HL Deb 10 March 1902 vol 104 cc850-9

, in rising to "call attention to the Brussels Sugar Convention, and to ask the Secretary of State for Foreign Affairs, whether by Article VI. of that Convention, Spain, Italy, Roumania, and Sweden are freed from the obligation imposed by Article I., as far as production bounties are concerned, as well as from the undertakings embodied in Articles III. and IV., as long as they do not export sugar; whether this Article VI. not only exempts them from the obligation entered into by the other signatory Powers, to abolish direct and indirect bounties on production as well as exportation, and, in contravention of Article III. enables them to impose any surtax in excess of the maximum of six francs fixed by that Article, but further exempts them from the action of the Penal Article IV., and whether the effect of Article IV. will not enable Spain, Italy, Roumania, and Sweden to exclude, by their bounties on production, sugar coming from the other countries parties to the Convention who have agreed to abolish all bounties direct or indirect," said: My Lords, the question of sugar bounties is so important that I feel I need not apologise for bringing the matter before your Lordships. A few days since we were informed that the Convention of Brussels was about to be signed owing to the decided action of the British Delegates, but after seeing the document I have come to the conclusion that for "decision" the word "concessions" would be an appropriate substitution. Reading the Treaty carefully, it must be admitted to be a most self-contradictory document. Forty years have elapsed since it was decided that sugar bounties ought to be abolished. Since 1862 no less than nine conferences have taken place, and four Conventions have been signed, with the gross result that sugar bounties now are more obnoxious in form and more dangerous to our West India Colonies and British refiners than they were in 1862. It is evident that each one of the Conventions was directed to the abolition of bounties, direct and indirect bounties on exports, imports and production. In the last Convention of 1888, which, in conjunction with the noble Marquess at the head of the Government, I had the honour of signing on behalf of Great Britain, the first clause distinctly stated that all bounties, direct and indirect, should be abolished. Turning to the present convention —I have not the translation here, but only the French copy—I find that Article 1. says— Les Hautes Partie Contractantes s'engagent à supprimer à dater de la mise en vigueur de la prèsente Convention, les primes directes indireetes dont bènèticieraient la production ou l'exportation des sucres, et à pasetabhr de primes de 1'esPece pendant toute la durèe de la dite Convention. That is simply a repetition in somewhat longer words of the Article in the Convention of 1888; but what 1 want to call your special attention to are the words "la production," because it will be found that the declaration against bounties on production is distinctly violated in the succeeding Articles of the present. Convention. The reason "la production" was introduced was that, as a matter of fact, bounties on production were the origin of the bounty system. Sugar bounties owe their origin to Napoleon I. In 1806 Napoleon 1, anxious to promote French industry, and still more anxious to injure British industry, established bounties on production in France. Though at first attended with little success the French bounty system has made gigantic strides, and at the present moment the sum given by France in bounties amounts to £4,000,000 sterling a year. I only cite this fact to show the great importance attached to bounties on production. Article VI. of the present Convention exempts Spain, Italy and Sweden from the engagements under Article I., II., and III., so long as they do not export sugar. What does that mean? It means that these three Powers are able to give bounties on production. That is to say, they can, by these bounties on production, prevent the importation of any other sugar. There can be no other interpretation placed upon these words. A climax of absurdity is reached when they say, "so long as they do not give bounties on export." If they gave bounties on export they would come under the Penal Article IV., which says— Les Hautes Parties Contractantes s'engagent à frapper d'un droit spècial,à 1'importation sur leur territoire, les sucres originaires de pays qui accorderaient des primes à la produetion ou à 1'exportation. Although it is distinctly stated that all countries giving bounties on production or exportation of sugar shall be visited with the penalties of Article IV., yet these three Powers are specially exempted from the action of that Article, with the result that their markets are closed against our Colonial sugar.


Exempted only so long as they do not export. The moment they export they come under the Penal Clause.


