KEY INDUSTRY DUTIES (REDUCTION) (Hansard, 25 April 1950)

§ Mr. Lennox-Boyd (Mid-Bedfordshire)
I beg to move, That an humble Address be presented to His Majesty, praying that the Order, dated 16th December, 1949, entitled the Safeguarding of Industries (Reduction of Rates) Order, 1949 (S.I., 1949, No. 2352), a copy of which was laid before this House on 19th December, 1949, in the last Parliament, be annulled. I do not think that this Prayer need detain the House for very long tonight, but I should be grateful for close consideration by both sides to the issues which are involved. It raises a subject which it would be altogether wrong to allow to pass unnoticed or undebated in the House of Commons. This Prayer deals with an Order made under the Agreement arrived at at the recent conference at Annecy, a conference which, with its predecessors, may well shape the future pattern of world and imperial trade.
There were until a few days ago, two Prayers down for tonight to annul statutory instruments, both of which arose from the Annecy Conference. The one that we are considering, No. 2352, deals with the reduction of the rates of duty imposed under the Safeguarding of Industries Act, but there was another, No. 2353, which would have dealt with the reduction of duties imposed under the Ottawa Agreements Act. We were assured that both Orders were subject to the negative Prayer procedure, but a little while ago the Board of Trade unearthed the fact that under the parent Act of the second Order, the particular reduction of duty with which we are concerned was not subject either to the affirmative or to the negative procedure in this House. Therefore, tonight we can only discuss the Annecy Agreement Order, No. 2352. I realise that this more strictly limits the scope of the discussion and consequently reduces the time we are likely to take on this Order.
Our interest on this side of the House—and I venture to think among a large number of hon. Members opposite also—in this Order arises not only from our desire to see that British industry, in a period of ever-growing competition, is given adequate protection, but also from a desire to see that the structure of Imperial Preference, to which all parties 904 alike from time to time pay tribute, should not be undermined. We on the Conservative benches are anxious that our fellow citizens in the Empire and, not least, the new Governments in Australia and New Zealand, should know the determination of many people in this country that this progressive whittling away of Imperial Preference must stop. We hope soon that we shall have a full Debate on Empire trade, and we can then adequately deal with the serious obstacles that we believe are now being placed in our way by ourselves to prevent the full recovery and the permanent strengthening of our Empire.
I would direct the attention of the House to one aspect of this Order. Under the Havana Charter, which we have signed but not ratified, it is extremely difficult to restore a preference or a duty once it has been removed. There is a whole chain of activities that have to be gone through before it can be restored. This Order deals in part with the duty on optical glass, on the lighthouse lens side of that duty. Old Members of the House may remember that the duty on optical glass was originally imposed in 1921 under the Safeguarding of Industries Act, and it was then at a rate of 33½ per cent. Five years later it was found this was quite insufficient to build up an adequate British industry. This duty was raised to 50 per cent., and there are a large number of people in this country who, with knowledge of what happened in the war, are very glad indeed that the duty was raised and that we were able to build up our industry to help in those difficult times.
We are now taking the duty down from 50 to 33½ per cent., and that would not matter if we were free agents able to put it back again, but now we are subject to elaborate machinery which has to be successfully and internationally gone through before it can be re-imposed. That, however, is not the really significant side of this Order. This Order is one further stage in removing from the British Empire the power to develop its trade along lines of its own choosing. This Order is a direct product of the Annecy talks, which took place from April to August of last year, but which really began with the Washington Loan Agreement in 1946.
That agreement obliged us favourably to consider an international trade charter which was drawn up by the United States 905 and which envisaged, in return for a reduction of tariffs, the elimination of all discrimination, which they held to include preferences. From the start, we have taken the view that preferences are not discrimination and are in no way different from the domestic arrangements arrived at by the United States itself. We have stated that the Conservative Party has never supported any decisions taken at Geneva, Havana or elsewhere, as at Annecy, which are inimical to the principles of the system of Imperial Preference, and we re-declare our intention to take in due course all steps necessary to ensure that in future our liberty in this direction is not impaired.
This country signed the Havana Charter in March, 1948, but it needs ratification, and we have not yet ratified it. Meanwhile, we, the United States and some 20 other nations have signed a general agreement on tariffs and trade which was drawn up at Geneva and was to be put into force, and has, in fact, been put into force, pending the ratification of the Havana Charter. Other nations have adhered to this, and there have been a number of other conferences adding new nations to this convention and altering the rates and conditions of tariffs. The last of these conferences up to date was that at Annecy, under whose recommendations this Order is now before the House.
The general agreement at Geneva runs until 1951, but we can withdraw from it at 60 days' notice. There is to be a further conference this autumn and, for the first time, it is to be held in Great Britain at Torquay, and it will be possible for our people, whose future is so deeply tied up in the decisions that will be reached, to watch at much closer quarters what is being done in their name. When this conference assembles at Torquay in the autumn, the question of making agreements like this run for another three years without repudiation will arise.
Hon. Members who have followed this matter closely will know that the international trade organisation envisaged at Havana has not been set up because we have not ratified the Charter, but the nations concerned in this general agreement on tariffs on trade are behaving almost as if the whole Charter has in fact been ratified. If we find at Torquay that agreements like this Order are prolonged 906 for three years, we shall have a great part of the Havana Charter without ratifying it. We shall deprive ourselves for the next three years of any power of setting our own house in order.
My apology to the House for raising this subject need not, I think, be a long one because frequently at this hour we have Prayers dealing with wholly domestic matters. This is something dealing with the future of the British Empire as a whole. These subjects get far more consideration in the Parliaments of the Empire than they appear to get in the Parliament of the mother country herself, and our object in moving this Prayer tonight is not, I frankly confess, to carry this matter to a Division, but to register the fact that nothing of this sort should happen without Parliament knowing what is happening and taking due stock of the situation, and also to give the Government an opportunity to allay some of our fears, and also to make it quite clear to the country what our intentions are when authority is once more ours to exercise.

