WHEAT QUOTA.

HL Deb 13 May 1931 vol 80 cc1193-232

LORD ARNOLD rose to call attention to the proposals for a quota for homegrown wheat and for Dominion wheat; and to move for Papers. The noble Lord said: My Lords, many proposals have been made during the past few years for dealing with the depressed condition of agriculture. As regards wheat, what is known as the quota has come to find much favour with agriculturists and also with politicians. Indeed, a quota for home-grown wheat has now, as I understand it, become part of the official policy of the Conservative Party. A quota for home-grown wheat has indeed been promised by Mr. Baldwin. Speaking on June 9 last year, he said: I have come to the conclusion that the first thing to be done is to give you an undertaking that one of the first things we do on coming into office is to fix a guaranteed price for wheat of milling quality at a price sufficient to enable wheat to be produced remuneratively on ordinary wheat land. That is a perfectly definite pledge, and with your permission I propose to deal with it step by step and see how the matter would be likely to work out.

For this purpose I will take the price of home-grown wheat as 25s. per quarter. It has, indeed, been unhappily lower than that recently at certain times, but I will take 25s. a quarter. The guaranteed price which Mr. Baldwin promises is—I think it will be admitted by supporters of the quota—unlikely to be less than 50s. a quarter. Many agriculturists indeed want more, but I propose to take the figure of 50s. a quarter. So, as compared with the present level of prices for home-grown wheat, the quota on that basis would mean that the price would be doubled. Now the crop of home-grown wheat may be taken as round about 6,000,000 quarters per annum, but only about two-thirds of that, somewhere about 66 per cent., is of millable quality, and Mr. Baldwin stated in the pledge which I have read that the quota is only to apply to millable wheat. If we take the crop as 6,000,000 quarters and the quota as applied in fact to two-thirds of that—the amount which is millable—it clearly would apply to about 4,000,000 quarters of wheat. Now 4,000,000 quarters of wheat at 25s. a quarter would be worth £5,000,000 and if the price is to be doubled that £5,000,000 would of course become £10,000,000. Therefore, in order to finance the quota on the basis which I have outlined, a sum of £5,000,000 per annum would be necessary to begin with, quite apart from any increase which there might be in wheat growing.

This £5,000,000 necessary to finance the quota would, of course, have to be found by the people of the country either as taxpayers or as consumers. I think that the method which would be adopted would be that they should pay as taxpayers, and indeed, as I understand it, so far as the Conservative Party is concerned that is the official policy, because in one or two of the official leaflets of the Conservative Party it is stated that the money required will be found by a tax on foreign manufactured goods coming into the country. Therefore, it is clearly intended that the quota money shall be found by the Exchequer, and that means that there will be a subsidy. If, on the other hand, the plan were adopted of making the people of the country pay as consumers, then of course it would be through the increased price of bread. I am quite aware that supporters of the quota, or many of them contend that there would be no increase in the price of bread owing to savings which would be effected between the producer and the consumer. That would be a very helpful argument for the quota as far as it went if it were true, but it is not true. I think myself that savings between the producer and the consumer as far as wheat and bread are concerned could be effected to some extent, particularly in certain of the costs of distribution, and I think also in the cost of baking. But these savings will not be dependent on the quota. If they can be effected at all they can be effected now. They can be effected without the quota, and therefore it cannot be argued with any degree of substance that the quota would lead to savings which would mean there would be no increase in the price of bread.

As a matter of fact, even if the quota were financed by a subsidy, there would still be an increase in the price of bread. If all the millers are to be compelled to use a certain quota proportion of homegrown wheat, new heavy charges will be incurred for rail freights consequent upon bringing the wheat to the mills, many of which are situated a long distance from the places where wheat is grown. A large number of the mills of the country are, naturally enough, situated near the great ports where the wheat arrives from abroad in vast quantities. But home-grown wheat is very little used by port millers. Homegrown wheat chiefly goes to country mills, and it would be a most uneconomic proceeding to incur the very heavy rail freights which would be necessary to take the wheat from the farming area to the ports and then, on the other hand, to take the part that is not millable for bread—millers' offals and so forth—back to the farming areas. Rail freights would be incurred both ways. That proceeding would be so uneconomic that the proposal had been made, in order to meet the difficulty, of a system of certificates, the idea being that the port millers would buy certificates for their percentages from country millers. But this would almost certainly lead to bidding up for the certificates. It would mean increasing the price of flour and that would lead to some increase in the price of bread. Whichever way the matter is looked at, therefore the quota is likely to lead to an increase in the price of bread.

Another series of objections which are very important and very difficult, as it seems to me, for the supporters of the quota to meet, has relation to the matter of poultry wheat. As I have told your Lordships—and many of your Lordships are, of course, very familiar with these matters—about two-thirds of the wheat is adjudged to be of millable quality, and the remaining one-third, or 33 or 34 per cent., is almost entirely used for feeding poultry. But if the quota is to be paid only on millable wheat—and that is the proposal of Mr. Baldwin in the pledge that he gave—then obviously every effort will be made to get as much wheat as possible accepted as of millable quality, because that wheat will fetch about double its economic price. If, owing to the quota, a larger proportion of British wheat than 66 per cent. should come to be accepted as millable, then obviously there will be less than the present one-third or so available for poultry wheat, so that poultry wheat will be more scarce and its price will rise; and this will be a somewhat serious matter for the poultry industry, which is in many ways the most promising branch of British agriculture to-day.

Let me try to put the matter in perspective by giving your Lordships one or two figures. The total value of agricultural production on the farms of this country to-day is about £250,000,000 a year. The value of poultry, including eggs, is now probably somewhere about £18,000,000 a year—that is, poultry on the farms, quite apart from allotments poultry, if I may so call it, and a good deal of other poultry that is kept by people who are not farmers. On the other hand, the value of millable wheat at the present time, as I have already said, is only about £5,000,000 per annum. Now £5,000,000 in relation to the total value of agricultural production—namely, 2250,000,000—is actually only two per cent., and I do not think it can be too much emphasised that when everything is analysed down to the bone, this proposal for a wheat quota is one which will only help somewhere about 2 per cent., at present prices, of our agricultural production.

And yet we are told that this is a new scheme for setting agriculture on its feet, despite the fact that it would relate to only about 2 per cent. in value of agricultural production, and the further fact, as I have just shown, that the quota would inflict injury upon the poultry industry, which is larger than the wheat industry, and is growing while the latter is declining, I submit, therefore, that the quota, when it is analysed in this way, appears to be a proposal for bolstering up a small and decreasing industry, while injuring a larger part of the total agriculture of the country, and a part which is growing. No doubt the supporters of the quota will say that, once it is in operation, wheat-growing will increase. That may be so to some extent, seeing that wheat is to get about double its economic value. But in the first place, so far as it increases wheat-growing, it would also increase the cost to the people of the country; and in the second place, it is, as a matter of fact, wholly improbable that whatever would be done by the quota would make millable wheat amount to more than 3 or 4 per cent. of our total agricultural production.

I will deal next with a very important contention of the supporters of the quota, which I do not wish to minimise—namely, that the value of wheat-growing cannot be estimated merely by its proportionate statistics, but that wheat, as a crop, has an importance greater than its money value. Supporters of the quota emphasise that wheat should be looked upon, not merely as an agricultural product, but as a rotation crop. Most of your Lordships are very familiar with these matters, but in order to explain everything as clearly as I can, I would mention that many persons hold that, unless wheat can be grown in its turn, rotating, say, every three or four years with other crops, then the effect on the fertility of the land will be serious. This contention suggests that, unless wheat is available as a crop, the land on which wheat now forms one of the crops will be of little or no value. I think that is putting it fairly. I do not think, from such information as I can get—and I have taken a lot of trouble over this matter—that this view can be maintained, certainly as regards somewhere about five-sixths of the land on which wheat is now grown. It is probably true that only somewhere about one-sixth of wheat-growing land would materially suffer if wheat-growing had to be stopped altogether. As regards about five-sixths of the land, there are other uses to which it could before very long be put, and it would be wrong to assume, as regards the one-sixth, that it must necessarily go out of cultivation altogether.

