CLAUSE 1.—(Charge of customs duties on goods specified in Second Schedule.)

HC Deb 28 October 1932 vol 269 cc1330-407

Sir H. SAMUEL

On a point of Order. I rise to ask your guidance on the procedure that will be adopted on this Bill, and to ask you certain questions of which I have ventured to give you private notice. This Bill embodies a series of Agreements or Treaties scheduled to the Bill, together with a number of Clauses imposing taxation and making other legislative provisions in conformity with those Agreements. I desire to ask, in the first instance, whether there is any precedent for a Bill to be presented to the House in that form. If not, it will be necessary to ask the Chair to give a ruling on the following points, which will be a precedent in any future case.

The title and preamble of the Bill state that its purpose is to give effect, so far as this country is concerned, to the scheduled Agreements, and the House has passed the Second Reading on that understanding. The Agreements provide inter alia that His Majesty's Government in the United Kingdom will invite Parliament to impose duties of specified amounts on specified commodities. Since the undertaking is only to invite Parliament to do these things, presumably the House is free to refuse to impose these duties, or to impose duties at lower rates, and it would not be out of Order to move the Amendments with that object which some of my hon. Friends have put on the paper. On the other hand the Agreements which are scheduled to the Bill were Acts formally signed at Ottawa on a past date in the month of August and are clearly not now alterable by Parliament. Is Parliament, then, free to make Amendments in the Clauses which would render those Clauses inconsistent with the teems of the Schedules? That is the point of substance I wish to put to you.

The Chancellor of the Exchequer said to the Committee of Ways and Means on October 19th: In order to implement those Agreements all these duties must be granted by the House, and, therefore, it is not possible to pick and choose among the duties, to decide that we will take one and not another; that would destroy the Agreements themselves."—[OFFICIAL REPORT, 19th October, 1932; col. 155, Vol. 269]. If that would be so, then any such Amendments, Amendments, that is to say, rendering the Clauses inconsistent with the Schedules, would appear to be contrary to the decision of the House on Second Reading, and to move them would therefore be out of order. I would ask, therefore, whether, since the Schedules are unalterable, it is open to the House to alter the Clauses in such a way as would render them inconsistent, with the Schedules. I desire to ask that point, because I want to make sure that the Amendments we have put on the paper would not be ruled out of order on that ground.

The CHAIRMAN

I must thank the right hon. Gentleman for having given me notice of this question, but I must perhaps ask the indulgence of the Committee by reason of the fact that the notice was very short, not through any fault of the right hon. Gentleman's, but through the fact that the Second Reading was passed only last night. I have, however, done my best in the time available, and I will answer the right hon. Gentleman's questions to the best of my ability. In order to do so, I think perhaps it may be convenient if I make this preliminary observation with regard to the Agreements which are scheduled to the Bill. Hon. Members will notice that Parliament is not asked by this Bill to adapt the Agreements or to sanction the Agreements. Parliament is invited, in the terms used in the Agreements, to pass certain legislation in fulfilment of these Agreements. Parliament can accept that invitation, of course, or refuse it. Parliament can pass legislation which is on the lines of this Bill or otherwise. But I think the important point arises on the first lines of Clause 1 of the Bill. In my view if the Committee passes subsection (1) of Clause 1 of the Bill without alteration it cannot amend the schedule of duties. Let me deal with the right hon. Gentleman's question, which I think has been in part answered by that statement. He suggests first of all that this Bill embodies a series of agreements or treaties scheduled to the Bill. I do not quite adopt his word "embodies," for the reason I have stated. The Bill schedules a series of agreements or treaties together, and contains a number of Clauses imposing taxation and making other legislative provisions in conformity with these agreements. The right hon. Gentleman asked "Is there any precedent for legislation in that form?" There are of course many precedents for legislation in which agreements are scheduled to a Bill and not necessarily adopted by that Bill. They are scheduled merely for purposes of convenience, as is the case here. I have not been able to find so far, and I am not aware that there is, any direct precedent for legislation in this form which imposes taxation. The Committee will understand of course that it does not follow that because there is no precedent that it is in any way out of order. I am asked by the right hon. Gentleman after dealing with that to give a. ruling on this point:—He says that the title and preamble of the Bill states that its purpose is to give effect so far as this country is concerned to the Scheduled Agreements. The title and preamble of the Bill is not quite in that form: Its purpose is not "to give effect to" the Scheduled Agreements, and what I have already said about the way these agreements are scheduled, I think answers that point. The Bill says:

Sir H. SAMUEL

May I draw your attention to the first words of the long title.

The CHAIRMAN

The words are To enable effect to be given to the agreements. The right hon. Gentleman's words are not quite the same; those are the actual words of the Bill. It is a Bill To enable effect to be given to the agreements made on the 20th day of August, and therefore again I say it is not in any way definitely adopting them. It asks Parliament to pass such legislation as is necessary in order to enable effect to be given to those portions of the Agreements which require legislation in order to make them effective. Then the right hon. Member went on to say— Since the undertaking is only to invite Parliament to do those things, the House is free to refuse to impose those duties or to impose duties at lower rates. On the first part of the question I must of course rule that it is obvious that the House is free to refuse to impose these duties. With regard to whether it is free to impose those duties at lower rates the answer again is in the affirmative, but subject to what I have already said—so soon as the House passes the words of Sub-section (1) of Clause 1 it has dealt with the matter and cannot impose duties at the lower rates. Therefore, Amendments with the object of reducing those duties would be out of order unless some words are moved by way of Amendment into Sub-section (1) of Clause 1.

Then the right hon. Gentleman says: On the other hand, the Agreements scheduled to the Bill, since they were Acts formally signed at Ottawa on a past date in the month of August, are clearly not now alterable by Parliament. That I agree is so. The Agreements are not Agreements to which Parliament was a party. They are Agreements entered into by the Executive Government and the Government have now asked the Parliament to pass certain legislation which is necessary in order to enable them to give effect to those Agreements. He asks, then: Is Parliament then free to make Amendments to the Clauses"— of the Bill, I take it, he means— which would render those Clauses inconsistent with the terms of the Schedules; in other words, with the terms of the Agreements. Parliament is free to do so, but what the effect of it would be is not necessary for me to rule at this present moment. If Parliament refuses to pass legislation which would enable the Executive Government to give effect to the Agreements which have been entered into, that would raise a situation which it is not for me to deal with at this juncture. Those remarks, I think, cover what the right hon. Gentleman has said in regard to the quotation from the speech of the Chancellor of the Exchequer in Committee of Ways and Means on 19th October. I think I have answered the right hon. Gentleman.

Sir H. SAMUEL

With all deference to you for your Ruling and arising out of that Ruling, I venture to submit a further question which I have also submitted to Mr. Speaker. Article No. 3 in the United Kingdom-Canadian Agreement—

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Before the right hon. Gentleman raises another point—

Sir H. SAMUEL

It is connected with the last point.

Mr. CHAMBERLAIN

I understand that you rule, Sir, that if Sub-section (1) of Clause 1 were passed unamended, then it would be out of Order to vary the Duties which are imposed under the Bill.

The CHAIRMAN

Yes. The Duties which are there referred to in that Subsection. The right hon. Gentleman will see that.

Mr. CHAMBERLAIN

Yes.

The CHAIRMAN

They are described as "specified" in a particular Schedule.

Mr. CHAMBERLAIN

Quite. May I call your attention to the first of the Amendments on the Paper which would insert in that Sub-section the words subject to the provisions of this Act, I understand, of course, that, if that Amendment were carried, the Committee would then be free to alter the whole of the Duties in the Schedule to which you have just referred; but, supposing that that Amendment were not carried, do I understand your Ruling to mean that with the passing by the House of the words with a view to the fulfilment of the Agreement set out in the First Schedule to this Act, the Amendments which follow on the Paper, and which refer to the omission of various Duties in the Schedule, would be out of Order?

The CHAIRMAN

Not quite. I am glad that the right hon. Gentleman has raised this point because I think it will be useful to deal with it now. If the first Amendment on the Paper were not moved at all, I should regard the second Amendment on the Paper, and those following to a similar effect, as being in Order. If on the other hand the first Amendment is defeated, the other Amendments would fall, because they would have been defeated in principle with the rejection of that first Amendment.

Mr. ATTLEE

I should be grateful for your guidance on that point. The first Amendment standing in my own name was put down for a specific purpose, in order to safeguard an Amendment to the first Schedule, inasmuch as certain modifications of the scheduled Agreements are sought to be made. The modifications do not refer to specific duties, but to certain parts of those Agreements which do not come into the body of the Bill. Do I understand your Ruling to be that if the Amendment, subject to the provisions of this Act. were defeated, then the other Amendments fall?

The CHAIRMAN

All the other Amendments to the same effect would fall, because the Committee would have decided the principle. As I have said, my Ruling does not apply if the first Amendment were not moved. Then I should have to take at least one of the next following Amendments. I think the hon. Gentleman will see my meaning.

Mr. ATTLEE

Might we know whether it is possible in any way to raise the points which we have down for the modification of the Scheduled Agreements? Would they then be in order, without the insertion of the words subject to the provisions of this Act? If they are unnecessary, I shall not move them.

The CHAIRMAN

The hon. Gentleman proposes to move a new Schedule. He proposes by means of three Amendments—introducing words, a new Clause and a new Schedule—to delete certain articles of the Agreements. The hon. Gentleman cannot do it in that way. The Agreements are not Agreements to which Parliament was a party. They are Agreements made, not by Parliament, but by the Executive Government.

Mr. ATTLEE

With all respect, Sir, I do not think that that is quite the effect of my Amendments. The effect of my new Schedule is first of all to safeguard the rights of this House, a safeguard which is made in the Agreements but is not made in the Bill, and, in so far as the Agreements are only in the Schedule to the Bill, the Bill does not confirm the Agreements. I want it in the Bill to protect the rights of this House with regard to the duties under the Imports Bill.

The second point is that we want to allow this Committee to modify the Agreements, that is to say to accept these Agreements with a modification as regards the possibility of shortening the time when it will end in six months. I submit to you that if it is in order for me to move these Amendments to achieve certain modifications as regards wheat, grain and so forth, then equally the Amendments seeking to modify those Agreements, either as regards time or any other point must be in order under your Ruling.

The CHAIRMAN

No, the hon. Gentleman does not follow exactly the points that are in my mind. He is proposing here I think to modify the Agreements. Parliament is not being invited by this Bill to do anything in regard to the particular points which the hon. Gentleman deals with in his proposed changes. Although the first Schedule contains the Agreements the Bill does not adopt the Agreements.

Mr. COCKS

Will you tell us since you say that the House is not invited to sanction or ratify the Agreements whether we have power to do anything with the Schedule? I take it that the Schedules will be put to the Committee and the Committee will be asked to agree to them.

The CHAIRMAN

What would result if the Schedules are not passed by the Committee, it is not for me to say.

Sir PERCY HARRIS

Have we not to vote for or against the Schedules and must they not be put to the Committee? Has the House not the right to vote either for or against them?

The CHAIRMAN

The Schedules, of course, must be put to the Committee, and, that being so, I cannot say that it would not be in order to vote against them. Obviously it would be. What would be the result is another matter. When the Bill came to be reported to the House it might be found that in effect the Bill had been negatived by the proceedings of the Committee.

Sir P. HARRIS

If we have a right to vote for or against, have we not a right also to move to delete a particular Clause or Schedule?

The CHAIRMAN

Does the hon. Baronet mean, to delete a particular Clause in the Schedule?

Sir P. HARRIS

No, to delete any particular Schedule.

The CHAIRMAN

I have said already that there is nothing to prevent the Committee from voting against the addition of the Schedule to the Bill.

Sir H. SAMUEL

May I put my second point? Article 3 of the United Kingdom-Canadian Agreement—and there are corresponding Articles in five other Agreements—states: His Majesty's Government in the United Kingdom"— will not in this instance invite Parliament to legislate, but will themselves undertake that the general ad valorem duty of 10 per cent. imposed by Section 1 of the Import Duties Act, 1932, on the foreign goods specified in Schedule C shall not be reduced except with the consent of His Majesty's Government in Canada. Similar undertakings are also given with regard to the other Dominions. No reference to these undertakings is made in the Clauses of the Bill, and I would ask whether the fact that these undertakings appear in the Schedule without being confirmed in any of the Clauses gives them statutory sanction. I would ask, further, whether, if this Bill, embodying these agreements in its Schedule, is, passed in its present form, that would in any degree preclude this Parliament or its successor from varying any of these duties at any time that might be thought fit?

The CHAIRMAN

The right hon. Gentleman has given sue an easier task than before. The reply is in the negative to both of his questions.

Mr. ATTLEE

I am not clear yet as to the exact position of these Schedule Agreements. I quite understand that the House cannot alter an agreement that 'has been made, but these Agreements are merely attached to the Bill, as exhibits, so to speak, and we are asked to confirm them, or rather to fulfil them by taking certain action.

The CHAIRMAN

The hon. Gentleman will forgive me if I interrupt him; it may make the matter a little easier. That is my point. Parliament is not asked to confirm the Agreements. Parliament is asked to pass certain legislation embodied in this Bill in order to enable the executive Government to carry out those parts of the Agreements for which it requires legislation, and the required legislation is included in this Bill.

Mr. ATTLEE

I quite understand that, but the point is, if you desire to give effect to these Agreements, is it not possible to move to give effect to these Agreements subject to alteration?

12 n.

The CHAIRMAN

The hon. Gentleman is proposing now that the Bill should do something which it does not do at the present time, that is to say, adopt the Agreements.

Mr. ATTLEE

No.

The CHAIRMAN

I understood him to ask whether it would not be in order to approve the Agreements with Certain modifications. Is that his question?

Mr. ATLEE

No, that we should pass this Bill in order to fulfil certain Agreements, but not the whole of the Agreements, and those Agreements subject to certain limitations.

The CHAIRMAN

If the Committee passes this Bill it will be fulfilling, or enabling the Government to fulfil, certain parts of the Agreements, but it will not be adopting them—it will not be commiting itself to anything in the Agreements which is not in the Bill.

Sir H. SAMUEL

Which is not in the Clauses.

The CHAIRMAN

Which is not in the Clauses of the Bill. It will not be committing itself to anything except what is actually in the Clauses of the Bill, and, as I have already explained, Amendments proposing to deal with matters which are in the Agreements, but are not dealt with in the Bill, would, in my opinion, probably be out of order as going outside the Title and scope of the Bill. As to the particular Articles of the Agreements referred to in the right hon. Gentleman's second question, Parliament is not invited to deal with those undertakings in any way whatever.

Mr. CHAMBERLAIN

The Schedule contains a number of Agreements which have been made. Clause 1 refers to fulfilment of the Agreements set out in the Schedule. The House cannot possibly alter the Agreements; those are Agreements which have already been made. It can alter a Schedule so as to make it inconsistent with the Agreements, I suggest, but to alter a Schedule would really have the same practical effect as voting against it; it would negative the whole business.

The CHAIRMAN

I suggested just now that alterations in the Schedule might have the effect of destroying the Bill.

Mr. T. WILLIAMS

I beg to move, in page 2, line 8, after the word "agreements," to insert the words: (except in so far as they relate to wheat in grain). This Amendment is a repetition of a similar Amendment which I moved on Monday last. I am glad that the Financial Secretary to the Treasury is here, because he said in Committee that my statement that an increase in quota payments would result from the imposition of this 2s. duty was something very different from what I was actually arguing. I wish, therefore, to deal with that point also, and to repeat what I said on the former occasion. The Chancellor of the Exchequer will recollect that my argument was that if, as a result of the 2s. duty imposed upon imported grain from foreign countries, there was an increase in the importation of flour from the Dominions, there would be a less quantity of grain for millers to mill. Consequently, as next year we are expecting a bumper harvest of home-grown wheat, the millers, having a smaller quantity of grain to mill, would require a smaller quantity of imported millable wheat for milling purposes, and, therefore, the millers would only require a very small proportion of our home-grown millable wheat. Consequently, I argued that the bargaining power would be in the hands of the millers, who, unwilling to purchase this home-grown wheat, would only offer a smaller price than the normal price, and, to that extent, the smaller the price for home-grown wheat the bigger the quota payment would be. When the hon. Gentleman came to reply to that point he made this very simple statement: I had made a note of the point just mentioned by the hon. Member for Don Valley (Mr. T. Williams), and I was going to reply to him that any increase in the price of home-grown millable wheat would reduce the amount payable under the Wheat Act, and would be a saving to the State."—[OFFICIAL REPORT, 24th October, 1932; col. 705, Vol. 269.] That is certainly no reply to the point I submitted, which was that there would not only not be an increase in the price of imported wheat or flour but that there would be a decrease in the price paid for home grown millable wheat, consequently increasing the quota payment. I want to ask the hon. Gentleman to reply to-day to that specific point. If, as a result of this 2s. duty on imported foreign wheat, there is a large increase in imported Dominion flour, that obviously will decrease the imports of grain.

Mr. CHAMBERLAIN

Why should there be a large increase in the imports of Dominion flour because there is a duty on foreign wheat?

Mr. WILLIAMS

Really, if that is not to be the case, will the right hon. Gentleman tell us the point of the 2s. duty?

Mr. CHAMBERLAIN

To promote an increase in the imports of Dominion wheat.

Mr. WILLIAMS

Of course, the figures at the moment are available to the right hon. Gentleman and he can see already that there is an increase in imported flour. At all events, this is an encouragement, and it seems to me that the imports of flour will continue to increase as against those of grain. I do not think that is hypothetical or speculative. I think it is almost a certainty that, foreign wheat having to meet a duty, the manufactured article, as the miller calls it—flour—will be on the increase, and an increase in imported flour will automatically mean an increase in the quota payments under the Wheat Act unless there is a general all round increase in the world price. I hope the hon. Gentleman will examine that argument again and, if he will look at the point that I submitted on Monday, towards the bottom of column 686, he will see that the argument was not replied to in any shape or form.

