IMPERIAL PREFERERENCE.

HL Deb 26 June 1924 vol 57 cc1013-68

VISCOUNT LONG OF WRAXALL had given Notice to move, That this House profoundly regrets the decision of the Government not to endorse the Tariff Preferences proposed at the recent Imperial Conferences, or the guarantee to maintain the Sugar Preference for ten years, as also their declaration that they reserve full liberty to propose to Parliament the reduction or abolition of the duties on all the commodities to which Preference now applies, and records its belief that this unsympathetic attitude to a policy which has been unanimously approved by all the States of the Empire at successive Conferences, must seriously weaken the stability of our Imperial trade relations and prejudice the unity of the Empire.

The noble Viscount said: My Lords, in placing on the Paper the Resolution which stands in my name I need hardly say that, as a practical politician, I did not do so with any hope that it would influence or affect the decision at which His Majesty's Government have arrived, nor did I anticipate that it would provide a suitable opportunity for their supporters on the Bench opposite, to announce their conversion to a new policy. My first object is that the case might once again be stated. My second object is this. I know of my own personal knowledge that if your Lordships think fit to carry the Resolution by a substantial majority supposing there is a Division, it will convey profound satisfaction and some degree of comfort to the Oversea Empire. Our Oversea Dominions, the Colonies and the Protectorates are very anxious that they may be given soma reasonable ground for hoping that the last word has not been said on this question, that the door has not been once again barred and bolted. They are ready to wait and frame their own policy and actions if this country—their own home, as they call it—will only give them some reasonable ground for entertaining hope. If your Lordships see fit to adopt this Resolution it will go a long way towards giving them increased hope and confidence for the future. Therefore, it is mainly for those two reasons that I have placed this Motion on the Paper.

When I put it down I was not aware that the debate was coming on so soon in the House of Commons, but I need hardly say that as a convinced and devoted advocate of the policy of Imperial Preference I rejoice at the result of the Divisions in the other place. From all the information I have received—and I think it is reliable and accurate—if it had not been for the great pressure exercised by His Majesty's Government upon members of their Party, the majority of six by which they rejected the first. Resolution would have been turned into a considerable minority. There is time yet, but there is not too much time, and that is why I am so anxious your Lordships should record your views and opinions at this moment. I was profoundly disappointed by the decision at which His Majesty's Government arrived in regard to this particular question. I had hoped that it was one of the many questions on which a Labour Government, coming into office for the first time, might find themselves untrammelled by previous utterances; that they would find their political treasury did not contain those shibboleths which have been so often a difficulty and stumbling block to the older Parties. I hoped that they would look at this question with a wide and far-seeing vision, that they would realise all that has happened, that after these Conferences which have been held they would realise that the time has come when this country ought to meet the rest of the British Empire at least half way.

It was my great privilege and honour to be at the Colonial Office in the years 1917 and 1918 when, owing to the pressure of the war, the Prime Minister was unable to preside over any of our Conferences from first to last, and it fell to my lot to fill that honoured post. I came into the closest contact with the representatives of our Dominions. It was extremely interesting to note that while, in the first year, their spokesmen emphasised the fact that they wanted no return for the favours they bestowed upon us—there was not a suggestion (in some cases there was a denial) of the existence of any desire on their part for a return on ours—in 1918 the situation had altered. They came to the second Conference with minds greatly changed on this aspect of the case. They declared in emphatic and unmistaken language that they must have an adequate return for the policy they had adopted, and that we could not expect their people to support them in a policy which was so entirely ignored by the Government here any more than our people could support a Government here which carried out a policy which was not appreciated and recognised by those on whose behalf it was conceived. This feeling grew. After I left the Colonial Office I saw at different times a great many of our representatives from overseas and I found that they had gone a step further in the direction they had taken, for the first time I believe, in 1918. They were not only ready to ask that they should have concessions, but they were prepared to make it quite clear that their demands, or at all events their suggestions and requests, must be met.

I notice, in the course of the discussions that have taken place, that some one—I think it was a Minister—advocated the presence at these Conferences of members of the Opposition as well as members of the Government, and he went on to say that if this was adopted there would be no risk of the Conference discussing things upon which, from the point of view of the British Government, they ought not to make recommendations. That statement was obviously made by somebody who has no knowledge of the constitution of an Imperial Conference, or of the way in which its work is done. You might have every member of His Majesty's Government at the Conference, every one of whom would be prepared to argue against Preference, but that could not, and would not, prevent the Conference, if it saw fit, from dealing with the question, and, if it had a majority, passing its own Resolution, or if it were in a minority, recording its views. The whole business of the Conference, from the first day of its meetings to the last, is entirely in the hands and under the control of the Conference itself, and to suggest that, by altering its constitution, you might prevent certain things being done, is to propose such a complete change in its constitution and in its methods that I am perfectly certain that the proposal would be resisted with the greatest determination by the Oversea Dominions and Colonies; and they would be right.

I cannot help feeling that, although the Divisions, and so on, have gone against us, there are evidences abroad of a growing change in public opinion, and I look forward to the time when there will be a much more general movement in support of this policy than is possible at present. I hope that, to-day, some member of His Majesty's Government, or someone speaking for the Liberal party, may tell us in a little greater detail more fully what are the reasons that have made them run the risk of giving this offence—for it is nothing else—to our self-governing Dominions and refusing to continue the Preference which has been already accorded.

I put this in an altogether different position from the further proposal to extend that Preference by new taxes. What objections are there against that course? I can conceive of two results which, it might be feared, would follow the adoption of Preference, but I can show, I think, that they have not followed it in so far as it has been at present practised, nor is there the least risk. In the first place, it might be urged that Preference would lead to an increase in the cost of living. We know from abundant evidence that this has not been the case. It might be urged, again, that we are an island almost entirely dependent for our existence upon our supplies from foreign countries and that therefore we could not do anything which would tend to lessen those supplies. I will come to this point in a moment and I think I shall be able to prove to your Lordships' satisfaction that there is no foundation whatever for this statement; that, on the contrary, so prolific is our Empire and so inexhaustible are its resources and so manifold is their character that we could, to-morrow, supply ourselves with every one of our needs—not merely necessities—if we chose to develop the territory that is our own and that is under our own flag.

I know that both the Labour Party and the Liberal Party are very indignant when statements are made in speeches by members of the Party to which I belong, seeming to indicate that we think we have a monopoly of Imperial and patriotic views. We have no desire to do anything of the kind. I speak as an old Protectionist, having been one all my life, but I have always said that while those are our views they could never be translated into practical working until the great mass of the people of this country shared them and were prepared to accept them if they were asked for their endorsement. So anxious am I to secure co-operation amongst all Parties that I certainly would not say anything that could be translated into a charge against my opponents of want of Imperialism or want of patriotism. I know well that when the issue is one of peace or war, when the stakes are the honour of our country and the freedom of our people, there is no division among the Parties; all Parties act together in the common cause and are prepared to make the same sacrifices. But this is a different situation. This is a situation in which all parts of the Empire are asking the Mother Country to join with them in making one the trade of the Empire, her resources and her markets, and on that point the two Parties to which I have referred are consistent in their refusal to co-operate.

I hope it will not be regarded as offensive if I say that it seems to me that the only reason which can be advanced for this policy is that these Parties feel bound to carry out that which is really the doctrine, of a bigoted Free Trader. It is in the hope that as time goes on this may be altered that I have moved this Resolution to-day, and when we are blamed for imputing to our opponents want of patriotism, or of public or Imperial spirit, it must be remembered that these are questions upon which people are apt to regard deeds as more important than words. Certainly this is the case with our Oversea Dominions. They look for what we are prepared to do, and they think far more of that than of what we are prepared to say. If, therefore, any such inference as I have mentioned is drawn from these state- ments, it is not our fault. It is the inevitable consequence and the natural result of the policy which has been pursued by the Parties in question.

The situation to-day, and indeed ever since the war, is entirely different from anything with which this country has ever been confronted before. I find in a statement made by Mr. Asquith in the House of Commons on August 2, 1916, by far the best expression of the view to which I am trying to give utterance of any that I have yet seen. I quote this statement, not with the smallest desire of bringing it up against that most distinguished man: I have no reason of the kind in my mind. I quote it solely because, with that almost matchless power of expression and language which he possesses, he seems to me to have described the case exactly as it is. He said—and I remember the speech very well— No one who has any imagination can possibly be blind to the fact that this war, with all the enormous upheaval of political, social and industrial conditions which it involves, must in many ways, and ought, if we are a rational and practical people, to suggest to us new problems"— It is to the words which follow that I would ask your Lordships' special attention— or possibly modifications in the solution of the old ones. I would regard it as deliberate blindness to the teachings of experience if you were to say we had forgotten nothing and had learned nothing from a war like this. Can the case be put better or in more forcible or clear language than that which I have quoted to your Lordships?

If that was the case in 1916, when the war was only two years old, before we had had the awful experiences of 1917 and the early part of 1918, how is it now, when we have found to our dismay and sorrow that the conditions of peace are thoroughly unsatisfactory, that the world is in a state of turmoil and we ourselves are suffering from trade depression and trade difficulty of the gravest kind? Surely, the attitude of public men and Parties who oppose a change of this kind is rightly described by Mr. Asquith as "deliberate blindness." I hope the time may not be far distant when we may see a greater change even than we see to-day.

I said there was one other reason which might account for this—namely, that we might be deficient in the necessary materials for our existence, and I propose, with your Lordships' permission, to quote a few figures. They are the only figures which I shall quote. First, let me say that anybody who doubts the power of the British Empire to support itself cannot do better, as a first step towards learning what is the truth, than pay a visit to Wembley to see one of the most remarkable exhibitions the world has ever seen. He will find, if he makes a list of all the articles required for human life, that there is only one article which the British Empire does not possess in full, and that is oil; and British enterprise, British courage, British determination and British capital have already brought within our reach great supplies of oil which are drawn from other countries.

Let me also recommend to noble Lords the study of a most remarkable book which has just been issued, the title of which is "The Balance of Trade," by Professor Hewins. I know there are many people who dismiss Professor Hewins's information and evidence as not worth anything, because they describe him as a hopeless Protectionist, and so on. I happen to know Professor Hewins better than most people, and I venture to say that that is an utterly wrong description of him. He has remarkable knowledge and wonderful power of putting it at the command of others, and if anybody takes up the book whose mind is open and fair and who is ready to be convinced if the facts are against his existing views, a study of this book and two or three other publications which have recently been issued will convince him that there is more in this policy of Preference than he really thinks.

I have selected for my purpose the figures relating to two of the greatest necessaries of life—namely, wheat and meat. To these all others are subordinate and inferior. Without ample supplies of wheat and meat we should be at the mercy of any enemy who chose to bring a sufficient force against us. Now, what are the actual facts? The United Kingdom consumes, annually, about 140,000,000 cwt., of wheat, of which our home production averages about 36,000,000 cwt We import from the Empire 40,000,000 cwt., and I am sorry to say that under our present system we import from foreign countries no less than 60,000,000 cwt.

