HL Deb 07 August 1918 vol 31 cc622-48

EARL BEAUCHAMP rose to call attention to the speech of the Secretary of State for the Colonies announcing that His Majesty's Government has decided upon a Preferential scheme of trade within the Empire; and to move for Papers.

The noble Earl said: My Lords, it will not be necessary, I hope, to detain your Lordships at any great length this afternoon in considering this question. My object is not so much to initiate a debate as to try and elicit some information, if it is possible to get it, and, if necessary, to register a protest. My first criticism must be directed to the method in which the announcement was launched upon the country. Here is a matter which has been the subject of discussion between two political parties for fifteen years. It has actually divided people in this country; it has frequently been made a matter of discussion both in this House, and in another place. I venture to think that Parliament is the proper place in which the announcement should first have been made; instead of which the Secretary of State for the Colonies, at a casual luncheon somewhere in the City, made a reference to this, and the matter was so ill-understood by the people of this country that since then there has been more than one explanation issued on behalf of the Secretary of State for the Colonies to try and explain what exactly was meant. And, my Lords, even now we would like to know, if possible, exactly what this Resolution is. I should like to have the terms of the Resolution, to know whether they are the same as the terms of the Resolution which was passed last year on a similar occasion by the Imperial War Conference, or whether this is something new.

Sir Robert Borden spoke the other day and threw a good deal of light upon the question. He said that neither the Imperial War Cabinet nor the Imperial War Conference has had under consideration this year the question of Preference. "The, recent announcement on that subject," he said, "was made on behalf of the British Government as a statement of the domestic policy of the United Kingdom; and as Canada claims and exercises the right absolutely to control her own fiscal policy, so the representatives of our Dominion necessarily refrain from attempting any interference in the fiscal policy of the United Kingdom." That was a welcome declaration on the part of Sir Robert Borden, directed, I cannot help thinking, not only to the people of this country, but also to his colleague Mr. Hughes. For Mr. Hughes has been busy making a series of speeches upon this question, which I do not think anybody could refrain from describing as partisan. It puts us all in a position of very considerable difficulty. If Mr. Hughes forgets that he is the guest of this country we are most unwilling to forget it. Therefore I should wish to abstain from any word of criticism of what has been said by Mr. Hughes, but I should like to hear from His Majesty's Government—if they can tell us—whether, when he makes speeches of this partisan character, Mr. Hughes is speaking in his capacity as a member of the Imperial War Cabinet, or of the Imperial War Conference, or as Prime Minister of Australia, or merely as a private individual. I cannot help feeling that the same success is likely to attend his efforts to convert the people of this country to Protection as attended his efforts to convert the people of Australia to Conscription. Certainly if anybody had been in Australia last year and had made speeches on that subject on the lines of those which have been made by Mr. Hughes this year, he would have heard a great deal about it in very strong language from no less a person than Mr. Hughes himself.

I think there is yet another point of fair criticism. His Majesty's Government is a Government for conducting the war. As I understand—and I hope I am right in saying so—this is a policy which is not to be carried out during the war, but is only to be adopted when the war is over; and this Government, unless it is in office at that time, is under no pledge, and no Government is pledged, to carry it out. Now, my Lords, even if the noble Earl is able to give us the terms of the Resolution, I confess that we shall wish to know something more about it. The more we are told the better we shall be pleased. Resolutions are often used not only to expose a situation but very often to conceal thoughts and also actions. We have an example only lately in a cognate question of the Paris Economic Conference. On that occasion Resolutions were passed which some of your Lordships welcome as going as far as they wish to go in the direction of Tariff Reform; whereas others, and not the least my noble friend the noble Marquess who leads the Opposition in this House, would say that those who took part in that Conference certainly thought that those Resolutions had no such import at all. Therefore it will be necessary for us, when we have the terms of Resolutions, to examine them with a good deal of care.

There are two way in which a Preferential Duty may be imposed—either by adding to the taxation which exists already, or else by subtracting something from duties which already exist. I have understood from one of the communications which have been made in the papers that His Majesty's Government do not intend to put a tax on food. But there does remain, as a possibility, the alternative that existing duties may be reduced in the case of those articles which come to us from the Dominions or from the Colonies. That is an alternative policy, and it is one which is not excluded by anything that has so far appeared in explanation of this Resolution. I venture to think that there will be a special difficulty if that is the idea of His Majesty's Government, because after the discussion which took place in this House on Monday night it is quite clear that the Treasury will be most unwilling, and scarcely able, to forego any of the receipts which they have been accustomed to receive during the past few years. The money cannot be spared, and it will be difficult to convey in that way any Preference to the self-governing Dominions.

And, my Lords, this new method of preferential tariff does go in direct opposition to the old dictum of Mr. Chamberlain, that "if we were to give a preference to the Colonies we must put a tax upon food." We understand, as I said just now, that His Majesty's Government do not propose to impose any fresh taxation upon food which is now exempt from it. There remain, of course, other goods which might become subject to taxation—raw materials, timber, and wool. I do not think that there is anything which has yet been suggested which seems to indicate that raw materials, including timber and wool, are among the subjects that are to receive preferential tariffs under this Resolution.

