HC Deb 23 May 1957 vol 570 cc1547-55

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

Mr. Gordon Walker (Smethwick)

I cannot let this Clause go by without a word of protest about the method of enacting the Agreement with Australia. What has really happened is that the major changes being made in Commonwealth preference between us and Australia are in a White Paper and not in the Bill. This is a great departure from the practice of 1951, for when a somewhat similar agreement was then made with Pakistan it was set out in great detail in Schedule 4 of the Finance Act, 1951. It seems much better that these things should be in the Finance Bill, where we can see the whole thing in one place, and, incidentally, where in future years it can be seen in a single Finance Act rather than in a White Paper.

The White Paper (Cmnd. 91), is really not very informative, because Schedule B is only intelligible if one has in one's possession the Australian Customs Tariff. This is the part that affects us in this country—the reduction of Australian preference on British exports to Australia. One cannot deduce from this White Paper, what those changes are to be without getting hold of the Australian Customs Tariff, which is not something very easy for Members of this House to do. There are a number of specific references that could have been translated at that date into clear statements of what the effect would be. In the case of the Pakistan Trade Agreement that was done—it was included in the Finance Act, 1951. The exact amounts of the preference rates and so forth were set out.

Of course, the effects have been set out at somewhat greater length in the Board of Trade Journal of 23rd March last, but it really is not good enough to legislate by reference, first, to a White Paper, and then to a Board of Trade Journal. It is very important that these things should be available to people now and in the future. I hope that the Chancellor will give serious consideration to inserting, on Report, an Amendment which would put a Schedule into this Bill equivalent to that which was put into the 1951 Act concerning the Pakistan Trade Agreement. It would be useful.

Now I turn to the merits of this Agreement. Of course, its essence is that we maintain our preference on Australian exports to this country, and Australia reduces her preferences on British exports to Australia. It is, of course, an unfavourable agreement in that we lose preferences that we now enjoy, or have them reduced, whereas we continue to give the same preferences to Australia as we do now.

It is, of course, quite clear and true that, as Australia has argued, the original Ottawa Agreements have worked out somewhat to her disadvantage, and more than was intended by both sides at the time. None the less, I think that this Agreement is worse than we need have had. We could have had a better one.

Here, I should like to echo what was said by my hon. Friend the Member for Sunderland, North (Mr. Willey)—who I see, is no longer with us—and say that this is an example of the laziness of the Treasury. Australia protested for several years about this movement of the Commonwealth preference system to her disadvantage, and made it clear that she wanted better preference, of one sort or another, for her exports to this country, and only wanted a reduction in Australian preference on British goods as a last resort.

This was not taken seriously by the Government. It dillied and dallied, and the consequence is that Australia was forced to resort to what she really did not want to do, namely, the reduction in the preference on British exports to Australia. I have no doubt that we could have saved our preference in Australia, at any rate to a greater extent than is the case now, had we been prepared to do the sort of things that Australia wanted two or three years ago, namely, to give by other means, such as long-term agreements, proper preferences in our home market here on Australian goods.

The Government cannot argue here that we cannot have long-term agreements because they would lead to rationing, State retail trading and all the rest. We have a Commonwealth sugar agreement with Australia, and we have a Common-wealth meat agreement with Australia, and neither has led to rationing or State retail trading. If we had had long-term agreements with Australia, particularly for dairy products and, above all, for wheat, we should not have had so unfavourable a trade agreement as we have now.

The Government do not like long-term agreements. They keep them as few in number as they can, and they are now paying the price on the preference on British goods to Australia. And all they can do by Article VI of the Agreement is to give a very vague and embarrassed undertaking to Australia to increase the intake of Australian wheat into this country—that our Government will consider sympathetically any measures which may be found practicable from time to time, having regard to their international obligations to improve the opportunities for the sale of Australian wheat in the United Kingdom. That is a feeble offer to Australia compared with the sort of agreement which we have for meat.

11.15 p.m.

Then, in Article VI, it is affirmed that it is our desire and expectation that we will import 750.000 tons of wheat from Australia. I should like to ask the Government how far that undertaking is working out. It came into operation towards the end of last year and the period began during that year in which we said that we would import 750,000 tons instead of the previous half a million. How is this aspiration, this desire and expectation working out? After all, it is no substitute for any long-term agreement such as would have given Australia the sort of compensating arrangement which would have enabled her to continue preferences in her own markets.

