us the real meaning of Imperial association and Imperial partnership. I hope very much that these Resolutions, giving effect to the findings of the Ottawa Conference, will mark the beginning of a new era in Imperial relationships, and in establishing new confidence in the possibilities of our own Dominions and Colonies; and that, while affording great fields for our manufacturing enterprise, they will at the same time, by extending preferential treatment to our own people, indicate how much we appreciate their co-operation for the economic advantage of the Empire as a whole. I hope very much that the Resolutions will be carried in this House by a large majority, and will be the basis of a great new expanding policy which year after year will contribute more and more to the uplift of our people in all parts of the Empire—Dominions, Colonies and Dependencies. I am confident that at Ottawa the Leader of my party in this House, the Chancellor of the Exchequer, and every one of our delegation, made a contribution towards the improvement of the economic possibilities and future prosperity of our people to which no estimate can at the present, time be attached. I hope that the exposition which we have had this afternoon from the Chancellor of the Exchequer of the policy that is being pursued by His Majesty's Government will commend itself to every section of the people of this nation.


I have listened very carefully to the statement made by the Chancellor of the Exchequer, and I must confess that, in applying to it the mind of a worker, I cannot find any indication of benefits that will accrue to the class that sent me to this institution. I was very anxious to know whether I was misjudging the situation when it was stated that trade was going to be developed and employment was going to be found for the workers of this country. The statesmen of this country and of every part of the British Empire went to Ottawa to discuss the making of trade agreements in order to get rid of their glutted stores to a poverty-stricken British Empire; but, before they can get rid of the stocks that have already glutted the markets in every part of the British Empire I should assume that the very first thing to do would be to increase the purchasing power of the people in order that they might be able to purchase this accumulation of articles which we find in the stores and warehouses in every part of the Empire. Statesmen went there from Britain, from New Zealand, from Canada, from India, and from Australia, but nobody has been able to convince me as to where a market is to be obtained for the goods that are already glutting the markets. Take, for example, Australia. They want to sell their meat, they want to sell their sugar and their dairy produce, but we have the contradiction that in Australia the workers who could consume these goods are starving. We have Australian statesmen going to Canada looking for a market to unload the surplus product of the workers' energies, while at the same time we have 50,000 Australian migrants living in tents and camps who cannot get the ordinary essentials of life to develop the bodies of their children.

Where is this market going to be found? You go there from Great Britain trying to unload your goods in different parts of the world, but in every place that you go to where private enterprise is predominant you find the same poverty-stricken working class who are denied the purchasing power to buy those goods. Is there some market in some part of the world that I have never heard of? Are there some workers in some part of the land whose purchasing power is steadily on the increase? Everywhere you go you discover that a poverty-stricken working class is being asked to purchase and consume goods, while at the same time you are urging a continual reduction in the standards of their purchasing power in those countries. You have applied a means test to your working class; you have cut the unemployment benefit of your workers; you have gone round the vicious circle time and again cutting wages; and you are engaged at the present moment in another attempt to go right round the scale and lower the purchasing power of the people.

The man who three or four years ago could manage to get a suit of clothes every year is only able now to get one every two or three years, if he is able to get one at all, and every move that you make within your present order of society in the direction of decreasing the purchasing power of the working class is adding to the chaos and confusion within your private system of society. Germany does the same; India follows suit; Canada plays the same game. No matter where you go, they are all engaged in measures of economy, and every measure of economy that is produced produces the need for a further economy, because, if you add to unemployment, as you are bound to do, in every part of the world, you are unable to consume the goods that are being thrown up in a scientific age by the energy that is applied to the machine, and you are glutting the markets of the world. We have to-day a machine, I am told, that can mix and shape and make 4,000 loaves of bread per hour. Thirty years ago a baker could only have made, in an eight-hour day, as much bread as would supply a very small number of people, but a boy of 16 operating that machine can turn out 4,000 loaves of bread per hour. You would think that what was wrong to-day was that there was no food and none of the other essentials of life. To hear the talk about stimulating agriculture, one would think that we were short of potatoes, that we were short of wheat, that we were short of vegetables; but the whole world is glutted with these things, and every country is saying, "Let us throw up tariff walls in order to prevent the foreigner from invading -our country."

The statement made by the Chancellor of the Exchequer to-clay was a mass of contradictions. He approved of tariffs being applied, and for the last 12 months this Government have applied their mind, their energy and their intelligence to the application of tariffs; but the right hon. Gentleman comes here to-day and hails with glee every lowering of tariffs and the allowing of free imports to come into a particular country. I cannot understand it. I simply say that since I came here—and I have a very short experience of this House—in 1930, and came to closer grips with the people who are ruling or running the destinies of this country, it has seemed to me that you are engaged in, to use a working-class phrase, a "game of cod," that you are making the people of the world believe that you have the power to put this system on its feet. You have had 39 conferences since the end of the War, and after every conference, instead of putting it on its feet, you have been more successful in putting it on its back, where it ought to be. You go on telling people that prosperity is round the corner. It is the old story that I used to hear Philip Snowden telling at a later period: "Are you going to throw us out just when prosperity is dawning, so that the Tories may come in and take the credit of the trade revival?" You have gone on since 1918 with that game of hypocrisy and make-believe, asking the people to take you seriously as having a positive remedy for unemployment.

6.0 p.m.

I am antagonistic to the Labour party in this way also. They tried to make the people believe that, if they were on those benches, they could cure unemployment. I remember in the 1929 election campaign saying on platforms that I disagreed with the statements made on Labour platforms that the Baldwin administration was responsible for the unemployment figures. I said that, if they still increased under the MacDonald administration, their opponents would be equally entitled to say that he was responsible for unemployment. No statesmen are responsible for unemployment. It is inherent in the system of society, and it is no use kidding people any longer that you have a solution for this problem. Australia goes to Canada and says, "Take our coal in exchange for your meat, sugar and wool." They say, "We have our own coal mines which we hate recently developed. We are looking for a market for our coal." "Will you take our ships?" They, say, "We have established our own ship-yards." "Will you take our woolen goods?" "We have our own woolen factories." "Will you take our cotton goods?" "We have our own cotton factories." The whole world is producing and we get at Ottawa a large number of people who are all sellers. They are all trying to sell the same things at Ottawa. They want to sell boots and clothes, ships and coal. They all go there as commercial travellers, but none of them wants to buy. They are all wanting to see what they can get out of the other fellow. You talk about trading within the Empire. If you cease to-morrow buying anything from Germany, are you not destroying the power of Germany to purchase goods from the rest of the world?

What is the use of trying to make us believe that statesmen have some great ability compared with the ordinary man, or with a student in an economic class in a working class area? I remember when I used to look in the Labour newspapers at the Will Thornes and the Crooks and others whom I thought the great giants of the Labour movement. I wished I had the ability and intelligence of these men. Then I came to closer grips with them and I found that, instead of giants, they were pigmies, who had no great intellectual ability. I was brought into closer relationship with these people than with others on the National Government side but the F. E. Smiths, the Bonar Laws, the Asquiths and the Lloyd Georges were all professional politicians attempting to make the world believe that they could put the world right if the stupid unintellectual section of the people would only put their trust in them. They had a bottle, two spoonfuls from which would put the whole world right. They were going to put the war-weary and poverty-stricken world in a good state. But they got to Ottawa, and what happened there? Nothing of any consequence to the world except that the Dominions Secretary played cards and the Leader of the House smoked his pipe. The Labour party claimed representation there but, instead of saying in an honest fashion that Ottawa is a sham and a make-believe, they staked a claim for their own vested interests. They went there taking their technical advisers, just as Arthur Henderson was sitting at Geneva representing the National Government that he condemns. He comes from Geneva, where his hotel expenses are being paid by the National Government, and goes to Leicester and condemns the hand that feeds him. It is the greatest sham and humbug in the world.

I do not say you do not desire to do the best you can by your trading agreements without disturbing your class or vested interests. You would lift men from the gutter and place them in a decent position in society but, when it comes to the vested interests of the ruling classes, they have to be bolstered up at the expense of the poverty and degradation of the great mass of the community. The workers are not looking to Ottawa now. They are developing a tendency to look to themselves to solve the problem. This Ottawa Bill will no more increase the purchasing power of the people than the Anomalies Act passed by the Labour Government, than the means test that they sought to defend, than the wage reductions that they imposed on the civil servants. They served their time as place-hunters and office-seekers on those benches and they are engaged to-day in a great game of shadow boxing, attempting to make the world believe that they are sincere. They are no more sincere than the men on the other side. It is the pot calling the kettle black. They are all engaged in a conspiracy to defraud, rob and plunder the poor. Unemployment is not going to be solved by Governments. It will be solved only when you rid yourselves of the present social system, when the working class take power into their own hands. The Prime Minister knows that he is engaged in a great game of sham and make-believe. He knows that the social system is going into decay and demoralisation, and he knows that the working class are awakening to the facts. As they rid themselves of their faith in politicians they will not look to Ottawa but to their own power and strength to rid themselves of poverty, destitution and despair. Yon may talk about what Joe Chamberlain said 30 years ago. What does it matter what Joe Chamberlain said 30 years ago? Who cares what he said then, or what the right hon. Member for West Birmingham (Sir Austen Chamberlain) says to-day? The working classes are knocking at the door. They are demonstrating. They are showing their teeth, and I hope they will go on showing their teeth until they pull the whole social system down and put in its place a system of security for themselves.

You talk about postponing action under the means test because of the Ottawa discussions. This is not important. The only important thing is to rid the world of poverty. The store houses were filled by the labour, the ability and the intelligence of the working classes and, when they liberate themselves from their chains of slavery, tied to your economic system, they will empty the store houses. They have the right to decide who shall control the means of life. At 56 meetings in the last three months I have encouraged them to have faith in themselves and not in political parties or individuals, who are all engaged in the game of scramble for vested interests. I have told them they must have faith in their own power to uproot the social system and put a real system, based on economic justice, in its place, a moral system, a civilised system and a real system. Unless they do that, they are going to he burdened with this top-heavy gang of quacks who are attempting to make us believe that Ottawa is going to produce results. Ottawa produced only one result. It gave a large number of clerical assistants and typists the finest holiday they ever had It gave to a large section of politicians a very fine holiday indeed. If they are going to go on kidding the world with this stuff that is being put across to-day, 99 hours out of 100 spent in this House are spent on useless talk. I am going back to-night to Glasgow to stir the work-class to social revolution and the uprooting of the present system and those hypocritical institutions which are keeping the people in slavery and passing so much dope every day across the wires and through the Press. The people themselves will have to solve the problem and not be kidded any longer by those who adorn the Front Benches, with fat salaries as professional politicians.


The reasons which have led some of my right hon. and hon. Friends and myself to resign from the Government have been publicly stated and have been fully discussed. The incident took place some weeks ago. There is no disrespect to the Committee if I do not on this occasion offer to it any explanation. I am sure the Committee itself would prefer to proceed with the urgent and important business which is now before it rather than receive from us further personal explanations. But it will be quite clear, from the view that we take of the Ottawa Agreements, that it would be impossible for us to express the opinions which it is incumbent upon us to express while remaining members of the administration. Our speeches on an occasion such as to-day would either have been weak and perfunctory, casting discredit on the sincerity of those who made them, or else, if they were vigorous and uncompromising, they would, made from that bench, put an undue strain even upon the great tolerance of the House of Commons.

The Chancellor of the Exchequer said that we in this House are all at one in desiring to promote the unity, the welfare and the prosperity of the great commonwealth of nations to which we belong. He said further, with which we will all agree, that the lowering of barriers to inter-Imperial trade would be a long step towards that goal, and that it would be of service not only to our Empire, but, through the prosperity and progress of the Empire, to the whole world. With that we whole-heartedly concur, and if that were the whole result of the Ottawa proposals we should receive them with complete and cordial approval, and give them our utmost support. If, indeed, these were measures to promote Empire Free Trade they would have no heartier advocates than ourselves, but those measures for the reduction of tariffs are only olio side of the picture, and my right hon. Friend passed over without a word the other side—the imposing of fresh duties, the raising of fresh barriers here and all over the Empire. Look at this particular Resolution which we are discussing to-day. Examine its terms. Every clause of it is the imposition of fresh taxes, fresh duties and fresh restrictions upon British trade. The lowering of inter-Imperial barriers of which he spoke is excellent, but wider in their scope are the measures raising the extra-Imperial barriers.

My right hon. Friend the Lord President of the Council, when he went to Ottawa and made the inaugural speech, which is printed in the Blue Book which has lately been circulated, drew attention to the fact—I am quoting his own words —that of the trade carried on by the Empire, 70 per cent. is with foreign countries and only 30 per cent. among ourselves. Seventy per cent. with foreign countries, that is the trade we are trying to restrict; 30 per cent. among ourselves, the trade we are trying to promote and develop, and yet we are told that measures which are to facilitate 30 per cent. and to hamper 70 per cent. are measures for the enlargement of the world's trade and are in essence a liberating policy.

The Chancellor of the Exchequer mentioned one aspect of these Agreements to which not very much attention has hitherto been given, though it is of very great importance—their effect upon the Colonial Empire, upon those Colonies which are not self-governing, the Crown Colonies. That is one of the most serious of all the aspects of this question from our point of view. Here you have vast native populations, tens of millions, upon whose contentedness and loyalty everything depends. They are now becoming educated, alive, alert. They watch these matters. Hitherto they have been free to purchase whatever they wanted from any country in the world as freely and as cheaply as they could obtain it. Now the Imperial Government, have directed their Governments and have secured the co-operation of their Governments, in imposing taxes upon the imports into their countries from foreign countries. If they are willing, well and good, but I think that we should be exceedingly careful not to allow any suspicion even to grow up in the minds of those masses and among the sensitive native populations that the government to which they are subjected is being conducted not solely in their interests, but partly, at all events, in the interests of the country which exercises that power.

Furthermore, mark the effect of this new policy—because it is new in this colonial part of the Empire—mark its possible effects upon the outside world. It is a wonderful thing that this one small Island exercises a degree of political control over one-quarter of the whole of the globe, 400,000,000 of people, one-fourth of mankind; and the rest of the world looks upon it sometimes with envy, sometimes with admiration, and sometimes with criticism, but always with a considerable degree of toleration. It is because it is felt—it is known by all students of Imperial affairs in all countries—that while we bear many of the burdens of civilisation and carry civilisation, through the devoted labours of our administrators and others, into the dark places of the world, the whole of the world may share in the benefits of order and progress, railway building and the promotion of commerce. They recognise that. But now for the first time our Colonial Empire—and this may be only the beginning—is to be made, to as great an extent as we find it possible to do it, into a preserve for British manufacturers. It may be an immediate financial and material gain. [Interruption.] Yes, it may be. You may get this, but think of the later effects upon the future of the Empire. Do not think of this moment but of 10, 20, 30 years hence. The danger is that the opinion of the world, not at the moment, will gradually change in its aspect and its attitude to Great Britain and the Empire, and, subtly, gradually, imperceptibly there may grow a less feeling of friendliness which may be of supreme importance to the whole of our Commonwealth perhaps in days of difficulty and distress. These are some of the objections to the Ottawa Agreements and they are fundamental to the whole policy embodied in them.

There is another very grave objection to which public expression has been given and to which the Chancellor of the Exchequer has made no reply. It is the Constitutional objection to these five-year Agreements; to agreements imposing new taxes, which, by mutual arrangement with each Dominion, are not to be lowered for a period of five years. Others of the taxes may be lowered within the five years if the assent of the various Dominion Governments has been obtained. We assert that this is wholly contrary to the practice of the Constitution and to all precedents. Of course, we are not so foolish as to suggest that there cannot be any such thing as an international or Imperial agreement covering a period of years. That would be ridiculous. No one has ever suggested such a thing. We have alliances that cover long periods. We have commercial agreements. We have agreements dealing with debts and guarantees, and it is ridiculous to suggest that at the end of each Parliament all these are to be invalidated, a clean slate is to be made and that a new Parliament can write anything fresh. No one for a single moment has suggested that. If that doctrine were ever to be advanced it would make impossible any binding agreements at all between nations. Of course, no one has suggested anything so foolish. All our commercial agreements contain a clause—it is common form—that they are terminable sometimes on three months' notice, sometimes six months' notice, and occasionally 12 months' notice.

My right hon. Friend the Lord President of the Council in his speech the other day said that the whole of my argument is disposed of by the fact that we had made an agreement with Greece to the effect that the duty upon currants should not be more than 2s. That agreement is an admirable example. By that agreement, if we desire to impose higher duty on currants, if we gave notice to Greece to-day we could do it next year. I am quite prepared to accept the argument of my right hon. Friend the Member for Sparkbrook (Mr. Amery) in a letter of his in the "Times," and the argument of my right hon. Friend the Lord President of the Council. I accept wholly their view that these Agreements are analogous to our commercial treaties. I accept that, if they are willing also to accept the common form of our commercial treaties, which is, that they are all terminable at short notice.


As my right hon. Friend has referred to me, perhaps he will forgive me if I remind him of the treaty made with Japan in 1911 by the Government of which he was a Member which was for 10 years definitely, and only provided for denunciation after the end of 10 years. It is a treaty under which we bound ourselves not to impose duties on silks and certain other articles, and which treaty, in fact I believe, limited our freedom when we introduced the first Safeguarding Measure after the Great War. That was a treaty which could be denounced in short periods of months; it was for twice the period of the Ottawa duties, and then only denunciable after that date.


My right hon. Friend is perfectly well aware that the common form of commercial treaties is that they are terminable at short notice.


That was exceptional.


It may be, but the fact that my right hon. Friend has discovered one exceptional treaty does seem for the moment to suggest that it is a general rule in commercial treaties to make them terminable at short notice and that the one he quoted was the exceptional provision. I confess that although I was a. Member of the Government in 1911—I think I was Postmaster-General at the time—I had no very active part in making that agreement.


Did you resign?