Now, do we resort to the aid of foreign countries because our own Empire cannot supply what we want? No! Nothing of the kind. In the first place, let me say, supposing this policy of Preference were really adopted, and there was a Joint Council of the Empire to determine how to make the best use of all the Imperial resources, there is no doubt that such rapid development would follow as would secure an immense increase in the supply of all the necessaries of life, including those two vital articles of food. But, apart from that, as things are to-day, you will see that Canada and Australia send to foreign countries 90,000,000 cwt., or 30,000,000 cwt., more than we require to import from abroad. Therefore, the question is really this. It is not merely a question of finance or statistics, or of Free Trade or Protection; the real question we have to decide for ourselves today is whether, there being this surplus within the British Empire, we are going to take advantage of it, or whether we deliberately prefer to take our supplies from foreign countries. The choice is between our own Empire and our own people on the one hand, and foreign countries on the other.

Next, with regard to meat. Australia and New Zealand send us the bulk of their exports of beef, mutton, preserved meats, rabbits and hares. Australia, incidentally, sends us no pork. Canada's exports of fresh beef are 520,000 cwt., of which only 88,800 cwt., are sent here. The exports of mutton and lamb amount to 64,000 cwt., of which we get none. Our meat supplies are about one-half of what we require. The remainder—21 per cent. of beef and 64 per cent. of mutton—comes from the Empire. Therefore the choice lies really here, as in the case of wheat, and, indeed, in the case of everything else, between the encouragement of our own Empire to supply us, and taking advantage of the Empire's resources, and continuing to rely, with all its danger and all its difficulty, upon foreign lands.

What actually happened in the course of the war? Your Lordships will remember that owing to submarine and other difficulties, and in the absence at the war of some of our best blood and muscle, we were hard set to get sufficient corn and meat, and we were largely dependent upon imports from outside. Prices rose and New Zealand, that most Imperial-minded, patriotic Dominion, and its great Prime Minister, Mr. Massey, took immediate steps to send here her supply of beef and mutton at specially quoted prices. They made great sacrifice of their profit in order that our own people might have large supplies at moderate cost.

What happened? Mr. Massey came over to that second Conference. He said to me: "This is what we have done in New Zealand, and why we have done it. And what is going on here? Our meat is being sold at a much higher price than is just and fair having regard to the price that we are asking, and my people are very angry about it." I knew nothing about it—these things were under Controllers—but I, of course, made inquiries. I found that the real fact was that they had sent us a great supply, but they could not, by themselves, send us enough, for many reasons. Your Lordships will all remember the great difficulty of shipping. We had to fall back upon foreign countries, especially Argentina. All the meat supplies coming from there were under the control and in the possession of foreign meat trusts. They had no reason, sentimental or other, to diminish their trade price, so they kept up the price of meat, and it was in order to bring it down a little and to equalise things that the cheaper meat from New Zealand was sold at a higher price. Your Lordships can imagine the indignation of Mr. Massey and his supporters when they found what had happened to the meat which they had sent from such an admirable and noble motive.

It is not, therefore, that the supplies are insufficient from this Empire, it is not that the result of Preference would be an increased cost of living; surely it must be only a rigid adherence to the old doctrines of Free Trade, and sooner or later these facts will make themselves known and will wear down the walls of opposition, and we shall see an almost, if not quite, united movement in favour of this great Imperial change.

There is one other statement which has been made by His Majesty's Government which I challenge absolutely. It is that they are debarred from even considering this question on its merits because they received a mandate at the last Election. They received nothing of the kind. There was no mandate in any constituency against Preference to our Dominions and Colonies. The question was never discussed. What was your mandate at the last General Election? How did you get it? You issued a series of pamphlets—or, at any rate, they were issued—to our unfortunate cottagers in the country villages, telling them that if they voted for us and our preferential arrangements the result would be a tax on all foodstuffs and an increase in the price of bread, meat, and clothing for their children, and there was no time, in the few days at our disposal, to get round and counteract these mendacious statements. We had to leave the matter to the chance of the consequences.

What was the result? The Liberal Party boasted of two seals won in my county, both from Conservatives, both seats that had been held by large majorities at the previous Election. And how were they won? They were won by spreading these statements broadcast through these small villages, where there is little opportunity for the unfortunate people to consult someone, or to get information, as to the real facts of the case. Women were frightened to death, and I do not blame them. It was a troop of frightened voters that voted at the last General Election. They thought that want and starvation were staring them in the face, and they voted as they did to protect not, only themselves but, still more, their little children from the empty bellies and the bare backs and legs which had been the fate of their grandfathers sixty years ago. And I should have done the same if I had believed what they believed. But that is not a mandate for refusing Preference; it is a mandate for not putting on the increased taxation and giving the extra powers that Mr. Baldwin asked for. To twist that into a mandate against Preference to our Dominions and Colonies is to turn the facts to a wholly improper use, and to describe the General Election in language which is entirely unjustifiable.

On this Question the Government really have, to-day, a free hand, subject only to the statements that they themselves individually have made. I know that, in the course of their previous career—for they did not think they would be so soon in office—they made many statements, and in the short time that they have been in office they have seen fit to change a great many of them, and to abandon a number of the aspirations which they assured the people they would be able to carry into effect. One more added to the promises that they have broken would not, I think, add heavily to the difficulties which they find in their consciences.

I say in my Resolution something about sugar. I mention it for the special reason that I have just returned from a visit to the West Indies, where I had the opportunity of discussing these problems on the spot, with planters and settlers there and those who were responsible for the government of those Islands. The long period of depression and suffering through which those Islands had passed had just seemed to them to be broken. The new arrangements in regard to sugar seemed to give them fresh hope, better chances of making a living. They were all in great spirits about it, and they told me how earnestly they hoped that those arrangements would never be given up by this or any other Government. We know now that that is all changed. I believe that one or two of your Lordships have special knowledge about this particular question and that we shall hear something about it before this debate ends. All I would say is that we must remember that it is inevitable that the residents in the West Indies should draw comparison between the treatment they receive at the hands of the. United States and the treatment they receive at the hands of this country. The United States takes them, if not into full partnership, at least into a very generous partnership. It does everything it can to advance their prosperity, while we turn a cold shoulder to them in regard to the most vital things of trade and industry. It is inevitable, therefore, that they should make this comparison.

So far, I have dealt entirely with the trade, commercial and the political aspects of this case, hut before I resume my seat I want to say one word about the greatest aspect of all from which it is to be regarded—namely, the Imperial aspect. What an opportunity we have, thanks to the prevision, the courage and the statesmanship of our predecessors. Here is a vast Empire with lands not only not fully occupied but practically vacant, with most magnificent prospects as regards the products of the soil of all kinds, agricultural and mineral, and the products of the waters, both salt and fresh. There is only one thing that is wanted and that is badly wanted.

The politics of our Oversea Dominions representatives vary, of course, immensely, but talk to any one of them and he will tell you the same thing—that there is one thing wanted if they are to offer to our people who are crowded out here the hearty welcome they are ready to extend to them. That one thing is new markets and an extension of their existing markets. Unless they obtain them, it is impossible for them to take immigrants and, what is more, as one of the Prime Ministers said to me this year, "It would not be fair or right for us to do it because we should be bringing them out without those certainties for the future which we should have if, in addition to all our other advantages, we had open markets. We are ready to welcome them at the port, to see them properly cared for and conveyed to their different stations, whatever they may be, in agriculture in all its various forms. We are prepared to give them every opportunity at the start and we are certain that they would get on; but we must have new markets."

Well, it is for this country now to decide whether they are going to help in the development of these markets themselves, or whether they are going to leave this great work to other countries and nations to do in conjunction with our Dominions. There is no doubt that whatever our policy may be, however blind it may be, however ill-conceived it may be, or they may regard it as being, nothing will ever shake their loyalty, nothing will ever decrease the devotion which they feel for our Sovereign, and for the Constitution. But it is only human nature—and why should they differ from anybody else?—that if they constantly find, day after day, week after week, all sorts of opportunities offered to them by other countries there must be a growing tendency to enter into those relations in trade and commerce with them which, though they will never weaken their loyalty and devotion to this country, will at all events not tend (it is impossible that they should) to strengthen those bonds of Empire which it is our duty to make unbreakable.

So far. I have dealt entirely with the trade, commercial and political alike on this great question. I look forward to a united Empire in the not distant future, an Empire united not only, as now, in defence and in affection, but in creating a, common trade, making common use of our various resources, treating it as one great property and not as different parts of the Empire. If we do that our children will be able to thank God that, under one Sovereign, and under a common flag, they are also able to enjoy the almost unlimited prosperity that must be their heritage if these opportunities are provided. I beg to move.

Moved, to resolve, That this House profoundly regrets the decision of the Government not to endorse the Tariff Preferences proposed at the recent Imperial Conferences, or the guarantee to maintain the Sugar Preference for ten years, as also their declaration that they reserve full liberty to propose to Parliament the reduction or abolition of the duties on all the commodities to which Preference now applies, and records its belief that this unsympathetic attitude to a policy which has been unanimously approved by all the States of the Empire at successive Conferences, must seriously weaken the stability of our Imperial trade relations and prejudice the unity of the Empire.—(Viscount Long of Wraxall.)

THE UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD ARNOLD)

My Lords, the Government make no complaint that this Motion has been placed upon the Paper. It was, indeed, to be expected. The Motion raises very big issues, and in replying to it I would ask for consideration at the hands of your Lordships because of the exceptional difficulty which confronts the representative of the Colonial Office in dealing with the situation arising out of the Resolutions passed at the Economic Conference last autumn. This situation, however, was not brought about by the present Government, and they cannot fairly be held responsible for it.

I said that the Government make no complaint that this Motion was placed on the Paper. On the contrary, we are glad of opportunities, such as those which have been given in another place and now here, to state our position in regard to these very important matters. There has been in certain quarters in this country—of course, it did not appear from the speech of the noble Viscount and I do not suggest that it did—so much misrepresentation about these matters, so much assumption that the true path of Imperial policy must lie along the lines of Preference, so much, at any rate, of implied condemnation as anti-Imperial of those who are opposed to Preference, however honestly, that we welcome an opportunity of stating what seems to us to be the real perspective of these matters.

The noble Viscount asks that reasons should be given for the position of the Government. I will endeavour to give those reasons. The first one which I will give is one which has been given before, and the noble Viscount anticipated, I take it, that it would be given. I say that the Government are not responsible for the present position and for any difficulties and disappointments which may ensue from it. The late Government had the matter entirely in their own hands. They went into the Economic Conference with certain proposals which, naturally enough, were endorsed by Dominion representatives. Nevertheless, the then Prime Minister, who wanted not merely Preference and extensions of Preference but also to introduce a comprehensive system of Protection, decided upon a General Election. Now, the noble Viscount suggested that Preference was not an issue at the General Election.

VISCOUNT LONG OF WRAXALL

Hear, hear.

LORD ARNOLD

I confess I was amazed to hear him say that. I will not give chapter and verse unless your Lordships desire it, but I will refer the noble Viscount, if I may, to a speech on this particular point delivered by the Chancellor of the Exchequer in another place.

VISCOUNT LONG OF WRAXALL

The noble Lord will pardon me, but I did not say that the question was never raised. I know, of course, that certain members of the Front Benches on both sides took part in the Election in the country. I said that in the country where the issue was decided the question of Preference was never referred to in local speeches, but taxes on food and other articles were.

