COMMONWEALTH TRADE AND ECONOMIC AID

HC Deb 21 July 1958 vol 592 cc36-164

3.39 p.m.

Mr. James Callaghan (Cardiff, South-East)

I beg to move,

of the Budget discussions on 16th April, he was pooh-poohing the idea. He said that the prices of imported raw materials form only a relatively small part of the total cost of production—about 20 per cent. He said that the diminution that had taken place in the import prices of raw materials was, in terms of the total reduction in costs to the manufacturers, not more than about 2 per cent., and so he said that, although there was some small decrease, we really could not expect very much.

Which is the Government's view? Is it the view of the President of the Board of Trade that the decrease in the prices of raw materials is of such a character and so very small as to affect such a small proportion of production costs that we cannot expect any widespread fall, or was the Chancellor right? It would be interesting if the Government could speak with one voice, at any rate, within an interval of three months, on a matter of this sort.

I should have thought that the fall in prices should have taken place, and that the British housewife has been "stung" over the last twelve months because there has not been a fall in the prices of the goods which she buys in the shops. There have been some small reductions, but the net result, taking the Interim Index of Retail Prices, has been that the cost of living for the last twelve months has gone up by 5 per cent. to the average housewife in this country, and that cannot be blamed on wages.

If right hon. and hon. Gentlemen opposite care to refresh their memories by looking up the Index, they will see that it has gone up steadily in the last twelve months. I find it difficult to understand why prices are being kept up at the present time. The Chancellor says that a reduction should take place in the next few months, but it should have taken place by now, because wages over the last twelve months have not offset the decresae in the prices of raw materials.

What we want to consider is the effect on the Commonwealth as a whole. There is no doubt that, at the conference in Montreal of all the Commonwealth countries, in September, commodity prices will be one of the most important items for discussion. Their instability has been the cause of the marked weakness in the sterling area over the last two years, and this decline has had a very serious effect upon some of the individual territories concerned.

I should like to read to the House a rather long quotation from the excellent document, published a short time ago, called "Review of Commonwealth Raw Materials", in the introduction to which we find this: The significance of raw materials to the economies of Commonwealth countries is readily apparent. Thus, in Canada in recent years, notwithstanding the advance of industrialisation, more than a fifth of the net value of all production has been derived from forestry, mining and trapping, while in the Federation of Rhodesia and Nyasaland the value of copper output alone has exceeded a third of the net national income. Again, wool has provided between two-fifths and one half of the total value of exports from Australia, between a third and two-fifths of those from New Zealand and about one seventh of those from South Africa; jute and cotton have provided some three-quarters of the value of all exports from Pakistan, rubber about one-fifth of Ceylon's exports and about one half of those from Malaya. Looked at in another light, about two-fifths of all imports into the United Kingdom are of raw materials, and fully half of these are from Commonwealth countries. These illustrations show the vital signifiance of raw materials resources to Commonwealth development. and, in the context of this afternoon, the vital consequences to the Commonwealth as a whole of the instability of these prices and rapid fluctuations up and down.

Mr. Walter Nash, the Prime Minister of New Zealand, said only a week or two ago that, despite the import restrictions which had been imposed in that country from 1st January last, there would be a balance of payments deficit of probably £70 million this year. In Rhodesia and Nyasaland, the deficit for this year will be £21 million, it is anticipated, as against a surplus of £22 million last year. Copper will contribute only £52 million to the national income, as against £92 million last year. While this has not affected exports from this country into the Federation very much so far, it has had a very serious effect in holding up a great deal of development.

Reviewing the Commonwealth as a whole, as far as we can see, what has happened so far is not that exports from this country have fallen off to a significant extent, taking the area as a whole, but the development plans which should have taken place have not been carried out, and this, in terms of economic development and social progress, is of very serious consequence.

In Rhodesia, as those members of the delegation which went there last year will know, African education is being slowed down. In the Copperbelt, which is the source of all these riches, less than half of all the African children are able to go to school, and there will be an even smaller proportion this year, because of the fact that the development programme and the building programme for schools is having to slow down. This is one of many illustrations that could be given of the social consequences arising from the serious decline that has taken place in raw material prices throughout the Commonwealth.

India is in a desperate position, and I do not think that "desperate" is an excessive word to use. Her five-year plan is based on raising the standard of life of the Indian peasant in a period of five years from £20 a year to £25 a year. That is the measure of the task which she has undertaken, and it is proving a very formidable one.

India's sterling balances in 1955 were £500 million, and now they are reduced to £160 million, and, of course, a considerable proportion of that £160 million should be used for backing the currency, and cannot be expected to be used to finance a development plan. Yet, at this moment, I am told, India's reserves are still dwindling from that figure of £160 million at the rate of £15 million a month. That is a desperate position.

Mr. Desai, the Indian Finance Minister, is due in London very shortly, and should like to ask the Minister of State what help he can expect to get from Her Majesty's Government, because I am quite sure that he will come with a request. India has had some help, at a price, from the United States, through the Export-Import Bank, and has had some assistance from Germany, but there is clearly a very real and serious need for us to help India, both socially and politically.

Over all South-East Asia today, India represents the only non-Communist alternative to the magnet of China. Unless the path of democratic Socialism which is being pursued by India at present is supported and financed, let there be no doubt that, if not in Mr. Nehru's lifetime, then after he has gone, the attractions of a totalitarian form of Government will be very great indeed. There is a very real political interest, quite apart from the duty of all of us who live in an advanced part of the world to help people who are now living on £20 a year, in assisting India to the limit of our capacity.

Now I turn to the Colonies, and, first, to British Guiana. Dr. Jagan has recently been in London, asking for a loan. For some unaccountable reason Her Majesty's Government have made it impossible for him to go to the Swiss Banking Corporation which, according to Dr. Jagan, was ready to offer £5 million to £6 million.

I am told, according to The Times this morning, that they have been prevented from accepting this loan because Her Majesty's Government will not guarantee it. Is that so? It seems folly, if it is true, because the Report, The Colonial Territories, 1957–58, says quite clearly that no one has been able to borrow—not one single member of the Colonial Territories. Paragraph 549 says: Since 2nd May no colonial public issue has been made in London, and the difficult conditions prevailing in the London market for colonial borrowers have been a significant factor in determining the policies of Colonial Governments in the field of loan finance.

British Guiana cannot borrow here, because the internal policies being followed by Her Majesty's Government are of such a character that interest rates are too expensive for them; far above those of New York. British Guiana cannot borrow here. Are the Government so insane that they also forbid her to borrow from Switzerland? What the Government are doing is to loan British Guiana £5,400,000, about £400,000 short. What is the reason for it being short? Why cut down by £400,000? I hope that we shall have an explanation of that.

If I may quote from The Times, which is getting a good advertisement from me at the moment—perhaps it will even mention my speech tomorrow—it says that the Government's action is … the sort of financial niggling most calculated to cause resentment. The Government will not allow British Guiana to borrow from Switzerland and cover the loan. They will not loan her the full amount here. There must be some other reason, apart from sheer insanity—I conclude there is, I hope there is, but I begin to wonder—because it was exactly the same sort of financial niggling which was part of the reason for the breakdown in Malta; the difference between £5 million and £6 million and the Government of Malta having to cut down to £5 million. Not all the fault was on Mr. Mintoff's side, however difficult he may have been.

There are other difficulties in this field, too. United States' exports have been falling. The dollar gap is closing, is the way they describe it. It is closing because the United States exports are falling, and where to? To Latin America, to the countries of South-East Asia, and to Africa—the very territories where these exports are needed. Plenty of studies have been made of this problem. When I was faced, at fairly short notice, with opening the debate this afternoon, I found myself confronted by a mass of documents. If I had attempted to read them I should never have been able to make a speech at all today. Everyone knows the root cause of the trouble and what is needed, but we have not yet got the international action to translate these studies into reality.

President Eisenhower has recently been to Ottawa and in his talks with Mr. Diefenbaker he seems to have crystallised the Canadian attitude. It is now becoming much clearer and, I think, realistically so. According to the Press, Mr. Diefenbaker is calling for help in the creation of much larger reserves of gold and dollars to support world trade, and especially to support the sterling area. That seems to me of vital importance; of equal importance, in fact, with the other major question of how the sterling area is to raise the capital necessary to finance development throughout the Commonwealth.

Mr. Diefenbaker calls for economic unity. I hope that we shall be able to progress to closer economic unity at Montreal. Our Prime Minister calls for the need for interdependence. I think he means interdependence between our country and members of the Commonwealth and the United States. I am in favour of interdependence; I am not in favour of subservience. If I may proffer a thought on this, it seems to me that the Government are not yet playing the cards they have in their hands in the way they might. After all, we are a tremendous Commonwealth in terms of our possession of raw materials; in terms of natural resources. We have them and America wants them. Well, one can do a deal on that basis; and when I talk of interdependence I mean that there should be a meeting of equal partners to discuss these matters. I hope that the Government will go into these discussions in an atmosphere of self-confidence, knowing that they have some cards of very considerable importance to play.

There is considerable understanding in the United States. Vice-President Nixon, after being rather roughly handled in South America, came home and had his eyes opened on the road to Damascus. He spoke feelingly of the need for some aid in these territories. There was recently a suggestion by Mr. Dillon, Secretary for Economic Affairs, who put forward three proposals; one for an international development association, the second for putting more funds and capital into the International Monetary Fund and the third for an increase in loans. So there is, basically, an understanding in the United States, certainly at some levels, about this matter.

Before moving on, I should like to point out the consequences of some of the instability which we find at present. I think it important that these facts should be clearly known. The New York spot price for cocoa has varied from 1957 to 1958 as follows. It was 185s. a cwt. in 1957. It is 342s. a cwt. in 1958. The crop, I understand, has failed. I understand that in one part there has been relative inflation, and there is a shortage of cocoa, which is the reason that the price has gone up. We on this side of the House do not believe that the free play of market forces of this sort is in the best interests of the world as a whole or of the producers in these territories. We should prefer to see more stable prices rather than these very wide variations.

Mr. John Tilney (Liverpool, Wavertree)

Surely, to some extent it is due to Government interference. Not from our own Government, but from the Brazilian Government having virtually cornered the market.

Mr. Callaghan

So I understand. Brazil has quite a part to play in this, which brings me to what the hon. Gentleman has anticipated that I was going to say. I was analysing the question, and now I will say right away that we think, therefore, that there is a good case to be made for commodity agreements which will interfere with the free play of the market.

It was the British Government who reopened the commodity markets in London. It was they who have given rise to and, indeed, encouraged this particular process, because of their ideology. If the hon. Member for Wavertree (Mr. Tilney) agrees with my analysis, is he prepared to say that we should try to set up long-term purchasing arrangements; that we should have stabilised prices to obviate these difficulties into which the primary producing countries are getting? If so, I welcome him as an ally, and he will become a good Socialist yet.

Wool has varied between 41d. per lb. this year and 54d. only a year ago. Butter—I hardly dare mention butter—but so far as New Zealand is concerned, the price in the fourth quarter of last year was half the price of two years ago. These are factors which affect our relationship with these territories very closely indeed. I say to the Government that we look to them to make such arrangements as are necessary and as will obviate the economic consequences of these factors.

Now I turn to the wording of the Motion, which gives the Government the opportunity of stating more fully, if they can, what their policy will be at the Montreal Conference. It also states our view that part of that policy should be to give economic aid to the underdeveloped territories. Although there is some common ground between us, the Government want to delete the executive part of our Motion. They agree with us as far as line 5; that is a start, anyway. When we get to the end and ask for further provision for economic aid to promote the welfare of Colonial peoples", the Government want to take those words out and to welcome the opportunity which will be afforded for discussion of these matters at the forthcoming Commonwealth Economic Conference. The Government Amendment has not been moved yet. I shall be interested to hear the reasons which the Government will adduce for not wishing to give further economic aid to the Colonial Territories. They are deleting the action we propose and substituting a rather mushy form of words. Of course, we are in favour of their talking about the matter at Montreal and we all want discussion. I would not have objected to the Government's adding the Amendment to our Motion, but why they want to delete the part of the Motion calling for provision for economic aid I cannot understand. Such a provision would not only help the people of the Colonial Territories, but would help us to maintain a high level of employment.

I come to certain proposals that we shall put forward to the Government. There was published this weekend an excellent document entitled "Plan for Progress". It will repay hon. Members who give it very considerable study. It costs only 1s. and contains Labour's policy for Britain's economic expansion. [An HON. MEMBER: "Advertisement."] If I can advertise The Times I can advertise a superior publication. The document sets out in considerable detail, and in a readable way that hon. Members will be able to follow, the proposals that we put forward for earning the nation's living.

This document and our plan for the Commonwealth are both based on a policy of expansion for Britain and for the Commonwealth. We believe that there is a tremendous future in front of this nation and in front of the Commonwealth as a whole if we can act together to get rid of the restrictionist policies which have been dogging us for the last three years and which have resulted, even in the lifetime of the present Administration, in a decline of exports from the United Kingdom to the Colonies and other Commonwealth Territories and a decline in the imports from those territories to the Commonwealth. The Government should not be complacent about it. It is high time that the trends were reversed. We are putting foward the proposals which I am now outlining as a basis of the plan for progress which will have the effect of giving new hope and encouragement to millions of people in this country and throughout the Commonwealth.

I will now come back to the proposal which the hon. Member for Liverpool, Wavertree made me anticipate a few moments ago, which is that we should do our best to stabilise the prices of primary products and so stop wide variations of price. We can take a step in this direction by making long-term buying agreements with other members of the Commonwealth and we can endeavour to extend those agreements to all producing and consuming countries. Anyone who has studied the problem realises the difficulties of a situation where people who stand outside an agreement can come in and upset it by putting a small parcel of tin or some other commodity on the market. That has not been unknown. These factors are all in some way driving us inexorably towards one world in the long run.

Mr. G. B. Drayson (Skipton)

Is it the intention of the Labour Party that those countries should make long-term buying arrangements with this country, for example, for Lancashire textiles, at fixed prices?

Mr. Callaghan

I think that we are all in favour of long-term arrangements being made. It is in the best interests of the world as a whole that we should get long-term agreements established.

Britain should resume its membership of the Wheat Agreement Committee. I know there is a difference of view on this matter in the milling industry. Perhaps it is not of any particular advantage to us to do so and I can understand the attitude of the milling industry on the matter, but, looking at the problem as a whole and throughout the whole range of commodities, I am sure that it is in our interest to encourage agreement. Therefore, we should be prepared to take our place on this one Committee, although perhaps it is not particularly to our advantage, so that we might get a larger advantage in other directions.

What is the Government's objection to resuming membership of the Commission on International Commodity Trade? I am told that it is ineffectual; it is bound to be so as long as the United States and Britain remain outside. One South Arnerican delegate said that it was like playing chess by yourself as long as Britain and the United States, the largest importers, remained outside the Commission. I would ask the Minister of State to reconsider the Government's attitude to this matter, so that we can go back into the Commission and debate these matters, to endeavour to work out long-term arrangements and establish a proper relationship between the prices of manufactured products and raw materials.

Secondly, "Plan for Progress" proposes that we should invite other members of the Commonwealth to join in setting up a successor to the Colombo Plan, a commission for Commonwealth Development. We can choose any name. We will not bother about the name if we can sell the plan. We propose that the principles of the Colombo Plan should now be applied to the rest of the Commonwealth, and, indeed, to as wide an area as we can get. The Colombo Plan has had a modest success—I will not say an overwhelming success—in drawing up and trying to co-ordinate plans for capital development and trying to allocate technical assistance and capital to the various plans that are proposed. It is in the interests of both Britain and other members of the Commonwealth that we should now endeavour to do the same thing.

We have pledged ourselves in the Labour Party to set aside one per cent. of the national income for the purpose of financing development in the underdeveloped territories. That is enlightened self-interest. It would be of value to the territories and to the people of Britain. This type of Commonwealth develop- ment commission would be very appropriate for handling some part of the resources that would have to be channelled in this way.

Mr. David Price (Eastleigh)

I would like to clarify the point about the one per. cent. Is the hon. Gentleman's proposal of one per cent. of the national income to be additional to the amount of capital that is already being exported, which is also about one per cent.?

Mr. Callaghan

I understand that it is not in order to refer to debates that we have had in this House in the same Session. If the hon. Member had been here when I was asked that question, he would know the answer that I gave then.

Mr. Price

I was at Strasbourg.

Mr. Callaghan

The hon. Gentleman was putting his interest in European affairs in front of his interest in the Commonwealth. [HON. MEMBERS: "Oh."] Have I touched a tender spot? I suggest to the hon. Member that rather than that I should take up the time of the House he should read the exchange that there was between his hon. Friend the Member for Wavertree and myself the last time I spoke on this issue. Then he will be well informed on the subject.

I must get back to my main theme. There is considerable competition in the Commonwealth between the various schemes of capital development. Somebody put an analogy the other day saying that if we were to support hydroelectric schemes in India we could only do it at the price of modernising our own railways. There are various other great schemes that are outstanding in the Commonwealth such as the Volta River development. They are held up at present for shortage of capital. We have no machinery at present, nor is there any joint responsibility for examining these schemes and trying to determine the order of priority for them.

Mr. Bernard Braise (Essex, South-East)

Hear, hear.

Mr. Callaghan

The hon. Member assumes that when he is in favour of a little planning we are all becoming Conservative. It really means that he is joining us, and we are delighted that that should be so. The hon. Gentleman has always been enlightened on these matters. The machinery that we should like to see is that which is proposed in this document. We would make Commonwealth members themselves responsible for determining the allocations of capital and raw materials, in so far as we can.

I am sure that it could be of nothing but gain both to Britain as a whole and to the Commonwealth generally if the Bank of England were to lose some of its sovereignty in this field—[HON. MEMBERS "Hear, hear."]—and let us have an institution in which members of the Commonwealth could sit together and jointly share responsibility for these matters. I am delighted to be carrying hon. Members on the Government side of the House with me on this matter. When we come to implement these plans we need expect no opposition from hon. Members opposite. We shall certainly have to remind them of their support for what we are putting forward.

Mr. Brian Harrison (Maldon)

rose—

Mr. Callaghan

Is it worth interrupting? If it is only a debating point, I would rather go on with my speech.

Thirdly, we believe that the arrangements under the Colonial Development Corporation and the colonial development and welfare funds are paramount. There is a substantial case, perhaps, for merging the two so as to get the social investment necessary inside the Colonial Territories as well as the Commonwealth. It must clearly be the case, while there are vast untapped resources inside the Commonwealth and inside Colonial Territories, that a great deal of public investment will be needed if they are to be properly developed in the interests of the people as a whole. Private mining companies are always ready to export zinc, bauxite, copper, or whatever it may be. They are not interested in providing the investment needed to control floods, to conserve water, to provide irrigation schemes, to provide land drainage, or to build the hydro-electric stations which are needed.

Those are essentially matters which will be left unless there is a considerable amount of public investment. It is for this reason that we should like to see considerable public funds channelled through the Colonial Development and Welfare Act, the Special United Nations Fund for Economic Development and other bodies which are ready to take up these plans. We want to see the wellbeing both of our own people and people in the Colonies. If we are to achieve that, we must have a continual expansion in our own production and in world trade. When we have regulated the commodity schemes and done what we can in that direction, we shall still not be tackling the reality of the problem unless, as the Motion says, we expand world trade.

This, to us, is vital. Her Majesty's Government can play a very considerable part in their own internal policies here in deciding whether we are to continue with the restrictionism which has disfigured British economy over the last three years, or whether there is to be a return to expansionism because—let us be clear—we are faced with a pressure of increasing world population on food resources and raw materials. That pressure will continue to increase. There will be a continual pressure for a higher standard of life. We can achieve those higher standards.

Professor Toynbee said only a short time ago that, for the first time in the history of man, it is within our power to abolish world poverty. That is true, and I believe the Commonwealth has a great part to play in the abolition of world poverty. I believe we can do a very great deal by means of self-help to achieve it. It is in that spirit that I commend this Motion to the House.

Mr. Arthur Creech Jones (Wakefield)

I beg to second the Motion.

4.15 p.m.

The Minister of State, Board of Trade (Mr. J. K. Vaughan-Morgan)

I beg to move, in line 5, to leave out from "trade" to the end of the Question and to add instead thereof: and to promote the welfare of colonial peoples; and welcomes the opportunity which will be afforded for discussion of these matters at the forthcoming Commonwealth Economic Conference". We welcome the opportunity for this debate and the chance for the House as a whole to discuss the important range of problems which are covered both by the Motion and by the Amendment. I have some sympathy with the hon. Member for Cardiff, South-East (Mr. Callaghan). He said that he had been faced with this debate at short notice and that he had a large amount of paper put before him from which he could choose points for his speech. I share his views on this matter, because I suspect that the notice I got was even shorter and that possibly the amount of paper put before me was even greater.

I would point out to the hon. Member that there is a very good reason for this Amendment. First, we do not only include economic aid; there are wider issues of promoting the welfare of colonial peoples. I think that the substantive Motion, under present conditions, would have been a little ludicrous if it had made no mention of the Commonwealth Economic Conference. I propose to concentrate most of my remarks on the question of commodity prices and the problems of stabilisation which, I think, form the nub of the Motion and of the problem. My hon. Friend the Under-Secretary of State for Commonwealth Relations, when he winds up the debate, will deal with the details of Commonwealth and colonial problems.

On the question of commodity prices, when my right hon. Friend the President of the Board of Trade spoke in the Budget debate he pointed out that that would certainly be one of the topics high on the agenda of the Commonwealth Conference. I think we all recognise the difficulties which violent fluctuations in commodity prices can create for countries which are heavily dependent on the export of a few commodities, or even on a single one as sometimes happens. We appreciate that some Commonwealth Governments are seriously troubled because they have geared their economies and their development programmes to a level of overseas earnings based on higher prices than are ruling today.

In parenthesis, I should like to say how much we sympathise with our Indian friends in their present difficulties. A decline in export earnings of the size which has happened in their case is particularly unwelcome to a country which is engaged on a very great programme of development. We are giving the most careful consideratoion to India's difficulties and wish to see what we can do to assist her. I am sure that the House will understand that I cannot go any further than that today. Generally speaking, we are all aware of the problems but, as has so often happened, this is a matter in which it could be dangerous and misleading to generalise or to jump to conclusions which might be based on a particular set of circumstances.

I wish to digress for a moment to remind the House of some of the main changes there have been in commodity prices in the last ten years. Until sterling was devalued in 1949, the previous postwar rise in commodity prices showed signs of being halted, partly as a result of a minor United States recession. Devaluation, followed by Korea, caused a sharp rise in the general level, which was an average of 50 per cent. higher in 1951 than in 1948. Prices then fell off during 1952, changed very little from 1953 to 1956, but were still appreciably higher than before Korea. There was a brief rise after Suez, but not so large as the increase caused by the happenings in Korea. Then came the downward phase in prices, which, so far, has continued in 1958, but considerably more moderately than in the year before.

We must recognise that there are a number of factors, mainly outside our control, that have caused the present situation. These are, of course, the effects of the United States recession, and the levelling out of production in Europe. The effect of stockpiling, of surplus disposal policies, and policies which have protected less efficient producers have also had their influence on prices.

The fortunes of different commodities have shown wide variations over recent years. So, too, has the impact on different countries. I think that one always translates these things into terms of personal experience and, having been in Nigeria, in March, I should like to pin a few remarks on that. I went there, expecting to find that economy having had a very serious setback. In fact, the position was considerably better than I would have expected. Nigeria, I grant, is very fortunate. It is a country of primary producers, with a remarkably diversified economy. It gains on the swings, and it loses on the roundabouts.

The high price of cocoa was then being of great help to that country and, even if the price of groundnuts was down, it was cushioned by the fact that there was a record crop. One other factor which we should take into cognisance is the balancing effect of the reserves of the producer marketing boards of those countries. The result was that the national income of Nigeria this year was expected to be at least the same as that of last year. I am not drawing any wide deductions, but I want to give the picture of one kind of economy that has not been quite so severely affected.

I do not want to bore the House with a long series of facts about the history of all the many commodities that are involved in this problem. The prices of some have hardly fallen at all in the last couple of years, and the prices of some others have even risen. Cocoa, we have already mentioned. Wheat and oil seeds have been fairly steady, and tin—to which I shall return in a minute—has, so far, been held by the Tin Agreement from falling too steeply.

The sharpest falls have been in copper, lead and zinc. The prices of these commodities have been pushed up very high by a number of factors, including, of course, stockpiling. We must also recognise that there had been some overproduction, and the producers themselves have now taken steps to limit production, which has steadied the market in copper.

Turning, now, to agricultural products, butter prices have fallen sharply, as the hon. Gentleman said, but the House knows, and the House has welcomed, the action that we have taken to help our New Zealand friends in the United Kingdom market. For sugar, we have the Commonwealth Sugar Agreement, and we are also members of the International Sugar Agreement. Again harnessing it to my own personal experience, as one who knows the West Indies, I am only too conscious of the help that these Agreements—which, I think, cannot be quite paralleled for other commodities—have been in providing a stable income there.

I said that I would go back to the Tin Agreement, of which we are also members. This Agreement has been working under some strain, but it has been of the greatest help in sustaining the price of a commodity that is of great importance to some members of the Commonwealth. Again referring to Nigeria—and this is the other side of the picture, which one sometimes forgets—that country is a very efficient producer of tin, and could export far more than she is now doing. When I went to the tin mines in March, I found that they had had to cut down production very substantially, and a large number of those employed in the mines had been sent back home. But Nigeria has had to do that as her contribution to the International Tin Agreement. I may say that not everyone over there was quite as enthusiastic about the Agreement as one might expect.

The hon. Gentleman also mentioned the Wheat Agreement, which some Commonwealth countries would like to see us join. In 1956, we decided not to adhere to the Agreement in its present form, because its provisions were unacceptable to us, and would not, in our view, be effective in dealing with the real problems. It is our intention, however, to play our full part in the International Wheat Conference to be held early next year to work out the provisions of a new agreement when the current one expires. We all hope that these efforts will be successful but, in my view, they will not be successful unless the basic problems of excess production and the accumulation of surpluses are covered.

The hon. Member asked about membership of the Commission for International Commodity Trade, which is one of the sub-Commissions of the Economic and Social Council. Our attitude to that is that, as I will amplify later, we have to deal with this matter commodity by commodity rather than on a general basis, but I can tell him that the terms of reference of that Commission are now under discussion, and they may make it easier for us to join

We have also participated to the full in the activities of the many international study groups that meet from time to time to study the problems of various commodities. In September, we shall take part in meetings on copper, lead and zinc which, as I have said, have been the hardest hit. These meetings will take place under the auspices of the Interim Co-ordinating Committee on International Commodity Arrangements, which is another Committee of the Economic and Social Council of the United Nations, established in 1947. Briefly, its duties are to explore the ground, to pave the way, wherever possible, for the convening of an international conference by the Secretary-General.