There are two differences between that case and any other similar case. You may find one other, possibly, in our commercial history. There are two differences. The first one, which I have no doubt the House will not accept, is that there is a distinct difference between forbidding a lightening of taxation and forbidding an increase of taxation. With that this House is very familiar, for it allows any of its members to propose at any time a reduction of taxes upon the people but does not allow any of its members, except Ministers of the Crown, to propose an increase. Similarly, while it may be for a period of years permissible to say to some other country, "We are willing not to increase our taxation," it is a different thing to bind ourselves in all circumstances not to reduce taxation. There is another reason to which I shall refer. My right hon. Friend interrupted me and took me a little off my argument, but I will come back to the second reason in a moment. Before that I was anxious to say that in one of these Treaties embodied in this Blue Book—in the Indian Treaty—there is a provision to this effect: This Agreement between His Majesty's Government in the United Kingdom and the Government of India shall continue in force until a date six months after notice of denunciation has been given by either party. So it cannot be so very wrong and so very foolish to suggest that with the Dominion Agreements also the same provision should be inserted as has been already inserted by our delegates at Ottawa in one of the most important Agreements which they signed. I would press very strongly upon the House, if I may, this suggestion, that in these Agreements there ought to be inserted a six months' notice. I quite recognise that with the present House of Commons it is not to be expected that they will consent to veto or to postpone the Agreements which are now before us, but I do think that this House, if I may respectfully suggest it, would be well advised to express its views and to im- press upon the Government that the assent of the Dominions should be obtained to inserting this six months' notice, which would get rid of this part of the constitutional objection to these Agreements.

6.30 p.m.

After all, that ought not to be impossible to obtain, for it is far from being the case that these Agreements are universally approved in the Dominions, and particularly that the five years term is unalterable. In Australia the late Prime Minister, now Leader of the Opposition, Mr. Scullin, has given formal notice in the Australian Parliament that he and his party will not be bound by the five years' Agreement. Looking at it from exactly the opposite position from ourselves but agreeing with us on the constitutional point, the Opposition in the Australian Parliament has declared that it will not agree to bind itself by this five years' provision whatever the United Kingdom may do. In Canada the late Prime Minister, now Leader of the Opposition, Mr. Mackenzie King, has stated in Parliament that he regards this five-years proposal, to use his own words, as "fundamentally wrong," and if he comes into power—and certain by-elections in Canada indicate that he represents a large measure of public opinion—he proposes that a Government under his leadership should propose an all-round reduction in Canadian tariffs, at least to the level of 1930, the date before they were enormously raised by the present Prime Minister, Mr. Bennett. He says that he would give a 50 per cent. all-round preference to British goods, without any bargaining, as an act of good will from Canada herself. Therefore, there can be no insuperable reason why, if the opinion of this House were unanimous, the Government should not accept that proposal and ask the Canadian Government to agree to the insertion in the Agreement of the provision, word for word, which has been inserted in the Indian Agreement.

There is another matter which is of vital importance in connection with these Agreements. Our Constitution, of which we sitting on these benches are the guardians, may be illogical, and indefinite, but it is elastic, it is practical, it works, and it is an unrivalled instrument of Government. It does not de- pend upon law and formal regulations, but it depends for its smooth and successful working upon traditions, conventions, gentlemen's agreements, and give and take between opposing parties, call them what you will. It works because all parties recognise the importance of continuity of policy in international and Imperial affairs. We all recognise the great evil of sudden reversals of policy when a new Government comes in and a new Parliament is elected and that it would be disastrous if after each election we were to reverse obligations undertaken with other countries, whether in the Empire or outside. Yes, but there is a reciprocal obligation on the Government of the day not to try to tie up its successors in matters of keen controversy.

Let me take a hypothetical case. It is a hypothetical case from the last Parliament. Suppose that our friend the late Mr. William Graham, whose loss we all so deeply deplore, when he was engaged in negotiations with foreign countries, which did not succeed, for commercial agreements, had taken certain steps. Suppose he had arrived at some understanding, say, with Germany that in exchange for advantages which he might have thought adequate, but which others did not think adequate, he was willing to agree that for a period of years German goods sent into this country should not be taxed. Suppose he made an agreement with Argentina that, in exchange for advantages which he thought might be sufficient, Argentine wheat and meat should not be taxed, and he signed an agreement which should apply for five years or possibly 10 years. What would the Conservative party as a whole have said about that? They would have said: "You are pushing the matter too far. Make your agreement if you like, but we believe in protection for British manufacturers against German goods, for the sake of our own manufactures. We also believe in preferences that will necessitate a tax on Argentine meat and wheat, and we cannot allow you to bind us for five years or 10 years and to say that in no circumstances during that period shall our policy be adopted." The Conservatives would have said, with the utmost emphasis: "That is unconstitutional. It cannot be done." And undoubtedly they would have been right. Here we have the converse. This is a matter of keen political controversy, very different from the Japanese duty on silk in 1911, which no one troubled about at all.


I would remind my right hon. Friend that the tariff issue was very acute in 1911.


I do not suppose that there is a single Member of this House who knew that there was that treaty with Japan in 1911. Certainly, it was not any great election issue at that time. But this is a point of great importance. You have here a great issue dividing public opinion. Some may think that there is a majority on one side arid some may think that there is a majority on the other. Certainly, it will be a great issue whenever a General Election or a by-election takes place. The issue to which I ask the House to give serious attention has been frequently discussed in Parliament. When my right hon. Friend the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer in 1926 he introduced a Budget embodying the stabilisation of Imperial preferences for a period of 10 years. That is a much stronger measure than the imposition of duties. At that time my right hon. Friend who is now President of the Board of Trade used this language: I satisfy myself, therefore, to-day with merely registering my objection to the Protective duties for which the right hon. Gentleman has made himself responsible, and with saying for the last time on this Budget, that in so far as he has attempted to stabilise or render permanent the Protective tariff, such as it is at the present time, he has entered into an obligation which naturally will not be honoured by his successors and has done nothing whatever to give to the Dominion trader or to the trader in this country that settled and unvarying policy which is one of the best assets that a business man can have in dealing with forward business."—[OFFICIAL REPORT, 21st July, 1926; cols. 1251–2, Vol. 198.] The then Chancellor of the Exchequer, the right hon. Member for Epping, said: The hon. and gallant Member (Captain Bean) has introduced a phrase that has not been heard for many years. He speaks of the distinction between a free preference and a locked preference. I think I drew that distinction in those days but the hon. and gallant Member must attach to that distinction the meaning that was attached to it at that time. A free preference, in my opinion, is a preference such as we are giving now. It is given because, as far as we can see, it will do us no injury and we hope that it will help the Dominions who have given similar preferences to us. A locked preference would be a preference given by the Dominions to us or by us to the Dominions as a reciprocal matter, as a matter of fixed bargain on both sides, and that would to a very large extent tie the hands of Parliament."—OFFICIAL REPORT, 21st July, 1926; col. 1274, Vol. 198.] Two years ago, in 1930, there was an imperial Conference and the then Government with the same Prime Minister as now and the same Dominions Secretary as now, made this declaration: In the meantime His Majesty's Government in the United Kingdom have declared that the existing preferential margins accorded by the United Kingdom to other parts of the Empire will not be reduced for a period of three years or pending the outcome of the suggested Conference, subject"— This was their declaration, a formal declaration by the Government to the rights of the United Kingdom Parliament to fix the Budget from year to year. In the present Parliament this year, in February, 1932, the Lord President of the Council said: Much of the debate also has run on the difference between the permanent and the temporary nature of a tariff. There is no such thing as permanence in politics. Whatever one Parliament does it is in the power of another Parliament to confirm, to increase, to diminish or to abolish."—[OFFICIAL REPORT, 9th February, 1932; cols. 802–3, Vol. 261.] The present President of the Board of Trade in the same Debate said: The other objection taken to our proposals is that they are permanent.…Certainly nothing in our fiscal system is permanent. The yearly Budget comes up for discussion here and for examination in Committee of Ways and Means and is varied from time to time according to the constitution of the House and the opinion of the electors."—[OFFICIAL, REFORT, 9th February, 1932; col. 703, Vol. 261.] I apologise to the House for troubling them with these quotations, but we are dealing with a matter of supreme constitutional importance. Do those declarations carry any meaning or not? If they mean anything, they must mean that the proposal now laid before Parliament is an improper one, that it does tie the hands of Parliament, that it does prevent one Parliament having a free hand for a period of years to alter what has been done by another Parliament. We are told that for five years these duties are to be unalterable. I therefore would again strongly appeal to the House that they should inform the Government of their desire that a due period of notice should be inserted.

Suppose there was a General Election during those five years, as indeed there will be. Are the electors to be told that if they vote upon this issue they are impotent, that they can do nothing, that whatever they do the hands of Parliament are tied, that they cannot get rid of these duties, even if the nation by a great majority wishes it, until the period of five years has run out If the electors return a majority to Parliament in favour of the abolition of these duties, is that Parliament to say that it is impotent, that it can do nothing, or is it to break an Agreement deliberately signed by the British Government in the name of the nation and sanctioned by Statute passed by both Houses of Parliament? The Government have no right to create such an impossible constitutional situation. They must not try to confine the British electorate within such bonds, for they will surely be burst asunder. I trust, therefore, that the Government will accept an Amendment as to a six-months' notice. If so, our point on this head will be met. If not, I am compelled to say, here and now, with the approval of my colleagues and the Liberal Parliamentary party, that if this Measure is carried in its present form we shall regard it as contrary to constitutional practice, that the rule of continuity would not apply, and that we must be free in the future to take such action as to modification or repeal as conditions may require.

Our further point is this, that with respect to a long series of duties dealing with foodstuffs and raw materials, this Parliament can repeal them during the five years' period, but only with the assent of the Dominions concerned. Those duties are taxation. They are founded on Resolutions of Ways and Means, and are embodied in a Finance Act. You may call them preferences if you like. You may say, if you hold that view, that the foreigner will pay for the privilege of using our markets, if you think that that is the case, but the fact is that this Parliament legislates and passes a law requiring certain sums to be paid, and the Customs officers act accordingly. The result is that British im- porters, British merchants importing goods that they propose to sell to the British people have to pay British money into the British Exchequer. Tariffs are taxation. Until this year Parliament, when it has imposed such taxes as it considers to be necessary and expedient in the national interest, has been free, of its own motion, without needing any outside assent, to lower or repeal those taxes. Henceforth, before Parliament can lower or repeal particular taxes they will have to obtain the assent at Ottawa of the Canadian Government, and at Canberra in Australia of the Australian Government. There will have to be agreements, six agreements, all over the Empire, six assents, before this free Parliament can repeal a tax it has itself imposed. During the great conflict with the House of Lords in 1860 over the control of finance on the Paper Duties this House passed a Resolution in these words: This House has in its own hands the power so to impose and remit taxes and to frame Bills of Supply, that the right of the Commons as to the matter, manner, measure and time may he maintained inviolate. Now, instead of having to object to the control of one second chamber, we are to have the control of six Dominion Governments in various parts of the Empire. That is contrary to the rights and privileges of Parliament.

This Resolution comes now in this month of October as a. prelude to the World Economic Conference, which we were told by the Prime Minister is to meet in London in a few weeks' time. The purpose of that Conference, we understand, is to try and persuade the nations of the world to agree to a greater freedom of trade, to abolish barriers and eliminate quotas, which stop the free channels of trade. Everyone knows that the world is suffering because the channels of trade are choked with tariff restrictions and quotas, and now, at the moment when our Government are to give a lead to this policy at the Conference, we have these Resolutions in the House of Commons, with a long list of fresh duties on foreign produce, an elaborate system of quotas for restricting our meat supplies, and, on the top of it, compel us to denounce our Trade Agreement with Russia. Whether we shall be able to effect another agreement with advantage to our trade remains to be seen. Eighty per cent. of the exports of the products of the machine tool industry go to Russia at this moment, and there are many other industries which are able to effect sales in Russia. If we have no trade agreement all this trade may be stopped and the number of our unemployed will be increased proportionately. Now, when we are being asked to go into this World Economic Conference with a view to lowering tariffs we have these new proposals.

We were told earlier in this Parliament that in adopting Protection we were doing it largely in order to get rid of tariffs elsewhere, that it was a mere weapon to beat down the tariffs of other countries, and that as soon as we could persuade or compel them to lower their tariffs our tariffs were to disappear. These tariffs, obviously, are not intended to be removed, no matter what other countries may do. They are fixed for a period of five years, locked tariffs, as the right hon. Gentleman for Epping says, which cannot be got rid of. Are you going to say that it does not matter because the World Economic Conference is going to fail, because in any case we cannot persuade foreign countries to lower their tariffs. If so, then it has been an elaborate pretence that we were adopting Protection in order to secure greater freedom for trade. If we hope to effect great things at the World Economic Conference these permanent tariffs must in a large measure be an obstacle. The Dutch and the Belgian Governments have made agreements for obtaining freer trade by stages. Suppose there is a movement towards such agreements at the Economic Conference, we, the conveners of the Conference, are debarred from joining it. But for this we should have been free.

I was surprised to hear the Chancellor of the Exchequer say that when the Schedules were published they were received with enthusiasm. I should rather have described it as a frigid silence from the great industries of our country; and I did not notice any delirious enthusiasm in the House of Commons this afternoon. I do not propose on this occasion to go into specific points; there will be an opportunity for that later on. I only propose to refer to the two or three points to which the Chancellor of the Exchequer himself referred. He said that in the Dominions these Agreements would receive fair treatment, that the tariff boards would give reasonable opportunities for British trade. Let us remember that there is an exception, a very important exception, embodied in all these Agreements, certainly in the Australian one, to the effect that if any local industry is, in the opinion of the local tariff board, not fully established and with reasonable prospects of success, they are under no obligation at all to British industries. There is practically no industry in the Dominions which would not at all events claim that it is not fully established and had reasonable prospects of success. The fact is, as far as Australia is concerned, that the Agreements, as Mr. Bruce declared, will effect no radical change in Australia's fiscal policy. As for the independence of the tariff boards, I noticed that the Chancellor of the Exchequer corrected himself when speaking. He was about to say that the decision on these duties rested with the impartial tariff boards. He caught up his own words and corrected the word "decision" to "investigation." Two or three days ago in the Australian Parliament Mr. Latham, the Attorney-General, defending the Ottawa Agreements, said: The Ottawa Agreement did not propose to go nearly as far in restricting possible future action. The Ministry was not bound to accept the Tariff Board's every report irrespective of its own views and those of Parliament. Those are the assurances given in the Australian Parliament to doubting protectionists by a member of the Australian Government.

When this legislation is passed we shall be one of the most completely protectionist countries in the world. No less than three-fourth of the whole of our imports, after allowing for all those from the Dominions, will be subject to duties. The latest figures are for 1930, when we imported £740,000,000 worth of goods. Under this present legislation £550,000,000 will be subject to protective duties. Not only almost all foodstuffs for man and beast but a large number of raw materials, some of which are now brought, into the list for the first time, are to be subject to a duty in addition to the duties imposed by previous legislation. Timber, leather, tallow, copper, lead, zinc, smelter, all these are to be taxed, while our competitors abroad, the manufacturers against whom our manufacturers have to contend in a struggle to secure orders and thus keep our people at work, are not so foolish as to tax raw materials; they are to come in free, while our manufacturers will have to pay these duties and will thus be handicapped in their competition. We have heard of scientific tariffs; this is the maddest tariff that was ever thrown together. No political scientist could ever have constructed it except in a nightmare.

My right hon. Friend the Chancellor of the Exchequer in his concluding observations advised me to beware of prophecy, and he quoted the fact that British prices had not been raised in the shops while I had said that the effect of tariffs would be to raise prices. Since we went off the Gold Standard world prices have fallen 14 per cent., but partly owing to our going off the Gold Standard and partly owing to tariffs the prices in this country are 14 per cent. above world prices, on the basis of September of last year. While world prices have been falling, tariffs and Gold Standard considerations have been raising prices here, and that is why our prices have remained stable while world prices have been falling. If my right hon. Friend wants to beware of prophecy, let him consider his own words. It is not only those who have the name of a prophet who venture to indulge in that dangerous art. I remember a speech of my right hon. Friend on the same day that I made the speech from which he quoted, in February of this year, which ended with the words, "And now we shall have cleared the road for prosperity."

February: we are now in October. How far have we gone along the road to prosperity? Our exports, just published for September, are at the lowest point they have been since the year 1905. They have declined 10 per cent. in the short period of three months, and our re-export trade has declined 25 per cent. since tariffs came in. It was £5,300,000 per month, it is now £4,000,000, and the number of the unemployed has gone up by 300,000 since tariffs came in. Cleared the road for prosperity! I would say to the Chancellor of the Exchequer, "beware of prophecy." And so with regard to Ottawa. Lord Stonehaven said that he had never known a policy so full of promise as the Ottawa Agreements. Full of promise it is indeed, but perhaps in a sense different from that which he implied. Designed to help unemployment, it will no doubt bring some into employment, but it will throw out more. Alleged to conduce to wider free trade, it will erect two barriers for every one it lowers. Intended to unite the Empire, it will bring Empire questions into vehement controversy all over the Empire. And worst of all, it brings into direct conflict the urgent daily needs and interests of the poorest classes of this country with the claims made on behalf of Imperial patriotism.

In these circumstances, it is obviously impossible for those who hold these views to remain members of an Administration pledged to carry out this policy. The country at the last General Election no doubt highly approved the co-operation of men of all parties which had been brought into being. There are many Members of this House, and many Conservative Members, who whole-heartedly welcomed that genuine national effort, realising that they themselves were supported by men and women of all parties. They hoped that this Parliament would introduce a new phase of government.

7.0 p.m.

When we made concessions to our colleagues in the Cabinet at the beginning of this year; when we accepted the Abnormal Importations Bill and even the Wheat Quota Bill—neither of them permanent measures—the wheat quota an experiment for a short period—those hon. Members did not jeer and gibe at us for surrendering our principles. They realised we were making sacrifices to meet the views of the majority of the Cabinet in order to try to make the new system work. And when full-blooded permanent Protection was introduced, and we resigned our offices in January, we acceded to the appeal made to us by the Prime Minister and the rest of the Cabinet that we should withdraw these resignations in view of the financial conditions of the time and the great and urgent problems then pending in India and elsewhere. When we accepted that, on the condition we made for full freedom of speech and vote, these hon. Members showed us great consideration and believed we were fulfilling what we regarded as a patriotic duty. Now we are obliged to come to the parting of the ways, and I hope they will not think un- charitably of the action we have taken or imagine that this is done from any unworthy motive or from other than what we consider to be a careful regard for our public duty.


