HL Deb 10 November 1932 vol 85 cc1191-252

Debate resumed (according to Order) on the Amendment, moved yesterday by Lord Strachie, to the Motion for Second Reading—namely, That the Bill be read a second time this day three months.


My Lords, I hope not to take an undue amount of your time in the discussion of this Bill, because I understand that several noble Lords wish to address the House on the subject. However, there are one or two points which I feel I should like to put before your Lordships for your most earnest consideration. We have heard a great deal from noble Lords opposite about this Bill. It is said to be a bargain, an agreement. I would like to pause for a moment just to investigate what this bargain consists of and what are the advantages which this country may expect to reap from it. In effect certain Ministers went to Ottawa, as your Lordships are well aware, prepared to make certain concessions to our Dominions, and hoping to get certain concessions in the way of trade preferences from the Dominions. I have looked at the various benefits which the Government claim to have secured for this country. I do not want to weary your Lordships by going through the list item by item, nor do I wish noble Lords opposite, and especially my noble and learned friend Lord Hailsham, to think that I make criticisms in any carping spirit, in any desire to discomfit the Government; on the contrary I am only too anxious to see that the trade of this country should be improved—not necessarily trade with foreigners but also trade with the Dominions.

The most important concession that we have made to the Dominions is an agreement to put a tax on food-stuffs that come into this country. I observe that there is a guarantee suggested by the Government to tax dairy produce, wheat, butter, cheese, apples and, shortly, the whole range of the most necessary food-stuffs for the poorer people of this country. Your Lordships will agree with me that that is a large and a serious concession to have to make, and I think we should be in a position to demand large concessions in return. I am not going to indulge in cheap gibes such as were made in another place about bagpipes and comic papers. There are a certain number of serious concessions made. Let us take the Canadian Agreement Schedule E of which we have heard so much. There is one item, aniline dyes, which is qualified by saying that they shall be soluble in water. I challenge any noble Lord opposite—and I should like a reply from the noble and learned Viscount who can speak on behalf of His Majesty's Government upon this—to mention the name of one soluble dye which is soluble in water. It is a farce. They do not exist. Let us go on still dealing with matters concerning the chemical industry in this country. We find perfumery which is not soluble in alcohol. There is no perfumery which is insoluble in alcohol. These are empty bubbles full of air, meaning nothing. We go on finding nickel in the list of preferences which we are to be given in importing stuff to the Dominions. Are your Lordships aware, and are His Majesty's Government aware, that 98 per cent. of the world's output of nickel is manufactured in Canada. What good is it to us to be enabled to send nickel to Canada when we have none?

I do not want to go through the list. I could multiply these instances a hundred times. Let us pass to something different. I will not call this an oversight because I think it can be nothing less than deception of His Majesty's Government. There is the question of gloves. This is a case where, if ever there was a case to be made out, the Protectionists have it here. I find that the import of gloves into Canada has been going up during the last two years. I do not want to bore your Lordships with a great many figures but three or four will perhaps suffice to show my point. The chief exporters of gloves into Canada have been France, Belgium and Italy as well as this country. Between March, 1926, and 1930 the imports of gloves by Canada from these countries are as follows: France's importation into Canada of gloves has increased by 166 per cent.; Belgium's has increased by no less than 1,355 per cent.; and Italy's by 133 per cent. When we come to look at the British imports of gloves into Canada we find that Canada has imported not more gloves but less by 23 per cent. Here is an industry employing a great number of men whose claims surely might have been kept in the forefront by our Delegates at Ottawa.

There we see exactly the case that the so-called Empire Free Traders have been putting to us. We heard a statement from the noble Viscount, Lord Elibank, yesterday in the debate. He interrupted my noble friend Lord Snowden to say that if Lord Snowden would go to Canada he would find any number of Canadians who would sacrifice foreign trade for Dominion trade. What do we find in this case, where Canada has been increasing its imports from foreign countries and decreasing them from this country? We find a duty of 30 per cent. on foreign gloves, and a duty of 22½ per cent. on English gloves. I submit that that is a bargain which can mean nothing whatever. Admittedly, in the Schedule to the Agreement there is one item of gloves mentioned—women's dress gloves of kid, elbow length. I have taken the opinion of one of the largest glove manufacturers in this country, and he says that no pair of women's dress gloves of this kind has ever been made in England or ever will be. It is the most farcical pretence to put things like that into a serious document for the serious consideration of Parliament. I can only describe these as impudent insertions in the list of preferences that Canada has agreed to give us.

I have one other point to which I wish most earnestly to draw the noble and learned Viscount's attention. In his opening speech yesterday he hoped piously—I do not like to admit that it was because he was frightened—no one in your Lordships' House would have the temerity to raise the constitutional point. I have the temerity to raise it. The noble and learned Viscount laughs. I am unwilling to cross swords with him unnecessarily, because I recognise his great forensic power and his skill in argument, but still I have the temerity to raise this point. It is not quite the same point as was raised in another place. I have here a copy of a Standing Order of your Lordships' House, with which you are no doubt a great deal more familiar than I am. Standing Order No. 104 reads: Any agreement intended to be scheduled to any Bill shall contain a clause declaring the same to be made subject to such alterations as Parliament may think fit to make therein; but if the Committee on the Bill make any material alteration in any such agreement it shall be competent to any party thereto to withdraw the same. I will admit freely, in order to stymie the noble Viscount opposite from point- ing out where I am wrong, that that Order applies to Private Bills. How much more important is this matter than any Private Bill? How much more necessary is it that Parliament should preserve this rule in a measure of this importance?

While I am on the question of procedure or constitutional legality or whatever you like to call it, I wish to refer the noble and learned Viscount to a Resolution passed in the House of Commons in 1860. A great deal was heard about 1860 in another place, but this is a different point to which I would call attention. This Resolution was adopted unanimously by the House of Commons. Your Lordships will agree that it is a rare occurrence that the House of Commons should be unanimous about anything. It was a Resolution passed in consequence of the refusal of this Chamber to acquiesce in the repeal of the Paper Duties. The Resolution was: That to guard for the future against an undue exercise of that power"— that is, the power of rejecting Bills of taxation— by the Lords, and to secure to the Commons their rightful control over taxation and supply; that the right of the Commons as to the matter, manner, measure and time may be maintained inviolate… You may say that that would preclude this House from arguing about this Bill. That may be so. But that was a privilege which was taken away from your Lordships' House in 1860, and one that is now without a murmur handed over to a completely and absolutely extraneous body, a Dominion Parliament.

Let me for a moment call your attention to the Articles in the Canadian Agreement. There are two Articles there which may be considered together, Article 3 and Article 9. Article 3 sets forth the undertakings of His Majesty's Government, or the undertakings which they propose to put before Parliament, and Article 9 contains the corresponding undertakings by the Canadian Government. Article 3 finishes by saying that these duties "shall not be reduced except with the consent of His Majesty's Government in Canada." In Article 9 there is no such similar proviso. There is no statement that the Canadians are without the power to reduce their tariffs without the consent of the United Kingdom Government. That seems to me a very inequitable state of affairs. In spite of what the noble and learned Viscount says, we have definitely laid down in this Bill that the House of Commons in Canada must have a say in alterations of preference in this country, but we have no say whatever in what Canada shall do. It is right that we should have no say in the matter, but to take away the inviolable right of the House of Commons to determine the taxation of the people of this country when it has been withdrawn from your Lordships' House, the members of which are at least citizens of the United Kingdom, and to give it to a Dominion Parliament, more than astonishes me. I am horrified by such unconstitutional behaviour on the part of His Majesty's Government.

Another point to which I should like to refer is the question of unemployment. A great part of the debate in the House of Commons on the subject of unemployment was devoted to pious hopes on the part of His Majesty's Government that a considerable reduction of unemployment would result from the passage of this Bill. We can test that fairly easily. I have the figures of unemployment in some of the biggest trades in this country. The four trades which are most cruelly hit by this evil of unemployment are coal-mining, shipbuilding, cotton and the woollen industry. In the coal-mining industry there are close on half a million men unemployed. I would ask for some authoritative statement from the Government as to what Ottawa has done for the coal industry. I think I am safe in saying that it has done virtually nothing. It is true that there is a preference on British anthracite going into Canada, but that is all that is done for the trade which contains something like 30 per cent. of the unemployed in this country.

In the woollen trade there are no fewer than 60,000 men out of work. What do we find is done for that trade? Nothing is done in the case of Australia. In the case of Canada we find over the whole range of woollen cloths there is a reduction on the average of tariffs from 64 per cent. to 54 per cent. It is farcical to suppose that we can send woollen goods into Canada with a tariff of 54 per cent. against us. I submit to noble Lords opposite that the members of His Majesty's Government who went to Ottawa were either duped and fooled by the Canadians or they behaved with the most impudent dishonesty. Noble Lords opposite may laugh, but they cannot contradict these figures. In the shipping industry there are over 100,000 men unemployed, and we were reminded yesterday by one speaker that one-third of our population lives in the ports of this country. Shall we encourage the great shipping industry for which this country has been so long renowned, by putting obstacles in the way of trade which must naturally and certainly decrease the total tonnage of shipping carrying goods to and from our shores?

There is one further point on which I would ask for a specific reply from the noble and learned Viscount opposite. A Tariff Board was set up in this country and a solemn pledge was given unequivocally that no tariff legislation would be imposed in this country without the advice of that Tariff Board. Not a single word of advice has been received from that Tariff Board and not a single word of advice has been asked. I submit that that is a very grave dereliction of duty and an outrageous breaking of a pledge. I am reluctantly forced to the conclusion that the provisions contained in the Ottawa Agreements are empty. They are like a soap bubble, iridescent with every beautiful colour, beautiful to look upon from the outside, but filled with a tenuous vapour, wind, of no account. The benefits we receive will be of no more use than the ineffectual breezes of the doldrums, whereas the handicaps to which we have exposed ourselves in the way of taxes on the poor man's food-stuffs will bring with them a train of disaster compared with which the hurricanes are as nothing. I do not wish to detain your Lordships longer. If the noble and learned Viscount opposite can give me answers on any of the points I have raised, if he can say with truth that any of the items I have mentioned are of any value to the trade of this country, I shall not only regard him with increased respect but I shall feel inclined to vote with him in the Lobby. I am certain he can give no explanation. All we are given is a tale Told by an idiot, full of sound and fury, Signifying nothing.


My Lords, I do not propose to reiterate the very powerful criticisms made by the last speaker. I do not think it would increase the value of this debate to say that I agree entirely with what he said on the subject of unemployment. There is, however, one point I shall have to emphasise, and that is the statement made by the noble and learned Viscount in his speech yesterday on what has been called the constitutional difficulty. As I read his speech he said that the Bill had disposed of that difficulty. In fact, I think he almost said the case which caused the constitutional difficulty had been disposed of already in the House of Commons. I read the debate in the House of Commons as carrying a different meaning from that altogether. I read the debate as admitting the constitutional difficulty, although it was said that it might not be raised or might not become important on some subsequent occasion. I recollect, if I may give an illustration, that when I was at Geneva in 1924, a large number of the countries represented there desired that this country should give a guarantee as regards pre-arranged military or civil assistance in the case of the Council of the League wanting assistance to sustain or promote their authority. I said at once that it was quite impossible, that no English statesman could possibly do that because, so far as our Parliament was concerned, the authority that could or would decide when the time arose would be Parliament itself; and after considerable discussion the matter was dropped. I was asked more than once whether I did not feel I could change my opinion and I said: "Certainly I cannot." And I would not say a word which would imply that a guarantee could be given on a matter of that sort which, as an English student of constitutional questions, I know to be quite impossible.

I want to say a further word. In the first place I assume that the noble and learned Viscount admits that in this country the sovereignty of Parliament is unquestionable and absolute. If he thinks I am putting any principle too far perhaps he will indicate it. I think myself that he would go a little further and, if I use the language of a lawyer on International Law, agree that in International Law the sovereignty of our Parliament is called a legal fact—that is, a fact which no Court and no authority can ever question. Not only is that the very essence of our Constitution; it is, in my opinion, the great factor which has enabled us to carry a Parliamentary system further and with better results than any other country. In almost all Parliamentary systems there is some authority outside Parliament itself. The result has been to discredit Parliamentary government.

