GOVERNMENT OF INDIA ACT, 1935, AND GOVERNMENT OF BURMA ACT, 1935.

HC Deb 16 February 1937 vol 320 cc1100-39

8.35 p.m.

The Under-Secretary of State for India (Mr. Butler)

I beg to move, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, and Section 157 of the Government of Burma Act, 1935, praying that the India and Burma (Trade Regulation) Order, 1937, be made in the form of the draft laid before Parliament. We have now reached the last batch of Orders under the Government of India Act, and I expect hon. Members will hear that statement with as much relief as I feel myself. The first of these Orders is the. India and Burma (Trade Regulation) Order, 1937. Before I describe its contents, I would like to pay a tribute, in which I am sure all sides of the House would wish to join, to the late Member for the English Universities (Sir R. Craddock), much of whose life was spent in Burma and whom we shall all miss so much in this sort of discussion. He seemed to me to bring to this House a classic knowledge of Indian administration, and a genial personality which seemed to bring colour to the most and discussions.

Coming to the Orders, it may be convenient if first I discuss the first two, the Trade and Immigration Orders, which are bound up together, and make a few preliminary remarks about them. I might then, perhaps, take in one or two blocks the remaining Orders, most of which are bound up together by some sort of similarity of subject. I must warn hon. Members, however, that their contents, apart from the first two, are highly technical, and that they may be classed as somewhat heavy material. If on a previous occasion I have alluded to the Orders I was attempting to pass through as a flotilla, I think on this occasion I might describe them as a string of barges bearing exceedingly heavy and difficult merchandise. In the case of the first two Orders, that merchandise is of great importance. I will try now to describe the contents of those two Orders.

Section 135 of the Government of Burma Act reads: With a view to preventing undue disturbance of trade between India and Burma in the period immediately following the separation of India and Burma, and with a view to safeguarding the economic interests of Burma during that period, His Majesty may by Order in Council give such directions as he thinks fit for those purposes with respect to the duties which are, while the Order is in force, to be levied on goods imported into or exported from India or Burma. Those terms describe shortly the contents of this Order and they explain clearly its origin and reasons. If I confine myself to one or two heads in my opening remarks, I think I shall be able to make the Order clear. Let me first remind hon. Members of its past history, then of its main features, why its main features are necessitated by the facts of the case, and finally survey its contents in so far as they affect the different trade interests represented in various parts of the House.

With regard to the past history of the Order, the first draft, which was laid in August, 1935, differs in no point of substance from the Order which I am now discussing, so that the House has had before it the outline of this Order for a very considerable period of time. At the time when my Noble Friend made that original memorandum, he issued an explanatory note which made it clear that the Governments of India and Burma had reached agreement both on the subject of the trade relations between them and on the question of immigration, the passage of labourers between them; and they made it clear that they regarded these two questions of their trade regula- tions and immigration from one country to the other as being interdependent. It was realised for some time, beginning with the Burma Round Table Conference, that there was a great interdependence of trade between India and Burma, and that there should be no sudden break. This was realised by the Joint Select Committee, which used these words: We feel that it would be a sorry concession to Burman sentiment if we were to recommend separation without carefully weighing the possibility of a serious diminution, whether immediate or prospective, of material prosperity. It is that material prosperity of Burma, and indeed of India, that we are considering this evening. The Joint Select Committee supposed that it would be necessary for each Government to derive revenue, through revenue duties, from the merchandise passing between them, but it gradually became clearer and clearer that the real and vital interests of Burma should not suffer in their trading relations any immediate dislocation, because the immediate advantage of revenue duties to one or other Government would not be worth the dislocation so caused. They decided on that at any rate for an interim period—during the period in fact, of this Order—and therefore, this agreement was come to between the two Governments looking, as they were bound to do, to the interests of their own countries. I think we should respect that fact in the House. So much for the past history of the question, which hon. Members will see goes back for a considerable period.

With regard to the main features of the Order, if hon. Members will glance at the Order, they will see that the fundamental principles are continually repeated in its pages. Therefore, it will be worth while to be quite clear as to what these are. They are to preserve the existing free trade regime between India and Burma and to maintain, in the meantime, existing tariff schedules. In the case of paragraph 4, which is probably the most important operative paragraph, the object is, with regard to goods which can be produced in India and Burma, that duties on such goods shall be lowered only by agreement between the two countries; that is, Burma cannot reduce the existing duties on goods from third parties if those goods can be produced in India. Why is this free trade regime between the two countries so important? It is important for this reason, that Burma depends for her livelihood upon the rich flow of natural products passing from her ports, in particular the port of Rangoon, to India. Let hon. Members picture these rich natural products passing from that smiling country and providing her with her very lifeblood—her rice, her oil and her teak, a volume of surplus products huge in relation to her small population—and let the House reflect that two-thirds of this rice, all this oil and 80 per cent. of this teak is marketed in India, and that India in return—and this is where immigration dovetails into the trade Order—sends annually no less than 300,000 coolies to harvest that rice crop which, in its turn, is marketed in India. Therefore, it will be seen that the interests of these two countries are indissolubly bound together and that the questions of the export from Burma of these natural products and the immigration into Burma of these coolies to harvest the main crop, are interdependent. That is the fundamental reason for continuing the free trade regime.

Hon. Members may ask what is to be the duration of this agreement. It now stands, by agreement between the Governments, at a three-year period, and the details of this are included in paragraph 7 of the Order. At the time of the Joint Select Committee, the Burma Chamber of Commerce asked for a 10-year period, because they attached so much importance to avoiding a dislocation of trade. The period was afterwards agreed upon between the two Governments to be five years, and then it was later reduced to three years. This means that the status quo continues in so far as we are regarding trade between India and Burma for this interim period.

Now I come to the next head which I said I would consider, and that is the interests of this country as represented by the different interests on all sides of this House. There is, first of all, that great export trade from Burma, which is financed largely, if not almost entirely, by British capital, which is said to amount to a sum between £40,000,000 and £60,000,000; and the House should, therefore, be careful of British interests which finance, control and organise this life-giving trade. There is also—and I am fully aware of this point of view— the British exporter, who feels that a country like Burma should give him the advantage of a lower tariff wall for such products, for example, as cotton textiles or certain steel products. I know these points are in the minds of hon. Members, but were immediate reduction of the cotton duty to be conceded, the result would undoubtedly be that India would be alienated from Burma, with disastrous results to the trade which I have described, and both would be alienated from us. Therefore, an interim period is suggested in this agreement in which Burma will not be able materially to reduce the duties on goods produced both in the United Kingdom and India save by agreement between the two Governments. If she can persuade India, it will be possible to reduce the duty. So, in the case of United Kingdom imports into Burma, the status quo continues save where negotiations between the two jointly will secure a modification. Therefore, from the point of view of the exporter, for this interim period which we are now considering his position is no worse, and he is given an opportunity to consider what opportunities he should take in the future.

This does not mean that there is no prospect of advantage to British exporters. In the first place, this interim arrangement is for three years and not the original five; in the second place, in so far as there is no competition with Indian products, the goods that can be produced in India, Burma is free to lower the duty at two months' notice; and, in the third place, there is a very interesting insertion in the Order, in paragraph 9 of Part III, in which the maximum quota of Japanese goods, according to Sub-section (2), is not to exceed the total quantity produced in the year 1934–35. I would ask those hon. Members who are interested in the textile trade in particular to realise that in that year the Japanese imports amounted to 42,000,000 yards, an amount under half what they were two years before and two-thirds of what they were the year afterwards, and so this trade agreement does actually secure that the proportion of Japanese imports into Burma shall be at an exceptionally low figure. With the passage, as I hope, of this Order that will be secured, and I believe it will be a very definite help for the British exporter. At present negotiations are proceeding between Japan and Burma, and I understand that agreement has been arrived at on all the important heads. I am not, unfortunately, in possession of the final agreement—I think it would help me were I in possession of it—but I can only hope that when hon. Members see it published, very shortly, they will find that they are not unduly disappointed and that the agreement is satisfactory.

