HL Deb 09 July 1935 vol 98 cc104-63

Order of the Day for the House again to be put into Committee read.


My Lords, in moving this Motion I should like to say one word with regard to the Amendment which appears in my name in connection with the First Schedule of the Bill. I hope that noble Lords who have now read the Amendment will realise that, important though the proposed change is, it is really quite simple. It involves merely this: that we pass from indirect election to direct election in the case of the Council of State; and that in itself involves only one other alteration of any importance: the consequent alteration that, instead of relying upon the system of proportional representation to secure the proper representation of the different communities, which was the proposal in the Bill, the proportions will now have to be laid down as they have been in other cases. Those are really the only two changes which this Amendment involves. I appreciate, however, the fact that the Notice which I have been able to give of the Amendment has necessarily been very short. That being so, I should like to ask noble Lords and my noble friend the Marquess of Salisbury whether it would suit their convenience if, when we come to the First Schedule, I were to propose that the consideration of the First Schedule be postponed until the conclusion of the consideration of the other Schedules to the Bill. If that met with their convenience we should then, I think, deal with the First Schedule to-morrow instead of to-day. I beg to move.

Moved, That the House do now resolve itself into Committee.—(The Marquess of Zetland.)


My Lords, as my noble friend has been good enough to mention my name in this connection, all I can say is that, as far as I am concerned, I think his proposal is a very reasonable one. It will be very difficult to enter upon a discussion of the new First Schdule to-day, because it raises very difficult points. I do not desire, of course, to lave the appearance of being very much opposed to this new proposal. That depends upon the tenour of the debate. I have to choose between alternatives none of which seems to me extremely admirable. But I do not of course intend now to discuss the merits of the case. As my noble friend has been good enough to refer to me, I understand his proposal to be a very reasonable one—namely, that we should dispose of the other parts of the Bill and that then we should revert to the new First Schedule. Personally, I am very sanguine as to the amount of time which it will take to finish this Bill. There are one or two important Amendments on fiscal matters which may perhaps be taken to-day; I thought that they might be taken before dinner, but perhaps it is a little difficult to take them then. Afterwards, however, there will be very little left in the Bill except, what is important, the question of direct or indirect election.


I think the noble Marquess will find it difficult, for technical reasons, to take the Sixth Schedule before the First. The two Schedules are to a certain extent interlaced, and if we were to pass the Sixth Schedule before the First, he would find himself landed with certain inconsistencies.


I should like to look into that and let the noble Lord have my opinion before we reach it.

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clause 357 agreed to.

THE EARL OF MANSFIELD moved, after Clause 357, to insert the following new clause:

Provision as to Bills imposing or increasing duties an Imports.

".—(1) Subject to the provisions of this section the Governor-General in the exercise of his functions under the section of this Act of which the marginal note is 'Special provisions as to financial Bills' shall not recommend the introduction or moving of any Bill or amendment making provision for the imposing or increasing of any duty of customs, tax, or import on goods imported into the Federation unless in his discretion he is satisfied that such Bill or amendment makes provision for securing that the duty of customs, tax, or impost for the time being levied on British goods is substantially lower than the duty of customs, tax, or impost for the time being levied on other like goods:

Provided that notwithstanding anything in this section, the Governor-General may recommend the introduction or moving of any such Bill or amendment as aforesaid if in his discretion he is satisfied that such Bill or amendment, if enacted and brought into operation, will not subject British goods in the Federation to less favourable terms generally than the terms to which Indian goods in the United Kingdom are for the time being subject.

(2) In this section the expression 'British goods' means any goods consigned from and in whole or in part produced or manufactured in the United Kingdom; and the expression 'Indian goods' means any goods consigned from and in whole or in part produced or manufactured in the Federation."

The noble Earl said: In rising to move the new clause which stands in the name of my noble friend Lord Rankeillour and myself, I respectfully suggest to your Lordships that it would be for your convenience if we considered this proposed new clause and the one that immediately follows it in the name of ray noble friend Lord Islington together, because both deal with the same subject although they approach it from slightly different aspects. Lord Islington has been good enough to inform me that he has no objection to this course. I must apologise to your Lordships for the fact that these proposed new clauses appear in what is not really their proper place in the Bill. That is not the fault of those who put them down; they somewhow seemed to have got mixed up somewhere, but I hope your Lordships will overlook this because, in the event of either of them finding their way into the Bill as a result of our deliberations, it will be easy enough at a later stage to put them in their proper place. There is one other point, and that is that in each of the clauses the term "British" at the present moment is taken only to refer to goods coining from the United Kingdom. Again, should either of these clauses be accepted or passed, we will ask your Lordships at the Report stage to sanction certain Amendments whereby the advantages accruing would be extended to all products produced within the British Empire. It would, of course, be unthinkable that the United Kingdom itself should seek to gain advantages not shared by the rest of our Empire.

The question raised by these two proposed clauses is, I submit, one of the greatest importance. We are told that there are no safeguards with regard to trade which are of very great value, and that we have to trust to the good will of the Indian people. But if no safeguards in regard to trade are any use, neither are safeguards with regard to anything else, and of these safeguards—or so-called safeguards—there are a great many in the Bill. The difference between the two clauses proposed is briefly this, that one would confer a right of Imperial preference, and the other merely the advantages of the most-favoured-nation clause. For myself, I should have thought that as we are giving this new Constitution to India of our own free will, and it is not being extorted from us by force, it would be only reasonable that we should have as a result some form of Imperial preference in India. Of course, we would naturally be prepared to accord a similar favour to India in return, and if such a suggestion does not appeal to your Lordships, I think you would all approve of the prin ciple that it should not be possible for India to put the manufacturers of this country in a worse position, with regard to the entry of goods into India, than the manufacturers of, say, Czechoslovakia or, still more, of Japan.

The Secretary of State, in introducing this measure on the Second Reading, made an almost impassioned appeal to us not to say anything which would hint that we did not trust the Indian people or the Indian political classes. I do not think anybody would say that he distrusted the Indian people, but I am afraid the noble Marquess is asking a little too much when he expects us to have unlimited trust in the Indian political classes, because I cannot feel, and I think few of your Lordships would feel, that the actions of these gentlemen in the past have been of such a character as to make us feel that their actions in the future towards this country are likely to be tinged with gratitude such as we have a right to expect. I do not distrust them because they are Indians, but because they are professional politicians, and I distrust professional politicians wherever I find them, whether among the Communist classes in India, or the trade union circles in this country, or among the occupants of the Front Bench in another place. I look upon them wherever I find them with the most jaundiced suspicion.

All I suggest is that it would be utterly improper for your Lordships to pass this Bill without ensuring that we shall not run the risk of losing more of our trade than we have done already through hostile action, directed from political motives on the part of Indian politicians. It is quite true that they may represent only a minute portion of the Indian people, but it is that minute portion which is likely to have control in India for years to come. It is with this that we have to reckon. There is only one more point to which I would like to refer, and that is to direct your attention to the word "substantially" in the third line from the bottom of this proposed new clause. The reason we do not ask for any fixed preference to be given to British goods is that it would be quite impossible to lay down that any one percentage would be suitable in all cases. Twenty per cent. would be much too low in some cases, and ridiculously high in others. Therefore, it is proposed to leave the exact figure to the discretion of the Governor-General. It is true that that superman has already cast on his shoulders a greater burden than any one man can assume without going insane, but this extra task is so small that I trust it will not be the last straw which will break the camel's back.

Amendment moved— Page 224, line 20, at end insert the said new clause.—(The Earl of Mansfield.)


I desire to support this Amendment, and to ask your Lordships, before we go any further with this Bill, to reflect upon how dramatic has been the decline of our trade position in India it a very short time, and to reflect further how urgent is the need of some sort of Amendment such as is proposed. Before the reforms in India, some fifteen years ago, India was our greatest market—some £200,000,000 worth of trade annually with India. We exported, as your Lordships know, mostly Lancashire piece goods and steel goods to India, and we bought an immense volume of India's raw materials in return, and over this vast volume of transactions profitable to both countries the protection of the British Navy was extended, solely at the expense of the British taxpayers. Since the reforms, whereas in 1924 we exported some 1,640,000,000 square yards of piece goods to India, in 1934 that figure had shrunk to about 582,000,000 square yards. In 1924 our total exports were £90,000,000, and in ten years they have fallen to £30,500,000. Such is the terrible and tragic story of the decline of our trade in India, which had been, up to the reforms, constantly and steadily in the ascendant ever since William Leedes mounted the twisted steps of Akbar's throne at Fahtepur Sikri and obtained that permit which was to have such unforeseen and yet colossal results for the benefit of both countries.

Then, as to the causes of the decline. They have been obviously very varied—partly world causes, partly due to Japanese competition, partly clue to the competition of the Bombay and Ahmedabad mills, but very largely due to discriminatory action on the part of political India against our trade. There is plenty of room both for the Lancashire and Indian mills, provided the consumers' interests are consulted, and provided—a very large proviso in this case—not only the interests of the consumer are safeguarded but that the Indian buyer is allowed to buy what he wants, and given due protection against intimidation and boycotting. How significantly in 1923 Sir Charles Innes spoke, in words to this effect: "If the Indian ryot had a vote, he (Sir Charles) would not be proposing to increase the tariff duties."It is essential, if the standards of living in this country are to be maintained—and the standards have been based on East Indian trade—that we should secure, in this Bill, some security for fair trade for British goods in the Indian market. Our claims for this fair play are solid and good. Surely they are these: first, and foremost, that it is due solely to the protection we are affording on the sea routes of the world that Indian exports are able to travel, that it is on our naval protection that they depend; secondly, that we give access to Indian trade, on exactly equal terms to our own, in the vast Crown Colony markets, which we protect and which our energy and our money have developed; and thirdly there is the actual right of partnership which has been laid down by Sir Samuel Hoare when he was Secretary of State as an essential condition of this Bill. There is no partnership if economics are to be excluded and if there is to be discrimination again our trade. Those, to mention only three, are ample reasons for claiming that our trade in India should be secured under this Bill and given, not only equal, but preferential treatment; we have a right to be treated better than foreign countries who discharge none of these duties and give none of these benefits to Indian trade. That case is unanswerable.

Yet right through the process of this Bill the Government have steadily refused to take the steps necessary to give any virtual security, as we think it—or anyhow sufficient security—for fair treatment for our trade. My right honourable friend the Secretary of State's predecessor always justified his refusal either by misquoting the Fiscal Convention, which he always has entirely improperly described as fiscal autonomy—he has always used the argument of the Fiscal Convention of 1919 in support of his view that he is debarred from taking effective steps to protect British traders from the hostile attacks of Indian politicians—or by relying upon the argument that any steps such as we propose would do something to damage the good will which he very strangely believes is going to result from this Bill. I am going to ask the Secretary of State to give us, if he will be so good, a much clearer reply to our question on the Fiscal Convention than that which we have been fortunate enough to obtain so far from the Secretary of State in another place.

May I remind your Lordships what the Fiscal Convention was? It originated, after all, in the India Bill of 1919 and the Simon Commission described it in these words: The Secretary of State does not interfere with the enactment of any tariff measure upon which the Government of India and the Indian Legislature are agreed"— here is the operative part— but as a member of His Majesty's Government he cannot divest himself of responsibility for ensuring that no such measure cuts across general Empire policy or is so unfair to any constituent part of the Empire as to bring India into conflict with it. That would obviously, without any question at all, include the Ottawa policy, which is a preferential policy. Therefore the Secretary of State has the right to interfere: indeed it is his duty according to the Simon Commission's view, if this policy, the present India Bill, should possibly cut across the Ottawa policy.

It goes on to say: This responsibility he can, in the last resort, fulfil by exercising his right of advising the Crown to disallow the measure if passed. But in order to avoid such a conflict if possible, he is kept informed … before the Legislature is consulted, and therefore before the Convention operates. I only read that last passage to show that it is not only apparently his duty to intervene under the Convention where any policy runs athwart of an Empire policy, but it is made very simple without friction for him to do it. It is therefore to be seen that there are three limitations on the grant of fiscal autonomy. The first one is when the Government of India and the Indian Assembly are not in agreement; the second is, if a tariff proposed by them cuts across the general lines of Imperial policy—and I speak with special reference to Ottawa—and the third if any proposal were so unfair to any constituent part of the Empire as to bring India into conflict with it.