I know it will be said—and this an argument which is often used by supporters of the quota—that, if wheat ceases to be one of the crops, less labour will be required upon the land and unemployment in agriculture will be increased. I think that this contention, like so many others in relation to the quota, will not bear close analysis. The amount of wages, including allowances for cottages and so forth, paid in respect of about one-sixth of our wheat-growing will be much less than the amount required for the quota. Moreover, it would be wrong to assume that the men now employed on the one-sixth of wheat-growing will all become unemployed. Certainly some of them would still be employed on the land in one way or another, and some of them, at any rate, would gradually find employment in other ways. As regards the remaining five-sixths of wheat-growing, the alternative uses to which that land would be put would employ a large number of those now employed upon it. Altogether, then, it would seem that the total number of men actually displaced from work, even if wheat went out of cultivation altogether, would be much less than is commonly supposed. Certainly it would be in no sense a business proposition to have a quota costing £5,000,000 and upwards in order to prevent the comparatively small number of men who will be finally affected being displaced from work by a decline in wheat-growing.

Whatever other claims are made for the quota—and many claims are made for it—it cannot be looked upon as a means of helping, on an economic basis, employment in agriculture through wheat-growing. The only way in which wheat can be grown more cheaply in Great Britain—and unless it can be grown much more cheaply it will in all probability cease to be an economic proposition—is by much larger and mechanised farms; in short, to use that overworked term, by some form of rationalisation. But changes of this kind would mean not more labour but less, and so, whatever way the matter is looked at, the prospects of employment of men in wheat-growing in this country are not good. The truth has to be faced, that the amount of land in this country on which wheat is growing is declining. It was declining before the War. By 1913 it had sunk to 1,701,000 acres, and the area is probably now about one and one-third million acres, and with the low price of wheat and the vast mechanised farms of the United States, Canada and Russia, it will be difficult, or it may be difficult, as time goes on, for wheat to be grown on a profitable basis in this country, with its much smaller farms. The probabilities are that the difficulty of growing wheat profitably in Great Britain will increase to such an extent that without a subsidy of some sort wheat will to a large extent cease to be grown at all. That prospect has to be faced, and I think it is better to face it now, and more businesslike and more statesmanlike to face it now, than to attempt to bolster up what has become a small and dwindling industry at the taxpayers' expense.

Another important matter which requires consideration before I pass on is the effect of the quota in raising rents. If the value of certain products is going to be doubled in price, the rent of that land will go up. In so far as the quota raises the price of wheat that increase will be reflected in the rent, and so far as tenant-farmers are concerned it will inure to the benefit of the landlords. Further protection for wheat will be afforded by some restriction which will be deemed necessary under the quota on the imports of foreign and Dominion flour. If the British millers are to be compelled to take a certain proportion of British wheat under the quota, something will no doubt be done about the imports of foreign and Dominion flour made from wheat bought at world prices. What will be done I do not know. It is not for me to solve that problem. I merely state it. It is one of the difficulties which would have to be met, and it bristles with difficulties and complications. Nor am I here to solve some of the other problems, such as the baffling decision of what is millable wheat, and other propositions put forward by Mr. Baldwin; but these problems will have to be solved by somebody.

I must pass on. Surely there is a very important principle at stake in this matter. If there is to be a quota for wheat, why should there not also be a quota for oats and barley? They too are depressed. Not so much as wheat, but still they are very depressed, and I do not think there is sufficient reason, if there is to be a quota at all, why it should be simply for wheat, leaving oats and barley outside the quota system. At any rate, there will be a very strong demand for a quota for oats and barley, and if you begin a system of quotas I do not know where it is going to end. If there is a quota for oats and barley, the cost together might amount not to £5,000,000 but to £20,000,000 per annum. How is it possible to reconcile support of schemes like this with the great regard for economy which the Conservative Party tell us that they have? I would like, if I may, to put that point to the noble Marquess, Lord Londonderry, who I believe is going to speak in the debate. He is always most courteous and fair, and does not burke discussion, and I would like to know what is the reply of the Conservative Party, who tell us day and night that economy is the first and last duty of man. They talk of it by day and dream of it by night. In fact they will do everything for economy but practise it. They never do that. Here we have them starting a scheme which is going to lead on to an expenditure of £20,000,000 or £30,000,000 a year. I notice that my noble friend Lord Banbury has left the House. If he were here, I would like to ask him what he has to say about that. As I have said, the noble Marquess is always willing to answer questions, and is always very courteous, and I await with interest his reply to the conundrums which I have put to him.

I very well remember in 1926, at the time of the coal trouble of that day, Lord Cecil of Chelwood, who was then in office, saying that whatever else was done, there could be no further subsidy—that that was absolutely out of the question. If that was so, then how is it possible, consistently with this principle, to have a subsidy for wheat? I think a very important consideration arises in this matter and that is that agriculture is by no means the only depressed industry in the country at the present time. Unfortunately, caught as we are in the grip of the world economic crisis, nearly every industry is depressed—cotton, iron and steel, shipbuilding, railways and so on. All these industries are having a great struggle to keep their heads above water, and I fail to understand on what principle you can compel men facing such difficulties as these, finding it almost impossible to keep their places open at all, to pay money to help wheat growers. I fail to understand, at this time above all times, on what principle you can compel people in depressed industries to pay money to help one part of another depressed industry. I submit then, before I leave the home-grown quota, that it is a proposal which will not bear close investigation. It is a crude and thoroughly unsound proposal, which concedes vital principles and will cost a lot of money without any commensurate result. It will only help a tiny fraction of agriculture while injuring a more important part of agriculture, and it will throw a heavy burden upon the people of the country, because they would have to find the money.

Then I pass to the Dominion quota. The proposal for a Dominion quota for wheat emerged, as your Lordships will remember, during the Imperial Conference last autumn. Various schemes were considered at that time by the Economic Committee and by the general members of the Conference for increasing and controlling inter-Imperial trade. The Economic Committee of the Conference was asked to prepare a Report on these schemes, including amongst others a quota for Dominion wheat imported into the United Kingdom. I must emphasise that no decision in favour of a quota for Dominion wheat was taken at the Conference. No decision in favour was given by His Majesty's government or any of the Governments at the Conference. I think the actual position can best be put by quoting from a leader which appeared in The Times dealing with the Conference. It was speaking of the position of His Majesty's Government as regards the Dominion quota, and The Times said:— -So far all they"— that is, His Majesty's Government— have done has been to promise 'to examine carefully' the Committee's Report"— that is, the Report about the Dominion quota— and in the course of their consideration of this subject to consult with the Governments of the wheat-growing Dominions and of India. Similarly Mr. Bennett, speaking for Canada, and Mr. Scullin, speaking for Australia, indicated that they were prepared to consider the quota scheme. So the whole proposal never got beyond the stage of consideration, and it is to be discussed further, I understand, at the adjourned Conference which will be held at Ottawa in October. In these circumstances I venture to think it is proper and useful to have some debate on the matter in your Lordships' House.

Now, first let me state what the proposal for the Dominion quota is, as outlined in the Report of the Economic Committee of the Imperial Conference. The proposal is that 55 per cent. of our imports of wheat should be of Dominion origin, and for this purpose the word "Dominion" means any part of the British Empire. There is also a proposal in regard to flour. The quota for flour was to be 335,000 tons per annum from the Dominions. That would be about two-thirds of our total imports of flour. As regards flour, about two-thirds of our imports come from the Dominions, and about one-third from foreign countries, and the figure of the quota for flour was put by the Economic Committee at 335,000 tons. But flour is a minor matter comparatively. I only mention that because I want to cover the whole ground. As regards wheat, the Report of the Economic Committee said that on the average of recent years the imports of wheat of Dominion growth may not have been in excess of 53 per cent. of our total wheat imports. They explained that it is difficult to estimate precisely, owing to the fact that a certain amount of Canadian wheat comes through the United States, and they suggest that 55 per cent. will cover the element of un certainty that attaches to the calculation. And so they fixed the quota at 55 per cent.; and it would seem that the figure of 55 per cent. would mean little or no increase in recent Dominion imports.