If they do export they are punished, but if they do not they are rewarded by being allowed to give bounties on production. It is impossible to conceive a more ridiculous state of things. Such action can only be directed against this country, for it is not, likely that Spain, Italy, or Sweden would import beet sugar, for they produce beet sugar; the only sugar they would import would be cane sugar, and the country that produces cane sugar is Great Britain. Then it has been stated that a success had been secured by our delegates by the reduction of the surtax from fifteen francs to six francs. So far from that being a success, I consider it one of the most unfortunate features in the whole Convention. It has always been understood in every Conference, notably in the last one, over which I had the honour to preside, that the surtax was the worst form of bounty, and it amounted to a prohibitive duty, whether it was fifteen francs or six francs. Why should the delegates of Great Britain have urged incessantly, not the abolition, but the diminution of the surtax, thereby admitting the principle? We occupy in this connection a position similar to that of the cat with the chestnuts in the fable, and our delegates have acted, not in the interests of Great Britain, but in the interest of France against the cartel system of Germany-Germany was not likely to give way to. France at her mere request, and therefore France most ingeniously employed the British delegates to plead for a reduction of the surtax and to make that a sine quâ non in the signing of the Convention. It is impossible to explain the action of the British delegates in any other way. This country has agreed to afford no preference to Colonial sugar as against sugar coming from the contracting States. I protest against such an instance of a self-denying ordinance as our agreement to a surtax against cane sugar, while binding ourselves not to give any preference to the advantage of our own cane sugar. If bounties are prejudicial to the interests of this country, if it is impossible for sugar to be grown in the West Indies or refined in England because it is exposed to all the dangers of foreign subsidies, it surely follows that we should not enter into a Convention which while purporting to do away with these subsidies, prevents our doing anything for the benefit of our Crown Colonies and for those who are dependent on the sugar industry.

It is very interesting to note the attitude of Germany with regard to the surtax, which fully justifies me in saying that the surtax is solely directed against the cane sugar industry. Speaking in the Reichstag on Saturday, March 1st, when the Report of the Budget Committee on the revenue from the sugar tax was under consideration, the Secretary of State for the Imperial Treasury, Baron von Thielmann, said— A surtax of six francs would lie entirely adequate to protect the production of German sugar front the inroads or foreign sugar. It would he impossible to he more frank and candid than the German Minister was in this statement. The surtax was originally fifteen francs. In consenting to its reduction to six francs, Germany says it is quite adequate to exclude English sugar from German markets. I do not think any further comment is necessary to show the absurdity of our action.

Now, my Lords, I pass to Article XII., which enables the ratification of the Convention without Italy, Spain, and Sweden. I have shown that these Powers have been allowed, so to speak, to contract out of the Convention, but supposing that they choose at the time of the ratification not to ratify it, the Convention will be equally valid with or without their signatures. The Treaty is unique as to the conditions of ratification and the power given to certain Powers who have already signed it to withdraw their names. Let me recall for a moment the Powers who signed the two last Conventions. The Convention of 1888 was signed by Great Britain, Germany, Austria-Hungary, Belgium, Denmark, Brazil, Spain, Italy, Holland, and Russia. Egypt notified her intention to adhere; and France added the following declaration in the Protocol— The Government of the French Republic adheres in principle to the Convention of August 30th, 1888, respecting the suppression of bounties. France accepted the principal condition in the Convention. Therefore it was signed by all the great Powers, and it contained no such clause as I have called attention to, giving special freedom to Italy, Spain, and Sweden. The Convention of 1902 is signed by Great Britain, Germany, Austria - Hungary, Belgium, Spain, France, Italy, Holland, and Sweden. Spain, Italy, and Sweden are to be entitled to withdraw from the. Treaty whenever they like, and that is not to affect the Treaty in any way whatever. Russia is not a party to the Convention, and was not represented at the Conference. I am afraid he would be a very sanguine man, indeed, who entertained the hope that this Convention would prove a success.