There is another fact in relation to this same point. It is that in matters of taxation in this country the supremacy of the House of Commons is unquestionable and unfettered. I will not go back into history, but no one will doubt that. Yet we find, as has been pointed out, in these Ottawa Agreements an authority directly introduced which, if it had any value at all, would undoubtedly interfere with the unfettered supremacy of taxation which the House of Commons now possesses. I am assuming for this purpose that neither the noble and learned Viscount nor anyone who represented our country at Ottawa would give a sham security which they knew could not in fact be maintained. If you were to admit that, you may do anything in any Act of Parliament or any Agreement, but surely in all agreements requiring statutory authority the one principle that ought to be maintained is that the maximum assurance that can be given is only up to the time when Parliament in its supremacy may otherwise determine.

If I am right in that I would ask the noble Viscount to look on Page 55 of the Bill at Article 3 in the Agreement between the United Kingdom and New Zealand. It says: His Majesty's Government in the United Kingdom undertake that the general ad valorem duty of 10 per cent. imposed by Section 1 of the Import Duties Act, 1932, on the foreign goods specified in Schedule C shall not be reduced except with the consent of His Majesty's Government in New Zealand. Now there is an undertaking, and a solemn undertaking, which disentitles the House of Commons to exercise its undoubted and admitted privilege as regards a reduction of taxation without the assent of His Majesty's Government in New Zealand. I do not wish to press this matter unduly, but it does seem to me to be of extraordinary importance. The same provision applies to all the various countries embraced by these Agreements.

Does the noble and learned Viscount think that that fetters the discretion of a subsequent Parliament? If he does not, did he or the representatives of Great Britain make it clear that they were giving an undertaking which it was beyond their power to stick to? I have noticed that the noble and learned Viscount, or some one, has referred to treaties, but treaties stand on a distinct basis. Under our constitutional system treaties do not require the assent of Parliament at all, and the matter is only brought before Parliament when certain clauses are required to alter the law as it exists in our own country. There is no analogy between the case of treaties and what is proposed to be done in this Bill, and it seems to me that it really is holding out a security which we cannot hold out, which our representatives cannot hold out, and that it is only just and fair to make that point perfectly clear to the other parties to these various Agreements.

In regard to another place, may I remind the noble and learned Viscount that the Chairman of Committees ruled perfectly frankly, freely and unquestionably that you could not do the very thing which is purported to be done in each of these Agreements with our Dominions? And, of course, it is wholly out of accord with constitutional practice and, still more, with a constitutional principle which is one of the essential bases of our Parliamentary success in this country and which I hope will never be diminished or disregarded. Parliament has succeeded in this country more than elsewhere because of this very principle. It has been the great fighting point in the past, and now, when it seemed to have been finally established, more than a doubt is thrown upon it by this incorporation of a provision which is wholly inconsistent with it.

I do not wish to discuss to-day the general question of tariffs particularly because there are larger outstanding points which I think require most careful consideration. I see the noble Viscount, Lord Snowden, in the House and, whatever may have been our differences on other matters, I think he and I always agreed on this question between tariffs and Free Trade.




What is the matter? I am not in the least afraid. Let me put this consideration. I think that the history of tariffs has been disastrous, and I think experience of tariffs where they have been imposed tells a story stronger and more complete than any theoretical arguments. There is one point; to which I do not think reference has been made up to the present time, but it is extremely important in my view. I am not one of those who believe in a succession of conferences and committees—one's whole mind is lost in a whirlwind of detail—but a very important Report was issued from the Conference of 1927 which was appointed at Geneva under the Chairmanship of M. Theunis. I have the benefit of knowing M. Theunis, and I have no doubt many in this House share that advantage, and of all men he was the right person to choose as Chairman of a Committee of that kind. He had great industrial experience, particularly in banking. He had been Prime Minister of Belgium during the most critical period of the War, and no man, in general experience, had a greater knowledge of the conditions of world trade at the time when this Report was issued. M. Theunis issued a summary of his Report, and I will quote his actual words, because they seem to me to be of extreme importance. This is his opinion, as stated in the summary: The main obstacles to economic revival have been the hindrances opposed to the free flow of labour, capital and goods. I do not think that any statement could summarise more clearly the objections to what is proposed in the present Bill.

Of course, no one doubts that new conditions and new difficulties did arise at the end of the War. We are not discussing what I may call a self-evident, proposition of that kind. What we have always been concerned with, both as between ourselves and foreign countries, and between ourselves and our Dominions, and in our own internal policy, is how, in spite of the evils which War-time produced, we can bring about in our own time, or within a reasonable time, economic revival. There is no other way in which we can deal with the terrible evil of unemployment. It is a terrible thing in the present day to go through districts or villages which are suffering from the evil of unemploy- ment. Demoralisation, degradation, in the sense of having no hope and no expectation, and a general feeling of pessimism prevail, and pessimism is one of the worst influences which can affect human energy and human enterprise.

The next matter to which I would like to refer—I see he is not present, to-day, but he will not; mind my referring to him, because I entirely agree with him—is what Lord Astor said when speaking on this Bill in this House yesterday. He said that the evil influence of tariffs cannot be disguised under the name of quotas or like expedients. Of course, all these obstacles have the effect to which M. Theunis pointed. All of them prevent the free flow of labour, capital, and goods. All of them are inconsistent with the utilisation of our commercial resources to the utmost extent. All of them are inconsistent with the unity of the world, to which we must look if we are ultimately to bring the terrible conditions after the War under our control.

Then the noble Viscount gave an illustration to which I want to refer shortly—the case of farming. I think it will strike your Lordships—I know it strikes me—that after all this period since the War, and although nostrums have been introduced which we were told were going to assist the industry of agriculture to regain its prosperity, yet—I speak as a farmer of fifty years' experience—the farming industry never stood at a lower level than it stands to-day. I sympathise entirely with those affected by the position, and I want to say a word in a moment about the way of dealing with it. My income is derived, small as it is nowadays, from farming, and for fifty years I have been a farmer. I sympathise wholly and entirely both with the owning interest in this country and also with the condition of the farmers, which is really extremely bad in many cases at the present moment. But the remedies which have been suggested have, never been really in the interests of the industry itself. They have been in other interests, sometimes, no doubt, in the owning interest, but never, in my view (and I have often criticised the fact in this House) have they really been based on what is required for the resuscitation and revival of the farming interest itself.

I say that for this reason. No one who knows the conditions in Lincolnshire and East Anglia can suppose that the trumpery tariff on Canadian imports will have any appreciable influence. The evil is far more deeply rooted than that. As regards Lancashire and Yorkshire, I am glad to say that I know many farmers there who are not dependent upon the value or the price of corn, but they regard these tariffs with great distrust. I met a leading farmer in Yorkshire only a short time ago—an old friend of mine—and I asked him what were the conditions as regards the farming industry in his district. What did he answer? "Not so bad in our case. The home-grown corn goes for poultry and stock, and I and a number of fellow farmers in recent years have been able to purchase imported wheat at such a price that we have made a good profit out of fattening stock and cattle." I asked him what was the price, and he said: "I can get it at 16s. per quarter delivered at my farm." I said that I could understand what he said because I had farmed in recent years for cattle, stock and sheep, rather than for corn, and to get feeding stuff at that price would be of inestimable benefit to many farmers in this country. They did not talk about dumping Soviet corn or questions of that kind. They said: "It is an admirable hard corn which we can import on these easy terms, and it is that fact which has made us fairly prosperous even in these bad times."

Now one word upon another matter, the proposed benefits to farmers. I must say that in my own case—and I think one is entitled to quote one's own case in these matters—where of recent years small farms and family farms have been substituted for larger farms, at a very great expense to the owner—I wish I could have done more, but no individual could possibly afford it—there has been in cases of that kind little or no hardship up to the present moment. A few months ago—I have quoted this once before—when by chance I had one of these small family farms in the market, I had more than sixty applicants for the tenancy; and that is where we come to the real pinch as regards farming. I agree largely in this case, although I have not always been in agreement with him, with what was said by Mr. Lloyd George: I believe that if you had a really extensive system of allotments, which ought to be open to everybody who desires them, and if you had a sufficiently large number of small farms cultivated by families, a great advance would be made not only in the prosperity of our farming industry but also in decreasing the terrible number of unemployed in the country at the present time.

Of course no one remedy is sufficient; no one suggests that for a moment, but that is one of the remedies which, according to my experience, ought to be applied, and which, if applied, would solve to a great extent the problems of the agricultural industry on the one hand and agricultural unemployment upon the other. It is true that in these small family farms the work is done by the family, but I can quote only illustrations which I know of, and I will vouch for this, that the small farms which I know produce a larger output than any of the larger farms in my district, and that the number of people employed is considerably greater, although, of course, they are not ordinary labourers, but are generally the sons or relations of the farmer himself.

I must not detain your Lordships too long, but I want to say one more word as regards the pretext of assisting the farming industry whereas, in fact, nothing is done. I will take the case of the Derating Act. It happened that some thirty years ago now I served for over five years on a Royal Commission which dealt with rates and taxes. That Royal Commission laid down, and it has never been questioned since, that rates are charges on property, whereas taxes may be, and often are, charges on industry, and that the owner should pay because he has received the benefit, whereas of course in the case of taxes you distribute the burden in proportion to the ability to pay. Why is it that the Derating Act, which has thrown a sum of more or less £30,000,000 upon the taxpayers of this country instead of on the local rates, has done no good to the farming industry? Why are the complaints quite as alive now as they were before? The reason is that in truth rates never affected the industry, they affected only the property, and it was the property owner who got the benefit, and the industrialist received none at all. When I say "None at all," I do not want to exaggerate. Until an ultimate adjustment has been made that would not be absolutely true, but as re- gards ultimate conditions, no one can gainsay the truth of what I have said.

I would say only one more word on this subject. I wonder sometimes whether we understand what we are doing when we put a tax, however small it may appear, on the food of this country. How can you say that you ought to make concessions to people in our Dominions who, as a rule, are much better off, when the concessions have really got to be paid for by the working and poorer classes of this country? That is what we have to consider and what we have to face; and it will have to be faced not only as regards corn, but as regards the proposal to place somewhat high taxes on meat products. Some time ago, at a time of agricultural depression, I made a close inquiry in my own district, and I found that the quantity of bread eaten was larger, because the people were too poor to have any other form of food. I found, further, that even a very small addition in price—and if you once start this there is no stopping it—created terrible troubles and terrible evils, loss of health and loss of vigour, to the poorer agricultural classes who were living where I was living at that time. This is really, to my mind, the true criticism of any taxation on food products. It is all very well to tax a luxury, which, as is sometimes said, a man at his option may purchase or not, but the poor man must live; the poor man must purchase food products. It is a sad matter for him, when he is already living in a cottage where starvation is almost entering the door, that any charge whatever should be placed on him in favour of people who may or may not be of our own kin, but who do not live in, and have not to deal with the difficulties of, this country.

Just look at one other illustration. I was asking the other day what was the value of Baltic timber in the construction of cottages. I suppose most people in the country have given a great deal of attention to the houses of the working people. I was told—I do not mean to say that it is always the same—that at the present time, by getting our Baltic timber from Russia, each house that we are building for the labouring people costs £17 less. I have no quarrel with the lumbermen of Canada; I wish them every prosperity; I have been amongst them a good deal, and very fine fellows they are; but what do your Lordships say to giving them a special tariff and a special preference, putting money into their pockets at the expense of higher rentals for the poor people of this country because the houses built for them cannot be built at such a cheap price? It is really a terrible question; I do not care where you turn or where you look at it. We hope to God that a revival may come soon, but at the present time the condition of the poorer classes in this country is terrible. They live in enforced idleness; I would rather be a slave than have to live under conditions of enforced idleness. No individual working man has the slightest control over the possibility of getting work for himself. I have no doubt that this Bill will pass. I do not think that I have been too Cassandra-like, too much a prophet of evil, in the views I have put before your Lordships; but, whatever happens, I for one, and I believe all patriotic people in this country, will strive to make the best of a bad bargain, however bad we may think at will be, and strain every nerve to do our part, however small, in diminishing the terrible evil of unemployment.


My Lords, we have listened to two very interesting and varied speeches from noble Lords opposite. I do not think I need say very much about the first speech, because the noble Lord who spoke seems to have a most deplorably low opinion of the ability of those Ministers who went out to Ottawa, and, as they were drawn from all Parties, it seems to be a reflection on this House and the other House that we can only produce men far below the average ability to represent all the Parties in this country. There is one observation, too, that I would like to make about the speech of the noble Lord, Lord Parmoor. I was as much interested in his auto-biographical observations as by almost anything in his speech. He told us that he had always agreed with Lord Snowden. It is unfortunate that my memory is rather long, and I wonder whether Lord Snowden has always agreed with Lord Parmoor. I rather doubt it. But it is not for me to express an opinion about Lord Snowden's view, because no doubt he will deal very faithfully with Lord Parmoor at a later stage.

