HC Deb 06 May 1952 vol 500 cc332-6

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

Mr. Gordon Walker (Smethwick)

I should like to explain our attitude to this Clause and try to elicit one point. The purpose of the Clause, I take it, is to make permanent the Imperial Preference on sugar, which was given a life of four years in the Finance Act of 1948. On general grounds, we are somewhat doubtful of making imperial preferences permanent in this way. We certainly think that the preferences that now exist ought to be kept, but we do not think they are nearly so important as such devices as quotas, and so forth. We also feel it is necessary to bargain from time to time about imperial preferences, as between friends in the Commonwealth, and that, in general, these things ought not to be made permanent.

Presumably this one is made permanent in this Clause because it is part of the British Commonwealth sugar agreement concluded in 1951. That provided for a guaranteed market and what was called the preferential market for the surplus. The Clause provides the preferential market talked about in that agreement.

The Commonwealth sugar agreement is valid to 31st December, 1959, but is renewable indefinitely year by year. There would be something to be said for making the sugar preference under this Clause run the same length of time and in the same way as the sugar agreement. But I hope it is made permanent in this case because it is the Government's intention to make the Commonwealth sugar agreement permanent so far as we are concerned. We are, of course, in favour of that agreement. It is an example of the bulk purchase, long-term agreements of the sort which hon. Gentlemen opposite have derided, but they are vital to our Commonwealth trade and exist in considerable numbers in our Commonwealth agreements.

We therefore would support this Clause, not because we are, in principle, in favour of making imperial preferences permanent—we would rather renew them from time to time as they fall in—but because this provision is an integral part of an important Commonwealth bulk purchase long-term agreement.

Sir A. Salter

In general I agree with the right hon. Gentleman opposite. It would undoubtedly be a breach of the Commonwealth Sugar Agreement if we changed, or removed, these preferences. Therefore they must go on as long as the Agreement. Indeed, they must go on for some time, because we are pledged to give South Africa and Australia, I think, 18 months' notice of any change. But "permanent," in this sense, does not mean for ever, but unless, and until, they are revised by Parliament, instead of being terminable, as hitherto, unless renewed by Parliament after a given period.

Mr. A. G. Bottomley (Rochester and Chatham)

I do not think that the Minister's statement helps very much, because what we want to avoid at present is controversy over Imperial Preference. We have to remember that those who, at present, want to protect industries in the United States are calling for higher tariffs. We have some good friends in America. Probably the right hon. Gentleman saw the leading article in the "New York Herald-Tribune" appealing to those wanting higher tariffs not to press for them at present. This suggestion of permanent Imperial Preference will allow the United States tariff lobbies to press for higher tariffs at a time when the Chancellor of the Exchequer has appealed for dollar exports. The timing of this is bad.

The President of the Board of Trade said last week that we would consult the Commonwealth on the whole question of Imperial Preference. Clearly, we ought not to have taken this action before that consultation. We have to realise that Imperial Preference has a sentimental value and is a tangible tie between the Commonwealth. But that ought not to blind us to practice. In practice, we find the Australians putting up tariffs. It is true that they give us a preference, which means that the tariff against a foreign country is higher than the tariff against; us but the tariff against us is just high enough to keep out our manufactured goods.

South Africa now limits goods from this country by a quota system. But she is going to protect domestic industries in future, because they have brought in suspended duty legislation which will obviously operate at the time protection is put up against the domestic industry in South Africa. Let no one say that I am not a stout defender of Imperial Preference in the bargaining sense. Hon. Members opposite were good enough to pay tribute to the work I did in Pakistan. But if we are to build up these preferences, whether it be in sugar or anything else, the best way to do it is by long-term agreement and bulk buying. The West Indies, I know from experience, would far rather have a guaranteed market for sugar for a long time to come, and we for some years have been buying our sugar at lower prices than the real price.

I should have thought that the right way to go about this was not to make the preference permanent, but to have had it on the basis of, say, a four-year period, as before, and that the real way to help the Commonwealth was by the policy, followed in the last Government, of long-term trade agreements and bulk buying, rather than by trying to patch up something on a preference basis which has no reality.

Mr. Glenvil Hall (Colne Valley)

When he replies, would the right hon. Gentleman explain quite briefly exactly what relationship the 525,000 tons of sugar, which is the quota mentioned in subsection (6), bears to the total output of the territories concerned? Is it anything like the whole output, or is it merely a relatively small percentage?

Mr. Frederick Willey (Sunderland, North)

The right hon. Gentleman has given an explanation which is partially satisfactory, but can he deal also with this small point, which puzzles me? Why was not the period not a permanent period, but the period of the Sugar Agreement? Otherwise, this provision might be open to a rather different interpretation, as being the giving of notice that after the termination of the Sugar Agreement, the Commonwealth sugar producers are to be expected to rely upon preference. I do not think that that was intended. I sincerely hope that we intend to negotiate a further agreement following this one. I mention the point because it might be understood, from the step taken in the Bill, that that was the intention of the Government.

Mr. G. R. Mitchison (Kettering)

May I make a suggestion on the same lines? I have just heard my right hon. Friend from this side of the Committee and the right hon. Gentleman on the other side agree that this was not necessarily intended to be a permanent provision but that it should be for the duration of the Sugar Agreement, leaving it open for Parliament to renew the provision after 1959. There did not seem to be any difference of intention between the two sides of the Committee on that. But it is rather unfortunate that the object of the Clause is said to be making permanent certain provisions as to imperial preference. … Exactly the same effect would be given by simply using the word "continuing," or some such phrase, which would not lay us open to the suggestion that having promised the other international parties that we were making something permanent, we may in the future at some time, and perhaps for good reasons, withdraw the promise. It seems to me to be likely to lead to misunderstanding if those words are kept in the Clause.

11.15 p.m.

Sir A. Salter

I am advised that the words as they stand mean that the preferences stand unless and until Parliament revokes or changes them. That is a substantial difference in the arrangement proposed this year from the arrangements made in earlier years, when the duties were only put into operation for a shorter and limited period, a period which would at present expire in August this year.

It will, of course, be perfectly possible for Parliament, when it so decides, to change these duties, but in any case we really must go on with this preference while the Commonwealth Sugar Agreement continues, which is until 1954. I suggest that the Committee should accept the legal effect of the wording and the declarations made on the subject, and I hope hon. Gentlemen are now prepared to accept the Clause at it stands. On the question put to me about what proportion of the 525,000 tons of sugar is exported by Commonwealth countries I understand that it is roughly one-third.

Clause ordered to stand part of the Bill.