The other Question I wish to ask the Secretary of State for Foreign Affairs is whether, in view of Article IV. of the Brussels Convention, His Majesty's Government is prepared at once to introduce the same Bill as in February 1889, which enacted that— Where in pursuance of Article VII. of the said Convention, the fact of the existence in any country out of the United Kingdom of a system involving open or disguised bounties on sugar is established by the decision of a majority of the signatory Powers of the said Convention, it shall be lawful for Her Majesty the Queen, by Order in Council, to direct that all sugar coming front the said country shall lie prohibited to he imported or brought into the United Kingdom exe-pt in transit, and to make such regulations as appear to Her Majesty necessary for giving effect to the said prohibition. And whether the Secretary of State will lay all the Papers relating to the recent negotiations at Brussels, together with the Convention, on the Table of the House. I take a lively interest in the answer to this Question, because I have a distinct recollection that, after all the negotiations had been successful in 1888, and the Convention signed, I had the honour of introducing the enabling Bill into the House of Commons in February, 1889, which was read a first time, but for some occult reason, which, perhaps, will never be disclosed, the Second Reading never took place. The Bill was afterwards dropped, and with it the Treaty died. I hope this will not be the fate of any measure to give effect to the Treaty of 1902. Its infancy is, I am afraid, sickly, but I trust there will be no infanticide at the hands of the, parents of the measure. The same question which I am now putting to the noble Marquess was put in the French Chamber the other day by M. Ribot to M. Caillaux, Minister of Finance, and he replied that this Convention, which suppressed all bounties on sugar, was a question he could not now discuss, but front the point of view of the general interests of the country it was long since any measure so salutary had been adopted. The Foreign Office would, he said, shortly publish all the documents of the Conference, but the Bill to give effect to it would certainly not be introduced till after September, 1903. Those who are in any way acquainted with French politics will not be astonished at the delay in dealing with this measure, as they are on the eve of a general election, in the result of which the sugar-producing districts are a very important factor. France does not intend to introduce legislation till September, 1903. I hope we shall not follow the example of France. There is no doubt that we are suffering from the bounties; there is no possible objection to their removal; and if after nine attempts to arrive at an international agreement there is still a failure to be recorded, there is only one policy for us to adopt. It is a policy of "splendid isolation." We must show the world that England is strong enough alone to defend her own commercial interests.


The noble Lord who has brought this subject before the House has, for many years past, made it a subject of study; and I can well understand the close, and I might almost say jealous, interest with which he has watched the course of the recent negotiations. But I must say that the intensity of his interest has led him to adopt a course which has not been altogether convenient to your Lordships House. The Brussels Convention was signed last Wednesday. The text of the Convention —the original, as he says, is in French—is not as yet in your Lordships' hands, although it will be distributed this evening.


It has been published in the Press and circulated extensively three days ago.


Surely in a matter of such great importance the noble Lord does not expect us to rely on the casual translation of this document as published in the newspapers. It is in French, and the noble Lord has read extracts from the Convention in that language. It would have been more convenient if he had waited till the authorised English version was laid on the Table of the House. The noble Lord suggests that we should present Papers. We are at this moment considering what Papers can be communicated to Parliament. For these reasons I somewhat deprecate a general discussion of the policy of this Convention at this moment; but I am quite ready to notice one or two points upon which the noble Lord laid most stress during the course of his statement. In the first place, he asked me why it was that, instead of securing the complete abolition of the surtax, we had been content with a reduction of it to six francs per 100 kilogrammes. The surtax as the noble Lord knew it when he was concerned with the Convention of 1888 was a very different thing from the surtax of today. Two things have happened since that time. The surtax has been enormously increased, and, in the next place, there has grown up in close connection with it a gigantic system of trade combinations known as cartels, under which huge profits have been made by the members of the sugar rings. When we had to consider the instructions to be given to our representatives at Brussels, we came to the conclusion that it was useless to deal merely with the question of bounties unless the surtax—by which I mean, of course, the difference between the Customs and Excise duties—was brought within moderate limits. We took the best advice which we could obtain, arid we came to the conclusion that with six francs per 100 kilogrammes there would be no room left for these trade combinations, these cartels, to which I have referred. We, therefore, made it a sine quâ non that the surtax should be brought down to that figure, but we did not think it necessary to insist ore its complete abolition. Our impression was that the Conference, like its predecessors, would have resulted in failure if we had insisted on that.