§ Mr. Russell (Wembley, South)
I beg to second the Motion.
During the Budget Debate yesterday, at least one hon. Member opposite referred to the state of the country in 1921. This Order recalls the fact that in 1921 there was passed the Safeguarding of Industries Act, which was one of the earliest Measures brought in to protect the industries of this country against foreign competition. It succeeded in protecting them against such foreign competition, and also succeeded in reducing unemployment. As my hon. Friend has pointed out, this Order reduces the duty on three of the items which were made dutiable under the Act of 1921. Therefore, in so far as it does that, it reverses the very sound steps taken in that year by that Act.
The duty on lighthouse lenses, which was made 50 per cent. in 1926, has remained at that level ever since—in other words, for a period of 24 years. Surely it is a bit unwise to tamper with something which has been in operation all that time, and which has, apparently, done its work very well. This Order is really a potential threat, not so much to Empire trade, as are most of the other things done at Annecy and Geneva, but a threat to home industry, because it is 907 the home market that will be affected by the operation of this Order.
Up to the present industry has had great difficulty in fulfilling some of the orders it has received. But before long the picture may change very drastically, and it is quite possible that items on which this and other duties are being reduced may come in from foreign countries in the same volume as they came in 1921, or, perhaps even worse, in the same volume as they came in 1931. We heard a great deal during the Budget Debate about the possibility of German and Japanese competition. I think I am right in saying that the worst competition which this country suffered as far as optical glass is concerned, was from Germany, or, possibly, from the United States of America. Therefore, we ought to be very wary in reducing a duty—and whittling down a preference at the same time—on a commodity which the Germans may possibly be able to manufacture cheaper than us, and returning to a competition from which this country suffered in years gone by.
I regard this Order as another step in the wrong direction taken by this Government ever since it negotiated the American Loan Agreement in 1945, when restrictive conditions applying to international trade were introduced. Surely, we must be free to arrange our trade, particularly our Empire trade, to suit ourselves and suit the Empire. I regret that this step is being taken, presumably at the behest of either the United States or the Germans, to reduce this Customs duty. It is a further step in the wrong direction, away from our right and privilege to arrange our Empire trade as suits ourselves and towards the idea of free trade embodied in the International Charter—an international trade idea which can only bring ruin to our trade and Empire.

§ Mr. John Hynd (Sheffield, Attercliffe)
On a point of Order. How far can this Debate range, Sir, over the whole question of Imperial Preference and the question of integration of trade?

§ Mr. Deputy-Speaker (Major Milner)
The Debate is really limited to the three items set out in the Order but it is, of course, in order to relate those to the general question, so far as they affect the general principle.