I have touched on the past history of the Order, its main features, the existing conditions which cause us to recommend it to the House, and the extent to which hon. Members are affected, in particular the two great branches of British interests which are affected in this matter. Hon. Members may ask, What about the future? and I want, before I conclude, just to touch upon that aspect of the matter. I think some hon. Members are keen that opportunity should be given for the interests of their particular industry to put their case. As is well known, negotiations will take place this year as soon as possible to replace the Ottawa Agreements, and the negotiations between India and the United Kingdom and between Burma and the United Kingdom will proceed at the same time, so that, if it is possible for any agreed concessions to be arrived at, they can be covered by the terms of this Order; and that, I think, will be the value of the negotiations being conducted at the same time.

Mr. Morgan Jones

Will the same persons represent India and Burma at the Conference?

Mr. Butler

No, I do not think they will. The negotiations will be conducted at the same time, but full details have not yet been decided. I should think it likely that there will be a representative of Burma who w ill negotiate with the United Kingdom and a representative of India who will negotiate with the United Kingdom. For instance, hon. Members who represent the Lancashire interests will realise that the negotiators on behalf of the United Kingdom will, I am sure, not neglect the interests of Lancashire, so there is an opportunity this very year for the British exporter to put his point of view and to see that his point of view, upon which, I am sure, he feels very strongly, can be satisfactorily and fully considered.

It only remains for me to say one word about the immigration agreement. The object of the agreement is that no restrictions shall be placed on emigration from India to Burma provided there is none in the contrary sense. This was a point upon which the Royal Commission on Labour and the Joint Select Committee agreed, and I hardly think there can be any dispute that, in view of the importance to Burma of this large flood of immigration, some such arrangement should be arrived at. Further details of the trade Order are fully set out, and if any hon. Member has any point to put with regard to them, I hope to be able an answer them, with the permission of the House, later in the Debate.

In conclusion, I would sum up by saying that this matter has been considered for many years, that it affects vital trade interests, and that it is essential that this Order should be passed in order to avoid uncertainty and dislocation of trade. It is our hope that these two countries may start upon their independent course uninfluenced by prejudices and undisturbed by too rapid a sundering of bonds before the important trade negotiations are undertaken this year; and I hope that British trading interests will reflect on the better opportunities that will be offered by patience and respect now, and, later, on the real interests of the two countries, with which future cordial relations are desired.

8.55 p.m.

Brigadier-General Sir Henry Croft

I am sure that the House will have appreciated the opening sentences of the Under-Secretary of State for India, and it is a tragic coincidence that some of us were attending a memorial service to-day in memory of one whom we shall greatly miss. I feel that we miss his presence especially now. We appreciate the fact that he came into the House at an advanced age after wonderful service for the British Empire overseas. We realise that the great strain to which he put himself probably hastened his end.

My first inclination would be to go into the Lobby against the Government on this Order. On the other hand, I and my friends gave an undertaking at the time of our long fight on constitutional reform that we did not wish to embarrass the Government in seeing that the machinery of government in India should come into effect. If we were to go into the Lobby we could only do it by direct opposition. I would like to have seen some postponement of this Order until the Conference which is to take place at a later period of the year. But there are certain major considerations that affect one of the most important industries in our country.

Fiscally, Burma has been exploited in the past by India. The Burmese have been penalised by high tariffs on British textiles and other goods marketed in that country. There are the Burmese duties on British goods and they have been laid down as solely such as are necessary for the revenue purposes of the Burmese Government. I wonder if the House realises the position. Since 1924 we have seen the textile trade of India and Burma decrease from 1,642 million square yards to 416 million square yards in 1936. The problem is a very real and urgent one and ought to call forth from this House all the best that we can do in this problem. But since we have started on this road, we find that our trade with Burma and India has decreased by no less than three-quarters. It is a solemn thought. It has been indicated that the negotiations that have been recently taking place have been carried out by an official or his assistant from Burma, and Indian officials at Delhi. It seems to me a most astonishing fact that this conference should have taken place without regard to the future safeguarding of our interests and the future position of Japan.

We ought to remember that Burma with no industries to protect is penalised. We recognise the very close links between the Indian and the Burmese trade, but we must not forget that while the Indian labourer goes into Burma to work, he takes back a vast amount of wealth into India which is of very great advantage. If you look through the Order you will find various phrases again and again about the interests of British India and Burma but there is not a single sentence in connection with this country. I find that in the last 20 years I have ventured at very great risk to prophesy what sort of a future our trade in the East is likely to have. I have always been described as an alarmist. Unfortunately all my alarms have been justified. I know we are often told that we are living in the best of all possible worlds, but we do not seem to appreciate the fact that in the East we have lost the great market of China. Our exports there decreased from 292,000,000 square yards in 1924 to less than 8,000,000 square yards. Something should be done, unless British prestige is not to be affected more and more in the Far East, such as clearing out of Hankow and that sort of thing. We have always been told about the policy of good will as a solvent for our troubles. We have just heard the Under-Secretary of State for India speaking, but he did not tell us that since 1932 when we started on this road our textile exports in yards to Burma have decreased by half. Here we have been this afternoon talking for hours about what is, after all, a comparatively trivial matter, a small matter, but this is a subject that really affects a very great population. Talk about three years; at the present rate we shall, in eight years, have lost our trade with India and Burma entirely. That is a solemn fact; it is our last great market. I cannot go into the Lobby against the Government, but I do ask the hon. Gentleman, when he replies, to give a categorical pledge to this House that when these discussions take place he and the President of the Board of Trade will use the whole of the economic power of this country and the British Colonial Empire in order to see that some vestige of this great trade is preserved, and that we shall not calmly sit by and see the whole of it transferred to India or to Japan.

9.6 p.m.

Mr. Morgan Jones

May I first associate myself very completely with the well deserved tribute which the hon. Gentleman and the hon. and gallant Member for Bournemouth (Sir H. Croft) paid to our late colleague Sir Reginald Craddock? In common with others of my hon. Friends and some hon. Members opposite it was my good fortune to co-operate with him on the Joint Select Committee for many long months. Subsequently we engaged in controversy of a friendly character across the Floor of this House. I can never hope to meet anyone who, in the midst of heated controversy, could display such charm and kindliness as Sir Reginald Craddock. It was always a pleasure to listen to his observations, drawn from such wide experience as he possessed. Many of us learned much by listening to him while he was addressing this House, and the House will indeed be the poorer for having lost his contributions to our discussions. We have just listened to a speech from the hon. and gallant Member for Bournemouth in which he told us that he had already made five prophecies and he ventured another one. I was much interested in what he said. If there is to be a boxing match between him and the hon. Gentleman opposite, he is going to take good care not to knock him out to-night. It is to be only a species of shadow boxing, for he will not undertake the odium of turning out the Government upon a Measure on which he engaged for so long in virulent and vigorous opposition.

I do not propose to occupy the attention of the House for more than a minute or two, as I have another engagement, but I want to say one word. In the last Parliament hon. Gentlemen opposite accepted the responsibility of passing the Government of India Act and the Government of Burma Act. We, from a different point of view, opposed the Government over many details of that legislation, and we do not now withdraw one iota of the contentions we then advanced. The hon. and gallant Member has said that that legislation is now the law of the land and that we cannot, therefore, go back over that somewhat familiar ground, but hon. Members opposite must take the major share of responsibility for that legislation. It was theirs and they must accept the consequences, be they good or be they bad. They did not grant to India or to Burma that full measure of self-government which, many of us here desired, but they granted it within certain limits, and within those limits they must now face the consequences.

