HC Deb 28 June 1938 vol 337 cc1843-65

Sub-section (2) of Section one of the Finance Act, 1934 (relating to the alteration of Customs duties on Colonial sugar, molasses, etc.), shall hve effect as though the words "but the quantity of sugar in respect of which such certificates are issued shall not in the financial year ending on the thirty-first day of March, nineteen hundred and thirty-five, exceed three hundred and seventy-five thousand tons, and shall not in any subsequent financial year exceed three hundred and sixty thousand tons" were deleted there-from.—[Captain A. Evans.]

Brought up, and read the First time.

10.11 p.m.

Captain Arthur Evans

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

The Clause relates to the extension of Imperial Preference to sugar credits in the British Colonial Empire, with particular reference to the West Indies. The effect of the Clause, if my right hon. Friend the Chancellor of the Exchequer finds himself able to accept it, will be purely permissive. It would enable the Treasury to extend the special preference certificate to any amount of Colonial sugar imported into this country up to a total tonnage of 997,000, which is the total permissible export from the West Indian Colonies to this country under the terms of the International Sugar Agreement. As the Committee is well aware, at the present time, under the restrictions contained in the Finance Act of 1935 the Treasury is allowed to issue special preference certificates up to 360,000 tons of sugar per annum. I understand that the Government have already laid it down that the number of these certificates will be decreased when the world price of sugar has reached per ton. We know that the price is L£5 a ton.

If the new Clause is accepted the Chancellor of the Exchequer would then be enabled to allow the Treasury to vary the amount of the special preference certificates which are isued from time to time in accordance with the world price of sugar obtaining at the moment. Therefore, it must be clear to my right hon. and gallant Friend the Financial Secretary that the acceptance of this Clause does not commit the Treasury to one penny of fresh expenditure, unless they so desire and the conditions so necessitate. It will, however, free the hands of the Chancellor of the Exchequer to take the obvious and, in my modest judgment, the only possible action if the International Sugar Council at their meeting next month fail to persuade certain foreign countries who are parties to the International Sugar Agreement to reduce the quotas which they are at present enjoying, with a view to stimulating the price obtaining for sugar in the world to-day.

Some weeks ago, in another place, the Under-Secretary of State for the Colonies used these words: We signed the Agreement in June, 1937, and we are certainly not going to go back on our word now. We shall stick to our signature, but it is quite clear that if prices continue to be so unsatisfactory as at present, so that the Colonial sugar producer is quite unable to make a livelihood or to pay a proper rate of wage, something must be done. It is clear that if this unfortunate state of affairs continues and the International Sugar Council fails to stimulate the price of world sugar and fails to find a solution to the economic problem, this Clause would enable something to be done and done immediately by His Majesty's Government. I do not desire at this late hour to weary the Committee by repeating the arguments I adduced on the Committee stage of the Colonial Office Vote. The Committee is well aware by this time, from the Debates which have already taken place and from the prominence which this important matter has received in the Press of the country, of the lamentable conditions which obtain in the West Indies at the present time, particularly vis-a-vis the economic outlook. However, in order to make my argument clear I must quote a few figures to show the assistance which sugar producers are getting in various parts of the Empire. The price received to-day by the British West Indies and other Colonial producers of sugar is gi£8 lo10s. per ton. Cuban producers, as a result of the preference granted by the United States of America, receive an average of L£9 per ton. British beet sugar is guaranteed by this House a minimum price of £15, the Australian producer receives in Australia £22 per ton, and the South African producer a little over that figure. These are conditions which make it practically impossible for the producer of sugar in the Colonies to obtain a higher price for his product and so improve conditions which have shocked the conscience of the whole Empire.

I do not desire to-night to anticipate or to attempt to prejudge any of the issues which will rightly come under the review of the Royal Commission which is shortly to be appointed by His Majesty's Government, but I feel that one thing is quite clear, that whatever their findings and recommendations may be they cannot deal with the economic depression which is at present crippling these Islands, and in the long run the Colonies and indeed this country must look to the economic aspect of the case which is largely governed by the world price of commodities. I need only quote the Colonial Secretary to support me in that view. Speaking in this House on r4th June, when he introduced the Colonial Office Vote, he used these words: These Colonies… depend almost entirely on their exports of a comparatively small number of commodities like sugar, cocoa, bananas, and a few other things. They depend almost entirely for their wellbeing on what price they can get for those commodities in the markets of the world. If the price is good, so much the better; if the price is had, it is something like a disaster for those West Indian Colonies. If the price is bad, it quickly becomes beyond the power of those Colonies, out of their own resources, either by public or private enterprise, to give the peoples of the Colonies secure employment, good wages and good conditions."—[OFFICIAL REPORT, i14th June, 1938; col. 88, Vol. 337.] No one who has studied this problem from the economic point of view, or from the point of view of improving the social conditions in these islands, can possibly quarrel with the view of the Colonial Secretary. Unfortunately, the conditions to which my right hon. Friend referred cannot be altered in any way by any recommendation of any Royal Commission. These fundamental economic conditions must of necessity be a matter for the whole Government and the financial policy of the Chancellor of the Exchequer. It is clear, I think, that it is impossible to improve the wages in the West Indian Colonies, particularly in the sugar industry, unless some practical assistance is given to the industry as a whole. I say that because I noted with interest only the other day that those countries which are interested in what is known as the free sugar markets of the world, Java, Peru and San Domingo, pay a wage of only between 4d. and 6d. per day, precisely on account of the low sugar prices which prevail. I do not wish to argue to-night whether the wages paid by the sugar industry in the West Indies are adequate or inadequate, for that is obviously a question for the Royal Commission; but I think it is interesting to observe—if we are anxious to examine the economic basis of this industry to see whether it is possible to make it a paying proposition and so set the islands on their feet—that before the recent riots few, if any, of the decent-sized sugar estates in the British West Indies paid less than an average of 3s. per day.