I want to ask, further, whether the world price, as referred to in several places in the agreement, will be the world price with or without the duty? That seems to me to be important. We want to know, further, notwithstanding the very fine effort of the hon. Gentleman to reply to the technical points advanced on Monday, when the world price will be determined. Will it be determined when the purchases are made in Canada or Australia or elsewhere, or, as the result of day-to-day fluctuations in the price level of the Dominion imports of wheat or flour, will the price be fixed at the British ports? That question has certainly not been replied to yet, although quite a lively scene was witnessed on Monday. There were so many interjections, all demanding replies to highly technical points, that I do not think he was quite able to reply to it. I do not say that offensively. It is a highly technical thing, arid I think the hon. Gentleman did his best to reply to interjections from all over the House, but, reading his replies, one is not too clear. If he will reply to these points now, we shall be in a better position to examine the situation.

With regard to the increase in price, he suggested that, if all imported grain, Dominion or non-Dominion, had to pay a 2s. duty, that would amount to a net increase perhaps on the 4 lb. loaf of a farthing. That is not a very high figure and it would break no one if that was the only farthing that the consumer of all sorts of foodstuffs had to consider. But that farthing on the top of the Wheat Act farthing makes a halfpenny, there is 1½d. on butter and 1½d. on cheese, and all the various accumulations of duties which have been imposed by the Government make a real burden on the people with the lowest wages. I am not at all sure whether the right hon. Gentleman can really justify such a burden as he intends to impose here. We partially expected, as a result of the Dominion Secretary's statement in December last, that they would try to impose a quota for the purposes of Dominion wheat. They found that was wholly impracticable. They reverted, therefore, to the duty in this form, which we think perhaps is a less scientific method of conceding preference to the Dominions. I am wholly hostile to the tariff policy of the Government but I entirely agree with one statement made by my hon. Friend the Member for Ebbw Vale (Mr. Bevan) yesterday that, if we are to have tariffs, it ought to be all-round tariffs and not discriminating tariffs. I do not see why all this unscientific, complicated, difficult-of-understanding method should be employed as far as agriculture is concerned. If you are to have all-round tariffs, let it be all-round tariffs. We appreciate that, when the circle has been fully performed, there will have been an all-round general restraint of world trade.

Mr. CHAMBERLAIN

What does the hon. Member mean by "All-round tariffs"?

Mr. WILLIAMS

If we are to impose duties upon imported steel, tintacks, copper and all the rest, I think we ought to impose a duty upon every sort and kind of article brought into the country.

Mr. CHAMBERLAIN

From the Dominions too?

Mr. WILLIAMS

From the Dominions or anywhere else and, unless that is done, all sorts of doubts and anxieties crop up in the minds of individuals that certain interests can press their claims to the detriment of other interests. [Interruption.] I should prefer to be a wholehog rather than a partial hog, whether it be on the question of food or anything else. I should have thought the agricultural industry could bring sufficient pressure to bear to see that this half-time, slipshod, unscientific method should not be em- ployed. We are certain that the duty will cause an increase in the price of bread. We are convinced that, indirectly, there will be dislocation in our wheat-growing areas. The quota payment, undoubtedly, will increase if the imports from the Dominions are increased, and the millers will no longer bless the Government for having made a bargain with them in February and broken that bargain in August.

There is only one other point. Will the Chancellor tell us whether the 2s. received as import duty on foreign wheat will be regarded in the world importing price for quota payments or will the Government take the duty of 2s., leaving the price less the 2s. to be calculated for those payments: or has the Chancellor got in mind the point which I submitted on Monday, that whatever the duty on imported foreign wheat may fetch, that sum shall be handed over to the Wheat Commission to meet the quota payment? If not, the home consumer of wheat will have to meet the whole payment and also the duty of 2s. on foreign imported wheat, and, instead of the burden being £6,000,000, which is the maximum under the Wheat Act it will probably be £1,500,000 up to £2,000,000 under the terms of this duty. We ask the Chancellor to consider whether or not the duty derived from imported wheat ought not to be handed over to the Wheat Commission as part of the contribution which will have to be paid. Because we disbelieve in a duty on imported wheat altogether, and because of the complications and doubts which have arisen and the fact that a solemn agreement has been broken, we are obliged to support this Amendment.

Mr. TINKER

This Amendment raises one of the most important discussions that will take place to-day—the question of the taxation of wheat or bread. I consider that full attention ought to be given to a matter like this. Last night the hon. Member for Aberdare (Mr. G. Hall), in speaking on the general question, touched specifically on this point, and the President of the Board of Trade, owing, I think, to having too much to answer, was not able to deal with the point. I do not remember his touching upon it at all, though I do think at the time it was well worthy of some answer from the Government. Probably it was overlooked through not having the opportunity or time to deal with it, but I trust that to-day whoever replies on behalf of the Government will give us an answer on this point. The question before us is the taxation of a prime commodity in the food of the people. It is an article of food used more in the poor families than any other kind of food. Meat is another such commodity, but bread is the prime commodity. The poorest families live mainly on bread, because that is the thing they can fill up with. The Wheat Quota Bill put a special tax on the bread of the people. We protested then, thinking that that would be the end of it, but this proposal puts further taxation on the same commodity—2s. 8½d. before on the quarter, and now 2s.

The Financial Secretary the other night stated that approximately it would be ¼d. on the 4-lb. loaf. To him that did not appear large. He said "What does it matter?" and, glancing casually at it, it does not appear to be very much, but when he realises what it means to the poor people, he will not pass it off so lightly. I give him credit, as I have always done, for being sincere in his remarks on this matter, and, if I may offer a word of commendation, he has done extremely on the Government bench in meeting these questions. But this is a point I do not want him to treat lightly by saying it is merely a ¼d. on the 4-lb. loaf. That, added to the ⅜ on the wheat quota—

Mr. HERBERT WILLIAMS

Five-eighths.

Mr. TINKER

I am speaking now of the ⅜d. on the Wheat quota, and then there is the ¼d. now.

Mr. H. WILLIAMS

Five-eighths.

Mr. TINKER

I agree, 5/8ths altogether, which, on a 4-lb. loaf, does mean something. I understand—I may be wrong again in my figures—that the cost of the wheat from foreign countries last year or the year previously was £25,000,000, as against £19,000,000 worth imported from the Empire. So that this tax will not result in the Empire being able to supply us with all the wheat we require for some time; consequently, this burden will have to be borne by this country in the way of food taxes. I feel very strongly indeed on this point. If taxation had to be put on, I should have thought, first of all, it would have been directed to something else. This particular tax, which we can describe as a bread tax, hits the poor people very hard indeed, and, therefore, I join this afternoon in protesting against the tax.

Mr. GRAHAM WHITE

I join with the previous speakers in expressing the hope that, before this Amendment is disposed of, a good deal more light will be thrown upon this subject, and also that any of the points left unanswered which were previously put before the House may be met. I think the Committee might very well expect some general statement to be made as to what is the object of this particular part of the Agreements, and that it should be stated definitely in whose benefit they are to operate. That certainly seems at the present moment to be very obscure. It is freely stated that a portion of the Canadian Cabinet was opposed to this proposal. It is known that a very important section of the Canadian growers were opposed to it, and said so. The Canadian merchants and growers, and those concerned in the export of wheat from Canada, were opposed to it, and, so far as this country is concerned, the Corn Trade Association and the National Millers' Association are definitely opposed to it. I have, therefore, reason to ask who is definitely in favour of this Bill? I have not heard that there is any considerable body of opinion in this country, either before or since the Ottawa Conference, who have asked that they should be associated with the Canadian growers in a partnership which will bring to them a better price at the expense of the consumers in this country. I am not sure that it will work out in that way, but so far I am not aware of any direction in which there is any support for this particular proposal.

The hon. Member for Don Valley (Mr. T. Williams) made reference to the fact that there was likely to be a decrease in the milling of flour in this country with consequent unemployment as a result of this proposal. It is the view of the millers of this country, and, indeed, it does not, seem to be a far-fetched view at all. An examination of the facts of the case, it is clear, would make it obvious to everybody. The British mill- ing industry is a big industry and has a very considerable export trade in flour, a most unnatural thing, because we have not been, hitherto, a great wheat producing country. We have to import our wheat from the ends of the earth, and, in spite of that, we have built up a great export trade in flour, because of the fact that our millers have had the freest possible access to vast quantities of millable wheat in whatever quarter of the globe or in whatever quality they were best available at the particular time. That has enabled us to build up a trade which normally would not have been expected to exist in this country. The millers are definitely afraid that this business will be interfered with and that there will be a consequent decrease of employment and business. I will quote a letter which I have received to-day from the Chairman of the National Association of British and Irish Millers, Ltd., on this particular point. It says: The danger to our industry lies in the fact that the 2s. per quarter duty on foreign wheat will lessen our flexibility in selecting our grist from the wheats of the world and thus give the Dominions more chance than ever"— These are his words— to dump"— That is not the word I used— their flour into this country at prices very considerably below those which rule in the countries in which the flour is milled. 12.30 p.m.

That is the basis upon which the apprehensions of the millers are founded, and indeed they seem to be very well founded. Coming from a district which is very largely interested in the milling industry—in fact, I believe it is the greatest in this country, and one of the greatest in the world—we are naturally very anxious about this particular point, not only for the special reasons which I have mentioned, but also for the one I will now put before the House, that in our particular district we are terribly distressed. Nearly 40 per cent. of our working population is already unemployed, and we consequently regard with the greatest apprehension any steps which are likely to increase that percentage. We have nothing to hope for in our district from any tariff proposals. At the instance of the President of the Board of Trade, a very careful inquiry was instituted into the industries and industrial prospects of Mersey side, having regard to the possible imposition or application of a tariff policy in this country, The conclusion to which this impartial body came was that only 14 per cent. of the employed people in the Mersey side area could conceivably benefit from the application of the tariff system, that 5 per cent. must undoubtedly be injured, and that the remainder would probably be injured by the adoption by this country of a tariff policy. That is one reason why on the Mersey side, one of the largest milling areas in this country, we are particularly anxious on this point.

It is not the whole argument by any means in this connection. It might be argued possibly—though I do not see that any argument in substance could be advanced—that these proposals were likely to be of some benefit to agriculture in this country. That clearly is not the case. Agriculturists in this country are particularly concerned to buy their foodstuffs at the lowest possible price. There have been, hitherto, imported from the Argentina and elsewhere large quantities of feeding offals which are now subject to a 10 per cent. ad valorem duty. As a result of those proposals, in so far as they lead to the milling of such wheat in this country and as they lead, as the millers clearly think they will lead, to an importation of more flour in this country, they will also lead to a decreased production of wheat offals in the variable proportion of feeding stuffs which farmers should buy and which it is essential they should continue to buy at the lowest possible price. The effect of the 10 per cent. duty is, of course, injurious to the farmer as far as it goes, but what might have even a greater effect upon prices to the farmer will be the withdrawal or decrease of supply of this particular commodity from the general field from which the feeding stuffs of the country are drawn, especially as there are now proposals in the Bill to increase the taxation of feeding stuffs by including maize.

I hope that we may have some reassurance upon these points, and that we shall have a definite clearing up of the difficulties with regard to the fixing of the world price and the machinery which is to be employed in order to decide whether or not the millers of wheat shall benefit from this preference or not. Hon. Members who were present in the House the other day will remember that the matter was left in a wholly unsatisfactory way.

I now pass to another consideration which is considered to be of great substance by the milling trade and those who are serving this country by producing wheat. It is a point to which my hon. Friend the Member for West Derby (Sir J. Sandeman Allen) in an earlier Debate, namely, the question as to how far they will be based upon the certificate of the country of origin in which the wheat is grown. That is a point which is of very great importance because, as Members are familiar, the St. Lawrence is closed—

The DEPUTY-CHAIRMAN (Captain Bourne)

The hon. Gentleman is now anticipating an Amendment on Clause 2 which raises this specific point, and I think the discussion had better be left until that Amendment is reached.

Mr. WHITE

I do not wish to anticipate the discussion upon the particular Amendment which has been put down by my hon. Friend the Member for West Derby and other hon. Members, but I wish to relate the discussion to the observations made by the President of the Board of Trade in the course of the debate last night, when he said that the preference would be given according to the certificate of origin, and we hope that that will be carried out. I trust that before the Debate is concluded we shall have these points cleared up. I have listened, I think, to every speech made on this particular subject, and I have read the speeches which I have not had the advantage of hearing, but as far as I can see there has been no word of defence—if that is the right expression—put up for this proposal. It is a matter of profound interest and importance. It is a matter which is of further significance because it is well known that a large number of hon. Members are definitely pledged against this proposal, and one cannot escape from the conclusion—at least, I find myself driven to it—that those hon. Members cannot honestly vote for a proposal of this kind, having regard to the pledges which they have given. I cannot refrain from expressing my opinion that in supporting a proposal of this kind they are definitely depreciating political currency in this country.

Sir JOHN SANDEMAN ALLEN

I rise only for a minute to say that, while I have great respect for a great deal that the hon. Member for East Birkenhead (Mr. White) has said on certain points, one cannot but feel that his views are affected by certain ideas and fears which we hold. Therefore, what he said about Merseyside feeling is to a certain extent coloured by his own feelings in regard to the matter. I am quite sure that Liverpool and the whole of Merseyside would very much regret if anything was done that would take away any benefits to be derived from other parts of the Ottawa Agreements by passing an Amendment of this kind. Among other things we have to remember the great interest which Liverpool has in the African Colonies. I have thought it right to make these remarks, especially as my hon. Friend made reference to an inquiry conducted in Liverpool by certain people who have undoubtedly been very much covered in their views by their fiscal ideas. I hope the Committee will unhesitatingly reject the Amendment.

Mr. WHITE

The document to which I referred, and which the hon. Member for West Derby (Sir J. Sandeman Allen) said has been coloured by the fiscal views of the investigating committee, is a Parliamentary document. The inquiry was carried out at the instance of the President of the Board of Trade. The report is a document of this House and cannot possibly be influenced in any way by fiscal views.

Sir J. SANDEMAN ALLEN

So far as I may have misunderstood my hon. Friend, I withdraw what I said on that point.

Mr. WHITE

I will send my hon. Friend a copy of the report.

Sir J. SANDEMAN ALLEN

I merely wished to say that the views of Merseyside are not so one-sided as has been suggested.

Mr. PRICE

I support the Amendment. Ail through the Debates on the Ottawa Agreements there has been no justification for the taxation of wheat, and before hon. Members support such a policy they ought seriously to consider what will be the effect of it. For a long time in this country the millers of wheat and the importers have had the opportunity of purchasing wheat from all parts of the globe. Owing to seasonal operations over which we have no control we have gone from one part of the world to the other for our supplies. In this Bill we are proposing to put a tax on the food of the poorest people, and the poorer they are the bigger price they will have to pay. Take the position of the Argentine. We propose to put a tax on wheat imports from the Argentine. The Argentine people have been very good purchasers of many of our goods. If we analyse this Bill from the point of view of a quid pro quo as miners we ask ourselves why our people should be called upon to pay an increased price for their bread, for the purpose of protecting Canada, by placing a tax on wheat from a country which has been a very good customer so far as British miners are concerned. [Interruption.] They have been and they are still. If you contrast the Argentine and Canada as purchasers of British coal, it will be seen that the imports of British coal into the Argentine prove that they are our best traders.

The most serious thing from our point of view is that these duties applied to wheat and other things are a further attempt to lay indirect taxation on the poorest people. Circulars have 'been sent to hon. Members from wheat importers and millers strongly objecting to the terms of this Agreement so far as it applies to wheat. During the initial stages of the life of this Parliament there were very few men who were sitting in this House last February who were prepared to declare that they were in favour of taxing wheat or meat. Ministers openly declared in the House that they would never be parties to the taxation of wheat or meat. Where are they now? We say that this part of the Agreement is going to impose a burden on the poorest people so far as bread is concerned, a very vital food, for five years. We ought not to allow either this Government or any other Government to tie us up to the possibility of further wheat corners, such as the one that we cannot forget which arose some years ago, when the price of wheat went up to an enormous figure and poor people could not afford to reach it. We are strongly against the policy of taxing food affecting the poorest people, and I trust that hon. Members will seriously recognise what they are doing before they support a policy of this description.

Mr. H. WILLIAMS

I think I shall be the first one to speak this morning definitely in support of the proposals of the Government. Up to now we have had five opponents, and one hon. Member who suggested that he was supporting this part of the Agreement because he takes the Agreement as a whole and not because he likes this particular feature of it. Before I defend His Majesty's Ministers I would express the hope that during the Committee stage we may have what we did not get during the Report stage of the Financial Resolutions the presence on the Front Bench of some of the Cabinet Ministers who were delegates at Ottawa. It is very disrespectful to the House of Commons that during the discussion of a Bill of this magnitude they should not be present. I am voicing the view expressed by many others that it is most desirable during a Bill of this magnitude to have the best guidance. I mean not the slightest disrespect to the two hon. Members on the Front Bench, the Financial Secretary to the Treasury and the Parliamentary Secretary to the Board of Trade, who did their job exceedingly well during the Report stage. It was a great Conference attended by six Cabinet Ministers, and some of them ought to be here to play their proper part in the work of the House of Commons. Having said that, I will proceed to a defence of the Bill.