I approach this great problem from the general attitude that I would rather treat my friends with greater intimacy than I would the great hosts of the indifferent world; and if this feeling, this strong sentiment, can be translated into the economic sphere I should rejoice exceedingly. I had some small responsibility for the Imperial Conference of 1926, when so great a change was made in the constitutional ties between ourselves and the Dominions; they were described as "dead wood," and possibly they were a survival from a more ancient time. But one felt, when putting an end to those relations, that one could not help asking what were to be the relations that were going to take their place. I am not one of those who depreciate—indeed, I attach great importance to—the ties that depend on language, on relationship, on common history, and on common blood. But when one looks round the great range of the British Empire one realises that many of those ties do not apply to some of the great constituent elements of that Empire.

May I refer to a conversation I had a little while ago with a very eminent Brahmin at Benares? We were discussing the relations of this country and India, and on some observation that I made he said: "That was a very British sentiment which you have just expressed"; and I felt in a flash, as it were, the enormous gulf that divided my feelings, as an Englishman brought up with British traditions, from this eminent man with a different history, tradition, religion and philosophy behind him. I felt then that if we are going to make the Empire a real thing, and if India is really to become, as I hope it will, one great part of the British Empire (or, if you prefer the term, the British Commonwealth of Nations)—I felt that, with those great differences, it was essential that at least some other ties should be forged, in addition, if you like, to the more spiritual ties, which would have the strong uniting effect of material interest, which, after all, plays so great a part in our life and in civilisation. I hope nobody in this debate will ever again speak about "sordid ties." The "sordid ties of trade"—that is an old phrase which descends, I think, from those aristocratic Whigs, with large landed properties, who thought it beneath their dignity to stain their hands in trade.

After all, there is nothing like trade to bring people together, to make them understand each other, to establish those thousand-and-one contacts which are so essential if we are to have a united Empire. I put those contacts even higher than the actual material benefit that comes from the exchange of goods, but I do think that this opportunity came at a most significant moment, and I think it would have been very dangerous if there had been any delay because, after all, not only the Dominions but ourselves have to be looking about for fresh outlets for our trade. The noble Viscount, Lord Snowden, in his very frank speech, if I may call it so, said: "Oh, but these people threatened that if you were not going to enter into trade agreements with them, they would go and enter into trade agreements with the rest of the world." Why use the word "threaten"? Were not they making a simple, commonplace statement that it was necessary for them to expand their trade, and that, while they would much rather enter into these trade relations with ourselves and with the other Dominions, yet the terrible compelling force of circumstance and necessity, the needs of their own people, would force them to go to the outer world and see what they could gain in the markets of the foreigner? I am therefore very much inclined to an arrangement of the kind, both on principle and because of the larger question of Imperial unity.

But before I say a word on some of the aspects of these Agreements, I want to make at the outset one criticism on the Agreements themselves. We are asked to approve of the Agreements as a whole; we cannot alter them and, of course, they are made for a certain period. The noble and learned Viscount has told us that the work at Ottawa only represented a part of the work that was done; there was a mass of preparation for it. I do not doubt it, but, nevertheless, at the same time a lot of new points must necessarily be brought up, and I do not suppose we knew the case of the other side until they were assembled at Ottawa. And, while I recognise the enormous value of the work that has been done, yet, as the noble and learned Viscount frankly admitted, it is not a flawless scheme. May I say very respectfully to those who negotiated it that there are undoubtedly some points—small, if you like, in comparison with the great realm that was dealt with—which I think might not have been entered into if those persons had been fully conversant with all the minor details of some of the business? Therefore we must take the Agreement as a whole, and I am ready to accept it as a whole.

I was going, if I may, to make this suggestion to the Government. It is very important, I think, that any of the frayed ends which there must be in Agreements ranging so wide, should be taken up at once as soon as these Agreements are settled, and by mutual arrangement. I am sure it is by mutual arrangement that these comparatively small matters can be settled. We have been told, I think rather vigorously in certain quarters, that these Agreements have been made for five years. That rather reinforces my argument. I entirely accept the position that if you are to make any trade agreements of this kind they must last for a certain time. That is, I think, generally admitted, and that really is the weak point of Mr. Mackenzie King's statement made yesterday that if he was in office he would give a 50 per cent. preference without any reciprocal bargain. I am sure that was a perfectly sincere statement. We most of us recall cases in this country where Leaders of Oppositions have made promises which they found themselves from various circumstances unable to carry out quite fully when they became Leaders of Governments. But the point about that is, that these arrangements are a matter of reciprocal agreement, and that is their advantage. They cannot be broken for five years, whereas an arrangement which is not reciprocal can be withdrawn. There is no consideration, as it were, for it, and in that case you do not get the same permanent security over a certain time for the business men who want to take advantage of it.

I do not want for more than a moment to allude to what has been called the constitutional argument. On that I would merely point out the various ways in which that argument has been treated by different speakers. I heard the noble Marquess, Lord Lothian, allude to it yesterday. He alluded to it with great skill. He rather disclaimed any constitutional authority; he handed that over to the noble and learned Viscount on this Bench, but I do not think it was modesty so much as caution that prevented him from dealing with it. He felt that the constitutional argument was an extremely fragile and delicate post on which he was going to lean the whole of his case. I congratulate him on his caution. The noble Lord, Lord Parmoor, did allude to it. I suppose there is a constitutional incapacity in myself to understand certain things. We all have our blind spots. I find it extremely difficult even to understand the argument itself. And the first thing before you reply to an argument is to understand it. I feel myself in some difficulty in doing so.

I happen to have before me at the moment—a friend has presented me with it—the Treaty of 1860, the famous Cobden Treaty. I am not going to dwell upon it because I have other things to say. I know it is an unpleasant bomb, and I only say that I have it here in case anybody challenges it. I am talking, I hope, constitutional common sense when I ask why one country or Parliament cannot make an agreement with another that lasts, two, three, four, or five years. I am entirely incapable of understanding why not. I thought Parliament was omnipotent. I have been brought up by the best constitutional authorities who regarded Parliament as omnipotent, but if you say that it cannot make an agreement for five years, then Parliament is impotent and not omnipotent. That, I think, is a sufficient answer to so absurd a contention. As for the suggestion that we are in the hands of another Parliament and cannot alter a duty until a Government in New Zealand or Canada agrees, why, of course, if you make a bargain with somebody you keep it. That is not only common sense but also, if I may say so, common honesty.

I want to examine for a moment the very important point that was raised by the noble Viscount, Lord Snowden, and others, which I confess interested me a good deal, as to how far our freedom of making agreements with other countries is affected or diminished by these Agreements at Ottawa. I certainly agree with the position that we still do a large amount of trade with other countries, and I do not want to sacrifice that trade. I want to have the best of both worlds. May I then examine that position for a moment? We are bound, to some extent, because we have given a preference to the Dominions, and, obviously, we are not going to make an agreement with somebody else which takes away the value of that preference. That again is common honesty.

But what on earth do we lose, not theoretically but practically, by such an arrangement? We have been told that a good many of these foreign countries are now coming to us and saying: "We will enter into a bargain with you; let us into your market; give us an advantage." The noble Viscount, Lord Snowden, in his speech said: "Why, they were doing that before, and we," he added, "were going to them." Well, we were going to them very frequently. I have followed these things very closely, and I would like some subsequent speaker on the other side to tell us what great advantages did we get from going to these people? As for their coming to us, did they come to us? Was there a queue of Foreign Ministers at Downing Street coming to interview the Prime Minister? Did one Ambassador after another come to the Foreign Office and say: "Let us make a trade bargain with you"? Of course they did not, because they had everything else beforehand, and why should they have come here? I have the greatest respect for Lord Snowden's accuracy, but I should be very glad if at some time he would supply the names of all these gentlemen who were seeking these bargains so keenly from us (shall we say?) during the last five years.

I think it is no paradox to say that the more we enter into agreements of this kind with the Empire the keener are foreign nations to enter into them with us, and if we sacrifice some part of our liberty in order to make these Agreements with the Dominions and India, curiously enough it makes these other countries far keener to push their foot inside the door before it is closed in order that they may get some advantage for themselves. I believe that those who think that the door is closed on foreign agreements have really not properly envisaged, though they may know the figures and numbers, the vast variety and intricacy of British trade, the vast number of matters and subjects upon which we can deal, if we choose, with foreign countries quite outside any arrangements that we have made with the Dominions.

Then the noble Viscount, I think, went on to say—and this is a point which others have dealt with also—"what is the advantage of it? It is only a transference of trade and not an increase of trade." Well if it is not a decrease of trade that is something as an admission, because some speakers have told us that this arrangement is simply making our trade shrink; but even if it were so I should support it, because after all, when exchanges are made between parts of the Empire—and trade of course is useful to both sides—then surely we in the Empire get the advantage from both sides of the exchange. Not only that, but it is, I believe, literally true to say, and some on the other side will admit it, that trade breeds trade, and that if trade breeds trade and if purchasing power breeds purchasing power, our power in this country and the Dominions will be vastly enhanced by the extra purchasing powers they will obtain by trade agreements which help trade in both countries.

I should like to make one observation before I go further, by way of criticism of the statement on financial questions at Ottawa. Frankly I was a little disappointed with this statement. I thought we should have had perhaps a little more guidance as to what we should do. It is full of the most admirable financial maxims. It is an absolutely Baconian compendium of all that should be said and done in matters of finance, but I should have preferred that it left the general and dealt a little more with the particular. For instance it says that you must have .… an adjustment of the factors political, economic, financial and monetary, which have caused the breakdown of the gold standard in many countries.… I think that would be an extremely admirable thing to have, but I should like to have a little more forcible direction. Then there is another statement: The evil of falling prices must be attacked by Government and individual action in all its causes, whether political, economic, financial, or monetary. That is a very large order indeed, and I rather regret that the conclusion seems to be that all these questions, vast and intricate as they are, should be postponed and referred to the World Conference on the subject. I wish I had more confidence in World Conferences than I have. I am rather afraid that these subjects may cause resolutions to be passed at the World Conference, but that nothing very definite will be done.

I think it is a pity, that we could not have given all the countries of the Empire some guidance in regard to fixing our exchanges or establishing some definite parity between them, so that we could have given a lead to the rest of the world in the Economic Conference, showing in that matter the solidarity of the British Empire. Perhaps the noble and learned Viscount will be good enough when he replies to tell us what is being done in this matter. I need hardly labour the importance of it. It is quite obvious that these preferences may be greatly affected by any shifting in the relative value of the exchanges of the different countries.

Now may I be allowed to pass to another matter—your Lordships will see the sequence of my observations—and deal with the Agreement with India and the Indian Report? I want to call special attention to the Report made by the Indian Delegation to the Indian Government. It is a very remarkable document. It is one of the most business-like and careful documents I have ever read. To those who are interested in the political development of India it is one of the best auguries I have seen of the capacity of Indians for managing their affairs. It has not a touch of sentiment about it. It does not refer to Cobden or other irrelevant personages of that kind. It is argued on purely business lines, and if you suggest that Indians are too much occupied in reflection or in philosophic studies, I can assure your Lordships that there is not one touch of mysticism throughout the whole of the document. It is very remarkable as showing how India was led up to its attitude at the Conference. It says first of all: "In previous Conferences we were not interested in this question of preference. We got a free market in England for ourselves. We did, it is true, give certain preferences to British trade. We gave preferences on cotton piece goods and on steel. But," they go on to say, "these preferences reduced the Customs Duties, but reduced them solely in the interests of India, because they were quite enough to deal with the Indian industries." Then they say: "But when the National Government came into existence the situation was wholly changed. It was not then a question of what we might gain, but it was a question of what we might lose."

Then they refer to the history of the Import Duties and to the fact that it was extremely important for India to have free entry and not to come under the ban (shall I say?) of these Import Duties. They make two very important observations. They say: "We should be very much injured in competition with the Colonies of the Empire who produce very much the same class of materials if they got a preference in the British market and we did not." They say further, with admirable common sense: "We cannot expect Great Britain to give us preferences for nothing when she is entering on a system of reciprocal preferences with all the other countries of the Empire. We cannot claim from her that special treatment." I think that is one of the most important and significant documents I have read for a long time. It really does show something which has been denied so often—that a certain amount of preference does lead to freer trade.

