HL Deb 19 November 1929 vol 75 cc546-94

LORD BEAVERBROOK rose to ask His Majesty's Government if they will do anything to encourage the movement for Free Trade within the Empire. The noble Lord said: My Lords, I rise to put the Question to His Majesty's Government that is on the Paper in my name. In doing so, I may be permitted perhaps to explain what we mean by Free Trade within the Empire. We mean a movement which is to develop the resources, the industry and the commerce of all parts of the Empire to the fullest possible extent and for that purpose, so far as may be possible, to make of the whole British Empire one economic unit, to do everything in our power to break down all obstacles to Free Trade within the Empire, and to make the financial resources of the Empire more fully available for the benefit of all parts of the Empire. I suppose that in these proposals we shall have general agreement, but when it comes to the methods by which we hope to carry them out there may be considerable points of difference. We hope to carry them out by building up such tariffs against the foreigner as may be necessary to realise those ideals.

Perhaps I may be permitted at once to say that our plan is not the plan put forward by Mr. Chamberlain in 1904. In saying that, I do not wish to dissent in the very least from the Chamberlain programme. On the contrary, I was a supporter of that programme and a humble follower of Joseph Chamberlain. But our plan does differ from the Chamberlain programme. We only wish to make out a case for the duties because it is said by the critics of the Chamberlain plan that it was four times rejected by the electorate. I do not agree with that statement at all and I think most of those who think with me will disagree profoundly with it. But at the same time, for the reason that the statement is made, we have a right to declare that our plan differs from the Chamberlain plan. It differs in this respect. The Chamberlain plan proposed a tariff wall around Great Britain. It was insular Protection. That insular Protection was subject to reciprocity in favour of the Dominions and of the Colonies. Our plan is a tariff wall around the whole Empire and, of course, the building of that tariff wall is conditional upon reasonable response from the rest of the Empire. Then again the Chamberlain plan proposed a duty on Empire foodstuffs, subject to rebate. We do not propose any duty at all on Empire foodstuffs. On the contrary, we declare that Empire foodstuffs shall be free of duty if our plan can be carried into effect. I must say that I firmly believe that if Mr. Chamberlain had had to deal with these issues at this time he would have brought forward our plan, and I also think our plan really flows from the Chamberlain plan. But it is a fact that in 1896 Mr. Chamberlain, with a proposal for our plan before him, actually rejected it. He gave as a reason for rejecting it that the burdens that Great Britain would have to bear were so huge, because of her immense foreign trade, in proportion to the advantages, that Britain would be carrying a much heavier load than our fellow-subjects overseas.

The next question that arises is whether our plan, if carried into effect, is really worth while. I am indebted to a manifesto recently issued by my noble friend Lord Melchett for some figures which I would lay before the House and which. I think, justify our contention that the plan is worth while. These figures show that the total imports of the Empire amount to £2,200,000,000 yearly. Of these total imports of £2,200,000,000, only £900,000,000 are brought in from one part of the Empire to another, leaving a surplus of £1,300,000,000 imported from foreign countries. We believe that this immense surplus of £1,300,000,000 offers us an opportunity which alone makes our plan worth while. But we go further in our assertions and point out that since the War the exports of Great Britain to the Dominions, Colonies and Dependencies have grown by 67 per cent., and at the same time the exports to foreign countries have grown by only 16 per cent. The figures for re-exports are: 60 per cent. to our own Empire and only 5 per cent. to foreign countries. These figures constitute for us a further argument in favour of our contention that the plan is worth while.

Now I come to my next argument, which involves a comparison with the United States of America. The United States has become of late a great menace to the British manufacturer. In fact, in 1913, the year before the War, American exports of manufactured goods were half those of Great Britain. Now, in the year 1929, American exports of manufactured goods are actually more than the exports of Great Britain. If ever there was an important industry it is that of steel and iron. During these years the American position has changed to such an extraordinary extent that the Americans now have five times the output of iron and steel that we have in Great Britain. Not only so, but under the existing conditions America is actually attacking us in our own Dominions. The imports of the Dominion of Canada from Great Britain have shown no development at all. In fact, if we take into account the different value of money between the year preceding the War and this present year, the imports of Canada from Great Britain have actually declined by 10 per cent., and all through these years the Canadian imports from the United States of America have grown steadily. A similar comparison of the condition in Australia gives very much the same results. In 1913 Australia bought 52 per cent. of her manufactured imports from Great Britain. In 1927, which is the last year for which figures are available to me, Australia imported only 41 per cent. of her imports of manufactured goods from Great Britain. During this period her imports from the United States of America actually doubled, and they now amount to the very considerable figure of 25 per cent. of the whole.

What is the reason, we ask ourselves, that the American position has improved so rapidly compared with that of Great Britain? We are convinced that it is due to mass production in the United States, and that this mass production is founded on the American domestic market. We argue that the Empire, with a larger area, with a bigger population and with more buying power, offers as good an opportunity or a better opportunity for the same development of mass production and for the same reliance upon the domestic markets. But in order to attain this we urge that economic fusion within the Empire is completely essential. The objection so frequently directed to those of us who support this plan is that it cannot be done. We think it can be done, because it has been done. It has been done, for instance, in Canada. In 1842 there were six separate Colonies in Canada. These Colonies all had separate tariffs. Some of these tariffs were designed for Protection, and two, at any rate, were for revenue purposes only. There were in the Dominion of Canada two races and two religions. There were the French Canadians and the English. The French Canadians were Roman Catholics and the English were Protestants. When the idea of a Union was brought forward in 1842 it had few supporters, but these grew in number, and the first effective steps in favour of the Union were made in 1867. Even so, the year before the Union was brought about the Province of which I am a native rejected it at the poll, and when it was brought about in 1867 two Provinces refused to join it. Notwithstanding these facts, the Union was carried out, and one of these Provinces joined very shortly.

When the Federation took place the distances between the Provinces were very great. It was a long journey from Eastern Canada to what were called Upper and Lower Canada, and the journey was made under very great difficulties. In the winter one Province had practically no access to the others, and during the summer months waterways had to be relied upon altogether, under immense difficulties, and great periods of time were passed in reaching the various Provinces that had joined in the Federation. Further, there was one Province, British Columbia, which was distant from Upper Canada by over 2,000 miles, and there was no communication between British Columbia and Eastern Canada at all. Indeed, the area between Upper Canada and British Columbia was almost a desert, with a great mountain range which was inaccessible and with no communication by telegraph or telephone, as there is now. There were no means of access by waterways. And yet this Union was carried out.

I pass at once to the Australian example. In Australia there were six separate Colonies. The Union of the Commonwealth was carried through in nine years, but during that time New South Wales had actually rejected it on one occasion, and when the Commonwealth was brought into being the State of Western Australia actually exercised the right to levy duties, and exercised it for five years after the Commonwealth was in being. We take great encouragement from the experience of Canada and Australia. We have yet another example in the United States themselves. After the War of Independence there were thirteen separate Colonies in America, all claiming separate sovereign rights. These Colonies set up tariffs against one another. One State was actually charging heavy duties upon the ships' bottoms of another State, and there was practically no traffic between New Jersey and New York. Yet five years after the War of Independence an attempt was was made to consolidate these thirteen separate sovereign States. Efforts appeared to move very slowly in the direction of success for a long time, and it was only with the greatest difficulty that the States were finally brought together, with three dissenting States. North Carolina, Vermont and Rhode Island all refused, but in the end, of course, these States joined in what we now know as the United States of America.

Of course, these examples are familiar to me, but another example, which is perhaps more familiar to the people of this country than any other, is the German Zollverein, which took fifty years to grow. During that time there were separate tariffs, separate fiscal systems and currencies, and Free Trade areas also, within the Zollverein. It is now merged into what we now know as the German Empire, and we have recently seen figures quoted in the newspapers to show the immense progress which the Empire is making, in competition with us, in the sale of manufactured goods.

If I have made some headway in suggesting that a union of the Empire can be secured, because it has been reached elsewhere in similar circumstances, I would like to pass on at once to the very next question directed against us most frequently and, as our critics think, with most damaging effect. That is, will the Dominions consent to it and have a fiscal union? We believe that they will, and in support of our belief we would refer first of all to New Zealand. I have here the New Zealand Official Report of the proceedings in the New Zealand House of Parliament on July 17. I have here a declaration by Mr. Cobbe, the Minister of Industries and Commerce. Mr. Cobbe declares that he knows of no remedy for the state of affairs which had been brought to his attention during the debate except Free Trade within the Empire, and a tariff against foreign nations similar to the tariff which they imposed upon our exports. Mr. Cobbe goes on to say:— The Empire of which we are part should not be a mere counter for the display of the manufactures of other countries. Of course, it may be said that we in New Zealand are actuated by selfishness when we advocate the encouragement of inter-Empire trade. But can we be blamed if, in doing good to the Empire as a whole, we do good to ourselves? I think that represents the attitude of New Zealand. I think I have clearly established that New Zealand not only looks upon Empire Free Trade as something obtainable but as something really beneficial to New Zealand itself.

Then I will deal with Canada. There has recently appeared on the Order Paper of the Dominion House of Commons a Resolution put down by Mr. Fansher, a member of that House. He is a Progressive. The Progressive Party, I think, numbers about ten. It has been an important factor in Canadian politics for some years. He has put down a proposal for consideration at the coming Session of Parliament of the question of providing a progressive increase of the British preferential tariff, with the object of Free Trade with the Mother Country within five years. His Resolution is very important, and I believe it does show a general support in the Dominion of Canada of the movement in favour of Free Trade within the Empire. Further, there is considerable newspaper opinion in Canada in support of the movement, and it is influential opinion. I do not deny that there is considerable opposition amongst newspapers to the movement, but there is also real support for it. And why not? Canada has a great deal to gain from Free Trade within the Empire.