The hon. Member for Leigh (Mr. Tinker) had some little assistance from me in the matter of arithmetic in adding together three-eighths and one-fourth. I do not agree with his conclusion that the effect of this Bill will be to add anything to the price of the loaf. Because in the past we have drawn large quantities of wheat from certain foreign countries he seems to think that it is necessary for that to continue. If he will examine the statistics of wheat production in the two large exporting countries of the Empire, Canada and Australia—India only comes into the picture in occasional years—he will find that normally their exportable surplus is about twice our importation from all destinations. There is not the slightest doubt that we can get the whole of our wheat, duty free, from the Empire and I would urge hon. Members who hold the Free Trade view to abstain from confusing a tax with a protective duty. It does not follow by any means that a protective Duty is a tax. It may be that if you impose protective duties unwisely you may get some enhancement of the price in the case of goods where there is not an ample supply, but it is absurd to base an opposition to these proposals on the ground that they mean any increase in the price of wheat. There is not the faintest possibility of wheat prices being enhanced in the slightest by this proposal, and in my judgment the reaction will be to force producers of wheat in foreign countries, who want to retain a part of the market in this country, to sacrifice a part of their price. Accordingly, so far as foreign wheat comes in it will be a contribution to our revenue without any burden on our people.

Sir H. SAMUEL

And what advantage will Canada get?

Mr. WILLIAMS

I will deal with that point when I come to the speech of the hon. Member for Birkenhead East (Mr. White). I am dealing now with the speech of the hon. Member for Leigh. I think it is better to take the points in their proper order. Let me now deal with the speech of the hon. Member for Birkenhead East. These people are going to be granted the assurance of an improved market in this country. Anybody engaged in trade is well aware of the enormous advantage if you have the certainty of selling a substantial part of your output in some market or another. It enormously increases your strength also in seeking other markets. If Canada and Australia have the assurance that as a result of this import Duty they will not only succeed in retaining their existing important share in our market but will also be given an apportunity of increasing that share then, quite obviously, their opportunities for organising a disposal of the rest of their crop in other markets are enhanced and not diminished by the fact that they have a firm foundation for one part of their trade. It is an enormous advantage to have a measure of assurance with regard to the disposal part of your output.

The Free Trade mentality is a profiteering mentality. They think that you never gain anything unless you sell your goods at an enhanced price. The major condition, however, is to sell your product at a reasonable price and the whole case for the preservation of existing industries, by what I would call preservative protection as distinct from a protective duty, is to get the benefit not of selling at a higher price but of selling in a wider market. A well conceived protective duty does not raise prices, it reduces them. The hon. Member for Birkenhead East said that Canadian interests were opposed to the proposal. It is true that certain Canadian interests put the view that a duty on foreign wheat coming into this country would prevent much of that wheat coming in and would give an increased market in this country to Canadian wheat but, on the other hand, they considered that it will throw on the other markets of the world an increased supply of foreign wheat and that as a consequence Canadian wheat will find itself exposed to much more severe competition in the East and in Europe than is the case at present, and that they might in consequence be forced to accept rather lower prices for the wheat they sell in those markets. That is a fear expressed by certain people, but the answer to it is the argument I have already presented that an assurance in one market strengthens not weakens your position in the markets of the rest of the world.

Mr. WHITE

In the case of the Dominions they will have to sell a greater proportion of their wheat outside the Empire, and, therefore, these fears are well justified, for our import of wheat is normally of the order of 29,900,000 quarters.

Mr. WILLIAMS

Taking the average of recent years, roughly one-half of the supplies of the United Kingdom are drawn from foreign countries and one-half from the Empire. In the present year for a variety of reasons, one of which is that Russia has a reduced export surplus, the Dominion percentage has been higher than usual, but normally the position is that half of our market has been occupied by foreign wheat. Surely, if this the largest market in the world is able to give our Dominions twice the market they have had in the past it will be an enormous advantage to them and will reduce the amount of wheat for which they will be forced to find a market in other parts of the world. The other natural market for Australia and Canada is going to be in the teeming countries in the East, where there is a distinct movement from rice to wheat. But the hon. Member for Birkenhead East drew attention to two points of more substance. He expressed the view that there was some risk of prejudicing our flour milling owing to the fact that the Canadians will be able to ship as much flour as they like on to our market. I am a Protectionist for Britain first and I think that some provision should have been made, if necessary, for a small duty to be imposed on Dominion flour in those years when the supply rises above a prearranged quantity or, alternatively, that there should have been a gentleman's agreement arrived at whereby the Canadian milling industry undertook not to increase their sales in this country above the level which has prevailed in the past.

To some extent the millers of this country have had a considerable advantage since February last. I do not know any powerful industry which squeals so quickly as the milling industry. Surely a great industry should not weep with quite the freedom which they do. Last year they grumbled about the enormous dumping of French flour. There is now a 10 per cent. duty on French flour imports, and they have dwindled to nothing. They have had a satisfactory measure of protection in that direction, and their position to-day is much more favourable than it was a year ago hope the milling industry will not grumble so much, or bring such an undue amount of pressure to bear on hon. Members in Parliament who represent constituencies in which mills are situated. I do not think the constituents of the hon. Member for Birkenhead East are quite so badly off as they make out.

Mr. WHITE

Forty per cent. of the workers are unemployed. That is a terrible thing, and they are anxious that one successful industry shall not be endangered.

Mr. H. WILLIAMS

It is not a fact that 40 per cent. of the flour millers are unemployed. The unemployment in Birkenhead, where I was born, arises mainly because of the difficulty in connection with shipping and shipbuilding, and one of the best ways of reviving both is to increase the importation of raw materials from long distances in British ships instead of importing large quantities of foreign manufactured goods very largely in foreign ships. There is, however, some substance in his point with regard to the question of the importation of Canadian flour. The hon. Member for Don Valley (Mr. T. Williams), who has always hitherto appeared as a Free Trader, seems to have degenerated this morning. He now wants us to adopt universal protection against Imperial products.

Mr. T. WILLIAMS

Oh, no. The hon. Member for Croydon South (Mr. H. Williams) gets away with it sometimes, but he is not going to get away with it quite so easily this time. The hon. Member for the Don Valley said that if he were attached to the agricultural industry and a protectionist Government were protecting everything except agriculture he would kick up a row. I said that so-called scientific tariffs, which are not in the least scientific, are bound to impose undue burdens on one section of the community for the benefit of another.

Mr. H. WILLIAMS

As I understand the long explanation of the hon. Member it is that we have not really got quite enough protection. He objects to certain manufacturing industries being protected if the agricultural industry is not adequately protected. Is that his conception? That is the implication, and I welcome him as a recruit. There was one other point of substance in the speech of the hon. Member for East Birkenhead. He referrred to the export trade in flour. If at any time there is minor enhancement occasionally in the price of wheat, or if for the purpose of blending they are compelled to purchase certain foreign wheats because it is known that they are compelled to blend them, the foreign producers may succeed in shifting some part of the import duty on the miller. But these circumstances are very doubtful, and if they arise steps must be taken to deal with them.

I would refer the hon. Member for East Birkenhead to Section 9 of the Finance Act of this year. Under Section 9 any trade which thinks its export trade is likely to be interfered with in any way as a result of the import duties is entitled to submit a scheme to the Tariff Advisory Committee providing for a drawback to be granted on their exports in respect of any dutiable material contained in those exports. If the highly organised milling industry have any difficulty in the matter they have all the knowledge and experience to enable them to submit to the Advisory Committee a comprehensive scheme for drawback, and if any case exists that Committee will naturally be willing to recommend such scheme to the Treasury, and the Lords Commissioners, on the advice of the Chancellor of the Exchequer, would, no doubt, sign one of those interesting documents that we receive once a week.

When people criticise a scheme for certain dangers that may result from it, they ought at least to inquire what provisions exist in the law to avert the dangers. There is the case of the Irish Free State. For the moment, of course, no provision will deal quite satisfactorily with that situation. This is not an export trade to the world at large, but more particularly to the Irish Free State, which I believe takes two-thirds of the exports of flour from this country. There is one other aspect of the export trade of some importance, namely, the shipping of flour on ships as stores. If any scheme of drawback is necessary it is important that the flour in ships' stores should be taken into account.

I think the case for assisting the inhabitants of Canada and Australia to find a larger market for one of their outstanding products is an overwhelming one. When you bear in mind what a large proportion of the spending power of those countries overseas comes to us, anything that enhances their prosperity would bring a quicker reward to us than anything we can do to enhance the prosperity of foreign countries.

1.0 p.m.

Mr. CURRY

There are some points which appear to me and to others on these benches, and we think they should be considered by the Government in relation to this tax. In the Committee stage of the Resolutions the hon. Gentleman who replied for the Government—he always replies with great skill and ability—pointed out that the tax which is going to be put on would not fall upon Imperial products or home-produced wheat, but would be confined to exports of wheat from foreign countries. Has the hon. Gentleman not overlooked the fact that the greater proportion of imported wheat comes from foreign parts and not from the Dominions as a whole? The hon. Member for South Croydon (Mr. H. Williams) said it came in equal pro-portions from the Empire and from other countries. I am not going to argue with him, but if it comes in equal parts it is a strange coincidence in general trade. The greater proportion comes from foreign parts, at any rate in value. [Interruption.] I am relying upon the hon. Member for Leigh (Mr. Tinker), to whom the hon. Member for South Croydon was at great pains to reply. The hon. Member for Leigh gave the figures as £25,000,000 foreign, and £19,000,000 Empire.

Mr. TINKER

Approximately.

Mr. CURRY

The point is that the supplies from foreign parts are sufficiently large to affect the world price, upon which certain important things are likely to happen. The suggestion I make is that if these supplies are not altered in pro-portion, if the supply of wheat from foreign parts continues to be a large proportion of the total importation, that will be a serious factor in the creation of the world price. That proportion which comes from foreign parts, being increased by the tax, the world price will tend to rise. We really would like some information as to how the world price is to be determined, and at what stage the Government will feel it, their duty to invoke the liberty which they have to release the tax.

There is another aspect of the matter. I feel rather deeply about it, because we are dealing here with the primary food of a densely populated island, the great majority of the people being nimble to bear any increase in the price of primary foodstuffs. The purpose of this legislation, the purpose of this tax, is to divert the source from which we are to draw supplies of foodstuffs. In other words the whole purpose of this legislation is to make us more and more dependent upon certain areas in the world for the crops which they can give us. In that connection I want to make the point that to the extent to which the policy is successful, to the same extent is the danger of this country being exposed to food shortage enlarged.

Mr. HOLFORD KNIGHT

Has the hon. Member taken into account the increase in our own crops? Does he not contemplate any extension of the wheat area in this country?

Mr. CURRY

I cannot contemplate both together. I think the argument which I am endeavouring to make is perfectly sound. I say that to the extent to which this policy is successful, to the same extent, are we forced to rely upon wheat production in a confined area. That surely is obvious, and it is because there is always danger in relying upon supplies of this sort from a confined area, that many of us are concerned as to the ultimate result of these taxes. The production of wheat in the Empire has not been of such steady and maintained advance as to leave us without any apprehension on that point. The figures show that in 1919 the production of wheat in Canada was 193,000,000 bushels; in 1928 that had increased to 567,000,000 bushels, but it fell again in 1929 to 305,000,000 bushels.

Mr. H. WILLIAMS

Has the hon. Member this year's figure?

Mr. CURRY

No. I have no doubt the figure this year will be more, but that confirms my point that you cannot, by regulation, control the sunshine and the rain. You are bound to have in any confined area, large variations of crop, and if we are to be restricted to drawing our foodstuffs from a confined area, then to the extent to what that crop diminishes, the food supply of our industrial population will be endangered. This danger, if it becomes acute would increase prices in this country to a tremendous extent, but there would still be no remission of the tax because the Dominions would still be offering at the world price.

Mr. H. WILLIAMS

Can the hon. Gentleman tell me of any year in the last 10 years in which the surplus production of Canada has not been equal to our importations from all sources?

Mr. CURRY

I cannot, offhand, give figures of that sort, and I do not want to reduce this discussion to a personal argument with the hon. Member. The point, which even the interruption of the hon. Member cannot get rid of, is that there is and must be in the nature of things, variations of crop and those responsible for the feeding of a dense population such as we have in this country cannot discuss a policy of this kind without some regard for the consequences of that policy. No doubt the hon. Gentleman who replies will seek to justify this tax upon two grounds. He will say, as the hon. Member for South Croydon has said, that it will help the producing countries in the Empire. He will also say that the rise in price, if any, will be so small as to make little difference to the working-class household. That is, generally, the justification offered for taxes of this nature. If this tax stood alone, that would be all that there would be to say, but we cannot discuss a tax of this sort without having in mind the fact that it is only part of a great policy involving a number of such taxes, and those other taxes in turn, are justified upon the same grounds. The result, however, is a very large increase in the total of the indirect taxation of this country. This indirect taxation we know is paid by the less fortunate people—as regards material wealth—in the country. The Government are reversing the financial policy which has been maintained in this country for 80 years of reducing indirect taxes and increasing direct taxes. It is because the Government's policy, in its entirety, will reduce the standard of life of the working-class and middle-class of this country that we feel it our duty to oppose this tax as part of that continuous policy.

Mr. EDWARD WILLIAMS

I should not have continued this discussion but for the fact that I regard this Amendment as the gravamen of the case, on this point. I agree with most of what has been said by the last speaker but I have been rather amazed both by the speech and the subsequent interjections of the hon. Member for South Croydon (Mr. H. G. Williams). It is surprising that the Millers' Association have not sought the hon. Gentleman's advice upon these matters. I think the members of that body should appreciate, by now, from the attitude of the hon. Member, the fact that he possesses encyclopædic knowledge. Perhaps the coalowners may seek his advice in endeavouring to ascertain how prejudicing the Argentine market is likely to help the mining industry. I do not understand how the hon. Member endeavours to reconcile universal restriction of the world market—which is what we are doing by this Bill and particularly by the part now under discussion—with his statement that a wide market is essential for the advance of trade. We are narrowing and not widening the market. We are making it Imperial and not international.

Mr. H. WILLIAMS

The hon. Member is misquoting me. I did not say a wide market; I said an assured market.

Mr. E. WILLIAMS

I am not going to argue academics with the hon. Member. In this discussion we have heard that this proposal represents the policy of the Government—the only policy that they can possibly advance. I put it to them that the result of Protection is not to increase trade at all. You cannnot increase the trade of the world unless you increase the purchasing capacity of the world, and there is nothing in this Measure to do so. Trade is merely to be diverted from one market to another.

The DEPUTY-CHAIRMAN

I think the hon. Member is now getting on to a Second Reading speech, rather than keeping to the Amendment before the Committee.

Mr. E. WILLIAMS

I am dealing with the question of purchasing power in relation to this tax on wheat. I am endeavouring to show that that tax is bound to restrict their market and that it will reduce purchasing capacity rather than increase it. I accept the percentage figures advanced by the hon. Member for South Croydon that we receive, roughly, 50 per cent. of our supply from what are technically described as foreign nations, and 50 per cent. from within the Empire. But by putting an extra tax on food we are not extending our trade or increasing employment. We are merely placing a heavier burden on the poor people. It was admitted when this matter was under discussion last week that it means an increase of a farthing upon a 4-lb. loaf, or, roughly, about £1,000,000 a year, and that to follow upon the £4,000,000 already paid under the Wheat Act. That, surely, is not a, minor matter, but is a serious matter, if the interests of the people of this country are to be considered.

But I put it to the Government that the interests of the people are not considered in this matter at all. It is in accord with Protectionist policy, which is merely a means of obtaining greater revenue from a special source. Its function is not to increase the trade of the world, or of the Empire, or of this country; its purpose is to obtain revenue for special purposes and from a special source, and that special source is the consumers of the country. The main plank of Protection throughout all the years has been to reduce direct taxation and to increase indirect taxation, and Protection is advocated, not to increase trade, but merely to increase indirect taxation. The present Government dare not tell the people of this country that this Bill is a substitute for a supplementary Budget.

The DEPUTY-CHAIRMAN

The hon. Gentleman is now going into a general discussion on the merits of Protection, and that cannot arise on this Amendment.

Sir S. CRIPPS

On a point of Order. Is it not in order for the hon. Member to discuss the effect of a 2s. duty on wheat on this Amendment?

The DEPUTY-CHAIRMAN

Most obviously. So long as he confines himself to discussing that, he is absolutely in order, but he was going on to the general merits of Protection, which is far beyond that limit.

Mr. E. WILLIAMS

I do not propose to enter upon a general discussion at all, except that, in so far as the Government are expected to defend their attitude in relation to wheat, which means reducing purchasing capacity and increasing indirect taxation, I must at least relate that to the principle of Protection as such. I do not want to get out of Order, but really we are up against the gravamen of the issue confronting this Parliament, and this is the biggest issue with which it will have to be faced in this Bill; and I again put it that the reason I stress this is because the hon. Member for South Croydon endeavoured to show that trade would expand by adopting these methods. I put it that it is impossible for trade to expand or for unemployment to be ameliorated by reducing the purchasing power of the people, as this Bill proposes to do, and particularly by imposing an additional tax upon wheat—[An HON. MEMBER: "Foreign wheat"]—upon foreign wheat, Do the Government not think that putting this extra tax upon foreign wheat will inevitably cause repercussions and directly affect the coal trade? I should like a reply to that question. While the milling industry is certainly of great importance, the industry that is most greatly distressed in the country is the industry, and if scores and thousands of miners who are now employed have their employment curtailed because the Argentine will set up some kind of proposals—you may call them trade reprisals—arising from what we are doing in this Measure, it certainly is a serious reflection upon the sincerity of the present Government.

