EXPORTS TO CHINA

HC Deb 28 April 1953 vol 514 cc2070-104

9.38 p.m.

Mr. Ede (South Shields)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Control of Trade by Sea (China and North Korea) Order, 1953 (S.I., 1953, No. 434), dated 13th March, 1953, a copy of which was laid before this House on 16th March, be annulled. I suggest, Mr. Speaker, that it would be for the convenience of the House if we discussed this Prayer with the next one on the Order Paper, as they are closely connected.

Mr. Speaker

I think that that would be a convenient course.

Mr. Ede

Thank you, Sir.

These two Prayers relate to the present position that has arisen in the Far East as a result of the military operations that are being conducted there. We are not at war but, unfortunately, numbers of men belonging to our Forces and of those of our allies are being killed and wounded and subjected to all the hazards generally associated with war. I have no doubt that at some time in the not distant future it will be necessary for Her Majesty's Government and other Governments in various parts of the world to discuss exactly the kind of definition and general international law that will prevail in circumstances such as those of the present.

I want to make it quite clear that Her Majesty's Opposition are not in any way anxious that strategic or military material of value should reach the people who are at the moment engaged in fighting the Forces with which our own troops are serving. However, we feel it desirable that some explanation should be given to the House of the reason for making these two new Orders.

These two Prayers have been on the Order Paper for some time and, by mutual arrangement with Her Majesty's Government, we have postponed bringing them forward in view of the delicate and, we hope, improved situation that appears to be coming about in the Far East. Nevertheless, it is clear that even if things move at the best, they will probably move slowly; in fact, it will probably be a better sign of ultimate success if some of the movements are slow rather that rapid. These two Prayers could not be moved after next week and, therefore, it is desirable that there should be some explanation given by the Government this evening.

Briefly to recapitulate the situation, on 31st January, 1951, when my right hon. Friends and I were the advisers of His then Majesty, the General Assembly of the United Nations passed by 44 votes to seven, with eight abstentions, a resolution originated by the United States condemning the Peking Government for engaging in aggression in Korea and recommending, among other things, the study of further measures to be taken to circumvent this aggression.

Following this, a group of 12 nations, known as the Additional Measures Committee, on which this country was represented, considered a United States proposal for an embargo on the sending of strategic materials to China. This resolution was eventually endorsed by the General Assembly on 18th May, 1951, by 47 votes to none, with eight abstentions and with the Soviet group of countries taking no part either in the debate or in the voting. The United Kingdom, which was then being administered by the last Government, voted for the resolution.

That resolution recommended all States, and not only United Nations members, to apply an embargo on strategic materials for China. It contained measures against transhipment, but it did not lay down a definition of "strategic materials." I understand, however, that from time to time lists have been drawn up indicating what is regarded at a particular moment as strategic material which falls within the resolution passed by the United Nations.

By 16th July, 1951, 35 States had reported that they were carrying out the resolution and some others, including the Dominion of India, said that they had in any case no trade in such materials. Following the United States resolutions, the U.S. Government applied a complete embargo upon trade with China. The previous Government of this country never agreed to do this, and I do not think that Her Majesty's present advisors have accepted that point of view either.

The Joint Under-Secretary of State for Foreign Affairs (Mr. Anthony Nutting) indicated assent.

Mr. Ede

The policy followed while the Labour Government were in office was fully set out in various statements made by my right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross), then President of the Board of Trade. For instance, on 19th June, 1951, as appears in column 246 of the OFFICIAL REPORT, he said: … it is not in our intention to impose a total embargo on trade with China.… We are satisfied that the measures which we have been operating have been effective in preventing any supplies of substantial military or strategic importance reaching China from the United Kingdom. …"—[OFFICIAL REPORT. 19th June, 1951; Vol. 489, c. 246.] My right hon. Friend the then Prime Minister also indicated the same policy in answer to a Question on 3rd May, 1951.

These statements add up to the following: That trade with China, like trade with other Communist countries, had been subject to restrictions by means of a prohibited list and a restricted list even before China entered the Korean war. After the United Nations resolutions, the procedure was tightened up. Control was exercised partly by Statutory Orders and partly by co-operation with trade associations.

All goods of direct military importance and many other goods which might directly assist military operations were totally prohibited. This prohibition covered all military equipment, aircraft, specialised vehicles, various metals and alloys, and many industrial goods, including all machine tools. Many other goods were restricted to what were regarded as normal quantities for civilian use in China. Much controversy centred around the export of rubber, by mid-1951 this trade had already been stopped.

Hong Kong, which is, after all, an emporium through which many British goods reach China, applied controls similar to those exercised by the United Kingdom. As an indication of the scale of China trade the value of the total United Kingdom exports to China in the main categories in the first three months of 1951 appears to be £1,291,000. That policy seems to have been continued ever since with only minor modifications of categories and procedure. Questions have been put from time to time to Her Majesty's present advisers on points of detail, but the answers indicate no substantial change.

The new Order, No. 434, does not appear to alter the policy relating to trade with China, but seeks to stop a leak in the existing policy. The Foreign Secretary answered a Question on that point on the 18th March, 1953, and we understand its objective is to prevent British ships from loading at non-British ports for carriage to China of goods which were in any case prohibited from loading at a British port. That appears to be the object of this. We understand that simultaneously, but not under the Order, steps are being taken administratively to prevent foreign ships carrying strategic materials to China from being bunkered in ports under British control.

It is on these points that I desire to put some questions to the Under Secretary and I hope that we may get an answer from him on each of them. The first question is: will the hon. Gentleman confirm that the main line of policy is unchanged? The "New York Times," on 8th March, suggested that new categories are being added and we know that the decision to make this Order, announced in Washington at the conclusion of the talks between the Foreign Secretary and Mr. Dulles, has been represented in the United States as a major extension of the measures adopted by this country in June, 1951, as a result of the United Nations resolution about an embargo of the supply of arms, ammunition and instruments of war to China.

It is being represented in the United States, we understand, as the imposition of a blockade in fact if not in form. We do not take the view ourselves that either the old Orders or the new one justify such an interpretation and we should like to know what the new measures mean in real terms. Is there some substantial alteration in the policy, which may be designed for stopping up a small leak, or is it—as has been represented overseas—something quite substantial, bringing about in the end something approaching a blockade? Can we know what goods have been slipping through the controls and in what quantities? Where did they originate and if this is something substantial who will be affected? What foreign ships engaged in this trade have been bunkering in British ports, and at what ports?

If, as we believe is probable, the truth is that the quantity involved is trivial, I would ask the Under-Secretary whether he thinks it was wise timing to make a gesture of this kind—which, on the supposition I am now putting forward is almost an empty one—which so looked like strengthening the measures against China that the "New York Times" of 7th March had a headline: Britain agrees to step up economic war on Peiping. This was at a time when dangerous statements were being made about Far Eastern policy; and when Her Majesty's Government ought to be advocating a realistic attitude toward China.

I would also ask whether these measures affect Commonwealth shipping and whether there was any Commonwealth consultation before or after the decision? This applies particularly to Ceylon who is refusing to stop all exports of rubber to China. Does this mean that shipping flying the flag of Ceylon will be refused bunkering at Singapore?