Over and over again in another place and in the country we have put questions to the Secretary of State, and he has merely ignored our questions, or he has repeated entirely fallaciously that India has been given fiscal autonomy. When the late Secretary of State moved the Second Reading of the Government of India Bill on February 6 he said: Our intention is substantially to continue the same fiscal autonomy that has existed in India for the last fourteen years … And he was corrected. The Simon Commission's Report was put before him. My right honourable friend Mr. Churchill, on the Second Reading in another place, made a very clear statement about it in the following very important passage. Referring to another member of Parliament he said: He asked me whether we who constitute the Conservative Opposition adhere to the so-called Fiscal Convention of 1919. I do. But"— Mr. Churchill said, and said for all of us— I place a very different interpretation on it from that of the Government spokesmen. The Fiscal Convention of 1919 is not a Convention in the sense of being a treaty. It is a unilateral declaration of policy. It does not confer fiscal autonomy upon India or upon the Government of India. It does not transfer British sovereignty to an independent external body. The Government of India is not an independent body, it is a projection, to a very large extent, of the Government of Great Britain. It is open to the Secretary of State to address, and if necessary, to instruct the Viceroy and through him the Government … To say that we have transferred fiscal sovereignty, that India has complete fiscal autonomy, is not warranted either by the letter or by the spirit of the so-called Convention. The only Minister, Mr. Baldwin, who immediately followed Mr. Churchill, made no reference to, and no denial of that doctrine. I want to ask the Secretary of State whether he supports or does not support Sir Samuel Hoare's contention that India has been given fiscal autonomy, and I hope he will make his position quite clear on that point. It is enormously important, because if fiscal autonomy has been given to India, then we have lost all power in the future of giving any protection to British trade, and we have been grossly misled all these years upon the matter.

At the Ottawa Conference India became a party to the principle of Imperial preference. We are told by the Government to rely upon the good will of political India in the future for security to our trade. At Ottawa Indian politicians who took part pledged India to the principle of Imperial preference, and the Legislative Assembly only on January 30 last passed a Resolution by a large majority denouncing it. Where is the security for our trade there, or the good will that is supposed to flow? On April 28, the Punjab Trades Association passed a resolution not only to promote Swadeshi industries—it would be perfectly natural that they should try to do all they could for their own industry—but they went on to urge that trade should preferentially be done, when dealing in foreign goods, in non-British goods! Is there no reason for us to ask your Lordships to see, in the interests of the distressed areas up North, with two million people still out of employment, that some definite security should be given that our trade be treated a trifle better than foreign trade? Again, the Bombay Merchants Chamber—that is a very important Chamber. It contains merchants and traders of the highest standing in India, and certainly of the greatest stability. They are not just a noisy crowd of unimportant people; they are responsible people. Over and over again they have passed resolutions aid made statements of great hostility to British trade.

In these circumstances I beg your Lordships to consider whether it is not of vital importance that we should do something to secure fair play for our own traders. Just think of the vast markets which we give for nothing to Indian trade. Every Crown Colony—free entry into these markets. They do not pay a penny; we pay; and yet in the Bill there is nothing whatever to secure for our people better treatment than foreign countries receive. We are told that we have to rely on political good will; that good will is the first essential of mutual trading between two countries. I ask forgiveness for repeating myself, for I have said the same thing in the House before, but good is not the first essential of mutual trading. Purchasing power is the first essential of mutual trading. Therefore we need to look into this Bill to see whether the purchasing power of the people of India is likely to be increased or decreased.

I have a quotation which I should like to read from Mr. H. P. Mody, author of the recent agreement between Lancashire and India. Speaking on April 20 Mr. Mody said: It is true that India's credit stands high and her budgetary position is better than that of most countries in the world. But the limit of taxation in this country has been reached, and it is almost impossible to find additional sources of revenue for financing the numerous developments which require to be undertaken if India is to find a worthy place among the nations of the world. This does not take into any account the seriousness of the agricultural situation in the country and the difficulties in which Indian trade and industries are finding themselves as a result of the numerous restrictions on international trade. It would be foolish— Mr. Mody concluded— to sound a note of alarm; but the situation is developing in such a manner that there is every likelihood of the Socialist element in the country sweeping aside Right Wing Congressmen and acquiring dominance everywhere. The Indian arena will be occupied in the next few years with a conflict between the town and the countryside, between the forces of Socialism and of Capitalism. A substantial world-recovery may avert such a catastrophic development, but the future at best is very uncertain. That is one of the leading industrialists and traders in India. There is not a member of your Lordships' House who would not agree—I am sure my noble friend the Secretary of State would be the first to agree—that the proposals for which he is making himself responsible are more than likely, for many years to come, to reduce administrative efficiency and probably the purchasing power of India. If that be true we have to think very carefully as to what we should put into this Bill to secure our trade. Sir Austen Chamberlain fifteen years ago was using just the same arguments as are put forward to us now. My noble friend Lord Derby will remember perfectly well that Lancashire was bidden by Sir Austen Chamberlain, then Secretary of State, not to protest against a 4 per cent. tariff because, he was told, if they did not they would earn Indian good will and all that flowed from it in the interests of trade. What has been the result? Four per cent has gone up to 14 per cent. and 25 per cent. in some cases, and on some goods to 10 per cent.

I cannot see what possible objection can be raised by the Government to the principles of Ottawa, all principles announced by the Government, to giving some measure of protection for fair trading between this country and India. Least of all people in this House do I desire anything which will destroy the welfare of the Bombay mills, in whose growth and industry I have taken a personal interest for many years past. There is plenty of room for both. What I am asking your Lordships to agree to is that we should have some measure of protection against the Nationalist bitterness that is likely to be found in Congress politics for some years to come if this Bill is passed into law. We hope that time will assuage it, but it is more than likely that British trade will suffer so grievously in the first ten or twenty years of the reforms that it is absolutely imperative to do something to protect our people.


This is a very large subject, and a few words are called for from this side of the House on behalf of my noble friends. Your Lordships have listened to a very powerful plea both from the noble Lord who has just resumed his seat and from the noble Earl who moved this Amendment. I will, if I may, sum up our point of view in a very few sentences. The noble Lord, Lord Lloyd, spoke of the two requisites of trade. He left out a third. As he was speaking I put down what I think your Lordships will agree are the three conditions on which we can trade with India or any other country. No number of Amendments, no amount of safeguards or Government checks or vetos will enable us to trade unless these three conditions are fulfilled. Two of them have been mentioned by the noble Lord. In the first place the goods that we offer must be suitable and cheap; and by cheap I mean cheap in respect of quality, not necessarily that they should be shoddy: and that, as regards textiles, depends on Lancashire herself. The second necessity of trade in any country is good will. The boycott weapon to-day has been so developed in various countries that it will defeat any political or artificial preference that is given. The third condition is ability to purchase.

The noble Lord, Lord Lloyd, doubts whether this Bill will produce good will. We on this side have our doubts too, but whereas he goes rather further than doubt—he is sure it will not—we on this side hope that it will. We feel that any artificial restriction as proposed by the noble Earl in his Amendment will weaken still further the chances of that good will which is so precious for the future. With regard to ability to purchase, that we hope will in future be allowed to be a matter for Indians and Indian economists to bring about themselves. The whole economic system in India needs reorganising. I might remind your Lordships of one remark made by the late Lord Ampthill, in the very powerful speech which he made on the Second Reading of this Bill, when he said that the problem in India is more economic than political. When we talk of Indian boycotts and Indian ill will and artificial restrictions, we must look to our own example. We have not set a very good example in the Empire recently. I ask the noble Lord and others who support him to reflect on what we have done with regard to Ireland. We have put on trade barriers against Ireland. We have tried for political reasons to ruin her principal industry, her stock-raising industry, in a way that has not escaped notice in India. I only mention that in passing. We cannot blame the Indians for regarding our action against Ireland although I admit that they began the discrimination against our goods during the boycott period. We cannot blame the Indians in the future if we ourselves do not behave with the most perfect propriety with regard to Empire trade. These are the views of my noble friends, and in a controversy of this great and vital importance I feel that they should be expressed.


I would like, first of all, to express my gratitude to the noble Earl who moved this Amendment for clearing up what I admit was to me a great puzzle—namely, why in the midst of clauses dealing exclusively with Burma I should suddenly stumble across a most important Amendment not referring to Burma at all but referring to the Federation of India. The noble Earl has explained how that point arose. He said that the Amendments got somehow mixed up, and that this one got into its wrong place. I can quite understand that in a Bill of this kind, with the large number of Amendments with which noble Lords have been dealing, that might easily happen. I would also like to express my gratitude to the noble Lord for excluding me, if I understood him rightly, by a process of elimination, from that class of person which excites the noble Earl's particular animosity—namely, the professional politician, and my noble friends behind me also. I am duly grateful to the noble Lord for that.

The Amendment which the noble Lord has moved, at first sight, is one of great attraction. It seems to be a very attractive thing to do to lay down in a Statute governing the Constitution of India that India shall provide a preference in her markets for British goods, but, though that is a very attractive proposition at first sight, I am quite sure that it would be an extraordinarily unwise proposition if it was actually acted upon. Let me first of all say a word about the Indian Customs tariffs. The noble Lord, Lord Lloyd, unless I misunderstood him, talked as though the Indian Customs tariffs were imposing upon British goods Customs duties at least as high as those imposed upon the goods from other countries. That is by no deans the case. At present the preferences granted by the Indian Customs tariffs to the goods of this country are considerable, and I think in the very case of cotton goods, which naturally are uppermost in the minds of noble Lords, because we all regret so much that period of economic depression through which the industries of Lancashire have been passing—even in the case of cotton goods I believe it is broadly true to say—I have not verified the figures—that whereas the import duties imposed upon British cotton goods going into India are at the rate of twenty-five per cent.—a high duty certainly—the rates of Customs duties imposed upon cotton goods coming from other countries is at least fifty per cent., so that under the Indian tariff at the present time British cotton goods are enjoying a very substantial preference in the Indian market. Let me also point out that the height of the Indian Customs duties is not really mainly due to a protective policy on the part of the Indian Government. It is perfectly well known that these Customs duties have had to be raised steadily year by year during the past few years, not for the purpose of granting protection in India but for the purpose of raising the necessary revenue to enable the Indian Government to balance the Indian Budget, and that should also be borne in mind when you are considering these matters.

The noble Lord, Lord Lloyd, asked me a question with regard to what is known as the Fiscal Convention. The noble Lord reminded us that this Fiscal Convention had its origin in the 1919 Act. That, of course, is true. But let me remind your Lordships that under this Convention, when the Government of India and the Indian Legislature are in agreement on tariff questions, the Secretary of State does not interfere. Let me also remind your Lordships that that Convention had its origin from a British Parliamentary Committee itself. It was a proposal by the British Parliament. Let me refer the noble Lord to the actual origin of the Fiscal Convention. It was put forward by the Joint Select Committee, not the Joint Select Committee over which my noble friend Lord Linlithgow presided so ably last year, but the Joint Select Committee which dealt with the India Bill of 1919. Let me read to the noble Lord a few words of what that Parliamentary Committee said. They said that they had been giving careful consideration to the whole question of what should be the future relations between the Secretary of State in this country and the Government of India under the Constitution which they were then proposing to set up.

They went on to say this: This examination"— the examination of the question to which I have referred— of the general proposition leads inevitably to the consideration of one special case of non-intervention. Non-intervention, that is to say, by the Secretary of State.

Nothing is more likely to endanger the good relations between India and Great Britain than a belief that India's fiscal policy is dictated from Whitehall in the interests of the trade of Great Britain. That such a belief exists at the moment there can be no doubt. That was in 1919.

