HC Deb 29 April 1935 vol 301 cc133-78

(1) For the purpose of giving advice and assistance to the Federal Government on all questions relating to the levying of any duty of customs on goods imported into the Federation or export duty on goods exported from the Federation there shall be constituted a board, to be called "the Indian Tariff Board," consisting of a chairman and not less than two or more than five other members, to be appointed by the Governor-General in his discretion after consultation with the Secretary of State.

(2) The members of the board shall hold office for a period of three years and shall be eligible for reappointment from time to time on the expiration of their term of office.

If a member becomes, in the opinion of the Governor-General, unfit to continue in office or incapable of performing his duties under this Act the Governor-General in his individual judgment shall forthwith declare the office of such member to be vacant and shall notify the fact in such manner as he thinks fit, and thereupon the office she become vacant.

(3) The expenses of the board to such an amount as may be approved by the Governor-General (including the expenses of their staff and such salaries or other remuneration paid to all or any of the members as the Governor-General may determine) shall be charged on the revenues of the Federation.

(4) The board may make rules—

  1. (a) for regulating the proceedings, including the quorum, of the board; and
  2. (b) for authorising the delegation of any of the functions of the board to a sub-committee consisting of members of the board.

(5) The board, so tar as they consider it necessary or desirable so to do for the proper discharge of their functions, may by notice in writing require any person to furnish them with returns or other information, or subject to the payment or tender of the reasonable expenses of his attendance, to attend as a witness before them or before any person authorised by them and to give evidence or produce documents, and if any person fails without reasonable excuse to comply with the provisions of any such notice he shall be liable on conviction to a fine not exceeding five hundred rupees and in the case of a second or subsequent conviction to a fine not exceeding two thousand rupees.

(6) The board, or any person authorised by them, shall have power to take evidence on oath and for that purpose to administer oaths.

(7) The Governor-General shall submit to the board any proposal to impose, increase, decrease, or abolish any duty of customs or export duty and the board shall consider any such proposal and shall report thereon to the Governor-General and the Governor-General may, in his individual judgment, publish such report in such manner as he thinks fit.

(8) If in respect of any proposal to increase any duty of customs or export duty the board shall be of the opinion that such proposed increase if brought into operation would result in decrease in the revenue derived from such duty of customs they shall report to that effect to the Governor-General, and the Governor-General shall transmit such report to the Secretary of State together with any statement in writing he may see fit to make, and the Secretary of State shall lay such report and such statement (if any) before Parliament.

(9) The Indian Tariff Board as existing immediately before the commencement or this Act shall be dissolved and such compensation for loss of salary and emoluments as His Majesty in Council may prescribe shall be paid to the members of that board out of the revenues of the Federation.—[Mr. Thorp.]

Brought up, and read the First time.

8.36 p.m.


I beg to move, "That the Clause be read a Second time."

I respectfully agree with you, Sir Dennis, that there is a great question of principle involved in all these new Clauses. The Clause which I now move is taken to a great extent from Section 2 of the Import Duties Act, 1932, and it is designed to set up in India a Tariff Advisory Board with analogous and in many respects identical powers and duties to those of the Import Duties Advisory Committee in this country. It is felt, and indeed it is submitted to the Committee, that what is good enough for the Government of this country might not unfairly be regarded as of some value and assistance to the Government which it is contemplated should be set up in India. The question of the tariffs which will be applied in India is one which has exercised, far more than is generally appreciated, the minds of a great many of the manufacturers in Lancashire, and they have been concerned with what will be the result if this Bill ever comes into effective operation.

We know that in the past the interests and anxieties of Lancashire have rather been scouted, and a member of the Government on one occasion said that Lancashire should not worry about the paltry 3 per cent. which was put against the goods of Lancashire. The question is capable of reduction almost to a simple proportion sum, but the answer, of course, is not easy to obtain. If in a few short years the duty against goods exported from Lancashire to India has increased from 3 per cent. to over 25 per cent., how much is it going to increase when this Bill becomes an Act of Parliament and the Government in India comes into operation? We know that from one cause or another there has been an improvement in Lancashire, thanks to a great extent to this Government. Some people think that improvement might have been brought about a great deal earlier than it was and that the measures taken by the Government to bring it about could have been more vigorously and potently pushed forward than they have been.

All this proposed Clause seeks to do is to set up machinery which would have two objects, if not three. One object would be to assist the Governor or the Governor-General in the decision to which he might have to come on the question whether any duties which were placed upon exports from this country to India should be rightly assessed as penal duties. It is, I think, the view of the Committee—it has often been expressed in the House—that no penal duties should be allowed against the imports of this country into India. What better machinery could be devised to advise the Governor-General on such a technical matter than an advisory board which this new Clause proposes to set up? In the second instance, the Board could in case of need give considerable publicity to its recommendations; and it would also form a forum before which the interests of Lancashire could be placed by the merchants and manufacturers who, rightly or wrongly, thought their interests were not being adequately or properly protected by the Governor-General. The remainder of the Clause is really only machinery in that it seeks to put an end to the present India Tariff Board and substitute the contemplated Tariff Board. The attitude of the Government towards the interests of Lancashire will be subjected to an acid test by the attitude they adopt towards this new Clause. The test is whether they are prepared to afford the Governor-General the protection of the advantage of having an experienced opinion upon the various duties that are proposed to be placed against Lancashire goods.

8.45 p.m.


I cannot recollect ever having heard an Amendment moved in this House with so scanty an explanation of what its effect would be. There is at the present time a Tariff Board in India which is under a statutory obligation to answer certain questions, notably whether, in the case of any industry which has applied for a tariff, there is a reasonable prospect that after it has been in receipt of the assistance of a tariff for a certain time it will become a self-supporting industry. The effect of this Clause is to abolish an existing Tariff Board which is very similar to the Import Duties Advisory Committee in this country and to substitute for it a tribunal whose report, if it finds that the effect of an increase in a duty will be to reduce the revenue, in other words, if the tariff is likely to have a protective effect, the Secretary of State will be under an obligation to lay before this House. The effect of this Clause is quite definitely to go back upon the Indian Fiscal Convention, which has been in force since 1920.

I confess that I find it difficult to understand how that section of the Conservative party who are frequently known as "Diehards" are able to put forward simultaneously and without any feeling of inconsistency two entirely different arguments. We heard them, in their great Second Reading speeches, talking about an India for which we have a sacred trust and expressing the utmost concern for the dumb and docile masses of the Indian people. Those who take that view about this Bill are, most of them, conspicuous for advocating a protective policy for this country, claiming that it would be in the interests of the working classes here. If they consider that we owe to India the same care, the same studious avoidance of exploitation, which a trustee owes to his cestui que trust, I should have thought that it would be impossible for them to refuse to Indian politicians, who have learned from them that a protective policy will be in the interests of the masses of India, the protective tariffs which they claim, when imposed here, are in the interests of the English working classes. Indian politicians who agree with that view have claimed for India the right to put on protective duties against imports from this country. Hon. Members can have it one way or the other. Either they can take the view that because we conquered India we are entitled to maintain a free and open market for our own exports or, on the other hand, they can take the view that India is a sacred trust and that the interests of India and the masses of the Indian people are far more important than the interests of constituents here. How the same hon. Members can put forward both arguments simultaneously I confess that I do not understand. When I hear their speeches I am no longer surprised that Englishmen have, unfortunately, a reputation for hypocrisy in so many countries of the world. The Cotton Excise Duty, imposed in 1894 by the Secretary of State in this country, in spite of the protests of the Government of India, is the usual example cited by Indian politicians when they say that the attitude of the British Government towards India has been one of exploitation.

What is the history of the Indian Fiscal Convention which it is proposed by this new Clause to abrogate? Let us remember that this is not one of the cases in which the Secretary of State or the Viceroy has, without the authority of this House, made a pronouncement which has afterwards been called a pledge. This Indian Fiscal Convention dates from the report of the Joint Select Committee which sat upon the Act of 1919, and I would like to quote a few words from that report which are very strictly relevant to this point: Nothing is more likely to endanger the good relations between India and Great Britain that a belief that India's fiscal policy is dictated from Whitehall in the interests of the trade of Great Britain. That such a belief exixsts at the moment there can be no doubt. That there ought to be no room for that belief in future is equally clear. The Report of the Joint Select Committee was accepted by the Government and, therefore, by the House of Commons. That Fiscal Convention has now been in operation for 15 years. It has been accepted by successive Secretaries of State, Liberal, Conservative and Socialist, and the Simon Commission themselves recommended that there should be no change. The hon. and learned Member who moved this Clause said there had been an improvement in the trade of Lancashire during the time the present Government have been in power. I wonder, therefore, why he should not wish to continue the policy which the present Secretary of State has followed with so much success. There was no attempt at coercion by the Secretary of State when the Indian Delegation went to Ottawa, they went without any orders or any instructions from the Secretary of State and a very valuable trade agreement was reached at Ottawa. Subsequently, there was a further subsidiary agreement about tin sheets. Carrying on in the same spirit, the Secretary of State gave encouragement to the mission headed by Sir William Clare Lees. I am glad to see that there is present an hon. Member who was a member of that mission. As we have heard from him, and as is generally accepted both in this country and in India, that mission did a great deal to improve the relations between Lancashire and the Bombay millowners.