If, so far, little has emerged from these studies we must not assume that they have failed, or that the work has been wasted. They are doing the groundwork on which, alone, ultimately, successful stabilisation agreements can be based. But even if a satisfactory agreement is not reached in so many cases, even if it cannot be achieved, there is no reason to think that this form of international co-operation is not, and cannot be of the greatest help. The fact that it has not been possible to devise, and to agree upon arrangements for ironing out existing price fluctuations in respect of a particular commodity may be because of very real difficulties arising from complex and particular circumstances.

I can give an example of that. Rubber, which, I think, speaking from memory, was almost the first in the field of international commodity agreements, many years ago, is a commodity of particular importance to certain countries, and it has fallen in price. It is a product for which a number of factors make it very difficult to work out a stabilisation scheme. There is the wide variety of grades of rubber involved. There is the difficulty of agreeing price differentials for the various grades. Last, but by no means least, there is the possibility of its substitution by synthetic rubber or plastics. The International Rubber Study Group has often examined the possibility of a scheme but, so far, the technical problems that I have mentioned have frustrated its efforts.

As I said in the beginning, we stand ready to examine, commodity by commodity, and in the appropriate bodies, the needs for, and the practicability of action. As an earnest of our good intentions, the House will know that we are foundation members of both the Tin and the Sugar Agreements, but we must realise the limits which exist to action by us. I think that the hon. Gentleman had some glimpse of the difficulties here.

The United Kingdom, as a consumer country, cannot do much to stabilise prices for commodities for which the whole world is a market. As my right hon. Friend the President of the Board of Trade said in his speech during the Budget debate: It is attractive to consider whether the Commonwealth, by itself, could devise means which could bring greater stability into commodity markets. We have had a good look at this question. Each commodity shows very distinct differences in the conditions of demand and supply. He went on to say that the conclusion that came out of all these separate studies is that no scheme is practicable … without the participation of the United States, usually … without the participation of Western Europe and, perhaps, sometimes without the participation of Soviet Russia, In any case, the negotiations for each separate commodity would be very long, very difficult and would usually call for very large sums of money with which to hold surplus stocks."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 196.] It is also obvious that if such schemes are to be successfully negotiated, they must pay full regard to the interests of the consumers as well as those of the producers.

There are two other very important factors that we must not lose sight of in considering the level of prices that are achieved for various commodities. First, there is what is known as inter-commodity competition For example, the price of copper is always affected by the price of aluminium, and many other examples will occur to hon. Members. A new factor has come into the situation, now that we live in a world in which the products of the soil are increasingly in competition with man-made substitutes. The development of man-made fibres, for example, must obviously have some effect on the prices of cotton and wool.

I also believe that it is in the interests of both producers and consumers to see that the arrangements which are introduced are, at least, reasonably flexible. To seek to maintain prices too rigidly, and at too high a level, can, in the short term as well as in the long term, militate against the interests of both consumers and producers, if not in accord with the long-term trends of supply and demand. In addition, and this is, perhaps, the most important point, they tend to hamstring the emergence of more efficient producers.

There is virtually no commodity that can be taken totally out of the economy and judged on its own. There is no perfect solution. The devising, the negotiation and the operation of these schemes involve problems of real difficulty which have, so far, in many cases, proved insuperable. They take a long time to negotiate, and only too often, when they do mature, the situation that has called them into being has changed.

We believe that what is really of the most importance is to establish and maintain a high and expanding demand in the world. In our view, the most urgent problem is for the countries of the free world to work together to maintain a high and expanding world demand.

Turning to our own economy, our imports are maintained in volume. In 1957, we imported from the Colonies twice as much, by value, as in 1948. It is rather difficult to assess this in terms of volume, but it is probable that the volume increase was about 20 per cent.—

Mr. Patrick Maitland (Lanark)

Does this figure of 20 per cent. relate to constant prices?

Mr. Vaughan-Morgan

No, to actual prices. What I am pointing out is that on the basis of price, one can work out that the increase of volume has been about 20 per cent. between those two years.

Perhaps the most important way in which we can help the fellow members of our Commonwealth is by a healthy expansion of our own economy which will maintain and increase the demand for raw materials and food which they send us. As the Chancellor has made clear, it is still our intention to operate an economic policy which is flexible and appropriate to the changing situation at home and abroad. We are determined that our trade and our industrial investment shall not be hampered, and that sterling, on which Commonwealth trade depends, shall be kept strong.

The recent relaxations which my right hon. Friend has announced are welcome evidence of the success of that policy. It may be that apart from maintaining our demand for the raw materials from the Commonwealth, we shall have to make other aid available. There are many ways in which this can be done. There can be provisional aid. There must be greater investment overseas, and I agree with the hon. Gentleman there. There can be an expansion of credit facilities. None of these possibilities at any given moment is excluded.

Let us be quite clear that there are only two ways in which we can help the Commonwealth and the under-developed countries. The first is for them to draw down the sterling balances which they have established here and which have played a very useful part in cushioning the fall of commodity prices. The second—and, surely, this is the most important one—is that we should earn a surplus and thereby have the means available for the credits, the aid and the other forms of investment which I have mentioned.

To sum up, I generally think that if this debate continues in the tenor in which it was introduced, discounting a few of the little advertisements and quips of the hon. Member for Cardiff, South-East, I think that it can be nothing but helpful so shortly before the Commonwealth Conference. The opinions which the House will voice today can help the Government greatly in their approach to that conference. We have mentioned—and it is only too easy to list them—some of the difficulties of the underdeveloped countries. I have tried to point out some of the difficulties of commodity stabilisation arrangements and I have tried to show that there is no simple solution through any of these schemes.

The real challenge which will face the nations of the Commonwealth at Montreal is to seek the means, in co-operation, for an expansion of trade. Only out of that can there come a rise in the standard of living of the peoples of the Commonwealth, which is what we all seek.

4.39 p.m.

Mr. Austen Albu (Edmonton)

The concluding remarks of the Minister of State, Board of Trade were a sort of circular argument, because the argument that we must increase trade in order to maintain the prices of the commodities produced in under-developed areas could be put the other way round. To some extent, trade, or at any rate our export trade, will not be continued unless the countries which produce commodities, and particularly those which are dependent on a small number of commodities, are in a position to purchase goods which we shall wish to export and therefore maintain world trade.

I do not think that the hon. Gentleman displayed that sense of the urgency and importance of this matter which some of us on this side of the House, at any rate, feel. For many years, certainly before the war, and indeed now that we have had this recession in world trade during the last two years, this matter has been thought to be the very nub of the problem of the trade cycle and the maintenance of a high level of trade. It is only because after the war there was a great demand for commodities, with a high level of production in most industrial countries, and then, with the Korean war, there was rearmament expenditure and the necessity for stock-piling, that the problem has to some extent been hidden. We are now seeing the problem again, and none of us knows how serious it will become, how difficult the recession may be or how low commodity prices may fall. I would hesitate to prophesy, but, looking at some estimates of what may happen in the next few months in some of these countries, the situation does not look very cheerful.

The problem, as has been stated, is a double one. It is the problem of maintaining the advance in economic development of the under-developed countries, and at the same time of maintaining world trade as a whole and, therefore, maintaining the exports of the industrial countries. In 1952 the General Assembly of the United Nations adopted a resolution on this matter and set up a working party of experts which made a report in November, 1953. I was interested in what the hon. Gentleman had to say about our participation in the International Committee on Commodity Trade. I would have hoped that we would not have merely, as it seemed to me from what he said, tagged along behind others in this matter. In view of the extreme importance to us, particularly as a member of the Commonwealth, we should have taken the initiative in trying to carry out some of the recommendations made by the working party.

Nobody who has read the recommendations or any other of the material on this matter can deny its extraordinary complexity. The number of different types of schemes that have been proposed—some by producers, some by consumers, some international and some national, some multi-commodity and some for individual commodities—could not have been dealt with by either of the representatives on the Front Benches in the short time that they have had to deal with this matter, since they have had notice of the Motion. Nevertheless, I think it is time that we again started to try to find some solution of this matter.

The United Nations working party report emphasised that while it is necessary to iron out the short-term fluctuations, it is undesirable to check the long-term movement of prices. The hon. Gentleman implied that this afternoon. He said that it was undesirable that we should maintain prices at an artificial level against consumers. But, of course, the main object of commodity agreements is not so much to prevent the long-term trend in prices as to prevent violent fluctuations from year to year which interfere with the revenues of the producing countries and so with their development plans.

Nobody can deny that very high prices of commodities can have harmful effects, within a year or two after those prices have reached their peak, on the prices and on the output of the commodities in particular countries. The hon. Gentleman referred to the price of copper. There is an extraordinary story about that which I discovered when I was in Rhodesia last year. The price of copper reached just about £400 a ton at one point about two years ago. When I was lunching in the guest house of one of the copper companies on the Copper Belt, there was sitting next to me the works manager of a company making the transmission lines for the Kariba power scheme. In a deadly silence, and to the horror of other guests, he announced that those transmission lines were made of aluminium, the reason being that at the time that the contract was placed it was more economic to make the new transmission lines of aluminium than of copper. There was no advantage to Rhodesia in the fact that the price of copper should have reached that fantastic figure for a very short period.

On the other hand, while we are considering long-term commodity prices we must face the fact that they are far more likely to go up relative to the prices of the things that we sell than they are to go down. Most people believe that over the next twenty or thirty years the terms of trade are likely to turn against us. It is not that we are trying, nor can we hope, to maintain artificially low prices any more than we want artificially high prices. At the present time we are all getting the worst of both worlds. A very wealthy industrial country, like the United States, can maintain the prices of commodities, mainly its farm products, because it can subsidise them out of its industrial production, but countries with few other resources at all, particularly those which are dependent on the production of very few commodities, have to suffer from the most extraordinarily violent fluctuations in prices.

As I was saying, it is not the long-term trend with which we have to concern ourselves at the moment, but the fact that a 5 per cent. surplus sends prices to the bottom and a 5 per cent. shortage—even much Jess than that—sends prices rocketing. The effect of these very sudden changes on the revenues of countries dependent on the exports of these types of commodities makes the planning of long-term projects very difficult indeed. Similarly, if it makes the planning of their investments and therefore their imports of manufactured and capital goods difficult, it does not help the planning of our own manufacturers who are trying to maintain a steady expansion of their own products.

Another effect of these violent changes is that the fear of them is a very important factor in causing Governments of the countries which produce these commodities to develop industrial production in their own countries at an uneconomic rate in order to diversify their economies. They would not be so anxious to do this if they could feel greater confidence in reasonable revenues from the natural resources which they have in their own territories. Such uneconomic development as we have seen in some parts of the Commonwealth is costly to them and harmful to us in terms of our own exports.

In fact, the opportunity sometimes to buy commodities at very low prices is a very illusory advantage even in the short term. It reduces exports and it undoubtedly causes British manufacturers to pause in their own expansion, and reduces the rate of expansion of our own economy generally. Finally, many of these products being sterling area products, it reduces the earnings of the sterling area and so reduces our already very inadequate reserves. These disadvantages undoubtedly outweigh the cost of many of the schemes which have been proposed.

When considering the difficulty and the cost, to which the Minister of State referred, of some of the commodity schemes which have been proposed, one must put against them the alternative losses to our own economy and to that of the sterling area as a whole. There is, for example, the interesting price stabilisation scheme put forward by Mr. St. Clare Grondona. This has been said to be a frighteningly simple scheme, but I do not find it easy to fault it and there are a number of economists of high reputation who do not appear to have been able to fault it seriously. This scheme has the advantage that it takes account of long-term price trends due to changes in the relationship between supply and demand. In addition, it is not a rigid scheme. The doubt that the right hon. Gentleman probably entertains, as would we all, is what would be the effect on our balance of payments and, consequently, on our reserves.

On the other hand, it is a scheme for transferring reserves from gold and dollars into commodities. Mr. Grondona produces a wealth of argument to support his case that it would not have disastrous effects on our reserves but would have the opposite effect. One must always remember in this connection that the reserves are not ours but are those of the sterling area as a whole.

Perhaps the weakest part of the scheme is that which contains Mr. Grondona's proposals for commodities which are in abundance. I find it difficult to envisage the United States of American accepting non-convertible sterling bonds, as he suggests, even on a three-year basis. That is not, however, an essential part of the scheme, which has the advantage that it can be selective as between commodities. It is not, of course, the only commodity reserve scheme. There are other schemes which are well worth examining.

If a scheme of that nature for certain commodities could be combined with other schemes already in operation, or which, where necessary, could be brought into operation, that would greatly increase the value of any investment made in under-developed areas from outside. I am certain that the advantages of the investment which is now being made in these areas are to some extent being lost by the continual fluctuation in the internal revenue of these countries. They cannot rely on a steady investment income because their own internal revenue, on which, in the end, they will much more have to rely for their own expansion, fluctuates to such a large extent.

I should like to say a word about the nature of investment in those territories unconnected with the problem of commodity prices. We tend to think too much in terms of large-scale schemes. In many of these territories, it would be much more suitable if more encouragement were given to small local industries based frequently on agricultural improvement, such as the agricultural improvement schemes now taking place in parts of Africa, and on small local sources of power. The big schemes which hit the headlines are not always very economical if they produce vast quantities of power at a great distance from centres of population, which may themselves be scattered, and an even further distance from sources of raw material.

We have not devoted nearly enough time or attention to research, both economic, sociological and technological, into small sources of power. Some interesting papers on this problem have been written by, for instance, Dr. Golding of the Electrical Research Association. One of them, I was surprised to find on my return, concerned the development of power resources in Somaliland, where, I should have thought, these resources were extremely difficult to develop. There are, however, all sorts of ways in which power can be developed. These include wind power, solar power, local sources of fuel burnt in the type of small engine developed by Dr. Ricardo for India, small local hydro power schemes, and so on. These could be related to agricultural development and to, for instance, the manufacture of agricultural machinery and furniture and clothing, in which the preparation of the material can be done by small machines and in which a good deal of hand labour is still employed and is frequently more suitable in these territories. This kind of development would lead to a quicker and wider growth of the standards of living than great big schemes which cannot affect the great mass of people in these territories for many years to come.

That is not to say that there are not many big schemes which are necessary; whether they be irrigation schemes, water control schemes, hydro-electric schemes or transport schemes. Nevertheless more could be done to develop smaller schemes, which would demonstrate to these people that their standard of living can be raised. The raising of the standard of living over a wide area is more likely to bring support for general economic and political advance than great schemes, the advantage of which will arise only in the future.

If that is to take place, however, we must have appropriate financial machinery. I would have thought that the Colonial Development Corporation is well suited to this type of expansion, especially if associated with local development boards. They are able to operate on a local and smaller level with the relatively small funds that are required; but they need to have adequate funds and to be closely associated with the local people, whether they are self-governing or Colonial Territories.

There is more than one way in which we can help these countries. I still think that the stabilisation of the prices of the commodities which they produce is perhaps the most important, but a great deal more capital assistance from this country will be needed if they are to expand at the rate at which most of us hope they will.

4.56 p.m.

Mr. R. H. Turton (Thirsk and Malton)

I wish that this debate had been on a somewhat wider Motion than that put forward so engagingly by the hon. Member for Cardiff, South-East (Mr. Callaghan). There is on the Order Paper a Motion in the name of my hon. Friend the Member for Lanark (Mr. Patrick Maitland), supported, I believe, by 100 Members, dealing with the wider problem of the Montreal Conference and the expansion of trade.

[That this House concerned that the Commonwealth share of world trade has declined in recent years, pledges its full support to Her Majesty's Government in all measures they take to expand the trade and influence of the Commonwealth and, welcoming the Diefenbaker offer of a switch of trade in our favour, urges that steps shall now be taken to increase inter-Commonwealth trade, to raise living standards in the Commonwealth with the help of Commonwealth agricultural surpluses, and to improve the machinery for Commonwealth investment and consultation, and calls on Her Majesty's Government to give an inspiring lead at the Montreal Conference in September.]

On the other hand, I know that we had a debate at the end of April initiated by my hon. Friend the Member for Maldon (Mr. B. Harrison) dealing with many other aspects of the Montreal Conference. Perhaps, therefore, it is wise that we should have a narrower debate today. I will try not to repeat anything I said in the earlier debate, although, possibly, I shall err.

What struck me about the speech of the hon. Member for Cardiff, South-East was his suggestion that apart from the delightful pamphlet which we would all enjoy if we paid the necessary 1s., the remedy for the problem is, first, longterm agreements, and secondly, to join the Wheat Agreement. The Wheat Agreement, however, was a long-term agreement. We did not join it, because by doing so we would not have helped to stabilise the prices of wheat throughout the world. In other words, the remedy is not the facile one of a long-term agreement.

With the hon. Member, I have great sympathy with, and approval for, longterm agreements. The Rhodesian Tobacco Agreement and the Commonwealth Sugar Agreement have been extremely valuable and it is likely that we can devise many other suitable agreements. The important thing, however, is to devise agreements that will result in more trade in the commodities. The fault of the International Wheat Agreement was that it fixed the price of wheat at an unreal price and, therefore, diminished the volume of wheat which could have been disposed of. That was why, three years ago, we were not anxious to continue membership of the International Wheat Agreement.

On the other hand, I am delighted to hear from my hon. Friend the Minister of State that we are to attend the International Wheat Conference and we will, I hope, persuade the wheat-producing countries to join with us in a bigger agreement that will not only keep the price stable, but will also secure that the surpluses of wheat are disposed of and that excess production is not continued all over the world.

Mr. James Johnson (Rugby)

The hon. Gentleman said a moment ago not only that he supports the Commonwealth Sugar Agreement, but that he contemplates other agreements possibly on the same lines. Most hon. Members on his own side of the House, however, are opposed to bulk purchase, long-term agreements and the like. I would very much like the hon. Member to elaborate his suggestions in that respect.

Mr. Turton

I followed those remarks by suggesting why we should have a long-term agreement in wheat which not only kept the price of wheat stable, but which also made some provision for the disposal of surpluses. I entirely agree with my right hon. Friend that each commodity probably requires different treatment, but I believe that we should make like provision with regard to rice in which similar treatment, though not necessarily identical treatment, could be provided.

I ask the House to consider the problem of wheat because I believe it is the major problem in commodities at the present time. I do not agree with the hon. Member for Edmonton (Mr. Albu) when he says that in his view commodity prices are likely to go up in the future. I think that is a false conclusion to draw from the present position. Unless we, together with the Commonwealth and certainly with other countries, take concerted action on wheat prices they will drop away and surpluses will mount.

The commodity surplus in wheat carryover two years ago was four-and-a-half times what it was before the war. The world wheat statistics published quite recently show that the following year the surplus had gone up to over five times what it was before the war, to 56.6 million tons. That is a very serious position. It is also important to note that the Commonwealth wheat-producing countries have been getting into greater difficulties than other countries.

The figures for the last harvest, which have just become available, show that Canada's exports of wheat—I am giving the figures for the period from the beginning of August up to April this year—have dropped by ¾ million tons, that Australia's exports have dropped by 1 million tons, that the United States' disposals have doubled and that the French disposals have increased sevenfold. That shows that the Commonwealth wheat producers have been doing increasingly worse in the last two years, that America has derived a certain advantage from the position and that France has become a very heavy exporter of wheat.

I want for a moment to look at the part that we have been playing in this matter and to ask my right hon. Friend to consider the following. Since the wheat season—when our own harvest finished last year—up to 31st May this year we have taken more wheat from France than from any other country with the exception of Canada. We have taken 11½ million cwt. of wheat from France, at an average price of 20s. 7d. a cwt., which is some 5s. lower than the price we have been paying for wheat from Canada and Australia.

Let us not forget that the wheat which we have been getting from France at 20s. 7d. a cwt. is the same wheat for which farmers in France have been paid 38s. 9d. a cwt. If that is not dumping, I do not know how that word can be defined. This is happening at a time when our Commonwealth is suffering because of the effect of mounting surpluses. I should have thought that we ought to take action under the Customs Duties (Dumping and Subsidies) Act to prevent France from dumping wheat in this country. I hope that my right hon. Friend will give consideration to that matter. We can do a certain amount by diverting our trade to the Commonwealth in order to help Commonwealth primary producers.

I have used wheat as an example, but that example can be applied to other commodities. It is not merely a question of the importing of wheat into this country. We ought to consider whether we can do more by encouraging agreements of this sort within the Commonwealth so that these surplus commodities can go to the hungry bellies in the underdeveloped countries. When we look at the position, it is extraordinary that we in this great Commonwealth of producers and consumers should have these mounting surpluses of, for example, over 20 million tons of wheat in Canada and yet have millions in the under-developed countries of the Commonwealth who want that wheat.

I know that this is a difficult matter. America has been pursuing a policy of diverting her surplus commodities to the under-developed areas in Brazil and India. Sometimes, the diversion of these surpluses has not resulted in any advantage at all. In other words, not only should the surplus commodity be sent to the hungry countries, but we should also ensure that the hungry countries do not thereby get into an inflationary spiral so that they are worse off as a result.

We must try to work out commodity agreements so that the surpluses go where they are needed in the under-developed countries and, at the same time, finance those areas so that they can purchase the capital and consumer goods with which to raise their standard of living. I hope that this will be one of the subjects that my right hon. Friend the Chancellor will discuss with the Commonwealth Ministers at the Montreal Conference. It seems to me that that is a most suitable forum for that purpose.

I was rather worried when my right hon. Friend quoted his master's voice no doubt he was quite right to do so—when he quoted the speech made by my right hon. Friend the President of the Board of Trade in the Budget debate in which he spoke about commodity stabilisation schemes and said that, generally, they are impracticable without the participation of the United States. We all know the quotation well. It goes on: … and, perhaps, sometimes without the participation of Soviet Russia."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 196.] I know that the working out of these schemes must be a prolonged and difficult matter, but that is no reason why we should not make an early start in considering them and why we should be frightened of the difficulties with which we are faced. I warn my right hon. Friend that if he intends to wait until he gets Soviet Russia's agreement to all his stabilisation schemes, he will have to wait a very long time. We have seen the development of Soviet policy in recent years. We know exactly what Russian influence has been in the Middle East, although we have been rather blind regarding their economic activities.

A little time ago I told the House what our imports of wheat had been since the last harvest. On that ocasion, I omitted the imports of Russian wheat. Those imports increased ten times in that period. It is quite true that the Russians had a bad harvest generally last year in the Steppes, but if there came a time when their harvest was fairly good over, say, 75 per cent. of their wheat-growing area. I am quite certain that the policy of Mr. Khrushchev in developing the Steppes would result in the breaking of the wheat market throughout the world.

If we turn from wheat and look at what the Russians have been doing in other directions, we see how, for instance, by their exports of aluminium they have broken the price of that commodity and how, by their exports of platinum, they have been depressing the world price of platinum. Indeed, even by their exports of Polish coal, they have caused the National Coal Board in this country grave difficulties through loss of markets.

We face here the real test of Commonwealth and British ingenuity in the next few years—how to counter Russia's economic war. The only way to do it, whether it is on the military or ideological plane, is to get one's friends together and make plans. In this case, in the Commonwealth it should be fairly straightforward. Let us start at Montreal by getting our friends together to make plans to stabilise commodity prices and to see that commodity surpluses are disposed of. By this means, I believe, not only shall we ensure prosperity for the Commonwealth but we shall make more likely the future peace of the world.

5.10 p.m.

Mr. H. Rhodes (Ashton-under-Lyne)

The question we are considering today is a very important one, to which the Western countries will have to devote very serious attention in the next year or two. This afternoon, we could not do better than say what are some of the things which should be considered at the Commonwealth Economic Conference in Canada later this year.

It seems that the West is rapidly drifting into a position where it cannot revive its commodity prices unless it has a jolly good intervention or a minor war. That is the challenge facing the Western nations today. Since this debate was arranged last Thursday, the prices quoted in my own industry have advanced by 8 per cent. The Chancellor, at the time of his Budget speech, spoke about prices, the need to reduce prices, and all the rest of it, but an increase in the price of a commodity of the order of 8 per cent. in a few days means that manufacturers, even competitive and efficient manufacturers, are faced with the usual worries.

I have been trying to work out what this increase in price of wool would mean if extra production in my own factory had to make good the difference between the price I would have been charged on Saturday morning and the price today. I should have to invest about £50,000 to effect the economies which cope with the difference of the price rise which has occurred since Saturday. It really is nonsense to talk about reductions in the price of manufactured articles while, at the same time, we are faced with this sort of fluctuation.

The Minister of State, if I understood him aright, said that the fluctuation in certain commodities was 50 per cent. at the time of Korea. The fluctuations in commodity prices between 1948 and the present day, taking them as a whole, are enormously greater than that. In my commodity alone, from 1948 until today, the price has fluctuated, from lowest to highest, by 570 per cent. There is a comparison here in the fluctuation in the price of American cotton over the same period. The price of American cotton, from 1948 until today, has fluctuated only by 84 per cent., and that has been one of the smallest fluctuations of all since 1948, due, of course, to the Americans having a close control.

What do the Government want to do? Do they want lower prices of commodities so that we are able to take advantage temporarily of better terms of trade, or are they thinking forward of what may happen to our manufacturing industries in this country? If the Government are not thinking about the impact of raw material prices on our manufacturing industries here and the prices which must be charged for finished articles abroad, they are failing in their duty. So this subject must be on the agenda for the Commonwealth Conference.

Circumstances in the purchasing of raw materials are changing very rapidly. For instance, at one time we were the principal purchasers of wool, purchasing up to as much as 500 million pounds of wool from Australia in a year. The pattern is changing now in wool and in other commodities as well. I am illustrating the point by the one I know best. Manufacturing is being undertaken by countries all over the world. Japan, China, Russia—they are all hoping either to export to earn foreign currency or, at any rate, to provide for the basic needs of their people for consumer goods. There has, therefore, lately been prosperity for Western countries through the supplying of some capital goods to make the consumer goods in these countries.

This is reflected in the opinion expressed recently about the impact of Russia in the economic field. The growth of Russia's and China's influence is inevitable. Without question, further developments are only just round the corner. All the capital goods which have been going into Russia to make the consumer goods so that the standard of living of the Russian people can be bettered can be switched overnight—let us not forget that it is a totalitarian régime—and those consumer goods can be sent somewhere else to earn the currency she needs instead of to her own people. The same thing can happen in China.