That there ought to be no room for it in the future is equally clear. India's position in the Imperial Conference opened the door to negotiation between India and the rest of the Empire, but negotiation without power to legislate is likely to remain ineffective. A satisfactory solution of the question can only be guaranteed by the grant of liberty to the Government of India to devise those tariff arrangements which seem best fitted to India's needs as an integral portion of the British Empire. I should have thought that those words were pretty clear.


May I intervene for a moment? That was not in the Act. That was a Report of the Joint Committee. It had no validity nor legality.


Quite so. I do not quarrel with the noble Lord. All I was saying was that the origin of the Fiscal Convention came from a Parliamentary Committee in this country. That was the recommendation made by a Parliamentary Committee. And not only was that recommendation made, but it was accepted, and that has been the policy with regard to India ever since. And I can tell the noble Lord this, that there is not a single occasion on which the Secretary of State has ever intervened since the Report of that Committee to overrule the Government of India on a question of this kind.


I do not want to interrupt my noble friend again, but it was the Report of a Commission which had no more validity than the Report of the Simon Commission or any other Commission. It is not an Act of Parliament. Therefore the Secretaries of State who have worked on that have worked really ultra vires.


I really think the noble Lord must have missed my point, but I will not weary your Lordships by repeating it. I have said it twice and I do not think it is necessary that I should say it a third time. Let me say, however, that it has been the policy of this country for the last sixteen years, or whatever number of years it is, and it is the policy of this Bill to continue, not by means of a Convention because a Convention will no longer be necessary, but to continue under the Constitution which this Bill proposes to confer upon India the policy embodied in the Convention—namely, that India shall be free to arrange her tariff policy to suit her own needs.

It is quite true that as a result of the Report of the more recent Joint Select Committee which sat in connection with the Bill now before your Lordships one case was put forward in which it was recommended that the Governor-General should have a special responsibility in the matter of Indian fiscal policy. That one case was the case in which a tariff measure was being enacted by the Indian Legislature which was clearly designed to have a penal effect upon British trade. The safeguard under that head was included in the Bill and your Lordships will find it in Clause 12 (1) (f). In that case the Governor-General will be called upon to exercise the special powers which are conferred upon him. That, broadly and briefly, is the present position. What would be the effect of inserting in this Bill the Amendment which my noble friend has proposed? I do not suppose that even the noble Earl himself would suggest that it would be viewed with enthusiasm in India.


Nor is the whole Bill.


The noble Lord thinks that neither is the whole Bill, but certainly he would not suggest that this particular proposal would be viewed with enthusiasm in India. My considered and sincere opinion is that nothing is more likely to be damaging to future British trade in India than to give the impression which this Amendment would give that you are dictating a fiscal policy, not in the interests of India herself, but of this country.

Let me in conclusion remind your Lordships that it is not only tariffs which prevent the importation of goods from outside into a country. There is an even more effective weapon than tariffs, and we have had experience of it in India itself. That is the boycott of the goods of a particular country. If noble Lords will cast their minds back to 1930—my noble friend who sits beside me can speak with great authority on the point—they will realise, I think, that the boycott against British goods which was the result of the fear on the part of Indians that we were not going to carry out our promise did a great deal more harm to British goods than any tariff is likely to do. While I recognise the sincerity of noble Lords who have supported this Amendment, and recognise the fears which they entertain with regard to the possible future of British trade in India, I do say that in my opinion this Amendment would be far more damaging to British trade in India than any fiscal freedom which you can give to the Indian people.


I hope the Government will not think that we are anxious to take an extreme view upon this question. We want to take a most moderate view upon it, as I venture to think we have taken upon almost every part of this Bill. We were, of course, opposed to the Second Reading—that is to say we wished to have a limiting Amendment on Second Reading—but in all the Amendments subsequently moved by any of those who are acting with me I think I may say that we have never challenged in Committee the fundamental principles of the Bill. I will not make an absolute statement, but broadly speaking we have tried to work upon the foundation of the Bill.

Now we come to the fiscal question which is so vitally important to this country, and I hope your Lordships will allow me to say that every commercial interest, especially in the County of Lancashire, is regarding to-day's proceedings in your Lordships' House with great anxiety. The question is how far in granting self-government to India we are to go in the matter of fiscal freedom. Let me consider for a moment whether the argument which the noble Marquess the Secretary of State has just delivered to your Lordships is really well founded. I am not going to repeat what was so well said by my noble friend that the so-called Fiscal Convention was a limiting Convention. There was always an ultimate power in the Secretary of State to override the fiscal autonomy of India.

I do not need to dwell upon that, but I must recall to your Lordships the fact that the Fiscal Convention turned upon the fact that the Government of India agreed with the Indian Legislature upon a particular fiscal policy which the Secretary of State was very reluctant to override and, as my noble friend said, was in point of fact not overridden. But you are now going to have a wholly different Government of India. Is it reasonable to argue that every attribute that belongs to the old Government of India ought to apply to the new Government of India? They are wholly different. The old Government of India was a Government under British influence with a British Governor-General instructed by a British Secretary of State, who was all powerful. Now we are going to have a responsible Government. The situation is quite different. The noble Marquess, the Secretary of State, said it is very dangerous to override the fiscal autonomy of India. To hear him speak one would have thought that no limitation on fiscal autonomy was contained in the Bill. But the whole Bill is full of what the Government call safeguards which are really limitations. There is the penal clause, which the noble Marquess himself recited, to prevent anything like penal use against the Mother Country of fiscal autonomy. Then there are all the clauses dealing with discrimination. We do not allow India under this Bill to do what it likes about policy. All these clauses which are designed to prevent discrimination are all limitations. My noble friend does not use menacing language about the indignation which will be felt in India if they are not allowed to discriminate in their policy against commercial interests in this country. He does not say that it will result in a boycott. Why not? If one kind of discrimination is so formidable, why not the other kind of discrimination? Really, the whole thing rests upon a complete misunderstanding of the actual policy of the Bill. I need not mention to your Lordships that in respect of Burma, as the Bill stands, the fiscal policy of India towards Burma is to be limited. I cannot understand, therefore, why this very menacing language should be used.

In what I may call the peroration to the Secretary of State's speech just now, he said how dangerous it would be if it were thought in India that we were going to use this Bill in order to further the interests of this country at the expense of India. You would think that he suggests that we are to reserve, under this clause which my noble friend has proposed, a power of raising unlimited taxation—of unlimited limitation of Indian fiscal freedom. Of course, all that we are trying to enforce is what is known as the Ottawa policy—namely, that this country shall be better treated than any foreign country. That is the Ottawa policy: not an unlimited power of interfering with Indian finance, but merely saying that when it comes to that critical moment, then there must be just a preference for this country. It is impossible to represent that as fiscal oppression of India.

But if my noble friend will be good enough to allow me to press him, I will go a step further. There are two Amendments on the Paper. One of them prescribes—the one which my noble friend Lord Mansfield has moved—that preference should be given to British trade. We do not say how much preference, but some kind of preference. Then there is another Amendment which merely says that most-favoured-nation treatment should be accorded to British trade: not that we should be treated better than other countries, but that we should be treated not worse than any foreign country. Now I make this offer to the Government. If they will accept it, I will in that case very respectfully suggest to my noble friend who sits behind me that he should withdraw his Amendment and allow us to put in the second Amendment, the more moderate Amendment; that is to say, that we shall take a step forward to meet the Government. They say preference is dangerous—preference for this country; that the Ottawa policy would excite the antagonism of India. To think that such a thing should be said by this Government, who have made it their greatest boast that they have promoted the Ottawa policy, which has been greeted all over the Empire with enthusiasm! However, he thinks that India would be offended by the Ottawa policy—


No, no; the noble Marquess has rather missed the point. The Ottawa policy is already in force as far as India is concerned.


Then what objection has the noble Marquess to the Amendment?


Because at Ottawa India negotiated as a free negotiating party. The noble Lord says, "No, they must not do that; they must do what we are stating here."


And we are to take no account of the fact that the Congress Party repudiated it afterwards.


The Secretary of State thinks that he can rely upon Indian public opinion in the future to carry out the Ottawa policy. Will he rise at that Box and say that he can rely upon it? I am quite certain he will not! He knows far too well that there is no such reliance to be placed upon the Indian policy. But he is again back to the question of allowing them to be free in this country. My Lords, the Bill crawls with limitations and fetters, as I have shown in the earlier part of my remarks. There is no reason why they should suddenly find that they think that in this one respect they should be so free. I suggest that the noble Marquess is forgetting that the British Government exist, not only to defend the interests of India, but also to defend the interests of Great Britain, and the attitude that the Government take to-night on this matter will resound right through the North of England. I warn them how dangerous the ground is on which they are treading.

I make once more this offer to them, that if they will allow us to put in the most-favoured-nation clause, then I will ask my noble friend to withdraw this Amendment. The most-favoured-nation clause is almost universal between this country and foreign countries—or at least it has been up till quite recently. All we should ask would be that, when we are making this vast change in the Indian Constitution, at any rate one additional limitation shall be made: that they shall not be able to treat this country worse than they treat any other foreign country. I make that offer to the noble Marquess and ask him to rise in his place and say whether he will accept it.


I am afraid I cannot accept the noble Marquess's offer, for the same reason; that you are once more imposing upon India instead of allowing India: to negotiate freely.


I hardly expected to find myself in opposition to my noble friend who has just sat down on a subject of this kind; but I seem to remember, in years gone by, advocating in your Lordships' House Imperial preference and other measures of that kind when my noble friend was not quite so persistent in his advocacy of it as he has been to-night.


I beg my noble friend's pardon. He will never find a single word that I have ever said in my public life which was not advocating preference.


He was advocating it, but not with the same persistence as to-night in connection with this Bill. I have given this question very serious and anxious consideration. Naturally, I agree with my noble friends who have moved this Amendment that trade is a. most important and fundamental question in connection with any new Constitution which we may give to India. But I have to address to myself the practical question as to how we can best achieve good trade conditions under this Bill. I have consulted many friends in commercial circles; I have consulted many friends who have been connected and who still are connected with Indian affairs and Indian commerce, and I have come to the conclusion that it would not be wise, nor would it be prudent, to incorporate either one or the other of these two Amendments which have been suggested in this Committee to-night.

What are we seeking to impose upon India by the first Amendment? We are seeking to impose upon India in the new Constitution a limitation which we have not even incorporated in the Constitution which was given to Ceylon last year. How then can we, in this Constitution to be granted to 460,000,000 people, not give the same fiscal freedom as we are giving to a neighbouring Colony which consists of only about four million people? My experience of the Colonies and elsewhere is that this country has never attempted to impose Imperial preference upon people without their consent, and here we are endeavouring to do this, through this Amendment, to a country which I agree has had fiscal autonomy for ever fifteen years. The question of Ottawa has been referred to. I attended the Ottawa Conference, not in an official capacity, but I was there throughout the whole proceedings, and I am aware that the Indian delegates entered into the arrangements with this Government, and other Governments represented there, voluntarily of their own free will, and without any compulsion whatever. Supposing we incorporate this Amendment, or either of these Amendments, in the Bill to-day, we are suggesting to India that we cannot rely upon them in the future in order to carry out these arrangements, or any future arrangements, or that we cannot even rely upon their good will at all. So far as India is concerned, good will does count for a very great deal.

My noble friend who moved this Amendment knows just as well as I do what were the effects of the boycott in Bombay two or three years ago. We know that the effects of that boycott have hardly disappeared to-day, and probably the alarming figures given by Lord Lloyd are due, in great measure, to that boycott, or the aftermath of that boycott, in Bombay two or three years ago. I suggest that we cannot afford, in the future, to risk boycotts of that nature in India. Boycotts have now been worked out, if I may put it in that way, on such a basis, and so scientifically framed, that they would be extremely difficult, especially after a. Constitution of this kind had been passed, to contend with, and to find a solution. I believe, from all I can learn, that our best method under this Constitution, so far as trade is concerned, is for this country to rely upon the future good will of the people of India. Unless we do that, I fear there may be very disastrous results. I agree entirely with what the noble Marquess, the Secretary of State for India, said on this subject, and I, for one, will go into the Lobby, if a Division is taken, against both Amendments.


