HC Deb 28 March 1935 vol 299 cc2120-7

Amendments made: In page 71, line 13, leave out "Indian subjects of His Majesty," and insert "British subjects."

In line 16, leave out "Subjects of His Majesty," and insert "British subjects."—[Sir S. Hoare.]

5.8 p.m.

Mr. MOLSON

I beg to move, in page 71, line 29, at the end, to insert: (2) If after the establishment of the Federation a convention is made between His Majesty's Government in the United Kingdom and the Federal Government providing for the admission into India of the products of the United Kingdom on terms, in the opinion of His Majesty, not less favourable to the United Kingdom than those provided for in paragraph (f) of sub-section (1) of section twelve of this Act, His Majesty may, if he is satisfied that all necessary legislation has been enacted both in the United Kingdom and in India for the purpose of giving effect to the convention, by Order in Council declare that the purposes of those sections are to such extent as may be specified in the Order, sufficiently fulfilled by that Order and legislation, and while any such Order is in force the operation of paragraph (f) of sub-section (1) of section twelve shall be suspended. The purpose of this Clause is to provide that if a satisfactory commercial convention can be entered into, between this Government and the future Government of India, these special safeguards may be suspended by Order in Council. The history of this problem is that at the First Round Table Conference it was agreed by all parties that the best way of safeguarding the interests of British commerce in India was by the negotiation of a commercial convention. At the Second Round Table Conference His Majesty's Government, who had accepted it at the First Round Table Conference, came to the conclusion that it would not be possible immediately to effect such a commercial convention, the reason given being that they did not feel it would be proper for them to negotiate a convention with the existing Government of India, which might be regarded as being under the influence of the Secretary of State, for the purpose of binding the hands of a future responsible Government. They have followed this line consistently. For example, in the case of the Ottawa Agreements, when they faced the indignation of the Liberal party in this House, they entered into agreements lasting five years. In the case of India only it was limited to six months. The Joint Select Committee very ingeniously has combined the advantages of the Statutory safeguards and also of the convention. If at some subsequent time it is possible for a convention, which will guarantee to European British subjects in India treatment as favourable as that accorded to Indians, to be negotiated, it will be possible for His Majesty to suspend these statutory safeguards. It is very much the hope of the European community that after the coming into operation of this new Constitution a convention of that kind will be negotiated. That is being provided for in this Bill in order to obtain protection for British commerce established in India.

The purpose of my Amendment is to provide that the same convention may also provide for favourable treatment of British exports to India, and that, if that convention provides the same kind of safeguards for British trade with India, then in that case the special responsibility of the Viceroy to see that no penal measures are taken against British exports should be suspended in the same way. The Ottawa Agreements have already had an extraordinarily beneficial effect, partly on account of the preferences given, and partly on account of the better general feeling and good will shown to British trade by India. Whereas in the year before the Ottawa Agreements came into operation, our share of India's trade was 35.5 per cent., in the first year that the Ottawa Agreements were in operation it rose to 37 per cent., in 1934 to 40.7 per cent., and in the 10 months up to 31st January last to 41.3 per cent.

I would urge on the Secretary of State that it would be very much valued in India if a provision of this kind were included. He has mentioned on several occasions that India attaches very great importance to status. I feel that if there were a procedure by which there might be friendly negotiation on equal terms between India and ourselves, it would be a very great inducement to India to come to a satisfactory trading agreement with us in order to obtain the suspension of the statutory safeguards which some Indians are inclined to regard as derogatory. May I remind hon. Members of the minute of dissent of the extreme Nationalist members of the Indian Fiscal Commission which reported in 1922? There, dealing with the matter of Imperial preference, they state that they were strongly opposed to any kind of Imperial preference until such time as India had a responsible Government, and then they said, "We are in favour of the principle of Imperial preference on the distinct condition that India should in this matter be put on the same footing of freedom as is enjoyed by the self-governing Dominions, and that the non-official members of the Legislative Assembly should be given power by legislation or other equally effective means to initiate, grant, vary and withdraw preference as may be necessary in the interest of India in all its aspects."

5.15 p.m.

Sir S. HOARE

I approach my hon. Friend's proposal with a great deal of sympathy. I think we should all like to see a voluntary convention take the place of the statutory enactments. In the case of traders and companies, as the Committee has observed, we do make in this Clause the possibility of the alternative convention taking the place of the statutory enactments. My hon. Friend asked the Committee to apply that procedure to tariffs. I have looked into his proposal with sympathy and a good deal of care, but I find that there are drafting difficulties in the way of carrying it into effect. His proposal would mean in actual practice that, if a convention were entered into, the Governor-General's special responsibility preventing penal treatment of British trade would be abrogated for the period of the convention. I am told by the draftsmen that that abrogation might go too far, and, in any case, I doubt whether, in any question which raises issues of such importance the House would be prepared to abrogate even for a period so vital a safeguard. My advice to the Committee, therefore, would be to proceed, not by way of such an Amendment as my hon. Friend proposes, but rather by an alteration in the Instrument of Instructions to the Governor-General in the event of a convention of this kind being agreed between India and the British Government. I think that that is really the method to pursue. It would carry out what my hon. Friend has in mind and would avoid the danger which is in the minds of some of my hon. Friends lest we should abrogate a very important safeguard and go further than we wish.

5.18 p.m.