This Clause is supported by a certain number of those who represent the industry in Lancashire, but it has not the support of those who are best qualified to represent the views of those chiefly affected. Important as the Lancashire cotton trade is, it is well to remember that of the total exports from this country to India cotton yarn and cotton manufactures have only amounted to 22.1, 29.3 and, in the last year, to 22 per cent. of our total exports to India.


Is it not a fact that up to a very few years ago exactly the reverse was the case, and our exports of cotton goods to India formed the great majority of British exports?


That is, surely, obviously true. There was a time, before the Indian cotton trade was as highly developed as it is to-day, when Lancashire was still successful in maintaining the cotton Excise duties in order to prevent India from developing her own industry and before Japanese competition was as severe as it is at the present time, when the exports from Lancashire formed a much larger proportion of the total exports from this country to India. We are, however, concerned about the present.


Does the hon. Gentleman suggest that the increase of the duty from 3 per cent. to 25 per cent. has not caused that result?


I do not question that for one moment. The point I am making is that the policy of Parliament, of successive Governments and of the Joint Select Committee and the Simon Commission all have agreed with the principle that the fiscal policy of India should be left in Indian hands to be influenced by Indian considerations and Indian interests, and that India's fiscal policy should not be dictated to her by this country in the interests of this country. We are concerned with the present trade between this country and India, and with the immense importance to us of India as a market, which is dependent upon Indian good will. I am pointing out that, important as Lancashire and as our cotton exports to India are, they do not amount to more than about one quarter of our total exports to India. For example, in the case of machinery and mill work—that is to a very large extent the machinery for which there has been a demand from India, because of the protective policy which has been followed and the development in India of secondary industries—exports in that single category amounted to from 17.2 per cent. to 18.3 per cent.


Would the hon. Member give us the figure of the total exports from this country to India since the War, and compare them with the figure to-day of £36,000,000.


I have not those figures, because they are not relevant to my argument. What I can say is that there has been an increase in our exports to India since the Ottawa Agreements were concluded, in which a policy of agreement and good will was followed by the present Government.


I think the hon. Gentleman is not quite correct in his figures. The increase in our exports has surely taken place during the past year.


I am sorry, but I have not the figures actually ready, and I should certainly be willing to be corrected. I was speaking from memory, and my memory may be at fault—although, frankly, I do not think it is. The Committee might well pay attention to the views expressed by the executive council of the Associated British Chambers of Commerce, in regard to the general policy which is advocated by the great exporting houses. The Chambers of Commerce were represented by Sir Alan Anderson before the Joint Select Committee, and when the report of the Joint Select Committee was issued, the executive council considered it and passed the following resulotion: The executive council supports the foregoing recommendations made by the Joint Select Committee including the safeguards against commercial, financial and shipping discrimination and penal tariffs. The council trusts that such provisions will be included in the forthcoming Bill as may be found necessary to make these safeguards effective. Because the Government's policy has been carefully framed on the lines of the report of the Joint Select Committee; because that is in accordance with the policy which has been recommended by successive committees of inquiry; because it has been followed by Secretaries of State representative of all three political parties, and because originally it was accepted as the policy of Parliament in 1920, I trust that the Government will not accept the proposed new Clause.

9.0 p.m.


I was rather surprised to hear the hon. Member for Doncaster (Mr. Molson) say that the general impression as to Englishmen throughout the world was that they have a reputation for hypocrisy. It is certainly news to me that that is the general impression in those parts of the world that I have visited, and I cannot accept the dictum of the hon. Member. In fact, I have always found wherever I have gone—and I have visited a few countries—that the Englishman is not looked upon as a hypocrite. He has been generally accepted as a man who is not afraid of speaking his mind and who, when he does so, generally tries his best to stick to what he has said. I congratulate the hon. and learned Member for Nelson and Colne (Mr. Thorp) upon the reasonable way in which he moved the proposed new Clause. The hon. Member for Doncaster might not realise the feeling which exists in the neighbouring county to that in which Doncaster lies, in regard to matters which affect the staple industry of Lancashire. I think he would agree that very little has been done for the cotton industry since we came into this House in 1931. I agree that a certain amount has been done, and I give all credit possible to the Government for what has been done. When I listen to the little discussions that go on, and to remarks like those made by the hon. Member for Doncaster, I gather the impression which is rather prevalent throughout Lancashire, that our cotton industry is being sacrificed in the agreements that have been entered on behalf of other industries.

We may be entirely wrong in that impression. I am willing to have an impression driven away from my mind and the proper ideas put there, but it will take more than what has been said by the hon. Member for Doncaster to do that. It will take more than what he said to alter the impression throughout the length and breadth of the cotton districts of Lancashire. We have noticed, and so probably has every other hon. Member in the House, that whenever we have asked that something should be done on behalf of the cotton industry, we have been put off. We have been told to have patience. When we glance through the Clauses in the Bill, what do we find that will directly affect the staple industry of Lancashire? In Clause 12 (1, f) there is undoubtedly a safeguard tending to prevent discriminatory or penal treatment against goods coming from the United Kingdom or from Burma. What would be the effect if the proposed new Clause were accepted by the Government? Surely it would merely put India into the position which this country enjoys at the present time. I may be entirely wrong in that view, but I fail to see any difference between such a board as is suggested in this proposed new Clause and the Import Duties Advisory Committee which we have in this country.

It has been said quite truly that there is already a Tariff Board in India, but, if my hon. Friend the Member for Doncaster had been a Lancashire Member, and had heard what is said about that Board in Lancashire, I am sure he would agree with all of us that the sooner that Board finishes its career the better for Lancashire. There is undoubtedly a strong feeling throughout Lancashire to-day that something ought to be done to set up a proper Tariff Advisory Board when a new system of government is being set up in India, and I fail to see how it will in any way detract from that good will about which we hear so much fro mall quarters of the House if we ask the Government to set up such a Board. Surely, it is not against the interests of India that the Governor-General, who under paragraph (f) of Clause 12 has the power to deal with anything that he considers detrimental or penal as regards imports from this country, should be advised by a board which would have the power to obtain, perhaps, more evidence than he would be able to obtain in carrying out that should we set up such a board in this specific duty. If that be not so, why country? Surely that was done because we came to the conclusion that it was better in the interests of this country that the question of tariffs should be, if possible, lifted out of the acrimonous atmosphere of party politics as we find it occasionally on the Floor of the House of Commons, and that is all that this Clause, as far as I understand it, suggests should be done in the interests of India. I cannot see why there should be any objection to the adoption of such a Clause.

Unless whoever replies on behalf of the Secretary of State can suggest what is the intention of the Government as regards helping that part of the industry of Lancashire which in days gone by exported so much to India to a fairer share of the trade with India, I am afraid that this particular Bill will not prove very palatable to the cotton people in Lancashire. No matter from what party point of view problems are approached in the House of Commons, it seems to me that, when those problems get back to the voter, they reduce themselves to a, question of bread and butter. My impression, during the short time for which I have interested myself in politics, is that, no matter on how high a plane problems may be put, the voter, in the final test, will reduce every suggestion and every beautiful theory to the question of how it is going to affect him as regards his work and wages, and that is how this question of the Tariff Board will be tested by the Lancashire voter. I am speaking quite plainly, and am putting before the Committee quite clearly what we have to face on this question. I cannot see why the Lancashire man should be told: "Yes, we have a Tariff Advisory Board here under the name of an Import Duties Advisory Committee, but we do not want to do that for India." I do not see any reason for not giving the same treatment to India that was given to us here in 1932.

9.11 p.m.

Duchess of ATHOLL

I should like to address myself more especially to the speech of my hon. Friend the Member for Doncaster (Mr. Molson) on this Clause. If he will forgive my saying so, I do not think his speech showed that he has studied this subject very deeply. He gibed at us on these benches for being in favour of protection for British workers and at the same time putting in the forefront of our points of opposition to the Government of India Bill the question of the welfare of the Indian peasants. My hon. Friend seemed to think that it was quite impossible to be working at the same time to help our workers and to promote the welfare of Indian workers. He forgets a speech made by Sir Charles Innes, the Finance Member in 1923, when the Indian Tariff Board was set up—a speech in which he said quite frankly, although it was his business to commend to the Assembly the setting up of the Tariff Board, that, if the peasants of India had full representation in the Indian Assembly, he would not be there that day advocating the setting up of a Tariff Board in order to carry out a system of protection which would mean high duties on many things the peasants used. That was a striking indication that, in the opinion of a man who well knew the economic and financial conditions of India, India was not yet ripe for high protective taxes, that her people were not ready for the policy of industrialisation which a tariff was likely to bring in its train.

