NEW CLAUSE.—(Establishment and constitution of Indian Tariff Board.)

HC Deb 30 April 1935 vol 301 cc199-280

Motion made, and Question proposed [29th April], "That the Clause be read a Second time."—[Mr. Thorp.]

Question again proposed.

3.11 p.m.

Mr. BAILEY

There are two or three further points which I wish to address to the Government on this very important new Clause. The speech of the Under-Secretary of State for India yesterday contained observations about the Fiscal Convention, and the Noble Lady the Member for Perth and Kinross (Duchess of Atholl) also made pertinent observations about that Convention. It is a little difficult to know from those two speeches what is the position in relation to that Convention. The Noble Lady, referring to the report of the Statutory Commission, said: 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.'"—[OFFICIAL REPORT, 29th April, 1935; col. 146, Vol. 301.] The Under-Secretary, when replying, said that the Government still stood by the spirit of the Fiscal Convention. I am paraphrasing his words, but I have the exact quotation, should it be required. I should like to ask the Attorney-General where the Government now stand with regard to the Fiscal Convention. The Noble Lady takes one view and the Government take quite another view of what the Fiscal Convention means. If an Act were passed which cut across Empire policy, it would, according to the spirit of the Noble Lady's interpretation, be the duty of the Secretary of State to interfere and to disallow that act. I want to get this matter cleared up. Members from Lancashire were comforted by the observations of the Under-Secretary, but one would like to know definitely before this Debate closes whether the Government take the view that after this Bill has come into force the Secretary of State will still have power to disallow any action of the Indian Government of a fiscal kind which cuts across Empire policy. This question raises the whole issue as to fiscal safeguards which are not embodied or enshrined in any legislation, and we ought to know where we stand on that point. It is no use, when a critical situation arises, perhaps in 10 years' time, to say that there has been a mistake because the Under-Secretary's interpretation and that of the Noble Lady were at cross purposes.

I should like to know the interpretation which the Government accept upon the Fiscal Convention. Do they consider that it would be the duty of the Minister to exercise the powers defined by the Statutory Commission and stated by the Noble Lady? If the Government take that view, do they consider that when the Act comes into force the position will remain the same, or will all previous conventions be overridden by the Constitution Act? If the answer be that the Government take the view that the Fiscal Convention will still be operative, why should they not say so in the statute, so that there can be no mistake hereafter? Why not lay down in the statute exactly where we stand, instead of having to argue in the future about what will then be doubtful, even if it be not so now. Assuming that the Fiscal Convention, in the sense that it was referred to by the Noble Lady, has no relevance after the Bill has been passed, am I right in saying that no trade safeguards are provided for this country other than those contained in the Bill? I should like an answer on that point.

The Under-Secretary made observations about the exchange of communications between the two Governments. He soothed us ever so cunningly—not, I am sure, with any intention to deceive, but it may have that effect, however unwittingly—when he said that there are always exchanges of communications between two Governments, if they happen to disagree with one another, such as the exchanges which have recently taken place between this country and Germany. If there be a dispute between two countries, each Government takes up the matter with the other Government, unless they are at war. Does the Under-Secretary suggest that the British Government will have any particular rights or privileges in taking up matters with the Indian Government which it would not have for taking matters up with France or Russia or with the Government of one of the self-governing Dominions? We ought to know whether the exchange of communications implies merely the normal channels which exist between two governments, or whether it applies to some further safeguards, if the conversations do not produce satisfactory results.

In regard to the proposed new Clause, I agree that as it has been drafted it is not entirely satisfactory. I do not mind admitting that we are not actually responsible for its literal drafting although it expresses our views. We are dealing with matters far too important for Lancashire for us to be tossed aside by legal quibbles as to whether the Clause is right or wrong in its phraseology. We deal in it with a very important principle. [Interruption.] I hear the Noble Lord the Member for Hastings (Lord E. Percy) ask what the principle is.

Lord EUSTACE PERCY

The hon. Member is mistaken. I did not say anything.

Mr. BAILEY

I very sincerely beg the pardon of the Noble Lord, but it is very strange that I should have mistaken the voice of somebody else for his. We are here maintaining a principle of very great practical and trading importance which we believe should be thoroughly ventilated. I do not desire to press the Clause, if we have an assurance from the Government that they will meet us upon the principle which is at stake. That principle is that, in our view, it is no use having a safeguard unless you have effective provisions for carrying out that safeguard. It is no use saying that you must not have any burglaries if you have no law courts and police to deal with the burglars; you must have some effective way to carry out your principle. What we complain of is that the Government, instead of saying frankly, as the Labour party say, "We do not want any safeguards at all," put in a safeguard which in our opinion is going to be unworkable in practice. With regard to the Tariff Board, the hon. Gentleman made certain criticisms. One was this: 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. The Board which exists at present has proved to be utterly biased and unfair, and would be no safeguard. I believe I am right in saying that its recommendations were not accepted by the British Government because they were so obviously out of harmony with the facts, and I cannot see why my hon. Friend should desire a board on the model of the present Board, which would not be of any assistance at all, but would only add burdens and might be the tool of a Ministry bent on imposing penal discrimination. He continued: 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 object which hon. Members have in mind."—[OFFICIAL REPORT, 29th April, 1935; col. 162, Vol. 301.] I fully agree. We do not wish for a tribunal subordinate to the Secretary of State; we wish for a tribunal above the Secretary of State, and above the Government of India—a tribunal which can fearlessly decide on the facts. I should be quite prepared to leave the matter to the Federal Court, but there must be some tribunal to decide on the facts whether a duty is penal or whether it is merely fiscal. Any fair tribunal could make that decision. The Judicial Committee of the Privy Council would be a perfectly reasonable appellate tribunal from any tribunal appointed. Would the Under-Secretary suggest that such a final court would be suspect in India on the ground that it was subordinate to the Secretary of State? Do the various Dominions resent appeals from their courts going to the Judicial Committee of the Privy Council? Why should we always assume that any tribunal other than one appointed by an Indian Ministry is bound to be unfair? What we are contending is that no safeguards will be of any value unless there is some tribunal which can decide whether the law has been broken. At present the decision is left to the Governor-General.

The Under-Secretary used another argument—that of delay. He said that it would be impossible to subject an Indian Ministry to the delay that would be involved if a board had to decide whether every item of their fiscal legislation was right or wrong, and, with the greatest respect, I entirely agree with him there. But if it be the duty of the Governor-General to stop penal legislation, why should he decide so much more quickly than a tribunal? Moreover, is it to be assumed that every Act of the Indian Government is going to be complained of? Not at all. We should be perfectly willing that there should be proper terms for the deposit of costs, so that if in fact there were any attempt to make vexatious use of such a tribunal, the attempt could be penalised in that way. But to suggest that the delay occasioned by the fact that an Indian Government might not know in advance whether their legislation was going to be allowed was a reason for not carrying out the Act effectively, seems to me to be an argument unworthy of the high traditions which my hon. Friend always seeks to maintain. If a duty imposed by the Indian Government were disallowed, it would be their own fault. If they put on penal duties forbidden by the law, why should Lancashire suffer, why should England suffer? Why should not those suffer, if suffering there be, who have done wrong? I cannot see any weight in my hon. Friend's argument on this question of delay.

Lord E. PERCY

May I ask my hon. Friend a question? I am only anxious to find out what is the proposal on which he is arguing. The proposed new Clause says: 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… He is now, I understand, arguing that no proposal to vary duties should be referred to the Board unless it is suspected that they are penal in intention.

Mr. BAILEY

I appreciate that point, and I agree that if I were arguing strictly on the terms of the Clause itself the Noble Lord's criticism would be fully relevant. But, as I said last night, and, as I have repeated to-day, I appreciate that the Clause in its present form is not one that we could ask the Government to accept. But as you, Sir Dennis, indicated last night, what we are dealing with on the three or four Clauses which are being discussed together is rather the question of principle as to whether or not there should be some board to deal with this question of discrimination.

The CHAIRMAN

I must disclaim having given any indication that the discussion could go beyond the Clauses referred to. The effect of my Ruling was merely that anything might be discussed which came within the terms of some one of the four Clauses in question.

Mr. BAILEY

With great respect, Sir Dennis, I should not wish to misrepresent you or go outside the terms of your Ruling, but I would submit that my arguments are in order for the reason that the greater must always include the less. Any board such as is proposed in this Clause would in fact deal with penal legislation and with other things also, but I abandon that part which deals with other things, and retain that which deals with penal discrimination. The principle of the argument is enshrined in the Clause, although, unfortunately, it has not been set out as one would like. I would press the Government to make us some concession. I would ask them, if they cannot give us all that we ask, to give us sufficient to provide impartial machinery for dealing with penal discrimination. If they would do that, we should feel a certain measure of gratitude to them for it.

As has been said by the hon. and learned Member for Withington (Mr. Fleming) and by the hon. Member for Bolton (Sir J. Haslam), this matter is raising wide and deep feeling in Lancashire. One realises that the discussions on the Bill have been so prolonged that it is difficult to detach those points which are of deep importance to us from those on which we know it is no use arguing for a long time, because the mind of the Government is made up. But I cannot help feeling that the Government will be making a very great mistake if they do not give us something which may afford a little greater security to Lancashire than she has at the present time. Frankly, we have no faith whatever in Clause 12 (1, f) as it stands in the Bill at present, and that is all that we now have to prevent discrimination. During the last 15 years we have seen one act of discrimination after another. We all know that political discrimination has been going on. It has not been stopped, and we regard the machinery now being set up as insufficient.

I am sure that the Government, as practical men of affairs, must know that no Governor-General can possibly carry out that special responsibility. He is the King's representative. If a small duty is imposed, and certain people say that it is a penal duty, while the Government of India say that it is not, how can the Governor-General run the risk of a constitutional crisis for the sake of a 2 or 3 per cent. duty? It is eminently a matter that ought not to come before the Throne until it has been decided by some tribunal. Surely you do not want to bring the Governor-General into conflict with his Ministers over a question of fact. Where it is an issue of fact and there is no dispute of principle, the Governor-General has the task of deciding whether there is discrimination. The only question is to find out whether there is discrimination, and surely it is better that the responsibility for deciding that should not be put upon the Governor-General but upon a proper court of law. Where you have a question of policy, the Government of the day decides, but, do you put either upon the Crown or upon the Government the burden of deciding an issue of fact between India and the subjects of some friendly country such as the people of Lancashire? Here is an issue of fact to be decided as to whether or not there is discretion, and that issue should go before a tribunal. Unless we can get some safeguard, I am certain that all that has been put into the Bill in the way of safeguards, when it comes to the acid test of standing up to actual conditions, will be found to give no security whatever to Lancashire.

I apologise to the Committee for having spoken at some length, but we Lancashire Members would be failing in our duty if, at this critical stage in the history of our county, we do not do all we can to impress upon the Government the urgent necessity of doing something in this matter. If we fail to do so, the consequences will be upon our shoulders, but, if they fail, at any rate our hands will be clean, and the responsibility will in the future lie with those who fail to do their duty to their own countrymen as well as to the subjects of His Majesty beyond the seas.

3.32 p.m.

Mr. RHYS DAVIES

I think that I can say at once that all Lancashire Members do not agree on this issue, and that I can speak for Lancashire with probably as much authority as the hon. Gentleman the Member for Gorton (Mr. Bailey). If the problem is one connected with the textile industry, I happen to have more textile mills in my Division than he represents. I doubt whether he has any at all. Manchester is just a place where they handle goods and make money by selling them. It is the manufacturers who send the goods to Manchester that I happen to represent. The Clause, moved presumably on behalf of the Lancashire textile industry, fails in two or three obvious respects. It would not achieve the object which the hon. Gentleman has in mind, because of some very simple facts. The hon. Gentleman who moved the Clause said that what was good enough for this country ought to be good enough for India, presuming I suppose that a Tribunal like the Import Duties Advisory Committee set up in this country ought to be imposed upon India by this Parliament. Hon. Gentlemen, however, make no provision at all as to the personnel of such a committee. I presume that they would like a committee to be set up in India to deal with this problem made up of representatives of Lancashire, transport them from the county of Lancashire to India, and allow them to decide what the Customs duty in India should be in connection with the importation of Lancashire textile goods. In fact, there is no provision in this Clause to preclude a court being set up in India made up of Italians or Germans or even Welshmen. This Debate reminds me of the tearing and raging campaign conducted in Lancashire some time ago by what is called the India Defence League. It is a sort of faint echo of the great meeting held at the Free Trade Hall to try and rouse Lancashire people in order to secure some safeguard against discrimination by the Indian Government. That discussion went on for some time, and, although I disagree with his political views, there is one gentleman who I think can speak for Lancashire very much better than all the other gentlemen who have spoken in this House. He is Lord Derby, who came down at last in favour of the recommendation contained in the report of the Select Committee. The hon. and gallant Member for Hulme (Sir J. Nall) rather favoured the point of view of this Clause until the other side was put to him.

Mr. BAILEY

I do not want to interrupt the hon. Gentleman, but he is raising a rather important point when he suggests that the hon. and gallant Member for Hulme (Sir J. Nall) and Lord Derby would support this particular proposal in the policy of the Government. I agree that Lord Derby would support the type of safeguard suggested by the Joint Select Committee, but has the hon. Member any authority for saying that Lord Derby either does or does not approve of the particular way in which the Government are trying to give effect to the report of the Joint Select Committee?

Mr. DAVIES

I would not dare to put words into the mouth of Lord Derby. He once upon a time represented Westhoughton, which I have the honour to represent. He made several important statements then, and I think he is quite capable of looking after himself. I am sure that Lord Derby speaks the mind of Lancashire very much more clearly and effectively on this issue than all the hon. Gentleman in this House can do. I do not think that even the hon. and gallant Member for Bournemouth (Sir H. Croft) dare stand up and dispute what I have said on that score.

Brigadier-General Sir HENRY CROFT

I am glad to hear that the hereditary principle is so strong.

Sir JOHN HASLAM

Is that a recommendation for the peers? Does Lord Derby represent Lancashire?

Mr. DAVIES

I have heard hon. Gentleman use his name very effectively when they have thought it suited their purpose to do so. Let us see what the Select Committee have said. I am very pleased for once to support the Government upon the issue, because I am sure that there is no trade possible between any two countries in the world, except upon the basis of good will. If hon. Gentlemen wish to carry their views to a logical conclusion, why not argue for the setting up of a tariff board in Canada? All the things about which they complain in India and what the Indian Government are doing against Lancashire are done very nearly in the same way in Canada and in Australia, but not quite so much in South Africa. I had reason to complain once to the Board of Trade that the Canadian Government are totally incapable of handling the problem of dealing with goods coming from the United States into Canada to be despatched to this country to the detriment of our home trade. I venture to say that there are men sufficiently clever and capable in India, and that hon. Gentlemen can argue how they like here and pass any law they like, but if the Indians are determined to get round these provisions they will do so as easily as they do it in Canada or Australia. There is therefore no possibility of increased trade between Lancashire and India except on the basis of good will. The argument of hon. Gentlemen is that we can practically compel India to buy Lancashire textile goods. We can do nothing of the kind. If the people of India do not want Lancashire goods, they will not buy them.

Mr. REMER

Does the hon. Member mean the good will of the Indian agricultural workers or of the workers in the Bombay cotton mills?

Mr. DAVIES

I was speaking of the good will of those who matter. Trade between Lancashire and India is already improving, I gather. [HON. MEMBERS: "Hear, hear! The hon. Members who say "Hear, hear" pay tribute to this Government for that fact. There are, however, factors in connection with trade between nations that have not the remotest relationship to the colour of the Government in power. It is possible still for India to take more goods from Lancashire whatever Government may be in power. What has happened to the trade of Europe in particular? The world depression has come along and people are unable to buy commodities because wages and the income of the common people is too low. If this Bill can improve the conditions of the common people of India it will make an enormous difference to trade. It has been said that if everyone of the people of India could afford to buy only one yard extra of Lancashire goods, the mills of Lancashire would be humming once again.

Hon. Members complain that the Lancashire textile industry is not doing well. What has happened? I think I am right in declaring that there have been firms in Lancashire who have actually stripped their own mills of textile machinery and have shipped it to India, and that Lancashire machinery has been put into Bombay mills to produce the very commodities that we used to export. What could this proposed tariff board do to deal with that situation? It could not prevent that?

Mr. REMER

The hon. Member has made a very serious statement. Can he name one single millowner in Lancashire who has done such a thing?

Mr. DAVIES

Somebody has done it.

Mr. REMER

The hon. Member has made a serious statement, which may go out into the highways and byways not only of this country but of India. Can he name one single millowner in the whole county of Lancashire who has done such a dastardly thing as he has said?

Mr. DAVIES

I go further. I will make this statement, which can be verified, that capitalists in this country when they have found out that they could do better and get better returns have sunk their capital in textiles in India and other Eastern countries.

Mr. REMER

Can the hon. Member name one single capitalist in this country who has invested his money in that way?

Mr. DAVIES

This is what the Under-Secretary of State said last night: Since 1914 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 1914, the Japanese imports were 9,000,000 square yards, and in 1934 the figure was 349,000,000 square yards."—[OFFICIAL REPORT, 29th April, 1935; col. 170, Vol. 301.]

Mr. BAILEY

The hon. Member made a very serious charge. That charge, as I understood it, was this, that Lancashire mills have been stripped of their machinery and that machinery has been sent out to India. He is now making another charge, which may or may not be serious. Let us stick to one charge at a time. I ask for the specific withdrawal of the first charge, or the hon. Member ought to cite one instance of the charge being true. I am sure that he is sufficiently fair-minded not to make a charge against capitalists or anybody else which he cannot substantiate. He has made a second charge, but whether that charge be true or false, it has no bearing whatever on the truth or falsity of the first charge.