LORD ARNOLD

May I say that I have some idea of what was going on at the General Election because, although I was not a candidate myself, I was following matters very closely and my experience was quite contrary to that of the noble Viscount. The Chancellor of the Exchequer in another place quoted extracts from speeches delivered by the late Prime Minister proving, if anything can do so, that Preference was an issue at the last General Election. The Government was badly defeated. About 9,000,000 votes were cast for Free Trade as against 5,500,000 for the late Government. I say-in these circumstances that the present Government cannot, even if it wished to do so, endorse the Tariff Preference which the noble Viscount has mentioned in his Motion. I do not believe that the late Government realised the difficulty which it was bringing into being, but that cannot be helped now. I do protest, and protest most strongly, against any assumption that the present difficulties and disappointments should be laid at the door of the present Government, when it is the late Government which, through its handling of the whole affair, is to blame.

In reply to the noble Viscount I propose to confine myself a little more closely to the actual terms of his Motion than he did. The Motion on the Paper divides itself into four parts, but two of them are rather outside the area of what I might call the usual Preference issue as we have known it in this country, at any rate in past years and until just recently. I, therefore, propose to deal with the two propositions which are rather outside the main issue first, and thus clear the ground for a discussion of the main issue. The first of these two propositions is one which regrets, in the terms of the Motion, the decision of the Government not to guarantee to maintain the Sugar Preference of ½d. per lb. for ten years. This proposal to guarantee for ten years ahead a certain form for a certain tax is something entirely new in the history of British national finance. The genesis of the proposal was the undertaking given by Mr. Churchill in 1922, but apart from that, there is absolutely no precedent whatever for such an undertaking. If there is one thing more firmly embedded in the Constitution of Great Britain than another, it is that the House of Commons has supreme control over the taxes of this country year by year, and to give this desired guarantee, even if it were worth anything when given, would be an entirely new departure from established practice.

But there is more than that. It should be made clear that no undertaking of this kind could have any legal obligation for ten years unless it were incorporated in a Treaty, a form of procedure, particularly with the Dominions and Colonies, for which there is no precedent. Again, no undertaking of this kind could have any definite moral obligation unless it were agreed to by all the other Parties in the State. Even if the present Government were not willing to agree to it, and they are not, the Liberal party would undoubtedly be entirely hostile. Therefore, no pledge, even if one were given, would be binding. I do not think it necessary for me to take up much time in substantiating what I have been saying on that point, because it happens that only two or three weeks ago your Lordships refused to attach any value beyond the lifetime of this Parliament to a pledge which I was prepared to give on behalf of the Government, and that was in regard to a matter which could be said, in the circumstances, to be non-controversial. The Government were willing to give a pledge, and there was agreement about the matter in question by the noble Lords opposite, including the noble Marquess, Lord Salisbury, who was leading the Opposition. Nevertheless, I was told that no Government pledge had power to bind a future Government. Therefore, it is clear that the guarantee which is asked for is one which could have no value even if it were given.

The second proposition of the noble Viscount which is rather outside the area of the main issue as usually discussed, is the one which expresses regret that the Government reserves full liberty to propose to Parliament the reduction or abolition of the duties on all the commodities to which Preference now applies. This is, in some respects, the most astonishing part of the noble Viscount's Motion. What is the position? The chief preferences now accorded are in respect of sugar and tea. For thirty years, ever since the Labour Party was formed, it has been a fundamental part of its policy to abolish at the earliest possible moment the duties on sugar and tea in this country which fall so heavily upon the workers and on poorer classes. In this policy the Labour Party has never wavered in the smallest degree, and I may say that in the present Budget the Chancellor of the Exchequer has made the biggest step in the direction of what is called a free breakfast table that has ever been made in one Budget. I will not, to-day, argue before your Lordships the case against the tax on sugar and tea, though, if I were to do so, I think I could prove that these taxes violate nearly every canon of sound finance.

But what does the Motion of the noble Viscount say? It expresses regret that the Labour Government, in order to be perfectly honest and so that there may be no misunderstanding, has reaffirmed its full liberty to propose to Parliament the abolition of these duties and other duties to which Preference applies. It is difficult to believe that the noble Viscount seriously proposes that, in order to keep in being a system of Preference in which it does not believe, and to which it has always been opposed, the Labour Party should now go back on all that it has ever said about the taxes on sugar and tea, and should undertake to keep these taxes in being at any rate to some extent in order that a preference on sugar and tea may be given. I cannot think the noble Viscount who, if I may say so, has a good record for consistency, really wants the Labour Party to play fast and loose with its pledges and promises and policies in the way that his Motion suggests.

I have now dealt with those parts of the noble Viscount's Motion which are somewhat outside the usual lines of this controversy, and I turn to the first part of the noble Viscount's Motion, which regrets the decision of His Majesty's Government not to endorse the Tariff Preferences proposed at the recent Imperial Conference.

The Motion, so far as the main issue is concerned, also divides itself into two general propositions, and I will deal with them in order. The first one regrets this decision of the Government not to endorse what the noble Viscount describes as the Tariff Preferences. I have already shown that in view of the result of the General Election the Government could not endorse those proposals. I will go further and say that the people, in the verdict which they gave last autumn, were right. This system of Imperial Preference involves the issue of Free Trade and Protection. It is necessary to emphasise, and I do emphasise, that Imperial Preference is, in effect, protection accorded to subjects of the Empire outside Great Britain at the expense of the taxpayers of Great Britain.

Let me take sugar, for instance. There are on sugar two rates of duty, a lower duty for the Empire products and a higher duty for the, foreign product. But the price which the British consumer has to pay is the price determined by the higher rate of duty. The foreign product which pays the higher rate of duty is and must be sold at a price which includes that rate, and the Empire product is, of course, marketed at the same price. That must be so owing to the simple economic law that there cannot be two prices for the same thing in the same market at the same time. It is, therefore, clear that Preference does involve a burden on the people of Great Britain, because the difference between the lower duty for the Empire product and the higher duty for the foreign product is lost to the revenue of this country and that means heavier taxation in other ways. The points I have been advancing must, of course, to some extent be subject to qualification in certain instances. There is, because of varying circumstances, hardly anything in the world of trade or economics which is true of every article. For instance, Preference in respect of tea is in a special position, though I will not take up time by going into the statistics about tea. Again, tobacco is in a somewhat special class. But Preference in general would operate substantially as I have stated.

I repeat that Imperial Preference involves the issue of Free Trade and Protection. It is argued that Imperial Preference is not a violation of Free Trade, but is rather a step towards greater Free Trade, because it means a lower duty on Empire products. It is this contention which has been used so much of late in advocating that on certain Empire products the duty should be remitted altogether so that these particular products should come in free. What, however, is not apparently realised is that any policy of that kind tends to stereotype more than ever the foreign duty, because under cover of the greater preference, new interests are created which will then naturally plead that the foreign duty must remain. Hence the remission of Empire duty would not really be a step in the direction of Free Trade, because, by tending to perpetuate the foreign duty, it would make the realisation of complete Free Trade very remote.

It is considerations of this kind which make the Preference policy so difficult and, indeed, dangerous. I have said before, if there is one thing more firmly embedded in the Constitution of our country than another, it is that the House of Commons has unfettered and supreme control over the taxes of this country year by year; but if varying scales of Imperial Preference are to set up, if these interlocking systems are to be constructed, if vested interests are to be created, and great expectations formed, the result must be that Parliament in this country will not be free year by year to do what it would wish. In fact, it is not going too far to say that this system of Imperial Preference is really inconsistent with the vital principle of self-government for each part of the Empire. Surely this, in itself, is an almost insuperable argument against Preference.

I pass now to the last part of the noble Viscount's Motion which affirms that the rejection of this policy by the Government must seriously prejudice the unity of the Empire. In dealing with this part of the Motion, it is necessary at once to emphasise very strongly that it is in the main based on a complete mistake. The noble Viscount says that the policy of Preference has been unanimously approved by all the States of the Empire at successive Conferences. What he omits to call attention to is that as soon as it was submitted to the people of this country for confirmation, the policy was rejected, just as it was rejected in 1906 after it was first put before the people by Mr. Joseph Chamberlain. The fact is that whenever this issue has been put to the people in this country as one of the main questions of a General Election, the electors here at home have pronounced against it. Therefore, it is utterly misleading—it is entirely wrong—to suggest, as the Motion of the noble Viscount does, that this policy has been unanimously approved by the Empire.

The truth is that so far from there ever having been unanimity about this policy of Preference, the introduction of it, now about twenty years ago by Mr. Joseph Chamberlain, was from the point of view of unanimity a most regrettable event in the history of our Imperial development, because of the extreme controversiality of the issues which Preference raises. Mr. Chamberlain took upon himself a terrible responsibility when he threw into the delicate and finely constructed system of our Imperial relationships this disturbing and discordant factor. Speaking broadly, all Parties in this country are at one in their pride of the Empire, and in their desire that the British Empire should develop as a great agency for the good of mankind. Many, I think I may say most, aspects of our Imperial policy command the assent of all Parties. I say then that Mr. Chamberlain took upon himself a very grave responsibility, and those who still support Preference do the same, in bringing into Imperial matters one of the most controversial subjects which it is possible to raise, thus throwing great Imperial interests into the cockpit of Party politics.

I have often wondered if the danger of introducing into Imperial relationships a policy so exceedingly contentious was sufficiently appreciated by Mr. Chamberlain. And I wonder still more if this danger was at all properly estimated by those Ministers of Great Britain who last autumn supported Preference and proposed extensions of the principle. The noble Viscount cannot for a moment be permitted to assume, as he does in his Motion, that Preference and the extension of Preference must necessarily promote the unity of the Empire. On the contrary, I say there is more risk as years go on of the unity of the Empire being imperilled by a pursuance of the policy of Preference than by refusing to go further along those lines.

I have shown that Preference adds to the burdens of the people of this country. In all earnestness I would ask whether that is likely to make the Empire more popular with the people here at home? Is that a good way to bind the Empire more closely together? Especially, is it a good way, in view of the fact that the people of the Mother Country are already much more heavily taxed than their brethren overseas? I cannot think that Imperial unity and stability are going to be promoted if the Empire is to be associated in the minds of the people of this country with heavier taxation and dearer living. I am quite unable to follow the noble Viscount in his argument that these proposals would not mean dearer living. Take one—5s. per cwt., on apples. Would not that mean dearer living? Of course it would. He did not substantiate his argument, and most of the proposals which were put before the Imperial Conference, if carried into effect, would undoubtedly mean dearer living in this country.

I desire before concluding to examine briefly, but a little more closely, the true facts of the position as regards this Preference policy. A little consideration will indisputably prove that the advocates of Preference have now been driven into a position which it is impossible to defend with any degree of success. I would remind your Lordships that in 1903, when Mr. Chamberlain first started this policy, he said, in the now classic phrase, that if you want to give Preference you must put a tax on food; and by food he meant a tax on corn and meat. The reason for Mr. Chamberlain's maxim, which was the very basis of his policy, is, of course, to be found in the nature of the products which the various parts of the Empire have for export. I will not go into these matters in great detail, but your Lordships will be aware that, in order to construct any sort of reasonably symmetrical system of Preference, it would be necessary to give a Preference on corn and meat, and also, I dare say, as Mr, Bruce, himself evidently seemed to have in mind last autumn, on wool. Unless Mr. Chamberlain's maxim is acted on, it is impossible, owing to the character of the products of the various parts of the Oversea Empire, to devise anything like an equitable scheme of Preference as between the various parts of the Empire. But this policy of taxing corn and meat was overwhelmingly rejected by the people of this country. They would have nothing to do with it. So emphatic was their verdict: that no political Party has dared to put a similar political policy before the electorate again.