First of all Canada must consider her markets. Her greatest market is in Great Britain, and that market is for wheat, the produce of Canada. In the year 1928 Great Britain took from Canada 70 per cent. of all her imports of wheat. In the present year the situation has greatly changed, for reasons which I hope to deal with shortly. The Argentine shipped into Great Britain 340,000 tons of wheat in September, and 320,000 tons in October—ten times as much as the Argentine sent in a year ago. Canada has sent to Great Britain in the same time less than half as much as was sent by the Dominion in 1928. Canada is conscious of the fact, because it is really under-selling by the Argentine in this country. Canada has much to expect from the sales of wheat here, and could and would be prepared to make considerable concessions to ensure that market. It will be said that Canada already gives a Preference to Great Britain, but it is not a Preference of very great real value, because in practice it does not work out just as we would like it.

At the present moment the United States of America sells to Canada a thousand millions of dollars' worth of goods a year, more than half manufactured goods. Great Britain, on the other hand, sells to the Dominion only two hundred millions dollars' worth of goods a year, and more than half of it is raw material, and the manufactured goods include whisky. There is a very big export of whisky to Canada. There is a great disparity between the figures of sales by Great Britain and by America in the Canadian market, and it seems perfectly plain that Canada, without in the very least damaging any of her industries, can still under a system of Empire Free Trade, subject to such limitations as we admit are to be imposed in order to protect key industries and important industries of the Dominions, impose conditions in relation to her trade with Great Britain which will immensely swell the output of this country.

Then take Australia. It is said that Australia will not have Free Trade within the Empire. Why not? Australia has a great deal to gain from it, and since many Australians look at it entirely from the economic point of view perhaps I may be permitted to do the same. We have declared that it is desired to make the financial resources of the Empire more fully available for the benefit of every part of the Empire. Australia has a great deal to gain out of furthering the financial resources of the Empire. Australia is very greatly in need of credit, and if the Empire is in a position to furnish that Dominion with additional credit facilities that in itself is a very great concession. I must say I am entirely in favour of doing so, for I am convinced that if Britain does not furnish the necessary credit for Australia, that Dominion will naturally apply to the United States of America. I am equally convinced that the United States of America will at once turn a listening ear to the Dominion. At any rate, there is a great deal in the way of real advantage to Australia if the financial resources of the Empire were made more fully available for that Dominion.

Then again, Britain is in any case the best customer that Australia has. Britain takes from Australia more than any other nation of the Dominions' wool, meat, and wheat, and these three commodities are the most important items in the Commonwealth's exports. The total exports of the Commonwealth amount to £142,000,000. Of that amount £108,000,000 represent agricultural produce, £10,000,000 gold and £4,000,000 lead, and the manufactured goods exported by the Commonwealth are practically negligible; so it would be right to say that the exports of Australia are primarily agricultural exports. Australia, like Canada, must be greatly interested at the present moment in the sales of Argentine wheat in the British market, for if the sales of Argentine wheat are to continue, Australia will find a damaged position for her products here. Then again, Australia is interested in the £28,000,000 worth of beef that Great Britain buys from abroad. This beef is at present supplied by the Argentine. There is a great deal to be said for the supply of beef from the Argentine; there is also a great deal to be said for getting that supply of beef elsewhere.

At the present time the Australians buy £140,000,000 worth of manufactured goods. Of those £140,000,000 little more than half come from the Empire; £65,000,000 come from foreign countries. Why should not Great Britain share in that £65,000,000? I am bound to say it is my firm conviction that Great Britain could quite easily obtain in the Australian market, without any damage whatsoever to Australian industry, and relying only on the invasion of the foreign markets, at least double her present sales to that country. For instance, Australia is buying yearly £14,000,000 worth of motors. Of this purchase £9,000,000 actually come from the United States of America, and £1,000,000 from Canada, with less than half a million from Great Britain. There seems a real opportunity for expansion in those directions, without the slightest damage to the existing key industries of the Dominion of Australia. Then again, there are the advantages which these Dominions will have in trading with each other. If we succeed in establishing our fiscal system, whatever opportunities we get for trading with the Colonies and Protectorates, they will enjoy exactly the same opportunities as we shall enjoy ourselves.

Now I go on at once to the difficulties which stand in the way of our project, for I admit that there are difficulties, and very great difficulties. I am told that the greatest difficulty is that the electorate will never consent to a tax on food. I cannot at all accept that declaration. The Republic of France has submitted to a tax on food. The Colonies of that Republic send their foodstuffs into the home country without any tariffs at all, but tariffs are strictly enforced against the foreigner. The people of France are quite as democratic as the people of England. If France could be persuaded to adopt food taxes, I do not see why England cannot be persuaded to take the same course. But, in any case, our plan has some features which the electorate have never had the opportunity of considering. Under our plan, we do not propose any duty whatsoever on Empire produce, whereas under the Chamberlain plan there was a proposal for duties on Empire produce. That is the first difference, a difference which I think will commend our plan to the electorate.

The second point is that under present conditions the Empire can feed herself. That was not the situation in Chamber lain's time at all. The Empire could not feed herself in Chamberlain's time. Since Chamberlain's day Canada and Australia, for instance, have increased their wheat output by five times, and there is now in the Empire an annual production which gives a surplus in the Empire of 20,000,000 quarters of wheat, 1,000,000 quarters of barley, and sufficient oats for our purposes—a very different story from a few years ago. We also have now in the Empire plenty of cattle. We have far more cattle than the Empire requires. Our sheep are far beyond our necessities. Australia now has twelve million head of cattle. England and Wales only have six million head, and Scotland and Ireland, North and South, have six million head; so that in Australia there are as many head of cattle as in England and Wales, Scotland and Ireland, North and South. North and South Rhodesia are also increasing their cattle stocks with great rapidity, and there are many persons who believe that Rhodesia will shortly increase her head of cattle at the rate of half a million yearly. The Canadian cattle will shortly be available to the Empire, too. Canadian cattle have been drafted for a long time into the United States of America, where the duty has only been 1½ d. a pound; but the American Congress are now proposing to increase the duty to 3d. a pound. The moment that is done there will be plenty of supplies available in Canada if we wish to make purchases there. I have only dealt with wheat and meat, but if noble Lords would examine the figures it will be seen that the Empire can really supply under existing conditions all the foodstuffs she requires, with one or two negligible exceptions.

The last, and perhaps the most difficult, of the contentions that we put forward is that there will be no increase in the cost of food. We make that contention and we try to support it by argument. And this is our argument: there will be no increase in the cost of food under our plan, because there will be no shortage. There will be a surplus, and there ought not to be any increase when there is no shortage but really a surplus. But we go further. We point out that at the present prevailing price for wheat, which is about 40s., or even less, a quarter, bread is selling at a given price. If the price of wheat were increased to as much as 55s. a quarter an increase of as much as 40 per cent., there ought not, in our belief, to be any increase in the price of bread. In support of that, I will quote some figures. In August, 1924, and in March, 1928—two dates that I have selected out of a long list of dates—bread was selling at 9¼ d.; yet in August, 1924, wheat was selling at 58s. a quarter, and in March, 1928, wheat was only 43s. 6d. a quarter. So here you have actually a difference of 15s. and yet the same price prevails for the four lb. loaf.

I quoted these figures recently and somebody said: "I am not in the least impressed by these figures carefully selected for good periods. It is well known that the price of wheat varies more rapidly than the price of flour and varies more rapidly than the price of bread. "So I went back to my figures and made up the figures for the price of wheat and bread over the seven years from 1922 to 1928, and I assure you that an examination of those figures shows, and shows clearly, that the contention that bread can be sold at present prices when wheat is as high as 55s. is really borne out. In support of that let me quote to your Lordships the years 1922 and 1924. I have taken those two years for purposes of comparison. Wheat in 1922 and in 1924 was selling at exactly the same price; yet in 1922 bread was actually one penny more than in 1924. Let me take the years 1926 and 1927 when bread was selling at the same price. In 1926 wheat was 53s. and in 1927 it was 47s. Therefore, I declare that an examination of those figures would convince almost anybody that there is sound ground for saying that an advance in the price of wheat from 40s. to as much as 55s. does not involve any increase in the price of bread at the present time.

I come to the next commodity that is used by the people in great quantities; that is, mutton. There is no case to make in regard to mutton at all because it all comes from the Empire and I think I can at once pass to beef. Under our plan will there be any increase in the price of beef? We import more than half the beef which is consumed in this country. Of that import as much as 90 per cent. comes from the Argentine. We are about to have a new element in the beef trade. The Uruguayan Government is coming into the market in Christmas week. The Uruguayan Government has got rather jealous of the Argentine shipment of beef so it is coming in with a cargo at Christmas. Why should we take this foreign beef at all? Is it necessary to do that at all in order that we shall have cheap beef? The reason why we take Argentine beef at all is that the lines of communication have been established with that country. The lines of communication are very efficient. The ships, the storage plants, the abbatoirs, the unloading and loading plants are all very efficient. The trade is all in the hands of five separate firms, four of them American and one of them British or Argentine, I do not know which. The firms are Swifts, Vesteys, Armours, Morris, and Wilson. Of these Swifts, Armours, Morris, and Wilson are American.

Those five firms control the trade with the Argentine. Please understand that I make no complaint of it at all. I am in favour of many of these things. Two of these firms, Armours and Morris, have undertaken to act together in the British market and separately in the Argentine. These five firms fix the price at which they will buy the Argentine beef. I am told on good authority that one of them, Vesteys, has as many as 5,000 butcher shops in Great Britain—5,000 distributing shops. These very large firms can develop exactly the same market in Empire beef. The opportunity is there. They have merely to turn to Australia with their lines of communication all built up. It is said that it is no use going to Australia because you cannot chill beef if you bring it from Australia: you must freeze it. You can only chill beef that is brought from the Argentine, it is said; the voyage from Australia is much too long. I do not agree with that. In the first place, I do not think that beef that is brought from the Argentine is chilled. I think it is practically frozen. The temperature falls, I think, as low as 29½ degrees and that is considerably below freezing point. Some, or rather all, of the Argentine beef brought into this county is practically frozen. Further, the period of time that it takes to bring Argentine beef here is five weeks altogether. I have a letter from the official secretary of the Commonwealth of Australia saying that a cargo of beef has been brought from Australia in 29 days; that the average time for loading and unloading is four days, making in all 33 days. If it can be brought from the Argentine in a chilled condition in five weeks it can be brought from Australia in the same period of time.