Mr. DAVIES

Unless I am misinformed the facts can be got. I will make another statement which can be vouched for, and that is that manufacturers in Lancashire have sent their best operatives to Eastern countries to teach the Eastern people how to do the jobs that they were doing in Lancashire.

Mr. HOLDSWORTH

Why not? You believe in nationalism?

Mr. DAVIES

Hon. Members do not think there is anything wrong in that.

Mr. HARTLAND

Do you?

Mr. DAVIES

I am not arguing the rights or wrongs of it. What I say is that while the manufacturers and capitalists in this country are doing all that, they cannot at the same time expect Lancashire trade to improve.

Mr. CROSSLEY

I think the hon. Member is wrong there. What has, in fact, happened in innumerable cases has been that Eastern countries, such as China and Japan and in former times India, have offered very tempting terms to Lancashire cotton operatives to go abroad, and Lancashire operatives have gone there, but they have not been sent by capitalists in this country.

Mr. DAVIES

There are many ways of sending people abroad. Lancashire people know full well what is behind this new Clause. Hon. Members who support it have been using Lancashire trade for some time past in order to try to persuade the Lancashire people that the Indian people should not be given a greater degree of self-government. They have been using the argument that Lancashire is going to suffer unduly by the passage of this Bill. I am satisfied that trade between Lancashire and India will improve, not by imposing any restrictions upon the Indian people but by granting them greater freedom to determine for themselves what they want to buy. When they get that freedom in the world of trade I think there is the possibility of Lancashire trade with India improving and being brought back once again to the point of success which it once held.

3.48 p.m.

Sir H. CROFT

I am sure the Committee will have been very much interested to hear the speech of the hon. Member. Members of the Committee know where these suggestions come from. When we hear the phrase that we must depend upon good will, we know who was the nurse of the baby which, unfortunately, was landed on the Government bench. [Interruption.] Perhaps hon. Members will go and wheel the "pram." The hon. Member cannot be congratulated on his advocacy, because in every single one of his great declamatory points which he was making against those who desire the establishment of this Tariff Board, he appeared to be unable to substantiate it. It is obviously true that a large amount of machinery has gone from this country to Eastern countries and other countries. Why? Because we have not taken the trouble to secure those markets in the East for British traders, and because we have been allowing our people to be driven out of those markets by vindictive tariff policies, whereas by strong action from the Secretaries of State in this country in the past we could undoubtedly have prevented that happening.

It was decided that we should have one general debate on the four different Clauses. That is very much for the convenience of the Committee, but it is a little difficult for those who are trying to get the Committee to concentrate their minds on two different matters. I should like to refer to the first Clause, standing in the name of my hon. Friend the Member for Prestwich (Sir N. Stewart Sandeman) who, unfortunately, is unable to be present. Failing any better proposal, or some improvement by the Government, I hope the Committee will insist on recording their vote on this matter as taking us as close as possible to the principle we are advocating. I was surprised to hear yesterday some hon. Members scoff at the Tariff Board as being suggested merely for the benefit of the representatives of Lancashire. If that were the truth, I should not regard it as a very great crime because I feel that it is the duty of this House to look after the interests of its own people, but in this case it does not happen to be the truth. We are no more favouring Lancashire in this proposal than the British Tariff Advisory Committee in this country is favouring India. Of course, our Tariff Advisory Committee has a general duty to see that in any proposal it makes there will not be any serious reactions against India or any other part of the Empire. That is the purpose of this Tariff Board. It may not be satisfactory, and, of course, hon. Members on the Liberal benches are never satisfied with anything which comes from any part of the Empire, although they must be pleased with the recent decision of the Australian Advisory Committee. These advisory committees were set up by the Dominions as a result of Ottawa in order to promote inter-Imperial trade, and that is our sole purpose in advocating that a similar body should be set up in India.

The representatives of Lancashire are not asking for any special treatment for Lancashire, but for a fair field and no favour. In Great Britain we have adopted the machinery of the Tariff Advisory Committee, with the general support of those who are behind His Majesty's Government, in order to prevent any possibility of log-rolling in Lancashire, Yorkshire, or the Midlands. If that be the plan which we have adopted in this country, with our accumulated wisdom of government, surely it must be right to adopt a similar plan in India, because you in ay not have the same political education there as you have in this country. If log-rolling was to be feared in this country from the millowners of Lancashire—I am not suggesting for a moment that such has been the case—it must be important to see that nothing of the kind can occur on the part of the millowners of Bombay. Lancashire millowners are powerless, and Lancashire Members, even if they chose to do so, would find it difficult to make any impression on the Advisory Committee. I suggest that as we have established a happy and as I think the best possible system we can find in order to take tariff decisions out of party politics it is a plan which should be followed in India. That is what we are asking, and when the boycott in India is properly understood every one will appreciate how desirable it is that any temptation should be removed from the textile millowners in India.

The Under-Secretary last night said that this procedure would be dilatory. That may be true. It is a criticism which has been made about the Tariff Advisory Committee in this country, but it is better to have a dilatory committee rather than take hasty decisions which will affect vast masses of population and dwelling in India. We are not afraid of that criticism. The Under-Secretary of State also asked why we do not make it obligatory to accept the findings of the Tariff Board. It is obligatory to consult it on questions of tariff policy, but not to accept its findings."—[OFFICIAL REPORT, 29th April, 1935; col. 163, Vol. 301.] He seemed to imagine that that dismissed our case with a gesture. It does not land us in any dilemma. That is precisely the position of the Tariff Advisory Committee in this country. We have an impartial tribunal which puts its proposals before Parliament, and we can endorse or reject them. The Under-Secretary also said that we must not impose this proposal upon India. Every Clause of this Bill is being imposed upon India. Does the Under-Secretary suggest for a moment that there is any section of organised political opinion which agrees with any of the Clauses of the Bill? The National Labour Conference and the National Liberal Association of India have reiterated their previous verdict upon the Bill. The Under-Secretary really cannot get away with it by saying that we must not impose a Tariff Board on India when day after day we have been imposing Clauses and decisions on the people of India contrary to their expressed will. We ought to insist on the very best and most enlightened method in the new Constitution, and this method, after all, is the very latest thing we have discovered. If you are imposing these various reforms on India, these Western ideas, we think that they must be of the very latest kind. The new Clause in no way infringes the spirit of the Bill. Anyone who desires an extension of constitutional reform in India can support the proposal and at the same time need not break faith with any promise he has made in regard to supporting the Bill. It simply says that what we have found best for the people of this country should be good enough for India.

Let me now turn to the even more vital Clauses which are on the Paper and which we are now discussing. There is one in the name of the hon. Member for South Croydon (Mr. H. Williams) and myself which deals with Imperial preference, and a second one which raises the question of the most-favoured-nation treatment. I am not going to deal for more than a moment with the second proposal, because I hope that the Government will accept the new Clause which lays down the principle of Imperial preference. I only put down the second proposal in case the Government decided that they could not support the principle of Imperial preference. The second Clause, which I am going to dismiss in a few words, merely demands that if the Government will do nothing more, they will at least give favoured-nation treatment to British goods in the Federation of India in the days to come. I apologise for even tabling the Clause, but the Committee will understand why I put it down.

With regard to the Clause described in the margin "Imperial preference," I hope the Government will accept the principle—I will not say the exact words either in my Clause or in that standing in the name of the hon. Member for South Croydon. The Committee, I hope, will realise that this is almost the last opportunity they will ever have of dealing with this. Some of us who have been in this House a quarter of a century may deplore certain things which have been done, but do not let the young men who come here elected on the Imperialist ticket look back 20 or 30 years hence and have any cause of regret for the attitude we took with regard to British trade in India at the present time. The principle laid down in the first Clause of mine on page 1761 is that in framing this new Constitution we shall insist that it shall be on the basic assumption, if I may use the words of the White Paper, that Britain and India will continue to act in a spirit of partnership. Please note that in the Clause we ask nothing of India which we are not prepared to give to India ourselves; that is to say, we only ask that the preferential principle is adopted as long as we in this country are prepared to extend the same principle to Indian goods, and we seek to insert the principle that India shall grant preference to Britain over foreign produce. That is the object of the Clause, subject always to the fact that Britain grants similar preferential advantages to India. Could any principle be more fair than that, and could any means be devised under which you could more certainly create a spirit of partnership between this country and India in the days to come?

The Under-Secretary last night said it was on the basis of Ottawa that they thought the trade between India and Great Britain was to be improved and developed. I was very glad to hear those words, but, if that be so, I ask him why he does not accept this Clause because it exactly covers the point? We had a very interesting discussion yesterday. We had the Under-Secretary saying to us that we really must not do anything to disturb the Fiscal Convention. I ask the Committee whether they realise that under the Fiscal Convention it was possible for the Secretary of State to intervene if he considered any tariff was unfair to this country, and although the evidence of his intervention has not been very great, it always has been there. At the present time, however, under this Bill you have no longer got the power or protection of the Secretary of State. Therefore, is it not really imperative that we should do everything in our power to see that this country shall have fair treatment in the days to come? We had numerous speeches in yesterday's Debate endeavouring to point out that the trade of Great Britain had been much improved, thanks to the Fiscal Convention and thanks to the action of His Majesty's Government in recent years, but do the Committee realise the tremendous drop in our trade, more especially Lancashire trade, with India during the period since the Fiscal Convention has been in being?

I would remind the Committee that the succession of Conservative and Liberal parties in this country right up to the War always held the view that our great services to India demanded that we should have equality of treatment in the market. That was always the accepted basis. I do not think hon. Members behind me ever got up and resisted the 3½ per cent. Excise duty. I think it was only when everyone was war weary, when the late Mr. Edwin Montagu proposed those vast changes, and I do not think that Lancashire, which gave such contributions to the War, realised what was happening to her future, but 3½ per cent. was raised to 7 per cent., and then to 15 and 20 per cent. and now to 25 per cent. This is the fruit of the Montagu policy. The results can be seen to-day in the homes of almost every weaver and spinner in Lancashire. They are really disastrous. The hon. Member for Doncaster (Mr. Molson) yesterday, and I think, also, the Under-Secretary, endeavoured to give the impression to this Committee that there had been a tremendous improvement in our cotton trade and our total trade in India in recent years. That really is incorrect. I am speaking from memory, but I think that between 1922 and 1929 the average figures of our total exports to India during that time were something like £85,000,000 a year, and in 1921 I think we exported to India well over £108,000,000 worth of goods. To-day, even with the very slight improvement since the boycott, the figure which the hon. Gentleman mentioned yesterday was £29,000,000 for goods other than cotton. If you add the cotton goods, I think it would come to £36,500,000, as against the average of £85,000,000 in the years to which I have referred. Therefore, your trade has gone down more than 50 per cent. in 10 years.

What is going to happen in the next 10 years with the decade of good will we are promised by His Majesty's Government? The price difference is not as great as the hon. Member imagines. If he will look into this matter carefully he will see it is rather extraordinary that in spite of sweated wages in India, to which reference has been so often made from the benches above the Gangway, in spite of the 25 per cent. duty, British goods are very little more than those of India. That was proved at the time of the boycott when Indians were preferring British goods if allowed to buy them, but men were permitted to be outside every wholesale and retail shop and tell people they would take their names if they bought British goods.

I am grateful to the Committee for allowing me to offer these few remarks, but I do beg everyone in this Committee and the Members for Lancashire in particular, also the Members for Yorkshire—because it is not only a Lancashire question—as this is the last chance we shall have, I think, of recording our votes on the principle, to say whether there shall be reciprocity in India in the days to come. I have given up 30 years of my life fighting far a certain principle which, I thought, was very dear to the whole Conservative party, and which swept the country on the last occasion by going all out for the idea of security for our manufactures at home and Imperial preference overseas. I do beg Members on this occasion not to sacrifice all those great achievements, but to support the principle embodied in this Clause, because I believe we shall never regret taking that decision. I believe it is just to India. I believe we are asking nothing which will be unfair to any Indian, and I believe we shall be doing something to promote the well-being not only of our country but of the people in the Indian Empire as well.

4.10 p.m.

Lord E. PERCY

It is perhaps doing some Members of the Committee a bad service to take the various new Clauses together in this collocation. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) began his speech by saying that Lancashire asked for a fair field and no favour, and ended by saying that Lancashire asked for preference.

Sir H. CROFT

There are two different Clauses; I dealt with that most specifically.

Lord E. PERCY

I do not accuse my hon. and gallant Friend of being at all disingenuous, but it does make it a little difficult to deal with the question when one is dealing with two propositions which are completely different in principle. Perhaps I may say about the second proposal as to statutory Imperial preference that I do not think that those who hold the views I do can usefully argue with those who hold the views of my hon. and gallant Friend the Member for Bournemouth. We have gone into this question as fully as possible, and we have decided what one would have thought was decided ever since the famous difference of opinion with the American Colonies, namely, that this Parliament cannot pass an Act imposing taxation upon any of its dependencies at any stage of political development from the status of Crown Colony up to the status of fully self-governing Dominion. To say, as my hon. and gallant Friend said, that our principle is Imperial preference and that therefore we must, of course, agree to impose, in a permanent Constitution, a statutory system of Imperial preference upon one of our dependencies, is really playing with words.

If my hon. and gallant Friend will forgive me, I will not concern myself any further with that particular proposal, but I do want to discuss the other proposal in regard to a Tariff Board. On that question there are genuine doubts felt in Lancashire. Of course, it is rather difficult to consider that proposal when one does not know what the proposal is. Two quite different proposals have been put before the Committee by different speakers. My hon. and gallant Friend the Member for Bournemouth said he wanted to give India a Tariff Board on precisely the same lines as the Tariff Advisory Committee in this country. Apart from the fact that this new Clause does not do that at all, is that what he really wants? This Clause proposes something which is without precedent in any country, and is certainly not the Tariff Advisory Committee in this country. It sets up a Tariff Board without a report from whom no customs duty may be altered by the Government of that country. That is not the Tariff Advisory Committee. Does my hon. and gallant Friend still say that what he wants is nothing more than what we have found so beneficial in the Tariff Advisory Committee in this country, or does he want the new Clause?

Sir H. CROFT

We want what is in this new Clause. If the Noble Lord is prepared to find some words which are more suitable to carry out that ideal, we shall be very glad to have them. Otherwise, we can go forward with this Clause.

Lord E. PERCY

My hon. and gallant Friend wants what is proposed in this Clause. We are not here passing an ordinary piece of legislation which may be repealed to-morrow. We are passing a Constitution Act like the British North America Act. It is proposed to set up a Tariff Board, and that Board must be able to do something. Under this new Clause there is nothing whatever that the Board can do except to hold up any action by the Government until the Board has reported on that action. What my hon. Friends want is not a board like the Tariff Advisory Committee in this country. Are my hon. Friends sure that that is the way to get the best tariff policy in India, having regard to the interests of this country? I have had some experience of tariff boards by watching them. My first experience was the Tariff Board set up by the least successful of American Presidents, President Taft, after the Payne-Aldrich tariff, with the specific object of revising the iniquities of that very high protective system. The chairman of that board, who was a friend of mine, was not, I agree, wholly innocent of any American party affiliation—you cannot expect that in America—but he was an economist of very high university standing. The only thing I can say is that it succeeded for three mortal years perfectly honestly and scientifically to hold up any sort of proposal for the revision of that tariff, and disappeared in consequence. Indeed, it would not be too much to say that under the regime of that board, in the words of the poet Dryden, "The men of Belial had a glorious time.'

I think that that is very much what may happen under any sort of tariff board, because it must be remembered that a tariff board always means the worst and most vicious thing in any system of government, namely, divided responsibility A Secretary for the Treasury, a Minister of Finance responsible for the financial policy of the country, and a board that he can always hide behind and always delay behind. After all, it has been stated by the present Finance Member of the Viceroy's Executive Council that the time has come when the whole of the Indian tariff ought to be revised from top to bottom. Would you rather have a, work of revision of that kind carried out by Ministers and departments or by a board which must hear all the evidence of all the affected parties, "until the cows come home." [Interruption] I am sorry if I used a vulgarism. I cannot always use the highly classical speech exclusively spoken by my hon. Friends. All that I wish to infer is that a board of this kind, having to hear evidence from every affected party, may be relied upon to be protracted in its proceedings to an extraordinary and an indefinite degree.

Sir BASIL PETO

Does my Noble Friend think that that is the way the Tariff Advisory Committee works in this country?

Lord E. PERCY

I am trying to point out that the Board proposed is not like the Advisory Committee that we have in this country. It is totally different from the Advisory Committee in this country; it has a totally different function. It has to review every proposal to be made by the Government before it is included in the Budget, and that is a sufficient answer to my hon. Friend.

Captain Sir WILLIAM BRASS

Would my Noble Friend accept the kind of board that we have in this country?

Lord E. PERCY

The only statutory effect of the Board we have in this country is to enable the Government of the country to pass its tariff through Parliament under a specially expeditious procedure. Do my hon. Friends wish to establish in India a Tariff Board which shall be a substitute for the Indian Legislature, a Board on whose advice Indian Ministers can enact new tariff legislation by Order-in-Council without any debate in the Legislature?

Sir W. BRASS

Provided the Board is appointed by the Governor-General.

Lord E. PERCY

I really would ask hon. Friends who speak like that to consider the present Tariff Board appointed by the Governor-General. These Debates have been full of the most violent attacks on the impartiality of the present Tariff Board in India. Who was the original chairman, the first chairman of the Board? An English member of the Indian Civil, Service, of quite exceptional Ability in these matters, and I think probably personally the best qualified man to be the head of an economic board of that kind that could be found in any country. He subsequently became Commerce Member of the Viceroy's Executive Council. Yet my hon. Friends throughout this Debate have been impugning him as a wholly and obviously biased and unimpartial person. After that, what weight can you put on the Governor-General's appointment in his discretion?