I agree with the hon. and gallant Member that the condition of the people of Lancashire cries aloud for attention. I do not speak as a Lancashire Member, but as one who is interested in this Lancashire question in so far as it relates to this discussion. Therefore, I take an objective point of view to some extent, and I ask permission to say just this to those here who represent Lancashire: I venture to demur to the suggestion that the condition of Lancashire is mainly due to the failure of the appropriate treatment of India and Burma, from their point of view. The hon. and gallant Gentleman said he hoped that at the forthcoming discussions or conferences the hon. Gentleman would use all the force of the economic power at the disposal of this country in bringing pressure to bear on India and Burma so as to secure better concessions for this country. I wonder what he means by applying full economic pressure. [An HON. MEMBER: It is like you applying a strike."] Then we are to have such pressure put upon India and Burma. I venture to say that that will be a disastrous policy. By all means fight at this conference for any legitimate concessions which will assist Lancashire, but we cannot go back upon the fact we have granted to India and to Burma some measure of self-government.

Sir H. Croft

Without fighting, would it not be possible to indicate to India and Burma that as they treat us so we shall have to treat them?

Mr. Jones

That might be an interesting point of contention between the hon. and gallant Member and myself. For the moment I am addressing myself to his request that the Government should bring to bear upon Burma's representatives all the economic power at their disposal. Those are somewhat menacing terms to use. If we want to keep this Empire together the way to do it is not by bringing to bear upon a smaller area, a weaker section of the Empire, all the economic power at our disposal for our own benefit. If there is a meaning at all to this thing that we call the Empire, it surely is that we are prepared to work together for the common good, and not for the good of one particular section. If that be so, what is the use of talking about bringing to bear all the economic pressure that this country possesses, for the sake of one section within the Empire?

I wish the Lancashire people all possible success in their efforts to revive their industry. The hon. Member need not sneer; that statement is made quite honestly, as honestly as he ever said anything himself. I can arrogate that claim to myself without fear of challenge. But when I say that I still reassert that, now that we have embarked upon the road of giving Burma some measure of self-government, we must enable them, in the first place, to safeguard the interests of their own people. I asked the hon. Gentleman, in an interruption, whether India and Burma would be separately represented at the conference, and I gather the answer was "Yes," though how they were to be represented separately was not quite clear. For my part, now that we have taken the steps we took two years ago, we must enable those people as speedily as possible to find their own feet, to stand upon their own feet and to learn gradually the art of self-government.

That is all I propose to say upon this matter. We shall therefore not oppose the Government in the proposal which is embodied in this and the subsequent White Papers. We shall offer no opposition whatsoever. I merely say that it seems to be an inevitable concomitant of the proposals which have been carried through this House after so much discussion a year or two ago, that in so far as, with the good will of our own country, India and Burma can establish cordial trade relations and profitable relationship, we wish them every possible success. If, out of those trade relationships, Lancashire can derive some substantial economic benefit, no one will be more pleased than those who are associated with me on this side of the House.

9.16 p.m.

Sir Walter Smiles

The Under-Secretary of State gave a very true and artistic picture of the relations between Burma and India, but I believe that he did not give a complete picture. There are other countries that will also be taken into consideration at the end of the three-year period. I would ask the Under-Secretary whether the three-year period is a maximum or a minimum. We think that three years should be the maximum time for the reconsideration of this agreement. An hon. Gentleman who is a friend of mine read the agreement to mean that it must be reconsidered in three years, but I read it as meaning that it might be extended for four, five, six, seven, or even 10 years. My constituents are particularly interested in this trade, and that is the reason why we protest. It must be admitted that, when the trade agreements are considered at the end of three years, everybody in this country will have to take a certain amount of risk. In Lancashire they are well prepared to take a risk, having lost three-quarters of their trade with India during the past five or six years. They think that things cannot get any worse. They would like all these trade agreements to be put upon the Table and reconsidered.

Burma will have to consider them, of course, and make the trade agreement which will be of most advantage to herself. The same is true of India and of this country. There may be other countries to be considered at the same time. It cannot be denied that when India put a high tariff upon sugar she completely ruined the Java sugar trade. Even when I left India, Australia was beginning to send commodities there to an increasing extent every year. A very interesting book came out three weeks ago, written by a man who has stood for Parliament. He was travelling to Australia, and he pointed out that Australia was thinking of markets not only in the United Kingdom but in the East, in Japan and India. If we have given Burma these rights of self-government, she ought to be well capable in the space of three years of reviewing the whole thing and of deciding what would be best for her.

In the United Kingdom, we feel certain that when these agreements come to be reconsidered we shall gain some advantage in Lancashire. As the Under-Secretary stated, among the principal exports are oil, teak and rice. There is no doubt that the great Burma Oil Company has the monopoly of the Indian market. The price of petrol in India may be more expensive so far as I know, than in almost any other part of the world, but the Burma Oil Company has always kept the price of kerosene oil down very low for the sake of supplying cheap illumination for the poorer people in India. We can see looming up, perhaps in the near future, the possibility of an oil war there, because new oil wells are being developed in the Persian Gulf, under the control of United States companies. It is just possible that in future the Burma Oil Company will not have the monopoly in India. I was reading a speech by the chairman of the Burma Oil Company in which he said that if their market in India were threatened they would have to take steps elsewhere. There is no doubt, from reading the Debates in what was the Legislative Assembly at Delhi, that the Indian Congress politicians are anxious for India to grow more rice and not to import it from Burma. Even with improved methods of cultivation, it will not be possible, I think, for them to grow sufficient food in India to feed that vast population, and they will always be dependent upon Burmese or Javan rice, principally upon Burmese rice. For that reason the people of Burma need not be afraid. The Indian Government will always have to depend upon Burma if they want to supply cheap food to their people.

For all those reasons, I think it shows a very great lack of confidence in the people to whom you have granted this new Constitution in India and Burma to say that if they are capable of doing so much—you expect so much from them already—at the end of three years they are to be able to decide trade agreements for themselves. When all these things are put upon the Table, we feel in Lancashire that there may be more employment and prosperity for our people.

9.23 p.m.

Major Procter

In discussing this matter, which is very vital to Lancashire, the right hon. Gentleman who spoke from the Opposition Front Bench said that we should merely go to a conference and that we should manifest good will. I do not see how, by mere words, you can carry on a negotiation unless there is effective force behind the words that you use. Members of the party opposite will remember that we tried good will. When Mr. Ghandi was violating the law and when there were strikes and the boycotting of Lancashire goods, Members opposite and members of the trade unions feted Mr. Ghandi. Lancashire girls even kissed him as a manifestation of their good will. It was not until the British Government put Mr. Ghandi and his followers in gaol that the boycott was stopped. We have tried methods of good will in India. When India took part in the Ottawa Agreement, she was allowed the same treatment in every part of the Empire as Lancashire, with the result that Indian trade in textiles increased over 206 per cent. in Ceylon, and 108 per cent. in Malaya.

In the first paragraph reference was made to this Order which states that the proposals were for the purpose of preventing undue disturbance of trade between India and Burma, but what about the disturbance of trade between Lancashire and Burma? That is the point that concerns Lancashire Members. I ask the hon. Gentleman why should India object to what we propose? What will be the situation under this Order? India will be able to send into Burma Indian textile products without duty, whereas Lancashire must pay 20 per cent. It was Lancashire and the rest of Britain that helped to build up and protect Burma and India. Yet the Lancashire manufacturer is to be treated as if he were a foreigner in the British Empire. We strongly object to receiving less favourable treatment than India. Why should India object to our having the same free market in Burma that she herself possesses? Lancashire has shown good will to India. When I first became a Member of this House I advocated that we should buy more raw cotton from India to help her and to show good will. In 1922 we bought Indian raw cotton worth £959,000,000 sterling—I am sorry, I mean £959,000.