I turn to the various articles that come into this country which might become the subjects of differential tariffs in this sense, that the imports which come to us from our self-governing Dominions might be subject to a lower rate of Import Duties than those which come to us from outside the Empire. If one examines the actual figures, it is difficult to see that any substantial relief can be given in the matter of tea. The Empire is almost self-supporting, with the exception of special tea which comes to us from China, and which probably no amount of duties would prevent people from drinking—it is drunk by a class of persons who would pay whatever the duty might be. Then there is sugar, tobacco, and coffee, of which the supplies from this Empire are wholly inadequate to meet the needs of the country, and which for a great many years to come must, as far as one can possibly foretell, come to us from places outside; the British Empire. Finally, there are various liquors, wines and spirits, on which, if we were to make any substantial difference to those goods of that class which come to us from the Colonies, the Excise would suffer so severely and the benefit to the Dominions would be so small, that I cannot think they are likely to be the main subject of taxation in this direction. Therefore, looking round, it seems to us very difficult to see what exactly is meant by the intentions of His Majesty's Government. We are very anxious to have the opportunity of seeing the Resolution and of examining it for ourselves, so as to try and find out what it really means.

Last year Sir Robert Borden, who had been present at the Imperial Conference here, made a speech when he returned to Canada in which he exposed the meaning of the new policy (as it was then) of the specially favourable treatment and facilities to the produce and manufactures of other parts of the Empire. I will venture to quote to your Lordships some extracts from what he said— I should say at once that this Resolution does not necessarily purpose, or even look to, any change in the fiscal arrangements of the United Kingdom. It does not involve taxation of food It does not involve taxation of anything. But what this proposal looks to, as I understand it, is this—that we can within this Empire get better and cheaper facilities of communication than we have enjoyed up to the present time. That, I believe, is the line along which the change indicated will proceed. I hope and believe there will be concerted action and cooperation between the Government of the United Kingdom and the Governments of the Overseas Dominions, by which speedier, better, and more economical transportation will be provided between the Mother Country and the Overseas Dominions, and between the Overseas Dominions themselves. This seems to foreshadow, if that is also the policy of His Majesty's Government, a policy of freight wars between this country and other countries who certainly are at the present time allied with us. That appears to me to open out a very dangerous future. After all, a freight war is a game at which two can play; and when we consider how very precarious is the merchant shipping industry in the future of this country, the immense extent to which America has been building and is building ships; the possibility that the Trident will pass from our hands to those of the United States of America—it seems to me that it will be very dangerous for this country to embark upon a war of freights in which we might so easily fail to secure victory. Any policy of this kind, though its immediate effect must all upon the people of this country, will also have a very much wider effect.

But it is not a merely local or domestic question. It is true that we believe that any taxation of this kind must raise the price of these various goods to the people of this country. Certainly if we are to enter upon an extensive freight war, this must be the result. But it is not only that the price will be raised to the people of this country at a time when food has already become so expensive that there are a great many complaints upon the subject, but it is that other interests will also suffer. We have yet to learn how it will be possible to make any scheme of this kind equitable; how, if food is not to be taxed, Australia and Canada and South Africa are to derive any benefit from the imposition of these duties. I should hope that it may be possible to hear from His Majesty's Government whether they have taken into consideration the question of India, and whether India is to be included and is to get some benefit at the same time as our self-governing Dominions; and, if so, it will be interesting to know in what direction India would gain.

Then there are also the interests of other people besides our own Empire to be considered. There are the interests of our present Allies. After all, you put on a preferential tariff in order to benefit somebody; then it is perfectly obvious that other people are going to get the worst of it. And, if we are to put on this tariff, in order to benefit the self-governing Dominions and the Colonies of the British Empire, it seems to me a most unfortunate moment to do it, when we ought to do all we possibly can to help that gallant little country Belgium, and not only Belgium, but also our Ally, France. It appears to me that it would be a most unfortunate thing if one of the first results of this war should be that we were to put on preferential duties in order to tax, and to some extent to impede, the trade of the nations of Belgium and France with this country.

There is yet another subject, one upon which I touch with some little reserve. For some time I have had on the Notice Paper of your Lordships' House a Question with regard to the most-favoured-nation treaties. I have postponed it at the request of the noble Earl, and I have been very glad to do so. But it is very difficult in connection with this matter not to refer to it, however briefly; and I hope that I may receive some assurance that this matter, and the effect of preferential duties upon this, has also received some attention from His Majesty's Government, and that it will receive more attention.

Finally, there is yet another, and, perhaps, the biggest interest of all to be considered—namely, how this question of preferential duties will affect the League of Nations. I will venture to quote to your Lordships one of the points made by President Wilson in his Congress Message on January 8 of this year. He said— …the removal so far as possible of all economic barriers, and the establishment of an equality of trade conditions among all the nations consenting to the Peace and associating themselves for its maintenance. We understand, from a speech which was made by the Prime Minister last week, that on the Paris Resolution America has expressed no opinion; and I imagine that she has expressed no opinion either upon this new determination of His Majesty's Government. I would press upon the noble Earl, and upon His Majesty's Government, the great importance that there is of acting in the very fullest possible co-operation with the United States of America in this matter as well as in all others; and express the hope that before anything is definitely determined upon, still more before anything is done, they will have secured the assent and the agreement of all our Allies. As I say, I hope that this matter in all its various aspects, and as affecting all these various interests, has already received the deep and serious attention of His Majesty's Government.

That being so, I feel sure that there are some Papers which have been drawn up in the various Departments dealing with the question. If that is so, those are the. Papers for which I wish to move this afternoon—Papers which will show the reasons which have guided His Majesty's Government in coming to the conclusion at which they have arrived, and which will enable us (the people of this country, who will be so vitally affected by this matter) to judge for ourselves as to whether we approve of the conclusions and of the reasons which have animated His Majesty's Government. I beg to move.


My Lords, my noble friend the Secretary of State for War had undertaken to reply to the noble Earl this afternoon, but having been unfortunately called away elsewhere on important business he has asked me at the last moment to take his place. In these circumstances your Lordship will, I am sure, pardon me if my reply to the important questions which have been put by the noble Earl is less full or less authoritative than that which would have emanated from my noble friend Lord Milner.