The Economic Committee in their Report also say: It was stated on behalf of the United Kingdom delegation that no price guarantee could be given for Dominion wheat, and that the suggestion was confined to securing a guaranteed share of the import requirements at world prices. The Report also assumes that there would not be a quota for Dominion wheat unless there was a quota in the United Kingdom for home-grown wheat. Broadly that is the proposal. I will proceed to consider it and its effects.

First, let me make it clear that the Dominions mainly concerned, indeed almost entirely concerned, are Canada and Australia. The amount of wheat or flour which comes to us from other Dominions, including India, is quite small. India sometimes sends us a little, but the imports from India as a rule are quite small. Last year, 1930, 55 per cent. of our wheat imports would be 13,475,000 quarters. But the total wheat available for export by Canada and Australia is vastly in excess of that number of quarters. It is estimated that the surplus of wheat available for export by Canada and Australia for the current cereal year, to July 31 next, is 64,000,000 quarters—44,000,000 quarters surplus from Canada, and about 20,000,000 quarters surplus from Australia. So that it will be seen that the surplus for export of these two Dominions is about five times as great as 55 per cent. of our imports of wheat. It is therefore plain that Canada and Australia have already far more wheat available for export than 55 per cent. of our imports. In any year in recent years they have always had a surplus for export largely in excess of 55 per cent. of our imports. I may say, for instance, that last year Canada sold wheat to about 17 other countries as well as Great Britain.

The question, then, naturally arises what advantage can the quota be to the Dominions, except in so far as they could get a somewhat higher price for all or part of the 55 per cent. of our wheat which we should buy from them—a higher price than they do now, and a higher price than the ordinary world price. As regards price, as I have said, the Economic Committee indicated that the 55 per cent. of our imports was to be sold at world prices. But that is, according to their own estimates, about what has been happening already for some years. If that was all there is in the proposal it is difficult to see where the advantage to Canada and Australia lies. Of course, the truth is that that is not all that there is in the proposal, and that is what I am going to deal with. The fact is that under the 55 per cent. quota prices would be affected, and in the end the people of this country would have to pay more for their wheat than they do now. That means they would have to pay more for their bread than they do now. That is what it comes to. And it is not difficult to prove it.

The suggestion is that the 55 per cent. of our imports will be sold at world prices. What is the world price? The world price is not something fixed by an act of God. It is not something static and unchangeable. The world price is made by the operation of all the factors which go to make up supply and demand. The world price is created by all the factors in the problem, and if you have a quota of 55 per cent. that will be one of the factors, and it will influence the price. And that is the point. The world price will be affected, and to some extent determined, by the quota of 55 per cent. which I am now discussing. What will be the position? Canada and Australia would know that Great Britain must take 55 per cent. of her wheat requirements from them. Accordingly, Canada and Australia would deal with their surplus, or some of it, differently from what they do now. They could, and would at times, hold back supplies in a way which does not happen now, and such holding back of supplies would affect the world price. And all this would mean that the people of Great Britain would have to pay more for their wheat than they do now.

Look at it in another way. If the world price means the price at which the wheat supply of the world can ordinarily be sold then the Dominions can in normal times sell at that price without a quota. But if the world price is the price at some: particular moment, and some of the wheat which would otherwise have come to the market at that moment is held back, then the price will be affected. In these circumstances what is called the world price would be affected by the 55 per cent. quota. It must be remembered that the world price quite apart from the quota is constantly changing. It is probably a little different now from what it was this morning and it will probably be different again to-morrow. It is very easy to talk about the world price in the abstract. I submit that the matter wants very much more consideration to see exactly how it would work out in practice. The element of time comes into the problem. When is Canada, for instance, going to make her sales, or some of them, and at what world price? Is it going to be in January, or March, or May, or July, or September, or December? When is it going to be? It might make a considerable difference when the quota is to operate. I submit that the world price will be affected by the Dominion quota to the detriment of this country.

I repeat that the Dominions, knowing that they have the quota of 55 per cent. to rely on, will be able to hold off wheat from the market in such a wav that the world price will be affected to our disadvantage. It will be at any rate temporarily higher than it otherwise would have been; so that Great Britain will have to pay more for her wheat. It will be small consolation to Great Britain if, after she has made her purchases, after the quota has been satisfied or largely satisfied, prices soon afterwards dip somewhat. She would have bought and would have been compelled by law to buy her quota of 55 per cent. of Dominion wheat in a way which destroys the complete freedom of purchase which she possesses at the present time. It is that freedom of purchase which has given the people of Great Britain the cheapest and the best bread in the world. I say that it is a grave matter to jeopardise a supreme blessing of this kind.

It scarcely seems necessary to argue any further this question of the effect of the Dominion quota upon price because, from various sentences in their Report, it is obvious that the members of the Economic Committee themselves have grave misgivings, to put it no higher, about the effect of the quota on prices. In paragraph 5 the Report says: The price of Dominion wheat in the United Kingdom could not be raised appreciably above the world price"— The word "appreciably" has an alarming elasticity about it and one's apprehensions are not allayed by the sentence with which the paragraph closes. At the end of paragraph 8 there are these words: The Parliament of the United Kingdom might also introduce legislative safeguards designed to prevent any undue inflation of prices. Manifestly, then, the members of the Economic Committee themselves, so far from ruling out higher prices, suggest the desirability, or at any rate the possibility, of legislation to prevent higher prices coming about. It seems to me a singular way of promoting Imperial unity to have a scheme which requires legislation to prevent one part of the Empire charging too much to another part of the Empire.

There are other words in the Committee's Report which clearly point to higher prices. Take, for instance, paragraph 8 which, amongst other things, speaks of the possibility of increasing the quota. It also contains this very significant sentence: It appears to us, therefore, that a quota which secured to Dominion wheat a guaranteed market for a quantity of wheat in excess of the figure of recent years would be pro tanto beneficial to the wheat exporters of the Dominions by giving them a secured market, of which they could not be deprived by any dumping competition, for a definite quantity of their exports. If those words mean anything they mean that in certain circumstances this country is to be obliged by law—that is what it comes to—to buy wheat from the Dominions at a higher price than elsewhere. If the words do not mean that what do they mean?

What, then, is the use of contending that the Dominions quota will not affect prices and will not make an increased price of wheat for Great Britain? The supporters of the quota say, I know, that in certain circumstances—that really means, if the scheme is not working well—the quota will be altered. There will be power to do that at any rate. The matter is not really so simple as that. An alteration of the quota, that is of the proportion, will almost certainly be to the advantage of one country and to the detriment of another. In those circumstances it is not difficult to conceive the disastrous effects upon Imperial unity of an alteration in the quota. So that, so far from furthering Imperial unity, which many noble Lords on the other side are apparently anxious to do, and which we are all anxious to do on the right and best lines—so far from furthering Imperial unity, I say that the quota may well become a disturbing and discordant factor. Certainly so far as Great Britain is concerned, it might have unfortunate repercussions, as it would lead to dearer food here and that would not help the cause of the Empire in the Mother Country.

These dangers would be increased—and the Economic Committee also suggests this—if the quota of 55 per cent. is only to be regarded as a beginning. May I read some more words of the Committee? They say in paragraph 8 of their Report— This advantage"— that is the stopping of what they call "dumping"— would be enhanced in so far as it was possible to increase the quota progressively over a period of years. Presumably, then, the wheat quota is only to be the commencement of an arrangement with the Dominions, and may be increased substantially, so that in time we may come to buy only a small proportion of our wheat from foreign countries. That would still more increase the price of wheat in Great Britain and still more limit our sources of supply. It is very inadvisable to do that because at the present time if there is a partial failure of the crop in any country or countries, it is very probable that some other country or countries have had bountiful crops, and with the whole world open to our market it is not wise to restrict our sources of supply.