Duchess of ATHOLL

I am relieved to hear the attitude which my right hon. Friend takes to this Amendment, because I think that the speech of my hon. Friend who moved it was unduly optimistic. I do not think it faced up to the realities of the position. For instance, he quoted a report of 1922 of members of a fiscal board who at that period said they favoured Imperial preference. That report was made in 1922 which is a long time ago in the history of modern India, and we know that a great deal of water has flowed under the bridge in the Indian Legislature in regard to increases in. tariffs since that date. My hon. Friend also spoke of the Ottawa Agreements and of the benefits they have brought to India. Those benefits were undoubted, but has my hon. Friend read a report made by a European member of the last Assembly, Mr. James, to the Madras planters whom he represented in the Assembly? A report was made last summer to a committee of the Indian Assembly on the results of the first year of Imperial preference. If my hon. Friend has not read Mr. James's report, I recommend it to him. It is important that he and other Members of the Committee should know that Mr. James, who was one of the European business men in India who came before the Joint Select Committee and gave general approval to these proposals, reported on the extreme hostility that members of the committee of the Indian Assembly had shown last summer to the results of Imperial preference.

The substance of the report was that the benefits of Imperial preference had been undoubted, but that the hostility shown was such that nothing could convince the members that it was a thing that should be allowed to continue; if the benefits had come from any other country than Britain they would have been recognised and accepted. I would draw the attention of the Committee and of my hon. Friend to the fact that the committee to which Mr. James reported was a committee of the late Assembly, in which the Congress party was not represented, and that therefore it included on the whole much more moderate elements than at present when the Assembly is dominated by the Congress party, whose members were returned on a policy of definite hostility to all forms of Imperial preference. What good is it for my hon. Friend to speak as if the benefits of Imperial preference were so general that everybody recognised them and that the Federal Assembly in future would be glad to continue that line of policy? It entirely depends on the extent to which the Congress party continues to dominate Indian politics and the extent to which it is faithful to its policy of extreme hostility to Imperial preference.

The CHAIRMAN

I am afraid I let the hon. Member for Doncaster (Mr. Mol-son) go a little wide of the mark, and I must repent of my sins and treat other Members more strictly.

Duchess of ATHOLL

I was only trying to Correct an impression which my hon. Friend gave to the House with regard to Imperial preference in India. My hon. Friend said he hoped to get an agreement so good that the Governor-General's safeguard would not be necessary. That, of course, was the purpose of his Amendment. If Indian politicians were inclined to give an agreement so good that it would be possible to dispense with that safeguard, I wonder it did not occur to any Member of the present Assembly that they might secure what they wanted, by giving an agreement very much better than the one decided on in January. It is because I wish that it may be possible to get much better conditions in future that I deprecate the hon. Member giving such an optimistic view of things to the Committee, and one that does not seem to me to take account of what has actually occurred. I am relieved to know that my right hon. Friend does not see his way to accept the Amendment, for I am sure that my hon. Friends would view with great anxiety any proposal for abrogating the safeguard contained in Clause 12.

Mr. MOLSON

In view of my right hon. Friend's reply, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

5.24 p.m.

Major-General Sir ALFRED KNOX

Before the Committee passes this Clause into law, we should have some explanation from the Secretary of State on one or two points. I should like to ask whether there is any constitutional precedent for a Clause of this kind. It seems to us that it puts it into the power of any Government in future to wipe away at one stroke all the safeguards which we have been discussing on the previous Clauses by the very summary method of an Order in Council. It is true that under Clause 286 an Order in Council has to be passed after a Prayer in this House, but that is not, in our opinion, sufficient safeguard. If this Clause is passed as it stands, it will put it into the power of any future Government to be able to cut away all the safeguards which some of us have been at such pains to get placed in the previous Clauses.

5.25 p.m.

Sir S. HOARE

I do not think the hon. and gallant Member need have these fears. The proposal pre-supposes a convention that carries out in the spirit and the letter the provisions which we have been discussing. The Government contemplate that only a convention fully carrying out those safeguards could be regarded as being in substitution for a statutory enactment. The Joint Select Committee came to the view that it was wise to make the alternative of a convention of this kind, for this reason. There was an opinion more than once expressed from the benches of the Indian delegates that, supposing these provisions had been carried out by agreement, they would receive more assent in India than would be the case if there were simply the sanction of a Parliamentary enactment. It was to meet that view that this alternative proposal was made. There was never for us any suggesion of the alternative falling short in any way of the actual statutory provisions. Moreover, as the hon. and gallant Member has himself observed, there will be the safeguard of Parliamentary sanction, namely, a resolution of both Houses. I should have thought that, with that sanction and with what is expressly set out in the Bill, namely, that the convention must carry out the safeguards set out in the previous provisions, the position was quite satisfactory.

5.27 p.m.

Duchess of ATHOLL

I am rather puzzled about this Clause, because it provides that the convention must give similarity of treatment as between British and Indian companies and persons. The previous Clause, in Subsection (2), does not give similarity of treatment. Are we to understand, therefore, that the convention which would supersede the previous provisions is something that would be more favourable to British companies in future than the provisions of the previous Clause?

Sir S. HOARE

The idea would be that the convention should be a substitute for the provisions of the previous Clause—certainly not falling short. If it went further than they went, so much the better, but Parliament would not be asked to accept a convention that fell short of this Clause.

Sir A. KNOX

It depends on Parliament and the Government at the time.

Sir S. HOARE

That always happens with everything.

Duchess of ATHOLL

Does my right hon. Friend think the words "similarity of treatment" are appropriate words to describe the words of the previous Clause?

Sir S. HOARE

Yes, I do.