Through the earlier part of the remarks of the noble Earl there seemed to run an impression that some novel and rather startling declaration of policy had recently been made by the Government with regard to Imperial Preference, and reference was made to a speech by my right hon. friend the Secretary of State for the Colonies, which appeared to the noble Earl to justify that inference. That is not how I, at any rate, or the Government regard the matter. Resolutions as to Imperial Preference have played a part in the proceedings I believe, of almost every Imperial Conference for years. I have not had time to verify my references in this respect, but I should be greatly surprised if they did not figure in the proceedings of every Conference for at least a decade past, presided over sometimes by members of the Party to which the noble Earl belongs. The last occasion to which I need refer is one with which I am most familiar, because I happened to be in the Government at the time, and that is the case of the Imperial Conference last year.

Now let us see exactly what passed on that occasion. The proceedings of the Conference are, as your Lordships know, laid before Parliament, and indeed the noble Earl himself referred to the particular Resolution which I am about to read. This is the wording of the Resolution which the Conference unanimously passed on April 26, 1917— The time has arrived when all possible encouragement should be given to the development of Imperial resources and especially to making the Empire independent of other countries in respect of food supplies, raw materials, and essential industries. With these objects in view this Conference expresses itself in favour of— (1) The principle that each part of the Empire, having due regard to the interests of our Allies, shall give specially favourable treatment and facilities to the produce and manufactures of other parts of the Empire— I call attention to that remark with regard to the interests of our Allies, in view of the great stress which the noble Earl laid upon the importance of acting only in accordance with the interests of our Allies— (2) arrangements by which intending emigrants from the United Kingdom may be induced to settle in countries under the British Flag. It is stated there, and is indeed a matter of common knowledge, that that Resolution was also passed at the Imperial War Cabinet, and therefore had behind it the double authority of the Imperial Conference and of the Imperial War Cabinet, and the policy there announced stands as the policy of His Majesty's Government at the present day. No departure has been made from it, and, so far as I know, no expansion has been added to it.

In the course of last year a statement on the subject was made by the Prime Minister in a speech which he delivered in the Guildhall of London, when he received the Freedom of the City. I have not the exact date in my mind, but I was present on the occasion, and I have verified my recollection of the words that he used. Perhaps your Lordships will permit me to read them to the House. This is what the Prime Minister said— We have given grave consideration to this problem, and have decided that in order to develop these enormous territories in the future" [alluding, of course, to the wider area of the Empire] "it is necessary that exceptional encouragement should be given to the products of each part of the Empire. We believe that a system of Preference can be established which will not involve the imposition of burdens upon food. We believe that it can be done without that, and, of course, with food at its scarcest and at its dearest, this is not the time to talk about putting additional burdens on food. But for purposes of Preference that would not be essential. You can secure that, by other means, and more particularly by taking measures which other lands have taken for improving the communications between one part of their dominions and another. By these means the products of one country inside this great Imperial Commonwealth can be brought more freely, readily, and economically to the markets of the others. Those sentiments are substantially identical with the quotation which the noble Earl read from the speeches of Sir Robert Borden in Canada and elsewhere.

Next we come to the proceedings of the present Secretary of State for the Colonies in a speech to which reference was made, alluding to the fact that he had been chairman of a Committee to advise the Cabinet as to the best method of carrying out this principle when the time should arrive—the principle being that where duties are in operation, or where new duties are imposed, in the United Kingdom, preference should be given in respect of those duties to the production of the Dominions and of the Colonies; and that principle, my Lords, the War Cabinet, acting in accordance with the previous history that I have described, affirmed.

The noble Earl asked me more than once for the text of the Resolution or Resolutions. I am afraid I have no idea to what he referred. There is no Resolution or Resolutions. There was a decision of the War Cabinet. The Resolutions of the Imperial Conference are published annually, as a matter of course; and if the matter comes before the Imperial Conference on this occasion and it sees fit to reaffirm its declaration of last year, or substitute a new one, that will be made public. The noble Earl himself pointed out that Sir Robert Borden had somewhere or other stated that the question had not been specifically under discussion at this Imperial Conference. I believe that to be the case; not that it has been altogether excluded, because of course the Conference never meets without discussing economic matters, but no resolution, so far as I know, has yet been tabled, discussed, or passed. In the same way, the matter has not yet been before the Imperial War Cabinet this year. Obviously it is a subject that ought to be and will be discussed at the Imperial War Cabinet before the statesmen from our Dominions go back to their homes. No decision so far has been arrived at, except one, as the noble Earl himself pointed out, quoting Sir Robert Borden, which commits the views and action of His Majesty's Government at home.

The noble Earl laid great and becoming stress upon two considerations. In the first place, the importance of acting in complete concert with our Dominions in this matter; secondly, assuming their agreement—because His Majesty's Government have, as has been shown, come into line with the policy which they have advocated for years—to the even greater importance of acting in concert with our Allies. This is all the more necessary because, as he pointed out, some of these Allies—I think he mentioned Belgium—have suffered cruel injury from the ravages and shocks of war, and it is clear that no policy ought to be adopted by us without regard to those considerations and without prior conference and consultation with them.

