HL Deb 30 July 1930 vol 78 cc1024-54

LORD OLIVIER rose to call attention to the conditions arising in British Colonies dependent on the production of sugar; to ask the Secretary of State for the Colonies to state definitely and to commend to this House the policy of His Majesty's Government in regard to those conditions; and to move for Papers. The noble Lord said: My Lords, this is the fourth occasion on which the subject of the British West Indian sugar industry has been raised in your Lordships' House, but I make no apology to your Lordships for again raising the matter before Parliament is prorogued, because I am quite confident that the subject is one of very great interest to your Lordships on two accounts: (1), because it involves the prosperity, livelihood and social stability of large numbers of His Majesty's subjects; and (2), because it raises, in my opinion, very important questions of Imperial Colonial policy, as to which I desire to elicit from His Majesty's Government some statement as to what they mean when they say that they acknowledge their responsibility. I may possibly be a little lengthy, and I ask your indulgence, but I want to summarise the whole case as it appears to me as completely as I can, and for that purpose I shall have to read extracts from the Despatches of the noble Lord the Secretary of State of the Colonies, and also from pronouncements of the Chancellor of the Exchequer.

Your Lordships will remember that in February last, when we first approached the consideration of this subject, I stated that "if the present situation continues and no further relief is promised" to the Colonial sugar industry— there must and will be considerable reduction of planting and cultivation after the crop now being taken off is completed. It is difficult, to see how any except a minority of the estates and planters can even carry on in the hope of better prices. If the Preference is annulled by the repeal of the Sugar Duties, without any countervailing assistance, the British West Indian sugar industry will be dismantled and come to an end, except for local supplies"— and, I may add, for some special products such as certain grades of syrup and certain very fine yellow crystallised sugar— as rapidly as estates can be cropped and wound up. That was the effect of the Report that my Commission made in reply to a reference by His Majesty's Government, in regard to which Mr. Snowden the Chancellor of the Exchequer had stated the purposes to be as follows:— We are seeing if it is possible to help in any way which will not merely enable theta to tide over their present difficulties but will put them in a financial and manufacturing position in which they will be able to stand world competition better in the future.

My Commission gave the Secretary of State exact information as to the means by which we considered that these purposes could be effected, the only means by which these producers might be able to tide over their present difficulties. I have not anywhere seen any criticism of the accuracy of our judgment on those conditions. On the contrary, confirmations of the tenor of our Report accumulate every day. The Secretary of State himself has not traversed any part of our presentation of the position, but has only either entirely ignored it or declared it impossible to adopt any fraction of the suggestions for help. The only alteration in the position since then is that the price of sugar has gone down by £2 12s. 6d. per ton. His Majesty's Government have given no pennyworth of assistance to the industry, but have simply stated that, if destitution through the unemployment of labourers occurs, they will give relief. The process which we assured His Majesty's Government was likely to take place, the probability which apparently they complacently ignored, is proceeding according to plan, and I want to give your Lordships a very brief summary of what is happening at present in the West Indian Colonies.

Let me take the Island of Antigua. This Island is the most difficult spot in the whole of the West Indies, in regard to its position in the sugar industry, and we pointed this out in our Report. We said that the Island of Antigua, although it was extremely well suited for the production of sugar and produced a very sweet and fine cane, the cultivation was good and it had about one of the best factories in the West Indies, had suffered very severely from drought and hurricane during the last two years, and the planters were on their beam ends. We said that unless the Government gave them some aid by financing them, they would not be able to carry on with the next crop. In regard, therefore, to Antigua, and Antigua alone, we asked His Majesty's Government for some definite financial assistance, such as was given, I may add, after the Report of the Commissioners of 1897, both to Antigua and Barbados. His Majesty's Government did not do so, and that which we and everybody else foresaw is naturally happening.

Let me give a very brief account of what is happening in Antigua. At most two-thirds of the labourers, and most of these for part time only, will find employment out of the crop in 1930. That, is to say, one-third of the population is thrown out of employment. Those employed will receive a rate of wages at least 25 per cent. less than the very much reduced rates Of last year, and about one-third will have no employment at all. That means that, even for those employed, highly-taxed imported foodstuffs in sufficient quantities to secure nutrition will be out of their reach and they will not have the physical strength to work full time. Industrial maintenance in Antigua is the only effective economic remedy. As an indication of the decline of wages, a well maintained estate, out of crop, in 1926 expended £53 a week. The same estate, cultivating fully in 1930, spent £30 a week. On every estate that diminution is found, owing to the difficulties in which the planters find themselves, for which we ask some temporary assistance to enable them to do what the Imperial Government profess to be willing to enable them to do—namely, to tide over.

Now I pass on to St. Kitts. Wages there have been reduced by 20 per cent. Both in Antigua and St. Kitts they have the advantage, as l said, of extremely efficient modern central sugar factories, and the proprietors of those factories are pursuing a liberal policy, and, although on the normal contract for cane production they would be paying something like £9 or £10 per ton for their cane, they are carrying on and paying £14 a ton in order to keep the planters going. If the cane supply drops out the factories will drop out as well. Moreover, they are arranging to give financial assistance to planters who have contracts with them. In Antigua only 50 per cent of the sugar acreage will be replanted with new plants. The rest will be carried on with what is already on the ground. In Barbados there has been a considerable loss on the crop—a loss of about 25s. a ton, but Barbados has had a stroke of good fortune. It has, however, been deserved. They have had record crops of cane, and a good extraction of sugar at the factories. They have also had the advantage of a good market for their speciality, refined syrups, and about one quarter of the estates have been able to make profits because of the good market for these refined syrups. The others, however, made losses.

Barbados has had a well merited stroke of good fortune. I say well merited, because in my Report I mention the public-spirited work that has been done for many years in Barbados by the Agricultural Department, which has been trying during last year to contend against one of the greatest pests of the sugar industry, the moth borer, and has now succeeded in finding a parasite, of which the Agricultural Department has distributed more than three millions. That has to some extent mitigated the evil from which the industry was suffering owing to this cause, and it shows that the Barbados planters are carrying on their business both scientifically and with success, and deserve any good fortune that may fall their way. The planters there are not so badly off as we feared they might be; still they have made a loss of round about 25s. a ton upon their crop, without providing any interest on capital, or anything for maintenance or improvements.