The Secretary for Overseas Trade (Mr. Boffomley)
There is, of course, general agreement between both sides of the House that we should constantly keep this question under review. We, on this side, have always understood from hon. and right hon. Members opposite that tariffs are a means of protection and it is in that sense that, at this stage, we have been to Annecy to obtain every possible concession for our own industry.
The Ottawa Agreement which was mentioned by the hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd) was, of course, carried out by the party opposite. They were responsible in 1938, at least the right hon. Gentleman the Member for Bristol, West (Mr. Stanley), was responsible, for handling in this House a Measure which dealt with United Kingdom-Australia trade, whereby there had to be modifications to suit a changed situation. Circumstances are again changing, and we must make arrangements to fit our requirements accordingly. If we do not, the other Commonwealth countries themselves will do it. Their economy is constantly changing; their pattern of overseas trade also varies very much more today than it ever did before.
We are in duty bound to take notice of these things and between us to get every possible concession for Commonwealth trade. It is interesting to note that the hon. Member for Mid-Bedfordshire made some reference to the G.A.T.T. and I.T.O. When we discussed the G.A.T.T.—the General Agreement on Tariffs and Trade —there was general agreement on both sides of the House; at least, it was not carried to a Division. It was acquiesced in. If it was not acceptable, it was not unacceptable in the sense in which we usually debate matters in this House. I ask whether it is now the policy of the Conservative Party to disown the General Agreement on Tariffs and Trade and also the International Trade Organisation.

§ Mr. Lennox-Boyd
We have announced and did say at the election in more than one official publication that we reserve the right to review any agreement arrived at, in so far as they have shown themselves to be inimical to Imperial trade and Empire Preference.

§ Mr. Bottomley
All I can say is that in the Debate that took place earlier 909 that was not shown as clearly as it is now stated. It is a good thing to have it On record. [An HON. MEMBER: "What happened at Strasbourg?" That is a matter between others and not myself. I know some of the things aimed at in Strasbourg, and they do not fit in with the aims of hon. Members opposite in moving the annulment of this Order with regard to the two items. The objection to which the hon. Member for Wembley, South (Mr. Russell), referred is indeed not the danger he anticipates.
As far as German competition is concerned, the Germans can export to several markets without any difficulty. Indeed, the problem with regard to production of lenses in this country, which has to be firmly safeguarded for strategic purposes, is the need to secure export markets and although the quantity produced is small, a high proportion is 'sold abroad. In coming to an agreement whereby we could make this concession, we carried the industry with us. They were fully consulted and they agreed. As to the concession, the Commonwealth Governments agreed with us, and we only gave the concession after it was clear that the advantages to be gained by the Commonwealth as a whole were sufficient to justify that action.

§ Mr. Russell
At whose request was the concession made?

§ Mr. Bottomley
Speaking from memory, I think it was Sweden which made the request. When a request is made by a foreign country, we have to ask ourselves what we are going to get in return. We do not expect to get a concession from other countries unless we are prepared to make some ourselves. With regard to the lenses and the sodium hydroxide, there is little or no import of those commodities from the Commonwealth countries. In giving this concession and getting others in return, the facts speaks for themselves. On balance we got an agreement very favourable to ourselves and the Comonwealth countries.

§ Mr. Joynson-Hicks (Chichester)
Will the hon. Gentleman say what advantages we got in exchange?

§ Mr. Bottomley
There are hundreds of concessions. One cannot say in particular what we got in return. All I can say is that in this case we have given nothing away. On balance we must at least have got something which justified the action 910 of the team of experts representing not only this country but all the Commonwealth countries, and we feel that we were justified in accepting this proposition. I can only say that it is a matter which has been agreed upon between the Commonwealth countries and ourselves. This matter was considered by industry in consultation with a committee of which I had the privilege to be the chairman. Hon. Members opposite may be assured that we are as anxious as they are to see that Commonwealth trade prospers fully to the advantage of the Commonwealth as a whole, and we shall not at any time lose sight of that very excellent objective.

§ Sir Herbert Williams (Croydon, East)
I have listened with great interest to the speech of the Secretary for Overseas Trade, and I am not much wiser than when he started. He concluded with words which a Yorkshireman would translate as, "We gave nowt for sum-mat" and when we asked what "sum-mat" was the hon. Gentleman said that our great team of experts looked after that. I do not think the hon. Gentleman was very well documented on what we got in exchange.

§ Mr. Bottomley
It is in the White Paper. If I were to read the White Paper we should be here for a long time, but if the hon. Member will read it he will find the answer to his question.