He further alluded to the immense importance of carrying the United States with ourselves. That we all freely admit, and we may admit it not only on general grounds but because of its obvious impor- tance for the future. The fact will emerge that, at the end of the war, the British Empire and the Allied Nations in combination—if, as I hope, they remain in combination—will be masters of the greater part of the economic resources and raw materials of the world. If it is necessary at any time to use that weapon against the enemy it is quite obvious that it can only be used with advantage if there is agreement among those who wield it. Therefore it is that, in the other House of Parliament, my right hon. friend the Chancellor of the Exchequer has more than once, in reply to questions during the last few weeks, said that when Parliament re-assembles in the autumn it will be right and just that a full statement should be made to Parliament on this subject. Your Lordships would hardly expect that it should emanate from me in the closing hours of the present session in any circumstances; and still more, in view of the fact that there has not yet been time for that final discussion with our friends from the Dominions—and, even less, with the Allies—is it desirable to postpone the full announcement which has been promised until that collaboration has taken place. When that has happened in the autumn I can assure, the noble Earl that there will be no reluctance to give the House and the country full information on the subject which he has raised this afternoon.

Now, may I allude to one or two of the positions taken up by the noble Earl in his speech? He once again placed before us the old and familiar argument that Preference would be of no use to the Dominions unless food taxes were imposed. That is what the noble Earl himself says; but the remarkable thing is that it is not what is said by the Dominions themselves. It is certainly not what is said by their representatives when we discuss the matter with them here. They tell us that they will be only too glad to accept Preference in any form that may be decided upon as suitable. Surely, my Lords, Preference is not a question of tariffs only. Tariffs need not be the most important subject of Preference.

The noble Earl talked rather ominously about a freight war. Upon that no one would say that His Majesty's Government should embark; but as regards transport and shipping, I should have thought it by no means impossible to treat parts of the Empire better than we treat other people. And, even if it were a question of tariffs only—and I have been arguing that it is not—surely that does not mean that you need have food taxes. You can, of course, impose taxes on other materials. The noble Earl went at some little length into the question of the difficulty of so doing, and he analysed some of the raw materials and other objects which might be the subject of such Preference. He will not expect me this afternoon to follow him into that branch of the subject; but, speaking generally, I would reaffirm that all that the Dominions, so far as I understand, ask is that when you do impose taxes, if you decide to do it, you will give them Preference.

The noble Earl then alluded, in terms of criticism if not of disparagement, to the oratorical performances of Mr. Hughes. I think, if I may say so, that the noble Earl was a little too sensitive upon this point. When the statesmen from the Dominions come here it is quite true that they come primarily to discharge their functions as members of the Imperial Conference and the Imperial War Cabinet, but they also come—and, indeed, they are expected—to make speeches on almost every platform throughout the country. That, I believe, in their opinion is by far the hardest part of the ordeal which they have to undergo The fact remains that while they are here they are much more acceptable as speakers throughout the country than any of us are. Nobody asks a war Cabinet Minister to come and make a speech, but bring a Minister from the Dominions, and thousands assemble to hear him, wherever he is kind enough to speak.

Broadly speaking, these statesmen, it seems to me, do accept the theory that they are not here to interfere with the domestic policy of our Government, and I have not, in so far as I have followed the Speeches of Mr. Hughes, traced any unfair or improper desire to dictate to us as to what our politics ought to be. But I think there would be considerable danger in muzzling Mr. Hughes, or in muzzling any representative of the Dominions when he comes over here; and what I would suggest to my noble friend is this—that if he is dissatisfied with these performances, or if he thinks they transgress the bounds of decorum, he should himself enter into the field against Mr. Hughes. I am certain that many platforms could be found in the country which would be adorned by the presence of the noble Earl, and I cannot conceive a more interesting spectacle myself than a meeting addressed both by Mr. Hughes and the noble Earl. Anyhow, I think you would hardly expect me in this House to say more in defence of Mr. Hughes than that I believe, so far as I know, that he has not knowingly transgressed the very sound principle which the noble Earl has laid down.

The noble Earl asks me another question about "most-favoured-nation" treaties. With the general principle of the denunciation of treaties which contained "most-favoured-nation" clauses the Government has, in another place, expressed its agreement. More than once I recall that my right hon. friend the Chancellor of the Exchequer has said—as, indeed, the noble Earl recognized—that the matter is one of the very greatest complexity, and he has promised a full statement upon the matter after the recess, which, if your Lordships desire, can, of course, be made also in your Lordships' House.

The last question to which the noble Earl referred was this. He seemed to be possessed by the idea that the adoption of a system of Preference would jeopardise the prospects of the institution of a League of Nations, to which he, in common with so many members of your Lordships' House, attaches such extreme importance. I listened to his argument, but I own I found some difficulty in following it. Why should it have that result? Does the noble Earl contend that nations cannot enter into a binding engagement for the maintenance of peace in the future—which is the object of a League of Nations—without pledging themselves to the mutual adoption of free imports? Is no nation to be admitted to a League of Nations unless it pledges itself either to have no tariffs, or not to differentiate in its tariffs between imports from its own possessions and those from foreign countries when they are members of the League? If the noble Earl takes that line I must confess that I think he is raising a new, an unnecessary, and what might, in the last resort, very likely turn out to be an insuperable, obstacle in the way of the realisation of a League of Nations. It is difficult enough in all circumstances. Do not let us go out of our way unnecessarily to increase those difficulties.