I have had information from people who have lived close to the peasants in various parts of India as to the popularity of British cloth, which is now so largely shut out. I am told that the Indian peasants prefer Lancashire cloth to their own because it wears better; and it was said in my presence at a meeting, by one who is recognised as an authority on the conditions of life of the Indian peasant, that the peasant cannot buy the shirt that he wants because of the high tariffs which have been put on by the Indian Assembly. I heard the gentleman in question describe in the most moving terms how, year by year, during the 30 or 40 years he had spent in India, he had seen the peasants gradually increase the little stock of comforts that they could afford, because prior to 1921 the Government of India was steadily reducing taxation and leaving them more for their own pockets. He described how very scanty their clothing was when he first went to India, and how he had gradually seen them become able to buy more clothing and other little comforts, until in recent years higher taxes and duties were put on, when the peasant was no longer able to afford to buy the shirt that he wanted and his standard of living went down. Moreover, the tragedy of the position is that the Indian cloth, so I am told, is kept by the Indian mill-owners at a price only just below that of the British, so that the Indian peasant has to pay very nearly As much for less durable cloth as he would have to pay for the British cloth which he desires to purchase.

If the hon. Member asks me for any proof of what has been said to me by various men who are recognised as authorities, I would point out to him that the boycott of British cloth in 1930–31 was in no sense a popular measure. I have heard it referred to as such, as if it were a boycott in which the people gladly joined. The evidence is all the other way, namely to the effect that severe pressure amounting to intimidation, often of a violent kind, had to be exercised on dealers to prevent them from stocking British goods. What did that mean? They knew that people wanted to buy British cloth, and they wanted to sell it and it was only through intimidation that they were unable to stock it. I have been told, indeed, that at the height of the boycott there was a great deal of surreptitious buying of British cloth. In one town in particular near the hills dealers who dared not buy British cloth in the main centres such as Delhi or Bombay had to send to smaller towns in order to get their stocks of cloth. They did not bring it in at the front doors of their shops and display it in the front but by the back doors, and they sent it away to the hills on ponies. I was told that during the height of the boycott a great deal of British cloth was carried surreptitiously into the hills and other out-of-the-way places. Indeed, in some places I am told that Congress was obliged to give permits for its sale because people were so anxious to buy it.

The Indian peasant in his capacity of consumer is therefore suffering because of these high tariffs. Some day, possibly, Indian industry may be sufficiently advanced to be able to give him everything he wants, but to-day it has not reached that point; he has suffered because these high tariffs have been imposed too early in India's industrial development. Again, the Indian peasants suffer as workers from these high tariffs. If my hon. Friend will look at the evidence given before the Joint Select Committee by the Association of Bengal trade unions he will see how they stated that many workers were suffering in health as a result of leaving their villages where they led a comparatively healthy life, to go to sweated labour in the mills in the towns. They spoke in very strong terms of how Indian workers had suffered in health, and how increases in profits to the mill owners had not brought increases of wages, but sometimes reductions.

Therefore, there is no inconsistency whatever in working at the same time for fair protection for British workers in this country and also for the welfare of the peasants of India. It has been a great matter of satisfaction to me to find that the interests of the British workers and the Indian peasants were in large measure identical. It has been a very great comfort to me to feel that I could work for the interests of the thousands of people in this country who depend for their livelihood on trade with India, and that I could do the same for the people of India, who, in spite of the gibes one often hears, I regard as the greatest overseas trust that has ever been placed in the hands of our country.

I was also interested in the hon. Gentleman's allusion to the Fiscal Convention. He told us that the Joint Select Committee of 1919 wanted no change in the Convention. From the way he spoke, it appeared as if, in common with some other people, he seemed to think that we on these benches desired to abolish it. If that is his view, it shows how little he understands the position. Does he realise that if and when the Bill passes into law the Convention goes by the board? And does he not realise that it contains safeguards which do not exist in the Bill? [An HON. MEMBER: "Why?"] There again the hon. Member who asked the question shows how little he knows of what is in the Convention. I have here the description of it given by the Simon Commission. On page 244 of the first volume of their Report they describe how it was agreed that the Secretary of State does not interfere with the enactment of any tariff measure upon which the Government of India and the Indian Legislature are agreed. The right hon. Member for Epping (Mr. Churchill) said in his Second Reading speech, of which I reminded myself a few hours ago, how in his own experience as a Cabinet Minister the Secretary of State had often been asked to intimate to the Governor-General that a tariff that was under consideration was too high. He told us that on several occasions of which he knew, action of that kind had been taken. But that is only one of the safeguards in the Convention. There are two others. The Report goes on to say, but as a member of His Majesty's Government he cannot divest himself of responsibility for ensuring that no such measure"— that is a tariff measure— cuts across general Empire policy or is so unfair to any constituent part of the Empire as to bring India into conflict with it. This responsibility he can, in the last resort, fulfil by exercising his right of advising the Crown to disallow the measure, if passed. There are three safeguards which the Fiscal Convention contains. I regret to have to say it again—I said it the other day when we were discussing the Burma trade agreement—that I have not heard any Member of His Majesty's Government even refer to these safeguards when the Committee has been discussing this question. I have heard references made by Ministers to the Fiscal Convention, but I have heard nothing to indicate that the Convention contains a single safeguard or to make clear to the Committee that if the Bill is passed the safeguards will lapse. The reference by the hon. Member for Doncaster is proof of the widespread ignorance which prevails on this subject.


I was referring to the spirit underlying the Fiscal Convention. It is perfectly true that as the constitution changes, the actual form of the Fiscal Convention must also change. I was making the point that as far back as 1920 this House accepted the principle that India's fiscal policy should be decided by Indians or by the Indian Government in the interests of India, and not in the interests of this country.

Duchess of ATHOLL

Can my hon. Friend deny that these powers were given subject to the safeguards I have mentioned? The safeguards are there. They are described by the Simon Commission. They say that there had been some misunderstanding about them, but that as a result of correspondence undertaken by two successive Secretaries of State, Lord Peel and Lord Olivier, the matter had been cleared up, and they described the safeguards in the manner I have just read to the Committee. It is clear that there have always been these limitations on the measure of fiscal autonomy Parliament agreed to give to the Indian Assembly, but these limitations have been left out of account in all discussions here on this subject, and I make no apology for bringing the matter forward and emphasising it as I have done, because I do not think that the Committee or the country realise what safeguards are being given up if this Bill goes through. The safeguard which enables the Secretary of State to veto a tariff even if passed by the Assembly, if it cuts across the general line of Empire policy, I understand to mean that, since the Empire agreed on a policy of mutual imperial preference at Ottawa, the Secretary of State could insist upon a preference being given to British goods in regard to every tariff passed by the Indian Assembly. It is all very well for the hon. Member for Doncaster to shake his head, but it is not for him to settle the interpretation of the Convention. [An HON. MEMBER: "Who does?"] I put this forward as my own interpretation. There may be legal authorities who will dispute it, but I put it forward for what it is worth. I am not going to abandon it merely because of a shake of the head on the part of the hon. Member.


If that really was the right interpretation, and if the rest of the Empire had adopted a policy of Imperial Preference, why then was the delegation at Ottawa left completely free to negotiate and come to an agreement, or refuse to come to an agreement, with this country and with the Dominions, and that it was also left that it did not come into operation until it had been accepted without condition?

Duchess of ATHOLL

It is not for me to explain the actions of the Secretary of State; I can only say that if the Indian Assembly were given to understand that it had complete freedom in this matter, that is in the same spirit as the repeated declarations of the Secretary of State that India has fiscal autonomy. The Ottawa Conference and the Empire policy arrived at there have made this safeguard of very great value, and I would contrast with that the very feeble attempt that the Bill proposes to make to enable the Governor-General to prevent a tariff being passed that is discriminatory against this country. There is no attempt to give the Governor-General power to secure a preference or to use his influence towards a preferences: there is merely a power to prevent a discriminatory tariff, and the power with which the Instrument of Instructions supplies him is to be exercised very sparingly; it is only to be used if he has good reason to believe that the aim of the tariff is more to injure Britain than to aid India. It will very difficult for any Governor-General, however astute, to read the mind of his Minister of Commerce in any matter of that kind.

It may well be asked of some of the tariffs to-day whether they are not meant to injure Britain more than to help India, because for two successive years a Budget was presented which allowed for a dwindling revenue from these high tariffs on textiles. Anyone can see that from reading the Budget speech last year of the Finance Minister of India. In that speech was given an interesting table showing how in two successive years the Indian Assembly passed a Budget allowing a declining revenue from these high tariffs. If that has been permitted—and no one challenged it—it may very easily happen in the future. That seems to make very valuable the power that the clause we are discussing proposes to give to the proposed Tariff Board to enable them to advise the Governor-General if a tariff would result in decreased revenue. It seems to me extremely desirable from the point of view of Indian finances, which, as we know, are likely to create a great problem, because of all the charges that will fall on the Federation. It seems to me a very valuable step to set up a Tariff Board whose duty shall be to report to the Governor-General if a proposed tariff would result in a decreased revenue.

I cannot help finding rather a similarity between this proposed power of the Tariff Board and the power which the Government have given to the committee set up under Part I of the Unemployment Insurance Act to advise as to whether the finances of the Unemployment Insurance Fund are getting into an unsound condition. The machinery that is proposed, therefore, should be useful, and I feel that unless we attempt to secure continued preference for British goods in India under the proposed constitution, we shall be faithless to the trust which we have laid on our shoulders at home as Members of Parliament to do all we can to create conditions that will make the utmost amount of employment for the people in this country.