The stupid method which we adopt in the West in thinking only of the old structure of supply and demand—"Let the markets find their bottom. Let it rip"—is totally out of date. The old conception is changing as the years go by. Totalitarian countries, when they go into a market such as the wool market, can play havoc with prices. The same thing applies to other commodities. They can wait, and then purchase in bulk; up goes the price; if they leave it, prices go down. Meanwhile, purchasers of wool in the rest of the world who go in and buy in penny numbers are vulnerable.

I ask the Minister and those who are going to the Commonwealth Conference to take this thought with them, not so much with a view to coming to an agreement about commodity prices as such, but with a view to a general policy as to how the Commonwealth can protect themselves in primary products.

All sorts of nostrums have been advanced to deal with the stabilisation of prices. I notice that my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) has a book here, "The Utilisation of World Abundance". That is all very well. I have read that time and again. The author advocates going back over perhaps ten years estimating the ups and down of a commodity's price. As our system is at the moment, by the time we have got to a figure based on ten years' experience and taken in our stride a Korea and a Suez and an intervention in Jordan, who will agree to what? A basis would not be agreed today on last Friday's prices of wool.

The West has got to support its primary producers. We have to support our primary producers in the Commonwealth. It can be done. But this Government discouraged—indeed, they wiped out—the Wool International Study Committee. I should have been better pleased if the Minister of State had mentioned that Committee in the list he gave. I ask him now to set it up again. The Commonwealth countries will be interested to pursue the studies that we in this party originated when we were in office. The findings are all pigeon-holed in the Board of Trade. A tremendous amount of work was done and if the Government will continue from where we left off they will save a lot of time.

Another thing I would say to the Minister of State is that they may not have needed intervention in Jordan or anywhere else in the Middle East if the impact of commodity prices and the ability of Middle East countries to sell their cash crops had been properly considered by ourselves and the rest of the Commonwealth and America. What was it that allowed Syria to play into the hands of Russia at the time of Suez? I will tell the House what it was. Thousands of acres of cotton were planted along the upper reaches of the Euphrates. Syrian politicians went nap on it for a cash crop. They told the people of Syria that there was a cash crop which was going to do the job for Syria. They hoped that the West would buy. We went into Suez instead. The result was that Russia was able to step in and clear the crop. The face of politicians in Syria was saved. Does the House realise that £1 million of cotton purchased from Syria by us at the time of Suez would very likely have kept Russian influence at bay? It could have been done if we had been organised properly.

The challenge to the West is that we must show the world that we do not need an intervention and that we do not need a war to enable producers in those primary producing countries of the world to get a proper price. The Americans have been very successful within their own boundaries with commodity price control, agricultural commodities control. I personally do not see why that cannot be extended in some way throughout the Commonwealth. Time is running out. A decision will have to be come to very shortly, or else the Iron Curtain countries in more than one way will undermine the livelihood of our people.

5.26 p.m.

Mr. David Price (Eastleigh)

I do not think anyone will disagree with the closing remark of the hon. Member for Ashton-under-Lyne (Mr. Rhodes): I do not intend to follow the hon. Member directly in his remarks on the price of wool, on which he speaks with great personal authority.

I welcome this opportunity to join in this discussion, because I missed the debate on 28th April when my hon. Friend the Member for Maldon (Mr. B. Harrison) moved a Motion on financial and economic co-operation within the Commonwealth. He was kind enough to invite me to second him, but it so happened that I was at Strasbourg at that time.

I am sorry that the hon. Member for Cardiff, South-East (Mr. Callaghan) saw fit to try to suggest that there was some division of opinion on this side of the House on the relative merits of wider associations economically with Europe and with the Commonwealth. I am sure that hon. Members on both sides of the House feel that the two ideas, of Commonwealth association and European association, are not incompatible. Indeed, unless we make them compatible we shall be unable to cope with the very problem which the hon. Member for Ashton-under-Lyne was talking about—namely, Russian intervention in world markets. We shall be unable to do so unless we can have closer relationship with both Europe and the Commonwealth. The fact that some of us—and I see my hon. Friend the Member for Wembley, South (Mr. Russell) behind me—go to the Council of Europe and to other European bodies and take an active part in their discussions and of our Commonwealth's economic problems shows how we recognise the link between Europe and the Commonwealth. Indeed, we should be delinquent if we did not take part in both associations.

Mr. Callaghan

The hon. Member is taking a light-hearted comment a little too seriously.

Mr. Price

I am sure the hon. Member will agree that if a light-hearted intervention enables somebody to make a point which bites at him he ought not to be denied that little political pleasure.

I wish to put forward a few suggestions for the coming Commonwealth Economic Conference at Montreal, which, I hope, will be within the general context of this debate. First I ask the House to consider the economic background against which the Commonwealth's problems will be considered at Montreal. We must consider Commonwealth problems in the light of world trends. We cannot isolate the Commonwealth nor create a Commonwealth economic autarchy, as is sometimes suggested by the Beaverbrook Press. In my humble opinion, such a suggestion is both politically and economically impossible.

There are certain background facts of the modern world, of which I would remind the House. There has been the very rapid increase in world population. It is estimated that in 1600 the total world population was 350 million. Today it is more than 2,600 million. It is estimated that by 1980 it will be 3,600 million. That is the middle figure of the varying estimates made by statisticians. Putting it in simpler terms, tomorrow morning at breakfast there will be 70,000 more mouths to feed than there were at breakfast this morning. That is the size of a good Parliamentary borough. That increase takes place every single day. It means very great pressure on economic resources.

At the same time, that increase is itself a measure of economic progress in the world, because it would not have been possible had it not been for the incredible developments in modern science and modern sanitation and in economic expansion throughout the world, and also good stable government. Let us not forget how in territories like Africa the intervention of this country in the last century abolished the slave trade, stopped tribal wars and made it possible to have a vast increase in population, not because suddenly, in the last two generations, there has been a greater desire to have children than there was in previous ages, but because the conditions in these territories in the last two generations have made it possible for children to survive. Although we face great problems in the future, we should take credit for the progress that has taken place.

Secondly, we face the problem of how we are to feed this increased population. This is a problem facing the whole world—not only the Commonwealth. The Second World Food Survey of the Food and Agriculture Organisation of the United Nations for 1952 sets down a standard of 2,200 calories a day minimum for reasonable existence. The survey revealed that two-thirds of the world's population was living below that standard and that 70 per cent. of the underfed people of the world were concentrated in Asia, whilst a further 18 per cent. lived in Africa and Latin America.

Looking ahead, the Organisation said that to provide adequately for the world's population by 1980 a total annual increase in the production of food of 2¼ per cent. a year, compound interest, is demanded. It was thought that it was technically possible, and I am glad to say that the Organisation did not come out with the earlier John Boyd-Orr type of pessimistic prognostication. All my experience of increasing productivity in agriculture bears out that that sort of increase is quite possible technically, but the present rate has been at about 1½ per cent. a year, compound interest.

The problem is how to translate this potential demand for food into actual effective demand in economic terms. If we are to have price stability and to give a reasonable return to producers we must pay a reasonable price for food. The reason for food surpluses, in spite of an increase in population, is that a marginal percentage of these people cannot produce the money or the economic resources to buy the food they need. I was most interested in the comments of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). I hope that my right hon. Friends will consider what he had to say, particularly in the context of the forthcoming Commonwealth Conference.

The third background fact that is very essential to keep in mind is that poverty is no longer accepted by moist people in the world. The average income of Europe, North America and Australia in 1949 was £300, and of Asia, Africa and South America £20 a year. The Western countries were also saving and investing about £30 per head per year. Therefore, if anything, the gap between the two should be increasing rather than narrowing. Let us be clear that this gap has not been due to the wickedness of the West. Throughout world history people have come up from the slime of primeval poverty. We had that in this country not so long ago. The break-through came with the scientific revolution, from the Renaissance onwards through the seventeenth and eighteenth centuries, the Industrial Revolution, and the consequential division of labour.

Let us remember that division of labour and not become too autarchic about our own economy. Above all, the break-through came when man applied energy to do the task of muscles. An examination of the average figures of consumption of electricity per head of population in each country of the world, and of the figures of personal consumption, will reveal that the order of countries in the two tables is precisely the same. In other words, there is a direct correlation between the amount of energy per head of population and the standard of living of the people.

It is perfectly obvious if one thinks of a factory. Before we had such things as fork-lift trucks a team of men was employed in humping bags, but the forklift truck came into existence only because we had energy available to work it. It is a simple law of physical mechanics. We now have inanimate things, hydro-carbons, coal and so on to do the jobs hitherto done by muscles. In addition, with the coming of automation we have the brain jobs done. A computer takes an hour to do work which would take a team equipped with slide-rules a year. That is the key to higher productivity and a higher standard of living. We need not feel ashamed of this disparity between the West and under-developed countries, but at the same time we must recognise that it cannot continue.

To translate what I have said into practical terms, it means the needs of under-developed and emergent countries are, first of all, for skilled technicians and, secondly, for capital. If we are to apply this energy to do the job of man we must convert it through machines, and as higher standards of living rise, the capital investment per person goes up. Again the international league tables for investment and employment of capital in industry are exactly the same as the other two tables which I have mentioned.

Thirdly, we need stable Government. That is very important. New nations are arising in Asia and Africa with an honourable desire to take a greater share in running their own affairs. But confused with that desire is a virulent and often rather ugly form of nationalism. Whilst we must commend the desire of millions of people to share in the fruits of modern science, that desire is moving far more rapidly than could be realised by even the most energetic Government; and unfortunately evil men come in and cash in on it.

For instance, those of us who talked in Delhi recently of the efforts of the Government there to deal with the economic problems heard of the part that the Communists have played in trying to get the peasantry to think that things can move more rapidly than they have, whereas any criticism that we may have of Governments in that part of the world is that they have tried to do things too quickly. We have the problem of evil men who are not prepared to teach the lessons of why the West has a higher standard of living than Asia and Africa. We must try to have these lessons applied as rapidly as possible and, at the same time, not go round trying to find a scapegoat, such as capitalism, to account for this state of affairs.

We are in the position, which was well put by Mr. Adlai Stevenson, as being in the presence of a revolution of rising expectations. I believe that Montreal provides us with a great opportunity, particularly now that the passions and growing pains of new nationhood in the new countries of the Commonwealth are past. They feel now that they can more honourably co-operate with the mother country. They feel that they have been away from home long enough to come back and sit at the table with dad on equal terms. They feel that they have got over the immediate freedom of being on their own and, therefore, will welcome much closer economic co-operation than they would have done at any time in the last ten years.

If we are to take advantage of Montreal we must try to get the other Governments there to agree to objective statements of our problems. We must cut out all the high-flown expressions and get down to hard, stark terms. I agree with Lord Kelvin when he said that to measure is to know. It is certainly the basis of any scientific approach to our problems. We must all realise also that the remainder of the world does not owe us in the Commonwealth a living and that we cannot look to international charity to solve our problems, although nobody would advocate wider international co-operation more than myself.

Also let us realise that each Commonwealth Government is independent and that the countries are often pursuing contrary economic policies. For instance, let us take our own Government and its predecessors. Our policy of supporting agriculture at home is in direct conflict with our desire to give a wider market to the products of Canada, Australia and New Zealand, and we hope that there is a right balance between this and wishing to protect our own agriculture.

When we talk about expanding Commonwealth trade we must be aware of the desire of our Australian colleagues to make their country less dependent on the outside world. This in itself is an obstacle to wider Commonwealth trade, because wider trade in itself, I suggest to the House, is not of the essence. What is of the essence is economic development and expansion. They are not necessarily the same thing, though frequently they are.

I want to make a few humble suggestions to any of my hon. or right hon. Friends who may be going to the Commonwealth Conference. First I suggest that we should advocate the institutionalised management of the sterling area. Up to now, the United Kingdom has always acted as banker to the sterling area, but with the rise of new sterling Powers within this area it is desirable to associate those Powers with the management of sterling.

The House will be aware that whereas 40 per cent. of world trade is conducted in sterling, the central reserves of the sterling area hold only 40 per cent. of the world's gold and dollar reserves. This means that the sterling area faces a continuing prospect of requiring exceptional skill on the part of the Bank of England in its management of the reserves, supported by a high degree of forbearance by the sovereign Powers who are members of the sterling area in making their claims upon our central reserves and in executing their development plans. I contend that such forbearance would be easier to sustain if the sovereign Powers concerned were associated directly with the management of sterling. I was delighted that the hon. Gentleman the Member for Cardiff, South-East espoused a cause which I advocated four months ago when I spoke in the Budget debate.

There is, in addition, the existence of the sterling balances, of which mention has been made. None of my banking friends can decide whether we want big sterling balances to deal with trade recessions or small ones to reduce the strain on sterling when trade is booming. At any rate they exist, and we as a country have accepted more deposits than would be wise if there should be a run on the bank. In the circumstances, therefore, it would not be a bad idea to ask some of the creditors to come on the board with us, because then there is less likely to be a run.

I notice that my banking friends, that mysterious body of people, tell us that the current liaison between the Bank of England and the other Commonwealth monetary authorities is very good. That is all the more reason to institutionalise management and let what is good be seen to be good. I suggest a number of steps to attain that object. First, after Montreal let us have regular meetings of the chairmen of the central banks in the sterling area under the chairmanship of the Governor of the Bank of England.

Following on that, could we not add some representatives of the sterling area countries to the Court of the Bank of England as lay members? And when we have done that for a time, it might then be possible to go on to a third stage, which would be the creation of a sterling area central bank divorced from the Bank of England, which would then be relegated to the position of being simply the central bank for the United Kingdom; or, put the other way, promoted to be the sterling area central bank and then below it we would create a local central bank simply for the United Kingdom.

On the monetary side, there is the outstanding problem of liquidity. I am surprised that hon. Members have not yet mentioned it because, in the long run, this is as serious a problem as is the problem of stability in commodity prices. I am sure the House is familiar with the very able analysis of the situation given by Sir Oliver Franks in his speech this year to the shareholders of Lloyds Bank when, amongst other things, he advocated international action through the International Monetary Fund. I believe that if we went to the International Monetary Fund speaking for the entire sterling area and, above all, bringing in Canada, and thus making it the Commonwealth as well as the sterling area, we would be far more likely to work out a reasonable agreement than merely sending the Governor of the Bank of England on his routine visit to Washington.

My second suggestion is for a Commonwealth Development Bank. The House will be aware that this would be distinct from a central bank dealing with the monetary side. The political advantage here would be that it would be visible evidence that we are taking the Commonwealth seriously and also our desire for general economic expansion. Secondly, it would show that we are tackling the problem of the under-developed countries. It is irritating when one wanders round the world always to have thrown in one's teeth what it is alleged Russia is doing, even what America is doing, with so little account taken of the considerable contribution this country has made to the welfare of the under-developed countries, and particularly those within our Commonwealth where our first responsibility lies. We are all human and not yet angels, so a little bit of self-interest would be a useful factor in helping to strengthen the Commonwealth.

As to the economic advantages, people ask what I regard as a fair question; would the creation of such a Commonwealth Development Bank attract new sources of capital and stimulate new savings, because if not we would not be adding anything to what we have already? We all know that the world is desperately hungry for capital, which means that it is short of savings. There are a number of reasons for believing that a Commonwealth Development Bank would attract new sources of capital and would stimulate new savings. I will put them briefly to the House.

First, we would be able to borrow medium or long-term sums from creditor countries which might lend to a Commonwealth Development Bank but would refuse individual colonial clients. Secondly, I believe such a bank would be able to borrow direct from international financial institutions offering better security risk, as it would have the backing of the entire sterling area. This would be an advantage as regards the under-developed territories, where many feel that the political risk is even greater than the economic.

Thirdly, because of its prestige, it would be possible for a Commonwealth Development Bank to attract new savings direct from private individuals and institutions within the Commonwealth who wish to invest in an expanding Commonwealth but do not know how to do it. Such investors would be able to spread their risks over a large number of projects and, therefore, would offer greater security to the investor than investment in individual projects. I could develop ray thoughts on this subject further, but I do not wish to detain the House too long.

My third suggestion is the creation of a Commonwealth economic secretariat. We are all aware of the good work of the Commonwealth Economic Committee and the hon. Member for Cardiff, South-East mentioned that. I should like to see it made permanent. The hon. Member will have noted that at the end of its Report the Committee suggested that if the survey was to have any practical importance it would have to be kept up to date. We have seen the great success of the Economic Secretariat of O.E.E.C. in Europe. If it works there, why can it not work in the Commonwealth?

I know that some people may say that it will infringe the sovereign power of member States. However, it would be a very useful thing to do. It was suggested by the hon. Member for Edmonton (Mr. Albu) that capital might be better used on a lot of small projects than on few massive ones. I do not know whether he has been talking to the Finance Minister in India, but that is certainly what India has found from its experience at the end of its first five-year plan, and it is part of the changed bias in its second five- year plan. Such an economic secretariat would go some way towards providing the factual surveys upon which that sort of policy could be based.

My fourth suggestion is for a Commonwealth technical consultancy service. The limitation upon the pace of development in the Commonwealth, particularly in the under-developed territories, is due as much and possibly even more to the shortage of technical manpower as to that of capital. The creation of such a service would make it easier for us to deploy our limited technical manpower to the best advantage.

Instead of each Commonwealth or Colonial Government having to hire people for a short time to meet a particular problem, it could get men from a permanent service. We have plenty of young men in this country who would like to spend their lives overseas within the Commonwealth, but there is no permanent service which can guarantee them a career. This would be like working for a private firm of industrial consultants in this country. A permanent career could be offered. The individual Governments would pay the service in proportion as they used their facilities. I am thinking particularly of such things as engineering, tropical medicine, hydraulic engineering, fuel technology and ordinary administration.

I have made four modest suggestions. I know that my right hon. and hon. Friends on the back benches can improve on them, and I know that they will add others. If there is any criticism of this debate, it is that we do not have enough time for all the suggestions which must be in the minds of hon. Members, because I know that every one of my hon. Friends who is to speak will put forward a suggestion which will be worthy of consideration.

My four modest suggestions may be shot down by those who fear their novelty. However, modern science has destroyed the cushion of distance and has realised Wendell Wilkie's dream of "One World." Will that one world be sensible and democratic and a world in which opportunity and security are successfully married and in which liberty and opportunity are personal realities, or a world of hatred, poverty and disorder in which men will accept tyranny and oppression as a merciful release from anarchy? In the Commonwealth, which covers so many diverse races, creeds and circumstances, we have a unique opportunity to show the peoples of the world that peaceful co-operation can be a dynamic force and that in order to obtain the mess of potage necessary to the sustenance of life, it is not necessary to sell their birthright to Nasser, Khrushchev, or any other tyrant who may succeed them.

5.55 p.m.

Mr. Arthur Skeffington (Hayes and Harlington)

I found myself in some agreement with at least the descriptive passages of the speech of the hon. Member for Eastleigh (Mr. D. Price). I want also to stress the need for some kind of formal machinery for the organisation of the sterling area, to which he also referred. The only other comment I want to make, in passing, is that I understood the hon. Member to say that one must not try to explain the problem of poverty in a part of the world solely by saying that it was the result of capitalism.

That may be correct, but the real test is when we have a large number of people with a very low standard of life and seeing foreign firms coming in and making very large profits out of their labour and creating in that country two quite distinct forms of life and society: one living in abundance; the other in acute poverty. In such circumstances, one can well appreciate what the reactions are and what our reactions would be in such circumstances.

The challenge and the test is how far the House of Commons, the Government and the British nation can, with the co-operation of people living in the areas, so apply policies that acute poverty is removed. Until we do that, the criticism of indigenous peoples about conditions under which they live must have relevance to capitalism and the organisation of their economic society as they see it.

We are all very glad to have this opportunity today of comprehensively discussing economic development within the Commonwealth, an opportunity which we do not often have. At the moment, we are all very much preoccupied with the very grave consequences for peace and security which confront the nation and the world. However, in the long run we must never relax our interest and actions in trying as quickly as possible to remove the great mass of poverty and misery which exist outside Western Europe.

I do not believe that permanent peace will ever be possible if large numbers of people are deprived of the ordinary things of life. I therefore welcome this opportunity, as, I am sure, do many of my colleagues, to get to grips with the problem and to discuss some of the solutions which we think should be applied. Following on some figures that the hon. Member for Eastleigh gave, I remind the House of the remarks of the Auxiliary Bishop of New York, Bishop Fulton Sheen, when speaking in Washington a few months ago. He said: One-third of the people of the world go to bed hungry every night. One-fourth of the population of the earth earns less than a dollar a week. That is about four dollars less than the per capita expenditure in the United States on alcohol. The highest per capita income in Asia is in Japan and that is only one hundred dollars per year. The per capita income in the United States is over 1,500 dollars a year. Half of the population of the earth lives in Asia, and yet they receive only 11 per cent. of the total income of the world. It is against those stark conditions that we have to apply policies which will give us some chance of success if we are to escape the kind of criticism about capitalism which the hon. Member for Eastleigh felt to be so unfair.

Before dealing with our responsibilities and opportunities within the Commonwealth, I make one appeal to the Government on a matter in which Britain can help generally. One of the most fruitful and imaginative organs of the United Nations has been its Technical Assistance Board, which has been able to give expert advice of the greatest consequence, as it will continue to do as time goes on, in many depressed areas in the world.

In this, the British Commonwealth has benefited. In 1954—the last year for which I have any details—there were 64 experts and 23 fellowships in 14 of our own territories. Yet last year the British contribution to this valuable organisation was only £800,000, out of our Government expenditure of £5,000 million. This is not good enough, and I hope that this very mean and unimaginative action will be altered at the next opportunity. This country can afford to make a contribution greater than that, especially in regard to work which is already becoming so effective.

Reverting to our own direct responsibility in the Commonwealth, it always comes as a shock to people, when they first investigate conditions in some of the territories for which we have responsibility, to find how stark they are and to realise that, by implication, these low standards mean that, whether or not we like it, we are being to some extent subsidised by this hardship and bad conditions of others. The real challenge for each of us in this House is the question: how can we improve those conditions as rapidly as possible?

I should like to reinforce that opinion with a few figures. Even in Britain today, amidst all our difficulties, although no one would say that it was a paradise the average income per head of the population is rather over £300 a year. In Jamaica, it is only £60 a year; in Kenya, it is £18; and in Tanganyika, where I was with some other hon. Members only a few months ago, it is £13. Some people will say that that is not a true comparison. They will say that it is not right to compare the income of the average person in the United Kingdom with that of the average person in these other territories—and I have not chosen the worst examples, by any means. I agree that one must make some reservations. It is true that individual expenditure on housing, transport, clothing, and certain heating may be very much less in some parts of the Commonwealth than it is here, but I would answer those who object in two ways.

First, the argument about needs being simpler can be overdone; indeed, one of the hopes we all have is that consumer demand and needs will be able to grow in these parts of the world—otherwise, there will be no evidence that the standard of living is improving. Secondly, for example, as more and more Africans find work in towns and factories their expenses will grow. In some parts of East Africa, and in Tanganyika a few months ago, I saw houses whose average rents formed a fairly high proportion of the income of the tenants, and transport problems are now beginning to play a part in the urban life of many people in Africa and elsewhere who travel some distance to work.

The real significance of low income, however, is not so much whether the minimum needs of the people require a higher income, but the fact that wherever we find this low income we also find appalling conditions of disease and illness. Even in Nigeria, which has certain advantages other territories have not, and which again is by no means the worst example, infant mortality rates are about 115 per 1,000 of the population, as compared with 25 in England and Wales.

In the Eastern region of Nigeria, 76 per cent. of the population suffer from yaws, and it comes as quite a considerable shock to many people—it certainly did to me when I first visited African territories, ten years ago—to find that 90 per cent. of all the men, women and children there suffer from hookworm, and a very considerable proportion from V.D. This is the sort of place where a medical officer said to one, "Ill health is a normal condition of the people here." This situation is a reflection of the income figures which I have given, and it is in that sense that I feel that they should be a challenge to us.

I am not at the moment allocating blame or otherwise, but we can complete the picture by seeing what the Government spend in certain territories on education or health, as compared with what is spent on those services in this country. The highest figure per head of the population per year in West Africa is £1 0s. 7d.; in the Caribbean—British Guiana—£1 15s. 6d.; and in East Africa—in Kenya—8s. 6d. The average per head for Colonial Territories overall is only 8s., as compared with £12 5s. in the United Kingdom. The health figures are very much the same. The average for all Colonial Territories is 6s. 2d., as compared with £12 3s. 6d. in the United Kingdom. It is quite clear that if these conditions are to be altered there must be opportunities of increasing the wealth of these territories, and an increasing opportunity for their peoples to share in the wealth which they may be able to produce.

What are our policies to be? I was very interested in what the hon. Member for Eastleigh said of the need to do something about the sterling area. In spite of the fact that we are the bankers of the sterling area, and that this area has more than half the world's population and is financing more than 40 per cent. of the world's trade, it has practically no formal machinery at all. It is true that the Commonwealth Finance Ministers now meet once a year, and sometimes more often than that, but that cannot be adequate to deal with all the problems which arise. In any case, there is no consultation between the Commonwealth and the important sterling countries outside.

There ought to be some machinery which can help in estimating the likely trends of world trade; so that we can plan our requirements and decide priorities in times of acute difficulty. Indeed, in times of stress it is necessary to have some sort of restriction about dollar spending. Violent oscillations in the terms of trade and world prices are bound to affect the sterling area, and especially this country. I know that some people are wondering whether we should not give up our position as bankers for the sterling area, but, in the meantime, in the end, when there are difficulties in the sterling area the British people have to make the final sacrifice so that gold and dollars for the other countries can be maintained.

There are two reasons for this difficulty. First, our resources are quite inadequate for financing these large volumes of trade and, secondly, there is no organisation. The time has now come to set up a kind of organisation on the lines of O.E.E.C.—set up an organisation which has a staff and is able to forecast movements in trade and take steps, with other financial authorities throughout the world, in connection with the problems that we are discussing today. This organisation should try to reach agreement with the United States about its raw material purchases so as to keep prices steady. Although we would never get the complete answer to the problem of price variation, we could bring a good deal of stability if the sterling area as a whole were able to meet as one authority and talk to the United States. Incidentally, the hon. Member said that he had advocated this course five months ago. If he will read the interesting publication called "Challenge to Britain" he will see that what he and I have been advocating was suggested in 1953.