I must draw to a close, but before doing so it is pertinent to ask in discussing these matters—for they should be looked at all round—what is Great Britain going to get in return for the Dominion quota if she grants it? We shall be told, no doubt, that we shall get increased trade with the Dominions, and that they will take more of our manufactured exports. There is no guarantee of that at all. Your Lordships will remember that at the Imperial Conference Mr. Bennett stated what Canada was prepared to do to help our trade, and it will be within the recollection of your Lordships that Mr. J. H. Thomas, in another place, speaking as Secretary of State for the Dominions, used language about this offer of Mr. Bennett's which would shock your Lordships if I were to repeat it in this House. But surely we in Great Britain are entitled to know what we are going to get as our side of the bargain.

Personally, I entirely deprecate this debit and credit way of running an Empire, but if it is to be entered upon, if we are to proceed along those lines we must try to contrive something like a fair profit and loss account. We cannot have most of the profits on one side of the account and most of the losses on the other. Quite apart from the position of Great Britain, consider the position under this Dominion wheat quota scheme of South Africa, New Zealand, the Irish Free State and India. What about them? I stress again that this quota is one which helps almost entirely Canada and Australia. The other Dominions surely will require something if this quota system is going to be put into operation.

What about India? Let me take India, which is a very important part of the Empire, especially at the present time, and is also the most populous part of the Empire. I never can understand—perhaps the noble Lord opposite will give me his mind on this, because he no doubt will be speaking to the Motion which comes before your Lordships' House next week—how it is that in these various proposals for increasing Empire trade very little attention is paid to India. It is true so far as the quota is concerned, and so far as preference is concerned, that owing to the character of her products it would be very difficult to give any substantial advantage under any of these schemes to India. But I cannot understand when we are told, as we are told, that it is most desirable that we should increase our export of manufactures to Empire countries, how it is that India is nearly always left out of account. It is the most populous part of the Empire. It has a population of about 320,000,000. If the exports of cotton goods from Lancashire to India could be increased by 5s. per head of the population of that country, that would increase our export of cotton manufactures in normal times by £80,000,000 a year, and that would treble the exports of Lancashire to India, or very much more than treble them, unfortunately, on the present basis. But there is no proposal, and there can be no good scheme for bringing India into this quota system, or any similar system, because she does not send anything upon which an adequate quota or preference could be given.

The position is somewhat different as regards South Africa, New Zealand, the Irish Free State and Newfoundland, but, owing to the nature of their products, any scheme would be more difficult to devise than in the case of wheat. Nevertheless, once this quota system is begun, they, too, will want to come into the quota system, and have their quotas, and I do not know how you will be able to resist their demands. So you will be driven on to other quotas—quotas not only for wheat, but quotas for meat, for wool, for butter, and so on. Some of these were, indeed, considered at the Imperial Conference last autumn. So we shall be driven on to a system which, in my opinion, is fraught not only with great complications, but with enormous administrative difficulties, and with danger to the Empire. When all these quotas have been arranged, if they ever could be arranged, we should still have created more causes for Imperial disunity and ill-will than for Imperial unity and good will. That is owing to the diverse nature of the various products of the Empire. This has always been the great stumbling block in all these schemes for closer Imperial trade. Owing to the diversity in value and quantity of the different products of the Empire, it is impossible to devise by quotas, preferences, or any other scheme, a system which is equitable and reasonably symmetrical for imperial trade on any of those lines between the different parts of the Empire. It cannot be done.

Another important consideration is this. We ought to take into account if we begin this system, the possibility, at any rate of retaliation or of adverse trade arrangements being made by other countries outside the Empire with which we now do a large trade. Take, for instance, the Argentine. We do a large trade both ways with the Argentine. Last year we exported to the Argentine manufactured goods, or nearly all manufactured goods, to the value of about £25,000,000. If the Argentine finds, owing to the quota, that an outlet for her products is to some extent blocked in this country, that is not calculated to increase her purchase of manufactured exports from us. She is much more likely to be driven to make trade arrangements with other countries. There is invested in the Argentine about £600,000,000 of British capital, and we ought to be careful not to jeopardise that large sum, or to lose that very important market for our goods.

I say that, leaving aside questions of principle, this quota experiment is one which is too risky to embark upon. There are too many dangers about it. It bristles with dangers and complications, and recent experiences, I submit, have emphasised this. Take, for instance, some of the artificial arrangements which have been made during the last few years for controlling the course of trade and prices. They have not succeeded. Rubber restrictions, the American farm boards, to some extent the Canadian wheat pools, copper control in America—they have not succeeded. All have brought, and have been brought to disaster in greater or less degree.

My final submission is that the whole policy of trying to hedge round the trade of the British Empire from the rest of the world—because that is really, apparently, what is at the back of this quota system, and certainly that is what is behind the schemes for Imperial economic unity—I say this whole policy is wrong not only economically, but politically, and I think it should be resisted from the beginning. I have endeavoured to argue that it is wrong economically, and particularly at this time any steps for restricting trade between the British Empire and other countries are opposed to what should be the trend of world policy for the interchange of goods. What is the position in which we find ourselves to-day? Look at the countries of the world—the United States, Australia, most of the countries of Europe, nearly every country in the world, suffering from tariffs and trade restrictions of one kind and another, and it is these barriers which are in no small degree responsible for the unprecedented economic depression of the last eighteen months. The policy is wrong economically and, more than that, all attempts to bring about more exclusive trading within the British Empire itself and to shut off the British Empire—that is about a quarter of the surface of the globe—from trading with the rest of the world are also wrong politically, because they are calculated to foster those economic jealousies and rivalries which in the past have often led to war and have brought countries and empires to disaster. I trust that is not going to be our fate. I trust history will not show if we follow those fatal paths that we are ourselves approaching the beginning of the end of our own empire, the British Empire, I beg to move.

LORD CRANWORTH

My Lords, I have listened with the greatest interest to the authoritative speech of the noble Lord who has just sat down, and I trust he will not think it presumption on my part if I venture to express a hope that that speech indicates that in future he is going to give some assistance on these points to the noble Earl, the Under Secretary to the Ministry of Agriculture, who, to some of us at least, has seemed to be fighting on these points almost a lone hand with conspicuous ability, if I may say so. I do not propose to follow the arguments of the noble Lord at any length. Some of the facts and some of the figures he gave us do not correspond to those that have been given to me. Some of the facts which he told us do net bear out either of my own experience or what I have been told by others. I noted that he stated as a danger that rents would rise. I did not notice that he said it would be an advantage that wages would rise too; yet I seem to remember that when the agricultural wages boards were brought in by his Party, they were alluded to as the workers' charter, inasmuch as any benefit that agriculture got would be shared by the agricultural worker to the fullest extent.

I thought that he fell—perhaps I am wrong—into the happy illusion of thinking that we on this side of the House were His Majesty's Government. At all events, he asked for an answer from this side of the House. Perhaps the wish may have been father to the thought. But there is a more important point upon which I desire to say a word or two. I have been wondering ever since I saw this Motion down what was the reason that was inducing the noble Lord to appear rather like Diogenes in the arena to-day, and I have wondered whether it might not indicate some slight flaw which is tending to shiver yet another of the Government's promises. We had a promise, you will recall, last August from the Chancellor of the Exchequer that cereal farming was going to be put on an economic basis.