I do not desire to follow the statements which were made by our Liberal friends, but it is positively true that during the General Election it was said on all hands that there would be no taxes on the foodstuffs of the people, and it is true that in February most of the Conservative Members were not prepared to reveal any information in that direction. Here, apparently, while a direct tax is being placed upon the staple foodstuff of the people, the Conservative Members, like sheep, are prepared to support the Government in the Division Lobby in direct violation of their mandate from the people. I am amazed that they are prepared to treat the electorate of this country in this way. I heard speeches that were delivered by Conservative candidates in more than one constituency, and they themselves in those constituencies were definitely saying that they would oppose any taxation upon the foodstuffs of the people. We have not heard, except in a very half-hearted manner from one bench below the Gangway here, from any Conservative Member any indication that they are prepared to fulfil their pledges in that respect.

I hope I shall have a reply on that point from the Financial Secretary to the Treasury, and further that the imposition of a farthing per 4 lb. loaf, in addition to the 3/8ths of a penny that already applies, will not be treated as a trivial matter. In practice, it will mean an extra penny per 4 lb. loaf, without a doubt, and particularly in the poorer quarters, where the people have to trade, not with cash, but on credit, and where they are unable to pay directly for their foodstuffs because they have not the means at their disposal. Therefore, I trust that it will not be treated as an infinitesimal increase. It is something substantial to the people who are living upon very meagre incomes indeed. I realise, of course, that I am restricted from treating the general question, but let me say, in conclusion, that I have no dubiety about the matter at all. I do not perceive that the purpose of this Bill or even the matter which is under discussion is a means to increase trade as such. I think it is a purely Protectionist measure to obtain revenue from the poorest of the poor, in order that the rich may obtain further unearned increment and not pay their direct share of the taxation of the country.

Mr. HOWARD

I should not have intervened had it not been for the remarks which fell upon the hon. Member for Bishop Auckland (Mr. Curry), who, in protesting against this Measure, referred to the British Empire as a confined area, and attempted to cause us to have fears for the food supply of our people on the ground that we were giving a monopoly to a confined area. The repetition of the words "a confined area" in connection with the wheat supplies of the British Empire does not represent the true position. Our Empire wheat supplies come from every part of the world, and any failure of crop that may happen in Canada would be made up by increased supplies from Australia or from India, and there is as much difference between the British Empire and its potential wheat supplying possibilities as there is between the sources which come within the category of foreign countries. It is misrepresenting the position to imagine that we could ever be without an adequate wheat supply if we had to rely only upon the British Empire for it.

There is another aspect of this question to which the Committee should give serious consideration. This morning I have been mixed with a number of the unemployed marchers. The constant complaint that comes from those men is what they describe as the unfair competition in the labour market from men from Northern Ireland and the country districts who are prepared to work for 10d. an hour as labourers against 1s. 3d., which is the usual rate in the London district. By this policy of encouraging our own agricultural workers to find employment on the land, or more employment for our migrants when they go overseas to the Dominions, we are giving the greatest possible benefit to our own unemployed in the towns. In this Measure is the opportunity to provide the increased employment. I know something of what the policy which this country has pursued means to my own family. Two members of my family have returned from Australia this year unemployed. They went there to grow wheat six years ago. At that time they were getting 6s. 8d. a bushel. Last year they had to sell it 1s. 8d. a bushel. These two men are now back with their families in London as unemployed men.

1.30 p.m.

How can hon. Members who sit on the Labour benches, who protest that they represent the interests of the workers, permit the continuance of a policy which buys more and more wheat from Russia and the Argentine or any other foreign country, and at the same time forces back members of their own class to swell the unemployed ranks of this country? Thirty thousand unemployed men came back from the Dominions last year to swell those ranks. If hon. Members want to do these men a good turn and help our own people to raise their standard of living, they should adopt a trading policy that will keep men on the farms which they want to occupy. The Labour Government two years ago spent £340,000 on encouraging overseas Empire settlement, but they did nothing to see that expenditure of that money was followed up by giving reasonable opportunities for employment. That is why this Bill is now going through the present Parliament. It is in order to carry through to its logical conclusion the expenditure that we have made during the last eight years under the Empire Settlement Act, under which 138,000 men had been sent to Canada, and 120,000 to Australia, their passages being paid for by the taxpayers of England. It is a crime against these men that they should have to come back now as unemployed because some members of the House desire that we should go on buying wheat from foreign instead of from Imperial sources.

The argument has been used that by these methods we are now going from internationalism to imperialism. I hope that that is so, because I desire to see opportunities for our surplus population to settle in comfortable homes overseas, and I know that those homes will be found only within our Empire. You cannot expect an unemployed man to emigrate to Russia to suffer under a standard of living less than a quarter as good as that to which they have been accustomed in England. If they go overseas, they must go to Canada and Australia where the standard of living is equal, if not superior, to our own, and it is the duty of this country to give them the advantage of selling their produce in the home land in which they belong.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha)

My hon. Friend the Member for Don Valley (Mr. T. Williams) opened his remarks by saying that it was impossible to indulge in this Debate without repetition. I am extremely conscious of that, although some of my hon. Friends who have spoken do not seem to be deterred by any such consideration. Our object is to take a greater supply of Empire wheat at the expense of foreign wheat. We know that the supply is sufficient. Not only can the Empire provide a satisfactory quantity, but it has a great variety of wheat. By taking a greater quantity of wheat from them we hope that the Dominions will reciprocate by being able to purchase more of our manufactures. Indeed, that is the whole purpose of these Agreements. How do we propose to secure our object? By placing a duty of 2s. a quarter on foreign wheat—not on all wheat. My hon. Friend opposite, who is always so fair in controversy, seemed to fall into the error, which has become general, of assuming that this is a tax upon all wheat. It is a duty upon foreign wheat only, and in so far as we purchase as a result of it a greater quantity of Empire wheat, it will fall upon an ever-diminishing proportion of our imports.

Mr. TINKER

My point was that if you put a tax on foreign commodities, the price of the Dominion commodity will rise to meet it. A 2s. duty on foreign wheat will probably lead to the Dominions raising their price.

Mr. HORE-BELISHA

I could, of course, answer that at once, but I am only trying to get agreement about what we are doing. We are not putting a duty on any but foreign wheat. It does not fall on home supplies or on what we take from the Empire. At present the duty, if it resulted in no diversion of supplies, would fall on only half the total quantity of wheat consumed in this country. How do we protect the consumer There is a Clause in the Agreement that the quantities provided by the Dominions must be sufficient, and the price at which they sell it must be the world price, or the duty is to be remitted. The right hon. Member for Darwen (Sir H. Samuel) heckled me severely on this point last time—quite rightly; and so did other Members of the House. How, they ask, are you to determine what the world price is, and what is your machinery for putting this safeguard into operation? I answer that the world price is a quoted price. I do not think that will be disputed. Then, who are the persons who are going to be aggrieved if there is an attempt to profit by this 2s. duty and to put up the price of wheat? The millers are going to be aggrieved. The millers are not only an efficient but a well organised body, as is quite evident from the speeches we have heard on their behalf.

Mr. WHITE

The hon. Member for South Croydon (Mr. H. Williams) made an observation which I rather resented. He suggested that pressure had been brought to bear upon me. I would like to say that no pressure has been brought upon me by the millers, or by anybody else. If so, I should know how to deal with it. My intervention in these Debates is purely on public grounds, because I have been for some years past an interested student of wheat for its own sake.

Mr. H. WILLIAMS

I would like to say that I had no intention of casting any reflection at all upon my hon. Friend the Member for East Birkenhead (Mr. White).

Mr. HORE-BELISHA

My hon. Friend is resenting something which he imagined was said by the hon. Member for South Croydon (Mr. H. Williams) and not anything I said, because I have made no imputation upon him whatever, and anybody who knows him would exonerate him from any charge of the kind, which he rebuts. One knows that he comes into this House to give the House the benefit of his information on the subject on which for the time being he speaks. Millers, as I was saying, are a well-organised body and an efficient body, and would be the first to complain if advantage were being taken of this provision. They would come to the Government and say: "Here are the quotations"—the quotations for three months ahead, futures quotations, for Manitoba wheat on the one hand and some comparable wheat from the United States of America on the other hand—"and the Canadians are trying to profit on it, and we ask for your protection." In other words, they would ask that we should invoke this agreement, and I can assure my hon. Friends that under those circumstances the agreement would be invoked. I hope that clears up the point about world price. I cannot be more precise than that, because we are dealing with something which, it is feared, may happen. When it does happen, though I trust it never will happen, we shall find some means of circumventing it, and we are concerned, as I have said, with a trade that is not likely to hide its light under a bushel.

It is possible to object to what we are doing from many points of view. We have made an agreement; we have made concessions which we hope will be of benefit to the Empire in return for other concessions which we hope will be of benefit to us. It is possible to object from the point of view of the millers, and to say that more Dominion flour will come into this country. That objection was taken to-day in its most extreme form by my hon. Friend the Member for Don Valley who also referred me to his speech on the Money Resolution. He said that the object of the Government was to enable the Dominions to import a greater volume of flour. Of course, that is not the object at all. The object is to enable us to import a greater quantity of wheat from the Dominions. The argument that more flour is coming into this country from the Dominions as a result of these Agreements, an argument which is put forward on behalf of the millers, is not consistent with the argument on behalf of the consumer, because if it were a fact that more flour were to come in from the Dominions that flour would be in competition with home-milled flour, and therefore the consumer would benefit by that competition. So you cannot at once take the argument of the miller and the argument of the consumer, for their interests are, indeed, opposed in this matter.

In his efforts to find some victim—I have the passage from his speech here—my hon. Friend falls back on what he considers to be the point of view of the home grower. He says: "If this flour comes in in greater quantity the grower of wheat at home will not be able to sell his wheat at any price." So the effect of a tariff upon wheat—it is the first time I have ever heard this argument—is to injure the producer whom we are protecting, because he will not be able to sell his wheat at any price! My hon. Friend, in putting forward that contention, overlooked the provisions of the Wheat Act, which enable the Government, by Order, to compel the millers to take unsold stocks at the end of the cereal year—in June. There has been no indication whatever that millers in this country desire to refrain from purchasing home-grown wheat.

Mr. T. WILLIAMS

My argument was clear enough. If the imports of flour from the Dominions increase materially, as they may do, then the imports of wheat will to that extent decrease. That implies that millers will require less home-grown wheat for mixing purposes, but we are expecting the maximum of home-grown wheat next year and if millers require a smaller quantity they will pay a less price for it, and the smaller the average price paid for home-grow wheat the higher the wheat quota payments will be and the bigger will be the burden upon the consumer. It is true that at the end of the cereal year the millers are obliged to buy 25 per cent., but what is to become of the 75 per cent., unless the home farmer sells his wheat at a ridiculously low price? If the hon. Member will look at it I think the argument is fairly clear.

Mr. HORE-BELISHA

I do not dispute the clarity of the argument at all. It is perfectly clear. But it all depends upon a hypothesis. The hypothesis is that the object of the Government is to enable the Dominions to import a greater volume of flour, and I deny that absolutely.

Mr. T. WILLIAMS

It will be the effect.

Mr. HORE-BELISHA

I say that is not our object, and we do not contemplate that that will be the effect. If the hypothesis were accurate, my hon. Friend's deductions might be correspondingly accurate, were it not for the provisions of the Wheat Act, which make it quite plain that the policy of the Government is to look after the home wheat grower, whose complaints are no longer heard here, or at any rate are not heard very loudly at the present moment. I think I have dealt to the best of my ability with the arguments raised by my hon. Friend. There were one or two other questions which he asked me. One was, "Is this 2s. to be reckoned in the world price?" My answer is that the world price is quite independent of this 2s. The world price is the quoted price and we do not intend to allow the Empire seller of wheat to take advantage of that 2s. We intend to secure that the consumer shall be protected in that respect.

Sir S CRIPPS

Does the hon. Gentleman say that the world price will be the duty free price?

Mr. HORE-BELISHA

Yes.

Mr. HARCOURT JOHNSTONE

And would the hon. Gentleman tell me what the Government contemplate doing in the case of two comparable wheats at different prices?

Mr. HORE-BELISHA

That is the advantage we have—that there may be comparable wheats quoted at different prices because it will enable the miller to come to the Government and say, "Here are two comparable wheats, one from the Empire and one from a foreign country, and there is an attempt to exploit us, because the quotations differ."

Mr. JOHNSTONE

Which is the world price, the higher or the lower?

Mr. HORE-BELISHA

The quotation for the comparable wheat would presumably be the world price for the Empire wheat—if it were comparable and were quoted above that rate.

Mr. JOHNSTONE

Then the world price would be the lower? Would it be the higher or the lower?

Mr. HORE-BELISHA

The world price is the quoted price. [Interruption.] If hon. Members are to interrupt me at every second word, I shall not be able to give my explanation. The world price is the quoted price. If there is any attempt by an Empire country to sell a. comparable wheat in this country above that price, this Clause would come into operation. I do not think that I can put it more clearly than that. Having shown that the home grower, the miller, and the consumer can suffer no appreciable burden under this Bill, that the supplies of wheat are sufficient from the Empire and that the buyer is amply safeguarded as to price, I think that everybody should be satisfied.

Sir S. CRIPPS

The hon. Gentleman has justly said that there is a good deal of repetition in the course of this Debate. So far as we are concerned, it seems as good to repeat this as anything else. Hon. Gentlemen opposite, under the leadership of the right hon. Gentleman, the Member for Darwen (Sir H. Samuel), are not willing to agree to any curtailment of the Debate, so the Debate must proceed.

Sir H. SAMUEL

That is not so, as has already been said.

Sir S. CRIPPS

All I can say is that conversations have taken place through the usual channels and that no agreement can be come to. If the right hon. Gentleman will get up and deny that I shall be glad.

Sir H. SAMUEL indicated dissent.

Sir S. CRIPPS

Then the right hon. Gentleman cannot know what is going on in his own party. The hon. Gentleman who is sitting next to him on the Bench has been trying to arrive at an agreement and says that nothing can be done, presumably under the right hon. Gentleman's instructions. If the hon. Gentleman is not acting for his party, I am afraid I cannot help that.

Sir P. HARRIS

Does not the hon. and learned Gentleman want to discuss the subject?

Sir S. CRIPPS

I am asked whether we do not want to discuss the subject. We think that all these discussions have already been sufficiently full on what has preceded this Debate.

Sir P. HARRIS

Then why does the hon. and learned Gentleman speak?

Sir S. CRIPPS

I am just trying to explain, if the hon. Baronet will give me an opportunity.

Mr. JOHNSTONE

The hon. and learned Gentleman has accused my right hon. Friend of not wanting to make any arrangement whatever to curtail the Debate. I take it to mean that, unless he gets the precise way that he asks for, it is no arrangement at all?

Sir S. CRIPPS

I always understood that an arrangement was something that two persons agreed upon. I understood from the hon. Gentleman that his party were not agreed upon anything. They wished to wait until Monday to see how the Debate proceeded. If we take up a lot of time on the early stages until Monday, an agreement will be far more difficult to come to. I only ventured to make these few remarks in order to explain how it was, as the Financial Secretary to the Treasury has said, that there is a certain amount of repetition in this Debate. We have to repeat something if we are to go on for eight days. The reason for my intervention is that this Amendment seems to be one of some importance; in fact, of considerable importance. Although it might have been disposed of, it is still important.

I only want to raise two points with the Financial Secretary. The first thing he told us was that the world price was the quoted price. Can he tell us where it is quoted? That is what we are anxious to know. There are many quoted prices—the Liverpool futures market, the Chicago pit, and many other places all over the world, are quoted. Obviously, they differ, as he knows, very much. The second was as to a question which he was asked, and to which he overlooked to give a reply. It was whether this 2s. Duty on foreign wheat will be used to assist in the quota payments, or whether the money will be taken simply as a part of the Revenue. He has admitted that, if the result of this tax is to lead to the importation of more flour, that will result in the quota payments being greater in amount. He admitted that if that argument was right, 'and if more flour would be introduced, that all the arguments of my hon. Friend the Member for Don Valley (Mr. T. Williams) would necessarily follow. If that result does follow, the Government or the consumer of flour will have to provide more in quota payments, because the price of English wheat will fall, owing to the smaller quantity of foreign wheat that comes in for milling. Surely in those circumstances it is right that this 2s. should be used to assist in the quota payments, because they are necessarily interlinked. Instead of putting an additional charge upon the consumer, this 2s. should be used to relieve him of some part of the quota charge and not be an addition to the quota charge. I should be glad if the hon. Member will let us know his answer to those two points.

Sir P. HARRIS

In spite of what my hon. Friend said, a few minutes more discussion of this very important subject of a 2s. duty on wheat can be profitably spent. I want to thank the Financial Secretary for his very important statement. He made himself perfectly clear. He could not have been clearer. He said definitely that if the world price for wheat, that is to say, the price of a similar quality of Manitoba wheat, could be bought for 2s. less in some foreign country than from Canada, then the duty will be removed. I hope that I have interpreted him correctly. Apparently, if the price of Canadian wheat goes up by 2s., there will he an Order, and the duty will be removed. The Canadian exported will be allowed to get the advantage of the extra 2s., owing to the fact that this particular wheat is not subject to a tax of 2s. This is the whole issue at stake. The Financial Secretary has made that statement. If it is not correct, he will be misleading not only our own producers but the Canadian Government, who are a party to the bargain. It is not our bargain. There are two sides to it. It is an agreement that cannot be altered except in special circumstances. We are entitled to know how this 2s. duty is to work.