It seems to us quite plain that we have only to persuade these firms by fiscal and economical advantages to turn their energies to the Australian meat market instead of devoting themsevles altogether to the Argentine market. We admit at once that the quality of the Australian beef must be improved. Actually there is no incentive to improve the quality until the Australians can find a market. There is not much use in their improving quality if there is no opportunity of selling their beef here. And even supposing we cannot divert the Argentine trade to Australia—I am strongly of opinion that we can—there is still Rhodesian beef that can be brought here in large quantities, and there is Canadian beef, which is much better in quality than the Argentine beef. Again, if Canadian beef is brought in it will be a great advantage to us in bringing in Canadian cattle on the boat because that means business in hides and so on.

In support of my contention that our food under our plan will not be increased in price let me say this. The inferior parts of Argentine beef sell in Great Britain at the same price as the inferior parts of British beef; it is only the superior parts of British beef that sell at higher prices. The better parts of British beef sell at from 4d. to 8d. more than the prices obtained for the better parts of Argentine beef. But the superior parts of British beef are worth the extra price. You cannot get the same quality of beef from an animal fed on the pampas that you can get from animals fed on British pastures. If there is an increase in the beef from within the Empire I have not the least doubt that there will be an increase in the sale of British beef. I must slip through my argument with regard to the price of food. But I think it is certain if I had time and could prevail upon your patience, I could prove that the same conditions that relate to wheat and to beef and mutton apply to practically all the other foodstuffs that are necessary for our consumption.

My next argument is all in favour of our plan for Free Trade within the Empire. It is an argument that cannot be ignored. It is the economic pressure of events not only on Great Britain but on the Dominions and the Colonies. That economic pressure is the new phase that is appearing in our commercial relations as exemplified by the dumping and subsidising that is going on wholesale. There is, of course, the East Prussian dumping about which my noble friend Lord Bledisloe has made the case in your Lordships' House. He made it, if I may say so, very clearly. I could add nothing whatsoever to it, nor could I make it nearly so well. There is, of course, a clear case against the present system of dumping from East Prussia under subsidised conditions, and if it is to continue there must be a complete disturbance of the whole economic structure here in Britain.

Passing at once to the Argentine, the Argentine is at present producing wheat at a price as low as 20s. per quarter. I have stated previously that the price was 25s. a quarter, but some calculations have recently come into my possession which convince me that the Argentine is producing wheat, at the moment, for as little as 20s. a quarter, and that compares with a cost of production here of something in the vicinity of 50s. a quarter. It does not bring any cheaper food to the mouths of the people of this country. But there you have this cost of production in the Argentine of 20s. per quarter and this cost of production in Great Britain of 50s. per quarter. When we examine the figures relating to beef we find that the cost of production in the Argentine is 27s. 6d. per live cwt. The cost of production in Great Britain is far in excess of that. The reason why the Argentine is in a position to produce at this low level is that they have cheap labour—labour that would not be tolerated in Great Britain for a moment—and it is really the protection of the labourer himself that makes it essential something should be done to deal with the Argentine problem.

There is a third economic issue, far more important than either of those, and that is the creation of the Federal Farm Board in America of which very little seems to be known in Great Britain. The Federal Farm Board was set up by the acts of Congress and the Senate. It is constituted of a body of eleven members, with a voluntary worker as the chairman of it. The Federal Farm Board is endowed by the American Government with a fund of 500,000,000 dollars, and with this immense sum of £100,000,000 the Board is instructed by the Act to use the money for two purposes—firstly, to subsidise the farmer, to advance money to him for the purpose of providing transportation facilities, storage facilities, elevators and so on, and to provide him with those facilities at a rate of interest which in practice works out at 3¾ per cent. There is, therefore, a new economic situation in America, where the farmer gets his financial resources at a cost to him of 3¾ per cent.

But that is not the real point of it. The point is the second instruction to the Federal Farm Board—an instruction that the money shall be used for the purposes of stabilising prices and for dealing with surplus. Let us see how that is applied to wheat in practice at this moment. The Federal Board with 100,000,000 dollars, one-fifth of the fund available at the moment, has actually gone into the Chicago market and has taken up 100,000,000 dollars' worth—£20,000,000 worth—of wheat. It has taken up this immense quantity of wheat, advancing to the farmer 96 per cent. of the fair price—not the market price, but the fair price, the price fixed by the Federal Farm Board. It is a price which is arrived at by calculating the cost of production. Having advanced the farmer 96 per cent. of the fair price of the wheat, the Federal Farm Board is in the position of having to decide what has to be done with the wheat. Of course it has to be sold in the domestic market, and to be sold at a fair price or at the prevailing price. Any loss has to be borne by the Federal Farm Board. But what about the surplus, for there always is a surplus in the United States of America? The surplus has to be sent abroad. Where? It can only be sent to one market, only one market in the world, and that is Great Britain. When it gets here it has to be sold in this market at any price it will bring. The difference betwen the price at which it is sold and what is called a "fair" price in America has to be paid for out of the funds of the Federal Farm Board.

That is a new economic situation and condition and it must be dealt with. It can be dealt with by means of our plan of Free Trade within the Empire. But supposing it is not dealt with, what is going to happen next? Canada at this moment produces wheat at 25 cents. or 30 cents. a bushel less than the cost of production in the United States. That is the advantage Canada has over the United States of America. Canada has been satisfied with the export market so far—entirely satisfied with it—because of that advantage over America of 25 or 30 cents a bushel in the cost of production. These are internal problems in Canada. But suppose that the system of the Federal Farm Board gets into operation, which indeed it will, what then? Immediately the American farmer, with a sure market for his wheat, will increase his acreage under wheat, and there will be more American wheat for export. The Canadian farmer will then go to his Government and say: "What about the Canadian farmer?" And the Canadian Government will have to deal with the situation by emulating the American example. There will then be a Federal Farm Board in Canada, too, and subsidised wheat for Canadian export as well as for American export.

These are economic conditions in a new world that have to be faced by many of us who lived in the old world. We have to attune our minds to the new situation. Unless it is dealt with the whole industrial structure here in England—the business and financial and industrial structure—must pass away and something else be put in its place. Farming, after all, is still the most important industry—not only in Great Britain but in the Dominions, and if the farmer is ruined what about the manufacturer? There is nothing left for him. The farmer is his market; he depends upon the farmer in order to sustain his structure; and the moment the farmer goes down the manufacturer goes with him. Manufacturers, therefore, ought not to be so jealous of their own interests as to close their eyes to the farmers' conditions not only in England but throughout the Empire under this new economic menace. I am satisfied that wheat at 55s. will not increase the price of bread. Wheat at 55s. for the farmer in Great Britain, or at something even less than 55s., means a living. At anything much less than that it means destruction.

I should have liked to proceed now to deal with our policy in relation to the problem of unemployment, but I have taken up so much time that I am going to allude to that subject only in the hope that somebody else will deal with it. It can be dealt with and it should be dealt with, and ours is the only policy that really offers an opportunity for solving the problem of unemployment. Instead of dealing with that problem, however, I am going to end my remarks upon a most optimistic note. It is a note that has often been sounded, but one that cannot be sounded too frequently particularly in our legislative bodies. There are in the world five great ports that stand far above all other ports. Those ports are London, New York, Liverpool, Hong Kong and Montreal, and of those five ports four are in the British Empire and one in the United States of America. We control half, or more than half, of the world's supplies of cattle, of cocoa, of gold, of ground nuts, of jute, of nickel, of palm oil, of rubber, and of sheet tin, and in a very short time, probably another year or two we will control half, or more than half, of the newsprint—the print on which newspapers are printed—in the world, with immense forest resources at the back of it. We also control one-third of the world's shipments. That is a brilliant, a splendid inventory, very briefly told, of the assets of the British Empire.

But even if you exclude the Dominions, and if you exclude India and Egypt, and take only the United Kingdom and its non-self-governing Colonies and Dependencies, you find that we have an area of 3,500,000 miles against only 3,000,000 miles in the United States of America. You will find the same population as the United States, and natural resources, agricultural and mineral, greater than in the United States of America, and with not less formidable brains, courage, energy and ingenuity the race is as well equipped to deal with these assets as their most successful rivals. This is the opportunity. If we reject it now, we can never expect to get another chance.


My Lords, although the reply which I shall give to the noble Lord will not be that which he desires, I wish at the outset to make it quite plain that His Majesty's Government are just as anxious for Empire development and prosperity as he and his friends are, and not only so but we hold that the policy which we are pursuing, the policy which we favour, will be more likely to achieve those results than any scheme of so-called Empire Free Trade. The noble Lord will, I am sure, forgive me if I say now that I fail to find any very close relation between some of his remarks and the details of a scheme for Empire Free Trade. After all, his Question is whether His Majesty's Government will give encouragement to the movement for Empire Free Trade.

The first observation I have to make upon that is that the words of the Question give a wrong impression. They convey the idea surely that what the noble Lord stands for is that the Empire as a whole should be more Free Trade than it is at present. But as a matter of fact, that would not be the effect of his policy. It would not be the effect of what he has been urging. His scheme would have precisely the contrary effect. The central point of this whole controversy is surely this, that what the noble Lord wants cannot be achieved without first reversing the fiscal policy of the Mother Country. You cannot have what the noble Lord calls Free Trade within the Empire unless you first make Great Britain a Protectionist country. There cannot be any argument about that, I think. I need scarcely say His Majesty's Government are strongly opposed to any such policy. Time after time attempts have been made to induce the people of this country to desert their allegiance to Free Trade and these attempts have always failed. They failed again last May. I say that the mandate of His Majesty's present Government is to maintain Free Trade and they will do it.