Mr. Ede

What do a few noughts matter?

Major Procter

It is far better to have an error of the lips than an error of mind. From January to November this year we brought from India raw cotton worth £4,713,000.

Mr. Deputy-Speaker (Captain Bourne)

What has this to do with the Order now before the House?

Major Procter

I was trying to show that the manifestation of our good will in the way we have done it is more eloquent than the words of hon. Members opposite; and in setting out what we have purchased from India to show that we can meet the objections of India to our opposition to this Order. Lancashire cotton exports to Burma have declined badly. In 1934 we exported to Burma 36,000,000 square yards and last year only 25,000,000 square yards, whereas Japan exported 42,000,000 square yards in 1934 and 126,000,000 square yards last year. In the period 1919 to 1931, when Labour was in office, they allowed the duties to be increased from 11 per cent. to 25 per cent. without making any protest on behalf of Lancashire. It may have been a matter of good will towards India, but it has been disastrous in Lancashire.

When these trade agreements are finally ratified and stabilised, I hope that the words "Japanese goods" will be sharply defined. India has put quotas on Japanese goods, but the Japanese in order to defeat the quotas instead of sending in long pieces of cloth have cut them up into short lengths, just what a woman requires for a sari. I hope that when the three-year period is up the new agreement will not be made as this one has been, by someone sitting in Delhi, without Lancashire being represented or consulted, but that accredited Lancashire representatives will be heard. By this Order Lancashire has been called on to pay the price of political peace. I hope the Government will use stronger methods. If India and Burma will not give the Lancashire cotton trade a square deal then we should treat them as they have treated us—as foreign countries in so far as trade agreements are concerned —and I am certain that greater concessions will be made to Lancashire than have been obtained by the so-called good will methods that have been advocated by the Labour Members opposite.

9.34 p m.

Major-General Sir Alfred Knox

The Debate takes one back several months to the time when my hon. Friends and I fought the question of Indian reform. As then, we have had a Member of the Government proposing to give away what is in our opinion a vital British interest; a Member of the Conservative party robustly objecting to what we call surrender; and then a Member of the Opposition defending the National Government from Conservative attack. We have seen that on several occasions in this House. The proposal in the present Order is founded on two reasons—the one to prevent undue disturbance of trade between India and Burma, which we agree, of course, is necessary, and the other to safeguard the economic interests of Burma during the period of three years. I would ask the Under-Secretary how the economic interests of Burma are safeguarded by preventing Burma from lowering her tariff on Lancashire goods going into Burma, in the interest solely of the Indian millowners of Bombay and Arhmednagar. I can understand Bombay requiring a high duty on Lancashire cotton imports, because they want to protect their own interests, but Burma has no textile industry. Why is Burma, although nominally separated from India, to be tied to her fiscally?

The British Government on many occasions, when it has given so-called freedom to dependencies, has always given fiscal freedom with it, irrespective of whether that has been in the interests of our unemployed in Lancashire or elsewhere in this country; but why, when we gave India fiscal freedom, did we not insist that India should give her late dependency of Burma fiscal freedom also? The reason for that is plain. It was because the late Secretary of State for India said in Debate that we could not do this because India would not accept it. Is not that rather a cowardly attitude for the Government of this great Empire to assume? Surely we should look after the weak; surely it is in accordance with our principle—the "Sermon on the Mount" principle on which we rule this Empire—that we should sometimes look after Burma, as well as the unemployed in Lancashire.

9.38 p.m.

Mr. Chorlton

It is a little difficult to join in the Debate on this important subject, but I think it will be possible within the rules of order to draw attention to what appeared to be real hardships. The Under-Secretary said at the beginning that the Order was based on an outline, that is to say, a lot of new words were introduced into it, and the first question I want to ask is whether the original wording contained no reference to this country, because the outstanding feature of the Order is the utter neglect of the paramount authority. It seems very strange that not only are we never mentioned, either directly or otherwise, but no real opportunity arises out of it, except by the good will of India and Burma, for us to take any action whatsoever. A minimum period of three years is laid down, and that can only be altered either by the Governor-General of India giving notice to the Governor of Burma or the other way about.

If we make trade agreements, as it is suggested we are about to do, upon what basis do we make them? Apparently we have no authority. This Paper gives us no authority to do anything. Must we go therefore, and beg that a trade agreement be entered into? These two countries can go on, and India, being the stronger, will go on, exactly as the Order now states; that is to say, we are never going to be any better off, not only for the period of three years, but for all the years that follow. It is astounding, when we know how the whole country at the present time is looking for export trade, that the Government instead of trying to help the export trade, are apparently doing their best to hinder it. The only real way to improve the conditions in North-East Lancashire, where this industry is settled, and which is very nearly a distressed area, is by improving our export trade, and bringing there employment for the people in the trade which they know best. I am disappointed that more Members on the Labour benches have not spoken. I hope that the hon. Member for Westhoughton (Mr. Rhys Davies) is going to speak, because, after all, the people who are really suffering under this agreement are the Lancashire operatives. The people who are out of work in North-East Lancashire are working people, and this is another nail in their coffin.

As to the actual agreements regarding which, it is suggested, negotiations are about to begin, the Under-Secretary said he thought there would be one representative from Burma, one representative from India, and, if Japan were concerned, one Japanese representative; but he did not make it clear to me that in every negotiation that took place there would be a representative from this country. I know, of course, that it is not in the White Paper, but, if he will kindly give some definite undertaking to that effect, it will be of considerable assistance. I think, also, that all who are engaged in cotton spinning will feel that the Governmental principle in regard to trade agreements, of offering something to those who are expert in the trade, is a wrong principle on which to go; no other country does it.

An hon. Member who spoke from above the Gangway distorted the words of my hon. Friend when he suggested that we were going to use trade agreements as threats. My hon. Friend meant nothing of the sort. When you make an agreement, you assemble on either side all the relevant factors from which an agreement can be made. But here we have the extraordinary position that a man goes from Burma to India—to Delhi—to make an agreement with Japan. No regard whatsoever is paid to the trade which is suffering on this side and which ought to have been attended to in the first instance. I do not wish to go on, but I should like to refer to that valuable natural export from Burma of which the Under-Secretary spoke. Is not that already provided for? I do not think there is any fear in the direction that he indicated, or that there would have been any risk in making some change.

Our final request is that notice will be given, in any case within the three years, which cannot be exceeded, and that, in the negotiations which take place, representatives from the trades concerned shall be allowed to take part. The matter has now been carried through and cannot be altered, nor do we wish to alter it, but we want to prevent the risk of anything like it happening again. Anyone like myself, whose forebears have lived in Lancashire for many years, will feel that the outstanding feature, not only in this Order but throughout the whole of the debates on India, has been the extraordinary neglect of the ordinary Lancashire working man. Every consideration was shown to India, and now to Burma, but not to the Lancashire working man. I hope that in reply the Under-Secretary will ease our minds and make sure that there will be no failure in this respect in the future as there has been in the past.

9.45 p.m.

Mr. Rhys Davies

I hesitate very much to enter into this Debate, but. I was taunted so much by the hon. Member for Bury (Mr. Chorlton) that I determined to say a few words. This Debate reminds me of grand opera; we have listened to speeches that I am sure I have heard dozens of times before from exactly the same hon. Members. When we discussed the India Bill we had the same arguments, especially from the hon. and gallant Member for Bournemouth (Sir H. Croft). It is rather surprising that Lancashire to-night has been supported in its claim by the hon. and gallant Member for Bournemouth and the hon. and gallant Member for Wycombe (Sir A. Knox). I should be sorry to think that Lancashire had condescended to ask them to plead its case. The whole of Lancashire is of course very much interested in these proposals, and we are all very anxious that the Government should do everything they possibly can to increase our export trade from this country to India and Burma. But I cannot understand the argument used about these proposals, because hon. Members are very inconsistent. They object to Burma and India putting up customs duties and tariff walls against us, but they are the very people in this House year in and year out who have advocated tariff walls to prevent even a yard of cloth or an ounce of anything coming in free to this country.