That is the position which the present advocates of Preference have not overcome, and they never can overcome these cardinal and fundamental difficulties. They are driven back on an emasculated policy. The original policy of Mr. Chamberlain, profoundly though the country disagreed with it, and as we today disagree with it, was yet one of a certain breadth and comprehensiveness. That cannot be said of Preference as it stands to-day. The present policy is wholly inadequate to effect that which is claimed for it, and yet it is sufficiently serious to be a source of constant controversy, friction and difficulty, and also sufficiently serious, especially if the Government were to accept the noble Viscount's Motion, to involve a real burden upon the people of the Mother Country. I emphasise again that Mr. Chamberlain said that a tax on food was essential for Preference, meaning by that a tax on corn and meat, but that is not the policy which the noble Viscount wishes the Government to endorse. Accordingly, the Government is being blamed for rejecting a policy which Mr. Chamberlain, the author of this propaganda, himself rejected because it was not sufficient for the purposes he had in view. When, therefore, the noble Viscount tells us that the rejection of these proposals will have all the consequences which he indicates, he is really at variance with the philosophy of the originator of this policy, and it is idle to say that the rejection of these proposals will have the results which the noble Viscount suggests.

The advocates of Preference are trying to achieve the impossible. They will not put the full policy before the country because they dare not, and the lesser policy is utterly inadequate as a means of constructing a reasonably symmetrical Preference as between the various parts of the Empire. It was this difficulty which actually, last autumn, led the late Government to propose that there should be a duty of 5s. per cwt., on foreign apples coming into this country, for no other reason than to give a preference to Canadian apples. Thus, apples, which have already been dear in these post-war days, were to be made dearer still, because, under the Preference, policy, it was deemed necessary to try to do something more for Canada in order to maintain some sort of a balance. It cannot be too strongly emphasised that the whole system is one which it is impossible to carry out in any complete and equitable manner. Difficulties, therefore, are constantly cropping up and will always be cropping up, and the present Government are convinced that the unity and stability of the Empire would be much more endangered by proceeding further along this path than by calling a halt now.

I said at the outset that in the main all Parties are agreed about Imperial policy except as regards this question of Imperial Preference. Preference makes a great gulf between the Parties. It brings to an issue a real clash of policies, and I again say it is most unfortunate that this controversial question is apparently to be kept alive year after year. Quite apart from all I have said, I submit that no mutual satisfaction will be obtained by trying to cement the Empire more closely together by debit and credit methods. It is very distasteful to discuss great questions of Imperial relations in any spirit of bargaining, but, if he will allow me to say so, the Motion of the noble Viscount makes this difficult to avoid. Accordingly, it becomes only fair to point out that the Dominions and Colonies have already great financial advantages through their connection with the Mother Country. We, the opponents of Preference, rejoice in all such benefits for our brethren overseas; we are prepared to do great things to help them, but not by Preference. At this time of day it surely may be taken for granted that there is not in this country any anti-Imperial Party. It would be well, therefore, when we differ about Imperial policy, that we should do so with mutual tolerance, and give each other the credit for honesty of purpose. Let it be assumed that, though there may be differences of method and policy, the aim is substantially the same.

I repeat that though we on this side do not believe in Preference, the Government are prepared to do much for Imperial development. The Secretary of State, in another place, has intimated what the Government will do towards setting up an Economic Committee of the Empire. Let me refer to another vital matter. In addition to expenditure under the Empire Settlement Act, the Government has submitted to Australia a proposal under which the Mother Country is prepared for a term of years to give liberal help for the purpose of assisting family emigration to Australia. Then again, we are advancing for Colonial railway development loans running into millions, free of interest for five years. Also, in pursuance of a Resolution of the Economic Conference of last year, there is, under the Trade Facilities Act, just passed, a provision under which the Government is prepared to guarantee three-quarters of the interest on money spent in this country to help schemes of Imperial development, up to an amount of about £25,000,000.

Quite apart from all such benefits, the countries of our Oversea Empire also have the inestimable advantage of cheap capital because they are parts of the British Empire. The total amount of British money invested in our Oversea Empire is probably somewhere about £2,000,000,000. It is probably true to say that, if it had not been for the advantage which they get through being parts of the British Empire, the various countries would, on the average, have had to pay about I per cent. more for the British capital which is invested in them. On this basis, they get a benefit, through their Imperial connection, of about £20,000,000 per annum. When all these and other matters are taken into account, it becomes clear that even as a matter of cash our Oversea Empire already has much greater advantages through its connection with the Mother Country than can be given them by Preference.

Personally, as I have indicated, I deprecate the introduction into the sphere of Imperial relations of questions of financial advantages and disadvantages, but it is somewhat difficult to avoid these questions in view of the attitude of certain advocates of Preference in this country. However, for my part, I am sure that the Mother Country and the Dominions and all Empire countries overseas are each and all willing—nay, more than willing, are glad—to bear their share of Imperial responsibilities. But let us proceed, not by controversial methods like Preference, but by measures which are substantially agreed to by all Parties. Surely it is in such measures that the wisest and most fruitful lines of Imperial development and evolution are to be found.

I apologise for having spoken so long, but a great many questions are raised in the Motion of the noble Viscount. Even yet I have not been able to discuss them as fully as I would like, but other noble Lords on this side will no doubt follow me, and I hope I have said sufficient to show that the Government has good reasons for the attitude which it has adopted with regard to the subject matter of this Motion.

THE EARL OF BIRKENHEAD

My Lords, the noble Viscount who introduced this Motion to the consideration of the House has rendered, I think, not only a public but also an Imperial service, by offering to your Lordships an opportunity of registering a decision which, though it does not precisely coincide with the decision reached in another place, will not, if my anticipation be well founded, very greatly differ from the attitude which the various Parties in the other place exhibited. It was indeed a striking circumstance that with a special Whip, with, so far as I know, all the leaders of the Labour Party in the House of Commons expressing, or allowing to be expressed on their behalf, the determination of voting against the Baldwin Resolutions, the Division was so evenly balanced, that even so some six or seven members of the Labour Party refused to follow their leaders, and that eighteen or nineteen members of the Liberal Party treated the admonitions of their leaders with the same disregard. It is for us to see whether we cannot make it plain that at least there exists a body in which there is a large amount of sympathy with the view which was so nearly successful in another place.

The noble Lord had no nerd to apologise for the length of his speech. It was an interesting speech, and not particularly lengthy. In fact, there were many branches of the subject—and, in my judgment, even vital branches of the subject—which he left wholly unexplored, and on which I will say a word or two in a moment; but I could not help wondering, when I listened to his defence of the whole principle of Free Trade, whether he carried all his colleagues with him. Was his view, for instance, expressive of the economic sentiments of Lord Parmoor?

LORD PARMOOR indicated assent.

THE EARL OF BIRKENHEAD

My noble and learned friend will correct me if I am wrong, but I think those views, within historical memory, must have undergone considerable modification, because if I am not mistaken, when my noble and learned friend stood in the Election of 1006, in which Mr. Chamberlain, according to the slightly depress- ing reference of the noble Lord, was doing such irreparable mischief, my noble and learned friend used some observations in the course of that campaign which might have been thought to offer some measure of support to Mr. Chamberlain. If I am not mistaken again, when a Lancashire seat ungratefully turned back upon my noble and learned friend and he assumed the rather more congenial and rural surroundings of Buckinghamshire, he became even more pronounced in support of the very views which the noble Lord, Lord Arnold, has just criticised with such severity.

I would therefore ask my noble and learned friend whether he will give us the advantage of informing us when he was converted, and what converted him. It must have been a very recent conversion, because just before the noble and learned Lord became a member of this House there was much discussion in the Unionist Party as to what particular branch of Tariff Reform should be accepted as the official view of the Party. There was, for instance, a section in favour of the full policy of Mr. Chamberlain. On the other hand, there was a section which thought it unwise to go so far. Now, if I am not mistaken, I remember clear indications that during the whole of that time, and until he became a member of this House, the noble and learned Lord was an avowed supporter of a considerable measure of Tariff Reform, and I do not recall one occasion on which, until he became a member of the present Government, he gave any indication of changing his mind. If there was such an occasion, no doubt the noble and learned Lord will inform us what it was and its date.

The noble Lord, Lord Arnold, said that the present Government had no responsibility for what had happened. In one sense he is right. Had there not taken place the Election the decision would have been in the hands of others, and a different course would have been adopted, but ho is completely wrong if he means to suggest that this Government had not, as new agents dealing with the matter, the most complete freedom to deal with it according to its merits. Therefore, the fact to which he referred more than once, that some censure might by those who care to pursue it be placed upon others, has nothing to do with the free exercise by the present Government of their discretion in the course which they took.

Let me deal with the points taken by the noble Lord. He said that the Labour Party have laboured under pledges for thirty years to give a free breakfast table. It would not in the least surprise me if that be so; indeed, if they had not made some such promise it would be a most amazing circumstance, because they have promised everything in the course of each Election. I do not suppose for a single moment that in his leisure moments the noble Lord has read all the leaflets with which the Labour Party have flooded the constituencies.

LORD ARNOLD

I know them all.

THE EARL OF BIRKENHEAD

Then I can only regret that the has made no public protest, for a more dishonest collection of electioneering propaganda has never been seen in this country, or in any other country with which I am acquainted, and a very great proportion of these pamphlets openly inculcates that kind of class hatred which Ministers nightly disavow, but the success of which has placed them where they are. As I have to deal with the pledges for thirty years of the Labour Party in relation to this subject, let mc remind the noble Lord that this promise to give a free breakfast table and remove all taxes on food is not the only promise. Combined with this promise, the most expensive and grandiose reforms, which they offer no means of financing, are to be carried out. So they enjoy the electioneering advantage of taking off all taxes and at the same time of giving everything which will immediately require an immense increase of taxation.

LORD ARNOLD

This is a minority Government.

THE EARL OF BIRKENHEAD

I have never heard that it was more respectable to tell falsehoods when you are in a minority. The temptation, of course, is greater but the morality remains the same. The noble Lord said the Labour party cannot play fast and loose with its pledges. I should think that it is extremely likely to play fast and loose with them in the near future, as it has already done in the few months in which it has been in power.

The noble Lord's economics, if he will permit me to say so, are somewhat crude. Let me take one of his illustrations. He said that if you were to reduce the duty on Colonial sugar there would be only one consequence, and that would be to increase, or to maintain in its then ratio, the price of sugar to the British consumer. He added also that, economically, the consequences must be even more serious, because you stereotype for all time the then existing foreign duties. The argument which led the noble Lord to this conclusion may be very shortly stated. He said there cannot be two prices for sugar, and it therefore must inevitably follow that the Colonial exporter of sugar will charge the same price as the foreign exporter of sugar, with the result that no benefit whatever will accrue to the British consumer.

In whatever sphere of life the noble Lord has spent his career, apparently no part of it has been devoted to the practical problems of business, because I can assure the noble Lord that that is not the way in which these things work out. I can assure him, with some small experience, that the actual event is quite different. Docs it not occur, for instance, to the noble Lord that, with the admitted encouragement of the growth of Colonial sugar, it is conceivable that the foreigner, who must sell his sugar and realise it to some considerable extent on the English market, in order to compete with the Colonial sugar will be compelled to lower his price? There is not a country in the world of which the greatest economists have not laid down that that is a commonplace. If the noble Lord knew the discussions which preceded the adoption of the German Tariff he would know that it was conceded that that was one of the results which would follow.