We read in the newspapers today the details of what this Agreement will mean. In The Times and the Financial Times there are short accounts of Mr. McEwen's speech to the Australian Parliament in Canberra, and it appears that there is to be a reduction in the United Kingdom's preference margins on more than 800 items worth last year about £A160 millions. We are told that among the 800 items on which tariffs have been reduced are drugs and chemicals, tinplate, agricultural and mining machinery, tractors, generators, and many other things, including goods of one sort or another from carpets to high-tension cables.

What does this mean in terms of cash to British exports? How much does the Government expect our exports to decline as a result of these reductions in preferences? Mr. McEwen said that one purpose in the Australian mind in reducing these preferences was that it would help the competitive position of countries which had been good customers of Australia; those which have bought more from Australia than they had sold her. These include Japan, France, Germany, and Italy, so that these competitors of ours will be encouraged to sell to the displacement of quite important exports from this country into the Australian market.

This all part of an alarming pattern that is developing. Over and over again we find that the Government talk about our great interest in Commonwealth trade and so forth but when it comes to deeds it will not do those things which will really help Commonwealth trade, but, on the contrary, do those things which lead to these unsatisfactory and rather alarming agreements.

The Economic Secretary to the Treasury (Mr. Nigel Birch)

The right hon. Gentleman has pointed out that this Agreement is not in the Schedules to this Bill and asked that it should be available. I would remind him that the heads of Agreement were in HANSARD on 12th November last, and that it is available in a fairly handy form in Cmnd 91. At the same time, we will see whether it would be a reasonable thing to put such an Agreement in the Schedules, but I do not want it to be taken that I am committing myself on that.

The right hon. Gentleman spoke rather unfavourably about this Agreement and appeared to think that if we had acted differently the Australians would not have wanted to reduce preferences; but they did so for the simple reason that they wanted to get their capital goods cheaply. The effect of the Agreement is that on capital goods we have a minimum preference of 1½ per cent. and there is a minimum preference on other goods of 10 per cent. Those preferences cover 90 per cent. of all our exports to Australia. Not only that, but under the Agreement these preferences are fixed for five years, whereas under the Ottawa Agreements they could be terminated on six months' notice.

I would say that the new Agreement gives us a very good chance of competing over the next five years on very reasonable and quite favourable terms. The right hon. Gentleman, I thought, was hankering after a bulk-purchase agreement for wheat, and he questioned how far this Agreement between the millers and the Australian Wheat Board for taking 750,000 tons a year was working. It has not been going for very long, but as far as I know it is working well. He then drew attention to the news in the papers that the Australians, very naturally, are using this Agreement as they intended to.

I cannot give the right hon. Gentleman any details, because the full details arrived in London, I am told, only late tonight. No doubt if he wishes to ask any Questions on that, he can put them down to my right hon. Friend the President of the Board of Trade.

Mr. Hale

It is a classic example of the ham-handed way in which we handle Commonwealth affairs that we discuss an important Agreement with one of the most friendly and co-operative of the Commonwealth Territories commencing at ten minutes to eleven and that the Minister rises to close the discussion the moment one speech has been made. Really, if we are to retain the respect and the co-operation of Commonwealth Territories, which has been given in abundant measure in years gone by, we ought to treat them with a little more courtesy than this. Trade arrangements with them are matters which need deliberation.

I have had the good fortune to make one visit to Australia. It was while the Labour Government were in office and, because I propose to make criticisms, I say frankly that we made mistakes and sometimes we were confronted with the choice of two comparative evils. I was tremendously impressed, in the course of five or six weeks' travel all over the Commonwealth, by two things. One was the wealth of affection and the desire for understanding that prevailed throughout the Commonwealth, and the other was the complete misunderstanding of our varied commercial points of view which existed then. There were all sorts of petty grievances at the time.

They were treating us with very great generosity at the time, as hon. Members will remember. Loans of money and cargoes of goods were sent by individual Australians to individual Englishmen whom they did not know, and so on. They were trying to help us in our shortage, and they wondered why we were exporting chocolate to them. I am bound to say that I wondered, too. They were trying to send us meat, but they were short of tinplate, and they wondered why they could not get tinplate from us. Of course, there were substantial reasons for that, but it showed that if we wish to retain the great understanding between the Commonwealth countries, which is one of the most powerful forces for good in the world today, we ought to have far more constant consultation than is contained in an occasional Prime Ministers' conference or in hard bargaining between officials over trade agreements.

I do not want to detain the Committee now—it is very late and many people have trains to catch; indeed, I myself am in that position—but I have from time to time suggested that if we can have a consultative Council of Europe we can have a consultative Council of the Dominion Territories. If we really want to retain the co-operation and the good will of the Commonwealth—and certainly in Australia and in Canada one finds it existing in quite an abundant measure—then the constitution of a consultative council which would face these matters would be of the greatest possible value and one of the greatest forces for good.