In British Guiana there has been a considerable reduction of cultivation. On one group of estates only in British Guiana there is a 20,000 ton reduction. The wages have been cut down, unemployment is increasing, and it is becoming very difficult, if not impossible, as it is also in Antigua, for the estate proprietors to consent any longer to do what they now do gratuitously—namely, maintain the public hospitals. In Antigua anybody employing contract labourers is bound to provide medical attendance. If the planter has to discharge his labourers, he is relieved from the obligation to provide medical attendance. In British Guiana, while there was coolie immigration, the estates had to maintain hospitals. After coolie immigration was suspended the obligation to do that ceased, but they have continued to maintain hospitals and provide medical attendance after discharging their labourers, although they have been making a loss of £2 to £3 a ton. They might continue to do that, but if the estate goes out of cultivation the hospital attached to it goes out of commission also.

The position in British Guiana is this, that every one of the principal concerns is carrying on at a loss. They are prepared, out of their liquid resources, to finance losses up to a certain amount, but when that limit is reached—and it will be reached by the end of next year—they will close down unless something is done to tide them over the present difficult position. Incidentally, I may say that the other day there was a Motion in another place asking that one recommendation of the Commission might be adopted—namely, that the British Preference might be equalised with the Canadian Preference, giving an addition of £1 a ton. If that had been done it would have made a difference on maintenance of about £20,000 or £30,000 to sugar production in the course of next year. The Chancellor of the Exchequer said it would not make any difference at all, but I will deal with that statement presently. In Mauritius wages have been cut down, and, unfortunately, their only alternative crop, hemp, is suffering from depression of price. I do not intend further to elaborate the statistics, but will only say generally that the precise development which the Commission reported would take place is taking place, and must inevitably continue to take place under present conditions.

I want to examine what is the Government's position in this matter, and I want a reply. As I have mentioned, the Government stated that they desired to tide over the industry, meaning that they saw some prospect, as everybody in the world does, that the price of sugar would not continue at its present ridiculous figure, but if it reverted to what I may call an economical world exchange price, independently of subsidies and dumping, then there was a prospect of part of the industry being able to carry on. And there is that prospect unquestionably. I say without hesitation that if world prices were regulated on free trade prices, and if the market were not depressed by the enormous overloading which is taking place at the present time, and also by dumping and subsidies, the West Indies could perfectly well carry on the industry, to a large extent at all events, upon economic lines.

The question of giving this small addition to the Preference of 1s. per cwt. was raised in another place and was discussed there. I want to call the attention of your Lordships, and particularly the Secretary of State for the Colonies, to some things which passed in that debate. Mr. Ormsby-Gore stated—in my opinion accurately—that the cost of this additional Preference would be about £700,000 a year. That is a figure which was supported by one of the best experts in the sugar trade in this country whom I consulted, and possibly Mr. Ormsby-Gore may have consulted him also. That would be the probable cost to the Chancellor of the Exchequer. The Chancellor of the Exchequer, on the other hand, said he regretted to have to say that that figure was a woeful under-estimate of the cost and that the cost would be more than double that figure—at least £1,500,000 a year, and that was excluding what would certainly happen—namely, the extension of the increased Preference to British-made beet sugar.

The Chancellor of the Exchequer had given those figures in the House of Commons before, although when he spoke before he said it was only £1,350,000. I challenged the accuracy of that at the time, and had some correspondence with the Chancellor of the Exchequer upon the subject. He protested his great astonishment that a man of my official experience should rush into print in that manner. I have examined the figures, and I adhere to my view that his statement is an over-estimate. I want to point out this. The Chancellor of the Exchequer said it would cost at least £1,500,000 a year, excluding what would certainly happen—namely, the extension of the increased Preference to British-made beet sugar. Apparently, one of those ministering angels who reside under the gallery sent a note to the Chancellor of the Exchequer and he corrected that figure saying: "I made a mistake; that £1,500,000 would include the Preference we should have to give to British-made sugar."

To begin with it is a little disconcerting when the Chancellor of the Exchequer gets up and makes a wild statement of that sort which he has to correct afterwards, even if there were any reasonable, arguable case for extending the Preference in order to equalise the conditions in the British beet-sugar industry. That industry gets a subsidy and a Preference from the Exchequer amounting altogether to £18 10s. a ton on the approximate world market price of £8 10s. and makes large profits by it. There is not the slightest arguable case for giving at the present time to the British beet-sugar industry a share in the Colonial Preference, which is given for the sake of our obligations to the Empire just as the subsidy to sugar beet is given to foster the home industry. Therefore I entirely traverse not only the Chancellor of the Exchequer's statement that the cost would be £1,500,000, but also his statement that there is the slightest justifiable ground for including sugar beet in that Preference. On the whole I think Mr. Ormsby-Gore's estimate of about £700,000 was probably reasonable. The Chancellor of the Exchequer, as I understood from him in correspondence, took account of the whole production, but Canada, at the present time takes more than half of the West Indian sugar production, and the whole of what goes to Canada is not coming to Britain because we increase the Preference, provided we do not increase it above the Canadian Preference.

I submit that that shows that the Chancellor of the Exchequer entered into this matter with a mind inadequately prepared, and I want to call your Lordships' attention to that as part of my case for asking for reconsideration of the whole matter. Then the Chancellor of the Exchequer went on to say: The world price is about 6s. 6d. a cwt. or £6 10s. a ton"— it is less than that now— How can a Preference of 1s. a cwt., or £1 a ton, make up the difference between £13 a ton and £6 10s. per ton? The Chancellor of the Exchequer had not taken the slightest trouble to see what were our recommendations. This 1s. a cwt. would help the industry to tide over because your Lordships will easily recognise that with the price of sugar standing at £10 a ton and the average cost being £11, a difference, of £1 a ton is all that is wanted to keep the industry afloat in the West Indies. But the Chancellor of the Exchequer assumed that the industry was down and out, that the Preference was gone and that what the Colonial sugar producers have to contend with is a price of £6 10s. a ton. They do not. They have the Preference already. That argument was entirely irrelevant and I have proof that it is irrelevant, because I have information of cases where producers say that they are going to put out of cultivation two large estates because they cannot carry on at a loss of £2 or £1 10s. They want the £1 a ton, because that would make an enormous difference in the stability and the prospects of the West Indian sugar industry.