§ Sir H. Williams
I gathered that the trade concerned did not mind about the lighthouse lenses. The second item I cannot pronounce, but I can pronounce sodium hydroxide. I also gathered that Sweden is very pleased, and we were led to believe that we got a lot in exchange. Nobody minds very much what is in this Order, because in themselves the items are of trifling importance to the trade and industry of this country and to imperial Preference as a whole. That is not the reason why we have moved this Motion. The reason why we are doing so is the same as the reason why the small boy stuck his finger in the hole in the dyke in Holland. This is merely the beginning of the trouble.
In a sense we are continuing the Debate which started in December, 1945. Hon. Members will remember that the House had been bundled into accepting the American Loan with strings attached. Then there was the trade conference in 911 Geneva which, I think, the hon. Gentleman called G.A.T.T., and which is the American gangster word for gun. I hope the hon. Gentleman will bear that in mind, because I think the gangsters were a little too smart for our people. I hope he will abandon this bad habit of describing things by initials. I rang up B.E.A. the other day for an aeroplane and they said they were the British Electricity Authority.
We are not greatly concerned with these items; we are concerned with the fact that the conference at Annecy, the sequel to Havana, the sequel to Geneva—

§ Mr. Speaker
If the hon. Member is not concerned with those items he must be out of Order. This Order is concerned only with those items.

§ Sir H. Williams
I appreciate the point of your rebuke, Mr. Speaker. We are not very much concerned with these items; we are concerned with them more as a symbol of what may come later.

§ Mr. Speaker
What may come later is, after all, not in the Order and, therefore, we cannot discuss what may come later. The hon. Member can discuss only what is in the Order.

§ Sir H. Williams
Again, I thank you for that rebuke, Mr. Speaker. By this Order we are making certain concessions, to some extent to the prejudice of industrial productivity and activity and to some extent to the prejudice of the margin of preference which we give to Empire countries.

§ Mr. Follick (Loughborough)
From what Empire countries do we get lenses?

§ Sir H. Williams
If the hon. Member studied the history of Canada and studied what we are now importing from Canada he would realise that the industrial potentialities of Canada are so great that the time may come when we should be in a position to import from them any industrial product. Anybody whose mind is so closed to the future and who judges the future entirely by the present, does not exhibit himself in a very enlightened frame of mind. Here, we are beginning a dangerous course, and it is because we are beginning a dangerous course that I support my hon. Friends who proposed and seconded this Motion. We have to be very careful. Our challenge tonight 912 is against the principle and the danger of its future application.

§ Mr. Boothby (Aberdeenshire, East)
I should like in a few sentences to add my protest to that of my hon. Friend the Member for Croydon, East (Sir H. Williams) about the use by the Minister of these horrible initials. He talked freely and easily of G.A.T.T. and I.T.O., in a way which was an illustration to me of the atmosphere in which Ministers now live. They live in this sort of world of initials, which means something to them—[HoN. MEMBERS: "No."] I suppose it means something to them but it does not mean anything to us. I thought I.T.O. was bad enough, but G.A.T.T. is really beyond anything we have had. I beg the Secretary for Overseas Trade not to do it again. These Orders are the product of Geneva, of Havana and of Annecy.

§ Mr. J. Hynd
And Strasbourg.

§ Mr. Boothby
It has nothing to do with Strasbourg. I wish the Secretary for Overseas Trade would stop this, and not go back. I know that officials meet in these agreeable places at the very best time of the year in a delicious climate, and have an extremely enjoyable time. They sit for weeks and weeks, chiselling away the foundations of British prosperity. I sat in this House in the 1920's and saw this country sunk by the post-war application of free, multilateral trade, and I sat in this House in the 1930's and saw it saved by the application of protection and Imperial Preference.
In my submission, these Orders chisel away that principle of protection and Imperial Preference on which the revival of our prosperity was mounted before the war—and the only things upon which the revival of our prosperity can be founded in the long run now and for the future. I agree that these Orders are not of great significance and importance in themselves, but they are an indication of the trend which is taking place. I say to the hon. Member: chuck it; do not go back. It is not as if he went himself. I agree that Havana and Geneva are charming places. I have been there. Has the hon. Member been there? If so, I can understand his attitude. The civil servants have a good time there. Should the hon. Gentleman allow civil servants to go there and fiddle about with the basis of British prosperity?
913 I hope this is the last Order of this kind he will ever bring before the House.