Now I should like to make one or two references to speches made yesterday. I listened with great interest to the speech of the noble Marquess, Lord Lothian. I do not think he has been many years in practical politics, and so he has not yet attained the art of being ambiguous in the statements that he makes. He was frank even to bluntness, because he told us—and I was very much struck by the observation—that these Free Trade doctrines had the solidity (that is not the word he used) of mathematical laws. It was a very interesting observation, because we all know that there is nothing more abstract than mathematical laws and nothing more difficult to apply to the ordinary affairs of life. If you are going to base your economic policy on abstractions you will get into great difficulties when you come to deal with practical matters. Any system of that kind applied to anything so fluid or to anything so rapidly changing and swiftly altering as trade is liable, I think, to land you in very serious difficulties indeed. But I entirely agree with one observation, and that is that there are too many tariffs in the world and that some of these tariffs are extremely badly arranged.

I agree that there are a good many other things outside the Ottawa Agreements with which the Government will have to deal—Debts, monetary arrangements and so on—but I am dealing here with the Ottawa Agreements and with the Ottawa Agreements alone. We have to look not only to present facts but to the tendencies of the future; not only to things as they are, but to the way in which things are moving. There is no doubt at all that many countries—foreign countries and the Dominions themselves—have moved very far in the direction of economic nationalism. The noble Marquess told us—it seemed to me rather begging the question; I think he relied on the noble Viscount, Lord Snowden, for it—that the recent Conference failed because there was too much economic nationalism; that, in fact, they were all Protectionists sitting round the table and therefore naturally did not make much progress towards lowering tariffs. If that were true, and if these countries were as nationalist as the noble Marquess makes out, then I think the Conference was a most amazing success for our representatives, and I begin to think that they were far too modest in their claims of success. I am ready to cut the finest laurels to crown them if I am told that they got all these results and yet had to meet a solid body of economic nationalists determined to make no concession whatever. You may object, if you like, to some portion or other of the Agreements, but there is no doubt, if that was the tendency of their policy, that it has been altered at Ottawa and that they moved from this so-called rigid economic nationalism to something more nearly approaching a system of complementary trade—a movement, in fact, from national to Commonwealth economics, the importance of which I think it is hardly possible to exaggerate.

I pass over many of those points already made by the noble and learned Viscount, Lord Hailsham, about permitting fair competition, efficiency, reservations if you like concerning industries not properly established, and matters of that sort. Of course people will be inclined to ask: Are these things going to work out as you think? But the most vigorous, uncompromising and hostile observations have undoubtedly come from the noble Viscount, Lord Snowden. I am rather sorry that some of those observa- tions were made, especially about distinguished persons in the Dominions, because, first, I think that they were quite unnecessary for his argument and, secondly, because I see little use in questioning people's motives when you do not even know the motives of those who are close to you on the same Bench. I think the noble Viscount said that out of 1,500 items there were only 217 on which we got a preference, and, of course, he condemned the whole business root and branch. Being a student of figures I am curious to know how many of these items we should have had to have a preference on in order to obtain the agreement of Lord Snowden. The figure of 217 does not seem to me a very contemptible one, especially when you find that in regard to many they are matters of the greatest importance dealing with great trades in this country. This particular figure, however, seems to have struck the noble Viscount with horror.

In regard to the dumping business I think the noble Viscount was guilty, I will not say of inaccuracy, but of omission. I am very sorry that that dumping duty could not have been done away with altogether, but I see that in Article 17 of the Agreement with Caanda they say they undertake to give sympathetic consideration to the reduction and ultimate abolition of the duty. I accept that statement at face value and I say that if they undertake to give sympathetic consideration I believe they will do so, and we may look for the most fruitful results. But the noble Viscount was speaking of this duty as being imposed on our goods and not upon American goods. He did not say so, but I think the suggestion was that it was specially imposed upon us and not upon America. Of course the reason, right or wrong, was that our currency was depreciated in terms of Canadian dollars whereas American dollars were not. It was the natural business arrangement.

Then he told us, I think, that one provision was directed solely against Russia, and that after all any country might by its greater efficiency dump goods into this country and we should have the opportunity of stopping those goods if we wanted to. I think that the noble Viscount, though an experienced debater, made the mistake of assuming that a provision was to be administered in the most foolish way possible. We are always entitled to say that reasonable administration must be presumed. But that kind of dumping is not really dumping. It is not the efficiency that produces goods at a lower price, but the selling of those goods often at a much lower price in the country to which you export than the price in the country in which they are made. In those points I think the noble Viscount did not do full justice to the Agreement.

But what I do complain of is this. Why are you going to apply systems of criticism so meticulous and so hostile to Agreements which you make with the Dominions or the Colonies? If any noble Lord on the Government side of the House were to stand up and apply the same criticism in the case of a foreign agreement and make the same observations about any foreigner, the noble Viscount would be the first to get up and, in a magnificent wave of righteous indignation, rebuke us for trying to make ill blood between ourselves and foreign countries. If anybody on these Benches were to dare to get up and cast the faintest reflection on the unsullied integrity of Russia the whole of those on the Labour Benches, those crowded Benches, would fly up to the ceiling in a fury. What is the inference to be drawn from all this? Well, if these people are so dishonest and are not going to carry out their pledges there is only one thing to be done, and that is to announce to the world that we shall enter into no more arrangements with our Dominions; that we are not going to go through the farce of having more Conferences at Ottawa or elsewhere; that the reason is that our fellow-countrymen translated across the seas into New Zealand or Australia or Canada have lost the old characteristics they had in this country, and have left out those virtues of honesty, fair dealing and common sense which we still arrogate to ourselves; and that we shall not sit any more at the Council table with them because in the whole Empire the only honest men are to be found in this country!

One word more. I do not think, as has been suggested, that our only business is to try to make full Free Trade arrangements with the Dominions. I do not think that is possible at this stage. What I believe our Delegation aimed at, and it is a reasonable aim, is a system of complementary trade—that is to say, that while these different countries do manufacture things they consider suitable, it will be found in the working of the Agreements that there are many things which this or another country can manufacture and supply to the Dominions far better than they can do it themselves. This sems to me a new application of the old Free Trade doctrine, only that, instead of what each country manufactures being left to the hazard of chance, it would be the result of careful arrangement, or bargaining if you like. It would be a conscious effort instead of an admission of the blind forces driving economics where you will. It is because I believe that that is the aim, and because I believe that that aim has been at any rate partially fulfilled, and because I believe we have given that impetus to a great system leading to far greater successes than at Ottawa, that I am confident your Lordships will not only endorse but will welcome this measure.


My Lords, if brevity, as a very great English man of letters has said, is the soul of wit, it should also be the soul of a speech made at this very late hour of the discussion on our Motion. I shall therefore not detain you long. I am only encouraged to intervene because I believe that there are certain things that have not yet been mentioned by any of the speakers during the last two days, and because I think, also, that there are some things which have been mentioned but yet are so vital and so important as to be able to bear repetition. I cannot reciprocate the sentiment of the noble Earl who has just spoken, that we should treat our enemies, or those to whom we are indifferent, less well than we treat our friends. It is far from my desire, or the desire of any unprejudiced person, to depreciate or belittle the admirable character of the bonds of language, race, and historical tradition, which draw together the English-speaking peoples in the different parts of the globe, but this should not lead us to neglect the equal rights of other peoples, of other nations, and of other races. If Imperialism is the neglect of the equal rights of all foreign peoples and of all foreign races, then the natural and unprejudiced outlook is one that does justice to the merits and virtues of different races and of different peoples, and that acknowledges those merits and those virtues, as it does homage to the merits and virtues possessed by those who are akin to the individual in nationality and in speech.

There is one very striking and I think very significant feature of the Bill that you have been discussing for the last two days—namely, that it is essentially an economic document, that it deals with economic issues and not with any question of domestic policy or of relations between ourselves and foreign Governments; and it is because it is such a purely economic document that it should be discussed and treated from the point of view of political economy. It is obvious enough that only those who have studied the economic structure of society can tell what the effects of trade agreements, of Government interferences in industry or commerce will be, so that we should apply, and I think I may say that on the whole we have applied, an economic criterion and standard in weighing up and balancing the merits or defects of the Agreements that have come before us for our consideration. Yet, my Lords, I think that you will all have detected at one time or another a certain tendency to grind the Party axe, a certain tendency to introduce considerations of politics and Party politics, and to depart from that impartial and scientific attitude which, on the whole, your Lordships' House has so nobly upheld during the whole course of the discussion.

Another matter of comment to any impartial critic would, I think, be that there has been a tendency to over-rate and over-estimate the importance of the Ottawa Agreements in themselves. It would be unreasonable, I think, to maintain that these Agreements represent an important event in our national history, that they foretell a period of prosperity, or, equally, a time of social decay, to expect that they will ever feature prominently in the history books of future generations, or even linger long in the memory of our descendants. The real importance and significance of this measure lies rather in the political policy of which it is the direct and logical expression, and in the various consequences that it is likely to have for this country and for foreign nations in the immediate and remote future. It has often been said, and I think it should be said again, that these Agreements are essentially an endorsement of that revolution in our fiscal policy which was inaugurated a year ago in the change from Free Trade to Protection, and that it rivets still more firmly the fetters of Protection, of tariffs, quotas and so forth, on the people of this country.

A great deal has been made of the fact that in specific instances, in certain cases, duties are actually to be lowered, but what we on this side of the House maintain, and what I think no unprejudiced person will deny, is that, on the whole, if those cases in which duties have been lowered are taken into consideration at the same time as those instances in which duties have been imposed or raised in order to allow our Dominions a legitimate margin of preference, on the balance the general level of tariffs in this country will be raised after the Ottawa Agreements have become operative. The supreme importance of this fact lies in the unanimous opinion held by all instructed persons that barriers to trade, owing to the enormous wastage of capital, labour, and consumer's goods which they create in the different countries of the world, are one of the principal causes—I do not say the only cause, as some noble Lords will maintain, but one of the principal causes—of the present economic depression, and besides, one of the most serious obstacles that lie between us and ultimate recovery.

I should like to endorse an opinion expressed last night by the noble Viscount, Lord Snowden. He said that these Agreements will tie our hands when we take part in the World Economic Conference which will probably be held at Geneva next spring. If these new duties are to be maintained for a period of at least five years, it is obvious enough and clear enough that we shall not be free to reduce our tariffs by mutual agreement with other countries, that the movement for reduction of tariff barriers which has already been begun by Belgium, Holland and Luxemburg in an agreement which represents one of the most hopeful features of the present moment, will be retarded, and that such agreements will be impossible, or at least extremely restricted, for the delegates whom we send to the World Economic Conference. It is quite true that, the primary function of this Conference being to design a concerted monetary policy, its significance is not altogether destroyed by the policy which our Government have pursued in recent months, but the function which it is intended to serve and which is at least second in importance to a concerted monetary policy, is to obtain gradually and by mutual agreement between certain groups of countries a reduction and a lowering of the walls which have sprung up in such huge dimensions ever since the end of the War. It was for this reason that such distinguished economists as Sir Walter Layton and Sir Arthur Salter resigned their posts as delegates to the Preparatory Commission for the World Economic Conference which is now meeting and deliberating at Geneva.

There are, in conclusion, three matters which deeply concern those who are interested in the economic mechanism and economic structure of society. The Schedules which embody the Agreements reached between our Government and the individual Dominion Governments will show your Lordships that the principle of what are known as "compensatory tariffs" has been adopted by our own Government. It stands to reason that the consumer only buys certain goods in preference to others because they are offered him at a lower price, and they are offered him at a lower price because the cost of production in one instance is lower than the cost of production in the other; that is to say, the manufacturer can afford to sell his goods at a lower price. If the differences in the cost, of production arc exactly equalised by tariffs, world trade is not only diminished but ceases completely. Of course I am not supposing that this situation will actually occur, because the world would not be so foolish as to commit suicide; but the tendency is there, and one may, I think, legitimately expect a gradual extension of the vicious principle of compensatory tariffs. In this matter I should like strongly to endorse the opinion expressed last night by the noble Lord, Lord Rhayader.

