HC Deb 28 July 1950 vol 478 cc860-78

12.15 p.m.

Mr. Russell (Wembley, South)

I should like to invite the attention of the House to the economic conference which is due to open at Torquay in September. In so doing, I shall probably wander even more widely around the Empire, and possibly the world in general, than the hon. Member for Middlesbrough, West (Mr. G. Cooper). The conference at Torquay is merely another in a series of long and dreary economic conferences held since 1947, mostly in the choicest watering places of Europe and America. The object of all these conferences is to lower tariffs and to reduce, and eventually eliminate, tariff preferences and especially our own system of Imperial Preference.

This process began at Geneva in 1947 when, after six months, there was produced the General Agreement on Tariffs and Trade. After a series of tariff negotiations which resulted in tariff reductions by many countries and a certain number of reductions of Imperial Preference, this policy was continued at Havana in the winter of 1947–8, at Annecy in the summer of last year and, in addition, there have also been one or two minor sessions at Geneva. The President of the Board of Trade told me, in answer to a recent Question, that the total cost of sending British delegations to these conferences had already reached a figure of about £150,000 and that the delegation at Torquay would cost between £4,000 and £5,000 per month. I merely mention these figures in passing.

The policy which is behind all these conferences has been imposed on the world by the Government of the United States. I do not blame the Government of the United States for trying to do this, I blame our Government for tamely swallowing that policy. The ostensible reason why they have done this, is that they believe that the policy of no discrimination is in the best interests of world trade. But the real reason why the Americans do this, is because their own exporting industries want our Imperial Preference abolished so that they can prise open the markets of the Dominions and Colonies for their own mass-produced goods.

Fortunately, the Government are implementing this policy at a very slow pace. In fact, the policy is trickling along in bottom gear. The Government realise that the policy cannot be put fully into operation at the moment, and I hope that gradually they will realise that it cannot be put into operation at all. So far, they have given away nothing vital. In fact, my chief complaint against them is that they have completely tied our hands. They have bound this country not to increase any of our existing Empire Preferences or to introduce any new ones. They have done that without getting anything in return. We have eliminated or reduced some of our Preferences and we have got something in return—whether it is valuable is another matter—in the way of reduced tariffs; but we have had nothing in return for this tying of our hands which prevents us completely from introducing any new Preferences or increasing any existing ones.

We can free ourselves of this policy at 60 days' notice. I was glad when the President of the Board of Trade said, in answer to a question last week, that if the proposal to be discussed at Torquay succeeded in extending the General Agreement on Tariffs and Trade for another three years, it still would not affect the 60 days' notice, because the Agreement has not yet been completely ratified, if the word "ratified" is the right one to use in connection with this Agreement. Therefore, the provisional protocol is still in application. I hope that the Agreement is not ratified and that the 60 days' notice will still apply.

The ban on increasing our present preferences is a very miserable business. In the Debate on the Finance Bill on 22nd June, when my hon. Friends and myself proposed a new Clause to reduce the duty on Empire wines, the Financial Secretary to the Treasury said, as one reason why it could not be accepted, that it would be contrary to the General Agreement on Tariffs and Trade. What a pitiful confession from a spokesman of His Majesty's Government, that we have tied our hands so that we cannot increase the preference on Empire wine and, therefore, encourage more Empire wines to be imported into this country.

The President has told us that it is Government policy, as he put it, to "maximise Empire trade." It is impossible to "maximise" Empire trade if we are barred from taking measures which will encourage the increase of imports from Empire countries, and Empire wines are a case in point. I am not suggesting that we should specifically try to increase the import of Empire wines. I am in favour of increasing all forms of Empire trade, but we cannot do that if there is this ban on increasing Imperial Preference. We hope that, one day, we shall live in a world free of exchange controls and of currency shortages, but if the Government are going to carry this Geneva policy through, as they have undertaken, they will in accepting the original American loan in 1945, they will have to give away something vital one day.

How are our Colonies going to fare if Imperial Preference is finally abolished? How are we going to improve conditions in the Colonial Empire, as we are pledged to do, if we cannot give priority to their produce? How will Mauritius or Barbados—I take them as two examples because they are almost made of sugar—be able to find a market for their exports in the face of the competition of sugar from Cuba if there is no preference in our Empire trade system? What will happen to Gambia, whose groundnuts form 95 per cent. by value of her total exports? What hope will there be for the fantastically expensive groundnuts scheme in Tanganyika, if any groundnuts ever materialise?