I rise at once to correct a mistake into which I fell in interrupting my right hon. Friend (Sir H. Samuel). I find with regard to the Japanese Treaty on trade that, while the terms of the Treaty generally were for 10 years, the particular provision dealing with duties could, after the lapse of the first year, be abolished after previous negotiations at six months' notice. I regret I interrupted the right hon. Gentleman's argument by a statement which was incorrect, and I hasten to make my apology.


In the circumstances I am glad he did so.

Vice-Admiral TAYLOR

The speech to which we have just listened has been one which has been very disappointing so far as I am concerned. I expected he would have placed before the House more cogent reasons than he has given why it seems to him that the views he holds have called upon him, and those who think with him, to resign from the Government. He tells us that in January he placed his resignation before the Prime Minister and was asked by the Prime Minister to continue in office in the national interest. Now he appears to have come to the parting of the ways and can no longer support the National Government in their Imperial policy and their policy of Protection. I would suggest that the policy of Protection was certain from the start of the National Government. I do not think there is any more reason for the right hon. Gentleman the Member for Darwen (Sir H. Samuel) to resign now than there was before the Ottawa Conference took place. Is it merely the case that because he hoped the Ottawa Conference would be a failure he remained a Member of the National Government and, now that he finds it a success he finds he has to resign?

The right hon. Gentleman occupied a considerable portion of his speech dealing with the constitutional question of whether the Ottawa Agreements would be binding on a future Government. I cannot enter into an argument on that question. He quoted many references to show that it would not be binding on a subsequent Government. If that is so, I cannot see why he made such a particular point of it in his argument. He also considered it must be a fact that during the five years Agreement as to that policy being maintained throughout the Empire, no alteration or additions could he made in the Agreements come to. That is not the case. During the term of the Agreements it will certainly be possible to come to agreements with those concerned not only to alter the existing tariffs, but to implement them as necessary for the extension of this Imperial economic policy. It is absolutely essential that we should have continuity in policy, especially with regard to this new policy at Ottawa. It is impossible to suggest to the Dominions and the people of this country that this policy should only continue for one year or even 18 months. During the term of years agreed upon it is hoped by the Government to alter these tariffs as necessary and make various additions to the Agreement. I am not sure whether the right hon. Gentleman is opposed to this policy because the policy of Imperial Preference will, in his opinion, bring about friction and disrupt the Empire. He put forward the argument that it is a dangerous policy so far as the Empire is concerned; also that a strong Empire will in future years bring about friction between the Empire and foreign countries.

Whatever may have been stated to the contrary, there can be no doubt that this Conference has marked a definite advance in the direction of Imperial economic unity. Because it has done that it has achieved something incomparably greater than any Conference in the past—due no doubt in the first instance to the change in the fiscal policy of this country. But it is primarily due to the determination of all units of the Empire taking part in the Conference to make it a success and bring about tangible results. We have only made a beginning. We have laid this foundation stone at Ottawa—only the foundation stone—and it is the wish and determination of all those who took part in that Conference that we shall gradually build up the Imperial economic fabric on this foundation. The success of this Conference, in my opinion, ought not to be gauged by the actual increased volume of inter-Imperial trade. No doubt it is a great asset, but the real advance which has been made, the real basis on which judgment should be given, is the acknowledgment and acceptation by all units of the Empire of the principal of Imperial economic unity founded on the basis of Imperial Preferences and their determination to put that policy into practice. Imperial Preference is not as has been stated, a policy of increasing tariffs. It is a policy of reducing tariffs throughout the Empire, of eliminating tariffs throughout the whole of the Empire, and bringing about completer freedom of trade throughout the Empire than exists at the present time.

There is one point which I regret—and I suppose it was through lack of time that it was not dealt with at the Ottawa Conference—that is the policy of migration. The whole of these agreements which have taken place will, in fact, bring about a diversion of the present trade. That is to say the trade at present carried out between foreign countries and the Empire will, to some extent, be diverted from these foreign countries to other countries of the Empire. That will, to some extent, increase the Imperial wealth, but unless, and until, we have a long-term policy of migration whereby man-power can provide for developing the vast areas of our Dominions—until that is brought into being, there can be no great increase in the prosperity and wealth of the Empire as a whole. It is absolutely essential and it must be made a part of Imperial policy. We must have a policy of migration. I hope the Government will pay particular attention to this and as soon as it is possible, In consultation with the Dominion Governments, bring out a scheme on a large scale—one which is practicable, which is acceptable to the Dominions, which will help to develop the Dominions, and to absorb the surplus population of this country.

It is obvious to those who have been in the House to-day that the right hon. Gentleman the Member for Darwen and others who think with him, believe that this Imperial policy will be one of disaster to the Empire. I think I am right in saying that he believes this policy will disrupt the Empire and antagonise foreign countries—that it will increase tariffs. I take the strongest objection to that. I would remind the right hon. Gentleman that when Free. Trade was introduced in the middle of the nineteenth century it was advanced as one of its advantages that it would distintegrate the Empire as it was in those days. The right hon. Gentleman the Member for Sparkbrook (Mr. Amery), in an address he gave recently, quoted what Mr. Cobden wrote on that subject. Mr. Cobden stated in 1852 that: The Colonial system can never be got rid of except by the indirect process of Free Trade which will gradually and inperceptibly loosen the bonds which unite our Colonies to us by mistaken notions of self interest. Does the right hon. Gentleman subscribe to that? Does he agree with Mr. Cobden that that is so?


Mr. Cobden, as far as I know—I have never quoted him in this House and I am not a very careful student of his works—was opposed to what is called the "Colonial system," which meant linking the Colonies to us by a system of Preference, and that what he did mean was the mercantile system which he was anxious to break up. In the end it was broken up and the Empire was strong upon it.

Vice-Admiral TAYLOR

Mr. Cobden and those who thought with him wished to get rid of our Colonies—they were "a millstone round our neck."


That is a quotation from Disraeli.

Vice-Admiral TAYLOR

That does not in the least alter what I have said that the Liberals were always against the Empire. There is no question whatever about that. That was their object, and Mr. Cobden pointed out that. Free. Trade was the best means of bringing about that object. Now the right hon. Member for Darwen suggests that the Imperial policy initiated at Ottawa will have the same result. The agreements reached with the Dominions are agreements for the lowering of tariffs throughout the Empire and not the raising of tariff barriers, and ultimately I am sure the Empire as an economic unit will gain such strength that it will be able to beat down tariff barriers throughout the rest of the world. Is the right hon. Gentleman not in favour of the reduction of tariff barriers throughout the Empire? Does he not subscribe to that policy? What is his objection? He has not enlightened the Committee on the subject this afternoon.

As to foreign countries and the antagonising of foreign countries, what has happened? Immediately we introduced a change in our fiscal policy we had France and Belgium, Denmark and the Argentine, clamouring for trade agreements with us. They had not done so before. They did not say, "Ah, you have raised your tariffs, or put tariffs on against us, we will raise our tariffs against you." They have not said that. What they have said is, "England is our best market. We now realise that we must buy more goods from England." That is what they are all saying, and they are now most anxious to make trade agreements with us. What a remarkable change! The whole time the tariff truce campaign was in progress in Europe they laughed at us. They said, Thank you very much, but you give us all that we want. We have free markets for our goods in your country, and you cannot give us more than that. We are not going to come to any agreement with you to lower our tariffs against you." Nothing resulted from the tariff truce policy, but immediately we changed our tariff policy, immediately we became protectionist, they said, "Now we want to make trade agreements with you. We are anxious to trade with you as we know you are our best market."

This Imperial policy has already had two direct results—the lowering of tariffs throughout the Empire, and the lowering of tariffs against us in foreign countries. The right hon. Member for Darwen said that we could not make any trade agreements with foreign countries without the permission of the remainder of the Empire. So far as we do not reduce the tariff preferences which we give to the Empire, we are permitted to do so, and there is nothing to prevent our coming to trade agreements with foreign countries. Undoubtedly we shall do so now for the first time, because we have changed our tariff policy.

With regard to agriculture, it is absolutely essential that commodity prices in the world shall rise. Otherwise there will be no means whatever of getting back to prosperity. The British farmer is in a deplorable position. Hundreds of thousands of acres of land are lying derelict to-day. Many farms cannot be let, and farms cannot be sold, they are unsaleable at any price. Until commodity prices rise conditions will go from bad to worse. I hope that the industrialist is beginning to realise that the condition of the farmer is depressing him in his industry, that the more the farmer goes out of business the more industrial labour goes out of business too. For the farmer is the best market for our own manufacturing industries. It has been admitted for years that we must do something for the British farmer, but very little has been done so far. At Ottawa the British Delegation refused to accept a tariff upon meat. They are to bring in an agreement for a quota on meat. If the quota will raise commodity prices in this country, as many claim it will do by its restrictive measures, so that the farmer will receive an economic price for his goods, I have no quarrel with the quota as such. But as soon as the farmer receives an economic price, it will induce him to increase his production, and I can see the time coming when supplies from the Empire and from the British farmer will meet our needs.

This quota system cannot be permanent. The Lord President of the Council stated in this House that it is merely a policy for an emergency, that it is not for a long period of time and that something will have to take its place. The farmer must have some guarantee that when the restriction by means of a quota is taken off, he will receive a measure of protection. Otherwise he will be in the same position as before. Apart from that, can the Chancellor of the Exchequer forgo the revenue which he would receive from the imposition of a tariff on foreign meat, amounting to £10,000,000 or more? There is no hesitation in overloading the British people with taxation, but immediately it comes to the taxing of the foreigner and getting him to pay something for the privilege of the British market, we must not do it, we must never tax the foreigner. As a matter of fact a tax on imported meat would not be paid by the consumer but would be paid by the producers. I very must favour a tariff on meat, and I hope that such a tariff will be brought in by the present Government. Then there is the question of dumped goods. Whatever precautions we may take with regard to tariffs or restrictions on imports, they will be null and void unless the Government bring in measures for dealing with the dumping of foreign goods, either by State aid or on the principle which is adopted by Russia. Russia stands in a category entirely alone. Russian prices have nothing whatever to do with economics. The Russian Government have no consideration for their people. There is no relation between the price of an article sold in Russia and the price of the same article as sold outside Russia. The consequence is that Russia undercuts the price of every article that comes here. That is all she is concerned about. By so doing she brings down commodity prices in this country. It is essential that in this matter drastic measures should be taken. I am glad to hear that the Government propose to do away with the Russian treaty.

I hope there will be continuity of effort in this great Imperial policy. At present there are the tariff Boards of Australia and Canada, which will receive and consider any recommendations sent through the Government of this country with regard to trade matters, but it seems to me that just as it has been necessary to set up a tariff Advisory Committee in this country, so as to remove our fiscal matters outside party politics, so it will he necessary to set up an Imperial Committee on much the same lines, to which all matters referring to tariffs and trade would be referred. So that you would have a committee permanently in being, and would get continuity of policy. I see that the Secretary of State for the Colonies is present. I would ask him what steps, if any, have been taken to get rid of the Colonies' treaties in Africa. We have heard that other treaties will be got rid of when they stand in the way of Imperial Preference. Has any decision been reached regarding the treaties with our Colonies in Africa? If we are to have a true Imperial policy it is just as necessary for the Colonies to be fiscally free as it is for other parts of the Empire to be free. I hope that that matter will receive the right hon. Gentleman's consideration.

There is no doubt that we have launched out upon an Imperial policy which has the approval of all parts of the Empire. It is only a matter of time before we receive the full fruits of our labour, and we shall be able to state that we have acquired what most hon. Members of this House and many people outside want, Empire Free Trade.


When the right hon. Member for Darwen (Sir H. Samuel) rose, I think that the Committee not unfairly anticipated that he would give some cogent reasons which persuaded him to adopt the course of leaving the National Government at the moment which he chose. In that expectation and hope the Committee has been exceedingly disappointed, at least as disappointed as the wider public which listened to his broadcast remarks and the somewhat scurrilous observations which did discredit to no one except to the holder of the office which he has just vacated. His speech was interesting more for the matters which it omitted than for the matters to which it referred. I was interested to observe that he had discarded the two reasons which he had hitherto given for leaving the National Government, and that he had substituted new ones. A week or so ago he felt entitled to leave the Government because the state of the country was so much better than it was when he joined the Government. No doubt in the intervening period the right hon. Gentleman has reflected upon the dilemma to which that might drive him, because if the state of the country is no better now and if the crisis is as acute as when he joined the Government, obviously he had no right to weaken the Government at this moment. But if on the other hand the state of the country is better, and the crisis is more subdued than at this time last year, then in fairness the right hon. Gentleman should admit that it has been brought about owing to the policy of the Government, the policy of the imposition of tariffs for the regulation of the balance of trade. Upon that dilemma the right hon. Gentleman seems to have stuck.

7.30 p.m.

I was particularly interested, however, in some of the points with which he sought to justify his opposition to the Ottawa Agreements—an opposition so intense and so severe that he found it incompatible with his principles to remain in the Government. He began by the bald statement that 70 per cent. of the trade of the Empire was done with foreign countries and that 30 per cent. was done with the countries of the Empire itself. I would like to ask him, is he satisfied with that picture? Is a complacent review of that situation satisfactory to him or to the party which he now represents? He went on to say that it was with this 70 per cent. that we proposed to interfere—that we proposed to restrict the 70 per cent. in order to deal with the 30 per cent. But what a ludicrous presentation of the facts. That you should attempt to divert some of that 70 per cent. into the channel which contains the 30 per cent. would appear to be a reasonable proposition to anybody who believes in the development of Empire trade. But that is entirely different from speaking about it as though there were to be a restriction upon the total volume of trade. These Agreements are an attempt to canalise that trade into Empire channels along which, by concerted effort, we know that we can make it flow freely and under conditions satisfactory to the common conscience of the Empire as a whole.

The right hon. Gentleman spoke next about the Colonies and referred to these Agreements as going some way towards making them into manufacturers' preserves. A more shameless misrepresentation of the effect of the Agreements I cannot conceive. If the right hon. Gentleman could point to one single case in which these Agreements impose upon any Colony an obligation to raise protective tariffs to the exclusion of foreign goods, there might be some justification in the gibe. I think he can point out no case in which Great Britain makes any attempt whatever to restrict the import into any part of the British Colonies of foreign goods. It is a gibe unsupported by any justification. Perhaps the most interesting of all his points was that strange constitutional point which he laboured at great length and which, I have no doubt will form the stock-in-trade of many minor Members of his segment of that fissiparous unit, the Liberal party, when they come to parade the country in search of the long-lost cohering principle that is going to revive their shattered fortunes. The right hon. Gentleman searched, as I think in vain, for anything that could justifiably be described as a constitutional point.

What is this so-called constitutional point? The right hon. Gentleman said that all existing foreign agreements are terminable in six months or 12 months or some other short period. In other words they are in force for definite stated periods of time varying from six to 12 months and in some cases extending to three years. Where does the constitutional issue arise? Surely it is only a matter of degree. I fail to see anything that makes an agreement which can be binding for three years constitutional, and an agreement which is binding for two more years, unconstitutional. As for the strange attitude of mind which draws a distinction between forbidding an increase of tariffs and forbidding a lightening of tariffs I think none but that particular brand of Liberal mentality would be able to appreciate it.

The right hon. Gentleman referred as an example to the efforts of the late Mr. Graham—whose loss to the House of Commons everybody, as he said, very greatly deplored—to achieve a tariff truce which would bind this country to a particular tariff policy for a period of at least three years. The right hon. Gentleman sought to make a point by asking what would have been the attitude of the Conservative party towards such a proposal. I ask the much more fundamental and searching question: What would have been the attitude of the right hon. Gentleman towards such a proposal? He said that the Conservative party would have opposed any such truce and would have been right, but I have the liveliest recollection of the attitude of the right hon. Gentleman himself to the Socialist party during the last Administration, and I confess frankly that I can conceive of no circumstances in which he would have opposed that party upon any fundamental issue, whether it was a tariff truce or any other truce. I have not the smallest doubt that, forsaking these new-found principles, he would in such an emergency have been found according his support to a policy which would have fettered this country to the admission of foreign goods for a period of three years, without let or hindrance. If, as I shrewdly believe, that would have been his attitude and the attitude of his party there seems to be little constitutional point in objecting to a policy which would facilitate the entry of Empire goods to this market over a corresponding period.

A good deal of the attack that is now being directed upon these Ottawa Agreements fails utterly to take account of the pre-existing situation in the Empire—of the situation as it was before the delegates went to Ottawa. It is to that situation and to the wider implications of the Ottawa Agreements that I would direct attention. You cannot judge these agreements without reference to the pre-existing conditions. What were those conditions? As it appears to me they were these. First, that the self-governing Dominions of the Crown were attached to the Crown by loosening bonds. There was the tie of royalty. It is a dangerous tie to strain. It is a sentimental tie and rapidly becomes a historical one. It becomes more dangerous to rely upon it as migration to the Dominions ceases to keep the link with the home country, as the Dominions became more cosmopolitan and get their citizens from other parts of the world. It is not a tie which anybody would wish to see unduly strained.

Then, down to the War the self-governing Dominions, of course, existed and maintained their Imperial connection on a basis of self-interest. To say anything else is delusion and eyewash. They remained in the Empire because, in the main, and in the last resort, they derived assistance and strength from the Empire and not because of the historical nexus although that had a somewhat minor and subsidiary part to play. But the Empire was being held together mainly by two things—the Navy and the Trustee Act. The Navy protected them and made it unnecessary for them to make that provision for their own defence which would have been necessary had they gone out of the bonds of Empire. Under the Trustee Act they were able to borrow money for development at a cheaper rate here than the rate at which they could get it in other markets of the world. But think of the metamorphosis which has occurred since the War. There have been successive conferences reducing the value of the Navy as a defensive arm. There have been successive disarmament conferences making us unequal to the task of protecting our trade routes. Think, on the other hand, of the loosening of the power of financial control—of the heavy taxation, depriving us of the capital which we used freely to lend under the terms of the Trustee Act to the Dominions before the War. Think of the competitive demands of Europe; of League of Nations loans; of the £78,000,000 which we heard of this afternoon, about 50 per cent. of which has been wasted and poured out into Europe instead of being diverted into the Empire.