I am not suggesting that that is an adequate or an inadequate wage, but I invite the Committee to consider that those producers, paying that rate of wages, are having to compete in the free sugar markets of the world with Java, Peru, and San Domingo, which are paying wages of 4d. and 6d. a day. We know, of course, that through causes which are admittedly outside the control of His Majesty's Government, the price of sugar has fallen by 25 per cent., and as was stated in the House by practically all the speakers in the Debate on the Colonial Office Vote, it is clear that the population of these islands, at a time when labour conditions were difficult and when employment was decreasing, was increasing at an alarming rate. I find, in studying the statistics that over the last ro years the population has increased in Jamaica alone by no less than 21 per cent. It may be argued that sugar is only a factor in this situation, and that it is not the whole problem which has to be faced; but we all know that the other commodities in which the islands are interested have also fallen in value, except bananas, which unfortunately are suffer- ing from a very serious disease. I need only quote the view of the President of the United Fruit Company, who I think is admitted to be the greatest authority on the banana industry. He said: The valuable Jamaica banana crop, which is the mainstay of that island at the present time, is likely to suffer severely from disease during the course of the next two years. Therefore, I think it is clear that we cannot look to the banana industry for any practical help in this matter, and that brings us back to the situation with regard to sugar. A well-known authority on the economic situation in the West Indies, Mr. De Lisser, who, as the Committee is probably aware, is the general secretary of the Jamaica Imperial Association, used these words the other day: Even as matters stand to-day, unless a better price is obtained for sugar, it will not be possible for the factories and estates to continue to pay the wages they have agreed to pay, with the consequence that the present troubles will be but the prelude to a still more serious situation. My right hon. and gallant Friend when he replies may say, "But the balance-sheets of the West Indian sugar-producing companies do not bear out this talk of distress." I think it fair that one should anticipate an observation of that kind and draw the attention of the Committee to the fact that the balance-sheets which my right hon. and gallant Friend possibly has in mind relate to the prices which obtained last year and which were considerably higher than the present prices. The average over the 12 months to 1st October, 1937, was 6s. per cwt.; to i1st April, 1938, it was 6s. 7½213d.; to 1st June, 1938, it was 5s. 7d. and to i1st May of this year it was 5s. 3d. Being anxious to give as fair a picture as I could of the situation I was at some pains to study the sugar market reports issued at the end of last week's business, because I observed that, in spite of the optimistic views expressed by my right hon. Friend the Secretary of State for the Colonies as to the possible outcome of the meeting of the International Sugar Council on 5th July, the prices of colonial sugar have continued to decline. I quote this extract from the report of a leading firm of brokers in the sugar market: The tone weakened perceptibly at the end of this week and final quotations show a decline of 2½d. per cwt. from the recent highest. Lack of trade support and a less optimistic feeling concerning the coming meetings of the International Sugar Committee were the chief factors in causing the downward movement. Professional opinion has never regarded the International Agreement with favour and its inability to grapple with the situation effectively has been evident from the outset. The plain truth is that there is too much sugar available under present conditions and unless the signatories recognise this fact and agree voluntarily to the necessary reduction in quotas, the Agreement will continue to be a failure. However, the British Government can and doubtless will use all its influence to create an improved state of affairs and the market awaits the issue with considerable interest. It is rather discouraging to find that on the eve of the meeting of the International Sugar Council, in which His Majesty's Government place great hope, the price of sugar continues to decline. When we bear in mind that freights, cost of material and in a particular minor instance wages have increased, I think we must realise that if we are anxious, as we are honestly anxious, to see an adequate rate of wages paid in the West Indies, and proper conditions of labour obtaining there, then we must take some practical action to assist those producers in disposing of their produce. Whatever the recommendations of the Royal Commission might be, we all want to see the better conditions for labour to which I have referredproper housing, extended education and adequate health services. I submit, in view of the economic arguments I have ventured to present, that it is only by assisting the sugar industry in a practical way that these results can be obtained. It is clear that a cash export crop is necessary for the economic prosperity of the islands and the only crop that fills the bill and for the production of which on a large scale the West Indians are eminently suitable, is sugar. Therefore, in conclusion, I beg my right hon. and gallant Friend to free himself from the present restriction and so arm himself with an instrument which can be used successfully, irrespective of the effectiveness or otherwise of any decisions which might be reached by an international body, thus facilitating the task of the Royal Commission shortly to be appointed and send to the West Indies a message of hope and a practical assurance that something will be done in the near future.

10.32 p.m.

Captain Wallace

It will be perhaps for the convenience of the Committee at this late hour if I intervene at once in order to indicate the views of my right hon. Friend the Chancellor on this important new Clause. Sub-section (1) of Section 1 of the Finance Act, 1934, provides that the general preferential rebate of duty for Colonial sugar shall be the same as for other Empire, that is Dominion, sugar, and also that there shall be a special additional rebate for Colonial sugar which is "accompanied by a quota certificate." This rebate is of 3s. a cwt. at a polarisation of 95 to 96 degrees and of corresponding amounts at other degrees. Sub-section (2) defines the quota certificate as a certificate issued by the Secretary of State for the Colonies certifying that the sugar forms part of the quantity of sugar which may be imported from the Colonies at the rates specified; it also imposes the limitation that for the financial year 1934–35 the quantity of sugar in respect of which these certificates were issued should not exceed 375,000 tons, and that in every subsequent financial year it should not exceed 360,000 tons.

