§ 10.43 p.m.
§ The Minister of State, Board of Trade (Mr. Alan Green)
I beg to move,That the Commonwealth Preference Area (Removal of West Cameroon) Order 1963, a draft of which was laid before this House on 3rd July, be approved.This Order, if approved, will have the effect of removing West Cameroon from the Commonwealth preference area as from 1st October, 1963. As the House may recall, the voters in the United Nations Trusteeship Territories of the Northern and Southern Cameroons, which have been administered by the United Kingdom Government since the First World War, were invited to decide by plebiscite early in 1961 whether they wished to become part of Nigeria or part of the Republic of Cameroon.
The Northern Cameroons opted to join Nigeria, while the Southern Cameroons opted to join the Republic of Cameroon and the change took effect from 1st Otcober, 1961. The Republic subsequently became a federal republic composed of two federated states and these were called East and West Cameroon. East Cameroon was the former French Cameroons, and the West Cameroon was the former Southern Cameroons.
If the Government had taken no action before she ceased to be a United Nations trusteeship territory West Cameroon would automatically have lost her status as part of the Commonwealth preference area, just as the former British Somali-land lost it on joining the Somali Republic. The Government decided at the time, in mid-1961, that West Cameroon should not be deprived immediately of 1203 her preferential status but should instead be given a year's grace, and this was extended to two years as a result of an Order in Council made last year.
My right hon. Friend announced the decision to give the extension in answer to a Parliamentary Question in June of last year when he said that the Government's present intention—perhaps I had better quote—…is that the inclusion of West Cameroon in the area shall be maintained until 30th September, 1963, but not beyond that date."—[OFFICIAL REPORT, 26th June, 1962; Vol. 661, c. 421.]The question would, he said, be reviewed again not later than the following April.
Having now reviewed the question, the Government have decided to stick to their intended course of action, and the reason is, I trust, a simple one. All West Cameroon's exports consist of tropical produce of one kind or another. As no such produce is grown in Britain there can be only two possible reasons for imposing import duties on it, either to raise revenue or to give a preference to suppliers in the Commonwealth preference area, or both.
Imports of tea, coffee and cocoa were in fact subject to revenue duties for over 250 years, but these were abandoned in fact if not in form when the rates of duty on imports from the Commonwealth preference area were reduced to nil, and those on imports from foreign countries reduced to levels which retained only the preference margins in the old duties. This was done in the case of tea some years ago, and of cocoa and coffee in the 1962 Budget. As Members may recall, the Import Duties (General) No. 4 Order, 1963, which was approved by the House less than two weeks ago, had the formal effect of taking the remaining duties out of the revenue and putting them into the normal protective field. All duties on tropical produce, therefore, exist at present solely to give a preference to countries which form part of the Commonwealth preference area as defined in Section 2 of the Import Duties Act, 1958.
West Cameroon's exports to Britain in order of importance are bananas, tropical hardwoods, coffee, cocoa, rubber, palm oil and kernels, and tea. These are all duty free when imported from preference area countries, but dutiable, 1204 with the exception of rubber, when imported from other countries. The duties on tropical hardwoods and tea are, however, likely to be suspended as from the beginning of next year simultaneously with a corresponding suspension of the common external tariff on these products. We expect to be able to announce the terms of this arrangement in the early autumn. It will of course be in accordance with the G.A.T.T. action programme of assistance for developing countries.
Of the other products imported from West Cameroon, bananas are by far the most important. If this Order is approved they will become dutiable from 1st October this year at £7 10s. a ton, or, to express the duty in terms which will be more familiar to the housewife, at three farthings a lb. Those concerned with the production and trade in West Cameroon bananas have expressed grave anxiety about the possible effect of the imposition of this duty on the prospects for West Cameroon growers of selling their production at economic prices, and this aspect has been most carefully considered.
Because of our severe restrictions on imports of bananas from the dollar area—and those bananas are the cheapest in the world—the price in Britain is normally well above the corresponding price in many other major consuming countries such as West Germany and the U.S.A. West Cameroon suppliers will still have this advantage. Their bananas will still be able to come to Britain without any quantitative limit, but they will of course have to compete in our market with bananas from Jamaica and the Windward Islands, our major suppliers, which will continue to be admitted duty free.
The question in a nutshell is really this. On the one hand we have West Cameroon, a territory which is by its own choice outside the Commonwealth and is now part of an independent country with no Commonwealth links, the Federal Cameroon Republic. The Republic is associated with the European Economic Community, and because of this relationship enjoys tariff preferences for her produce in the markets of the Six.
