HC Deb 11 May 1959 vol 605 cc923-6

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

6.45 p.m.

Mr. Gordon Walker (Smethwick)

Before we part with the Clause we ought to have a word of explanation from the Government. I take it that this is one of the complicated things that nobody understands and on which the Paymaster-General will reply. It is certainly complicated.

As I understand, there is, first, a Commonwealth preference for Commonwealth sugar up to 2,375,000 tons of sugar a year. Within that amount, on which ordinary Commonwealth preference is paid, there is 1,600,000 tons of sugar which might be called Commonwealth Agreement sugar; that is, a special longterm arrangement is made to fix prices year by year for that amount of the total quantity of Commonwealth sugar which receives preference.

To make it more complicated still, there is a colonial quota within this general amount of sugar that we get from the Commonwealth under a long-term agreement, and one-third of this colonial quota, amounting to 525,000 tons, qualifies for an extra bonus of £3 per ton. I understand that that is the present rather complicated set-up. The effect of the Clause is to increase the amount of 525,000 tons which is receiving the bonus over and above the Commonwealth Agreement price for colonial sugar.

I wish to ask the Government why the increase is being made now. Is it because there is no longer a shortfall in their quotas by Australia and South Africa? In the old days the Colonies were able to exceed their quotas because of a shortfall in the quotas from Australia and South Africa. Or is it because colonial sugar production is going up and the general quota of the Colonies would no longer suffice and they could not make up above their quota by the shortfall in sugar exports by others?

Has the arrangement been negotiated with the Colonies or not? All the Colonies concerned are facing considerable economic difficulties. They are producing a few staple products. In sonic cases, sugar is their only staple product. I believe that the Colonies which will be covered by the Clause are the West Indies, British Guiana, British Honduras, Mauritius and Fiji. I do not know whether the arrangement has been negotiated or not. It is a very small benefit which the Clause is conferring upon these Colonies. They will get a £3 extra bonus on 545,000 tons of sugar a year instead of the previous amount of 525,000 tons. That means a further 20,000 tons at £3 per ton; in other words, it will cost about £60,000, which will go in aid of the economies of the Colonies concerned. That is very little indeed.

If there were negotiations, I wonder whether the Colonies concerned express themselves as satisfied with this very minor increase. When we are having a Clause in a Finance Bill to make the increase, why is it so small? Why is it only £60.000 a year? Does the Paymaster-General think we are doing enough to help these British Colonies who are always in very grave economic difficulties and depend upon a few staple products, of which sugar is for most of them the most important?

This sugar agreement—it is part of the Commonwealth Sugar Agreement—is the only remaining Commonwealth long-term bulk purchase agreement. The Government have destroyed one after another since they came into office. When they came to office they had a large number of Commonwealth agreements negotiated by the Labour Government. The Government have continuously and steadily, for doctrinaire reasons, torn them up one after the other. This is the only remaining bulk purchase agreement, and a very successful one. It is, indeed, a proof that this sort of thing applied to appropriate commodities can be very well done, with very great benefit to the Colonies and the Commonwealth countries.

I wonder how the Government and the Paymaster-General will justify this one remaining Commonwealth long-term agreement, when the right hon. Gentleman and his colleagues have advanced so many reasons for tearing up all the others.

Mr. Maudling

I will gladly answer the questions which the right hon. Gentleman has put to me about the effect of this Clause. I do not want to enter the wider question of the proper ways of conducting our world-wide trade, but shall confine myself to the effect of this Clause, which has worked extremely well.

Mr. Gordon Walker

World-wide trade?

Mr. Maudling

How we conduct our Commonwealth trade has a considerable effect on our trade with the rest of the world. There are such things as international obligations.

Mr. Gordon Walker

Including sugar.

Mr. Maudling

Yes, including sugar.

The effect of this Clause is very much as the right hon. Gentleman himself suggested. Within the Commonwealth Sugar Agreement, there is a special provision for colonial sugar. The Commonwealth preferential rate is about 4s. 5d. duty per cwt., whereas a certain amount of colonial sugar can come in at 3s. per cwt., and that is a sort of super-preference. The amount of colonial sugar that can enter at this super-preferential rate is limited by the Finance Act, 1952, which enabled the Colonial Office to issue quota certificates to colonial sugar producers up to a maximum of 525,000 tons of sugar a year. It is that maximum which is now being changed to 540,000 tons.

The reason for doing it now is that the exports of some members of the Commonwealth Sugar Agreement may fall short of their quotas, and there is therefore scope for other people to export more than their quotas. In the case of the Colonies, as colonial sugar exports are now expanding, the time has come to make provision for further colonial exports over and above the 525,000 tons which is the rule at present.

As the right hon. Gentleman himself said, 525,000 tons is one-third of the total colonial quota. If these Colonies are in fact exporting more than their quota, it is reasonable that they should be able to claim the super-preference on one-third of the actual exports, even if they exceed their quota. That is the purpose of making the increase. It is, as the right hon. Gentleman said, a modest increase, but I am advised that it is likely to cover any foreseeable extra exports. Should that not be so, the Government will no doubt be glad to look at it again.

The right hon. Gentleman asked me whether there had been negotiations. I do not think that this is a case for negotiations, because it is a unilateral action by the United Kingdom, which I think the whole of the Committee will welcome. It is designed to give a further modest assistance to the producers, and I am advised that the increase made, though a modest one, will be quite sufficient to cover any extra exports in the foreseeable future.

Mr. Gordon Walker

This seems to be a gratifying case of enlarging Commonwealth Preference, and I hope it will be a precedent. I do not know how it fits into the G.A.T.T. but it seems to be a very good thing to widen Commonwealth Preference.

Mr. Maudling

There are some things which should not perhaps be pursued too far, but I do not think that this will cause any embarrassment.

Question put and agreed to.

Clause ordered to stand part of the Bill.