If the new Clause were accepted it would repeal the limiting proviso of 360,000 tons and would empower the Colonial Secretary to determine, by the issue of quota certificates, what quantity of imported Colonial sugar should in any year be allowed the additional rebate. It would be competent for him, if the Clause were carried, to certify for this purpose at his discretion any part or the whole of the imports of Colonial sugar. In an answer a few days ago to my hon. and gallant Friend the Member for Accrington (Major Procter) who asked what the cost of such a proposal would be, I replied that if it were pressed to its logical conclusion the additional cost to the Exchequer would be up to £3,000,000 a year. But I do not want at this moment to stress particularly the point about loss of revenue, because I wish to deal with this Clause on somewhat different lines. My hon. and gallant Friend who moved the Clause wrote to the Colonial Secretary on 2nd June and stated that in his view a proposal of this kind (carrying with it, by implication, the corollary that the number of certificates would be largely increased) was one of the few practical methods of giving assistance to the sugar industry in the West Indies, and he suggested that such action should be taken without waiting for the despatch, much less the report, of the Royal Commission which it is proposed to send to the West Indies.

My hon. and gallant Friend also argued during the Debate on the Colonial Office Vote on r14th June that the fact that there had been set up an International Sugar Council for the purpose of regulating exports of sugar, and thereby assuring to the producers a price which would enable them to give decent conditions, did not relieve the Government of the responsibility for improving the economic conditions of the West Indies. I must point out that the hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) said that he did not think that the sugar preference alone would save the economic position, a view with which, I think, my hon. and gallant Friend agrees. The object of this International Sugar Agreement, to which my hon. and gallant Friend has referred, which was signed on the 6th May, 1937, and came into operation provisionally on 1st September last year—the Committee will remember that we have already passed a Clause in this Bill dealign with the stabilisation of the Imperial sugar preference—was to bring about a better relation between the supply of and demand for sugar by regulating the export of sugar throughout the world. In this Agreement the British Empire was treated as a single unit and, therefore, as a sugar-importing and not a sugar-exporting country. In the Debate on 14th June the Colonial Secretary expressed very frankly the view that the Colonial sugar preference, despite its very generous value to the producers of L£4 15s. per ton, had failed to rehabilitate the sugar industry in the West Indies and other Colonies owing to the large excess of supplies over demand in the world market. He also admitted the failure for the time being of the International Sugar Agreement to provide a remedy owing to unforeseen disturbing factors in the world, of which, perhaps, the principal is the Sino-Japanese conflict. As regards a solution of this sugar trouble, he said: I believe that we have to look for it through the machinery of the International Sugar Council, and that we have to try to persuade the Council to alter the quotas for production so that they are reduced in conformity with the reduced demand for sugar in these times."—[OFFICIAL REPORT, 14th June, 1938; col. 90, Vol. 337.1] The Colonial Secretary went on to say that the Council were meeting again in the early days of next month, and that he hoped they might be persuaded by further voluntary reductions in the supplies coming from foreign countries into the free market, to get equilibrium once more established. At any rate, in the view of the Colonial Secretary, which I think will command considerable respect in this House, the International Sugar Council is the right and proper machinery for dealing at this moment with the situation.

There is actually a further objection to the proposed new Clause of my hon. and gallant Friend, but unless the Committee particularly wants me to do so I shall not elaborate it at this time of night. It is that Canada also gives a preference upon Empire sugar. In 1932 that preference was greater than the general British Colonial preference, but owing to the fall in the exchange value of the Canadian dollar, our preference here became more valuable than the Canadian preference, with the result that West Indian sugar was diverted from Canada to this country. The present arrangement was designed to make the British preferential rebate on Colonial sugar of less value than the Canadian, except for the fixed quantity of 360,000 tons, which has already been mentioned, and which is sugar which would have come into this country in any case. It would be a mistake to disturb that kind of inter-Imperial equilibrium.

I fully appreciate the general considerations advanced by my hon. and gallant Friend, but I am certain that what is at the back of his mind is largely, if not wholly, the necessity for assisting the West Indies. I must point out to the Committee that an increase in the sugar preference for the Colonial Empire at large, such -as would be made possible if this Clause were accepted, appears to be a somewhat extravagant method of applying a remedy. If the Clause were passed and the Secretary of State for the Colonies certified all the sugar that he could certify, a very substantial proportion of it would be other than West Indian sugar, and the assistance would accrue to other Colonies, in particular to Fiji and Mauritius.

I have tried to put these points as succinctly as I can. I would say, in conclusion, that the reason why I suggest that my hon. and gallant Friend should withdraw this proposed Clause can be summed up by recalling the views of the Colonial Secretary, who is the best person to judge on these matters, that it will be wisest to deal with this matter at present through the International Sugar Council.

Sir P. Hannon

Will the terms of reference of the Royal Commission which it is contemplated to set up in relation to the West Indies, enable the commission to study the sugar situation?

Captain Wallace

My hon. Friend has rather got me out of my depth, but I do not imagine that a Royal Commission going upon a mission of this kind would not include this question among those which it considers.

10.44 p.m.