Sir H. Croft

Against India and Burma?

Mr. Davies

The hon. and gallant Member knows more about this subject than I do, and I hope he will deal very gently with me as I hope to deal with him before I sit down. The hon. and gallant Member for Accrington (Major Procter) was the least helpful. He wanted us to discard good will towards India and Burma and to use some effective force. He nearly used the words "big stick." Whether he used them or not, that is exactly what he meant. He ought to realise that we have got past that stage long ago. I will venture one or two reasons why Lancashire has lost part of its export trade to these countries. No section of this House regrets the loss of our export trade more than we do on these benches, and we wish we could do something to help to increase that trade. I am not, however, very much impressed by the old argument of the Tory party about the sufferings of the working man. It is like the old story about the widow; she is brought in on every convenient occasion.

Let me give a few reasons why we have lost our export trade. We cannot be continually sending from Lancashire to these parts of the world machinery to manufacture on the spot the very textile commodities that we used to export to them, and then expect that we can retain our export trade. We have been exporting textile machinery of the very best type for years. The manufacturers of textile machinery in Lancashire have been immensely successful during the whole of the period that our exports of textile manufactures have been declining. As the export of our textile commodities has declined the business of the manufacturers of textile machinery has gone up in Lancashire. We cannot have it both ways.

Mr. Dodd

That is not a statement of fact. At least three textile machinery firms have closed down in Lancashire in the last few years.

Mr. Davies

A large number of textile mills have closed down, too. The hon. Member called me to account some time ago when I said that I had seen advertisements in Eastern newspapers offering second-hand textile machinery from mills in Lancashire for sale in Eastern countries. I am not saving that sort of thing is wrong under the system under which we live, but I insist that we cannot manufacture textile machinery in Lancashire and export that machinery to these countries so that they can manufacture the goods on the spot and maintain our Lancashire export trade at the same time. Hon. Members complain about Bombay mill owners sending textile goods to Burma instead of Lancashire doing so. Is it not true that a great number of the textile mills in Bombay are financed by capital from this country? [HON. MEMBERS: No!"] The Under-Secretary said that in Burma there was about £40,000,000 of British capital employed. Am I to understand that no Bombay textile mills have ever been financed by British capital? Am I right in saying that a goodly number of textile mills in Bombay are financed by British capital?

Sir W. Smiles

As far as I know 90 per cent. of the capital invested in the Bombay and Arhmednagar mills is Indian capital and that less than 10 per cent. is British capital.

Mr. Davies

The hon. Member admits that there is 10 per cent. I am therefore entitled to 10 per cent. of the argument. I should not be a bit surprised if many years ago there was no Indian capital; that it was practically, all British. We will leave it at that. In spite of differences of opinion on this matter of imports and exports I would say this: Hon. Members for Lancashire' have been complaining about the type of person sent to Delhi and elsewhere to negotiate these agreements. That means that the Government they have put into office are not fit to negotiate for Lancashire. It is well known that one-tenth of the membership of this House comes from Lancashire. There are 62 Lancashire Members here, and there is not a single Member for the whole of Lancashire in the Cabinet. I am as certain as I stand here that the neglect of the conditions of the people of Lancashire is in part due to the fact that we have nobody in the Cabinet from the County Palatine.

Sir W. Smiles

Is not the Minister of Education a Lancashire man?

Mr. Davies

I was referring to Lancashire Members, and if the hon. and gallant Member for Blackburn (Sir W. Smiles) will allow me to correct his geography, Westmorland is not in Lancashire. The right hon. Gentleman is Member for a Westmorland division.

Sir W. Smiles

But he is a Lancashire man.

Mr. Davies

I repeat that the distressing conditions of the people engaged in the textile industry in Lancashire are beyond description, and I am not sure that Members from outside the county would believe us when we say that there are scores if not hundreds of men and women employed in that industry to-day who, because of the depression, are working full time at wages which are lower than the sum they would receive if they were on public assistance.

Sir H. Croft

To which part of the Order does this refer?

Mr. Davies

To the same part as the hon. and gallant Member's speech referred to. But in spite of the fact that I belong to the Opposition I again join in asking the Government to do all they can to bring about a revival of the export trade from Lancashire.

9.57 p.m.

Mr. Radford

The best part of the hon. Member's speech was his last sentence. It was almost the only helpful sentence he uttered. He and his colleagues always employ two methods of explaining the depression in Lancashire and the loss of the Indian market. They say that we have exported textile machinery to India and other Eastern countries which are now providing themselves, to some extent, with the cotton goods which they require. Alternatively, they argue that the mills in India and elsewhere have been put up by British capital. I do not wish to weary the House by going into a point which has already been dealt with by the hon. and gallant Member for Blackburn (Sir W. Smiles), but to-day by pure accident I was speaking to one of the best known British-Indian merchants who was going to the White City Exhibition. This gentleman has lived in India for 25 years and I raised this question with him because when speaking in the Gorton by-election last night I was challenged on this very subject. My friend had with him another man, equally knowledgeable, and one of them told me that the amount of British capital in these mills was 10 per cent., while the other put it at not higher than 15 per cent. All the rest of the capital, I am informed, is Indian.

Mr. Silverman

Would the hon. Member care to tell the House what his friend has been doing in India for the last 25 years.

Mr. Radford

My friend is not in India now. He is in Manchester doing his best to work up the export trade with other parts of the world which still afford an opportunity for Lancashire goods. As regards the export of textile machinery, if the great British textile machinery firms had not sold their machinery to the people who wanted that machinery, then those people would have bought American, Italian or French machinery. The people who wanted the machinery would have obtained it in any case, and we should have missed the trade involved in supplying what we did supply. I do not think that even the speech of my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) giving the yardage of cloth by which our exports have decreased in recent years, can convey to the House a correct impression of the extent of our loss. In the last pre-war year 3,000,000,000 yards was the figure of our export to India and that has to be compared with 400,000,000 yards now. One must not wander too far from the terms of the Order, but I think I may mention that the export to the Chinese market has fallen from 700,000,000 yards to 8,000,000 yards or has been practically destroyed.

Mr. Rowson

Can the hon. Member say how much we exported to Japan before the War?

Mr. Radford

I have not those figures but if the hon. Member has them he will have an opportunity later of quoting them. Then there is the very anomalous position of India vis-a-vis Burma as far as this trade is concerned. The Simon Commission drew special attention to the extraordinary situation created when it was decided to regard Burma as a part of British India. Since 1921, the report pointed out, as it were almost accidentally and merely for purposes of ease of administration, Burma had been regarded as part of British India. That was all right at that time and for that purpose, but those who made the arrangement did not visualise the effect of the fiscal autonomy convention which began to operate about the same date and enabled India to pile up import duties against British goods. The result was that although Burma is as much a separate country from India as Great Britain is, being separated from India by impenetrable mountains and forests and the nearest ports of India being 800 to 1,000 miles distant from Rangoon, the Indian cotton goods manufacturers were able to send their goods into Burma free, while British cotton goods had to pay an import duty of 25 per cent. It is true that the 25 per cent. has recently been reduced to 20 per cent. Under the standstill agreement, I understood from the Under-Secretary, the period was to be five years but that it had been agreed to reduce it to three years. No doubt when my hon. Friend replies he will deal further with that question because this part of the Order says: This Order shall come into force on separation, and shall remain in force for three years or until twelve months have elapsed from the giving by the Governor-General of India to the Governor of Burma or by the Governor of Burma to the Governor-General of India, of notice to terminate the operation thereof, whichever is the longer period. Surely that means a three years period which may, by agreement, be 30 years; which may indeed go on ad infinitum. As long as the representatives of Burma and India remain content with the status quo so long can it continue and so long will it be impossible for Britain in making trade agreements with either India or Burma to be able to secure equitable terms for her exports to Burma.