§ Mr. John Hynd (Sheffield Attercliffe)
I intervene only because, to the surprise of most of the hon. Members on this side of the House, the discussion has been allowed to range a little farther than the specific items of duty referred to in the Order, and to roam over the principle behind the Order and the Preamble to it. So far as the specific items are concerned, I should have thought that the answer of the Minister would have been conclusive and satisfactory to everyone—that the trade had been consulted and had agreed and that the Commonwealth countries had been consulted and agreed. That having been said, there is no more to be said about these items
We have been asked why my hon. Friend made these concessions. I was surprised to hear an hon. Member on the other side ask who it was who applied for these concessions; when the answer was given that it was Sweden, he said, apparently with an air of indignation, that Sweden was not a member of the Commonwealth. I should have thought that hon. Members opposite, particularly the hon. Member for Aberdeenshire, East (Mr. Boothby), would have realised that Sweden is a member of Western Union and of the Council of Europe. Surely it is a new policy that is being adumbrated from the Conservative side when it is announced, only a few months after the first meeting of the Council of Europe at Strasbourg, that they are against any concessions from this country, even on a collateral basis, on a basis of the mutual exchange of concessions, in order to assist in the co-ordination of European economy, because this is precisely a step towards that end.
The hon. Member for Aberdeenshire, East, knows that very well indeed. I thought when he rose to speak that he was going to support the Minister in this discussion. Now the position has been clearly stated by the hon. Gentleman on the Opposition Front Bench, who stated—

§ Mr. Speaker
The policy has been agreed and tonight we are merely dealing with the details which result from that policy. It cannot be attacked or approved. Surely it is a fact; whether we think it right or wrong, it is agreed.

§ Mr. Hynd
I should like to say, with all respect, Sir, that I raised a point of Order, when this discussion opened, as to whether it was possible to discuss the very point being raised by the Opposition—namely, the principle on which these three concessions have been made, and it was ruled that the discussion could proceed on these lines.

§ Mr. Speaker
The policy itself cannot be challenged.

§ Mr. Hynd
I am replying only to a simple point made by the hon. Gentleman opposite. When he referred to these concessions he stated that it was made clear in the Conservative programme during the General Election that—I forget the exact phrase—the Conservative Party reserved the right to consider or review any such concessions that might be considered inimical to Commonwealth interests. If that is the case, it is as well that it should be underlined and put on record. When Conservative Members go to Strasbourg, and discuss the integration of European economy, will they make it clear that that is where the Conservative Party stand, and that any hope of European integration exists only in so far as any item can be regarded as inimical to the interests of the Commonwealth?
The case has been explained by the Minister. While it is impossible to say what we have got out of one of the many concessions made to us at Annecy it is clear to everyone that the outcome of the conference was that mutual concessions were given to all to help in reaching, a better balance of European trade. When hon. Gentlemen opposite ask which of the concessions was given in return for this one or that one, they are displaying a low level of political sagacity. In the general agreement concessions were mutual, and if the whole of the agreement were submitted to the House and put to the test of the vote I am certain that a number of hon. Members opposite, and certainly the hon. Gentleman the Member for Aberdeenshire, East, would not oppose it.

§ Colonel Gomme-Duncan (Perth and East Perthshire)
I do not wish to detain the House for more than a few minutes, but there is a good deal of chattering on the opposite side of the 915 House, mainly on the Front Bench, which seems to indicate that the hon. Gentleman the Secretary for Overseas Trade is not paying much attention to what has been said. You have ruled, Mr. Speaker, that we cannot discuss the principle behind this and that we must confine ourselves to the specific items in the schedule, but when one of my hon. Friends was speaking a short time ago the hon. Member for Loughborough (Mr. Follick), who is about to leave the Chamber, asked—[Interruption.] I beg the hon. Gentleman's pardon, he is just changing his seat —whether we import anything of this kind from any Empire country.

§ Mr. Follick
I did not say that. What I asked was from which Empire country did we import lighthouse lenses?

§ Colonel Gomme-Duncan
If that is not the same thing, then English means nothing. The hon. Gentleman's grasp of European languages is as profound as his efforts to change the English language, but he must not try to get away with saying that what he said was not precisely the same thing as I said he said. Does he not realise the advance that has been made in Canada in the production of these articles? It is coming along at a tremendous rate, and we must not think only of what is happening now, but must look a little ahead, and ensure that Empire trade is preserved.
Therefore, the three items in this Order are of actual interest to the Empire, and I hope the House will realise that there is no foolish idea about bringing forward Order for discussion tonight, because it is a matter behind which the principle of Empire Preference lies. That is a great principle. We are perfectly right, as I am sure the House will agree, and I hope the matter will be treated with the great seriousness which it deserves, because it is an important matter.

Mr. Emrys.Roberts (Merioneth)
Is it not a fact that Canada and other Commonwealth countries are parties to the agreement, and that the argument advanced by the hon. and gallant Gentleman therefore goes by the board entirely?