Captain P. Macdonald

I support the arguments advanced by my hon. and gallant Friend the Member for South Cardiff (Captain A. Evans), in moving this Clause, and I must say that the answer of the Financial Secretary to the Treasury was very disappointing after the very able arguments put forward by my hon. and gallant Friend. As was pointed out at the outset, the proposed new Clause is only permissive. It empowers the Chancellor of the Exchequer or the Colonial Secretary, or whoever is their representative, to increase the preferential duty to £2 per ton beyond the 360,000 tons to which it is now limited. The argument of the Financial Secretary was that if the total exports of West Indian sugar were included the Exchequer would be involved in an expenditure of £3,000,000. That is a very feeble argument. We do not ask that the total exports of West Indian sugar to this country should be included, but we strongly urge that powers should be given to the Colonial Secretary to extend the preference beyond the 360,00o tons to which it is now limited, in order that he might have a valuable bargaining weapon when he entered into this International Sugar Convention. I do not share his optimism as regards the outcome of this convention. I could give many reasons why I think it is doomed to failure. The chief arguments have already been put forward by the Mover of the Clause when he said that the other countries taking part in the convention are already receiving such enormous subsidies and preferential duties from their own countries that it is not in their interest to meet us in this connection.

I am not going over the same ground again, but will only refer to one or two cases. Cuba has been mentioned. It does not matter very much if Cuba, which sells 2,000,000 tons of its present production of 3,000,000 tons to the United States under a bigger preference than our own producers enjoy to-day. Java and San Domingo have been mentioned, and wage conditions have been compared. If all these factors are taken into consideration, I do not see any hope of success for any international sugar convention unless the representative of the sugar islands in our Colonial Empire is in a position to have some bargaining weapon such as this Clause would give. He would he in a much stronger position if he were able to say, "The House of Commons has included a Clause in the Finance Bill which compels us to increase the preference of £3 per ton which our Colonial sugar enjoys to-day provided you do not meet us in stabilising world prices for sugar." That is the basis of the whole argument; it is purely economic.

Last week we had a Debate on Colonial affairs, and a very sad picture was painted by Members in all quarters of the House of the conditions in the West Indian Islands to-day. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) nearly brought tears to the eyes of Members of the House whc.en he pointed out the social conditions prevailing in Jamaica at the present time. He said he had just returned from a visit there, and would not keep a dog under similar conditions to those in Jamaica at the present time. I can endorse everything he said in that regard, because the conditions are appalling. No one denies that that is the fact. The Colonial Secretary said he was so impressed by the arguments that he was setting up a Royal Commission to go and investigate and report on the conditions. He also said, and it is a fact, that these sorry conditions have come about largely through economic factors. I did not maintain on that occasion, and I do not maintain nog;w, that sugar is the dominating factor in these arguments, but it is a very important one.

Sugar is the one crop that we know the West Indies can produce, and, if the West Indies are given an opportunity, such as this Clause would give them, of increasing their production of sugar and increasing their markets for sugar, we know that at any rate that is one sphere in which we can assist these sugar islands, for which we are responsible, in their present very sorry economic plight. In spite of what the right hon. and gallant Gentleman says about the attitude of the Chancellor and the Colonial Secretary, I urge him to reconsider the matter and to accept the Clause. It is purely permissive and it need not necessarily be made use of, but it is a very useful bargaining weapon and one with which he should arm himself when the colonial representatives meet the International Sugar Convention.

10.51 p.m.

Vice-Admiral Taylor

I fully realise that the Colonial Secretary appreciates the serious position of the sugar industry in the West Indian Islands, and acknowledges the justice and the urgency of the Clause that some material assistance must be given to the sugar-producing Colonies. My right hon. Friend places his hopes for a solution of the problem on the finding of the International Sugar Committee. Not so very long ago the Colonial Secretary admitted that the International Sugar Agreement had already failed to find a solution, and I should like to ask my right hon. Friend on what he bases his hope that the Committee will now be able to find a solution, which they failed to do in the past. We have not been informed what new factors have come into being which will enable them to solve the problem. If he contemplates that the Committee will suggest a reduction of the quota all round in order to raise the price of sugar, that would reduce production, increase unemployment and aggravate the serious position in the West Indies. It would still further lower the standard of living of the inhabitants, and that is the last thing that we desire to happen, especially in view of the recent most regrettable outbreaks, due in the main to economic conditions, the low standard of living, bad housing conditions and lack of employment. Whatever the reasons are the Royal Commission will inquire into the whole matter and will, no doubt, propose measures to remedy the situation. But it must not be forgotten that we in this country are directly responsible for the welfare of the inhabitants of our Colonial Empire. To no other nation can they, or should they, turn for assistance. We should not shirk that responsibility.

The Chairman

The hon. and gallant Member should keep to the subject of the Clause, and not discuss matters which are remote from it.

Vice-Admiral Taylor

I have said we must not shirk our responsibilities to our Colonial Empire and the sugar industry on which they depend.

The Chairman

The hon. and gallant Member need not repeat it. I have already said that that is remote from this Clause.

Vice-Admiral Taylor

The history of the sugar industry in the West Indies is deplorable. There is no certainty for the sugar producers. They are entirely dependent on the world price for the prosperity of that industry. They have no alternative industry to which they can turn. Their lack of prosperity has not been their fault, but ours. If I am in order, I would like to draw a comparison between the small island of Porto Rico, under the Government of the United States of America, which is also a sugar-producing island, and our West Indian Islands. This very small island, only three-quarters of the size of Jamaica, is now supporting a population half as great again as Jamaica, and in 1936 it exported almost entirely to the United States as much as the export of the whole of the West Indian Islands taken together. That is not a very satisfactory parallel, so far as we are concerned. If one island can be rendered as prosperous as that, other islands in the same area, with the same climatic conditions and soil, could also be made as prosperous and their people could be living in the same prosperous and contented conditions.