State trading is no remedy. Article XVII of the Geneva Agreement on Tariffs and Trade says that the Government must buy solely in accordance with commercial considerations. Therefore, if groundnuts from Tanganyika are a little dearer than groundnuts from the United States we would be compelled to buy United States rather than Empire groundnuts. The poultry scheme in Gambia is now hatching some eggs. As far as I know they are very expensive eggs, so expensive that the Ministry of Food is very wary of buying them. How can we guarantee a market for them?

I invite the hon. Gentleman who is to reply to say what will happen to Lancashire if the preferences which cotton goods enjoy in some Empire countries are wiped out. How will Lancashire, his own county, and incidentally the county represented by his right hon. Friend, fare, if cotton goods do not obtain preference? Apart from the question of Japan, there is competition from other industrial countries as well.

One of the odd things about the Havana Charter—most of which has been incorporated in the Geneva Agreement on Tariffs and Trade, because it was not ratified in Havana—is that it bans systems of moderate preference, like ours, but it actively encourages customs unions which give 100 per cent. preference. The United States is a case in point. It is one vast customs union. The State of New York gives to the State of California, 3,000 miles away, 100 per cent. preference, yet, according to a system that we are invited to make worldwide, Australia should not give New Zealand, about 1,200 miles away, any greater preference than she gives to Norway or Nicaragua.

There is a great deal of opposition to this doctrine. The Benelux countries, which have tried to form a customs union, have gone so far towards it, but I understand they have now come on to the rocks, because neither the farmers of Holland nor those of Belgium want to admit each others' produce free of duty. It looks as if the customs union will come to grief on that point, because farmers all over Europe are taking the same line. The same opposition applies even in the United States. The New York Board of Trade objected to the Havana Charter and its policy when it was introduced. The National Foreign Trade Council of the United States and the American Tariff League, and also South American countries, do not like it. Various groups of those countries have preference systems. Nor do the countries of the Arab League care for it.

The most conspicuous impression I brought away from the Plenary Session of the Geneva Conference, which adopted the draft trade charter which eventually went to Havana, was that there was complete apathy towards it. There was about as much enthusiasm as one would expect if members of the Supreme Soviet, for example, strayed into a Salvation Army meeting. The Government, in adopting this policy, are putting the clock back 100 years. As Mr. L. S. Amery said in his book "The Awakening," they are "setting up the Humpty-Dumpty of mid-19th century economics on his wall again." If the Conservative Party had done this we would have been called reactionary, and rightly so.

There is no need to prove the success of the system of Imperial Preference between 1932 and 1939, introduced by the pre-war National Government, because the President of the Board of Trade admitted its success when he gave figures, in answer to a Question of mine on 27th April, showing the increased proportion of Class 1 and 2 imports, which came from Empire countries in that period.

I know there are certain right hon. Gentlemen in the Government who believe fervently, or who said they believed very fervently, in a system of Empire Preference. The Minister of Town and Country Planning once said that he gave a rebellious vote in favour of Imperial Preference soon after he came to the House, and he said that he is not one of those who go nibbling away at Imperial Preference. The present Government has nibbled away at Imperial Preference, and I hope that one day the Minister of Town and Country Planning will call them to task for doing it.

While we were increasing our imports from Empire countries before the war we also increased imports from foreign countries; therefore our system of Empire Preference before the war did not damage the interests of the United States. It is really in the interest of the United States that we should continue that policy, because, if we did not, it would mean the break-up of the British Empire, which is the strongest bulwark in the world against Communism.

We should take the lead and persuade our good friends, the Americans, of the error of their ways. I am quite convinced that the future of world prosperity, so far as international trade is concerned, does not lie in this moth-eaten policy of 1850–60, but that it lies in modifying the most-favoured-nation principle so that not only can our own system be developed but foreign countries will be allowed to adopt similar systems in regions or groups. Some experts say that if that were done, even the Russians might find it difficult not to co-operate.

I hope the Government will consider very seriously the way they are going and where it will eventually lead. If they eventually come to the conclusion that they have strayed on to the wrong course. I hope they will come to the House and tell us and that they will take a lead in persuading the Americans of which is the right way of conducting international trade.

12.31 p.m.