On the other side, we have Jamaica and the Windward Islands, both con- 1205 cerned to increase their export earnings and worried about the tendency, especially in the winter months, for the British market to be over-supplied with bananas. These countries have made it clear that they are strongly opposed to sharing their preferential advantages in our market with West Cameroon given that the territory is the only area of the world which enjoys preference both in Britain and in the E.E.C.
Her Majesty's Government have decided that the right thing to do is to remove West Cameroon from the Commonwealth preference area. The territory will already have had two years' grace. My right hon. Friend made it quite clear last year that the Government's intention was to keep her in the area until the end of September this year but not longer. The present situation of giving preference to part only of a foreign country is obviously anomalous. Jamaica and the Windward Islands have a strong case for arguing that West Cameroon should not continue to have the advantage of preferential entry for her bananas to our market. It is in these circumstances that I move that the Order be approved.
§ 10.51 p.m.
§ Mr. Norman Pannell (Liverpool, Kirkdale)
I accept the Order with some regret. I have already given my views on it during the debate on 19th June on the Commonwealth Development Bill, and I do not intend to repeat them now.
I fully understand the contending claims of the West Indies, particularly in regard to bananas, and that West Cameroon, as no longer a part of the Commonwealth, has no prescriptive right to Commonwealth preference; but there are precedents for the continuation of Commonwealth preference even when a country leaves the Commonwealth, to cite only Burma and the Republic of Ireland, and not to mention the Republic of South Africa.
I regret the Order particularly because it cuts off sharply the preference that this area has enjoyed for the past two years. I urged on 19th June that the preference should not be cut off abruptly but should be tapered off over three years, and that had support from all sides of the House. I regret that my hon. Friend has not found it possible to adopt that course.
1206 There are considerable British interests in West Cameroon, particularly the Cameroon Development Corporation, which is managed by the Colonial Development Corporation and has received from the Colonial Development Corporation a loan of £1 million. The Camdev produces some 30,000 tons of bananas a year, and last year it made a loss of £316,000. My hon. Friend dismisses as insignificant the duty preference of £7 10s. a ton as being only ¾. per lb. But it should be borne in mind that if that preference had not existed last year the loss of the Cameroon Development Corporation would have been not £316,000 but more than half a million pounds. It seems fairly clear to me that, as it has a capital which is comprised solely of a loan of £1 million from the Colonial Development Corporation, unless something quite extraordinary happens in the banana market, the Camdev, which is an important element in the economy of West Cameroon, will founder and sink. There are, of course, other interests. There are the shipping interests, which are largely British. Six ships are regularly on the run carrying these bananas from West Cameroon to the United Kingdom.
An alternative market does not exist. Although West Cameroon is now officially part of Cameroon, which is attached to the E.E.C, the banana requirements of E.E.C. are amply met by the French-speaking part ofthe Cameroon Republic, and there is no possibility of any of the bananas produced in West Cameroon going to the E.E.C. Perhaps it is because the price is entirely non-competitive. I very much hope that my fears will not be realised. I did urge that the duty should be tapered off, because British banana interests out there have been trying strongly to produce a new strain of banana which would eventually offset loss of preference. Now it appears that that will not happen. I should be grateful to my hon. Friend if he could allay anxiety on the prospect of the West Cameroon banana enterprises, in which British interests are so greatly involved.
§ 10.55 p.m.
§ Mr. E. L. Mallalieu (Brigg)
It all sounds so plausible when it comes from so reasonable a man as the Minister of State. According to him it was a question of West Cameroon having opted out 1207 of the Commonwealth of its own free will, but that the country would be all right because it was associated with the E.E.C. I hope that this reasonable Minister will be reasonable enough to recognise that the whole of his argument from an economic point of view has been blown sky high by his hon. Friend. How can the West Cameroon banana people suddenly get new markets in Europe? It just will not happen. If he is the reasonable man I think he is he will admit that a mistake is being made.
What about South Africa? When she left the Commonwealth what did our tired old Imperialists do then? They leaned over backwards to do everything they could to give her what help they could.
§ The Parliamentary Secretary to the Board of Trade (Mr. David Price)
They are younger than you.
§ Mr. Mallalieu
They may be younger in age than I but I have been here twice as long as other hon. Members opposite who are present. I have seen hon. Members opposite who have talked so much about the Empire, throw it away. Throw it away perhaps they must, but what they have failed to do is to recognise that they are stamping with their miserable little footsteps on something that could have been quite big in West Cameroon.