It is twelve years since I last inflicted myself on your Lordships, and therefore feel a certain amount of nervousness in addressing you now. I am practically out of all political life, but that does not mean that I am out of what is, after all, the chief life of the country, the industrial life of the North, and although I speak more or less in favour of the Amendment, rather than against it, I do not do so in any way as an opponent of the Government. I think the noble Marquess and those associated with him know that I have been throughout an ardent supporter of the Bill. Therefore, he may rest assured that if I support any particular Amendment it is not with any intention of injuring the Bill, but simply because I think an improvement can be made, and that the Amendment proposed would not be injurious to the general construction of the Bill. Two Amendments are on the Paper, and they are being taken together, and it is a little difficult to speak on them when you entirely disagree with one and agree, in the main, with the other.

The difference between the two is, to my mind, a very vital one. In the first Amendment you are dictating to India and definitely telling India that she is to give preference to this country. With that I entirely disagree. I do not think you have got the right, and I think India would resent that. The other is entirely a different matter. It says to India: "You shall not discriminate against the Mother Country." For that I feel there is a great deal to be said. I ask myself the question which I know I shall be asked in my own industrial district: Is there anything wrong, when you give a new Constitution, in saying to those to whom the Constitution is given: "You have got to put the Mother Country on the same footing as other countries" We ask for no favour whatsoever, but we do ask and we put it in as an order, let us say, that no favour shall be given to other countries as against the Mother Country. I confess that it seems to me that an answer to that is very difficult to find.

The Ottawa Convention has been alluded to. I am one of those who believe that from the Ottawa Convention, although it is of slow growth, there is an enormous amount of good to come in the future to the industries of this country, and I am therefore very reluctant to see anything done which could in any way interfere with the growth of that Convention. It seems to me that if, in your new Constitution, you empower the country to which it is given to make a preference for other countries as against this country, you are cutting at the very root of that Convention. You are destroying, to ray mind, for all time, if they do such a thing, that which is the dream of many of your Lordships, myself included—namely, free trade within the Empire. The noble Marquess the other day, in speaking on Clause 296, said the clause was intended, as far as possible, to establish free trade within British India. May I not go a little further, and say that I can only support the second Amendment because I think that by doing so I am doing something which will help on, or at all events prevent the stoppage of, free trade between the Mother Country and India. For that reason, and for that reason alone, I should support it.

But I think there are other points that have to be considered. First of all, do not your Lordships think that it must be an advantage to the Viceroy in the future to let it be known that this House has decided against any question of discrimination against the Mother Country? That superman, as he must be, has any number of obligations put upon him in which he has to act on his own discretion. Do not your Lordships think it would be advisable to give him one in which his discretion would not be called into play, when he would not find himself in conflict perhaps with his Legislature, but it would be put in definitely in the Act that there was to be no discrimination against the Mother Country?

There are other points which others have made and which others will make, but I should like to allude to one thing and that is the question of good will. I entirely agree with the last speaker that good will is essential. We cannot continue trade to the advantage of this country unless there is good will. You must have not only a willing seller but a willing buyer, and if I thought that this was going to the extent of destroying good will I should be very reluctant to support the Amendment. But I cannot believe that this is so. I cannot believe that by asking India, to whom you are giving this new Constitution, simply to put the Mother Country on the same footing with other countries, you are going to destroy their good will. I had the opportunity of talking with many Indians who were here on the Joint Select Committee and with many who came over during the sittings of that Committee. All of them assured me of the same thing, that there was no real ill will against England and that if this Constitution were granted then good will would most certainly come. I may have been simple to believe them, but I did believe them, and I do still believe them. I believe that they have got good will for this country, and I do not believe that this restriction—which, after all, is in a way a very minor restriction, the prevention of discrimination against this country—will in any way impair their good will.

I hope that the noble Marquess, with whom one has worked for so long, will see his way to put in something in the Bill which would allow one to answer one's friends in the industrial North and say: "There is something in that Bill which is going to prevent discrimination against you. I believe there is no discrimination against you. With the good will of the Indian people, which I believe will come, you will see in future years that this Bill has been of benefit, not only to India but to this country, and your trade will prosper in the future as it has in the past."


The noble Marquess, Lord Salisbury, made clear to the House that he was intending to invite the noble Earl, Lord Mansfield, to withdraw the first Amendment on the Paper and to ask the Committee to rely upon the second Amendment which stands in the name of Lord Islington and Lord Darcy (de Knayth). He argued that surely it would be right and essential that the most-favoured-nation clause should be inserted in the Bill. The noble Earl, Lord Derby, has very strongly emphasised the same point. The Secretary of State when he spoke drew attention to Clause 12 of the Bill. May I invite the attention of the Committee very closely to that clause? Clause 12 (1), which has already been passed by your Lordships without amendment, says: In the exercise of his functions the Governor-General shall have the following special responsibilities, that is to say: (f) the prevention of action which would subject goods of United Kingdom or Burmese origin imported into India to discriminatory or penal treatment. Is it not possible for noble Lords interested in the industrial North to make it clear to those who place reliance upon the defence of their interests that already those interests are defended? The Bill contains the words which I gather are so much desired. It is already not legal for discrimination to be exercised against the importation of British goods into India. If that were not already so I fancy that many of your Lordships would be determined to insist that they should be so inserted. But if it is a fact that they are already there, and indeed they are, surely the case so amply made by noble Lords has already been met. I suggest that it is so, and that being so, I am inclined to think that noble Lords who are pressing for its reiteration now are surely asking for that which is unnecessary.


Why will the Government not accept this?


I am not competent to speak for the Secretary of State, still less for the Government, but I take it that, as it is already there, they think it is not necessary to put it there again.


The noble Lord evidently did not listen to the Secretary of State's speech.


The noble Marquess may be assured that I did listen with great care to the Secretary of State's speech, and I was rather struck by the fact that he did not rely entirely upon this clause and subsection. At that moment the Secretary of State was endeavouring to show that the first Amendment which stands on the Paper was one which it was impossible for the Government to accept. It was not until after the Secretary of State had spoken that the noble Marquess suggested to the noble Earl, Lord Mansfield, that the first Amendment should be withdrawn and that the second should take its place, and it was only on that account that I rose to point out that already the conditions desired are provided.


I of course respond at once to the appeal of my noble friends, Lord Salisbury and Lord Derby, but before asking leave to withdraw the first Amendment, I wish to ask your Lordships to divide on the second. I cannot agree with the noble Lord, Lord Hastings, that it is in any way superfluous. I beg leave to withdraw.


I assume from the fact that no member of the Government has risen that they intend to continue to resist this most reasonable Amendment for most-favoured-nation treatment. It is clear to everyone. It prevents the efforts of those who are vindictively raising a tariff against British goods, and surely it is worth while putting it in the very forefront of the Bill. I still hope—although it is very difficult for me to hope—that the Government will accept it.

Amendment, by leave, withdrawn.

LORD DARCY (DE KNAYTH) moved, after Clause 357, to insert the following new clause:

Higher duties not to be imposed on United Kingdom imports than on other imports.

". Nothing in this Act shall be taken to empower the Federal Legislature to impose or increase ally duty of customs upon goods imported into the Federation winch are consigned from or in whole or in part manufactured in the United Kingdom if such imposition or increase would impose on such goods a higher duty of customs than the duty for the time being imposed on like goods imported into the Federation which are consigned from any country other than the United Kingdom."

The noble Lord said: After the observations which have fallen from the noble Earl, Lord Derby, I feel it is wholly unnecessary to say anything further in support of this new clause, and I should like to pray in aid every word he has said. I think I have never known an occasion in the whole time I have sat in this Chamber, about eight years, in which such a speech has been made containing not one superfluous word. It was certainly one designed for the benefit of the country as a whole. I beg to move.

Amendment moved—

After Clause 357 insert the said new clause.—(Lord Darcy (de Knayth).)


After that, I can assure the noble Lord he will never hear me speak again! May I say in answer to my noble friend Lord Hastings that I was perfectly aware of that paragraph in the Bill which he mentioned? I quite agree that that does in a way cover this question, but it places the sole responsibility on the Governor-General. I do not want to put more on the shoulders of the Governor-General than T can possibly help. I feel that in this Amendment you are removing this responsibility from the shoulders of the Governor-General and putting it on this House by putting it into the Bill itself.

On Question, Whether the proposed new clause shall be there inserted?

Their Lordships divided:—Contents, 47; Not-Contents, 64.

Argyll, D. Exmouth, V. Kilmaine, L.
Wellington, D. Falmouth, V. Lawrence, L.
FitzAlan of Derwent, V. Lloyd, L.
Aberdeen and Temair, M. Meldrum, L. (M. Huntly.)
Salisbury, M. Aberconway, L. Middleton, L.
Addington, L. Monkswell, L.
Albemarle, E. Boston, L. Palmer, L.
Derby, E. Carrington, L. Phillimore, L.
Effingham, E. Conway of Allington, L. Rankeillour, L.
Lindsay, E. Cranworth, L. Redesdale, L.
Mansfield, E. Darcy (de Knayth), L. [Teller.] Remnant, L.
Mar and Kellie, E. Rochdale, L.
Midleton, E. Daryngton, L. Rushcliffe, L.
Morton, E. Greville, L. Shute, L. (V. Barrington.)
Onslow, E. Hardinge of Penshurst, L. Strachie, L.
Scarbrough, E. Howard of Glossop, L. Strickland, L.
Islington, L. Wolverton, L.
Bertie of Thame, V. [Teller.]
Canterbury, L. Abp. Radnor, E. Digby, L.
Rothes, E. Elgin, L. (E. Elgin and Kincardine.)
Hailsham, V. (L. Chancellor.) Sandwich, E.
Spencer, E. Elphinstone, L.
Vane, E. (M. Londonderry.) (L. Privy Seal.) Stanhope, E. Gage, L. (F. Gage.) [Teller.]
Strafford, E. Hampton, L.
Hastings, L.
Northumberland, D. Elibank, V. Hay, L. (E. Kinnoull.)
Somerset, D. Goschen, V, Hutchison of Montrose, L.
Halifax, V. Ker, L. (M. Lothian.)
Bath, M. Hambleden, V. Lamington, L.
Dufferin and Ava, M. Luke, L.
Linlithgow, M. Abinger, L. Marks, L.
Reading, M. Annaly, L. Marley, L.
Zetland, M. Arnold, L. Oriel, L. (V. Massereene.)
Ashton of Hyde, L. St. Levan, L.
Airlie, K Balfour of Burleigh, L. Sanderson, L.
Bathurst, E. Biddulph, L. Sandhurst, L.
Feversham, E. Bingley, L. Stafford, L.
Iddesleigh, E. Chesham, L. Stanmore, L.
Iveagh, E. Clanwilliam, L. (E. Clanwilliam.) Strabolgi, L.
Lichfield, E. Strathcona and Mount Royal, L.
Lucan, E. [Teller.] Clinton, L.
Lutton, E. Chwyd, L. Templemore, L.
Peel, E. Cornwallis, L. Woodbridge, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clauses 358 to 364 agreed to.

Clause 365 [Medical qualifications]:


The Amendment to this clause is drafting.

Amendment moved— Page 233, line 7, leave out ("of") and insert ("in force in").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 365, as amended, agreed to.

Clauses 366 to 368 agreed to.

Clause 369 [Expenditure defrayable out of revenues of Burma]:


This Amendment is consequential.

Amendment moved— Page 236, line 11, leave out ("the government of Burma"; and insert ("Burma or some part of Burma").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 369, as amended, agreed to.

Clause 370 agreed to.

Clause 371 [Duty of the Government of Burma to keep Secretary of State supplied with funds]:


Both these Amendments are consequential.