Now let me turn to what this proposal made by the noble Lord involves. So far as Free Trade within the Empire is concerned, Great Britain gives it now. We do that now, and indeed in reply to the Question of the noble Lord I may say that the truth is that His Majesty's Government have done a great deal to encourage Free Trade both within the Empire and without the Empire. If the late Government had been returned to power we should probably by now have been well on the way to becoming a Protectionist country. It is His Majesty's present Government who have kept, and are keeping and will keep, Great Britain a Free Trade country. I did not find this coming out very prominently in his speech, but it seems necessary to remind the noble Lord that the Dominions have Free Trade here for their products now. Of course, that does not satisfy the noble Lord. He wants more than that.

He wants not only that there should be Free Trade for the Dominions here, but that other countries should for the future have tariff duties set up against them. He said so in his speech and he said so in the article in which he adumbrated this policy in the Sunday Express of July 9 this year. He said:— The policy is quite simple…Tariff barriers between Britain and the Dominions would be knocked down. The barriers against the rest of the world would he set up. So there you have it. In order to carry out this policy of the noble Lord's, Great Britain will first have to set up tariff duties against all the rest of the world certainly on corn and meat, possibly on wool and probably on, at any rate, some manufactured articles.

I thought, if I may say so, that the noble Lord in his observations was a little bit anxious on the point as to whether his scheme was the same as the scheme of Mr. Joseph Chamberlain. I have to say to him that, although his scheme is to some extent a variation of the scheme originally put forward by Mr. Joseph Chamberlain, yet in essence it is very much the same thing as Mr. Joseph Chamberlain put forward when he began his campaign for Imperial Preference in 1903, when he said in those words, quoted so many thousands of times: "If you want to give Preference, you must put a tax on food." That is just as true now as it was then, and, to do the noble Lord justice, he faces it. He is quite frank. He says, in effect: "That is what we are out for, we are out for putting a tax on food."

On the other hand, he suggests, or rather he did suggest—I say "did suggest" advisedly because his policy is on a constantly fluctuating basis and what he says now is quite different from what he said in July—that in return for put ting a tax on foreign imports of food and probably other things Great Britain will get free entry for her manufactures into the Dominions. His words in his article on July 9 were:— The British manufacturer will also get the right of entering the Dominions, the Colonies and the Protectorates free of Customs Tax. That is perfectly clear. There is no ambiguity about that. I challenge the noble Lord to state what is his authority for holding out any such prospect. I challenge him on that point. Where is there the slightest evidence that the Dominions will be prepared to do any thing of the sort? I am not for a moment saying they ought to do it. That is not my point. It is entirely a matter for them just as our fiscal system is a matter for us. That is the only firm ground in these matters. No other ground is firm ground. But I ask again, what is the authority of the noble Lord for his statement?

He read a quotation from a speech of one gentleman in New Zealand and then said that clearly establishes that New Zealand favours his proposals. He read a speech of one gentleman in Canada and he said that shows a genuine support for the movement for Empire Free Trade in Canada. But what did Mr. Amery say? After all, no one will accuse Mr. Amery of being lukewarm in these matters. Mr. Amery is an ultra-Protectionist and a very ardent advocate of what is called inter-Imperial trade. He said on October 14, after returning from Canada:— There is a general disposition for freer trade in the Empire by the extension of mutual preference, but I cannot say I found any one (in Canada) who believed the abolition of internal duties as between Canada and Great Britain was possible, at any rate in our time. That is very frank of Mr. Amery and I attach a great deal of importance to that admission coming from him.

What did the Morning Post say? The Morning Post is a paper which certainly is not ardent in advocacy of Free Trade. The Morning Post said:— We are interested to see "— this was on July 8— that Lord Beaverbrook proposes what he erroneously thinks is a new policy of Free Trade within the British Empire, and a customs barrier around it. That policy, unfortunately, was proposed—and rejected—at the first Colonial Conference"— that is many long years ago— since when the Dominions have gone so far in tariffs, both for protective and revenue purposes, that they are not in the least likely to abolish them. As a matter of fact, in practically no single instance in any one of our Dominions does the duty against British manufacturers allow those manufacturers to compete except on terms which give good protection to Dominion manufacturers. That is their system. They believe in Protection. I am not complaining, but it is their system.

In these circumstances, I put it to your Lordships: What is the good of the noble Lord coming here and suggesting that, just as we are expected fundamentally to reverse our fiscal system, the Dominions at the same time will fundamentally reverse their fiscal systems? The fact is that the whole policy of the noble Lord is remote from reality. It does not deal with things as they are, or as they will be. In fact it is so remote from reality that already, as I have indicated, it has been materially changed. The noble Lord himself doe; not now stand for what he called Free Trade within the Empire. That is not his policy now. What has happened? I have already told your Lordships what the noble Lord said in his original scheme I have quoted his words. He laid it down clearly that there was definitely to be Free Trade between all parts of the Empire. All Dominion products were to come in here free of duty and all our manufactures were to go to the Dominions free of duty. But the noble Lord was before long driven from that position. For instance, in reply to a Canadian correspondent who had asked certain questions, this is what the noble Lord said:— The difficulty, of course, is "— these are his own words— that industries have grown up in the Dominions behind a tariff barrier directed as much against Great Britain as against the rest of the world. If we were asking the Dominions to allow British manufacturers the right of free entry, I can well understand your dismay. But we are not asking this at all. That is very astonishing, seeing that in July that is exactly what the noble Lord was asking and what he was saying would happen.

How is it possible to reconcile these two positions? They are totally incon sistent. We see that, at a very early stage, the policy of Free Trade within the Empire has been abandoned. On his own admission the noble Lord does not now stand for Free Trade within the Empire. The policy has been very greatly altered. Just recently there has been issued his booklet, which some of your Lordships may have seen, entitled "Empire Free Trade." This booklet has whittled down the original scheme by two very important provisions which, in effect, make Empire Free Trade impossible. They appeared in this booklet. I might add that there are certain passages in the booklet which are contradictory and mutually destructive of each other. For instance, on page 6 the noble Lord speaks of the free entry of British goods into the Dominions; but a little later, on page 14, we find that he has shifted from that position. He says that the latest basis of the policy means that, in the first place, a measure of protection for certain industries called "key industries" is absolutely essential, even against imports from other portions of the Empire. I noticed also that he made this suggestion in his speech, if I heard him aright—he will correct me if I am wrong—though he was clearly a little uncomfortable on this point. He referred to key industries and important manufacturing industries.

In the second place he says that it is no part of the proposals that import duties for purely revenue purposes should be repealed. I have no hesitation in saying that these two provisions destroy his case. They mean that, whatever else the noble Lord stands for now, he does not stand for Empire Free Trade. His provision now is that duties for certain key industries are to be permissible. But what is a key industry? Who is to decide it? Many people, for instance, consider that iron and steel are a key industry, in view of their importance in time of war; and certainly, so far as the Dominions are concerned, with their comparatively small manufacturing equipment, a case could be made out for nearly every industry except purely luxury industries being called a key industry.

Then the noble Lord goes on to say that duties for revenue purposes are to be allowed. But we are told by Protectionists in our own country that the McKenna Duties are revenue duties. I can quote very high authority for that. Mr. Baldwin himself—I cannot go higher than that—said in the debate that took place on the proposal to reimpose the McKenna Duties:— I have never given any pledge with reference to the McKenna Duties. I have never regarded them as Protectionist Duties, and they are re-imposed for revenue purposes alone. According to this provision of the noble Lord regarding revenue duties, we should apparently be able to keep all such duties by saying that they were for revenue purposes; and, of course, in the Dominions in their present state, since they cannot get the same portion of revenue from Income Tax and Death Duties as we can, they could make out so much the stronger case for some of these duties being kept on as revenue duties.

The noble Lord says that we must then allow them to remain in being. But what becomes of Free Trade within the Empire if this kind of thing is going to happen? The original scheme has gone. It has vanished. If goods are to get the right of entering the Dominions free of Customs Tax, as the noble Lord said at first, that is one thing; but if you are to have all these duties allowed, it is a totally different thing. Accordingly I ask the noble Lord what his policy now is. When he says to His Majesty's Government: "Are you going to do anything to encourage Free Trade within the Empire?" I submit we have the right to ask: "What do you mean by Free Trade within the Empire? Do you mean what you say now, or what you said in July, or what you may be saying next March? What is your policy now? Can anyone say? What certainty is there with this constantly fluctuating basis?"

The more closely it is examined the more clearly it is seen that the whole policy is indefensible, and I am going to look at it in a little closer detail. The noble Lord—I am not in the least blaming him, for it is a very large subjects—made a lengthy speech and, if he will allow me to say so, a very interesting speech, profoundly though I disagree with him, and I hope that I will not trespass too far upon your Lordships' time if I endeavour to put the other Bide of the case. This is a very big question, but I will be as brief as I can.

In the last resort I think there will be agreement about this: that this problem is a matter of figures and of the character of the trade between the Mother Country and the Dominions, and also with foreign countries. It is judged by this test that the proposals of the noble Lord break down so entirely. They break down on the facts. That is his difficulty. Whatever else he has got on his side, he has not got the facts on his side. The facts are against him.

Let me deal first with foodstuffs. In 1928, of our total imports of foodstuffs retained for home consumption, the pro portion that came from the six great self-governing Dominions was 28.2 per cent., or rather more than one quarter. Surely that is a very striking figure, having regard to the proposals of the noble Lord. While I am on this point I want to deal with one mis-statement in this booklet "Empire Free Trade." It was repeated, as I understood him, by the noble Lord to-day. He says that there are enough cattle now in Australia to supply us with our beef. What are the facts about that? It really is not so. The total amount of beef of all kinds imported into Great Britain in 1928 and retained for home consumption amounted to £35,100,000. The noble Lord gave some figure of £28,000,000, but that is not the total. I am trying to put the matter as fairly as I can. Of the total amount that I have stated, the proportion that came from Australia was about £2,300,000, or about one-sixteenth. What, then, is the good of the noble Lord coming here and saying that there are enough cattle in Australia to supply us with all our beef, when of our total imports last year, retained for home consumption, of £35,100,000, somewhere about £26,750,000 came from the Argentine? And if the Argentine supplies were eliminated—the United Kingdom is her principal customer—Australia cannot possibly make up the deficiency. The noble Lord dwelt upon the matter of chilled and frozen beef, and he suggested, and in fact said in his booklet, that the difficulty there—the difficulty which affects Australia—is on the point of being over come. He says, in his booklet, that scientific research has already brought us within sight of meeting this difficulty. About that I will only say that so far as the Board of Trade are aware this process has not been developed so as to be effective upon a commercial scale. The noble Lord also said something about herds. The figures of herds are really relative. The head of cattle in Great Britain number 7,240,281; in Australia, the head of cattle in 1928 numbered 11,545,000, and in the Argentine 37,065,000. How then can the noble Lord say that Australia can supply us with all our beef?