My second suggestion is connected with general investment. One of the sad stories of Commonwealth development has been small total investment and how ineffective it has been. In 1954, we find that the gross capital formation for the whole of the Colonies, as opposed to the self-governing countries, was only £400 million. It is really ludicrously inadequate, when one remembers the resources available and the opportunities.

Mr. Patrick Maitland

I am obliged to the hon. Gentleman for giving way. Would he explain what he means by that figure? Is it the figure for the gross capital formation within the Commonwealth from indigenous sources?

Mr. Skeffington

I intended to analyse what it was. Of that £400 million, only £65 million was, in fact, fresh capital from outside the Colonies, and the rest—£135 million—was from inside, so that the balance came from public agencies of one kind or another, international or British, so that the total outside investment, apart from what was made by State or other authorities, was only £65 million. I am sure the House will agree that, against the background of the problem, it is totally inadequate.

It seems to me, and perhaps I shall carry a good many hon. Members with me in this, that a good deal of this investment, partly because of the risk, partly because of the nature of the work, and partly because I do not think this sort of investment, if it is to be worth while, can be highly profitable, has got to come from some sort of public authority. I value very much what my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said about the United Kingdom itself publicly announcing the proportion of its resources which it was prepared over a number of years to devote to development of this essential kind.

First, it is a guarantee which will encourage other supplies of capital, for the British Government and people will be behind the guarantee. Secondly, if we have a guarantee of this kind over a period of years, we can begin to match the capital with the materials and the man-power which will be needed, and which are sometimes more important than the granting of the actual credit. Unless the guarantee is done over a long period we shall have very little chance of its being effective in the way I have mentioned.

In this connection, I should like to see the terms of reference of the Colonial Development Corporation revised and extended. Within its scope, it has done an excellent job, and last year had 76 schemes in operation. But it is limited in having to make a profit. It means that there are a great many developments which the Corporation cannot undertake. It may well be that some people will say that this is not the body to undertake the work of a semi-commercial character, but at present there is nothing else, and the Government should make up their minds to let the C.D.C. do this work or create something else to do so.

There are two ways in which it could be done. Either Parliament should be prepared to meet some of the losses experienced in schemes of a semi-commercial character, or, alternatively, grants should be made to the C.D.C. to undertake work which is not strictly commercial. It is very difficult, in many of these schemes, to draw the line between what is commercial activity and what is not. In many cases, we cannot expect, in a primitive country, to win something from the soil or organise agricultural production unless we build roads, hospitals, harbours and many other things, which may well be beyond the capacity of the individual territory.

A good deal of the expenditure which went on the groundnuts schemes, which became the unfortunate subject of so much political controversy, ought never to have been debited to the production side of the scheme at all; such things as the deep water harbour at Mtwara and the 130 miles of excellent railroad which had to be built. All these things had to be done, and certainly required to be done if the scheme was to be a success. Therefore, I hope that there will be some revision of the charter of the Colonial Development Corporation.

Lastly, may I refer to one other form of activity of which I think more use might be made? We have now had an opportunity of seeing, in the last ten years, the work of the many co-operative societies in the Colonies. There are now some 10,000 of these, inside and outside the Co-operative Alliance, with about 1½ million members. It gives some of us particular pride to think that in Ghana the co-operative organisation now handles more cocoa than the United Africa Company.

Some of us have seen recently in Moshi, in Tanganyika, the Kilimanjiro Native Co-operative Union, which is not only so successful in organising the collection and marketing of coffee for hundreds of small farmers in 37 societies, but has ploughed back so much of the profits, resulting in the great improvement in the social welfare of the Chagga people. It is a remarkable fact that of the 33,000 people in the Chagga district, over 30,000 actually go to school. I do not think that there is a similar case in any other part of the world of a local people which has attained such a high standard of social service and which is maintained by the people themselves through their co-operative venture.

In keeping emerging peoples, there are so many obvious advantages in this method. Those who are in a co-operative society are doing the job themselves. They can get expert advice from the registrar of friendly societies, which they often need in the early stages. We need not get too superior about that, because it is sometimes necessary for the registrar to act here when societies are starting. Secondly, this ensures that the development was free from suspicion of exploitation, or sometimes real exploitation. For example, in Northern Rhodesia, though I agree that the special circumstances may make the figure more startling than might have been general, of the total money income only 13 per cent. goes into African pockets.

Lastly, in co-operative organisation it is a community organisation which Africans and others are used to and which they understand. In view of the very great work which has been done by the co-operative societies I have mentioned, and others, I hope that the Government will press on with the policy initiated by my right hon. Friend on the Opposition Front Bench, and will see to it that more and more people can be associated in their own development free from the dangers of exploitation.

6.17 p.m.

Mr. John Tilney (Liverpool, Wavertree)

I wish to detain the House for only a short time, because many of the points which I had hoped to urge for the consideration of the Montreal Conference have been made already by my hon. Friend the Member for Eastleigh (Mr. D. Price) in a most excellent speech.

First of all, I should like to take up one or two points made by the hon. Member for Hayes and Harlington (Mr. Skeffington). I am glad that he qualified later on in his speech his opening remarks about large profits arising from private company exploitation. If he really knew the amount of money that has been lost throughout Africa by private companies, as well as by the Colonial Development Corporation and the Overseas Food Corporation, he would think twice about suggesting that too much money was taken out of certain territories.

I know that in the case of Rhodesia it was a very lucky strike, but there have been very many other cases elsewhere in which large sums of money have been lost by private enterprise going into a project at the request of the local government, occasionally together with a local development board, entirely for the benefit of the people of the area, but still losing very large sums of money. It is right to keep the balance properly, especially in this debate, which, up to now, on both sides of the House, has been full of ideas and free from any party bias.

I am glad that the hon. Gentleman mentioned co-operative methods, because I have seen some of them at work in West Africa where the co-operative movement trades very freely with private capitalist enterprise traders to their mutual benefit. Of course, it is something which should be supported, especially in Africa.

I am also pleased that he mentioned the technical assistance of the United Nations, to which my hon. Friend the Member for Eastleigh referred, as something that we ought to establish as a Commonwealth service. I believe that we have the embryo of it already in Her Majesty's Overseas Service which, unfortunately, up to now has been applied only to Nigeria. But the idea of it originally—unfortunately it has not been implemented—was a technical service of experts available to be seconded throughout the Commonwealth; and who would be offered a proper career with a pension at the end of it. That is a service which I believe the Montreal Conference should discuss.

I have always felt that there are two problems which face Colonies; one is self-government and the other is self-development, and both are intertwined. The hon. Member for Cardiff, South-East (Mr. Callaghan) referred early in his speech to the remarks of Dr. Jagan of British Guiana. The hon. Gentleman asked why the British Government were not prepared to guarantee a loan which British Guiana could obtain from Swiss capitalists. This House must bear in mind that a guarantee can be expensive. It can be more expensive than the process of the guarantor borrowing the money and lending it himself. It is frequently given at a higher rate of interest. In any event, such an action would pledge the credit of the United Kingdom.

It would seem to me to be very much better, wherever possible, and when the sums are not too big, for the United Kingdom to lend the money itself. In that connection, we should bear in mind something which has not been sufficiently publicised; that Nigeria, in order to get £10 million from the World Bank for the extension of a railway from the Jos Plateau through the Bornu Province to Maidu-Guri, went to the World Bank and got the money under the guarantee of Great Britain. I hope that in the future when we give such a guarantee the actual contract will be signed in this country with a certain amount of publicity, because the result is the same as if this country had pledged its own credit.

The hon. Member for Cardiff, South-East referred again to the 1 per cent. that the party opposite say they will invest in the Commonwealth. I understand his argument that although we now invest 1 per cent., or thereabouts, the bulk of it goes to Canada and Australia and to the fully-developed and self-governing members of the Commonwealth, and that territories like British Guiana, the Gambia, Sierra Leone and even Nigeria, in proportion to their population and their needs, do not get what they would like to get. I wonder whether 1 per cent. would be anything like enough, and how it is to be divided up among the needy applicants.

First, I think it important to know whether various territories wish to remain inside the Commonwealth and be own friends. My hon. Friend the Member for Eastleigh said that the world does not owe us a living; nor, I believe, do we owe a living to those who are not prepared to be friendly. One hopes that all the members now in the Commonwealth wish to remain there. I would give them the chance of going out or staying in, except for the various fortresses which are Commonwealth responsibilities. I believe in an expanding Commonwealth of those who wish to be in it. I do not want to keep anyone in it who wants to be outside. I believe that the sooner we state that firmly as our belief—a belief which I think is shared by hon. Members on both sides of the House—the better for the Commonwealth as such.

We have had a long discussion on the need for the stabilisation of commodities, a very difficult subject. The hon. Member for Ashton-under-Lyne (Mr. Rhodes) said that he had many times read Mr. Grondona's book, "Utilising World Abundance". I cannot say that I have done that. I found it very hard to understand and rather dry. But I believe that it contains a measure of common sense, and I hope that it will be studied by my right hon. Friends on the Government Front Bench. Because if we can examine the position, commodity by commodity—and imperishable ones rather than those that deteriorate with keeping—and if some wide commodity point can be established similar to the narrow gold point on which we rely for far too small a basis of liquidity, it will extend that monetary base to which again my hon. Friend referred. There is not enough gold in the world. There are not enough dollars. Our friends in America, generous though they have been in the past, are not lending to the underdeveloped nations anything like an amount in proportion to what this country lent a hundred years ago proportionate to our income then. That is one of the great difficulties in establishing a bigger volume of trade throughout the Free World.

There is one matter to which I should like to refer, which is in our power to control which does not depend on agreement either with the Commonwealth countries or with the United States. It is our management of colonial funds.I wonder how many millions of pounds have been lost since 1946 in the investment of the funds of Colonies and of various development boards, and also of produce boards, because of our out-of-date Trustee Act. I know it is difficult to alter the Trustee Act for people in this country, and anyhow the Treasury objects. But we are trustees of the funds of Colonies; and not only has the £ depreciated in value, but any reserve funds which they have put in at par, or even above par, during the time when the right hon. Member for Bishop Auckland (Mr. Dalton) was Chancellor of the Exchequer, have shown an immense depreciation when invested in medium-dated or long-dated stock, and in some cases in irredeemables as well.

In some instances, I hope that my right hon. Friends on the Front Bench will think that we should be wise to widen the scope of investment—which I believe is invested through the Crown Agents in many cases—for the funds of the territories we administer. It may be too late to do it now because of the high Bank Rate and the fall there has been in gilt-edged, but I think it a matter which should be examined. It is time that we examined anew what was thought right for the Victorian age. We hope that the measures taken by my right hon. Friend the Chancellor of the Exchequer will stop the fall in the value of the £. But nobody knows what the future holds; and I think that the Colonies, for whom we are trustees, should have their money properly and sensibly administered. It may well be that thinking which was right for the middle 'forties may prove to be wrong for the late 'fifties.

6.30 p.m.

Mr. A. Blenkinsop (Newcastle-upon-Tyne)

As I listened to very interesting speeches from hon. Members on both sides of the House, my mystification has grown about the meaning of the Amendment. So far, no Government supporter has addressed a word to us about it or has explained it. Apparently the explanation is being left to the hon. Gentleman or the right hon. Gentleman who is to reply.

My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) who introduced the debate pointed out that the references in the Amendment to discussions at the forthcoming Commonwealth Economic Conference were quite agreeable to us, and that the Amendment could have been proposed merely as an addendum to our Motion. For some reason that has not yet been explained, the proposal of the supporters of the Amendment is still to cut out the words of the Motion make further provision for economic aid. I have not heard a word from the Government Front Bench or from any Government supporter in support of the Amendment. They really should say whether they really mean to delete those words from our Motion or merely wish to make an addendum. We are entitled to a clear explanation. It is bewildering that every speech that has been made has supported our Motion plus the Amendment as an addendum, and not one word has been said about the real terms of the Amendment.

I hope that hon. and right hon. Gentlemen on the Government benches will act as they have spoken and will support the Motion. Perhaps there can be discussions with some of my right hon. Friends about using the Amendment as an addendum. We might thus be able to secure agreement between the two sides of the House. It is always well worth while to secure agreement and perhaps upon this issue we could do so.

I have listened with great interest to the speeches and I have found a great deal with which I agree. I listened with immense interest and a great deal of agreement to the suggestion for a Commonwealth Service. I have a great deal of interest in the proposal, although I should like to take it even wider. I have argued for some time that we cannot hope to recruit some of the medical personnel that we wish to see in the Commonwealth unless we can offer them more security than we can offer now. This is a matter of very great concern if we want to improve the quality of the advisory staffs in the Commonwealth. I had the pleasure and honour of visiting certain areas recently in the West Indies where it is quite hard to make such appointments unless it can be done on more secure terms.

Mr. Tilney

Or unless one can make proleptic appointments two years in advance, which would mean legislation in this House. It would give registrars who hope to be consultants and will never get the chance, the opportunity to know what their future holds.

Mr. Blenkinsop

I hope the hon. Gentleman will assist me and will join me in pressure upon his right hon. and learned Friend the Minister of Health about some of these matters, particularly consultant appointments, with which I thoroughly agree. As matters stand in areas like the West Indies, individual appointments cannot hope to be made of the status and standing really needed. They can be made only for the islands as a whole, and even then it is extremely difficult to get the right people to go out from this country because of the lack of security in the posts, among other matters.

I would very much like to see a Commonwealth Service—I know this is idealistic—linked with our own National Health Service, in which it would be possible to link with them some of the international appointments. I know there are difficulties about scales of remuneration in making these appointments. I would wish to see professional appointments in the Commonwealth regarded as a natural extension of our own National Health Service. That is something I hope may come before too long.

I had an interesting and instructive opportunity of seeing some of the problems that arise in a community like the West Indies. We have all been very much excited by the prospect of the development there of the new Federation, but we come right up against problems which are not very different from those in other Commonwealth territories. The course of development is restricted by both lack of capital and lack of technical, specialised advice. Of course, there is a tremendous need for the further development of what has been called in the past the "infra-structure" of social services, upon which further development has to be based. By that, one means such things as education. Primary and elementary education must not be lost sight of as the basis upon which technical education can be built. Above all, there is an appalling lack of technical training for vocational skills.

Industrial and social development depends upon what can be done in the field of health and of communications. I very much agree with what was said by my hon. Friend the Member for Edmonton (Mr. Albu) about the value of the small projects. We must not be deluded by the attraction of grandiose schemes into holding up capital for relatively small developments. Take a small territory which is capable of further expansion and development, like Dominica, a small, isolated island in the West Indies. It feels itself very isolated. It lacks road communications for the want of which valuable agricultural development is held up. That development is promising, both through the Agency of the Colonial Development Corporation and indeed of peasant farming schemes, but is held up for lack of communications.

It is not an easy island in which to develop road communications. Nevertheless, a great deal has already been done. A relatively small further contribution in capital would make a very much larger agricultural development possible. Those are examples of the kind of thing we wish to see. Fishery schemes are held up for the lack of motorisation of vessels and of training of the men. These and similar schemes could be got on with.

Up to now most of this work has been done through the agency of direct grants from this country, and certainly we pay tribute to those responsible for ensuring the provision of those grants, which have been quite considerable. Up to date, the sum of £10 million has gone through direct grant, and we have the guarantee that it is to continue for a further ten years in the West Indies. A great deal of social development has been based on colonial development and welfare funds and the much larger sum of £40 million has been provided for the West Indies from that source.

There is the problem of how long those grants are to continue and under what form they are to continue. I understand it has been said that they are not to be cut off abruptly. Certainly they have not been cut off so far under the new Federal Government which has been established, but we want to know how long they are to continue and what is to happen when independence comes. Many people are thinking in terms of the new Federation of the West Indies becoming an independent member of the Commonwealth within ten years, as we hope, and, naturally, we want to know what will happen to funds of this kind. The name may have to be altered. It may not be possible any longer to call them colonial development and welfare funds, but there must be an assurance that they are to be made available for a reasonable period ahead. I do not think we have yet received that assurance and I hope the Government will be able to give it.

Several of my hon. Friends have referred to the other body which is fully in our control, the Colonial Development Corporation. The Government have a direct responsibility for the limitations which appear to have been placed upon the activities of that body. One thinks in terms of particular schemes one knows. There are projects which I believe the Colonial Development Corporation could perfectly well undertake in the West Indies, but it is prevented from doing so because of the limitation by which it cannot take over an existing project or scheme in operation. For example, in the small island of Montserrat there are a number of private estates which are rapidly running down. Large areas in that small island are uncultivated. This is a political issue which, naturally, is of some consequence and it is also an economic issue because people are losing their livelihood.

In one case the absent owner of the estate is obviously anxious to dispose of the land, but wants to dispose of it, apparently, to all kinds of profiteers and rather undesirable people who merely want to make their bit of profit out of speculation without any immediate prospect of development of the land. That is the kind of area which C.D.C. should develop. It would have value in educating people in the island in the proper cultivation and planning of the island, yet the Corporation is denied the opportunity of doing that by reason of the fact that it would be entering the market to take over what, nominally, is still a going concern even though in its operation it is limping along on one leg.

Far more serious are limitations on the Colonial Development Corporation which prevent it from undertaking new work in any independent territory in the Commonwealth. There again we come up against the question of nomenclature. The name of the Corporation could be changed or it could be combined with another organisation. I cannot understand why we cannot use the expertise and knowledge which the Corporation has built up to enable it to carry on work in territories in which it has operated in the past. It is a serious matter that it should be crippled in this way. There is the problem of the financing of the Colonial Development Corporation and the criticisms made in the inimitable style of Lord Reith in the Report of the Colonial Development Corporation, which have very considerable point.

I agree that in addition to these schemes which are within our control we ought to be making a larger contribution to international schemes, as my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington) rightly said. It may be right that some of the contributions we have been making to colonial development and welfare funds should be transferred into international agencies as these territories become independent. I do not know. It may be that that would be the way forward, but it is quite certain that the amount of capital required in many of the territories concerned cannot be met from our own resources alone. It may be that some project such as the development of a new type of Colombo Plan may be attractive. That may be one way of getting some of the capital needed, but I am certain we ought to commit ourselves to a much more vigorous support of international agencies which are doing so much valuable work in areas such as the West Indies.

I wish to make a brief comment on the discussions we have had about prices. The present Government have a rather unhappy record in this matter. To many of us they appear to have been the major stumbling block to international discussion of any scheme for regulation of prices. The Minister of State, who moved the Government Amendment, said that there was some prospect of the Government reconsidering their position in relation to the International Commodities Committee. He said that if the terms of operation were slightly amended it might be possible for the Government to come in.

I very much hope that will be the case, because the abstention of Her Majesty's Government has led to a great deal of misinterpretation and of dismay in the world. Rightly or wrongly, many people believe that we are not interested in this problem of price regulation, although I believe we are, and must be. It is nonsense to talk on the one hand about providing capital grants or loans through the United Nations and, on the other, to destroy the value of that by doing nothing to prevent the kind of price variations which can have such an effect on the revenues of some of these territories, even a greater effect than any considerable grants may have. Those territories are much more interested in trying to secure price stabilisation with the whole matter under their control than in receiving grants and aid from outside.

There has been some reference already to the book I have with me, the book written by St. Clare Grondona, on the question of price stabilisation. Although it may hardly seem necessary to refer to it again, I wish to say that I should have thought it is a fairly simple statement of this problem and of a possible means of solution. We should not be deterred by criticisms which have been made in the debate. It seems that the answers which are offered are reasonable ones. There is a certain flexibility in this scheme, as has been mentioned. I hope we shall have some comment on it from the Government Front Bench.

We really cannot go on saying of every scheme put forward that it is too difficult to follow through. I quite appreciate the problem of getting international agreement, through the United Nations and elsewhere, on these very complex problems extending over a wide range of commodities, but, if that is felt to be impossible, surely this much more simple and direct approach, that we could start ourselves with reasonable prospects of success, should not be turned down out of hand. If it is not applicable, we should be told why.

I am interested to hear now that we are getting a number of hon. Members opposite converted to long-term contracts, bulk contracts and some kind of guarantee of price. I remember the attacks made upon those arrangements by hon. Members when they were in Opposition. I only hope that when, in the near future, they are again in Opposition, and we ourselves vigorously proceed with effective long-term contracts again, we shall not have the same kind of niggling complaint and attack.

I do not believe that schemes of aid for territories that are so much in need of development can come purely from Governmental agencies. I am certain that there must be some way in which the ordinary people of this country can be associated with the schemes of developments that are in progress. It does not matter much what the political complexion of the Government may be. No Government can get public support for the scale of contribution that I think is needed, unless there is a good deal more public education about what it is all about.

That is why I am anxious to find ways in which people may be invited to make their own contributions. That is why I have been interested, for example, in the proposals put forward to the Foreign Office by the United Nations Association for putting on the market a form of bond, supported by the International Bank, to which the general public would be invited to subscribe at a relatively low rate of interest. The funds would be made available for community development projects in different parts of the world. Although the details still have to be worked out, that type of scheme could be of enormous value, not so much for the total amount of capital that might be provided but for the educational effect.

A way is urgently needed to link the ordinary people with this kind of work, to get them to understand something of what it is all about, and how it affects them. Unless they are given some chance to contribute, I do not believe that they will ever feel that personal link. I hope very much that the Foreign Office—which has made some vague, kindly noises about this scheme, but nothing more, so far—and other bodies affected, will give the proposal vigorous support. I believe that it is being discussed at the moment by the Economic and Social Council of the United Nations. I hope that our own Government's representative has been encouraged to support the proposal, or something like it. It is something that is urgently needed.

I end, as I began, by asking someone to explain to me what on earth the Government mean by putting down their Amendment in its present form.

6.55 p.m.

Mr. Ronald Russell (Wembley, South)

I am very glad that we have this opportunity to debate this very important subject and that the Opposition have chosen a Supply Day for it. It would, indeed, have been deplorable had we gone into Recess before the Montreal Conference without having the chance of this debate. Like my hon. Friend the Member for Eastleigh (Mr. D. Price), I am glad of this opportunity to speak, because I was with him at Strasbourg when we had the last debate on Commonwealth trade. I join with my hon. Friend in saying that there is nothing inconsistent in forwarding policies for the greater economic integration of Europe at the same time as forwarding policies for the greater economic integration of the Commonwealth.

The two go hand in hand, provided that they are done in the right way. My worry at the moment is that they are not being done in the right way, otherwise Ghana, for example, would not be expressing anxiety about the future of her cocoa exports to Europe when the Common Market Treaty comes into being. I do not wish to pursue the topic of either the Free Trade Area or the Common Market. That might be out of order, but it has a bearing on this debate.

The hon. Member for Cardiff, South-East (Mr. Callaghan), in a speech with which most of us, I think, would find little to disagree, said that he objected to what he called the restrictionist policies of the present Government. If he regards those policies in that way, he is perfectly entitled to call them restrictionist, but it is a little hard coming from him, because he was a member of a Government that introduced the most restrictionist policy on inter-Commonwealth trade that we have had for many a long day. It was the policy that introduced the General Agreement on Tariffs and Trade. I hope that I am not out of sympathy with the House on this, as I do not think it has so far been mentioned today. In any case, I make no apology for bringing it in now.

I did not expect the Government spokesman to say anything about it in opening, and I am, perhaps, expecting too much in hoping that anything will be said in the winding-up speech about amending G.A.T.T., which is what I want to see, but various hon. Members opposite, including the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), have said that some of us on this side have been converted to the policy of long-term contracts.

Whether or not that is the case depends on what kind of long-term contract is envisaged. If it is the long-term contract made by private enterprise in the Commonwealth, such as the Tobacco Agreement with Rhodesia to which my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) referred, that is what I call sound policy, but I do not regard Government bulk buying as a sound way of carrying on Commonwealth trade, and I am sure that the present Government would not go back to the bulk buying carried on so much by the last Socialist Government.

Only as a last resort would I regard Government bulk buying as a method of stimulating Commonwealth trade. If one is hamstrung by agreements like G.A.T.T. from using any other method of granting Commonwealth priority, I agree that we are forced back to Government bulk buying, but only as a last resort. It has so many disadvantages. It created artificial shortages, in many respects it distorted the pattern of trade, and it discouraged Commonwealth producers from producing as much as they could, and, indeed, as much as they have produced since that method was abandoned.

I am a little disappointed at the terms of the Amendment standing in the name of my right hon. Friend the Chancellor of the Exchequer, particularly the last phrase, which … welcomes the opportunity which will be afforded for discussion of these matters at the forthcoming Commonwealth Economic Conference". I hope that that does not mean that the Government do not intend to put forward some policy at that Conference, and, if some policy is to be put forward, I hope that we shall hear something about it tonight and that the Government will give the lead to the Commonwealth in the way of bringing about more Commonwealth trade.

My hon. Friend the Minister of State, said that the Government want to see an increase of world trade. That is all very well, but I should have thought that the Montreal Conference would have quite enough to think about if it thought about increasing Commonwealth trade. In that connection, I hope that some attention will be given to some policy which will take into consideration the suggestion made by the Prime Minister of Canada last July for a switch of trade.

I am a little alarmed by the speech made by President Eisenhower in Ottawa a few weeks ago, to which reference has already been made, when he said something which, I think, was meant to be a discouragement of any pursuit of that policy of the switch of trade. He said that he hoped that there would be no switch of trade from Canada to the United Kingdom.

The hon. Member for Cardiff, South-East used the word "subservience". I hope that we will not be so subservient to the policy of the United States that we are dissuaded from following that policy of a switch of trade by any speech made by any American statesman. If there is disagreement between our Government and the United States Government on that matter, it is something that should be thrashed out on the many occasions there are for consultation between the two countries.

As my hon. Friend the Member for Eastleigh said, in pursuing a policy which will bring about an increase in Commonwealth trade there is no danger of Commonwealth autarchy. I would not for a moment suggest that we should carry out a policy of giving some form of priority to trade between different parts of the Commonwealth to such an extent that we shut out altogether all other trade. That would be a policy of extremism. However, I am worried at the extent to which there has been a fall off, in certain respects, in Commonwealth trade and the extent to which we are buying some things from foreign countries that we could well get from the Commonwealth countries.

My hon. Friend the Minister of State said that when he was in Nigeria he found that tin production there was having to be curtailed as a result, I think, of exceeding the quota under the International Tin Agreement. After he said that, I looked up in the Trade and Navigation Accounts the supplies of tin ore and concentrates that were imported into the United Kingdom from various parts of the world.