I find myself completely in agreement on one point made by the hon Member for South Croydon (Mr. H. Williams), which is that we ought to have a Minister, one who was present at Ottawa and who was a party to the Agreements. The House of Commons are not making these Agreements. The Government made them, and we should like to know exactly why this particular form of putting a tax on Canadian wheat was adopted. I suppose my hon. Friend, the Financial Secretary to the Treasury, has been allowed to see behind the curtain. He has no doubt read the discussions and seen the reports of the proceedings. We are entitled to know why the duty of 2s. was adopted, instead of the original proposal of a quota. It is not only common knowledge, but it has been printed in the Press, that what the Canadian producer wanted was a quota for over two years. There has been an agitation throughout the Empire in favour of some system of quotas. A quota has been adopted for meat. The original idea was, not a quota for meat, but a quota for wheat. Why, instead of a quota, has this proposal for a 2s. duty been adopted? If the Financial Secretary is bashful and not prepared to enlighten the Committee a second time, perhaps his very able colleague who represents the Board of Trade, which is the Department mainly concerned, would kindly enlighten us. As we are not going to have any more opportunities of discussing the question, I think we are entitled to know how this proposal is going to work.

The hon. Member for South Croydon assured us that the result would not be to increase the price of wheat in this country by a penny. If that be so, will the hon. Gentleman, or some other hon. Member, explain how the grower in Canada is going to get any advantage from this proposal? How is he going to get any increased price for his commodity when he puts it on the market? [Interruption.] If it is right, as we believe, that the duty will be paid by the consumers, we have to look after their interests. If, on the other hand, there is going to be no advantage to the producer, there must be some special reason for Canada being fobbed off with this proposal. I myself am quite clear about it, and I believe that in his heart of hearts the hon. Gentleman thinks as I do, but we are entitled, in the special circumstances of this Agreement, to have a clear and precise statement from the Minister who was in charge of it. In this case the ordinary routine is not being followed. We do not even know what revenue is expected from the tax. We have had no estimate; no White Paper has been published; but I am told that, if wheat comes from its present sources, this duty may bring in anything from £2,000,000 to £2,500,000. That is a very large tax on the public. If there is reason to believe that by some organisation or some operation there will be a great transfer of our consumption from foreign sources to Canada, let us be given some facts or arguments. At any rate, if when I sit down there is no answer interpretating the hon. Gentleman's shake of the head, I shall gather that the hon. Member has withdrawn his original statement that there will be no increase in the price of Canadian wheat as a result of the 2s. duty.

2.0 p.m.

Sir H. SAMUEL

I do not think that this matter can be allowed to rest where it now is. We have repeatedly inquired what is the meaning of this provision, which is embodied in the Agreements, that a 2s. duty upon foreign corn is to be imposed, but that, if Dominion supplies cannot supply the corn at the world price, that 2s. duty is removable. We have pressed the Financial Secretary again and again to to say how this is going to work, and we thought we had secured from him a clear and definite answer. He said that if a world price were quoted for a certain kind of wheat, and if the Canadian price were above that world price, then the Government would take action to put this provision into operation. We thought that that was perfectly plain, and that the action that would be taken would necessarily be to inform the Canadian Government that, unless this wheat were to be sold at the world price, the 2s. duty would be removed. Unless the provision means that, it means nothing. When, however, my hon. Friend the Member for South West Bethnal Green (Sir P. Harris) put that into distinct terms, and asked whether that was what the hon. Gentleman meant, he shook his head.

Mr. HORE-BELISHA

My right hon. Friend has stated the problem more accurately. I was, of course, referring to wheats of comparable quality, and on that assumption my right hon. Friend's re-statement just now is correct.

Sir H. SAMUEL

He mentioned Manitoba wheat. That is one of the predominant classes of wheat, and the whole of his observations were to the effect that the two wheats were of comparable quality, and that if on the Chicago market it was quoted at one price, and if, because of the 2s. duty, similar wheat was quoted on the Winnipeg market at another price, the Government would take action to remove the duty, if necessary, in order that the Canadian wheat should come down to the price of the Chicago wheat. Is that so, or is it not? I gather that it is so, and, if my hon. Friend does not now again shake his head or show denial, the House must take it, the country must take it, and Canada must take it that that is the interpretation which is put upon it by the Government. Silence gives assent, so that I am glad that the previous shake of the head is neutralised, and we know now precisely where the House stands.

Mr. HORE-BELISHA

I cannot carry on a discussion with my right hon. Friend by shaking or nodding my head, and I cannot quite make out what movement of my head he has construed as being an assent to his proposition. I stated my proposition, and I naturally prefer my own language, but, although my right hon. Friend uses six or seven sentences where I used one, and I cannot agree with every adjective and qualification, yet, roughly speaking, my right hon. Friend has stated the position.

Mr. REMER

There was only one remark in the speech of the hon. Baronet the Member for South West Bethnal Green (Sir P. Harris) with which I agreed, and that was that we ought not to curtail the time spent in discussing the Ottawa Agreements Bill. I think that the more time we spend on it, and the less time we spend in conducting a nebulous unemployment Debate, to enable the Labour Members to show once again that they have no remedy whatever for the great problem of unemployment, the better for this Committee. Another advantage that has arisen from continuing this debate is that it has enabled the Financial Secretary to destroy every possible argument that has been used by our opponents. There is an added reason. The Solicitor-General in the late Labour Administration expressed doubts as to what was a quoted price, but I think it is within the knowledge of most people in business that the livest market in business that there is in the whole world is the world's wheat market. The wheat markets of Liverpool, Hull and London are in the closest possible touch with the Chicago and Winnipeg markets, and what is quoted at one minute in any of these markets is almost always translated immediately to the others, so that to know what is the world price in the case of wheat is easier than in the case of any other commodity, with the possible exception of cotton.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 51; Noes, 200.

Division No. 329.]	AYES	[2.6 p.m.
Acland, Rt. Hon. Sir Francis Dyke	Foot, Isaac (Cornwall, Bodmin)	McEntee, Valentine L.
Adams, D M. (Poplar, South)	Greenwood, Rt. Hon. Arthur	Maclay, Hon Joseph Paton
Aske, Sir Robert William	Grenfell, David Rees (Glamorgan)	Milner, Major James
Attlee, Clement Richard	Griffith, F. Kingsley (Middlesbro, W.)	Parkinson, John Allen
Banfield, John William	Grundy, Thomas W.	Price, Gabriel
Batey, Joseph	Hall, George H. (Merthyr Tydvil)	Samuel, Rt. Hon. Sir H. (Darwen)
Bernays, Robert	Hamilton. Sir R. W.(Orkney & Zetl'nd)	Sinclair, Maj Rt. Hn. Sir A.(C'thness)
Briant, Frank	Harris, Sir Percy	Thorne, William James
Brown, C. W. E. (Notts., Mansfield)	Holdsworth, Herbert	Tinker, John Joseph
Cocks, Frederick Seymour	Janner, Barnett	Wedgwood, Rt. Hon. Josiah
Cripps, Sir Stafford	Jenkins, Sir William	White, Henry Graham
Curry, A. C.	John, William	Williams, Edward John (Ogmore)
Daggar, George	Johnstone, Harcourt (S. Shields)	Williams, Dr. John H. (Llanelly)
Davies, David L. (Pontypridd)	Jones, J. J. (West Ham, Slivertown)	Williams, Thomas (York, Don Valley)
Davies, Rhys John (Westhoughton)	Lansbury, Rt. Hon. George	Young, Ernest J. (Middlesbrough, E.)
Edwards. Charles	Lawson, John James
Evans, Capt. Ernest (Welsh Univ.)	Lunn, William	TELLERS FOR THE AYES.—
Evans, R. T. (Carmarthen)	Mabane, William	Mr. Groves and Mr. G. Macdonald.
NOES.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Beauchamp, Sir Brograve Campbell	Betterton, Rt. Hon. Sir Henry B.
Applin, Lieut.-Col. Reginald V. K.	Beaumont, M. W. (Bucks., Aylesbury)	Borodale, Viscount
Barton, Capt. Basil Kelsey	Beaumont, Hon. R.E.B. (Portsm'th,C.)	Bossom, A. C.
Boulton, W. W.	Hacking, Rt. Hon. Douglas H.	Peto, Geoffrey K.(W'verh'pt'n,Bliston)
Bower, Lieut.-Com. Robert Tatton	Hall, Capt. W. D'Arcy (Brecon)	Pickford, Hon. Mary Ada
Bowyer, Capt. Sir George E. W.	Hanley, Dennis A.	Powell, Lieut.-Col. Evelyn G. H.
Boyd-Carpenter, Sir Archibald	Hartland, George A.	Pybus, Percy John
Bracken, Brendan	Harvey, Major S. E. (Devon, Totnes)	Raikes, Henry V. A. M.
Briscoe, Capt. Richard George	Heilgers, Captain F. F. A.	Ramsay, Alexander (W. Bromwich)
Broadbent, Colonel John	Heneage, Lieut.-Colonel Arthur P.	Ramsay, Capt. A. H. M. (Midlothian)
Brocklebank, C. E. R.	Herbert, Capt. S. (Abbey Division)	Ramsay, T. B. W. (Western Isles)
Brown, Ernest (Leith)	Hills, Major Rt. Hon. John Waller	Ramsbotham, Herwald
Brown, Brig.-Gen.H.C.(Berks.,Newb'y)	Hore-Belisha, Leslie	Rankin, Robert
Buchan-Hepburn, P. G. T.	Hornby, Frank	Reed, Arthur C. (Exeter)
Burghley, Lord	Horne, Rt. Hon. Sir Robert S.	Reid, James S. C. (Stirling)
Burgin, Dr. Edward Leslie	Howard, Tom Forrest	Remer, John R.
Burnett, John George	Howitt, Dr. Alfred B.	Renwick, Major Gustav A.
Butler, Richard Austen	Hudson, Capt. A. U. M. (Hackney, N.)	Rhys, Hon. Charles Arthur U
Campbell, Edward Taswell (Bromley)	Hume, Sir George Hopwood	Ropner, Colonel L.
Cambpell, Rear-Adml. G. (Burnley)	Hunter, Dr. Joseph (Dumfries)	Rosbotham, S. T.
Carver, Major William H.	Inskip, Rt. Hon. Sir Thomas W. H.	Ross Taylor, Walter (Woodbridge)
Chalmers, John Rutherford	Joel, Dudley J. Barnato	Runge, Norah Cecil
Chamberlain, Rt. Hon. N. (Edgbaston)	Kerr, Lieut.-Col. Charles (Montrose)	Russell, Alexander West (Tynemouth)
Charlton, Alan Ernest Leofric	Kerr, Hamilton W.	Russell, Hamer Field (Sheffield, B'tside)
Clydesdale, Marquess of	Kimball, Lawrence	Saimon, Major Isidore
Cobb, Sir Cyril	Kirkpatrick, William M.	Samuel, Sir Arthur Michael (F'nham)
Cochrane, Commander Hon. A. D	Knatchbull, Captain Hon. M. H. R.	Sandeman, Sir A. N. Stewart
Collins, Rt. Hon. Sir Godfrey	Knebworth, Viscount	Sanderson, Sir Frank Barnard
Conant, R. J. E.	Knox, Sir Alfred	Savery, Samuel Servington
Cook, Thomas A.	Law, Richard K. (Hull, S.W.)	Scone, Lord
Cooke, Douglas	Leckle, J. A.	Selley, Harry R.
Copeland, Ida	Leighton, Major B. E. P.	Shaw. Captain William T. (Forfar)
Craddock, Sir Reginald Henry	Levy, Thomas	Simmonds, Oliver Edwin
Croft, Brigadier-General Sir H.	Lister, Rt. Hon. Sir Philip Cunliffe-	Simon, Rt. Hon. Sir John
Crooke, J. Smedley	Lockwood, John C. (Hackney, C.)	Smiles, Lieut.-Col. Sir Walter D.
Crossley, A. C.	Loder, Captain J. de Vere	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Davies, Maj. Geo. F.(Somerset, Yeovil)	Lovat-Fraser, James Alexander	Smith-Carington, Neville W.
Denman, Hon. R. D.	MacDonald, Rt. Hon. J. R. (Seaham)	Smithers, Waidron
Denville, Alfred	MacDonald, Malcolm (Bassetlaw)	Somervell, Donald Bradley
Donner, P. W.	McKie, John Hamilton	Somerville, Annesley A. (Windsor)
Duckworth. George A. V.	Maitland, Adam	Stourton, Hon. John J.
Dugdale, Captain Thomas Lionel	Makins, Brigadier-General Ernest	Strauss, Edward A.
Duggan, Hubert John	Manningham-Buller. Lt.-Col. Sir M.	Strickland, Captain W. F.
Duncan, James A. L. (Kensington, N.)	Margesson, Capt. Henry David R.	Stuart, Lord C. Crichton-
Eden, Robert Anthony	Marsden, Commander Arthur	Sugden, Sir Wilfrid Hart
Edmondson, Major A. J.	Mayhew, Lieut.-Colonel John	Sutcilffe, Harold
Elmley, Viscount	Merriman, Sir F. Boyd	Tate, Mavis Constance
Emmott, Charles E. G. C.	Mills, Sir Frederick (Leyton, E.)	Thomas, James P. L. (Hereford)
Emrys-Evans, P. V.	Mills, Major J. D. (New Forest)	Thompson, Luke
Entwistle, Cyril Fullard	Mitchell, Harold P. (Br'tf'd & Chisw'k)	Todd, A. L. S. (Kingswinford)
Erskine, Lord (Weston-super-Mare)	Mitchell, Sir W. Lane (Streatham)	Touche, Gordon Cosmo
Erskine-Boist, Capt. C. C. (Bik' pool)	Moore, Lt.-Col. Thomas C. R. (Ayr)	Tryon, Rt. Hon. George Clement
Everard, W. Lindsay	Moreing, Adrian C.	Vaughan Morgan, Sir Kenyon
Faile, Sir Bertram G.	Morris, Owen Temple (Cardiff, E.)	Ward, Lt.-Col, Sir A. L. (Hull)
Fermoy, Lord	Moss, Captain H. J.	Ward, Sarah Adelaide (Cannock)
Fielden, Edward Brocklehurst	Mulrhead, Major A. J.	Warrender, Sir Victor A. G.
Fox, Sir Gifford	Munro, Patrick	Wells, Sydney Richard
Fremantle, Sir Francis	Murray-Philipson, Hylton Ralph	Williams, Charles (Devon, Torquay)
Gillett, Sir George Masterman	Nation, Brigadier-General J. J. H.	Williams, Herbert G. (Croydon, S.)
Gilmour, Lt.-Col. Rt. Hon. Sir John	Nicholson, Godfrey (Morpeth)	Wills, Wilfrid D.
Glossop. C. W. H.	North, Captain Edward T.	Wilson, Clyde T. (West Toxteth)
Goff, Sir Park	Nunn, William	Wise, Alfred R.
Goodman, Colonel Albert W.	O'Donovan, Dr. William James	Womersley, Walter James
Gower, Sir Robert	Ormsby-Gore, Rt. Hon. William G. A.	Worthington, Dr. John V.
Grattan-Doyle, Sir Nicholas	Pearson, William G.
Grimston, R. V.	Penny, Sir George	TELLERS FOR THE NOES.—
Guinness, Thomas L. E. B.	Perkins, Waiter R. D.	Mr. Blindell and Commander Southby.
Gunston, Captain D. W.	Petherick, M.

Mr. DAVID GRENFELL

I beg to move, in page 2, line 8, after the word "agreements," to insert the words: (except in so far as they relate to butter, cheese, eggs and milk). We are dealing now with the Clause which provides for duties being imposed upon articles enumerated in the Schedules which follow, and my Amendment is designed to effect the exclusion of these four articles. We on this side of the Committee propose that whatever articles may be subject by agreement with the Dominions to duties, these four articles, being special articles of daily consumption in the homes of the people in this country, should not be included in that list. It is proposed in the Schedule that butter shall be subject to a duty of 15s. per cwt., and cheese at the rate of 15 per cent. ad volorem when imported from foreign countries. With regard to eggs in shell, there are to be three scales of duties—eggs not exceeding 14 lbs. in weight per great hundred, Is. per great hundred; eggs over 14 lbs., but not ex- ceeding 17 lbs., 1s. 6d. per great hundred; and larger eggs, I understand, are to be charged a duty of 1s. 9d. per great hundred. Coming to milk, the fourth article that we wish to exclude, we find that there are three scales of duties: First, sweetened condensed milk 5s. per cwt.; unsweetened condensed milk, 6s. per cwt., and milk powder, 6s. per cwt. Whatever may be said of the Schedules in general, these special commodities, by every test that can be applied to the merit of these proposals, ought to be excluded from the Agreement.

We are told that the taxes are designed, in the first instance, to help the producers in the Dominions or, in the alternative, concurrently with the benefit to the Dominion producers, to be of benefit to the home producers as well. The first ground of complaint we put forward is that we do not think that these duties can be justified on the ground of necessity. These four commodities are produced in this country under conditions which give the producer fair competitive opportunities compared with those prevailing in any part of the world. This country is pre-eminently suitable for milk production. These articles ought to be as cheaply and efficiently produced in this country as anywhere in the world, and if we have nothing to fear from competition, what is the justification for imposing duties which must add to the price both of the home-produced commodities and those imported whether from the Empire or from foreign countries? The quantity of these commodities imported is exceedingly high. There are representatives of the agricultural industry who will say, with some justification, that the quantity of these imported products is too high, and that we ought to be able to manage without importing such large quantities of butter, cheese, eggs and milk.