These bonds were loosening when the Imperial Conference met at Ottawa and the Conference was faced with a very different Dominion situation from any which existed at any other period of history. These great self-governing Dominions were growing up with all the vices of that economic nationalism which is so curiously denounced by the remnants of the Liberal party although by implication they have been advocating economic nationalism this afternoon, in saying that in no circumstances should we consent to an agreement under which its barriers should be broken down. [Interruption.] I say "by implication" and what other implication is there? If you are not going to permit an agreement, over a period of time, which will make for some economic inter-dependence between the units of the Empire, the argument inevitably is that you are promoting economic nationalism in the different parts of the Empire. But that economic nationalism, when it occurs in Europe, is, of course, one of the things Which Liberals most loudly deplore.

The Empire, then, presented many of the worst features of the system clamped upon Europe by the Treaty of Versailles. You had these small economic units, concentrating on uneconomic production within their own boundaries, raising the cost of living within their own boundaries, pursuing a wholly serious spurious and illusory standard of life in the form of nominal wages which did not secure real value and dumping outside their own boundaries into Great Britain or wherever they could find a market. All the vices of economic nationalism were growing up within the Dominions and the process was becoming ever more difficult and severe. We had ourselves hastened that process by the change in the character of our migrants to the Dominions We had no agrarian population with which to supply the Dominions and the industrial migrants whom we sent there demanded just that kind of aggregation into towns which causes a demand for intensive industrial development in different parts of the Dominions. What was the result in these new countries? Log-rolling high tariffs, a lowering of the standard of life and high internal prices.

In my judgment Ottawa marked something very like the economic crisis of the Empire. If that divergence of policy between the different parts of the Empire had been permitted to continue, then, within measurable distance, in terms of a generation or a generation and a-half, you would have had complete economic disunity between the different self-governing Dominions and the last bond of Imperial unity would have been unduly strained and loosened. I think the Committee ought not to appraise their agreements merely upon the basis of the somewhat slender practical results which have been brought home. It seems to me that they should be judged upon the principle which was established in the course of the discussions and how much there is in that can be realised by anybody who takes the trouble to read the opening speech of Mr. Bennett, and the concluding speeches and the results of the Conference. I confess that, in reading the opening remarks of the Dominion statesmen, it appeared to me almost impossible that any headway should be made against the mentality which only -saw a. future in ever-increasing tariffs.

It is little short of a triumph for the British delegation that they brought home Agreements which secured acceptance of the view that my right hon. Friend the Lord Privy Seal had enunciated at the opening of the Conference, the view that there must be a modification of the purely national spirit, that there must be a rationalisation of production, an allocation of production to the portions of the Empire in which it could be most efficiently carried out, and, last but not least, that the control of the tariffs of the different self-governing Dominions should be in the hands of a non-political tribunal. The great advance that that marks can hardly be appreciated by those who have not been in close contact with the Dominions, where almost every statesman is in his place because of some sectional interest that he represents, where there is no Civil Service in the sense that we have a Civil Service, of expert, inde- pendent men who are thoroughly efficient in their particular tasks and who are not changelings with each successive Government, as they are so often in the different self-governing Dominions. The enormous advantage that will follow if that principle can not only be accepted but really applied in the Dominions, so that a tariff board which really is independent of political control and which really is capable of dealing impartially with the different applications for tariffs, cannot, I think, be overstressed.

In conclusion, I would like to add that for these reasons I think the Government are to be heartily congratulated upon the success of these negotiations, and when you come to consider points of detail, I think that is an unfair angle from which to attack these Agreements. A foundation has been laid, and upon that we can build. Better a thousand times the foundation of principle established in these Agreements than the blank negative proposed by those who say that in no circumstances ought we to attempt to keep fiscal step with the different units of the Empire. It is only a beginning, but it is a solid beginning, a solid foundation upon which we can build, and it depends very largely on us whether we utilise this foundation upon which to build an edifice which will be of lasting value, not only to the Empire, but to the whole world.

Upon those foundations we can discuss a common monetary policy, we can discuss a common development policy, a policy which would secure amendments, agreeable to the Dominions, in the Trustee Act, for example—that antiquated Act of Parliament which enables us to tempt the Empire to unfruitful forms of expenditure by providing it money at a cheaper rate than it could get if it put its proposals forward on their own merits. There can be no greater advantage at the present moment than something in the nature of an Imperial development board, which would be so constituted as to afford trustee status to loans for the development of the Empire. That is another matter which we can build upon this foundation. I have spoken of a common monetary policy, which might result, I hope, in the establishment of an Imperial economic clearing-house through which statistics relating to the demand and supply of goods might be collated in the way in which chambers of commerce are supposed to do in this country, and as the pan-American Union does for the American continent. It all comes within our purview, now that we have at long last sat down in common conclave with the statesmen of the Empire and hammered out a policy which at least gives us a foundation upon which to build.


In opposing these Agreements, I really wonder whether the last two speakers have read the Agreements or not, and that remark applies especially to the hon. and gallant Member for South Paddington (Vice-Admiral Taylor), who made the statement that there would be no increased taxes on the food of the people as a result of these Agreements, because it has been admitted, I think, that the Agreements will do one thing. They will certainly increase tremendously the cost of living to the poorest people in this country. There has been no case put forward since the introduction of these Agreements by the Chancellor of the Exchequer that they will remove the difficulties from which the country is now suffering. We have not been told that there is likely to be any more employment as a result of the Agreements or that the people's living is likely to be increased, and it is obvious that the Agreements will result in the poor people of Britain being much poorer by having to meet an increased cost of living.

There is another serious matter concerning these Agreements. We were told in the early part of this Government's life that it was not their intention to introduce food taxes, and I remember that during the discussion last February on the Import Duties Bill it was denied even by the Prime Minister himself that that Bill was the thin edge of the wedge for the taxation of the people's food. Here we have admittedly a full-blooded Protectionist policy, which the Conservative party in this country have been trying to introduce for years and have at last introduced under the name of a National Government. I do not wonder in the least that there have been resignations during the Recess, and if some men are honest in their convictions there will be some more in the morning, because I cannot understand how the President of the Board of Trade, after the statement that he made in this House, not at a public meeting outside, that he should never stand for the taxation of meat and wheat, can remain in the Government now.

I submit that these Ottawa Agreements make definite provision for the heavy taxation of both wheat and meat. Moreover, I question this Government's right to introduce a policy like this without getting a mandate from the country, and I also question its right to hand over to Dominion statesmen the right of saying when these duties shall be withdrawn, restricted, or otherwise altered. The Government have not only made provision in these Agreements for the very high taxation of imports on which the poor have to depend, but they have also made provision for restrictions in many ways. We suggest that this policy will not deal with the problems from which we are suffering to-day. The real difficulty is under-consumption, the spending power of the people not being sufficient for the purpose of getting goods to flow as they ought to do from country to country. I can see nothing inside these Agreements that is likely to help the heavy industries in this country. When we knew the Government were going to impose Agreements of this sort on the country, I asked the Dominions Secretary, before he went to Ottawa, if anything would be done regarding the coal mining industry, but there is nothing in these Agreements that is likely to create any further employment in that industry, which surely is one that ought to have had the Government's foremost consideration.

A more serious thing than that is the fact that these Agreements, as sure as we are here, will raise in the minds and hearts of the people of foreign countries bitterness, hostility, venom, and hatred and are likely to create a further war. The Government had a splendid opporunity, if they had called a world economic conference at first, when they could have entered it with a free hand and when, with friendly conversations, they might have achieved something worth while, but now they are calling their world economic conference after they have tied their hands behind them and already formed agreements that will increase the cost of living to the poorest people in this country. We have no confidence in these Agreements, and we desire to repudiate them as unlikely to improve the condition of the workers. Reference was made this afternoon to prophecies sometimes failing, but it is also true to suggest that the prophecy made by the Chancellor of the Exchequer in the early days of this Parliament regarding the saving of the pound was a mistaken prophecy.

The Government would have been engaged on far more important work if they had endeavoured to form a world economic agreement, recognising that we cannot ignore the 1,400,000,000 people who are outside the Empire. It is too late in the day to start talking about Imperial preferences. We have to look the world' in the face and endeavour to get our agreements for trade and commerce fairly established over the whole world's surface. We are also sorry to learn that the trading agreements with Russia are likely to be affected—a vast country which to-day is taking 80 per cent. of our trades' engineering manufactured goods. That is likely to he interfered with, and that again will arouse venom and bad feeling. I am hoping that, whether or not these Agreements are passed, the people of this country will realise ere long that these Agreements can be of no use to them, either to the, unemployed or to the distressed in the, land, and that we shall have a Government returned which, so far from making these Agreements for five years, will abolish them and go in for world free trade.

8.0 p.m.

Duchess of ATHOLL

I find it a little difficult to follow the statement of the hon. Member for Hemsworth (Mr. Price) to the effect that there is no hope of better times for the heavy industries to be found in these Ottawa schedules. I do not think that he could have read very far into the schedules to the Agreement with Canada, or he would have seen on how many different types of production in the iron and steel industry there are to be new preferences. I am sure that I need not remind the hon. Member that any development of production in the iron and steel industry means better times for the coal industry, but I do not wish to pursue that question further. I wish to confine myself entirely to the paragraph in the first Resolution which proposes to give the Board of Trade power in the circumstances contemplated in the Agreement made between His Majesty's Government in the United Kingdom and His Majesty's Government in Canada, by order to prohibit the importation of goods of a class or description grown, produced, or manufactured in a foreign country. I should like to tell the Chancellor of the Exchequer with what great satisfaction I learned that the British Delegation had found themselves able to accede to the very strongly pressed request of the Canadian Delegation that power should be taken to prohibit dumping on this market of commodities which have competed severely and as they and most of us hold, unfairly, with imported Canadian commodities. No one who has studied our Board of Trade returns can fail to have noticed how cruelly Canadian exports to this country have suffered since we began some two years ago to buy so very largely of Russian cereals, and, some years further back, since we began to buy so largely of Russian timber. In 1931 Canada sold us £14,250,000 worth less of wheat than in 1928, a reduction which, I think, the figures of the Board of Trade returns show must have been largely due to the advent here between those years of large quantities of Russian wheat, always at prices below all the other large suppliers. If we look further into the trade returns for barley, oats, wheat flour and sawn timber, we find that Canada sold of those commodities nearly £4,000,000 worth less in 1931 than in 1928. So that Canada in those five commodities alone sold us some £18,000,000 worth less in 1931 than in 1928.

The Canadian Delegation no doubt pointed out to our delegates that we had felt the menace of dumped wheat sufficiently destructive to our wheat farmers as to endeavour to give them complete security from it by a wheat quota and a guaranteed price. That Act of course gives security only to the British wheat farmer. It leaves the Canadian wheat farmer still exposed to this abnormal and unfair method of competition on our market. I do not know if the delegates realised it, but from early in August Russian wheat, after a period of several months in which there had been little or none on our market, has been regularly quoted on our market week after week. I have seen notices that it is actually being sold afloat on its way to this country. During the same months Russian barley has been quoted here week after week, and I saw in a farming journal some time ago a definite statement to the effect that Canadian barley had had to fall in price because of the competition of the Russian barley. It is not surprising, therefore, to any one who has studied the Board of Trade returns to learn the great importance which the Canadian Government attach, to the cessation of this competition, and it was with great satisfaction that I learned that His Majesty's Government had agreed that the Canadian producer should be protected against low prices here which were due to action by the Government of the country from which the low priced commodities came.

But I must remind the Committee that it is not only the Canadian producer who has suffered on our market from the competition of dumped commodities. Australia also has suffered from the dumping of Russian wheat here. In 1931 she sent us about double the quantity of wheat that she sent us in 1928, but she received the total sum of £123,000 less. That gives an idea of the losses of Australia in wheat. Both Australia and New Zealand have suffered from the heavy drop in the price of butter, which again is seen from the Board of Trade returns to be clearly due to the low price at which Russian butter has been imported into this country in the last three or four years. In the same way the Board of Trade returns show that South Africa has suffered losses in her sales to us of maize, another commodity which is shown to be largely depressed by the price at which Russian maize has been sent to us in the last two years.

I therefore wish to put to the Chancellor this question, among others. Does this Agreement mean that the Government are prepared to give the same security to the producers in other Dominions that they are pledged to give the Canadian producer? I should like further to ask whether, if that happily be the case, the security will also be extended to the colonial producer who may occasionally come up against Russian dumping in our market? I can conceive, for instance, that Kenya may have suffered from the competition of Russian maize in the British market. The next question and, of course, an even more important question for us, is whether the British producer is to enjoy the same security against the competition of dumping in his own market that is now to be assured to the Canadian producer. It is true, as I have said, that the British wheat farmer is now protected against dumped wheat from wherever it comes. I am not going to suggest that it comes only from Russia, though it comes from Russia very largely, but the 10 per cent. duty on foreign barley and oats is not enough to keep out the Russian barley which is coming in at very depressing prices. And though no Russian oats are coming in at present, the British farmer stands to have to meet the competition of Russian oats any day.

The dumping of poultry still goes on. During recent months there appeared to be signs that, it was lessening, but the September returns show that in that month just double the quantity of Russian poultry came to this country that came in September, 1931; and whereas the average price last year, was about 69s. per cwt., last month the average price was no more than 55s. Although the ex-Home Secretary spoke of prices rising here, it certainly does not apply to the poultry that is coming in in such large quantities from Russia, causing very heavy losses to poultry farmers all over the country. If you look at the Board of Trade returns, you find that whereas Russian butter was quoted at an average price of 91s. 6d. per cwt. in September last year, the average last month was not more than 75s. 9d. per cwt. Again, a much larger quantity of butter has come in, and there are signs that tail menace may become even more serious in the near future than it has been in recent months. The official Russian trade journal known as "Foreign Trade"—I will not attempt to give its Russian name—the other day recorded that there had been a meeting of commissars of foreign trade. These are important officials of the Soviet Government who met to see how Russian exports can be increased. They came to the conclusion that not enough poultry, eggs or butter were being exported, and they gave orders that 12 districts in that vast territory were to produce poultry and eggs for export purposes only. In regard to butter, it was decided that certain factories were to concentrate on the export of that commodity and new factories were to be set up for the same purpose. Therefore, it seems clear that the menace is increasing in spite of what most of the visitors to Russia report as a growing and very acute shortage of food, particularly of butter and other fats.

Not only do farmers in this country stand to suffer continued grievous loss if they are not to receive the security which is to be given to the Canadian producers; there are also producers in manufacturing industries who equally stand to lose. Take, for instance, the question of doors. Some two or three years ago Russia was sending us a very small quantity of ready-made doors, but there has been a tremendous increase in the quantity which she has imported to this country in the last year or so. Some months ago I was informed through a trade source that some 500,000 Russian doors were available, and an attempt was being made to place them on our market at not more than 5s. each, c.i.f. London. Quite recently I have learned that Russian doors are being offered at not more than 4s. each, c.i.f., for quantities of 2,000 and over. That means that if you add the duty they will not cost more than 4s. 10¾d. each. Only a short while ago the Minister of Labour spoke of some 35,000 men being out of employment in the builders' woodwork industry. Surely we stand to have that terrible number increased if this ever-growing number of Russian doors is to he free to come here quoted at, any price which the Soviet Government think will ensure a, sale. The prices I have mentioned bear no relation to the cost of production in this country.

The glue industry is another which has suffered grievously from the very large increase of imports of Russian glue in the last few years. It is imported at half the price at which it can be remuneratively produced in this country. I could give several examples, but I do not wish to go into the point in too great detail. I only wish to emphasise the fact that there are British manufacturing producers who, with their workpeople, stand to suffer continuous and grievous loss, and that more and more people are likely to be thrown out of employment in those industries unless they as well as the farming industry are given the security against dumping which is to be given to the Canadian producer.

The word dumping has been a stumbling block to the right hon. Gentleman, the Leader of the Opposition. I agree that it is not a pretty word at all and that it needs definition. I think that its usual definition, and the sense in which I have hitherto used it, is the sale abroad of a commodity at a lower price than the sale in the country of origin, but I would ask the right hon. Gentleman to observe that it is not an expression which figures in the Ottawa Agreement. The Government have agreed on what seems to me a better method of describing the evil that we wish to see ended, that is, that the criterion is to be whether any Government action has assisted the offering of commodities at a very cheap price. That is an admirable criterion, because while dumping which is unassisted by State action must always be very irritating to the traders who have to meet action of that kind, undoubtedly when the placing abroad of things below cost price or below the home price is due to action by the Government of the country from which they come, it is a much more serious form of competition for people to meet in the country to which those exports go. Dumping in that case does not merely denote that some individual firm is palming off on another country its surplus goods after it has satisfied the needs of its people at home. It means a deliberate policy on the part of the Government of the country of origin to help those exports to undersell the similar commodities in a foreign country, and a. policy of dumping carried out with that advantage may well be something much more continuous and much more to he feared than the dumping of surplus stock by the private trader, which in most cases probably will be sporadic.

We have to remember that in the case of commodities coming front Soviet Russia there is more than one form of Government action which contributes to their cheapness. There is a large measure of forced labour and of prison labour; there is the system of rationing, which enables the Government to send out of the country many foodstuffs which ought to be kept at home for the consumption of the Russian people; and last, but not least, there is the fact that, as we all know, all foreign trade is in the hands of the Soviet Government. Therefore, I submit to the right hon. Gentleman that there should be no difficulty whatever in the Board of Trade discovering whether or not any very cheap Russian goods being offered here come within the terms of the Resolution, because we all know that everything exported from Russia is exported by State action. [Interruption.] I am only referring to simple and well-known facts, very easily ascertained. If anything were needed to show how State action affects exports, it should be this record of the meeting of Commissars of Foreign Trade, to which I have referred. We know that every negotiation for the sale of anything Russian, as for the importation into Russia of anything from abroad, is undertaken by a body that is an agent in some form or another of the Soviet Government. Therefore, my second and most urgent question is to ask whether this security, which I believe will bring much relief to the Canadian producer, is to be extended to his equally necessitous British brother.