Mr. Braine (Essex, Billericay)

The case has been argued very fully by my hon. Friend the Member for Wembley, South (Mr. Russell) and I think all that remains for me to do is to make a few observations on the general principles involved. I suppose there are very few people in this House who would dispute the fact that Imperial Preferences have been a powerful, if not the most powerful, instrument in the promotion and expansion of trade between ourselves and other Commonwealth countries. In so far as trade is the means whereby resources are developed and conditions created under which population can be attracted into the Commonwealth countries, then it might be argued that preferences have played no mean part in building up the strength of the Dominions. That strength has been of inestimable value to this country and the world twice within the span of a man's lifetime.

I am, however, more concerned with the future than with the past. We have been reminded, particularly during the present Session, that the Commonwealth stands on the threshhold of great developments. The economy of the Dominions, and indeed of the Colonies, too, has been expanding rapidly in the last 10 years. The untapped resources of the British Colonial Empire alone are enormous. Yet it is at this moment that His Majesty's Government have sought to bind' our hands and to limit our control over our own economic destiny.

It is all the more incomprehensible to me that a Socialist Government should have done this, because I have always believed that one of the principal objectives of the Socialist Party was to provide not only full but stable employment for our own people and to provide them with the highest possible standards of living. Yet one of the declared objectives of the Havana Charter is, if I may read it: To further the enjoyment by all countries, on equal terms"— and the operative words are "on equal terms"— of access to the markets, products and productive facilities which are needed for their economic prosperity and development. What exactly is meant by the phrase "equal terms"? I suggest that it is an example of that woolly thinking which has characterised the action and outlook of our own and other governments since the end of the war and has landed us in the grave difficulties in which we find ourselves today in other spheres.

It means, ultimately, the removal of all controls over imports. To give a specific example, it would mean that Japanese goods could flood British Empire markets although they were produced under vastly lower standards of living than those enjoyed by our own people. We could not possibly compete with the mass flooding of the Commonwealth with Japanese or, for that matter, German goods. A British Government guilty of implementing that kind of nonsense would commit an act of the highest folly and would be sealing the death warrant of the British Commonwealth.

Fortunately, as my hon. Friend said, all is not yet lost. There is time for second thoughts. I trust, therefore, that the Government will see fit to instruct our delegation at Torquay accordingly and to re-think their whole attitude and policy on this matter.

12.35 p.m.

Mr. A. Edward Davies (Stoke-on-Trent, North)

I should like to say a few words on another aspect of this subject. A few days ago we had an announcement concerning the establishment of the European Payments Union and the Minister of Economic Affairs gave us a brief explanation of what was intended. From what he said, I gathered that the basic conception of the scheme was the liberalisation of trade. Some of us were rather apprehensive about what it really meant.

The right hon. Member for Aldershot (Mr. Lyttelton), who spoke for the Opposition that day, asked certain pertinent questions and indicated that although there was to be an attempt to liberalise trade to the extent of 60 per cent. and still further, there were certain qualifications. He thought it was a facade which had not much in it when go down to close examination. He said there were tariff barriers and customs requirements of various kinds which would still keep out certain traffic. As I understood the arrangements, however, it was the intention to raise imports and, in that connection, we were to expect that further goods would enter this country from Western Germany, Belgium, and Switzerland.

I think it is a good thing that the trade of the world should be liberalised, if that means the development of the natural resources of the various countries for the benefit of the world and the employment of labour upon those processes and activities which they are best designed to perform. Nevertheless, having said that, I think there is some truth in what has been said this morning by hon. Gentlemen opposite, especially in their remarks about Japan and other parts of the world. We know that in Germany and Japan there exists what is called a low price economy—an economy which, before the war, was almost on a slave basis in the case of Japan. As we have so often heard in this House, we saw some of the weaknesses of the system in respect of textiles and pottery. I am very closely associated with the pottery industry in Stoke-on-Trent. We are still to some extent apprehensive about what will happen with Japan and other parts of the world, like Western Germany.

While, as I have said, I welcome the idea of liberalising trade if it is intended to raise the standards of the people generally, and while I realise that if we are to expect America and other countries to take a large quantity of our primary products—as obviously they will have to do—we must consider the point of view of the buying country, there are, nevertheless, certain qualifications.