9.30 p.m.


No member of a Lancashire constituency brought into constant, close touch with the problems of that county, knowing the hardships that the cotton trade is having to undergo, and knowing that those hardships are mainly due to the lack of export trade, could have heard the rather provocative speech of the hon. Member for Doncaster without desiring in some way to undermine the arguments that he put forward. Those arguments have been demolished by the Noble Lady the Member for Perth and Kinross (Duchess of Atholl), but I should like to be permitted to say one or two words on the particular arguments he advanced. His arguments seemed to rest on two legs, both of which, in my view, are fallacious. He referred, in the first place, to the Fiscal Convention. He drew the mind of the Committee to the fact that the various committees which have examined this matter on many occasions had referred to the Convention and had said there should be no change. On that basis he rested his argument. This Bill definitely and absolutely alters the basis of the Tariff Convention. This Bill sets up a new kind of government, and it would be wrong to turn down this new Clause on the basis that it does something in connection with the Fiscal Convention. I think very few Members of Lancashire constituencies desire to go back on the Fiscal Convention. There is no such desire; but they are anxious to see that there should be reasonable safeguards in respect to the position.

The second argument put forward by the hon. Member for Doncaster was based on the suggestion that the Lancashire cotton trade had now fallen so greatly from its highest export level that it was desirous that we should pay less attention to it. That argument, I think, is one that will not carry much weight in this House. Formerly over 3,000,000,000 yards of Lancashire piece goods were sent to India, and, even allowing for any increase in exportation which might have taken place by reason of the Ottawa agreement, or the better feeling with the Clare Lees agreement, the figure of export now does not exceed 600,000,000 yards—certainly it does not exceed 700,000,000 yards. I am speaking from memory. Therefore, in the light of that catastrophic decline, the position of Lancashire does require very special consideration. I approach the consideration of this new Clause with the attitude of mind of an individual who has consistently advocated, and who believes in, a policy of good will as the basis and as the most sure foundation for our trade relations in India. It is on that basis that I rest. Nevertheless, it must be appreciated that a policy of good will can only be brought to fruition if it is brought into existence in an atmosphere of impartiality. What is the function of this Tariff Board? It is to find the facts and to indicate various suggestions. If by any circumstances the facts as they are well known to the outside world are preverted, if there is a jaundiced view of the position by reason of a partisan tariff board, then we are going to have the movement for good will working in an atmosphere which will not be successful.

I examined this new Clause not from the point of view of detail but from the point of view of principle—to consider whether or not it is desirable to see that the Tariff Board when it does exist is an impartial board. I should be willing to admit, as I am sure my hon. Friend when he replies will point out, that the scheme as outlined in the new Clause is not workable, and that it is a scheme which has many objections. But it is not on the details of the scheme that I support it. I support it on the question of principle as to whether or not it is desirable to set up some kind of tariff board of a known impartial character. The risk that the Tariff Board may not be impartial is a real risk. We have had some experience of what has happened. In the last tariff inquiry into textiles the findings were so obviously at variance with known facts that it became clear to everybody concerned that the sooner that tariff board inquiry failed, the better. Therefore, it is a real danger, a danger which has been experienced and a danger which all those who associate themselves with me in this matter, realise.

We do not impugn Indian good will one iota, but we do say that we have a duty to ensure as far as we can that the tariff board shall be impartial, that it should state the facts as it sees them and not gloss over the facts in accordance with some idea of putting forward a nationalistic policy and using the Tariff Board as an instrument of that policy. It is desirable that we should have an impartial Tariff Board, and we ask the Government, in reply, to address themselves to that particular point. We are not going to press the Government in regard to every word of this long new Clause, but we do think that we are entitled to say to them: "Here is a question of principle; a question which will become of the utmost importance not only to the people in India but to the people in Lancashire, as to whether or not the Tariff Board when it is set up will be impartial and will report the facts without any gloss." If the Government cannot accept this Clause, we ask them to consider the matter between now and the Report stage, and let the House of Commons and those of us who are particularly anxious to do something to help the Lancashire cotton trade have some assurance that when the new Constitution takes place there will be in existence an impartial tariff board.

9.40 p.m.


On this matter the arguments of Lancashire Members, who put forward quite frankly the interests of the Lancashire cotton trade, are a good deal more satisfactory than those who try to gloss over this matter and to suggest that this is some special provision on behalf of the Indian people. We are told that the Indian cotton manufacturers exploit the situation in their own interests. Yes, just as the manufacurers do over here. In the present phase of capitalism groups of capitalists use their national governments as much as they can for their trade interests. To suggest that we have in this country some wonderful impartial Tariff Board, some impeccable committee acting on some principles quite apart from the trade interests of the country, is absolute bunk. All tariffs are directed ostensibly in the national interests of the country concerned or in the interests of trade groups. The issue that we have here is an issue between the manufacturing interests of this country and the manufacturing interests in India and, of course, the consumers will be exploited. A tariff board does not consider consumers any more than the National Government consider consumers when they put on tariffs. Let us get rid of the idea that we are going to interfere in Indian fiscal affairs in the interests of the Indian people. Let us be perfectly frank, as the hon. Member for Stockport (Mr. Hammersley) was when he declared that he is looking after the interests of Lancashire people. The only point to consider is whether this is a wise policy. I suggest that it is an unwise policy if you want to sell your goods to try and set up some form of organisation by which you are going to say to people: "You must do what we want." The result is that you get exactly a contrary movement.

It is rather curious that this suggestion comes from hon. Members who are never tired of talking about Empire. If they think that it is right that tariff boards should dictate tariff policy, they will have an opportunity in the next week or two. We are to have a large number of Premiers from various parts of the Empire over here. Hon. Members might suggest to those Prime Ministers who are coming over here for the Silver Jubilee that this House should pass a Measure setting up tariff boards and stating that tariffs are not to be put on in Australia, Canada or elsewhere in the Empire except strictly on some abstract principle of justice and that they should have no regard to the particular interests of their own traders. Let hon. Members do that and see what response they would have from those Prime Ministers. If they propose to serve out to India a different measure from that which they serve out to the rest of the Empire they had better say so frankly and put it forward in the name of the old-fashioned exploiting Imperialism, and not try to suggest that they are going to give India self-government but that at the same time they must in the interests of India get control over her fiscal policy.

Vice-Admiral TAYLOR

Is not the hon. Member forgetting that we are partners with the Government of India and that we have a special responsibility?


I agree, but why not suggest that India should also have a hand in appointing a tariff board over here? I do not understand the hon. and gallant Member's idea of partnership. I think his partnership must be from some naval point of view, such as a partnership between an admiral and a stoker, in which the admiral gives the orders and the stoker does the work. The Noble Lady is probably correct in saying that the Indian peasant is exploited by the Indian capitalist, exactly as they are exploited in this country and in every other country. It is not much good saying that India has been built up on sweated goods. The Lancashire cotton trade was built up on the sweating of small children. Everybody knows that. Let us have no humbug about the methods employed by capitalism, whether in the East or the West. There is nothing very high or moral about them.

9.44 p.m.


I support the new Clause, although I recognise its weakness. In reality it only insists on setting up a board similar to what we have here, although the board will be more numerous. I consider that we should have preferential treatment in regard to India. Unless we pass the new Clause we are in the hands of the advisory committee which is to be set up in India, and we know perfectly well that however the advisory committee is composed it is bound to be one-sided in regard to Indian affairs. That is natural. It is a question of every country for itself, and after all we should do the same if the position were reversed.

It will not be denied that we have done immense good in India and, therefore, I think we should gain some benefit. Why should we be on a par with, or only a little better than, Japan or America, or any European country? If we had a preferential tariff of 20 per cent. Japan could undersell us in the Indian market. Whatever we may say in regard to the quality of English cloth or machinery, or goods, which are exported to India, the Indian peasant, just as the English working-man's wife, will buy in the cheapest market. We have to see what advantage we can obtain in our trade with India. I certainly consider that as we have given so much to India it is not unfair to ask India to give us something in return, and that something should not be less than a 50 per cent. preference in any tariff which India may raise. India must have tariffs for revenue purposes, but if we had a 50 per cent. preference it would not interfere with the total revenue which India would obtain because we should export more goods to India and therefore more revenue would be raised. In my opinion, we made a great mistake during the last 70 years. When we gave self-government to the Dominions we could have made a business bargain with them, and I believe they would have been prepared to have accepted Dominion status and given the goods of this country a big preference. The hon. Member for Limehouse (Mr. Attlee) places all the blame on the capitalists. I should like to ask him whether assuming that cloth was manufactured in India by an Indian Government and was manufactured in this country by a Nationalist Government, or a Socialist Government, whether these two Governments, having to sell and buy, would not be just as keen rivals as capitalists are to-day. Undoubtedly they would. I support the new Clause, and I am sorry that it does not go farther.

9.49 p.m.