Then I wish to ask a question which arises out of the statement made by the Secretary of State for the Dominions, and that is whether it is impossible for the Board of Trade to make any Order such as is described in the Resolution until the Treaty with Soviet Russia has lapsed. I had hoped that as the Resolution does not specifically mention any country, but is general against all countries sending us cheap exports due to State action, it would not be held to infringe any Treaty with any individual country; but I would like an assurance on that point, because I feel bound to say that if this system of prohibition cannot take effect until six mouths from now, when the Treaty with Russia will lapse, a very serious position indeed will have arisen for the farming industry and for the other industries concerned. As it is, the farmers are just at the end of their tether. They have looked to the Government to save them from dumping, as, indeed, the Government are pledged to do, and it was a matter of bitter disappointment to many of them that steps against dumping were not taken many months ago. I cannot forget, also, that it was only some seven or eight months ago that the Government were urged by some of their supporters to give notice to end the Russian Treaty in order that their hands might be free, after the Ottawa Conference, to take whatever steps they felt necessary, free to end the Russian Treaty or to make another Treaty; because some of us foresaw that otherwise it was possible their hands might be tied for six months after they had made the Agreement with the Dominions. I hope very much that I shall not learn that our fears are correct and that the hands of the Government will be tied for another six months.

In the fourth place, I want to ask whether any Treaty with any other country will have to be terminated in consequence of this Agreement, because while the dumping from which we have suffered has chiefly come from Soviet Russia in late years, unquestionably that is not the only country exports from which are being sold cheap in this country on account of action taken by the Government in the country of origin. An answer from the President of the Board of Trade some months ago made it clear that wheat flour was corning from France and rolled oats and pearl barley from Germany under a system by which the Governments of those countries gave the exporters certificates entitling them to duty-free imports. That is another form of State action—and there are other forms of it—which ought to he got rid of in the interests of normal and free trade. I hope very much the Government are prepared to take whatever steps may he necessary to ensure that that kind of Government-facilitated exporting comes to an end in all countries so far as we are concerned.

I want, in conclusion, to say that those of us who have urged the ending of this unfair competition are often accused of a narrow economic nationalism. I protest very strongly against that suggestion, because nothing is more clear from a study of the Board of Trade Returns that it is not merely our own Dominions which have suffered in our market by our purchases of foreign dumped commodities; foreign countries have suffered also. The Argentine, for instance, has suffered cruelly from our purchases of Russian meat, and so have the United States. The Argentine sold us £8,000,000 worth less of wheat in 1931 than in 1928, and the United States £10,000,000 less. The Argentine has also suffered from our purchases of Russian maize. The United States have suffered from our purchases of Russian timber, oats and barley; Sweden and Finland because of our purchases of Russian timber; and Denmark and Holland on account of our purchases of Russian eggs and butter. What I would say to the right hon. Gentleman is that if we can prevent dumping by State action on our market we shall help to restore the purchasing power of all these countries which I have mentioned, countries which are accustomed to trade with us on ordinary normal lines, and it is to the restored purchasing power of those countries to which we must look for new markets, or restored markets, for those engineering industries which, in the meantime, appear superficially, but quite superficially, as I hold, to be benefiting by orders from Soviet Russia. That is where we can really look for a restoration and improvement of markets, and all the efforts of the Government should be directed towards that end.

Further, other countries are suffering from this same dumping in their own markets. Take Germany. She is not only suffering in our market, because we are buying much dressed fur from Russia which we formerly brought from her—Germany sold us £1,300,000 less of dressed furs in 1931 than in 1928, on account of the fact that in the interval we bought more Russian dressed fur—but she is also suffering in her own market from the competition of dressed furs from Russia. I am told that in Leipzig, the centre of the German fur dressing industry, there are only some 3,000 or 4,000 men now employed where before the War there were about 15,000. The decrease has largely been due to Russian imports, which have increased very greatly under the five-year plan. German timber and sawmilling offer other examples, the German wood-working industries having suffered in the same way from Russian competition in their own markets. I cannot help feeling therefore that, if only our Government will be ready to make effective and comprehensive the security of this market against unfair and abnormal competition, other countries will be ready to follow suit. In doing so, this country and others will do an enormous service to international trade.

Finally, the right hon. Gentleman said that he wanted to increase consumption. I entirely agree with him, but the country where there is most need for consumption to be increased is Soviet Russia. The gap there between consumption and production is far greater than in any other country. That is another advantage that I see in the stopping of the dumping of foodstuffs upon our market. More of those precious foodstuffs can be kept at home for the nourishment of the people who produce them. It should give us just that increased consumption which the right hon. Gentleman desires. I know of cases already, where some foodstuffs, exported from Soviet Russia and refused in a foreign port, were put into the co-operative store in a Russian town, to the very great benefit of the people of that town. I feel that the Canadian Government in raising this question, and in attaching to it the importance that they have done, have rendered a very-great service, not only to their own people but to the producers in other countries, because they have given a clear lead on this matter. It is inconceivable that we should not follow that lead by extending to our own producers the security for which the Canadian Government have asked. I believe that if we extend this protection to our own producers we shall be giving a lead that many other countries in the world will be ready to follow, and I believe that we shall take a real turn and make a real step forward towards the restoration of the prosperity in many countries of the world for which we have long waited.


I always listen to the Noble Lady with very great interest whenever she addresses us. On no subject do I find her more interesting and diverting than on this subject of Russia. She has thoroughly enjoyed herself in the last quarter of an hour or 20 minutes, riding her favourite hobby horse, but I wish the Noble Lady would make up her mind and determine what is her attitude in regard to Russia. She would have us believe that the Russian economic system is working disgracefully, on the one side, and that, on the other, it is working so efficiently as to interfere with the well-being of nations in other parts of the world. I wonder what the Noble Lady really feels concerning the position of affairs in Russia. I am not going to follow her to-night over that somewhat familiar territory. I desire to discuss for a short time the Resolutions which are before us.

8.30 p.m.

The marriage which was solemnised with such pomp and ceremony some 12 months ago between the Liberal party and the Conservative party, and which was witnessed by the rump of the Labour party, the National party, has suddenly come to an end. To-night the parties are applying for a deed of judicial separation. In a very short time I have no doubt that the divorce will be entirely complete. That is no reason why those who have enjoyed those marital relationships for the last 12 months should turn round and denounce each other with such gusto as they have done to-day. Whatever may be the merits or the demerits of these tariff proposals, I would ask those who follow the right hon. Member for Darwen (Sir H. Samuel) to bear in mind that the discussion of them would not have been possible had it not been for the action that they took some 12 months ago. It is very probable that we might not have a coalition Government, and possibly not even had a General Election last year, had it not been for the defection of the Liberal party, to be followed by their defection from Governmental office some 14 months later. However correct they may desire us to believe their attitude to be to-night, we must remind them of the error of their ways some 12 or 14 months ago. I see opposite two representatives of that party who have not become conscious of sin.

We were assured by the Prime Minister during the General Election that now that this National Government had been established, everybody was to work with a single eye to the national wellbeing and was to co-operate, always as a band of brothers. No one was to steal a march, politically, upon his fellows, and there were to be no party considerations. For 30 years the Tory party—I do not complain of it—have advanced the policy of Tariff Reform as the main part of their political creed. They were entitled to do it just as we were entitled to advance Socialism as our political faith. What I complain of is that they have used the circumstance of the formation of a National Government as a cloak under which to hide the advance of their own party nostrums. This is nothing other than a pure Tory party proposal which the Committee is to-night invited to endorse under the aegis of a National Government. They have toasted this day for a long time, and I have no doubt that those who have always been Tories—I am not thinking of the new recruits to the Tory party—rejoice very much in their party triumph.

The fundamental question which I want to ask is what relation these proposals have to our present economic distress. Unemployment is a problem of which everyone is aware, from whatever part of the country he may come. It obtrudes itself upon our notice. I know that the Prime Minister derives enormous satisfaction from the fact that the unemployment figure has not yet reached 3,000,000. So long as it does not reach 3,000,000, the Prime Minister will be thoroughly satisfied with things as they are. However, the problem is a very distressing one. Where is unemployment to be found? It is to be found mainly in our heavy industries, mining, shipbuilding, engineering, iron and steel, and so on. Even suppose that we grant that there may be, through the medium of these proposals, some little relief arid assistance to, say, the iron and steel trade, or some of the other industries, will anyone argue that, putting them altogether, these proposals offer any substantial contribution immediately to our economic relief? Even if we take the enthusiastic presentation of figures made to us this afternoon by the Chancellor of the Exchequer, as indicating the financial benefits to be derived from these proposals, and we put them all together, how far will they, in point of fact, influence the present unemployment position in the country? Take the question of the mining areas. I am sure that the right hon. Gentleman the Minister of Health, who has recently been visiting my part of the country in South Wales, will know that, whatever may be the prospect arising from these proposals, the problem of mining and the mining areas in South Wales, is to say the least, terribly distressing. I am sure that he will endorse that statement. I shall return to that subject later.

Let me take one or two of the claims which the Chancellor of the Exchequer made in his opening speech this afternoon. I want to repeat the challenge which my right hon. Friend the Leader of the Opposition made concerning the right of the Government to enter into these negotiations and binding agreements, so far as they are binding, between this country and India, because, after all, however distinguished the person may have been who presumed to speak on behalf of India, he had no more authority to speak for India than I have. Moreover, I think that in these days, when our relationships to that great Dependency of India are under the very closest examination and are the subject of the greatest suspicion in India, it is a piece of very poor statesmanship indeed to bind one new fetter round the limbs of these Indian people without their authority.

May I say, in passing, that it is no small matter in terms of finance, because the Chancellor of the Exchequer reminds us that in 1931 the total amount of imports from this country into India was something like £20,000,000. I believe I am right in stating that that was his proposition. £29,000,000 in a year is a very substantial amount of money, and I suggest, therefore, that to embark upon a procedure such as this without even inquiring whether the people of India approve or disapprove is a very risky procedure, especially at this present moment. Moreover, we are told that the Colonial Secretary has entered into some agreements. Of course, the polite wording is that he "will invite," but we know exactly what that means. If the Colonial Secretary invites, it is done, and done entirely on his own ipse dixit, without any authority whatsoever, except, of course, as he carefully interpolated, that it will be after consultation—prolonged consultation if you like—between him and various Colonial Governors. I venture to say that the point made by the right hon. Gentleman the Member for Darwen was a very important point. Whether we like it or not—for my part I like the thought of it immensely—the people who inhabit these Colonial areas must surely, as the years go by, become more and more alive to their own personal interests, and the more they become alive to their personal interests, the more, surely, will they become conscious of the fact that they have been bartered, as it were, between the Colonial Office and the other Dominions merely to suit the tastes of the Tory Government that happens now to be in power.

Then there is the effect upon the outside world, which needs no emphasis, because the Chancellor of the Exchequer himself, in what I considered to he a very impressive opening of his speech, reminded the Committee that we cannot enter into these agreements nowadays without having regard to the fact that the world is not now divided into isolated units. We are all inter-related, interconnected by the various devices of science which have been brought to our doors, making the well-being of every individual throughout the world dependent upon the well-being of every other. Therefore, I accept the proposition laid down by the Chancellor of the Exchequer that the well-being of the world is very much involved in what we are doing here tonight.

I want to invite the Committee to make with me an examination of Appendix I on page 19 of this Blue Book. I invite the Committee, in looking through pages 19–23, to contrast, as we are entitled to contrast, and as we ought to contrast, the approach of the Home Government of the United Kingdom to this problem, and the response of the Dominions Governments to that approach. I think I shall be well within the truth when I say that, in every Article that deals with what we are to give, there is absolute precision and clarity, but that, when we come to the Articles which discuss what the Dominions are to give, they are in almost every case very carefully circumscribed with reservations. Let me remind the Committee of the phraseology of some of these Articles. The first which deals with Canada's contribution is Article 9, and it will be found there that the language used is fairly precise. Now turn to Article 10, and you will find language there which may mean anything or nothing. Anyway, there can be as many different opinions concerning the exact meaning of the words used as there are Members in this Chamber at the present moment. The words are: His Majesty's Government in Canada undertake that protection by tariffs shall be afforded against United Kingdom products only to those industries which are reasonably assured of sound opportunities for success. What is "reasonable assurance"? Who will define it for us? Perhaps the Finan- cial Secretary to the Treasury would like to have a go, and tell us what precisely he means by "reasonable assurance"? We thought that we had reasonable assurance last year that this was going to be a non-party Government, but what has become of it? It may still be said that it is a reasonable assurance, but I should regard its performance as being frightfully unreasonable, speaking for myself. The next Article—I will not read it all—speaks of: full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production. What in the world does that mean? Who will tell us what "reasonable cost" means? What is "efficient production?" Some of us, looking at the steel trade of this country, say that it is frightfully inefficient; its spokesmen say that it is efficient to the last degree. What is efficient production? The phraseology, I submit, is hedged around, in respect of the contribution of the Dominions, by all sorts of reservations and limitations. It would be easy to drive a coach and four through any one of these Articles. Let me turn to Article 13. It speaks of certain tariff board findings, and says that the Canadian Parliament, shall be invited to vary wherever necessary.… Who will interpret "If necessary," the Tariff Board or the Canadian Government? There is no such indeterminateness concerning our contribution. "Where necessary," "if it is possible," "provided," and so on—hedged round in such a way that it will be fairly easy for the Canadian Government to say, "We are carrying it out in the letter though, perhaps, not precisely in the spirit."

Let me take the next Article, 14. It is well to get this point home because we know what we are giving, but it is what we are getting that I have some little difficulty in determining.

His Majesty's Government in Canada undertake that no existing duty shall be increased on United Kingdom goods except after an inquiry and the receipt of a report from the Tariff Board and in accordance with the facts as found by that body. That is to say, we are to wait till the Tariff Board has met and held an inquiry, but is it the Tariff Board that determines or is it the Canadian Government that determines after inquiry by the Tariff Board? Who is to deliver the goods to us? Can the Financial Secretary tell me? If he would like a chance, I will give him one. I find he does not jump at the opportunity. He is very wise in his generation. He is a very cautious Financial Secretary. I expect the Chancellor of the Exchequer could not tell us. Who is going to tell us? We ought to know for, after all, we are invited to change the fiscal system of the country. We cannot tell from this phraseology who is and who is not to interpret what Article 14 really involves. I hope we shall have a little more light upon this rather dark and dismal subject. The Chancellor of the Exchequer invited the right hon. Gentleman the Member for Darwen not to make himself look ridiculous. How about the Government?

Hon. Members who are enthusiastic Imperialists will find that the Canadian Government are going to allow us to import into Canada, free of charge, comic periodicals for juveniles. I am sure the Noble Lady will now feel reassured. Let Stalin fulminate in Moscow as much as be likes, we will see that the children of Canada are well protected from his false philosophy. I had the curiosity yesterday to walk into a shop to find out what these periodicals are and I had a long list given me. First in order of precedence comes "Comic Cuts," then comes another called "Crackers." There are also "Eve's Own Stories," "Poppy's Paper," "Butterfly," "Puck," "Film Fun," "Chicks' Own," "Bo Peep," "Bubbles," "Bull's Eye," "Play Box," "The Joker" and finally "Wonder." I am sure the Prime Minister will be glad to know that the "Wonder" is to be adequately represented in Canada. We are invited by the Chancellor of the Exchequer to take this thing seriously and not to make ourselves ridiculous. Thus does one generation make its contribution to the wellbeing of its successor Thus do we lay the foundations of a great Colonial and Dominion Empire. It seems to me that the Colonial Secretary is entitled to share in the glories that fell to the lot of the Lord President of the Council. He received a silver salver for his great services, not only to his own country but to the world at large. We know that his services to literature are substantial and that his claim to fame on that account is well and truly laid, but why not a salver for the Dominions Secretary, having regard to the literature that we are sending to Canada? Is not this a contribution to literature too? Lord Rothermere, I have no doubt, will feel duly grateful to the deputation that went to Ottawa for I find that all these papers are to be found in the Amalgamated Press group.

Let me turn from that somewhat diverting subject to the next question. What is to he the effect of these imposts in the long run? The Chancellor of the Exchequer says they are not to be judged by their immediate effect, but, somehow or other, by the standard of purchasing power. I wonder what that means precisely, for I am not speaking without my book. The Dominions Secretary has favoured us with his views in a rather dangerously coloured pamphlet, having regard to his present situation in the House, a red book. He speaks in the plainest possible terms of the purpose of these imposts. He says: It will, of course, mean—it is intended to mean—that the price of mutton and lamb to the consumer in this country will rise. It is not I who say that; it was written in the current number of the "News Letter," issued on 1st October by the "National Labour" party. It is not ours, but it runs under our name. How is this going to add to purchasing power? In my part of the country there are tens of thousands of people living on the starvation line, or on the poverty line to say the least of it. Their earning capacity has gone down steadily for the last 10 or 12 years until now it is at rock bottom. At this time, when their earning capacity is at its lowest, let us hope, we are told by the Dominions Secretary that their cost of living in relation to meat and wheat is deliberately to be raised. How in the world can that be a fulfilment of the right hon. Gentleman's philosophy, that this in some way is going to assist the enlargement of purchasing power? There is to be an extra 2s. a cwt. imposed upon wheat, but that will be additional to the extra 2s. 3d. per sack or 2s. 8½d. per quarter imposed under the Wheat Quota Bill. That means an extra 4s. 8½d. per quarter. Is this your contribution to the revival of the capacity of our people to purchase goods by making the things which are essential in their daily lives—flour, bread—considerably dearer than is now the case? The claim which is made, that in some nebulous way—for it is nebulous to me—this is going to be a contribution to the economic well-being of our people is, in my judgment, entirely untenable.

The constitutional question has been raised to-night, and I am not going to argue it, but the Government cannot stand upon both legs either. They say, "Oh, it is quite true that we are entering into an agreement now between ourselves and these Dominions, but Parliament is not tied." They imply that Parliament can change it at any moment. Very well, is that what you are saying to Mr. de Valera? The Dominions Secretary this very afternoon said that the present President of the Irish Free State is bound in honour to observe the commitments of his predecessor. Shall not we too be told later on, if we want to abrogate these Agreements, that we are bound in honour by the commitments of our predecessors? Shall we be told so or shall we not? I am not anxious to see a system established whereby succeeding Governments may constantly be occupied in repudiating each other's works. That would be a very undesirable state of things. But there are occasions when principles become so fundamental that it is essential that one Government should feel entitled to repudiate the commitments of its predecessors, and in my judgment, speaking for myself, I hope very much that no one will regard us as being committed irrevocably to this proposal.