Amendments moved— Page 236, line 35, leave out ("or such person as lie may appoint") and insert ("and any High Commissioner representing the Government of Burma in the United Kingdom") Page 236, line 37, leave out ("in the United Kingdom out, of the revenues of Burma") and insert ("out of the revenues of Burma in the United Kingdom or through officers accounting to the Secretary of State, or to any such High Commissioner as aforesaid").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 371, as amended, agreed to.

Clauses 372 to 381 agreed to.


It will probably meet your Lordships' convenience if we adjourn these proceedings now and resume them at half-past nine.

[The sitting was suspended at ten minutes before eight o'clock and resumed at half-past nine.]

Clause 382:

Executive authority in respect of railways to be exercised by Railway Board.

382.—(1) The executive authority of Burma in respect of the construction, maintenance and operation of railways in Burma shall be exercised by a Railway Board (hereinafter referred to as "the Board").

THE MARQUESS OF ZETLAND moved in subsection (1), before "construction," to insert "regulation and the." The noble Marquess said: The first Amendment in my name on this clause is to regularise the position with regard to a private railway in Burma, the existence of which was a little overlooked when the Bill was drafted. It so happens there is a railway which is available to the public belonging to the Burma Corporation, and it was never intended that a private railway of that kind should actually be run by the Railway Authority, though it may be intended that it should be under the general control of the Railway Authority. My first Amendment is to regularise that position.

Amendment moved— Page 243, line 25, after ("the") insert ("regulation and the").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

THE MARQUESS OF ZETLAND moved, at the end of subsection (1) to insert the following new subsection: (2) The said executive authority extends to the carrying on in connection with any railways operated by the Board of such other undertakings as either were being carried on in connection therewith by or on behalf of the Governor-General in Council immediately before the commencement of this Part of this Act or as the Board may be authorised to carry on after the commencement of this Part of this Act by or under any Act of the Legislature. The noble Marquess said: This Amendment is similar to an Amendment which I moved on the Indian clause of the Bill to enable the Railway Authority to embark upon operations which are ancillary to the actual running of trains, making agreements with regard to road transport and so on. I beg to move.

Amendment moved— Page 243, line 27, at end insert the said subsection (2).—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 382, as amended, agreed to.

Clause 383 [Composition &c. of Railway Board]:


This is a drafting Amendment.

Amendment moved— Page 243, line 39, after ("railways") insert ("operated by the Board").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 383, as amended, agreed to.

Clauses 384 to 387 agreed to.

Clause 388 [Provisions as to certain obligations of the Railway Board]:


The Amendment in my name on this clause is consequential. I beg to move.

Amendment moved— Page 248, line 18, leave out ("railway premises") and insert ("the premises of railways operated by the Board").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 388, as amended, agreed to.

Clauses 389 to 391 agreed to.

Clause 392 [Audit and annual reports]:


The Amendment in my name on this clause is consequential.

Amendment moved— Page 249, line 16, leave out ("persons using or desiring to use the railways and the Board"), and insert ("the Board, and persons using or desiring to use the railways operated by the Board").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 392, as amended, agreed to.

Clauses 393 to 399 agreed to.

Clause 400 [Additional appeal to His Majesty as respects interpretation of this Act]:


The Amendment in my name on this clause is drafting. I beg to move.

Amendment moved— Page 253, line 22, leave out ("criminal").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 400, as amended, agreed to.

Clauses 401 to 406 agreed to.

Clause 407 [Saving of rights of appeal]:


May I ask whether the Governor of Burma is in precisely the same position as regards defence as the Governor-General of India and has he the same powers?


Yes he is in the same position.

Clause 407 agreed to.

Clauses 408 to 417 agreed to.

Clause 418 [Conditions of service, pensions, etc., of persons recruited by Secretary of State]:


These Amendments are consequential. I beg to move.

Amendments moved— Page 261, line 7, after ("service") insert ("or civil post") Page 261, line 10, at end insert ("or was appointed to his post").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 418, as amended, agreed to.

Clauses 419 and 420 agreed to.

Clause 421 [Application of four last preceding sections to persons appointed by Secretary of State in Council, and certain other persons]:


The Amendments in my name on this clause are consequential. I beg to move.

Amendments moved— Page 263, line 21, after ("service") insert ("or civil post") Page 264, line 2, after ("service") insert ("or was appointed to his post") line 13, leave out ("subsection (4)") and insert ("subsections (2), (3) and (6)").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 421, as amended, agreed to.

Clauses 422 to 426 agreed to.

Clause 427 [Provision for protection of existing officers of certain Services]:


There are two consequential Amendments to this clause. I beg to move.

Amendments moved— Page 267, line 22, leave out (" to ") Page 267, line 27, after (" of ") insert (" or civil post under ").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 427, as amended, agreed to.

Clauses 428 to 439 agreed to.

Clause 440 [Persons not to be disqualified by sex for holding certain offices in Burma]:


This is a consequential Amendment.

Amendment moved— Page 274, line 13, after (" service ") insert (" of ").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 440, as amended, agreed to.

Clause 441 [Transitional provisions]:


These are consequential Amendments.

Amendments moved— Page 274, line 22, leave out (" service of ") and insert (" services of or civil posts under ") Page 274, line 26, leave out (" then ")—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 441, as amended, agreed to.

Clause 442 [Interpretation, etc.]


There are two consequential Amendments to t his clause. I beg to move.

Amendments moved— Page 275, line 5, after (" to ") insert (" and to the dependants of persons who are or have been ") Page 275, line 6, after (" provided ") insert (" or preserved ").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 442, as amended, agreed to.

Clauses 443 to 447 agreed to.

Clause 448:

Provisions as to Customs duties on. India-Burma Trade.

448. With a view to preventing undue disturbance of trade between India and Burma in the period immediately following the separation of India and Burma and with a view to safeguarding the economic interests of Burma during that period, His Majesty in Council may give such directions as he thinks fit for those purposes with respect to the duties which are, while the Order is in force, to be levied on goods imported into or exported from India or Burma, and with respect to ancillary and related matters.

THE MARQUESS OF ZETLAND moved to leave out "in Council may" and insert "may by Order in Council." The noble Marquess said: This Amendment is to a large extent of a drafting character, but I should like to say that it is put down to meet a point which my noble friend Lord Rankeillour has brought before your Lordships on more than one occasion in the course of these debates. I do not think I need say anything more about the Amendment which explains itself.

Amendment moved— Page 278, line 25, leave, out (" in Council may ") and insert (" may by Order in Council ").—(The Marquess of Zetland.)


I am extremely grateful to the noble Marquess for having met me. It would be ungenerous to observe that I have been met only at the fifth time of asking. I have been met, and I thank him. I think it is quite clear now that simply to say His Majesty may do something in Council does not necessarily mean that he does it by Order in Council, the effect of which would be to bring that action under Clause 305 so that it would come before the notice of Parliament. That is the whole point and it is rather an important one. It arises again, if I may say so, on Clause 471, and on the strength of this Amendment I. think a similar Amendment will be necessary there. Otherwise the pledge that there should be a review by Parliament, especially a review of finance before Provincial Autonomy comes in, would not necessarily be fulfilled. However, I do not want to pursue the matter any further. I thank the noble Marquess for having met me and I hope that he will repeat it, as I think logically he must, on Clause 471.

On Question, Amendment agreed to.

THE EARL OF DERBY moved to insert: Provided that no Order in Council shall be made which shall authorise for a. longer period than two years the imposition of duties in India on Burmese, goods or duties in Burma on Indian goods at levels lower than the duties applicable at the same time to like goods of United Kingdom origin.

The noble Earl said: Two hours ago I said I would not inflict myself again on your Lordships, but I hope you will allow me to go back On my word for a very few minutes. I had put down this Amendment to Clause 261, but I was told that it was there out of place. Therefore I have put it down on this clause and I would ask your Lordships to consider it at this juncture. It is a little difficult for me to move the Amendment without giving a slight sketch of the history which led me to make this proposal. Let me say at once that I agree that an interim agreement between India and Burma is essential I have not the least objection to urge against any agreement to which they may come, provided that it does not last too long, and provided also that this country has a say in that agreement before it becomes too much a settled purpose.

Now, when it was contemplated—as it always has been from the very beginning, and in the Joint Select Committee—that there should be such an interim agreement, my friends in my own part of the world, in Manchester, asked that they should be allowed to make certain representations. They were told that certainly they could, and when they asked if they could send up a deputation they were told that it was a little too early to send it up. Nothing more did they hear until, by quite a different channel, they heard that negotiations were not only in progress but had practically come to completion. They then asked whether they might not be heard, and they were told that it was too late to be heard. They now very naturally feel that they were not very well treated. I want to say at once that I am perfectly certain that there was no question of sharp practice on the part of the noble Marquess's predecessor. It was a misunderstanding; but because of that misunderstanding I hope that I may be allowed to-night to put the case as briefly as I can for a short period in which that interim agree-merit shall last.

If I remember correctly, on the Select Committee we discussed this question and, although no time was definitely stated, my impression is that it was always spoken of as one year. Now if I had wanted any other incentive to put forward this Amendment to get justice—I will not say "justice"; to get opportunity for British traders to have their case put before the two Governments of India and Burma, I could have found it in the speech of the noble Marquess's predecessor. If I may quote at some length what Sir Samuel Hoare said in another place: I agree with my honourable friends from Lancashire that that agreement ought not to be of undue length. It should be of sufficient length to enable the new Governments to settle down and to enable the Indian Government and the British Government to enter into negotiations with the Burma Government and to make what agreements are possible. I hope then that the British Government and the Burma Government will come together, and we shall see that we have much in common between us in the future. For the moment there must be this interim agreement— as I have said, I entirely agree with that— and it can only be on the lines I have suggested. How long that agreement should last is a matter for argument. The negotiators in India have suggested five years.

And this is the remark which gives me, if I may say so, the reason why I should bring the matter before your Lordships' House: If my honourable friends from Lancashire or honourable friends representing any other substantial section of British trade think that the period should be a shorter period, and they will discuss the question with me or the Board of Trade, let us by all means have a discussion on those lines. We are not to-night taking a final decision. The agreement has not been placed before me yet in detail. Now it seems to me that that must be my justification for bringing this matter at this moment before the Committee. I have, as I have said, absolutely nothing to say against an interim agreement being arrived at, but what I do want to protest against is that it should be of such a lengthy duration as to give an undoubted preference to India as opposed to this country. At the present moment India and Burma are one; the tariffs of one are the tariffs of the other, and the consequence is that there is a tariff against Great Britain which does not exist between Burma and India; in other words, the traders in this country are paying a heavy tariff while traders in similar goods in India are going in free into Burma.

That may be all right for a short period, and a status quo which it may be necessary to maintain for a period while matters are settling down, but I do say that five years is too long, and I hope His Majesty's Government will see their way to reduce that period to two years. There is a great difference in some matters between two and five, and in the extra three years, which I ask shall be taken out of the agreement, there is time for the competitors with British trade to dig themselves in, so to speak, in Burma; and everybody who is connected with trade knows that once a clientele is established it is extremely difficult for other competitors to get in. Therefore you will find that when the time comes for the agreement to lapse, those who are our competitors in certain trades in India will have established such a hold as will make it very difficult indeed for our people to get any footing whatsoever. Please understand that I do not, for one moment, challenge tae time for which this interim agreement shall stand if Burma and India enter into separate negotiations. They are perfectly at liberty to do what they like, and I do not want to interfere with their discretion, but I want to limit the time during which we have not got a say in the matter, and to allow free discussion between ourselves and Burma and ourselves and India to conic at the earliest possible moment. I suppose it is almost out of order in this House to give a racing illustration—


No! No! Go ahead.


—but still, at the same time, it is one that I think the noble Marquess and other noble Lords will understand. If you have two equal horses, and it is a "toss-up" which is likely to be the winner, if you give one a. flying start has the other got much chance of beating him? In this particular case I hold that by this agreement, if you extend it to the length of five years, you are giving to one of our great competitors, in one particular trade, a flying start, and that is what I ask the noble Marquess, if he possibly can, to see is obviated, so that we are put on an equal footing. For that reason, without wishing in any way whatsoever to hamper the ultimate arrangements which Burma and India may come to with each other, or with this country, I ask the noble Marquess whether he does not see that it is possible to limit the five years—which was never mentioned in the Select Committee—to a much shorter period, and I suggest, for his consideration, that the period should be two years.