There is another point to be mentioned, and it deals with a question asked by two of my hon. Friends. There is a special difficulty in resting your safeguards upon any tariff board in India. In this country, where you have a highly developed industrial system, in nine cases out of 10 and Almost in 99 cases out of 100 you are protecting an established industry which is threatened by foreign competition. In India I should think that in nine cases out of 10 you are asked to protect an infant industry which is seeking to establish itself. Infant industries have the peculiarity in many cases that they are unable to offer strict evidence as to their prospects and as to the exact height of the tariff that they require. The establishment of a tariff for an infant industry is above all things a matter for statesmanlike judgment and not for economic theory, and the question as to what is an appropriate tariff in India is the most difficult problem of statesmanship in the world at the present time. I have no doubt that the balance at the present moment presses too heavily towards industrialisation. I have no doubt that if some of my hon. Friends had their way, from the point of view of India, the balance would be depressed excessively on the agricultural side. The increase of population in India does, unfortunately, demand a certain measure of industrialisation. When you are dealing with that sort of proposition you must remember that it is far safer to rely on the individual judgment of statesmen than on the theories of an economic board.

Finally, I come to the other proposal of my hon. Friend the Member for Gorton (Mr. Bailey), which is totally different from the proposition of my hon. and gallant Friend the Member for Bournemouth. He realises the difficulty of this proposal. Therefore, he suggests—it is a proposal much more worthy of consideration—that the Viceroy in the discharge of his special responsibilities under Clause 12 (f) shall have a board appointed by himself to whom he can refer a question in order to discover whether there is penal treatment or not. That is a much more defensible proposition. I would say to the hon. Member for Gorton that he was unworthy of himself when he said that Lord Derby and my hon. Friend the Member for the Hulme Division (Sir J. Nall) had voted in favour of the proposals of the Joint Select Committee on this question, but had not supported the proposals of the Bill. I ask my hon. Friend to point out to me one respect in which the Bill and the Instrument of Instructions, taken together, do not verbally and exactly carry out the recommendations of the Joint Select Committee in this matter. Can my hon. Friend point that out to me?

Mr. BAILEY

I frankly confess to the Noble Lord that that particular question takes me by surprise. I cannot at the moment answer yes or no, but I fully accept his assurance when he says that there is no difference. In regard to what I said in reply to the Member for Westhoughton (Mr. Rhys Davies), since the matter has been raised let me state that I did not for one moment say what were Lord Derby's views or the views of the hon. Member for Hulme (Sir J. Nall). I merely asked the hon. Member for Westhoughton whether he had any authority to say that either of those two distinguished gentlemen would have supported the proposals of the Government in this particular form. That is exactly what I said.

Lord E. PERCY

Nor do I desire to hide behind anyone on a matter like this, but as regards the identity of the Government proposals with the recommendations of the Joint Select Committee let me say that I have read the proposals again within the last quarter of an hour, and I cannot see the slightest difference, even down to points of verbal imitation. Let me point out to the hon. Member that the recommendation of the Joint Select Committee was that the Governor-General should have a special responsibility for deciding in his discretion whether the intention of a particular proposal was political or economic. That is the whole essence of what the Governor-General will have to decide in deciding whether a proposal is penal. That is a proposition which a man of common sense, in close touch with the political situation, can always decide. It is like the question whether a man is a gentleman or not, a thing which is not provable in a court of law but is perfectly well known to everyone. But to whom else are you to submit this question of whether a duty is penal or not? My hon. Friend suggests that it could be submitted to the Federal Court. How are you to prove before a court that the motive of a proposed duty is penal. The only thing you could do would be to submit the question, not to a court of lawyers but to a court of economists, to decide whether there was any economic reason for the proposed duty, and if there was no economic reason you would say that it was merely political.

Mr. BAILEY

In regard to what the Noble Lord has just said, I agree that it would be easy to recognise whether or not a particular proposal conflicted with the Act. The whole point of my argument was that the Governor-General would be placed in a very embarrassing position in recognising it. He will have a great many other matters to consider besides this specific matter, whereas the tribunal would not be in any such embarrassing or difficult, position. That is why I prefer the tribunal—not because I think that a particular type of expert is required to solve the problem, but because the problem requires independence and freedom from other problems.

Lord E. PERCY

The hon. Member interrupted me too soon. I was about to say that the result of asking any tribunal, whether of economists or lawyers, to decide whether there was or was not any economic argument in favour of a proposed duty, would always be to find that it was possible to adduce economic arguments in favour of that particular duty. I never heard of a duty proposed by the most log-rolling Congress politician in America, for which apparently weighty economic arguments, though quite fallacious economic arguments, could not be adduced. What my hon. Friend suggests is that a certain duty can be carried out by the Governor-General, but that it would be embarrassing to him. "Therefore," he says, "let us transfer it to a tribunal which from its very nature will be incapable of carrying out the duty at all." The experience of every nation shows a tribunal of that kind to be utterly useless for that purpose. Lancashire, I feel sure, has to choose between, on the one hand, a process of litigation in India in which it will be almost impossible for them to prove their case under any sort of rules of law and on the other hand a procedure by which they rely upon the commonsense of the direct representative of the Secretary of State acting in his discretion. Of course, the exercise of that common sense and discretion by the Governor-General will be embarrassing. The process of governing in all countries is always embarrassing. No one sitting on that Front Bench ever spends an hour in which he is not embarrassed. That is the business of governing. I would earnestly represent to my hon. Friends that while they are seeking, as I have sought for two long years, more effective safeguards, what they have hit upon here is not a more effective safeguard than the one which the Joint Select Committee has proposed. It destroys absolutely any safeguard which exists in the Joint Select Committee's Report and it would land Lancashire into hopeless litigation.

4.34 p.m.

Sir W. BRASS

I do not propose to follow my Noble Friend the Member for Hastings (Lord E. Percy) in his general attack on tariff boards, but representing as I do a Lancashire constituency in which a great deal of manufacturing used to take place and in which far less manufacturing takes place at the present time, I want to say a few words about the speech of my hon. Friend the Under-Secretary yesterday. I admit that I was very disappointed in that speech. As a result of the words which my hon. Friend used at the commencement of that speech, I thought at first that something was going to be done by the Government. My hon. Friend said: 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."—[OFFICIAL REPORT, 29th April, 1935; col. 162, Vol. 301.] I would ask my hon. Friend exactly what he means by those words and especially the words "as it stands on the Paper"? Does he mean that he agrees with the principle of the new Clause or that he turns it down altogether. When I heard those remarks I thought that my hon. Friend was going to announce that something would be done. I did not think that he was merely going to ride off on that statement and do nothing at all. He went on to complain about certain things in the Clause. I admit that I do not agree with the proposed new Clause in toto. I think a great deal of it is wrong and my hon. Friend pointed out various respects in which he disagreed with the Clause. He said for instance that whereas at present the Tariff Board in India was appointed by the Governor-General, the proposed future Tariff Board under this proposal was to be "subordinate in the Secretary of State" and he disagreed with that proposal. I am sure that my hon. Friends who have put down this new Clause would not mind leaving out that part of it in which it is provided that the board should be subordinate to the Secretary of State.

Sir H. CROFT

In regard to the word "subordinate" I think it was used in debate but perhaps it was not clearly understood. All that is provided is that the Secretary of State is to sanction the names of the members of the board.

Sir W. BRASS

The word "subordinate" was used by the Under-Secretary and is not in the Clause itself. I agree, however, with my hon. Friend the Under-Secretary that, in effect, under the Clause the Board would be subordinate because the Governor-General has to consult the Secretary of State on the appointment of the Board. I agree, too, that what we want in Lancashire is good will with India. But we want a square deal, and we feel that there should be some kind of body in the future of the nature proposed here. The Under-Secretary last night referred a great deal to the past and to what had happened or is happening under the present regime. He said that there had been a gradual improvement in trade, and I agree that there has been, but we are not talking about what has happened in the past, or what is happening at the present time, but what is going to happen in the future under the measure which we are now considering. Whatever my hon. Friend may say about a gradual increase in trade—and it is a very small increase—that has nothing to do with the question of what is to happen after this legislation becomes operative.

My hon. Friend the Under-Secretary pointed out that there is a board at the present time. We want to know whether there is going to be a board in the future and, if so, by whom is it to be appointed. That is a very pertinent question. My hon. Friend tells us that things are better now than they were previously but we do not know what is going to happen under the new Federation. I think we ought to have a little more explanation from my hon. Friend as to what was in his mind when he said that he could not accept the Clause as it stood on the Paper. Later on he said that the Board as proposed in the new Clause was unsatisfactory. The proposed Board may be unsatisfactory to my hon. Friend and possibly to a large number of other hon. Members, but we ought to be told whether there is going to be a board under the new system and whether we are going to get a square deal in this respect in India. The majority of Lancashire members have supported the Government all the way through on this Bill. We are simply trying to find out whether the trade of Lancashire is going to be safeguarded or not under the new condition and perhaps the Attorney-General or whoever replies on behalf of the Government will give us some information on that matter.

Then, again, how is the Governor-General to know whether a duty is discriminatory or not. Clause 12 which deals with the Governor-General's special responsibilities, includes among those responsibilities the prevention of discriminatory or penal treatment directed against goods of United Kingdom origin imported into India. How is the Governor-General to discharge that responsibility? Take, for example, what has happened in the past. When I was first Member for the Clitheroe Division the import duty on cotton goods going into India was 3 per cent. and there was a countervailing Excise duty of 3 per cent. also. That import duty on cotton goods has gradually risen from 3 per cent. to 25 per cent. and that import duty of 25 per cent. has had a great effect in reducing the export from Lancashire to India. I am not suggesting that has done all this. I agree that a great deal of it is due to poverty, to low prices, to low standards of living in India. I agree that it is also due, to some extent, to machinery having been imported into India and to the increase in the manufacturing trade in India itself. But it is not only due to those causes. It is due also, to a certain extent—and a big extent—to the increase in the import duty in India against goods from this country.

The Governor-General, as I say, among his special duties has that of stopping anything which he considers penal treatment against this country. Suppose that there is a gradual increase in import duties over a period of years. Suppose that after this legislation comes into effect there is an increase of 2 per cent. one year, 3 per cent. the next year, then 5 per cent. and so on. Where is the Governor-General going to draw the line and say that a particular increase of duty amounts to penal treatment against goods from this country? How is he to find out about all these matters? I suggest that there must be some board or other body in India to advise him and to help him in arriving at a decision in a case where duty is being increased by stages in the way I have described. This is a matter which affects the whole of the Lancashire cotton trade. Lancashire Members who have supported the Government on this Bill and who believe that good will is the secret of the whole thing, want to be satisfied that the interests of Lancashire are going to be safeguarded and that Lancashire is going to get a fair deal under the new arrangements. We want to know that there will be some sort of board or advisory committee in order to see that the trade of Lancashire is properly looked after in future.

4.45 p.m.

Mr. MORGAN JONES

None of us can complain that Members representing Lancashire have taken so lively an interest in this matter, but while we concede that readily, we are entitled perhaps to say that we are not assured that the way in which they seek to safeguard Lancashire's interests is the best way. Most of the speakers so far have reiterated that they are in favour of a fair deal for Lancashire and a fair deal for India, but in the course of the discussion very little has been said with regard to the second part of that theory, namely, the fair deal for India. Hon. Members opposite are exceedingly anxious to safeguard the future of Lancashire trade with India—that is their fundamental basis—but I ask, To safeguard it against what? It may be against one of two things or perhaps both. First of all, it may be a desire to safeguard Lancashire trade against what is called a boycott. I submit that, however much they may desire to do that, a Tariff Board will be utterly futile for the purpose. You may be able to deal with a boycott by other legislation; you may be able to make a boycott illegal and to impose penalties upon those who practise it, but a Tariff Board certainly can do nothing to deal with a boycott. In the long run, I am surely right in saying, if a people are determined not to buy your goods and have an obsession about it, nothing that you can do, either by legislation or otherwise, can compel them to buy the goods.

The other possible safeguard is an effective safeguard against unfair discrimination, and it is that which is our main concern to-day. In order to achieve an effective safeguard against unfair discrimination, as I understand it, a Tariff Board is suggested, and among the arguments advanced in its favour is this, that if you have a Tariff Board, you will remove the subject entirely from party politics. Well, we have seen a tariff advisory committee appointed in this country, and I am not prepared to say that I am convinced that we have not seen in actual operation, through the medium of the Import Duties Advisory Committee, the triumph of a party policy which has been advocated in this country for 30 years. It has been done, I know, upon the Advisory Committee recommending it to the Government, but in the long run it is nothing other than the triumph of a party policy; and if you have this kind of thing in India, and unless your Tariff Board is fairly constituted, you may force this thing right into the centre of party politics rather than take it out of politics.

It all depends, I submit, on the personnel of the Tariff Board. What guidance do hon. Members opposite give us in the proposed new Clauses as to their idea of the personnel of this Tariff Board? There is no guidance at all, beyond this, that there are to be a chairman and from two to five members. That is all we are told. Clearly there must be a majority either of Indians or of Englishmen on this board. If hon. Members opposite urge a majority of Indians, will that suit Lancashire? Will that guarantee Lancashire against unfair discrimination? Surely the danger of unfair discrimination will be present just as much when you have a majority of Indians on the Tariff Board as is the case now. Turn it the other way round and suppose that the majority is a majority of English people on the board. Will Indians be satisfies with that? Can you expect them to be satisfied? Ought they to be satisfied? Surely, if anyone has a right to a determining voice as to the fiscal policy of India, it is the Indian people.

We here assert that we have the right to impose barriers against what we regard as unfair trading conditions. How should we like to have the tariff advisory committee in this country constituted of a majority of Indian people Hon. Members opposite really must begin to be fair. If they are entertaining the thought that the Governor-General, in the exercise of his discretion, is to put on this Tariff Board a majority of Englishmen, representing English business interests, so as to safeguard Lancashire against unfair discrimination, I can assure them that they are going to put the poor future Indian officials in a most unfortunate position. Moreover, it is an indefensible proposition. You have no right to ask that there should be a majority on the Tariff Board in India of our people as compared with Indians.

Mr. BAILEY

The hon. Member has raised the question of the personnel of the Tariff Board. Actually it is a matter of indifference to me whether it is a majority of Indians or of English. I cannot believe that there will not be sufficient people of both races, whether Indians or English, to be impartial, but if there are not sufficient Indians to deal impartially, that justifies the criticism which has been made of this Bill all along. If there are not to be found five Indians who can honestly be said to be fair in this matter, it shows that our criticism is justified. Again, I suggested that there should be an appeal from the board to the Judicial Committee of the Privy Council.

Mr. JONES

The hon. Gentleman is a lawyer and knows how expeditious is the procedure of the Privy Council and how appropriate a proposal of that kind would be for a business transaction. I started with the presumption that hon. Members opposite are anxious to safeguard themselves against unfair discrimination against British trade. That unfair discrimination could only arise from a desire on the part of Indian traders to take an unfair advantage of British traders. How could your Tariff Board be a fair representative of trade at all unless it had upon it Indian traders and English traders? If you have a majority of those speaking for Indian trade, there is, if I am to accept the theory of hon. Members opposite no safeguard against unfair discrimination against British trade. If, on the other hand, you have a majority representing British trade, the argument is in the opposite direction. I suggest to hon. Members opposite that there is no machinery really which you can devise to deal with a spirit that animates a people—none whatsoever. If, in the long run, they are determined to get the better of you in a business sense, they will get it, whether you have a tariff board or not. In any case I am convinced that a tariff board machine is not the way to deal with this question.

The hon. Gentleman the Under-Secretary of State made an admirable speech last night, if I may say so, on this subject. I do not agree with all his arguments, but I thought his statement of the case was complete. He invited hon. Members opposite to face the real problem with which we are confronted in this matter. What is that problem? On the one side we have a decrease of British trade as compared with pre-war times, although of recent years it has increased. The Under-Secretary of State last night directed our attention to two opposing or, rather, two countervailing facts as distinct from that. One is a very substantial increase in India's own production, and that is a very important point. Is there an hon. or a right hon. Gentleman here who, would care to assume authority for saying that he wants to prevent an increase of India's own production? No, I am quite sure.

Mr. BAILEY

I apologise for interrupting the hon. Gentleman again, and I would not have done so had he not challenged us. No one in this Committee would deny the right of the Indians to develop the cotton industry so far as they can for the Indian people, but we say that it is totally wrong that the Indian cotton industry should develop not only to the detriment of Lancashire but to the detriment of the Indian agricultural workers as well.

Mr. JONES

The claims of the agricultural workers of India compared with those of the city workers of India is a matter for the Indian people to determine, not for Lancashire people. And, incidentally, I do not see why the hon. Member should claim the right to speak for Lancashire every time. There are others. There is a very substantial increase in India's own production, and I am sure that every well-wisher of India must rejoice in that fact. Surely they must.

Mr. REMER

Can the hon. Member say, comparing the wages paid to Indian workers with the wages paid to Lancashire workers, why the Bombay mill-owner wants 25 per cent. protection against Lancashire?

Mr. JONES

That is not the point at the moment. Is it a good thing or a bad thing for India, in the minds of hon. Gentlemen opposite, that there should be an increased production of cotton goods in India? What is the answer? There is no answer, apparently. I should assume that every well-wisher of India must say that in the interests of India herself she should be able to increase her productivity of goods, whatever they may be.