The noble Earl opposite alluded to it in November, and I do not think I can do better than quote his words to you. He said: Finally, your Lordships will remember that the Chancellor of the Exchequer last August made a definite pledge to Parliament. He said that this matter, affecting as it does the question of wheat, affecting as it does so vitally our great Dominions, would lie discussed at the Imperial Conference, and that after the Imperial Conference the Government would undertake whatever practicable steps could be devised to put cereal farming on an economic basis. That pledge was a very specific one. Then he went on to say:— I cannot, at the moment, commit His Majesty's Government to taking any definite step, but I can say—and it is a great deal more than anybody said on behalf of your Lordships opposite when your Lordships were sitting on this Front Bench—that whatever ultimate decision His Majesty's Government may take on this question there is no intention whatsoever to withdraw from the pledge made in the House of Commons by the Chancellor of the Exchequer. Those were brave words, but in my part of the country we are getting sick to death of words. I was brought up on a saying with regard to words which was this: "Hard words break no bones and soft words butter no parsnips." if broken promises were to breed butter it would be at an even cheaper price under this Government than it is to-day.

I have an interesting document here. It is headed "General Election, 1929. Labour's Appeal to the Nation." It makes a lot of the usual Election promises with regard to agriculture. The workers are promised a minimum wage, unemployment insurance, easier access to holdings and better cottages. I would like to ask the noble Earl opposite, two years afterwards, what single measure has been introduced to give effect to one of those promises? With regard to the farmer, the first thing he was to have was security of tenure. Yet the first Agricultural Bill introduced by noble Lords opposite has as one of its avowed and definite purposes turning the farmer out of his holding to make room, on the one hand, for large mechanised farms and demonstration farms, and on the other, for 100,000 of the unemployed.

I, in common with others of your Lordships—and not all, I presume, on this side of the House—have been accused of bleating ignorant inanities on agriculture, and I am free to admit that it is only right that the Minister of Agriculture should have at the moment when he is Minister a better knowledge of agriculture than any one of your Lordships can pretend to have. But I know my part of the world. I know the condition of agriculture there from bitter personal experience. I know the ruin in those parts. I know how it increases from day to day. In my part of the world they pray every Sunday in the churches for agriculture of all grades. I know that, and if the Minister of Agriculture knows it as well as and better than I do, then I say the more shame to him that he treats our troubles with such callous disdain.

THE LORD BISHOP OF NORWICH

My Lords, when I came to the House to-day I was extremely anxious to learn from the noble Marquess's reply how the quota system is expected to work. I wanted to learn the exact details, so far as they are to hand, as to the manner in which it would help our farmers, whether it would involve large official interference, whether it was the kind of scheme that would in practice be carried through without being so artificial as to produce no satisfactory remedy. I have every hope that when the noble Marquess speaks he will relieve any misgivings on that point. I for one shall be only too glad if I can find that farmers in my part of the world and elsewhere will under some quota scheme receive some help and encouragement.

As the noble Lord who raised the question proceeded in his speech I found there were a good many things he said which from my own knowledge I am rather inclined to question, and which made me wonder whether he had given quite a comprehensive review of the whole situation. If the price of bread would rise under the quota scheme, I am stupid enough not quite to understand why it should be so very little help to the farmers. If the farmers, on the other hand, are to gain much from it then I can understand general prices might rise. But if the thing is really trivial from the farmer's point of view, will it not be trivial from the consumer's point of view in what he pays for his bread?

Then again it appeared to me that the noble Lord spoke of agriculture in England in too general a sense. The agriculture of the East of England is very different from the agriculture of the West of England, and what might bring small help to agriculture in the total might, at the same time, bring very large assistance to the agriculture of the corn-growing counties to which I belong. In Norfolk our main crop, of course, is barley and it did not seem to me to be an absurd question to put: If wheat, why not barley? I should be delighted to say: If wheat, then certainly barley. I do not think that if a quota for wheat may bring in its train some assistance to barley, that that at all rules out the wisdom of giving some assistance to wheat.

Then I hoped that the noble Lord would explain what was the ready employment which could be found for the one-sixth of the workers who would be displaced. It seems to me from my knowledge that they are far more likely to find unemployment ready to hand in the towns than to find employment ready to hand. As for the other five-sixths, if I did not misunderstand, I think it was expected that they would devote themselves to poultry farming and market gardening. But the success of poultry farming and market gardening very much depends upon the ease with which the produce can be marketed. Both these propositions may be satisfactory on the outskirts of large towns, and there are places in the Midlands where such efforts thrive because of the locality. But I do not see any prospect that all our farming industry could be transferred from arable working to poultry or orchards, or to the growing of vegetables. I waited to find whether my puzzle would be solved, but I did not find that it was.

I am inclined to think that agriculture does stand in a unique position. I do not think it is quite a fair thing to say, if the agricultural industry should receive some form of subsidy or help, then why not the cotton industry or others? I believe the agricultural industry is very closely bound up with the actual health and robustness of the nation. If one or two of our industries came to a complete end, I do not know that the nation as a whole would necessarily suffer very deeply or very really, but if our countryside came to an end I believe this would have very far-reaching consequences in regard to the whole welfare and well-being of the country, and would be felt in the towns as well as in the agricultural districts themselves.

When the noble Lord went on to speak of the Imperial aspects of the question, he travelled over ground with which I am not so familiar. We are hoping very shortly in Norwich to welcome a party of our Empire farmers. They are anxious to see what we are doing and to learn from us, and I hope very much that we shall be able to learn something from them. In planning for that visit, and in other ways, I cannot help supposing that sentiment counts for a great deal, and that it is not only a matter of business and cash, to which the noble Lord chiefly referred. I believe that this sentiment is of very great value, and that we in the British Empire do not merely wish to deal with one another on purely profit and loss grounds. We wish to keep together as one family, and anything that tends to help us in that sentimental direction, if you please so to call it, is of advantage. In saying this I do not imagine that we have any desire to shut off the Empire from trading with the rest of the world. Far from it; but if we can knit the bonds of brotherhood more closely, I believe this in itself, quite apart from any cash advantage, is of very great value all round.

I thought the noble Lord spoke with a certain amount of exaggeration, if I may be allowed to say so, on this whole question. I thought also that we were dealing only with one thing at a time. If any kind of Empire preference is found to be a good thing, then I suppose that some further step in the same direction may be taken; but I do not think that to take one step in relation to agriculture necessarily commits us to another long series of steps, involving commitments that we are not able to envisage. If the first step is good, and others are desired, we can take them, but it is possible that one step at a time is quite enough for our purpose.

I have said from my place here before that I cannot believe it can be our desire to purchase wheat grown at the lowest possible price—that is to say, I cannot believe that we ought to adopt a policy that in the end would lead us to every kind of dumping of cheap goods, no matter what the conditions under which those goods are produced or grown. I think that this is a matter of opinion on every occasion, but if we are to commit ourselves to the statement that we want the cheapest thing in all circumstances and to have no further consideration than the cash price of the articles that we procure, then I believe that we stand upon a very slippery slope, and we shall find ourselves constrained to welcome dumping, even of the most disgraceful character, of things produced under conditions that we could not possibly tolerate.

I return to my first question. I hope that the noble Lord, when he is good enough to reply, will be so kind as to give some indication of the way in which this plan will actually be worked, and whether the first difficulties raised by the noble Lord are real and cannot be got round—whether, that is to say, the inconvenience of working this quota system near the ports, the inconvenience of the cost of transport and so on, will really be as great as the noble Lord indicated, or whether the plans have got so far as to make it clear that the quota system can be economically and satisfactorily worked without giving an immense amount of trouble in the execution of the plan.

LORD PARMOOR

My Lords, I rather regret that the right rev. Prelate, the Bishop of Norwich, should on an occasion of this kind have attempted, as I thought, to lead us into a subject matter which is full of prejudice and difficulty. I have noticed that, in lack of argument, the word "dumping" very often takes a very prominent place. I do not wish to say anything more in reference to the statements that he made. I think I had best deal with them in discussing the extremely able and interesting arguments of my noble friend Lord Arnold. I want to say at once that, although I may not be able to give him, or your Lordships, a complete answer at this stage on the matter to which he has referred, his speech will be carefully studied by all those with whom he worked for some years, and that we are grateful to him for explaining his view as to the points on which he thinks that difficulty will arise.