The Colonial Empire, so far as sugar production is concerned, is in a very disadvantageous position. In Australia and Natal, which are both sugar-producing countries, no sugar is allowed to be imported. They have a sheltered home market. The world price is not a matter of vital importance to them, although naturally it affects them. They already have a high price in their home market. They also, I am glad to say, get a preference in this country. So far as the beet sugar industry, which has already been referred to, is concerned, they have already a guaranteed minimum price. But when we come to the export of Colonial sugar, we find that they only obtain, together with their preference and with the preferential certificates, a sum of £4 15s. a ton for their sugar. That preference is not sufficient in view of the low price of sugar in the world market to-day. To them the world price is the deciding factor. They are never certain as to what their position will be. They are entirely dependent upon the world price; there is no reasonable certainty for their sugar industry. If we desire that this position shall no longer obtain in the West Indies, it is necessary for us to take some definite action, either in giving a greater preference or in giving this permission for the extension of preferential certificates. There is no other way in which we can give the Colonial producers a more stable industry, more employment for their people, and more contentment, which we all so ardently desire. It is a responsibility that falls upon us, and the question of the price that we shall have to pay for it should not be the main consideration.

11.1 p.m.

Brigadier-General Sir Henry Croft

I regret that, no doubt for very good reasons, the Colonial Secretary is not here in order to give us his advice, because we understood from him that the Royal Commission certainly was not primarily going to Jamaica to deal with the sugar question. The present position in Jamaica is entirely economic, and the situation undoubtedly depends upon three products, with regard to only one of which can we assist at present. What does my hon. Friend propose? He is asking the Government to consider whether it is not wise to take permissive powers in order that if the Sugar Convention does not meet the situation, he will be able to take subsequent action. To wait for a Royal Commission which may take two years to report, when everybody knows the situation in that island, seems to very many of us to be wholly unreasonable. If the Chancellor were to give us an assurance that this matter would receive reconsideration, it would give a great deal of happiness to a large number of people here, and at least would convey to those people in the West Indies, who have a vast surplus stock, the hope that this House will really tackle this question. I think it would be a new hope.

If the right hon. Gentleman can give no such hope, I confess I hope my hon. Friend will go to a Division. Otherwise we must realise that, unless we are able to sustain the three staple industries in the West Indies by some means or other, this House will have a great sum to pay in the days to come. Therefore, from every point of view, and particularly- from the point of view of restoring the economics of that country, the only possible way is to give help to these people. I hope my right hon. Friend will not turn down this proposal in the somewhat abrupt manner which we have heard this evening, but that he will endeavour to meet the suggestion made, which does not commit the Chancellor or the Committee, but merely gives him power to act should to find that the Sugar Convention, when it meets, does not meet the situation. Many of us think the Sugar Convention's original arrangement gave a very poor deal for the British Empire as a whole, and it is surely time, as we have our responsibilities in the Colonial Empire, that we should see that they receive a fair deal. I hope my right hon. Friend will be able to give us some encouragement.

11.5 p.m.

Captain Wallace

Perhaps I did not make myself sufficiently clear. I should like to repeat again the words of the Colonial Secretary on the Colonial Office Vote on the 14th June. He was referring to the International Sugar Council and said that they were meeting again in the early days of next month, that that was the right and proper machinery for dealign with the present sugar difficulties, and that at least we have to exhaust the possibilities there before we begin to explore any other possible solution of the trouble. That seems to me to be the answer to this Clause. My right hon. Friend has said he feels that we should exhaust the possibilities of action by the International Sugar Council before we look round for some other solution. It appears to me that, if the Sugar Council fail, then will be the time to consider some other solution. If I gave my hon. and gallant Friend or the Committee the impression that I was turning down this Clause in an abrupt manner, I offer them my sincere apologies.

Sir H. Croft

I apologise for using the word "abrupt." What I meant to say was that the effect of the reply to my right hon. and gallant Friend was an attempt to turn down the question. Is it not the fact that, supposing the Sugar Council does not fulfil these hopes, already so sadly disappointed previously, is not my right hon. and gallant Friend aware of the fact that a whole year will go by before we can take any action at all, and that is why I ask whether he cannot give the matter further consideration.

11.7 p.m.

Mr. C. S. Taylor

I rise to support the Clause because I look upon it as an insurance policy. If the Sugar Council fails, as my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) has said, we shall have to wait for another year. This Clause is a very moderate Clause. It does not ask for the total exclusion of foreign sugar, or of Cuban dumped sugar, which I should like to see. There is no doubt that, if this Clause were passed, in time to come we might see a rise in the price of sugar in this country. Then we should see the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) come down and reduce the House to tears, saying that the price of sugar to housewives in this country had gone up. Having been to the West Indies very recently I realise that you cannot have your cake and eat it. [Interruption.] Perhaps I should say you cannot have your sugar arid eat it. If we want to see better conditions in the West Indies a sacrifice will have to be made somewhere. If Cuban dumped sugar were kept out of this country altogether, it is estimated that the housewife in this country would have to pay something as small as a farthing increase on her sugar, and even then sugar would still probably be lower in price in this country than in most countries of the world, certainly than in the United States of America.