I do not want to be facetious about an agreement. I appreciate the difficulties. I appreciate that in every trade agreement there will be gains and losses on either side. I appreciate, too, that although the Chancellor of the Exchequer or the President of the Board of Trade, when negotiating these matters, has to have a very close regard to the interests of Great Britain, he obviously has to show an understanding of the problems of the other side. The very essence of negotiation involves the necessity for understanding on either side.

I would ask the Committee to consider one point. The one agreement that we preserved and did not exclude is contained in Schedule H of the Ottawa Agreements Act, 1932, and this is now brought up at this late hour without much consideration and without much explanation, because, with respect to the President of the Board of Trade, the statement made on 27th February, after the conclusion of the United Kingdom-Australia Trade Agreement was necessarily short. After Questions one does not have an opportunity for prolonged examination.

The declaration in Schedule H of the 1932 Act states: 1. The present wholesale prices of frozen meat are at a level which has resulted in grave depression in the livestock industries of the United Kingdom and the Dominions. This depression is likely, if continued, to bring about a serious decline in production and consequent ultimate injury to the consumer. 2. Such a position is so serious that it is essential to take whatever steps may appear feasible to raise the wholesale prices of frozen meat in the United Kingdom market to such a level as will maintain efficient production. Does anyone say that is really meant today?

I do not criticise the Australian Trade Agreement and its effect. It is perfectly good. We talk about a lazy bureaucracy. I do not think it is fair, but it may be a symptom of the fact that Ministers are overworked that we permit these things to be said. I do not want to raise acute political issues. The Minister knows that we on this side of the Committee feel very strongly on the question of bulk purchase and long-term contracts. Had more of that been done in years gone by and had there been consultation we would have seen Australia grow as one of the great raw material producing areas of the earth instead of being reluctantly forced to industrialise itself because the prices of raw materials could not be maintained.

Here is this great fertile country, greatly under-populated, which has to turn to industrialisation, largely financed by American capital, mostly in New South Wales. It has altered its economy and essentially altered its outlook as a nation in world affairs. A policy of encouraging the raw material producer on long-term contract might have avoided all this. I say it as a Member for a comparatively poor, low-wage constituency, and I have said it on the political platform in my constituency, that though cheap food is, of course, the object of every Government here, to reduce the cost of living, cheap food is driving the producer out of business, as always. We have said that ourselves in 1945 in relation to this country, but we cannot carry out that policy alone if we believe in the integration of the Commonwealth and the Commonwealth is to be a force in world affairs.

There have been days when we have been in sight of the whole of this friendly, unbonded association showing a tendency to disintegrate. That is why it is important that we should not discourage a process of long-term buying, stabilisation and maintenance of prices. They are a great contribution that we could make to a cause which does not mean only the prosperity of a nation. They are a contribution to the strengthening of world peace that we should have a balanced economy growing throughout the world.

Mr. Gordon Walker

The Economic Secretary to the Treasury has told us that we should have a 7½ per cent, or 10 per cent. preference minimum. What sort of cut does that involve in the preference we now have? He gave the impression tonight that we were doing very well out of all this, but what we are getting out of the Agreement is a reduction in the margin of preference. How far is that margin being reduced? It has been on the whole higher than 7½ per cent, and 10 per cent.

I am also not satisfied with what the right hon. Gentleman said about taking into consideration giving us more information. Even this White Paper is really extremely uninformative compared with the schedule to the Pakistan Agreement, which we had in 1951. We cannot work out the effects of this on British industry even in the terms of the Agreement without getting hold of the Australian Customs tariff. It is really putting too much on hon. Members for the Government to say that we have got to get hold of the Australian Customs tariff to understand what we are doing in Clause 4 of our own Finance Bill.

11.30 p.m.

We really must have the information available and reasonably handy to us. It was not a satisfactory answer for the right hon. Gentleman to say that he would just think of it. He must put it into a Schedule to the Bill, or explain it in another White Paper—to which I would strongly object—so that we can have at least as much information as we had in 1951 about the similar Agreement with Pakistan.

The right hon. Gentleman said that the facts were just coming in, tonight. It will not be very easy, by ordinary question and answer, to get much information about so complicated a matter as this. The neatest and simplest way, of course, would be to adjourn the debate now so that we could start off next time with this Clause. The right hon. Gentleman would then be in the position, having digested the complicated facts which are coming in by telegram, to give us the information. There is surely no other way short of having another day's debate on it. Question and answer is quite useless for elucidating the details and complications of a very great number of tariff changes.

Question put and agreed to.

Clause ordered to stand part of the Bill.