I will not detain your Lordships any longer, although there are several other matters which I should have liked to mention. I would only summarise my main contention, if I may, by saying that this measure appears, from the economic point of view, to be dangerous, harmful, and useless: dangerous because it increases the level of tariff walls in this country; harmful because it makes our task in reducing these tariff barriers even harder than it was before; and useless because it does nothing actively to help us to recover from the depths of economic depression, because it cannot assist in reducing the numbers of the unemployed, and because it gives no indication that we are to expect from our Government whatever assistance it may be in a position to give towards the alleviation of the suffering, the squalor, the misery and enforced idleness which are the real and human features of the trough of a great trade depression.


My Lords, I feel that we must immediately dissent from a large number of the things which the noble Earl who has just sat down stated. He gave us to understand—and a legitimate theory it is—that all countries and all peoples should be treated equally. I take exception immediately to that statement. When we were a Free Trade country did they turn round and treat us equally? Did they give us any preference when they were raising tariff barriers against everybody? Did they give us specific advantages? It is a most untenable theory. And if, as may be pointed out, the Dominions raise tariff barriers also against us, they did give us preference; and since we have abandoned our policy of Free Trade I fail to see why we should not start with our own kith and kin, as we have done in these Agreements. The noble Earl went on to say that these Agreements could not be a basis on which to build future prosperity. I think that is a most extraordinary statement to make. These Agreements are the very basis upon which we in this country and throughout the Empire intend to try and build up the future prosperity of the world; and to say that it cannot be done is to enunciate another of those hopeless theories to which noble Lords opposite are so fond of giving currency. He went on to welcome the tariff arrangement made between Belgium, Holland and Luxemburg. He welcomes a tariff arrangement made between three foreign countries, but what about this tariff arrangement?


I did not maintain that there was an exact resemblance, as I think the noble Lord assumes, between the tariff arrangement that has recently been made between us and the Dominions and that which has been made between these three European States. My whole point was that they were utterly different, because in the one case the level of tariff barriers has been raised, and in the other case the level has been lowered.


A most remarkable statement. Noble Lords on the other side can say what they like, but tariff barriers and restrictions of trade are undoubtedly being removed by these Agreements; and to say that one set of countries can lower tariffs and open up freer trade, and that they are doing right, and that when we are doing the same thing over a far greater area we are doing wrong, is one of the most remarkable statements I have heard for many a long day.

I think the Government have accomplished a great triumph, and the nature of the criticisms that have been hurled against them here and in another place is one of the things which make me think the triumph is extremely great. The noble Lord, Lord Stanley of Alderley, denounced the Government this afternoon because they have not bargained hard enough. It has been dinned into our ears that they bargained far too hard. I wish that noble Lords opposite would make up their mind which way they are going to attack the Government, and attack them solidly and consistently. I think that we must definitely state here and now that these Agreements which have been made at Ottawa are only just a beginning of what we intend to do. What noble Lords opposite and what Free Traders have not yet realised is that times have changed and times are changing very rapidly every day. My conception of a fiscal policy is not that of an iron-bound, absolutely unchangeable thing; my conception of tariffs and Protection is that which was expressed by Mr. Baldwin at Blackpool on October 7, when he said: We are not doctrinaires. We admitted Protection, not as a principle but as an expedient. We knew the dangers, as we knew the dangers of Free Trade. We have never worshipped it. We know what can be done in the way of log rolling, in the way of excessive Protection; we know what can be done in the way of corruption. With our eyes open we took every step to safeguard that policy from what we know to be the dangers associated with it. If it fails I do not see our Party sticking to the carcase of dead policies. Free Trade throughout the world has been strangled, and yet noble Lords continue to stick to the dead carcase which is rotting away.

It was obvious that to preserve our own people we had to make a change, and that change we made a year ago. I think that it is a matter of rejoicing that the Government embarked upon the policy of Imperial Protection and benefit rather than some niggardly national plan, such as would have been adopted if any other Government had been in power. I myself have always been amazed at noble Lords who sit in Opposition. They work, I know, and they work quite rightly, to keep up and maintain and protect the standard of life and the wages of working people. I have no quarrel with them for that; I think it is a very just aim. And yet when they come to these Agreements, which in certain clauses definitely protect our people's work from unfair competition, which undoubtedly are freeing trade throughout the world, they attack and denounce them with the utmost virulence. It shows an agility of mind which would be most commendable in an Æsop, but not in noble Lords and those associated with them who conceive it to be their destiny to lead this country.

It is obviously impossible for me to go into details at this late hour. All the points of the Bill have been covered, both here and in another place, but one of the most striking facts which have emerged from this debate is the utter lack of any suggestion in the speeches of the critics of the Bill to replace these Agreements. Only the noble Viscount, Lord Snowden, yesterday made one or two suggestions as to what would have happened if the Labour Government had been in power. He said: The United Kingdom Government suggested for examination certain methods of increasing Imperial trade—namely, quotas, import boards, direct exchange of commodities, promotion of agreements between industries, important machinery for Commonwealth consultation on economic matters. That was the reference which, had the Labour Government remained in office, they would have sent forward to the Conference at Ottawa. They have got most of those things in these very Agreements. Those are only just minute crumbs of a far bigger Agreement, which the Government have negotiated, and which the Labour Party, had they been in power, would never have been able to obtain for us.

I will conclude by saying that it is my privilege to go up and down the country and come into contact with many people of all shades of opinion and all classes of life, and I can tell your Lordships that, certainly among the young people who are growing up to-day, the utmost impatience is being expressed with all these moanings and lamentations over a policy which has long been dead. I think that when the noble Viscount who leads the House has the satisfaction of seeing this Bill passed into law it will constitute a work which will be of the utmost and most vital moment for this country and for the Empire. I can assure him that he has behind him a growing body of opinion among those who are determined that every opportunity for the successful carrying out of these Agreements shall be assured to the Government for many years to come.


My Lords, the noble Lord who has just sat down abbreviated his spirited speech for the reason that practically all the ground had already been covered in the course of this debate. I agree with him. I think it has, and therefore I shall confine my observations to a very small compass indeed. The previous speakers have attacked this measure from several different points of view. My noble friend Lord Strachie, who has moved its rejection, does so on the ground that in practice it does nothing to help agriculture. The same objection was taken in part of his speech by the noble and learned Lord on the Front Bench, Lord Parmoor, and from the Cross Benches yesterday the noble Viscount, Lord Astor, made a very determined attack on the quota which is to be applied to our meat supply. Other noble Lords on these Benches, Lord Lothian and Lord Stanley, have assailed this measure from the point of view of Free Traders, and the noble Lords who have spoken from the Labour Bench have, as a rule, taken very much the same line. Then the noble Earl, Lord Listowel, whose thoughtful intervention in debate I am sure we all appreciated, announced that in his opinion the importance of the whole business was greatly overrated.

I should not have taken part in this debate at all except for the fact that two other of my noble friends—I mean Lord Grey of Fallodon and Lord Reading, both Liberal Ministers of old standing, and two of His Majesty's Ministers in the first National Government—and myself, thought it our duty, when a number of Liberal Ministers resigned from the Government the other day, to express our agreement with their action. I am not sorry also to feel obliged to intervene because the attitude which some of us older members of the Liberal Party take has been, I think, somewhat unfairly misrepresented. We are supposed to be perpetually burning incense before the rather battered shrines of Adam Smith and Sir Robert Peel (at whose shrine, I am afraid, the noble Earl opposite (Earl Peel), his grandson, does not worship, although I was very glad in the course of his most eloquent speech that he expressed the opinion that on the whole there are too many tariffs in the world). I think those of us who share my views look at this business in a spirit of the purest pragmatism and not on a priori grounds, and we have to consider whether this measure and the general movement towards a definite policy of Protection in this country can really work out to the benefit of the country and of the Empire.

If noble Lords opposite or anybody else can show that it does, no preconceived ideas will, I am certain, prevent us from applauding their action. Personally I am prepared to go further. I shall always be prepared to say that if it can be definitely proved that, for purposes unconnected with fiscal policy, it is necessary to maintain in any country some special industry which could not be maintained without special support, either by tariffs or by some other method, such action ought to receive the most careful consideration. But take a purely hypothetical example. If in some foreign country it were to be said that the mercantile marine might just as well be scrapped because all the necessary vessels could be bought at a, reasonable price, and of the best quality, built at Glasgow or at Barrow, and that in that country it was quite unnecessary to man those ships because excellent sailors could be got from neighbouring countries or from Russia, I should expect a citizen of that country to point out that life does not consist entirely of buying and selling, that a number of other considerations may arise, and that by some means or other that particular industry had to be preserved for that country. That being so, I hope that my friends and I will not continue to be accused of being mere theorists and utterers of ancient shibboleths.

But I think it is fair to point out that a number of those belonging to our Party who voted for the National Government at the last Election have felt, and do feel, sentiments of profound disappointment at the action which has been taken. They accepted the introduction of tariffs to meet an emergency, and they were not specially particular in enquiring into the precise methods by which those tariffs might be applied, but they did not foresee, and they were not told at the time, that the acceptance of that principle involved a complete volte face in the fiscal policy of the country; and they feel the same kind of resentment which would have been felt if, after compulsory service was introduced, as it had to be introduced during the War, the Government which came into power at the end of 1918 had, without saying a word about it, imposed a system of universal service on the country. There is nothing wrong in universal service. Some countries, as we know, prefer it, but it has been considered contrary to our British tradition and practice, just as in the same way for practically the last seventy or eighty years the reversal to a complete system of protective duties and prohibition or hampering of imports has been considered to be no part of our policy.

The subject of this Bill, the Conference at Ottawa, has been discussed through and through in the course of this debate. Fortunately, the whole question of the monetary system of the world did not come within the purview of the Ottawa Conference. It was obviously impossible to discuss an Imperial monetary system. The Conference therefore concentrated on the question of Imperial trade and Imperial Preference. There is nothing new in the conception of Imperial Preference. Some people talk as if it had been invented by Mr. Joseph Chamberlain, but of course that is not so. In the middle of the last century before the Free Trade policy was adopted this country gave preferences to Canadian timber, to the wines of the Cape of Good Hope and to the sugar of the West Indies. It was only when the protective duties were gradually cast away that those preferences ceased. Then came the reciprocal preferences which were given in our favour—handsomely and generously given—by the great Dominions, as we now call them, which had definitely adopted a policy of High Protection.

I think it is reasonable to consider what was the genesis of those preferences. At that time this country was entirely responsible for the whole defence of the Empire, for the costs of all the diplomatic service and the consular work of the Empire, and it was regarded, in fact, as the Mother Country to which a quid pro quo could very fairly be given in the form of preferences on certain articles of our trade, always provided that those preferences did not interfere too greatly with the slow growth of Colonial manufactures. I use the word "Colonial" because that was the word in use at the time. Then came Mr. Joseph Chamberlain's movement in 1903 and his failure and the failure of those who agreed with him to enforce their views. But of course the impulse had been given. I well remember being in the Government which was formed in 1905, and in the succeeding two or three years, when various Colonial Conferences took place, some of us had many conversations on this subject with the overseas Ministers. I remember one prominent Minister from overseas expressing wonder why we set aside the notion of Colonial Preference and saying: "If I had a boy who was starting in business I should do anything I could to help him. I would even make some sacrifice in his favour." But, my Lords, that was 25 years ago, and a change has taken place since then.

It is no question now of a parent assisting a boy in business. It has become a question whether the parent can continue to carry on business himself. Perhaps it would be putting it more accurately if I said that the whole idea of the parental relation has disappeared altogether, and that therefore no claim can properly be made upon us on those lines. But I cannot help wondering whether that idea has not remained in a degree latent in the various discussions that have taken place between the Government representatives and the representatives of the Dominions—whether there has not been at the back of such discussions as have taken place the idea that if sacrifices have to be made this country should be the more ready to make them, because, presumably (although I think the fact is open to dispute) she is the more able to make them. Examining the Schedules attached to this Bill and looking at the general tone of the whole measure, I cannot help wondering whether that belated idea has not somehow remained at the back of the discussions which have taken place.

The only other point on which I wish to say a word is that of the coming International Conference. It is a point that has been mentioned in a good many speeches, and I take it that the Government argument is that the fact that a group of countries composing the British Empire has come together and has been able to proceed with a system of preferences, even at the cost in some cases of raising duties against other countries, of itself will be found to be an encouragement to other countries to proceed on a lower-tariff basis rather than on a high-tariff basis. I hope I have stated correctly what I take to be the argument of His Majesty's Government. I am altogether unable to follow that argument.