The Government must be very careful to pay attention to the conditions of production. I was very proud of the work which the International Labour Organisation was able to do between the wars. I thought it was one of the most successful specialised agencies. I hope we shall watch conditions of production, in terms of fair wages, of hours of employment and the plagiarising of trade marks, practices and inventions which should be the property of this and other countries. We know that in some industries in this country, particularly pottery, many of the trade marks and much of the inventive work done in this country have been exploited by countries like Japan.

While we all recognise that we cannot press down 70 million people in those islands indefinitely, and while we appreciate that they have to be allowed to earn their living; while in my view it is wrong to have a closed shop which leads to a condition of autarchy, we must have regard to these basic considerations. I hope that whoever goes to Torquay to talk about the liberalisation of trade or to do some kind of bargaining on tariffs, will not overlook this subject, because it is vital, whether it concerns Japan or Germany or anywhere else in the world.

If those conditions are observed I feel sure we may have confidence in what the Government are doing, because surely to goodness we are all convinced at this time of the day, that the British Commonwealth, in its methods of tackling political, social and economic problems, has much to give to the world. It is a system of which we are very proud and about which we should be very jealous; but we do not want to make it a closed shop. We want to give these good things to the rest of the world.

12.41 p.m.

Miss Hornsby-Smith (Chislehurst)

It is a pleasure to find oneself following an hon. Member on the other side with whom one can agree. I believe that, small though the attendance here is today, the importance of the subject far transcends the apparent but by no means actual disinterest in the subject in the House today. For many years the British Empire has been the victim of not always kind propaganda, and anti-preference propaganda has been made a missile to be hurled at the British way of life. I should like to mention briefly three points which I consider are vitally important to be borne in mind when our delegates go to Torquay.

I would first support previous speakers who have emphasised that our standard of living in this country, despite the burden of taxation—the highest in the world—and, not least, our system of social services, which is the most comprehensive and costly per head of the population of any nation in the world, is maintained because we are able to sell our goods within Empire markets, and we are able to enjoy mutual exchange of trade with Commonwealth and Dominion countries that enjoy a standard similar to our own.

Secondly, I believe most firmly that it is no good spending millions of the taxpayers' money in Colonial Preference and development of new industries, in order to raise the standards of living of the peoples of those Colonies, unless we are prepared to provide markets for the goods which we encourage to be developed in those areas. Colonial development is not worth the paper it is written on, unless we are prepared to protect the goods whose production we stimulate there.

Thirdly, I believe that America cannot go on buying her own exports with her own money for ever. We are grateful for the generous aid she has given Europe, and particularly to us; but she knows, and we know, that if we are to restore Europe to prosperity and maintain her employment, then we must be in a position to keep our people employed. The greatest disservice that was done to this country in trade was to believe for a short while that we could subscribe to the terms of the Havana Charter under which buying in the cheapest world markets was the first criterion.

I believe buying in the cheapest markets would strike a death blow at all the services, at all the standards of life, at all the trade union rules and regulations, and at the very basis of our way of life in this country, which have been built up over the last 100 years. We cannot believe that a free market where goods made in long hours of work by sweated labour in poor factory conditions should be allowed to compete with that citadel of increasing prosperity, as we hope it may be, and of good hours and working conditions, as it certainly is, that is this country today.

I believe very strongly that our delegates to this conference will carry with them— and I believe this is shared by Members on the other side of the House—the feeling that it is our duty to maintain our standards, to do all we can to encourage better standards elsewhere, so far as it lies in our power to do so, and to see that for freer world trade we do not jeopardise the livelihood of our own people, the standards of our own factories and workshops, and, above all, the prosperity which is the great bulwark against Communism.

12.45 p.m.

Mr. Lennox-Boyd (Mid-Bedfordshire)

Provided the international situation, as is more than likely, does not demand the return of this House before the full Recess has been exhausted, the conference on international trade will have assembled at Torquay before this House meets again, and that does give particular justification to my hon. Friend the Member for Wembley, South (Mr. Russell) in bringing up this matter today on the Adjournment. The object of our party in encouraging a discussion on this subject is two-fold; first of all, to make our own position absolutely plain; and secondly, to try to get certain definite assurances from the Government. It has also, I hope, achieved a third useful purpose in that it has shown how less and less this matter is becoming a matter of party political controversy, and that the interest and the anxiety on this issue is common to both sides of the House; and I hope that that fact will not be lost sight of by His Majesty's advisers at the Torquay conference.