A number of my hon. Friends will be raising specific points with the hon. Gentleman regarding particular trades but I would like to quote an article from the "Coventry Evening Telegraph" of 14th March, in which it is stated: A glance at a trade table … shows that the field (of trade with China) is far vaster than textiles. It includes raw and manufactured iron and steel, non-ferrous metals, machinery, chemicals, drugs, vehicles, and many other things. In 1947, the total we sent to China was £12,805,000 … Lancashire business men believe that the field for textile machinery in China will be far more encouraging at some future date … We sent China last year £494,000 worth of textile machinery—a mere drop in the ocean of her needs … Although the number of British ships carrying goods to and from the vast Chinese mainland is only a twentieth of what it was, every day a ship clears Hong Kong for China … I would emphasise that any measure that Her Majesty's Government take to prevent the supply of materials which may be used in connection with hostilities against Her Majesty's troops in China will continue to receive the full support of hon. Members on this side of the House. But we require an assurance that in this matter we are not departing to any extent from the policy pursued by the former Government all the while that principle I have just enunciated is observed. I hope that the Undersecretary will be able to give us an explicit assurance on the issues I have raised.

9.54 p.m.

Mr. Sydney Silverman (Nelson and Colne)

At this moment, as throughout the last two years and more, military operations are going on in the Korean Peninsula. In those operations China is fighting on one side and we are fighting on the other. However that situation may have come about, I am sure there is no hon. Member of this House who would think it right that we should engage in any kind of trade which directly supplemented the forces arrayed against our troops in the Korean Peninsula.

But not all wars are of the same kind. Some are total all-out wars fought on either side for total victory and for the unconditional surrender of the enemy. Others are strictly localised and limited wars. It is obvious that the economic policy which is right for the one kind of war may not be the right one to apply to another. There has been no difference between the main parties in the House, or between the policy of the late Government and the policy of the present Government, in that we in this country have always believed that the war in Korea ought to be limited and localised so far as it can be.

That is not everybody's view. There is another view, which is that the Western world as a whole is engaged in an all-out conflict with the Communist world as a whole and that our economic policy ought to be dictated not by the ordinary economic and trading considerations but by quasi-military considerations. If the object is to bring to an end the regime which we dislike, then, of course, we conduct our trade policies accordingly and we willingly and cheerfully submit to all kinds of economic sacrifices and sufferings on our own part to make sure that the countries arrayed against us do not benefit by our economic activities.

It would be fair to say that the second of those two policies is, in the main, the policy of the United States of America, whereas the first is the policy of this country. There is not a conflict as to Korea, but there is a deep conflict about our economic policies considered from that point of view.

What we have to consider is how far these Orders were necessary; how far they contribute to the purely limited objective of not sending or selling strategic materials to the enemy forces in Korea; and how far they inflict upon the trade of our own country wider and deeper damage than is necessary for that limited purpose. The first point that strikes me about the main Order, No. 434, is its extreme width. Although it is entitled: The Control of Trade by Sea (China and North Korea) Order, 1953 the scope of the Order is very much wider than that. It is not until we get very nearly to the end of the Order, in paragraph 3 (2, b), that China or North Korea comes into the picture at all. The purpose of the Order, so far as it can be discovered from the terms of the Order itself, is to make it impossible for any British ship to leave any British port without a licence from the Board of Trade.

Why was it necessary to have an Order as wide as that? It must be an additional irritation, if no more, upon the trading community. It is not limited in any way And kind of ship above the tonnage of 500 tons sailing from anywhere to anywhere is covered by this Order, and is prevented from doing so unless it has a licence in advance from the President of the Board of Trade. It is not only that it covers every ship sailing under the British flag, but that the conditions on which the President of the Board of Trade many grant the licence are completely undefined. I quote from paragraph 3 (2): Any licence granted under this Order may be granted subject to such limitations and conditions as the Minister or person granting the licence thinks fit to impose with respect to:

1. (a) the trades in which the ship may engage and the voyages which may be undertaken by the ship;
2. (b) the class of cargoes or passengers which may be carried in the ship for the purpose of being put off in China or North Korea or within the territorial waters of those countries:
3. (c) the hiring of the ship."

The only limitation, the only restriction upon the Minister is when he is talking about the class of cargo or passengers being put off in North Korea; in that respect only he is limited to China and North Korea and considerations arising out of that. So far as the hiring of the ship is concerned, so far as the trades in which the ship may engage and the voyages which it may be undertaking are concerned, these restrictions are not limited to China and North Korea at all.

Right hon. and hon. Gentlemen opposite used to be extremely eloquent when they sat on this side of the House about the dangers of delegated legislation. They used to say that it was quite wrong for the House to part with this control of legislation, and, although they were compelled to concede that there were many purposes for which delegated legislation was necessary, and that did not stop the Leader of the Liberal Party saying that there should not be delegated legislation at all, nevertheless, they said that it should be severely limited and that we should examine every Order very closely in order to see under what power it was issued and to see that the powers that were delegated were no greater than those that were required for the purpose.

It does appear on the face of it that the powers granted by this Order by delegated legislation to the Minister are far in excess of those which will be necessary for the limited objective which my right hon. Friend the Member for South Shields (Mr. Ede), who moved the Prayer, said was the only objective of the Order. Is this really a time when we should inflict greater irritation and difficulties upon those who are trying to maintain British trade into the world? Surely not. Was it really impossible for the Government to devise an Order which would have limited its powers to ships in the territorial waters of China and North Korea, and would have limited its power to interfere with cargo and passengers to those strategic materials with which, it is said by my right hon. Friend and apparently agreed, we are alone concerned.

In order to prevent some British ships from taking some strategic materials to China, North Korea and those territorial waters, was it really necessary to impose upon every British ship sailing from any British port on any voyage whatever the necessity to get a general licence and to give the Minister power to impose any condition whatever within this narrow objective, or far outside it, without any control of Parliament at all?

It really seems to be an abuse of the process of delegated legislation which not even the most devoted advocate of the necessity of delegated legislation in modern times would support. But there are dangers involved in it, because if we go back to the conflict of ideas with which I began, the House will see that under the guise of giving the Government power to prevent trade in strategic goods in a limited area it is giving the Government complete power to control all shipping and all trade. Surely we ought to have some explanation of that.

The second point to which I wish to draw attention is that under this Order the conditions imposed by the Minister need not be restricted to the narrow class of strategic goods and materials which my right hon. Friend had in mind, but could cover everything prohibited under the Battle Act. I am not now talking about what may actually be the intention of the Government, but about what powers we ought to give them. I submit that there is no doubt that under this Order the Government could impose a total embargo, not only upon trade with China, but upon trade with anybody.

There is no limitation in the Order at all. If the President of the Board of Trade were to decide that from tomorrow onwards we ought not to trade with France, there is nothing in the Order which would limit his power so to impose conditions upon the granting of licences as to prevent the cross-Channel trade between the South Coast of England and the North Coast of France. I think the Minister of State said in an answer in the House a little while ago that we have no intention of imposing a general blockade on China. But some American newspapers—for instance, the one to which my right hon. Friend referred—have another view.