In the debates which we had a few weeks ago various ideas were expressed as to the composition of the League of Nations, and what nations should, or should not, belong to it. But one thing is absolutely certain. A League of Nations is wholly unthinkable that does not comprise France and the United States of America. Let me point out to the noble. Earl that both these countries are firm and unswerving adherents to the principle of Preference within their respective dominions, and, indeed, they carry it much further than it has ever been proposed that we should do in this country. Let me state what I mean. The United States differentiate strongly in favour of Cuba and the Philippines; France differentiates in favour of her great colonial empire. Are we going to decline to join France and the United States in a League of Nations unless they surrender their traditional and deeply-rooted convictions in this respect; and, on the other hand, is it contended that they will decline to join us because we have decided to adopt, perhaps rather late in the day, a system to which they have clung so tenaciously for so long. Therefore I venture to suggest that to mix up the question of Preference with that of a League of Nations is really to confuse the issue and to run the risk, which I am sure the noble Earl would be the last to wish to incur, of spoiling the chances of both.

I have now answered all the questions which my noble friend put to me, with the exception of the one about the production of Papers. For the reasons I have stated there are no Papers, to the best of my knowledge, which it would be possible at the present moment to lay; but when we have the fuller statement, which I have promised in the autumn, it will be open to the noble Earl or to any one else to ask that Papers should be laid in support of any declaration that may be made.


My Lords, if I ask permission to intervene in the debate for a single moment it will only be because, in days gone by, I took a very prominent part in all the discussions with regard to fiscal and tariff reform which were, so common and so constant in those days. I listened with great satisfaction to the speech of the noble Earl the Leader of the House, and it confirmed the impression I had formed during the delivery of the speech which immediately preceded him, that this really was a somewhat inopportune time to have raised many of the questions which the noble Earl has raised.

There is nothing in the speech of my noble friend opposite that more cordially appeals to me than what he said about Belgium, and in that I am sure your Lordships' House will unanimously concur. I do not agree in any respect with what fell from the noble Earl below the gangway with regard to Mr. Hughes. It has been my pleasure to make the acquaintance of Mr. Hughes, and I have heard him speak on more than one occasion. I am not in the least surprised at the popularity he has earned in speaking in different parts of the country whenever he has appeared on a public platform, and I am certain it indicates that, in the opinion of the British public, the views which he has advanced are not so unpopular as the noble Earl would have us believe.

I wish to say nothing further upon this point myself, but I should like, to add that whenever an opportune time arrives for the discussion of the question of Preference generally—and the time will come when we shall have to face the Herculean task of meeting our obligations when the war is over—I would utter just one word of warning with regard to that industry which is connected with the production of food. It is this, that if Preference is given to any other industry in this country the agricultural interest, which after the war will resume the position it always occupied before, as the largest, the most important, and greatest industry in the whole of the United Kingdom, will never consent to be left out in the cold.


My Lords, I came down to the House feeling not a little regret that the necessity had been imposed, as I thought, upon my noble friend below the gangway, or upon some other noble Lord holding similar views to his, to raise this question at this moment. It undoubtedly appeared to me, as it also appeared to him, that this particular question of Imperial Preference had fallen into a new phase, and that it had received, definitely, a new impulse, from the speeches lately made by Mr. Long and Mr. Bonar Law, and that it was therefore almost imperative for my noble friend, or somebody else, to endeavour to elicit from His Majesty's Government the actual facts.

We have heard now from the noble Earl who leads the House that nothing has happened at all; that there has, in fact, been no advance made either by the War Cabinet or anybody else in the direction of Imperial Preference over and above what, according to the noble Earl, has been the view of the Imperial Conference for a great number of years past, even, as I gathered from him, before the war. I am not certain that I can accept the accuracy of that statement, but the noble Earl's explanations will disabuse a great number of people of the opinion which they have formed, as we had, from what has happened within the last few weeks. It certainly was formed at any rate by Sir Robert Borden. The noble Earl passed rather lightly, I thought, by Sir Robert Borden's speech, and it was not clear whether he had even seen it. But it was quite evident that Sir Robert Borden's speech was made with the deliberate purpose of removing the possible belief, which was beginning to enter the minds of a great number of persons, a system of Imperial Preference having been accepted, as we all believed, in a new form by the War Cabinet, and therefore liable to be proposed in Parliament at the earliest possible moment, presumably after the war, that the Dominions might be expected to agree to such a proposal very probably involving a tax on food, with regard to which Sir Robert Borden carefully guarded himself.

We are bound to remember, after all, that this is not a new question, although the circumstances are so new. We are sometimes told that the war has altered everything, and that, former beliefs and convictions may be held to be swept away by the altered circumstances. But the war has not altered a number of elementary facts. Two and two still make four, not five; and in whatever respects fiscal policy may be altered by circumstances and the needs of the day, it need not be assumed that people will change their minds about what they believe to be the fundamental troths upon which political economy is based.

I confess that even after the noble Earl's explanation I am not entirely clear in my own mind as to what the; actual position with regard to Imperial Preference is. There is no need to go back upon ancient history, when we all remember that the year before the war Imperial Preference was announced as the accepted policy of the then Opposition. They pledged themselves to bring it into operation as soon as possible if they were returned to power, as it always seemed possible they might be after another General Election, and the question of a tax upon food was left in a dubious state. The general position appeared to be that Imperial Preference would be instituted without a tax on food, but that, having got the principle assorted, efforts would then be made, in consultation with the Dominions, to pass on to the position of preferential duties upon food, on the ground, which, after all, is not ours but Mr. Joseph Chamberlain's, that for anything like a wide or effective system of Preference you must have at any rate a tax on food even if you do not desire to have one on raw materials.

The noble Earl tells us that now the Dominions would welcome the establishment of a system of Preference, even if in some case they might apparently get nothing by it at all. My impression is that, for instance, on the existing taxes New Zealand would get practically nothing out of a preferential tariff. We, of course, can take it from the noble Earl that the mere assertion of the principle is so valuable that it would be welcomed even without any material advantages whatever. But I confess I regret that it has been necessary to resuscitate this question at this moment, indeed on somewhat new lines, in spite of what has fallen from the noble Earl, and largely for the reasons which have been stated by my noble friend below the gangway. It seems to me altogether premature even to mention Colonial Preference, and certainly premature to put it, as it is now put, as the one fiscal change on which His Majesty's Government are determined, before it is possible to state what the general fiscal policy of the Government will be in respect of the war and the conditions arising out of the war.