9.0 p.m.

There is another observation I want to make, and I said that I would direct attention to the matter. We are told that all sorts of trades are going to thrive under this new arrangement, and that iron and steel are going to have a good deal, as are also cotton, woollens, and textiles generally. I am glad to see the Prime Minister is in his place, because I wish to put a question in regard to that claim. May I have the attention of the right hon. Gentleman for a moment? What has the South Wales coal trade done to him that he has ceased to have regard to its well being? Will he point to one single item in these Agreements whereby one extra ounce of South Wales coal is to be sold as a consequence of them? [An HON. MEMBER: "To Canada."] You can point, it is true, to an allusion in the Agreement to anthracite, but what of the South Wales coal trade outside the anthracite area? I do not say anthracite is not important, but it is by no means the larger section of the South Wales coal trade, and what I say with regard to South Wales applies as much to other parts of the country as well, although we in South Wales are dependent more exclusively on the export trade. Where does our South Wales coal go now? I am not disappointed to find that Canada is not going to take much of our South Wales coal. Of course, she is not. She has unemployed miners of her own at, this moment. I do not expect Australia to take coal from us. Australia has unemployed miners of her own. I do not expect South Africa to take coal from us. She has unemployed miners of her own. But I do say that when mining is so largely providing our unemployment figures in these days, it is disgraceful that the Government should have been so utterly callous as to overlook the claims of this important trade.

How are we involved directly? You are to tell the Argentine that you are going to call upon our people to give preferences on wheat and meat from Canada and Australia. I am trying to argue it fairly. I hope that if I show some bitterness about it I shall not forget my duty to present a fair argument. I ask the right hon. Gentleman to answer this question. Where, in the future, are we to send the quantity of coal which we are now accustomed to send to the Argentine. [An HON. MEMBER: "To the iron and steel industry!"] My hon. Friend may argue if he likes that the improvement of the iron and steel trade may have a consequential benefit upon the coal trade, but that is nothing more than a drop in the bucket compared with the proposition with which we are now confronted. You are going to tell the people of the Argentine that whereas in the past we have taken their wheat and meat, in the future we are going to turn our main attention to Canada and Australia. That is the substance of your argument. When we took wheat and meat from the Argentine, what did they take from us? Coal, from the Prime Minister's old constituency, among other places. If we now say to the Argentine, "We do not want so much of your wheat or meat," will not they say to us in return, naturally: "We do not want your coal"? If that is the sort of contribution you make to a distressed area like South Wales, it is a shameful negligence of your task as representing the interests of the nation as a whole.

I say to the right hon. Gentleman, not in bitterness, but seriously, that he has probably delivered one of the most damaging blows at South Wales which any Government has delivered for the last 12 years. It is as bad a blow almost as that involved in the Reparations Treaty of 1920, and no one denounced that Treaty more than the right hon. Gentleman himself. Now he may be called upon to defend this action, and I shall be very glad indeed to hear what he has to say on the subject. This is a problem which we must not allow the Prime Minister to forget. We have a claim upon him to have some regard to those people who have been good to him in the past. They are, after all, as good, as honest and as diligent a people as any to be found in the land, and that they should be asked to give a vote of confidence to him who has so soon forgotten his responsibility to them is to ask the impossible.

I can scarcely speak with patience on an instrument such as this, which has forgotten the claims of our people. The Under-Secretary of State for Dominion Affairs (Mr. Malcolm MacDonald) shakes his head. I will challenge him again. Can he show one single instrument or clause in this Agreement which makes a specific provision for coal such as is produced in my constituency in the non-anthracite areas? The benefit which will come from the iron and steel trade and subsidiary industries consequent upon the introduction of this proposal is problematical. It is a subsidiary benefit and not a direct one. I apologise to the Committee for introducing this matter with some little feeling, but I owe my origin to a miner, I have lived all my life in a miner's home, I have always lived amongst the miners, and I think it is a dastardly thing for the Government, especially the Prime Minister and the Dominions Secretary, to have been so shamefully negligent of their duty, their plain, obvious duty to safeguard the rights of people who have contributed so much to the material well-being of our land.


I do not propose to follow the hon. Member for Caerphilly (Mr. Morgan Jones) too closely into his last point. I cannot claim the advantage of having closely considered the special aspect of South Wales coalfields and from what the hon. Member has said I should imagine that he has not closely studied the foundation upon which he has based his charge against the Prime Minister. I was looking into the figures connected with meat a day or two ago and, if I remember aright, the great contribution that the Argentine makes to this country in regard to meat is in the chilled meat market. If the hon. Member had studied that particular Blue Book a little more closely I think he would have seen that the percentage of chilled meat remains stable. Therefore, whilst he might have said that possibly a larger amount of chilled meat may come from the Argentine, so far as chilled meat is concerned the percentage remains the same as it was before. I do not know why the hon. Member has taken it for granted that even if in the frozen meat market there was some diminution, it necessarily follows that the coal industry will be the one that will be specially affected amongst the other industries of this country, even granted that the purchasing power of the Argentine should happen to be diminished as a result of what has been done at Ottawa. Before the hon. Member delivered a charge so vehemently as the one that he has just made against the Prime Minister a little closer investigation of the facts might have shown that the foundations for such a charge are not nearly as sure as he would lead the House to imagine.


I estimate that there will be 114,000 extra cwts. of frozen meat coming from Australia.


I have not the figures before me but it does not necessarily follow that the coal trade of South Wales is going to be affected at all. I believe the railways in the Argentine are very large British interests. One reason why the coal for those railways comes from this country is on account of the British finance and British interests connected with it, therefore if the railways are still going on prosperously there is every chance that the orders for coal will come to this country even if the fears of the hon. Member in regard to certain aspects in regard to the meat trade are fulfilled.

I listened with considerable interest to the speech of an hon. Member behind my hon. Friend, because he referred to the whole question of Protection on the assumption that necessarily anyone who supports these proposals must be indifferent to the interests of the poorest people in the country. I would like to remind the hon. Member that it does not by any means follow that those who hold his views in other countries, I mean the Socialist views of the Labour party, hold the Free Trade views which are supported by the Labour party in this country. I believe that the strongest supporters of the highest tariffs in Australia are to be found amongst members of the Labour party in that country. The hon. Member would not for one moment suggest that the Labour leaders of Australia are indifferent to the interests of the workers of Australia. I am simply putting this argument forward to suggest that this question of Free Trade and Protection is no more than the adjustment of the needs of the different countries to the special needs of the time.

The hon. Member referred to the effect of the announcement that has been made by the Dominions Secretary as to the Treaty with Russia. On this point the Noble Lady who has addressed the House may he disappointed when I say that I did not read into the statement of the Dominions Secretary anything like the same feelings or opinions that she seems to have read into it. It is quite a common occurrence to give notice to terminate a Treaty, but it often happens that before that time has elapsed a new Treaty will have been made. The hon. Member opposite seemed to take it for granted that the fact that the Dominions Secretary has given six months' notice means that our trade with Russia is going to come to an end. The same remark has been made by other hon. Members in the Debate. Even if there were no new trade agreement brought into existence, I do not believe that it necessarily follows that the trade with Russia will come to an end. During the last two or three years, at the time when I was specially interested in watching the figures of trade between this country and Russia and other countries, I noticed that one of the countries most interested in sending goods to Russia was the United States. At that time, as I think is the case to-day, the United States had no diplomatic intercourse with the Soviet Government. I do not know that they even had a trade agreement, and yet goods were going into Russia from the United States to the extent of millions of pounds a year. Even if our trade agreement with Russia terminates, there is no reason why the traders of this country, if they so choose, cannot go on trading with Russia as they do at the present time.

I very much hope that the importance of our trade with Russia will not be made light of in the way that the Noble Lady made light of it this evening. I sympathise with and appreciate to the full the feeling that there is a certain danger to the trade of any country from the fact of having sent into it goods which have been produced under the conditions that have manifested themselves in a country like Soviet Russia. When you have removed from industry, for the first time I suppose in the history of the world, what may be called the controlling factor and it is transferred to the State, a new situation arises. Until the Soviet Government came into existence and took complete control of industry, when goods were sent to a country there was usually one dominating factor which helped to fix the price and that was that the producer in the exporting country was expecting to make a profit; but that has been removed in regard to Russia. If the Soviet Government at the present time for any reason choose to send goods to a certain country it is a matter of indifference if they sell them at a loss, provided it is essential to raise money in that country. Therefore, I agree with the Noble Lady that that is a new and very serious fact in the industrial history of the world, but when she says that our export trade to Russia is not of importance, I entirely disagree with her.

Duchess of ATHOLL

I do not think I said that. It was said by hon. Members opposite that if imports from Russia were stopped we might lose orders which would benefit us. I said that if we stopped dumping it would do something to restore purchasing power and that we should find compensation in other markets for those markets which we might lose in Russia.


I am much obliged to the Noble Lady for her explanation. It seems to me that our relationship with Russia is simple. It is obvious if we are not going to receive some of her timber and wheat and other goods that automatically she cannot purchase machine tools and other things, the manufacture of which has been invaluable to certain classes of industry in this country during the last two or three years. I hope that when the Government are considering the Russian problem they will bear this question in mind. I am aware that the balance of trade is far from being beneficial to ourselves in so far as the amount is concerned, and if anything can be done to bring imports and exports between this country and Russia more closely together I hope it will be done.

Let me turn to the main question this evening, the Ottawa proposals. One of the considerations which has induced me to support these proposals is my experience, during the days of the Labour Government, in watching the attempts made by Mr. Graham to try and get something done under the Free Trade system. Much as I appreciate the able way in which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) has put forward his ease against these proposals and while fully realise that you cannot ask him to-day to say what he would do to help the industries of the country by Free Trade, I say this to myself, that the last Labour Government was a Free Trade Government supported by the Liberal party and that for 2¼ years Mr. Graham, whose faith in Free Trade nobody questioned, attempted to do all he could to improve the condition of the country on a Free Trade basis. No one can say that it did not have a fair trial or that during that period the unemployment figures did not go on increasing steadily and systematically.

I agree with an hon. Member opposite who said that he did not attach a great deal of importance to these proposals. I look upon this Debate as being relatively secondary to the great problems which are before the country to-day. The right hon. Gentleman and his friends have made an outstanding mistake in going out on a question that is virtually second-rate in comparison with the much greater economic questions ahead, which alone are going to find any remedy for the evils from which we are suffering. The economic question, the disarmament question, the question of India, are matters which will be studied and considered as land-marks in the history of this country long after the proposals of Ottawa will have been almost forgotten and obliterated. The right hon. Gentleman and his friends should not have left the Government because of a slight difference on a matter of this kind when they had agreed on the principle of an agreement to differ and had gone a long way on the road.

Take the position as it was when the last Labour Government came out of office. The first proposal was a revenue Budget, with the support of the right hon. Gentleman. If the right hon. Gentleman was returned to office at the head of a Free Trade Government next month, where would he find the money to take the place of that which has been coming into the Exchequer from the various taxes that were imposed? No one can question the sincerity of Lord Snowden as a Free Trader. For 2¼ years he was in control of the finances of the country. Were the McKenna Duties removed? They were not, because he could not see any other sources of income, and I suggest that, if the hon. Members who are leaving the Government now were in control of the country and its finances, they would have no suggestions to make as to where they could find the necessary money to replace the revenue taxes which have been imposed.

There is a matter which I think has often been overlooked in regard to the question of Free Trade and Protection. It is the alteration which has come about in the money markets of the world, the provision of vast sums of money, which can float about the world, and which can be sent first to one country and then to another according to the will of those who own it. Anyone who has been connected with the money market pre-War and to-day must have noted this significant factor. It is a. factor which is of interest in regard to the question now before us because it has made it possible, to a much greater extent than hitherto, for goods to come into this country. On account of the money which is available in the money markets of the world imports, which formerly were at once replaced by exports, can be financed by money loaned by other countries, which virtually means that imports are being paid for by money borrowed from countries abroad.

This factor has not been sufficiently appreciated, and it is one of the reasons which has made it essential to institute a tariff in order to try and adjust the balance of trade. Once again the right hon. Gentleman and his friends gave their support to the proposal. They went along the path, and I cannot see why now, when we are simply following up the proposals and bringing into being a weapon which has been formed and trying to use it successfully at Ottawa, they should part company with us. In speaking of the weapon, I refer to the fact that Mr. Graham undoubtedly found that he had nothing with which to bargain when he met people from other nations. I do not know whether hon. Members realise or have appreciated the fact that in 1929 the first effect of his proposal was that the tariffs of all the world were raised, because many said that if there is to be any reductions in tariffs let us put up our tariffs first and then when they go down we shall be where we were. In the two years that followed the tariffs of the world were being raised to a very considerable extent, and in the World's Economic Summary, published by the League of Nations, special reference is made to the fact that these tariffs were rising and rising until almost the end of the period the Labour Government were in office.

There are those three factors, first, revenue; secondly, the need for adjusting the balance of trade, and now the way in which we can use the power we have to try to open up some of the closed markets of the world. What more reasonable that, in the first place, we should approach the Dominions and ask their sympathy and support? It gives us an opportunity of drawing closer the bonds of amity and friendship. I am not one of those who underrate the importance of the British Empire. I believe it is one of the greatest factors for world peace. It is, in a small group, the idea of what you want the League of Nations ultimately to become, and I should be only too glad to think that anything that can be done on these lines would strengthen the foundations of that Empire and contribute to what it is doing in the world to-day.

It has been said that if we do these things we shall find that we are alienating the sympathies of other nations. Why should it? They have been doing it to us year after year and we have not been enraged because they have put up their tariffs, even if it has annoyed us and been painful. When I was at the Overseas Trade Department I watched it being done by different countries, the Dominions among them. We did not complain, for they must face up to their own problems and their own difficulties. Now I am glad to see we are taking action, and whatever the final result of the proposals may be, it means that we shall have a closer unity, and undoubtedly there will be opened up certain markets for our exporters to come in.

For these reasons, I very much regret the action of the Liberal Ministers who have left us. I cannot understand how the Noble Lord acting with their party could have written a letter saying that, he regrets that those right hon. Gentlemen are leaving, but on no account must they defeat the Government, because if they did defeat it to-day, such a defeat would be worse than any kind of Protection or any kind of tariff that the Government could bring in. You can be for the Government or against the Government, but when it is said that you are going to be half for it and half against it, hon. Members on those benches have my sympathy in the difficult position in which they are placed. As far as I am concerned, I feel that in this question of Protection and Free Trade, as well as our relationships to other countries, these new experiments are on their trial. I am surprised that an hon. Member opposite was so disturbed about the question of a meat quota. The last Government were talking about quotas for meat and hon. Members opposite were talking about control. The moment a suggestion of that kind comes from another quarter they at once go into opposition, quite indifferent to the fact that one of the fundamental principles of their party is, in one form or another, that the industries of the country shall be controlled. For these reasons, certainly, I think we should use some of these new methods to try to meet the problems before us and I believe the contribution that has been made to the solution of our problems to-day by those who have attended the Ottawa Conference will be, in the long run, for the benefit of this nation.

9.30 p.m.


The time has now come when we in this country must decide whether we are to be a partner in the Empire—an Empire owing allegiance to one Crown, pursuing one economic end—and animated with one unity of purpose—or whether we are to be submerged is a welter of cosmopolitan interests. Ottawa has set a great ideal before us. No ideal is ever lightly won. The path to success lies strewn with thorns, and those who would grasp her by the hand must be prepared to make sacrifices. This Debate will decide whether we in the Empire are ultimately to become absorbed in a United States of the smallest of Continents, or emerge a living Empire so that our statesmen when they rise will rise to positions of paramount importance enjoying not only the admiration of our countrymen but the respect of foreigners. One of the chief causes of the present world crisis is that we in the Empire have had no unity of purpose. Ottawa has put an end to that dismal picture of Liberal statesmen coming to that Box amid making speeches more worthy of soliloquies in the Cabinet than statements in the British House of Commons. On no occasion have they omitted to bemoan the difficulties they have had to face.

Too long have we listened to the interests of foreign countries, and it is high time we paid attenton to ourselves first and the foreigner afterwards. A new generation of Englishmen is growing up which is not afraid of the responsibilities of their birth, and which despises men who swallow Protection with an ill grace, but reject Imperial Preference. I have every sympathy for their Free Trade ideals. I believe that the lowering of tariff barriers is highly desirable, for Protection is a discouragement of all imports. Imperial Preference is the encouragement of some imports rather than others, and the development of trade through assured channels under conditions in which those engaged in industry may earn a just remuneration. I should like to add my own expression of delight to that of the Noble Lady the Member for Perth and Kinross (Duchess of Atholl) at, that article in the Agreement between the United Kingdom and Canada which prohibits the importation of dumped goods. My complaint against these Liberal ex-Ministers is that they were given a great privilege at the time of the world crisis of serving this Ration, but instead of using that opportunity to cement the Empire, they have frittered it away for the sake of prehistoric dogmas.

I do not intend to weary the Committee by going into the Agreements in great detail, but I must admit I read with considerable misgiving, not to say apprehension, the prospect of a meat quota being adopted. The system of quotas is utterly uneconomic. It is the complete control by the State not only of the quantity and price but also the country of origin of our meat supplies. It is Socialism run mad. I can conceive no greater form of State control. The object of the quota is to enable our livestock farmers to make profits. I do not believe the disastrous fall in commodity prices is due to over-production. With the exception of tin, rubber and wheat, I can think of no article which is over-produced in this world. The fall in commodity prices has been precipitated by the quantitative supply of money. That supply might well be expanded by a policy of re-monetization of silver, and other measures which might be adopted at the forthcoming World Economic Conference. Such measures in conjunction with tariffs might well enable our farmers to make a living. Personally, I doubt whether farming in this country will ever pay without a subsidy that would have to be regarded in the nature of an insurance premium to cover the risk of shortage in the event of war.