I will take an imaginary case—that of France and the wine growers there. Wine, as your Lordships know, cheap wine is the main drink of the poorer people in France—very sensible people, I venture to think, although I am afraid one or two of my noble friends behind me will not take the same view. Although France is a great wine-producing country yet a great deal of wine is imported into France for mixing with the cheapest varieties. A great deal comes from Algeria, a good deal from Spain and some from Portugal, although I think that is of rather a higher quality. Suppose the French Government received representations from Algeria that greater facilities should be accorded to them for importing their wine into France, and that those facilities are given. The French wine grower does not care the value of a centime whether the wine that competes comes from Algeria or the Iberian Peninsula, and therefore, in order to satisfy him, the duty on the wines of Spain and Portugal is considerably raised.

Then you have to imagine, to complete my story, the French representative at an international conference coming and saying: "See how admirably we are operating in the direction of lowering duties; we have admitted the wine of Algeria into France on infinitely easier terms; it is true we have had to put up duties against Spanish and Portuguese wine, but surely we are lowering the wine duty in a way which will encourage you all over the world to lower your duties against our goods." I venture to think that those present at such an international conference would be tempted to laugh at such a contention, and I am very much afraid that when our representatives at the International Conference come forward with the Ottawa Agreements as representing any shadow of an argument in favour of a general reduction of tariffs, they will utterly fail to convince those with whom they are conversing.

If the contention that His Majesty's Government advances is justified, that the general effect of these Agreements would be a lowering of tariffs, nobody would rejoice more than I, and I should certainly in that case consider very carefully whether it would not be our duty on the Liberal Benches to vote for this Bill. But to my mind the conclusion is exactly the opposite. What you are doing, it seems to me, is to encourage the formation all over the world of high-tariff groups and low-tariff groups and that you are enlisting in the high-tariff groups. That being so I feel I have no choice whatever but to give this measure all the opposition I can. What the noble Lords on the Opposition Front Bench propose to do have not the faintest idea, but the speeches they have made have shown such ingrained hostility to many of the main features of the Bill that I trust when the time comes they also will follow my noble friend Lord Strachie into the Lobby.


My Lords, I did not come down to your Lordships' House with any prepared speech and I therefore hope that I shall not delay the debate very long, but I should like to associate myself with my noble friend Lord Crewe in all he has said, and as I intend to vote for the Amendment I should like to give a few words of explanation. The noble Earl, Lord Peel, spoke about the proper way in which to speak of foreign countries. The suggestion he conveyed to my mind had nothing to do with his argument, but when he was speaking I could not help asking myself what we should say if these Agreements were made with foreign countries and not with the Dominions. Let me apply the analogy to a foreign country which made an agreement under which we were to admit everything from that country free and promised the foreign country to impose duties ourselves, not in our own interest but in the interest of the foreign country, and at the same time, though we were to receive a preference in that foreign country, we left it free to impose duties on the goods we sent. If any such agreement had been made with a foreign country no Government would have dared to propose it. Judged from the economic point of view alone such an agreement would have seemed absolutely one-sided.

Of course the Government will naturally say that in dealing with the Dominions you must take into consideration other than purely economic things. That would have had great force if this had been an agreement for free trade in the Empire. I should not have thought then of applying a purely economic test. It would have brought advantages of bonds between the Empire making for union and free development inside the Empire, and it would have had political considerations outweighing purely economic ones. But these are not agreements for free trade within the Empire, but one-sided free trade. We are to give all the Dominions free trade, but they are to retain the right to impose duties on our goods.

I am told that we have gained the great advantage that British manufactures will be able to compete with Canadians in the Canadian market and that a Tariff Board has been established for that purpose. I am not at all confident as to how this Tariff Board will work. Everything depends on the point of view. The Government regard this Tariff Board as one set up to ensure that British manufactured goods shall compete on fair terms with Canadian manufactures in the Canadian market. I wish the Dominions laid as much stress on that point of view. My fear is that in the Dominions—in Canada, for instance—the primary duty of the Tariff Board will be regarded as not to enable British goods to enter, but to impose duties which will countervail and neutralise the natural advantages which British goods would have if no duties were imposed, and that the Tariff Board will work very differently according to the point of view from which you regard it. I wish I could think that the British and Canadian Governments had really had the same purpose in mind when they agreed to this proposal for a Tariff Board to settle the duties on British imported goods.

I come to another point which is of immense importance to my mind, and that is the question of how these Agreements are likely to affect our trade with the rest of the world. Our trade with foreign countries is vastly more important, from the point of view of the prosperity of this country and the numbers of the unemployed in this country, than our trade with the Dominions can ever be. The noble Earl, Lord Peel, laid stress on this—that foreign countries are now more ready to negotiate than before. Well, I have always felt that while we were a Free Trade country we had a strong lever with foreign countries. It was always open for us to say: "If you will impose duties on our goods you cannot expect to go on having a free British market." Then we should have kept our hands perfectly free to negotiate—perfectly free to offer free trade. That has now gone, and I should like to ask the noble and learned Viscount opposite what power of bargaining remains.

If we negotiate with foreign countries we cannot bargain with those goods on which we have promised the Dominions to impose tariffs. We are pledged to the Dominions. What duties have we that can be used for bargaining purposes? There are two other reasons why the Government have imposed duties. One is to obtain revenue. We cannot use those duties without sacrificing the purpose for which they were imposed, and sacrificing revenue. The other is for protective purposes. Take. for instance, the proposed, or actual, protective duty on iron and steel. It was to be, or is, imposed for a certain time to give the iron and steel trade time and opportunity to reorganise itself. If it does not do that, I understand, the duty is not to remain. That was the proposal, at any rate, when last I heard of it. Obviously we cannot use that duty for bargaining purposes, because we are pledged to the iron and steel industry, and if we go and lower the duty that industry will say that it cannot re-organise.

So with other protective duties. Those duties have been imposed to protect industries, and are pledged to those industries. Therefore we cannot use them for bargaining purposes. That is why I think it has always been proved, hitherto, that tariffs have led to tariffs—other tariffs have been the outcome of tariffs. I should like the noble and learned Viscount to name, if he can, any duty which the present Government have imposed which has not been imposed for any purpose other than bargaining, and which is therefore available for bargaining purposes. It seems to me that everything we have done has weakened our power of bargaining with foreign countries, and I should like the noble and learned Viscount to tell us, if he can, what power is left to us of bargaining. We are told that foreign countries are now coming to us in a way that they have never done before to negotiate trade agreements with us. It is very satisfactory that they are coming, but I should like to ask the noble and learned Viscount whether any progress has been made, and whether those negotiations, so far as they have gone, especially with the Argentine, which is most important to British trade, disclose any prospect that as a result of those negotiations our trade will have the advantage of lower tariffs in those countries which have come to negotiate than it has had before? It is of no use telling us that foreign countries are coming to negotiate unless it can be proved that those negotiations do have some effect in lowering foreign tariffs.

It was stated at the opening of the Ottawa Conference, I believe by the British Delegation, that it was hoped that the negotiations with the Dominions would be the precursor of a reduction of duties all over the world. I agree with what Lord Crewe has said, that if that does turn out to be the result I should revise my opinion about these particular Agreements, but it is because I fear that that cannot be the result, and that they must result in weakening our power of lowering tariffs in other countries, that I have so much apprehension about the Agreements at Ottawa.

Then I should like to ask one question. Belgium and Holland, we are told, have entered into a low-tariff agreement between themselves, and possibly other countries. That is precisely the direction in which we want to go—reducing the obstacles to trade in the world; and I would like to ask the noble and learned Viscount if we have made any proposals to join in that low-tariff agreement. I understand that Belgium and Holland invited other countries to join, no doubt their object being to spread the area of low tariffs as far as possible. Have we made any proposal to join in that agreement? If we have not yet done so are we going to do it, and have we taken any line about low-tariff agreements at all? It seems to me that if we are really to help to reduce the obstacles to trade in the world, here is our chance to encourage and help and to join, if we are free to do so. What I am afraid is that we have so tied ourselves up already that we are not free to join in a low-tariff agreement. If the noble and learned Viscount can tell me that we are proposing to join in a low-tariff agreement I shall be delighted, because one of my great apprehensions about these Ottawa Agreements will have been removed.


My Lords, I only venture to intervene for a moment, not to reply to what has been said by the noble Viscount who has just spoken, to whom we always listen with great respect, but because I wish to raise one point before this debate closes, and it is only possible to do it at this moment. It is with regard to our Crown Colonies and Dependencies. During the whole of this debate we have heard very little reference to the Crown Colonies and Dependencies. I think Lord Snowden made one reference to it, in which he admitted that there were vast possibilities of an increase of trade among the hundreds of millions of the coloured population of the Empire. A great deal was done at Ottawa with regard to this question. The Crown Colonies and Dependencies were represented by the Secretary of State for the Colonies, Sir Philip Cunliffe-Lister, and for the first time in the history of our Crown Colonies and Dependencies they were represented by a single individual. The result was that there were obtained not only reciprocal agreements between the United Kingdom and all these Colonies, but also very valuable reciprocal agreements between these Colonies and the various Dominions. A very large number of products came under review—practically every product which is grown in those Crown Colonies and Dependencies—and in practically every case very useful preferences were granted upon these products, which will be of very great value to these Colonies and Dependencies, and of very great value to Great Britain and to the Dominions themselves.

Yesterday in the course of the debate the noble Marquess, Lord Lothian, referred to a letter which was written by Sir Graham Bower some twenty-four years ago, in which he contrasted the conditions in the French island of Réunion and the British island of Mauritius, and to the advantage of Mauritius, attributable, in the opinion of Sir Graham Bower and I assume in the opinion of the noble Marquess himself, to the fact that there was Free Trade as between this country and Mauritius and Protection between France and Réunion. I do not think that that statement ought to go unchallenged, because it is not an accurate statement of the conditions which exist to-day, even if it were accurate of the conditions which existed in 1907.

I should like first of all to turn to Mauritius. The extracts quoted by the noble Marquess were from a report on Mauritius for 1908 by Sir Graham Bower when the latter was Acting Governor. Sir Graham Bower is a well-known Free Trader—I wish to emphasise that—as may be judged from many letters of his which have appeared in the Press since his retirement in 1910. In the 1908 report Sir Graham Bower established a comparison between the condition of Mauritius under Free Trade and that of Réunion under Protection. It is somewhat unfortunate for Sir Graham's contention that in the very next year, 1909, whilst he was still the officer administering the Government, there was a deficit of 800,000 rupees in the Mauritius Budget, and the Colony was in such a parlous state that the then Secretary of State for the Colonies, the noble Marquess, Lord Crewe, who is here to-day, with the concurrence of Sir Graham Bower, had to send from England a Royal Commission presided over by Sir Frank Swettenham, to report on measures for improving the finances and economic conditions of the Colony. Shortly after, owing to a bumper sugar crop, the island was enabled to regain stability, but only for a very short period indeed. Had it not been for the good prices obtained during the War years and for two years afterwards, Mauritius would have been unable to pay her way during the past decade. As it is at present, during the past six years the Mauritius Government's Budget has been in deficit every year, and the island has only been kept going by means of loans to the sugar-cane planters. Government reserves accumulated during the years from 1915 to 1922, when sugar was selling at a good profit, are absolutely exhausted, and a deputation is in London at the present moment asking our Government what we are going to do about it.

What is the position in Réunion? It is perfectly true that Réunion has a larger area than Mauritius, but it has not such a large area of cultivable land, owing to its mountainous nature. There is no doubt that the production and trade of Mauritius are much larger than those of Réunion, for besides a larger cultivable acreage it has a large population and a plentiful supply of labour, while in Réunion their output has decreased of late owing to lack of labour. What is the actual state to-day? Réunion is able to produce rum and sell it, with these advantages, to France, on a quota system. This has very largely contributed to the prosperity of the Colony, and at the present moment I am told on very good authority the planters of Réunion have millions of francs in the local banks to their credit, besides large investments in French Government securities. What is the position in Mauritius? Last year thousands of boxes of cigarettes, cases of whisky, gin, and other goods had to be destroyed by the Mauritius Customs owing to the inability of merchants to take delivery and no purchasers for them coming forward. That is the reply, and the accurate reply, to the statements made by the noble Marquess, Lord Lothian, yesterday; and that is so much for the so-called prosperity of Mauritius under Free Trade.