This is an insurance policy. Supposing the Sugar Council were successful this Clause would not be operative, but if the Sugar Council were to break down and we did not see any really good effects we should be able to fall back on a Clause which makes provision for that case. I hope that, after the appeals which have been made from all sides—and I feel that hon. Members opposite must support this Clause—my right hon. and gallant Friend will help us and help the West Indian Islands by agreeing to accept the Clause.

11.10 p.m.

Sir P. Hannon

I wish to express my respectful disappointment at the reply of my right hon. and gallant Friend. At the present time His Majesty's Government contemplate the appointment of a Royal Commission to deal with a very serious economic and social situation in the West Indies, and I think it would have been helpful to that Commission if my right hon. and gallant Friend had made a little more generous concession on the Clause. The West Indian Islands at the present time are in a very difficult and embarrassing situation, and any gesture from this House which indicated the anxiety of the Government to help them out of their difficulties, would be most welcome. Therefore, I am glad to see the Chancellor of the Exchequer now present, and I hope he will see his way, pending the findings of the International Sugar Council, to give some indication that if the findings of that council are not favourable to the development and expansion of the sugar industry in the West Indies, His Majesty's Government will take definite action in order to improve the situation.

I regret that the Secretary of State for the Colonies is not able to be present. A great responsibility rests with him in relation to the future of the West Indian Colonies. I do think that in dealing with this question which so much affects the economic and social progress of the West Indies, there might have been a more generous gesture to people who have been most loyal members of our Imperial family for generations. We founded our Navy years ago in these small communities of the West Indies, where the sugar industry is of such vital importance.

11.13 p.m.

Captain A. Evans

My hon. Friends who have supported the Clause, and I were anxious to be convinced by my right hon. and gallant Friend. I regret exceedingly that I must join in expressing my disappointment, because, if I understand him aright, the view of His Majesty's Government is that, having regard to the statement made by the Colonial Secretary when the vote was before the House, the Government are more or less pledged not to take any action until they are quite satisfied that the negotiations at the International Sugar Convention prove futile. We are not asking His Majesty's Government to take any action at this stage. If this Clause is accepted the Government will not be compelled to take any action. They will be arming themselves with an instrument, so that in the regrettable event of the negotiations proving a failure, they will be enabled to take practical action to assist the Colonies immediately.

There was another point in my right hon. and gallant Friend's speech in reply to an interjection by my hon. Friend the Member for the Moseley Division (Sir P. Hannon) which was rather alarming. He said definitely that one question which the Royal Commission would obviously consider is the question of the future economic position of sugar.

Captain Wallace

I prefaced my reply to that interjection by my hon. Friend the Member for Moseley (Sir P. Hannon) by saying frankly that he had caught me rather unawares. All I did was to express my own personal and impromptu opinion that the Royal Commission would probably take cognisance of such a situation; that is not to be taken in any way as an official pronouncement on the terms of reference.

Captain A. Evans

I apologise if I have in any way misrepresented his remarks, because I quite understand that that is the only conclusion to come to in view of the present state of affairs, and it is reasonable to suppose that one of the first and most important subjects to come under the consideration of the Royal Commission will be the state of the sugar industry. But that was not the view of the Colonial Secretary. On 7th May I asked him this question: whether in view of the cycle of riots and strikes which the British West Indies have experienced since 1935, largely as the result of the present state of the sugar industry, he will consider the appointment of a Royal Commission to investigate the whole question of the future of this industry and the conditions of the people employed therein? My right hon. Friend replied in these words: My Noble Friend is only too well aware of the series of distressing incidents, of the kind to which my hon. and gallant Friend refers, during the last year or two; but he does not share his view that a Royal Commission into the sugar industry is warranted. The economic difficulties of the sugar industry arise from circumstances of a worldwide character and there already exists an International Sugar Council which is charged with the duty of trying to find means of overcoming them."—[OFFICIAL REPORT, 11th May, 1938; col. 1571, Vol. 335.] If that reply means anything at all it certainly means that for the time being His Majesty's Government have pinned their faith not on the recommendations of the Royal Commission but on the machinery set up under the International Sugar Agreement of 1937. We therefore must press the new Clause. If we do not and the Government are faced with a breakdown of the machinery of the International Sugar Agreement they will have to come to this House for further legislation to give effect to their views. If they accept the new Clause it will not commit them to any action, but other countries who

are involved in this complicated economic difficulty will realise that if they fail to reach a fair agreement there are means at the disposal of the Government to deal with the matter on a fair basis so far as the West Indian Colonies are concerned. In view of the fact that we are not asking the Government to commit themselves to any expenditure I hope they will reconsider the matter, accept the new Clause, and then if on further consultation they are still of the opinion which the Financial Secretary has expressed they will be at liberty to make an Amendment on the. Report stage.

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

The Committee divided: Ayes, 12; Noes, 226.