In my view, Ottawa is a definite step towards Imperial unity. A few years ago the idea of Empire economic unity was laughed out of court. To-day it is almost an accomplished fact. This Conference will lay the foundation, I believe, of an Imperial Economic Parliament. Looking to the future, I think the time is not far distant when we will find it advantageous to adopt one system, one standard of living, among all our people, one condition of labour and hours for the people throughout the Empire. I believe that such a condition is inevitable unless our standard of living is to be reduced to Continental or Eastern levels. Our prosperity in the past has been guaranteed by expanding markets and increasing population. To-day we are faced with a dual problem. Machinery is turning out more goods in less time with fewer labourers in a dwindling market and our population is being limited by birth control. I am not at all sure whether the old Biblical command, "Be fruitful and multiply," is not far sounder economic advice than many of our economists realise. But no mention was made at Ottawa of emigration. I should have thought that at least there would have been some mention of it. Let me utter a word of warning to the Dominions. It is impossible with an overcrowded Europe and expanding Japan, to keep large tracts of land uninhabited. Unless we have a policy of Imperial migration those Colonies will be colonised by other than Anglo-Saxon stock.

There is one other point of importance arising out of the Ottawa Agreements, of which no mention has been made. I refer to the question of aerial development within the Empire. I understand that draft proposals were prepared for a, system of Imperial airworthiness. I trust that the Under-Secretary for Air has some information to give us other than the vague expression in the report that cooperation with this object in view may take place. If we could set up one standard of air-worthiness within the Empire we should gain in the air a prestige as great as that which we possess at present upon the sea. I would like to know also whether any progress has been made towards the development of All-Red air routes. That is a problem of vital importance.

I was dismayed to see the possibility of the Empire Marketing Board coming to an end in September, 1933. We do far too little advertising. We have seen what publicity can do at the exhibitions in the Argentine and in Denmark. Why cannot we have similar exhibitions throughout the Empire? We should take advantage of the most potent form of advertising, the films. We should utilise films depicting our national life and its aims and aspirations, films which would show the world the service which the Empire has rendered. By so doing we would re- move doubts and misunderstandings, and further the cause of peace. Ottawa has not been without its disappointments; its work is not yet ended. It has achieved more than many of us ever hoped. It has set before us a great ideal, the culmination of which will, I believe, fulfil the purpose entrusted to us by Almighty God.


It is a real pleasure for me to follow my hon. Friend the Member for South Leeds (Mr. Whiteside) as his constituency and mine are immediately contiguous. If he will allow me, I would like to use him as an illustration to answer some of the arguments advanced by my hon. Friend the Member for Caerphilly (Mr. Morgan Jones). The hon. Member for Caerphilly suggested that the system of protection, now to be enlarged and spread over the British Commonwealth of Nations, had not any mandate for it at the last election. In common with 80 other candidates my hon. Friend the Member for South Leeds fought a battle in which the fiscal issue was the prime issue, and in common with 74 out of the 81 candidates he was victorious. Furthermore, the aggregate of votes recorded for the protectionist candidates in those constituencies was no less than 1,600,000, whereas the Free Liberal and Free Trade vote, just exceeded 800,000. If ever there was a mandate in our history it is the mandate today for Protection.

But I am not going to labour the fiscal issue. I wish very briefly to deal with one aspect and one aspect only of the present political conjunture, and that is the retirement of the Liberal Ministers from the Government. In particular, I would like to take the former-Home Secretary as being symbolic of their movement out of the Government. I very respectfully share the opinion expressed yesterday by my right hon. Friend the Prime Minister that such a retirement is a deplorable thing. Three years ago the right hon. Member for Seahaan (Mr. Ramsay MacDonald) enunciated the aspiration which I have respectfully shared since, that this honourable House would become in course of time a Council of State. Now, on the academic objections of the right hon. Member for Darwen (Sir H. Samuel) to this particular change in our national life, we are going to revert to a sounding board for this moth-eaten and flea-bitten controversy.

From the conduct of the right hon. Member for Darwen one would imagine that the fiscal issue was the greatest, if Dot the only issue. In my judgment the issue between Free Trade and Protection began to be moribund as long ago as 1915, with the inauguration of the McKenna Duties. Since then the people of this country have been able to test the experiment in suspense and in operation. I suggest that the time to have taken objection to a change in our fiscal system was last February. I am well aware that the right hon. Member for Darwen then took advantage of the situation in order to voice his vehement objections; but he rather amazed me by expressing a solicitude for the British Empire, and the bonds of Empire, or, as I prefer to call it, the British Commonwealth of Nations. I think I can dispose of that by the remark that Imperialism ill befits a Free Liberal.

If we come down to a close examination of the proposals contained in this extraordinarily dull document that has been placed in our hands, I think we are driven to the conclusion that what arises, seeing that Protection was established last February, is merely a readjustment of a certain number of duties. It may be objected by hon. Members that some of us have no mandate to tax food. That might be so if you looked at the situation from only one aspect. But on the other side you have to remember that every candidate for Parliament gave an implied pledge that in these days of stress he is going to do what he can to relieve the burden of unemployment. When you bargain, as you must bargain, with the other members of the British Commonwealth, in order to seek advantages for our manufactures, I suggest that you cannot have it both ways. You have to make concessions for such advantages as you secure. Is not every other tax in some form or other a food tax? Is not the Income Tax at 5s. in the £ a food tax? Is not the Beer Tax a food tax? It is an extremely high food tax in my submission, but I believe that it is also a justifiable luxury tax. At any rate it is a tax on something that is often internally consumed, though in more moderate quantities than in former days.

I heard somebody the other day express this description of the action of the right hon. Gentleman the Member for Darwen—that he was washed across the bar last October upon a flood of patriotic sentiment, and that now he is trying to float out into the boundless deep upon a rivulet of cod liver oil. During his sojourn at the Home Office—and I say it with the greatest possible respect—he had a brief and very illustrious career. I, for one, sincerely regret his departure. As an illustration of the other issues which exist besides the Ottawa fiscal issue, I would like to remind my right hon. Friend that there are other things that can be done by a Home Secretary than simply to concern himself with the fiscal issue. Some of us were hoping that he was going to abate the rigour of our law. For example he might have directed his brilliant qualifications towards correcting the position in which a man is virtually executed by getting 14 years' imprisonment for forgery, while at the same time many murderers go scot free, because juries are frequently and properly appalled by the penalty which will follow a verdict of guilty. That is the kind of problem to which my right hon. Friend might easily have directed his brilliant gifts.

I would ask again, is Ottawa the only issue? Has my right hon. Friend not heard of Geneva? The issue of Ottawa, as the hon. Member for Finsbury (Sir G. Gillett) has said, will soon come to be forgotten upon the scroll of our history. The issue of Geneva is something much more vital and fundamental. It is briefly whether civilisation is going to be allowed to commit suicide. Why did not my right hon. Friend stay within the circle of the Government and help to leaven the counsels of His Majesty's Government by the belief which I know he sincerely holds in peace, retrenchment and reform? Why did he not seek to assist the Government in following a policy which would preclude rearmament and initiate a real and sincere measure of disarmament? Why did he not stay within the Government, and remember the Hoover plan, and try to persuade his colleagues to pursue that simple and obvious first step towards a solution? Why did he persist in his Victorian objections? I would wish that he had done otherwise. Does the former Home Secretary imagine that, by his retirement at this point, the steps of the right hon. and learned Gentleman the Foreign Secretary are going to be less tortuous, his utterances to the nations abroad less sophisticated, his career less halting? This is the very worst moment in my humble submission that the right hon. Gentleman and his colleagues could have selected for their resignation.


I rather sympathise with the right hon. Gentleman the Member for Darwen (Sir H. Samuel) on having been subjected to so much attention, on personal grounds, during this Debate, from those who a day or two ago were his colleagues in the Government. But, indeed, one may leave the right hon. Gentleman to himself. He is quite able to defend himself in normal circumstances, but having disarmed himself, having thrown away the sword of principle, and the shield of consistency, he is at the mercy of much less valiant warriors than himself. But I have no words of pity to offer him, because I know that he is guilty of a good many of the charges levelled against him. We do not find him—although we have much common ground on the subject of this Debate—an ally on whom we can depend in the controversy with the Government. We, therefore, have to address our remarks to those who have spoken as supporters of the Government. The Noble Lady the Member for Perth and Kinross (Duchess of Atholl) more or less represents here an ever-present obsession with the existence of Russia as a state, and with the presence of Russian trade on the markets of the world. I wish to say very kindly to her that she relies on information which is not at all to be depended upon, and I suggest to her that she should make closer inquiry into the sources of the information, which she sometimes quotes in this House as authoritative.

Duchess of ATHOLL

May I remind the hon. Member that any information which I gave was either from the Board of Trade returns or from official Soviet sources?


I have had the advantage of having been to Russia, and I know that a good deal of the information which the Noble Lady has given to the House of Commons on former occasions is not at all to be relied upon. But, mark the inconsistency of the Noble Lady and other supporters of the Government. She says that Ottawa did a great service to the trade of the world, and to this country, because we had at Ottawa all the members of the British Commonwealth, and they came to an agreement that within a specified period the Trade Agreement with Russia was to be denounced. She thanked the Government for having come to a decision to denounce the Trade Agreement, and said that it was a very remarkable contribution to stabilisation, and to the removal of trade difficulties in the world.

Duchess of ATHOLL

I do not know whether the hon. Gentleman was in the Committee when I spoke or not, but I do not think I said that the denunciation of the Trade Agreement was going to be a great contribution to the improvement of trade. I said "the stoppage of dumping."


The Noble Lady said that Russian goods were dumped, and that the most pernicious form of dumping was that which came from Russia.

Duchess of ATHOLL

I said it was due to State action.


I shall do the Noble Lady no injustice at all. I shall do her full justice. She said that the kind of dumping which was encouraged and assisted by the State was the most pernicious and she inferred that all the competition of Russian goods was part of a deliberate policy to lower world prices and especially to get down the prices of goods produced in the British Empire. She said that Russian goods came here in such profusion and at such low prices as to lower the price of agricultural products here and bring grave distress on the farming population. She did not, I feel sure, remember that the Chancellor of Exchequer earlier referred to a particular branch of farming in which there is not the slightest competition from Russia. The right hon. Gentleman said that a special form of farming, namely, sheep farming, is on the verge of ruin because there has been an astounding fall in the prices of mutton and lamb—and, he might have added, in the price of wool, which has sustained a proportionate decrease. The Noble Lady knows full well if she knows her brief as she ought to, that there is no competition from Russia in wool production, or in——

Duchess of ATHOLL

If the hon. Gentleman will allow me again to intervene, may I say that I did not make that sweeping assertion about farming as a whole, being subject to dumping from Russia. I specified certain forms of farming—poultry, eggs, butter and others.


I know that the Noble Lady referred to a whole range of commodities. There were not less than a dozen, I think, quoted by her, such as timber and oil——

Duchess of ATHOLL

I did not mention oil.


I do not wish to go into a controversy with the Noble Lady on these points. My argument is that from the statements made by her, one would imagine that Russia—quite inconsistently with current reports made in newspapers and by hon. Members in the House of Commons—is not a land of scarcity and poverty and famine and distress, but a land literally overflowing with milk and honey, and with all kinds of wonderful commodities, so that they overflow all national boundaries. Suppose Russia does send goods out to the world at less than our cost prices. Suppose Russian costs of production are lower. Three must, be some reason for that, and I suggest to the Noble Lady and to others who make Russia their special object of attention in this House that the explanation may be found in the absence in Russia of many of the standing charges on industry that are found in this country. There are no high ground rents in Russia, and there are no large profits on Russian industry. That should be a cause of gratification.

The hon. Member for South Kensington (Sir W. Davison) often bewails his personal bad fortune and that of several other hon. Members in this House who have been unable to reclaim money invested in Russia, and they have pressed Government after Government to compel the Russians to pay up. I suggest that we should debit the Russian account with so much value given to us year by year in the cheap goods that Russia supplies to us. Let us write down Russia's obligation to us year by year by some agreed amount in this way. If Russia were to repay her debts, she would pay large quantities of goods in repayment of those debts. She would hand over to us large quantities of goods without any price at all; and really this assumed evil of cheap goods from Russia is a blessing in disguise, disguised from Tory eyes, because they are always blind to blessings of that kind.

I shall not follow the subject of Russia further, though I am sure I could convince a good many open-minded people in this House that there is something in my argument, but I want to refer to something that was said by the Chancellor of the Exchequer this afternoon. He made, as usual, a speech which was clear and, accepting his outlook, convincing, but I must confess that I have never listened yet to a speech on tariffs that was convincing, and he has failed to-day, as before, to convince me of the merits of his case. He said the main preoccupation and object of the delegation to Ottawa was to lift all the nations of the world from the slough into which they have fallen, this economic morass or muddle or puddle into which the world has fallen, and from which the world cannot extricate itself except—I am not quoting his words, but will use my own—by extricating one member at a time, one foot at a time, one hand at a time; and they hope all will escape to firm land in that way. That was his main argument. I thought he would demonstrate to us the economic steps by which this was to be done, but I was sorely disappointed, because, having read this Blue Paper and having read closely the resolutions passed by the Conference, I was very much interested in the schedules and in the details of the new scales of duties, and I would welcome a more scientific Tory examination of this Blue Paper.

10.0 p.m.

The right hon. Gentleman told us that the Empire is to lead the way out of this economic morass and that there are to he new principles adopted. First of all, the Dominions and Colonies are to come to all kinds of mutual and complementary agreements one with another, either through direct treaties between the Dominions and the Mother country, or through adjuncts to those treaties in a variety of ways. There are to be, I gather, many schedules which have not yet appeared in this Blue Paper, and I understand that there is to be set up a complicated system of machinery of tariff boards and so on which will determine from time to time the rates of duties and preferences between various parts of the Empire.

The Empire is supposed to have a common mind and purpose, and the first step to be taken is the restoration of wholesale prices. I would like to examine that point. If that is the object, I believe that these Agreements and tariffs are doomed to failure, because I feel that from the very nature of things the steps taken at Ottawa must lead, not to an increase, but to a considerable diminution of wholesale prices. I believe that they will have the contrary effect to that which is expected of them by the Government. The right hon. Gentleman himself analysed the causes of falling prices and gave us an illustration which served his purpose fully. He said there was an excess of imported commodities into this country, and he gave us the origin of some of them and said that we must expect falling prices when an excess of imports comes into a market the capacity of which cannot be extended. He said, "If your market is fixed and the goods offered in it are increasing, prices must fall." I think he is right in that diagnosis. Prices must fall if at any given time a fixed market is offered more than it can absorb. Then he gave us some quotations, which were striking, but indeed well known to everybody who has examined the economic life of this country in recent years.

The Noble Lady did not do full justice to her own case when she quoted the fall in the values of goods imported into this country from different parts of the world in the last two years. If she had quoted the volume of commodities imported, she would have found that in 1931 and 1929 the volume was the same, but the value fell to one-half. In the case of goods from Australia—wheat, sugar and wool—they came in almost exactly the same volume in 1931 as compared with 1929, but we paid Australia almost exactly half the amount of money for the full volume of goods.

The right hon. Gentleman said we must expect that fall in prices if goods are offered and there is no increased demand, but he must realise that that has an implication which is of some value in this argument on tariffs, because, after all, tariffs check the flow of goods into a market. Goods produced, seeking a market, are pushed with greater and greater force against a market that is partly closed, and the greater the accumulation of unsold goods outside that obstruction, the greater the tendency for prices to fall inside that obstruction. The first and natural effect is a fall rather than an increase in prices, where tariff barriers have been set up. But I would like to point out another very important implication, because in this matter we have not a fixed market, a market incapable of expansion. What we have here at the present time—and indeed it is the right hon. Gentleman's claim—is a world market for certain commodities. Britain is a world market for wheat, for wool, and for certain other commodities.

The right hon. Gentleman must carry his assumption a little further, because this is not a market that is incapable of expansion. This is a market which unfortunately, owing to the presence of a National Government, is contracting every day, a market getting smaller by direct action. The Government themselves are drawing the ringed fence closer and closer and contracting the accommodation for goods within the home market which is their direct responsibility. When the right hon. Gentleman says that you cannot get an improvement of wholesale prices when goods come into a market in ever-increasing quantities, the corollary is that you cannot get an increase of wholesale prices if your market contracts and if the buying power inside that market does not correspond with the increase in the producing power. The right hon. Gentleman must realise that there are two factors which work to prevent the rise in wholesale prices, and both these factors are to a great extent under the control of the Government. One is to get your market as large as possible by allowing the free entry of goods of all kinds. You can also influence the purchasing power of that market by keeping up wages and purchasing power to the highest possible standard. The right hon. Gentleman and his colleagues on that side can be deaf to the arguments that I have advanced so far, but I could quote passages in support of them from the report of the proceedings at Ottawa. One passage reads: His Majesty's Government desire to see wholesale sterling prices rise. The best condition for this would be a rise in gold prices, and the absence of a rise in gold prices inevitably imposes limitations on what can be done for sterling. A rise in prices can- not be effected by monetary action alone, since various other factors which have combined to bring about the present depression roust also be modified or removed before a remedy is assured. Then it goes on to speak of inflation and other policies. I want to say a word or two on that question, because it is very important. I have listened to many Debates in this House and to financial experts, and I am disappointed with the contribution they make on the subject of inflation. Inflation can be controlled and promoted; it can come into operation without direction; it can run wild, and it can be checked. It can be a very dangerous thing. It is like a motor car which is a very serviceable vehicle when you have a tried driver at the wheel who knows his road and who has petrol and all the conditions which determine whether the journey will be successful or not. When you have an untried driver who does not know the road and who has no control over his machine and no motive power, you never know what will happen to a machine driven in that condition.

So with inflation: it may be sound in principle; I believe that it is, and there are valuable hints in this report for future action by the Government; but I would like to point out to the Government that a most easily manageable form of inflation is a rise in the purchasing power of the workpeople. You know exactly how much you are giving if you increase wages by 10s. a week; you know how much you have added to purchasing power. You can add to the social services and continue paying so much in unemployment benefit. You know how much inflation you have brought about by this means, but you do not know by the method that has been tried by different Governments in the past. As one who is instinctively opposed to tariffs, and as ore who, as far as his reason permits him to go, is unconvinced of the merits of tariffs, I warn the Government not to proceed with measures which must add considerable difficulty to the people of this country whose standard of living is already too low.