Let me at the outset say that I desire to differentiate entirely the question of an Imperial or Dominion quota from the quota which is advocated for the advantage of the English farmer. The considerations in either case are wholly distinct, and I think they really do not cross one another at any single point. It may be quite right, for instance, to have a quota for the assistance of farming and not at the same time to desire a Dominion quota for the benefit of the Empire. The benefit of the farmer will not be diminished in any particular, and, on the other hand, except to the extent that I shall explain by and by, it is quite possible to advocate a Dominion quota without in any way touching the question of farming in this country. What I want to say first then is a word or two upon the Dominion quota. I think the noble Lord was quite right when, speaking of the Dominion quota, he referred to the discussions on this point which had taken place, particularly in the second plenary session of the Imperial Conference, and I think it will elucidate what I have to say if I refer to one or two of the matters which arose in that Conference, and see how they were dealt with. For instance, the Government intimated at the second plenary session, as a Dominion question, that they were opposed to any policy involving duties upon foodstuffs or raw materials.

The noble Lord semed to think that it was also a necessary consequence of a Dominion quota that there should be something in the nature of an arrangement which involved duties on foodstuffs or raw materials. He may be right in some of the arguments which he has adduced, but I can tell him he is wholly wrong if he thought any such suggestion has ever been the result of the Government policy on this question. I think the various Dominions made it quite clear that they were not desirous of that. They were simply seeking to find a market for wheat, of which they had a large surplus production. It was not a question of price, but a question of quantity, and when the world market price is mentioned it is intended, as I read it, to mean what the noble Lord indicated when he used the words "freedom of price and freedom of purchase."

I do not intend to say that these matters have been thoroughly thought out. They were matters of discussion and have not been rediscussed since the date of the Conference. They will have to be rediscussed, and settled, I hope, at the autumn conference at Ottawa, and I cannot myself see any reason why Empire wheat should not be dealt with upon what is called the quota system. It is not intended to have a quota for the particular Dominion, Canada or Australia or India or South Africa, but it is intended that there should be a Dominion quota applicable to the purchase of all wheat, whenever purchased, which has a Dominion origin, and what is asked for is that we should give a security for quantity purchased, in order that the Dominions may be able to get rid of their surplus production, which, no doubt, particularly in Australia and Canada, has produced a very difficult economic position at the present time.

I assume that we all desire that. I cannot imagine any one not desiring it if we can work it out as I have indicated, and that is the way desired both by the Dominions and by ourselves. I am not speaking in any way in a hostile spirit to the Dominions. We have both carefully considered whether this quantity of wheat can be guaranteed to be purchased by us without interference with what is called the world price, which means that there should be nothing in the nature of a duty on food as regards the wheat imported into this country. Let me read again, to be quite certain, what the statement was when all the Dominions were here at the Conference: The Government intimated at the very outset that they were opposed to any policy involving duties on foodstuffs or raw materials. The noble Lord, in his very able argument, suggested that it would be extremely difficult to carry out this Imperial policy without involving duties upon foodstuffs. If it is found to be impossible, I presume it will have to be dropped, but I do not see why it should be myself. The difficulty is rather one of detail, which I cannot deal with and which cannot be finally determined until after the Conference at Ottawa.

I do not know how your Lordships feel but I know that many desire to see inter-Imperial trade increased. The Dominions do not think it impossible, and the Government do not think it impossible, but whether we shall formulate a scheme satisfactory to them and to ourselves time alone can show. This matter was referred to a, Committee at the time of the Imperial Conference, and what Canada and Australia attached special importance to—I am reading from an extract from the Conference proceedings—was:— increasing the sales of their wheat in the United Kingdom, particularly in view of the depression in the world's wheat markets. They were not asking a privilege in price. They were saying: "We have actually produced this stuff, which is more than is wanted in the world's markets, and we ask you to take from us as a matter of business and friendship a certain ascertained or guaranteed quantity, whatever it may be." The noble Lord has said that it is something about 55 per cent. of the total import. That will no doubt have to be considered and adjusted at Ottawa before the scheme can come into operation.

Then the Committee to whom this subject matter was referred reported in some detail on the subject, and included the outline of a plan which will be found in Part XIII of the Summary of Proceedings of the Imperial Conference. That was only an outline, and it was passed on from the Committee to what is called the Economic Committee, who further considered how this matter could be carried out as a practical scheme. This is what we did, and I think quite rightly. The Government undertook to examine carefully the report on the quota—I am now dealing with the Dominion quota—and in the course of their consideration of this subject to consult with the Governments of the wheat-growing Dominions and of India. Since the date of the Conference the whole question both of the home and Dominion wheat Quotas has been explored in detail, but no further consultation has so far taken place with the Governments of the wheat-growing Dominions and of India.

India and the other wheat-growing Dominions are not excluded in any sense. The area from which the wheat is to come would be any of the Dominions or India, and Canada and Australia are only specially interested. The claims of the whole Empire, so far as wheat production is concerned, would be considered, and the quota when ascertained and fixed would not be applicable to any particular country but to the whole of the Empire, from whatever part the particular wheat may happen to come. It may be added that the undertaking given at the time of the Conference has not been interpreted as necessarily involving the Government in any consultation with the Dominions prior to the resumption of the Conference. That is to say that, although I have no doubt negotiations have taken place, since the Conference there has been no resumption of the questions which were then left unanswered; they were left over until the reassembly of the Conference at Ottawa. I am afraid I shall not satisfy my noble friend Lord Arnold, but I am only too pleased to have heard his argument, and I can assure him it will be thoroughly considered. But, so far as others of your Lordships are concerned, I hope you will consider that a proper business procedure has been adopted in what is a very important step in our Imperial traditions, and I see no reason myself why the matter should not be carried out on the quantity basis, leaving the price unaffected. I am sure for myself that any proposal for a duty on food in this country, particularly of wheat, is one to which I should be absolutely opposed.

I think that is all I need say about a Dominion quota. The other matter is an important matter, but one which depends upon other considerations. Is the farming industry as a whole in this country likely to be benefited by the quota, and could the quota be used for the benefit of farming in this country without imposing a burden upon the consumer or the taxpayer? Of course, the answer to the last part of my question is in the negative. It would be no good as regards the farmers of this country to have the quota system, unless as regards the quantity in the quota they had a guaranteed price. I think, at any rate from my experience of farmers for a good many years now, that the noble Lord was right when he said that the guaranteed price, taking the price of wheat at 25s., which is exceptionally low, would have to be made up to something like 50s. In my own country on the Chiltern Hills all the farmers and people interested had meetings some years ago when wheat was at a had price, as it was just before the end of the last century, in order to ascertain under what conditions wheat could be grown at a profit. At that time it was thought that the minimum at which it could possibly be grown on an economic basis at a profit was 40s. a quarter, but for various reasons that would be represented by about 50s. a quarter at the present time.

The difficulty I feel about the quota is two-fold. First of all I have always held that the real treatment for the farming industry in this country is to encourage an adaptation to new economic conditions. That has been done very largely in the country where I know the actual conditions of the farmer, and it has been done by the substitution of what is known as the family farm for the old-fashioned farm of 300 acres. That is the old-fashioned farm in my district and to-day a farm of that size I admit is unlettable. If you can get it cultivated for nothing you are pretty fortunate; whereas as regards the small farms, of which I have a fair number, for the last one I had vacant I had sixty applicants because the demand was for a farm of that character. And those farmers are very much influenced by what Lord Arnold told us. Their interest is not in the sale price of wheat, of which they grow very little, but much more in the purchase price of wheat because they want it very largely for poultry, and also for other feeding purposes. I recollect reading in Lloyd's Monthly Magazine last autumn a paper on farming by a great expert, Mr. Dampier-Whetham, senior fellow of Trinity College, who is head of the Research Department at Cambridge. He said, I think quite rightly, that although the quota is beneficial in certain districts it does not go to the root of the general farming depression in this country, and even if it were adopted we should have to look elsewhere and outside to get any real remedy for the present state of things.