In the first five months of this year, we bought 28,000 tons of tin ore and concentrates from Bolivia, compared with only 3,650 tons from Nigeria. There was a similar proportion in 1957, not only for the first five months but for the whole year. In 1957, we spent £16 million on buying tin ore and concentrates from Bolivia, but we spent only £7½ million in buying them from Nigeria. That was despite our adverse balance of trade with Bolivia, which was in the proportion of £16 million to £1½ million. In other words, our purchases from Bolivia consist almost entirely of tin, and that results in that huge adverse balance of trade.

There is a vast difference in the price of the tin ore that comes from the two countries, the price of Nigerian tin ore being nearly twice that of Bolivia. Presumably, that is because of the higher tin content in the ore. Nevertheless, we should, I think, look at the International Tin Agreement to see that it is operating to the advantage of the Commonwealth. Are we being compelled, by our obligations under that Agreement, to buy so much more tin from Bolivia when there is a Commonwealth country ready to sell it to us but is having to curtail its production? If that is the case, we should seriously consider whether that Agreement is worth continuing in the future.

My right hon. Friend the Member for Thirsk and Malton spoke of wheat, but there is also the question of meat. I am disappointed to see that in the first five months of this year our shipments of veal from Australia and New Zealand are heavily down compared with the corresponding period of last year. Perhaps it is not absolutely fair to compare one 5-month period with another, but there has to be some kind of comparison. By contrast, in the same period our imports from the Argentine are considerably up.

Maize is a commodity that I have often mentioned before in this House. Last year, out of a total import of £32 million, we spent £26 million on maize from the United States. I am glad to see that there was an increased quantity imported from the Federation of Rhodesia and Nyasaland. But cannot we have a Commonwealth maize policy? Here is a commodity which can be grown in various parts of the Commonwealth, including Africa. It surprises me that before now we have not got together as a Commonwealth and tried to make the Commonwealth much less dependent on dollar sources for maize, when we are so short of dollars and when there seems to be plenty of room for growing maize in the Commonwealth.

On the question of apples, I know that there are plenty in the shops now, as I often do some of the shopping. I am surprised to find that we are buying apples from the United States and the Argentine. I should like to know whether in doing that we are taking all that is offered us by the Commonwealth.

Mr. Braine

Is my hon. Friend aware that under the latest arrangement entered into with the United States we are importing various fruits from that country at a time when there is a surplus of production in Commonwealth countries?

Mr. Russell

That adds point to what I have said. It is appalling that we should have spent £1 million on buying apples from the United States and the Argentine within the first five months of this year. I presume that by the end of the year the figure will be about £2½ million which, as my hon. Friend the Member for Essex, South-East (Mr. Braine) said, might have been spent in Commonwealth countries.

Then there is the question of tinned fruits. We have bought over £2 million worth from Japan in the first five months of this year, £896,000 worth from the United States and another £2 million worth from what are described in the Trade and Navigation Accounts as "other foreign countries"—that is excluding Japan, the United States, the Netherlands, Italy and Formosa. I do not know precisely in what countries that £2 million was spent; only further investigation of the Trade and Navigation Accounts will give that information.

Then there is the question of the West Indies to which the hon. Member for Newcastle-upon-Tyne, East referred. We have at the moment a fairly satisfactory arrangement for imports of citrus fruits from the West Indies, these being the next most important commodity to sugar. That is due largely to the fact that there are restrictions on the import of citrus fruits from the United States. Here is a grave danger if we ever have to relax those restrictions, because that fine industry in the United States is bound by its own enormous size to be much more competitive than the West Indies. The margin of preference that we give to the West Indies in grapefruit and oranges is microscopic compared with what it was intended to be when it was introduced before the war, and it is much less than the protection which the United States gives to its produce in its own home market. I hope that we shall examine that matter seriously at Montreal and, if necessary, take it up with the United States.

When the Federation came into being three or four months ago the United States made a very generous offer and asked if there was anything which they could do to help the Federation in their early stages. I hope the United States will be told gently but firmly that one way in which they can help is by not pursuing policies which will eat into West Indian trade, and by not subsidising exports of citrus fruits so that they compete unfairly with the West Indies.

Mr. Blenkinsop

To confirm the point which the hon. Gentleman is making, may I ask whether he is aware that many of the West Indians are raising that very problem of dumping of American produce in Canada to the great detriment of West Indies trade?

Mr. Russell

That is a very important point, and I hope that it will be pursued at Montreal.

I cannot help feeling alarmed that the United Kingdom's share of world trade in manufactures has been falling steadily over the last four years. It was 21 per cent. in 1953, and it was only 18 per cent. in the first six months of 1957, which is the last period for which figures are available. The share of colonial exports bought by the United Kingdom is also decreasing. We bought 26 per cent. of colonial exports in 1955, only 23.9 per cent. in 1956 and 23.6 per cent. in 1957. In other words, that side of inter-Commonwealth trade is declining and not increasing.

In 1933, the last big conference on Commonwealth trade in Ottawa started a world recovery which lasted until 1938. We began then by increasing inter-Commonwealth trade, and an increase in world trade followed. I do not say that we are conducting this conference in quite the same circumstances as that. That was a very unhappy period, particularly for this country and the Commonwealth. We were much less prosperous then than we are now. We had 2 million unemployed, and the United States had even more. But we might take a leaf out of the policy followed at that time by looking after our own interests as a Commonwealth first, increasing the prosperity of the Commonwealth by increasing Commonwealth trade. That would be a help to world trade in the long run.

I also plead for a rather more enthusiastic attitude than we have sometimes had in the past towards this question of inter-Commonwealth trade. On reading the report of the Commonwealth Parliamentary Conference held at New Delhi last December, I find a great deal of comfort from the remarks of Chief Solaru of Nigeria, which I hope will be noted. He said: … In our economic relations in the Commonwealth all we need is a reorientation of outlook. We have been looking each to his own needs, but the Commonwealth as a family must be the emphasis. The emphasis must be the Commonwealth as a family by common consent, by tradition of Government, by common ideals or goals pursuing the same methods in achieving them. He made a plea for a plan of development for the Commonwealth. I ask that we should go to this conference with a policy for extending Commonwealth trade and that we should give a lead to the rest of the Commonwealth, because they are just waiting for such a lead.

7.13 p.m.

Mr. James Johnson (Rugby)

This is a most unusual debate, and it becomes more and more unusual as it proceeds. If those on the Government benches will excuse me for saying this and will accept the spirit in which I say it, we are having some fine speeches from the back benches opposite. In fact, back benchers on the Government side of the House are giving leadership to the Government which the Government badly need. We are having honest speeches, too. The hon. Member for Liverpool, Wavertree (Mr. Tilney) has said that private enterprise has lost a lot of money in Africa—in fact, more than the C.D.C. or any of the public boards have lost. We did not hear speeches like this in connection with the groundnut scheme or the Gambia eggs.

My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), in a jocular mood, said that he hoped to see his speech in The Times in the morning. I am convinced that many of the speeches which we have heard from the benches opposite should be in the Daily Express and the Daily Mail in banner headlines. A former Conservative Minister, now Lord Chandos, made a famous statement in which he said that he could not "export a deficit". After hearing speeches from the back benches opposite and having listened to the Minister of State, I I believe it is time that the Government exported the deficit from the Government Front Bench and imported some of the Members from the back benches to give a lead.

The hon. Member for Wembley, South (Mr. Russell) told us that he has never known a time when Commonwealth trade was falling as it is now doing. Such admissions are honest, and for the first time since I have been in the House, hon. Members opposite who have been pleading for a bi-partisan policy are now giving us one. They are taking the Labour Party's leadership in these matters.

I welcome the realistic statement that one needs an economic foundation for a Colonial Territory before one should allow it to escape its colonial status and become an emergent dominion. One has only to look in West Africa and see the difference between the Ghana that is, with its scores of millions of sterling balances from cocoa, and a place like Sierra Leone which may be a dominion as early as 1961 or 1962 but yet with little in the way of a solid, stable, economic foundation.

It is startling to discover that education even in Ghana can depend upon the world price of cocoa. Youngsters will get education in Ghana to a greater or lesser degree as we sell cocoa in the world market. Not long ago I was in Northern Rhodesia. What is happening there, following upon the line of falling world prices and the need to have an economic buttress for the social services? We are told in balance sheet after balance sheet of the copper companies in Northern Rhodesia that they are not doing quite so well. The Financial Secretary, speaking in Lusaka, said that this year they will get only a little over £8 million in their income tax from company profits as opposed to £12 million last year. Because of this, according to the Northern Rhodesian Government, the Minister of Education in Lusaka says that there will almost certainly be 50,000 African boys and girls wandering about the Copper Belt with no education and with a consequent lack of discipline. These are the bitter fruits of falling prices in world commodity markets.

The Times had an excellent article this morning summarising the whole of this Commonwealth financial discussion. I will take one point only, and that is this matter of what can be called the "fluidity of funds for investment." In other words, where and how can we get money to go into these Colonial Territories where economic development is needed? The general pattern remains the same as it has been for some time. These Colonial Territories export mainly to the dollar sector of the world but they import United Kingdom goods by and large. But here is the disturbing fact, that in the last year the value of their exports rose by only 2 per cent. whereas their imports rose by 7 per cent. Overall there is a slightly falling deficit in their economies. This is due, no doubt, to their ambitious schemes of economic development. That is laudable, and one does not blame them in the slightest. One does blame the Government for not allowing the money to flow to those Colonies to support these ambitious development schemes.

We heard earlier—the Government were challenged upon it—about giving British Guiana authority or backing for a Swiss loan which they asked for. We hear time and time again that there is a cut-back in development schemes in the Colonies because the Government are too parsimonious and mean. One wonders why they have put down an Amendment today. My hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) questioned the Minister and asked why on earth the Amendment had been put down. The reason is quite obvious; it sticks out a mile. They do not want, at this time, as we do, in the words of our Amendment, to make further provision for economic aid to promote the welfare of colonial peoples". The Government want to delete that. They say they want to talk about it. They are going to Montreal to have discussions about how they might, perhaps, if or when, some time in the future, do something by way of extended development work in the Colonies. They are castigated by their back benchers, who say that something should be done at once. We can gather from the volume of support for the speeches from back benches opposite how hon. Members feel. I hope that the Under-Secretary in closing the debate will not give us a bromide; but will, at the end of the day, give us something factual and sensible to cheer us up a little more than did the opening speech by the Minister of State.

What is happening to commodity prices overseas? I could quote from the reports of a number of companies, all saying the same thing. I have here a statement by the chairman of the British Central African Company, Limited, who, at the annual meeting said: Our annual crops suffered from the fall in prices general throughout the world commodity markets, with the result that some of our operations are now conducted on a profit margin so narrow that it can easily be upset by any adverse condition. That quotation can stand for all such companies whose reports we see in the financial newspapers. The only part I challenge there is a profit margin so narrow A former Member of the House of Commons, Captain Waterhouse, has been speaking as the chairman of Tanganyika Concessions. He thinks he has a narrow profit margin. He has made only £4½ million this year for Tanganyika Concessions. These companies are still making plenty of money, but, of course, things are not quite so good.

There is no doubt, in regard to copper, coffee, cocoa and copra, that there is anxiety. In all these commodities, the Food and Agriculture Organisation of the United Nations is setting up working parties at this moment to consider what can be done to stablise the commodity markets. The only cheerful picture is presented by the sugar trade. I hope that hon. Members will consider carefully why sugar is doing so well. At the moment, this country guarantees Barbados, Mauritius and other islands the sale of 1½ million tons of sugar per year in the United Kingdom market at a present cost of about £43 16s. 8d. a ton.

There is that cheerful picture. We must remember that it is a legacy from our Government. One wonders why hon. and right hon. Gentlemen opposite are so critical of bulk purchase and long-term agreements and arrangements of that kind when they can see this wonderful job being done in regard to sugar. Why should not similar arrangements be made for copper, cocoa, coffee and the like—not necessarily just the same thing, but something on the lines of the Commonwealth Sugar Agreement. The Solomon Islands and other places in the Pacific, will suffer if copra falls. Kenya, too, will have a difficult time if the price of coffee falls. At the moment, the South American coffee people, as I know from what has been said in conference at Mexico City, are going to cut back 80 per cent. of their output. In Kenya, we are doing well at the moment. Last year, 57,000 African peasant farmers, mainly in co-operatives, made £1 million. If 57,000 African coffee farmers in Kenya, are to suffer as a result of wastage, caused by world conditions, there is something wrong with the House of Commons if we allow this to happen.

The Colonial Territories obviously must be made more viable. They need a more balanced economy, and they must have more diversification of activities. We have been told how dependent many of them are upon one or two crops, as much as 40 or 50 per cent. of their economy sometimes being dependent upon one or two commodities. Capital investment is needed but not only in secondary industry. I was intrigued by what my hon. Friend the Member for Edmonton (Mr. Albu) said about small-scale industrial undertakings, particularly in agriculture. We all know the Kariba Dam, which has caught the world headline, but I should be just as happy to see a million spades enter Africa next year so that a million African peasant farmers could use them to cultivate their land. Simple equipment of that sort is essential to African peasant farmers in order to increase their output. It is just as necessary as the spectacular and sensational expensive schemes which we have. The two go side by side.

I want to emphasise the importance of what could be done about the flow of capital. The Times this morning spoke about a "world shortage of liquidity," but said that this was not an overall shortage but a matter of unequal distribution. Earlier in the same article it said that what we needed was a flow of funds outside the Commonwealth. Where is the money? It is in the North American continent. I am not by any means anti-American, as some hon. Gentlemen opposite seem to be. I support our Commonwealth, but I want to see America come in as well, just as much as I want to see the Canadians and New Zealanders. We live in a world society and we talk about the community of nations. The Commonwealth is simply part of the world. It is an important part, it is our part, but do not let us forget that we belong to a much larger family than merely the family of English speaking communities overseas.

The only large surpluses available are in the North American continent. We have the World Bank. Its chairman, Mr. Eugene Black, has just visited Kenya. He gave the East Africa High Commission ES million for railways, docks and harbours, and he said that he would give more in the future. Kenya and East Africa are credit-worthy, never mind what some people think of Mr. Tom M'boya and Mr. Julius Nyerere. The World Bank feels that Kenya and East Africa are stable places into which it can put money.

If the World Bank is prepared to do this, why not a Commonwealth Bank, too? I do not see why we should not have a Commonwealth Bank. We have our sterling system covering 40 per cent. of the world, which does great work. We talk loud and long about Commonwealth bonds. It baffles me that we should not have his closer financial inter-penetration and have capital sums given to the Bank by Commonwealth Governments, out of their internal taxation. These could be allocated by a central board for suitable and judicious investment in those parts of the Commonwealth which need the capital so badly. Why should not this arrangement be allowed to develop? I hope that the Minister of State will discuss it with his right hon. and hon. Friends so that we shall, at Montreal, have the Commonwealth Bank plan on the agenda.

The full and only answer to this question of investment is to be found in two documents, both published in 1951. I am afraid that this Government will never look at them, never mind act on them. One was a report commissioned by President Harry Truman. The chairman of the body was a gentleman called Nelson Rockefeller, a delightful man who had spent his time on economic development in South America in both public enterprise and, of course, private enterprise. His committee's document was called "Partners in Progress", published by the State Department. At the same time, the United Nations set up a body of five international experts, headed by one of our West Indian friends, Dr. Arthur Lewis. Its document was entitled, "Measures for Economic Development of Under-developed Countries."

I wonder how many hon. Members opposite have looked at the second of these documents, never mind the first. It is notable that they both say the same thing. American capitalists came to the same conclusion as a West Indian Socialist, namely, that we need an International Development Authority. My party, at its Blackpool Annual Conference in 1956, pledged itself—and pledges mean something—to allocate 1 per cent. of our national income to a world development authority of this kind. I am heartened to find leading American capitalists and bankers in Washington coming to the same conclusion as the Labour Party in Blackpool about the answer to the problem of obtaining sufficient funds to develop these hungry areas of the world. We have been told by my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington) that half the people there go to bed at night feeling hungry.

That is a challenge to people like ourselves who are wealthy and who should do something about it. Yet all that the Government can say is, "We will go to Montreal and have discussions about what we might do sometime in the future." I hope that they will do more than talk at Montreal. I hope that they will do something positive on the lines of these world documents. I hope that they will go to the United Nations and say, "We believe not only in the World Bank but in an International Development Authority which will pump money—and that will be mainly North American dollars—into these backward and under-developed parts of the world."

7.31 p.m.

Mr. Bernard Braine (Essex, South-East)

This has been a most interesting and thought-provoking debate. I entirely agree with the remarks of the hon. Member for Rugby (Mr. J. Johnson) about the quality of the speeches which we have heard so far. I enjoyed the speech of the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), but I hope that he will not mind my saying that he made rather heavy weather of the Amendment and the Motion. Quite frankly, it is utterly unrealistic, in present conditions, for the House to discuss such questions as the instability of commodity prices, the desirability of expanding trade between Commonwealth countries, and the need to stimulate their economic and social development without making reference to the great economic conference which is to take place in Montreal in September.

Indeed, the Motion puts the cart before the horse, because it is only when Commonwealth trade shows an upward movement and the trade of the United Kingdom expands so that we have a still greater disposable surplus than we have had in the last few years that we shall be able to provide the means whereby the development and well-being of Colonial Territories can be advanced. But I also agree with my hon. Friend the Member for Wembley, South (Mr. Russell), as I have done for many years now, when I say that I wish that the Amendment had been more strongly-worded and had given a more vigorous indication of the kind of mood, if not the policy, in which the Government's representatives will be going to Montreal.

We are all very conscious that the debate is taking place at a time of great uncertainty in world trade and economic affairs. The negotiations for a European Free Trade Area, for example, are still very much in the balance. That is something I regret. I have never taken a narrow Commonwealth view of these matters. I believe in expansion. I believe that Britain must seek world trade as well as Commonwealth trade, but we have to face the possibility that the European Free Trade Area concept may break down and that by the end of the year not only may the United Kingdom exporters of manufactured goods find themselves confronted with new tariff barriers around the six Treaty of Rome countries but that primary producers, especially in the Commonwealth, will be suffering from discrimination applied against their products in favour of the associated over- seas territories of the Treaty of Rome countries.

This is very serious, and it will be of little use to talk of these general problems at Montreal without having a clear idea in advance of what we intend to do if events in Europe take this unhappy course, if there is no sign from the United States of willingness to stop unfair trade practices which have been undermining a good many Commonwealth countries, And if there is no disposition on the Americans' part to realise that the reserves of the free world must be strengthened by positive assistance. We must go to Montreal with a positive message, to give a positive lead and armed with positive policies. It may be difficult for my hon. Friend the Under-Secretary of State for Commonwealth Relations, whose heart, I know, is in the right place, to go into great detail on this problem tonight, but I hope that he will understand the anxieties and apprehensions on this score which extend across both sides of the House.

I have always admired the hon. Member for Cardiff, South-East (Mr. Callaghan) for his vigour and his debating skill, and I think that he made an excellent speech today, though I quarrel with one or two items in it. His short-term analysis of the present situation in the Commonwealth was absolutely correct. On the other hand, the hon. Member for Edmonton (Mr. Albu), whom I had the pleasure and privilege of accompanying on a long tour of East Africa, Somaliland, Kenya and Ethiopia, a few months ago, had the situation in better perspective. In the long term there is no doubt that as world industrial expansion continues, and all the indications are that it will, and commodities come into their own again, we may well find ourselves in a period of short supply, such as that which prevailed after the war.

We are concerned, however, with the present situation and as it is likely to be for the next twelve months. It we take-a false step now, or fail to take any steps at all, we may find the situation at the end of that twelve months far worse than we ever imagined. It was right for the hon. Member for Cardiff, South-East, and my hon. Friends, therefore, to stress the dangers and the hazards inherent in the present instability in commodity prices, and to emphasise the fact, which I have tried to bring home in my humble way over and over again in the House in the last twelve months, that if the export earnings of Colonial Territories or self-governing Commonwealth countries continue to fall their capacity to buy essential capital equipment from this country must be reduced.

In the long run, therefore, even though the terms of trade have been running steadily in our favour, we cannot be indifferent to the plight of Commonwealth primary producers. It would be fatal for us to do this. An hon. Member opposite hinted, quite rightly, that the fall in commodity prices which has already taken place has negatived in a good many under-developed countries the effect of external aid received from the United Nations sources or from the United States. It is all very well to talk about aid programmes, but if the way in which a nation earns it bread and buttter suffers, and its trade falls off, all the aid in the world will not help it. This is already happening, and the appropriate agencies of the United Nations have observed it. Furthermore, a decline of this kind reduces the defences of the free world. It weakens the unity and, therefore, the effectiveness of the Commonwealth in the conduct of world affairs.

I thought, however, that the hon. Member for Cardiff, South-East was advocating some dubious methods to deal with this situation. It was clear that he and his hon. Friends pin their faith on bulk purchase. I have no objection to bulk purchase in principle if, as my hon. Friend the Member for Wembley, South said, in the last analysis it is the only thing one can do. But all experience has shown that it has very grave disadvantages. It was about the only thing that we could do immediately after the war, when so many of our countries were shattered. The old trade pattern had been completely distorted and there was an acute world shortage of dollars. It was possible then to enter into long-term arrangements with Commonwealth countries. Not only was it possible; it was, indeed, desirable.

Today, however, I do not think that there will be any argument in favour of returning to that old method. I say at once, however, that the Commonwealth Sugar Agreement, having regard to the nature of sugar as a commodity, is a desirable arrangement.

Mr. J. Johnson

If I may interrupt the hon. Gentleman, I would like to know what he means by saying, "having regard to the nature of sugar as a commodity". Surely he knows that Cuba could flood the world market and that the price of this commodity has fallen from 6 cents to 3.60 cents a lb. If our sugar markets were at the mercy of Cuba, they would "go west". Why is it not in the same category as other commodities?

Mr. Braine

It is precisely because sugar is so vulnerable a commodity that the Agreement has served a useful purpose. The world price of sugar is the price at which Cuba, enjoying a preferential market in the United States, could unload its surplus on the world market and ruin our producers. But conditions are different for different commodities. I agree in spirit with the hon. Gentleman, but it was his Government which, no doubt for good reasons at the time, bound the hands of this country by entering into the General Agreement on Tariffs and Trade. I am not saying that, on balance, at the time that was not a good thing, but under that Agreement we were prevented from increasing imperial preferences or introducing new ones.

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

I am not arguing in support of what the hon. Gentleman is saying, but if his view is right he has failed to convince his Government, after six years, that this is the policy to follow.

Mr. Braine

Let us get the matter into perspective. When we talk about the decline in inter-Commonwealth trade, it is a relative decline that we mean. There has, in fact, been the most formidable economic growth in almost every Commonwealth country, including some of the poorest. What alarms us is that the present situation reflects a relative decline, so that our economic ties with Commonwealth countries are weakening. To imply, however, that during the period of the Labour Government higher living standards were general in Commonwealth countries and greater wealth was created than has been the case while the present Government have been in office is far from the truth.

I make no special point about this, because we were all busy trying to rebuild our shattered fortunes at the end of the war, after a titanic struggle. I am not making a party point, but everyone in this House must be concerned at the fact that the Commonwealth trade ties have been weakening in recent years as a result of our doing less trade between ourselves, relatively speaking, than was the case in the past.

I agree entirely with my hon. Friend the Minister of State that too much interference with the laws of supply and demand in this matter is not beneficial either to producers or consumers. The only point about this is that the normal laws of supply and demand do not always obtain in this imperfect world. Thus, we have a situation in which there is American dumping of subsidised agricultural surpluses, often at give away prices. We had the recent situation over butter, where certain European countries were prepared to dump their product at below the cost of production in this country. We now have the possibility of discrimination against us by the Treaty of Rome countries, and not only against us but against Commonwealth primary producers as well. That is a serious state of affairs, and I believe that we may find ourselves invoking G.A.T.T. before long in defence of our interests.

This is the dilemma with which my hon. Friend the Member for Wembley, South, who is such a determined opponent of G.A.T.T., and myself are faced, namely, that in the present situation it may provide a defence of our best trading interests. On the other hand, none of the objects which the hon. Gentleman the Member for Cardiff, South-East thought desirable this afternoon, none of the purposes which he thought the Montreal Conference could serve, are possible unless we are prepared to go there and say that if the rest of the world does not toe the line, if discriminatory practices against all the best interests of international trade are not stopped, we will seek a renegotiation of G.A.T.T.

It was significant that on this subject the hon. Member for Cardiff, South East was silent, yet it is the nub of the problem. Are we to regain our freedom to defend ourselves if discrimination is employed against us? I hope that will not be necessary because, frankly, all the Commonwealth primary interests with which I am concerned, as chairman of the British Commonwealth Producers' Association, are anxious to see not a return to discrimination and restriction, but a general expansion of world trade.

There are two reasons for this desire for a general expansion of world trade. The first is that it is the only way in which we can find a surplus for the overseas investment to which hon. Gentlemen opposite have rightly referred this afternoon. The second is that any contraction in world trade is bound to affect our country more adversely than any other country in the world. We live by trade. Our foreign trade expressed in terms of our national income has been growing through all the years of this century. That is not true of the Americans. Today, we are exporting double what we exported before the war in real terms, while importing much about the same. We have to do that to live. Thus, there is no real future in a policy which does not seek to expand world trade generally.

Having said that, I say at once that I thought hon. Gentlemen who have spoken from the opposite side of the House this afternoon about investment were really rather missing the point. This country is now investing more than the 1 per cent. of its gross national product in development overseas, which has been referred to by the Labour Party. If the argument is that over and above the 1¼ per cent. of our national income we are new currently investing, a further 1 per cent. has to be found for special development in the under-developed countries, this would mean that we would have to run a trade surplus of between £400 million and £500 million a year.

There has not been a single year since the end of the war when we have run a true surplus of that order. Indeed, it is only in the last four or five years under the present Government that this country has been paying its way. In other words, our earnings have exceeded its outgoings. It is true that a great deal of long-term development, and very good development, took place during the period of the Labour Government, but it was at the expense of running up the sterling balances and of borrowing from the United States. I make no complaint about that, but that was factually the position.

My second point is that at present we are investing at the highest per capita rate of any country in the world, including the United States. My American friends argue that they are doing a great deal for the rest of the world. They are investing and providing aid of various kinds to the tune of 4 billion dollars a year. Yet, if the American people were facing their responsibilities in the modern world, as the United Kingdom did prior to 1914, the amount of overseas investment they would have to make to keep the world in balance and to match our effort would not be 4 billion but 30 billion dollars a year.

Mr. Johnson

Before the First World War we were exporting 7 per cent. of our national income. The Labour Party is asking for 1 per cent. Is the hon. Gentleman telling the House, in a defeatist mood, that with 50 million people here we cannot find more money to export to the Commonwealth?