So far as the terms of the Order are concerned, if while it is in force this Government or any Government wished to limit all trade with China, or with anybody else they would have complete power to do it, and once the House parted with this Order it would cease to have any right to criticise or to control the Government's action with regard to it. Surely it was not necessary to have an Order so wide as that. Why should not the Order have strictly and rigidly defined those countries and those territorial waters to which it applies?

Colonel L. E. Crosthwaite-Eyre (New Forest)

If the hon. Gentleman will refer to paragraph 1 (1) of the Order to which he refers, he will see that it is specifically laid down to what it refers.

Mr. Silverman

Paragraph (1) says: This Order shall come into operation on the 17th day of March. 1953, and may be cited as The Control of Trade by Sea (China and North Korea) Order, 1953. Is that the point?

Colonel Crosthwaite-Eyre

Yes.

Mr. Silverman

I am not concerned about how the Order may be cited. I am concerned with what it does. I do not want to repeat all that I have said on the subject, but if the hon. and gallant Gentleman will read the Order I think he will find that there are no such limitations as I think there ought to be, and as I gather from his intervention he thinks there ought to be.

Colonel Crosthwaite-Eyre

And as there are.

Mr. Silverman

Where are they?

Colonel Crosthwaite-Eyre

If the hon. Gentleman likes me to interrupt him—

Mr. Silverman

I do not want to delay the House. If the hon. and gallant Gentleman thinks that there are words of limitation in the Order, all I can say to him very sincerely is that I have been unable to find them, and that if he speaks later in the debate and will draw my attention to such words of limitation I shall be very grateful. In the meantime, I shall go on with my speech on the assumption that the words are not there.

Why should not the Order have been limited strictly and rigidly to the countries with the territorial waters of which the policy of the Government is concerned? It could have been done quite easily. [Interruption.] If the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) wishes me to send him in the course of a post a draft Order which I would draw up, I will undertake to do it. I cannot do it now in his presence, but I am sure that there will be no more technical difficulty in drawing up an Order limited to some countries and some territorial waters than there was in drawing up an Order such as this giving power to put a general embargo upon all trade by sea between this country and any other country. That limitation should be there.

The second limitation which should be there is this: I can see no insuperable difficulty—I do not say there are no difficulties, because this class of legislation has its technical difficulties—in having an Order which, instead of giving the Government power to prohibit any kind of goods gives them only a limited power to prohibit scheduled goods. Why should we leave it in doubt? Why should we leave in doubt what the Government regard as strategic materials and what they do not? Why should there not be a definite schedule of contraband? We should be able to know positively what goods are contraband and what are not.

I am sure that the House will agree that if there is any doubt about it the benefit of the doubt should be given to the trader and not to the Government. If it is possible to argue with any degree of plausibility that the matter is unclear and could be made clear, it should therefore be made clear. It would be better to have a scheduled list of prohibited and contraband goods instead of leaving the matter so ill-defined as to make it possible for the Government to declare contraband any kind of goods for as long as they like and without giving any reason. There is no reason in the world why that could not have been done.

I hope that the points that I have made so far will be accepted by the Government as being genuine, constructive points which it was perfectly legitimate to make, and that the questions that I have asked will be accepted as perfectly legitimate questions on which to ask the Government for an explanation when we are dealing with something so vital, especially at this time, as the foreign trade of this country.

I conclude, therefore, by drawing attention to the irreparable damage that might be inflicted upon this country by going further at this time, for this limited purpose, than we need to go. The Chinese market is a traditional British market. It goes back many centuries, and certainly right up to not very many years ago it was one of the vital markets for our export trade. Until the early years of the 1920s the Chinese market absorbed quite a substantial proportion of Lancashire cotton manufactured goods, and the decline of the Lancashire cotton trade between the two wars—a very, very serious decline as hon. Members concerned with it will remember—is largely, though by no means entirely, attributable to the loss of the Chinese market to the Japanese. Until recently the Japanese have been out of that market and we have the opportunity to recapture it.

When we deal with the economic problems of this country, everyone says that we must find some way of making our living otherwise than by dependence solely or mainly upon the American dollar market. Indeed, there can be nothing more ridiculous than that the people of this country should go on straining every nerve to produce goods and export them to the one market in all the world that does not need them and will do everything in its power to keep them out. That is not a criticism of the American market. We would do the same in the same position, and we would be right.

There is no reason in the world, on ordinary economic considerations, why the American market should absorb our surplus manufactured goods. The Americans can make them all themselves quite as well as we can, and cheaper. [An HON. MEMBER: "No."] To a great extent that is true. I am not saying anything to depreciate the necessity, in present circumstances, of maintaining our sterling-dollar balance. All that I am saying is that there is something distorted and unbalanced in a world economy which forces us to export our manufactured goods to a reluctant market, which is almost saturated with its own goods, whereas all over the world there are markets waiting to absorb our goods and needing them. Our economic policy ought to be directed to redressing that balance and straightening out that distortion.

Mr. Beresford Craddock (Spelthorne)

If the hon. Gentleman is advocating trade with China, I should be interested in his views on the ability of China to pay for British goods.

Mr. Silverman

I do not want to go into that at length, and I think that it would be out of order if I attempted to do so. If the hon. Member will not press me for argument and proof today, my own belief is that we have an expanding Chinese market and that they will be able to pay for all the services which they need from us with the things they produce. The whole history of Anglo-Chinese trade proves that that is so. In so far as these measures would interfere with the redress of that lack of balance and the straightening out of that distortion of world trade, they are wrong and ought to be changed and limited in order to make sure that they do as little damage as possible.

Some people talk as though world trade can be postponed until international peace has been established. That is the wrong view. Of all the means and all the instruments at our disposal—and I am sure everyone thinks we should use them all—by which we can bring about an alleviation of the international position and try to get nearer to an established and permanent peace, the most useful method is to develop trade among all the nations of the world, without regard to ideological differences or political considerations. While fighting is going on strategic materials must naturally be withheld but, subject to that overriding consideration, the more we can do to restore world trade on a general basis the further and the quicker we shall advance towards world peace.

10.22 p.m.

Colonel L. E. Crosthwaite-Eyre (New Forest)

Listening to the hon. Member for Nelson and Colne (Mr. S. Silverman) I was not surprised that, despite the argument which we have before us, he managed to introduce the United States of America. It would be most rash for us to be led astray by the theory that because it may be impossible to export certain goods to the United States we must export them to other countries.

His argument is based on the view that a large amount of goods and services should be provided to China. To a certain extent he is ready to ignore the war conditions which prevail. One might almost say that he is one who looks so much to what he believes to be the ideal that he is quite prepared to ignore the present circumstances which surround us.

Mr. S. Silverman

I am sure the hon. and gallant Gentleman does not wish or mean to be unfair. I made it quite clear in my speech that I recognised that war conditions prevailed and that they imposed obligations upon us all in regard to strategic materials, but I drew the distinction which every hon. Member of the House in any party has always drawn between a localised and limited war and a general war.

Colonel Crosthwaite-Eyre

Certainly. I accept the hon. Member's contention. He has taken refuge behind the barrier of the weakest argument and has used terms like "strategic."