Mr. GODFREY NICHOLSON

Does the hon. Member make no proviso about labour conditions?

Mr. JONES

I make my own proviso, certainly, about labour conditions in India and elsewhere, and I want India to co-operate with other nations, through the medium of the International Labour Office, for raising labour conditions everywhere, as well as I would urge the creation of trade union conditions in India itself. That is a side issue. The point is that we ought to rejoice at this increase of Indian productivity. A Member of the Government now asks me why.

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking)

I did not speak. I think it was an hon. Member sitting behind me.

Mr. JONES

There seems to be some ventriloquist about. I apologise to the right hon. Member. I should say it is a good thing for any country that its productivity should increase and that this applies to India as well as to other countries. Let us take side by side with that the other point which the hon. Gentleman made which is often overlooked—the terrific increase in Japanese competition in India. The Under-Secretary said: 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 square yards in 1914 to 349,000,000 in 1934."—[OFFICIAL REPORT, 29th April 1935; col. 171, Vol. 301.] That is a colossal increase. I am stating a fact.

Sir W. BRASS

Do you agree with the principle of it?

Mr. JONES

If the Indian people want to place an embargo upon foreign goods, that is their affair; it is not mine, but I do say that it is not for us to lay down the law, not merely temporarily but in a Constitution Act, that such and such shall be the law until Parliament in its wisdom changes the Constitution. May I put a third point? Let us also remember another important fact which the Under-Secretary mentioned to us last night—the amount of machinery which has been introduced into India since 1914. I presume that for practical purposes we can neglect the war years between 1914 and 1918, because I do not suppose there was very much exported in that time. Therefore, it means that in some sixteen to eighteen years there has been exported into India £140,000,000 worth of machinery. It is a terrific amount.

Mr. G. NICHOLSON

All cotton machinery?

Mr. JONES

No. The phrase actually used was this: Is this to be wondered at when it is remembered that since 1914 we have exported £140,000,000 worth of machinery to India of which this production is the direct result"— this production being square yards of cotton. That is a tremendously significant fact. In addition to these three factors of the increase in Indian production, the increase in Japanese competition and the increase in India's imports of machinery, there is a fourth factor to which the Under-Secretary referred last night, and which I will quote to the Committee. He said: Another fact which I think is of importance in considering the diminution of British imports to India is the impoverishment of the Indian peasant."—[OFFICIAL REPORT, 29th April, 1935; col. 171, Vol. 301.] There is the last and most potent factor in the whole of this situation. Hon. Members may talk as much as they will about a tariff board and tariff arrangements and foreign competition with ourselves in India, but in the long run there is nothing that we can do more effectively to improve India's trade with Lancashire than to raise the purchasing power of the Indian people themselves. We on this side of the House are sure that this Tariff Board proposal is not going to be effective. It is not going to find a way for saving Lancashire's trade with India. There is only one way to do that and that is to cease this agitation—I can call it nothing short of that—which perpetually creates a feeling of embitterment and antagonism between the Indian people and ourselves. In the long run the best medium for the creation of trade is good will; and I am sure that this Government could win the good will of the Indian people more speedily by taking them whole-heartedly with them along the road of self-government than by any other method.

5.7 p.m.

Mr. RADFORD

I was disappointed and surprised to hear the hon. Member for Caerphilly (Mr. M. Jones) say that if a majority of the members of this proposed Tariff Board were Indian gentlemen there would be no hope of fair recommendations by that Board in the direction which hon. Members who have been advocating the Board hoped for. I will put the thing the other way round and say without hesitation that I am perfectly convinced that there are Indian gentlemen of character and honour whom I would not fear to see serving on a tariff board in this country. As is seen in the wording of this proposed new Clause, there is no suggestion that Europeans should constitute the Board. There is no suggestion at all as to how the body should be constituted. It is perfectly clear that the Governor-General would have available as members to be chosen by him both Europeans and Indians who could be relied upon both for their ability and fairness of judgment. I would like to reinforce the request of the hon. and gallant Member for Clitheroe (Sir W. Brass) that the Minister who replies should state whether there will be a tariff board in the future when this Bill becomes law, and, if so, what its composition will be; because that will be a guide to some of us who do not quite know how we shall act when the time comes for the Division. My Noble Friend the hon. Member for Hastings (Lord E. Percy) referred to the Indian cotton trade as being in its infancy. It is such a lusty infancy that the Indian cotton trade consumes as much raw cotton at the present time as does the cotton trade of this country. We are supposed to be the fathers and mothers of the world's cotton manufacture—and India consumes as much raw cotton as we do. There is not so much of the infant about the Indian cotton industry.

How has this Indian cotton industry grown to such dimensions? How conies it that its productivity has grown to such a terrific extent during the years since the War? The reason for it has been the tremendous import duties put on against what were the chief suppliers of the Indian market—the Lancashire mills. There is no room for argument about that. At the time of the recognition of the Fiscal Autonomy Convention as the basis of our trade with India in 1921 there was a 7½ per cent. import duty on cotton goods sent into India; but there was also a 3½ per cent. countervailing Excise Duty, which meant that there was a difference of 4 per cent. which our people had to pay to get their goods into India. Since then the duty has gone steadily up. I will not weary the Committee by giving the figures of each individual advance, but the figure has been quoted several times to-day as being now 25 per cent., with no countervailing Excise Duty. But this is a complete understatement of the position. The 25 per cent. import duty is, and for some time has been, a minimum duty on British cotton goods going into India. In substitution for that 25 per cent. ad valorem duty, in the case of the cheaper cloths which used to constitute a tremendous proportion of the cloth which Lancashire sent to India, there is a duty based on weight. It is what is called a specific duty of 4⅜ annas per pound weight.

To give the Committee some idea of how that works out, I will give one example. Let us take a grey shirting, 38 inches wide and 38 yards long, weighing 10 lbs., and worth 11s. in Manchester to-day. The manufacturer of this shirting will sell it in Manchester for 11s.; and anyone who has noted the trading results of Lancashire manufacturers—particularly those making this kind of cloth in recent years—will know that this cloth will probably show the manufacturer a loss at the price of 11s. This piece of cloth, costing 11s. in Manchester, because it weighs 10 lbs. will have to pay a duty in India of 4s. 1d., which works out at a duty of 37 per cent. ad valorem and not 25 per cent. The result has been that this specific duty which amounts to 37 per cent. ad valorem has practically killed that cheaper class of trade with India.

What has been the result? There has been some reference to the machinery which is going to India. The reason for it going there is that with the help of these terrific import duties it was worth the while of wealthy Indians to erect mills and equip them with machinery. With this high tariff wall behind them they could work away for increased productivity, with the result that their productivity last year amounted to between four and five thousand million yards of cotton cloth—and the most that Britain' ever sent into India in pre-war days was in the neighbourhood of 3,000,000,000 yards. Their productivity is infinitely greater than the total imports from this country or from Japan. The rise in Japanese imports referred to by the Under-Secretary and by the hon. Member for Caerphilly, from 9,000,000 yards to 349,000,000 yards, is trivial compared to the increase in India's own production. India's own production has risen from 2,156,000,000 yards 20 years ago to 4,257,000,000 yards last year. Therefore, the increase of some 300,000,000 yards in Japanese imports is a flea-bite compared with India's own production.

Has this been for the good of the Indian people? It has been for the good of the wealthy millowners and possibly for some two or three hundred thousand operatives whom they employ—although things may not be so good for the operatives. Hon. Members opposite will be as well informed as I am as to whether the rates of pay and other conditions in the Indian mills are such as please them. At any rate, this increased production has been a tremendous benefit to the Indian mill-owners and possibly to these two or three hundred thousand operatives; but the people who have paid for it have been the 300,000,000 poor peasants of India who have had to buy at higher prices cotton goods of a quality not as good as they used to get from Lancashire. I wish that the hon. Member for Doncaster (Mr. Molson) was in his place, and I wish that some of my hon. Friends from Lancashire had told him the truth when he spoke last night and rather sneered at us for advocating tariffs on foreign manufactured goods coming into our own country as being for the good of our people while saying that we did not consider tariffs were for the good of the Indian people. There is no analogy at all between the conditions in this country and in India. We are an industrial people and four-fifths of our population have to work in industry, whereas in India there are merely a few hundred thousand in industry, and they are benefited while 350,000,000 are having to bear the cost of dearer goods. I hope that the Government will give us information with regard to the position of the Tariff Board in the future and their view on the suggestion that there should at least be most-favoured-nation treatment for this country.

5.16 p.m.

Mr. STONES

It is not very often that I trouble the Committee with a speech. I remember the Noble Lord the Member for Hastings (Lord E. Percy) saying that it was impossible for him to find sufficiently classical language to deal with his friends below him. I am sure that he will not have much difficulty in understanding what I, as a Lancashire Member, say. It will be in the pure Lancashire fashion, straight and quite plain. For the first time I find myself in agreement with those who have been opposed to this Bill. I have religiously voted for the Government throughout, but on this occasion I feel that, unless some concession is made, I shall have to go into the. Lobby against them. I regret that the Government have been unable to make any concession. I was sent here to support the National Government, and I have faithfully carried out my promise to my constituents, but I feel bound today to support the principle of the proposed Clause. I do so because I come from a constituency which during the last four or five years has seen 14 mills closed down as a result of this very competition. I have been told many times during the last few weeks that I ought to support a clause such as this one. The Government have agreed that discrimination is wrong. Clause 12 makes it the duty of the Governor-General to prevent discrimination, but surely it would be more reasonable, if the Government were really in earnest, to agree to the setting up of a tribunal to go into the facts when complaint arises. I do not say that this new Clause is perfect, but it is a step in the right direction and can be perfected later on. It represents a principle for which there is widespread support in Lancashire, and I earnestly beg the Government to make some concession in the matter. I agree with the hon. Member for Gorton (Mr. Bailey) when he said last night: 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?"—[OFFICAL REPORT, 29th April; col, 173, Vol. 301.] In a word, all we want is that the Indian politician shall not be allowed to penalise British trade merely for political purposes. I agree in the main with the proposed Clause, and I feel that it would not be in the interests of my constituency if I did not support it by going into the Lobby.

5.20 p.m.

Mr. SUTCLIFFE

I listened carefully to the reply which the Under-Secretary gave last night at the close of the first part of this Debate, and I was disappointed with what he said, although I should like to pay a tribute to him for the careful way in which he dealt with the various points which were raised, chiefly by Lancashire Members. There have been times in the last three years when Members who represent Lancashire divisions have thought that those who have replied on behalf of the Government have dealt in a somewhat perfunctory manner with the points that have been put forward. They have not been occasioned, however, when the question of India has been before the House. Last night we were pleased that the points were dealt with so carefully. Nearly all the Lancashire Members have supported this Bill throughout its long passage, and they will continue to support it. Some of us have been here, day in and day out, have trooped through the Division Lobbies defeating Amendment after Amendment, and have done all that we could to support the Government in the passage of this Bill. I have done that, not because I am in love with the Bill, but because I realise its importance. I realise, after all that bas gone before, that the only possible course to pursue now is to give India some measure of self-government. That is the only way which will benefit Lancashire trade. To deny India this at this late hour would be very much worse for Lancashire trade than anything which could happen under this Bill. There is no doubt in our mind that we are doing the best for the cotton trade by supporting this Bill.

The hon. Member for Caerphilly (Mr. Morgan Jones) raised one or two points. I did not propose to deal with the Import Duties Advisory Committee as set up in this country, but the hon. Member brought the question before the Committee, and I will, therefore, say a word about it. He said that the Advisory Committee follows party politics in this country. I think that he is wrong, and I have never before heard it suggested seriously. That Committee is the most impartial body that has ever been set up to deal with anything.

Mr. MORGAN JONES

What I said was that the Committee's recommendations were a triumph for the policy of the party opposite.

Mr. SUTCLIFFE

That amounts to pretty much the same thing. The Committee was set up primarily for two purposes, namely, to help manufacturers to get more orders for the greater employment of our people, and to ensure, as a corollary, that there should not be victimisation of the people by increased prices. The hon. Member for Limehouse (Mr. Attlee) hinted yesterday that prices as a whole have not increased. That is proved by the fact that the cost of living to-day is down to 39.

The CHAIRMAN

I must remind the hon. Member that we are not discussing the Advisory Committee in this country, and though legitimate reference has been made to it, he must not discuss it now.

Mr. SUTCLIFFE

I have no intention of doing so, except to reply to a point made by the hon. Member for Caerphilly. I apologise if I have gone out of order in doing so. The hon. Member also said he was not against Indian trade increasing as much as it possibly could. That seems to be a case of the usual Socialist party attitude of every country but one's own. I propose to deal with one or two points that arose out of the speech of the Under-Secretary last, night. We know that politics have played a large part in Indian trade, and there is a danger, although it may not arise at once, that power will go again into the hands of those who will put politics first and enact measures of a penalising character against our trade for political ends. It was well described by the Under-Secretary last night when he said that power might again get into the hands of the wrong section. The question, then, is whether the safeguard provided in the Bill would be sufficient. The Governor-General has power to intervene if penal action is taken against British goods, but would it not be better to ensure at an early stage that that position is never reached? How can the Governor-General intervene in adequate time? Surely it can only be in very exceptional, and therefore obvious, cases where he will intervene. What about the numerous cases of what may be called pinpricks, small increases, small points of discrimination, which are from time to time enacted against this country and which in many cases probably would not be big enough to justify the Governor-General intervening? Will he not hesitate to intervene except in the most glaring circumstances?

Would he not, therefore, be helped if he could have the advice of some impartial body such as the Tariff Board which we are suggesting? It would be an expert body which would give him undoubted strength. We do not lay down any rules as to its exact composition, but it would be a body of experts in trade. At the same time, the members would be completely unbiased. These are two qualifications which must be insisted on. Again, the board would be in close touch with the figures of the trade of both countries, and it would be in a far stronger position to decide whether a tariff was essential to India or grossly unfair to this country. The Under-Secretary has suggested that the present machinery should work well, but it seems rather top-heavy. The Trade Commissioner has to inform the Board of Trade if penal discrimination is taking place. The Board of Trade has to tell the Secretary of State, and the Secretary of State has to tell the Governor-General, who exercises his discretion. I do not think he is in a very enviable position. Is it calculated to foster good will? We have heard a lot about good will during this Debate, and the Government appear to be relying on good will more than anything else in the future relations between this country and India. I think they are apt to rely too much on good will. We have relied on good will in the past, and on many occasions have been badly let down. When the Governor-General suddenly takes this course, it is bound to arouse ill-feeling. He makes a sudden arbitrary decision that some duty has to go and it must be taken off straight away. We cannot say that that will make for friendly relations. The Under-Secretary seemed to be very well satisfied with the present Tariff Board, but would he have been equally satisfied with the arrangements for reviewing tariffs in Canada and Australia before the Ottawa Conference took place? Is it not a fact that provisions were inserted in the various Agreements arising from that Conference in order to improve the methods adopted by the tariff advisory bodies in the Dominions?

Another point made was that delays would be prejudicial to trade. Is not the Budget here, which imposes alterations in duties, subject to delays in its long passage through the House? And is not delay a good thing? There has been too much speed in the putting on of tariffs against this country. Delay would enable public opinion to express itself on both sides. Then there is the question of publicity, which is of great importance in influencing public opinion. It is the lack of publicity in the past which has enabled these duties to be put on hastily, and that has reacted against this country. Publicity would be an excellent thing. In conclusion, I would urge the Government to consider this matter again before the Report stage. There will be plenty of time before the Report stage. We do not ask that the exact wording of this new Clause should be adopted but we do ask that the principle of it should be considered once again to see whether it is not possible to do something on the lines proposed, or something akin to what is suggested, because we take a serious view of the position. There is nothing startling in this proposal. We ask only for fair and impartial consideration, and we think such a Clause would be one more brick in the big edifice which we are gradually building up for India. I hope the Government will give the matter further consideration, and will be able to do something on the lines I have suggested, so that English trade may receive a fairer deal than it has had in the past.

5.35 p.m.

Mr. REMER

I might remind those who have been criticising the details of this Clause that the Question put from the Chair is, "That the Clause be read a Second time," and that if they desire to see a Tariff Board set up it will be open to them, after the Clause has been read a Second time, to put down Amendments to it. The Noble Lord the Member for Hastings (Lord E. Percy) spoke for some little time, and with great eloquence and ability, but his speech was destructive of the idea of tariff boards anywhere in the world, and not once did he put forward a constructive suggestion which would be helpful to the distressed trade of Lancashire. We have heard a lot about the paltry increase of 100,000,000 yards in Lancashire's trade during last year. In 1913 Lancashire sent to India 3,000,000,000 yards of cotton cloth, and that has now fallen to a paltry 300,000,000 yards. Lancashire has received a very raw deal. It may be asked why I, who represent a constituency in Cheshire, am speaking on behalf of Lancashire. I reckon that there is more cotton cloth printed and dyed in my constituency than in any other constituency in the United Kingdom. It is the home of the printing and dyeing trades, because they go there for the necessary raw material, the raw material of water, pure water for the purpose. As one who knows the distressing circumstances of those villages, where they have suffered serious unemployment, I am angry when the Noble Lord comes here to speak without having one constructive suggestion to put forward to help those people to regain prosperity.