I pass from that to a word or two about raw materials, because the noble Lord touched upon that. In the case of raw materials the figures of the Dominions, as compared with other imports, are even more difficult for the noble Lord. Out of our total imports, retained for home consumption, in 1928, 13.5 per cent., or less than one-seventh, came from the six self-governing Dominions. These figures exclude tobacco, but that would not help the noble Lord, as no doubt he will see. It is, therefore, abundantly manifest that both in foodstuffs and raw materials the great bulk of our trade is done with foreign countries; and yet it is against these foreign countries that the noble Lord asks us to put up a duty against their imports, certainly of foodstuffs!

I say that these new duties upon foreign imports would inevitably have the result of raising prices to the consumer. These duties, so far as the home consumer is concerned, would inevitably raise the price of the imports by the rate of the duty—the imports from the Dominions, as well as the imports from foreign countries, and to the same extent. The foreign imports which pay the duty must be sold at a price which includes the duty, and the Empire import would be sold at the same price. That is due to a simple economic law, that you cannot have two prices for the same thing in the same market at the same time. That is one of the difficulties which the noble Lord has to surmount. I know that he and his friends—I think they call themselves the Empire Crusaders—say that if you give a preference to the Dominions there will be no increase in the price of food in the Mother Country, because new areas in the Dominions will be put under food cultivation, owing to the preference given in our markets. I will deal with this point. There is really nothing in it. As a matter of fact a large proportion of the best land in the Dominions is cultivated already, and the remaining land, much of it being further afield, will not, economically, be so good.

Moreover, the noble Lord assumes that new land can be cultivated in the Dominions without any reactions elsewhere. That is not so. In so far as a preferential duty will lead to cultivation of new land in the Dominions, the effect would be that other new lands which might otherwise have been cultivated for food production, say in the Argentine, will not be cultivated, and the total supplies of food will not be increased over and above what they would have been if no Preference had been put on. It is the total supplies which affect prices. It is idle to contend that Preference will lead to increased cultivation and that supplies will be increased in a way which will prevent the new duties on foreign wheat raising the price in this country. I repeat that the advantage of any increase of supplies from the Dominions would, in effect, be offset by smaller supplies (than there otherwise would be) coming from elsewhere. The total supplies will not be increased, and therefore prices will be inevitably higher by reason of these duties on foreign imports.

Where the noble Lord and his friends, like all Protectionists, so often go wrong is on the question of price. They talk about increased production here or there owing to the operation of duties, but they leave out of account the fact that these things will not happen except with the result of higher prices. The noble Lord himself admitted this when he started his campaign in July, and his contention that this preference will not increase prices only came along afterwards. In July he said:— We present to our opponents the cry of dear food and the small loaf…Contrary to the established Free Trade belief, this cry was never an election winner in any great industrial centre when it was faced boldly as part of an Imperial policy. Men care more for steady employment at high wages, which the Empire policy offers, than a cheap loaf and no money to buy it with. Surely those words cannot mean anything except that food will be dearer? If they do not mean that, what do they mean?

I say it is only subsequently that the noble Lord has evolved this idea that there will be no increase in price. He does not get support even from the Australian Economic Committee which dealt with these matters. That Committee was set up by Mr. Bruce who, as everybody knows, is a strong Protectionist. That Committee, in their Report, say:— It is assumed that supplies of certain products could be obtained in the Dominions sufficient to satisfy British requirements without an increase of price…. Wheat and dairy produce are the only important Australian products that would benefit. Both are hampered by the disabilities of soil, climate and transport, and a substantial increase in output would be possible only if prices were higher. Even then Australia could not compensate Great Britain for the loss of imports from other sources. Great Britain then, in any case, would have to pay more for her imports. I might also quote one further sentence from this Report. The noble Lord told us, so I understood, that there was encouraging propaganda and support for his proposals going on in the Dominions. That does not seem to be the view of the Australian Tariff Committee. They do not seem to be very enthusiastic about them. I have here a quotation from the Observer of July 28:— The Report of the Prime Minister's Tariff Committee (that is, Mr. Bruce's) just published, is conclusive that Empire Free Trade would be a positive disaster to Australia, because it must involve the abandonment of substantial protection to Australian manufacturers, with which British imports compete. That is not very encouraging to the noble Lord and his propaganda.

The noble Lord gave your Lordships many figures about wheat and bread. He spoke about France. He said that the French people seemed to be quite satisfied to have a duty on food, so why should not the British people be satisfied to have a duty on food? I would remind the noble Lord that, for one thing, France is much more of an agricultural country than Great Britain, and that is an important fact, because sometimes it happens that France has to import very little food from abroad. But in any case I would say this to the noble Lord as regards France and ourselves. The real wages in France are lower than they are here, and in producing that result the price of bread and the price of wheat have over a term of years some considerable part to play. The noble Lord quoted some returns. I can commend his attention to a return which he will find in the Library here, which will give him figures right back to 1840—from 1840 up to 1911; that is a good long period. There the noble Lord will find that the effect of an import duty has been, broadly speaking, to increase the price of a quarter of wheat in the protected countries by the amount of the duty. It is proved there as clearly as anything can be proved; occasionally there are slight variations, but the broad effect is absolutely beyond dispute. The noble Lord spoke about the price of bread, but as a matter of fact wheat in Canada and the United States is clearly cheaper by the amount of the freight than in England; and yet bread is dearer there. I think those figures; are very convincing.

Now I have pointed out to your Lordships that not much more than a quarter of our imports of food come from the self-governing Dominions, but the imports from the Dominions are of widely varying character, and it is this fact which makes it quite impossible to devise any sort of reasonable, symmetrical, and equitable scheme of Preference as between ourselves and the Dominions. Let me take the three biggest Dominions—Canada, Australia and South Africa. There we shall see that, whereas broadly speaking Canada sends us wheat, and Australia sends us wheat and butter and wool, South Africa sends us little or nothing on which a preference could be given. In 1928 food imports into the United Kingdom from Canada, retained for home consumption, amounted to £39,200,000. Food imports from Australia, retained for home consumption, amounted to £24,900,000. Australia sends us also wool, about £11,000,000, retained for home consumption. But South Africa sends us little or nothing on which preference could be given. She sends £4,200,000 worth of wool—that is the amount retained for home consumption; but apart from that she sends little or nothing on which preference could be given. She sends us altogether about £36,000,000 worth of gold and diamonds, the major portion of it being gold, but you cannot give a preference on those things; and unless you are going to give a preference on wool you can do very little for South Africa, and not much if you give a preference on wool, because our import from her is relatively small. Moreover, wool is a vital raw material, and I would like to ask the noble Lord whether it is part of his policy to put a tax on wool. If I remember rightly, Mr. Bruce, the Australian Prime Minister, some years ago certainly seemed to suggest something of the sort. But if there is going to be a tax on wool, it will be a great disaster for our wool industries. So I do not think I need go any further than those three Dominions in order to show that you cannot possibly construct any equitable scheme of Preference as between the various parts of the Empire.

But what about India? The noble Lord never referred to India. That is a very important part of the Empire; it is much the most populous part. But the Empire Crusaders seem to have forgotten it, just as the supporters of Preference of an earlier generation forgot it. And yet there it is, and what does Lord Beaver-brook propose to do for India under his scheme of Empire Free Trade? What preference is he going to give to India? There was a preference given to India on tea—it was not of very much value to her, for certain reasons—but that was swept away by the last Government, which was almost a Protectionist Government. There is very little left on which you could possibly give a preference to India. But surely, if any kind of symmetrical scheme of Preference is going to be constructed you must bring India into it. It has a very large population—a population of 320,000,000. It is much the most populous part of the Empire; why is it to be left out of account? Look at it from another point of view. The noble Lord talks about increasing the exports to the Dominions. Why do not he and his friends give more account to the possibility of increasing the exports to India, with its huge population of 320,000,000? If you could increase your exports of Lancashire cotton goods to India by 5s. per head of the population there you would increase your exports by £80,000,000 per annum, and that would more than treble the trade which Lancashire does with India. Surely, these are relevant points, which the noble Lord ought to give more attention to.

He gave certain figures about the trend of Empire trade, but even he admitted that the present Preference was not having the results which he desired. For instance, take Canada. As regards Canada, the value of merchandise imported into Canada from the United Kingdom in 1923 was £31,600,000; in 1928 it was £39,900,000, or an increase of about £8,000,000. But in the same period the value of merchandise imported into Canada from the United States increased from £123,500,000 to £178,300,000; an increase of £54,800,000. That is without Preference. Take Australia. The imports into Australia from the United Kingdom have gone down, despite the Preference, from £68,400,000 in 1922–3 to £62,700,000 in 1928–9; and the imports from foreign countries into Australia have gone up from £47,900,000 to £65,600,000. Those are the figures. What has the noble Lord to say about them? He says they are not very satisfactory: Preference is not quite what it ought to be. There seems to be very great difficulty about these Protectionist and Preference proposals: they never do work out satisfactorily in the result.