Big things are happening in Africa generally and in West Africa in particular. Here surely there is a confrontation of the Francophile element with the Anglophile element. That is the drama that is taking place. And what are the Government doing? They are trying to give silly little kicks in the pants to a territory which opted out of the Commonwealth. That is what it looks like even if it is not so. This is a move by tired old men—old at least in spirit if not in years.
Great efforts are being made to integrate the people of West Cameroon with the French-speaking part and complete fairness is being shown them by their French-speaking compatriots. Immense efforts are being made to see they get a fair deal. The radio is evidence of it, while even the judges still wear their red robes and wigs and will, as far as one can see, continue to do so because of this desire.
1208 But now comes this ham-fisted Government saying that because these people are now out of the Commonwealth the preference must be withdrawn. It is red tape. If the preference has to be withdrawn—and perhaps that is Inevitable—can it not be done another way? Could we not have heard something about that from the Minister, who is usually so reasonable? The right hon. Gentleman merely said that the preference was to be cut off and, in effect, that he could not care less.
This is a tragedy and I hope that hon. Gentlemen opposite will think again before they take this step which may have sad repercussions in other parts of Africa. This is not the only part of Africa where the French and British systems confront each other. We want there to be the maximum harmony between them to aid them in their efforts, for instance, to encourage the speaking of French in English-speaking parts and vice versa. We are taking a step in the opposite direction. The Government are so muddle headed that they do not even know what they are doing.
§ 11.0 p.m.
§ Mr. G. M. Thomson (Dundee, East)
My hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu) says that he is surprised that such proposals should come from so reasonable a Minister as the Minister of State, Board of Trade. If he were one of the Dundee Members, he might not be so sure about the reasonableness of the Minister of State, who has recently been in my constituency proposing certain things as doubtful as this. I share the anxieties expressed by my hon. and learned Friend and by the hon. Member for Liverpool, Kirkdale (Mr. N. Pannell). We differ on a number of things across the Floor of the House, but the hon. Member for Kirkdale and I share similar views about our responsibilities towards West Cameroon.
The Government's proposal is very illogical. On 19th June, when the hon. Member spoke at some length on this subject, we had no indication from the Colonial Office Ministers that any sudden termination of these preferences was to take place. The Colonial Office spokesman was most unforthcoming, but he did not say that the Government had made up their mind.
1209 It is illogical because during that debate on the Commonwealth Development Bill we discussed the operations of what is now to be called the Commonwealth Development Corporation, which has played a notable part in the life of West Cameroon. What is more striking is that the Government are proposing that the C.D.C. should continue to operate in the West Cameroon and probably increase its already substantial investment there. The Corporation's new report shows that during fast year the Cameroon Development Corporation drew from this country a further £450,000 of its £1 million loan commitment, and goes on to say that an approach has been made from the Cameroon Government for further finance, which, it has been agreed, should be made available from this country on certain conditions.
I find myself a little puzzled that West Cameroon should be excluded from Commonwealth preference at the same time as being included in the Commonwealth in terms of capital aid and technical assistance, especially when the British taxpayer is being asked to provide money to make an investment in bananas from which the Government are then to remove preference. When that is compared with what was done for South Africa, it makes one think.
What happened with South Africa was particularly shocking because of the High Commission Territories for which we have special responsibility. Swaziland depended very much on sugar and, in order to make concessions to the Republic of South Africa, outside the Commonwealth, Commonwealth preference on that sugar was seriously cut.
I think that my hon. and learned Friend is right when he says that there is an inconsistency in the way that this has been carried out. I can only say that, from a brief visit to West Cameroon about a year ago, I was immensely impressed by the amount of work being done by the Cameroon Development Corporation. It seemed in many ways to be the finest thing that we were leaving behind. I was also much impressed by the fact that in this little African country there was this attempt to integrate a French-speaking former colony with an English-speaking former colony. When I returned to this country I de- 1210 scribed the English-speaking side of West Cameroon as very much an English-speaking Wales in that South African nation, because it is very much the smaller part of that nation. I came back to this House and pleaded with the Government to do their best to make sure that the English traditions were supported there. People there wanted to maintain their link with us, and cutting the preference on one of their main exports seems a poor way of maintaining this link.