The first question I would like to put to the Minister is this: Is it intended by these duties that the quantity of imports shall be reduced? Are these duties intended, directly or indirectly, to lessen the volume of imports of this country and to increase home production, or are they simply intended to raise the average level of prices both of commodities produced abroad and of commodities produced at home, without altering the balance of production in this country and outside our shores? If this duty is to encourage and increase home production, and to diminish the quantity of imports, how is that going to help the Dominion producer who, in the main, is responsible for the large volume of imports of one and all of these commodities? If it is not intended to lessen the volume of imports, how will it help the production of those commodities in this country if large volumes are to continue to come in after these duties have been imposed?

It is laid down in the Schedule that these rates of duty to which I have referred are to remain unalterable for three years, and that after three years they may be altered by agreement between the Dominions and this country. Now what kind of case has to be made out by the interests either at home or in the Dominions for a change in the rate of duty? I will submit a hypothesis to the Minister. Suppose, as a result of these duties, it should be found that the volume of imports from the Dominions has very much increased and the volume from foreign countries reduced. Would it then be open for the producer in this country to make representions to the Tariff Advisory Board under the Bill for a lesser measure of preference to the Dominion producer as against the foreign producer? If it were found that these duties left competition in the home market just as strenuous as it has been in recent years, but the full weight of competition now came from the Dominions rather than from foreign countries, would that be a condition justifying an appeal for a diminution of the Preference? The Dominion producer cannot be helped unless it can be shown that he is to be given a guarantee of a market at a higher price in this country, and I gather that there is no guarantee in the Bill for these commodities.

I would like to take the House with me on a survey of possible effects when these duties have been imposed. We find that immense quantities of butter and the other commodities named are coming into this country every year. I am sure that the average man-in-the-street does not realise that it is now intended to impose a duty of more than 1½d. per lb., which in the retail price must be represented by an increase of 2d. per lb.; 15s. a cwt. is over 1½d. per lb. When that duty is computed in the pound unit, it will be found generally that the price rightly will have been advanced by no less than 2d. a lb. We imported last year no less than 8,000,000 cwts. of butter, of which roughly 45 per cent. came from British countries, and 55 per cent. from Foreign countries. Nearly 4,500,000 cwts. came from foreign countries. This butter will now be liable to a duty of 15s. per cwt. If the quantities remain as they are at the present time, the butter consumer in this country will have to pay, in respect of the foreign-produced butter alone, an additional amount of over £3,000,000 per annum. We shall be able to say that the effect of this Bill will be that "Your butter will cost you more." Your butter must cost an additional sum at least equal to the gross value of the duty of 15s. per cwt. upon butter imported from foreign countries. The total charge in respect of this one commodity will have to be paid in the main by people who are now finding it very difficult indeed to purchase butter and other articles of daily consumption for their household.

Last night the President of the Board of Trade inferred that my hon. Friend the Member for Aberdare (Mr. G. Hall) was not as well informed as he should have been in respect of the question of the importation of butter, and scornfully explained why the consumption of Danish butter had not increased as rapidly as had butter from New Zealand and the other Dominions. He said that the explanation was a very simple one. Danish butter had come in in large quantities, but the rate of increase in consumption of Danish butter had not kept pace, because Dominion butter was cheaper. He could have said "and inferior and therefore cheaper." He said that Dominion butter was cheaper and was preferred on that account. He did not draw the necessary deduction which must always be present to those who examine the subject. The housewife buys the cheapest butter, because she cannot afford to buy the best. She does not buy the cheapest butter if she has plenty of money to spend. She buys the cheapest because she has not sufficient money with which to buy the more expensive and superior butter.

Mrs. WARD

Will the hon. Member tell us why this butter is inferior?

Mr. GRENFELL

I do not know, I am not a farmer. I am a miner, and I know a good deal about coalmining. I am dealing with arguments used in this House, and accepting the explanation of the right hon. Gentleman the President of the Board of Trade.

Mrs. WARD

Has the hon. Gentleman any proof that it is inferior?

Mr. GRENFELL

The hon. Lady must pick a quarrel with the President of the Board of Trade and not with me. I am not trailing my coat this morning, and I certainly would not challenge a lady if she offered to controvert a statement which I had made. Perhaps the Committee do not realise that the increase in the imports of butter is very high indeed and that in the last five years we have nearly doubled our imports of butter from abroad. In buying butter from abroad we take the cheapest we can buy, and we are taking the Colonial butter because it is cheaper. If we charge an additional 2d. per lb. because of the duty of 15s. per cwt., will not the tendency be to find cheaper butter, and if housewives are unable to purchase butter at all will not the tendency be to buy margarine instead? Will not the housewife be driven to buy cheaper butter or a substitute in the form of margarine? I would like to know how that will help either the Dominion or the Home producer.

2.30 p.m.

With regard to cheese, we have a greater disparity in favour of the Dominion producer. We find that of the 3,000,000 cwts. of cheese imported last year 87 per cent. came from British countries and 13 per cent. from foreign countries. That was before the imposition of the Ottawa duties. That was the result of the competition between Empire countries and foreign countries. I do not think than hon. Gentlemen who cheered that statement need quarrel with the position. The Empire countries are farther away from us geographically than the other producers of cheese, and it is not natural to expect that all the cheese consumed in this country should come from the far distant countries of New Zealand and Australia when there are cheese-producing countries almost within a stone's throw of the country of consumption. If cheese were only one of the commodities men- tioned, there would be no justification at all for the imposition of a duty upon cheese.

We import a large quantity of eggs. The hon. Gentleman knows something about eggs, but I think that the eggs which be knows best are Chinese eggs, eggs which are not sent in shell, but eggs in the form of egg-powder. No less than 26,000,000 great hundreds of eggs were imported into this country last year. The proportion from foreign countries is exceedingly high, but the import of eggs from the Dominions is very small indeed. Out of the enormous total of eggs imported into this country, Denmark sends us over 29 per cent. It is a small country which has no special opportunities in egg production and no national advantages in its favour, but it has, by organisation and efficient methods, found a way to place its eggs and dairy products into all the markets. We find that the Irish Free State sends about one-sixth of the eggs. The eggs coming into this country come in the proportion of 29 per cent. from Denmark and 17.6 per cent. from the Irish Free State.

Mr. PERKINS

Is not the Irish Free State in the British Empire?

Mr. GRENFELL

Of the two largest supplies, one comes from outside the Empire and the other from inside the Empire. Eggs from the Irish Free State are coming without paying duty, but the eggs from Denmark, the largest supply of all, will carry a duty of 1s., 1s. 6d., or 1s. 9d. per great hundred according to weight. We find that a duty of 6s. per cwt. is to be charged on condensed milk or milk products. We submit that there is no occasion for putting duty upon any of those commodities. There is no reason why, on the grounds of climate, soil conditions and experience, we should not be able to produce all these commodities as cheaply as they can be produced anywhere in the world. We have the best climate for the production of these commodities. If we embark upon these duties and give this protection to the home producer and the Dominion producer, it really will be a premium upon inefficiency, which will have to be paid by people who cannot afford to pay, and who in their own circumstances of life are to receive no protection. I mean the people who earn low wages or whose wages have been reduced. Almost concurrently with the passage of this Bill which will enhance the prices of the necessities of life, plans are being put through which will take away from large numbers of people in this country a portion of their already low purchasing power in the form of wages.

The unemployed cannot indulge in these days in butter, cheese, milk and eggs. [Interruption.] Very few of the unemployed on the Means Test can indulge in any of these commodities. Prices are already too high for them. The circumstances of the unemployed not much below the level of the Means Test will be directly affected. Their purchasing power will be still further reduced by the heavier prices which must ensue upon the imposition of these duties, aggregating—the Minister will correct me if I am wrong—to a charge on these four commodities of not much less than £8,000,000 a year. That £8,000,000 will be paid in the main by people who have not the necessary purchasing power to pay the higher prices at the present time. We do not believe that the producer would get his full value for the form of protection which he will get on these commodities. Even if the producer at home were to get a small advantage, the price paid will be paid by people who cannot afford to part with any portion of their incomes for this purpose. We move this Amendment not with any hope that any concession will be made, because we have reveived a very definite opinion from the Chair that not one of these commodities can be withdrawn, but because we wish to call public attention to the injustice of imposing duties on these articles of daily consumption in the homes of the poorest people in this country.

Lieut-Colonel SANDEMAN ALLEN

The hon. Member for Gower (Mr. D. Grenfell) has had a very happy time in putting up cocoanuts and then knocking them down. With regard to eggs, I was not quite clear whether he was concerned particularly about election eggs. He said as to butter: "Your butter will cost you more". He completely forgot to point out that the Duty is not to be imposed upon Empire butter, which is already cheaper than foreign butter, but upon foreign butter. He made a long story in saying "Your butter will cost you more", when what we are doing is to increase Empire production and Empire consumption in this country, with the result that Empire butter will eventually be produced at a cheaper cost. It is an absolute bogy that is being put up or an attempt to draw a red herring across public opinion. If no duty is to be imposed upon Empire butter I cannot understand why the price of the butter should be increased. I wish my hon. Friend would explain that to me. I may be dense, but I cannot follow his argument there.

Mr. BATEY

The hon. Member says that it is a bogy when we use the argument: "Your butter will cost you more". What is the need for this tax? I hope the Government will tell us why they have selected these four articles, butter, cheese, eggs and milk, to be taxed. When we look at the figures in regard to Empire butter we find that it has not had a bad time. Without a tax they have been getting the butter market in this country. This year Australia has increased the amount of butter sent into this country by 600,000 cwts., and New Zealand has increased the amount of butter sent in during the first nine months of the year by 500,000 cwts. While the Empire has been making such rapid strides in capturing the market in this country, why should we put such a tax upon foreign butter. I understood that these duties were being put on in the interests of the Dominions, but from the figures it is clear that it was unnecessary to put a tax on in the interests of the Dominions, because they were making headway without the help of a tax.

It seems to me that the tax is being put on butter simply to hit Denmark. Only three countries are exporting butter to any large extent to this country—Australia, New Zealand and Denmark—Australia and New Zealand have sent us for the first nine months of this year vast quantities of butter, Australia has sent practically as much as Denmark and New Zealand has sent practically as much as Denmark. Therefore, the object of the tax can only be to injure Denmark. Why should the Government want to injure Denmark at the present time? The choice of Empire butter or Denmark butter is simply a matter of taste. The Government are saying to the people who enjoy Danish butter: "You are not going to have Danish butter. You will be compelled to have Empire butter, but if you want Danish butter, you will have to pay more for it". The hon. Member for Cannock (Mrs. Ward) asked about Empire butter: I will tell her our experience during the Recess. We always like Danish butter and we have bought Danish butter, but on one occasion we bought Empire butter—only once! We can afford to buy Danish butter and therefore we buy it.

Mrs. WARD

Since we could get Empire butter I have never used anything else but New Zealand butter in my house, and it is perfectly good and wholesome.

Mr. BATEY

It is simply a matter of taste. We prefer Danish butter. What interests me most in regard to this tax is the effect upon Denmark. I hold that this action on the part of the Government will annoy Denmark, and just after the Exhibition, when we thought that we had made good relationships with the Danish people which would increase Danish trade with this country. This tax will naturally have the effect of annoying the Danish people.

Mr. J. A. L. DUNCAN

If that is the case, how is it that Denmark is seeking to make a trade agreement with us?

Mr. BATEY

If the hon. Member was about to make an agreement with anyone he would think it unjust if a tax was put on against him just beforehand. When the Government ask them to make an agreement the Danish Government will have in mind this action of the Government when they come to discuss the question of Danish butter. My argument is that we cannot afford to annoy Denmark by this tax on butter. We have annoyed far too many European countries already. Those interested in the coal trade do not want to annoy Denmark. We want to encourage them to buy our coal, but this tax will have the opposite effect. The Government are also annoying the Argentine, and we can see our markets for coal in France, Belgium and Italy all going. Take the tax upon cheese. I cannot understand the Government's action. The bulk of the cheese coming into this country comes from New Zealand and Canada. No foreign country has a market for cheese compared with New Zealand and Canada, and why the Government should put a 15 per cent. tax on cheese when these two Dominions have the market practically to themselves I cannot understand. It is a futile proposal and the Government would have been far better advised to leave it alone.

Again the tax upon eggs is a hit at Denmark, which sent to us for the first nine months of this year over 5,000,000 great hundreds of eggs. The Irish Free State send eggs, but I do not think the Government have the Irish Free State very much in mind. The Dominion which sends us eggs is Australia, but the import from Australia was only 277,000 great hundreds during the first nine months of this year as compared with 5,000,000 great hundreds from Denmark. Why the Government should seek to injure Denmark in this way is beyond me. Foreign eggs are only bought by the very poorest of the people. Those who can afford buy English eggs not foreign, and this action on the part of the Government is aimed at increasing the price of those eggs which are bought only by the very poorest of the poor. The same argument applies to milk. For the first nine months of this year foreign countries sent us 127,000 cwts. while only 20,000 cwts. came from British Dominions. Why should we complain there. Condensed milk is only used by the poorest of the poor, by people who cannot afford to buy fresh milk.

Mrs. COPELAND

Does the hon. Member realise that condensed milk is more expensive than fresh milk?

Mr. BATEY

It may be that in the long run condensed milk is dearer than new milk, but it is only bought by people who cannot afford to buy new milk. Those who can afford to buy new milk do not buy condensed milk. There is no justification on the part of the Government for taxing butter and cheese and eggs and milk, and I hope, in regard to eggs and milk, that in the interests of the poorest of the people they will wipe these two articles from the tariff list.

Mr. ERNEST EVANS

This is the first occasion on which I have intervened in the discussion on the Ottawa Agreements. I have tried to approach the examination of these Agreements from as independent an attitude as possible, to forget old controversies about Free Trade and Pro- tection, and although I have no doubt been unconsciously affected by them I have tried to examine these proposals from the point of view of the benefit they will afford to the people of this country. This particular Amendment, I think, affords a convenient opportunity for one ho like myself has approached the matter from that angle to come to a conclusion as to whether the Bill is really designed and calculated to promote the best interests of the people of this country. We are dealing with certain staple goods of the people which come into the household of practically every man and woman in the country.

I have been trying to imagine what it is the Government think they have done for the benefit of the consumer or the producer in this country by this particular part of their Agreements. What is it they think they have done in regard to butter for the consumer or producer in this country? They have done nothing for the consumer except to encourage an increase in price. I do not want to commit myself to the proposition that the imposition of a duty on a particular commodity will necessarily and immediately increase the price of that commodity. Prices are affected by many considerations, and by world conditions. It may well be that the conditions in the world are such that for a short time the imposition of a duty will not affect appreciably the price of a commodity. It may well be that occasionally the producer will be prepared to put up with a loss. But in the net result the ordinary laws of economics will prevail, and although there may not be an immediate effect on prices, in the net result the duty will involve an increased cost to the consumer. That is a certainty in regard to commodities like butter and eggs and milk, which are so largely part of the food of the ordinary population of this country. When the Parliamentary Secretary to the Board of Trade said, in relation to cheese, that he did not think the imposition of the duties would necessarily lead to an increase in price, I honestly failed to follow his argument, because unless it does lead to an increase in price it is no use from the point of view of Government policy.

Not only must we consider this from the point of view of the consumer, but also from that of the producer. What is the producer at home to expect to get by way of benefit from any one of these items in this Agreement? He is not going to benefit. Take the case of butter. The main competition for the home producer of butter in this country does not come from foreign countries but from our Dominions. It is a remarkable tribute to the Dominions that the importation of butter from their territory in the last few years has increased to such an extraordinary extent. But it is no consolation to the farmer in Cardiganshire to be told, "Although you may he trying to prevent the importation of butter from foreign countries, you are trying at the same time to encourage the importation of butter from the Dominions." It does not matter to him, from the point of view of business, whether his competitor is in the Dominions or in a foreign country.

As far as I can see, in regard to all the items of this Ottawa Agreement, the effect is that you are doing something which is likely—I do not put it higher than that—to impose a burden on the consumer, and at the same time you are not doing anything which will encourage the producer at home. In regard to these particular items, butter, milk, eggs and so on, you are dealing with commodities which are the daily necessities of practically every home in the country. You are doing something which, I am convinced, is going ultimately to increase the price to the consumer of these commodities, and you are doing nothing to encourage the home producer. While you are doing that, while you are supposed to be encouraging the Dominions, you are imposing a real difficulty on any British Government that proposes to deal with international trade.

3.0 p.m.

Reference has been made to Denmark. I was rather surprised to find that the reference scented to encourage smiles on the part of some hon. Members opposite. Denmark is one of the few countries which have invited this country to take part in negotiations with a view to arriving at agreement on tariffs. It is one of five countries which have done that. Denmark has been the great source from which this country in past years has bought many of the products with which we are concerned, particularly butter. We have not bought those things from Denmark without Denmark in return buying things from us. [Interruption.] No one will contradict the statement that we have been a good customer of Denmark and that Denmark has been a good customer of ours. Denmark has now invited us to discuss trade relations. A few years ago Germany was one of Denmark's best customers. Germany established a system which corresponds to what we call a quota system. The result was that trade between Denmark and Germany was considerably reduced, from the point of view of Denmark. In the last few months that system has broken down, and now Denmark has again access to a market in Germany which she had lost. Yet this is the very moment when we are imposing restrictions which are bound to affect our relationship with Denmark in respect of these commodities. That is only an illustration of the way in which these duties not only affect the consumer in this country to his detriment, without producing any benefit to the producer, but at the same time impose great restrictions on the freedom of this country in its negotiations with other countries.