In regard, first of all, to the position of the Conservative Party. We have made it absolutely plain that we do not consider ourselves pledged by any international agreements reached at Geneva, Havana, Anneçy, or, in September, at Torquay in so far as they limit the right of the British Empire to make its own mutual preferential arrangements. We have made it plain that we feel that now, in the present situation in the House of Commons, there is an obligation on the Government to take notice of those warnings. The House is very closely divided. Only yesterday there was a majority of only one on a matter of prime importance, and I think it would be very unwise for the Government to go to the Torquay conference and encourage their delegates, or any foreign delegates, to believe that a party Government of another complexion that may well succeed the present Administration, will be in any way bound by agreements of that sort reached at Torquay.

I do not think that in the United States there is quite the same feeling in regard to the need to do away with British Imperial Preference as there used to be. I am encouraged in this view by the favourable response to the article by Sir Hubert Henderson in the "American Economic Review" last year, when he made it quite plain that, in his view, the only hope for the United Kingdom, the sterling area and the British Empire to get out of its present dollar difficulty, was by the wise use of discrimination, and that non-discrimination and multilateral trade pursued at this moment might well permanently prevent the British peoples from recovering economic independence and playing their proper part in the world.

No doubt we shall hear from the hon. Gentleman the sort of phrases that all Ministers feel obliged to use in regard to the merits of multilateral trade, but I would draw his attention to the concluding paragraph of an article in the "Economist," and so shall, I hope, discount in advance any general tribute of that kind which the hon. Gentleman may feel inclined to make. Any reasonably competent third-year student of economics "— says the "Economist"— can demonstrate with triumphant theoretical finality that any international trading system which has the peace and the welfare of mankind at heart must be based upon these principles of multilateral convertibility and nondiscrimination. No sensible person would dispute that they represent polysyllabic perfection. They have only one defect: in the world as it is they will not work. It is because of that fact I do not want the House to pay much importance to any words or phrases in favour of nondiscrimination to which the hon. Gentleman may give vent today. We want from him definite assurances.

There are two dangers. The first danger is that the British Government may ratify the Havana Charter, and the other is that they may agree, without ratifying it, to a procedure which will have the same practical effect as ratification. I should like very briefly in the next two or three minutes to ask the hon. Gentleman certain questions about that. We should be grateful for a definite declaration that the Government will not ratify the Havana Charter at Torquay, or take any steps to do this without reference first to the House of Commons. I think we are entitled to ask for that statement, having made our own position quite plain, and having drawn the Minister's attention to the narrow margins which now separate the two parties. I hope he will be able to give us a definite assurance on that.

Secondly, in regard to any action the Government might take, short of ratifying the Havana Charter, which will have very largely the same practical effect as if they did ratify it, there is a very great danger that we may find ourselves committed to nearly as much as the Charter itself represents, but committed rather by the back door, without the country, or British industry, or the British Empire wholly knowing what is happening. As the House knows, we did sign the general agreement on tariffs and trade, and at the same time we agreed to an article whereby we said we would do our utmost, or words to that effect, to live up to Chapters 1 to 6 and Chapter 9 of the Havana Charter. The chapter that we did not pledge ourselves to, was the chapter setting up the international authority; we certainly have not got that, and it is a good thing that we have not. But the chapters that we have undertaken to accept, can be made just as dangerous for imperial trade in many spheres as the full Charter might be.

The House ought to realise, for example, that today any decrease in most-favoured-nation margins automatically at this moment reduces or eliminates Imperial Preference; that no Imperial Preference margins can be increased; that whatever the situation may be in, for example, the British sugar colonies, no new preference can be instituted; and that the machinery of most-favoured-nation clause agreements applies to any new preferences. This appears to us to be an extraordinary handicap to British imperial recovery, and little more should be needed than to draw to the attention of our friends in the United States, the problem of our sugar colonies and the vivid contrast with their own treatment of Cuba. In Cuba, sugar producers have an absolute priority in American markets, and a large virtual Imperial Preference. All we are asking is to be able to treat those countries that are part of our own Empire, in the same way as America is treating Cuba which is not part of her Empire.