The hon. and learned Member for Nelson and Colne (Mr. Thorp) has raised a subject of vital interest to Lancashire, and one which merits the closest scrutiny of all Lancashire Members. I should like to take the Debate away from the more abstract principles which have been raised by some hon. Members, and study the problem on a purely objective basis. I would like hon. Members to put themselves in the place of a Lancashire merchant delivering his goods in Karachi, Bombay or Calcutta. He will find, as all hon. Members know, a tariff barrier awaiting him. But if these tariffs are raised for admittedly purely revenue purposes, I think he will have scant cause for objection. At the present moment the greater part of the Federal revenues are drawn from duties on imported goods, and under the projected constitution I understand that some 80 per cent. of the Federated revenues will fall under the purview of reserved subjects. These reserved subjects are the Army, foreign affairs and ecclesiastical affairs, and, therefore, if we analyse the situation we find, most unfortunately from the Lancashire point of view, that in fact cotton goods and the duties on cotton goods are in a large measure paying for the Indian Army.

But if our Lancashire merchant finds that the duties against him are imposed from purely political motives, then he will have very grave cause for complaint. If some hostile Indian administration threatens the Governor-General with an increase in the duties on Lancashire cotton goods if he does not reduce the Army Vote by so many crores or hand over some special department of state, then obviously a case of commercial discrimination will have arisen. Lancashire Members, and Members of the House, must scrutinise very carefully the powers which the Governor-General will enjoy in order to defeat any such move. Clause 17, Sub-section (4) lays upon the appropriate Minister, in this case the Minister of Commerce or his Secretary, the duty of warning the Governor-General of any such projected move of commercial discrimination. Therefore, the Governor-General will have some warning of such a move. Likewise, in the report of the Joint Select Committee it was laid down that the Governor-General should take action where discrimination is projected in fact if not in form. For instance, if a duty is imposed on certain goods of which 70 per cent. come from this country and 30 per cent. from other countries, that duty would in fact heavily hit this country.

With regard to the constitution of the Tariff Board, we may in future have some member of the board of well known congress views, but in my opinion, looking over the Bill, it seems to me that in Clause 12 the words "prevention of action" would in themselves allow the Governor-General to take any suitable action against commercial discrimination of that kind. I should like to ask whether that is not the case. I think it is better to leave this rather loose phraseology, "prevention of action," as a more suitable safeguard for Lancashire rather than insist on some more definite wording of the Bill. It is upon this aspect that hon. Members for Lancashire will judge the Bill, the safeguards against political discrimination. We as Lancashire Members must closely scrutinise every aspect of the Bill and are confident that the Government will have allowed no loophole which could have been avoided.

9.54 p.m.


On the face of it, this is a long and complicated proposal, but the issue raised is a very simple one. The new Clause proposes that a Tariff Board shall be set up and that if an Indian Minister desires to vary an import and export duty, he shall be obliged to submit the proposal to the Board before it can be effective. There is nothing in the proposal to compel the Indian Minister to accept the advice of the Board once it has been given. If the Board is not to have any power of enforcing its resolutions or opinions, we are left to consider what influence it is likely to have. I submit that if we are to judge by the speeches of hon. Members who support the proposal, the Board is not likely to have very much influence with an Indian Minister, and for this reason: We have heard nothing of any demand in India for this Board. We have heard a lot about Lancashire. Do hon. Members really think that by inserting a Clause which sets up a Tariff Board avowedly in the interests of Lancashire, and then saying to an Indian Minister, "You must put your proposals before that Board and hear their advice before you act," the Minister is likely to pay much attention to the advice Quite obviously the Indian Minister would probably be prejudiced from the start against any finding of the Board.

What is the alternative? The alternative is that we should rely upon free negotiations between the two Governments. Some hon. Members say: "Yes, that is all very well if both Governments honestly want to come to a commercial agreement without any hostility the one towards the other"; but they add: "It may be that an Indian Ministry would desire deliberately to pursue an anti-British policy." It seems to me that the safeguards already provided in the Bill are far more likely to be effective in that case than such a board as is proposed in this Clause. If hon. Members will look at the Instrument of Instructions to the Governor-General they will find in paragraph 14 a description of the circumstances in which be has to discharge his special responsibility in this matter, and it is therein quite clearly set out that he has to use his special powers in cases relating to import or export duties "only if in his opinion the main intention of the policy contemplated is by trade restrictions to injure the interests of the United Kingdom rather than to further the economic interests of India."

I submit that we are not entitled to ask for more than that. We are not entitled to ask India to sacrifice what she believes to be her economic interests to ours. We are only entitled to ask that she shall not, under the cloak of commercial action, deliberately strike at this country. That is provided for in the Instrument of Instructions. In these circumstances it would be most unwise to set up such a board as is proposed. The analogy of the board in this country falls to the ground for this reason: It is true that we have set up a tariff Advisory Committee in this country, but we can destroy it if we will, and it is not imposed on us from outside. Moreover, even in this country with that board set up, there is considerable freedom of action reserved to the Chancellor of the Exchequer. Suppose that because of some unexpected circumstance connected with currency or some world disturbance it is desired quickly to alter a duty. The Chancellor of the Exchequer can do it in his Budget without any previous inquiry by the Tariff Advisory Committee in this country. But under this Clause an Indian Minister would not be able to do that. The consequent delay might be a very serious matter. While one must have the greatest sympathy with the appeal made by the hon. Member for Stockport (Mr. Hammersley) in the interests of his constituents, we must not allow ourselves to be misled by that into doing something which in fact would not accomplish the purpose which he and others have at heart, and which very likely would hinder the accomplishment of the purpose of proposals that are already in the Bill.

10.2 p.m.


I am sorry that the hon. Member for Doncaster (Mr. Molson) is not in his place, because I told him that I was going to criticise the statement that he made. I was amazed at his statement that Englishmen had a reputation throughout the world for hypocrisy. The pedestal upon which this country was built was the word, the bond, of an Englishman. I was talking the other day to a friend of mine who had come back from Bolivia, and he told me that when the natives wanted to keep an oath they swore on the word of an Englishman. That could not happen if there had been any reputation for hypocrisy among Englishmen. I have the honour to represent a constituency in Yorkshire. Yorkshire is very interested in this subject, because it does quite a large export trade with India. I also have some cotton manufacturers in my constituency. When I listened to the hon. Member for Colchester (Mr. O. Lewis) the thought that occurred to me was that we as Members of Parliament are here to represent the views that are put before us by our constituents. Therefore, we have to deal with this matter on the general basis of trade, and not on the isolated case of cotton or any particular commodity.

I agree with what the hon. Member for Stockport (Mr. Hammersley) said. This new Clause may not be acceptable to the Government in every detail, but I am one of those who have been instructed to support the general principle contained in it. My constituency and the whole of Yorkshire are concerned in this matter. Within the last few years we have seen India's tariffs raised from 3 per cent. to 25 per cent. on goods which Yorkshire exports to India. With a number of my hon. friends I had on the Paper an Amendment to an earlier part of the Bill, the effect of which was that the Governor-General was entitled to have three advisers to help him, one to deal with external trade, and the Amendment asked that one of those members should have actual business experience, in practice and not merely in theory. But that Amendment was never called. I fail to see why, if a Tariff Board is so essential in this country and if we are handing over government to India, we should not have an impartial Tariff Board set up there so that the people of this country who are handing over government to India may feel satisfied that they are getting the protection to which they are entitled. I believe that a good deal of the anxiety which is felt by traders in this country who do an export trade with India would be relieved if they felt that the question of tariffs was to be dealt with by an impartial tribunal. It is not stretching it too far to say that at the present moment they are deeply concerned as to whether there shall or shall not be discrimination against the goods which they import into that country. I sincerely hope that if the Government cannot accept this Clause in the way in which it is framed, they will be able to accept the principle contained in it, and perhaps alter the words.

10.6 p.m.


I rise to support the Clause moved by the hon. and learned Member for Nelson and Colne (Mr. Thorp). But before doing so I should like to say a word with regard to the remarks of the hon. Member for Lime-house (Mr. Attlee) about the sweated labour of the cotton trade of Lancashire. It is quite evident that the hon. Member knows nothing about the cotton trade of Lancashire when he comes out with remarks of that description. The strongest trade union organisation in point of numbers is that of the cotton spinners of Lancashire. It was the richest in finance, and had the highest numbers because they were 100 per cent. of the operatives engaged in the trade. As for the abuse of child labour, all I can say is that the children of Lancashire will stand comparison with the children of the East End of London, and the adults of Lancashire will stand comparison with the adults of East London. The hon. Member may know something about Limehouse, but it is evident that he knows nothing about the operatives of Lancashire, who are quite able to stand examination from any point of view, and well able to look after themselves from a trade union point of view.

The hon. Member for Colchester (Mr. Lewis) commented on the fact that if a Tariff Board were established it would have no powers. Why, then, be afraid of the board? Even now we have a board in existence, and it has exercised certain powers, which some of us feel has been done in a manner detrimental to Lancashire. If it is wise, useful and necessary to have a Tariff Board in this country, it cannot be very detrimental to have one in India, which no one can claim has reached the system of government which we have in this country. It is claimed that the Tariff Board in this country has removed tariffs outside the reach of political influence, and the same people whom we are asking now to erect a Tariff Board in India are the people who erected the Tariff Board in this country.