I support what my hon. and gallant Friend the Member for Bournemouth said relative to the trade agreement which is shortly to be negotiated between this country and India and Burma. It is not a case of adopting a threatening attitude. These are matters of business and it is no use thinking that because we have given India self-government we are going to get sentimental gratitude from the Bombay mill-owners, and that they will be anxious to let our goods in on better terms. There is no ill will in two busi ness houses endeavouring to secure honourably and fairly the best terms and a fair sharing of the mutual benefit of the trading between them. Let our representatives take great care that India does not overlook that, whereas our manufactured goods going there have to bear a duty of 20 per cent., we let her linseed and other commodities come in free of duty. The India trade in linseed to this country has grown by leaps and bounds and India has benefited enormously. Let us see that the best possible bargain is made for Britain. The Under-Secretary tells us that to-night we are going to discuss matters with regard to the welfare of India and Burma, and we do not mind doing it, but when the time comes to negotiate the new trade agreement, let British interests be the first consideration of our representatives.

10.7 p.m.

Sir John Haslam

Seeing that we are going to bind our hands for at least three years, what is going to happen about the trade agreements that we are told are to be negotiated during the next few months? How can we bring this agreement to a standstill between India and Burma? Some of us would like to know if it is going on in perpetuity. After all, trade ought to be a two-way traffic. I supported Imperial reciprocity for many years before it was as popular as it is to-day. I have always believed in reciprocity, and reciprocity does not mean tariffs on one side and Free Trade on the other. I think the time has come when the representatives of India should realise who their best friends are, and not allow their tariff policy to be dictated by a few manufacturers in Bombay. Successive Governments, Conservative, Liberal, Labour and National, tried to negotiate with Indian administrators in the old days, before they got self-government, and tried to get them not to advance their tariffs against Lancashire goods, but failed miserably. Now that they have self-government they seem to be binding themselves for at least three years, and possibly much longer. I want to comment on the remark by the hon. Member for Westhoughton (Mr. Rhys Davies) that we complain about the representatives whom we sent to Delhi to voice our opinions. We are not complaining about the quality of them. We are complaining that we have never been consulted at all, and had no representative there, as far as I can gather. The hon. Member also made the point that the Bombay manufacturers had a right to compete against Lancashire manufacturers, and that we had sent them machinery from Lancashire. Of course we have. If we had not, Germany, Austria and others would have sent it.

We complain that their goods come in here absolutely free and, when we want to send anything there, we are met with hostile tariffs. What is good for the goose cannot be bad for the gander. We want fair trade between India, Burma and the British Isles. This is the last chance that we shall have in connection with this agreement, and I ask the Under-Secretary to consider how Lancashire has suffered in the past, and to see if something cannot be done. He represents the British Parliament and not the India Parliament or the Burma Parliament. I want him to represent the voice of British trade and see if something cannot be done to look after the interests of British trade. We have no desire to quarrel with India or with the Indian representatives. We ask for fair play to everyone concerned. We have shown them, both by example and by precept, what we are prepared to do for them and it behoves them to reciprocate and to show a kindly feeling towards the trade of this country.

I need go no further than to give the example of the figures showing how Lancashire has increased her consumption of Indian cotton. We have increased our imports during the last few years from £1,000,000 to over £4,000,000. Action such as that deserves some sort of reward. We want India and Burma to realise who are their best friends. We do not want an agreement concluded between them which may go on for ever. We seem to have no voice in the cessation of them. We want to ensure that representations can be made by the home Government to Burma and India for their cessation in due course and at the same time we want trade agreements between Burma and Britain and between India and Britain and not that all the trade agreements shall simply be between Burma and India. I ask the Under-Secretary to study our interests.

10.14 p.m.

Mr. Spens

In saying a word on behalf of other than Lancashire interests I hope Lancashire Members will not assume for a moment that one does not realise that Lancashire has suffered by reason of the protective tariff put up by India and Burma some years ago. The complaints of Lancashire to-night appear to be complaints against the result of the imposition of that tariff, and what Lancashire is crying out for is that now or later some steps should be taken to lower that tariff and to allow Lancashire goods once again to get into Burma. The point of view that I want the Committee to consider is that we are faced with the fact that behind that protective tariff, which has included Burma, there has grown up an immense trade between Burma and India in which this country is vitally interested. There are £40,000,000 or £50,000,000 of British money invested in Burma in oil, hardwood and so forth. Burma supplies the India market with between 60 and 70 per cent. of her exports in return for some 40 per cent. of exports from India to Burma.

Mr. Romer

Is the hon. and learned Member aware that the Burmese hardwoods come into this country with the advantage of 10 per cent. compared with hardwoods from Siam, and that that is of very great advantage to them?

Mr. Spens

I am dealing at the moment with the India-Burma trade which has grown up and exists at the present time. What happened when the separation came is what the House is really considering. Is it right that that huge inter-India-Burma trade, in which many people in this country are vitally interested, should or should not continue? [Interruption.] Certainly there is British capital in it, and British capital means wages for British workmen. The House has to consider whether or not there ought to be an interval as long as three years during which the trade arrangements should be allowed to continue before there should be a radical alteration.

Sir W. Smiles

Can India get teak wood from any place in the world except Burma?

Mr. Spens

I should say very likely not. If you import goods into one country you have to export goods from that country. I believe very firmly that, if Lancashire cotton goods are going again into Burma, this country will have to take something from Burma in exchange. If this country is to take vast masses of the present Burmese exports that go into India, then India will not get them, and the situation which Lancashire is envisaging is indeed a great change. Surely, there must be time in which arrangements should be made and negotiations carried out in order to carry out that change. Lancashire Members are right, and I am fully with them, in hoping that during this period, three years or whatever it be, Lancashire will be able to persuade Burma to take Lancashire goods, and they will have to persuade Burma to send to this country, and find importers in this country of, Burmese goods, which will come in exchange. That is the job which Lancashire will have to do. Do hon. Members of the House think that it can be done by threats that we will put up tariffs against Burma? It is a much more difficult job than that. You have to create the channel of trade once again, and I do not think that it is impossible. I believe that it can be done by negotiation and good will a great deal more than by any sort of threats to Burma or India such as we have heard from one or two quarters to-night.

Sir H. Croft

May I ask the hon. and learned Gentleman whether he considers, when he puts the capital point of view, the enormous amount of capital invested in the various textile industries which did this enormous trade with India and Burma?

Mr. Spens

I agree that capital is invested in this country. The point of view I am putting is that of British capital in Burma at the present time. We have this trade which is bound to be dislocated, in my view—I may be entirely wrong—if violent action which some Lancashire Members appear to advocate were, in fact, put into operation. I am appealing to the House that it is most reasonable, having regard to the fact that we have to accept the fact that this trade has grown up between Burma and India, that if you are going to alter it there must be a reasonable time to negotiate and make the requisite arrangements. All that this Order means is that the two Governments have come to the conclusion that for a period of three years no alteration should be made. Surely, that is a reasonable arrangement when you look at the facts. It is the result, I agree, of the high tariff against our goods put on in 1921 or 1924, I forget which year, but we have to face the facts of to-day, and the facts are that as there is this trade between Burma and India it would be ill advised to disturb it unduly and rashly, and that there ought to be a reasonable period of time in which to negotiate and rearrange trade in the interests of Lancashire. On these grounds I hope the Order will be passed by the House.

10.22 p.m.