Division No. 255.] AYES. [11.24 p.m.
Croft, Brig.-Gen. Sir H. Page Macdonald, Capt. P. (Isle of Wight) Smiles, Lieut.-Colonel Sir W. D.
Greene, W. P. C. (Worcester) Nall, Sir J. Taylor, Vice-Adm. E. A.(padd.,S.)
Gretton, Col. Rt. Hon. J. Perkins, W. R. D.
Herbert, A. P. (Oxford U.) Petheriok, M. TELLERS FOR THE AYES.—
MacDonald, Sir Murdoch (Inverness) Poole, C. C. Captain Arthur Evans and Mr.
C. S. Taylor.
Aocland-Troyte, Lt.-Col. G. J. Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs) Hall, G. H. (Aberdare)
Adamson, W. M. Cranborne, Viscount Hambro, A. V.
Agnew, Lieut.-Comdr. P. G. Crooke, Sir J. Smedley Hannah, I. C.
Albery, Sir Irving Crookshank, Capt. H. F. C. Hannon, Sir P. J. H.
Anderson, Rt. Hn. Sir J. (So'h Univ's) Crowder, J. F. E. Harbord, A.
Anstruther-Gray, W. J. Culverwell, C. T. Harris, Sir P. A.
Asks, Sir R. W. Daggar, G. Harvey, T. E. (Eng. Univ's.)
Assheton, R. Davies, C. (Montgomery) Moslem, Sir J. (Bolton)
Astor, Major Hon. J. J. (Dover) Davies, S. O. (Merthyr) Hayday, A.
Attlee, Rt. Hon. C. R. Day, H. Heilgers, Captain F. F. A.
Baldwin-Webb, Col. J. De la Bère, R. Hely-Hutchinson, M. R.
Barclay-Harvey, Sir C. M. Bobbie, W. Henderson, J. (Ardwick)
Barrie, Sir C. C. Dorman-Smith, Major Sir R. H. Henderson, T. (Tradeston)
Beamish, Rear-Admiral T. P. H. Duckworth, W. R. (Moss Side) Hepworth, J.
Beauchamp, Sir B. C. Dugdale, Captain T. L. Herbert, Major J. A. (Monmouth)
Beaumont, Hon. R. E. B. (Portsm'h) Duggan, H. J. Herbert, Capt. Sir S. (Abbey)
Beeechman, N. A. Duncan, J. A. L. Higgs, W. F.
Bens, Rt. Hon. W. W. Dunease, Lord Holdsworth, H.
Bird, Sir R. B. Ede, J. C. Holmes, J. S.
Bossom, A. C. Edge, Sir W. Hopkinson, A.
Bower, Comdr. R. T. Edmondson, Major Sir J. Horsbrugh, Florence
Boyce, H. Leslie Edwards, Sir C. (Bedwellty) Hudson, Capt. A. U. M. (Hack., N.)
Braithwaite, Major A. N. Ellis, Sir G. Hudson, Rt. Hon. R. S. (Southport)
Brass, Sir W. Elliston, Capt. G. S. Hunter, T.
Briscoe, Capt. R. G. Emrys-Evans, P. V. Hutchinson, C. C.
Broad, F. A. Errington, E. Inskip, Rt. Hon. Sir T. W. H.
Brown, C. (Mansfield) Erskine-Hill, A. G. Jenkins, A. (Pontypool)
Brown, Col. D. C. (Hexham) Evans, D. O. (Cardigan) Jenkins, Sir W. (Neath)
Browne, A. C. (Belfast, W.) Everard, W. L. John, W.
Bull, B. B. Fildes, Sir H. Jones, Sir H. Haydn (Merloneth)
Burke, W. A. Fletcher, Lt.-Comdr. R. T. H. Jones, L. (Swansea W.)
Butcher, H. W. Fremantle, Sir F. E. Kerr, H. W. (Oldham)
Campbell, Sir E. T. Furness, S. N. Kerr, J. Graham (Scottish Univs.)
Carver, Major W. H. Fyfe, D. P. M. Lamb, Sir J. Q.
Cary, R. A. George, Major G. Lloyd (Pembroke) Latham, Sir P.
Christie, J. A. George, Megan Lloyd (Anglesey) Lathan, G.
Churchill, Rt. Hon. Winston S. Gledhill, G. Law, R. K. (Hull, S.W.)
Clarke, Colonel R. S. (E. Grinstead) Gower, Sir R. V. Leech, Sir J. W.
Cobb, Captain E. C. (Preston) Gridley, Sir A. B. Levy, T.
Colfox, Major W. P. Griffith, F. Kingsley (M'ddl'sbro, W.) Liddall, W. S.
Colman, N. C. D. Grimston, R. V. Lindsay, K. M.
Colville, Rt. Hon. John Guest, Lieut.-Colonel H. (Drake) Llewellin, Colonel J. J.
Conant, Captain R. J. E. Guest, Hon. I. (Brecon and Radnor) Lyons, A. M.
Cook, Sir T. R. A. M. (Norfolk N.) Gunston, Capt. Sir D. W. Habana, W. (Huddersfield)
McCorquodale, M. S. Ramsbotham, H. Spens, W. P.
MacDonald, Rt. Hon. M. (Ross) Ramsden, Sir E. Stanley, Rt. Hon. Lord (Fylde)
McKie, J. H. Rankin, Sir R. Stanley, Rt. Hon. Oliver (W'm'I'd)
Maitland, A. Rathbone, J. R. (Bodmin) Stokes, R. R.
Margesson, Capt. Rt. Hon. H. D. R. Reed, A. C. (Exeter) Strauss, H. G. (Norwich)
Marsden, Commander A. Reed, Sir H. S. (Aylesbury) Stuart, Hon. J. (Moray and Nairn)
Marshall, F. Reid, W. Allan (Derby) Tate, Mavis C.
Mather, G. Ramer, J. R. Thorneycroft, G. E. P.
Maxwell, Hon. S. A. Rickards, G. W. (Skipton) Tinker, J. J.
Mayhew, Lt.-Col. J. Ridley, G. Titchfield, Marquess of
Mellor, Sir J. S. P. (Tamworth) Robinson, W. A. (St. Helens) Tufnell, Lieut.-Commander R. L.
Mills, Major J. D. (New Forest) Ropner, Colonel L. Walkden, A. G.
Morris-Jones, Sir Henry Ross Taylor, W. (Woodbridge) Walker-Smith, Sir J.
Morrison, G. A. (Scottish Univ's.) Rowlands, G. Wallace, Capt. Rt. Hon. Euan
Morrison, R. C. (Tottenham, N.) Royds, Admiral Sir P. M. R. Ward, Lieut.-Col. Sir A. L. (Hull)
Muirhead, Lt.-Col. A. J. Ruggles.Brise, Colonel Sir E. A. Ward, Irene M. B. (Wallsend)
Munro, P. Russell, Sir Alexander Warrender, Sir V.
Neven-Spence, Major B. H. H. Russell, R. J. (Eddisbury) Waterhouse, Captain C.
Noel-Baker, P. J. Russell, S. H. M. (Darwen) Watt, Major G. S. Harvie
O'Connor, Sir Terence J. Salt, E. W. Wells, Sir Sydney
Palmer, G. E. H. Sanderson, Sir F. B. Westwood, J.
Parker, J. Scott, Lord William White, H. Graham
Parkinson, J. A. Seely, Sir H. M. Wilkinson, Ellen
Pcake, O. Shepperson, Sir E. W. Williams, E. J. (Ogmore)
Peat, C. U. Simon, Rt. Hon. Sir J. A. Windsor, W. (Hull, C.)
Pethick-Lawrence, Rt. Hon. F. W. Simpson, F. B. Wise, A. R.
Pickthorn, K. W. M. Sinclair, Rt. Hon. Sir A. (C'thn's) Woods, G. S. (Finsbury)
Porritt, R. W. Sinclair, Col. T. (Queen's U. B'If'st) Wragg, H.
Price, M. P. Smith, Bracewell (Dulwich)
Procter, Major H. A. Smith, E. (Stoke) TELLERS FOR THE NOES.—
Radford, E. A. Smith, Sir R. W. (Aberdeen) Captain Hope and Lieut.-Colonel
Raikes, H. V. A. M. Somervell, Rt. Hon. Sir Donald Kerr.
Ramsay, Captain A. H. M. Southby, Commander Sir A. R J.