The noble Lord then said that this policy has not been adopted by the, whole Empire. I think that I shall carry the noble Lord with me when I say that the policy is approved in every part of the Empire except, apparently the noble Lord believes, in this country, and every part of the Empire, including this country, appreciates that form of Preference which the Dominions extend to us, about which I am sorry to observe that the noble Lord said nothing at all. The noble Lord claimed that, in his opinion, Mr. Chamberlain made a dis- turbing and dangerous contribution to our Imperial life when he made his first Tariff proposals. When the Dominions make proposals to us in the direction of Preference, when everyone in this country gratefully accepts the Preference which the Dominions give to us, does the noble Lord dissociate himself from that advantage? Of course he docs not. The noble Lord and his friends approve the advantage, of which I will speak a little more explicitly in a minute, which this country derives from the Dominion Preferences to us.

Then the noble Lord said that Mr. Chamberlain, who at least could sec a little way ahead, realised with his broad and statesmanlike outlook upon Imperial affairs, that there must come a time when those who are giving you so much will begin to hope that It might be possible for you to do something to develop their trade. This demand would inevitably have been raised. It will be raised again one day, and I believe that one day it will be successfully raised.

The noble. Lord also claims that Preference will add to the burdens of the people of this country, and he quoted the old saying of Mr. Chamberlain, marked, whether he was right or wrong, by that singular courage which distinguished all his public utterances, when he said that for a complete system of Preference you must tax corn and meat. The noble Lord, somewhat reversing his argument, turned round, and said, that this Preference was no good, because you cannot have Preference without taxing corn and meat. Mr. Chamberlain said so, and therefore this Preference, says the noble Lord, was worthless, and we have injured nobody by removing it. On the whole, I prefer the opinions of the Premiers of the self-governing Dominions on such a point to the opinion of the noble Lord. The Premiers of the self-governing Dominions came over here, they made great journeys, some of them travelling thousands of miles, they spent week after week in what they at least believed to be fruitful discussion, and they went away one and all satisfied, and with great professions of gratitude for that which had been done for them. And then we are to be told by the noble Lord, who thinks the whole thing a fraud and a sham, and by Lord Parmoor, who was recently converted to the same view, that these things are worthless which the Colonial Premiers tell us they profoundly value.

Let me illustrate to the House how worthless the Colonial Premiers think they are. General Smuts, whose views have much in common with the views of those who are not members of my Party in politics, when he returned to South Africa, said: Though we have no interest in Party Government or in local politics yet the pledges made by His Majesty's Ministers must be carried out, and I cannot doubt that the carrying out of them will be undertaken by the present Government or by their successors in any vicissitudes of politics; otherwise, I foresee a very grave danger that the whole Conference system, to which we attach so great a value, will fall into discredit and fail. Mr. Massey, the Prime Minister of New Zealand, and other leaders of Dominion thought, have since expressed themselves in the same sense.

What I discerned in the speech of the representative of the Dominions in this House was the apparent complete lack of all knowledge of actual conditions in the Dominions at this moment, and the complete failure to realise the immense advantages that we in this country have already derived from the existence of those Preferences. One would have thought that the noble Lord and his Party would have been more deeply concerned, if possible, than any other Party to discover markets for the manufactured goods of those on whose behalf they profess so exclusively to speak. I had assumed it to be, at this moment, almost a commonplace that not in our lifetime will you restore the economic balance, stability, and productiveness of Europe. Is it not apparent that not in our lifetimes shall we be able to support our surplus population upon any markets which existed before the war, unless we can either restore them in their entirety or unless we can create new ones? Where are those new markets to be found if they are not to be found within our own Empire? The noble Viscount spoke with deep knowledge and with great force of the bountiful resources of that far-flung Empire.

All who have studied recent conditions in the United States of America know that that country has suffered hardly at all as the result of the world convulsion. We know that the staggering prosperity of that country has grown year by year, and decade by decade, under that system which the noble Lord is so persuaded must on principle destroy any country. What is the explanation of an accession of wealth and prosperity so astounding? Undoubtedly, one explanation is to be found in the immense demand and extent of the domestic market, and the teeming and abounding resources of that vast continent. If, with wise statesmanship, we develop them, we have resources which are not smaller, we have varieties of climate which are not less striking, and, under wise guidance, there is no reason why the volume of trade within the British Empire should not be so stimulated—and stimulated within one or two decades—as not only to provide homes for our surplus population, but to provide also our surplus populations with the means of livelihood in surroundings where they will still be breathing the spirit of English traditions and still looking with pride to the same flag under which they will live.

Yet the noble Lord completely disregards, upon this point, the lessons of the past. Take, for instance, what happened when the Canadian tariff was first given to us. At that time, as the House will remember, the exports from this country to Canada were undergoing a progressive diminution and very considerable alarm was felt both in this country and in Canada. For example, between 1892 and 1897 our exports to Canada dropped by £1,700,000. That means that one-half of that sum which would have been paid in wages was not paid and, consequently, the numbers of men represented were cither unemployed or passed into other business. When Preference was granted our exports to Canada immediately went up and they have gone up year by year until, in 1913, they had increased by an average of £1,000,000 a year, going from £6,000,000 up to £24,000,000.

I am not going to weary your Lordships with any more figures. It is sufficient for me to say that the same process has gone on in all those Dominions which have given us Preference. I can give your Lordships analogous and comparable, though, of course, not identical, figures in the case of Australia, and figures which, though smaller, point to the same practical conclusion in the case of New Zealand. Of course, noble Lords know well that India purchases more of our goods than any country in the world—far, far more than we ever sold to Germany in the old pre-war days.

Has the experience of those years nothing to teach us? Do the Government really believe that the concession of that Preference by the Dominions to us has not been very considerably responsible for the increase in our export of manufactured goods to them? The Government appear to me to contemplate the grave situation in which the country is in this respect with the most extraordinary indifference. How do noble Lords who sit on the Front Bench opposite think that they are going to find work for the unemployed? Where is it to come from? Is it to come by exports of manufactured goods to the protected countries of the world? I may remind the noble Lord who speaks with such intellectual superiority of the demerits of Protection that he and his friends are almost alone in the world. Where are the other countries in the world who hold this view? To what device does the noble Lord look to break down the barriers which exclude our manufactured articles from so many markets of the world?

Furthermore, has he considered upon what basis and with what prospect of success our manufactured articles must compete in the future, when once Germany is restored, with the manufactured exports of Germany? We talk of Reparations, and it is right that Germany should pay the largest sum in Reparations which she can pay without impairing her capacity to pay any; but do let us keep a clear mind on the subject of Reparations. Economically, there is one way, and one way only, in which a country can pay Reparations, and that is if she is assured of and maintains an excess of her exports over her imports. Unless she has a reserve of gold there is no other way of doing it. It is no use talking about compelling people to pay Reparations in any other way, because that is the only way in which they can be paid. We are afforded the agreeable prospect of having, in the next five or ten years, to compel Germany to pay Reparations which can only be paid if her exports exceed her imports in a sufficient ratio to enable her to pay them.

The National Debt of Germany has completely disappeared. The whole of her municipal debt has disappeared with the dissipation of her exchange. Not only that, but mortgage debts all over Germany have been extinguished. We are, therefore, afforded the prospect, in markets where we should not only have no advantage against Germany but in other neutral markets of the world, of competing with a Germany which has no National Debt to pay and which does not at present enjoy the happiness of a Government which has promised quite so much as this Government has and which, as we know from the noble Lord, always keeps its pledges. Germany has not to suffer from any financial incubus but has an advantage in competing with us. Does anybody in the wide world believe that we can compete successfully with her unless we have special assistance? We cannot do it. And if we fail, we perish, because we, and we alone, need to import food for the nourishment of an industrial population which we cannot support unless our export trade flourishes. We, and we alone, are in the singular and unfortunate position that if we cannot find adequate markets we must perish. Here we have growing markets in countries which, of all others in the world, are prepared to give us special assistance, and which have given us such assistance in the past as has indicated that they are prepared to increase it in the future.

When we speak of this to a Government which has embarked upon such a dangerous policy, we are given a long catalogue of loans between countries in the Empire. I do not myself greatly value recitals either here or in the Dominions of the benefits that we have conferred upon one another. I would rather hear it recognised in Canada and Australia that we have not been without the capacity of being of some help to them, than hear that claim made in this House in excuse for not doing something which is at once reasonable and greatly valued by those who came to this country to represent the Dominions.

The noble Lord rebuked the late Mr. Chamberlain, and expressed polite regret at the callow and immature experience that has led my noble friend Lord Long to do so much harm, according to the noble Lord, by his speech in this House to-night. I would venture to remind him that there are many people in this country, not confined to one Party—there were several among his own colleagues in the House of Commons the other night—who believe that by the decision which the Government have taken they have inflicted a profound injury upon this country and upon the Empire and done mischief for which they, and they alone, must bear the responsibility. If that decision was founded upon any fundamental consistency of principle, while I should regret it I should at least respect it. How am I to respect the representatives of a Socialist Party who speak in language which would come with consistency and respectability from the Liberal Benches but sounds incongruous and illogical indeed when preached by Socialist lips?

We are told that Free Trade is a system which is required in the interest of this country. There was never in this or any other country a Party whose creed was more profoundly based upon the very spirit and principle of Protection than the Labour Party as it exists in this country to-day. What is the principle upon which they have insisted, and rightly insisted, for many years by prohibitions against the employment of sweated labour? It is obvious to everyone. It is that you are not to allow competition between the industrial strata of the Empire in order that you may buy in the cheapest market. That principle is destructive of the whole spirit upon which the teaching of Cobden rested. That is trade unionism from the first article of its creed to the last. I tell the noble Lord that in my judgment the time is not far distant when, so far as the import of manufactured goods is concerned, the working classes of this country will insist that there shall be a Tariff imposed upon unrestricted foreign importation.

Prophecy is always dangerous. I wish to embark upon it sparingly, but I would say this of the speech which the noble Lord has made to-night: that it is one which I believe will be received by your Lordships with deep regret and anxiety. I only hope that your Lordships, when we proceed to a Division, as we shall proceed to a Division upon this subject, will show that so far as this House at least is concerned we repel the decision which was reached by the Government as being unjust to the Dominions, and unfair to the whole Conference system (which had reached deliberate conclusions which ought to have been treated as outside the range of Party), and which at the same time would, if not corrected by expressions of opinion in this House and in the country, inflict great harm upon the whole fabric of the Empire.

EARL BEAUCHAMP

My Lords, the noble and learned Earl expressed at the beginning of his speech his sense of the gratitude that we owed to the noble Viscount who raised this Question this afternoon. I should like to associate myself with that expression, and I would include in it the noble and learned Earl who has just sat down, for he has given us an admirable exposition of the policy which underlies this whole matter of Preference. The speeches of the noble Viscount and of the noble and learned Earl Shave shown us that, it is quite impossible to limit the question to this small one of the Preferences which were proposed at the Imperial Conference. The two speeches which they have made—the first one by the noble Viscount made reference to the taxation of bread and meat—show that we cannot deal with the actual proposals of the Imperial Economic Conference without also considering the larger matters which are implicated within the small proposals. In the same way, in the last speech to which we have just listened, the noble and learned Earl, with unrivalled lucidity, explained to us how really involved in this matter is the whole question of a general tariff upon imports.