I am extremely sorry to have detained your Lordships at such length on this subject at this moment, but that point had to be replied to owing to the effect which it would have had, if it had been left unchallenged, on the whole system of Preference throughout the Colonies, and the whole system of Preference as it has been applied by the Ottawa Agreements. I think your Lordships will find in every Colony and in every Dependency very great gratitude for the Ottawa Agreement. They are passing it through their Legislative Councils in every instance with large majorities and without any demur: and I believe that the Ottawa Agreements are not only the commencement of a new era in our Dominions, but the commencement of a new era in our Colonies and our Dependencies as well.

Before I sit down I should like to make just this concluding reference. We have with us here to-day my noble friend Lord Beaverbrook, to whom I believe that the country owes a very great debt of gratitude. I can remember that in November, 1929, he stood up in this House and made a speech in favour of what he called Empire Free Trade. I ventured on that occasion to rise and support him. That was only three years ago, and yet to-night we find, after that short period has elapsed, that we, have Agreements, not based entirely upon what the noble Lord would have desired but going a very long way in the direction in which he sought to base his plans: and we have those Agreements before us in the shape of legislation which I venture to hope will be passed by a very large majority to-night.


My Lords, I have listened with great attention to these two days of debate: I think I have missed only one speech and half a speech. The impression which I have got from it is one that makes me feel that we are going backwards. I feel the echo of the old controversies of nearly thirty years ago, with the same arguments brought forward on either side, the only difference being that in the early days of this century the Free Traders were in the ascendant, and now we find the Protectionists in the ascendant. It is rather depressing, because it makes one feel that political affairs, instead of going forward and progressing, seem to obey some sort of Einstein law which involves the futurity of yesterday.

The noble Lord, Lord Rhayader, in his speech—and we have had many speeches from the Liberal Benches—said that the Liberals were driven out of the Government by these proposals. I wish to say just one word about that, because I think that that is an inaccurate statement. The Liberals entered the National Government with their eyes open. The Liberals entered the National Government, which had a backing in the House of Commons of nearly 550 members, and amongst those members I do not believe that there were more than a score who could have been counted as Free Traders. Surely those who joined that Government must have known that the law of the majority, the law of the big battalions, must prevail, and that the Conservative Party, which had never disguised its intention of bringing in Protection, would avail itself of the first possible opportunity and would not neglect an opportunity of this sort. I think the Liberals, by joining the National Government have betrayed the cause of Free Trade, although the Conservatives may have attacked and defeated it.

A two days' debate in your Lordships' House always covers a very large ground. This particular debate, which is far from being an exception, seems to have extended to an enormous field, because in addition to tariffs, quotas, taxation, unemployment and housing, and the glut, the noble and learned Viscount who is going to reply will have also to deal with the ticklish question of the atmosphere at Ottawa, the Pig Commission, the Colonial Conference of 1887, dyes, timber, perfumery, women's kid gloves elbow-length, and the Micky Mouse game; and last night we had a disquisition, which I am afraid a good many of your Lordships missed, on Noah's Ark, not to mention Réunion and Mauritius. I seem to remember them in those old controversies of many years ago. I myself cannot believe in the establishment of a system which involves locks and dams in the channel of trade, I cannot believe in a system which is going to place bones of contention constantly between the Governments of the Empire, is going to encourage disputes and friction between ourselves and foreign Governments, and is going to raise the price of the people's food. Moreover, I think it will lead to corruption and pressure of an insidious kind which will be brought to bear on politicians and public life. One consolation I have is that I believe the best way to kill Protection is to try it. But, of course, it is a heavy price because, in the demonstration of what I believe will be its dangerous consequences, certain vested interests will grow up which will be very difficult to remove.

I only want, in conclusion, to say a word about the attitude of my friends on these Benches and myself with regard to the Motion for the rejection of the Bill that has been moved by the noble Lord, Lord Strachie. We in the Opposition on these Benches do not consider that your Lordships' House, with its indefensible constitution, should be in a position to reject the measures introduced by a Government which has the support of a majority in the House of Commons of elected representatives of the people. We as a Party have declared that doctrine, and I think the Liberal Party in days past have also been emphatic on the subject. When the Labour Government were in office we expressed very strongly this view, because the unrepresentative majority in your Lordships' House could, and indeed did, reject measures passed by a representative majority in another place.

Although by an adverse vote on our part to-day there can be no chance whatever of rejecting this Bill, the principle is the same, and we desire therefore to be consistent. A vote given to-day against the Second Reading of this measure is at the same time a vote in favour of the principle that your Lordships' House have the right and are justified in rejecting a Bill passed by a majority of the House of Commons. Whatever we may think of the methods by which that majority was obtained we do not regard it as the function of this House to contest the considered decision of the House of Commons. While, therefore, reserving to ourselves the right to vote on Amendments to Bills or on Motions which may be brought forward in this House, we shall abstain from voting as a Party against the Second Reading of Government measures which are sent up to us from another place, and, although we object to this measure which is now before the House, we shall abstain from voting on the Amendment which the noble Lord, Lord Strachie, has proposed.


My Lords, after a debate lasting for eight hours and ranging over the wide variety of topics to which the noble Lord the Leader of the Opposition has just called attention, your Lordships, I am sure, will forgive me if I do not attempt to answer all the questions which have been raised. For instance, my noble friend Lord Peel, in a speech which struck me as a devastating reply to some of the criticisms of the Bill, asked me a question as to the Financial Resolutions which had been reached at Ottawa, and what were to be our future actions with regard to them. They do not occur in the Bill, and I hope he will forgive me if I say that I must get further instructions before I am able intelligently to answer that question.

I desire only to deal with a few of the principal points which have been raised, and first just a word about the constitutional point, if it is still worthy of that title, which the noble Lord, Lord Parmoor, reiterated this afternoon. Let me state it. Parliament, said he, is supreme. Agreed. The House of Commons is the ultimate authority in matters of taxation. Agreed. Therefore, said he, any Bill passed by Parliament for a term of years limiting taxation is unconstitutional. An absolute non sequitur, as any lawyer can see at once. It is perfectly true—indeed it does not require a lawyer, any man of common sense can see at once that if Parliament passes an Act pledging the country to do something for a number of years, Parliament can pass another Act inconsistent with that pledge next day, if it likes. Just as, if one of your Lordships makes a bargain, you can break it next day if you like; but honourable men and honourable countries do not break their bargain. And all that has happened in this so-called constitutional innovation is that, in accordance with the invariable practice of this country throughout the centuries, we have made Agreements which we believe are beneficial to this country and which bind us not to do certain things for a certain time. When we promise not to do them we can still do them if we like to disregard our word; but fortunately our word is something more than a "scrap of paper."

As to the suggestion that there is no analogy to a treaty because a treaty does not need to be submitted to Parliament, I would first of all remind the noble Lord who made that observation that Sir Herbert Samuel, who invented the constitutional point, said there was an exact analogy to treaties, and only changed his mind when he found that the result was to blow him out of court. And, in fact, the difference which the noble Lord, Lord Parmoor, detected between a treaty and these Agreements was this, that the Executive could make a treaty without reference to Parliament, and these Agreements had to be submitted to Parliament for ratification. In other words, it is constitutional for the Executive without the consent of Parliament to make an Agreement binding this country for a term of years, but if, with the consent of Parliament, they do it, then that is a wholly unconstitutional doctrine. My Lords, I do not think we need waste time on the constitutional point.

Then I want to say a word as to the attitude of the noble Marquess, Lord Crewe, and those for whom he speaks. The noble Marquess defined the attitude of the Liberal Party, and explained how unfair it was to suggest that they were guilty of any bigoted adherence to old-fashioned doctrines. He said that they were actually willing to go so far as this: that if, for reasons apart from fiscal policy, it is proved necessary to maintain an industry by means of a tariff, such a measure should receive his consideration. A wonderful concession of liberality, because see what it involves. It involves that if, for reasons which include fiscal policy, it be necessary to maintain an industry in the interests of the country, such a matter would not even receive the noble Lord's consideration or the consideration of those for whom he speaks. If, in fact, so broadminded, so experienced a statesman as the noble Marquess regards this as the limit of reasonable concession, how bigoted must be the attitude of the Party to which he belongs!

The noble Marquess went on to complain, very courteously but still to com- plain, that the Liberal Party had not been quite fairly treated because this Parliament and this Government had not been returned pledged to Protection, and we ought not therefore to introduce a Protectionist measure. See what that involves. The Government were returned a year ago with a free hand to deal with a national crisis, and to take whatever steps after consideration they thought necessary. Nobody can deny that the matters were investigated, and that the steps which the majority of the Government thought were necessary have been taken. But it is said it is unfair. Why? Because it is not a Liberal policy. And really the contention involves this, that a National Government is only national so long as it enacts exclusively Liberal measures. I am not going on with that Free Trade controversy, because I am glad to believe that controversy is dead.

The noble Marquess said that he and his friends were going to vote for the Amendment of my noble friend Lord Strachie. It is remarkable to notice that the noble Lord, Lord Strachie, in moving his Amendment, complained, speaking as a Free Trader, that there were not enough duties put on. His complaint was: "You have let the Dominions in free, you ought to tax them, too; it is very hard on the farmer that he should have to meet the competition of the Dominions on level terms instead of having protection against them as well as against the foreigner." I wonder if that really represents the Free Trade attitude of the Liberal Party and the noble Marquess who leads it.

The noble Viscount, Lord Grey, who never comes to make a speech in this House without raising the level of debate and illuminating the subject which we are discussing, said that he was going to vote for the Amendment because, while he would have supported Imperial Free Trade, he was not prepared to support one-sided Free Trade. What else has the Liberal Party done ever since Free Trade was introduced into this country? One-sided Free Trade is the very thing we tariff reformers have complained of. One-sided Free Trade is the very thing they have stood for for eighty years. When the noble Viscount says: "This limits your bargaining powers, because otherwise we could have gone and threatened the foreigner with tariffs if he did not let our goods in," I wonder whether, during all these years when the noble Viscount held the office of Foreign Secretary with such distinction, his Liberal colleagues ever allowed him to state that it was part of the policy of His Majesty's Government to impose tariffs on foreign goods unless they gave satisfactory concessions for ours. It is no good your objecting to one-sided Free Trade when the whole policy of the Party to which you belong has stood for nothing else ever since it has been a Party.

Then the noble Viscount asks whether we were proposing to enter into some combination such as that of Belgium and Holland, which was arranging for low tariffs. The noble Viscount can hardly have studied this Agreement or he would have seen that, instead of asking to be allowed to enter into some other low-tariff combination, we, the British Empire, are setting up a low-tariff combination, and so far from clamouring to be allowed to enter into some foreign country's arrangements, we say that our Empire, large as it is and comprising a great portion of the globe, is in itself an entity large enough to form an economic unit. Although it is quite true that the steps we have taken do not lead to Imperial Free Trade—I think it may be that the diverse competition between the different free Commonwealths may prevent complete Free Trade—yet it does establish an economic system in which each member enjoys an advantage against the rest of the world, in which a great number of the articles that are exported from one part of the Empire to the other are admitted free of duty, and in which, therefore, we have a chance of developing our economic prosperity and developing our inter-Imperial trade to an extent which would be impossible by any arrangement with any Zollverein in any other part of Europe.

I turn to deal quite shortly with the speech made yesterday by my noble friend Lord Snowden. Lord Snowden began by complaining that my opening speech had not been sufficiently provocative to raise his temperature. I am very glad that he was not warmed up, because, after that very promising prelude, he proceeded to tell us that we, the British Delegates, deserved to be hung. I suppose we should have been drawn and quartered if I had been a little more provocative. He went on to make an attack upon Mr. Bennett and Mr. Bruce, two of the Prime Ministers of our sister Commonwealths, who were regarded as the twin demons of the Conference, treacherously plotting the destruction of the Empire, whose offers to us were a mockery, whose appeals were a fraud, whose methods were bluster and bullying. He asked us whether or not Agreements of this kind tended to join the Empire close together. I can at least be sure of this, that many speeches like that of the noble Viscount, Lord Snowden, are not calculated to make relations more friendly.