We are not speaking here solely in the interests of Lancashire and Cheshire people. We are speaking as much in the interests of the agricultural workers in India. After all, Lancashire has not a great deal to complain about. If Lancashire had listened to Joseph Chamberlain 30 years ago Lancashire might have had a different story to tell to-day; but it is very unfair that the cotton weavers and spinners of Lancashire should be punished because the Manchester Chamber of Commerce and other Free Trade bodies happened to give the Government of the day and the people of this country very bad advice, just as they are giving very bad advice to the present Government. One thing which I can never understand is why successive Governments, when they want to know anything about the cotton industry, persist in going to the Manchester Chamber of Commerce, a body composed almost entirely of merchants whose sole object is to buy their goods in the cheapest market, and who will readily go to Japan or any other place to buy cheap goods, made by underpaid labour, if it will enable them to make profits. If there was one thing in the speech of the hon. Member for Limehouse (Mr. Attlee) last night with which I agreed it was his reference to capitalists of that type, of the purely merchant class, who are actuated solely by the idea of gaining a small merchanting profit and have no interest in the employment of their own people.

For too long the Bombay millowners have dictated to the Indian Government what the policy of this country should be. Their object has been throughout to exploit the industrial workers of that country and charge the agricultural workers a high price for very bad cloth. The Government of India would have been well advised to see that the tariff, which has been raised to the high rate of 25 per cent., was reduced to a much lower level. I believe that it is through the operation of a Tariff Board such as is suggested that we can see some real hope of advantage for the English cotton industry. Just before the Ottawa Conference it was my privilege to meet a gentleman who was the Mohammedan representative at the Ottawa Conference, and I spoke to him about my views, which are well known, on Imperial Preference. He said to me, "Which goods have the most Empire content? Is it Lancashire cotton goods, which are woven out of American cotton, or Japanese goods, which are woven out of Indian cotton?" Since that date Sir William Clare Lees and the hon. Member for Stockport (Mr. Hammersley) have been to India and have undoubtedly increased very largely the use of Indian cotton in Lancashire, and I believe that is a movement which will continue to grow. The great county of Lancashire has been long-suffering for too long. Seldom does one hear the views of Lancashire spoken with such a unanimous voice as to-day, and I only hope those who have voiced her claim will be found in the Division Lobby with me in support of this Clause. Only by some proposal of this kind can we really secure that attention shall be paid to the cotton industry of the county of Lancashire.

5.44 p.m.

Mr. ENTWISTLE

I rise for only two minutes to deal with a point made by the Under-Secretary for India in his speech last night. He made particular reference to the admission of the Movers of the Clause that the adoption of the recommendations of the Tariff Advisory Board which it is proposed to set up by the Clause would not be obligatory on the Indian Government, and therefore that it would not provide a safeguard for the trade of Lancashire or any other trades in this country. I submit that that is not an argument which will carry conviction to the Committee. The Tariff Advisory Board would be of such a character that its impartiality would be recognised by all parties. If they made a recommendation which, of course, would not be published, that would provide a very effective safeguard against duties being levied contrary to agreements which had been entered into between this country and India, or not levied in accordance with what they have now agreed to be the principle upon which these duties are to be levied, that is, to equate conditions in the home market reasonably to conditions prevailing in this country.

If this impartial Tariff Advisory Board were set up, the recommendations it made would provide a very effective safeguard. In the circumstances I cannot see why it is not possible for the Government to accept the proposed new Clause, or at any rate something on the lines of it. Nobody can say that to ensure that questions of this sort should be dealt with by a body which is admittedly impartial is unfair to India, or in any way derogates from the self-government which is given to India by this Bill. It may be said that it is derogating from the sovereignty of the government given to India that this Advisory Board should be set up by any other Government than the Government of India, but in the Bill there is provision after provision putting in safeguards for the preliminary stage, before we are quite sure that India will be worthy of the self-government which is to be established in that country. It is not unreasonable also to put in that the investigation of these very vital matters should be in the hands of a body of an impartial character set up by the Governor-General in consultation with the Secretary of State, who has so many other powers which are regarded as safeguards. In the circumstances, I once more press upon the Government to give an indication to Lancashire that the principles embodied in the proposed new Clause will be carried out either by the acceptance of the proposed new Clause or by the presentation of some other Clause upon the Report stage.

5.48 p.m.

Lieut.-Commander ASTBURY

As a Lancashire Member and one who has traded in cotton with India for the last 30 years, I felt it was impossible for me to sit still without entering a word of protest at what appears to be the reluctance of the Government to do anything to safeguard the Lancashire cotton trade. Thirty years ago we had practically the whole cotton trade of India. I remember the tariff going on, and it gradually rising from 3 per cent. to 5 per cent. and then to 7½ per cent. and 11 per cent. There was a great outcry in Lancashire at that time, but it was nothing to the outcry in Lancashire at the present time. Indian tariffs have practically cleared the Lancashire cotton trade out of India. We talk about a few hundreds of thousands of yards of cotton material; they are a mere drop in the ocean to Lancashire. The Under-Secretary of State told us that we must rely on the good will of India. I agree that good will is necessary between any two countries, but we have tried to rely on the good will and the sympathy of India for the last 50 years, and, instead of Lancashire being able to live upon that good will and sympathy, she has been starved out of existence.

I remember the Debate which took place here, when the President of the Board of Trade, answering me, said, "Look at what the trade negotiations have done. India has promised a reduction of five per cent." I said then that Lancashire would never see that five per cent. because India had only promised it if and when her finances would allow. There has been another Budget, which was not a bad budget for India. Have we had a reduction of five per cent.? Nothing of the sort. We shall never see that reduction. The hon. Member for Royton (Mr. Sutcliffe) has told the House that this is the best Bill for the cotton trade of Lancashire, and that Lancashire has recognised that that is so. I should be very sorry for him if he went down to Royton and made that speech to the cotton operatives, because he would get the biggest shock that he has ever had in his life. Lancashire recognises that with the passing of the Bill the last hope of restoring their cotton trade in India will have gone once and for all. India has been the mainstay of the cotton trade of Lancashire, and her millowners and operatives have not been out to do any injustice to or to impoverish the Indian people.

Years ago we were supplying cloth to the Indian natives cheaper than the Indian mills are supplying it to them to-day. Who started those mills? They were people from this country. They have made their pile of money without any regard for the huge mass of peasants in India, in order that they might draw money from those peasants and enrich themselves. That is how the cotton industry started in India and how it is going on to-day, and it is those very millowners who are at the back of this agitation to see the Bill put into operation. I beseech the Government to make this gesture to Lancashire. Even if the Government cannot accept the proposed new Clause as it stands, I ask them to show that they are willing to do something, even at this late hour, for the operatives who have been walking the streets in Lancashire for from four to six years. If the Government cannot see their way to do something, I shall be anxious to see how many of my fellow Members from Lancashire go into the Lobby against the Government.

5.53 p.m.

Mr. LENNOX-BOYD

The Committee have heard with very great interest the expressions of view from a large number of cotton experts and other people who are gravely apprehensive as to the effect in their own constituencies of the proposed constitutional changes. We who have consistently opposed the Bill are grateful for the eleventh hour support received from the representatives of Lancashire, on whose behalf we have waged a rather lone fight for the last few months. I hope that their opposition will be followed by a greater readiness to be apprehensive also of any threat to the welfare of the Indian masses that may become apparent at a later stage of the proceedings on the Bill. The Noble Lord the Member for Hastings (Lord E. Percy) recognised that there is a very deep disquietude among many people when he made reference in particular to the Clause which we are now considering. My Noble Friend's speech was, as always, a delight to the ear as to the mind, but when he sat down I was in extreme doubt as to what constructive suggestion he had made, and as to how he would have dealt with this problem if he had been the arbiter of Indian-Lancashire trade relations.

The only thing which has emerged quite clearly has been the recognition on both sides of the Committee of the need for good will in our future trade relations, but if good will existed on both sides, the chief reason for the erection of some tariff board such as we envisage would disappear. Does good will exist? In this country there is unanimous good will towards the Indian people and whatever mistake we think was made a generation or so ago, none of us would be ready to cancel or abrogate the Indian Fiscal Convention. Does good will exist in India? There is no doubt that good will exists among the great masses of the Indian peasantry. During the boycott period in 1930 and 1931 there was no wholehearted crusading zeal on the part of the masses of the Indian peasantry but good will certainly does not exist on the part of those to whom, by these proposals, we shall transfer almost complete power in India in the coming years. The evidence is accumulating on all sides. The high tariff on textiles has been maintained, despite the dwindling revenues of the past two years. There are those in the Indian Assembly who do not wish to give any preference whatever, and as little encouragement as possible to British trade.

The hon. Member for Doncaster (Mr. Molson) in his speech yesterday, drew attention to the Ottawa Agreements, and said that they were very valuable. The Under-Secretary took up the same argument and said that it was on the basis of agreement and on the basis of Ottawa that the trade between India and Great Britain ought to be improved and developed. The impression was subtly conveyed to the Committee that the Ottawa Agreements were welcomed, and that all sections of Indian political opinion gave an affirmative vote to them. I hope that hon. Members realise that the Congress Members who have now been returned in such large numbers were absent altogether from the Legislative Assembly when the Ottawa Agreements were brought up for discussion. That does not prevent them from saying now exactly what they think about the Ottawa Agreements. When we are considering whether we should set up the Tariff Board which we have envisaged, we should read the opinions of responsible Indian statesmen upon the Agreements which were passed in their absence. One of the representatives has said: This Assembly may have endorsed the Ottawa Agreements, but at that time we were devoid of the services of a section which is the most independent and the most public-spirited. Sir S. V. Chetty, speaking on behalf of the Madras Indian Chamber of Commerce, said: The Commercial constituencies have given an unmistakable evidence of the fact that they do not only not endorse the Ottawa Trade Agreement, but are anxious to take the earliest opportunity to terminate it. Another Member, speaking also on behalf of the Indian commercial element, was even more frank. He said: The country has given its verdict in unmistakable terms that it does not approve of the Imperial preference by not returning to this House the champion of the Ottawa Agreement"— Sir Shanmukhan Chetty. Lastly, another speaker who was also putting forward the same point of view said: If we read Article I of the Agreement we find that the principle and policy of Imperial preference has been accepted in its entirety. He was referring to the Agreement recently concluded in regard to Lancashire. Then the Member for Commerce and Railways, Sir Joseph Bhore, interrupting him said: "No, not at all." In all quarters of the House during that debate, Imperial preference was regarded as a monstrous, vicious and poisonous principle. They may be right, but I do not agree with them, as I believe that Imperial preference is the best way of encouraging world trade; but it is certainly no good fooling this Committee into the belief that there is, on the part of those people, good will which alone will be adequate to secure a greater measure of trade between Lancashire and India. We have the views of those who spoke with authority in the debate on the Lancashire agreement, which was negatived in the Assembly, the elected members voting almost unanimously against it. We know that there is here no good will. If there had been any good will, one of the main arguments in favour of the Tariff Board would not exist. In the absence of any such indication, and with the knowledge that Lancashire within a generation will probably be ruined and will have to face a far greater increase of unemployment as the result of any mistake for which this Committee may make itself responsible this afternoon, I earnestly ask the Government to give very careful consideration to this proposed new Clause and to try to incorporate it in the Bill.

6.1 p.m.

Lieut.-Colonel Sir WALTER SMILES

At this late hour I only want to speak for a very short time, and I only speak because I represent Blackburn, the town that has probably been hardest hit by the loss of Indian trade. When I went to India last January there were unmistakable evidence there of the good that the 25 per cent. duty on Lancashire cotton-piece goods has done to the Indian mills. Only just outside Calcutta I saw one completely new mill being built, and I was told that there were four new mills being built and extensions made at Ahmedabad. There is no doubt that, whatever good Protection has done to this country, Protection in India has done a considerable amount of good to the Indian cotton industry.

I went to Delhi, and while there I had an interview with Mr. Mody, the chairman of the Bombay Millowners' Association. Before the interview started, I said to him, "I would like to know whether I can refer to this interview in the future." He said, "I have no objection at all," and we started on that understanding, that he could refer to what I said to him and I could refer to what he said to me. I started by saying to him, "You are the villain of the piece; you are the man who is responsible for closing down 70 mills in Blackburn and putting about 20,000 cotton operatives in my constituency out of work." "Well," he said, "what I am thinking about are not the millowners in Blackburn, and not the cotton operatives in Blackburn, but the millowners in Bombay and the cotton operatives in Bombay"; and I think that that was quite a fair statement. At any rate, however, in this Committee at the present moment we are trying to think about the cotton operatives in Lancashire. There are other things, of course, besides piece goods to be considered—things like motor cars, textile machinery, and locomotives for the Indian railways; but all these things are small, for the reason that India cannot make them at present. When, during the last century, machinery was introduced in Lancashire, Lancashire broke the hand-loom cotton industry in India into little bits, and this 25 per cent. import duty has now broken, or is breaking, the Lancashire weaving industry into little bits in revenge.

Sir H. CROFT

Would my hon. and gallant Friend regard that duty of 25 per cent. as a penal duty?

Sir W. SMILES

Certainly I regard it as a penal duty, and I do not think that any mill in Lancashire will have a chance as long as a 25 per cent. duty is imposed. I should be very sorry to see a tariff board, appointed at a time when a 25 per cent. duty had been in force for two or three years, start with that as being a fair duty. I consider that it is a most unfair duty, and I do not think that Lancashire will really have a chance of competing properly until it is reduced to 12½ per cent. or 15 per cent. With a duty of 12½ per cent. I think they could compete. For that reason, and to save future Governors-General of India more responsibility—of which, goodness knows, they will have enough—I hope that the Government will consider this proposal to set up an impartial tariff board to consider whether some of these duties against goods imported from the United Kingdom are penal or not.

6.6 p.m.

The ATTORNEY - GENERAL (Sir Thomas Inskip)

We have had a prolonged but, I think, a useful debate, if only because of the prominence which has been given to a question which undoubtedly affects a great county and a great industry. I am certainly not going to complain of any Lancashire Member who deems it to be, not merely his interest, but his duty to represent the views and fears which he or his constituents may entertain. I observe that my hon. Friend the Member for Mid-Bedford (Mr. Lennox-Boyd) rather gleefully welcomed the Lancashire Members as recruits to the little army that has been opposing this Bill. I am very glad to see that the hon. Member for Bolton (Sir J. Haslam) is aware of the net that has been spread for him. I was a little sorry to hear the somewhat rasping tone, if he will forgive me for saying so, of the speech of my hon. and gallant Friend the Member for West Salford (Lieut.-Commander Astbury) when he complained that the Government had done nothing at all to safeguard or protect Lancashire interests—

Lieut.-Commander ASTBURY

I did not mean that at all. I only asked the Government to make a gesture to Lancashire.

The ATTORNEY-GENERAL

I quite accept that from my hon. and gallant Friend. I now see that what he intended the Committee to understand, was that he wanted something more than what the Government have already done, and he was not complaining that the Government had done nothing. There is, of course, a substantial difference between the two points of view. I am especially glad to note my hon. and gallant Friend's recognition of what the Government have sought to do in relation to the protection of Lancashire interests. I think I am justified in saying that the first of the four new Clauses upon which the debate has been proceeding has been practically abandoned by its sponsors. Member after Member who has spoken in support of the proposal that something should be done by tike Government has been at pains to say that he does not feel able to support the Clause as it stands, and that he can understand that the Government could not possibly accept the proposal as it stands on the Order Paper.

Sir H. CROFT

I hope the Attorney-General will allow me to say, on behalf of my friends, that, unless the Government can produce a better Clause, we shall most certainly support this Clause in the Lobby.

The ATTORNEY-GENERAL

I quite understand that. I am not sufficiently optimistic to think that I can persuade my hon. and gallant Friend to vote for the Government on this question, but I am hopeful enough to believe that some of my other hon. Friends will, upon a review of the whole position, be willing to take a different course from him. I was not suggesting for a moment that my hon. and gallant Friend has promised to support the Government. What I was saying was that Member after Member who has spoken in favour of the policy of doing something has said that he could not pretend that the first of the four proposed new Clauses could be accepted by the Government in substance or in form. It has been put forward merely as a sort of idea, which it was hoped, I think, would germinate in the Government's mind and produce something a little better or more satisfactory than the Clause in question. I think I have fairly represented the tone of the speeches that have been made in favour of the first of these four proposed new Clauses. I am bound to say that, when one looks at the new Clause, lengthy as it is, the gist of it is really contained in half-a-dozen words. Those half-dozen words are the words which require that the Tariff Board shall be appointed by the Governor-General in his discretion after consultation with the Secretary of State. That is the gist of the Clause. Do not let the Committee be under any misapprehension. This is not a question of having a tariff board to advise the Federation. I am not sure that I am so enamoured of tariff boards as a means of reducing tariffs as some hon. Members appear to be. That is, perhaps, a concession to hon. Members who belong to the Opposition. Those who have had some experience of tariff boards in other countries may perhaps be of opinion that they are excellent vehicles for increasing tariffs, but they are a little dilatory in action in reducing them; and inasmuch as the expectation of those who have sponsored this first Clause is that the tariff board which they propose is going to reduce tariffs, I have listened with some interest to hear whether or not there is any experience to justify the placing of confidence in a board of this character. Let us bear in mind that, as has been said more than once in the Debate, there is at the present time a Tariff Board. But the distinction between the Tariff Board that exists and the tariff board proposed is that it is suggested that the new board will be appointed after consultation with the Secretary of State, and therefore will be more mindful of British interests than th existing Board, or than one merely appointed by the Governor-General or by the Government of India.