Mr. Braine

The hon. Member could not have been listening. Far from being in a defeatist mood, I was pointing out that in the last few years, since my party has been in office, conditions have been created to enable us to earn a true surplus and thus to make a net new investment overseas. That was not so for the first six or seven years after the war.

I have tremendous faith and confidence in the capacity of this country. I believe that its skill, ingenuity and leadership, married to the resources of the Commonwealth, make an unbeatable combination. I have always believed that. I am certainly not defeatist, but while I agree entirely with the Government that the aim should be maximum expansion of world trade, and ensuring that we are getting our fair share of it, nevertheless the fact must be faced—and sometimes the free traders forget this—that almost 50 per cent. of our trade is still with the Commonwealth, a high proportion enjoying preferential advantage.

With the erosion of preferences since the war, many Commonwealth countries have been saying that Imperial Preference is not what it was, that under G.A.T.T. it cannot be strengthened and that no new preferences can be introduced. They are, therefore, turning one after another to seeking a reduction in the margin of preference granted to British manufactured goods. That pattern is being repeated all over the Commonwealth. So long as we get more and more competitive, we can face it, but I warn hon. Gentlemen that we cannot afford to play the fool with this vital segment of our trade. We must keep it, for it is essential to us. When we talk about expansion of world trade, let us not think, therefore, that we can continue to expand our exports to Europe while neglecting our markets in Australia, New Zealand and Canada.

The hon. Member for Cardiff, South-East asked for some new machinery to channel Commonwealth investment. I was delighted to hear him say that. When some of us on these benches put forward a similar proposal in 1956 and 1957 we did not get as good a reception as we expected, from either side. The reason was that at that time the British economy was running at full stretch and the economists all argued that the need was not for new agencies for development, but for additional sources of capital. I agree with that view in retrospect. It is all very well to talk about a Commonwealth bank, but unless one has some money to put in it, or unless one can command resources from outside, it is merely one more agency of development.

The situation is quite different today. There is a slack in the economy and in the overseas Commonwealth there is the fear that markets will collapse. I notice with some pleasure that the Chancellor has intimated that if world trade and purchasing power continue to fall the Government are ready, in case of need, to use powers under Sections 2 and 3 of the Export Guarantees Act, 1949, to provide direct finance to overseas customers to enable them to buy our goods.

There are dangers in starting a credit race, and a credit race is in progress at the moment, but I hope that the Government will use their powers to stimulate trade not generally but specifically in Commonwealth channels. Some such stimulus is needed. I have suggested before—and I hope that I carry hon. Members on both sides of the Committee with me—that what is now needed is something on the lines of the United State Import-Export Bank which will tie the granting of credits to overseas customers to purchase in the United Kingdom.

Such a device would have a stabilising influence and I hope that my hon. Friend will be able to say that this will be one of the ideas likely to be discussed at Montreal.

I hope that the Government representatives who go to Montreal will not merely talk about these problems, but will go with a positive policy to meet the requirements of the day. There is no doubt that we are passing through a period of some anxiety and that many of the factors in the situation are outside our control. Nevertheless, that is no excuse for going to Montreal merely to "collect the voices" of the other member States. Our representatives must go there with certain positive ideas seeking to carry the Commonwealth with us—because the Commonwealth is a partnership and persuasion is the instrument to be used.

This may be the last chance, because as the economies of Commonwealth countries become more diversified, as they seek alternative markets for their products, so will the trade picture become more diffuse, and the old trade ties between ourselves and the Commonwealth may weaken and become insignificant. Economically, that may not be so bad, but politically and in every other way it would be a tragedy. That situation must not be allowed to develop and I do not believe that it will if my hon. Friend and his colleagues go to Montreal determined that the Conference will yield positive results.

7.57 p.m.

Mr. John Stonehouse (Wednesbury)

This is a remarkable debate, and I have agreed with practically everything which has been said on both sides of the House, except with the rather disappointing speech of the Minister of State. If only we could have had the leadership from the Government Front Bench which has been shown by some hon. Members on the back benches our Commonwealth relations today would be very much healthier.

I was impressed by the dynamism of the hon. Member for Essex, South-East (Mr. Braine), and I agreed with some of what he said. It is absolutely true that we must have not only an increase in trade, but an increase of production and an increase of wealth in real terms. However, I must take the hon. Member to task for saying that we were already exporting capital in excess of 1 per cent. of our national income. He had got his figures wrong.

My figures show that, after allowing a deduction of £90 million for our overseas disinvestment and for other countries' investment here, our net long-term investment is about £120 million per year. That figure covers United Kingdom investment in all countries. Most of it is private investment and only just over half is going to Colonial countries where the need is greatest.

I hope that we shall be able to implement the very imaginative plan of the Labour Party which guarantees to a world development authority at least 1 per cent. of our national income to permit public investment in the Colonial countries, especially in the under-developed areas which need investment to go ahead. The Minister of State said that Britain's contribution to a solution of the problem of investment in Commonwealth and Colonial countries could be handled in two ways. He said that one was to allow sterling balances to run down so that the countries holding those balances could use the investment in their own countries, and the other was that the United Kingdom should earn a surplus so that it had a net surplus with which it could finance overseas investment.

I have looked at the figures of sterling holdings of the overseas sterling countries and have discovered that between 1946 and 31st March of this year the total sterling reserves of those countries jumped from £2,367 million to £2,628 million. Instead of those countries drawing upon their sterling reserves during that period they have added to them. There are exceptions; India, in particular, has allowed her reserves to run down, but other countries have been putting more into their reserves. They have been helping our economy, rather than this country helping theirs.

This applies to our colonial countries. Their sterling holdings amounted to £461 million in 1946, and they now amount to £888 million, after taking out of the list Ghana, Malaya and Singapore. Rather than the Colonies—whose economies are controlled from this country—being allowed to run down their sterling holdings and invest the money in development, they have had to maintain their sterling holdings here, thereby assisting our economy. We must now make energetic plans for public investment in the colonial countries to enable them to use up their sterling holdings usefully.

The background to this most important subject has already been referred to by the hon. Member for Eastleigh (Mr. D. Price), who made a remarkable speech. He gave us the facts about world poverty, from details provided by the Food and Agriculture Organisation. I agree with practically every word of his speech, which was a first-class one. We had another excellent speech from my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), who gave us much detail about the poverty which exists in the Commonwealth and Colonial countries—and that is the poverty with which we are trying to deal.

Although we talk of trade, and of sterling reserves, it is poverty which we are trying to avoid—the poverty which means that only about one person in six in Commonwealth and Colonial countries have enough to eat; the poverty that means that the expectation of life in India is only thirty-two years; the poverty that means that children in countries like Uganda and Kenya are dying in their hundreds and thousands of malnutrition—400 out of every 1,000 children dying before they reach the age of 14. One of the main reasons for the high child mortality rate in these countries is malnutrition. That is the poverty about which we are talking. That is the poverty that means disease, debilitation, and real unhappiness—the sort of unhappiness of which people in this country cannot conceive.

There is also the fact that as we deal with the problem of poverty we shall have an increase in population. By counteracting disease the expectation of life rises, and the population increases. This means that the increase in production must be great enough to cover the needs of that increasing population as well as the rising standards of the country as a whole.

We cannot rely upon private investment to do this job. Private investment is always searching for the most profitable outlet. Although there have been some notable exceptions, most private investment will flow in the direction where money is to be made. It will go towards the building of hotels in Sydney, or the development of flats for Europeans in Salisbury, Rhodesia. It will not go to the essential job of building up road and rail communications, and the factory developments which cannot pay off in under ten years. Public investment must therefore take over the job. There must be a tremendous increase in public investment in these countries.

The next fact in the background to the problem is that so many countries to which we are referring today are dependent upon one, two or three main export crops. If these crops fail, or their export price on the international market falls, the economies of the countries concerned receive a real belly punch. They can hardly recover if something happens to the price of their main exports.

Let me take the example of Uganda. Last year its total exports were valued at £45,850,000. Cotton took up £17½ million of that, and coffee £21½ million. Practically all the exports of Uganda consisted of those two crops. If there is a drop in the prices of these two commodities, or if something goes wrong with a crop in one year, the whole economy of Uganda is affected. It is therefore important that in our investment we should try to diversify the economy as much as possible. In Uganda there have already been developments in tea production. The tea crop is now worth over £1 million a year. At Kilembe the copper mines are producing copper valued at over £1 million a year. These are welcome developments, but for some time it will be impossible for Uganda to develop other crops to take over the job which cotton and coffee are now doing.

In order to protect Uganda, as well as Kenya, Tanganyika and other countries with similar problems, we must have international commodity agreements which will give them some stability over a period of time. Look at the position in Kenya and Tanganyika. Coffee accounts for £13½ million of Kenya's total exports of £29 million. and Tanganyika depends upon three main exports coffee, £9 million; sisal, £10 million and cotton, £7 million. It is essential that there should be international agreement to protect the exports of these three countries, and give them some stability.

The next fact in the background to this debate is that there is a general downward trend in commodity prices. If we take 1913 as the base year we can see how the trend has gone. Taking 1913 as 100, the manufactured exports index rose to 122 in 1938, whereas the primary products index fell to 91 over the same period. Primary producing countries were having a bad time just before the Second World War. In 1950 the manufactured exports index rose to 206 and the primary products index to 210. The primary produces had caught up with the manufactured goods. There had been a change in the terms of trade, and the manufacturing countries were worse off to the extent that a given volume of their manufactured exports bought less than three quarters of the primary products it bought before the war.

Since 1951, there has been a collapse in commodity prices, mainly due to the Korean War, but, even since that initial collapse, there has been a general trend in the downward direction in commodity prices, For instance, if we take the export prices of the United Kingdom, taking 1953 as the base at 100, we find that in 1951 it was 96, and that the index jumped up to 106 in 1957. The Far East sterling area export index, however, dropped from 100 in 1953 to 96 in 1957, and the export index for the rest of the sterling area, Commonwealth countries and Colonial Territories, which come within this section, dropped from 126 in 1951 to 97 in 1957.

That is the trend, and it means, in real terms, that these countries are getting lower foreign earnings, and also that the peasant producers themselves have smaller money incomes to spend. It means that because of the resources which these countries have, the real savings which they can make in their own economies to be ploughed back in development are undermined. Sometimes, the impression gets abroad in this country that we are holding up the Colonies and that colonial development depends almost entirely upon what we can afford to spend. If we look at so many of our colonial countries, we find that what has happened since the war is that they have made net additions to their sterling holdings in this country. They have been saving with the Bank of England and at the same time financing their own economic development.

Rather than it being a case of our investing money in the Colonial Territories, we have been enjoying an investment from them in us. I think we have now to redress this balance out of our own pockets, and find money for investment which we can make in these countries, particularly if commodity prices continue to drop, because there is no international agreement on the protection of commodity prices. We have more than a duty to fulfil to these colonial countries to make sure that they have the money with which to carry on their own capital investment programmes.

We are talking not only in terms of trade, but in real terms of economic development, and I should like to take as an example a country which I know fairly well, and should like to digress, if I may, showing how development can take place in a particular colonial country. The example I have in mind is Uganda, but what can relate to Uganda may well be applied to a number of other colonial countries. Let us take the area of Uganda called Busoga. There, we find that the proportion of unused land to cultivated land is something like three to one. A lot of land is unused. In the Northern Province of Uganda, we find that the proportion of unused land to cultivated land works out at fourteen to one. There is an enormous amount of unused land there.

It is true that some of it may not be easy to develop, but quite a lot of this land could be developed if there were irrigation schemes, if roads and railways were built, and if the people living in this part of Uganda had the mechanised equipment which would enable them to cultivate more than a very small area of land. In fact, the average area cultivated per person in Uganda is deplorably low—one-and-a-half acres per person. If they had some equipment available, it would be fairly easy for that average acreage cultivated per person to be increased.

What are the necessary conditions for development? The first is land tenure reform, and I believe that this is one of the essentials, because unless a peasant farmer feels that he has security on his own land, he will not spend his money or his life building up the profitability of that land. If he knows that his neighbour's cattle can wander over any part of his land without hindrance, he will not be enthusiastic in developing his own crops. I am, therefore, very glad that the Government are at last acting on a recommendation of the Royal Commission on Land in Kenya, Tanganyika and Uganda, which recommended that this problem of land tenure should be tackled.

I make this suggestion. Not only is it important to give the individual security of land holding, but in many areas it would perhaps be even more desirable to give security to co-operative societies, not individual producers who link together merely for the marketing of their crops, but actual production co-operatives, which can do the job of farming on a much wider scale than the individual peasant producer who occupies a small plot of land.

The next reason why land tenure reform is so important is because it gives the individual or the co-operative society concerned more security so that they can raise loans, and this is absolutely essential before development can take place. The peasant farmers should be able to borrow money which will enable them to invest in ploughs or cattle or in a godown in which they can store their crops after they have been harvested. These are the things in which the farmers want to invest, but so often they have not got the security on which to develop their land. Once they get security of tenure and have the title deeds of their farms, they can go to the banks and get the money.

The Credit and Savings Bank of Uganda has been doing a good job in Buganda in this respect, and I hope it will extend its activities outside Buganda as this land tenure system begins to be worked out in more detail. I also hope that it will be possible to develop co-operative credit banks to do that job, and give credits which can be supervised by the co-operatives themselves. Often, they can do a much better job in supervising the farmers' repayments of their debts than can officials hundreds of miles away, say, in Kampala.

The next important condition for development is the improvement of communications. There are vast areas in Tanganyika, for instance, as well as in Uganda, which are crying out for development and which could be developed if lines of communication were there. We need good roads and railways, without which it is impossible for the farmers to get their crops to market. It is no good people growing things unless they can sell them, and in many countries development has been held back because there has not been any means of communication.

Who is to pay for these new railway lines and roads? We shall not get private enterprise to provide them, because there is no money in it. It is up to the Governments in these countries to develop their communications, but they can spend money on these projects only if they can raise loans in Britain. Therefore, it is up to the Government here to assist the colonial Governments to raise the money they need for transport communications and the other developments to which I have referred.

There is the example in Uganda of the railway line to provide a service to the copper mines at Kilembe. Not only is that railway drawing the copper from Ruwenzori, but also it has opened up a vast area for peasants who are able now to use the railway to send their crops to distant markets which before were out of their reach. Another essential condition for development is the availability of consumer goods. Often peasant farmers do not have the initiative to develop their land, because they have not anything in the near vicinity on which to spend their money. When I was in Uganda I was amazed to find in some parts that farmers had accumulated as much as £1,000 in shillings which they had buried, because there were no consumer goods sufficiently attractive to tempt them to spend their money. A lot of money is buried in the ground because there are no consumer goods on which to spend it. Let us also not forget that these people have no confidence that next year they will be able to get the same prices for their crops as the previous year, and that is another argument in favour of stability of prices so as to give the peasant producers confidence over a long period.

The next condition is availability of machinery, fertilisers and other equipment which helps to ensure efficient agriculture. Here again, co-operative societies can be of great help. I agree with everything said by my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), about the contribution which co-operative societies can make to the development of these countries.

When the crop has been raised and the production per acre has been improved—for example, in the production of cotton in Uganda—what happens to that crop if there is not a world demand? This afternoon the Minister of State referred to the fact that the cotton market was being threatened by the development of man-made fibres. He painted a rather pessimistic picture about the future of cotton, but I do not feel as pessimistic about it as he did. Although that proportion of the world consumption of fibres taken by cotton decreased from 80 per cent. in 1938 to 68 per cent. in 1955, there is such a building-up of demand for all types of fibres that, in 12 or 13 years, the net demand for cotton may actually be about 40 per cent. higher than it is today. This is because, as standards improve in under-developed areas, the first thing on which people spend their additional income is clothing.

The figures for fibre consumption in various countries show what a tremendous potential exists for developing the consumption of cotton cloth. Per capita the consumption of fibres in the United States of America is 15.9 kilograms. In the United Kingdom it is 12.2. But in India it is only 2 kilogrammes. In China the figure is 1.3, and in Africa as a whole it is 2.1. In Japan it amounts to 6.4 kilogrammes per person, per year. So there is a potential, even if the consumption is increased only to that enjoyed in Japan; but were we to see an increase in the standards in India, it would greatly assist Uganda which sells a lot of its cotton in India. If the Chinese people should improve their standard of living, they will want to buy more cotton from overseas. They already buy some cotton from Uganda, and they will want to buy more, and so they will help the peasant producers in Uganda.

We have heard a lot today about the wonderful contribution which Britain is making in the form of investment in overseas countries. I should like to bring the House down to earth about this, because the figures I have are not quite so complimentary to the Government and to investors in this country as some hon. Members opposite would have us believe. In 1956, investment in our Colonies from all sources amounted to only £101 million. In 1957 the figure was £116 million. That is about the amount which we pay to the Sheik of Kuwait in oil royalties. It is a paltry sum compared with the immensity of the problem and the crying need for capital in the Colonial countries.

Taking 1957 as an example, we find that private investment was £95 million out of a total of £116 million. Government investment was very small. Capital raised by colonial countries was about £17 million, whereas the net investment by the Colonial Development Corporation was only £2 million. I hope that it will be possible for the work of the Corporation to be greatly expanded. For the Corporation to make a net investment in 1957 of only £2 million is, in my opinion, deplorable. I should add that about half of the amount invested comes from this country. The other half comes from other parts of the world, in particular the United States. Therefore, the amount of investment which we are making from the United Kingdom in colonial countries is about £70 million a year. If this debate has proved anything, it is that the amount of real investment which this country is making, in the colonial countries and in other Commonwealth countries must be greatly increased.

8.27 p.m.

Mr. Alan Green (Preston, South)

I have listened to most of to-day's debate, and I hope that I shall not be misunderstood if I characterise it as "cosy." Hon. Members on both sides of the House have, on the whole—I think quite rightly—accepted each other's point of view as being perfectly sincere. Indeed, some hon. Members opposite have expressed surprise that my hon. Friends who have spoken before me are interested in increasing investment in the Commonwealth, in improving standards of living there and so. In those terms, the debate has been cosy.

I hope I shall not appear as the thistle between the red flower and the blue, but if I am I shall be making a non-party point in terms of this debate. I hope I may even carry the members of both Front Benches with me in the consideration of the one point which I desire to make. I am not surprised that the Motion from the Opposition has required amendment. It seems both paternalistic and anachronistic, and it talks solely about stabilising prices of raw materials and the injecting of more welfare aid. Of course, trade is raw material. Commonwealth countries and colonial countries do not produce more raw materials in order to leave them to rot, and those terms—

Mr. Callaghan

Quite an important part of our Motion calls upon Her Majesty's Government to pursue policies that will expand trade. That is a factor which the hon. Gentleman should not neglect.

Mr. Green

I am not neglecting those words, but they are just two words out of many. The Amendment widens the Motion substantially in a way of which I approve.

Mr. Ede (South Shields)

The Government will be flattered.

Mr. Green

It will be surprising if did not approve, but I think the Government will be less flattered by the time I have finished. What is going on in the Commonwealth and here is two industrial revolutions side by side. This is no longer merely a matter of primary raw materials coming in from the Commonwealth and of our being good enough to give them a little welfare aid and then buy their raw materials. I have been astonished that no hon. Member has drawn attention to these two industrial revolutions. I am delighted to see the hon. Member for Ashton-under-Lyne (Mr. Rhodes) in his seat, because he knows, as I know, that there is a cloud bigger than a man's hand over the North of England. It is not primarily the raw materials coming in that worries this country, but how we are to mesh the two industrial revolutions going on in the Commonwealth one with the other

The primary revolution, through which we passed 150 years ago, is now taking place in the Commonwealth. The secondary revolution is taking place in this country and has to do with new sources of power, new materials, new products, new capital equipment and so on. I speak as one who has been supplying all parts of the Commonwealth with capital equipment and industrial consumer goods for more than twenty years. I have personal knowledge of what it means to set up a new industry with capital equipment made in this country in places as diverse as India and Canada, and they are extremely diverse.

The problem is to hammer out an agreed Commonwealth policy, not merely a nice-sounding do-good policy from this country. I mean a real, effective policy that will provide a common denominator for countries as diverse as St. Helena, India—with too many people and too little power—and Canada—with too much power and too few people. That is a tremendous problem. That is why I welcome the reference in the Government Amendment to the coming Commonwealth Economic Conference in Canada.

When money is invested in the Colonies and when textiles, bicycles, lighters and motor cars pour out of the cheap-labour countries into this country, hon. Members on both sides of the House have to reconcile that stream of low-cost goods with economic realities. It is not only a question of quotas or tariffs from Asian dependencies. Hong Kong's is not the only kind of cloth that will come in here. Cloth from Nigeria will be the next. There is a whole stream of goods that this country has been privileged to make in the past and that others can now make.

When we talk about investing money in those countries we should be careful how we do it. We must control the rate at which we do it so that we can adapt investments to the changes that we are advocating. Otherwise we will lose, here in the heart of the Commonwealth, the support we need for the policies we need in the Commonwealth. Great care must be taken about this. The rate of industrial change in the Colonies must be controlled. Just because we are responsible for their growth, their control, and protection, we must be very careful not to let the rate at which they change run away from us. If we do, the cloud over the Lancashire textile trade today will grow and cover many other industries in this country, not merely textiles. Then support for the Colonies and the Commonwealth will cease to be expressed in this country, which alone can support it.

I want my hon. Friend to say tonight that the problem of controlling the rate of industrialisation in the Commonwealth, and particularly in the Colonies, is a real problem for him. I want to be certain—I want to be very certain—that the rate of growth of industrial progress in the Colonies is in fact controlled in such a way that the majority of our people will continue to support that progress. I say that because there is a real lesson to be learned from what is going on in Lancashire constituencies today. On whichever side of the House we sit, we shall be most unwise if we do not face the fact and get away—if I may repeat the phrase—from our cosy idea that all we need to do is to invest more money overseas in the Commonwealth and all will be lovely in the garden. That will not necessarily be so.

We are responsible for controlling the rate at which the Colonies grow as well as for controlling the conditions under which we grow at home. One hundred and fifty years ago we had an industrial revolution, and every politician who has had any authority in the last 150 years has been, so to speak, boiled in oil for not controlling the rate at which we industrialised ourselves. Do not let us jump into another lot of oil, boiling oil, because we have sacrificed industries in this country to those in the Colonies or have allowed that process to become so fast that our folk at home had not the time to adapt themselves to new ideas and new policies.

I hope very much that at Mont Tremblant, or wherever the Conference is held, an attempt will be made for the control of the pace of industrialisation, not only here but in the Colonies as a whole. I hope very much that we shall not put this problem into a separate compartment in our thinking and one day talk very nicely about what we are doing for the Colonies and another day act to the opposite effect. Hon. Members opposite will remember that a fortnight ago they voted against the Government on the question of Lancashire textiles, when they advocated a quota restriction on Hong Kong goods, and then on another day they are talking about buying goods from the Colonies. If we put these things into separate compartments, there will not be enough support willingly forthcoming from our country for these countries which need it so bitterly.

We must try to control the pace and to mesh the two revolutions together so that they drive at a greater power and do not, so to speak, strip the teeth off their gears and destroy the engine. I hope I shall get an answer tonight saying that this problem will be in the forefront of what is discussed in Canada, because payments for more capital investment and resources overseas are understandable and desirable. There is no quarrel about that on either side of the House, but one may venture to say that we cannot invest what we have not got, and it is no good calling for more investment unless we have more savings with which to make the investment.

One might add that there is no quarrel between the two sides of the House about seeking to put into the Commonwealth every scrap we can, in fact, scrape together to put in. Whilst we are doing that, however, let us bear in mind how folk are employed in this country. Let us bear in mind that they need a little time to adjust themselves to floods of imports of cheap cloth, bicycles or whatever it may be from these very Colonies that we are seeking to support. Let us have that as our first priority in Canada, and the whole country will continue to go with us on Commonwealth development. If we do not have that in mind, then increasingly the country will cease to support Commonwealth development and we, who should be leading it, will fall behind.

8.40 p.m.

Mr. Robert Edwards (Bilston)

I have listened to nearly every speech that has been made this afternoon, and I have enjoyed every word that has been spoken—

Mr. Callaghan

Not the last one.

Mr. Edwards

Yes, I enjoyed the speech of the hon. Member for Preston, South (Mr. Green) because it was a challenge to us. In it was the thought which I think runs through the minds of many Conservatives, the thought that we can hold back the great social revolution of our time. They have the idea that we can create an alibi for refusing to assist in developing backward, poverty-stricken areas—

Mr. Green

I am sure that the hon. Gentleman does not wish to misunderstand me. If I have expressed myself badly, I apologise to him and to the House. I did not say that we must refuse to assist the under-developed areas but that we must take our own people with us while we are doing that. If the hon. Member goes to Lancashire, he may see some signs of what I mean.

Mr. Edwards

I listened to the hon. Member very carefully. I have no doubt that what he said he said very sincerely, but fundamentally the suggestion running throughout the whole of that interesting contribution was that the 50 million people in this country with the very highest standard of living, relatively speaking, should control development in the under-developed areas of the world. Fundamentally, that was his contribution.

In Kenya, the annual income of the people is an average of £18. The average income in India is £20. In Tanganyika it is—what?—£13 per annum. In some parts of the Colonial Territories it drops as low as £12 per annum. Our income per head of population averages fourteen times that of India.

Millions of people are living in unimaginable, grinding poverty; yet we are told to control capital investment in those territories, that we should control their social revolution, which is the only means by which they can be rescued from this terrible misery and poverty, which allows 600 out of every 1,000 children in some parts of the underdeveloped areas to die before they are one year old. In some parts, the average life expectation is about thirty years, as against ours of sixty-six years. Despite these facts, we have this miserable apology for a policy which says that we, the English, should still police the world and, in this age of tremendous social change, should still tell the undeveloped areas how far they should advance and at what rate.

The trouble with those countries is that their economies are unbalanced. Many of them are dependent on one single crop—cotton, rice or coffee; or on one single, basic mineral, such as tin or copper or on rubber. When the prices of those commodities collapse in the markets of the world—often through financial speculation or the operation of restrictive cartels over which we have no control whatever—those people are thrown on the scrap-heap. They go back to the poverty of their tribes to scrape a living out of the soil. They have lost their security in industry, they have no opportunity for a decent life at all, merely because the bottom has fallen out of the commodity markets. They have no control over that; indeed, Governments themselves rarely have control over it.