I think enough has been said of these alleged disunions at Ottawa. They are started by the same people who were anxiously spreading abroad rumours of dissensions in our own Delegation and of differences among the Canadian representatives. I know those allegations were untrue, because I was on the spot. I know those allegations of disunion, quarrels and differences are a travesty of what really happened. It is no doubt true—I have never disguised it—that each Delegation thought it its duty to do the best it could for the country it represented. The Dominion representatives did it each for their own country. We, the United Kingdom Delegation, did the same, and we should have been ashamed of ourselves if we had not done the same. But while we were there to represent the views of our different countries, while we were there to make known the wants and desires of each part of the Empire which we represented, none of us ever lost sight of the fact that the paramount and overriding interest of each part of the Empire was the prosperity of the Empire as a whole. When I am told that we have quarrelled and had such differences, I remember that it was my privilege to be on terms of friendship with more than one of the Dominion Delegates before I went to Ottawa, and I can say honestly that I have come back from Ottawa with my circle of friends enlarged, with the closeness of my friendships enhanced, and, I believe, with the respect in which we hold each other undiminished.

It is said that these Agreements do not tend to lower tariffs. Lord Snowden said that 217 items only were affected, and that there were 1,300 items in the Canadian tariffs. You cannot judge this matter by the number of items; the question is what the items are. If your Lordships take the trouble to ascertain the facts, if Lord Snowden had ascertained the facts, he would know that the 217 items comprised 40 per cent. of the total imports from this country into Canada. What is the good, then, of saying that there is no lowering of tariffs?

Another noble Lord, Lord Stanley, whom we were glad to welcome to the debates but who will perhaps permit me to say that wider experience may lessen the violence of his language—Lord Stanley was good enough to express his friendly feeling for His Majesty's Government, and he went on to accuse us and me personally of impudent dishonesty and of outrageous and monstrous conduct. Lord Stanley said that these items were a fraud, and he cited two or three, and was good enough to ask me to meet his challenge with regard to any one of them and to say that if I could do so he would come into the Lobby with us this evening. I am much obliged for that promise. The first one was whether there were any aniline and coal dyes not soluble in water.


Of any commercial importance is what said.


Aniline and coal tar dyes cover a very wide range of subject. The noble Lord's question was, are any of them soluble in water, because these are the ones that get in free. I am told there are a large number of them which are soluble in water. I cannot tell the noble Lord the exact importance of the different kinds of aniline dyes, because it is not a subject with which I am familiar, but I have a list of five or six—and I am told it can be multiplied almost to any length—which begins with Bismarck brown and goes on to include other colours. I could go on through the whole rainbow. The noble Lord also wanted to know about perfumery insoluble in alcohol. If he looks at the Canadian Agreement he will see that there are two classes of perfumery—the first alcoholic and the second non-alcoholic.


The noble and learned Viscount misrepresents me. The item he refers to deals with non-alcoholic perfumes individually. I was referring to perfumes in general.


Certainly, but there is alcoholic perfume (that is item 160) and non-alcoholic perfume (which is item 234). If there is perfume which is neither alcoholic nor non-alcoholic I really do not know what it can be. It must be the sort they import into the United States. The noble Lord said we did nothing for coal. If he looks at item 586 he will find that anthracite coal gets into Canada free and that there is a duty of no less than 50 cents, more than 2s. a ton, on coal from any other part of the world. I hope the noble Lord is coming presently into the Lobby with me. The noble Earl, Lord Listowel, said any independent person must realise that tariffs were raised and not lowered. He ignored, first of all, the Import Duties Act which on November 15 would commence to apply to the whole of the Dominions unless these arrangements were made. By virtue of these arrangements the whole of the products covered by that Act will come in free. He ignored also the whole range of preferences at present given to British products and seemed to suggest that we should follow the essentially foolish and short-sighted policy of sitting smugly back and saying we have got all these preferences from the Dominions for nothing, why should we give them anything? They will not take them back. "There is no sentiment in it," says the noble Marquess, "that is an exploded and worn-out myth." What is left, then, to induce them to give us these preferences over hundreds of items unless it is the fact that at last we have begun to realise, just as they have realised, that by tariff preferences you can build up trade within the Empire?

I am afraid I have not as much time as I should wish to deal fully with all the points that have been raised, but one or two words more I must say. The noble Viscount, Lord Snowden, asked what would be the effect on Great Britain of these Agreements, and the noble Lord, Lord Rhayader, in his very sincere speech last night, quoted some figures to show that the import and export trade of this country, converted into gold prices, had dropped in one case by 56 per cent. and in the other case by 60 per cent. The noble Lord will forgive me if I say that that is an entirely misplaced way of calculating percentages. It is just as true to say that you must alter the price of commodities into gold as to say that you must alter the price of gold into commodities.

If you want to compare one item with another and make allowances for differences in prices, the only true way is to turn from prices to volume and see how much of each commodity was imported or exported in the period you choose. I have had the figures prepared for me, and it is very remarkable to see that during the years 1929 to 1931—the time when the Free Trade Iron Chancellor ruled our destinies—there was a fall in our domestic exports from 122 per cent. to 76 per cent., a drop of nearly 50 per cent. Between October, 1931, and September, 1932, during the first year of the National Government, when protective duties were in force, so far from domestic exports continuing their dismal fall, they were actually a fraction higher than for 1931. You find further that, whereas retained imports remained practically stationary during those first two years, they dropped by over 6 per cent. in the last twelve months. That drop was almost entirely in manufactured articles, because raw materials and food both went up, showing that the Import Duties Act had done exactly what we claimed it would do, and showing what a complete fallacy it is to suppose—as Free Traders imagine—that imports and exports always balance and that if one goes down the other must go down as well. When you remember that the figures I have given relate to a period when all the rest of the world found its trade rapidly and steadily declining, there can be no doubt at all that this country to-day enjoys a much larger share of the world's export trade than it did last year and probably than it did in 1929 or 1930. That is what Protection has already done for Britain. Why should we not try to extend its benefits by extending the scope of Imperial Preference and Imperial trade?

What, finally, is the effect on the world at large? It is said that this will stop us from bargaining with foreign countries. The noble Viscount, Lord Grey, said we could always hitherto make a good bargain because we could threaten that we were going to put on a tariff. I wonder if the noble Viscount thinks that foreign countries would have been very much alarmed by that threat. Now that we have put on a tariff we have something to bargain with. It is true that we cannot offer them something which we have given already to the Dominions. It is true that we cannot take back from the Dominions the margin of preference we have covenanted that they shall enjoy, but there is a large range of articles with regard to which there is no such covenant with the Dominions and with regard to which if a proper case be shown we can hope to do a very satisfactory deal.

The noble Viscount asked whether we had made any bargains as yet. The answer is "No." We deliberately said that we were not prepared to enter into negotiations until the results of the Ottawa Conference were known. The moment the results of the Ottawa Conference were known one country after another began to enquire whether we were prepared to do a deal. One country after another is sending a Mission to enter into negotiations. We heard only yesterday, I think it was, that an important Mission was coming from Argentina, headed, I believe, by the Vice-President of the Argentine Republic—I am speaking from memory—charged with the duty of trying to negotiate a satisfactory bargain with this country. It is not true to say that if we take less produce from foreign countries they will necessarily take less of our goods. The truth is that hitherto foreign countries have known that they could dump as much as they liked of their produce into this country and that we should take no steps to stop them, and that they were not bound to take any of our goods in return. Now they know that they are expected to take something in return, and that we shall show favour to those most willing to show favour to us. The result of that will be, not to reduce exports but to increase exports.

I am afraid I have detained your Lordships too long, but I have tried to cover the ground as quickly as I could. I only desire to say in conclusion that the Government do not suppose—certainly the members of the Delegation do not suppose—that the arrangements they made at Ottawa were a perfect achievement incapable of alteration, incapable of development, incapable of amendment. We do believe that they are arrangements which will do more than anything which has happened since the National Government came into power to foster Imperial trade, lead to closer relations between this country and the Dominions, and lay the foundation upon which greater prosperity may result for the trade of

England and the greater prosperity of the world.

On Question, Whether the word "now" shall stand part of the Motion?

Their Lordships divided:—Contents, 139; Not-Contents, 34.

Sankey, V. (L. Chancellor.) Hampden, V. Hothfield, L.
Hereford, V. Howard of Glossop, L.
Somerset, D. Hutchinson, V. (E. Donoughmore.) Howard of Penrith, L.
Wellington, D. Hunsdon of Hunsdon, L.
Knutsford, V. Hutchison of Montrose, L.
Camden, M. Wimborne, V. Irwin, L.
Dufferin and Ava, M. Jessel, L.
Exeter, M. Aberdare, L. Kilmaine, L.
Salisbury, M. Abinger, L. Lawrence, L.
Addington, L. Leconfield, L.
Shaftesbury, E. (L. Steward.) Allen of Hurtwood, L. Lloyd, L.
Airlie, E. Alvingham, L. Luke, L.
Balfour, E. Ampthill, L. Marks, L.
Bradford, E. Annaly, L. Meldrum, L. (M. Huntly.)
Cavan, E. Annesley, L. (V. Valentia.) Middleton, L.
De La Warr, E. Armstrong, L. Monckton, L. (V. Galway.)
Denbigh, E. Arundell of Wardour, L. Monkswell, L.
Grey, E. Bayford, L. Monteagle, L. (M. Sligo.)
Halsbury, E. Beaverbrook, L. Morris, L.
Iveagh, E. Belper, L. Newton, L.
Liverpool, E. Berwick, L. Oriel, L. (V. Massereene.)
Lucan, E. [Teller.] Carrington, L. Ormathwaite, L.
Malmesbury, E. Charnwood, L. Ormonde, L. (M. Ormonde.)
Midleton, E. Chesham, L. Oxenfoord, L. (E. Stair.)
Mount Edgcumbe, E. Clanwilliam, L. (E. Clanwilliam.) Polwarth, L.
Onslow, E. Queenborough, L.
Peel, E. Clements, L. (E. Leitrim.) Rankeillour, L.
Plymouth, E. Cochrane of Cults, L. Redesdale, L.
Roden, E. Congleton, L. Remnant, L.
Rothes, E. Cornwallis, L. Russell of Liverpool, L.
Sandwich, E. Cottesloe, L. St. Levan, L.
Scarbrough, E. Cusheudun, L. Selsdon, L.
Selborne, E. Danesfort, L. Sinclair, L.
Spencer, E. Darcy (de Knayth), L. Somerleyton, L.
Stanhope, E. Darling, L. Southampton, L.
Vane, E. (M. Londonderry.) de Clifford, L. Stonehaven, L.
Wicklow, E. Ebbisham, L. Strathcona and Mount Royal, L.
Ypres, E. Ernle, L.
Erskine, L. Stratheden, L.
Bertie of Thame, V. Fairfax of Cameron, L. Strickland, L.
Brentford, V. Fairlie, L. (E. Glasgow.) Swinfen, L.
Bridgeman, V. Faringdon, L. Templemore, L.
Chaplin, V. Forteviot, L. Teynham, L.
Churchill, V. Foxford, L. (E. Limerick.) Wargrave, L.
Elibank, V. Gage, L. (V. Gage.) [Teller.] Waring, L.
FitzAlan of Derwent, V. Hampton, L. Warrington of Clyffe, L.
Goschen, V. Hanworth, L. Wharton, L.
Hailsham, V. Hardinge of Penshurst, L. Woodbridge, L.
Hambleden, V. Hindlip, L. Wynford, L.
Crewe, M. Cawley, L. Pentland, L.
Chalmers, L. Rathcreedan, L.
Buxton, E. Clwyd, L. Revelstoke, L.
Midlothian, E. (E. Rosebery.) Denman, L. Rhayader, L.
Doverdale, L. Rochester, L.
Allendale, V. Forres, L. Sandhurst, L.
Cowdray, V. Gladstone of Hawarden, L. Stanley of Alderley, L. (L. Sheffield.)
Esher, V. Ker, L. (M. Lothian.)
Grey of Fallodon, V. Mendip, L. (V. Clifden.) Stanmore, L. [Teller.]
Leverhulme, V. Meston, L. Strachie, L. [Teller.]
Mersey, V. Monteagle of Brandon, L. Sudley, L. (E. Arran.)
Snowden, V. Northington, L. (L. Henley.) Swaythling, L.
Tenterden, L.

Resolved in the affirmative, and Amendment disagreed to accordingly.

On Question, Bill read 2a, and committed to a Committee or the Whole House.


My Lords, before we adjourn I would like to say what I did intimate earlier, that the Committee stage will have to be taken on Monday next so as to enable us to get the Third Reading on Tuesday next, which is the last day before the Import Duties Act comes to an end. There are two or three Amendments down already, but I hope it will be convenient to conclude the Committee stage on Monday evening. I have given notice to Lord Halsbury that I am putting down a Motion that this Bill shall take precedence on Monday.

House adjourned at eight minutes before eight o'clock.