Before I sit down I should like to say that, although we cannot obviously give any encouragement to these proposals of the noble Lord—even if we knew what they were, and nobody can say what they are, they are so changeable—yet we are most desirous of helping forward Imperial development, and of doing all we can to increase trade between the Mother Country and the Dominions and Colonies. Not only so, but we are not sitting with folded hands and doing nothing. We had only been in office a very short time when we announced our desire that an Imperial Economic Conference should be called at the earliest convenient date, at which all parts of the Empire should be represented. The object of this Conference is to consider and devise ways of increasing inter-Imperial trade. Then there is the Empire Marketing Board, about which questions were asked. There seemed to be some apprehension about that shortly after we came into office. His Majesty's Government have kept the Empire Marketing Board in being, and it is working steadily. Your Lordships will remember the Colonial Development Bill of last July. That was one of the earliest Bills of the present Government. The noble Lord touched on this next point, but I sometimes think that it does not receive the attention it deserves. Our trade with our Colonies and Dependencies is important and with some of them it is increasing; it is increasing very rapidly. The Government will do everything possible to help in various ways. The Colonial Development Bill will do a great deal as time goes on for the extension of trade.

I will give the noble Lord some figures. Already under this Bill the Advisory Committee, with Sir Basil Blackett as Chairman, has been engaged during the last three and a half months in considering applications from the Colonial Governments for assistance from this Fund, and already there are applications which this Committee has recommended which involve a total expenditure of approximately £5,000,000, with an estimated charge on the Colonial Development Fund—that is, either by way of interest or grant—of about £1,000,000 that will be spread over a term of years. In this connection I would say that one of the great services which the Mother Country has been able to render to the Dominions and the Colonies has been to provide cheap capital; that means capital on cheap terms. Over a long course of years various parts of the Empire have had this great advantage. The benefit to them of the Trustee Investment Act has been enormous, and the total amount of money from the United Kingdom invested in our overseas Empire, taking not merely the amount for Government loans, but for railway and industrial purposes as well, is now probably well over £2,000,000,000.

I do not think it is unfair to suggest that it would be probably well within the mark if I said that on the average over a long term of years the various parts of the British Empire would have had to pay, if they had not got money from Great Britain and had not been parts of the Empire, at least one per cent. more for that money. On this computation they are deriving a benefit from their connection with the Mother Country of about £20,000,000 per annum, which is a very considerable sum. It is true that I personally deprecate the introduction into Imperial relations of these questions of debit and credit; but it is very difficult to avoid them in view of the speeches and articles of many advocates of schemes for Imperial Preference and this so-called Empire Free Trade. If such matters are to be taken into consideration, I think it is clear that the Mother Country can do, and does do, a great deal for Imperial prosperity. In this connection I trust I may allude to the security which is given to the Dominions and Colonies because they are parts of the British Empire. Much the major portion of the cost of defence is borne by the Mother Country, though there are welcome contributions from other parts of the Empire.

I would suggest to the noble Lord that at this time of day it might be taken for granted that we all want to do our best for the Empire. There is no difference of view about that. It is not the object about which we are disagreed; it is the method. That is where we part company. That is where there is a clear and definite clash of policies. His Majesty's Government do not believe—and I have given some reasons for their view—in this plan of trying to promote Imperial unity, to bind the Empire more closely and to make it more prosperous by a system of preferential tariffs and differential rates. Not only is that the position of His Majesty's Government, but it is also the position of the Conservative Party. The noble Lord is fighting a very difficult battle. He has not been able to obtain the support of the Conservative Party for his proposals. He has obtained the support of a few members of the Conservative Party. He has obtained the support of Lord Melchett, for instance. He referred to Lord Melchett. I had rather hoped that Lord Melchett would have been present to-day in order to give us the advantage of his views upon this matter—of his present views, whatever they may be. If he had been here it would not have been difficult to reply to him. As a matter of fact, the speeches of Lord Melchett on this and on all fiscal matters in his present vein can he best replied to from the speeches of Sir Alfred Mond.

Again, it is true that at Twickenham Sir John Ferguson, the Conservative Candidate, came out as a supporter of this Empire Crusade. He was thereupon promptly disowned by Mr. Baldwin and he did not stand as the official candidate. Then take Mr. Neville Chamberlain. Mr. Neville Chamberlain delivered a speech to the Empire Industries Association on July 4 which might have been taken, I think not unfairly, to support the noble Lord. But on the very next day he had to say that that was not so. He is reported to have said that his words must not be taken to mean that I contemplate a tax on imported wheat. Times have changed since a policy of that kind was practical politics. Then Mr. Amery, whom I quote again, says— The impression that I support Lord Beaverbrook's plan is erroneous. We could not tax wheat to give Canada preference. Although Lord Melchett is not here I may quote him. He is one of the high potentates of this new movement; but he has created great consternation by saying that the method of putting taxes upon foreign food not of Empire origin may not prove to be the best method of approach. I wonder what the noble Lord opposite has to say about that, because that is his method of approach.

The fact is that the Conservative Party know perfectly well that the people of this country will never agree to the taxation of wheat. For my part I have always thought that Mr. Joseph Chamberlain rendered a great disservice to the Empire when he threw into the delicate and slowly evolved system of our Imperial relationships this disturbing and, indeed, disruptive factor. The effect, the inevitable effect, of the policy, whether of the noble Lord or of Mr. Joseph Chamberlain—there is not much difference—would be to make living dearer at home. It would add to the burden of the people of this country. I repeat that and ask: Is that a good way to try to unite the Empire more closely together? You are not likely to increase Imperial unity and stability if the Empire comes to be associated in the minds of the people of this country with dearer food and a higher cost of living. The fact is that the policy of the noble Lord, instead of promoting Imperial unity would have the precisely opposite effect. It would really bring to an end the system upon which the Empire has been built up; that is, the policy of self-government for the Dominions and for the Mother Country.

This policy of the noble Lord would mean this. It would destroy the control which the House of Commons has year by year over the taxes of the country, and there is nothing more firmly embedded in our Constitution than that. If you are going to set up foreign duties and to enter into reciprocal and interlocking arrangements such as we are asked to do then your freedom is gone; you cannot alter your duties and you cannot alter your tax system year by year in the way you can do it now. Nor will the Dominions have the freedom to alter their tax systems which they have now. So this policy is really inconsistent with the vital principle of self-government under which our Empire has been built up. Therefore, I think that the noble Lord, in spite of his one or two quotations, is under a profound delusion if he supposes that the Dominions would tie themselves up in the way which would be necessary if this plan is to be carried out. I apologise for having spoken for so long, but it is a very difficult subject. I cannot hope that my reply will be satisfactory to the noble Lord. I know it will not be. But I ask him to take consolation in the reflection—I have already alluded to it—that although there may be disagreement about the best policy to pursue, there is no disagreement about the aim. He may rest assured that all Parties in this country are united in their pride of the Empire and in their desire to develop it as a beneficent agency for the good of the world.


My Lords, I do not know, of course, whether my noble friend behind me will find as much consolation as the noble Lord wished him to find in the pious platitude with which he concluded his speech. I do not intend to attempt to follow the noble Lord who has just spoken. A good deal of his speech, if not altogether irrelevant, at all events appeared to me to have a very loose bearing upon the subject raised by my noble friend. If I may say so without offence, he appeared to me to dish up for our consumption some well-worn, stale, economic fallacies about the relationship between import duties and prices and so on, which I do not think really have any close bearing upon the subject that we have to discuss. But there was one thing the noble Lord said at the outset of his speech with which I am bound to say that I largely agree. He pointed out that the Question upon the Paper by my noble friend is one thing, and that the speech he made upon it is a very different thing, and goes far beyond it. We have, however, to approach the matter from the point of view, not of the Question on the Paper, but of the speech made by my noble friend.

It is quite true, as the noble Lord opposite pointed out, that we have already in point of fact as nearly as we can Free Trade within the Empire. With the exception of certain comparatively unimportant revenue duties we have opened our markets free to the great staple products of the Dominions, and, therefore, we do offer them Free Trade. But are the Dominions prepared to do the same by us? My noble friend used some arguments in order to show that he was optimistic upon that point. He gave indications that there is a certain amount of movement in one Dominion and another which, he thought, pointed in that direction. I am bound to say that, while I do not deny there may be those indications, I do not think that movement has gone very far as yet. Let me take Australia. It is quite well known that Australia has for a long period been following a sort of vicious circle in legislation. Under the influence of the Labour Party there they have passed a number of Statutes the effect of which is to raise the cost of production. Then, in order to remedy the evils produced, they turn to a higher protective duty, and a higher protective duty, of course, in its turn, requires some addition to real wages, and so it goes on in a circle, legislation raising the cost of production and protective duties being imposed to remedy the state of things so produced. All Parties in Australia, so far as I know, are absolutely tied not merely to a tariff, but to very high protective duties, and certainly not least the Labour Party, which is now in power in the Commonwealth. Therefore, having regard to these tendencies and all we can see going on, and what has been going on for a long time in Australia, I am quite unable to share the optimism of my noble friend in thinking that they are prepared, within any measurable future, to knock down the whole of their tariff walls and to allow our goods in free of duty.

Then there is Canada. My noble friend quoted a speech I think by some statesman in the West. That opinion, of course, must carry a certain amount of weight, but I have been studying, in the last week or so, a number of speeches and interviews given by Mr. Carrel, who is also, I believe, a member of the Federal Legislature, and Mr. Carrel is an enthusiastic supporter of Empire development and especially the development of Empire trade. He has made great sacrifices for it. He has travelled about the world, and, so far as I can judge, he devotes the whole of his energies to promo Ling an increase in inter-Imperial trade. But in those interviews and speeches which I have recently read of Mr. Carrel, although he suggests all sorts of plans and schemes and devices for increasing Imperial trade, he never once suggests as a possible remedy that Canada should lower her tariffs in order to let in Empire goods. He laid stress upon a great number of other things—education, advertising, packing, grading, marketing, trade marking, co-operation and organisation and matters of that kind—but never has he suggested that a change of the fiscal system is a possible remedy or a possible encouragement of Imperial trade.