In regard to the second danger, that we might find ourselves committed by the back door, I should like a definite assurance from the Parliamentary Secretary that what is called the provisional application procedure will apply to any extension at Torquay for another three years of the existing tariffs arrangements; that is to say, that whatever His Majesty's Government agree to do at Torquay in regard to extending for another three years the general agreements of Geneva, we shall still be free to give 60 days' notice of intention to renounce such an agreement, and that no country would have a complaint against our honour if we took that course.

I hope the Parliamentary Secretary can give us definite assurances on those few points. I should like, on behalf of the Opposition, to welcome him in his rôle today, and to say that his right hon. Friend the Minister and the Secretary for Overseas Trade did both explain to us that urgent prior engagements made it impossible for them to be associated with the Parliamentary Secretary today.

12.54 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Rhodes)

I thank the House very much for the way in which hon. Members have expressed themselves on this topic. It is not my particular branch of the work of the Board of Trade, but I must confess that I am very interested in it, because for many years my own livelihood has been connected with it. I always expected to export 25 per cent. of the fabrics that I made, at any rate before I came to this House. I am. therefore, aware of that particular aspect. I am grateful to the hon. Member for Wembley, South (Mr. Russell) for raising this subject. The fact that a large number of countries will be meeting at Torquay on 28th September to negotiate between themselves reductions in tariffs, makes this subject an extremely important one, and it is fitting that the House should have an opportunity of hearing about this complicated and often misunderstood subject before it adjourns for the Summer Recess.

The misunderstandings which have arisen about the Geneva Agreement on Tariffs and Trade, and Torquay seem to have caused several hon. Members considerable concern—and not unnatural concern either. The main cause of alarm seems to be, first, that G.A.T.T. is a conspiracy to whittle away Imperial Preference behind a screen of technical jargon; and, secondly, the idea that irrevocable steps will have been taken to change the tariff before the House meets again. These are, in fact, illusions, as I shall try to show in the course of my remarks.

It may help if I first deal briefly with the background to the negotiations which we are about to open at Torquay. During and after the war, a considerable amount of thought was given, both here and overseas, to the shape which international economic co-operation would take in a peaceful world, and this found expression in the project to create an international Trade Organisation. As the hon. Member for Wembley, South knows full well, that idea stemmed out of the Atlantic Charter, in which his right hon. Friend the Leader of the Opposition played a considerable part, and when he is criticising G.A.T.T. he is indirectly criticising something his own leader helped to set up—and rightly so helped.

This organisation would provide a code of rules to preserve world trade from unfair and undesirable practices, and would provide for periodic negotiations between contracting parties for the reduction of their tariffs. The aim of this grand design was to reduce throughout the world the barriers to free and fair trading, and so enable all those who joined its ranks to move forward from the poverty of war to a brighter and more prosperous world.

Mr. Lennox-Boyd

Hear, hear.

Mr. Rhodes

Yes, that is one of the phrases to which the hon. Gentleman referred, and I concede him that.

The first of the international conferences designed to hammer out the details of this organisation met in London in 1946. At the second in Geneva in 1947, it was realised that some half-way house was needed before the full-scale Charter envisaged could be ratified by all the members and come into operation. The General Agreement on Tariffs and Trade, which contained some of the provisions it was hoped later to embody in the Charter, was concluded at Geneva in November, 1947 by 22 countries, including all the Commonwealth and the U.S.A. Attached to the Agreement as schedules are the reductions of tariffs negotiated by these original members, and the results of those negotiations were laid before the House as Command Paper 7258, and debated in January, 1948.

A second round of tariff negotiations took place at Annecy during the summer of 1949. The original contracting parties did not negotiate among themselves, but negotiated with newcomers who had expressed a desire to accede to the General Agreement. As a result of these negotiations, a full account of which was laid before the House in Command Paper 7792, a further nine countries became contracting parties.

It is now proposed to hold a third round of tariff negotiations at Torquay. To be quite fair, I think the fact that this charming resort has won the honour of being the seat of an important conference such as this, from such exotic places as Cannes and Monte Carlo is in no small measure due to the activities of my right hon. Friend and the British Travel and Holiday Association, not to mention the activities of the hon. Member for Torquay (Mr. C. Williams).

In these negotiations, which are due to begin on 28th September this year, contracting parties will negotiate tariffs amongst themselves, and also with the following countries who wish to accede to G.A.T.T.: Western Germany, the Philippines, Guatemala, Peru, Austria and Turkey. I would point out to my hon. Friend the Member for Stoke-on-Trent, North (Mr. Edward Davies) that Japan is not a contracting party and does not come into it.