Mr. Silverman

I did not use it originally.

Colonel Crosthwaite-Eyre

Who is to say what is a strategic material? The hon. Member may consider a certain material as strategic when hon. Members on this side would not, and vice versa. He would say that there are many materials that can be sent to China; that he is certain that they are non-strategic and are things that could be sent, but who is he to judge?

Mr. Silverman

The hon. and gallant Gentleman will perceive that the logical result of his argument is that one cannot be certain of not aiding the enemy's war effort unless one refuses to sell him anything at all. In saying that he is going much further than his Government would go.

Colonel Crosthwaite-Eyre

The hon. Gentleman is now taking the argument a step further. At the moment I am only dealing with his speech, in which he made an impassioned plea that, whilst he would keep strategic materials away from China, he would be perfectly prepared to allow all the rest to go there. That was his statement, if I may truncate it. but it seems to me to be the most monstrous thing.

Mr. Silverman

It is the view of the Government too.

Colonel Crosthwaite-Eyre

The one thing we must ensure is that no material, be it called strategic, tactical or anything else, should be allowed to reach China at the moment if it will prolong the war in Korea or promote the "cold war" in East Asia, if I may put it like that. I think that speeches such as those from the right hon. Gentleman and the hon. Gentleman opposite do an enormous amount of harm. They are trying, in a sense, to say that we can debar with our left hand what we do not like and accept what we want with our right. That seems to me quite impossible. If we believe there is a crisis in East Asia, that there is a cold war, and that in Korea there is a war, the one thing we must do is to see that raw materials, whether they be called strategic or anything else, do not reach the foes who are fighting us.

I must admit that my objection to these Orders tonight is because I do not think they are nearly strong enough to meet the needs of the country at the moment. We are leaving far too many leaks; we are allowing far too many goods to get through, in one form or another, which may aid those who are fighting us. In contradistinction to the hon. Member for Nelson and Colne, who wants a relaxation, I believe that what we need is a tightening up; that we want to ensure that, no matter what temporary hardship may be caused, none of these things which we know the enemy want reach them.

When the hon. Member for Nelson and Colne says that these Orders may be prolonged and extended to any country, I ask him to look at paragraph 3 (1). where he will see that they are limited to this particular issue of China and Korea; that all that is meant to be done is to see that we prevent raw materials and strategic necessities from reaching the Chinese.

Mr. Silverman

I am sorry to interrupt again and I am grateful to the hon. and gallant Gentleman for giving way. I do not follow his argument about this. Paragraph 3 (1) says: Notwithstanding "— certain things which I need not read— no British ship to which this Order applies shall on and after the 31st day of March, 1953, proceed to sea from any port"— and I leave out certain words— except under the authority of a licence granted under this Order.

Colonel Crosthwaite-Eyre

The hon. Gentleman will be wiser than I am about this, but I understand the legal construction of that is to make the Order refer to ships going to sea in respect of this present Order. The hon. Gentleman may contradict me, but I understand that is the legal construction of those words.

I wish to ask whoever replies to this debate to answer one or two questions. Whilst we have these Orders to serve the purpose for which they are laid, I believe that we should stop any possible leak that occurs through other channels. I have mentioned the case of Hong Kong before, and given various figures. Can we believe that 20 million Hong Kong dollars' worth of rubber could be imported into that Colony unless it is to be exported elsewhere? Can we believe that 42 million Hong Kong dollars' worth of explosives and chemicals were rightfully imported into Hong Kong, particularly when we know that only 10 million of the 42 million were retained in the Colony? Can we really say that we are happy when we know that of minerals, fuels, lubricants, etc., Hong Kong imported 130 million dollars' worth last year or, to give another figure which will be of great interest to the House, 144 million dollars' worth of machinery.

Mr. Harold Davies (Leek)

And Japan 72 million dollars' worth.

Colonel Crosthwaite-Eyre

I should like to make my own speech.

During last year Hong Kong imported 400 million dollars' worth of goods more than it exported. Where did the balance go? [An HON. MEMBER: "Where did it come from? "] It does not matter where it came from. The fact is that Hong Kong imported goods worth 400 million dollars more than the goods exported. The balance must have gone to China. We are told that the United States and Canada have put an embargo on imports into China. It is interesting to see that in the last year they imported 300 million dollars' worth of goods into Hong Kong. I have not been able to find the figures for Macao because they are very difficult to obtain.

On the other hand, out of reasonableness we may govern our own interests and prevent any European evasion of the regulations, but what is the good of doing all this in the face of the figures for Hong Kong? It is said that in Hong Kong no abuses have been found. I can only say that figures talk rather louder than do committees' reports. From the figures which I have given there seems to be a grave leak in Hong Kong to the detriment of the very things that we want to preserve. I hope that, so far from the House rescinding the Orders, it will reinforce them and ensure that the aims to which we have set our purpose are properly maintained.

10.33 p.m.

Mrs. Barbara Castle (Blackburn, East)

The speech of the hon. and gallant Gentleman the Member for New Forest (Colonel Crosthwaite-Eyre) must have gravely embarrassed his Front Bench for he has been most strongly recommending the Orders to us on the grounds that he wants a total blockade of trade with China, whereas the Orders are being recommended to us by the Front Bench on the grounds that they want nothing of the sort.

His speech can only have stimulated the already lively anxieties which are felt by the Opposition about giving the Government the very wide powers contained in the Orders. I was glad that my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) gave us the benefit of his legal mind in analysing these powers. Looking at the Orders quite independently and with a purely lay approach, I had come to the same conclusion that he has reached, that we are giving the Government powers so extensive that we are, in effect, losing control as a House over the conduct of our trade with China. That is an extremely serious thing.

We know perfectly well that already the operation of the embargo list under the original Orders drawn up following the United Nations Resolution in June. 1951, has not been satisfactorily under the control of this House. It has been extremely difficult for anyone interested to know what new items were being added to the embargo list, what export licences were or were not being given in particular cases. As the President of the Board of Trade will agree, the issuing of export licences has been varied considerably—sometimes an export licence has been issued for a commodity at one stage and not at another. There has been no clear pattern and, therefore, there has been no satisfactory control by this House.

But under this further step we are taking we are asking this House to agree that power should be given to licence British ships going to sea and once we have passed this Order, the terms of those licences will be outside the control of this House although they may contain all sorts of regulations not only with regard to voyages and destination of the ships, but also with regard to the class of cargoes and passengers. Indeed, it means that all kinds of embargoes may be added without our having a direct control over them.

Already many of us on this side of the House, while being prepared to accept the necessity for the banning of the export of strategic materials in the Korean war situation, have been very unhappy about the way in which that word "strategic" has been interpreted. Innumerable Questions have been asked in the House. Why, for instance, under the original United Nations Resolution have export licences been denied for such things as electric motors of low capacity on the grounds that they are a war material? And motor jacks, and diesel engines of low speeds? All kinds of things which are clearly essential to the ordinary life of a country which is trying to industrialise itself have been put on the banned list.