If it is wise to remove tariffs out of the reach of political influence in this country, surely it cannot be very detrimental to do that in India. I appeal to the Government as representing a body of Members who have loyally supported this Measure with great temptations and provocations to do otherwise. With the principle of the Measure we are in hearty agreement. We think that it is the natural result of development, and although we have supported it right through from the beginning, I think we ought to have some consideration on a matter of this sort. It may be that we are asking a good deal of the Government in this matter, but I appeal to them to consider this request that is being made by us. The Tariff Board ought to be, and, I believe, would be helpful to the Governor-General himself. As one who has carefully listened to the whole of the discussions on this Measure, I have wondered what the Governor-General is going to do with all this legislation which is thrust upon him. Talk about a superman or a Philadelphian lawyer; he will have to be a very remarkable person indeed. Whoever he is, he would rejoice in the fact if he could have a board to help and advise him in this particular respect.

May I appeal to the hon. Gentleman who is to reply on behalf of the Government to see if he cannot meet us in this matter? We feel very strongly on this question. The Clause may not be word perfect, but we do ask for further consideration, and, if necessary, let the Government grant us something on the Report stage. We feel that we have a right to ask for something of this description. After all, we are giving great powers and concessions to India, and we have a right to attach conditions to those concessions and privileges. We feel that now is the time to demand that our trade should have precedence over the exports from other countries when we are making huge concessions, as we are, to the Indian people. We believe that when the Indian people themselves arrive at the stage of self-government which we in this country and most of the Dominions have, we can appeal to them from a mutual trading aspect; but at the present time we feel that the manufacturers of India have an undue preference in the council of India, and that makes us particularly afraid in Lancashire and we feel that some safeguards should be made. I appeal to the Minister to make these as strong as he can on behalf of the export trade of Lancashire.

10.14 p.m.


I feel that the Committee have fully realised the importance which this debate holds for Lancashire in particular, and not only for Lancashire but for all those who are interested and vitally concerned in British trade with India. We have had the privilege of listening to a great many speeches from Lancashire Members to-night. I feel sure that the Committee will bear testimony to their sincerity, and will sympathise with their great county in its difficulties. Any words of mine are inspired by sympathy for the position in Lancashire and sympathy with the mutual trading conditions between Great Britain and India. Under the Chairman's Ruling we are to discuss this new Clause and other new Clauses to do with tariffs in one and the same debate, and I think that it would be for the convenience of the Committee if I range over the whole subject as it has been presented and attempt to answer some of the complicated and difficult points that have been raised. Let me say that I fully realise the loyalty and enthusiasm with which the hon. Member for Bolton (Sir J. Haslam) has given us his interest and support, I fully realise the position in which he is placed in his own county and constituency, and in anything I say I will pay due regard to the appeal which he made to the Government in this matter.

The original proposal upon which all this discussion has arisen deals with the establishment and constitution of an Indian Tariff Board and it is to that proposed new Clause that I wish, in the first place, to address myself. The Government have naturally looked into this Clause with great interest and with as much sympathy as possible but the more we examine it the more difficult we find it of acceptance as it stands on the Paper. It appears that the main object of the Clause is to secure in India a Tariff Board the members of which are to be people agreeable to the Secretary of State. That is provided for in Subsection (1) which deals with the constitution of the proposed board and that proposal is of course directly contrary to the present practice. Whereas, at present the Tariff Board is appointed by the Governor-General as head of the Indian Government, it is proposed here that in future the appointment should be by the Governor-General in his discretion after consultation with the Secretary of State. That is a vital and radical difference from the constitution of the present board. I feel that there is a great deal of justice in the warning of the hon. Member for Colchester (Mr. Lewis) with regard to a board so radically different in its composition and method of appointment from that which exists at present. A board which was, in fact, subordinate to the Secretary of State would be at once suspect in India and would not, I feel sure, achieve the objects which hon. Members have in mind.

Under Sub-sections (7) and (8) of the new Clause it is proposed that in certain matters the board shall be under the supervision, if I may use a broad term, of the Governor-General, again acting in his discretion. These Sub-sections deal particularly with revenue duties and with the question of finding out whether such duties are imposed really with a view to obtaining more revenue and whether they are likely to do so. That again would be a direct departure from the constitution of the present Tariff Board. If we examine the objects with which the proposed board is to be set up, and the further proposals of the Clause we find that potential value of the board is seriously diminished. For instance, there is no obligation on the Indian Government to accept the findings of the board. Hon. and right hon. Gentlemen who have been opposing us thus appear to accept the Fiscal Autonomy Convention because they acknowledge that there is no obligation to accept the findings of this board. I am therefore obliged to ask them, in the first place, what would be the value of setting up a board for the objects which they have described, when they do not include in the Clause any obligation to accept the board's findings?


Are the Government here bound to accept the recommendations of our Tariff Board?


What is the obligation in the case of the Tariff Board in this country on which this Clause is framed?


I think our discussion of this important subject will be of more value if I am allowed to state my case. The hon. and gallant Member will see that I am trying to deal with that point. If it is his idea, as I believe it is, to obtain some sort of control over the findings of this Board and if at the same time there is no obligation to accept the findings of the Board then I am submitting that from the point of view of our critics, the Board appears to lose its most important function and a great deal of its value. I am not referring to my view of the Board. I am pointing out that hon. and right hon. Gentlemen themselves consider that there should be no obligation to accept the findings of the Board and I am questioning the value of the Board from the point of view of those who have spoken in such terms of this subject this evening. Why then is it valuable to set up a Tariff Board? It is obligatory to consult it on questions of tariff policy, but not to accept its findings.

Let us see to what impasse this suggested composition of the Tariff Board would bring us. It would involve a very great dilatoriness if, on every occasion that a duty had to be imposed, the Indian Finance Member had to submit the question of raising or altering a duty to the Tariff Board. It would mean that, unlike our Chancellor of the Exchequer and unlike the present Finance Member in India, it would be impossible to frame the Budget without submitting these proposals for the consideration and the views of the Tariff Board, and not only would it result in a very dilatory form of procedure, but it would also result in the very opposite of what the Chancellor of the Exchequer or the Finance Member in India desires, and that is that upon a matter on which publicity was perhaps not desirable, which it was perhaps not desired to air in the full light of day, it would insist that the Finance Member should consult the Tariff Board in framing the detailed proposals of his Budget if they affected tariff policy or altered rates of duties.

Because it would result in a very dilatory procedure and in disadvantageous publicity, we consider that the board as proposed in this new Clause is unsatisfactory, and we are unable to accept the Clause. We consider that the imposition upon the Executive in India of a castiron procedure of this sort, differing from the procedure which is necessary at present, and the fact that we should be forcing the board to remodel itself, would render this board extremely suspect in the eyes of India, and would really run counter to the whole spirit of our fiscal relations with India, which have grown up over so many years past.

The hon. Member for Stockport (Mr. Hammersley) raised an important point about the impartiality of the Tariff Board. He seemed to look, from the Lancashire point of view, to an impartial Tariff Board in order to ensure satisfactory trade between Lancashire and India.




The hon. and gallant Member says "Shame." It has been the object of the Government, as he knows perfectly well, and it has been the earnest and perpetual concern of my right hon. Friend, to improve the trading relations between India and Great Britain, and I do not think any hon. Member of this Committee ought to impugn the motives of those responsible for the government of this country or should attempt to credit us with wishing in any way to destroy British trade. In reality, as I shall show later, the trade between India and Great Britain has markedly improved during the last year in cotton-piece goods, and has markedly and steadily increased, particularly in all the other branches of British exports, over the last few years and noticeably since the Ottawa Agreement was framed. It is on the basis of agreement and on the basis of Ottawa that we think the trade between India and Great Britain ought to be improved and developed. I fully sympathise with the point of view of the hon. Member for Stockport, but I think probably that in wishing to achieve it by the constitution of an impartial Tariff Board, he is seeking an ideal which it will be very hard to achieve.

The Tariff Board in India at present is constituted by the Government of India, and for reasons that I have given in my opening remarks it would cause grave suspicion and defeat the objects of the hon. Member if we were to alter its constitution in the direction which he has in mind. If we were to appoint the Tariff Board so that the Secretary of State had the last word in its appointment, it might be acceptable to Lancashire but most unacceptable to India. [HON. MEMBERS: "To whom?"] To the Indian trading interests and Indian interests altogether in the Assembly, and to all those who are interested in British trade in India. On the other hand, if we conceded a Tariff Board which was solely in the interests of India it would naturally not suit Lancashire. The tariff boards of Canada and this country and elsewhere are appointed by the Government of the day, and we see, therefore, no reason to alter the constitution of the Tariff Board in that respect.


Is it not a fact that the tariff boards in Canada and Australia were deliberately set up in order to promote preference throughout the Empire?