I had the honour of being one of the representatives of His Majesty's Government at the Paris Conference, of which we have heard so much, in company with Mr. Bonar Law and Mr. Hughes. Nobody yet has finally decided or; behalf of the Allies what the future dealings either of this country or the other Allied countries will be in commercial matters with Germany, when any such dealings will commence, and how far they may be limited by the discretion of the countries concerned. And rightly, because these limitations must obviously play almost a primary part—certainly a very important part—in conducting negotiations for peace, and to discuss them at present would be altogether futile. Neither have the Allies so far been able to arrive at, or at any rate—if the various consultations which have, been going on have led to an agreement,—to announce, the various terms on which we shall be able to trade among ourselves during the transitional period after the war, or for the further period ahead.

The noble Earl mentioned Belgium, and the wrongs of Belgium, which we are pledged to right. Who can say what the necessity of righting the wrongs of Belgium may impose on us in relation to the question of Preference within the Empire? I am not at all prepared to say that this country would agree in many material matters to give worse terms to Belgium than to all countries within the Empire, and yet a system of Preference, blankly and uniformly adopted, would have that result. Then, again, the position as we examined it at the Paris Conference has been altered in the most material degree by the conversion of the United States from a neutral Power, as they then were, to an Allied power—a fact which of itself shows how wise we were in 1916 not to attempt at that time to formulate definite proposals. I cannot help feeling, therefore, that it is a misfortune that His Majesty's Ministers, sadly and painfully misunderstood as the noble Earl has endeavoured to show us, have somehow put themselves into a position where they have caused it to be supposed that this question of Imperial Preference is raised in the very front line of matters which have to be dealt with at as early a date as possible.

My noble friend, the noble Viscount behind me, who has just spoken, naturally is greatly rejoiced, because he has been all his life a most convinced champion of Protection in all its forms, and since I believe it to be the case that it is impossible to establish a system of Imperial Preference without a system of general Protection—of that I am entirely convinced, and challenge contradiction upon it—I naturally regard these proposals as part of a great whole. Holding, as I do, the views of one who believes that Free Trade for revenue should be the rule subject to certain exceptions, practically all of them concerned with national security in one form or another, I naturally take a different view from those who, like the noble Viscount behind me, believe that a protective system should be the rule, and that concessions should only be made to free imports in certain cases of necessity.

The noble Earl replied to complaints which were made by the noble Earl below the gangway regarding some of the speeches made by my right lion, friend Mr. Hughes. It undoubtedly has been conceived here that Mr. Hughes has somewhat overstepped the line in some of the speeches he has made in recommending action by Government on matters which are held to be of domestic rather than of Imperial concern—domestic concern in the same sense, as my noble friend pointed out, in which Australian conscripton is a domestic concern, although it is also in the highest degree an Imperial concern. I think this has to be remembered about Mr. Hughes in his discussion of fiscal matters. I do not conceive that he looks at them from the point of view either of a Protectionist or of a Free Trader; he looks at them simply from the point of view of an opponent of Germany. So far as I am able to judge, although I have no doubt he would express an opinion in favour of Imperial Preference, his prime desire is to found our system of Imperial trade on a rule that we should have no dealings with Germany, either immediately after the war, or indeed at any other time, so far as it is possible to look ahead. And holding that view as he does, his speeches on the subject are naturally highly coloured.

I have no desire to discuss the particular points of Imperial Preference—the limitations of taxes on food, the possibility of taxing some raw material, and the like; but I desire to say this, that if all that is meant by a system of Imperial Preference is a system of subsidised steam-shiplines for the benefit of the Dominions and Colonies and of nobody else, that may or may not be a right thing to do, but it is not Imperial Preference in the sense in which it is ordinarily understood. The phrase "Imperial Preference" has become a term of art meaning tariffs. As the noble Earl pointed out, there are some other respects in which Preference can be given to the Dominions or the Crown Colonies; but if tariffs are excluded from this new scheme, then I think the term loses some of its meaning to most people, and some of its charm to many people, such as my noble friend behind me.

As it is, I am glad that this debate has taken place. What my noble friend believed and what, a great many of us believed to be an important matter has been minimised and pared down to the smallest dimensions by the noble Earl, opposite. I suppose we are allowed now to go home and forget all about the matter. I hope we may assume that if speeches are made in the autumn the country will not be stumped in the interests of Imperial Preference, either from the Tariff Reform point of view or any other: that, in fact, the whole business has only come up by a pure accident and something of a misunderstanding, and that, being as we are all united in our devotion to the Empire, we can go home and feel that we are all perfectly agreed.


I did not like to interrupt my noble friend, but I wish to say this, that when he described me as the champion of Protection in all its forms, that his never been my view or the policy that I should wish to pursue. I have been, on the other hand, a determined opponent, from the first time that I took part in politics, of a system which was wrongly called free Trade, for I have never yet learnt and I do not know to-day of any leading country in the world with which our trade is free.


I am sure my noble friend knows that I have no indention of misrepresenting his views, which I hope are well known to the world.