Clearly the words "strategic material" can be interpreted so widely as to bring a blockade in at the back door. And with the mentality of hon. Gentlemen opposite, as expressed in the speech we have just heard from the hon. and gallant Gentleman, we have a right to be profoundly concerned about the powers we are giving.

Colonel Crosthwaite-Eyre

The hon. Lady mentioned diesel engines as being clearly designed to promote the industrial efficiency of the country. Surely, if we promote the industrial efficiency of a country we increase its war potential?

Mrs. Castle

I am grateful to the hon. and gallant Gentleman for so brilliantly underlining my argument and making my case for me. In effect he has come to us tonight and said, "Let us give these powers to the Government to ban the carrying of strategic cargoes," and then he says, "We should define as strategic material anything which contributes in any way to the industrial life of the country "—

Colonel Crosthwaite-Eyre

No. I did not say that. [HON. MEMBERS: "Yes."] Let me make my point clear. I said I hoped the hon. Laly would not defend the augmentation of the industrial life of China if that meant an increase in its war potential to the detriment of our position.

Mrs. Castle

The hon. and gallant Gentleman is making the task of his own Front Bench almost impossible. If, for instance, we export wool tops to China, are we not, in effect, helping to clothe the soldiers? If we export fertilisers, are we not helping to keep Chinese people alive? And can it not be argued that a human being is a war potential? Are we then tonight being asked to starve the Chinese people by these Orders? Is that our policy in relation to China?

I think there is now proof positive, from every contribution which the hon. and gallant Gentleman has made, why we should be deeply alarmed at what many of us feel is a further step towards a total blockade of China. Let us make no mistake about it, when we look at the reasons for these Orders, which have been suddenly produced out of the blue, we find that they are purely political reasons and are dictated by the desires of the United States, which does believe in a total blockade of China. In the context in which these Orders have been brought forward, I think we have a right to say we should not give these powers to the Government, which is following the political principles not of this country but of a foreign country. I ask the hon. Gentleman who is to reply to the debate what other reasons he can give us for introducing these Orders.

Has there been any evidence from either side of the House that there have been any substantial leaks through the embargo by the export of strategic goods? There has never been any evidence produced in this House that such a thing has taken place. The reasons for the Orders must be regarded in the context of the visit of the Foreign Secretary to Washington and his talks with Mr. Foster Dulles and Mr. Eisenhower. After his return, as a concession to American thought, he produced these Orders. When he was asked in this House on 18th March by one of his hon. Friends about what would be the amount of trade to be affected by this Order, the answer he gave was: I do not consider it is at all large."— [OFFICIAL REPORT, 18th March, 1953; Vol. 513, c. 31.] He went on to say how many people in the United States thought that it was large. We are accepting pressure from outside to introduce a very serious innovation in the restriction of British trade with China. It is extremely serious when one thinks that the shipping companies themselves have resisted the control of our trade.

I suggest that when we see the political reasons for these Orders, we must bear in mind the whole background against which they have been made. Let us realise that we are not merely under pressure to close little gaps in the operation of the United Nations Resolution. That is not really what the United States Government and the Secretary of State are asking for. There has been an insidious encroachment in the last few months by the United States on the freedom of shipping of all its allies in relation to China, and if we give way on this, we shall not satisfy the desires of the United States. We shall not pacify them in regard to their desire for a blockade. We shall be asked to make another concession.

On 9th March I drew attention to another serious interference with shipping and trade which resulted from the decision of the Mutual Security Agency in the United States under which it placed a restriction on the carriage of goods to Formosa. Any shipping carrying mutual security goods to Formosa was, under the new regulations, to be prohibited from trading with the China coast within a period of 60 days of carrying their M.S.A. cargo. I pointed out that this was a quite ludicrous restriction because, when I talked to the shipping companies about it, they made it quite clear that it was not strategic materials which were involved.

There was a considerable amount of carriage by tramps, some of them British tramps, of fertilisers to Formosa, and, on the return journey, the ships brought goods back from China to the rest of the world. At no stage was there a suggestion that this was in any way cutting across the strategic issue; but as part of the policy of the United States of closing the ring round China in respect of all trade, legitimate or illegitimate, this new restriction was introduced, which crippled once again free trading by British ships.

We all ought to have been considerably concerned when reading in "The Times" the other day of the activities of Senator McCarthy, who has now turned the atten- tion of his permanent investigating committee to the question of East-West trade. As if he did not have enough to do in other spheres, he has been interrogating both Mr. Stassen and Mr. Hanson, of the Mutual Security Agency, who is responsible for the enforcement of the conditions of the McCarran Act. In the course of his interrogation of Mr. Stassen—

Sir Ian Orr-Ewing (Weston-super-Mare)

I am sorry to interrupt the hon. Lady, but how does all this affect the substance of the Orders now under consideration by the House? I quite appreciate that certain comparative matters, quite rightly, should be raised, but in connection with the Orders are we not getting rather wide of the subject?

Mr. Geoffrey Bing (Hornchurch)

Surely it is in order, if the allegation is, as it may well be, that these deplorable gentlemen who have been visiting this country have been putting pressure on hon. Gentlemen opposite, to refer to it in regard to this matter. Here were two gentlemen visiting this country, who come here to say that they are going to investigate and put pressure on various people. They have already put pressure on the Greek shipowners. How do we know that they are not trying to put it on to the British shipowners via hon. Gentlemen opposite?

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I thought that the hon. Lady was in order, otherwise I should have stopped her.

Mrs. Castle

Thank you, Mr. Deputy-Speaker. I am always grateful for your protection.

I was pointing out to the House something which should show that, if the Government took the whole question seriously, and if hon. Members opposite were really concerned with the stopping up of leaks in the operation of the United Nations Resolution, they would not wave aside so light-heartedly the evidence which I am bringing forward, and which my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) brought forward.

When we realise that these Orders have been introduced purely as a result of American pressure, as a concesssion made by the Foreign Secretary on his visit to Washington, in order to create a more amicable atmosphere between us and the United States, it is important that we should bear in mind the following conversation which took place before Senator McCarthy's investigating committee. He asked Mr. Hanson, of the Mutual Security Agency, this question: Do you consider it your job to eliminate all shipping to China? According to "The Times," of 31st March, the eventual answer which was wrung from the wretched gentleman was that that was their "ultimate objective." In the light of that statement and of the notorious tirelessness of Senator McCarthy, we ought to consider this situation very seriously tonight.

We have all said that we are now on the threshold of hopeful new developments in international affairs. Certainly, we want to encourage and not to impede those favourable developments. It has been suggested in some quarters that just because there are favourable developments, the Members of this House should keep their mouths tightly closed and contribute nothing whatever to the development of world events.

I take the opposite view, and I ask the Government, in view of the fact that, since the Foreign Secretary's visit to Washington and the necessity which he felt to make this concession, there have been these hopeful new overtures both from the Soviet Union and from China —the armistice negotiations in Korea are beginning to take a more hopeful turn—whether it would not be our contribution to the lessening of international tension and to the creation of a more favourable international atmosphere if these Orders tonight were to be withdrawn.