The Motion before the House suggests that there should be some control over prices, some stability in the prices of primary goods on which the daily bread—the very lives of so many millions of people—depends. There is, therefore, no case—and, I hope, no support—for the principles outlined in the speech of the hon. Member for Preston, South. Throughout this debate, I have not heard any kind of support for that defeatist philosophy.

What the hon. Member says is quite true. There are two great revolutions taking place; two revolutions that are unfolding themselves simultaneously. There is the great revolution of nuclear development for peaceful purposes, which will change the whole basis of political and economic power in the world. The other revolution is that of automation and electronics, which is already changing the industrial landscape of the world.

But there is a third revolution, the social revolution. All these underdeveloped areas are demanding a place in the sun and the right to run their own country in their own way. We cannot halt that revolution. We have got to make our peace with it, and the purpose, of this Motion is to enable us to do so. We are all happy on this side of the House to know that, in spite of their past, the Government are making their peace with these great social changes which are taking place throughout the British Colonial Territories. If we do not become part of this great revolution, if we do not give it a peaceful democratic direction, it will become a totalitarian nationalist revolution; human freedom might very well be blacked out, and the great contribution that the Commonwealth can make in keeping the peace of the world might be lost for all time.

I listened with great interest to two speeches which impressed me greatly by two hon. Members opposite. The hon. Member for Eastleigh (Mr. D. Price) made a profound contribution. But I differed from him on one basic point, namely, that the poverty of the Colonial Territories was a necessary consequence of their lack of energy and power and that our relatively high standard of life was due to the fact that we had passed through the Industrial Revolution.

I differ from the hon. Gentleman on this point because, to a large extent, we are to blame for the unbalanced economies of many of the territories over which we have control today. We have taken great wealth out of these Colonies in the past and we have not put a little back. In the Copperbelt, for example, we have been taking millions of pounds in wealth each year but we have not put a lot back. I believe the natives of Northern Rhodesia enjoy only about 7 per cent. of the income of the Colony. The other 93 per cent. goes in profits, dividends and taxes and is controlled by a very small proportion of the population, which is white.

The right hon. Member for Thirsk and Malton (Mr. Turton) made a notable contribution to the debate, which I hope will be taken up by the Minister who is to reply, namely, the necessity for sharing the surpluses of the world with the people who live in such poverty and who are short of all the things which are required to give them a decent hold on life. Between the wars thousands of tons of wheat were used as fuel on the North American continent; hundreds of tons of meat were destroyed, and thousands of gallons of milk were thrown into the gutter or fed to pigs. Great quantities of food were destroyed while people in other parts of the world were dying from starvation.

That situation still exists in the world, and it is a question of organising the distribution of surpluses which exist in one part of the world among the needy people in another part. Let me give an example. India, to expand her economy and lift the living standards of her people from £20 per head per year to £25 per head per year, has had to engage on a terrific five-year plan. India needs, above all, water and power. These can be obtained by using oil. The cheapest oil in the world is at India's front doorstep, on the Persian Gulf—oil that flows as cheaply as water, in fact more cheaply than water, but it is maintained at an exorbitant world price by the operation of a great oil cartel.

Why should India not be able to buy this oil at its production cost? That oil would enable India, Pakistan and Afghanistan to produce power, to use the streams and lakes from under the ground to cultivate the land, to build up the countries like gardens and to give their people a decent chance in life. This is one of the problems which the Motion poses—the problem of controlling and stabilising prices of essential commodities on which the lives of millions of people are dependent.

There are many other things I should like to say. I have not made a single point which I had embodied in my notes, but I will bring to a close my small contribution as a modest back bencher. I should like to say that I have very much enjoyed the debate and have learned greatly from the contributions which hon. Members on both sides have made.

8.55 p.m.

Mr. Brian Harrison (Maldon)

I followed with great interest the speech of the hon. Member for Bilston (Mr. R. Edwards). I must admit that I found it a little difficult to reconcile what he had to say about the speech of my hon. Friend the Member for Preston, South (Mr. Green) and what was said by the hon. Member for Cardiff. South-East (Mr. Callaghan), who opened the debate. The hon. Member for Cardiff, South-East advocated that we all read and study the pamphlet recently published by Transport House, the name of which—it is probably just as well, for commercial reasons—escapes me for the moment.

This pamphlet suggests a series of controls for controlling investment, for controlling industry, for the co-ordination of investment plans, and so on. It was exactly that sort of point that my hon. Friend the Member for Preston, South was advancing, yet his words were interpreted by the hon. Member for Bilston as urging the holding back of development and advance among colonial peoples. That is not at all what my hon. Friend was suggesting.

My hon. Friend's point was that we must co-ordinate what is going on in the Commonwealth if we are to ensure that we do not run into problems in this country. The other day the hon. Lady the Member for Flint, East (Mrs. White) said something very similar about the danger of developing secondary industries in the Commonwealth if their development would mean a loss of export markets for us in this country. Whether we like it or not, secondary industries will develop in the Commonwealth. We must see whether we can co-ordinate such development. The forthcoming conference at Montreal will give a good opportunity for doing that.

I notice that the Motion calls for stabilising the price of the primary commodities on which the income of so many Commonwealth countries, both Colonies and independent member countries of the Commonwealth, depends. It is very easy for us to talk in this Chamber about stabilising prices. There seem to me to be two factors affecting what we can do which are quite out of our control. One is the weather and the other is the attitude of the people who produce the things.

Anybody who has produced or grown anything in horticulture or agriculture knows, for instance, how a little rain such as we have had during the past week can reduce the yield of corn by 200 cwt. an acre. For various reasons crop development can be arrested. In tropical crops, on which most of our Colonies depend, the variation is even greater. The second factor is the need to get the producers to agree upon some scheme. I remember the reaction of primary producers in one Commonwealth country to a scheme to stabilise the price of wool. When the Korean boom came, the Australian Government decided that it would set a good example and put a levy on wool so that the fund thereby collected could be used to stabilise the price later when it went down, as it has now gone down during the last few months.

What happened? First of all, there was an awful outcry. That was reasonable. I suppose they thought that they would make a great deal of money quickly, but when the actual levy was imposed the special tax was taken to the High Court and eventually proved to be unconstitutional, because it was a tax on a particular section of the community, and the money had to be refunded. I know that some of my hon. Friends may say that Australia is not enlightened, but surely they will agree that it is comparatively enlightened. When we have people who should be able to understand these things not agreeing to a scheme like that, let us consider how much more difficult it would be to organise a scheme among a number of tropical Colonial Territories whose prices we wish to stabilise.

A further point has been made about developing Commonwealth trade. I have always been in favour of expanding Commonwealth trade to the absolute maximum, but there is a great danger that we may lose the real objective of Commonwealth prosperity by looking to expanding Commonwealth trade rather than to the expansion of world trade and the opening up of markets by Commonwealth countries outside the Commonwealth. It has always seemed to me that countries like Australia and New Zealand and Canada, with its Pacific seaboard, have a wonderful opportunity in the markets of Asia.

American firms go in for secondary production in Australia so that they can tackle the markets of Asia. When countries like Australia find difficulty in marketing their beef and wheat in this country because of the development of home production, they should look to the north and try to investigate those markets and build them up. They will not be built over night, and the Australians will have trouble with American surplus disposals in that area, particularly of wheat. But if those countries and we as head of the Commonwealth wish to expand not only our trade but Commonwealth prosperity, the answer is to encourage all the members of the Commonwealth to look outwards to the other markets that are available, some of them very close to their doorstep.

I hope that this is one of the points which my right hon. Friends will take with them when they go to represent this country at the forthcoming Commonwealth Economic Conference. I should have liked to have said a little about economic consultations, but that subject has been largely covered. I hope that machinery, which is at present rather nebulous in character, is successfully developed and institutionalised so that we may have something which we can use as a machine to help in Commonwealth consultations.

9.4 p.m.

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

The hon. Member for Maldon (Mr. B. Harrison) should never forget a plan for progress, even if for the moment the phrase refers to the title of a Labour Party policy document. I join with others in saying that this has been indeed an extremely useful debate with a good deal of harmony shown between back benches on both sides of the House. To the extent that there has been disagreement, it has been directed against the Government. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) has directed some very good shots which really have gone home. Whether we shall have a reply to them tonight remains to be seen. Certainly the Minister did not present a statement which carried conviction. It did not disclose the policy of the Government.

As regards the Amendment, if it was necessary to include in the Motion reference to the Commonwealth Economic Conference there would have been no objection to its addition; but this is not the way to introduce it, by evading responsibility so that these things can be shifted to the Montreal conference and discussed there. The Minister said that this had been a rushed affair, and he referred to masses of papers and to having to sort out what to say. A statement of Government policy should have been made by a Cabinet Minister. This is not the way to treat the Commonwealth or to handle the matter. We on this side of the House still hope to hear, before the evening is out, a statement of policy from the Government. Of course the Minister may say that a White Paper has been produced. I agree that Command Paper 237 was issued a year ago in July. It was entitled "The United Kingdom's Role in Commonwealth Development". That document as such has never been discussed and, although it has been presented, it is not in keeping with the needs of the moment.

To the extent that we have debated Commonwealth matters in this House it has been on the initiative of hon. Gentlemen opposite supported by my hon. Friends on this side of the House, because the Government do not seem able to provide time for Commonwealth debates. Today again the Opposition have provided time for this important debate. As hon. Gentlemen opposite have said, it would have been tragic if the Commonwealth Conference in Montreal had taken place without a previous debate in this House. It seems to us that the Government have been more keen to get on with their Rent Bill to send up the cost of living, and their Local Government Bill to cut education—and this at a time when we want more and more technicians, not only for this country but for the overseas territories. They have been more anxious to do those things than to give time for really necessary constructive work to help the Commonwealth and overseas territories.

The hon. Gentleman the Member for Eastleigh (Mr. D. Price) said that there will be a different atmosphere at the Conference. I believe he said that the children have grown up, are now equal partners, and will sit round the conference table and discuss matters in a manner very different from that of the past. I agree that normally this would be so, but I remember what happened over Suez. At that time the Commonwealth was shaken badly. The Canadian Prime Minister said the strain was such that the Commonwealth came nearer to breaking than it had ever done. The Australian Minister for External Affairs said the Commonwealth was under great strain. I think that as a result of the Government's Middle East policy the Commonwealth is again under a great strain, particularly in the case of the Asian and African countries. I do not like saying this, but we must recognise the fact that there may not be the harmonious atmosphere at the Montreal Conference which we had all hoped and expected before the Government embarked upon their Middle East campaign.

In answer to a Question the other day the Foreign Secretary showed what contempt he has for Commonwealth consultation. Nevertheless, in spite of the Government's views on these matters, it is vital that the Conference should succeed, and it is in this spirit that I will direct some remarks to the Government tonight. It is necessary that the Montreal Conference should succeed, not only for economic reasons but for political reasons too. I am sure that each Commonwealth country knows that if it goes outside the club it will be isolated, weakened, and will have less influence in the councils of the world.

Economically I think we would do well to remind ourselves that there are quantities of raw materials and feeding-stuffs in the Commonwealth and great industrial might in this country. These two, joined together, could bring much success.

Let us not forget that the United Kingdom was the pioneer in radar, electronics and jet propulsion. Calder Hall is an example of using atomic energy for peaceful purposes. Recently, we have heard of ZETA, the future of which, in spite of difficulties, cannot be in doubt—as those of us who were members of a Parliamentary mission to Harwell recently were shown. This country has the skill, technical "know-how" and industrial might to make a most valuable contribution which should be harnessed to the primary products of overseas countries—tea, sugar, wheat, butter, cocoa, rice, oil, seeds, natural rubber, wool, cotton, jute, sisal, bauxite, asbestos, wood pulp, manganese, chrome, tin, lead, copper, zinc, coal, and, the most valuable raw material of the day, uranium. There are all the requirements for building up a great economy within an expanding Commonwealth, and yet the Government give precious little time to discussing these matters.

That is where the policies of the two parties differ. When the Labour Party was in power, we believed in the control of investment, the proper distribution of raw materials, the distribution of industry and long-term trade agreements. However, that policy pursued by the Labour Party was turned aside by the present Government. They prefer to go back to the so-called freedom which replaced social purpose by concessions to vested interests and private gain. They sacrificed economic purposes for economic frivolities.

To quote a publication which does not usually support the party on this side of the House, The Banker, … it is an intolerable rôle having to act as planners for a Government which regards planning as impossible. Yet a plan must be found if Britain is to became strong and free and the centre of a great Commonwealth. It is worth recalling that the first Government ever to try to secure economic co-operation in the Commonwealth was the Labour Government of 1929. It was then suggested that we should have long-term trade agreements and bulk purchase to bring about Commonwealth security. A Commonwealth Secretariat was also proposed.

That Labour Government went out of office to be replaced by a Conservative Government who turned their backs on those ideas and who instead went to the Ottawa Conference in 1932 to embark on a programme of Imperial Preference for which we have heard strong support tonight. Imperial Preference might have brought some benefits, not in the sense of the tariff, but through the fact that there was free entry into this country of raw materials and foods and because the Commonwealth was able to earn more money and thus able to buy more goods.

The policy which we have advocated is one of long-term trade agreements and bulk purchase as being a better method of ensuring that the Commonwealth could earn the money with which to buy the goods from this country. The Labour Government were responsible for the success of no fewer than forty-nine longterm trade and bulk purchase agreements. Most of those were turned aside by the Conservative Government.

The contention that they were successful is supported by bodies outside the Labour Party. The world forum, the United Nations, has more than once paid tribute to the success of the Labour Government's trading facilities and methods. Indeed, on many occasions it was shown that we were able to buy goods much cheaper than any other country in the world.

In one year, as a result of long-term trade agreements, we saved £150 million on the import bill. That is a sum of money which could have made it unnecessary for the Government to increase National Insurance contributions, or which would have enabled them to give something more to old-age pensioners. I stress that long-term trade agreements are of great benefit to this country and to the Commonwealth countries and the Colonies, since they help in their development.

Reference has been made this afternoon to one long-term trade agreement which is in being—the Commonwealth Sugar Agreement. This provides a market for 2,375,000 tons of sugar—twothirds of which is sold at an agreed price. The price makes provision for rehabilitation, labour welfare and price stabilisation in the sugar-producing areas. By this means not only do we provide these advantages for the colonial countries but we are able to ensure the stability of prices more effectively than in any other way.

We have been hearing a good deal about butter recently. It is sold in a free market. I wonder whether hon. Members opposite have considered the fact that because butter is being sold in a free market the price, since the end of the war, has fluctuated from 1s. 6d. to 4s. 10d. per 1b., whereas with sugar, where a longterm agreement has continued since the end of the war, the price has fluctuated between 6d. and 8d. per 1b. This is the best way to ensure price stability at home, and it brings equal benefit to the Commonwealth countries concerned.

None of these countries could survive, or lead anything but the most miserable existence, without the development and expansion of Commonwealth trade. Nearly 90 per cent. of the goods produced in the world are consumed in the country in which they are produced. Only 10 per cent. are exported. But it is this 10 pet cent. which largely determines whether conditions of boom, slump or prosperous stability exist in the world. By dismantling the machinery created by the Labour Government, the Conservative Government have made it more difficult to withstand economic recessions in other parts of the world. Before the Election the Conservative Party was proclaiming that it would leave the buying of primary goods to those who understood the business, and so bring down the cost of living. That is far from true, as everybody knows. The Tory Party said, "Mend that hole in your purse." It would be more true today, to say, "Mend that hole in the nation's purse."

Reference has been made to the way in which prices have fluctuated and to the fact that, not only in Commonwealth but in world affairs, we have not played our part in trying to bring about stability. The Secretary-General of the United Nations, at a meeting of the United Nations Economic and Social Council in 1956, said: … commodity price stability problem represents one of the greatest weaknesses in the fabric of economic co-operation. That is specially true in the Commonwealth, where there is substantial production and a fall in prices. What did we hear this afternoon? We heard that the Government will reconsider rejoining the International Commodity Commission. After the Secretary-General's statement had been made it was not very internationally-minded of the Government to withdraw from the very commission that was trying to bring about price stability.

The fact that we have traded in this way means that Commonwealth countries continue to have a balance of payments problem, which is causing a weakening in the sterling area as a whole. In these circumstances in the case of the United Kingdom, the Government increased the Bank Rate. I should have thought that they would realise that this blunt and brutal weapon of the nineteenth century is not suitable for handling affairs of today. It is both an indiscriminatory and an expensive way of trying to adjust the economy. The worst effects are revealed in the Colonial Territories. They cannot afford to borrow the money for development, owing to the high rates of interest. If it were possible for each person in the Colonial Territories to earn as little as 2s. a week more it would be possible for these countries to spend £400 million a year in this country. What a blessing that would be for Lancashire and the textile industry, or to Scotland and Wales, where the effect of unemployment is now being felt.

We cannot ignore the fact that a good deal of work is being done by many organisations. There is the Colonial Development Corporation, the Colonial Development and Welfare Fund, and the Export Credits Guarantee Department. The Government have subsequently introduced the Commonwealth Finance Corporation, with a flourish of trumpets, as if it were going to do some remarkable work. In the five years which it has been in being, it has invested about £10 million, and, in the main, that £10 million has gone into services which are already well financed. It has not done the job which it ought to have done. One of my hon. Friends says, "A waste of time". I will not go as far as that, but will say that it is not a machine that will bring about this great change that we desire in Commonwealth economic development.

All these organisations are limited in their scope. As a matter of fact, Government spokesmen in previous debates have recited this long list of Commonwealth committees and organisations, and have given the appearance to me of being quite complacent with their present rôle in Commonwealth development. The Government have not made any clear proposals on how they intend to provide new strength for this most important association, and even less evidence of taking action, following the constructive suggestions made in an earlier debate and again today, as to how we could do better by having some central kind of Commonwealth association.

The Government have a duty to tell us how they visualise this organisation becoming stronger and having greater influence in world affairs. Some hon. Members have referred to the Colonial Development Corporation, and, certainly, it has had great experience and is certainly an organisation very well fitted to undertake Commonwealth development work. We should expand it still further, and bring in Commonwealth representatives. The proposition has been made by several hon. Members this afternoon that the Government should consider expanding this organisation, and we should like to hear whether the Government intend to do anything about it.

I referred earlier to the Government White Paper. The United Kingdom's Role in Commonwealth Development, in paragraph 17 of which we find: Her Majesty's Government consider that it is through the investment of privately-owned funds in the Commonwealth that the United Kingdom has made in the past and should continue to make its most valuable contribution to Commonwealth economic development. I remember that in an earlier debate the hon. Member for Harrow, West (Sir A. Braithwaite) said, and I quote him: Those are undertakings which we cannot expect private investment to carry out at this tune."—[OFFICIAL REPORT, 3rd May, 1957: Vol. 569, c. 513.] This is so, and it is no good the Government in the White Paper trying to leave it to private investment. Indeed, on an earlier occasion, the Under-Secretary of State for Commonwealth Relations told me, quite rightly, that one of the problems is a shortage of capital. If there is a shortage of capital, this stresses the need for capital to be directed into the most productive and most profitable channels.

In one earlier debate, I suggested that one way to do this would be to establish a Commonwealth body akin to O.E.E.C. I had it in mind to develop the Commonwealth Economic Committee, and I was very glad that last summer the Commonwealth Prime Ministers decided that they would ask the members of this Committee to consider what expansion of its functions might usefully be undertaken. Here is a Committee composed of senior Commonwealth representatives, and I regretted that, last week, in reply to a Question by me, the Under-Secretary was not able to assure me that the report would be ready for consideration at the Conference at Montreal. I further asked the hon. Gentleman whether, as the result of a survey carried out on raw materials in the Commonwealth, a second report was awaited, and the Under-Secretary was not in a position to assure me that this would be ready for the Commonwealth Conference.

The Under-Secretary of State for Commonwealth Relations (Mr. C. J. M. Alport)

The right hon. Gentleman is not quite clear about this. The second volume of that report is a presentation, as I understand it, of material which appears in the first one, but in different form, and, therefore, it does not provide additional information for the benefit of the Committee.

Mr. Bottomley

This seems to be unnecessary duplication, but if the Government do their business in this way, we can understand why they have not come forward with any constructive proposals.

Mr. Alport

May I make it clear that this is not a Committee over which the United Kingdom presided or for which it was responsible. It is a Commonwealth Committee, in which all Commonwealth Governments play their own part and have their own responsibilities. This is not a decision which falls on the shoulders of Her Majesty's Government in the United Kingdom.

Mr. Bottomley

Nevertheless it is a Commonwealth Economic Committee, manned by senior Commonwealth representatives, meeting in London. If all the other Governments are as keen on the Montreal Conference succeeding as our Government would have us believe they are, surely the direction to this Committee should be that the documents must be ready for the Conference. If they are not, why fool the public into the belief that this is the greatest economic and trade conference since the end of the war?

I would not say that this Committee will do all the work. It has been rightly suggested today that, while we want to extend the Commonwealth and to look after our own interests and investments, we have a wider obligation to the whole of the world. Trade is not limited to any particular section and neither is aid. The Colombo Plan has been mentioned several times today. I happen to be one who was associated initially with the Colombo Plan. I recall that on one occasion the late Mr. Ernest Bevin, when he was Foreign Secretary, told me that Burma needed aid. He said, "You are the Secretary for Overseas Trade. If I send someone from the Foreign Office to talk about it, that will be regarded as British Imperialism. Not only that, but we do not want to shoulder this burden alone, it is a Commonwealth responsibility. You go to India and if you can get the Commonwealth countries, whom we will invite to do so, to share this responsibility, then it will really be Commonwealth co-operation; and I wish to ensure that the countries of Asia will have treatment from a body like the O.E.E.C. that aided devastated Europe".

I am glad to say that the conference was held and when I returned. Ernest Bevin said, "This is the beginning of a great scheme." But that was in 1949. The Colombo Plan has been acknowledged today as having been the means of achieving some remarkable work; but nothing like the amount of work envisaged by Ernest Bevin. It was introduced in 1951 but the responsibility for its development rested with this Government. A great deal has been done, but nothing like enough. That again is in keeping with this Government's general policy towards the underdeveloped countries.

I think we all recognise, at least it is recognised by some hon. Members on the back benches opposite and by hon. Members on this side of the House, that we have a moral reason to help to develop the backward nations of the world. There is also a hard, economic reason for doing so—in order to expand and develop and maintain our markets. In Asia and Africa there is an insatiable demand for goods, for ports and communications generally, for mining equipment and for schemes of irrigation. There are also strong political reasons for giving such aid. Evil nations are spreading the rumour that Western nations care nothing for the starving peoples of the world. I think we have a chance to show that we do care for them.

I do not think this Government can do that. I am reminded, as this Conference is being held in Canada, of a quotation from a Canadian paper published in Vancouver which appeared after the defeat of the Labour Government in this country in 1951. The writer stated: It is my personal view that the defeat of Clement Attlee is the worst thing to happen to Britain since the outbreak of war. It means not merely the end of a splendid experiment, a peaceful revolution designed to give a decent life to everyone in the British Isles; it may also mean the final confirmation of the United Kingdom as a secondary Power. That quotation ends on a note which I am sure will be echoed in many parts of the country: It is my profound belief that Britain will regret the day it wondered how things might go with the other fellow. This Government have failed to give the peace or security which they promised. They have neglected the Commonwealth, and I think that we must all admit that the specific issue which arises from the very good debate which has taken place is that the Commonwealth itself is a microcosm of the whole world. Within it, we see this most dangerous of all international phenomena of the present age, the ever-increasingly-widening gap between the developed, technological States and those which lag dangerously behind.

We are convinced that the Government have no policy to offer; the Minister of State did not present any. It does not appear from what has been said in any Government statement today that we have a lot to hope for. I hope that the under-Secretary of State will give a better justification for the Amendment which will otherwise cause a Division in the House. We shall not be responsible if he fails to give anything better than we have had so far, in which case we shall have no alternative but to go into the Division Lobby.

9.31 p.m.

The Under-Secretary of State for Commonwealth Relations (Mr. C. J. M. Alport)

As my hon. Friend the Minister of State, Board of Trade, has said, we greatly welcome the opportunity which the Motion provides for a discussion of Commonwealth trade and economics. It seemed strange to us that in framing their Motion the Opposition should have made no reference to the forthcoming Montreal Conference. Our Amendment is designed to put that right.

I do not know why the right hon. Member for Rochester and Chatham (Mr. Bottomley) has been so angry about the fact that we have not given time for a discussion of the Montreal Conference. In fact, I remember taking part in a debate precisely on this subject not so many weeks ago, in time which I think was provided as the result of the good fortune of one of my hon. Friends in the Ballot. That gave us a perfect opportunity. The right hon. Gentleman and his colleagues were not sufficiently concerned to bother to draw attention to the Montreal Conference in the Motion which they put down.

Our friends in the Commonwealth would have found it very queer if, at this juncture, the House of Commons had debated this subject and passed a Motion which seemed to ignore an event of great importance springing from the initiative of the Prime Minister and Government of a great Commonwealth country. They might have concluded that the whole purpose of the Opposition was to give advertisement to a recent publication which seems to me, as far as I can make out from what the hon. Member for Cardiff, South-East (Mr. Callaghan) said, to be a rehash of a number of very familiar ideas with a rather jazzy cover and under a title consisting of one of those flashy bromides which delight the heart of political propagandists.

The Motion as originally drafted looks as if it were for the specific purpose of doing precisely that, and that subsequently on the drafting committee somebody added a rather colourless phrase about economic aid at the end, tacked on as a mere afterthought.

The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) and the hon. Member for Rugby (Mr. J. Johnson) asked the reasons for our Amendment. I have already given one, but there is another which I think hon. Gentlemen on the other side of the House might feel it right to ponder. We heard, and quite rightly heard, a very great deal during the debate about the necessity for aid for Colonial Territories in all parts of the world, but it is not only aid that they want or a continuing sense of economic dependence on the mother country, acceptable though that aid always is. They also want trade, and they want the feeling that they are able to stand on their own feet economically.

Mr. Blenkinsop

rose—

Mr. Alport

Perhaps I may finish this point and I will then give way to the hon. Member. Only a couple of weeks ago we had a debate about a subject which concerned Colonial Territories and the damage they were doing to the interests of an important industry in this country because of the special trade relations existing between the United Kingdom and the Colonies. One hon. Member opposite advocated that the right action would be to throw Hong Kong out of the Commonwealth. Another said that the first priority for the development of the Colonies was to give them trade unions, the second to give them co-operative associations, and the improvement of the standard of living came third. A third hon. Member said that if that had been the pattern of trade in the Commonwealth in the past it would not continue in future.