The first consideration is justice to the unemployed. We have people holding on to a bare standard of living like grim death, a standard which is an irreducible minimum. The Prime Minister has said that there are not 3,000,000 people unemployed in this country. I think that there are many more than that. There are at least half of that number on the poverty line and a large proportion well below the poverty line, and any addition to the cost of living which these proposals will bring about must have the first effect of adding to the cost of commodities normally brought by them. The sheep farmer, with whom the Chancellor of the Exchequer was so sympathetic, certainly has to be saved, but why should the unemployed man save him? Why should the ill-paid collier save him? The right hon. Gentleman said that considerable quantities of this cheap meat have been imported into this country. Is he surprised that the unemployed workman's wife has to buy cheap meat wherever she can get it? Does he realise that the first effect of putting a duty on that meat is to add to the difficulties of the housewife in the home of the unemployed man? I urge the right hon. Gentleman not to proceed to add to the cost of living of these people because they are already having a very bad time. I urge the Government to have sympathy with these men; they are men like ourselves, just as good as ourselves.

If sympathy with them does not help us to decide rightly in this matter, let us look at it from the really national standpoint. If more is charged for imported meat, fruit and food, and prices are advanced through a system of tariffs, the Exchequer will gain, but that gain will be made at the expense of the poorest people in the country. I urge the Chancellor of the Exchequer on the grounds both of immediate consideration to the Exchequer and of immediate national consideration, on the grounds of Empire solidarity and the example that we should set to the world, not to proceed with these proposals. The right hon. Gentleman has said that we are a happy family, that the British Empire is a, united family. How long will it be? It is definitely said in Article 3 of this report that we shall not be entitled in this House to govern ourselves any longer. The people to determine the amount of duty in this country are the Government of Canada. They will have to determine what will be charged as duty on food supplies to the unemployed and the very poorest of our people.

Let me warn the Government, though I do not believe in exaggerating things, that the people of this country are approaching breaking point. We have had demonstrations, we have had men batoned into submission—hungry men, desperate men—by officers of the law acting in the interests of law and order. How long can that go on, how long should it go on? Cannot the House see that we are adding one more straw of temptation to those who desire to break the law every day? The last straw will break the camel's back. The people of this country are patient people, people without peer in their observance of the law and recognition of authority, but some day they will become impatient and show their disapproval of what the Government are doing in putting this extra burden upon them. Therefore, let the Government consider first of all the interest of those who would be most directly affected by these measures. Then, considering such matters, I am sure the Chancellor of the Exchequer, a devotee of Protection, born to it, nurtured in it, will see that there is much worse in those who oppose Protection as a system than those who particularly oppose this so-called Agreement with members of the British Empire.

The PRIME MINISTER (Mr. Ramsay MacDonald)

I am indeed very sorry if anything that my hon. Friend opposite, the Member for Gower (Mr. D. Grenfell) meant to say has been curtailed on account of the time he has been kind enough to give to me. There is no man in this House who puts a case with more clarity than the hon. Member, and he is not only clear, but he is very definite. It is a long time since I heard such a very gentle but deadly reproof of my right hon. Friend behind me while the hon. Member was showing him the door; and his very polite examination of the Noble Lady's arguments regarding Russia is certainly very well worth serious consideration. As regards the speech of his leader, who addressed the House at an earlier time, there was a certain amount of familiarity in it. As I sat here and listened to him I wondered where I had heard it before—this great denunciation of us for having no immediate agricultural programme, this tremendous denunciation with reference to the rise in the figures of unemployment. I confess it took me a. little time to remember when I had heard it, who used the language, who took that point of view and against whom the criticisms were directed. Presently it began to dawn upon me that what my right hon. Friend was hurling at our heads was precisely the same criticism as used to be hurled at his head when he sat here and some of the hon. Members now behind me were sitting opposite. I am beginning to get a little bit tired of it, especially at the present moment.

The right hon. Gentleman to-day said nothing about unemployment that was not said about the Labour Government and unemployment. What is the explanation of it all? He knows it as well as I do. The explanation is that the causes of this unemployment are not superficial causes; they are deep-seated causes, and he knows as well as I do that criticisms based upon purely party considerations are not going to be helpful to the unemployed or to the country. My hon. Friend below the Gangway, who acted for the time being as Leader of the second Opposition—it may be third in point of numbers, but second in historical priority—the hon. Member for Shettleston (Mr. McGovern), who to-day was Leader of the second historical Opposition, put his finger upon certain points that whatever Government is trying to make some really sound and substantial contribution to a solution of the unemployment problem will have to consider. What was the conclusion of the hon. Gentleman's remarks? All that his contribution amounted to was: "What's the good of anything? Why, nothing!" The discussion at Ottawa was a discussion of various points of view. Perfectly right. Nobody here has said that we should not discuss matters from the point of view of unemployment and of the present industrial situation, both in this country and in the world in general. We must also discuss matters from the point of view of the Empire and we must discuss from the point of view of constitutional practice.

There is one thing that I noticed in the Debate to-day, and I have listened to as much of it as I possibly could, and that is that a great many things said outside have not been repeated here. One thing that has not been repeated here is in regard to the Government's election pledges. I dare say we shall hear a great deal about that, and I want to face it, because I hope that during the coming winter a great deal of educational propaganda is going to be carried on in the country. One of the things about which we shall hear a great deal is that the Government broke their election pledges. They did nothing of the kind. There is not a single pledge given by any responsible member of the Government that has been broken by what is proposed now under the Ottawa Agreements.

I should like to remind the House of what took place. I would like to observe, first of all, that if any pledge has been broken, so far as tariffs are concerned, that pledge was broken before my right hon. Friends left the Government. What were the pledges? In the election manifesto for which I was responsible, it is perfectly true that we did not say that we would introduce tariffs. What was said was that in considering the situation tariffs would be studied and that tariffs would be adopted when and how the National Government made up their mind that it was necessary to do so. I give the words: The Government must, therefore, be free to consider every proposal likely to help, such as tariffs, expansion of exports and contraction of imports, commercial treaties and mutual economic arrangements with the Dominions. Various speakers have said that they were not prophets. I quite agree that they were not, but in any event I think that the Government can fairly well claim to have had a prophetic vision of the problems that they would have to face, and the possible expedients that they would have to adopt in order to face them. But there was more than that, and I am sure the Committee will pardon me if I get it in the OFFICIAL REPORT for convenience in use. I also broadcast, and I believe that in a broadcast one has a very much larger audience than at any meeting or through the distribution of any leaflet. I said in that broadcast speech, on the 7th October last year: A reduction in imports may mean some form of prohibition of certain luxuries and other unnecessary things, or it may mean a tariff, which would act as an impediment to their corning into the country. The Government must be free to consider when that expedient is to be used, and how it is to be used. That is plain enough. If I might add something, it is this, that, after that pledge—because that was a pledge—after that pledge was made, and after that warning was given to candidates, Liberal, Labour and Conservative, who were supporting the election of a body of men and women who were to create a National Government—after that warning was given, the right hon. Gentleman not only accepted support from us——


And gave it.


You were very glad to have it.


Yes, we were very glad to have it when hon. Members gave it to us after heating that statement, but the accusation now is not from us to them, but from them to us. They asked for it, and they got it. Both my right hon. Friend the Lord President of the Council and myself gave it, and gave it wholeheartedly, because we believed that that would have to be done after study, and we believed that we should have the support of those who accepted our support. Therefore, so far as the accusations are concerned which have already been pretty freely made, that we have somehow or other broken our pledges, my withers are quite unwrung.

Then there was another point. My right hon. Friend and myself—if I may say so, those who, at any rate finally, were more responsible than anybody else for anything that might take place—took the greatest care that that word "study" should be carried out. Who went to Ottawa with my right hon. Friend? Was it a selection of representatives of one party only? If that had happened, an accusation against us that we had broken our pledges would stand. We did nothing of the kind. Conservatives were represented; Liberals were represented; Labour was represented. That was the composition of the Ottawa delegation. That was the body of men, with various angles of view, who went to Ottawa charged with the first duty of coming to an agreement and not allowing the Conference to break down. That was essential.

10.30 p.m.

It may be said: "We do not object to the Conference. We object to the Agreement." Again, let us examine that. Everyone who was concerned with the inter-Imperial Conference of 1930 knew what the Dominions' demands were going to be. No one knew better than hon. Gentlemen opposite, especially those who were at the Departments. They knew the difficulties that would be met with. They knew that when Mr. Bennett issued the invitation which the late Government accepted. Let there be no mistake about that. Ottawa was accepted not by the National Government but by the Labour Government, and rightly accepted. I do not believe, I cannot believe, because it is so impossible to fit into a rational scheme of things, that there was one Minister of the Labour Government who was unaware of the fact that Mr. Bennett and Mr. Scullin—it did not matter that he was not in office when it actually met; he was still represented there—no one had the least doubt that the negotiations at Ottawa were going to start at exactly the point where they had left off. What is the use of living in a fool's paradise? My colleagues knew it perfectly well, too. Everyone who has been in direct contact in economic negotiations with the representatives of the Dominions knew that this was the kind of agreement that had to be made if the Conference was going to succeed.

What was the duty of men in these circumstances? We knew perfectly well that this Conference, if successful, could only result in something in the nature of tariffs and that foodstuffs would have to be included somehow or other. All that we did was to put up the stiffest fight that was possible in order that these tariffs should be as advantageous as possible to this country. If anyone held that certain things, as a matter of absolute and unbending principle, should not be included in the tariff schedule, he ought to have striven with might and main, either on the Labour Government at the time or later on the National Government, to vary the reply. We were quite free to vary the reply. We did not vary the reply. Neither the Labour Government nor the National Government, unless they were prepared to face these things, should have replied, "We will go," but should have replied, "We will not go at all because we are not in a position to negotiate with you and, after meeting with you, to make the meeting a success."

I dare say that that does not amount to a pledge, but certainly it dues in the ordinary common-sense working of Government business. You have no business, and no Government and no party have any business to enter into a position when they know that the very nature of the problem, the things which are going to be put up and which are essential to constitute success, make for them an im- possible barrier. They ought to have stopped the whole thing at the beginning and said, "We will not go." However bad that might have been, at any rate it is something you could have faced. But, fancy going to Ottawa, meeting the representatives not only of Canada but of South Africa, Australia, India and the other countries and then suffering a breakdown! That would be a calamity which no one, whatever his imagination might be, could adequately describe.

The second point of which a great deal has been made both outside and inside this House is the constitutional point about finance. My right hon. Friend said to-day—and I am not quite sure whether it was one of those things which drop out sometimes, and which, after we have said it, we are very sorry we have done so because it is apt to be misunderstood, and I do not want to stress the point—that the constitutional aspect of this matter was the most important. I agree with him that it is a very important aspect. What is his position? I tried to find it out. I listened very carefully to everything he said. I tried not only to listen but to follow the process of his reasoning. What is his doctrine? His doctrine is that in all finance matters, taxes, tariffs and so on, this House must retain its power to change them, to stop them and to abolish them at its will. The only concession is that a tolerably short notice should be given to the other parties, and he says that anything beyond that is a new procedure. Being a Liberal he will object to a new procedure. But is it a procedure which does violence to the constitution and destroys its nature?

I was very much interested in his elaboration of that point. It is perfectly true that the right hon. Member who sits behind him made what he himself admitted a few minutes later to have been a mistaken point, but that did not affect the difference in principle which the right hon. Gentleman put up for himself while under the impression that it was a good one. What was his explanation? His explanation was: "Yes. That may be so, but I do not think that it does violence to my views of the Constitution if the power that is to be taken from the House of Commons is the power to increase taxation. By well established right, no Government can deprive the House of its power to reduce taxation, but it can deprive the House of its power to increase taxation." That to my mind and my training, is not a very sound exposition of the constitutional rights in regard to finance in this country.

My right hon. Friend said that there was another safeguard. He asked, "Who knew about that Treaty? Who took any interest in it." In other words, if a financial bargain taking away the great outstanding characteristic details of Constitutional powers is not of interest to the outside public, you can take it away without violating the Constitution. That will not do. My right hon. Friend the Member for Sparkbrook (Mr. Amery) withdrew his Treaty, but my right hon. Friend and late colleague, a very valuable colleague and one whose absence I deplore, cannot withdraw his arguments. They remain on record, and instead of the right hon. Gentleman to-day being the champion of the Constitutional liberties of the House of Commons, 50 years from now some obfuscated old Tory will turn up the OFFICIAL REPORT of the 18th October, 1932, and will produce it in this House and say: "There is the opinion of a great Liberal, the leader of his party who, in a Debate in which he said that the Constitutional aspect of Ottawa was the most important, gave away every principle upon which the Constitutional case for House of Commons guardianship of finance is based." I would not like to have that reputation.


What will they think about the Leadership


The country will bless itself. The hon. Member opposite must be aware that in 50 years from now they may have voices, which I hope will be very harmonious and beautiful, in Heaven, and they will not be able to spread any prejudices upon earth. It has been stated again and gain that this is a new example, that never in the history of this country since a Royal head was chopped off, have there been these commitments. Do we want to impose taxes because we need them, or because on account of a political policy we want to place certain impediments upon certain foreigners in this country? Let me give the right hon. Gentleman a case. I turn to the German Commercial Treaty. In Article 32 it is laid down that the Treaty shall remain in force for five years. Article 2—I wish I had time to quote it—says that the House of Commons shall not be free to impose taxes except under certain conditions, specified in the Treaty, upon German subjects. If the right hon. Gentleman wanted to impose taxes on Germans he could not do it, although he may have his majority in the House of Commons. It is not a a question, I beg the Committee to remember, as to whether it is likely to be done. That is not the constitutional issue. The constitutional issue is, can it be done; and that is all I am concerned with now. This Treaty, a very recent one, and one which I started negotiations about myself in 1924, lays it down that it cannot be done whether we want to do it or not for five years.


Is there not a provision for 12 months' notice?


After five years. I have not time to elaborate it. As a matter of fact, what happens here in these commercial treaties with foreign countries is that there are certain interests and considerations which do not come in when you are making a commercial treaty with a Dominion. The great difference is this. This Treaty is not a statute; it is part of a policy. It is partly a finance affair. It is the sort of Treaty which it is difficult to imagine any Government having to make with a purely foreign country. I am cautious in my language there. One of the things which we want to do if this policy succeeds is to establish certain sources of labour and of income; in other words, to develop certain parts of our Dominions. Now suppose fruit is one of the commodities. What is the use of our going to a Dominion and saying, "We would like you to develop your fruit industry and we guarantee you a six months' continuance of this agreement"? Why, they would laugh at it. That is the point and we cannot overlook it. Either do not put your hand to this sort of thing at all or do it in such a way that the effect that you want by doing it can be realised. We can have as much academic argument as we like. There was never a professor of constitutional law that was so stilted as my right hon. Friend. But we are politicians who are legislators. I am one of those people who are prepared to change things tomorrow if in the course of time it has been proved that certain of our most cherished constitutional practices have become out-of-date.

All that we want the House to do by the Division which will follow this Debate is to say that we are going to carry it and we want to say to the Dominions, that we mean this and as long as we have authority we will stand by this up to the period specified in the Agreements and we will do everything we can to get the country to stand by us so that the Agreements will be carried out. We pledge ourselves, you pledge yourselves, this House pledges itself, to do everything it possibly can in order to show the Dominions that the Agreement at Ottawa has been an Agreement made with us, the House of Commons, and an agreement made with the country. That is what we are going to carry out and to work in the best spirit and to challenge them, not by word but by our own conduct, to carry out in exactly the same spirit in which we mean to carry it out.

I would have liked to have dealt with the question of my right hon. Friend's attitude since he and his friends left the Government. I regret their reason. I mentioned yesterday that the right hon. Members below the Gangway have not merely left the Government and said, "We cannot agree with you." They have said, "We declare the time has now come for a return to party Government." That is what it means. Everybody who has been even for 12 months only in this House knows that is the effective meaning in relation to Parliamentary procedure and Parliamentary practice.

As to the development of industry, I am perfectly certain that the President of the Board of Trade will deal with that matter later on as the general Debate proceeds. I want to say a few words regarding unemployment. Already we have been told there is increasing unemployment. Are we going back to that fruitless and not always honest claim? When I was associated with the right hon. Gentleman opposite, I protested against a statement being made by my hon. Friends who are around me now that it was merely owing to the Labour Government that unemployment was increasing.


I never said that.


I have only five minutes. We have already had statements that unemployment has gone up since tariffs have been introduced. Is that true? Only a month or two ago those who were in favour of tariffs were telling us that unemployment, which was going up more rapidly then than it has been going up since tariffs were introduced, was going up on account of Free Trade. There is this problem, which is a social problem relating to the constitution of society itself, and are we going—[An HON. MEMBER: "You will offend your friends."]—I do not care whether I offend or otherwise. It is futile for any section in this House, any party in this House, any propagandist outside this House, to go away and delude the country that the rise in unemployment during the last few years is evidence either of the failure of Free Trade or the success of tariffs. It is not true. This state of rising unemployment is common to Free Trade countries, common to tariff countries. It means that in applying tariffs you have to apply them with the same discriminating care as characterised the work of my right hon. and hon. Friends who went to Ottawa and, face to face, discussed the items of a programme and came to agreements which undoubtedly will expand trade throughout the Empire.

I have time for one more point. I have been told that this is going to put an end to the International Economic Conference. If one still comes about, I suppose it is going to be my fate and that I shall be compelled to accept an invitation which has already been given to me to preside over that Conference. I am willing to face that Conference with the Ottawa Agreements. But I will tell you what would have made me hesitate very much. After all, one does not want to face an impossible proposition. I am perfectly willing to face a difficult one, but not an impossible one. What would have made that Conference impossible would have been a failure at Ottawa. Never has there been a clear road, and I do not expect one now, either here or at the International Conference, but with full knowledge of what one is up against. I would appeal to the Committee, when the Division comes, to show the Dominions that we accept the Agreements, and that we are prepared to carry them out in the most generous spirit; and at the same time I appeal to the Dominions to show the same spirit in applying the Agreements to their own conditions.

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

Committee report Progress; to sit again To-morrow.

The remaining Order was read, and postponed.

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