Mr. Snowden, with inadequate information or not understanding his brief, entirely ignored that. He misled his supporters in the House of Commons by giving them a perfectly worthless argument. Then he said:— For the reasons which I have given—because of its cost and its ineffectiveness for doing anything material to help the Colonial industries in their present plight—I regret that I am unable to accept this proposal. I have spoken to your Lordships about cost and ineffectiveness, and I shall return presently to the question of cost. Then, thirdly, the Chancellor of the Exchequer referred to the fact that they had made an offer of credit. He said:— .…we took steps some time ago in order to enable next year's crop to be handled. We made arrangements for credits for that purpose. We discussed this question of credit some time ago in your Lordships' House. The noble Lord the Secretary of State for the Colonies has had replies now from all the Governors, and I want him to lay those on the Table of the House. Every one of them told him that the credit scheme was not worth 2½d. to the West Indies or to anybody else in the world. If he will lay that correspondence on the Table that will be proved.

Yet months afterwards the Chancellor of the Exchequer gets up in the House of Commons and claims credit for having made a noble and generous offer, just as an inspired article in the Daily Herald claimed that the West Indies had been saved by a grant of £150,000, not one penny of which was ever going out of the Exchequer. That is the way the ease was put before the House of Commons. The noble Lord the Secretary of State for the Colonies has not put the case so misleadingly as it was put in the House of Commons, but he has put it as obscurely. I want to know definitely whether we are to understand that the Chancellor of the Exchequer in his statement really meant that it is the deliberate policy of His Majesty's Government to say: "We are going to regard the world price of sugar as £5 10s. or £6 and we are not going to stir a finger to tide the West Indies over their trouble. We are going to let them drop on to that price of £5 10s. or £6 and let them go wherever they please. Certainly we will try to provide some maintenance for their starving population." I want definitely to ask whether that is the policy, whether His Majesty's Government regard it as assured that within the next year or two years, before there is any chance for the world price to recover, that the West Indies shall drop out? Is that their considered policy?

If so, it is a very serious matter and it will interest a good many noble Lords who are interested not only in West Indian sugar production but also in British beet sugar production. It is perfectly obvious, if that is the policy of His Majesty's Government and they are going to rely for sugar on buying bankrupt stock from Cuba or wherever they can get it, that the British sugar industry is going out simultaneously with the West Indian. Sugar beet is a subject of interest to those of your Lordships who in this country are concerned with the agricultural side of the beet sugar industry. I want to interest them in that situation. To put the matter very briefly, the British beet sugar industry is a very much more expensive proposition than the West Indian sugar industry. Take the factories. The best factories in the West Indies can produce sugar at the rate of one ton of sugar from 6.9 tons of cane; that is almost exactly the average of what British factories do. Last year they produced a ton of sugar from 6.92 tons. The West Indian factories do a little better than that average, but not all do as well as that.

As regards the agricultural side of the matter, the West Indian planters have to be content with 14s. a ton for cane costing five guineas for a ton of sugar, whereas the British farmer has be paid £2 11s. 3d. a ton. That is to say, what costs the West Indian factories five guineas costs the British beet factory seventeen or eighteen guineas—at least three times as much. That of course is the agricultural position. Enthusiasts for beet cultivation always hoped that they would get more out of the cultivation by the farmers than they do. The yield per acre is very low. It is only 8⅔ tons per acre on the average, and the beet cultivators are continually saying that they ought to have eighteen or nineteen tons an acre; but they do not get it and that is the best they can do. So that British beet sugar cannot be produced nearly so cheaply as West Indian cane can be produced.

I want to interest the British beet industry in the present plight of the West Indies. I have referred to the complaints made by the Chancellor of the Exchequer and by my noble friend Lord Passfield of what they call the "cost" of our proposal, and again I want to trouble your Lordships with some figures which I have written down for the sake of preciseness. I believe that they are accurate. The average open market price of raw sugar of the standard West Indian and Cuban quality—96 degrees standard—was in 1927, three years ago, £13 15s. a ton. This is the average price from the brokers' circulars. Two years ago in 1928 it was £11 12s. 6d. a ton. In 1929, last year, the average price was £9 Os. 9d. In December last, when my Commission drew up its figures, the price was £8 5s. a ton. The price to-day, or rather last Saturday, because I have not seen the prices since Saturday, was £5 12s. 6d. So that the price for British buyers of sugar has thus fallen in three years by £8 2s. 6d. a ton. Our consumption in 1929 was 2,180,000 tons. So that, in three years there has been a saving on our annual sugar bill at the rate of £17,712,500. In the last two years it has fallen £6 a ton, and the saving is at the rate of £13,000,000 a year. The difference between last year's average price and the price to-day is £3 8s. 3d. a ton, and the saving to our consumers is at the rate of £7,939,250, say £8,000,000 a year. Since last December, when we framed our Report, it has fallen £2 12s. 6d. a ton, and the saving to our buyers is at the rate of £5,722,500 a year—since we made our recommendations.

We proposed that all our sugar should be handled through an import board giving a guaranteed price for British Colonial sugar. My noble friend Lord Pass field curtly dismissed that proposal in your Lordships' House on the ground that it would "cost several millions." I must protest against the word "cost." It would not have cost anything. It would have meant the sacrifice of foregoing a certain amount of this unnaturally increased cheapness of sugar by means of which sugar is now being sold at a price of about half that at which the best factories in Cuba could produce it. We should have sacrificed a certain amount of unnecessary and unnatural cheapness, but the sacrifice would have saved those about whom I am speaking. If the Government had adopted our maximum proposal for a guaranteed price to Colonial sugar the sacrifice of increased cheapness since we made our proposal would have been at the rate of £3,937,000 a year. That is to say, the net cost of our sugar would not have been increased at all, but would have been reduced by about £1,785,000 a year.

If we fake the average price for the whole of last year as a standard, the net reduction of cost, the clear gain now being enjoyed, even after accepting our proposal, as compared with last year, would be at the rate of about £4,000,000 a year— £4,001,750. Undoubtedly, if we were now buying all our sugar at the open market price of 1928, two years ago, without giving any Preference at all, it would be costing us £25,342,500 a year. If we were buying it to-day at the prices recommended by the Sugar Commission, and superseding the Preference, it would be costing us £18,825,000—a saving of £6,517,000 a year to our buyers since we reported, and the Exchequer would have saved the whole cost of the Preference which, on the same basis of calculation, would amount now to about £2,625,000, and the total reduction in cost since 1929 would have been £9,142,500.

The noble Lord talks about cost and about the great hardship to the wage-earning classes of having to pay more than they need for their sugar. We all sympathise with that view. We know that cheap sugar is a great boon, but in my opinion the extraordinary increase in the cheapness of sugar—and this is almost an echo of the words of the Royal Commission of 1897 of which the noble Lord, Lord Grey, and Sir David Barbour, both ardent Free Traders, were members—that increased cheapness is bought "at too high a price": at the cost of others of His Majesty's subjects, the West Indian and other producers of sugar. It is too high a cost to pay from the Imperial point of view, and I urge His Majesty's Government to revise and reconsider their view as to cost and to credit the rank and file of the Labour Party, to which I belong, and with whom I have talked on the subject, with a little of the generosity which I have found among them in my own conversations on the subject.

They would very gladly not allow the price of sugar go down if it would help their fellow workers in the West Indies and the other Colonies concerned that it should not go down. I appeal to His Majesty's Government not simply to regard this matter as a thing to be dealt with by a stern adherence to a fixed and immutable principle. I am told that if you put a hen in a circle of chalk and put its bill on the circle nothing on earth will induce that hen to move from that circle. His Majesty's Government seem to be actuated by that principle. Why should my noble friend adhere to that view and subordinate himself at the present time to that policy and say that this item of our Imperial trade equal to a million tons a year is to be sacrificed and scrapped, and that the workers employed in connection with it are to be thrown into destitution. Why should be adhere to that and say: "It costs too much; we must follow out the principle of this so-called Free Trade and adhere to the principle of cheap sugar"—of which your Lordships will remember he gave us a panegyric on the first occasion when he spoke on the subject— "this is the policy of His Majesty's Government on this matter"?

I have spoken of the destruction of trade. You would entirely destroy a British industry of 1,000,000 tons of sugar a year, worth, you may say, certainly £10,000,000 a year at the very least. You will entirely destroy about half of your West Indian trade. After all, your West Indian trade is worth in imports into Great Britain about £5,500,000 and exports from Great Britain nearly £7,000,000. You will destroy half of that by buying cheap sugar at 5s. 6d. cwt. or whatever it may be from Cuba. What are you going to get in the way of trade in return? I know there is an economic theory that wherever you buy your stuff you get trade in return. I doubt if you will get any return of trade from Cuba. As a matter of fact so far as this exchange of sugar is concerned, the Cuban crop is practically all held in the United States and I cannot believe, whatever you pay for your sugar to the United States of America, that you will be able to send any trade to Cuba. They do not take any of our trade. They bar it to-day. How are you going to get an increase of trade with America that would countervail that loss of your trade? You cannot possibly get trade in return when people are trying to bar, or have actually barred, your trade out. When you are dealing with your own people who are giving you a Preference, some trade goes in return, but there is inevitably a loss of trade as compared with the trade that previously existed.

I have a letter from the Principal of the Imperial College of Tropical Agriculture, a very valuable institution which is doing very good work in the West Indies and which was largely financed and founded by the sugar industry. The people of Trinidad gave a very large grant and the sugar machinery manufacturers in England gave a grant of £25,000 for the study of the technique of sugar production. If you destroy the sugar industry, you destroy a very large amount of the value of that institution because the only sugar growers you would then have to provide for will be those of Natal, who will go on being protected, and the Australians, who can look after themselves. There will be no other British sugar industry. How can you expect the Trinidad people and other people, who have given subsidies to that college to help their principal industry, to go on giving it subsidies? Of course they will not.

In this letter Mr. Evans, the Principal, says:— It is a pity Mr. Snowden and some of the others have not had the opportunity of seeing some of these Colonies. They would then more fully realise that the problem is a social and political one and only incidentally a sugar problem. People out here are very sore and there are local rumours about the abolition of the. Preference on British trade goods. If the Sugar Preference is not renewed next year I think you may take it as pretty certain that most of the Colonies—British Guiana and Barbados anyway—will remove the British Preference and that will mean the return of monopoly to United States goods. The Trinidad Government is assisting the sugar planters to the tune of £2 a ton for the next two years. So is Jamaica. Barbados and British Guiana desire to do so but they have not the money. They have asked the British Government for the money. It has been refused.

"The people are very sore," says the letter, and it would interest my noble friend if I could show him some of the letters I have received on the subject. My noble friend may complain of my statement that he has done nothing to help the West Indies. He has promised us assistance from the Development Fund and the intention, I understood, was that assistance should be given from the Development Fund to the sugar planters to improve the conditions of the industry, such as transport, and to make a live and efficient industry out of what is now a struggling industry, so that they may contend with the world conditions. What do we find? We find the Chancellor of the Exchequer saying that his standpoint is that they cannot possibly contend with the world conditions with their cost of production, that their cost of production is £12 or £13 a ton and the world price is £5 10s. or £6, and that they cannot contend with it. We can imagine the Colonies sending in an application to the Development Commission. Many of your Lord ships know the Development Commission and the Development Acts and they have sat upon the Public Accounts Committee, as I have done as a humble assistant adviser to that Committee.

Suppose you go to the Colonial Development Commission and say: "These West Indian people are in a very bad way and we want to spend a little money so that we may be able to give relief works; we would like some money for improving transport, for improving factories, making roads in order to tide them over." I do not know what the Public Accounts Committee would say to those Commissioners if they were to accede to any application for relief in the West Indies at the present time on those grounds. I have been informed by Colonial Governors that the Development Commission are taking the very proper and logical view of their duties that they will not give money for any eleemosynary purposes in order to keep an industry going that His Majesty's Government have declared cannot be kept going. If, for instance, Barbados say: "We want to improve our roads or light railways", they will ask: "What for?" Barbados will reply: "In order to improve the efficiency of our sugar industry." If Antigua ask for money for the same purpose, they will also say that they want to improve the efficiency of the sugar industry, which is their principal industry. The Development Commissioners will, very properly—I speak as an ex-Assistant Comptroller and Auditor—boggle at that.

My right hon. friend has been very liberal in telling the Colonial Governments that His Majesty's Government intend to help them through the Development Fund. I want to know what is the position about that. Is it the view of His Majesty's Government that the Colonial industry cannot survive? Are the Development Commissioners taking that view, or are they really sympathetically dealing with applications for aid for improving the sugar industry with a prospect—shared by His Majesty's Government—that that industry will survive? If His Majesty's Government do really share that prospect and believe it will survive, they are in a fool's paradise if they believe it can survive at the present time without more assistance than they are now giving. It can only survive if the Government will face the position set forth in my Commission's Report and as it has been aggravated since then by the great fall in the price of sugar.

We quite admit there are industrial difficulties in this country and that the West Indies are at the present time sharing in that depression, but, in this country, each industry supports the others and our workers do not starve because there is an Unemployment Insurance Fund and an established system of maintaining our workers. There is no such thing in the West Indies, nor does the law acknowledge any obligation to give able-bodied outdoor relief. You cannot deal with relations with British Colonies on the principle that they are to be treated as recipients of outdoor relief. They are individual satellites or associates of ours in the British Empire and we have a moral obligation to keep their communities in a healthy state of existence, just as we have an obligation on the part of the Government here to keep the community in a healthy state of existence, and therefore to assist this distressed industry. The Imperial Government cannot discharge its duties to those communities simply by saying, "We will relieve your populations in case of distress."

As I have laboured to prove, and as the Commission of 1897 also laboured to prove, in these Colonies, in Barbados, Antigua, St. Kitts and to a lesser degree in Trinidad, if the sugar industry goes out, you destroy the whole machinery of government, you render it impossible for men of enterprise and spirit to go out to those Colonies, and you discourage the progressive white element in those Colonies. You cannot discharge your duties to those Colonies in that way. You must preserve those Colonies as individuals. They are small and they may be insignificant, but, if a man is an individual member of your family, it is no justification to treat him badly and to undermine his constitution because he is a small man. He has just as much right as the bigger man, or the bigger community, to your fatherly care and your Imperial obligations.

I come to the question of relief work. I have had a great deal of experience of relief works after hurricanes and droughts in the West Indies, and if you think you can effectually from this country deal with the problem of relief by giving the population of the West Indies relief work or "doles", you are grievously mistaken. In the first place, it is almost impossible to find relief works that will at all touch the situation. I have had to deal with the question, fortunately, where relief works did touch the situation—in Jamaica, where we had the banana and the coffee industry, and where we wanted more roads. In Barbados and other places they have too many roads already. You cannot give employment through relief works, and are you going to distribute money by way of "doles"? You know very little of the population of the West Indies if you think it is not an even more disastrous expedient than the unemployment relief fund in this country, because all experience proves that the people who draw the money spend it, and their dependents, the women and children and old people, go on starving, just as they did before. You cannot deal with the illiterate and unorganised West Indian population by outdoor relief. It would create far more mischief than giving them land to work upon.

I have kept your Lordships far too long. There is a great deal more that I would like to say, but I hope I shall be followed and supported by other members of this House. I want the Government to reconsider the position in this matter. I have quoted the manlier in which the Chancellor of the Exchequer dealt with this subject in the House of Commons, and I ask your Lordships whether one is not entitled to appeal for reconsideration or a rehearing, on the ground of misdirection of the jury? The facts were not put before the House of Commons properly. The facts of the situation are much more serious than the Government have given any indication of recognising, and I urge them, as I am confident all their Governors and deputations from the West Indies have urged them, to reconsider the matter on the basis of their first programme, which was to help the industry to tide over a period of difficulty and distress. In view of the perfectly ridiculous price at which sugar now stands, and of the enormous profit which the British community is reaping through the lowering of the price of sugar, I urge that the Government should be liberal and give a grant, just as they gave a grant on the recommendation of the Commission of 1897.

What is required to keep the British sugar industry in the Colonies and in Great Britain going is to guarantee the maintenance of the present Preference. I can conceive no possible reason why the Chancellor of the Exchequer should have been so reluctant last year to tell the British West Indies what was going to be done. It cost them thousands and thousands of pounds, and I made a statement in my Report that great loss was actually imposed upon West Indian communities by that. I cannot understand the quite inexplicable reluctance of the Chancellor of the Exchequer. If duties are going to be increased, I can understand his silence, but if a Preference is going to be maintained I can see no practical administrative reason why it should not be stated. If it is not going to he maintained, let us be told and we know where we are. Secondly, let the Government add that moderate increase to equalise our Preference with the Canadian Preference. We can perfectly well afford it from the surplus got by cheapening sugar, and that will allow the West Indies to tide over. The weaker will no doubt go out, but not three-fourths of the planters, which must happen if present conditions continue.

Thirdly, I urge the Government to pay some attention to the recommendations of their Governors, and to assist those Colonies which are making efforts to assist themselves. We ask the Government to do what Mr. Chamberlain's Government did on the recommendation of the Commissioners of 1897. We have had immense profits from the reduction of the price of sugar, and we should give back a little of it to the West Indies. Let the Government give back generously some of the profit and they will escape the evil notoriety of having been the Labour Government which destroyed not only the British sugar industry but also a great part of the West Indian Colonies.


My Lords, I feel that it is my public duty to address the House on this question, because I had the honour to be Governor of Antigua and to administer the grant under Mr. Joseph Chamberlain, to which reference has been made three times in the course of the noble Lord's speech. I will be very brief, and I regret that the views which I am bound to express may not be welcome to brother Governors in the West Indies. I feel that my noble friend the Secretary of State for the Colonies is being attacked in regard to his policy in regard to sugar in the West Indies in a manner which is not always just, and which is certainly unsound financially. I regret to have to say that the days of subsidies payable outside England are over. When Mr. Joseph Chamberlain saved, by a small subsidy to encourage central factories, the sugar industry in the lesser islands of the West Indies, and Antigua in particular where it had become unprofitable, conditions were very different. Since then we are subsidising a competing sugar industry in England. To subsidise a competitive sugar industry in England, and to continue to subsidise sugar industries elsewhere outside, appears to me to be arithmetically unsound. It is as if anyone were to back in a match two horses to win the race at the same odds.

I remember on the wharf at St. Kitts when governing the Leeward Islands seeing Muscavado sugar sold for £5 2s. 6d. a ton. Their machinery was then antiquated and wasteful. Putting in new machinery created wealth by an expedient that cannot be repeated. The British subsidy of £250,000, obtained from this Parliament by Mr. Joseph Chamberlain for the West Indian sugar industry, was parcelled out among the Governors of the West Indies leaving to each to do his best with it, and in Antigua I employed it in premiums to encourage the setting up of central factories, which central factories have been very successful and added to the productiveness of the industry for the time being sufficiently to get the planters out of their financial difficulties and give them many years of profit and prosperity. But it appears that what the planters now want is not the creation of new wealth by financial and mechanical expedients, but that the Secretary of State should do much that is not practical to keep up the price of sugar for their benefit above that which is commercially possible, to an indefinite extent, and at our expense. The one thing that can be clone for the West Indies to-day is to stabilise prices for a short period on sound banking lines. To stabilise prices might cost a little but it would do much good at comparatively small cost. To raise prices against the law of supply and demand is a different proposition; to call it "preference" does not make it sound.

If there is to be any raising of price in defiance of the law of supply and demand, that involves a subsidy, and if a subsidy is to be given for manufacturing sugar let it be given to keep the balance of trade in favour of England, let it be given to help English landowners and English sugar factories. British landowners last year were in many cases, in fact, nothing but unpaid tax gatherers. This year by reason of the increase of taxation to 12s. 6d. in the pound many of us have to pay for the privilege of facilitating the collection of taxes, and passing them on, before rents are received, to the Chancellor of the Exchequer. If landowners here are to do that, let us vote to pass on what is taken from us to brother landlords in England, not to brother landlords in the West Indies.

The real difficulty is that there are West Indian Islands and estates of which the productiveness has ceased to be competitive in the markets of the world. There are places in the West Indies—it would not be wise to mention names—which may still struggle on competitively; but to try and help indefinitely by subsidies—not by the creation of central factories—those which are beyond redemption, as well as those which might perhaps struggle on, is certainly bad finance, if not a hopeless task. In view of the very heavy taxation now payable in England, the defiance of political economy should not be carried any further. It is with great regret that the truth has to be told. The truth has to be told equally for landlords in England and landlords in the West Indies. The time has come when for many of us our heads are left but the land that cannot meet competition is taken by the tax gatherers.


My Lords, as no other noble Lord wishes to support Lord Olivier, I will endeavour to make such reply as I can to the very lengthy and detailed speech which he has made, and to which I listened with great attention and, I hope, some profit. But a large part of that speech, perhaps the greater part, was made up of an attack upon my right hon. friend the Chancellor of the Exchequer, and an attack upon him upon the figures. Really, I cannot at a moment's notice undertake to straighten out the figures either of my noble friend Lord Olivier or of the Chancellor of the Exchequer. I suggest to your Lordships that too much has been made of the apparent discrepancy between the two figures of what certain proposals would cost. Is it not clear that you must make various assumptions if you are attempting to work out that sum? It is perfectly clear that the Chancellor of the Exchequer made certain assumptions which differed materially from those which my noble friend himself made.

The Chancellor of the Exchequer assumed that an offer of increased Preference to Empire sugar would lead to a larger proportion of Empire sugar coming to this country than does under the existing Preference. I cannot say whether such an assumption was exactly justified, but it is not an unreasonable one. If the present Preference draws a certain proportion of Empire sugar, an enlarged Preference would probably draw a somewhat larger proportion of Empire sugar, and on that increased amount the Chancellor of the Exchequer would not only lose the increased Preference, but would also be at the cost of the existing Preference on that sugar, which otherwise would have come from foreign sources. That is only one assumption which has to be made on which apparently the Chancellor of the Exchequer differed from my noble friend. There are other assumptions which were made into which I do not want to go now, but I submit that probably the discrepancy lies in the difference between the assumptions made for making the calculations. But, whether that is so or not, surely the essence of the matter does not lie in the amount of the cost. The cost is considerable, and the cost, as my noble friend has attempted to show, is one which ought to be incurred.


I put the point definitely. The Chancellor of the Exchequer assumed that the Preference would be abolished, and that what the West Indies had to contend with was the price of £6 10s. Does the noble Lord assume that sugar will remain at that price?


That is not the point to which I was referring. The noble Lord in his speech dealt with this matter two or three times, and I think each time dealt with it somewhat differently. With regard to his last explanation, I certainly do not assume, and I do not know that I have ever assumed, or that His Majesty's Government have ever assumed, that the price of sugar is always going to be as low as the present price, or anything like it. Really, that is not a matter on which I can prophesy. I am not a speculator in sugar myself, I am glad to say, and, if I were, I do not know whether I should be inclined to be a "bull" on sugar at this moment. But I ant certainly not able to answer the question; I cannot say what the future price of sugar is going to be. The policy of the Government must necessarily be based on the present and existing circumstances. It cannot gamble on the future; it cannot assume that sugar is going to go up or go down; it can only have regard to the existing circumstances and what is reasonably and immediately in prospect. And it would not be accurate to say that the Government policy is founded upon an expected increase in the price of sugar or au expected decrease. Obviously, we ought not to speculate in that way.

Another part of my noble friend's attack—an attack, I think, upon the Chancellor of the Exchequer—very largely was that he was constantly assuming that the existing Preference is going to be abolished, or that at any rate the Chancellor of the Exchequer ought to say that it will not be abolished—never be abolished, I suppose. All I can say is that the Chancellor of the Exchequer has said definitely as long ago as July, 1929, and has repeated it several times, and I have said it here on his behalf, that so long as the duty remains he will not attempt to take off the Preference. But he has, very naturally I think, not been prepared to commit himself to the statement that the duty is going to be maintained for ever. I do not know whether my noble friend thinks he ought to have done that, but I cannot hold out any hope that we shall be able to induce the Chancellor of the Exchequer to say that he is never going to touch the Sugar Duty or any other duty. I doubt whether he ought to, but at any rate I do not believe this particular Chancellor of the Exchequer will do that, and he has gone pretty far in attempting to com- fort the West Indies on the point, by saying that unless the duty is removed the Preference will not be removed.

I think the Sugar Duty yields at this time something like £15,000,000 a year. I know no more than your Lordships what is the actual state of the Exchequer at this moment, but it would not be going too far to say that the prospects of there being £15,000,000 to spare at the next Budget do not appear to be at all rosy. And consequently I should not assume that it was likely that the Sugar Duty was going to be abolished at the next Budget or, for that matter, at the Budget after. But I know nothing about it, and there is no reason to assume, as I think the noble Lord several times did, that the Preference is going to be abolished next year or within the near future.

The noble Lord based a large part of his argument on the fact that, if the present low prices continued, if the existing Preference were abolished and if nothing were done to replace it, the sugar industry in the West. Indies and in Mauritius would come to an end. I am not prepared to say what would happen if all those circumstances took place. All I can say is that the Government are not in a position at this moment to act as if all those prognostications were going to be carried out to the letter in the near future. We are not prepared to act on that assumption. I should prefer to act in the light of the information we have, and it is really only causing additional trouble and apprehension for the noble Lord to go on talking as if the existing Preference were going to be abolished next year or the year after. I do not know that it is, and I should think it more reasonable to proceed on another hypothesis. At any rate, your Lordships will realise that I am not in a position to give any assurance that the Sugar Duty will not he abolished. All I can say is that personally it does not look to me as if it would be within the power of any Chancellor of the Exchequer to lose £15,000,000 of Revenue in the next Budget.

I hope the noble Lord, Lord Olivier, will forgive me if I do not follow him in all the various terms of his speech. I should like, for his sake, and I think for your Lordships' sake also, to try to give what I will call a positive answer to the noble Lord rather than mere debating points. I shall not satisfy him, I am afraid, but at the same time I want to say how the position stands. Naturally it has been a matter of very grave and almost continuous consideration. We have had the benefit of the presence in this country at the Colonial Office Conference of a number of the Governors of the sugar Colonies and of high officials from those Colonies from which the Governors were not able to come, and we have therefore obtained a great deal of information from them, and also as the result of recent telegrams, about the exact position of most of these Colonies.

Undoubtedly the position is grave. I do not want to exaggerate. There is a good deal of apprehension, but there is some actual trouble. In most of the sugar Colonies there are some estates—not many—that have thrown up the sponge, and there is a good deal of local organisation among them by which they are endeavouring to help themselves. Barbados, Jamaica, British Guiana and Mauritius are all turning to and endeavouring to see what can be done. There is already some unemployment but, I am glad to say, no very serious amount in any place. The worst, place in this respect is British Guiana, where there are some thousands of people out of work. Steps are being taken to deal with them and, needless to say, the action taken will not be dictated from Downing Street, but will be organised and administered by the local Governments in places where this is possible. Funds are being found, partly locally, where it has been possible, and partly from the Colonial Development Fund; and we shall very likely have to come upon the Exchequer also for something on the Estimates to maintain the administration of these Colonies. My noble friend made much of the fact that we could not let the administrations go down. I need hardly say that the Government have not the least intention of letting the local administrations go down. At any rate, so far as we can see, we shall he able, to keep them going.

I want to give some particulars regarding the Colonial Development Fund. I want to make it clear that, although there have been one or two applications from people engaged in the sugar industry for direct assistance, those applications from employers for aid to keep their enterprises going have not been acceded to—very properly, as I venture to think. But those responsible have already agreed to free grants, or loans free of interest, to an amount which, including all the West Indian Colonies, comes to £322,000.


Is that all from the Development Fund?


Yes. That, of course, is for specific works of one kind and another which are not in any sense relief works. They are justified as works of utility which are required. They are not invented for the purpose of giving employment and, of course, some few of them do not give any employment at all. The bulk of them, however, have the advantage that they will supply wages to a certain number of the population. That is something. Other applications are before them and, I hope, will be acceded to. Then, as I have said, we have telegrams from a number of the sugar Colonies.


Have there been any grants for assistance in maintaining or improving the conditions in the sugar industry?


No, if the noble Lord means any direct assistance to people engaged in the sugar industry.


If they desired to centralise the sugar factories in Barbados would they get a grant?


I cannot say what would happen, but grants, as a matter of fact, have been given for roads, bridges, water supply and various health measures. Roads and bridges cannot be considered as directly contributing towards maintaining the sugar industry, and yet they are part of the means by which the sugar industry is carried on. I cannot be more precise than that. I have said quite frankly that they have refused to give grants to particular sugar firms for the maintenance or improvement of their industry. Whether they would make a grant to enable central factories to be substituted for a number of smaller ones I cannot say. They have not had this before them. We hope to pursue the policy of public assistance, either through the Development Fund or directly from Colonial funds, or possibly by a grant in aid.

I want to add that all the Governors who have said anything on the subject have endorsed and welcomed the view laid down by the Colonial Office that they must at all costs avoid anything in the nature of out-relief, handed over the pay table because people are starving. They must contrive in seine way, if possible, to offer employment at wages. It is a little difficult to define exactly what relief works are, but I think your Lordships will realise that there is a difference between taking on a man at wages, even if the work would not have been undertaken but for the desire to take him on, and out-relief handed over the pay table to a man and his wife and children, There is another small thing. In a number of these Colonies there have been export duties levied on sugar when it is exported. It is obvious that when you are dealing with the market in its present state such export duties are a real deduction from the possibility of carrying on business without a loss or without a great loss, and we have told the Colonial Governments that to comtinue such export duties or any duties which press directly upon the sugar industry at the present time is a very bad policy, and we have asked them to obtain the removal of these duties and taxes at the earliest possible moment, even if they have to substitute some other duty which does not directly fall upon sugar for the taxes thus remitted.

I am not able to say anything more about the policy of His Majesty's Government. We are watching the situation. We are doing everything we can short of actually giving a subsidy to sugar production. We have not thought it wise to take that course. It would be in many ways the easiest thing to do, if it was not that it would mean a considerable cost, to the Chancellor of the Exchequer. When my noble friend says this country has made a large profit out of sugar by its cheapening, I would point out that the Chancellor of the Exchequer does not have that profit. It is the public which gets it, in so far as the fall in the wholesale prices has been realised in the retail trade. I think the House must understand that any increase of Preference, or any grant of a subsidy in any way whatever, does mean a direct addition to the expenditure of the Chancellor of the Exchequer. When the Government are constantly told that the one thing necessary for the revival of industry is that expenditure should be reduced and not increased, it is of course a little difficult to say that in this particular case there should be an item of £1,000,000 or £2,000,000 or £3,000,000 added to the Government expenditure to enable the sugar industry to conic nearer making both ends meet than it can do at the present time.

That is not the Government policy. The noble Lord asks that it should be reconsidered. I confess I can promise him that it will go on being considered, because we shall not get away from this question—we shall be bound to go on considering it—but I cannot believe that I shall be able to induce the Chancellor of the Exchequer either to guarantee the maintenance of the Preference or to increase it up to the Canadian level, or to assist—the Colonies my noble friend said, but he meant, of course, the planters. We can assist the Colonies, and I think we can assist the planters, but I do not think the Government will be able to do anything in the nature of giving a subsidy to the sugar industry. I think that is the only thing that I can actually say. I will only state generally that I think the situation may be going to be grave, but it is not so very serious at the present moment. The replies which we have from the Colonies concerned indicate that, whilst they will have to provide for a certain amount of distress and unemployment in the coming winter, it will be within their capacity to make the necessary provision for that, aided from the Development Fund and, possibly, by here and there a grant in aid.

What is going to happen if the position gets worse in a year's time I am not prepared now to say. We do not see any indication that more than the fringe of the sugar industry is at present going to be given up. Undoubtedly the fringe is being given up here and there, but I would like to say that in Antigua, for instance—one of the most difficult places—the central factory, which I am told covers two-thirds of the whole sugar production of the Island, has offered a loan of £20,000 to its planters—to the people who grow the cane—in order to enable them to go on. That seems to indicate that the central factory at any rate sees its way to go on, even at that cost, and I have no doubt that for the rest of the people in Antigua the Government would be able to make at any rate provision.

I ought to say one other word with regard to the effort the Government did make last year to help the people who were growing cane with credit from the banks. The noble Lord made great fun of that at the time. He has made great fun of it since. I give him the satisfaction of saying that he proved to be right, and that that particular effort was not necessary. As a matter of fact, I remember very definitely that we did not put it forward as being any help to the sugar industry or any solution of the, sugar problem, but we were informed very definitely that the banks were refusing credit to the little planters—credit actually necessary to enable them to go on with their planting, and, because we were informed of that fact, we did consult all the banks, and we said: "We do not want you to reduce your advances to an amount less than you gave before, and we are prepared, if you say that that may land you in any loss, to stand in with that loss." The banks accepted that, but the various Governments said it was not necessary, and it has proved apparently not to be necessary. It was a false alarm. The banks did their business in the way they had done it before, and the planting took place. We were to blame, if you like, for being misled by what turned out to be a false alarm, but I submit we were not to blame for making an effort to cope with the particular difficulty. It was a relatively small matter in the whole range of the problem.


May I ask the noble Lord, was no advantage then taken of so generous a Government offer?


No advantage was taken, for they were able to do without it. In Mauritius they considered it very carefully, but found on the whole they could go on without it, and, that being so, it was obviously better that they should go on without it and that the banks should do the business. I own that the noble Lord has the laugh of us there, and all I can say is we acted on the information that there was going to be a restriction of credit. And may I say that part of the trouble in this West Indian problem is the prevalence of these rumours of coming calamity, and of the tremendous size of the calamity. The sting of death is most in apprehension. I think there is rather too much apprehension about this.

In conclusion, I am sorry to say I am not able to give the noble Lord the sort of assurance he wants that the Government is going, by subsidies or by buying the sugar at £15 a ton, to maintain the whole of the sugar industry. That is the position of the Government. We do acknowledge our responsibility to the people of the West Indies and Mauritius, and we are going as far as human effort can go—we are going in the least bad way we can find—to save them from any extreme destitution or distress. We are going to try to put them in the way of earning their living to the greatest extent possible. The noble Lord has not been very promising as to what he thinks can be done, but we are trying at any rate to see what can be done in that way, and no effort will be spared to do it. I can only say that I have the promise of the Chancellor of the Exchequer that whatever money is necessary on these lines he will give very favourable consideration to. But the moment is not yet. We have not needed the money, and when we do need it I have no doubt the Chancellor of the Exchequer will be prepared to come forward with an estimate in the House of Commons, and we shall be able to get what is absolutely necessary. I do not pretend that the picture is a pleasant one. I do not pretend that we can avert very serious calamity from the West Indies. This calamity has been impending for the last four years. No more than the late Government can we avert the calamity in any way that I can see practicable. All we can do is to be guided by the best information we can find in the Colonies and to steer as far as we can in such a way as to prevent the local administration, the hospitals and everything else going down, and as far as we can prevent the most severe distress coming on any of the population.


My Lords, I did not formally move for Papers, but I explained to my noble friend that I hoped he would lay Papers, especially the replies received to the Despatch asking the Governors for their views.


I shall be very glad to see what Papers can be given. Some Papers can be given. It will not be possible to give such Papers as refer to the circumstances of particular firms or confidential matters of that kind and also it is not in accordance with the practice of the Colonial Development Fund that we should publish the actual applications made to that Fund. The Fund itself publishes periodical particulars of what it has done. Subject to those two exceptions, if the noble Lord will not mind certain omissions to preserve the anonymity of particular people mentioned, I shall be very glad to lay all the information possible.


My Lords, the noble Lord has given us as little comfort today as on previous occasions. He says that he sees a great calamity and does not see a way to do anything to avert it. Our complaint is that the Government are not prepared to take means to avert a calamity by tiding over the industry until prices have resumed a normal level. The present price of £5 10s. a ton is a great deal less than the price at which any factory can produce. One little crumb of comfort I have elicited is about export duties. Last autumn the noble Lord referred to my colleague, Mr. Semple, and myself the question of these export duties and we strongly recommended that they should be taken off. They were put on in Antigua at, a time when Antigua was doing very well with its sugar industry. They have been kept on ever since. We pointed out that it was perfectly ridiculous to tax in this manner an industry which was not making a penny. About five weeks ago I enquired if the duties were still being levied and the people in Antigua said: "Yes, they were still being levied." I wrote to the noble Lord and said I was going to ask whether these export duties would be taken off, and I am very glad that now the noble Lord has had his attention called to the matter he has given directions. I suppose the difficulty was that the revenue from these duties could not be spared and that he could not get anything out of the Chancellor of the Exchequer to make good the loss of these duties. I hope he will get something now.

There is only one other point—a very small point—to which I want to refer. He said he was not sure that the increasing cheapness of sugar was getting through to the consumer. Nor am I. It seems to go to the wholesalers and refiners, and I would like to suggest, that a little extra levy might be put on the wholesalers and refiners—that they should make a sort of conscience money payment to the West Indies which the West Indies think is their due. Having had the noble Lord's assurance I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.