Sir John Wardlaw-Milne

I do not propose to keep the House for more than a few minutes, but if hon. Members will allow me I should like first of all to join with those who have paid testimony to the work of the late Sir Reginald Craddock. I specially want to do so not only because I met him constantly in recent years and on the Select Committee, but also because I am probably the only Member of the House who knew him personally at the height of his powers as Home Member of the Government of India, and before he became Governor of Burma. It is a somewhat tragic coincidence that we should be discussing these matters on which he was such an expert so soon after his death. I have been extremely interested in the Debate as it has progressed, but I must say, if hon. Members will excuse the statement, that a great deal of it has had very little reference to the matter upon the Order Paper. Many of the speeches to which we have listened have been a plea, eloquently made, on behalf of Lancashire, a plea with which I have the greatest sympathy, for an alteration in the duties placed by India and Burma upon textile goods from this country. I agree with every word that has been said about the hardship from which Lancashire is suffering, and I hope as keenly as any other hon. Member that when we get to negotiations with India, which under this Order will for the time being include negotiations with Burma, we shall be able to get better terms than we have now for the export of Lancashire cotton goods. But that really has very little to do with the Order.

This Order deals with the position as it is to-day, continues the state of things which exists at the moment between India and Burma for a further period of three years as a minimum, and it is absolutely essential that the present tariff conditions as between the two should continue if you look at the position of the trade between the countries concerned. About 48 per cent. of Burmese exports go to India and 42 per cent. Of Burmese imports come from India. It is clear that if there is not some continuation of the present position until there has been ample time for the new Governments to get into their stride and make such new arrangements as they may decide upon, we may get complete chaos in the trade between these two countries.

Earl Winterton

May I interrupt my hon. Friend to remind the House that both at the Burma Round Table Conference and in the Joint Select Committee the expert evidence on that matter was completely against the arguments used the other way to-night?

Sir J. Wardlaw-Milne

I am glad my Noble Friend reminded the House of that fact. The expert evidence was all to the effect that absolute chaos would ensue if there was not a continuation of the present system until there was ample time for the whole thing to be reconsidered. There is another point. My hon. and right hon. Friends who have spoken so strongly in favour of Lancashire have, in effect, suggested that if this Order were not passed, Burma would have no duties against Lancashire. On what authority do they say that? On what authority do they tell the House that the position of Lancashire would be necessarily better if this Order were not passed? We do not know what Burma might do; we do not know what the position might be then. I would remind the Committee that, as is stated in the Joint Select Committee's Report, the Government of Burma have said clearly that they expected that when separation took place their financial position might be somewhat difficult for a time and that they might have to look for revenue in new directions. The House will forgive me for speaking plainly, but the fact is that practically the whole of the speeches to-night have had nothing whatever to do with the Order.

Sir John Haslam

May I point out to my hon. Friend that the Government of Burma cannot increase any tariff against India, but they can considerably increase the tariff against Lancashire?

Sir J. Wardlaw-Milne

It is not suggested that they are going to increase it —I am only asking what authority hon. Members have for saying that if this Order were not passed, the position of Lancashire in Burma would be necessarily better than it would be if the Order were passed. I agree that it is a necessity that there should be a new trading agreement between this country and India and Burma.

Sir H. Croft

May I remind my hon. Friend that I did not suggest that this Order should not go through? What I and other hon. Members have said is that we agreed that the Order must go through, but we urged that if we supported His Majesty's Government on this, we should have a specific undertaking that the whole question would be reconsidered.

Sir J. Wardlaw-Milne

I do not entirely agree with my hon. and gallant Friend. May I remind him that he said he was going into the Division Lobby to support the Government unwillingly, because he had given a pledge not to oppose these matters further? That was the only reason he gave for going into the Division Lobby in favour of this Order. Indeed, one of his hon. Friends said he was going to oppose the Amendment. That is not the point however. I have the greatest sympathy with the point of view of Lancashire, but the speeches that have been made have really been based on a misconception. What is wanted in connection with Lancashire is a new trade agreement, and I think that when we come to that we have a very strong case. The division which I represent for example has suffered very much from the continually increasing importation of Indian carpets, and the consequence is that I have no doubt we shall be able to put forward a strong case to induce India to help us as we help them. Nevertheless, I suggest that if this Order were not passed, the position of Lancashire would not necessarily be any better, and in fact it might be very much worse. The Order is essential in the present position for carrying on the trade between these two countries, which are so closely allied and interwoven in their daily operations that, if the Order were not passed, there might be complete chaos resulting from the separation of Burma. Therefore, I hope the Order will secure the full assent of the House to-night.

10.30 p.m.

Sir Cyril Entwistle

The hon. Member for Kidderminster (Sir J. Wardlaw-Milne) said that speeches on behalf of Lancashire had not been germane to this Order. I hope he will not think that I am guilty of a want of relevance to the Order, because I would like to deal specifically with paragraph 7 of Part 1 of the Order, which is concerned with its duration. We have had it said that the duration of this Order, which perpetuates the status quo between this country and Burma, is for a minimum of three years, and quite clearly that is only a minimum, because it says, "whichever is the longer period," so that if three years is the longer period, it will be three years, but if no notice is given by either the Government of Burma or the Government of India, there is apparently no limit to how long the agreement can continue.

Sir J. Wardlaw-Milne

I think the hon. Member cannot have been in the House when I myself drew attention to that fact.

Sir C. Entwistle

I was not quarrelling with the hon. Member for that, but I was emphasising that until one side or the other gives notice, this agreement can continue for an indefinite period, and what we are concerned with, as representing the interests of Lancashire, is to know where our own Government stand in this matter. I submit that the Under-Secretary of State has not quite satisfied us on that point, because we want to know where the initiative of this Government will be when we are getting near the expiration of this period. If the agreement is only to last three years, either one Government or the other will have to give 12 months' notice two years from the date when the Order comes into operation, so that when the first two years of the three-year period have expired, unless notice is given this must continue for three more years. What we want to know is whether the Government of this country will take the initiative when we are approaching the end of two years and enter into discussions with the Burmese Government carefully to consider what trade has transpired between the two countries in the interim period of two years, and to examine it in the light of the mutual interests of Burma and Great Britain, not of Burma and India.

As long as Burma is to have the advantage either way and to get all the advantages of a preference and so on, and does not want to offend India because of its important trade, Burma will not be concerned in giving any improvement in the trade relations between Burma and this country. What we want is that our own Government, which represents our interests, shall stipulate that Burma shall be fully cognisant of all the advantages of making a fresh arrangement, if need be, at the earliest moment, and that is at the end of the three years. We in Lancashire have not liked this status quo being preserved for three years. The hon. Member for Kidderminster said it would be in the interests of this country, but we in Lancashire do not think so. We think the present relations between this country and India are not equitable so far as Lancashire is concerned, and we think India is not acting in her own best interests.

Sir J. Wardlaw-Milne

It seems to me that the hon. Member's whole argument is based on the idea that these duties must continue for a minimum period of three years, which is not the case at all. The whole of the duties might be removed by both countries if an agreement could be arrived at between them.

Sir C. Entwistle

But these Burmese duties on United Kingdom goods will remain as long as the Indian duties on United Kingdom goods remain. They are tied together for this period of three years. We disliked this period of three years very much, but as we were faced with a period of years, we preferred three years to five years, and it is on that basis that Lancashire has had to acquiesce in this arrangement. What we are now faced with is a possible indefinite continuance after the expiration of the three years. We want to know if the Government, at the earliest possible date when a review is possible, two years after this Order comes into operation and the 12 months' notice can be given will of its own initiative say that this arrangement is not intended to last more than three years. We want to know that the Government of its own initiative will open up discussions with Burma with a view to examining the course of the trade relations between our two countries in the two years, and if it is seen that it is to the advantage of Great Britain, that it should depart from the policy that India pursues, that Burma should be encouraged to do so, and if necessary we should be encouraged to give our assistance in that matter. We are not satisfied that we have had a full assurance from the Government. We want to be sure that the Burmese Government will in two years be able if it is thought fit to have an alteration in the existing trade agreements.