Mr. PERKINS

I hope that this Amendment will be resisted because if carried it will not only wreck the Agreements, so far as they affect British industry, but it will give a knock-out blow to British agriculture. I think all hon. Members will agree with me that in these Agreements, so far as they affect wheat and meat, there is nothing whatever for the British farmer but when we reach the question of eggs and milk there is something in these Agreements for the British farmer. As regards eggs, I cannot help feeling that within one year the British farmers, and the Empire farmers, including the Irish Free State farmers, will be able to supply the British market with all the eggs required. I would go further and prophesy that under the shelter of these protective tariffs the British farmer within three or four years will be able, himself, without the help of any Empire farmer, to provide all the needs of the British market in eggs. I agree with many hon. Members about the five-year agreement. I cannot help feeling that in the case of eggs it would have been better if the Agreement had been three years, because, as I say, I believe that in three years' time we shall be in a position to produce all the eggs we want without the help of the Empire farmers at all, and the same thing I believe to be true of milk.

Last year a considerable quantity of tinned milk, much of it marked "Unfit for Babies"—no doubt because it was unfit for babies—came into this country. Not only so, but we had a small quantity of fresh milk from Denmark. I welcome the fact that in this proposal there will be a substantial duty imposed on both types of milk. The result will be that the foreign manufacturers who previously made this tinned milk in their own countries will be compelled to open factories here. Only a few months ago, in answer to a question which I put to him, the President of the Board of Trade told the House that two foreign manufacturers were then looking for sites in this country for tinned milk factories. I feel confident that as a result of these duties those manufacturers and, in all probability many more, will be compelled to open factories in this country.

Mr. TINKER

The hon. Member for Stroud (Mr. Perkins) has been more candid than any of the previous speakers who have supported the Government. He admits or infers that the duty is to be put on to help British agriculture which must mean that the cost of these commodities coming from overseas will be increased.

Mr. PERKINS

I did not say that the British farmer wanted a higher price. The British farmer does not necessarily want a higher price. All he wants is a stable market where he can sell his products.

Mr. TINKER

The inference is that you must increase the price of these commodities coming from overseas, in order to allow the British farmer to produce at a price that will enable him to live. The argument must be that you want to keep out the foreign producer in order to help the home producer. If it were not for that, why should you do anything, except let the British farmer go on as he has been going? The Government have been trying all along to increase the price of the commodities coming from abroad. That is why we are so much concerned. They ought to be quite candid about it and say that their policy eventually means an increase in price of the foreign articles for the purpose of giving the Dominions a better chance to sell their goods here and incidentally to give our own people a better chance.

That is the point which we are arguing at the moment. We say that the proposal means an increase of indirect taxation. The whole tenor of the Bill is that, in return for certain concessions from the Dominions, we are prepared to give them certain advantages which must mean an increase in the price of many foodstuffs. An import of 15s. per cwt. means just over 1½d. per lb. on butter from foreign sources and that provides the Dominions with a chance of sending in their butter here, so long as they are able to do so, at a price below that of the foreign butter. They can increase the price by 1½d., and therefore the consumer will have to pay that, because that will just be able to keep the competitor out. That is how I see it, and if others can remove that impression from my mind, all the better, because I take it that we attend these Debates not altogether prejudiced, but in order to see what point of view the other side can put before us. If 15s. per cwt. is put on, that means 1.6d. upon foreign produce.

Cheese is 15 per cent., which is slightly higher in price than 15s. That 15 per cent. will work out at about 2d. a lb. on cheese, which is another commodity that is very much used in this country. I remember a conversation not long ago with a cheese dealer in the town in which I live, St. Helens. When he was asked to set up a cheese shop there, it was said to him, "It is well known that colliers like cheese, and therefore you will do very well in the cheese business there." That is true. The colliers like cheese, and putting a tax on cheese will hit the collier and many other working-class people who like cheese very hard indeed. These are commodities that are essential to working-class houses. This morning I argued on bread which is the first thing that we require, but when we are able to afford a bit more, butter comes along, and then cheese comes along, so that those are three essentials to make life something like for the working people.

By this Bill the Government are putting a tax on these staple commodities, and if they were quite open with us, they would say it is done and that it is done in order to give something to the Dominions, but I am very sorry that Members of the Government try constantly to get away from that fact. If they are dealing fairly with us, let them say that it does mean that. For some considerable time to come the price must be enhanced in order to give the benefit to the Dominions of the market which they desire to have. It must mean that, and it is because of this that I am so strongly opposed to what I term a method of indirect taxation, to which we are always bitterly opposed on these Benches.

Mr. McKIE

I hope the Committee will reject this Amendment decisively, which I am certain it will. I represent what is the largest area under cultivation in Great Britain, and an area incidentally which is entirely concerned with the livestock branch of the farming industry, with which this Amendment directly deals. Of course, I am in sympathy with all the products covered by this Amendment being protected. As the hon. and gallant Member for Pembroke (Major Lloyd George) indicated the other night, if we are to have Protection in this country at all, by all means let the most ancient industry in the country have the same benefits as the other basic industries in the land.

I shall deal only with two of the items mentioned in the Amendment, namely, cheese and milk. In the district which I have the honour to represent, we are very much concerned with the manufacture of cheese, and the point has been repeatedly made in recent times that if the industry of cheese-making is to go on in the way that it ought, something will have to be done to control foreign imports. It has been said that even if we had drastic control of foreign imports in this direction it might not be enough to give the home producer the chance he wants in view of the imports that will come in from the British Commonwealth. The Committee will realise, in view of this fact, how strongly I feel with regard to the necessity for decisively rejecting this Amendment. [An HON MEMBER: "Hear, hear!"] An hon. Member below me says "Hear, hear." I listened with great interest to him the other day putting the ease, as he rightly thought he ought to put it, on behalf of the home producer, but perhaps in a minute or two, when I have outlined the position of the farmer in regard to the Ottawa Agreements, he will not say "Hear, hear."

We have had in Scotland in recent years a tremendous amount of argument about the marketing of milk. We had in operation for a short time a system known as the milk pool, but it broke down as those best qualified to speak said, because we had not got the control of foreign imports which it was necessary to have to make the marketing of milk in Scotland a success.

Sir ROBERT HAMILTON

It did not break down because of the want of control of foreign imports, but because there were home people who would not support it.

Mr. McKIE

I agree with my hon. Friend, but the home producers would have supported it—and I have it on their own word—if we had had control of foreign imports. We are going to get that now, and I urge the Committee to help us to get it by decisively rejecting this Amendment. We have had a great deal of talk, with which we are so familiar, about the increase of cost to the consumers if we have control of foreign agricultural produce. Perhaps some hon. Members will not agree with me in the statement I am about to make. The free hand that has been so much discussed in connection with the last election certainly included the control of imports in this direction, if necessary, as well as in every other. If it had excluded that control, how could it possibly have been the policy of the free hand? Further, I think—and there is little reason to doubt the truth of this—the urban population to-day is increasingly turning to the plight of the agricultural community, and they realise that those who dwell in the rural areas must have some form of assistance. My right hon. and gallant Friend the Member for Caithness and Sutherland (Sir A. Sinclair), in his interesting speech the other day, when alluding to the position of the supporters of the Government, quoted: The roseate hues of early dawn, "How fast they fade away. I might say that the farming community are just waiting to join in the hymn, "Now the day is over"—

Mr. HOLDSWORTH

"Night is drawing nigh"!

Mr. McKIE

I was expecting that. We want to see the end of the day of uncontrolled foreign imports into this country. We are waiting for the dawn of a better day, when our ancient industry shall have given to it the assistance which it richly deserves.

Sir S. CRIPPS

May I move to report Progress simply in order to say to the Committee that the party of the right hon. Member for Darwen (Sir H. Samuel) has now come to an arrangement with us by which we think the debate can be terminated by Thursday night?

The CHAIRMAN

I must remind the hon. and learned Gentleman that under the terms of the Resolution we have passed this morning he cannot move to report Progress; but I am prepared to allow him to make a short statement.

Sir S. CRIPPS

I thought I was out of order. All I wanted to say is that we are most anxious to expedite the matter in order that it may be terminated on Thursday, and that the right hon. Gentleman and his friends may have every opportunity of putting forward all the points they wish. So far as we are concerned, we shall do everything in our power to see that the programme is kept.

Mr. HOLDSWORTH

I wish to draw attention to remarks of an hon. Member sitting opposite to me regarding condensed milk. I did move an Amendment on condensed milk during the consideration of the Money Resolution. He referred to skimmed milk, but as a matter of fact there is nothing in these Schedules which deals with that milk at all. It is the whole milk, and not a particular type of milk which is short of certain ingredients, and I suggest to my hon. Friend that he should support me in seeing that the better milk is allowed to come in free rather than the kind which is unfit for babies. I also wish to refer to certain remarks which the Parliamentary Secretary to the Board of Trade made in reply to some remarks of mine on Monday last. I suppose that all these Agreements must have an economic basis, but the strangest reply which has been given in this debate was given by the Parliamentary Secretary. The reason why he thinks that the Empire should be allowed to export more condensed milk is a geographical one. He said His Majesty's Government are unable to see why, if the United States can export it, Canada cannot, because the width of the Atlantic was, broadly, the same. A further point I want to make is that 95 per cent. of the condensed milk imported into this country comes from foreign countries. We are asked to put a duty on the 95 per cent. in order to benefit the 5 per cent. Really, we ought to have some stronger reason from the Parliamentary Secretary than these words, which will be found in column 722: The argument which I am pressing is that for reasons not known to the Government the supplies from the Dominion countries have decreased, and the supplies from foreign countries have increased."—[OFFICIAL REPORT, 24th October, 1932; col. 722, Vol. 269.] It seems very strange to me that the Government should not know the reason for their proposed action. There must be one of two causes operating—either the quality of the Dominions supply is inferior, or the price is higher than that of the foreign supply. It is a very strange argument to say that the geographical distances are the same and that there is no known reason why we should be asked to put on this duty. I think the hon. Lady the Member for Stoke-on-Trent (Mrs. Copeland) interrupted this morning. I do not wish to misinterpret her, but I think she said that the working-class got condensed milk because they were too lazy to get the other.

Mrs. COPELAND

I beg your pardon, I did not say that. What I said was that it is much better than the other for anyone, especially for women, who want to prepare milk in the hot weather, because the other milk does not keep.

Mr. HOLDSWORTH

I would not for one moment misrepresent what the hon. Lady said. My suggestion is that because of that very reason you ought to allow the free import of it. There are many houses where no facilities exist for keeping milk such as are necessary in the summer time. In the industrial areas of this country a number of people take their meals with them to their work, and it is a convenience for them to take condensed milk in the tin. Several people will club together to get a tin of milk and use it until it is done. I think that every facility should be extended in this case, because nobody can deny the wholesomeness of tinned milk. I suggest to the Parliamentary Secretary that he cannot give as his reason that the Dominion supplies are adequate, because they are quite inadequate. Ninety-five per cent. of the supplies come from foreign countries, and it is a scandal to put a duty of this sort on the consumers. Why you should tax the 95 per cent., in order to protect the five per cent., is beyond my understanding.

Mr. GODFREY NICHOLSON

I do not like the situation that has arisen. Members of the Labour party are taking upon themselves to speak as though they alone represented industrial populations, and especially the mining population in this country. If I felt that these duties were going materially to increase the cost of living to the mining population, I should protest against them to the very best of my power. The hon. Member for Leigh (Mr. Tinker) said that he was always glad to have new viewpoints and further arguments on such a question. I can present him with one that he has overlooked. The basis of the argument of those of us who represent industrial populations is that where, in a primary commodity, there is sufficient production or overproduction in the market which you wish to favour, the effect of the tariff is not to raise prices, but is only directional. I maintain that the tariff policy of this Government, and certainly the policy under the Ottawa Agreements, is directional. That is the basis of the argument of those who represent industrial districts in my party, the Conservative party, and who are quite as averse as are the Labour party to raising the cost of living in industrial areas.

Mr. REMER

The county of Cheshire, as the Committee will know well, is one of the greatest milk and dairy counties in the country. I cannot allow some of the speeches to which we have just listened, particularly the speech of the hon. Member for South Bradford (Mr. Holdsworth) to pass without comment. He referred to the question of milk. In the county of Cheshire there is a very real amount of trouble, which has been called a "war." There has been a "war," because the farmers were not able to get from the milk dealers the price which they thought was adequate. If hon. Members compare the prices that retailers receive with what is received by the farmer, I think that most of them would be considerably surprised if the farmers did not complain.

3.30 p.m.

Why is it that the farmers are not able to make a better bargain with the retailers? There is always in Cheshire, and in other parts of the country, a surplus of milk, and, if this foreign milk comes in, it only adds to the surplus, and therefore prevents the farmer from making a better bargain with the retailer and getting a more remunerative price. The hon. Member for Leigh (Mr. Tinker), who has now left the Committee, said that this meant higher prices, but he misunderstands the whole complaint of the farmers. Whatever agricultural produce you like to name, there is at some time during the year bound to be a surplus of supplies, and generally at the same moment there is a surplus of supplies in Denmark, a surplus of supplies in Holland, and a surplus of supplies in all the countries which export to this country. The farmers in those countries then do not sell their surpluses in their own countries, but send them to this country, and so depress our market still further. This import duty gives the farmer in this country a stable market and a feeling of security which will enable him to go ahead and produce his goods.

The hon. Member for the University of Wales (Mr. E. Evans) made great play about Denmark, and told us that they buy from us and we sell to them. I have not looked up the figures since he spoke, but I think I am right in saying that Denmark sells to us nearly five times as much as we sell to her, and it is an astonishing thing that we never once heard anything from Denmark about trying to increase British exports to that country until this tariff policy was started. It was only then that we heard these conversations from the Danes, and I think it is one of the most striking evidences of the success of the tariff policy that they have now awakened to the fact that, if we are to continue to be customers of theirs, they must at least do something for us.

I feel convinced that, particularly as regards the three commodities of cheese, eggs and milk, we are going to see a great increase of production in the milk and daily areas of this country. I am sure that that is going to be of great value to our farming community, and I would ask my industrial friends to remember that there is no better customer of our industrial areas than our farming community. If they are prosperous, it means a great increase of employment in our industrial areas. They are far bigger purchasers than the people in any of our export markets and a really prosperous agricultural community in our country will mean a great increase of prosperity in our industrial community also. I have never been one of those who believe that one view can be taken in regard to the town and another in regard to the country. I believe that we have all to stand together and see how we can help one another. It is only by that means that we can restore our country to a state of prosperity.

Mr. CURRY

I was rather struck by the contribution of the hon. Member for Morpeth (Mr. G. Nicholson) to this discussion, and also by the remarks of the hon. Member who followed him. I understood the hon. Member for Morpeth, who comes from the same part of the country as I do, to make the case that taxes of this sort would not raise prices, but that their whole consequence would be a directional movement in trade. He was followed by another equally enthusiastic advocate of these Agreements, who showed that they were absolutely necessary in order that the farmer should get a better price.

Mr. REMER

I never said that. I said it was in order that he should have a secure market.

Mr. CURRY

The hon. member in a later portion of his remarks went on to that, but at first he drew us a picture of Cheshire farmers unable to sell milk because of the competition of cheaper milk from abroad.

Mr REMER

I said that complicated the difficulties of the Cheshire farmers in their negotiations with the retailers.

Mr. CURRY

We will leave it at that, and we will pursue the argument of the hon. Member for Morpeth (Mr. Nicholson) that the whole effect is directional. Even a directional effect can only be achieved by alteration of price. Long years ago, when this tariff policy first became a great contraversy, men of my age who were coming into politics listened with great interest and attention to the masters of that time. Mr. Balfour defined protection as manipulation of the fiscal system in order to raise home prices, and that remains a perfect definition to this day. [Interruption]. Then I am afraid we must agree to differ. We will assume that you have achieved your object without affecting the price and that you have changed the habits of the people who use the articles in question. You have done it by magic, by the mere signing of an agreement. Yet those of us who come from the part of the world that the hon. Member and I come from are concerned because of this directional change that you are trying to make. We in the North East of England depend primarily upon our coal trade. It is in a large measure an exporting industry. A large part of the trade is done with near European countries, and, if you are going to succeed in this directional change, what prospect have we, of holding that export trade in coal? If the purchases that we used to make from these near European markets of agricultural products are going to be cut off? That is one of the things which we in the north-eastern part of the country regard with a great deal of apprehension.

We can see nothing in this whole policy which is not placing in jeopardy the principal means by which the bulk of our population lives. Although we have no difference of opinion at all with hon. Members opposite about the desirability of increasing trade and raising the standard of life of our people, we see in this continued policy of adding a little here and a little there to the burden of indirect taxes and altering the direction of trade from those channels from which it flows naturally to channels which will be unnatural but which will not increase in volume, nothing but a continued depressing of the standard of life of the great mass of the people, and we are forced to oppose these taxes. I have heard members state again and again that these foreign countries are pouring their goods into this market—the best market in the world. Of course it is the best market in the world, because the great majority of the people have been given a purchasing power which people in no other part of the world have. We have that purchasing power because up to now, up to the passing of these agreements, we have retained the liberty to draw our supplies from every part of the world.

The PARLIAMENTARY SECRETARY to the BOARD OF TRADE (Dr. Burgin)

I must ask the Committee to reject this Amendment. It deals with the dairy products—butter, cheese, eggs and milk—and we are asked by those who moved the Amendment and by hon. Members who spoke in favour of it, what the Government have done with regard to these commodities. It is very simple. When an agreement is made between the United Kingdom and a self-governing Dominion, and an effort is put forward to find a basis on which there can be an exchange of products from the home country to the Dominion and from the Dominion to the home country, it is very natural that among the products included in what the Dominions can contribute to the United Kingdom should be dairy products such as those we are discussing. Climatic conditions make it quite possible for Australia, New Zealand, Canada and South Africa, and all contribute very largely to the articles which come within the scope of this Amendment.