Is it not time that this country took some initiative and some independence of action in trying to solve this acute situation of international tension? Are we always to wait until the "Big Brother" across the Atlantic has given the word to go? Cannot we decide here tonight, having the admission from the Foreign Secretary's own mouth that these Orders will be negligible in their effect, and remembering that the situation has changed since these Orders were introduced? The reaction of the Peking Government to these Orders was that they were evidence of the deep hos- tility among the British people towards the Chinese; can we not prove tonight that that hostility does not exist by withdrawing these Orders?

When we took action under the original United Nations Resolution we took it as a member nation of the United Nations, and with approval of the United Nations; but since that time, there have been too many individual actions by individual countries which, I think, have not been authorised by the United Nations. This drift towards a total blockade has no United Nations' sanction, and I say that if there was a meeting of the full Assembly, and this issue was brought into the open, the decision would come down against any action tending to lead us towards such a blockade. Issues of peace and war are not merely topics for Parliamentary debate, and we should consider this most important subject in that light and in the light of the undeniable new developments.

10.53 p.m.

Mr. Wedgwood Benn (Bristol, South-East)

I am glad of the opportunity to intervene in this debate because the question of trade between Britain and China is one of the greatest causes of friction between this country and the United States. Anyone who has knowledge of the United States knows that if ever the question of the Korean war is introduced, the first thing which is said is that the British have not done enough in Korea; and, secondly, that we have been half-hearted in our measures to prevent exports to China. I believe that the reason for this friction is in the relationship of the two countries to China, and I would like to say a few words on this.

No doubt as a result of the brilliant and forceful speech of the then Leader of the Opposition, the right hon. Member for Woodford (Sir W. Churchill), in 1949, the Labour Government decided to recognise China's new Government. Anyone looking up the speech of the right hon. Gentleman in HANSARD will see there a powerful argument for the recognition of a Government once established; but since that time, the attitude of Britain towards China has taken a different course. If one cares to follow through the negotiations in the United Nations from the beginning of 1951, one will find that since then, while the United States has been the prime mover in the aggressor Resolution. Britain has been reluctant to support it.

I am sure my right hon. Friend the Member for Grimsby (Mr. Younger) will confirm that we said we would not support the aggressor Resolution unless it was agreed that there should be no talk of additional measures or sanctions until the Good Offices Committee said there was no hope of there being some compromise with China. By the time we reached the United Nations Resolution of the summer of 1951, when the Good Offices Committee had nothing to report, the embargo on strategic materials to China was reported and the British Government then decided that an embargo on strategic goods to China should be enforced.

I do not want to argue with hon. Members opposite about what are strategic goods. Obviously that is a question which to a certain extent has to be left to the experts. But I say that once we had fulfilled our obligations under the United Nations Resolutions, we were still left with a considerable divergence of opinion between this country and the United States. In my view, the difficulty into which the Government have got themselves is that they keep pretending that our policy is the same as United States policy and then cannot understand why the Americans are always pushing them to do more. That is the real difficulty.

Mr. Deputy-Speaker (Mr. Hopkin Morris)

As I understand it, these Orders do not cover the general position. They cover only the position of British ships sailing from foreign ports.

Mr. Benn

I am grateful to you, Mr. Deputy-Speaker, for enabling me, I hope, to point out the relevance of what I was saying. First, I am trying to address myself and the attention of the House to what I believe to be the reason for these Orders—that is to say, the negotiations which the Foreign Secretary had in Washington. The second point to which I draw attention is to where the Order lays down the rules of granting a licence and says that if any British ship is leaving any British or foreign port it must be granted a licence by the Minister of Transport. Previous speakers have followed the point that it is permissible to discuss British trade with China in the widest terms. I hope you will accept that, Mr. Deputy-Speaker, because that course has been followed in the debate and previous occupants of the Chair have not objected.

I was saying that we are always getting ourselves into difficulties with the Americans because our spokesmen pretend that we are following the same policy when we are not. There are two ways out of the difficulty. The first is to follow the same policy as the Americans. I do not believe that the Government regard that as a sound step, but at any rate it is one way out of the difficulty. The other way, which I recommend, is for the Government to say to the Americans, when they are asked about these things, "We are following a different policy;" instead of making apologies they should be quite frank. Then we shall not get into the absurd position of seeming to be saying one thing while doing another.

I know that some hon. Members opposite think we ought to be following a more rigid policy. That is quite arguable, but while we continue the policy which the Government are now adopting, let us be frank with the Americans and tell them that we are following it and that it is different from their policy. Let us tell them that we think it is the right policy and that we do or do not intend to change it, as the case may be. It bedevils Anglo-American relations to an extraordinary degree if we get a reputation, and deserve a reputation, for pretending to be doing one thing when in fact we do another.

The question of whether there ought to be a total blockade or whether it ought to be a blockade in respect of a very limited list of strategic materials depends to a certain extent on how we interpret the war in which we are engaged. Some people, I notice from an intervention opposite, suggest that anything which contributes at all to China's economic well-being is a strategic export to China, but of course logic is not really a very good adviser in matters of this kind.

If we applied logic to military and economic problems in our relationship with China, we should find, first, that we had a total blockade, and, second, that we were following the policy of General MacArthur towards China—a policy which he repeated recently and which is the only logical policy to follow if one pursues logic to its conclusion. I do not think that view is accepted by this Government and it was certainly not accepted by the late Government. I think it would be a good thing if the Government took this opportunity of reaffirming quite frankly but without discourtesy what our stand is on this question of economic relations with China.

My hon. Friend the Member for Blackburn, East (Mrs. Castle) quoted one passage from Senator McCarthy's investigation into East-West trade, and I think that is a point on which the Government should give her some reply, for this reason—that under the United Nations Resolution every country is free to follow its own policy about exports to China.

Any country is free to decide what it should do under that Resolution, but if it were possible for the United States Government to prove that we were violating the Battle Act in any way Her Majesty's Government's freedom of action would disappear, because we have accepted American military aid and would, therefore, no longer be able to claim that it was something which was left to our responsibility under the United Nations Resolution.

I want to say a word about the significance of these Orders. My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) has gone into this question at great length. Their significance is twofold. First, the Minister of Transport who has signed them and not the President of the Board of Trade. That is a very significant thing. If I may use a parallel, if one wants to alter the route of a bus one talks to the driver of the bus, and if one wants to control the type of passengers carried one speaks to the conductor. Up to now our policy towards China has been in respect of goods carried, and previous Orders have been signed by the President of the Board of Trade—the bus conductor, but now we get two Measures signed by the bus driver, if my parallel is a good one.

It obviously means that the Government are taking powers—whether they intend to use them or not is a matter into which I do not want to go now— which give them the right, without coming to this House again, to impose a total blockade on China. I am quite prepared to accept any assurances from the Government in regard to this matter. But a House of Commons matter is involved here. The purpose of Statutory Rules and Orders is to give the House of Commons an opportunity to consider a change of policy as it is to be implemented by a Statutory Order.

If the Government take powers sooner than they need them it means we are discussing a change of policy a long way before it has occurred. If I were to make a great speech against a blockade the Minister would say, "The hon. Gentleman opposite is wasting his time; we do not intend to enforce a blockade." But this is the last chance I have to make a speech against a blockade, because of the nature of this Order. This is a House of Commons matter. I cannot expect any satisfaction about it, but if the Government have any respect for the House of Commons they should limit themselves to taking the powers which are necessary in the light of the policy they intend to pursue, and they should not take greater powers sooner than they need them.