He actually lays it down specifically that what he proposes is not the old idea of the Dominions devoting themselves to producing raw material and food and Great Britain being the workshop. He rather sneers at that as an obsolete idea, calling it the London-centred idea. Furthermore, this gentleman, who evidently speaks with great knowledge and authority of Canadian economic politics, lays it down as the most important thing of all that they should keep politics out of it. "Bring business men together," he says over and over again; "let us have consultations; let us have conferences of business men, but keep politics out of it." Obviously, you cannot keep politics out of it if it is to become a question of import duties. These other matters of which I have been speaking—advertising, packing and grading, co-operation, marketing and all that—may be done apart from politics, but if you are going to keep politics out of it then I am afraid there is no hope for the proposals of my noble friend.

I do not know exactly what it is that my noble friend proposes. I have some difficulty in making out exactly what it is he proposes, but I have gathered that what he intended was something in the nature of an Imperial Zollverein. I do not think he shirks the necessity for having import duties on wheat, meat and wool, to which the noble Lord referred. I could not quite follow the distinction which my noble friend sought to draw between the policy which he propounds and the policy proposed by Mr. Joseph Chamberlain in 1903. The noble Lord thought fit to make some sort of a sneer, I thought, at that policy, which he thought had done infinite mischief. I, on the contrary, like my noble friend, was twenty years ago a firm supporter of that policy, but I cannot altogether forget my own experience in regard to it. It was my fortune in the four years between 1906 and 1910 to contest four elections, all of them, I regret to say, unsuccessfully, and all of them devoted almost entirely to the propounding of Mr. Chamberlain's policy. I am quite convinced that if at that time Mr. Chamberlain's policy had prevailed in the country, it would have been of infinite value to our trade and, especially, to our employment.

It is an example, I take it, of what was said by Sir Henry Mayne with reference to democratic government. Sir Henry Mayne was speaking of the various weaknesses likely to be found in democracy, and he said that one great danger especially was that a democratic government resting on an extended franchise would reject legislation founded upon scientific ideas. I have no doubt that that was the case. I can remember so well Mr. Chamberlain's propaganda and his speeches based upon a close observation of up-to-date economics and scientific notions, and, of course, he was swept aside simply by the catch-penny slogans that were brought to bear against that policy upon the platform. So it will always be. It is no use for my noble friend to come here and point out, as is perfectly true, that the Dominions might be able to supply us with all our wants and that we might get our free food from them without increasing the price even if we put an import duty upon it elsewhere. That is all quite true, but you will never get that scientific fact into the heads of the people who have to learn their politics either from the platform or the newspapers. In my opinion one of the first necessities of modern practical politics is to think not merely of what is true, but of what can be made convincing, which is quite a different thing. And we had a more recent experience. With great courage, I think, the Conservative Party put forward in 1923 in a more modified form the policy which had been first propounded by Mr. Chamberlain. Again it was found impossible to get the electorate to accept that policy.

Therefore, apart from principle and as a mere matter of practical politics, it appears to me that it would be the height of folly for any political Party to disregard and to insist upon disregarding two practical lessons of that sort, whatever might be said in economic science for the truth of it or not. From that I draw this deduction, that we cannot get Free Trade within the Empire, first of all because, as I have pointed out, there is no sufficient indication that the Dominions would tolerate any such idea, and secondly, because I am afraid it would involve us in a policy which we have already proved to be impossible. But, very unlike the noble Lord, we on this Bench approach this matter with the utmost sympathy, receive the ideas of my noble friend with a large measure of agreement as regards his principle, and even regard his methods with a large measure of sympathy. But I do not think it is possible for us sitting on this Bench to say that we favour Free Trade in the sense in which my noble friend has expounded it. If it were merely the words, yes, but not in the sense in which my noble friend expounded it. What we do want and would do everything we could to promote is freer trade than we have, freer in every way.

It is very easy to say we are all for the Empire, that we are all equally anxious to promote the Empire. We are not all equally anxious to promote the Empire. I do not know whether any other member of the Government is going to speak, but I should like to ask a definite question. What are they going to do about Preference? We have taken direct steps so far as it was possible to do so, to show not only our sympathy with the Dominions but our anxiety to promote inter-Imperial trade. We have done it by promoting Preference and we stabilised that Preference during the term of the last Government for a period of ten years. Mr. Snowden immediately gave notice that he would not be bound by any such agreement as that, and I think he intimated that he would be prepared to do away with this Preference at the first possible moment. I want to know what the Government are going to do about it. There are very large and important interests in this country that are in a state of uncertainty and doubt at the present moment. One of them is the very large tobacco industry. There is growing up in this country a very large industry in Imperially-produced tobacco. I understand that that industry just now is in such a condition that if the Preference now enjoyed was taken away it would probably be destructive of that industry. I repeat, what is the Government going to do? I think we are entitled to know whether they are going to do anything more than express sympathy in words, whether they are going—in the only way, I agree, that they can at the present moment—to show definitely that they are in favour of doing something for Imperial trade, and I invite them to give the fullest information on the subject.


My Lords, I do not propose to take up your time for more than a few minutes, but I want to put one important and plain question to my noble friend Lord Beaverbrook, to whose extremely interesting, informing and eloquent speech I listened with great satisfaction. I want to put the plain question: where does the British farmer come in? He, through the journalistic organ which he directs with such skill, has quite recently made a fervent appeal to the British farmer in support of this so-called scheme of Free Trade within the Empire. I, among many other farmers, have studied that appeal with the greatest care, and I am sorry to say that I remain, up to date, wholly unconvinced, and whoever else may conceivably benefit by such a scheme as that which he has submitted to the public of the Empire at a moment when the British farmer is in a condition of utmost need—for I think we have never known such a state of agricultural depression and so poor an outlook for the British farmer as obtains to-day—I can see nothing in his scheme, nor, so far as I can ascertain, can any of the leaders of agricultural opinion, which is calculated to improve that position.

At the request of the British National Union I am shortly about to conduct a large party of distinguished agriculturists from various parts of the Empire to New Zealand and Australia, and I naturally came down here this afternoon wondering whether the able eloquence of my noble friend Lord Beaverbrook would enable me to carry the banner of the Crusader to the Antipodes, either in the interests of oversea agricultural producers or in those of our farmers at home. My noble friend began by saying that, unlike the fiscal programme of that eminent statesman Mr. Joseph Chamberlain, his policy was for oversea Empire foodstuffs free of duty and no increase whatever in the cost of food. My noble friend in his articles has appealed very ably to the farmers of this country to grow more food than they are growing at the present time. He says: "How can you help us?" My answer to my noble friend is: "What inducement do you present to British agriculturists to help you?" After all, sentiment is a very fine thing, particularly Imperial sentiment, out when people have to make a living out of their calling money is even more important and is more likely to prevail with them than sentiment.

I am entitled to ask my noble friend what there is in his programme that can appeal to the ordinary human instincts of our farmers to induce them to be supporters of this scheme. He told us just now—it is a very interesting and, I have no doubt, a perfectly accurate statement—that with the price of wheat at anything less than about 52s. a quarter there was not any reasonable prospect of the British wheat-grower earning a profit out of wheat growing. He also told us—a much more interesting fact—that, although the price of wheat increased at times from 40s. to 52s. a quarter, there was no appreciable difference in the cost of the British loaf. I should like to appeal to members of the Government sitting opposite and to say that, if that, is true—and I am sure it cannot be disputed—here is a problem which they can help to solve for the benefit of British farmers and indeed, for that of oversea Empire agriculturists as well. Are they going to notice that statement or to sit still and say that, whatever the working population of this country pay for their bread, it is going to make no difference to the British farmer, or indeed to any other farmer, whether the price of the wheat that enters into that bread is 40s. or 52s. a quarter? Surely here is a matter of which the Government might well take cognisance to the real advantage of the producer of wheat in this country.

I cannot help feeling that, whatever may have been the possibilities of such a scheme as this some twenty years ago, the time has now passed when our oversea Dominions are likely to agree to it. Surely they are all out to develop their own manufacturing industries, and their manufacturers will look to their rural population for home custom to the advantage of both. As that, home custom develops, surely the tendency to export large quantities of foodstuffs, very often dumped upon our markets at less than the cost of production, will to some extent abate, and I venture to hope and to believe that our manufacturers similarly will look to an increasing extent to the farmers at home and to the agricultural population generally to supply the market which they are largely losing in oversea countries. If they would only bear in mind one of the great decisions to which the World Economic Conference came two years ago at Geneva, that there is an essential interdependence between agriculture, industry and commerce, and if they will take good care, while promoting their own manufacturing interests, that those who ought to be their best customers at home have sufficient purchasing power through the enjoyment of agricultural prosperity to be their customers, then I cannot help thinking that there will be a ray of hope for both, and a better outlook both for the agricultural population at home and for our manufacturing population which to so large an extent has looked overseas for its customers.

I cannot travel the whole way with my noble friend Lord Beaverbrook, even, I am afraid, as regards his facts. He told us—not I think in this House to-day, but certainly in the appeal that he made to British farmers—that in order to raise more milk and milk products in this country we require, as an essential raw material, cattle cake and other artificial foodstuffs, the materials for which are easily obtainable from countries under the British flag. I venture to say to my noble friend Lord Beaverbrook that he is perhaps about twenty years behind the times. We are looking forward to the time when, especially with such inexpensive fertilisers as my noble friend Lord Melchett will no doubt be able to provide, we shall be able to raise upon our own land not merely grass but leguminous crops such as lucerne, the surplus production of which wall be pressed in tabloid form for feeding our cattle throughout the winter. That, at any rate, is a science far more advanced than any science that might demonstrate the possibility of so chilling Australian meat as to enable it to be carried to this country in the same condition as that in which it can come from the Argentine Republic. At any rate the suggestion that he has made in his articles regarding cattle cake as a raw material of the live-stock industry, both for the purpose of feeding and also for its manurial value, is based on a theory which has already faded away and is likely in the early future to be wholly untenable.