Let me say at once that, if anybody felt able to propose to this Committee a tribunal which would be strictly impartial between the two interests concerned, the Government would be—I will not say more ready to accept the proposal, for, indeed, the Government are ready to accept any proposal that would help Lancashire industry—[Laughter.] Oh, yes. It is all very well for some of my hon. and gallant Friends—for they are all "gallant"—who oppose this Bill to laugh at me for saying that the Government would be very ready and glad to do anything for Lancashire. He would, indeed, be a callous Member of Parliament who could view with equanimity the desolation that has been wrought in a great industry, by causes, let me add, for which this Government is certainly not responsible, nor, so far as I know, other Governments, in part at any rate. But I say, and I claim the support of the main body of the Committee in repeating this, that the Government would be very happy indeed if there were some additional means better than those that have already been attempted for protecting the interests of Lancashire in relation to the Indian trade. Therefore, I say again that, if there were a means of devising an impartial board that would hold the balance equally between the two interests, that would be an improvement upon the board suggested in this Clause, which, as I have already pointed out, is proposed by my hon. Friends who are sponsoring the Clause for the very reason that it would have to be approved by the Secretary of State, and therefore would contain people who were to regard Lancashire interests primarily in relation to their duties. [HON. MEMBERS: "No!"] I am trying to be as fair and candid with the Committee and with my hon. Friends as I can.

Sir J. HASLAM

Does the Attorney-General insinuate that the Secretary of State only considers the interests of Lancashire? Surely, the Secretary of State would consider the interests of India and Lancashire.

The ATTORNEY-GENERAL

I do not insinuate that the Secretary of State would consider only or mainly the interests of Lancashire; but, as I understand it, the proposal to establish this Tariff Board to be approved by the Secretary of State is, as I have already pointed out, attractive to my hon. Friends because the Secretary of State will be—

Sir H. CROFT

Impartial.

The ATTORNEY-GENERAL

No; that is not the attraction to my hon. Friends. However, I make the point as I see it. I regard the attraction of the Clause of my hon. Friends as lying in the idea that the Secretary of State will be a better instrument for looking after the interests of Lancashire than the Governor-General without the consultation with the Secretary of State. I am glad to have my hon. Friend's approval to that way of stating the proposition. The Clause having been practically abandoned in its present form, though not the general proposal, let me say that it has been taken, and my hon. and learned Friend who moved the Clause admitted, and, in fact, stated, almost direct from the Import Duties Act, 1932. In other words—and I say this without offence—it is a piece of "paste and scissors." It has been lifted from an Act which deals with conditions in this country to try to make it apply to conditions which are very different in India. When Parliament establishes a tariff board to consider questions of new tariffs or existing tariffs for the United Kingdom, there is but one interest, and one interest alone, that should dominate their deliberations—the interest of the people of these islands.

Sir H. CROFT

And the Empire.

The ATTORNEY-GENERAL

And the Empire, let me add. I think that the expression which I used was, perhaps, more accurate that the only consideration which should dominate their deliberations, though other considerations may enter into their deliberations, is the interest of this country. But when you go to India and try to apply that proposal in so many words to the conditions in India, if one is candid, one is immediately faced with the fact that you now have two conflicting interests. You have the Indian interests, and the Lancashire and the British interests. There is the exact antithesis to which my hon. and gallant Friend the Member for Blackburn (Sir W. Smiles) referred in his conversation with Mr. Mody. My hon. Friend said that he was thinking of Blackburn, and Mr. Mody said, "I am thinking of Bombay," a very natural absorption in the interests of the people with whom these gentlemen were most closely connected. Therefore, it is no good taking a proposal for a tariff board from Great Britain and saying, "It is good for Great Britain, and therefore it is good for India." In relation to Great Britain the tariff board has a comparatively simple task. It has to consider the interests of Great Britain and to make proposals appropriate to those interests, but the tariff board which is proposed will have to consider the conflicting interests of the two great countries, and immediately the question must arise: Is it attempting to make an exact balance between those two interests? I gather that my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) would answer "Yes" to that question. It should balance Lancashire interests with Indian interests.

Sir H. CROFT

The Clause does not say so. There is not a word in the Clause to that effect. The right hon. and learned Gentleman is perhaps confusing the Debate on the further Clause—the Imperial Preference Clause—which is quite a different thing, with the machinery of this Clause. All we are asking here is for an absolutely impartial body in India who will be able to say that the tariffs which are recommended are wise, and there is nothing in the Clause which says that the board has to consider the interests of Britain. All we want is that it shall be impartial, and a kind of advisory committee. It would be set up de novo without any other consideration.

The ATTORNEY-GENERAL

My hon. and gallant Friend is deceiving himself if he thinks that all that Lancashire wants is an impartial committee. If I may make my point of view clear to my hon. and gallant Friend, the moment a tribunal of this sort is set up to uphold the impartial views which my hon. and gallant Friend proposes, they will be faced with this question: How are we to treat a tariff which might be penal in its effect against the Lancashire interests, but absolutely essential to the proper balancing of the Indian Budget?

Mr. CHURCHILL

They must think of the Indian consumers.

The ATTORNEY-GENERAL

My right hon. Friend says that they must think of the Indian consumers, and I quite agree that the Indian consumers will come into the picture. I do not want to dwell too long upon this matter, but I wish to point out that it is much easier to say that this Board is intended to be an impartial one than to point out exactly how, if it regards the interests of India, it is to be impartial in such a way as to confer the hoped-for advantages upon the languishing trade of Lancashire. We have tried, and I think successfully as far as it goes, to put into this Bill proposals which certainly follow, as my noble Friend the Member for Hastings (Lord E. Percy) pointed out, the recommendations of the Joint Select Committee for preventing penal or discriminatory tariffs from being imposed upon British trade. Let me say with my noble Friend how difficult, and indeed impossible it would be for a legal tribunal to consider that question as has been suggested in more than one quarter. I believe that my hon. Friend the Member for Gorton (Mr. Bailey) suggested that the Judicial Committee of the Privy Council should, in the ultimate resort, decide a question like that. It is not a question to be decided by a legal tribunal. It is a difficult question at all times to attempt to lay down rules to deal with the position, but the Government have thought that the Governor-General, on the whole, with the assistance of the different bodies and persons to whom he will have resort, is much the most likely tribunal to decide what is penal or discriminatory as compared with what is purely revenue or protective, and to disallow or to allow it as the case may be.

Questions have been asked as to what assistance the Governor-General will have in deciding these questions. He will have full information through his advisers. He will have the advantage of the help of his own secretarial staff. Upon revenue questions, he will have the skilled advice of his financial adviser. On questions of protective tariffs, he will have the report of the existing Tariff Board which, in answer to my hon. and gallant Friend the Member for Clitheroe (Sir W. Brass), I may say is certainly intended to be continued. He will have, through the channels of the Trade Commissioner and the Secretary of State—channels which most certainly will not be closed to him—the full information that will enable him to do what that much-to-be-desired impartial Board, if it could be devised, was intended to do. One also remembers that in addition to the special responsibility contained in Clause 12, the Governor-General is directed by his Instrument of Instructions to prevent a tariff, the main intention of which is to injure the interests of the Indian Government rather than to further the economic interests of India. He is also to bear in mind the historic partnership which has existed between Great Britain and India. I venture to think that these are safeguards. I will not say that there are ample safeguards, because I am not going to suggest that the most that we can do would solve what is perhaps an insoluble problem, namely, to settle which of these great interests has the preference in our own minds. Of course we think first of Lancashire. [Laughter.] Of course we do. I am making a confession of which I should think that no British subject domiciled in India would complain. We naturally think of our home people first. I think of them first, certainly, and I make a present of it to my hon. and gallant Friend who mocks me when I say it. At the same time, we have undoubtedly, if we are loyal to our duty, to remember that the interests of India are as dear to them as the interests of our own people are dear to us.

I come to a point to which surely we must give full weight. Fifteen or 16 years ago India was given that measure of control in relation to her fiscal arrangements which Lord Curzon described as almost absolute freedom of fiscal policy. My right hon. Friend interposes the word "almost." I understand that that was rightly put in because it was always intended, as the Noble Lady the Member for Perth and Kinross (Duchess of Atholl) pointed out, that in certain circumstances there should be power to prevent full freedom of fiscal policy, that is to say, if some measure agreed upon between the Governor-General and the Legislative Assembly cut across some international system or some Imperial interest. Therefore it could not be a full freedom of fiscal policy, but it was almost an absolute freedom of fiscal policy. Lord Curzon said that its importance could not be exaggerated, and no one has suggested in this Committee that we should go back upon that policy. There have been suggestions made that in the past the policy has not been applied as rigorously or as fairly as it should have been applied, but that is in the past. Nobody has suggested that this grant of almost absolute freedom should be reversed.

What does that entail? It means that the spirit of the policy—not the letter of it—must be conceded as one which is to prevail in relation to the tariff question as affecting Lancashire, and if India be pleased, or thinks it necessary for the purpose of balancing her Budget, having regard to the revenues that are at the disposal of the Central Government or of the Federal Government in the future, to impose certain tariffs of a revenue character, it is surely not to be said that we can interfere with a revenue tariff of that kind without going back upon the grant to India of almost absolute freedom of fiscal policy. The two ideas are really inconsistent, and I am bound to observe of my hon. Friends who are sponsoring these Clauses that they have recognised that fact in one of the Clauses which they themselves have proposed. My hon. and gallant Friend the Member for Bournemouth pinned his faith upon, and expressed his desire, if possible, to secure, the acceptance of his proposal for Imperial preference. The Clause appears on page 1758, and if my hon. and gallant Friend will refer to it, he will find that he recognises the necessary exemption, even from the Imperial preference point of view, of the duties of customs imposed mainly for revenue purposes.

Sir H. CROFT

But not 25 per cent., which, as we have heard, is a penal tariff. Here are you going to stabilise a penal tariff of 25 per cent. as a start?

The ATTORNEY-GENERAL

I will deal with that point in a moment. My hon. and gallant Friend says that we have heard of a penal tariff. He put a proper question to the hon. and gallant Member for Blackburn, and asked him if he regarded 25 per cent. as a penal tariff. The answer came back, as was expected: "Certainly, it is a penal tariff."

Sir J. HASLAM

Does the Attorney-General recognise the fact that cotton is sold on the basis of one thirty-second of a penny? If 25 per cent. is not penal, I should like to know what penal means.

The ATTORNEY-GENERAL

I hope that my hon. Friend will not be angry with me. I am not saying that 25 per cent. may not be penal in its effect, but I think it is fair to recognise that there is a difference between saying that a tariff may be penal in its effect against Lancashire, and saying that a tariff is intended to be penal in the sense of being discriminatory or penal because you want to hurt the person whom it is going to prejudice. There is a distinction. I am pointing out that even my hon. and gallant Friend in proposing a measure of Imperial preference recognises that, however drastic may be its effect, if it is a customs duty imposed mainly for revenue purposes it must be exempted from his proposal for Imperial preference. That admission on his part and on the part of his friends seems to me to rob a great many of his arguments of the value and weight that they would otherwise have. Once you concede that, however penal in its effect, a customs duty imposed mainly for revenue purposes may be, it is to be permissible to the Indian Legislatures and the Indian Government, you have really conceded the case, or gone a long way towards conceding the case, of the Government that the only way you can interfere with Indian action is to prevent that which is intended to be penal or discriminatory in the sense in which those words have been so often used in these Debates.

Let me say a few words on the first of the two Clauses on page 1734. That Clause is really a proposal for Imperial Preference in another form, and I am bound to say that I prefer my hon. and gallant Friend's first Clause to his second Clause. The fourth Clause at the bottom of page 1734 provides for higher duties not being imposed on United Kingdom imports than on other imports. That Clause makes it quite impossible for provision to be made for any special economic bargain which India may be pleased to make in connection with some reciprocal arrangement with another country. That is a power which the Joint Select Committee very properly pointed out must always be open to the Indian people. Therefore, that is the defect of the fourth Clause.

Sir H. CROFT

It is on page 1761.

The ATTORNEY-GENERAL

I have a different Order Paper. May I say a word about Imperial preference? I hope that I am not taking merely debating points about the Clauses. I think there is a substantial point which I must make as to my hon. and gallant Friend's Clauses for Imperial preference. He wants to impose Imperial preference upon India. Mark the word, "impose." Imperial preference is a gift which one nation gives to another in return for similar accommodation. Imperial preference is not a fetter but a boon to be conferred by those who are prepared to give it. If the Government were to attempt to impose Imperial preference upon India, it would not only interfere with the freedom of fiscal policy upon which nobody wants to go back, but it would deprive Imperial preference of precisely that character which has made it so valuable in increasing the trade and developing the connection between two great countries. I should always deplore any attempt to force Imperial preference upon any community within the Empire which has been clothed with the power of making its own fiscal arrangements. Imperial preference as the term itself suggests, is a plan for giving to your own kith and kin, or those with whom you are associated, something which you desire to give to show your closer connection with them than you have with a foreigner. To impose it upon them as a fetter, a bond from which they cannot free themselves—

Sir H. CROFT

This Bill is imposed in every Clause on India.

The ATTORNEY-GENERAL

My hon. and gallant Friend is not able to rid himself of that rather, I think, inaccurate supposition.

Sir H. CROFT

Ask India?

The ATTORNEY-GENERAL

It is no good my hon. and gallant Friend in this Debate trying to convert me to his view, and it is no good my trying to convert him to my view. He merely diverts me from the more immediate matter under consideration, and that is whether any of his three Clauses for forcing Imperial preference upon India can properly be accepted by this House, having regard to both the reasons which I have mentioned in the last few minutes. My hon. and gallant Friend said that he wanted a fair field and no favour. So do we all. What is a fair field and no favour? More than once the 25 per cent. tariff has been mentioned. I am informed, and I have inquired a, little about this matter, that when the tariff was increased up to the figure of 7½ per cent., it was solely due to the increased expenditure during the War. We cannot complain, therefore, of the increase to 7½ per cent. I am told that between 7½ per cent. and 15 per cent. a great deal of the increase, possibly all of it, was rather protective than for revenue. When it was raised from 15 per cent. to 25 per cent. it was almost wholly due to causes of world trade. That it was punishing in its effect against Lancashire industries I frankly admit, and so do the Government, and I hope and believe that the high watermark has been reached. I hope there is nothing to prevent me from expressing that hope. I think I have some justification for it in the statement in paragraph 344 of the Joint Select Committee's report, where they say: We have been assured by the Indian delegates that there will be no desire in India to utilise any powers which they may enjoy under the new Constitution for purpose so destructive of the conception of partnership of which all our recommendations are based. That is a statement embodied in the report of the Joint Select Committee, but I understand that some of my hon. Friends—and they are entitled to do it—regard the statements made by the Joint Select Committee as open to suspicion. At any rate, I have two very powerful advocates on my side in this respect, in that Lord Derby and the hon. Member for Hulme (Sir J. Nall) have not gone back upon these proposals that were contained in the report of the Joint Select Committee. I am not going to suggest, having regard to the importance and the prominence of this question, that they would not have taken an opportunity of saying that they did not adhere to the proposals of the Joint Select Committee in this connection. I say no more than that. They have not gone back upon them, and therefore I am led to think that they are very powerful supporters of the view which I now suggest.

Sir J. HASLAM

There is no justification for that statement.

The ATTORNEY-GENERAL

I think from the way that I have stated it, it is perfectly justified. They have not gone back upon the view expressed in the report of the Joint Select Committee, and to that extent I think they are powerful supporters of the view which I am now presenting to the Committee. I say again, that if there was a means of devising an impartial tribunal that could fairly hold the scales between these two interests, that are bound to some extent to conflict, the Government not only would be happy but will be happy to give consideration to any proposal of that character; but until that happy moment comes the proposals contained in the Bill seem to go a long way to meet the fears which have been entertained and to allay the suspicions that the Government intend that nothing shall be done to help Lancashire. I am a little surprised that more attention has not been concentrated upon the statement made by my hon. Friend the Under-Secretary yesterday when he pointed out the improvement that has already taken place. It may be slight in degree, but it is in the right direction. There has been an increase in the volume of trade. My hon. Friends who have so far given support to the Government—and I gladly and gratefully recognise it on behalf of the Government—would not be doing any injury to their cause if they were not to vote against the Government on this occasion, but would help us, if there be any method of obtaining an impartial tribunal, to devise such a tribunal. Meanwhile, they might accept the proposals contained in the Bill, by which there will be not a body but a person in the Governor-General, with the assistance of a staff who will decide questions with impartiality, due consideration and full information. If we build upon the foundations of the policies of good will that have been laid down in the last two years, although some of my hon. Friends may mock at it, we are more likely to advance the interests which we all have at heart than if we try to devise some method that will arouse suspicion without being a practical proposal for achieving our object.

6.44 p.m.

Mr. HAMMERSLEY

I am sure that the Committee will excuse me for keeping it for a minute from the Division. The debate has ranged over the whole sphere of Indian and Lancashire trade relationship and we are now going to have four separate votes. As certain members for Lancashire constituencies intend to vote against the Government, they should make it clear on what basis they are proposing to vote, in view of the fact that what takes place in this House will be quickly re-echoed in India, and it would be unfortunate if the votes that we give were to be misunderstood in any way. Our intention to vote against the Government on the first Clause is purely on the principle of setting up an impartial tariff board. We do not in any way impune or retract from our support of the Tariff Autonomy Convention. It would be most unfortunate if any vote that takes place in this House were to suggest to public opinion in India that there was an alignment of Lancashire opinion in favour of doing away with the Tariff Autonomy Convention. That is nut our view, and it is not our intention. Neither do we in any way make any attack on the Government in general on this India Bill. We believe that the trade relationship between India and Lancashire should continue, and can only continue on the basis of good will.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 52; Noes, 221.