I know very well the great feelings hon. Members on both sides of the House have on this subject, but I ask hon. Members opposite to consider how this kind of thing appears in the headlines of newspapers in Hong Kong and what is felt there when the moment comes for them to stand on their own feet and be no longer dependent as purely primary producing countries and then, because they enjoy special relationships with the United Kingdom as Colonies, that sort of reaction is apparent on the benches opposite. By the Amendment, we wanted to draw attention to and to emphasise the fact that it is not only aid which will help our dependent territories to improve their standard of living, but other policies designed for the expansion of trade generally, trade not only between ourselves and the colonial Territories but between the countries of the world.

Mr. Callaghan

That might be a reason for making an addendum to our Motion, which we could have considered and perhaps accepted. We should like to know why the hon. Gentleman asks his hon. Friends to vote against a clause which calls for further economic aid which he himself says is justified.

Mr. Alport

The hon. Member and his hon. Friends, if they have paid attention to what has been said from this side of the House and have paid any attention to the action taken by Her Majesty's Government in the last few months—indeed, the last few years—will realise the great extent of aid which is being given, and will continue to be given, to Colonial Territories. They will realise that, within the last few months, we have extended the finance available to the Colonial Development Corporation by £30 million and have allowed it to borrow an extra £20 million and, in the last few days, we have given a substantial sum, £5½ million, to British Guiana. These are only small features of a very large programme of aid carried out by the Government through C.D. and W. and the C.D.C. over the last few years.

Mr. Blenkinsop

From what the hon. Gentleman says, I take it that he is in agreement with the words in the Motion, because he is saying that that is the object of Her Majesty's Government, in which case why force the House to divide tonight when, apparently, he is saying that the Government accept the Motion?

Mr. Alport

The answer is that the greater includes the lesser. In aid and other means of extending the prosperity of the Colonies, we hope hon Members opposite will be able to join us—I say this with great seriousness, because I know the resentment which is caused in the Colonial Territories when the relationship between this country and those territories is always one of dependence—and will not consider it is necessary always to look merely for aid from the United Kingdom but also for encouragement towards independence in other ways.

I should like now to deal with a point made by the right hon. Gentleman the Member for Rochester and Chatham, to which I have already referred. The provision of price stability for primary producers is of great importance both to them and to us, but in our view bulk purchase and State trading are not efficient ways in which this can be achieved. As we know from experience, they are essentially restrictive. Their effect is to prevent production adjusting itself to changes in demand. They lead to inefficiency, they damp down enterprise, and it is quite unrealistic to suppose that they can form part of a policy aiming at trade expansion.

What we have to do is to strike a sensible mean between, on the one hand, stability at the cost of restriction of supplies and high prices to the consumer and, on the other hand, expansion at the cost of fluctuations due to the process of adjustment of supplies to demand, which may, at times, return too low a price for the producer.

In our view, this problem is not soluble by any nice, tidy, doctrinaire scheme—

Mr. Bottomley

Then, if those are the facts, can the hon. Gentleman say why the Government continue to support the Commonwealth Sugar Agreement?

Mr. Alport

As my hon. Friend the Member for Essex, South-East (Mr. Braine) has said, that is a particular subject. In actual fact, it has produced great advantages—we accept that; and high prices, too—we accept that. It has been of great advantage to us, but that is precisely where the right hon. Gentleman and his colleagues differ from us. They say that because it has been applied, and successfully applied in one case, it should be applied in all. We say that there may be occasions when the right answer is an international commodity agreement, or, if this is not possible, an agreement on a Commonwealth basis which, at any rate, will provide a partial solution. Indeed, the Sugar Agreement is an example of how an agreement can be applied to a particular commodity.

On the other hand, the answer may be local stabilisation schemes designed to cushion producers against the effects of sudden rises and falls in prices. That has been very successful with Ghana's cocoa. The hon. Member for Cardiff, South-East asked whether we intended to do anything about cocoa. The Food and Agriculture Organisation's cocoa study group, on which the major producing and consumer countries are represented, met at Hamburg in May of this year. It considered a report on possible international price stabilisation schemes for cocoa.

It was clear from the discussion that a stabilisation scheme was not practical at present, and the group concluded that no useful purpose would be served by further discussing such a scheme. All I say in this particular case is that it is quite wrong for the hon. Gentleman to assume that because a scheme like the Sugar Agreement is successful for one commodity it must necessarily be applied to all. Cocoa is an example of where alternative means of providing stability for the producer are working effectively.

Thirdly, the best contribution that can be made to the problems of a primary producing country hard hit by falling prices is to provide some sort of guarantee or credit or loan which will help to maintain the purchasing power of its consumers until such time as a temporary economic squall blows itself out and demand—and, therefore, primary prices—begins to re-assert itself. Therefore, as I have said, while we fully realise what it means in terms of the life and prospects of the primary producing countries, our approach to this problem is one in which we believe that the solution will and must differ in accordance with the particular circumstances of each commodity in the world markets. The hon. Member for Cardiff, South-East asked why we had given a loan of only £5½ million to British Guiana and why we had not accepted the responsibility for guaranteeing a further loan from the Swiss banking houses. In regard to that second question, the terms offered were, in our view, most disadvantageous. The truth of the matter is that, from our point of view, it would be of no particular benefit to be the guarantor of a loan, coming from another source which was disadvantageous to the borrowing country and, therefore, to the guarantor, when, in fact, if we were to do that at all it would have been far better to provide the money from our own resources.

The hon. Gentleman asked: "Why only £51 million and not £5,900,000?" The answer is that at the moment there are immense calls upon the resources of the United Kingdom. My Department is responsible for the direct administration and welfare of three small territories in Southern Africa. I can assure the hon. Gentleman that the population of those territories is considerably greater than that of British Guiana and that in those territories we could have used that money, or part of it—or one-fifth of it, or even one-tenth of it—extremely profitably indeed.

I therefore feel that my right hon. Friends the Chancellor of the Exchequer and the Colonial Secretary have been extremely generous in the handling of British Guiana's problems, and, if I may say so, I think it most ungenerous that the hon. Gentleman should cavil at the fact that it was their view that the loan resources available at the moment in this country amounted to £5½ million and not £5,900,000.

I think the whole House was struck by the contribution made by the hon. Member for Edmonton (Mr. Albu) and by his reference to the necessity, or the advisability, of not always thinking in terms of gigantic schemes requiring enormous bulk finance but more in terms of smaller schemes which would, perhaps, provide only local advantage but which, accumulated, would be of great benefit to single territories, and particularly to those territories that did not have large resources for development and were, therefore, unable to finance large power schemes or similar projects.

We made it clear in the White Paper which was published last year that we were particularly concerned with the spread of the local development finance corporations, with the particular object of dealing with small-scale development precisely of the sort that the hon. Gentleman had in mind. Already a good deal of development has taken place not only in colonial countries but also in countries in the independent Commonwealth in establishing these finance corporations.

Some rather hard remarks were passed about the Commonwealth Development Finance Company, but the truth of the matter is that one of the contributions that it has made has been in helping and participating in the finance of local finance corporations of that sort in various Colonial Territories. I am sure that the hon. Gentleman is right in saying that in the future and in the case of many Colonial Territories we must think in terms of rather small-scale development which will be of immediate benefit to them and which will be within the proportions of their economic circumstances.

We feel that the traditional type of international stabilisation scheme may not necessarily be the only form of international organisation. We in the United Kingdom, at any rate, should beware of the dangers of seeking to stereotype the pattern of international trade by managed market arrangements. It is essential, in our view, that any approach to these problems should have full regard to the interests of consumers and producers alike, that they should not seek to introduce rigidity into world trade and that they should be consistent with the objective of expanding trade for the Commonwealth, for the United Kingdom and for the world.

The right hon. Member for Rochester and Chatham propounded once again his party's ideas upon bulk purchase and long-term contracts. I realise that the idea of long-term contracts and bulk buying appeals to some Commonwealth producers. My hon. Friend the Minister of State outlined some of those schemes which are in existence and are under consideration. But we have no wish on our side to see the purchasing power of our customers in the Commonwealth weaken to such an extent that they can no longer provide markets for our exports. We are prepared to take what action may seem practical to help with that problem.

We have no wish to see the ranchers or the miners or the farmers of the Commonwealth working without prospect or profit while consumers in this country flourish. We recognise that the interests of primary producers and of a great industrial exporting nation like ours are not in conflict but are parallel. It is just as much in their interests as it is in ours that there should be a continuous and steady expansion of markets. But there are other means of maintaining purchasing power of primary producers, rather than raising artificially the prices of their commodities or preventing their customers from having full advantage of the conditions of plenty which their efforts have helped to create.

Bulk purchase, once embarked upon on any significant scale, will sooner or later compel the Government to assume full powers of control of imports from all sources. Bulk buying means bulk selling. The control of buying involves sooner or later control over distribution—or, in other words, that ugly word rationing. Wherever a commodity which is bulk bought competes with home production, as in the case of food, sooner or later quantitative control of home production becomes necessary, and wherever it involves some form of deficiency payment, if it is not intended that the full increased price should be passed on to the consumer, there must also be controls, unless some complacent Chancellor of the Exchequer is willing to commit the Treasury to a policy of unlimited liability or the country to inflation.

Mr. Bottomley

Does this mean that the Government are prepared to follow a policy which means that maize should come from the United States in great abundance, meat from the Argentine, apples from the United States and the Argentine, wheat and tin from the United States, all adding to our dollar liabilities, more likely to make this country go bankrupt and damaging the Commonwealth? Is this the policy that the Minister supports?

Mr. Alport

The right hon. Gentleman and his hon. Friends are still living in the period when they were in power—a period of shortage. This is now a period of plenty. I am quite certain that the people of this country would not accept the introduction of the whole costly clobber of controls, high prices or high taxation, the quantitative restriction and the rationing which the policies of the Opposition were bound to entail.

Mr. Blenkinsop

Let the hon. Gentleman look behind him and ask his supporters.

Mr. Alport

My right hon. Friend the Chancellor of the Exchequer has said that the Government are ready to use the powers which they possess to offer economic assistance to the Commonwealth and to other overseas countries and thus to maintain export activity there. He went on to say—and here is the point made by my hon. Friend the Member for Essex, South-East—that this might well involve the provision of guarantees or finance over longer periods than at present.

I would remind the House that we have already taken action along these lines on occasions in the past when they have been necessary, and, as the Chancellor of the Exchequer has said, we are perfectly prepared in similar circumstances and where it is justified to do the same in the future. But it seems to us that the whole of the principle of our policy must continue to be not to bring in a system which is bound to lead to restrictions and rigidity, but to maintain, in the interests not only of this country but of the Commonwealth as a whole, the basis upon which expansion alone can take place.

My hon. Friend the Member for Maldon (Mr. B. Harrison) is perfectly right in saying that Commonwealth countries like ourselves are now looking upon their problems not from a restrictionist standpoint but from an expansionist standpoint. I assure the House that it is in that sort of mood that not only we but the other Finance Ministers and their colleagues who will attend the conference at Montreal will approach the problems to be discussed there.

We have had, during the last few years, an extremely good record in economic development within the Colonial Empire. It is all very well for hon. Gentlemen opposite, with great sincerity, to find deficiencies. They undoubtedly exist, but nobody who has been to a Colonial Territory during the last few months or years and seen the practical results of the application of development money from this country to their economies can doubt that we have carried out the policy we set ourselves in the darkest days of the war, in 1940, the policy of contributing from our reserves for the development of Colonial Territories everywhere. Hon. Gentlemen opposite have their ideas about how this development can best be brought about. We said in our White Paper last year, and we still maintain, that, on the whole, the greatest flexibility can be provided by investment from private enterprise sources. At the same time, we have made it clear, in the Act which the House passed within the last few months, that

we believe that public corporations like the Colonial Development Corporation have an important rôle to play.

The two countries, Malaya and Ghana, which have reached independence within the Commonwealth during the last two years and which have done so as the result of a flourishing economy have done it because of the investment of private monies in their economies in earlier days, not because of the action of any Government or public corporation. We should be quite wrong to suppose that we can place upon the sources of public investment in this country full responsibility for the development of Colonial Territories.

I have done my best to answer some of the questions which have been put to me—

Mr. Callaghan

Not why the Government is dividing.

Mr. Alport

I have explained already that we are voting in order to expand the rather restrictive terms of the Motion the hon. Member for Cardiff, South-East put before the House.

The Ministers who will go to Montreal in the middle of September will go there not to find means of restricting the expansion of trade but with the object of finding means of expanding not only trade within the Commonwealth but trade between the Commonwealth and the world today, in the interest of the Colonial peoples, of the people of this country, and in the interests of the independent Commonwealth as a whole.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 181, Noes 219.

Division No. 202.]	AYES	[9.59 p.m.
Ainsley, J. W.	Bowles, F. G.	Craddock, George (Bradford, S.)
Albu, A. H.	Boyd, T. C.	Crossman, R. H. S.
Allen, Arthur (Bosworth)	Braddock, Mrs. Elizabeth	Cullen, Mrs. A.
Awbery, S. S.	Brockway, A. F.	Dalton, Rt. Hon. H.
Bacon, Miss Alice	Broughton, Dr. A. D. D.	Darling, George (Hillsborough)
Baird, J.	Brown, Rt. Hon. George (Belper)	Davies, Ernest (Enfield, E.)
Bellenger, Rt. Hon. F. J.	Brown, Thomas (Ince)	Davies, Harold (Leek)
Bence, C. R. (Dunbartonshire, E.)	Butler, Herbert (Hackney, C.)	Deer, G.
Benn, Hn. Wedgwood (Bristol, S. E.)	Callaghan, L. J.	de Freitas, Geoffrey
Benson, Sir George	Carmichael, J.	Delargy, H. J.
Beswick, Frank	Castle, Mrs. B. A.	Diamond, John
Blackburn, F.	Champion, A. J.	Dodds, N. N.
Blenkinsop, A.	Chetwynd, G. R.	Donnelly, D. L.
Boardman, H.	Coldrick, W.	Ede, Rt. Hon. J. C.
Bottomley, Rt. Hon. A. G.	Collick, P. H. (Birkenhead)	Edwards, Robert (Bilston)
Bowden, H. W. (Leicester, S. W.)	Collins, V. J. (Shoreditch & Finsbury)	Edwards, W. J. (Stepney)
Evans, Edward (Lowestoft)	King, Dr. H. M.	Ross, William
Fernyhough, E.	Lawson, G. M.	Short, E. W.
Fitch, Alan	Lee, Frederick (Newton)	Shurmer, P. L. E.
Fletcher, Eric	Lee, Miss Jennie (Cannock)	Silverman, Sydney (Nelson)
Foot, D. M.	Lever, Leslie (Ardwick)	Skeffington, A. M.
Fraser, Thomas (Hamilton)	Mabon, Dr. J. Dickson	Slater, Mrs. H. (Stoke, N.)
Gaitskell, Rt. Hon. H. T. N.	McAlister, Mrs. Mary	Slater, J. (Sedgefield)
Gibson, C. W.	McCann, J.	Smith, Ellis (Stoke, S.)
Gordon Walker, Rt. Hon. P. C.	MacColl, J. E.	Sorensen, R. W.
Greenwood, Anthony	McInnes, J.	Soskice, Rt. Hon. Sir Frank
Grenfell, Rt. Hon. D. R.	McKay, John (Wallsend)	Sparks, J. A.
Grey, C. F.	MacPherson, Malcolm (Stirling)	Spriggs, Leslie
Griffiths, David (Rother Valley)	Mahon, Simon	Steele, T.
Griffiths, Rt. Hon. James (Llanelly)	Mallalieu, E. L. (Brigg)	Stonehouse, John
Hale, Leslie	Mallalieu, J. P. W. (Huddersfd, E.)	Stones, W. (Consett)
Hall, Rt. Hn. Glenvil (Colne Valley)	Mann, Mrs. Jean	Strachey, Rt. Hon. J.
Hannan, W.	Marquand, Rt. Hon. H. A.	Summerskill, Rt, Hon. E.
Harrison, J. (Nottingham, N.)	Mason, Roy	Swingler, S. T.
Hayman, F. H.	Mitchison, G. R.	Sylvester, G. O.
Healey, Denis	Morris, Percy (Swansea, W.)	Taylor, Bernard (Mansfield)
Herbison, Miss M.	Mort, D. L.	Thornton, E.
Hewitson, Capt. M.	Moss, R.	Viant, S. P.
Hobson, C. R. (Keighley)	Mulley, F. W.	Watkins, T. E.
Holman, P.	Neal, Harold (Bolsover)	Wells, Percy (Faversham)
Holmes, Horace	Noel-Baker, Francis (Swindon)	Wells, William (Walsall, N.)
Houghton, Douglas	Noel-Baker, Rt. Hon. P. (Derby, S.)	Wheeldon, W. E.
Howell, Charles (Perry Barr)	Oram, A. E.	White, Mrs. Eirene (E. Flint)
Howell, Denis (All Saints)	Orbach, M.	Wigg, George
Hubbard, T. F.	Oswald, T.	Wilcock, Group Capt. C. A. B.
Hughes, Emrys (S. Ayrshire)	Owen, W. J.	Wilkins, W. A.
Hughes, Hector (Aberdeen, N.)	Paget, R. T.	Willey, Frederick
Hunter, A. E.	Palmer, A. M. F.	Williams, David (Neath)
Hynd, J. B. (Attercliffe)	Pannell, Charles (Leeds, W.)	Williams, Rev. Llywelyn (Ab'tillery)
Isaacs, Rt. Hon. G. A.	Paton, John	Williams, Rt. Hon. T. (Don Valley)
Janner, B.	Pentland, N.	Williams, W. R. (Openshaw)
Jay, Rt. Hon. D. P. T.	Popplewell, E.	Willis, Eustace (Edinburgh, E.)
Jeger, George (Goole)	Prentice, R. E.	Wilson, Rt. Hon. Harold (Huyton)
Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Price, J. T. (Westhoughton)	Winterbottom, Richard
Johnson, James (Rugby)	Probert, A. R.	Woodburn, Rt. Hn. A.
Jones, Rt. Hon. A. Creech (Wakefield)	Redhead, E. C.	Woof, R. E.
Jones, Jack (Rotherham)	Reid, William	Younger, Rt. Hon. K.
Jones, J. Idwal (Wrexham)	Rhodes, H.	Zilliacus, K.
Jones, T. W. (Merioneth)	Robens, Rt. Hon. A.
Kenyon, C.	Roberts, Albert (Normanton)	TELLERS FOR THE AYES:
Key, Rt. Hon. C. W.	Robinson, Kenneth (St. Pancras, N.)	Mr. Pearson and Mr. Simmons.
NOES
Agnew, Sir Peter	Cole, Norman	Grimston, Sir Robert (Westbury)
Aitken, W. T.	Conant, Maj. Sir Roger	Grosvenor, Lt.-Col. R. G.
Alport, C. J. M.	Cooke, Robert	Gurden, Harold
Amery, Julian (Preston, N.)	Cooper-Key, E. M.	Hall, John (Wycombe)
Amory, Rt. Hn. Heathcoat (Tiverton)	Corfield, Capt. F. V.	Harrison, A. B. C. (Maldon)
Anstruther-Gray, Major Sir William	Craddock, Beresford (Spelthorne)	Harvey, John (Walthamstow, E.)
Arbuthnot, John	Cunningham, Knox	Head, Rt. Hon. A. H.
Armstrong, C. W.	Currie, G. B. H.	Heald, Rt. Hon. Sir Lionel
Atkins, H. E.	Dance, J. C. G.	Heath, Rt. Hon. E. R. G.
Baldwin, Sir Archer	D'Avigdor-Goldsmid, Sir Henry	Henderson, John (Cathcart)
Barlow, Sir John	Deedes, W. F.	Hesketh, R. F.
Barter, John	Digby, Simon Wingfield	Hicks-Beach, Maj. W. W.
Batsford, Brian	Drayson, G. B.	Hill, Rt. Hon. Charles (Luton)
Baxter, Sir Beverley	du Cann, E. D. L.	Hill, Mrs. E. (Wythenshawe)
Bell, Philip (Bolton, E.)	Dugdale, Rt. Hn. Sir T. (Richmond)	Hill, John (S. Norfolk)
Bennett, F. M. (Torquay)	Eden, J. B. (Bournemouth, West)	Hinchingbrooke, Viscount
Bevins, J. R. (Toxteth)	Elliott, R. W. (Ne'castle upon Tyne, N.)	Hirst, Geoflrey
Bidgood, J. C.	Errington, Sir Eric	Holland-Martin, C. J.
Biggs-Davison, J. A.	Erroll, F. J.	Holt, A. F.
Bingham, R. M.	Fell, A.	Hope, Lord John
Birch, Rt. Hon. Nigel	Finlay, Graeme	Hornby, R. P.
Bishop, F. P.	Fisher, Nigel	Hornsby-Smith, Miss M. P.
Black, C. W.	Fletcher-Cooke, C.	Horobin, Sir Ian
Body, R. F.	Gammans, Lady	Horsbrugh, Rt. Hon. Dame Florence
Boothby, Sir Robert	George, J. C. (Pollok)	Howard, Gerald (Cambridgeshire)
Bossom, Sir Alfred	Gibson-Watt, D.	Howard, John (Test)
Bowen, E. R. (Cardigan)	Glover, D.	Hughes, Hallett, Vice-Admiral J.
Boyd-Carpenter, Rt. Hon. J. A.	Glyn, Col. Richard H.	Hughes-Young, M. H. C.
Braine, B. R.	Godber, J. B.	Hulbert, Sir Norman
Brooman-White, R. C.	Goodhart, Philip	Hutchison, Michael Clark (E'b'gh, S.)
Bryan, P.	Gough, C. F. H.	Hutchison, Sir James (Scotstoun)
Burden, F. F. A.	Gower, H. R.	Iremonger, T. L.
Butler, Rt. Hn. R. A. (Saffron Walden)	Graham, Sir Fergus	Jenkins, Robert (Dulwich)
Campbell, Sir David	Green, A.	Jennings, J. C. (Burton)
Carr, Robert	Gresham Cooke, R.	Jennings, Sir Roland (Hallam)
Chichester-Clark, R.	Grimston, Hon. John (St. Albans)	Johnson, Dr. Donald (Carlisle)

Johnson, Eric (Blackley)	Nairn, D. L. S.	Storey, S.
Joseph, Sir Keith	Neave, Airey	Stuart, Rt. Hon. James (Moray)
Kaberry, D.	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Studholme, Sir Henry
Keegan, D.	Noble, Comdr. Rt. Hon. Allan	Summers, Sir Spencer
Kerby, Capt. H. B.	Nugent, G. R. H.	Temple, John M.
Kerr, Sir Hamilton	Oaksbott, H. D.	Thomas, Leslie (Canterbury)
Kershaw, J. A.	O'Neill, Hn. Phelim (Co. Antrim, N.)	Thomas, P. J. M. (Conway)
Kirk, P. M.	Orr, Capt. L. P. S.	Thompson, Kenneth (Walton)
Lambton, Viscount	Orr-Ewing, Charles Ian (Hendon, N.)	Thompson, R. (Croydon, S.)
Lancaster, Col. C. G.	Page, R. G.	Thorneycroft, Rt. Hon. P.
Leather, E. H. C.	Pannell, N. A. (Kirkdale)	Thornton-Kemsley, Sir Colin
Leavey, J. A.	Peel, W. J.
Legge-Bourke, Maj. E. A. H.	Pike, Miss Mervyn	Tiley, A. (Bradford, W.)
Legh, Hon. Peter (Petersfield)	Pilkington, Capt. R. A.	Tilney, John (Wavertree)
Linstead, Sir H. N.	Pitman, I. J.	Turner, H. F. L.
Longden, Gilbert	Pitt, Miss E. M.	Turton, Rt. Hon. R. H.
Low, Rt. Hon. Sir Toby	Powell, J. Enoch	Tweedsmuir, Lady
Lucas-Tooth, Sir Hugh	Price, David (Eastleigh)	Vane, W. M. F.
Macdonald, Sir Peter	Prior-Palmer, Brig. O. L.	Vaughan-Morgan, J. K.
Mackeson, Brig. Sir Harry	Profumo, J. D.	Vickers, Miss Joan
McKibbin, Alan	Ramsden, J. E.	Vosper, Rt. Hon. D. F.
Mackie, J. H. (Galloway)	Rawlinson, Peter	Wade, D. W.
McLaughlin, Mrs. P.	Redmayne, M.	Wakefield, Edward (Derbyshire, W.)
Macleod, Rt. Hn. Iain (Enfield, W.)	Rees-Davies, W. R.	Wakefield, Sir Wavell (St. M'lebone)
Macmillan, Rt. Hn. Harold (Bromley)	Renton, D. L. M.	Walker-Smith, Rt. Hon. Derek
Macmillan, Maurice (Halifax)	Ridsdale, J. E.	Ward, Dame Irene (Tynemouth)
Macpherson, Niall (Dumfries)	Roberts, Sir Peter (Heeley)	Webbe, Sir H.
Maddan, Martin	Robertson, Sir David	Webster, David
Maitland, Hon. Patrick (Lanark)	Robinson, Sir Roland (Blackpool, S.)	Whitelaw, W. S. I.
Manningham-Buller, Rt. Hn. Sir R.	Roper, Sir Harold	Williams, Paul (Sunderland, S.)
Markham, Major Sir Frank	Ropner, Col. Sir Leonard	Wilson, Geoffrey (Truro)
Marshall, Douglas	Russell, R. S.	Wood, Hon. R.
Mathew, R.	Sharples, R. C.	Woollam, John Victor
Mawby, R. L.	Shepherd, William	Yates, William (The Wrekin)
Maydon, Lt.-Comdr. S. L. C.	Spearman, Sir Alexander
Milligan, Rt. Hon. W. R.	Speir, R. M.	TELLERS FOR THE NOES
Molson, Rt. Hon. Hugh	Stanley, Capt. Hon. Richard	Sir Gerald Wills and
Mott-Radclyffe, Sir Charles	Stevens, Geoffrey	Colonel J. H. Harrison.
Nabarro, G. D. N.	Steward, Sir William (Woolwich, W.)

Proposed words there added.

Main Question, as amended, put and agreed to.

Resolved, That this House, recognising the serious effect of unstable prices of raw materials and crops on the well-being of the Commonwealth and the trade of the United Kingdom, calls upon Her Majesty's Government to pursue policies that will help to stabilise prices of primary products and expand trade; and to promote the welfare of colonial peoples; and welcomes the opportunity which will be afforded for discussion of these matters at the forthcoming Commonwealth Economic Conference.