Amendment moved— Page 278, line 30, at end, insert the said proviso.—(The Earl of Derby.)


I should like to add just a few words in support of the Amendment moved by my noble friend Lord Derby. I have had the pleasure of meeting, in company with the noble Earl, some of the gentlemen interested in questions affecting their commerce with India and Burma, and I was impressed by their moderation and desire to fortify by good will their commercial relations with both India and Burma. The period of five years appears to me to be much too long and at the same time quite an arbitrary period, for which so far there does not seem to be much justification. If this period is maintained, the existing tariffs will have become so fixed and definite as to make it difficult for new arrangements to be made which would place British trade on a fair and equitable basis with Indian and Burmese trade.

When I was in India there was a cotton Excise duty which had been imposed on India as a protective measure for the cotton industry of this country. This Excise duty was regarded as a. great injustice in India and exposed the British Government to the charge that India was being governed in the interests of Lancashire, rather than of India. As a result of many representations a definite assurance was given by the Home Government to reconsider the economic position of India with a view to the abolition of this cotton Excise duty. Finally, the Excise duty was abolished a short time after the end of the War. It seems to me that this proposed delay of five years is almost an analogous case, but of course the other way round, and Indian and Burmese trade are to be protected to the detriment of British trade for the space of five years. This seems to me hardly right or fair. The demands of the British traders appear to be extremely moderate, and I trust that it may be possible to adjust this matter in a manner that would be equitable in the interests of British trade. I hope therefore that my noble friend will be able to accept the Amendment.


I can assure your Lordships that nothing would give me greater pleasure than to feel that I could accept the Amendment. But there is, as a matter of fact, a great deal more at stake in this matter than the actual trade between Lancashire and Burma. First of all let me point out, adopting the metaphor of the noble Earl, that the horse which he was thinking of has had a flying start for the last fifty years, because for the last fifty years free trade has existed between India and Burma, and it would not appear therefore that it would make really a vast difference if the flying start were to go on for a few years longer. Let me put it another way. If two horses are running a race and one has a start of fifty yards out of 100 or 200 yards, it. would probably win just as easily as if it had a start of fifty-five yards. It would not really make very much difference.

What I want to make quite clear to your Lordships is that this Amendment really involves a great deal more than Lancashire trade. It involves the whole of British trade with India, and for this reason. The noble Earl, in speaking to his Amendment, rather overlooked the last part of it. The noble Earl suggested that the result of his Amendment would be to curtail the interim agreement between India and Burma from five years to two years; but if noble Lords will look at the Amendment they will see that at the end of these two years a condition is laid down in the noble Earl's Amendment, and that condition is this. At the end of the two years there shall be duties—this is what it amounts to—on Indian goods going into Burma and on Burmese goods going into India at the same rates as the Customs duties charged on British goods. That is to say, at the end of the two years free trade between India and Burma is to come to an end. Not only that, but Burma is not to be a free agent at the end of the two years to negotiate for herself. It would be laid down by the Amendment that the Customs duties that Burma is entitled to levy on Indian goods must in any case be as high as the Customs duties levied on British goods. That is a very important addition to the Amendment.

The arrangement which has been negotiated between India and Burma is not a final, signed agreement. I have not seen the final text of it; it has not yet reached this country, and as far as I know it is not signed. But it is general information that the effect of the agreement will be to maintain the status quo so far as Indo-Burmese trade is concerned. That is a great advantage to Burma, and not only to Burma but to vast British interests which have grown up in Burma. If noble Lords will consider the character of Burmese trade they will see that by far the greater part of the exports of Burma find a free market in India. Rice, oil and teak are among the chief exports from Burma, and so much is that the case that last year 62½ per cent. of Burmese exports found a free market in India. Two-thirds of her rice, varying from 1,500,000 to 2,000,000 tons a year, was sold in the free market of India. The whole of her oil products found a free market in India, and 80 per cent. of her teak exports found a market in India. I recall these facts because it roust be clear from them that India is in a very strong position to retaliate against Burma if Burma adopts a policy which is contrary to the interests of India.

Let me ask your Lordships to bear this in mind, that the amount of British capital invested in these great interests in Burma is estimated at from £40,000,000 to £50,000,000 sterling. That capital is spread over a very large number of shareholders, and I have got to consider, not only the shareholders in Lancashire businesses—I agree they must be considered, too—but also the shareholders in other large enterprises. I have got to think of the owners of this £40,000,000 or £50,000,000 sterling invested in Burma if India retaliated on Burma. If Burma excited her to do so by adopting a policy of taxing Indian goods entering Burma, that would be the result, and it is unhappily the case that in this country we have not got an alternative market we can offer to Burma for her products. We do not eat rice to any extent in this country. Though we use a certain amount of teak, we do not use anything like the amount that Burma exports to India.

That is the position with regard to Burma. India likewise desires to retain free trade with Burma, certainly for the sake of her cotton products. She sells a very large part of her cotton goods in the Burmese market. That is not all. I have, since the Amendment of the noble Earl appeared on the Paper, received representations from the Chambers of Commerce in India, representing British trade in India and representing those who import goods from this country to India, protesting strongly against the Amendment which stands in the name of the noble Earl. I think the reason why they protest is pretty obvious. At the present time the imports from this country into Burma are enjoying the advantage of the preferences granted under the Ottawa Agreement. The Ottawa Agreement, in the case of India, does not last for a specified number of years, as it does in the case of the other Dominions. It was only agreed to in India on these terms, that it, might be reconsidered at the end of any period of six months. In point of fact the Government of India did give an undertaking to the Indian Legislature that at the end of three years, in any case—that is to say, in December next—they would re-submit the matter to the Indian Legislature for their consideration.

The point I want to make is this, that if you are going, once again, to attempt to impose, whether upon Burma or upon India, conditions with regard to her tariffs, as would be done by the last part of the noble Earl's Amendment, you are going to produce in India a very unfavourable atmosphere for the reconsideration of the preferences which are at present granted by India to the trade of the United Kingdom under the Ottawa Agreement. I have figures which will give your Lordships an idea of the advantage of these preferences. Under the Ottawa Agreement, so far as it affects India and the United Kingdom, goods amounting to 28 per cent. of the total exports from this country to India are at present receiving preferential treatment. More than that, as a result of the policy adopted by the Indian Legislature some few years ago of discriminating protection, the cotton imports and the iron and steel imports from the United Kingdom to India even before Ottawa, were receiving preferential treatment as compared with similar goods which came into India from other countries. In that respect, therefore, India has been treating the trade of this country, may I say, very reasonably. I ask your Lordships to consider this point. The export of cotton goods from Lancashire to Burma in any case amounts to less than 10 per cent. of the total amount of cotton goods exported from Lancashire to India and Burma combined. I think it is appreciably less than 10 per cent., something between 7 and 9 per cent. What I would venture to submit for the consideration of the noble Earl is whether it is worth while creating in India an atmosphere hostile to Lancashire by making this arrangement with regard to the 9 per cent. of her goods which she sends to Burma and overlooking altogether the 90 per cent. which Lancashire sends to India. That, I submit, is a very material consideration.

There is one further point which I think your Lordships would do well to bear in mind. As a result, of the agreement which was recently contracted between India and Japan an arrangement was made which limited the imports of cotton goods from Japan into India and Burma to specified quotas. Anybody who is familiar with the circumstances of the cotton trade in India in recent years will realise that the really dangerous rival of Lancashire in that market is Japan, and I would ask your Lordships to consider, if, as a result of an Amendment of this kind, Indians who have not yet signed the Indo-Burmese Trade Agreement said, "Very well, we will not have any agreement at all," what would be the result so far as Japanese quotas are concerned. They would no longer apply in the case of Burma. I am bound to say I think Japanese competition would be a very serious item in the case of the cotton trade of the United Kingdom.

I have devoted the greater part of my remarks to the second part of the noble Earl's Amendment to which, if I may say so, he really did not refer at all in the course of his speech. The noble Earl was talking only of the question of the period of the validity of the Indo-Burmese Trade Agreement. I think the question of period is a matter to which India and Burma would very likely be quite prepared to give further consideration. The question of the actual period of the interim agreement has, as a matter of fact, been referred to—as I think the noble Earl reminded us—by my predecessor in another place. He stated that the provisional agreement effected by the Government of India and the Government of Burma contained a provision preserving the status quo for five years. He said that he had formed no decided opinion himself as to the actual period. On the one hand, the period must not be so short as to fail to achieve the purpose in view—namely, the prevention of the undue disturbance of the existing trade between India and Burma. On the other hand, he laid it down that if it was for too long a period it would involve an unnecessary and an undesirable encroachment by Parliament on the fiscal autonomy which India has and which Burma after separation will enjoy.

In the past few weeks I have myself been in consultation with the Government of India with regard to this matter, and I can at least inform the noble Earl of this, that I have some reason—indeed I think I may say I have good reason—to hope that the two Governments, before they finally sign their agreement, may themselves come to the conclusion that the period of five years which was originally proposed for this agreement might be unnecessarily long. I understand from the consultation which I have had with them that they both hold the opinion that a period of three years is the minimum which would be of any value for the purpose for which it is required; that is to say, maintaining the status quo during the interim period. But I have every hope that they may come to the conclusion that a period of five years may prove to be unnecessarily long, for the reasons which I have given, and that when we eventually receive the agreement which they have been negotiating we shall find that it is proposed that it should extend for a period of only three years.

There is only one other observation that I need make and that is this. When the agreement reaches this country it will have to be dealt with by an Order in Council, and it will therefore be open to noble Lords on that Order, when they have the full terms of the agreement before them and when they know precisely how long it is intended that the agreement shall last, to come to their decision as to what action, if any, they should take.


At an earlier stage in your Lordships' deliberations the noble Marquess, the Secretary of State for India, I think, plumed himself that I had given him a certificate of exemption from the ranks of professional politicians. But the noble Marquess is learning very rapidly, and I am afraid that before long I may have to endorse, or even suspend, his licence! The noble Marquess—I hope unintentionally—has not dealt at all with the real point which I am sure lies at the back of the proposal of the noble Earl, Lord Derby. The people about whom the noble Marquess is apparently most concerned Are that very sensitive body the Indian politician, the importers in Burma, and the shareholders in various countries. The people to whose fate I should like to direct attention are the scores of thousands of workers in Lancashire who have already lost their livelihood, and the other scores of thousands of workers who may lose their livelihood. I have not heard from the Front Bench any allusion to that. I submit that in the rather cavalier way in which the noble Marquess is turning down every suggestion which may possibly help to minimise the blows which Indian politicians are likely to strike at British trade, the Government are vitally neglecting the interests of British workers, which it ought to be their chief object to protect and foster.


I must point out that the speech of the noble Earl, Lord Mansfield, was not entirely accurate when he suggested that there are some thousands of Lancashire workers who may lose their livelihood by this proposal. I would remind him that, after all, Lancashire will be no worse off under the proposed clause than it is now. Lancashire is not now enjoying the preference that it desires to secure. When £50,000,000 of British capital is involved in this matter and the whole of the Burmese commercial people are very anxious to have this agreement ratified, it is a little hard that Lancashire should press its claim once more, as it has pressed it so very often during the last three years, for preferential treatment over the rest of British capital and British industry. We have heard a great deal about Lancashire trade, and no one is more anxious than I am that Lancashire should have a very fair deal in this matter and in the matter of Indian trade. But the whole of Lancashire trade is only a quarter of our exports to India. We have metal and machinery trade; we have soap and woollen trade; which all amounts to three times as much as our total exports from Lancashire. Therefore I think that in pressing the claim of Lancashire, of one particular county and industry in that way, the noble Earl is doing grave injustice to all those other British interests which are vitally concerned in keeping the Burmese export trade to India.