My Lords, I do not think the occasion has come for a full-dress debate on the subject of Free Trade and Tariff Reform, but, after such a speech as that to which we have just listened from my noble friend the Leader of the Opposition, it is quite impossible for those who hold my views and those of the Party which I represent to keep their silence, because such a speech is the more noteworthy, coming as it does immediately after the speech of the noble Earl below the gangway and after the references to this subject of Lord Emmott in the debate yesterday.

As I understand my noble friend the Leader of the Opposition, he and his friends of the Liberal Party adhere absolutely and without qualification to the doctrines of Free Trade which they held before the war, and they think that any proposals for Preference within the. Empire are premature. To us that is a most amazing confession. We believe the experience of the war to have shown that the Free Trade system, as pursued and believed in by the Liberal Party before the war, is incompatible with national safety. I put it no lower than that—incompatible with national safety. And to secure national safety the qualifications and reservations would have to be so numerous and so large as absolutely to destroy that system, in the belief of which the Liberal Party have flourished for so many years.

As for saying that it is premature to consider whether there should be Preference within the Empire with our Dominions, our Colonies, and India, that language almost seemed to us strained and unintelligible in the days of Imperial Conferences before the war; but when such language is used to-day, after the way Australia, New Zealand, and Canada, and the other parts of the Empire, have stood by us in this war, and seeing that they still ask for that Preference which was consistently refused them before the war, I take the earliest opportunity of dissociating myself entirely from the view expressed by the noble Marquess. Nor do I think that he gave an accurate account of what my noble friend the Leader of this House said. What my noble friend said was that no fresh decision in respect to Preference had been taken this year; but the Resolution which he read out to us from the proceedings of the Imperial war Cabinet of last year, and the Imperial Conference of last year, surely mark a completely fresh departure in the history of this matter. It is quite true that time and again this subject his been brought up at Imperial C inferences, and we know the attitude which the Government, of which my noble friend was an ornament, always adopted towards those Resolutions when brought forward by Sir Joseph Ward, or some other Colonial statesman. But, according to my recollection and understanding of the position, for the first time last year His Majesty's Ministers in this country joined with His Majesty's Ministers from the Dominions in asseverating the necessity for that policy, and passed Resolutions in the Conference and in the War Cabinet to which His Majesty's Government here in the United Kingdom was just as much a partner as His Majesty's Government in the Dominions over the seas. Therefore, while it is quite true that no fresh departure has been made this year, a very fresh departure was made last year, and one which will mark the turning of public opinion. Because I do not mind prophesying here that my noble friends the Liberals are absolutely out of touch with national feeling if they think that the nation, Liberal or Conservative, is any longer reluctant to accept the principle of Preference with our brethren beyond the seas, or that at the next General Election you will not, whatever Party is returned to power, have an almost unanimous national vote for doing all that is in our power to assert that doctrine of Preference.

Nor is the noble Marquess behind me justified in whittling down my noble friend's statement about the nature of Preference. My noble, friend did not say that communications and transport were the only forms of Preference. He said that tariffs were not the only forms of Preference, and that there were, in addition to this, means of assistance through transport and communication. That is a totally different statement from the one which the noble Marquess tried to fasten on my noble friend. I do not want to go further into this matter to-day, but I could not possibly lot that speech pass without making my protest.


My Lords, I approach this question from a somewhat different angle from that which I believe your Lordships have taken. I have always been a Free Trader, not because I did not think that a sound tariff was by far the best policy, but because I have never been able to see the way by which a country which is ruled by Parties and by votes could hope to obtain a scientific tariff. I was in Melbourne when the first tariff of the Commonwealth was being framed, and what I saw and heard there confirmed me most strongly in that view. It was said at the time that if the Parliament which was framing that tariff had sat at Sydney, which was the capital of the Free Trade Colony of New South Wales, the tariff would have been something very different. I believe that to be true, but if it is true it means that the mere chance of the location of the place at which Parliament sat determined the form of tariff. Could anything be more unscientific than that? 0n Monday last Lord Emmott gave us what seemed to me to be the; wisest possible advice. He said "Postpone all tariff questions till after the war." I believe that this is the right course for the country to take now. We have to win the war, and when the war is won we can again talk about questions of Tariff Reform. It seems to me that a wrangle between Tariff Reformers and Free Traders and Protectionists during the war would be really worse than unprofitable. When the war ends there will be many uncertainties, but one thing seems to me to be absolutely certain—that there will be a frantic scramble among all countries for raw materials, and we must safeguard our interests and those of our Allies in the scramble which I believe must take place. I believe that the best way to do that would be to pass the Imports and Exports (Temporary Control) Bill, which is hung up somewhere in the Expiring Laws Continuance Act to be voted afresh every year. By that means it seems to me that we should obtain a lien on our own raw materials, and that we should secure an orderly distribution to our Allies. The enemy countries could then have the surplus, if there were any, which seems to me to be very unlikely. But if that is not done I am not at all clear that Germany may not outwit and outbid us in the scramble which I think is certain to come.

We do not know what stocks of raw material are under the control of Germany at this moment. We do know that such stocks have been discovered in America; and we have been so much more tender to German interests in this country than the Americans have been that it is quite possible that considerable stocks are in some way or another now controlled by Germans waiting to be used when the end of the war comes. I think that in a promiscuous scramble which may happen after the war Germany might succeed in getting an undue amount of raw materials, which would be, ostensibly of course, sent through neutrals. So that I believe that the plan I suggest is the safest course, and I have reason to believe that it will be welcomed by France and by Italy, and probably also by the United States. I believe also that it would have considerable effect and exercise a great amount of pressure in Germany. It would bring pressure to bear upon Germany because so long as that law continued so long would Germany be restricted in her materials. It would therefore be to her best interests to behave in the best possible way so that the time might come when she would have an equal chance in free markets for obtaining the materials which she requires.