I should now like to say a word or two about the procedure which is followed during the negotiations. The countries negotiate bilaterally, but the concessions thus negotiated by each pair of countries apply equally to all other contracting parties. Consequently each country benefits not only from the concessions it negotiates on the items of which it is the principal supplier but from concessions on items in which it has a secondary or minor interest and which have been negotiated by the principal supplier.

The results of the negotiations which have so far taken place under G.A.T.T. have been incorporated as schedules to the General Agreement and have been frozen until 1st January, 1951. At the conclusion of the Torquay negotiations it is intended to extend the life of existing schedules until 1st January, 1954. I will have a. word to say about the advisability of that course. Before confirming the schedules negotiated at Geneva and Annecy, the contracting parties will be able to negotiate some modifications, but it is the intention that these modifications should be kept to an absolute minimum so that the maximum amount of trade may remain covered.

At Torquay, the United Kingdom envisages negotiations with the United States, the Philippines, Western Germany, Turkey, Austria, Peru, France, Belgium, Holland, Italy. Greece and Sweden. I have said that the object of these negotiations is to secure reductions in tariffs in order to help and to further the expansion of world trade. The House will remember what my right hon. Friend said in answer to a Question only yesterday, that it is the Government's policy first to agree to reductions in our tariffs, or in the preferences enjoyed in Commonwealth countries, only when we secure tariff concessions which we consider of at least equal advantage, and secondly to agree to no changes—which answers the point made by the hon. Gentleman opposite—in preferences which we give or enjoy, without the fullest consultation with the other Commonwealth countries involved.

While we are not proposing to negotiate with other members of the Commonwealth, they have agreed to our suggestion that we should all meet in London before the Torquay negotiations take place. That meeting will take place on 16th September. It is proposed that, at that meeting, there should be a full and frank exchange of information and views, and at Torquay the United Kingdom delegation will keep in close touch with the delegations of other Commonwealth countries. I should also add, in reply to another question, that industry has been fully consulted and its advice has been asked on the tariff concessions that we should seek. It is similarly being consulted in regard to requests for concessions which have been made to us.

The second point which seems to be causing some concern to hon. Members is that there may be some irrevocable change in the United Kingdom tariff during the Recess. I can give an assurance here and now that that will not be the position. The Torquay conference opens on 28th September, and is likely to last for several months. The point which seems to be causing concern to some hon. Members is a confusion between the time limit for a possible withdrawal from the G.A.T.T. and the period for which we are proposing to prolong the schedules of tariff reductions at Torquay.

I should perhaps remind the House that these are two separate and distinct operations. So far as the G.A.T.T. is concerned, we are not doing anything which impairs our right to withdraw from the Agreement at 60 days' notice, subject to this, however, that we are proposing to prolong for a further three years the bargains we made at Geneva and Annecy. We are also proposing to give this term to bargains which we make at Torquay in order to bring them into line.

Mr. Lennox-Boyd

The term of 60 days?

Mr. Rhodes

The 60 days' term is quite separate and is the notice which has to be given to terminate. Unless we renew our tariff concessions for a further three years, we should run the risk that other countries might withdraw the benefit of concessions of great value to our own exporting industries which we have already negotiated with other countries over a period of years.

I should like here to refer to the request made for details of what we have asked for and what we have been asked for. I cannot provide details of this nature. Under the rules governing the conditions of tariff negotiations, details of requests made are confidential. The House may rest assured that, as on the two previous occasions, a full report on the outcome of these negotiations will be made to it as soon as possible after the conclusion of the negotiations. That is as far as I can go.

It has often been said that it is only by an expanding world economy that this great trading community can hope for steady improvement in its standard of life. The General Agreement on Tariffs and Trade is designed to ensure the lowering of barriers which is essential if world trade is to continue to expand, without infringing in any way the principles to which His Majesty's Government are committed—full and frank consultation with the Commonwealth, with a traditional and proper regard to our own interests.

Mr. Lennox-Boyd

When the hon. Gentleman said there would be no change in the tariff structure during the Recess, or words to that effect, before the House reassembles, I hope we are entitled to assume that his statement covered the ratification of the Havana Charter. That will not be ratified before Parliament reassembles?

Mr. Rhodes

I quite agree. I can give that assurance.