I sincerely hope the result of the Indian Tariff Board will be an increase in trade between England and India. If my hon. and gallant Friend will not interrupt my remarks, he will find that I shall come to the points on which he desires elucidation. One is better able to pursue an argument if one can do so without interruption. I was saying that there are certain points which it is legitimate to bring to the attention of the hon. Member for Stockport. There is in the Bill definite provision under which the Governor-General by the special responsibility given him in Clause 12 (i) (f) can intervene if there is any penal or discriminatory treatment particularly aimed against British goods. I gather that the hon. Member was depending rather on the impartiality of the Tariff Board to look after British interests. I would remind him that it will be the business of the Governor-General, if any particular penal action is suggested against British goods, to intervene under his special responsibility, and that is the safeguard on which the hon. Member ought to depend.


Do I understand that if it were abundantly clear that the Tariff Board had made recommendations which were obviously contrary to the weight of evidence and to the facts, the safeguard which my hon. Friend mentioned would operate?


The safeguard would operate in any case in which it was regarded that British goods were being submitted to penal or discriminatory treatment. If the hon. Member will read paragraph xiv of the Instrument of Instructions he will find that if any of these considerations applied and the Tariff Board reported in a sense so obviously governed by these considerations, the Governor-General would certainly have the right to intervene under his special responsibility. In order to relieve the anxiety of the hon. Member, I would remind him that under the control of the Department of Overseas Trade there is a British trade commissioner in India whose business it is to keep in touch with Indian trade and to foster a spirit of good will in the interchange of British and Indian goods. It will certainly be possible for him to inform the Board of Trade and the Secretary of State and then, through the chain of responsibility, to the Governor-General in his discretion, if it is thought that there is any penal discrimination of British goods in particular.

Various hon. Members have asked what there is in the Bill which is of benefit to Lancashire. I think I should refer them, as I have referred the hon. Member for Stockport, to the deliberate insertion of the new special responsibility upon which the Joint Select Committee insisted. As hon. Members will know, this matter was considered exhaustively by the Joint Select Committee. It was considered with the aid of two representatives from Lancashire, who both subscribed to the view that this was a satisfactory insertion in the Bill. We have purposely included this special responsibility in order to relieve anxiety, and we do not intend that this special responsibility shall be a dead letter. If, unfortunately, the wrong section in India were to gain control of the policy of trading relations between our two countries—


Then there is a wrong section.


I quite acknowledge that there is a wrong section. We always like to face difficulties. My right hon. Friend has been the first to do it on every occasion. We consider that it is essential to face the fact that there may be occasions upon which the wrong spirit gets the upper hand, and in that case we have inserted on purpose a special provision in the Bill. The Noble Lady the Member for Perth and Kinross (Duchess of Atholl) raised some questions which are of extreme importance, and she said they have never been categorically answered. I have not quite the same recollection, but I think I had better not compete in documentation with her and that it would be safer for me to make a few remarks on the subject.

Duchess of ATHOLL

I shall be only too glad if the hon. Gentleman can inform me of any occasion on which they have been answered.


From my remarks the Noble Lady will see that we have understood this matter to be as clear as daylight both to Great Britain and India for a considerable time. She referred to the Fiscal Autonomy Convention and read from the report of the Statutory Commission the safeguards which were read into the Fiscal Autonomy Convention by the Statutory Commission. She said that, in fact, the Fiscal Autonomy Convention was completely altered by the fact that we had introduced a new Bill, and that therefore neither the Convention nor the safeguards under it would operate. I must say, in answer to that, that it has been clearly understood both in Great Britain and India that His Majesty's Government have no intention whatever of going behind the Fiscal Autonomy Convention or of altering the general spirit of the trading relations between Great Britain and India which has grown up under successive Secretaries of State and successive and different Governments ever since the report of the Joint Select Committee in 1919.

Duchess of ATHOLL

Is the hon. Gentleman aware that in the discussions in the Indian Assembly in 1930–31 references were made which show that some members of the Assembly quite recognised that the Secretary of State had power to influence the Governor-General in the matter?


I am not denying what the Noble Lady has read out from the Statutory Commission, and it is well know that there are perpetual exchanges of views between the Government at home and the Government of India. It must be clear to everybody that if we have a Government in India and a Government in England they will exchange views, and that it is the duty of the Secretary of State to represent his point of view to India, but that does not mean that it is the policy of the Government to go behind the spirit of the Fiscal Autonomy Convention, which, as I have said, has been in operation under successive Secretaries of State and successive Governments since 1919. I think the best way in which I can explain to the Committee that this spirit has continued is by referring to a published document, the Instrument of Instructions to the Governor-General. I will read the last paragraph of paragraph xiv. At the same time, in interpreting the special responsibility to which this paragraph relates"— that is, the special responsibility about which I have been talking— our Governor-General shall bear always in mind the partnership between India and the United Kingdom within our Empire which has so long subsisted and the mutual obligations which arise therefrom. That sub-paragraph, read with the rest of paragraph xiv of the Instrument of Instructions, which governs the operations of the Governor-General's special responsibility, will show the Committee and Lancashire the sort of safeguard which we intend shall operate in future. I hope that that, together with my general remarks in reply to the Noble Lady, will show that we intend that the same spirit shall continue to exist between the two countries as has existed in the past, largely because of a convention which has brought great good will and better results in trade to both our countries. Before leaving that point I would remind the Committee that if the Governor-General found that a Bill or a Measure had been passed which, for example, had not allowed for sufficient and due inquiry to be made, he would be entitled to withhold his assent from that Measure. That will provide some small extra safeguard for those who are anxious in particular about British trade.

It would be advisable if I attempted to answer—not at any too great length—some of the other points which have been raised by hon. Members. I have said that the policy of negotiation and agreement between our two countries has borne good fruit. One of the recent results has been a Supplementary Agreement—supplementary to the Ottawa Agreements—recently contracted between the two countries. In return for a concession from the United Kingdom, the Government of India have recently given an undertaking that the measure of Protection afforded to Indian industries shall be only so much as will equate the prices of imported goods to the fair selling price of similar goods produced in India and that wherever possible lower rates of duty shall be imposed on goods of United Kingdom origin. That is a definite insertion in the Supplementary Agreement which, hon. Members from Lancashire will agree, is a very distinct advance.

If we look at some of the trade figures, we find that not only in actual statement of policy but also in those figures the policy of good will has had definite results. It is a hopeful sign that the boycott has been ended and Indian trade is tending to improve. Cotton exports from Great Britain are rising: in 1933 they were 486,000,000 square yards and in 1934 583,000,000 square yards. Besides these effects, Indian and British trade are tending to balance. There has been an increase in the purchase of Indian cotton by Lancashire, again as the result of an estimable mission which visited India and which purposely encouraged the continued purchase of raw cotton from India. In 1933, 48,296 tons, and in 1934 64,599 tons were bought by Lancashire. Besides cotton—the Committee should bear in mind—there has been a remarkable increase in exports of other commodities. The figures are: for 1932, £25,600,000, for 1933 £26,700,000, and for 1934, £28,600,000, a steady and progressive increase of our exports to India over recent years.

When we envisage the results of this policy, it would seem madness to go back upon it to the extent proposed by some of the other proposed new Clauses, apart from those relating to the Tariff Board. Hon. Members make a great mistake when they attempt to attribute purely to ill will the deterioration of British trade in India. I think that this can be put down, among other things, to the growth of the Indian industry itself. In 1913–14 the Indian industry produced 1,164,000,000 yards, and in 1933–34 as much as 2,945,000,000 yards—a most remarkable increase. Is this to be wondered at when it is remembered that since the War we have exported £140,000,000 worth of machinery to India, of which this production is the direct result? Besides this phenomenon, there is the growth in Japanese trade. In 1913–14 the Japanese imports were 9,000,000 yards; in 1933–34, the figure was 349,000,000 yards.


Can we have the British figures?


I think I gave them earlier. In square yards they were 583,000,000 in 1934, a distinct increase over 486,000,000 in 1933.


Could we not have the same comparison? Is it not a fact that the imports from the United Kingdom in 1913–14 were 3,104,000,000 yards?


That was precisely the point with which I was dealing. I was facing the fact that there had been a progressive deterioration in the quantity of British imports from that date. I did not mention the date, but was trying to show that there were other reasons besides those given by hon. Members for the deterioration of our trade. If my hon. and gallant Friend is an economist, he will perhaps pay some attention to those vital economic reasons which have resulted in the unfortunate diminution of our exports to India. Japanese trade, as I was saying, increased from 9,000,000 yards in 1913–14 to 349,000,000 in 1933–34. Thanks to the policy adopted by the Government of India to restrict the quota of Japanese goods—and this is another feather in the cap of the administration of the Government of India under my right hon. Friend—the imports of Japanese goods were 552,000,000 yards in 1932, and 365,000,000 yards in 1934.

Another fact which I think is of importance in considering the diminution of British imports to India is the impoverishment of the Indian peasant. My reason for mentioning this point is that it was raised by the Noble Lady the Member for West Perth in her interesting speech. She said that the Indian peasant actually preferred British goods, and I can well believe that he does, because they are softer and more comfortable to wear next the skin, and not so rough. But, unfortunately, owing to the fall in the price of commodities, the Indian peasant can only buy 65 per cent. of what he used to buy in the old days. The result of this has been that he cannot indulge his wish for bleached goods to the same extent as before. In 1929–30, the best year of the post-war period, he consumed 60 per cent. of unbleached goods and 40 per cent, of the more luxurious bleached and coloured goods, whereas now he has to consume 70 per cent. of unbleached goods and only 30 per cent. of bleached and coloured, in which we in our industry are more particularly interested.