THE EARL OF BIRKENHEAD

Really, the noble Earl makes a prodigious error when he says that. If he will read my speech in the OFFICIAL REPORT he will find not only that I did not say that, but that I did not say anything which could be remotely mistaken for it. It does not represent my views at all, as the noble Earl will find when he reads the OFFICIAL REPORT to-morrow.

VISCOUNT LONG OF WRAXALL

Perhaps the noble Earl will allow me to say this in regard to my speech? In case the remarks he has made in reference to me should be taken and put into a pamphlet, I desire to say that the noble Earl ignores the statement that I made in the earlier part of my speech—namely, that I was against the taxation of foodstuffs until it became the obvious wish and desire of the people. I instanced food, meat and wheat, in order to show what you could do if you chose.

EARL BEAUCHAMP

I am sorry if the noble and learned Earl thinks I have in any way misrepresented him. It was far from my intention. What I was trying to point out was that the fact that in the course of his speech he dealt with these questions of general tariffs showed, as it seemed to me, that it was impossible to deal with these single isolated proposals of a policy without dealing with the whole lot. I was not at the moment trying to controvert the arguments that were used, but was alluding to the fact that both the noble Viscount and the noble and learned Earl, by mentioning these questions, proved what seemed to me to be the obvious fact that you cannot deal with these Preferences as an isolated matter. They are inherent in the general question of Protection in this country.

I think it is specially interesting to note that the noble Viscount who initiated the discussion spoke, in the first place, of the Preferences which were proposed in the Economic Conference without entirely explaining to your Lordships' House the difference that there is in regard to some of them. Some of them certainly do simply involve a reduction of the taxation which already exists, but there are a large number of them which at the same time, as your Lordships would see if you had these Papers before you, go on to propose a whole series of new or increased duties upon foreign goods. Even in regard to currants it appears to be necessary, in order to make the Preference a valid one, that there should be an increased duty. I find in the Command Paper this phrase:— His Majesty's Government are prepared to offer free admission to Empire currants and to consider what increase in the duty on foreign currants may be necessary to make the preference effective, such increase to come into force at a future date to be agreed upon. Then, in Chapter III, "New or Increased Duties on Foreign Goods only," we find other dried fruits and other preserved fruits mentioned, such as raw apples, which have already been referred to, canned salmon, honey, lime, lemon, and other fruit juices and dried currants.

That being so, I think it is only fair to remind your Lordships that the Division which took place in another place the other day dealt not with the whole of these economic proposals but only with this part of them. It dealt with the reduction upon taxes which already existed, and there was no Division taken upon the other points. I think the more important matter is how far the members of any political Party are prepared to recommend in the future that there should be new taxes put upon articles of food where those duties do not exist at the present time.

Your Lordships will remember, no doubt, the references to sugar which have been made during this debate. Fortunately, we have had in this House before now a discussion upon this very matter, and the then representative of His Majesty's Government, Lord Hylton, explained in regard to sugar that the Preference had not meant a reduction in the price to the consumer in this country. There was a debate on July 16 last year, in which the noble Lord explained that the growers and producers in the West Indies had been able to obtain higher prices, practically to the full amount of the Preference, for all sugar sold in this country. Your Lordships will see, therefore, that as regards sugar at any rate, in this little woking model we find that the institution of Preference did not mean a reduction in price. There are also other disappointing features in the Preference on sugar. We find it has not led to an increase in the quantity of sugar that is grown in the West Indian Colonies. We find that, whereas before the war there was a quantity of 950,000 tons being grown in the West Indies, the estimated yield for this year is only 894,000 tons. Therefore, I think we may fairly say that you cannot prove by the Preference that has already been put into operation that you necessarily either reduce the price or increase the quantity grown.

For my own part I would associate myself with what was said by the noble Lord, the Under-Secretary for the Colonies, in regard to the responsibility for the rejection of these proposals. The responsibility does not seem to me to rest with His Majesty's Government, but rather with the voters themselves who, at the last General Election, gave so overwhelming a majority against the policy which had been put before them at that Election. I should have thought that there was very little doubt indeed that at most of the meetings which took place ample reference was made to the preferential aspect of the policy which was put before the people of this country. A great deal of play was made upon the natural desire to do what we could to help the self-governing Dominions, and to meet their wishes. There were very few meetings, I think, at which a great deal of emphasis was not laid on that point. Therefore, I think that His Majesty's Government could really do nothing else but accept the mandate which had been given to them, and sweep away the Preferences as far as they possibly could.

I am not quite sure how far at the present time Preference is indeed the policy of any particular Party in the State. It seems to me that, both with regard to Preference and also with regard to a General Tariff, the official documents put forward on behalf of the Conservative Party show a certain amount of tenderness in dealing with the matter.

I desire to emphasise particularly what seems to me to be the real aspect of the Resolution moved by the noble Viscount. It means, in the first place, an increase in the duties upon the food of the people of this country. It is not necessary for me to read again the list of articles upon which, for the first time, a duty was to be placed, but I must emphasise the point once, more, that there are a number of articles upon which the Conference recommended that duties should be placed, a number of articles of food upon which these duties were for the first time to be put. That is an aspect of the matter which up to the present has not received a sufficient amount of attention.

The second point I wish specially to emphasise is the fact that the agreement to put these Preferential Duties in force would really be only a step in the direction of a full Tariff. Certainly that is the idea which is in the minds of a good many people who support Protection. In the speeches which have been made the same idea occurs. I take Mr. Massey, who, speaking in support of Preference, said: I look upon it that what we are doing now in only a commencement. I know that it is only a comparatively small thing, hut it is an earnest of what is to follow. And so it goes on. Mr. Bruce, whose speeches I am sure every member of this House always reads with interest, says exactly the same thing. He looks on it as only a first step towards a general system of Tariffs. That is what he wants, and he is not, of course, to be criticised for doing so. He wants a General Tariff upon corn and meat, with which the various self-governing Dominions can supply us. It is the first step; and that is why I think it would have been an exceedingly dangerous thing if this country had endorsed the recommendations made by the late Government. When once you have imposed these duties it is extraordinarily difficult to take them off. That is shown by the difficulties there have been in removing the McKenna Duties. There you have an example of Duties which were put on for war purposes and which leading statesmen of both political Parties pledged themselves should be removed as soon as the war was over. Your Lordships know that it is only now that Mr. Snowden, after overcoming great difficulties, for which great credit is due to him, has managed to remove these Duties from the Statute Book.

We are frightened of the policy of Imperial Preference. We are frightened because we know that it was the foundation for the whole of the propaganda for Tariff Reform which was begun by Mr. Joseph Chamberlain in 1903. Those of your Lordships who will carry your memories back to that time will remember that it all sprang from the question of a shilling registration duty on corn. It was from that small beginning that the whole question grew. We are afraid of it today as we were afraid of it then. I am not sure that we always realise the difference there is between Preference in the form which it assumes in this country and the form which it assumes in the self-governing Dominions. Preference here means, of course, that there will be, certainly with regard to these new articles recommended for a first duty, an increase of cost to the consumer. But Preference in the self-governing Dominions means a reduction in cost; and for this reason—where you have a high Tariff and you take off a considerable proportion of it, say, 15, 20 or 25 per cent.—as I am glad to realise many of the self-governing Dominions do—it means that the consumer gets his articles for less than he would have paid if that remission had not been made. Therefore, in common with all Free Traders, I feel that consumers in the self-governing Dominions, in paying less, are reaping some advantage from the Preference given by their own Government.

I dislike very much this bargaining between the self-governing Dominions and the Mother Country, but we are bound to do it. Let me give you some rather striking figures. We provide a free market for the produce of our self-governing Dominions. All that they send to this country comes in free, with the exception of one-quarter of one per cent. That is to say, ninety-nine and three-quarters per cent. of the produce of the Dominions comes into this country free. How do they treat our produce? They put a duty upon 71 per cent. of the goods we send to them and only 29 per cent. of our goods go in free as compared with 99¾ per cent. of Dominion goods which come to us free.

We had a debate on this question early in the year. It was a very valuable debate, and the noble Lord, the Under-Secretary of State for the Colonies, told us something of the difficulties, the enormous difficulties, which met our manufacturers when they tried to send out goods into the self-governing Dominions. Let me take a single example. We are glad to have all the wool which Australia will send to us. If we were looking for a considerable measure of Preference might we not fairly say that all the woollen goods we sent into Australia should go into that great self-governing Dominion as freely as we admit the raw wool which they send to us? That is not an unfair bargain to ask for, but, unfortunately, we do not find that they are likely to agree to it. The noble Viscount behind me has referred to the example set us by the United States of America in regard to Cuba, and he referred especially to the way in which the United States brought Cuban sugar into their own country. Let me remind your Lordships, not unfairly, that Cuba gives a completely free admission to all American goods which go into that country and, therefore, the two cases are not altogether upon the same basis.

We have to remember that there are a certain number of Protectionists in these self-governing Dominions who are anxious to abolish Preference, and for this reason: that it means to them that in so far as there is a reduction in the amount of Preference so far the wall which guards their own country from these imports is lowered, and it is easy for goods to come in. They are anxious that this Preference should be abolished, whereas the Protectionists here want to institute a measure of Preference as a first step towards the taxation of still more and more articles, not only food and raw materials but general and manufactured articles. For my part, I still I hope that we may hear from the Colonies and the Dominions some greater response to the ideal started by Mr. Chamberlain when he suggested that if we gave a preference to them they should give a better market for our manufactured articles. The schedule of prohibited industries has apparently disappeared from all Tariff Reform literature to-day and all that is left is a suggestion that we are to give a Preference to these self-governing Dominions.

I am grateful to those noble Lords who have expressed their agreement in the view that we, who object to a system of Preference, are just as anxious as they are themselves for the unity of the Empire, and I do not share the contempt which the noble and learned Earl threw upon the large sums of money which we lend in order to assist the Dominions. It is a matter of considerable satisfaction to us that this poor and ruined Free Trade England is able to lend to protected countries like Australia a sum of money equal to no less than £700 or £800 per household over the whole of that country. We must, I think, also remember, in welcoming these Preferences which are given to us by the self-governing Dominions, that the statesmen who propose them, and who persuade the people of their countries to adopt them, always explain that they are imposed not only as a benefit to the traders of this country, but also as an advantage to the country which itself gives the Preference. That, I think, is so in every case in which a Preference has been given.

At the present moment, of course, the trade of this country is going through difficult times, but it is interesting to recognise that, while we have increased our trade with the self-governing Dominions, so also the general proportion of our trade has increased and is the same to-day as it was before the war. The totals are naturally different, but the general proportion which our trade with these self-governing Dominions bears to our total trade is the same as it was before the war. If isolated figures were of any use, I would remind your Lordships of the fact that the trade between this country and the United States has increased by something like 100 per cent. since 1913. Without the help of Preference, therefore, we do find that our trade is able to make advances throughout the world.