I really think the Government may very well pray to be protected from their friends. If the best thing that the noble Marquess can say for the Government's Bill is that it is not going to make the plight of Lancashire's distressed areas worse than it is now, then I am even more sorry for the Bill. Surely, it is the duty of the Goernment to take into account, not shareholders, but the distressed areas in the North, to which their Indian policy has already done so much damage.


May I say one word in answer to what the noble Marquess has said? Nothing disturbs me more when any question of this kind arises than that it should be looked upon as a question of Lancashire versus India. That is the last thing that I wish. I think it is the one thing which might ensure bad will, and. it is good will that I am asking for all I can. There are, however, certain things which are not really Lancashire versus India which I think, and I thought in this case, it right to bring forward. It does not apply only to Lancashire trade, but to all trades, and here, if I may say so, I think the noble Marquess a little misunderstood me. I do not, for one moment, question the validity of any arrangements that Burma and India may arrive at together for the interim period. They are at perfect liberty to come to any arrangement they like. All I want to do is to limit that arrangement to a comparatively short period, and that then there should be a free discussion and a free entry by Burma, which is now part of India, into any relationship she likes with this country, or any other country. The noble Marquess said that I did not allude to the last part of my Amendment. My Amendment is this. There is an Order it. Council which will have to come before both Houses, which will make valid the interim arrangement arrived at between Burma and India. I want that interim arrangement confined to two years, and that is why, in that part of my Amendment, I say that the duties in India on Burmese goods, or the duties in Burma on Indian goods, shall not be at levels lower than the duties applicable at the same time to like goods of United Kingdom origin. In other words, I only want it to be for the same time as the interim arrangement is arrived at.

With regard to the answer of the noble Marquess to my Amendment, I want to thank him for the courteous way in which he dealt with it, as he deals with all Amendments. I am not going to enter into discussion of the question as to whether a horse which would win at fifty yards would also win at fifty-live yards. I will only say I would sometimes like those five yards to my credit. Although I am naturally disappointed by the answer, and his not being able to accept my Amendment, I do thank the noble Marquess for the ray of hope he has given—that he will consult with the Indian Government and the Burmese Government in the hope that at all events a portion of my Amendment can be accepted. If he does so and succeeds, I can assure him he will confer a great benefit on the industrial part of the world in which I live. I have such confidence in the noble Marquess and the way in which he has always tried to help us in various matters that came before the Select Committee that, rather than divide the Committee, I would leave it to the noble Marquess to endeavour, as he has promised, to secure some revision of the terms in which the Order in Council is framed and to get that revision accepted by the Burmese and the Indian Governments. With the permission of the Committee I will withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 448, as amended, agreed to.

Clause 449 agreed to.

Clause 450 [Provisions as to monetary system]:


I gave what I am afraid was rather short notice to the Government that I wanted to raise a matter on this clause. The clause is very widely drawn indeed. It gives His Majesty in Council powers to make provision with respect to the monetary system of Burma and matters connected therewith or ancillary thereto, and then it goes on to say that the Governor of Burma, with the approval of the Secretary of State, may also make certain arrangements. May I ask the Secretary of State if he will be so good in the first place as to explain why Clause 448 has been altered with regard to the way in which Orders may be made. Instead of saying that His Majesty in Council may do so and so, in that clause, we have just passed a drafting Amendment by the Secretary of State laying it down that His Majesty may by Order in Council do certain things.

On Clause 451 there is another Amendment down in his name proposing to alter the powers of His Majesty in the same way; that is, altering them from "His Majesty in Council" to "by Order in Council", and as your Lordships will appreciate there is a slight difference. With regard to this clause now under discussion it is proposed to leave the original wording in and my noble friends would like to know why it is not proposed to alter that also. By Clause 469 of the Bill it is laid down that Orders in Council should be laid before Parliament, but I believe I am right in saying that "His Majesty in Council" means "His Majesty in the Privy Council" and the Order does not come before Parliament; but the matter is a little obscure, and I have sought guidance in various expert directions but so far without complete success.

May I also ask for an explanation from the Secretary of State as to the intention of this clause? We understand that if you are separating Burma you must presumably separate the Burmese currency, which is at present the rupee linked to sterling. What is intended to be put in its place? This is a matter of very great importance to all business men and to the future trade of Burma. Secondly, is it intended that these powers shall be permanent or not, or is it only for the transitional period? The position is this. We are separating Burma from India, and that means, apparently, a separation of the monetary system, though I do not know that that should have been quite necessary. Very wide powers are accordingly given under this clause to His Majesty in Council and to the Governor of Burma in Council, with the approval of the Secretary of State. Are these powers going to be permanent?

I would point out that these tremendous powers are not given to the Governor-General in the Part of the Bill dealing with India. I have searched the Bill, but I have not been able to find that similar powers are given to the Governor-General of India. Both Governors-General have financial advisers; both Governors-General have certain responsibilities placed upon them to see that nothing is done to imperil the financial stability of their respective charges; but these particular powers under this clause I have not yet found are being conferred on the Governor-General of India. I therefore make so bold as to take up the time of your Lordships to ask for enlightenment on what I think your Lordships will agree is a matter of some importance.


The noble Lord has asked two questions with regard to this clause, the first of a drafting nature and the second in the nature of a more general inquiry. With regard to his first question, if I understood it correctly, he suggests that a drafting Amendment is required in regard to these words, "His Majesty in Council may," similar to that which my noble friend introduced a few moments ago. I have not had an opportunity of a full consultation with the draftsman on the point since the noble Lord raised it, but in the few moments at my disposal I have taken such opportunity as I could, and I am advised that, having regard to words that occur later in the Bill, a change at this point is not necessary. If I find on fuller examination that I have unwittingly misled the noble Lord in that regard, I will give him an undertaking that it shall be put right at a later stage, but I believe I am not misleading him.

With regard to the second point, as to what is the meaning of these wide words in the clause, I think I can in a very few words tell the noble Lord what the position is. At the present moment, as he knows, Burma and India enjoy the same rupee currency. It may very well be that that arrangement will continue indefinitely. At all events it is clearly necessary to make some interim arrangement to ensure that it does continue for a period of time until the Governments of India and Burma have had an opportunity, if they so desire, of making an agreement with regard to it. At the present moment, I am informed, an agreement is under consideration between the two Governments for the continuance of the same currency, which is clearly in the interests of both; and if, and when, that agreement is made, I am advised that it will be necessary for it to be brought before Parliament in order to be ratified by an Order in Council which will come before both Houses. I think, therefore, the noble Lord will recognise that the object of this clause is to give powers, in words, indeed, somewhat wide, the object of which is, as I have stated, to ensure that there should be no rude disturbance of an arrangement which is to the interest of both parties until they have been able to come to an agreement.

One other word I may add. I hope that as part of that agreement, and as part of the genera system that will be established, the same system of rupee currency will be maintained, and that, connected with it, Burma will both bring strength to, and draw strength from, the Indian Reserve Bank. I am quite sure that., having regard to all these considerations to which the noble Earl, Lord Derby, drew attention, your Lordships will feel that the more close this arrangement can be made the better it will be.


I am much obliged to the noble Viscount. If he is looking into this drafting question, perhaps he will, at the same time, look into Clause 449 which is in the same position. I am delighted to hear, if he will allow me to say so, what has just fallen from him with regard to the currencies. I was afraid it was proposed to set up a brand new currency in Burma, whereas throughout the world it is the different currencies and the different exchanges that are causing so much difficulty to trade. I am more delighted than I can say to find that the Bill is less reactionary than I feared.

Clause 450 agreed to.

Clause 451 [Provisions as to immigration from India]:


The Amendment in my name on this clause is drafting. I beg to move.

Amendment moved— Page 279, line 6, leave out ("in Council may") and insert ("may by Order in Council").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 451, as amended, agreed to.

Clause 452 [Power of Governor to issue Proclamations]:


The Amendments in my name on this clause are consequential. I beg to move.

Amendment moved— Page 280, line 24, leave out ("six") and insert ("twelve").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

THE MARQUESS OF ZETLAND moved to insert after subsection (3): (4) if the Governor, by a Proclamation under this section, assumes to himself any power of the Legislature to make laws, any law made by him in the exercise of that power shall continue to have effect notwithstanding the revocation or expiration of the Proclamation, and any reference in this Act to Acts of the Legislature shall be constructed as including a reference to such a law".

The noble Marquess said: This amendment is consequential. I beg to move.

Amendment moved— Page 280, line 27, at end insert the said subsection (4).—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 452, as amended, agreed to.

Clauses 453 to 456 agreed to.

Clause 457 [Persons not to be subjected to disability by reason of race, religion, etc.]:

THE MARQUESS OF LOTHIAN moved to insert the following new subsection: (3) Nothing in this section shall be construed as derogating from the special responsibility of the Governor for the safeguarding of the legitimate interests of minorities.

The noble Marquess said: This Amendment is really con sequential on an Amendment agreed to in Clause 297. It is giving the same power in the case of Burma. I beg to move.

Amendment moved— Page 283, line 8, at end insert the said subsection.—(The Marquess of Lothian.)


I accept this.

On Question, Amendment agreed to.

Clause 457, as amended, agreed to.

Clause 458 [Compulsory Acquisition of land, &c]:


The Amendments in my name on this clause are consequential. I beg to move.

Amendments moved— Page 283, line 9, leave out ("in Burma"). Page 283, Line 10 after ("property") insert ("in Burma").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 458, as amended, agreed to.

Clause 459 agreed to.

Clause 460 [Courts of Appeal in revenue matters]:


The Amendment in my name on this clause is consequential. I beg to move.

Amendment moved— Page 284, line 12, leave out ("in revenue matters") and insert ("or revise decisions in revenue cases.")—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 460, as amended, agreed to.

Clauses 461 to 464 agreed to.

Clause 465 [No proceedings to lie against Governor or Secretary of State]:


The Amendments in my name on this clause are consequential. I beg to move.

Amendments moved— Page 285, line 16, after (" in ") insert (" and no process whatsoever shall issue from ") Page 285, line 17, leave out (" subject to the provisions of Chapter X of this Part of this Act ") Page 285, line 20, after (" otherwise ") insert (" and, except with the sanction of His Majesty in Council, no proceedings whatsoever shall lie in any Court in Burma against any person who has been the Governor or the Secretary of State ") Page 285, line 21, at end insert (" in performance or purported performance of the duties thereof ") Page 285, line 21, at end insert: ("Provided that nothing in this section shall be construed as restricting the right of any person to bring against the Government of Burma or the Secretary of State such proceedings as are mentioned in Chapter X of this Part of this Act.")—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 465, as amended, agreed to.

THE MARQUESS OF ZETLAND moved, after Clause 465, to insert the following new clause:

Removal of certain disqualifications of the occasion of the first elections to Legislature.

".For the purposes of the first elections of persons to serve as members of the Legislature, no person shall be subject to any disqualification by reason only of the fact that he holds—

  1. (a) an office of profit as a non-official member of the Executive Council of the Governor of Burma or as a Minister in the Province of Burma;
  2. (b) an office which is not a whole time office remunerated either by salary or by fees."

The noble Marquess said: This is a consequential Amendment. I beg to move.

Amendment moved— After Clause 465 insert the said new clause.—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clauses 466 to 468 agreed to.

Clause 469 [Orders in Council]:


The Amendments in my name in this clause are consequential upon the Amendment of my noble friend Lord Rankeillour. I beg to move.

Amendments moved— Page 287, line 34, leave out ("which expressly authorises the making of such an Order") Page 288, line 12, at end insert: ("(3) Nothing in this section applies to any Order of His Majesty in Council made in connection with any appeal to His Majesty in Council").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Clause 469, as amended, agreed to.

Clause 470 [Interpretation]:

THE MARQUESS OF ZETLAND moved to insert: 'Burma' includes (subject to the exercise by His Majesty of any powers vested in him with respect to the alteration of the boundaries thereof) all territories which were immediately before the commencement of this Part of this Act comprised in India, being territories lying to the east of Bengal, the State of Manipur, Assam, and any tribal areas connected with Assam; 'British Burma' means so much of Burma as belongs to His Majesty.