When I try to discover the reason for this, I can only find it in the view that the Government seem to be taking of France's responsibility for the Cameroon Republic. I am not a noted apologist for the French on these matters, and it seems that they could do a good deal more than they are doing at the moment. If the hon. Member for Kirkdale is right, the French are putting on a quota which means that it is only the French-speaking side of the Cameroon Republic which is likely to benefit from the export of bananas to the European Economic Community. Surely this is a matter about which we ought to negotiate with the French to try to get some sort of agreement?
I am left with the suspicion that we are deserting people whom we have tried to help in other ways and who look to us for help in many directions, simply because we have been snubbed by the French in our efforts to get into the European Economic Community. It seems rather hard that the people of West Cameroon, who have been linked to us in so many ways for so many years should be made the victims of a dispute between us and France and which is unrelated to their welfare. The Minister is grimacing. Let him make a better case for this Order than he has made so far.
§ 11.8 p.m.
§ Mr. Douglas Houghton (Sowerby)
It is evident that this draft Order has not been very well received. I have listened with great interest to the speeches that have been made so far. I think that there must have been some misunderstanding when I was deputed to this task this evening. Apparently it was thought that this was; a simple matter of taxation. It appears to have far deeper significance.
1211 I sincerely hope that none of the suspicions expressed by my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson) were in the Government's mind when they reached their decision on this admittedly difficult matter. Probably part of the trouble is due to the fact that we appear to have no satisfactory and orderly way of dealing with a former Colonial Territory which leaves the Commonwealth. Consider for a moment what it has been necessary to do in this case. Had nothing been done, this territory, on leaving the Commonwealth on 1st October, 1961, would have been deprived of any of the benefits of the Commonwealth preference area. To avoid what clearly would have been conditions of considerable hardship to this territory, a Clause was put in the Finance Bill of 1961 naming West Cameroon as a member of the preference area until 30th September, 1962.
Then Her Majesty's Government thought that it would be desirable to extend beyond the 30th September, 1962, the benefits of the Commonwealth preference area. To do that they had to take advantage of Section 2(4) of the Import Duties Act, 1958, to bring West Cameroon into the preference area again. Out by the Finance Act; in again by the Import Duties Act. Now the Government want to get them out again, so they invoke another part of Section 2 of the 1958 Act to withdraw the benefits of the preference area. That seems to suggest that when a territory leaves the Commonwealth there is considerable difficulty in finding ways and means of easing its way out in a matter of this kind.
On these benches we have been very jealous of the benefits of membership of the Commonwealth, and have criticised the extension of those benefits to territories leaving the Commonwealth. That is quite natural, and there is no malice in it. If we attach importance to membership of the Commonwealth, and if importance is to be attached to that membership, the benefits of being in must be extended with care and discrimination to any who go out.
My hon. Friends will remember how critical we were when it was proposed to give the benefit of quite generous transitional arrangements to the Republic 1212 of South Africa. Hon. Members on this side of the House then took the view that if they were going out they could not have the benefits of remaining in, more than very temporarily. We must draw a very sharp distinction in our respective attitudes towards the Republic of South Africa and the territory of West Cameroon. To one we were unfriendly; to the other—West Cameroon—we had the utmost good will for its future prosperity.
Nevertheless, there is this problem of what we are to do with territories which choose to go out of the Commonwealth. In London at present discussions are going on regarding the future of Malta. There may be opinions in Malta about whether an independent Malta should remain in the Commonwealth. There again, this sort of problem might arise in the future. It may be desirable for the Government to consider whether some more orderly and satisfactory arrangement—a more flexible arrangement—should be introduced to deal with situations of this kind.
§ Mr. E. L. Mallalieu
Does not my hon. Friend think it desirable that different sets of arrangements should be arrived at respectively when a country which is prosperous leaves the Commonwealth and a country which is an underdeveloped country leaves it?
§ Mr. Houghton
Yes. That was implied in what I said just now—that if we had arrangements which were more flexible, and permitted of more discrimination, it would be much better.
So far, this sort of situation has had to be dealt with ad hoc, either by specific legislation or, in this case, by being moved temporarily into the Finance Act, then given an extension of the benefits under another Act, and finally being thrown out under the same Act. It does not seem to be a very satisfactory way of dealing with the matter. The information I have is that this draft Order is the very first in which this means of depriving any country of the benefits of Commonwealth preference has been adopted.
If we face this situation quite fairly we must agree that the benefits of the Commonwealth preference area cannot continue to be given indefinitely to a territory which has left the Common- 1213 wealth. There can be no dispute about that. That would be quite contrary to the whole concept of the Commonwealth and would clearly give rise to the strongest objection of many members of the Commonwealth that we were giving benefits of Commonwealth to a country which had deliberately chosen to leave it. We agree that benefits cannot be retained indefinitely by a country which chooses to leave.