Division No. 157.]	AYES.	[6.46 p.m.
Acland-Troyte, Lieut.-Colonel	Everard, W. Lindsay	Procter, Major Henry Adam
Applin, Lieut.-Col. Reginald V. K.	Fleming, Edward Lascelles	Radford, E. A.
Astbury, Lieut.-Com. Frederick Wolfe	Goodman, Colonel Albert W.	Reid, David D. (County Down)
Balfour, George (Hampstead)	Gretton, Colonel Rt. Hon. John	Remer, John R.
Bracken, Brendan	Hammersley, Samuel S.	Rickards, George William
Brass, Captain Sir William	Hartington, Marquess of	Smiles, Lieut.-Col. Sir Walter D.
Broadbent, Colonel John	Hartland, George A.	Stones, James
Brown, Brig.-Gen. H. C. (Berks., Newb'y)	Haslam, Sir John (Bolton)	Sugden, Sir Wilfrid Hart
Carver, Major William H.	Jones, Sir G. W. H. (Stoke New'gton)	Sutcliffe, Harold
Churchill, Rt. Hon. Winston Spencer	Keyes, Admiral Sir Roger	Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)
Cobb, Sir Cyril	Knox, Sir Alfred	Templeton, William P.
Courtauld, Major John Sewell	Lennox-Boyd, A. T.	Touche, Gordon Cosmo
Craddock, Sir Reginald Henry	Levy, Thomas	Wayland, Sir William A.
Croft, Brigadier-General Sir H.	Maitland, Adam	Wragg, Herbert
Crookshank, Col. C. de Windt (Bootle)	Nall, Sir Joseph
Cross, R. H.	Nicholson, Rt. Hn. W. G. (Petersf'ld)	TELLERS FOR THE AYES.—
Davison, Sir William Henry	Nunn, William	Mr. Thorp and Mr. Shackleton
Emmott, Charles E. G. C.	Oman, Sir Charles William C.	Bailey.
Entwistle, Cyril Fullard	Peto, Sir Basil E. (Devon, Barnstaple)

NOES.
Acland, Rt. Hon. Sir Francis Dyke	Ganzoni, Sir John	MacDonald, Malcolm (Bassetlaw)
Adams, D. M. (Poplar, South)	George, Major G. Lloyd (Pembroke)	Macdonald, Sir Murdoch (Inverness)
Agnew, Lieut.-Com. P. G.	Gillett, Sir George Masterman	Macdonald, Capt. P. D. (I. of W.)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Gilmour, Lt.-Col. Rt. Hon. Sir John	McEntee, Valentine L.
Allen, William (Stoke-on-Trent)	Glyn, Major Sir Ralph G. C.	McKie, John Hamiltor
Aske, Sir Robert William	Goff, Sir Park	Maclay, Hon. Joseph Paton
Assheton, Ralph	Grattan-Doyle, Sir Nicholas	McLean, Major Sir Alan
Astor, Maj. Hn. John J. (Kent, Dover)	Graves, Marjorie	Magnay, Thomas
Attlee, Clement Richard	Greenwood, Rt. Hon. Arthur	Makins, Brigadier-General Ernest
Baldwin, Rt. Hon. Stanley	Grenfell, David Rees (Glamorgan)	Manningham-Buller, Lt.-Col. Sir M.
Banfield, John William	Grenfell, E. C. (City of London)	Margesson, Capt. Rt. Hon. H. D. R.
Barclay-Harvey, C. M.	Griffith, F. Kingsley (Middlesbro', W.)	Mason, Col. Glyn K. (Croydon, N.)
Barrie, Sir Charles Coupar	Griffiths, George A. (Yorks, W. Riding)	Mayhew, Lieut.-Colonel John
Barton, Capt. Basil Kelsey	Grigg, Sir Edward	Meller, Sir Richard James
Belt, Sir Alfred L.	Grimston, R. V.	Mills, Major J. D. (New Forest)
Bennett, Capt. Sir Ernest Nathaniel	Grunay, Thomas W.	Milne, Charles
Boulton, W. W.	Gunston, Captain D. W.	Mitchell, Sir W. Lane (Streatham)
Bower, Commander Robert Tatton	Guy, J. C. Morrison	Molson, A. Hugh Elsdale
Bowyer, Capt. Sir George E. W.	Hacking, Rt. Hon. Douglas H.	Monsell, Rt. Hon. Sir B. Eyres
Braithwaite, J. G. (Hillsborough)	Harris, Sir Percy	Morrison, G. A. (Scottish Univer'ties)
Brocklebank, C. E. R.	Harvey, Major Sir Samuel (Totnes)	Nation, Brigadier-General J. J. H.
Brown, C. W. E. (Notts., Mansfield)	Headlam, Lieut.-Col. Cuthbert M.	Nicholson, Godfrey (Morpeth)
Burghley, Lord	Heilgers, Captain F. F. A.	North, Edward T.
Butler, Richard Austen	Herbert, Major J. A. (Monmouth)	O'Neill, Rt. Hon. Sir Hugh
Cadogan, Hon. Edward	Hills, Major Rt. Hon. John Waller	Ormsby-Gore, Rt. Hn. William G. A.
Campbell, Sir Edward Taswell (Brmly)	Holdsworth, Herbert	Orr Ewing, I. L.
Caporn, Arthur Cecil	Hope, Capt. Hon. A. O. J. (Aston)	Owen, Major Goronwy
Cayzer, Sir Charles (Chester, City)	Horsbrugh, Florence	Parkinson, John Allen
Cazalet, Thelma (Islington, E.)	Howitt, Dr. Alfred B.	Patrick, Colin M.
Chapman, Col. R. (Houghton-le-Spring)	Inskip, Rt. Hon. Sir Thomas W. H.	Pearson, William G.
Christie, James Archibald	Jackson, Sir Henry (Wandsworth, C.)	Percy, Lord Eustace
Clayton, Sir Christopher	Jamieson, Douglas	Peters, Dr. Sidney John
Cleary, J. J.	Joel, Dudley J. Barnato	Petherick, M.
Cocks, Frederick Seymour	Johnstone, Harcourt (S. Shields)	Pickthorn, K. W. M.
Collins, Rt. Hon. Sir Godfrey	Jones, Henry Haydn (Merioneth)	Powell, Lieut.-Col. Evelyn G. H.
Colville, Lieut.-Colonel J.	Jones, Lewis (Swansea, West)	Pownall, Sir Assheton
Cook, Thomas A.	Jones, Morgan (Caerphilly)	Ramsbotham, Herwald
Cooke, Douglas	Kirkwood, David	Rathbone, Eleanor
Cooper, A. Duff	Lamb, Sir Joseph Quinton	Rea, Walter Russell
Cranborne, Viscount	Lansbury, Rt. Hon. George	Reed, Arthur C. (Exeter)
Crooke, J. Smedley	Law, Sir Alfred	Reid, James S. C. (Stirling)
Crookshank, Capt. H. C, (Gainsb'ro)	Law, Richard K. (Hull, S. W.)	Rhys, Hon. Charles Arthur U.
Croom-Johnson, R. P.	Leckle, J. A.	Roberts, Aled (Wrexham)
Daggar, George	Leech, Dr. J. W.	Robinson, John Roland
Davidson, Rt. Hon. J. C. C.	Leighton, Major B. E. P.	Ropner, Colonel L.
Davies, David L. (Pontypridd)	Leonard, William	Rosbotham, Sir Thomas
Davies, Maj. Geo. F. (Somerset, Yeovil)	Lewis, Oswald	Ross Taylor, Walter (Woodbridge)
Davies, Rhys John (Westhoughton)	Liddall, Walter S.	Ruggles-Brise, Colonel Sir Edward
Denman, Hon. R. D.	Lindsay, Noel Ker	Russell, Albert (Kirkcaldy)
Denville, Alfred	Lister, Rt. Hon. Sir Philip Cunliffe-	Russell, Alexander West (Tynemouth)
Doran, Edward	Lloyd, Geoffrey	Russell, Hamer Field (Sheffield, B'tside)
Duckworth, George A. V.	Lockwood, John C. (Hackney, C.)	Russell, R. J. (Eddisbury)
Dugdale, Captain Thomas Lionel	Loder, Captain J. de Vere	Rutherford, Sir John Hugo (Liverp'l)
Duncan, James A. L. (Kensington, N.)	Loftus, Pierce C.	Salt, Edward W.
Edwards, Charles	Logan, David Gilbert	Samuel, M. R. A. (W'ds'wth, Putney).
Ellis, Sir R. Geoffrey	Lumley, Captain Lawrence R.	Sandys, Duncan
Emrys-Evans, P. V.	Lunn, William	Savery, Samuel Servington
Essenhigh, Reginald Clare	Mabane, William	Shaw, Captain William T. (Forfar)
Foot, Isaac (Cornwall, Bodmin)	MacAndrew, Lieut.-Col. C. G. (Partick)	Shepperson, Sir Ernest W.
Fox, Sir Gifford	Macdonald, Gordon (Ince)	Smith, Louis W. (Sheffield, Hallam)
Fremantle, Sir Francis	MacDonald, Rt. Hon. J. R. (Seaham)	Smith, Tom (Normanton)

Somervell, Sir Donald	Train, John	Williams Edward John (Ogmore)
Somerville, D. G. (Willesden, East)	Tryon, Rt. Hon. George Clement	Wills, Wilfrid D.
Southby, Commander Archibald R. J.	Tufnell, Lieut.-Commander R. L.	Wilson, Clyde T. (West Toxteth)
Spencer, Captain Richard A.	Turton, Robert Hugh	Windsor-Clive, Lieut.-Colonel George
Spender-Clay, Rt. Hon. Herbert H.	Wallace, Captain D. E. (Hornsey)	Winterton, Rt. Hon. Earl
Spens, William Patrick	Ward, Lt.-col. Sir A. L. (Hull)	Womersley, Sir Walter
Stanley, Rt. Hon. Lord (Fylde)	Ward, Irene Mary Bewick (Wallsend)	Wood, Rt. Hon. Sir H. Kingsley
Stanley, Rt. Hon. Oliver (W'morland)	Ward, Sarah Adelaide (Cannock)	Wood, Sir Murdoch McKenzie (Banff)
Storey, Samuel	Warrender, Sir Victor A. G.	Worthington, Dr. John V.
Strauss, Edward A.	Wedderburn, Henry James Scrymgeour	Young, Rt. Hon. Sir Hilton (S'v'noaks)
Sueter, Rear-Admiral Sir Murray F.	Weymouth, Viscount	Young, Ernest J. (Middlesbrough, E.)
Thomas, James P. L. (Hereford)	White, Henry Graham
Thompson, Sir Luke	Whiteside, Borras Noel H.	TELLERS FOR THE NOES.—
Tinker, John Joseph	Williams, David (Swansea, East)	Sir George Penny and Dr. Morris
		Jones.

The following new Clause stood upon the Order Paper:

(Power to appoint special advisers.)

(1) To assist him in the exercise of those of his functions which arise out of his special responsibilties the Governor may, acting in his discretion, appoint advisers not exceeding three in number who shall have had at least ten years' service under the Crown in India, and whose salaries and conditions of service shall be such as may be prescribed by His Majesty in Council.

(2) The salaries and allowances of any such adviser shall be charged on the revenues of the Province.—[Sir R. Craddock.]

The DEPUTY-CHAIRMAN (Captain Bourne)

Before I call on the hon. Member for the English Universities (Sir R. Craddock) to move this new Clause 1 think that he cannot escape discussing this proposed new Clause and the subsequent new Clause—(Power of Governor-General to appoint special advisers)—together, but he will have the right to take a separate Division on each of the new Clauses if he so desires.

Clause brought up and read the First time.

6.56 p.m.

Sir REGINALD CRADDOCK

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

It raises an extremely important subject, and I hope that the Government will pay special attention to the grounds upon which I am putting it forward. I do not think that the Government or the Committee have fully realised the vast psychological difference which will be made throughout India, and indeed throughout all the Provinces, by the abolition of the executive councils, which have been in existence since the days of Warren Hastings. Every Governor of a Presidency who seeks to make reforms in a Province has at least had an executive council to support and assist him with their advice, on all those subjects which were reserved under the Montagu scheme. Now we are proposing to get rid of these executive councils and to substitute a Council of Ministers, whose advice is not absolutely binding on the Governor, indeed, in certain respects he may act without their advice and in other cases may seek their advice and then ignore it. Very remarkable powers are left with the Governor-General both in his discretion and in his individual judgment, and it will take a man of extraordinary knowledge and understanding to know when and how his special responsibilities should be acted upon. Ministers are not likely to advise him to overrule them, and, therefore, he will be left as a solitary figure to decide when and where he shall overrule the Council of Ministers in his discharge of his special responsibilities.

The Government plan is that he shall be given a secretary, but that secretary has no position in the Constitution; in fact, he is nothing more than a glorified private secretary and will fulfil functions which have hitherto been fulfilled by a private secretary. There will be no one with a constitutional position or administrative experience to give him advice on those occasions when advice as to the action he should take is most needed. The fact is that the Governor-General will have no less than 11 Governors of Provinces, and, while they may have had a long experience in Indian administration, they vary enormously in respect of the personal equation. Some are ready to act quickly, others are hesitant and timid, and the Governor-General is in the difficult position that he has to decide whether a Governor shall be stimulated to be a little more vigorous or restrained in his activities. He will not have any information before him. Where is he to obtain all the local information of a complete continent the size of Europe If he gets it from the Governor of the Province, the Governor of the Province is likely to support the action he himself has taken. He will have no independent assistance as to whether he should intervene to induce a Governor to take a more serious view of his responsibility.

There is another point which is very important when we are considering the position which this Bill will give to the Governor. Formerly, before the Montagu reforms, the guiding principle was sound administration with sound, selective advice. Since the Montagu reforms sound administration has been at a discount and political dexterity has been at a premium. It is only natural that that should follow, because under the Montagu reforms, and under his scheme, the members of the Civil Service who had hitherto governed the country under the Governors, were warned and exhorted to turn to the political side and to endeavour to govern by persuasion, by compromise and so forth. The consequence is that the position has receded very greatly as compared with what it was when the Montagu reforms were instituted. I do not believe there is anyone who has yet realised the vast differences that will remain in the position of the Governor in comparison with the position he holds this very day. No Governor has been without an executive council. He has not governed India without consulting somebody. He has not been at the mercy of a group of Ministers elected by a legislature which may be hostile to the British Raj itself. He has never been in that position, and it is only when you see, as I have, the day-to-day work that comes before a Governor that you can really realise what an enormous variety of departmental work there is, what a number of problems arise at various times, and how difficult it is for a new man, unacquainted with a Province, to find out what are the essential things, what are the implications of various orders and policies which are put before him, and, indeed, to ascertain in whom he should put his confidence.

Those of us who served in India know very well that it takes a Governor from England about two and a half years before he really understands what everything put before him means, and the consequence is you find very often that a Governor in the second half of his term of office changes greatly his views on questions of policy. Of this there have been many examples in the recent history of India. Lord Sydenham, for example, spent two and a half years in trying to conciliate the politicians in Bombay. Then he found his task was hopeless, and he changed his tactics and took measures to put down seditious agitation of which, for the first half of his term, he had taken no notice. It may surprise people to know that the first half of Lord Sydenham's rule was criticised as being weak and full of futile attempts to conciliate implacable people, and the second half was entirely the other way. It was these views which he held at the day of his death. These are views which I put forward from knowledge of the administrative work that comes before persons who are governing a Province. Hitherto, although the Governors may be new, the members of the executive council have been there, and he has always available to him the advice and experience of Ministers.

Under the Bill this will be entirely lacking, and it will be extraordinarily difficult not only for the new Governor from home, but even for the Governor who may be appointed from the Indian Civil Service. Sometimes—in fact, quite frequently—a Governor from the Indian Civil Service is appointed Governor of what to him is a strange Province. I had that experience in Burma, and I know how hopeless it was for a long time to find out what were the proper steps to take when you had advisers who took two opposite views on certain questions of policy. It ultimately rested on oneself to make up one's mind as to which of these was right, or to adopt some middle course. It takes you a long period before you really feel you are on safe ground and can make your decisions with reasonable courage and assurance.

All these aids of experienced officials who have been brought up in administration are practically gone so far as the Governor is concerned, and I may say at once that this is a Clause which I would equally have moved had I been a warm supporter of this Bill, because I see in this omission a fatal flaw in the scheme put forward for provincial autonomy. I may be told I am prejudiced, although I do not think so myself.

Sir H. CROFT

You speak from experience.