May I say one final word, a word of repetition? We are afraid of these Preferences because they are only a step towards a general system. That is why it is that now, as for the last twenty years, we have been Free Traders. It is not, perhaps, altogether inapposite to remind your Lordships that in every General Election that has taken place during that period, with one exception, the people of this country have declared themselves against this system. Whether we recall the tremendous claims which are associated with the idea of a Preference which we wish to give to cur own kith and kin, or whether it be the more full-blooded appeal of the idea of helping the unemployed, the people of this country have always refused to have anything to do with it. I venture to think, therefore, that His Majesty's Government were quite right in interpreting the wishes of the people of this country by taking the step which they have taken regarding the proposals of the Economic Conference.

THE EARL OF GLASGOW

My Lords, this is the first occasion on which I have addressed your Lordships, and I ask your indulgence. The noble Earl who has just sat down has made a number of remarks which, no doubt, are unacceptable to some of your Lordships, but he made one statement on a matter of which I have some special knowledge. He stated that the Preference given to the West Indies had not proved satisfactory. I should like to say that this is a misleading statement. There were two bad years of drought there, and, over and above that, the production of cane sugar is an expensive business, and results do not appear for three or four years from the beginning of the work. As the Sugar Preference was introduced in 1919, the results of development are only just beginning to show, but now, with the slap in the face which they have received, the planters see that there is no prospect of continuity, and Empire sugar development will surely decline. If sugar estates go out of production they cannot be brought back within many years, so that, if once foreign control is established, high prices will continue here.

The Resolution before the House has three bearings on Imperial relations—political, economic, and that which concerns the settlement of population. I do not propose to detain your Lordships by discussing the political point of view, which has been fully dealt with by other speakers, except to say that the action of His Majesty's Government has disjointed the policy pursued by the Imperial Government for nearly twenty years, and that this action has been taken without their putting forward any alternative constructive policy in its place. That is a very serious thing to have done. Stability and continuity are essential factors in Empire affairs. It has always been an axiom in foreign policy that there shall be continuity of action by successive Governments and the honouring of obligations. It is much more vital to this country, increasingly dependent as it is for essential supplies on Empire sources, that the decisions of Empire representatives in Conference should be given even more consideration than is given to questions of foreign policy.

There seems to be a delusion prevalent in the country that in considering Empire Preference we are doing a favour to the Dominions. Surely the subject which we are really debating is the security of our own business future. It is obvious that we are an industrial people, whose prosperity is bound up in what we can export, particularly of manufactured goods. In 1922 our total exports were of the value of £719,000,000, and of these eighty per cent. were manufactured goods. The Empire took one-third of this total; but they took nearly one-half of our manufactured goods, which is a point which an eminent statesman in another place quite forgot to mention when he talked about the one-third.

In order to judge of the future of our markets it is necessary to give the figures of the purchases per head of population in the principal countries, as stated in Parliament, for the year ending March, 1924. The statement is a very brief one, and is as follows:—New Zealand, £15; Australia, £10; South Africa, £4; Canada, £3; India, 5s; France, £ United States of America, 10s.; Germany, 14s. 2d. These figures show that the Dominions are far and away our best customers, and as they are developing and their populations are increasing, they are, even more, our best potential customers.

At present the policy of effective Preferences is the policy of the Empire outside this country. All the great Dominions and the main groups of Colonies give us Preferences ranging from a 20 per cent. to a 50 per cent. advantage. All the great foreign countries protect their own products and those of their Dependencies by Tariffs nearly approaching to prohibition for our manufactures and for the primary products of the Empire overseas. These foreign systems act as a repelling force to what the Empire produces, whilst Dominion and Colonial Preferences are a compelling influence towards interchange between Great Britain and her Empire. Are we to refuse to take advantage of this gigantic double force for the sake of a doctrine, and thereby compel the Dominions all unwillingly to make terms with our economic rivals? A Government refusing to do this is guilty of neglecting the interests and prosperity of the people of this country.

To return, if I may, to sugar, I need not tell your Lordships that sugar has always been not only the touchstone of British politics but one of the earliest growths of the Oversea Empire. It is, to-day, the key of the Preference movement. I assume that the object of the alteration in the Sugar Duty is to give cheap sugar to the consumer, but the cheapness, to be of any use, must be continuous, and not merely momentary. The danger of the admission on easier terms of foreign sugar—and that is what the reduction in the money value of the Preference means—is that it will result in the ultimate foreign control of this market, and, although sugar may be cheap for a year or two, its price will rise as a natural result of such increased foreign control. Take the American group—the United States, Hawaii, the Philippines, Cuba, and so on. In 1898 America's controlled product was 12 million tons out of a total world crop of 176 million tons. In 1923 it had risen to over 7,000,000 tons out of a total production of 18,000,000 tons. Add to this the fact that the United States Preference is 10s. per cwt., and our own Preference only 1s. 9d. per cwt. How can the Empire compete in the face of this disparity? It seems beyond dispute, in the light of these figures, that, unless the quota of Empire sugar is maintained, this market will be very soon at the entire disposal of the United States.

In my judgment the result of the failure of the Government to stabilise the Sugar Preference will be the danger of the destruction of this industry in the Oversea Empire, it will also result in foreign control of the homo market, when the consumer here will pay dearly for his sugar for a long period after a year or two of low prices. It will also mean that the ruin of the sugar-producing industry in the Oversea Empire will deprive the British manufacturer not only of the machinery of the industry but of the everyday needs of the persons concerned in it, as well as of some of his most valuable customers, not to mention the disastrous effects on Empire political relationships. Then there is also the loss of a very large amount of British capital invested in Empire sugar undertakings, and the resultant loss to the revenue here.

If I may say so, I can speak with some authority on oversea industries, for the reason that I am, as President of the Empire Producers' Organisation, in touch with all the principal Empire producers, and I think your Lordships should realise the feeling of dismay and discouragement which has been caused by the action of His Majesty's Government. With your Lordships' permission I should like to read some cables which I have received from different parts of the Empire. The South African Sugar Association, who are among the largest buyers of British machinery and supplies in South Africa, cabled to me as follows: Reference cables reporting possibility withdrawal Imperial Preference consternation exists among settlers who undoubtedly invented capital relying stability Preference desire call attention fact that during four years elapsed since principle Preference established and consequence thereof production increased forty per cent. The Australian Sugar Producers' Association, whose members have just placed orders in this country for two of the largest sugar mills in the world, are dismayed at the reduction of the Sugar Preference, for the reason that Australia has become an exporter of sugar and those mills would never, have been built but for the expectation of stability of marked conditions in this country. This is what they say:— Producers deeply regret action Government reducing Sugar Preference which strikes severe blow Dominions. Repudiation this and other Conference decisions must have oblique effect Preferential Tariffs production maintenance integrity Empire. I have other cables to the same effect, which, however, I will not read. Unfortunately, I see from the Press that action has already been taken to effect reductions of the Preferences in the British Guiana Tariff. What effect the reduction will have in the Mauritius industry I cannot say, but there is no question that the result will be to divert the flow of sugar to other markets. Before finally leaving this question of sugar let me say, from some knowledge of the development of this industry, that the previous margin of Preference acted as an enormous encouragement in the development of sugar-growing in the Empire, and schemes were progressing for growing sugar in Kenya Colony, Tanganyika, and many other places which, unless there is a change of policy, will never arrive at their contemplated development. I will not detain your Lordships any longer, except to ask this question: How can we expect Prime Ministers and high officials of the Empire to come here when we fail to give effect to their unanimous decisions, particularly when their decisions are no departure from the principle of the policy of the last twenty years?

LORD EMMOTT

My Lords, I will not detain you for more than a few minutes, but I am placed in a somewhat difficult position, because, while I am a supporter of Imperial Preference, I am unable to support the Motion of the noble Viscount. It is almost a quarter of a century to-day since I entered the House of Commons During the whole of that time, and long before it, I have been a Liberal specially interested in Empire questions, and deeply anxious to explore every avenue which would tend to bind the Empire more closely together. During my three years at the Colonial Office that interest was greatly increased. I visited all the Dominions except Newfoundland, and I hope that I know something of their feelings. I had seen the Empire develop upon a Liberal policy, and yet it seemed to me that some Liberals never fully appreciated the full grandeur and possibilities of the Empire. The Conservatives were more ready to talk of the Empire and to claim credit for the Empire. That was perfectly sincere and natural on their part, and the revival of the Protectionist propaganda in the last twenty years has made it even more the case.

All our Dominions are Protectionist and have given us a measure of Preference which has been a very real benefit to our trade. We ought to say on every occasion how grateful we are for that Preference, but I do not think we should put the case too high. Lord Birkenhead used figures with regard to Canada, but he must be aware that our exports doubled in something like twenty years before 1913, and the exports to foreign countries also increased in about equal proportion. There was a general increase, and his statistics want checking by the statistics of foreign countries. Now we cannot give the Dominions the Preference that they desire because that means the taxation of food and the taxation of raw material. This country refused to listen to that, both in 1906 and in 1923. I think the country is wise. While we are so much dependent for the things we eat and our raw material upon our export trade being one-third or one-fourth of the whole production, it is absolutely essential to manufacture cheaply, and I do not see how we are to do so if we abandon our practice of Free Trade.

If Free Trade within the Empire were possible I should be willing to consider the question of Tariffs against the rest of the world, but it seems to me to be wholly impracticable. I hold in my hand an official publication from the State of Victoria in which it is said that their policy is to attempt to give Preference within the Empire consistently with the development of local manufactures. We know that it is the case, and it is likely to continue to be the case, and it is becoming the case I regret to say in India. Canada, New Zealand and South Africa are also Protectionist. The possibility of Free Trade within the Empire seems to me to be absolutely out of the question; and therefore I come to the main point to-day: What ought to be done by anybody holding my views?

Certain Resolutions were passed dealing with Preference at the Imperial Conference. My experience at the Colonial Office, and such knowledge of the Dominions as I have, make me attach great importance to these Imperial Conferences. We shall drift apart if we do not keep them up, and if we do not confer, and it is most desirable that the Dominions should retain faith in these Imperial Conferences. I know what ought to have been done. That insensate Election of 1923 ought never to have been held. There was a majority in the House of Commons then that would have passed these Resolutions on Imperial Preference. I never can understand why Mr. Baldwin was so ill-advised as to take the line he did. However, it is no use crying over spilt milk; the point is what we ought to do now.

I confess frankly I should have liked to see a more sympathetic attitude in regard to these Resolutions. On broad Imperial grounds it is necessary that the faith in these Imperial Conferences should be maintained in our Dominions. I should even have stretched a point on some of these Resolutions. I would not have put on new duties—the point to which my noble friend, Lord Beauchamp, referred—because I think that kind of thing leads to friction. But I would have continued to give Preference on any commodities that we could. I know you can argue, taking each one by itself, that they are no use, that they are more or less illusory, unless you tax food. But I do not like the argument of the noble Lord, Lord Arnold, or the phrases which he used, in regard to the whole question of Imperial Preference. If the Dominions are willing to take what seems to me, as a Free Trader, a somewhat illusory benefit, why should they not have it? It is surely worth while to make some gesture. I am not saying now what I have not said elsewhere. I wrote to the leader of my Party months ago to say what I am saying to your Lordships to-day. But, of course, I am speaking here entirely for myself.