Then the noble Lord has spoken for some time as to the effect on the British Colonies of the Convention. Let me state in a few words the effect of the Convention on the Colonies. The Crown Colonies, under the Convention, will not be permitted to give any bounties, direct or indirect, on sugar either in their own markets or any other markets. As to the self-governing Colonies, as the noble Lord is aware, under Article XI. they are excluded from the Convention; but it is open to them to give their adhesion to it if they desire to de so, and if they give their adhesion they will assume a position to all intents and purposes identical with that of the high contracting parties.


I cannot find in Article XI. this exemption.


The exemption is clear in the copy of the Convention I have, but this is another illustration of the inconvenience of discussing these subjects without having the documents before us. The general enactment with regard to the Colonies binds us not to give any preference to Colonial sugar over sugar originating from the countries of the high contracting parties; and it is obvious that we could scarcely have asked the other Powers to accept an arrangement under which they would be absolutely precluded from giving bounties while we retained our complete freedom to give bounties to sugar originating in our own Colonies.

Then the noble Lord pointed out that it was open to the Powers mentioned in Article VI. to withhold their ratification at the last moment. I am bound to say, supposing that were to happen, although I should sincerely regret it, it does not seem to me that it would be in any way fatal to the Convention or deprive it of its good effects. None of the Powers mentioned in the Article are exporters of sugar, and therefore there would be no question of their flooding the markets in other countries with bounty-fed sugar under conditions which would render the competition of that sugar with other sugar unfair.

I pass to the Question which the noble Lord has placed on the notice Paper. The noble Lord desires, to know whether the three Powers, not four, as has been said, mentioned in Article VI. will remain free to give bounties on their own sugar in their Own markets, and whether, if they retain that liberty, the result will not be to preclude the competition of any other sugar in those markets. It is quite true that under the Convention, Spain, Italy, and Sweden will be at liberty so long as they are not exporters of sugar to give bounties on, their own sugar in their own markets. It is quite conceivable that they might do this to such an extent as to render it difficult for other sugars to compete in those markets; but, while I make that admission, I do not in the least admit that such a result would frustrate the operation of the Convention. The general scheme of the Convention is to prevent any Power by bounty or surtax from stimulating the manufacture of sugar within its own limits to such a point as to enable it to export sugar under conditions which would enable it to compete unfairly with other sugars in the markets of the world. That is why I insist so much on the words "so long as they do not export sugar." It is laid down by the Convention, however, that the moment any of these Powers becomes an exporter of sugar it shall be liable to all the obligations of the Convention in the same way as the other Powers. The noble Lord is under the impression that the three Powers are to enjoy exemption from Articles I., III., and IV., but the Articles they are to enjoy exemption from are I., II., and III. The noble Lord has asked me a further question about the legislation which will be necessary to give effect to the Convention. Well, the Convention was only signed four days ago, and it is a little previous to ask the Government to exhibit now the exact text of the Bill, which at the proper time will be laid before Parliament. The delay which the noble Lord anticipates as likely to take place on the part of the French Government, who, he said, would not bring in their Bill until the autumn of 1903, is not likely to take place, inasmuch as the ratification of the Convention is to be made before February 1st, 1903. We shall inform Parliament of the legislative measures which may seem to us to be necessary for this purpose. I hope that at an early date I shall be able to lay Papers on the Table of the House. When those Papers are before the noble Lord, I hope he will he convinced that the Convention, far from beng a capitulation on our part, or a series of mischievous concessions made by our delegates, is, on the contrary, the most hopeful attempt that has yet been made to bring to a satisfactory conclusion this much vexed question, which has occupied the public for over forty years, which all of us have desired to solve, and which up to the present, for various reasons, we have not been able to deal with satisfactorily.


I do not propose to enter into this subject tonight, for I fully share the views the noble Marquess that the discussion is introduced at an unhappy and premature moment. I understand that there will be some Papers explaining the conduct of our delegates and the history of the Convention. There may be very important points involved in this matter which will require discussion, and to some of which, perhaps, exception may be taken—for instance, the clauses with regard to retaliation. I will postpone any remarks, however, that it may be thought proper to make from this side of the House, until we have further information.

House adjourned at twenty minutes past Six o'clock till tomorrow at quarter past Four o'clock.