I want to say one word about the policy of restricting trade to China, but I do not want to go into figures or bore the House at this late hour. Ceylon, who is not a member of the United Nations and has never accepted the embargo, has been trading a great deal with China in rubber. We have seen Western Germany doing a great trade with China in antibiotics, which British manufacturers have been unable to do because of the policy of embargo, and we have seen the Japanese engaged in a terrific exchange of Chinese coal for textile machinery and fertilisers. The effect of the embargo has been to tie China still more tightly, economically, to the Eastern bloc—the Soviet Union and her satellites. It is very arguable whether there has really been any economic or political advantage from so rigid a policy as has been pursued.

Will the Minister give an assurance on one point? I went to another place today. I believe it is permissible to quote from a speech by a Government spokesman in another place and, although I cannot quote it because it has not yet appeared in HANSARD, I should like to paraphrase it. Lord Mancroft, speaking on the same subject, gave an assurance that the restrictions on trade with China were imposed because of her warlike activities, and that he, speaking for the Government, could not see that those restrictions could continue if those warlike activities came to an end. Are we to understand that when a truce is signed we no longer hold ourselves bound by the United Nations Resolution?

This is particularly important for the reason that, as I stressed when I was talking about the background to this subject, the British Government accepted the recommendations of the Additional Measures Committee only because the Good Offices Committee failed to produce any result. If we used the same terms today we should find that the Good Offices Committee would, if it were still sitting, have good news to give us, because it would be concerned with the truce negotiations. Then we find a situation in which, if the war comes to an end —and who does not hope that a truce will be signed shortly—the aggressor Resolution really lapses. Therefore, the U.N. Resolution embodying the embargo lapses.

If the Government can give an undertaking similar to that given by Lord Mancroft in another place it will go a long way to relieve the anxieties of many of us who do not like the Order and think that it is based on a misunderstanding of good Anglo-American relations and who hope that, were the Order passed tonight, it would lapse as soon as peace is signed.

11.6 p.m.

The Joint Under-Secretary of State for Foreign Affairs (Mr. Anthony Nutting)

I should like first to thank the right hon. Gentleman the Member for South Shields (Mr. Ede) for the temperate manner in which he raised this matter tonight. As he has said, there are difficult and delicate negotiations going on in Korea, and none of us wants to say anything which may hamper them. The scope of this Order tonight is, on the whole, a narrow one. But, before I deal with the Order, let me assure the right hon. Gentleman and other hon. Members who have spoken in this debate who are anxious about this aspect of the matter that there has been no extension of or change in Her Majesty's Government's policy. No blockade is envisaged, or foreshadowed, in the Order. There is merely an extension of power which the Government already possesses to prohibit and control the export of strategic goods to China and to North Korea.

The hon. Member for Nelson and Colne (Mr. S. Silverman) asked about the width of the Order, and why it had to be drawn so wide. I had the same thought when I read the Order. The explanation is complicated, and I hope the hon. Member will allow me to give it. The difficulty arises from the Defence Regulation under which this Order is made. The Regulation in question, Defence Regulation 46, deals only with the port of origin. It does not permit an Order made under it to prohibit arrivals at any given destination. The destination can only be controlled by attaching a condition to a licence under the Order. That is entirely because of the way Defence Regulation 46 is drafted.

The Order therefore does not say that ships may not go to China; on the other hand, it does say that ships may not go anywhere without a licence. The general licence which is made under the Order modifies this by permitting those ships to go anywhere except China. The general licence adds the condition that they may not divert from a permitted voyage to China. It is in order to avoid a ship proceeding to an innocent destination and from that destination proceeding onwards with a strategic cargo to China that this complicated and rather wide power has had to be taken.

I will deal briefly with two things. The first is what the Order does, and what it does not do. First of all as to what it does. The House will recall, as the right hon. Gentleman recalled, the United Nations Resolution passed on 18th May, 1951. Let me remind the House of the recommendations of that Resolution. They were to: (a) Apply an embargo on the shipment to areas under the control of the Central People's Government of the People's Republic of China and of the North Korean authorities of arms, ammunition and implements of war, atomic energy materials, petroleum, transportation materials of strategic value, and items useful in the production of arms, ammunition and implements of war; … (c) Prevent by all means within its jurisdiction the circumvention of controls on shipments applied by other States pursuant to the present resolution; I want to draw the attention of the House to the particular passage "to prevent the circumvention of controls", because I believe that this passage is particularly relevant to the Order we are discussing.

As the House knows, both the late Government and the present Government have fulfilled their obligations under this Resolution. On the other hand, until this Order came into effect on 31st March there had been a loophole. Now, admittedly only a small amount of traffic has so far passed through this loophole. In 1951 there were two isolated cases, the case of the "Nancy Moller," familiar to hon. Gentlemen opposite, for it was their Government which had to order a British destroyer to head off the ship and take her to a British port because she was carrying a strategic material, rubber, to China. In the last quarter of 1952 there were three "guilty" voyages, and early this year there has been one. That is four over a period of something like five months, and although the increase is very small, there has been this slight increase.

The right hon. Gentleman asked me what goods have slipped through in these ships. I have not got the tonnage figures, although I can obtain them if he wants them, but the goods were mainly iron and steel goods and rubber. He also asked me what foreign ships which have been carrying strategic cargoes to China have been bunkered in British ports. This is now prohibited under the new regulations. The number of foreign ships bunkered in British ports in 1952 was of the order of a dozen. They were bunkered mainly at Aden and Singapore.

All this may seem rather small beer, but the point is that it could become a serious abuse if we were not to take these extra powers to block this loophole. What is more, we are bound under the U.N. Resolution, which states that we must not only prohibit the export of strategic materials but also prevent any circumvention of our regulations. For instance, without this control it could be possible for a British ship to call at a Communist port and there to load a cargo of arms or other strategic materials and carry it direct to Communist China, for there was no control under the Defence Regulation or the previous Export Control Regulation to prohibit that.

The Government therefore felt that to permit this would not only be an anomaly, but that it would not be in accordance with the letter or the spirit of the United Nations Resolution. They therefore decided to take steps to tighten up their controls of strategic exports, and it is really absolute nonsense for the hon. Lady the Member for Blackburn. East (Mrs. Castle) to suggest that we did this as a result of any pressure from the United States or the United States Government on the Foreign Secretary when he was in Washington on his last visit. In point of fact, if the hon. Lady wants to know, this decision was taken by Her Majesty's Government before the Foreign Secretary left for Washington and it was communicated by him to the United States Government when he was in Washington; and in a communiqué issued on 7th March it was announced that we had decided to introduce this system of licensing voyages by British vessels trading with China.

Mrs. Castle

Is the hon. Gentleman not aware that in answering Questions on this in the House the Foreign Secretary agreed that the practical effect of this Order in reducing trade with China would, in his own words, not be at all large, but it is a fact that in many American minds it bulks very large"?— [OFFICIAL REPORT, 18th March, 1953: Vol. 513, c. 31.] In other words, it was American psychology he was considering, not the practical need for the Order.