Now I come to the Resolution of the noble Viscount. I cannot vote for it. It is rather idle to talk of a policy "unanimously approved by all the States of the Empire" when this policy—mixed up, I admit, with other proposals—was submitted to this country at a General Election and was rejected. Nor do I think it is true, still less do I think it would be wise if it were true, to say that this decision is going to prejudice the unity of the Empire. We are still the best customer of the Empire, we still have our ports open to nearly all the commodities of the Empire, and I do not believe in this talk of their going elsewhere. Why, Canada and Australia have been trying to arrange, for twenty years, a preferential agreement about wool and timber, and have been unable to do it. When this talk cools down I hope that we shall retain the affection of the. Dominions, and that they will see that there are strong and definite reasons why they should remain loyal to the British Empire.

THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR)

My Lords, we all recognise in these matters the authority of the noble Lord who has just spoken, and who, I think, has more than once used the same language in this House which he has used this afternoon. Before proceeding further I want to make it absolutely clear—though I think that Lord Arnold himself made it absolutely clear—that in approaching this question we desire to do everything we can to cement the unity of the Empire, and to carry on the Imperial unity of which we are all so proud in this country, and which has had so beneficial an influence in the history of the world. The noble and learned Earl, Lord Birkenhead, postulates that the refusal of this Preference policy tends to the prejudice of the unity of the Empire. I think that is absolutely untrue. I think the discussion to-day, and the discussions in various parts of the Empire, show most clearly that, by introducing into our Imperial relationships a matter that undoubtedly raises Party differences in our home politics, you are much more likely to prejudice the unity of the Empire than by any unsympathetic attitude towards Preference.

The results of this are obvious already. It is very lamentable that even in this country we should dispute as a matter of Party politics over our desire for real Imperial unity. It is a matter of regret that one Party should say of another that "Unless you adopt some particular Preferential policy you are prejudicing the unity of the Empire." But it is worse, I think, when you come to the Dominions themselves. Disputes have been aroused in various Imperial Legislatures which I very much regret, on this very question, which I think ought not to have been raised at all. I have noticed the discussions particularly in Australia, where it has been intimated that the loyalty of the Dominions towards the Mother Country depended, at any rate to some extent, on the ability to obtain these preferential trade conditions. I think that is very lamentable indeed. I do not believe that the loyalty of the Empire depends upon any such thing. It is not unnatural, if you once begin to discuss such things, in reference to which you know there are differences of opinion, and on which there is not and cannot be unanimity, that those discussions should lead to the suggestion that the unity of the Empire may be imperilled unless we adopt a particular trade policy. I think nothing can be worse than that, and it is one of the reasons why those who desire Imperial unity regret that the Preference issue should have been raised in this aggravated form.

The noble and learned Earl seemed to think that the noble Lord, Lord Arnold, had not dealt with matters of fact. I think the crucial instance that he took was sugar. It has already been stated, and therefore I need not repeat the figures, that in reference to sugar no benefit has accrued as regards price. That is common ground. But what appears to me perhaps more crucial is that there has been no increase whatever of production in the Empire.

THE EARL OF BIRKENHEAD

Surely the noble and learned Lord is aware that there was a world shortage of sugar at the relevant period?

LORD PARMOOR

What I am saying is perfectly accurate, and the noble and learned Earl's intervention is beside the point.

THE EARL OF BIRKENHEAD

I would not be guilty of discourtesy. I merely meant that that is the explanation—that there had been a world shortage.

LORD PARMOOR

I am sure the noble and learned Earl would not be discourteous, but what I am putting is the broad fact, which no one can deny, that no benefit has accrued as regards price from the Preference, and that no increase in production has accrued within the Empire. If I might take what the noble and learned Earl so often referred to, you have there an actual fact. Although I am the last person to prophesy, particularly in regard to these very intricate commercial matters, I must say that I think that if you are looking at the "interests of this country—although I deprecate looking only to the interests of this country and I think we ought to look to the interests of the Empire at large—or to the interests of the Empire at large, when you come down to concrete facts you will find there has been no benefit either to the one or to the other.

Before I turn to one or two other points to which the noble and earned Earl referred, I should like to emphasise something which I think has been forgotten: that is, the analogy which the noble Lord, Lord Arnold, made regarding the terms of the noble Viscount's Resolution. What is the Resolution? I feel sure that the noble Viscount will appreciate the criticism which I wish to offer, although the noble Lord, Lord Arnold, has already referred to the matter. The Resolution refers to the proposal to maintain the Sugar Preference for ten years. Under our system of Government, how can you give a guarantee to maintain the sugar Preference for ten years? You cannot interfere with the authority of Parliament. You cannot interfere with the power of Parliament to give effect to whatever may be the wishes of the people of this country. Surely there could not be a worse suggestion, if I may say so to the noble Viscount, for whose opinions I have great respect, than that the loyalty of the Empire depends upon the disregard of one of the fundamental conditions of our Constitution—namely, the power of annual review possessed by the House of Commons in matters of this kind. When one comes to analyse these matters it seems to me that one sees on every side possible causes of friction.

Let me deal with the second part of the noble Viscount's Resolution, which says that the House profoundly regrets the declaration by the Government that they reserve full liberty to propose to Parliament the reduction or abolition of the duties on all the commodities to which Preference now applies. Does the noble Viscount want to take away that power from Parliament? Let me give your Lordships a similar illustration to that already given by the noble Lord, Lord Arnold. Supposing that a Parliament is elected with a mandate—I will not discuss whether there is a mandate now or not—that there shall be no further duties on sugar or tea, is it not absolutely essential that you should not place the Dominions in the position of being able to say, because a particular Parliament with a certain mandate desires to abolish the duties on sugar and tea: "You are playing false to the promises you made to us"? I think that would be a most lamentable position of affairs, and I cannot think of anything worse than to give a vote in favour of what the noble Viscount's Resolution would really mean, which is that where a Preference has once been given no subsequent Parliament is to have any power of dealing with it by revision or reduction.

VISCOUNT LONG OF WRAXALL

I neither said nor meant anything of the kind.

LORD PARMOOR

I am taking the terms of the Resolution on which I understand we are to vote. The terms of the Resolution in this case are: "as also their declaration "—that is, the Government's declaration, and this is what the noble Viscount objects to— "that they reserve full liberty to propose to Parliament the reduction or abolition of the duties on all the commodities to which Preference now applies."

VISCOUNT LONG OF WRAXALL

The noble Lord forces me to interrupt him. It is perfectly evident from his own reading of those few words of my Resolution that what I say there refers to the Government. It does not refer to Parliament. It does not propose to limit the powers of Parliament. It says that I regret in the circumstances (as I do) that the present Government chose to announce that in this particular case they would abrogate these duties, although, as the noble Lord knows perfectly well, there are cases in which other duties are to be in force for five years.

LORD PARMOOR

I should be very sorry to have any controversy with the noble Viscount, and on the constitutional point I do not think there is any real difference between us. Whether you ask for a declaration that the Government will bind itself not to alter these Preferences, or whether you say, as I understand the noble Viscount to say, that the Government should pledge itself that Parliament will not do it, no Government could make such a pledge. If a Government gave that pledge and a Parliament was afterwards elected which intended to adopt a different policy concerning duties of this kind, it would then be open to our Dominions to say: "Why did you put us in this position? You put us in the position of believing that these Preferences would be perpetual, whereas you knew"—and every lover of the Constitution in this country knows it—" that under your free system no Government could give a guarantee of that kind, and that it would be entirely dependent upon the Parliament which might be returned after a particular Election."

There are two other points in the noble Viscount's Resolution which have already been referred to by the noble Lord, Lord Emmott, on which I should like to say a word or two. How can the noble Viscount talk of the unanimous approval of all the States of the Empire? Are we not one of the States of the Empire? Has there been unanimous approval in this country? It is because there has not been unanimous approval in this country that this policy is not at present being carried forward. When you are talking about Imperial unity and Imperial loyalty, it is absurd, to my mind, not to take into consideration the opinion expressed in the Mother Country. I am absolutely at a loss to see how, under these conditions and under the conditions of the debate which has taken place this evening in your Lordships' House, any one can possibly say that there has been an "unsympathetic attitude to a policy which has been unanimously approved by all the States of the Empire at successive Conferences."

I will not deal now with the last part of the Resolution, because I have already referred to it. I think it is by far the most important part. Had the noble Viscount, the noble and learned Earl, or the course of the debate been convincing that the policy which the Government has adopted towards Preferential Duties would prejudice the unity of the Empire, no one would vote more gladly against any policy of the kind than I should. I say frankly that I do not believe it. I say exactly the contrary—namely, that a policy in commercial matters which creates so much difference of opinion is just the sort of policy which is likely to raise very awkward questions between the various States of which our Empire is at present comprised. You are throwing among them an apple of discord so long as this is a matter in reference to which there are acute political differences.

May I say a few words next upon two points which were referred to by the noble and learned Earl, Lord Birkenhead? If I may say so, I will not go back into my own history. I have been Chairman of the North-West Free Trade Union for very many years, and I think there was a time when the noble Earl's own arguments appealed to me more strongly, perhaps, for their vigour than their logic. However, I will not go back into those days. Let me deal with two matters with which, apparently, he dealt incidentally. One is the question of Reparations. I entirely agree with every word he said, though we are not discussing that point now. I do not see any way in which Reparations can be paid unless there is a surplus of German exports over imports, and I do not believe that any economist does. As I say, I entirely agree with the noble and learned Earl. But if that is true, the disadvantage as regards our trade or its influence on our trade is that we have committed ourselves to Reparations at all in this form. I am not going into that question at the present time; it is far too wide a question. I only wish to say that I entirely agree with the statement of the noble Earl. I do not believe that there is any way in which these Reparations can be paid without getting a surplus of exports over imports. I dare say there will be fear that there may be unfair competition with the industries of this country.

There is one other point to which the noble Lord referred, and that, was in regard to trade unionists. I think he is quite mistaken in saying that trade unionists are Protectionists in the sense that he used the term. They are protectionists in the same sense no doubt as the members of the Bar are protectionists—that is to say, they seek, so far as their trade or profession is concerned, to secure the best conditions that they can. I think that is quite right. At the present time I think you will find that almost every profession is gradually becoming a protectionist body as regards the interests of its own members, in order that they may carry on their trade or profession under fair conditions.

What I want to put to your Lordships is this. The noble Lord thought that unfair conditions were likely to arise by the competition of sweated industries in other countries against the industries of this country. I happen to have come back only last week from Geneva. What is going on there? The International Labour Conference is meeting there, and that Conference is dealing with this subject. There is to be an International Convention under which the hours of labour shall be the same amongst all these competitive countries to which the noble Earl has referred.

THE EARL OF BIRKENHEAD

Japan as well?

LORD PARMOOR

Yes, all countries. I do not say that the proposal of a Convention has been adopted yet, but the effort is being made so as to meet what the noble Earl called unfair conditions by insisting that in all countries the working classes shall not be employed under conditions of sweated labour. That is the effort which is now being made. I sincerely hope it will be, successful. I only refer to this matter because it was mentioned by the noble Earl, for I think it is really rather outside the topic which is before your Lordships. Let me repeat, in conclusion, what I have said throughout, that we, the members of the present Government represented in your Lordships' House, do not yield to any one in the loyalty of our feelings towards maintaining in the most friendly relationship Imperial unity between all the States and Commonwealths of which our great Empire is composed.

On Question, Motion agreed to.