The noble Marquess said: This is only an Amendment to insert a definition of Burma in the Burma part of the Bill. I think it would be rather invidious if Burma had to go after separation to the Indian Act to find out a definition of Burma.

Amendment moved— Page 288, line 16, at end insert the said words.—(The Marquess of Zetland.)

On Question, Amendment agreed to.


The next Amendment is consequential. I beg to move.

Amendment moved— Page 289, line 4, at end insert ("railway' includes a tramway not wholly within a municipal area;").—(The Marquess of Zetland.)

On Question, Amendment agreed to.

Clause 470, as amended, agreed to.

Clause 471:


(2) The remainder of this Act shall, subject to any express provision to the contrary, come into force on such date as His Majesty in Council may appoint and the said date is the date referred to in this Act as the commencement of Part III of this Act and referred to in Part XIV of this Act as the commencement of that Part.

Loan MIDDLETON moved, in subsection (2), after "may," to insert "by Order." The noble Lord said: I hope I may share the pleasure experienced by my noble friend Lord Rankeillour, when he was met the whole way over a similar Amendment in Clause 448. I do not think I need say anything further about this Amendment.

Amendment moved— Page 290, line 3, after (" may ") insert (" by Order ").—(Lord Middleton.)


I have attempted frequently to meet my noble friend Lord Rankeillour's point, and I am afraid I have succeeded in the end rather clumsily. I have put Order in Council in place of other words in a number of clauses, yet, on searching through the Bill, I find these are a large number of other clauses in which, in the interests of grammatical accuracy, it would be desirable to make this alteration; but I think I can do it in a different way and really a much more comprehensive way. If the noble Lord, Lord Middleton is prepared to withdraw his Amendment now I will be prepared on the Report stage to move to insert new words at the beginning of Clause 305 and also at the beginning of the corresponding Burma clause, Clause 469. The new words I would propose to insert at the beginning of the clause are: Any power conferred by tins Act on His Majesty in Council shall be exercisable only by Order in Cc tuned and "— and then the rest of the clause will follow. I hope my noble friend will feel that this time I really have met him. Indeed, I feel almost astonished at my own generosity.


May I say that I most heartily appreciate what has been said by the noble Marquess? I have pursued this matter of King Charles's head from clause to clause, and I now feel that it has been given me on a charger with all the grace of the daughter Herodias.


I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 471 agreed to.

Clause 472:

Charge of expenses on revenues raised in India or Burma.

472. Where under the provisions of this Act any expenditure is charged on, or is to be defrayed out of, the revenues of any of the Governments constituted by this Act or of the Governor-General in Council, that expenditure, whether expenditure heretofore charged on or defrayable out of the revenues of India or not, shall be charged and defrayed in accordance with the provisions of this Act.

THE MARQUESS OF ZETLAND moved to leave out Clause 472. The noble Marquess said: This really ought to have been done in another place. Those of your Lordships who have served in another place will remember that in Bills submitted in another place, all clauses and lines of clauses which deal with finance have to be printed in italics. By an arrangement, which I will not characterise by any adjective, between the officers of another place and the draftsmen of this Bill the trouble and expense of printing lines in italics all over the Bill was got over by inserting Clause 472, which then appeared in italics. By introducing Clause 472 they achieved the object which it was desired to achieve but, that object having been achieved, the clause of course is no longer required. Indeed it is entirely superfluous and in those circumstances I beg to move that it be omitted.

Amendment moved— Leave out Clause 472.—(Th e Marquess of Zetland.)

On Question, Amendment, agreed to.

Clause 473:


473. The Government of India Act shall be repealed and the other Acts mentioned in the Sixteenth Schedule to this Act shall also be repealed to the extent specified in the third column of that Sehedule:

Provided that—

  1. (a) nothing in this section shall affect the preamble to the Government of India Act, 1919;
  2. (b) without prejudice to any other provisions of this Act and to the provisions of the Interpretation Act, 1889, relating to the effect of repeals, this repeal shall not affect any appointment made under any enactment so repealed to any office, and any such appointment shall have effect as if it were an appointment to the corresponding office under this Act.


On this clause I must really ask the noble and learned Viscount the Lord Chancellor what is the position of the preamble to the Act of 1919. A preamble usually implies that something follows. Will this preamble be really embodied as a preamble to this Act by the fact of its being kept alive? If not, what validity or effect will it have? Will it be simply suspended in space, or will it have any effective force at all? Or will it be left—that might be very valuable—as a signpost for the further activities of Parliament?


I hesitate a little to embark upon a discussion of an obscure constitutional point, which occupied a great deal of attention in another place and which was the subject, I gather, of some substantial differences of opinion; especially as my noble friend Lord Rankeillour did not have the opportunity of calling my attention to the fact that he was going to raise the point, so that it is sprung upon me without any previous notice.


May I say that it was an inspiration?


I wonder where the inspiration came from. I think I can, provisionally and subject to second thoughts, give an answer to my-noble friend. There is a considerable body of authoritative opinion which supports the view that the repeal of an Act of Parliament does not repeal the preamble, the reason being that the preamble has no operative effect at all. My noble friend asked me whether the effect of preserving the preamble would give it any operative effect. The answer is "No"; it never had any operative or executive effect. That is why it is a preamble and not an enacting part of the 1919 Act. But doubts were expressed in certain quarters as to whether that was so, and it was suggested that if the complete Act were repealed, some persons who know no better would imagine that that involved the repeal of the preamble and the cancellation of the assertion contained in the preamble as to the objects of the legislation which the 1919 Act embodied and in pursuance of which this Act has taken another step. That was obviously undesirable, because Parliament did not intend, and Parliament does not intend, by the enactment of this Bill, in any way to depart from the statement of intention contained in the preamble to the 1919 Act.

In order to prevent any misconception, it has been thought desirable expressly to retain the preamble in existence, so as to show quite plainly, to anyone who otherwise might draw a false inference, that there has been no change in the policy and no departure from the principles which the preamble contains. Therefore, when the preamble remains, it will not be suspended in space. It will remain as it was, a statement of the intention of Parliament, and it will remain as it was, without any enacting force, because that is never the function of a preamble. I hope that that answer will make the position clear to my noble friend.


I thank the Lord Chancellor. He has made a most valuable declaration riveting attention on the preamble to the Act of 1919, which is the only thing to which Parliament has hitherto been pledged. I am sorry that I did not give him further notice, but I am bound to say that I admire the process whereby his intellectual agility overcomes the want of preparation.


May I add that it is quite in accordance with constitutional practice that before a Bill arrives at the Third Reading stage, if the Bill is not congruous with the preamble, the preamble has to be altered accordingly, and therefore the difficulty should not arise.


Would your Lordships give consideration to one point? It is of the utmost importance that this preamble should be preserved. I do not want to go into the particulars of it, but if my noble and learned friend would look at the Schedule of Enactments repealed he would find that there is no exception made: the whole of the Act is repealed. I should have thought that, when you get a Schedule completely repealing the Act, then, whether the preamble is operative or not, the whole Act goes. Although there are these words in the clause, I suggest to my noble and learned friend that it would be worth while considering, possibly on the Report stage, whether, when you come to the Sixteenth Schedule on page 416, there should not be some words in the repeal of the Act saving the preamble.


There are.


You have done it in the Act of 1919, and it is not necessary in the Act of 1935.

Clause 473 agreed to.


I propose now that the consideration of the First Schedule be postponed until after the other Schedules.


Before we postpone it, I would point out that there is a misprint in the sixth line on page 11 of the Marshalled List of Amendments.

Moved, That consideration of the First Schedule be postponed.—(The Marquess of Zetland.)

On Question, Motion agreed to.

Second Schedule [Provisions of this Act which may be amended without affecting the accession of a State]:

THE MARQUESS OF ZETLAND moved, to add to the reference to Part II, Chapter III, "and the protection of Judges of the Federal Court and State High Courts from discussion in the Legislature of their conduct." The noble Marquess said: Perhaps I might just remind your Lordships what is the object of the Second Schedule to this Act. This Schedule is the one referred to in Section 6, subsection (5). Its, object is the following: Since the Princes enter the Federation, as set out in the Act, of their own volition and in accordance with their Instrument of Accession, it would, of course, have been quite unfair to them, and indeed their adherence could never be obtained, if there was an unlimited power for subsequent Parliamentary legislation to alter the. Federal Constitution, leaving the States completely bound by the amended Act, which might constitute a Federation of a totally different type to that which the Princes had agreed to accede to. On the other hand there are, of course, provisions in the Bill, and in particular nearly all those relating to the purely British India side, to the subsequent amendment of which the States cannot possibly offer any objection.

The solution of this difficulty which has been adopted is the following: Those provisions of the Act which it was proposed should be amendable without the States being able to object, are set out in Schedule 2, and under Clause 6 (5) Amendment may be made of these pro visions of the Act "without affecting the accession of the State" with the addition that no such amendment (unless agreed to by the State) should extend the powers of the Federal authority in relation to the State itself. These provisions are set out, as I have said, in Schedule 2. They may be amended without affecting the accession of the States, and may be conveniently referred to as "unprotected" provisions of the Act. Those provisions in the Act which are riot mentioned in the Second Schedule may be called the "protected" provisions of the. Act. These are, of course, the provisions which deal with the fundamental parts of the Federal Constitution, and with other parts which directly affect the States. It will be noticed that Clause 6 (5) does not say positively what is to happen if a "protected" section is amended by Parliament, but by implication such an Amendment would be one which "affects the accession of the States," that is to say if the "protected" provisions are amended by Parliament the State has the right to reconsider its position, or in more technical language it may be said that if "protected" portions are amended, the State's Instrument of Accession is voidable, though not void.

I have on the Order Paper a number of Amendments to the Schedule, the object of which is to make a few additions to the list of "protected" clauses of the Bill. None of the additions is of any very substantial importance, and one or two of them are put down to cover undertakings given in another place. The time was so short, I understand, that it was not possible in the time available to insert these in the Schedule, or to remove them from the Schedule as the case might be. The others concern relatively small points, on which we have been doing our best to meet the legal advisers of the Princes, who are interested in this particular matter. With that preliminary explanation, I may now move the different alterations to the Second Schedule which I propose.

Amendment moved— Page 313, line 36, at end insert ("and the protection of Judges of the Federal Court and State High Courts from discussion in the Legislature of their conduct").—(The Marquess of Zetland.)


I presume all these are extensions of the "protective clauses?


Yes, that is so.

On Question, Amendment agreed to.

Amendments moved— Page 313, line 43, leave out from (" special ") to the end of line 48 and insert (" responsibilities of the Governor relating to the rights of Indian States and the rights and dignity of the Rulers thereof and to the execution of orders or directions of the Governor-General and the superintendence of the Governor-General in relation to those responsibilities.") Page 314, line 4, at end insert (" and the protection of Judges of the Federal Court and State High Courts from discussion in the Legislature of their conduct") Page 314, line 16, after (" Act ") insert (" any power of a State to repeal a Federal law, and") Page 314, line 32, at end insert ('or empower the Governor-General to issue orders to the Governor of a Province for preventing any grave menace to the peace or tranquillity of India or any part thereof") Page 314, line 35, at end insert ("and the appointment, removal and conditions of service of the Auditor-General") Page 314, line 36, leave out (" The whole Chapter ") and insert (" Save in so far as it affects suits against the Federation by a Federated State.") Page 314, line 46, leave out (" the power of the Governor-General to refer questions of law to the Federal Court ") Page 315, line 16, after (" relations ") insert (" the limitation in relation to Federated States of His Majesty's power to adapt and modify existing Indian laws; His Majesty's powers and jurisdiction in Federated States;") Page 314, line 20, at end insert (" and save also the provisions relating to the interpretation of this Act so far as they apply to provisions of this Act which may not be amended without affecting the accession of a State ").—(The Marquess of Zetland.)

On Question, Amendments agreed to.

Second Schedule, as amended, agreed to.

Third and Fourth Schedules agreed to.

Fifth Schedule: