§ VISCOUNT ELIBANK rose to ask the Secretary of State for Dominion Affairs and the Colonies whether he will furnish an explanation of the terms of loans to be afforded to sugar planters in the West Indies and Mauritius as announced in his cablegram to the Governors of those Colonies dated 14th March, and generally to give an explanation of the situation; and to move for Papers.
§ The noble Viscount said: My Lords, I rise to make the Motion standing in my name and to ask certain questions connected with it. This is the third occasion on which I have raised this matter in your Lordships' House. On the first occasion, on February 5, I asked the noble Lord, Lord Passfield, when he was going to issue the Report of the West Indian Sugar Commission. On the second occasion, about three weeks ago, I asked the noble Lord once more when that Report would be published and what were the reasons why there had been delay in publishing it. On both occasions the noble Lord informed your Lordships' House that he intended to publish the Report with the least possible delay. He discussed at the same time the questions contained in the Report, and informed your Lordships that he was giving the whole subject very close attention but that, owing to the difficulty of the problem with which he had to deal and to the difference in the cost of the production of sugar in the West Indies today and the sale price of sugar, the Government had not been able to come to any conclusion.
§ We pressed the noble Lord from this side of the House for the publication of the Report, and the noble Lord, Lord Olivier, the Chairman of the Commission, did likewise. To-day I am glad to be able to express my thanks to the noble Lord, Lord Passfield, for having published the Report, but I hope he will not consider me ungracious if I suggest that he might have published it very much earlier. The Report, which is in our hands to-day, contains 124 pages. We have had it for only two or three hours and it has not been possible, therefore, to go through it in any way which would enable one to discuss it at any length. But from what I have seen of it in the short time I have had it, I should like 991 to take this opportunity of congratulating the noble Lord, Lord Olivier, upon it and upon the very close and careful investigation he has made into the whole subject.
§ But it was to the considerable astonishment, I think, of everyone connected with the sugar industry in the West Indies and interested in that industry in this country that, before the publication of the Report, there appeared in the Press about eight days ago a public announcement from the Colonial Office containing a copy of a cable to the Governors of the West Indian Colonies and Mauritius, in which there were proposals for meeting the situation and for helping the sugar industry. If those proposals had contained a plan which would have saved the sugar industry, I would have been the first to congratulate the noble Lord upon those proposals. I could even have forgiven him for not making an earlier publication of the Report. But, whatever those proposals contained, since they were published there have been numerous telegrams from the West Indian Colonies. If the noble Lord will permit me I would prefer to deal with the West Indies and not with Mauritius because that is a Colony with which I have not got a personal acquaintance.
Telegrams have come in considerable numbers, some of which have been published in The Times, and I should like to read short extracts from those telegrams, because, possibly, some of your Lordships have not had an opportunity of seeing them. One telegram is from the Barbados Chamber of Commerce and it says:—
it considers assistance offered by Lord Passfield totally inadequate even if the tariff preference is maintained, for unemployment must follow as the planting of the 1932 crop will not take place except in rare instances.
There is a long telegram from Antigua which says:—
Firstly, that the unavoidable reduction in expenditure due to continuing losses is permanently injuring the sugar industry and causing further great distress amongst all classes.
Another telegram was received by the West India Committee yesterday from the Sugar Planters' Association, British Guiana, and this telegram states:—
Legislative Council yesterday passed Resolution that following telegram be immediately despatched to Secretary State:—
'The proposals of His Majesty's Government as indicated in the telegram from the Secretary of State for the Colonies can do nothing ameliorate let alone remedy time desperate position of the sugar industry in this Colony even if the Colony were in a financial position to assume guarantee of liability or to help the industry on which it chiefly depends for its income. Sugar industry requires a secured market with a guarantee price for sugar f.o.b. for a period of years as without such security planters cannot lay out money for a year ahead which means consequential deterioration of estates and unemployment of labour. The position is extremely critical and further delay of security to sugar producers will inevitably mean abandonment of estates and starvation of thousands of the labouring classes.'
Those telegrams speak for themselves.
§ The Report of the West Indian Sugar Commission also has made statements which have a bearing on the same subject, but I do not wish at this moment to deal with the Report. I will come to that a, little later on. I was surprised, about the time of the publication of these proposals, to see in the Daily Herald a large heading in these words "The Sugar Industry Saved." That journal is, I believe, a supporter of the policy of the Party to which the noble Lord (Lord Passfield) belongs, but I am quite sure that the noble Lord himself, with all the knowledge he has of the circumstances, would not agree that that was an accurate description of the situation. In fact if that heading had read "Sugar Industry still to be Saved" it would have been more in accordance with the facts of the ease. I think if the noble Lord read a leading article in The Times which appeared a day or two afterwards he would have found there a much more accurate description of what these proposals meant. That newspaper has evidently made a very careful investigation of the whole subject. It summed up its conclusion by saying that these proposals were of an impractical nature, and bluntly ended with the suggestion that the noble Lord should reconsider his offer.
§ If your Lordships will bear with me I would like to put certain questions to the noble Lord with regard to these proposals. I might say that I have sent those questions to him so that he should not be taken unaware, as they are intricate to a certain extent and rather lengthy. To begin with the general effect of the scheme as I understand it is—I am now reading from the Government 993 proposals—that the Local Government shall guarantee a bank or other approved lender in respect of one half the losses of capital and interest on crop advances not recovered within twelve months from the end of the crop season, provided that the liability of the Government in any one ease shall not exceed 15 per cent. of the total advance made in that case. That means that collectively the losses of these advances in the West Indies shall not exceed £300,000, and in Mauritius £200,000. Of these losses the Imperial Government will bear half—that is, £150,000 in the case of the West Indies and £100,000 in the case of Mauritius, whilst the Local Governments are to bear the other half.
§ Certain points in connection with the proposed advances are of great importance and require elucidation. To begin with the published notice speaks of "possible difficulties in obtaining advances for the cultivation of the next crop of sugar," and then a little later it speaks of "the assistance which His Majesty's Government is prepared to give to Colonial Governments in order to give financial assistance in connection with crop advances." Sugar in the West Indies is produced under four systems. The first one is that some planters both cultivate sugar cane and manufacture it into sugar in their own works. Then many planters and cane farmers do not manufacture sugar, but grow sugar cane and sell it to factories. Thirdly, some central factories grow no cane, but buy it from planters and cane farmers at a price dependent upon market price of sugar. There is still a fourth case in which central factories both cultivate part of their own cane supply and buy the rest from planters and farmers. I would like to ask the noble Lord what is the meaning of the term "cultivation of the next crop of sugar" in relation to each of these four systems? When the noble Lord replies I hope he will give an elucidation of that.
I come now to the second question. The public announcement states that the
advances must be made a first charge on the cane and/or sugar produced and any further legislation necessary for the purpose must be introduced and should provide for an obligation to cultivate after the receipt of the money.
This raises certain important issues and I should like to ask the noble Lord
whether, in the first place, we are to understand that the remedy of the bank or approved lender against the borrower will be solely against the crop and that the general practice in regard to such advances will be abandoned—namely, that the remedy is against the whole of the borrower's assets? Secondly, is the whole of this security to be exhausted or not before the Government comes in aid of the borrower to the extent proposed to be offered—that is, 15 per cent. of the total advance made? Again, has His Majesty's Government any understanding with the banks here or in the West Indies, or with other approved lenders, that they are prepared in this connection to relax their ordinary principle of banking prudence in granting advances to sugar producers which are usually restricted to two-thirds of the value of the crop? Those are rather important points, and I would not have ventured to put them in this form unless I had already sent them to the noble Lord.
§ Another very important question is this: Does the proposal refer to advances for the next crop—that is those in the West Indies where reaping begins in December, 1930, or January, 1931, in British Guiana in December, 1930, and in Mauritius in August, 1930? There is also another question of great importance. His Majesty's Government offer to make good any deficiencies up to an amount not exceeding £150,000 or, with the Colonial Governments, up to £300,000 in all in the West Indies. The average annual export of sugar from the West Indies for the past three years has been 3010,000 tons. The average value of West Indian sugar f.o.b. does not exceed to-day ten guineas per ton including the preference, or a total value of £3,150,000. I assume that in any event no lender, bank or otherwise, unless the lender abandoned caution and prudence, would be prepared to make an advance of more than two-thirds of the estimated value of any planter's crop. That is to say if the whole of the £300,000 were called up this would imply that the banks and other lenders must have made advances up to the amount of £2,000,000 on the whole of the sugar crop. I should like to know from the noble Lord whether he has any reason to assume that the total crop will be subject to advances of the nature which he proposes? Personally, I should be inclined to doubt that, because, as a 995 rule, there have been, and no doubt there will continue to be, a certain number of factories and others who finance their own crops.
§ What I want to emphasise very strongly indeed is that unless there are some special advantages attached to these proposals which do not appear on the face of the proposals, or unless there is going to be abandonment of the ordinary principles of prudence and caution in connection with the making of advances on these crops, these proposals are of no value whatsoever to the sugar industry. I want to give one reason for this. I am assuming—and I believe that I can rightly assume—that no bank or lender will advance more than two-thirds of the estimated value of the crop. The estimated value of the crop to-day is ten guineas per ton and assuming advances are made up to two-thirds of that ten guineas the amount will be £7 per ton. Unless the price of West Indian sugar including the preference, which, as we have been told by the Daily Herald, will be retained—and the Daily Herald perhaps knows the mind of the Chancellor of the Exchequer better than anybody else—falls below £7 per ton, then there can be no recourse whatsoever to the apparently generous offer of His Majesty's Government, because that £7 per ton will include the amount of £3 8s. of preference which is to-day granted to the West Indian sugar industry. Therefore the price of sugar will actually have to fall to the difference between £3 8.s. and £7—that is £3 12.s. per ton—before there can be any recourse to this offer, and obviously—I think the noble Lord will agree with me here—that would be ridiculous.
I cannot understand why His Majesty's Government will not face the position and do something which is definitely helpful to the sugar industry. The scheme which the noble Lord has put forward is only playing with the position. It leads nowhere. It will not help the sugar industry at present, and it will not help the sugar industry during the trying period through which it has to go. I think I may here refer to the statement of policy which has been issued by the Government, together with the Report of Lord Olivier and the Mauritius Report. In the statement of policy it is said with regard to these particular proposals:—
His Majesty's Government have already shown their sympathy with the sugar producers in the Colonies by the offer which they have made to associate themselves with the Colonial Governments in bearing a portion of any loss.
My Lords, what we want is not sympathy. We want practical help. I think it was Mr. Joseph Chamberlain who, on one occasion a number of years ago, said that sympathy without relief was like mustard without beef. I am going to suggest by altering one word that sugar without relief in the West Indies is like mustard without beef. I am going to ask the noble Lord whether he will not reconsider that offer and see whether something else can be done to meet the situation as it exists?
I turn now to the Report of the Commission itself, and I find actually that out of four recommendations made by the Commission the Government have turned down three stone-cold and have accepted one which may not be effective for a number of years to come. The one which has been accepted is this:—
His Majesty's Government should make a resolute endeavour to eliminate, in con cert with other Powers, the disturbing factors of high tariffs and subsidies.
What does the Report say about that? I am quoting now from Lord Olivier's Report. It says:—
Any negotiations for this purpose must necessarily involve protracted consideration and conference; and it cannot be expected, in view of the existing situation, that they could produce any effectual result before the West Indian sugar industry, as at present carried on, had been practically destroyed. We suggest that, in the interim, an endeavour should be made by His Majesty's Government at once to set on foot the rationalisation of the sugar trade of our own Empire on the basis of a guarantee of reasonable local costs of production to those who can carry on the industry in the Colonies especially suited for it and at present dependent upon it.
§ I am beginning to wonder why the Commission went to the West Indies because the only proposals which would carry out the last part of the paragraph which I have read, are contained in the proposals made by the Royal Commission and referring especially to the raising of the Imperial preference from 3s. 8d. to 4s. 8d. per cwt. and buying sugar at £15 per ton. I suppose that it is of no avail to ask this Government to increase the preference upon West Indian sugar. In fact, in this same 997 statement of policy, they say that the Chancellor of the Exchequer stated in the House of Commons that the Government would not deal with the difficulties of the sugar industry by way of preference but that, so long as there was a duty on sugar, the preference would be maintained. Here is a definite recommendation from the Sugar Commission that the preference should be increased by 1s. per cwt. If the preference were so increased, not only would it assist the industry in its present struggling condition to tide over its difficult time and enable it to carry on whilst the major proposal of treaties in connection with a tariff and bounties was being investigated, but it would also bring the preference on to the same basis as that which is to-day granted to the West Indian Colonies under a Treaty with the Canadian Government, and it would help the West Indian Colonies to the extent that they would obtain the whole benefit from the Canadian preference, which they do not obtain to-day owing to the fact that the British preference is 1s. lower.
§ As I have said, suppose it is of little use to ask the noble Lord to tell us today that this can be done, and I have very grave doubts whether, when the Budget speech is made on April 14, we shall hear from the Chancellor of the Exchequer that he proposes to take any such step. Accordingly I think it is necessary to make a suggestion to the noble Lord as to how he may be able to meet the situation and really to help the sugar industry other than by the method that is proposed in the cable that he recently sent to the Governors of those Colonies. If the noble Lord were to make a direct subsidy to those Colonies for every ton of sugar raised during the next crop, this would be of definite assistance to the industry and it would certainly eliminate all the ambiguities and uncertainties with which the scheme that he has recently proposed is befraught and with which it bristles. I would urge the noble Lord to take into consideration this suggestion, because I believe that it would meet with approval in the West Indies and would definitely assist the industry, as the proposals that he has put forward are not going to do.
§ I venture to say to the noble Lord that this is the gravest crisis through 998 which the West Indian sugar industry has ever passed. In a speech about eight weeks ago the noble Lord said that during his experience the West Indies had passed through many crises and that probably crises would come again, but I venture to impress upon the noble Lord that those crises were not as this crisis. In those crises individual estates went out of cultivation and were gradually brought back into cultivation. In this crisis, unless something is done, miles of estates are going out of cultivation and the whole of the Colonies are going to be cast into conditions which it is hardly possible to realise. I appeal to the noble Lord not to stand by the proposals that he has made, for they will be absolutely of no use. I appeal to him to reconsider the proposals that he has made and to make proposals of a different nature along the lines that I have suggested. I beg to move.
§ THE SECRETARY OF STATE FOR DOMINION AFFAIRS AND THE COLONIES (LORD PASSFIELD)
My Lords, if no other noble Lord wishes to follow the noble Viscount, Lord Elibank, it is my duty to endeavour as far as I can to reply to his speech. Both Reports have now been published, and I can only say that they were published as soon as this could conveniently be done. As a matter of fact, we did want to publish the West Indian Report in its entirety, and we received Part IV of that Report —I cannot remember how few days ago, but it was instantly sent to the printers and, as soon as it was ready, the Report was published in its entirety. It is true that the Government received the earlier parts of the Report something like two months ago and we even received a telegraphic statement of the gist of the proposals earlier still, but as a matter of fact those proposals were not such as the Government could find itself able to act upon. If there has been any undue delay in the publication of the first part of the Report, which alone could have been published earlier, it is because the Government—I say it quite frankly—could not see in it any remedy for the very difficult situation into which the sugar Colonies have come that they could propose to either of the Houses of Parliament.
I want to emphasise that point a little. This crisis is not exactly a new one. It 999 did not arise when the present Government took office. It had arisen before that time, and the matter had been brought to the notice of the preceding Government. The preceding Government and the preceding Chancellor of the Exchequer did not find themselves able to take any action to relieve the West Indian sugar industry of the very serious losses which it had already by that time been making. I am not in the least blaming or criticising the late Government for not having done so, but I would ask the noble Viscount, who seemed to think that this Government could have made a proposition that would have prevented the terrible calamity which he sees coming upon the sugar industry, to remember, among other things, that exactly the same problem faced the last Government, and that the last Government did no more than the present Government towards averting that evil. The losses of the sugar industry last year were very considerable in all these sugar Colonies, and nothing was done and, as I venture to think, nothing properly could have been done to prevent those losses.
It is perfectly true that the Government have issued telegraphic instructions to the Governors of the sugar Colonies after consulting the banks with regard to facilities for advances. The Government had information—I do not know how far it was of general application—which led it to believe that there might be a restriction of advances to those cultivators of cane sugar, small and large, who were dependent upon bank overdrafts or bank advances in one form or another for the means of actually cultivating the crop. That was a question of some urgency and it was represented that it was necessary or at any rate desirable—whatever happened to the larger issue—to try to prevent any sudden restriction of the usual facilities which enable the cultivators actually to put the crop into the ground and proceed to cultivate. I might remind your Lordships that the proposal which has been made by the Government was not made after the publication of the Reports. It was made before the Reports were published because it was regarded as not having any relation whatever to the major question with which the Reports deal—namely, the protection of the sugar industry against an almost 1000 certain loss. No one has suggested that what the Government has proposed will remedy the financial position of the sugar industry. The fact that that executive action was taken before the Report even reached your Lordships' hands may be taken to show that it was not done in pursuance of the Report but in view of the representations made to the Government that these ordinary advances would be refused to the cultivators.
In order to enable all those persons who wished to cultivate cane not to be prevented from cultivating it, the Government have in consultation with the banks, made this proposal to which the noble Viscount, Lord Elibank, has referred. As he said it does nothing to protect the sugar industry from loss owing to the fall in the price, but it will benefit those who wish to cultivate this season. He has asked whether this proposal applies to the crop of which the reaping begins in December, 1930, in the West Indies. Yes, the proposal refers to the crop which is now about to be cultivated and not to any future crop. It is a purely temporary measure to prevent that restriction of bank credit which might otherwise have occurred.
§ LORD OLIVIER
Will the noble Lord explain that? In certain Colonies the plants which are planted in June and July next will not be reaped until the spring of 1932. Does it apply to those? That is the Barbados method.
§ LORD PASSFIELD
Yes. The noble Lord, in the last of his questions, seemed to indicate that the proposal of the Government was far too large, that it contemplated a perfectly unexpected range of advances. If the proposal of the Government is unnecessarily generous and large to meet its immediate purpose, of course, the Government will be pleased. What was necessary—and needless to say the Treasury insisted upon it, as they always would—was that a definite limit should be made to the possible Government loss. That limit has been put. If the limit is such as to indicate a larger 1001 measure of advances than will be necessary, certainly the Government will only be very pleased to have been unnecessarily generous in its forecast. Facilities for crop advances were not in the least proposed as a remedy.
Let me take care I have answered the questions of the noble Lord. Does this advance apply only to the cultivation of cane and not to the operation of the central factories which cultivate no cane? It applies only to the cultivation of the cane. As regards the factories which both cultivate and manufacture, the guarantee applies only in proportion to the extent to which advances are made for cultivation. The remedy of the bank against the borrower in respect of these advances will be made the first charge on the cane and/or the sugar produced, as is clearly stated in the telegram to the Colonial Governments. The liability of the Government, in the event of the bank being unable to recover an advance made, will not exceed 15 per cent. of the total advance made in any one case. The Government has made no arrangement with the banks in regard to their conduct in judging of applications for advances. We do not ask the banks to do anything which they think imprudent as bankers. We are merely anxious that they should not be restrained from making those advances which they otherwise would make in the ordinary course of their business by fear of a possibility of loss. We do not attempt to influence the banks at all as to the advances they will or will not make.
May I ask the noble Lord whether in that case he expects that any bank would make any advance beyond the ordinary prudent advance, because, after all, under the proposals the bank will have to bear half the loss? It is not likely that any bank in those circumstances will make any risky advances at all.
§ LORD PASSFIELD
I can only say that the Government have acted in consultation with the banks in this matter and we are advised that this proposal will be of use for the purpose I have mentioned, to see that no person willing to cultivate will be prevented from cultivating by a restriction of credit by the banks which would not otherwise have taken place. It has nothing whatever to 1002 do with the position of the sugar industry. The noble Lord asked why the Government will not face up to the position. Will the noble Lords consider what that means? At the present time we are facing up to the position under the existing preference to the extent of a subsidy from the taxpayers of this country which is costing over £2,500,000 a year. That we are giving by diminution of the revenue which the Chancellor of the Exchequer would otherwise get. We are giving that £2,500,000 for the benefit of the Empire sugar industry. The various things which have been proposed, a secure market with a guaranteed price covering the cost for a period of years, which is what the sugar planters desire, would cost, in addition to the £2,500,000 of the existing preference, another £2,000,000 or thereabouts for a period of years. Altogether what is in question to put the industry on its feet, as I gather from the noble Viscount and other speakers and those who telegraphed, is something in the nature of several millions a year for five years at least. I have not heard any noble Lord who has occupied a responsible position in the Government ask for that. What I have heard noble Lords on other occasions say is that the Government ought to have reduced its expenditure and that there ought to be economy.
Is it seriously suggested that it is the duty of this Government to provide several millions in one way or other, in addition to what it is already providing, as a subsidy to this particular industry? The noble Viscount who has spoken gave us his remedy. He suggested that we should consider a direct subsidy for each ton of sugar produced. As he said, it would meet with approval in the West Indies. Would it meet with approval in this country? Is it suggested that the Chancellor of the Exchequer should add two or three millions a year in order to give a direct subsidy to this particular industry? There are other industries which ask for a direct subsidy. I should be surprised, in view of the constant appeals to the Government not to increase expenditure, if there is any substantial support for a proposal to give in any form a direct subsidy to this particular industry, hard as its lot is, and much as we may sympathise with those who are concerned 1003 in it. It has been exceedingly profitable in not very distant years, and now it meets with losses. Well, I should be exceedingly surprised if there were any deliberate, serious desire that this Government should expend these millions a year for the benefit of this particular industry. There are other industries which want subsidies, and I do not think it is possible to contemplate that those subsidies can be given.
Let me add one other word. The present situation is not due to any calamity in the West Indies or to any wrong conduct, perhaps, of the sugar planters; the present calamity is due to a remarkable and extraordinary fall in the world price, and that fall in the world price is fundamentally caused by a world over-production of sugar, which has actually piled up a visible stock of 5,000,000 tons of sugar—it has been increasing during the past five years—owing to the general over-production in the world. Now, I am not bringing it as any crime against the sugar planters in the West Indies, but I must point out that they have been contributing in their degree to the over-production. If you take the figures of the last four or five years you will find that the production of sugar in the West Indies has increased by something over 60 per cent., and the production of sugar in Mauritius has increased during those years by something like 60 per cent. If you take particular Colonies you will find that their increase in production was in one case as much as 90 per cent. Finding, I suppose, that business was good, they increased their production enormously, with the result that the product has failed to realise the price which they expected.
I do not say that the amount contributed by the West Indies to the overproduction is a very large proportion of the total; they have all been doing it. All I mean is that the West Indies and Mauritius have been doing their very large share of that over-production. I am afraid I cannot give noble Lords any sort of hope that this Government can possibly find from this community, either from the taxpayers or the consumers—because the millions a year which the noble Viscount asks us to contribute towards the West Indies—
The noble Lord says that I have asked the Government 1004 to contribute millions a year. I have done nothing of the sort. I have asked the noble Lord to consider giving a subsidy for every ton of sugar produced in the West Indies. There are 300,000 tons produced per annum. Supposing the subsidy were £2 per ton, that is £600,000; it is not millions. And may I just add in regard to the amount now proposed to be given, £300,000, it seems to me that the noble Lord in making that proposal hopes that that £300,000 will be cut down to £100,000 or £50,000. If it is an offer from the Government why not let the offer stand at the fixed sum of £300,000 or £500,000?
§ LORD PASSFIELD
The noble Viscount has perhaps rather stretched the privilege of an interruption. He says that he did not ask for millions for the West Indies alone. He would not expect the West Indies to be treated differently from any of the other sugar-producing parts of the Empire.
Well, we were dealing with the West Indies and Mauritius, and Mauritius produced 200,000 tons and the West Indies 300,000 tons, or 500,000 tons altogether. Therefore at most, if it were £2 a ton, that would make £1,000,000. But actually in the Mauritius Report I think it is suggested that £1 per ton should be given, which would make it £800,000.
§ LORD PASSFIELD
I am sorry, but I must emphasise the fact that we could not deal in different degrees with different parts of the Empire producing sugar. This question, if it is a question of help to the industry, must be deal with uniformly through all the sugar-producing countries concerned. I do not think I need emphasise that. And if you are going to pay something substantial per ton on all the tons of sugar imported from the British Empire into this country, it does run into a very considerable figure.
As I say, I have not heard anyone who has held a position of responsibility in the Government say it was possible to give such a subsidy to this single industry. The last Government did not contemplate it, and did not do it, and I can hold out no hope that the present Government will be able to deal with 1005 the matter in that way, casting either upon the consumers or the taxpayers of this country the burden of coming to the aid of this particular industry in this particular way. I hope that is at any rate frank. I am very sorry we have to come to that conclusion, but I think it is a conclusion with which many noble Lords will find themselves in sympathy. It is the conclusion apparently which the late Government had to come to, and I do not see how we could have done anything else. I cannot promise the noble Lord any more Papers, because there are no more Papers which can be given. The Reports contain all the information, and until the Budget comes I am afraid nothing else can be shown. As I have told the House already, the Chancellor of the Exchequer more than once declared that as long as the Sugar Duty remained the preference would not be abolished. But he has very naturally refused to discuss whether or when the Sugar Duty may be dealt with, and consequently I am not able to add anything more to-day.
§ VISCOUNT HAILSHAM
My Lords, the Report which is the immediate occasion of the debate this evening only reached my hands, in common, I think, with the rest of your Lordships, this afternoon, and you will appreciate therefore that I have not been able to devote to it a very careful or detailed study. Still less have I been able to discuss that Report or its implications with any of my political friends. What I say to-night I say on my own behalf alone without previous discussion and without very long opportunity for consideration. But I have this qualification for addressing your Lordships on the subject of this Motion, that I, perhaps alone among your Lordships, was for some years intimately connected with the sugar industry in the West Indies. I began my commercial life by acting as overseer to a sugar planter in Demerara, and I was for some years after that a West Indian merchant; and although my direct connection with the West Indies, indeed my whole connection with the West Indies, ended more than thirty years ago, still a loyalty to old associations and some little practical knowledge of the facts which underlie this Report, and which this Report brings 1006 prominently to the notice of the public, compelled me to make some few observations this evening.
What are the facts which this Report discloses? The facts are that in some of the oldest Colonies of the British Empire the staple industry of those Colonies is threatened, in the words of the Report, with entire extinction. The result, according to the Report, will be that the working classes in those Colonies will be thrown out of employment and threatened with starvation, the capital embarked upon the development of those Colonies will be completely lost, the revenues of those Colonies for the carrying on of the public works and administration there will cease to exist, and, in the words of the summary itself, effects will be produced disastrous to labour and to local government and a "destructive shock with permanent damage to the good relations with the United Kingdom" will be inflicted upon these ancient British Colonies.
Those results, as the Report is careful to point out, flow not from any mismanagement or lack of enterprise in those who are carrying on this industry in the West Indies or Mauritius. The Report from the Mauritius states that:—It must be conceded that the cultivation and the manufacture of sugar have received careful attention for many years past and that a relatively high degree of skill and efficiency have been attained.The Report of the West Indian Commission points out that it is evident thatthe present depression of the British West Indian sugar industry is not due to any general lack of efficiency and cannot be remedied effectually by improvements in methods of production alone.The Reports are not merely negative. They not only exonerate the West Indies and Mauritius from responsibility for the disaster which is overtaking them, but point out in the plainest possible terms that the cause of the disaster is a competition of protective tariffs, bounties, and subsidies which production at a reasonable economic cost can be enabled to withstand only by action in the proper province; that is to say, that the disaster is due to tariff action and can only be met by tariff means.
The noble Lord told us that, although parts of this Report have been in possession of His Majesty's Government for some weeks, I think for more than 1007 two months, the reason why it was not published before was that they wanted to present it as a whole and that they had not got Part IV until within the last few days. It is unfortunate, if that was so, that the Report as published today does not contain Part IV. There is a footnote to say that Part IV will be published later. What becomes of that singularly disingenuous explanation which is offered as a reason for the non-publication of the Report?
§ LORD PASSFIELD
May I say, my Lords, that I said at the same time that it was kept back because we were trying to find a decision. It was, as a matter of fact, intended that it should be published with Part IV. As we could not get Part IV it happened to be delayed.
§ VISCOUNT HAILSHAM
We see how much Part IV has had to do with it when we see that the Report is published without Part IV. I think I can give your Lordships a more accurate explanation of why this suppression has gone on for so long. It is because, in paragraph 17 on page 13 of the Report, we find the Commission reporting—How far the risk may materialise in the abandonment of sugar production after the coming crop, or the efficient handling of that crop be impaired through financial difficulties, would, in our opinion, depend upon whether any assistance or guarantee of support to the industry can be given within the next two months."Therefore, His Majesty's Government, being wholly unable to do anything to meet this clamant demand at the hands of their own Commission, keep the Report back until two months are up for fear public opinion may be brought to bear upon them to compel them to do what they are so unwilling to face up to.
The noble Lord has told us that he frankly admits that this Government is wholly unable to find any remedy. If a Government cannot find any remedy for what is admittedly a very grave evil, creating, in the words of the telegram, "permanent damage to the good relations between the British Colonies and the United Kingdom," then I beg to suggest that the right course for a Government which has arrived at that conclusion is that it should make way for someone else who is more able to face those problems with success. It is difficult for anyone who has had personal 1008 experience of the Colonies who are suffering this disaster to speak with patience of the complacent attitude with which the Government contemplate the extinction of their staple industry.
What is the offer, which the noble Lord frankly admits is no remedy but which the Government make as an expression of their sympathy with those whom they propose to see pass to destruction without any helping hand? They propose, forsooth, that instead of their suffering immediate extinction they shall be lent, with a Government guarantee—a Government guarantee to the lender not to the borrower, as I understand—some more money which, according to the Report, they are bound to lose within the next twelve months. In other words, instead of being put to an immediate death, their dying struggles are to be prolonged for twelve months so that, I suppose, at the end of that time their destruction may be made more absolutely certain. Your Lordships appreciate that the Report itself is careful to point out that:There appears, accordingly, to be no reasonable ground for expecting any early restoration, under existing conditions, of the market prices of sugar to figures which will enable the present rate of production to be maintained without loss to unprotected or unsubsidised producers.As the noble Lord points out, there is a great weight of over-production hanging over the market at the present moment. In other words, the one remedy—not remedy but palliative—which the Government can offer to the sugar producers in the West Indies, is that they are to be encouraged or assisted to go on losing money for another twelve months so that they may be quite certainly utterly destroyed and bankrupt at the end of that time. More callous brutality has, I suppose, seldom disgraced any Government proposal. When that is coupled with the cynical hypocrisy which professes to view with sympathy the dying struggles of the West Indies, one realises that it is not only this country which has to mourn the coming into office of a Socialist Government
It is not for me to endorse, still less to propose, any particular remedy. I have said that I have seen this Report for something less than four hours in all; but I will say this, that one of the 1009 factors which, as the Report points out, has brought such immediate disaster upon the West Indian Colonies is the uncertainty which has been created by the action of the present Government regarding the continuance of the existing preference. The Report says:—The market for West Indian sugar for future delivery has already been for the present destroyed by uncertainty as to the policy which may be contemplated by His Majesty's Government. ‖If the entire extinction of the industry through the abolition of the preference is to be averted, it is, in our opinion, necessary that His Majesty's Government should make an early pronouncement which will restore confidence.The answer to that is to suppress the Report for seven weeks, and then to say that you have no remedy, and you cannot make a statement because that would be to anticipate the Chancellor of the Exchequer's Budget speech.
So long as a Conservative Government was in power they were under no uncertainty as to the continuance of the preference, or as to the practical sympathy and practical assistance which would be given, if necessary, to prevent the extinction of several of our ancient and most loyal Colonies. When I see that the Report itself points out that so far from preference or assistance being inconsistent with those principles of Free Trade in which the Government profess themselves to be such ardent believers, if only conditions of Free Trade were established the West Indian sugar industry would be in a satisfactory and even prosperous economic position; when I see it pointed out that the Free Trade position, representing the view that all world commodities should be produced where they can be produced most cheaply and interchanged between the respective populations of national areas, if it were once established, is all that the West Indies ask for—then one gets a little impatient at being told "We cannot do it because it is inconsistent with our Free Trade principles."
I find a little later in the Report that it is pointed out by the Commissioners that—it has become increasingly difficult for us to imagine how any one can suppose—if anyone does—that it would be of advantage for the people of Great Britain, for the British Empire, or for the world, that British consumers of sugar should be enabled to buy 1010 their sugar at an advantage of perhaps a farthing a pound through the acceptance of tribute from the taxpayers of other nations or the unpaid labour of Cuban colons, Haytian primitives, or congested Javan peasants, at the cost of destroying old-established and valuable organic British communities successfully developing the solution of the problems of racially mixed populations.Then I find that they also point out that "if it is admitted"—
I do not know whether His Majesty's Government admit it—that there would be an obligation upon the Imperial Government to provide at least the expenditure necessary for the relief of distress, and for carrying on the institutions of local government in those Colonies which would chiefly suffer, it cannot but be recognised that the pecuniary balance of profit to the British community, as taxpayers, consumers and producers, which would accrue through the reduction of the price of all the sugar they buy to the lowest competitive open market rates at which it could be obtained would be either on the wrong side or at best very small.Yet it is "the economics of the pecuniary balance of profit" which so concerned His Majesty's Government that they professed themselves unable to find any remedy.
The Report apparently is unable to credit the present Socialist Government's attitude. The Report says they would consider it impossible for any British Government to be a party to bringing about the destructive shock with permanent damage to good relations with the United Kingdom which would result from allowing the present disaster to go unchecked. They did not know His Majesty's present advisers when they reported in those terms. "It ought to be impossible for any Government" and yet that which they thought was impossible for any British Government the Secretary of State for the Colonies has just pronounced to be his Government's settled and unalterable policy.
I have spoken perhaps strongly. I feel strongly. It is a matter upon which I speak with personal knowledge of the conditions under which these men have worked and are working, and when I see Colonies whose only fault, whose only crime is that they belong to the British Empire, threatened with the death penalty (because that is what it means) for the commission of that crime, then I am a little impatient with the Secretary of State for the Colonies who comes down 1011 and glibly says that His Majesty's Government is unable to suggest any remedy except to encourage them to lose more money for another twelve months. Had the British Colonies, had the British in the West Indies been in the position of Cuba, been in the position of a French Colony, been in the position of anything but a British Colony, they would not be in their present dire stress to-day, and it is a cruel punishment to inflict upon them for their loyalty that a Socialist Government at home should condemn them to utter extinction rather than sacrifice Free Trade principles which it has not yet begun to understand.
§ LORD OLIVIER
My Lords, I want just as a preliminary to try to get into my noble friend's head the facts about Parts I, II, III and IV of our Report. I have already told them once in this House, and I have stated them to him in writing. My letter said that we regarded Parts I, II and III of our Report as our complete reply to the reference made to us. We had also expected to publish a fourth part, which we had to delay, because it was one that was to include a very valuable report on general agriculture in the West Indies, the contents of which we had already gutted, and put into our Parts I, II and III. The rest of Part TV dealt with very general questions of conditions in the West Indies, and most of the observations on those aspects could only possibly develop if the action recommended by us in Parts I, II and III were taken, because they applied to conditions of a surviving sugar industry, and if the sugar industry were not saved they did not apply at all but were mere impertinences. I assure His Majesty's Government that if they have to take up the whole question of an entirely new policy and administrative system for the British West Indies it will keep them and any other Government fairly occupied for a good many years to come. However, I do not think that the noble Lord really makes that an excuse for not publishing Parts I, II and III.
§ LORD OLIVIER
I just wanted to clear that out of the way, because there is nothing whatever in it. I come to the subject of my noble friend Lord Elibank's questions. I do not know what epithet to apply to this claim put forward by the 1012 Government to show their sympathy. They say they have shown their sympathy. Well, they may show their sympathy, but they have not shown any intelligence whatever, and they have not shown any desire to ascertain the facts of the case. If my noble friend had taken the trouble to go to anybody—I do not say myself; I have not been consulted—if he had gone to anybody and asked about the facts in the West Indies they would have told him that this thing is of no use whatever, and is not likely to be of use. It can only be of use to a man after he has lost one-third of what he has invested in his crop, after he is dead broke, after his assets have been sold up. What sugar planter, with the present prospects of the market and with the possibility that even the preference may be taken off the 1931 crop—what sugar planter is to plant under those conditions?
My noble friend is full of kindness and benevolence. He says that there was a question whether some planters would get advances or not, and in the kindness and simplicity of his heart he said: "I will go to Barclay's Bank." We are all acquainted with Barclay's Bank. The manager is an old colleague of mine in the India Council. When I was at the Board of Agriculture Lord Ernle and myself had a good deal to do with Barclay's and other banks, and we had the greatest respect for their soundness and character. We, ourselves, the members of the Commission, were greatly indebted to Barclay's Bank for the convenience they gave us in financing ourselves on our journey. But the point is that he said: "We will go to Barclay's Bank" and they went, and the bank met them in the same way that banks always meet the Government when they go and ask them for help with agricultural credits. They said: "Banking is a healthy business, but we are not in business for our health. We will give advances on sound security." Nobody can complain of them for that. They will give advances on sound security and the Government seem to think that by an offer to bear half the loss up to £150,000 they will induce them to be a little more willing. I do not think they will. Some private inquiries have been made at Barclay's with regard to this and there was no indication whatever that they would be 1013 the least willing to relax the ordinary precautions of a bank. When they see a sinking security such as the West Indian sugar industry they are not going to touch it more than they can help.
In this Report there are about ten paragraphs with regard to West Indian credits. We went very carefully into the question of what was the position of credit and, generally speaking, I may tell your Lordships—as you may see for yourselves in the Report—that excepting in the case of one or two weak Islands, such as Antigua, given reasonable commercial security, ordinary reasonable expectation that a man would come out on his crop, there was and would be no difficulty with regard to advances. We dealt specially with the Island of Antigua because that was the worst case, and I want to refer to that for a reason which your Lordships will understand in a moment. We said that:—Conditions in the sugar industry in Antigua are already considerably worse than those in either Barbados or St. Kitts as, in addition to the low prices obtained for canes, the cost per ton of cane has been greatly increased through the low yield per acre consequent on the severe drought … and as money obtained from the usual commercial channels costs from 8 to 10 per cent. … it is recommended that a loan of £55,000 be immediately made at the lowest rate of interest possible from Imperial funds …That was really the only case in which we knew and reported that planters were going to be prevented from getting advances.
When the noble Lord, Lord Passfield, was speaking on the subject, he said he hoped that the Report would be published at any rate before the West Indies were ruined. Well, in our Report, as quoted by the noble Viscount, Lord Hailsham, we said that if something was not done within the period of two months ruin would begin. It has begun. I have received to-day a letter from the Governor of the Leeward Islands in which he says—The position is really critical in the Leewards, especially Antigua, and the Bank of Canada will, I understand, no longer 'carry' its clients.That is what we said would happen if the Government did not take means to stop it.
I am bound to say that I entirely sympathise with the somewhat severe 1014 language which the noble Viscount, Lord Hailsham, used. When the Government say they cannot do a thing that means simply that they do not want to do it. They can do it. When you have a terrible calamity threatening you and you say you do not know what to do. I say—quoting from Mr. Belloc's book "The Bed Child's Book of Beasts"—"This learned fish has not sufficient brains to get into the water when it rains"—Put up an umbrella. As regard all other estates if you ask anybody who knows anything about the West Indian sugar industry and about banking business you may be quite sure that this is going to be a dead letter. It is not worth troubling about. Although the Government have said they will make a grant of £150,000 to the West Indies it is a most ridiculous over-estimate, as my noble friend Viscount Elibank has pointed out, at the best. It would be very safe to insure the Government liability at a premium not exceeding 1 per cent. As a matter of fact the thing will not march a single step. Nothing will be done unless the Government take other steps to maintain the sugar industry. The question was raised in the other House whether it would not have been better to have had this matter discussed on a Supplementary Estimate and the Under-Secretary of State replied "I am not at present bringing in a Supplementary Estimate." No, I should think not. He will never bring in a Supplementary Estimate in this matter.
There are one or two small other matters which I want to clear up. You may clear the air entirely of this sympathetic offer. It is not well for the credit of the Government that they should advertise this scheme at all. Clear it away. It is not going to work, although I am sure the noble Lord, in the benevolence of his heart, did intend it to work. We are left with the other proposals of the Government, but before I come to them I want to make one further remark. The noble Lord in his first speech, which was rather in the nature of a smoke screen to dissemble the benevolent intentions of the Government, or perhaps even a sort of general barrage against any sort of demands whatever, actually said that the West Indian planters ought to have built up reserve funds from ten years ago in order to meet their losses now. This has been 1015 quoted in the Daily Herald, an excellent paper which I hope your Lordships all take now instead of the Morning Post, being now the best penny morning paper. After saying "West Indies to be saved," it goes on:—It should not be forgotten that, as Lord Passfield suggested, a well-organised industry would have conserved the immense profits made a few years ago to tide itself over the present crisis.That is a most unjust criticism.
It is perfectly true, as the noble Lord said, that there were speculative dealings in the capital of sugar estates. They did change hands at high prices. But there were speculative dealings in other things, in dozens and dozens of British industries after the War, when the boom was on—Dunlops and Austins. No doubt it injured business, but does anybody suggest that the West Indian sugar industry should have saved up such profits as they made ten years ago to carry on for five or six years under present conditions? If they did make big profits they were not so big as they might have been because they made contracts to sell their sugar in England. whereas if they had sold in the United States they might have made twice as much. If they did make big profits they had to pay Excess Profits Duty of 80 per cent. Whatever profits they made they only got 20 per cent. of them and then there was Super-Tax on their incomes. I can assure your Lordships that some concerns have saved reserves which have been carrying their losses this year and last year and will be carrying their losses for part of the coming year; but that cannot go on for ever. In one or two cases I have examined the accounts of the factories which had a reserve fund and, although the factories made no profit, they paid the shareholders a dividend out of that reserve fund. You cannot expect them to go on doing so, and that kind of arrangement is not going to maintain the sugar industry.
At present, you have a loss, even with the preference, of £2 per ton on every ton that you make. You cannot expect them to carry on in the certain knowledge that those conditions must last for four or five years. Noble Lords should not, by accepting wild statements, lend currency to the idea that the people of West Indies are different from all other commercial people. Such profits as they 1016 have made they have mostly put back into the industry. After these large profits were made, the leading feature of the last eight or nine years has been the great improvement made in the factories in the West Indies. It is a most pathetic thing to see factories in which the owners have put back profits into improving the machinery and the slump came upon them before they had been able to complete the improvements. In British Guiana and elsewhere they have magnificent grinding and crushing installations, but they have not been able to use part of them because they have not been able to bring their boiling houses up to the power of their mills, and the boiling houses cannot take off the juice as fast as they can grind it. Factories have been crippled in that way because the slump came when they were in the actual process of improvement. That is a fact which, I think, should be remembered to the credit of the West Indies.
I turn to the general aspect of the matter. The Government have turned down our proposal and that of Sir Francis Watts, which was, of course, in one form or another to guarantee a certain price for sugar. Our proposal that the guaranteed price should be maintained by having a single buyer is entirely in line with the proposals now being advocated for the wheat industry—proposals which my noble friend Lord De La Warr, before he beat his ploughshare into a sword, advocated in this House. I am convinced that that proposal was the soundest way, but it was turned down. The Government tell us that—All possibilities of scientific research are being actively investigated and will continue to receive earnest attention. Other detailed suggestions for improvements in the industry will be sympathetically considered, and, in particular, the Government will be prepared to examine, in consultation with the Governments of the Colonies concerned, how far any, or all, of the measures indicated can be assisted under the Colonial Development Act.That is another instance of—really there is only one word, an American word, to express it—"poppycock." There is nothing in it.
If noble Lords will read our Report, they will see that all these things were referred to us months ago. We considered what could be done with regard to research and improvement. We went 1017 very carefully into that matter, and we had the advantage of the help of a very capable technical man and a very capable agriculturist and sugar producer. We considered very carefully what could be done in the way of research, and I can assure your Lordships that the provisions for research in the West Indies, and not only in the Colonies but in the Imperial College of Tropical Agriculture, with the assistance of Committees of the noble Lord's Department, are in a very high state of efficiency, and it is very difficult to suggest anything that could be done to make them more efficient. Research is going on very well, but the results of research cannot in any circumstances come into operation for a considerable number of years, and then only gradually.
The noble Lord in his first speech spoke about the West Indies having been outstripped by Java because the Dutch had shown such magnificent ability in developing the scientific treatment of sugar. The Dutch, for one thing, have had £160,000 a year to spend on it. The fact is that the Dutch learnt how to deal scientifically with sugar from West Indian planters and factory people. The noble Lord referred to their having produced a marvellous cane with a great yield. I have seen that cane. It is a wonderful cane, but it is not very many years ago that nearly 60 per cent. of the whole area of Java was planted with a Barbados cane, reared in Barbados. They have been thriving and improving their industry for a number of years on Barbados and Demerara seedlings. It was the West Indies that developed scientific methods of treating the canes, and other nations have followed. It just happens that in the last two or three years the Dutch had a great stroke of luck and produced a very remarkable seedling. We have it growing in Trinidad. It is growing very well there, and in a few years time, if the industry goes on, we shall have that cane in other parts of the West Indies. But if nothing more is done upon this Report than His Majesty's Government have adumbrated, we shall not see that cane growing except in the Botanical Gardens. In every respect we have given the noble Lord in our Report particulars of the possibilities of development that can be effected and, in comparison with the gravity of the present position, they do not amount to a row 1018 of pins. I do deplore that, in this statement of His Majesty's Government, they merely say that they are going to do what they can by research and credits. They had much better cut the cackle and say: "We know that the sugar industry must go out unless they have relief, and we cannot give them that relief."
I now come definitely to the real point of the matter. It is perfectly true, as the noble Lord has said, that you cannot maintain the sugar industry of Mauritius and the West Indies unless you are going to consent to pay a higher price for your sugar than you would, if you took advantage of your market at the present time, be paying. Unless very much worse things are to happen to the Empire and the world, I say you will have to pay a higher price for your sugar. The present price of white granulated sugar in this country is 2¼d. per lb. It is retailed at 2¾d., but that is what it costs to produce. More than half the price is due to the Sugar Duty. The price of white granulated cane sugar is about £1 1s. 0d., and of home-grown white granulated beet sugar £1 0s. 6d., and the duty is 11s. 10d., so that more than half the price of sugar is now owing to the duty. If you take that off, you get a price for sugar that amounts to slightly more than 1d. per lb.
Before I go on, I want to mention incidentally that I was not invited to report upon the British beet sugar industry, but before I went out I asked my right hon. friend Mr. Buxton if he could tell me anything about it. He said: "We have a Report in preparation." When I came back I asked for it, and was told: "We are not able to release it at present." I am not surprised, because that Report regarding the prospects of the beet sugar industry under present conditions would be just as disagreeable reading for those interested in beet sugar as the Report on the West Indies has been to my noble friends. As a matter of fact, the West Indian Colonies can produce sugar more cheaply than the beet growers in England can produce it. They produce two to four tons of sugar to the acre, whereas the beet sugar people—I have the latest report—average only 25 cwts. to the acre, and they have to pay as much for their beets at the factory as would cover the whole cost of planting and manu- 1019 facture in the West Indies. That is a fact. It costs as much to buy the beet for the British factory as it does to grow, make and put on the market West Indian sugar. All the rest they get out of the Imperial Preference and the subsidy they receive of £5 10s. a ton on production. As soon as that subsidy goes, the British beet industry will be in a worse position than the West Indian industry to-day.
How cheaply do you want to have sugar? The West Indies can sell it at about 1½d. per lb. It can be brought here and refined so as to sell under 2d. per lb. The noble Lord says that all of us are desirous of cheapening sugar for the working classes—the poor charwoman and so on. How much does the charwoman want to pay? Does she buy ½lb. a week or 1 lb. a week or, if she has a large family, does she buy 1 lb. a day? The point is this. If you take the West Indian sugar and give them a proper price and not charge your duty of £11 10s. a ton—if you want to have Free Trade in sugar, have it, but you can still give the West Indies and Mauritius a fair price for their sugar and yet be able to sell sugar in this country at 1¾d. per lb. Surely that is cheap enough? If the noble Lord does not think it cheap enough, he has only to pay his charwoman 1¾d. a week more in her wages and that will indemnify her. It is much better that prices should be kept up and wages kept up than prices should be cut down, because wages always follow them. There is a limit beyond which it is ridiculous to expect that sugar prices should be cut down. Sugar prices at the present time are bankrupt prices. How long are we to submit to having our Colonies broken up by flooding the country with bankrupt sugar?
Not only are we having sugar dumped from Australia and Natal, because they have a protective tariff and can dump their sugar at a loss, but we have also great quantities of sugar unloaded below the cost of production from Cuba and San Domingo and elsewhere. There are 5,500,000 tons, which, at the present rate of consumption, will take five years to work off if production stays at its present level. I was all through Cuba recently and we found Cuba in a state of great agricultural depression. They did not know what to do about the situation. 1020 They had then taken the desperate expedient of putting all their sugar crop into the hands of one seller. Every sugar factory had to send their sugar to one seller in order that he might make the best bargain for it. "If we cannot sell our sugar and get the money to carry on and pay our labourers, how are we to carry on?" they were asking. When we were in Cuba that problem was not solved. It has been solved by unloading 100,000 tons of Cuban sugar at the lowest price at which sugar has ever been sold. The price has gone down in the British market to 7s. 6d. because they found it necessary to get the cash. It is a bankrupt price.
Are we going to acquiesce in the industry of our Colonies and our Colonies themselves being ruined simply because other people are in a position to ruin them by selling bankrupt stock? There is a limit below which it is ridiculous to sell sugar. You can stop it, as we have pointed out, and it is worth while to stop it. What is the alternative? It has been very properly described by my noble friend Lord Hailsham, who knows many of these Colonies. We have described it in temperate words but in words which are authentic and indisputable. We have chosen our words very carefully and we will stick to anything in that Report and make it good to you. Under the present conditions of the sugar market and unless something is done to improve the price which the sugar manufacturers are getting at the present time, the sugar industry is going to be put out of commission. If the preference went, the industry would be wound up immediately. A certain minority of the sugar people can carry on for a short time at present prices in the hope of revival. My friend Sir Francis Watts, who knows the West Indies and the sugar industry thoroughly, says that, if the sugar industry went, it would mean for Mauritius and other British Colonies consequences which can only be described as appalling. My colleague and I have told you what is going to happen. If that happened, His Majesty's Government would be occupied for years together in reconstructing the whole sociology of the West Indies and it would take them much time and would cost them a great deal more than the proposals which Sir Francis Watts or I have put forward. It would cost them much more in trade and in outlay.
1021 What will it mean in the Colonies themselves? There are certain old English Colonies like Antigua, St. Kitts, and Barbados, which anybody who knows them knows are really in the English sense very valuable Possessions. If the English population or the English character of those Colonies were taken away they would fall back to the position of the little Island of Nevis, an island of scrub and small peasant proprietors, which cannot pay for its churches and schools, and can only hope to live by selling vegetables to Canada, which it is doing increasingly. If that happened to these old English Colonies you would then have a certain number of poor whites as farmers on their own estates and an enormous number of labourers without any livelihood except growing sweet potatoes and yams, and there would be no possible means of raising the revenue for the churches and schools of which anybody who has been out there knows they are so proud. These three Colonies will be destroyed and will go to pieces. That line of lights which has a shining effect upon us as we think of English history will be extinguished and go out. My noble friend and anybody who knows the Colonies knows that will be the case.
The Colony of British Guiana is only maintained from physical destruction by the sugar industry, because British Guiana, so far as it is cultivated at all, has an elaborate system of trenches and drainage which is maintained at the cost of the sugar industry. When the sugar industry goes out it will be impossible to maintain that system. The rice industry cannot be developed; already it cannot be developed unless you improve the irrigation. In a physical sense the Colony of British Guiana will sink into the mud. There is all the unemployment and the loss of revenue which will follow. Anybody who has surveyed the Colony knows that that is the case. In British Guiana there is a great mass of Indian immigrants always wanting to go back to India. They have a right to go back and, if the sugar industry is unable to give them employment, they will claim to go back to India en masse and the immediate liability for return passages is carefully calculated at £800,000. They will claim it and my noble friend Earl Russell and Mr. Wedgwood Benn will see that they get it.
1022 Then I come to Trinidad. In Trinidad the sugar industry is a very valuable institution because there the system of cane farming has been developed more than anywhere else. The factories are very well managed and equipped. Probably the best factory in the British Empire is now in Trinidad. The Trinidad factories have 20,000 cane farmers. They have these men organised in co-operative societies, and all the organisation of peasant cane farming, of co-operation among admirable and intelligent men, will go to pieces—a really terrible set-back in the social organisation of Trinidad—if you break up the sugar industry. And, again, as in British Guiana, you have the liability for the repatriation of Indians. The Indians in Trinidad will certainly claim their return passages. They are with difficulty restrained from doing it now. If the sugar industry goes you will have from £700,000 to £800,000 liability on the Colonial Government to pay passages. Trinidad may be able to pay it, because they have an oil industry, which they can tax—it is not heavily taxed now. British Guiana has no such revenue. You will have all your front line of Colonies—the Lesser Antilles and British Guiana practically extinguished, Trinidad very grievously crippled, and a great deal of Jamaica very grievously crippled, although it has other resources which I hope can pull it through.
That is your bill, which you have to face. On the other hand, you can obviate this by paying a living price for sugar. I am not very much frightened by the noble Lord's figures. We at present pay a great deal in sugar taxation, and we should not have to pay very much more to put the British Colonial sugar industry on a sound footing. The noble Lord said: "You will have to do this for the whole Empire." Well, I do not agree that we are bound to do it for self-governing Colonies which have such a high protective tariff that their internal price for sugar is 34s. or 28s. a cwt., and which are enabled by that to dump their sugar in our own market. I think that a self-governing Colony which looks after its own industry in that way might very well be regarded as not being entitled to take advantage of any bounty which the British Government might give to its Colonies. It has been responsible for the Government of all these Colonies; 1023 Barbados is the only Colony which has had any sort of autonomy. All these other Colonies in their present position have grown up under the responsibility of the Imperial Government. That is your alternative. You must either make such arrangements that a proper price shall be given to the West Indies, Mauritius, and Fiji sugar, or you must have all those Colonies, with the exception of Jamaica and the partial exception of Trinidad, wiped off the map and destroyed. I put these things perfectly plainly.
The noble Lord also referred to measures of research which Mr. Snowden mentioned last July, and which I said were under the circumstances derisory. I challenge His Majesty's Government to say whether there is any reason why they ought not to be ashamed to put on paper such a triviality as that. If there is anything in it, let them convene their Economic Advisory Committee, or any of the expert committees that they have, and examine my colleague, Mr. Semple, and myself, and let them advise the Government how much there is in that, and as to the extent—the trivial extent—to which that is going to help the industry. If the industry is saved that may and will be of benefit, but if the industry is not going to be saved, by fixing such a price of sugar that the West Indies, Mauritius and Fiji can survive—and Fiji will have a bill of £500,000 or £600,000 for repatriation of labourers—then this disaster will happen to the West Indies. Noble Lords on the Government Bench may say: "Well, we cannot help it." Well, my colleague and myself have done the best to make this irrefragable situation perfectly clear, and we put it before you. I have found 1024 myself regarded rather with reproach by some members of my Party for having set down these facts. They are facts. They cannot be other than facts. I have stated them, and I state them again, because, first of all, I do not believe that the rank and file of my Party will desire to destroy the West Indian Colonies and Mauritius for a gain of a farthing a pound on sugar, and I do not want them to have the infamy of taking that responsibility as a Party to which I have myself belonged all my life. It would be an infamy if that happens; and would remain an infamy.
My Lords, we have had a very interesting debate, and I am very glad that it has fallen to me to move the Motion which has provided this debate. I cannot help saying that I go away with rather a sad heart after listening to the noble Lord, Lord Pass-field, because I sometimes feel that he has not appreciated the conditions under which the sugar industry and the Colonies and the West Indies are suffering to-day. I would urge him to read the speeches of the noble Lords, Lord Hailsham and Lord Olivier, once more, in the hope that he may be so impressed with the disastrous and calamitous conditions that exist that he will impress upon the Chancellor of the Exchequer the necessity of assisting these Colonies, lest worse befall, and at some future time he will have to find even a greater sum than has been suggested to-day. I beg leave to withdraw my Motion.
§ Motion, by leave, withdrawn.
§ House adjourned at twenty minutes past seven o'clock.