Lords Amendments considered, and agreed to.

11.28 p.m.

Mr. Pethick-Lawrence

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

I do so with the object of asking the Chancellor of the Exchequer, how far he proposes to go on this Bill to-night? I would point out that we have just spent an hour and a half in the discussion of one of these new Clauses. There are still on the Paper a number of new Clauses and Amendments to Schedules, some of which, at any rate, I understand, it is intended to call. My hon. Friends on this side have been very quiet during the discussion on the last two or three new Clauses put forward from the Government benches, not wishing to interfere with the domestic quarrels of the Government supporters, but the patience of my hon. Friends is not inexhaustible, and if the remaining new Clauses are to be discussed at the same length as the last one, then I am afraid it will not be found possible to complete the Committee stage to-night, and when daylight comes again we shall still be engaged on these new Clauses.

11.30 p.m.

Sir J. Simon

I agree that some time has been taken in the last discussions, and I acknowledge the very good example that has been set by some hon. Gentlemen on both sides of the Committee. I hope now that we may make more rapid progress. I do not think there will be any extended debates on such remaining Amendments as are to be dealt with. It will be unfortunate if we do not get the Committee stage to-night because we have a great deal of business to deal with, and I think we can do it with co-operation. May I ask at least that we should try to do it?

Mr. Pethick-Lawrence

It is now half-past Eleven, and if we can get through the remaining Amendments by midnight we are prepared to do that; but if there is any idea of going on into the small hours, the proceedings will have to be adjourned. On the understanding that we get through the business by midnight I will withdraw my Motion.

Sir J. Simon

I cannot guarantee that we shall finish all the remaining Amendments in half an hour, but I do not think we should be late. Let us go on and see what we can do.

11.32 p.m.

Mr. Alan Herbert

I should like to support the Motion. I have on the Paper a new Clause which is bound to be called, and I am grateful for that advantage. Last year there were five days for the Committee stage of the Finance Bill, but this year only four. When I hear my right hon. Friend, to whose patience I pay tribute, say that he expects to get through the remainder of the Amendments in a short time, because, apparently, they are not very important, I am bound to take some slight exception because my new Clause is one to which many people attach great importance, and I do not think it right that it should be squeezed in at the last moment.

11.33 p.m.

Mr. Ede

It is unfair to expect us to sit until the early hours of the morning, because that is what it means if we go beyond 12 o'clock. Most Members on this side find their last trains going about the same time as mine, at 12.16, and, frankly, after then I am prepared to sit until four or five in the morning when the trains start running again. The alternative is to pay 15s. taxi-fare in order to get home, and I would sooner be here listening to hon. Members opposite and encouraging them when they are flagging in their efforts, and get home in comfort by train in the morning. This side of the Committee has not delayed the proceedings, and it is unfair of the Chancellor to punish us for the activities of his own supporters.

11.34 p.m.

Sir J. Simon

Let us see whether we can make an arrangement. The entertainment we shall be glad to have from my hon. Friend the Member for Oxford University (Mr. A. Herbert) had better be postponed to a more suitable hour on another day. I hope, however, that we shall be able to deal with the new Clause which is about to be called, which is a small matter in which there is no difference of opinion, and the one, which is more important, in the name of my hon. and gallant Friend the Member for Clitheroe (Sir W. Brass). There we can stop.

Motion, by leave, withdrawn.