§ 25 and 26. Mr. HANNONasked the Secretary of State for the Colonies (1) whether he will reconsider the question of increasing the total amount of Colonial sugar on which preferential rates of duty are allowed, in view of the fact that the 853 proposed total of 842,000 tons is inadequate to provide for the normal expansion of the West Indian sugar industry;
§ (2) if the proposed establishment of a new sugar factory in Jamaica has been brought to his notice; if he is aware that this project is about to be abandoned because of the uncertainty whether the product of the factory will recceive preferential treatment in the British market; that the failure of this project will mean a loss of a machinery contract worth £70,000 to this country and a loss of £40,000 in wages in Jamaica; and if he will take appropriate action?
§ 24. Mr. DAVID GRENFELLasked the Secretary of State for the Colonies whether, with respect to his announcement at the World Economic Conference that the Government were willing to limit the quantity of Colonial sugar, he is aware that this announcement is causing concern in the trade, in that the total quantity proposed to be allowed will be inadequate to provide for the normal expansion of the West Indian sugar industry, and one result of the announcement has been to stop orders in this country for machinery; and whether he can make any statement which will allay the anxiety felt in the industry?
§ Sir P. CUNLIFFE-LISTERAs the answer is a long one, I will circulate it in the OFFICIAL REPORT.
§ Lieut.-Commander AGNEWDoes not my right hon. Friend think that it is time that a colony like Jamaica should be given a chance of reverting to its old policy of producing sugar, now that it has been visited by such great losses in its banana plantations?
§ Sir P. CUNLIFFE-LISTERIf my hon. and gallant Friend reads the main answer which I have given, he will see that nobody is doing anything which prevents Jamaica producing sugar.
Viscountess ASTORWhat about our subsidy on sugar-beet? Surely, the £5,000,000 subsidy on sugar-beet may have something to do with it?
§ Sir P. CUNLIFFE-LISTERThe Noble Lady, I think, forgets the very large increase in Imperial preference granted 854 to the Colonies in the year after we came into power.
§ Following is the answer:
§ I am not aware that the policy of His Majesty's Government with regard to a world agreement on sugar is causing concern to the Colonial sugar industry generally, with whose representatives I have kept in close touch; but I am glad to have an opportunity to correct the misconceptions which appear to exist in some quarters.
§ The economic life of the sugar-producing Colonies is dependent on the maintenance of a remunerative price for sugar. In 1932, when the fall in price had not proceeded so far as it has now, His Majesty's Government felt it necessary to come to the assistance of these Colonies by a special extension of the preference at considerable cost to the United Kingdom Exchequer, but it would be unfair to hold out any hope that this assistance can be increased. At present the world's potential output of sugar is very largely in excess of the figures of consumption. That excess of productive power is partly held in check by an agreement between the principal exporting countries; but without a continuation and an extension of that agreement there is a real risk of such an unregulated flow of sugar on the market as will lead to a complete collapse in price. His Majesty's Government believed, and they have reason to think that they had the general support of the Colonies in believing, that the prevention of such a contingency by a world wide regulation agreement was in the interests of Colonial sugar producers. They accordingly stated at the Monetary and Economic Conference that, provided the other principal producers entered into a satisfactory agreement, they would limit the expansion of Colonial exports by stabilising them on the basis of current potential output for two years, with provision for a reasonable expansion thereafter.
§ Although it has not yet been possible to reach a world agreement, that offer holds good in principle, subject to whatever adjustment of the figures may be required owing to effuxion of time; but no actual restriction is being imposed on develop- 855 ment in the Colonies. I think there can be no doubt that unregulated expansion throughout the world could in the long run have nothing but disastrous consequences both to Colonial producers, whose output might be expected to fall owing to the losses they would experience, and to machinery makers in this country, who would lose orders because producers would be unable to afford new machinery.
§ I should add that the question of restriction is quite distinct from the question of Imperial preference. The object of restriction is to maintain the world price of sugar at an economic level; the object of Imperial preference is to afford a preferential market to Empire producers.