The next question is, how long do we continue them and under what conditions are they to be withdrawn? The hon. Member for Liverpool, Kirkdale (Mr. N. Pannell), to whose opinions on these matters the House always listens with care, suggested a tapering arrangement. Perhaps the Minister will tell us whether any tapering arrangement is possible under the machinery and means at his disposal. This may give point to my suggestion that there is no flexibility about these arrangements. It is all or nothing, it seems, under this Order. Although the extension has been given and welcomed by the territory concerned in order to ease the ultimate decision, the fact is that when it is taken the deprivation will be complete. That, clearly, is the difficulty for a territory of this kind.
The matter is further complicated in this case of a territory which has been given associated territory status by the European Economic Community. That is more nominal than real from the point of view of benefit to the territory. Finally, the question may be asked, are there any alternative means of easing the difficulties of this territory? Will there be any means of retrieving this step if the damage to its economy is so serious that we feel obliged to do something about it?
I hope that none of the fears that have been expressed will be realised. If a British taste for Cameroon bananas could be cultivated, the problem could be solved, but so long as people just ask for bananas and get bananas, the Cameroon banana will probably be no more distinguishable than any other, although it may have a peculiar flavour and quality of which I am not aware.
I am sure that the Minister would wish to give the House what reassurances he can. He has told us that the gravest anxiety has been expressed by 1214 West Cameroon. He has also told us that a further continuance of the preference would be objected to by other members of the Commonwealth who are substantially banana producers. That is the dilemma the Government are in.
One can understand that some territories are anxious that no benefit should be retained by those who go out of the Commonwealth, because if they go out, then there will be consequential benefits for those who remain in. We cannot overlook that. That is a very difficult question and, frankly, I am glad that it has not fallen to me to take the decision. One can only weigh it up with all the information the Minister must have at his disposal as to the pros and cons and the strength of the fears expressed in West Cameroon. Various suggestions occur to one, of lifting duties on this kind of import altogether, but that again would be an indirect way of giving a benefit to a non-Commonwealth territory.
I am still in the throes of the dilemma. I am concerned that no serious damage should be done to the economy of the Cameroons, I am as anxious as anyone to retain the good will of the Commonwealth. I can only hope that, weighing the factors as best they can, the Government are coming to a wise decision. The hon. Gentleman knows that anxieties are expressed from knowledgeable quarters of the House.
§ Mr. Green
I think that, with leave, I should reply to the points made. One of course regrets very much any change in trading arrangements necessitated by a political decision taken by another country but this is the situation. I thank the hon. Member for Sowerby (Mr. Houghton) for the honesty with which he took the dilemma and attempted to face it. I was hoping that I should be able to say the same about some of hishon. Friends.
My hon. Friend the Member for Liverpool, Kirkdale (Mr. N. Pannell) put the situation quite straightforwardly. I know his mind and I agree with him that it is a matter for regret that we cannot do more. We have delayed action for two years, and unnecessarily from our point of view. Perhaps I had better not repeat what I said earlier, but it is a fact that if the Government had taken no action before this territory ceased to be a United 1215 Nations trusteeship territory, West Cameroon would automatically have lost its status as part of the Commonwealth preference area. We delayed this for two years deliberately.
The suggestion that this is done as a snub to France is wholly unworthy of both the intelligence and the power of listening of the hon. Member for Dundee, East (Mr. G. M. Thomson). If he had listened to the timetable I gave he would have realised that we extended the period of grace to this territory long before the Common Market negotiations broke down in Brussels and it is simply not possible to connect these two events in time in the way he sought to do. I hope that he will not do that again, because it simply makes a little more trouble somewhere instead of helping to ease things.
Finally, it is exceedingly difficult to accord to one part of a unified republic treatment one does not accord to the other. What we are doing to help both these territories and others in Africa is to get duty-free entry for at least some of their products agreed by the E.E.C. and ourselves which will widen the market for some of these products for all these West African territories. This applies particularly to tea and hardwood. I hope that this will be achieved this year. This is the best factual answer I can give to show that our interests extend widely over these under-developed countries and we seek to help their trade in tropical produce wherever we can.
§ Question put and agreed to.
That the Commonwealth Preference Area (Removal of West Cameroon) Order 1963, a draft of which was laid before this House on 3rd July, be approved.