My Lords: I was very anxious for some information as to the policy of the Government as regards imperial Preference, but for very different reasons from those of the noble Earl who opened the discussion this afternoon. I was anxious to know what the policy of the Government is, because it seems to me that the position of this country is very serious, and that the outlook for the future of our trade after the war is full of anxiety.

I disagree with what fell from the last speaker and also with the view of the noble Marquess on the Front Bench. I think it is absolutely important that this question of Imperial Preference, of fiscal policy, should be decided now during the war, and that we should not wait till the end of the war before we come to a decision on this question; and for this reason. It is absolutely important for manufacturers to know during the war under what conditions the trade of the country is going to be carried on after the war, that they may lay out their plans with proper forethought for providing employment for those masses of our people who will be no longer in the employment of the Government at the end of the war. I look upon the present position as serious, because in every war in which this country has been previously engaged the trade and shipping of the country have prospered in spite of the war. In the present war conditions have been very different, as we learnt in the debate which took place in this House on Monday last. I think I am correct in saying that the noble Lord, Lord Emmott, told us that from his experience a good deal of our international trade had gone without prospect of recovery.

A fact which was not mentioned in that discussion, and which impresses me profoundly, is that the balance of imports over exports has now risen to something like £80,000,000, and during the first six months of the present year amounted to £400,000,000. In pre-war days the balance of imports over exports represented the earnings of our shipping and the interest on our investments abroad. During this war the Mercantile Marine has suffered enormous losses. Lord Inchcape told us, I think, that 8,000,000 tons of British merchant shipping had been sunk; and the shipping that has not been lost is under Government control. Whereas the shipbuilding of the Allies as a whole has, I believe, now overtaken the losses due to enemy submarines, that is not the case with regard to British shipping. Our investments abroad are largely in the hands of the Government; and, therefore, the present position is that the balance of our imports over exports is largely increasing our indebtedness to foreign countries, and it is of more vital importance than ever for us to keep our export trade going.

I would now like to say a few words on what seems to me to be the chief lesson to be drawn from our experience during this war, which has caused so many people—Liberals as well as Conservatives—to change their opinions. The first lesson which I think we should draw from the war is that every country should in its own interests establish, as far as possible within its own borders, all essential industries, of which the most important are the production of food-stuffs and materials for munitions. I think it is true to say that the loss of her oversea trade would long ago have brought Germany to her knees if she had not for many years before the war, of set purpose, pursued the policy of building up essential industries by securing to her own producers their home markets. What was the result? A phenomenal progress in agriculture and in commerce of Germany; emigration ceased, and there was a large growth in population. We pursued a very different policy, and what was our position at the outbreak of the war? We were dependent on foreign countries for a large proportion of our food-stuffs, and for articles essential in the production of munitions; and that despite the fact that we had in the British Empire the raw materials for the production of many of these articles. I refer especially to the zinc concentrates from Australia which were sent to Germany to be smelted under the German Metallgesellschaft, and we then bought the zinc back from Germany, with the result that, when war broke out, our ordinary supply of zinc, which was very essential for the manufacture of munitions, was cut off, and we had to pay for zinc from America something like £100 a ton, when that commodity was worth a few days before from £20 to £22.

There is one other point which very much impresses me in connection with Imperial Preferene—namely, the question of settling ex-Service men in the Dominions, which is occupying a great deal of public attention. The Dominions can give inducements to ex-Service men to settle by offering land on favourable terms; but the British Government has no right, no Government has any right—I do not suppose it would attempt to do so—to prevent ex-Service men emigrating to any country where they can sell their labour or employ their capital to the best advantage. If we want to ensure British emigrants remaining under the British flag we must give a preference to the products of the Dominions. I think that there can be no possible question that, if Imperial Preference had been adopted when Mr. Chamberlain proposed it, the British Empire would have gone into this war very much stronger as regards population, and would have been in a very different position from that in which it is to-day. It is possible that many people—like the noble Earl who opened the discussion this afternoon—may adhere to the old principles of Free Trade; but the lessons and experiences of this war have caused many others to alter their opinions. It may, perhaps, interest the noble Marquess of the Front Bench to know that my father—than whom there was no more staunch champion of Free Trade for over eighty years—in the last year of his life completely changed his opinion and became a firm believer in Imperial Preference; and we who had differed on this subject for fifteen years were in agreement during his last year of life.

As I said at the beginning of my remarks I feel great anxiety about the present and the future position of this country. I am not sure that, in the prosecution of the war, the permanent interests of the country have not been too much lost sight of. I welcome the announcement that the Government intend to go forward with a policy of Imperial Preference, and I trust that ere long we shall know that they have taken effective steps in that direction.


My Lords, in asking leave to withdraw my Motion I should like to offer my best thanks to the noble Earl the Lord President for the very full answer he gave to the Question I put on the Paper. The fact that he was willing to take the place of the noble Viscount the Secretary of State for War is another example, if he will allow me to say so, of the unremitting labours which he is always ready to place at the service of this House. I am very much obliged to him for having done so.

I will only say that his statement was a matter of very great satisfaction to me, as I am sure it will be to those who think with me. I understand that there is nothing new on the part of His Majesty's Government; that no new policy was inaugurated when Mr. Walter Long made his speech. The satisfaction which I feel is not likely, I confess, to be shared by those who do not agree with me; and I am afraid the announcement will be received with a good deal of dissatisfaction by some of the noble Earl's own supporters. But, in view of the fact that there are no Papers beyond those circulated last year, I ask leave to withdraw my Motion.

Motion, by leave, withdrawn.