Although the ordinary farm is a great difficulty in the district which I know, the smaller farm is doing well and is making no complaint. No doubt, the burden falls largely on the landlord, because to construct and maintain buildings for a number of small farms is exceedingly costly. That, I suppose, is the reason why Mr. Orwin has said so decidedly that he thinks some change of tenure is necessary for the general adoption of the small farming principle, because very few landlords can possibly under modern circumstances provide the necessary outlay. For myself, I live on agricultural land, and I sympathise intensely with the condition of farmers at the present time. I do not want them to go astray. I agree with Lord Arnold that it is only a very small proportion of the farming industry that would be assisted by the quota, and if that can be done without putting any duty on our food supply, particularly on wheat, which is the food of the poorest classes, I should not object to it. But I do not know how that can be done. I think on the whole that there is a great deal in the considerations put forward by my noble friend Lord Arnold, but time will show—it has not been considered in full detail—whether a movement in that direction can be entered upon under the limitations which I have mentioned.

Those who have read what the President of the Board of Trade said the other day in his broadcast speech, which was afterwards transcribed in The Times, will know his strong view and the view of the Chancellor of the Exchequer that all tariffs have been found to lead to greater unemployment and greater difficulty, and that, although we have suffered much in this country, we, a free trade country, have suffered much less than the countries which have tariffs, and that unemployment is 25 per cent worse in Germany, while the United States have 6,000,000 or more unemployed. All evidence is to the same effect. So far from a tariff in any form being a remedy, it is always an exaggeration of the evils with which undoubtedly many countries are afflicted at the present moment.

THE MARQUESS OF LONDONDERRY

My Lords, I am sure you have listened to the speech which has just been delivered by the Leader of the House with great interest, and I think the first part, in which he showed conclusively that the Government have not shut out the idea of a quota in connection with the Dominions, is something which will give your Lordships on this side of the House a great deal of satisfaction. I am sure that if that policy can be developed by the present Government the noble and learned Lord will not find my noble friends and myself backward in supporting him in that policy. With reference to the second portion of his speech, it is always interesting to hear the noble and learned Lord talk about agriculture. But I am not sure that I find myself in full agreement with several of the things he said, although I have not taken so entirely gloomy a view of the situation as he has done.

The initiation of this discussion was undertaken by the noble Lord, Lord Arnold, who was kind enough to pay some compliments to me for which I thank him very much indeed. He certainly paid me the highest compliment of all in entirely ignoring the Leader of the House and looking upon me as the Leader who should respond to the Question he had placed on the Paper. I do not know whether the noble Lord was singing a dirge or tolling the death-knell of the present Government, or whether his speech represented coming events casting their shadows before and that, prior to undertaking an Election campaign, he would like to hear a member of your Lordships' House who sits on a Front Bench and is, perhaps, not so experienced as a great many people, committing himself so as to provide the noble Lord with material for telling the masses in different parts of the country that their food will cost them more. I am perhaps too wary an old electioneering bird to be led into laying down policies at this moment, but I can assure the noble Lord that when the people of this country hand over to us the keys of the medicine chest we shall be very pleased to dispense the medicine. Until that time comes I hardly think your Lordships would expect me to go fully into all those details which the noble Lord presented to the House this afternoon.

The right rev. Prelate also gave me the proud position of Leader of this House and addressed a question to me. I am sorry to see that he is not now in his place. He was, I am afraid, appalled at the difficulties put forward by the noble Lord, Lord Arnold, and asked me definitely whether I was in the same position with regard to those difficulties. I can assure him that, just as life bristles with difficulties, as the noble Lord has told us, I am inclined to think that in all these problems which require solution we shall have difficulties which we shall be compelled to overcome. But while there are difficulties in the pathway of any policy which is put forward, still I am not at this moment thinking that they are insuperable. The noble Lord who raised the question, as I have said, addressed his interrogations to me and I assure him that I am not proposing either to answer his speech in detail or to lay down any definite policy at this moment. Mr. Lloyd George, who is a warm supporter of noble Lords opposite, has told us that the people of this country have returned this Government for the normal period of five years; so I presume the idea is that they will be in office for a considerable time yet. I can assure him that we shall not be wasting one moment of that time in developing a policy that we shall be prepared to put before the people of this country when they call upon us to do so.

The noble Lord, Lord Arnold, I say it with regret, is an inveterate Cobdenite. I think that is the best description I can give of him. He believes in the old school theories of cheapness in this country. I can assure him that I should be only too glad to go with him in many of his principles, unless I saw growing up in this country a great band of unemployed for the alleviation of whose position the present Government has no solution whatsoever. The noble Lord inveighed against tariffs. I am sure that the world would be an infinitely better place if there were no tariffs. We were told by Mr. Cobden that tariffs would disappear if we maintained our policy of Free Trade; but instead of that I say regretfully that tariffs have increased and, as far as Mr. Cobden's prophecies are concerned, we find ourselves in a very difficult position at the moment. Therefore, it seems to roe to amount to this—that everybody who supports the Cobdenite theory is prepared to see the countryside devastated and unemployment increasing in this country without taking any steps to alleviate the difficulties with which we are faced.

I think your Lordships will agree with me that it is an interesting fact that we have heard nothing in this debate from the other side of the House about the question of unemployment. I should have thought at this moment that was the problem which cried aloud for solution. Agriculture in this country is a problem which confronts whatever Government is in power, and I should have thought we were all agreed that it is an absolute necessity for this country that we should maintain an agricultural population. We know quite well that, unless we are prepared to give the agricultural population a certain measure of assistance, it will rapidly decrease and we shall find the whole countryside denuded. Every factor in the past has contributed to that. The great industry with which I have been associated has certainly drawn from the countryside in the vicinity of the mines men who were formerly employed in agriculture. And we see that going on all round. Therefore I think that most people have arrived at the conclusion that something must be done to support agriculture in this country.

A great many theories have been put forward. The Government have not been backward in putting forward theories. They recently introduced a Bill with which my noble friends behind me did not feel altogether in agreement. It is not for me to go into the details of that Bill at present, we have had many opportunities for doing so during the last few weeks, but it entails the expenditure of money in what we thought was not a profitable way of assisting agriculture. We believe that by the system of the quota you will be able to give some measure of assistance to that sorely tried industry. The noble Lord, Lord Arnold, gave us figures and no one is more competent than he is to give us figures. He showed that the quota policy—your Lordships will understand what I mean by that expression—with regard to wheat was a very small portion of the question. Then in another part of his speech he said that rents would be raised and, therefore, the landlord, about whom I believe the noble Lord holds special feelings of antipathy, would profit. These questions have to be considered as a whole, and I feel that when the world is in the depressed condition it finds itself in at the moment it is the duty of everyone of us to devise some means of alleviating or even mitigating the evils and difficulties which confront us.

We have the old time-worn controversy of the capitalist system against Socialism, but I should not be entitled to go into that now. We have been told that if there was a fresh discovery of gold, the depression which exists at the present moment would be lifted. It is the duty of any Government to consider every possible method for the purpose of confronting the situation in which we now find ourselves. One of those great problems, which many of your Lordships can discuss with greater knowledge than I can, is the problem of what, in some quarters, is called over-production, and in other quarters is called under-consumption, and, if may venture to make a prophecy, I would say that the noble Lord is quite right when he said—he expressed it as a fear—that we shall see a great extension of the policy of the quota throughout the world. It strikes me in this way. When there is no difficulty attending production, the question which confronts us is the distribution of, and the manner of allocating, the production to those who require it. I do not know how far we have advanced along that road. It may be that it is only a beginning, but it does seem to me that by a process of what might be called rationalisation we begin with the quota system.