10.37 p.m.

Mr. Butler

In beginning my reply to the Debate I want to say again, as I have previously said, how much we sympathise with the difficulties with which Lancashire has had to contend. We have heard statements about the amount of British capital that has been involved there and the vast trade in natural products between Burma and India. It is said that there are British interests concerned on both sides of the question. Another feature of the Debate has been the speech of my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). I think that following upon our many discussions on the Government of India Bill, my hon. and gallant Friend and his friends will not pursue to a division the question he has raised. I fully appreciate the attitude that he and his friends have adopted since those days of controversy some time ago. We feel quite at home here to-night hearing the points of view on all sides of the House.

I want to deal with some of the points raised. This Order is for an interim period. That is stated in the Preamble to the Order and the judgment of the Joint Select Committee and the view of the Government, and I think of the House during the passage of the India Bill, has been not to dislocate the trade in countries which may be affected in this matter. There is no advantage for India or Burma or this country in any such dislocation, and in this matter we do not wish to ignore the advice of the Joint Select Committee. This Order is for an interim period, as I have said. It has been suggested that in some respect it may make matters worse for the British exporter. On the contrary it does not make them worse but in some respects better. In regard to Japanese piece-goods allowed to be marketed there, hon. Members will see from page 7 that they will be limited to 42,000,000 yards. It is almost unnecessary for me to say that Japanese piece-goods compete with Lancashire goods, and this figure is under half of the total which entered Burma in 1932–33. To that extent the position of the exporter is 50 per cent. better, and if hon. Members will turn to the figures they will see that the figures of Japanese imports are only two-thirds of the 62,000,000 yards which Japan imported in 1935–36.[Interruption.] I have tried to point out that there are advantages in this Order.

I believe that part of the anxieties of hon. Members who represent Lancashire has arisen from what paragraph 7 means, and as to whether this Order is for an interim period of a minimum of three years. The fact is, as the hon. Member for Bolton (Sir C. Entwistle) said, that the Order is for a minimum period of three years. He and his friends wish to know that this Order is not going on, as the other hon. Member who sits for Bolton (Sir J. Haslam) said, in perpetuity, and it is my business to try to give him and the hon. Member for Rusholme (Mr. Radford), who thought it might go on for 30 years, some sort of understanding that their fears on this subject have not a very great basis of fact. Not only do we believe that this interim Order will not go on, on exactly the same basis, in perpetuity, but we believe that almost immediately steps will be taken to negotiate a new agreement with Lancashire.

As I said in my opening remarks, it will be possible for the representatives of Lancashire to put their point of view, and the Government, through my right hon. Friend the President of the Board of Trade, will naturally take into consideration during those negotiations the point of view of the British exporter, as I believe my right hon. Friend has done in the past, and, I am sure, will do in the future. I go even further, and I think this will show hon. Members that we wish British interests to be considered and have every opportunity: were any agreement during the course of this year to result in such considerable alterations in the tariff schedule as to make the Order unworkable in its present form, His Majesty's Government would be prepared to introduce an amended Order, taking such alterations into consideration. I think that will show that we believe that there are possibilities of agreement under this Order itself. It is not our intention that the amending Order should depart from the general principle of the interdependence of Burma and India trade, but we have always admitted the possibility that Burma might find it convenient in some categories to reduce her tariff level, and we have also wondered whether every item in this Order, which, I repeat, is for an interim period, would ultimately inure to the benefit of India.

That leads me to a consideration of the longer outlook. I have said that we have always envisaged the possibility that perhaps the interests of India were not entirely secured for ever by this Order. It is just possible that India may find that it is in her interest to give notice to terminate the Order, or that Burma may find that it is in her interests to give notice to terminate the Order, and I therefore think it is likely to be an interim Order. The hon. Member for Bolton asked whether the Government would be ready to put forward the point of view of the British exporter at any time, and I can say with safety that it will be the interest of the Board of Trade, if they are approached by British exporting interests, to put their point of view to the Governments concerned, and see that not only in the immediate future of this year, but, if necessary, in the later period, the points of view with which hon. Members are so closely associated are fully considered. I hope that that assurance will do something to show that we in the Government stand for British interests just as much as hon. Members on all sides of the House.

The hon. and gallant Member for Wycombe (Sir A. Knox) asked, as is his wont, a very pertinent question, which I do not want to shirk. He asked, How are the economic interests of Burma safeguarded by this Order? Because, to put it bluntly, Burma has no indigenous cotton industry to protect, why, therefore, should she have to adhere to the India tariff? I think that sums up the argument of the hon. and gallant Gentleman quite fairly. Burma has had to consider this point herself, and this is one of those difficult points to appreciate in the Order. She has come to the conclusion that she would rather adhere to the interdependence of her trade with India and not quarrel with India on this point, and that she will share in the tariff schedules in this manner rather than let them go, and risk the displeasure of India and the consequent effect on her more important natural products, on which she depends so much. That is the issue. The hon. and gallant Gentleman may not agree with it, but that is the position which Burma has taken up.

I would utter one word of warning to hon. Members who represent Lancashire. I agree that we all want to see the trade between Lancashire and Burma improved, but it is approximately one-tenth of the trade between Lancashire and India, and, therefore, for the sake of the smaller quantity of the Burma market, it is very much in the interest of Lancashire that trade in the Indian market should not be lost by disturbing Indian sentiment in this matter.

I want to take up a point which was mentioned by hon. Members about British export trade. The Government is very apprehensive of this aspect of the export trade. The hon. Member for Westhoughton (Mr. Rhys Davies) was correct in saying that economic considerations have caused that trade to decline. There is the export of machinery and the growth of Indian industry itself, which has increased in the last few years in a most phenomenal manner, by one quarter of its production. Indian consumption has also increased. Together, they have resulted in the reduction, but we believe that considerations may arise which will in due course improve the position, or, at any rate, we hope so. We feel that while every opportunity ought to be given to British interests to negotiate in the near and distant future, nothing should be done at this stage to disturb the trade between India and Burma. We believe that if we did so the dislocation would do more harm than good to both sides, to ourselves, and to the world.

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address he presented to His Majesty, in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Immigration) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, praying that the Government of India (Adaptation of Acts of Parliament) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned. "—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, praying that the Government of India (Adaptation of Indian Laws) Order, 1937, be made in the form of the draft laid before Parliament, subject, however, to the following amendments:— In the First Schedule, page 70, line 30, leave out the first 'of,' and insert 'or.' In the First Schedule, page 75, line 11 (marginal note), after 'application' insert 'of' In the Eleventh Schedule, page 250, line 21. leave out '1833,' and insert' 1883."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, and Section 157 of the Government of Burma Act, 1935, praying that the India and Burma (Transitory Provisions) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Miscellaneous Financial Provisions) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, praying that the Government of India (High Court Judges) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned. "—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (High Court Judges) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned. "—[ Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, and Section 157 of the Government of Burma Act, 1935, praying that the India and Burma (Burma Monetary Arrangements) Order, 1937, be made in the form of the draft laid before Parliament,"—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Counsellors) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned. "—[ Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, and Section 157 of the Government of Burma Act, 1935, praying that the India, Burma, and Aden (Transitory Provisions) (Taxation) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.

Motion made, and Question proposed, That an humble Address be presented to His Majesty in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Adaptation of Laws) Order, 1937, be made in the form of the draft laid before Parliament."—[Mr. Butler.]

Ordered, "That the Debate be now adjourned."—[Captain Margesson.]

Debate to be resumed upon Monday, 1st March.