We are asked, why should a tax be placed on these commodities which are consumed in large quantities daily by so many of the population? Again the answer is simple, and the hon. Member for Morpeth (Mr. Nicholson) has, of course, been perfectly right in saying that the object of these provisions is more to direct trade than to increase prices or to deal with other objects of that kind. It is because there is such a very large field of our imports of these commodities from foreign countries that we believe by proper encouragement, alike to the Dominion producer and to the home producer, a very large portion of that foreign trade can be kept within the Empire. The figures are most striking, and, if I may, I will take butter first. May I interpose at once to say that I feel sure the President of the Board of Trade has never at any time made any observation derogatory of the quality of Empire butter. I feel sure observations of that kind made in debate will not be found to have any justification. Of the imports of butter into this country, one half of the whole comes from foreign sources.

Mr. D. GRENFELL

The right hon. Gentleman the President of the Board of Trade last night said that it was a question of quality; it was cheaper because the quality was not the same.

Dr. BURGIN

I have the quotation from the speech of the President of the Board of Trade to which the hon. Member for Gower (Mr. D. Grenfell) refers, and I think the President's observation that prices depend on the quality of butter must be regarded as an entirely general observation, and not in the least reflecting upon the quality of Empire butter. I was dealing at the moment with the very large volume of imports of butter from foreign sources—30 per cent. from Denmark, 5 per cent. from Russia, 5 per cent. from Argentina; Finland, Sweden and Estonia in smaller quantities. It is a startling fact that the imports of butter from all sources have increased so very largely. The hon. Member for Gower said that they have increased in the last seven years by something like 200 per cent. That shows what a very wide margin of trade in butter there is of which a considerable proportion could, no doubt, be supplied from Empire sources and from home production.

I pass for a moment to cheese. References have been made to the importance of the cheese industry. Only 10 per cent. of the imports of cheese come from foreign sources. Ninety per cent. already come from within the Empire. When we come to eggs in shell, the figures show a very gratifying increase in home production, an increase which it is desired to stimulate and assist in every way. The chief sources of foreign supplies of eggs are: Denmark 29 per cent., Holland 15 per cent., Belgium 8 per cent., and considerable quantities from Poland and China. It is confidently hoped that these arrangements with regard to eggs will assist the home producer as well as the Dominion producer.

I want to say a word or two on milk because of some remarks which fell from the hon. Member for South Bradford (Mr. Holdsworth), who has now left the House. Milk has to be subdivided. Included in this Amendment are condensed milk and also milk powder. It is a strange fact that the supplies from the Dominions of condensed milk have shown a falling tendency and are now relatively small, while those from the United States of America remain considerable. It is the hope of the Government that, with the assistance of the arrangements contemplated by this legislation, the Dominions will be able to regain a very considerable portion of the trade which they appear to have lost in recent years. The hon. Member for South Bradford referred to percentages of 95, and five, and asked why the 95 per cent. should be penalised to benefit the five per cent. The Committee will no doubt like to know that the figures to which the hon. Member is referring are only of one special type of condensed milk, namely, separated condensed milk, of which the supplies from the Empire are, as he says, limited to 5 per cent. No appreciable quantity of separated condensed milk is manufactured in the United Kingdom, as it is a by-product of the butter-making industry.

I pass from specific matters relating to these individual dairy products to deal with the more general observations which have been raised in the debate. A number of speakers have complained of the fact that these articles of consumption should be taxed at all. Let the Committee be under no misapprehension about the matter. These are already taxed to the extent of 10 per cent. ad valorem under the Import Duties Act, 1932. There is no proposal in the Bill relating to these products to put on an entirely new tax of which the country has had no experience. There is a comparatively slight increase in the basic rate. In some cases the new duties are specific duties, and it is not easy arithmetically to calculate the specific duty and arrive at the precise ad valorem figure. But from the calculations which have been made it appears that, if we said that the basic ad valorem duty under the Imports Duties Act was 10 per cent., the rate under the Ottawa provision is something in the neighbourhood of 15 per cent. It really does seem to be straining at a gnat to use some of the observations which some hon. Members have employed in referring to this Amendment in decrying the taxation of these articles as if the poorest of the poor were being injured. There is no foundation for those assertions whatever, and steps are being taken to see that the increased duties here are compensated for by the area of supply being controlled in the sense that the Dominion producer is now to have an assured market for these articles, and so, we believe, the needs of the consumer will adequately be met.

Sir P. HARRIS

Will the same principle apply to butter and eggs as applies to wheat? If the price goes up is there power to take off the duty?

Dr. BURGIN

In reply to the specific question, there is no power asked for to take off the Duty. I was asked by the hon. Member for Gower whether the policy of the Government with regard to these dairy products was to restrict the total quantity coming into this country, or merely to put the price level of the home producer up to the cost of the imported article, with the duty on it. The policy, of course, is to restrict the quantity of foreign products coming into the United Kingdom, but that does not necessarily involve an increase in price. Whether an increase in wholesale prices has an effect on retail prices or not, is always a matter of experience and argument, but certainly nothing will be lost by the general level of prices being much more stable than it has been under conditions of recent times.

I was asked a question by the hon. Member with regard to the provisions which appear in all the Agreements with the Dominions as to the power to put on a duty against these imports from the Dominions after a period of three years. I think the provision which is scheduled in the Agreement in each case speaks for itself, but in order to make it perfectly clear I will deal with the specific question raised. It will be remembered that there are two powers, one by the United Kingdom Government after notification to the Dominion Government, and the other only by agreement with the Dominion Government. The power to be exercised after notification to the Dominion Government is to impose a duty against a Dominion's commodity provided that some preferential arrangement is maintained against foreign countries. In order to do that, the Government would have to rely upon their general powers, not under this Bill, of increasing the duty against foreign imports—presumably under the Imports Duties Act, 1932.

Mr. D. GRENFELL

What I want to know is what would be the conditions of the industry which would require the adjustment provided for?

Dr. BURGIN

The hon. Member must not ask me to anticipate what the conditions will be at the end of three years which might induce His Majesty's Government to put on a duty against a, Dominion product.

Mr. GRENFELL

What were the considerations present in the minds of those who made the condition?

Dr. BURGIN

I should have thought that point was quite obvious. We are endeavouring to assist our home producer first of all, and here is a provision, elaborately worked out at Ottawa, which says that we are providing that Dominion produce is to come in free, but we let the Dominion Governments realise that if that should hurt our home producers then, at the expiration of three years, we reserve power to ourselves to put on a duty even against the Dominions, still reserving the preference. It seems to me that this is another instance of the fact that those who negotiated this Agreement displayed considerable foresight and business acumen. The second part of the power which the United Kingdom Government possess is, by agreement with the Dominion Government at the end of three years, to arrange the whole matter on a quota basis, if that should then be thought desirable. I think that deals with the point raised by the hon. Member.

Mr. CURRY

The hon. Member says that at the end of three years the United

Kingdom Government reserve power in certain circumstances to put on a duty against the Dominions, still reserving the preference. Does the phrase, "still reserving the preference," mean that the tariffs on foreign goods are going to be raised still higher?

Dr. BURGIN

I thought I had made that paint perfectly clear. Under the Import Duties Act, 1932, there is power, subject to the provisions of that Act being observed, for a duty on an article coming from a foreign country to be put on whenever the Tariff Advisory Committee think fit. This power in the Ottawa Agreements is a provision saying that this is not an open door to the Dominions to the extent of damaging our home producers, and that at the end of three years, should that effect, unfortunately, be produced, there would be power to put a duty against a Dominion. In order to maintain the preference, that would involve a greater duty on foreign imports. There is no hesitation in making these points perfectly clear. In all these duties relating to dairy produce the Government have had three considerations in mind; the home producer, the Empire producer and the consumer. It is clear that these slight increases from the level of the Import Duties Act to the slightly increased rates under this Bill cannot have the effect upon retail prices which some hon. Members fear, and that the stimulus to the home producer and Dominion producer alike should result in considerable benefit to this Country.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 39; Noes, 197.

Division No. 330]	Ayes.	[3.56 p.m.
Acland, Rt. Hon. Sir Francis Dyke	Edwards, Charles	Lansbury, Rt. Hon. George
Adams, D. M. (Poplar, South)	Evans, Capt. Ernest (Welsh Univ.)	Lawson, John James
Aske, Sir Robert William	Foot, Isaac (Cornwall, Bodmin)	Mabane, William
Attlee, Clement Richard	Greenwood, Rt. Hon. Arthur	McEntee, Valentine L.
Banfield, John William	Grenfell, David Rees (Glamorgan)	Parkinson, John Allen
Batey, Joseph	Griffith, F. Kingsley (Middlesbro', W).	Samuel, Rt. Hon. Sir H. (Darwen)
Bernays, Robert	Groves, Thomas E.	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Briant, Frank	Grundy, Thomas W.	Thorne, William James
Brown, C. W. E. (Notts., Mansfield)	Hall, George H. (Merthyr Tydvil)	Tinker, John Joseph
Cocks, Frederick Seymour	Harris, Sir Percy	Wedgwood, Ht. Hon. Josiah
Cripps, Sir Stafford	Janner, Barnett	Young, Ernest J. (Middlesbrough, E.)
Curry, A. C.	Jenkins, Sir William
Dagger, George	Johnstone, Harcourt (S. Shields)	TELLERS FOR THE AYES.—
Davies, Rhys John (Westhoughton)	Jones, J. J. (West Ham, Silvertown)	Mr. John and Mr, G. Macdonald.
NOES.
Albery, Irving James	Amery, Rt. Hon. Leopold C. M. S.	Beauchamp, Sir Brograve Campbell
Allen, Sir J. Sandeman (Liverp'l, W.)	Applin, Lieut.-Col. Reginald V. K.	Beaumont, M. W. (Bucks., Aylesbury)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Barton, Capt. Basil Kelsey	Beaumont, Hon. R.E.B. (Portsm'th,C.)
Bennett, Capt. Sir Ernest Nathaniel	Guinness, Thomas L. E. B.	Perkins, Walter R. D.
Betterton, Rt. Hon. Sir Henry B	Gunston, Captain D. W.	Petherick, M.
Borodale, Viscount	Hacking, Rt. Hon. Douglas H.	Peto, Sir Basil E. (Devon, B'nstaple)
Bossom, A. C.	Hall, Capt. W. D'Arcy (Brecon)	Peto, Geoffrey K.(W'verh'pt'n,Bilston)
Boulton, W. W.	Hanley, Dennis A.	Pickford, Hon. Mary Ada
Bower, Lieut.-Com. Robert Tatton	Hartland, George A.	Powell, Lieut.-Col. Evelyn G. H.
Boyd-Carpenter, Sir Archibald	Harvey, Major S. E. (Devon, Totnes)	Pownall, Sir Assheton
Brass, Captain Sir William	Heilgers, Captain F. F. A.	Procter, Major Henry Adam
Brocklebank, C. E. R.	Heneage, Lieut.-Colonel Arthur P.	Raikes, Henry V. A. M.
Brown, Ernest (Leith)	Herbert, Capt. S. (Abbey Division)	Ramsay, Capt. A. H. M. (Midlothian)
Brown, Brig.-Gen. H.C.(Berks., Newb'y)	Hore-Belisha, Leslie	Ramsay, T. B. W. (Western Isles)
Burgin, Dr. Edward Leslie	Hornby, Frank	Rankin, Robert
Burnett, John George	Howard, Tom Forrest	Reed, Arthur C. (Exeter)
Cadogan, Hon. Edward	Howitt, Dr. Alfred B.	Reid, Capt. A. Cunningham-
Campbell, Rear-Adml. G. (Burnley)	Hudson, Capt. A. U. M. (Hackney, N.)	Reid, James S. C. (Stirling)
Carver, Major William H.	Hudson, Robert Spear (Southport)	Remer, John R.
Castlereagh, Viscount	Hume, Sir George Hopwood	Rentoul, Sir Gervais S.
Chalmers, John Rutherford	Hunter, Dr. Joseph (Dumfries)	Renwick, Major Gustav A.
Chamberlain, Rt. Hon. N. (Edgbaston)	Hurd, Sir Percy	Rhys, Hon. Charles Arthur U.
Chapman, Sir Samuel (Edinburgh, S.)	Joel, Dudley J. Barnato	Robinson, John Roland
Clydesdale, Marquess of	Jones, Sir G. W. H. (Stoke New'gton)	Ropner, Colonel L.
Cochrane, Commander Hon. A. D.	Kerr, Lieut.-Col. Charles (Montrose)	Rosbotham, S. T.
Collins, Rt. Hon. Sir Godfrey	Kerr, Hamilton W.	Ross Taylor, Walter (Woodbridge)
Colville, Lieut.-Colonel J.	Kimball, Lawrence	Runge, Norah Cecil
Cooke, Douglas	Kirkpatrick, William M.	Russell, Hamer Field (Sheffield, B'tside)
Cooper, A. Duff	Knatchbull, Captain Hon. M. H. R.	Salmon, Major Isidore
Copeland, Ida	Knox, Sir Alfred	Samuel, Sir Arthur Michael (F'nham)
Craddock, Sir Reginald Henry	Law, Richard K. (Hull, S.W.)	Sandeman, Sir A. N. Stewart
Cranborne, Viscount	Leckie,.J. A.	Sanderson, Sir Frank Barnard
Croft, Brigadier-General Sir H.	Leighton, Major B. E. P.	Savery, Samuel Servington
Crossley, A. C.	Lennox-Boyd, A. T.	Scone, Lord
Davison, Sir William Henry	Levy, Thomas	Simmonds, Oliver Edwin
Denman, Hon. R. D.	Llewellin, Major John J.	Simon, Rt. Hon. Sir John
Denville, Alfred	Lloyd, Geoffrey	Smiles, Lieut.-Col. Sir Walter D.
Duckworth. George A. V.	Locker- Lampson, Com. O. (H'ndsw'th)	Smith, Sir Jonah W. (Barrow-in-F.)
Dugdale, Captain Thomas Lionel	Loder, Captain J. de Vere	Smith, R. W.(Ab'rd'n & Kinc'dine, C.)
Duggan, Hubert John	Lovat-Fraser, James Alexander	Smith-Carington, Neville W.
Duncan, James A. L. (Kensington, N.)	MacDonald, Malcolm (Bassetlaw)	Smithers, Waldron
Eden, Robert Anthony	McKie, John Hamilton	Somervell, Donald Bradley
Edmondson, Major A. J.	Maitland, Adam	Somerville, Annesley A. (Windsor)
Elliot, Major Rt. Hon. Walter E.	Makins, Brigadier-General Ernest	Southby, Commander Archibald R. J.
Elmley, Viscount	Manningham-Buller, Lt.-Col. Sir M.	Stanley, Lord (Lancaster, Fylde)
Emmott, Charles E. G. C.	Margesson, Capt. Henry David R.	Stanley, Hon. O. F. G. (Westmorland)
Entwistle, Cyril Fullard	Marsden, Commander Arthur	Stourton, Hon. John J.
Erskine, Lord (Weston-super-Mare)	Mayhew, Lieut.-Colonel John	Strauss, Edward A.
Erskine-Bolst, Capt. C. C. (Blackpool)	Merriman, Sir F. Boyd	Stuart, Lord C. Crichton-
Falle, Sir Bertram G.	Mills, Sir Frederick (Leyton, E.)	Sugden, Sir Wilfrid Hart
Fermoy, Lord	Mills, Major J. D. (New Forest)	Thomas, Rt. Hon. J. H. (Derby)
Fielden, Edward Brocklehurst	Milne, Sir John S. Wardlaw-	Todd, A. L. S. (Kingswinford)
Fox, Sir Gifford	Mitchell, Harold P.(Br'tf'd & Chisw'k)	Touche, Gordon Cosmo
Fremantle, Sir Francis	Mitchell, Sir W. Lane (Streatham)	Tryon, Rt. Hon. George Clement
Fuller, Captain A. G.	Moore. Lt.-Col. Thomas C. R. (Ayr)	Wallace, Captain D. E. (Hornsey)
Ganzoni, Sir John	Moreing, Adrian C.	Ward, Sarah Adelaide (Cannock)
Gilmour, Lt.-Col. Rt. Hon. Sir John	Moss, Captain H. J.	Warrender, Sir Victor A. G.
Glossop, C. W. H.	Munro, Patrick	Watt, Captain George Steven H.
Gluckstein, Louis Halle	Murray-Philipson, Hylton Ralph	Wells, Sydney Richard
Goff, Sir Park	Nation, Brigadier-General J. J. H.	Wills, Wilfrid D.
Goodman, Colonel Albert W.	Nicholson, Godfrey (Morpeth)	Wilson, Clyde T. (West Toxteth)
Gower, Sir Robert	North, Captain Edward T.	Wise, Alfred R.
Graham, Sir F. Fergus (C'mb'rl'd, N.)	Nunn, William	Worthington, Dr. John V.
Grattan-Doyle, Sir Nicholas	O'Donovan, Dr. William James
Graves. Marjorie	Ormsby-Gore, Rt. Hon. William G. A.	TELLERS FOR THE NOES.—
Grimston, R. V.	Pearson, William G.	Captain Sir George Bowyer and
Guest, Capt. Rt. Hon. F. E.	Penny, Sir George	Lieut.-Colonel Sir A. Lambert Ward.

Sir S. CRIPPS

rose—

It being after Four of the Clock and objection being taken to further Proceeding, the CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again upon Monday next.