The noble Lord the Leader of the House, as I said in my opening remarks, has not shown that hostility to the quota for the Dominions which I would have anticipated from the remarks that had fallen from the noble Lord, although I know he has placed himself in a position of greater freedom and less responsibility. I agreed with the noble Lord the Leader of the House when he told us there is a distinction between his conception of the quota for this country and the quota for the Dominions. My friends and myself hope to see the quota system established in relation to agriculture in this country, but that in my judgment carries with it a guaranteed price, or it could not in any circumstances be of any benefit to agriculture. But a quota would, I feel, in this country stimulate wheat growing which, after all, is a very important portion of the agriculture of this country; it would establish a certain definite proportion of the food supply in this country—I think the amount is given as about 15 per cent.—and it would employ a large section of the community in arable farming which, at the present time, is in a grave state of difficulty, as the noble and learned Lord himself said. I think we are justified in considering agriculture as a whole and in studying it as closely as we can, and I hope we shall put into operation, whenever we have the opportunity of doing so, the policy of the quota for the agriculture of this country.

But when I address myself to the quota as applied to Imperial policy, I think that the remarks made by the noble Lord the Leader of this House are remarks with which we find ourselves more or less in agreement. We do feel that the quota holds out a measure of assistance to the Dominions. If we can give them an idea of our requirements, of the wheat which they could send into this country, it would be an advantage. None of us in our private lives makes arrangements without estimating what we require, and surely we shall find ourselves in a position of having a far better understanding with the Dominions if we can tell them more or less approximately the amount of wheat we shall require from them. They will then be able to make their arrangements, for they will know definitely where they can place a proportion of their production of wheat. That is an assistance which all of us are glad to give to the Dominions. They, on their side, do offer us preferences, which have a value.

I do feel that the manner in which the representatives of the Dominions were treated at the Conference was one which was hardly in agreement with the feeling of the majority of the people of this country; in fact, I think as a whole the people of this country resented the treatment which was meted out to those representatives of the Dominions. The future of the Empire has got to run on economic lines, and the more we can make arrangements with our Dominions, the more we shall develop that ideal of Empire Free Trade of which we heard a great deal lately. At this moment it is not capable of fruition, but it is the pathway we should follow, doing our utmost to approach as near that ideal as possible. The remainder of the requirements in wheat of this country would be allocated to foreign countries, and I cannot help feeling that a quota would certainly be of advantage—I do not like to use the word weapon—to us in negotiating with foreign countries for an exchange of our goods for theirs.

The noble Lord who raised this question desires to see a lot of international understandings and agreements. He believes in them, as I do myself. I know he is timorous perhaps that if we go too far into these arrangements we shall bring more difficulties upon our shoulders than we should otherwise have to carry, but I think I shall receive the agreement of your Lordships when I say that we have of necessity to magnify the ideas which we have had in the past, and, instead of thinking nationally, we have to think internationally. And when we think internationally, and consider all these arrangements which are being made, and which will have to be made, surely it is necessary for us to consider what we have on our side to bargain with, to use the technical term, though I would sooner put is as what we can offer to other countries in return for what they can send to us.

There is another and an important point in connection with the power which the allocation of quotas gives. It means that we can definitely stop dumping. My noble friend of the Cobdenite school has no fears whatever of dumping, and believes that the more cheap goods which come into this country so much the more will we be able to send out in manufactured articles. But whatever may have been the theories in the old days, and however much we may have believed in the benefit of receiving cheap goods, I think you will agree that there is a, worldwide feeling, which is growing every day, against the idea of goods being produced by labour which does not receive that remuneration which we believe it is only right and proper that every worker in the world should receive. Therefore I think I am right in saying that if we establish the policy of allocating different quotas to our Dominions and to countries abroad, we shall be able to provide ourselves with that protection against the dumping of goods which, after all, none of us can really on principle possibly support.

I do not know that I can usefully say anything more on this subject which we have been discussing this afternoon. I had hoped, when I saw the question of the noble Lord on the Paper, that he would use this opportunity to develop an economic argument on which he has so much knowledge, but I think the noble Lord will forgive me when I say that, though he made us a speech which was very interesting indeed, he made no constructive proposals whatsoever. It is not primarily our duty at this stage—I am sorry it is not our duty—to put forward constructive plans, because that, after all, is the duty of the Government of the day. Still, I had hoped that the noble Lord would have given us some constructive ideas as to how he proposed to overcome the difficulties with which we are confronted at the present moment. I am not sure that the noble Lord on this occasion is not in a position of splendid isolation. He has adopted an attitude with which we on this side certainly do not agree, and I was not able to defect anything in the speech of the noble and learned Lord the Leader of the House to indicate that he was in any great measure of agreement with the noble Lord who sits behind him.

I can only say that I am glad this question has been brought forward. I shall hope that—perhaps at an earlier date than we believe at the present moment—the policy of the quota will come before the House of Commons and that it will be enacted in the best form in which it can be enacted. But if the noble Lord thinks I am going to develop a whole policy at this moment, I can only say that I am old enough to remember the Newcastle programme and the disaster which followed the endeavour of the Liberal Party to lay down exactly what they were going to do before they came into office.

LORD ARNOLD

My Lords, you have been good enough to listen very patiently and attentively to a very long speech which I felt it my duty to make, going into a lot of difficult points of a technical character, and I am happy to think that it is not necessary to speak now for more than two minutes. I should like to thank my noble and learned Leader for his very kind words about my speech and also for saying—twice, I think—that my arguments should have careful consideration. That is what I want. I am satisfied myself that, the more the question is considered, the more crude and unsound it will be found to be. Speaking for myself, I have no complaint to make of the tone of the debate. I ventured to hope, and I think my hope was right, that I was justified in bringing forward this subject.

There is one point I want to touch upon in the speech of the noble and learned Lord the Leader of the House. The noble Marquess also dwelt on the same point. They both said that one advantage of the quota was that it would give the Dominions security for a certain portion—55 per cent.—of our imports. The fallacy about that is that it really gives the Dominions nothing at all, because 55 per cent. of our imports is so very much smaller than the surpluses they have to export. Canada and Australia have surpluses about five times as large as 55 per cent. of our imports, and therefore that security would be of no real advantage to the Dominions except in so far as they could work the quota at certain times in certain ways so that they would get a better price for their wheat than they could without the quota. That is undoubtedly what would happen.

The noble Marquess said that I had addressed a series of questions to him. If he will allow me to say so, that is rather an overstatement. I had thought of putting a lot of questions to him, but as I knew he could not answer them I thought I would spare him and also spare myself the task of framing those questions. That is in no sense derogatory. He could not answer them either now or at any other time. I did put one question to him, and that was to ask him to be good enough to say how his Leader's pledge to support the quota which, as I have said, is likely to lead to an expenditure of £20,000,000 or £30,000,000, could be reconciled with those principles of economy which we are told are the first plank in the Conservative Party's programme. That was the point which I put to him, but, of course, he is an old Parliamentary hand and very skilful. He talked mostly about other things and did not deal with that particular point. Of course, it is impossible to reconcile the two things—nobody can reconcile them—and I take note of the fact that not only were they not reconciled, but no attempt was made to reconcile them. The main argument which I put forward has not, I think, been shaken, despite a very interesting debate. That is my view.

The right rev. Prelate, I think, misunderstood me on one point. He said that I had talked about the quota giving little help to farmers. That was not so. I think it will give a great deal of help to those farmers who are growing wheat if they are going to get twice as much for their produce. My point was that wheat is such a small proportion of our agricultural production—only about 2 per cent.—that it could give very little help to agriculture as a whole. The right rev. Prelate, just as I anticipated, asked: Why not a quota for barley? I Well, that would require about 66 per cent, quota. Is that the suggestion? Already, we see what will happen if the matter is seriously considered. I will not detain the House further now. I am sure the noble Marquess opposite did not really expect me to put forward constructive ideas—I had already spoken, I am afraid, for nearly an hour—but if he will be good enough to listen to me on another occasion I will do my best to satisfy him on that point. I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.

House adjourned at twenty minutes past six o'clock.