The Indian, as hon. Members know, employs a great deal of cloth, not only to wind round his waist, but to put on his head in order to keep off the strength of the sun. In the first period that I mentioned, 1913–14, the Indian consumption was 16 yards per head of the population, whereas last year it fell away to only 14 yards per head. These are some of the economic reasons why we have suffered in competition with others in the Indian market. It cannot all be attributed to the ill-will which some hon. Members believe to be the sole cause of the deterioration of our trade. I have tried to show that it is not only due to ill-will but to economic reasons that there has been an alteration in the flow of trade from Lancashire to India. If I have taken too long, I must apologise. I have always understood that Lancashire is vitally concerned in the Indian market. Hon. Members have complained that there has not been enough time given to Lancashire, and I wish to show the Committee that the Government are vitally concerned in studying this important problem and that they have looked into it from every point of view. I have tried to show the Committee that the policy of good will has had definite results in the improvement of trade which we have seen, and that either to substitute a tariff board, as is suggested, or to move into the Bill any new Clause on the Order Paper would have a result precisely opposite that which hon. Members desire. It would break down the beginning of a considerable improvement in the trade between our two countries and would have results precisely opposite what hon. Members desire.

10.46 p.m.


I think that those of us on these benches, and indeed most Lancashire Members, will have listened with profound disappointment to the conclusions of my hon. Friend, but we are all bound to recognise the courtesy with which he always puts his case, and that even if he cannot give us what we want he always refuses our requests in the most generous and sympathetic terms possible. I shall endeavour to put an equally strong and, I am afraid, rather an opposite point of view with equal courtesy. First of all, the hon. Gentleman made the assertion that it was unfair to impugn the Government that their object was not the welfare of British and of Lancashire trade. I entirely accept the view that the object of the Government is for the good of Lancashire trade, but you cannot only judge people by their object; you must have regard to how far they are successful in achieving their object. The melancholy fact undoubtedly is that Lancashire's trade with India has so declined that we hear the argument, "It is only now 25 per cent., so that we need not pay all that much attention to it."

I also agree with my hon. Friend that it is not ill will in India that has been the sole cause of the falling off of Lancashire trade, but nobody can deny that the boycott and the body of ill will in India has been a very powerful cause in the decline of Lancashire trade. I will not follow my hon. Friend into the question of the various causes of the decline of Lancashire trade for the reason that we are now dealing with one specific cause, and for the purpose of this discussion other causes play no part. I would refer to one observation made by the hon. Member for Doncaster (Mr. Molson) who is not now in his place. He twitted us on this side of the Committee with being in a dilemma. He said: "You claim to be the servants of the masses of India. You are thinking of the poor ryot, and, on the other hand, you represent the vested interests of Lancashire." That is perfectly true. We on these benches stand, I believe, for the interests of the peasants of India and of the non-political classes in India, and equally we stand for the interests of the Lancashire working people. I see no real conflict of interests between those two classes, because it has been due to the political association of the cotton manufacturers of Bombay and the Congress party that the cotton manufacturers have been able, to a large extent, to ruin Lancashire, and, at the same time, to deprive the Indian masses of articles they want.

All that we are asking is that there shall be fair-play for Lancashire operatives and fair-play for India. It is not as if we were asking for preference for Lancashire, which I think we are entitled to ask, in view of the fact that we are giving it to India. We are not asking for any preference for ourselves or for any priority of treatment over countries which have done nothing whatever for India. We are only asking that there shall not be penal discrimination against us from political motives. Is that exploiting the workers of India? Is it not getting very near to hypocrisy to use such language when we merely ask that the country which has done so much for India should not in future be exploited by penal duties having no relation to the fiscal or revenue interests of India? Our whole case is not that we want to interfere with India pursuing a fiscal policy of her own for protective or revenue purposes, but that the Indian politician should not be allowed to penalise British trade merely for political motives. That is all we are asking, and I cannot help wondering at our moderation at asking for so little. I cannot help wondering why so modest a demand should be regarded as exploitation of the Indian.

The hon. Member for Colchester (Mr. Lewis) and the Parliamentary Secretary both used the argument that Indian Ministers might not like a Tariff Board. Are we to understand that all these discretionary powers are to be exercised with the approval of Indian Ministers? If Indian Ministers will not like the decisions of the Tariff Board against them, will they like the decisions of the Governor-General against them? Why should they regard more favourably an adverse decision by the Governor-General than an adverse decision by the Tariff Board? I should have thought the loyal gentlemen—and I use the term in no sarcastic sense—sitting on the Front Bench would have been anxious to keep the name of the King's representative out of a sordid commercial squabble. Is it not better that the Governor-General should not be faced with the task of making decisions between Lancashire and India, and that such decisions should be made by a judicial body?

I should like to ask one or two questions as to the attitude of the Government on this question of penal discrimination. I do not want for one moment to accuse the Government of insincerity, but I want to know where they do really stand. Do they really want the safeguard put into their own Act to be effective, so that there shall not be penal discrimination? Before this Debate finishes to-morrow I should like an answer to that point; because if the Government in fact want that particular safeguard to be effective then they will have no objection to providing adequate machinery to make it effective. Is the present machinery effective? Let us consider for a moment the position in which the Governor-General will find himself. We are not going to be faced with some sudden calamitous proposal in the nature of a 50 per cent. addition to the duty, for that would be obviously discriminatory and penal. But we shall be faced, as we have been faced during the last 10 or 15 years, with a series of accretions—none serious in itself but cumulatively ruinous. Three per cent. is nothing. Is the Governor-General going to face all the odium of his Indian Ministers and run the risk of soiling his own name in a commercial quarrel over another 2 or 3 per cent. duty? In other words, is it not absolutely essential, from the standpoint of the Governor-General as much as from the standpoint of Lancashire that there should be an independent tribunal to judge on facts, not policy?

I understand the attitude of hon. Members on the Opposition side for they say frankly that they would not have this safeguard in the Bill. I quite appreciate their point of view. They do not want that safeguard in the Bill, and I hope Lancashire will mark that fact when it comes to judge them. Labour Members do not want any safeguards for Lancashire operatives. I will do the Government the credit of saying that they do want such safeguards I can understand the attitude of the Labour Opposition but not the attitude of the Government. The Government say: "We want a safeguard, but we will give it in such a way that it cannot be effective." That is what their attitude means. Do the Government think that over a small duty of 2 or 3 per cent. the Governor-General, who will have endless matters to deal with, who is going to be faced with all sorts of constitutional difficulties, is going to run the risk of attack in India and in this country by standing up for the constitution? Whatever we may like to think, we know perfectly well that the machinery in the safeguard will in effect be a dead letter. If the Government want their safeguard to be effective, why should they object to an independent tribunal? When that independent tribunal have given their verdict it should be the duty of the Governor-General to carry out the law. I cannot see any reason why the Government should object to this machinery. Of course, it would be unpopular with Indian ministers. Anything that will give justice to this country will be unpopular with Indian ministers. That is the difficulty we have been up against right from the beginning. We have it on the evidence of the leaders of Congress. We have it in the Indian Press. They tell us that they are going to turn us out bag and baggage and that there can be no peace between this country and India while one shred of our authority remains. When you try to set up effective machinery for your safeguard you find yourselves up against this sort of thing. If you seek to do anything for this country or for Lancashire you incur the wrath of Indian Ministers. The Government ought to think less about incurring the wrath of Indian Ministers and more about doing justice to British subjects in India and in this country. I urge the Government to give the most serious consideration to this matter.

I am ready to admit that the terms in this Clause require a good deal of modification. I do not think that the Clause, although my name is down to it, is an ideal one, but to-night we are debating a principle. We should be perfectly content if the Government would give us an assurance that our real and genuine anxiety will be met. It is symptomatic that hon. Members who, in the face of great pressure in Lancashire, have been loyal throughout to the Government, are to-night with those of us who have been opposed to the Government on this Bill from the beginning. The hon. Member for Bolton (Sir J. Haslam) who is deeply respected in his constituency and throughout Lancashire for the moderation of his opinions, an hon. Member who more than most Members has sought to maintain in Lancashire the reputation of the National Government, has warned the Government to-night. The hon. Member for Withington (Mr. Fleming) warned the Government in no uncertain terms. If the Government persist in their attitude I cannot help feeling that the political consequences in Lancashire will be disastrous, although I hope that they will not. But it is not so much a question of the political consequences in Lancashire as the economic consequences if this thing goes through. We are so apt to forget in this House, in passing hundreds of Clauses and getting very tired of this Bill in many of its aspects, that some of the things we are doing are leaving our hands for ever. We are the last revising tribunal and if we do not do something now we can never do it. If we do not do it now the opportunity

It being Eleven o'Clock, The CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

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