Mr. Nutting

Just because a decision by Her Majesty's Government happens to be welcome to the United States Government, there is no reason to suppose or to suggest that it was taken as a result of pressure from the United States Government.

The general effect of the voyage licensing control Order and the General Licence issued under it is that since 31st March no United Kingdom or colonial ship of over 500 tons can go to China or to North Korea without a special licence. This special licence specifies that no strategic goods shall be carried to China or North Korea, and a list of strategic goods which cannot be so carried is attached to the special licence so that anyone applying for it will know precisely what he is not entitled to carry. This covers all vessels, wherever they start, and means, in effect, that any British ship carrying strategic goods to China would expose the owners and master to prosecution.

Now let me say what this Order does not do, because there has been some doubt and fear and anxiety expressed on this point in the House tonight. It does not hamper the carriage in British ships of non-strategic goods. It does not add to the list of goods whose export to China from the United Kingdom or the Colonies is already subject to embargo. It does not add any item to that list. It does not imply that we are stepping into a new field of control in trade with China. It does not involve a blockade. As my right hon. Friend said in answer to the hon. Member for Pembroke (Mr. Donnelly) on 18th March: Until the hon. Gentleman suggested it, I had not seen any suggestion that we were sliding into any sort of naval blockade. I made it quite clear in my public statement in the United States …that this is not a new policy. It is strictly a fulfilment of a policy which we are obliged to carry out by the United Nations Resolution of May, 1951, which the late Government agreed to."—[OFFICIAL REPORT, 18th March, 1953: Vol. 513, c. 31.] The hon. Member for Nelson and Colne has said tonight that he wants an expansion of trade with China, but that he recognised that war conditions applied in respect of the export of strategic goods. I have absolutely no quarrel with him at all; I, too, want an expansion of trade in non-strategic goods with China; but I cannot, and Her Majesty's Government cannot, agree to sanction any export of strategic materials, still less to withdraw this Order.

As those who are familiar with these matters know, we are carrying on an important trade in such non-strategic goods as chemical fertilisers, wool tops, wool yarns and cloth, and textile machinery. There is nothing in the Order we are now discussing, nor in any earlier regulation governing trade with China, nor in the United Nations Resolution itself, which prohibits a continuation of this trade in non-strategic materials.

It may be argued—and the hon. Member for Nelson and Colne did argue, or appeared to argue—that by taking these extended powers the Government are imposing upon this country a burden and a self-denying ordinance which is not altogether shared by others. Well, it is, of course, true that when the United Nations drew up their Resolution in 1951 they did not prescribe the methods of its execution or the list of strategic goods whose export to China should be prohibited. It was left, on the contrary, to each country which sponsored the Resolution to work out its own methods and its own lists. In fact, there are several countries, including the United States and Canada, whose embargo lists are more extensive than our own. In other countries, shipping controls are more severe, as, for instance, Honduras, Panama and Greece. We, of course, continue to review our policy and there are frequent discussions between this country and other friendly countries, especially the major maritime and trading nations concerned.

I have been asked whether we would review this policy should an armistice-prove possible in Korea. The answer is that, of course, should an armistice prove possible in Korea, the situation under which the United Nations Resolution arose would be altered and therefore the policy of all the nations concerned would naturally and immediately come under review.

My hon. and gallant Friend the Member for the New Forest (Colonel Crosthwaite-Eyre) asked me about Hong Kong. He produced some figures for trade between Hong Kong and China which, he alleged, represented trade in strategic materials, including rubber. All I can say, in answer to him, is that I have no knowledge of any strategic goods going from Hong Kong to the mainland of China. On the contrary, as far as I am aware, Hong Kong operates the same embargo list as the United Kingdom and controls cargo transhipments in the same way as we do. It controls all goods in transit except those which are consigned from outside direct to China and do not pass through any Hong Kong agent in the process.

From any information I have, or any which has been passed to me by the Colonial Office, I do not think there is any significant leak in this trade with Hong Kong, but, of course, we cannot be 100 per cent. certain that there will not be some leak somewhere. Unless we have full war conditions, involving a naval blockade, we can never be 100 per cent. certain. What we have done is to make it as certain as possible.

Considering the degree and delicacy of this problem, I think a surprising degree of unanimity has been achieved among the United Nations in implementing this policy, saving always of course, the Soviet bloc. Consultations on the measures which we are now discussing are now in progress with other countries, both on the control of voyages and on bunkering. The French Government have announced that they intend to take measures to prevent the transport of strategic goods to China in French ships and also to prohibit the bunkering of ships going to China with strategic cargoes. France is therefore acting in line with ourselves.

The right hon. Member for South Shields asked me about the Commonwealth. The Commonwealth can, of course, take their own line. The Commonwealth are in no way bound, except in as far as they are morally bound, by the terms of the United Nations Resolution. Ceylon, as the right hon. Gentleman knows, is not operating these controls and is trading in rubber with China. Of course, Ceylon is not a member of the United Nations. Canada is introducing voyage licensing control in the same way as we are. The Greeks have announced that Greek ships will be prohibited from 17th March from calling at all ports controlled by the Central People's Government and the ports of North Korea.

In conclusion, my last wish would be to say anything in this debate which might in any way prejudice the negotiations which have now been re-started at Panmunjom, but in considering this Order there are three facts which must be borne in mind and which I ask the House to bear in mind. The first is that, unhappily, fighting is still going on in Korea, and in that fighting United Nations Forces are involved, including British and British Commonwealth troops. Secondly, Communist China and North Korea stand condemned by the United Nations of acts of aggression, and theirs are the forces which for the last two-and-a-half years have been, and still are, shooting, killing and wounding our men and those of our United Nations allies. Thirdly, we must recall that Britain is pledged—pledged by the late Government; a pledge which we have accepted and carried out—to carry out to the fullest possible extent the terms of the United Nations Resolution prohibiting the export of strategic goods to China and North Korea.

I do not think it is unreasonable or undesirable that this House should be asked to approve measures which are designed to prevent a British ship proceeding from any port from carrying materials and weapons which could be used directly or indirectly to shoot down our soldiers and their comrades in arms of the United Nations. I ask the House, therefore, to allow these Orders to go through, and I ask the Opposition, with that explanation which I think has answered the majority of the questions and the anxieties that have been expressed, to withdraw the Motion.

11.26 p.m.

Mr. Ede

This is the first time I can recall when every question I have asked has been answered by someone on the other side of the House and, may I say, so satisfactorily? I hope that the almost concluding words of the hon. Gentleman will not have been spoken in vain. I do not think that anything has been said in the course of this debate which should hamper the negotiations that are now going on. It is the earnest wish of all of us that those negotiations should be ultimately successful. We may have an opportunity of dealing with some of the issues that have been raised in the Foreign Affairs debate, whenever that may take place. Therefore, while thanking the hon. Gentleman for the clarity and frankness of the answers he has given us. I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Mr. Speaker

I take it that it is not desired to move the second Motion?

Mr. Ede

No, Sir.