Sir R. CRADDOCK

I have had my experience, and I think I have been, at all events, open-minded on all great questions that have come before me. In case it may not be thought that my advice is quite unbiased on account of my long career in the Civil Service, I would like to call a witness. The witness I am calling is the late Governor of Bombay, Sir Frederick Sykes. When he submitted the opinions of the Bombay Government on the proposals of the Statutory Commission, he appended to them a minute which he directed should be sent to the Government of India with his own Government's dispatch on the subject. I ask the Committee if they will kindly pay close attention to the few quotations that I propose to make from Sir Frederick Sykes's minute. He says: As regards (1) (the Constitution of the Provincial Governments and the Governor's powers) I feel that, assuming that there are in a Presidency or Province a good Legislative Council, experienced and broadminded Ministers, and infrequent emergencies, the Constitution recommended by the Commission, which, except in some matters of detail, has been accepted by my Government, may be workable; but we have to try to organise, of course, on the possibility that these three assumptions, so far from materialising, may prove in fact to be far from the realities. It appears probable that emergencies may frequently occur, at all events at the outset, in one or other Province, and the Governor concerned will find himself in the position of having either to use his emergency powers, which may antagonise his Ministry, or to neglect the interests of a section of the public. A newly-appointed Governor, in particular if from home, and with no permanent official of the Cabinet responsible to him, will especially find his position difficult should an emergency arise before he has had time to grasp the conditions in his, Province, to discriminate between the claims of various communities and parties, and to learn whose advice he can trust. The absence of any experienced official in the Cabinet, on whom he could rely for advice in dealing with an emergency, will be a conspicuous disadvantage of the new régime, seeing that the Secretaries of Departments will presumably not have the existing right of regular access to the Governor. They will be Secretaries to Ministers responsible to the Legislature, and as such may be put in an awkward position if the Governor calls on them for advice on any particular question. Unless, therefore, the administration runs smoothly and emergencies are infrequent, I have some doubts whether the Constitution proposed for the Provinces will prove workable. The Governor then goes on to discuss the great difficulty he will have if he overrides the Ministers and they resign in consequence, and still further if these men are returned at the next election with the same or a larger majority. He also points out that in such a case: He would therefore have to decide that the situation is so grave that he must declare an emergency to have arisen and to take over the whole administration personally. In this event, also, he will be faced with difficulty in choosing Ministers on whom he can rely to carry on the administration. He will have no members of Council on whom he can fall back, and will have to select Ministers from among officials and non-officials, none of whom may hitherto have held positions carrying such responsibilities. The selection of his Ministers under such circumstances would be an extremely difficult matter. It may be said that a position such As is described above is not likely to arise frequently. It cannot, however, be ruled out, and under such circumstances it would seem that the Governor is given responsibilities without machinery for reasonable warning of the approach of crises and means of meeting them which would prove workable in practice. That statement was made by Sir Frederick Sykes, a Governor sent out from this country, and who, no doubt, is well known to many members of this House. He certainly carried to a great extreme attempts to conciliate the agitators, and he tried to use persuasion to bring them to reason, but he felt the difficulty. He had two and a half years' experience when he wrote that minute, and he fully realised what a terrible position he would have been in had he come to Bombay under the new constitution, without any knowledge either of the Ministers on whom he had to depend or of the details of the administration he had to carry out. Therefore, I do urge the Government to think well before they reject the advice which I tender to them in good faith and with no desire to use the case as an opportunity of marking opposition to the Government, but as advocating the filling up of a gap which my long experience makes me realise may be an extremely serious one, and one which in certain circumstances may render the welfare and the success of the new reforms extremely precarious.

I know that the Government will probably say that the secretaries will have a certain amount of access to the Governors. I daresay they will, but I am sure, the more I have learned of the administration both before and after the reforms, that the position of a secretary who is constantly what will be called running and sneaking to the Governor, will be untenable; and in fact, if the Minister found or thought that the secretary was spying on him or giving information to the Governor as to the conduct of the Minister, that secretary would stand a very small chance of being retained as secretary. It is a well-known principle in Indian administration that men, officers, have no claim to be secretaries to Governors as they have a claim to certain other posts. The selection of a man from the district to be secretary must rest with his superior officers. A man cannot say "Oh, I have a claim to this appointment," nor, if he does not please the Governor or the authority under whom he is serving, can he say that he has any grievance if he is told "We do not seem to get on very well together and you had better go back to a district."

One must also remember—I say this without any disparagement—that in the Indian Civil Service there is a tendency for Ministers to gather into the secretariat a larger proportion of Indian members of the Service than of British members. I have had that said to me many times by people who have experienced it, and they were not making any special complaint but were urging it as a fact. You may be quite certain that many Indian members of the Indian Civil Service who have probably to spend their lives in the country and who may depend, after this or that Governor has gone, upon the Minister for their further selection or appointment as secretary, will find it very difficult to go up to the Governor and report upon the doings of a Minister. Sometimes Governors do not like inconvenient information to be given to them. That makes it all the more important that the Governor should have one or more experienced administrators as counsellors to help him in the exercise of his responsibilities, and help him in sizing up what are the implications of the problems put before him, and put before him very often in a way which may prove deceptive. I do not think that the private secretary or secretary of the Governor appointed by himself can ever fill that position. I particularly note the case in which, under the Bill, in connection with certain police sections, the Governor is supposed to nominate some official to represent him on the Legislative Council. I am sure that that system will not prove satisfactory. What is wanted is what Sir Frederick Sykes suggests, a sort of extra member in his Cabinet, and not a stray messenger to be sent round to interview Ministers from time to time, having himself no permanent constitutional position in the Government. All these considerations put together and weighed make it absolutely essential that Governors should be given these experienced administrative assistants. There is no reason why there should be friction with the Minister, because they will not be administrating any particular department; but they will receive papers of various kinds which will enable them to keep a vigilant watch and inform and advise the Governor accordingly. It is also very possible that some of the papers received by the Secretary to the Governor will be complaints against the Minister. It will be very difficult for the Secretary or the Governor to know what to do with these complaints. If he sends them to the Minister then the Minister may put into force influences against the man who had the courage to complain, and these influences may prove disastrous. If he sends them to some district or divisional officer then he is sending to a subordinate complaints against his superior.

Anyhow, that raises a great difficulty in the absence of some adviser who can advise to good purpose in these matters. The Governor will not be any worse for having these men in addition to his private secretary. It might very well be that a Governor, anxious to get a private secretary, will select a man who has had all his experience in secretarial work and therefore has no such close acquaintance with administrative problems as the kind of officer he would select to be one of his counsellors and advisers. For these reasons I strongly urge the Government to give ear to this advice which I am honestly tendering to them, and to try to find some method of filling this gap by one or more counsellors.

I now come to the second of the new Clauses, which is of much the same kind as the first. It suggests that the Governor-General should be given three or more counsellers to assist him. The matter is not quite so urgent in the case of the Governor-General, for the reason that he has already three counsellors. But it is a great pity that the Bill does not say specifically that he may consult them also on the matter of special responsibilities. Of course, he will have one counsellor who will deal with military matters, one who will deal with external affairs, and a third who will deal with ecclesiastical affairs. If the last-named has an hour's work a week that will be about all he has to do. That particular counsellor could no doubt be entrusted with other matters. At the same time no doubt the Governor-General himself would find it better if he were aided by one or two counsellors who had had long administrative experience, because the counsellor who advises him on military affairs and the counsellor who advises him on external affairs may have had very little administrative experience such as would be extremely useful to the Governor-General if he had papers sent to him from the Province by the Governor to consider and advise upon. I hope that the Committee and the Government will not turn a deaf ear to these proposals.

7.27 p.m.

Sir EDWARD GRIGG

I would like to express my great appreciation of the speech of my hon. Friend the Member for the English Universities (Sir R. Craddock). He speaks on this subject with very great authority, and I am sure the Committee will be grateful to him for having given it the benefit of his great experience. I am bound to say that on a question like this advice, coming from a man who has held the responsibility that my hon. Friend carried in India, must carry very special weight. At the present moment a Governor going out to India without experience can rely on the advice of an Executive Council over the whole range of decisions which he has to take. Under the new Constitution he will have two kinds of responsibility. In the first place he will be a constitutional Sovereign, taking the advice of his counsellors; but apart from that, over the whole range of decisions in which he has to exercise his individual judgment or in which he bears a special responsibility, he will now be deprived of any advice whatever. That seems to be a dangerous position in which to put a man who may go out to carry this great responsibility without any previous knowledge of the matters which he has to determine and without any previous administrative experience. For that reason I feel very strongly inclined to support this new Clause.

I see a certain difficulty in the new Clauses, even in that which relates purely to Governors. If you are going to give to Governors this advice, I agree with my hon. and learned Friend that it will not do to give it in the form of private secretaries. That produces a kind of centre of intrigue without responsibility which I am sure will not work in any administrative system. But I also see a difficulty about creating advisers of ministerial rank or even superior in some respects to ministers, with no definite responsibilities of their own except that of offering advice to the Governor. In the case of the Governor-General that difficulty does not arise. His special counsellors would all have their own particular responsibilities. But I do see a difficulty in creating in the government of a Province an adviser who would be a kind of mayor of the palace, having the private ear of the Governor, but without any actual administrative responsibility. For that reason I see a certain objection to the proposed new Clause as it stands. Nevertheless I hope the Government are prepared to give consideration to the point which my hon. Friend has raised, and that it may be possible to find some means of equipping the new Governors with that responsible and experienced advice which I am sure they will need.

As regards the other proposed new Clause on the Paper to which reference has been made, I see no necessity for it. As I say, the Governor-General has his counsellors and they have their responsibilities, and the point seems to be met in that case. But the position of the Governors is going to be more difficult in many ways than that of the Governor-General. In fact the provincial part of the Bill is going to be harder to work than the federal part, and it is extremely important that we should give every attention to that part of the Bill, on which the whole Committee is agreed. I do not think there is any section of the Committee which is opposing self-goverment in the provinces, and it is extremely important that the Governors who will have to carry great responsibilities under that part of the Measure should have the opportunity of consultation with men possessing experience of India and a knowledge of its conditions.

7.33 p.m.

The UNDER-SECRETARY of STATE for INDIA (Mr. Butler)

I agree with the hon. Member for Altrincham (Sir E. Grigg) that the proposed new Clause is an important one. Actually the Committee is being asked to consider two new Clauses which embody the same idea. I also agree with what my hon. Friend has just said about the contribution of the hon. Member for the English Universities (Sir R. Craddock), who has had great experience, having, himself, acted as Governor in two Provinces. He is aware of the difficulties which are involved in the administration of a Province and of the need which a Governor has for special advice in administering a Province. The hon. Member for Altrincham was also right, I think, in referring to the difficulty attaching to the new Clauses as they stand on the Order Paper. It would be extremely invidious, in fact impossible, under such a system as we propose, which is in fact responsible government in the provinces—for that is what provincial autonomy implies—to have officials, as he described, like mayors of the palace alongside Ministers who are responsible to the elected assembly. It would be impossible, for instance, if one had three or four such Ministers, to have side by side with them three or four official watchdogs of the Governor all watching what the Ministers did. It would be regarded as extremely offensive by Indian Ministers, and any good result which might be expected to flow from their appointment would thereby be immediately nullified. The Government agree however that the matter is one which deserves consideration, and it has received close consideration.

I should like to mention also in this connection the experience of Sir Frederick Sykes, whose opinion has already been quoted. Any representations which he makes after his recent experience as Governor of Bombay are deserving of the respect of the Committee. Hon. Members will realise that in Clause 33, Sub-section (3) (c) of the Bill as it stands, it is provided that the salaries and allowances of the personal and secretarial staffs of the Governor-General and the staff of the financial adviser are non-votable, and there is an equivalent Clause in the provincial section of the Bill. There is therefore the necessary supply enabling a Governor-General or a Governor to surround himself with and pay for the staff requisite to assist him in the performance of his duties. There may be many things upon which a Governor-General or Governor will need the advice of a staff. We have further examined the Bill, however, and we find that, although there is a negative provision for supply, there is no positive indication on the face of the Bill as it stands that the Governor-General or Governor has the power to appoint such a staff.

The nature of the staff I propose to discuss in a moment. At present I am only referring to the power of appointment. We are prepared, either when we come to consider the Third Schedule or later on the Report stage, to insert something which will make it clear on the face of the statute that the Governor has power to appoint any staff necessary for the discharge of these duties. Then the matter will be made clear. It will then be open to a Governor-General or a Governor to surround himself with the sort of staff which we have in mind, and provision for the supply of which is already included in the Bill. We are indebted to the hon. Member for the English Universities and the hon. Member for Altrincham for calling attention to the subject because, as I say, the power to appoint such a staff was not actually apparent in the Bill as drafted. There is in Clause 7, Subsection (3) provision for enabling the Governor-General to discharge conveniently and with dignity the duties of his office, and it was intended that those words should cover the provision of a staff but they are not thought to be sufficiently explicit to meet the anxieties of certain hon. Members. I hope however that the undertaking which I have just given will go some way towards relieving those anxieties.

I think it is incumbent upon me in answering the very comprehensive speech of the hon. Member for the English Universities to say something about the nature of the staff which we have in mind. I cannot agree that the appointment of a secretary or a secretarial staff would result in all kinds of intrigues centering round the Governor and would be unsatisfactory. I think it would be much less unsatisfactory than creating, as the hon. Member for the English Universities seemed to desire, an extra member in the Governor's cabinet. Stated in that way the hon. Member's suggestion really comes back to a discussion which we have already had upon the question of an official member of the cabinet. That proposal has been discussed and rejected by the Committee, and I do not propose to go over that ground again except to say that the Government cannot possibly envisage a counsellor of that type, namely an official, who shall be a member of the cabinet. It remains for me therefore to reassure the Committee about the sort of staff which a Governor or Governor-General may have.

In the case of a Governor, if it is a matter of accepting advice in the performance of his office, the advice which he must receive is the constitutional advice of his Ministers, and that is why the word "advisers" in the proposed new Clause is very confusing particularly to Indian opinion. If, on the other hand, in exercising his special responsibilities the Governor has to differ from that constitutional advice we have always been clear that the Governor must make up his own mind in the best way he can, and we have always wished him to have a secretary of some standing who could help him in such a matter or in any other duties arising especially in the exercise of his discretion. In a case of a Presidency where a Governor would go out from England without any previous experience of Indian conditions we have envisaged that the Secretary to the Governor should be a man of considerable status, a man say of 20 or 25 years' service, perhaps of the rank of Commissioner—a man of standing and repute who would be beside the Governor advising him and helping him as his personal attaché and secretary.

I do not think the Committee should be led into believing that there is anything derogatory in the word "secretary." There are Secretaries of State and the word "secretary" is used in a general sense. By saying that the Governor would have a private secretary, one does not mean that the secretary would be a man of no experience and no reliability and merely a person to conduct social affairs. We envisage in the case of a Presidency, especially where a Governor has not previous knowledge of India that under the new Constitution the secretary should be a senior man capable of giving valuable help and advice, such as has been the case in the past. We also envisage as I have pointed out that, the supply for this purpose being non-votable, the Governor can if necessary have assistant, secretaries to do any work which may appear to be necessary under the new Constitution. I think therefore the object of the hon. Member will be met by that, description of the sort of staff which we have in mind.

In a Province apart from a Presidency it is possible that the secretary would be a senior man even though the Governor would probably be a man who had resigned from the Indian Civil Service himself, and would have more experience of Indian conditions than a man going out from England. However, we are purposely leaving that question open in order that it may be decided on the spot by the Governor-General or the Governor. In the case of the Governor-General I want to make it clear that we believe that the views of the British Indian Delegation summed up in paragraph 188 of the Joint Select Committee's report are correct. We do not mean to take away from the position of the counsellors who are to administer the reserved departments. We wish the Governor-General to have the benefit of the advice of the counsellors, but we are providing him with the opportunity of having a personal secretarial staff in exactly the same way as we are providing the Governors with that opportunity. I hope I have shown that we have taken some trouble in trying to meet the spirit of the proposed new Clauses, although I am sure we have not gone as far as the hon. Member for the English Universities would desire. We have at least attempted to show that we think the Governor-General and the Governor will need help of this sort, but we do not intend that there shall be any competition, in a question of constitutional advice, with the responsibly-elected Indian Ministers.

7.43 p.m.

Mr. ATTLEE

I feel a little nervous about the remarks of the Under-Secretary. It seemed to me that he was rather expanding the staff of the Governor as suggested in the report of the Joint Select Committee, and I was glad to hear his final words that it was not intended to infringe the responsibilities of Ministers. The hon. Member for the English Universities (Sir R. Craddock) seems to be looking back to the days when he was a Governor. He forgets that he is now an agitator. We are all agitators here because "agitator" is only a rather impolite name for politician. You may be a red agitator or a black agitator, or whatever colour of agitator you like, but you are still an agitator.

Sir R. CRADDOCK

I hope I have not agitated the hon. Gentleman.

Mr. ATTLEE

The hon. Member by his agitation has stirred many people's minds. I was, however, rather afraid about the Under-Secretary's suggestion that the Governor of a province was to be surrounded by a phalanx of retired Indian civil servants.

Mr. BUTLER

Not retired.

Mr. ATTLEE

Then, shall I say a phalanx of Indian civil servants of great seniority? I agree that there should be a responsible secretary with experience capable of giving information to the Governor. I was in India for only a very short time but I was struck by the fact that most of the Governors seemed to have very junior A. D. C's. as their only advisers, and I certainly think they ought to have something more than that. But I hope it does not mean that the Governor is going to be allowed to appoint a whole number of people as official advisers. Really the object of the hon. Member for the English Universities, although he has put it rather nicely, is to get back to the old pre-reform days. The whole of his idea is that the right and normal way of governing India is by civil servants, who will not have anything to do with the agitators at all. He really wants that it shall all be done by civil servants of 20 or 30 years' experience. However, this Bill is intended to give self-government to India, and I think the hon. Member should not try to give responsibility with one hand and to take it away with the other. I understand the difficult position of a Governor going out to India from this country, but I do not think a Governor's second thoughts are necessarily better than his first thoughts. I should not agree that Lord Sydenham, for instance, was a more enlightened man after four years in India than when he went out. Quite the reverse. After all, the suggestions in this Clause are only an attempt to go behind the object of all the reforms in India, ever since the Montagu-Chelmsford reforms.

7.47 p.m.

Sir JOSEPH NALL

I want to support what was said by the hon. Member for the English Universities (Sir R. Craddock), and particularly in regard to the second new Clause. As it has not been possible for me to take part in the debates on this stage of the Bill, apparently that fact has been misinterpreted in some quarters as meaning that I am supporting the provisions of the Bill. I want most emphatically to repudiate that suggestion, which was insinuated by the Attorney-General this afternoon. In my view the safeguards in the Bill are wholly inadequate for the purposes for which they are designed, and unless the Governor-General has advisers such as are proposed in this Clause, he will not be able to carry out those safeguards.

Question "That the Clause be read a Second time" put, and negatived.