I do not desire to follow my noble friend into the details of his argument, but I do want to ask him in all candour, before he asks farmers, in this country at least, to accept his scheme, to make it perfectly clear to them what are the financial inducements to them to do so, bearing in mind that in a time of extreme agricultural depression sentiment is not going materially to assist him in gaining support from the countryside. He has asked: What can the farmers do? I believe myself that by more intensified production, with the help of inexpensive fertilisers and far better drained land than we have had for many years past in this country, with increased marketing facilities, and with the institution of a National Mark, which will distinguish between home-raised produce of high quality and produce of an inferior quality, and best of all by the development of co-operation, it will be possible to raise at least 75 and probably 100 per cent. more food from the land of this country than at present; but whoever appeals to the British farmer, as to any other business man, has to prove that it is to his advantage to fall in with any such scheme, or else his support can hardly be looked for.


My Lords, I had not intended to take any part in this discussion, but in view of the chorus of criticism which has been raised of the speech of Lord Beaverbrook, I am afraid lest there might be some misunderstanding if I did not say something on behalf of my noble friends and myself. I should like to thank Lord Beaverbrook for having introduced this subject into this House, which seems the ideal place where an Imperial policy of this kind can best be discussed. I regret very much that more noble Lords who have personal experience of the feeling in the self-governing Dominions have not taken part in the debate. Their views would be very valuable, and would have added to the interest of the discussion. Beyond that I confess I am rather struck by the fact that all the speeches, so far, are in criticism of the suggestions of the noble Lord, persuasive as his speech undoubtedly was.

On behalf of the Government, Lord Arnold has given us a very informative disquisition upon the subject. It was a whole mine of information, from which many of us will no doubt cull missiles which we shall use to throw at Lord Beaverbrook's policy on future occasions. That was from the theoretical side. Then Lord Cushendun, while more inclined to sympathise with the noble Lord on the theoretical side, was entirely opposed to his proposal on the practical side, and gave him no more encouragement than did Lord Arnold. Lord Bledisloe then gave us to understand that that very large and important section of the community who are connected with agriculture in this country will have nothing to do with Lord Beaverbrook's policy. It was a remarkable chorus of criticism, in which I am afraid I find myself obliged to join.

I really think, however, that the speeches of the noble Lord, and his articles, should be addressed not so much to us in this country as to the self-governing Dominions and our Colonies overseas. They are to be persuaded before any forward step can be taken. We know that in most of these Dominions, and in India, generally the tendency is to raise their revenue by means of protective duties. It will mean a revolution in the fiscal systems of those Dominions and Colonies if they begin to adopt the contrary system recommended by Lord Beaverbrook. Therefore it is that I venture to say that for the present at any rate it would be more important, if he wishes for the success of his movement, that the noble Lord should address other countries rather than this country, in order that when he does get some greater measure of approval in our self-governing Dominions and Colonies, then he may come to us and find, on some Benches at any rate, a more sympathetic hearing than he has found this evening.


My Lords, as I had the great privilege of being convener to what was then the Tariff Reform Party when Mr. Joseph Chamberlain brought in his policy, I should like to say a few words. The present Leader of the House was then a great supporter of that policy, and the Colonial aspect was one which appealed to him most. I think the noble Lord who brought forward this Question has done great service, because this is the place where, as Lord Beauchamp has said, matters of this kind can be investigated. I do not say that I can agree with most of the things which the noble Lord has proposed, but I think the tendency will be to bring before our Colonies and Dominions the fact that we think they might reduce their tariffs against us. I think there is a great deal of difference between the present proposals and those which were made by Mr. Chamberlain years ago. There was at that time no idea of making any terms with the Dominions, but I understand from what the noble Lord has said this afternoon this is an arrangement by which the Dominions should, in the first instance, say what they are prepared to do for us. I am very glad that the subject has been brought forward, and I hope that questions of this kind will continue to be raised in the future.


My Lords, I wish to detain yon for a few minutes only. Like the noble Lord who has just sat down I think the country is greatly indebted to Lord Beaverbrook for having raised this matter, and for having raised it in such a definite form. We have heard this afternoon a great deal of criticism of these proposals, and no doubt the subject as it has been adumbrated so far has a great many difficulties connected with it, and there will be great trouble in bringing it to fruition. All the same, I think, as Lord Arnold has said, that we must look facts in the face. There is no doubt that the trade of this country with foreign countries is growing gradually less, and that unless we find other channels for this trade then this old country of ours is bound to go lower, and fall into the position of a second-rate Power. Should that take place, what is going to happen to the Empire? Obviously the security of the Empire, the standing of the Empire, depend upon the position in this country. In the course of his remarks, the noble Lord, Lord Arnold, referred to the Imperial Economic Conference which he said was going to sit next year. The noble Lord emphasised the fact that the present Government is a Free Trade Government. I should like the noble and learned Lord the Leader of the House to inform us in his reply whether that Imperial Economic Conference will be allowed to consider the question of the improvement of the conditions of Imperial trade from every point of view, or whether on the other hand it will be hampered by not being permitted to consider any subject of Imperial Free Trade.


My Lords, in answer to the last question of the noble Viscount, I must say that, it would be quite impossible to answer a question of that kind, of which no notice has been given, and which really is not included within the terms of the Question asked by the noble Lord, Lord Beaver-brook. I know nothing of the matter at the present time. I presume the Imperial Economic Conference will consider all matters which any of the Dominions or this country desire to bring before it. But the noble Viscount will know from his experience of Parliament that a question of that kind cannot be definitely answered as a mere incident in a debate of this character. I think we are all very much indebted to Lord Beaverbrook for the exhaustive speech he made on this question, in which we know he is deeply interested, the question of Free Trade within the Empire. But, quite irrespective of the views of the Government or of any political Party in this House, this proposal has in truth been universally condemned. There have been suggestions that in this direction or in that something must be done, but the main feature of his proposal has been condemned by every speaker this afternoon.

It is an advantage to be able to discuss such a matter in this House, particularly a matter which does not depend upon political differences. I think no one was more emphatic in his condemnation of the proposal than the noble Lord, Lord Cushendun. He said that the Dominions would not tolerate it. That was the very argument put forward by Lord Arnold—not a theoretical argument, but a very practical one indeed. And, as far as I know—and I have read a great deal of what has passed on this question in the Dominions—Lord Cushendun is undoubtedly right. I do not wish to cross-examine him, but can he for a moment suppose that any Party in this country which desires to protect in advance our Empire would commit itself to a policy which no Dominion would tolerate? I do not see how you could have any greater condemnation. Then he also said on wider grounds—and I entirely agree with him—that the policy is impossible. But having made up his mind that he would condemn this particular proposal root and branch, he then said, "But what is your policy on preferential duties?" That question has already been very fully discussed in another place, both by the Prime Minister and the Chancellor of the Exchequer. It was discussed in the earliest days of the Session, in July, and such a question is certainly not going to be embarked upon by me at this stage and without any notice. I think that Lord Arnold in the wider sense has answered the question. He said that we are a Free Trade Government, and so far as I know nothing that has been suggested this evening can in any way modify or alter that wide expression of the true basis of our financial policy.


Does that mean that the noble Lord is not in a position to say what the Government's policy on Preference is?


That is rather a cheap way of putting it. It is a kind of question often put for the purpose of immediate effect. I think it would be highly impolitic for me to embark upon a topic of that kind without previous notice and consultation with the members of my Party who are chiefly interested in these financial questions. It would, indeed, at this moment be entirely irregular for me to embark upon it, and I feel perfectly certain that Lord Cushendun does not expect me to do so. I think he assents to that. I notice that Lord Bledisloe is not at the moment in his place. The only other question was one on agricultural policy. That, again, is a matter that one cannot embark upon at this stage. It is only one of the incidents connected with the much wider scheme which the noble Lord, Lord Beaverbrook, has suggested. He referred to what has been said about the connection between agriculture and manufacturing industry in the most interesting Report of the World Economic Conference at Geneva, of which M. Theunis was the Chairman. I recollect very well addressing your Lordships on that subject. He said that agriculture was to have its fair share, and not to be treated as the Cinderella of finance, and, if I recollect aright, there was no difference at that time between Lord Bledisloe and myself as to the interpretation of that extremely important statement, made with the authority of M. Theunis, at one time Prime Minister of Belgium.

I thank the noble Earl, Lord Beauchamp, for what he said about Lord Arnold's speech. I do not think that the noble Lord, Lord Cushendun, was quite as complimentary as he might have been about it. It was not only a theoretical speech, although it was theoretically sound, but it was full, as Lord Beauchamp pointed out, of statistics and details. If the noble Lord opposite will take a recommendation from me, as I have no doubt he will in all hearty good sense, if he missed the details of the most relevant facts stated by my noble friend Lord Arnold in your Lordship's House, I suggest that he should inform himself, as I am sure he would desire to do, by reading most carefully that speech and all the statistics contained therein. There is nothing more that I desire to say. I hope that I have given quite a courteous answer as far as I could, and there the matter must stop.


My Lords, I do not intend to detain your Lordships, but I must say that I do not think the House has gathered very much from the speech to which we have just listened. The noble and learned Lord comes to take his part in a debate which is to deal with the fiscal relations between this country and the great Dominions, and then says that is is entirely irregular for my noble friend behind me [Lord Cushendun] to put any question about Imperial Preference. It is of the very essence of the problem, and for the noble and learned Lord to pretend that this matter is really wide of the question is to ignore the speech of his colleague who sits just beside him.

On the other hand, the noble Lord, Lord Arnold, in a very full speech—I do not complain of that—made it a matter of boasting that there was going to be an Economic Conference next year. Have not the Government foreseen what they are going to do with the Economic Conference? What is the noble Lord boasting about if they have not any policy to submit to the Economic Conference? What does it amount to? The truth is that noble Lords opposite have no policy on Imperial Preference. They made certain pledges, I believe, at the General Election. They made certain rather rash statements when they first took office. But now when they are beginning to look at it they see that the question of Imperial Preference is a very difficult one. Then the noble and learned Lord the Leader of the House pretends that it has nothing to do with this debate and so avoids giving any answer. But they cannot escape in that way. They are like rabbits trying to make for some hole to avoid the difficulties which the sportsman will bring upon them. But they will be ferreted out. They will have to come out into the open. They will have to find out what their policy on Preference is. They will have to learn yet once again how rash it is to give un-thought-out pledges at a General Election.