HL Deb 28 April 1953 vol 182 cc32-50

4.7 p.m.

Debate resumed.

VISCOUNT ELIBANK

My Lords, we come back from the tempestuous seas surrounding atomic energy to the more peaceful waters surrounding the subject of my Question. When the noble Marquess rose to make his statement, I was referring to the resumption of the sale by Japan to China of textile machinery and fertilisers in return for Chinese coal. In the course of the next three months alone, 157,000 tons of Kailan coal will be delivered to Japan in exchange for 860,000 dollars' worth of textile machinery and 400,000 dollars' worth of chemical fertilisers and other goods. This represents a definite break by Japan with United States policy on the banning of trade with China. It is significant and interesting because in the speech which I made on the Japanese Treaty in this House, on November 29, 1951, I referred to the attempt to tie up Japanese economy with the West, and I said that it was bound to break down in the course of future years. That is exactly what is happening at the present moment. The breakdown was bound to come, and it has come. And let us remember, also, that it means a saving for Japan of no less than six-and-a-half dollars a ton on imported coal. The present United States price is 17.50 dollars a ton, against 11 dollars for Chinese coal. It will also mean that prices for Japanese iron and steel will be lower, and Japanese competition will become fiercer and fiercer as the months go by. I suggest that there is urgent need for revision of this matter of export licences.

The impression given to me by statements made since the Foreign Secretary's visit to Washington and in particular, by the reference (OFFICIAL REPORT, Commons, Vol. 512, No. 75, col. 2075) to attempts to get other maritime and trading nations to co-operate with us, is that the Government, I do not say intentionally, have set themselves an objective beyond that of the United Nations Resolution of May, 1951, which expressly limited itself to arms, ammunition and implements of war, atomic energy materials, transportation materials of strategic value, and items useful in the production of arms, ammunition and implements of war. After making every allowance for the difficulties of distinguishing between goods which have direct or indirect strategic value and those which have not, I submit that on the basis of this resolution it is very difficult to justify the Government's embargo on the export to China of antibiotic and sulpha drugs, manilla rope, carbon diaphragms for telephones, die stocks for pipes and all mining equipment.

There is a noteworthy border-line case that I should like to submit to your Lordships in which perhaps the Chinese might have been given the benefit of the doubt—and I think there is a doubt—in view of their continuous efforts to improve their internal communications. I refer to road-making machinery, which has been on the Board of Trade embargo list since June, 1951. At the end of March of this year, the Chinese indicated that they would be interested in purchasing road construction machinery from this country to the value of approximately £l0 million sterling. In view of the small percentage which this represents of the Chinese economy in relation to the war effort in Korea, this seems to me a borderline case which might have been given the benefit of the doubt. Recently, when asked in another place whether he did not think it was scandalous that reputable British firms should lose the opportunity of trading with China in non-strategic items, letting it go instead to other countries, the Secretary for Overseas Trade replied (OFFICIAL REPORT, Commons, Vol. 509, col. 1191) that The manner in which the various N.A.T.O. countries carry out their duties differs. This country has the highest standard of all. I referred to that standard in my remarks in connection with the question of accuracy, which was the word used by the noble Lord, Lord Mancroft, on March 24. In relation to all these very difficult matters in connection with the export of non-strategic materials to China, I have put down this Question on the Order Paper. I have put it down with the object of giving the Government assistance in their onerous task of making decisions connected with export licences to China. With this in mind, I Lave quoted a precedent which, although it may not be a true precedent in every respect, is the only one which I could discover. I now beg to ask the Question standing in my name on the Order Paper.

4.15 p.m.

LORD STRABOLGI

My Lords, in rising to support my noble friend on this Question, I want to make two things clear. First, I am not in any way attacking the Government or the noble Lord, Lord Mancroft, or any other Minister in this matter. My noble friend has put his Question in a friendly way and I shall try to keep my remarks in a friendly sense, because I realise that the Government are in a very difficult position. As a member of the United Nations and as a member of N.A.T.O. they have certain obligations and they are under continuous pressure from the United States of America on this particular business. At the same time, this country has an old, traditional and valuable market in China which we hope one day to regain. I am sure your Lordships will agree that not only is China the greatest country in the world in population but it is also a country of immense natural resources, where for the first time for centuries the old shackles of tradition and feudalism have been broken away and the whole people are on the march. Therefore, it may in the future become a country of tremendous importance, politically, strategically and commercially.

I want to make clear also that I am engaged in business all over the world, including the sale of coalmining machinery to many countries. Small quantities were sold in the recent past by my company to China and also to Japan, but that trade has now been stopped. I am making no complaint, because it is only a small market, but I have an interest in this matter. I have no wish to criticise here, if only for the reason that the original list of articles considered to be of strategic importance was introduced in another place by my right honourable friend Sir Hartley Shawcross, when he was President of the Board of Trade. In other words, this was initiated by the Government of which three of my noble friends below me were at one time or another such brilliant ornaments.

The whole question of what is of strategic importance is difficult indeed, as the noble Viscount, Lord Elibank, has said. The simplest approach is that everything is of use to a country in case of war and therefore is of strategic importance. I quote the classic example of the First World War, of which I have reason to know some details. It was not convenient for us to declare a blockade of Germany, because of the position of certain neutrals, the most powerful of which was the United States of America, but we imposed severe restrictions of German sea borne trade by enforcing a list of contraband articles of strategic importance—a list which was continually extended. I used to get the list because one of my duties was to try to enforce it. In the end, I think the only articles of commercial exchange which were not on the strategic list were ostrich feathers. For a long time oranges were not on the list; and then somebody said that oranges might go to the German troops in the trenches, and so we put them on. You can say that everything is of strategic importance. The list is a formidable and a long one. The noble Viscount has quoted the case of certain humanitarian healing drugs, road-making machines—which he said is a borderline case—and many other articles which really have no direct connection at all with military operations but which have an indirect bearing as supporting the economy of the country which is at war.

The criticism of Her Majesty's Government which has been voiced by the noble Viscount is that they are being too honest, too scrupulous and too conscientious. That is what we might well expect. We have, first of all, an extremely honest Government—all Her Majesty's Governments are honest—supported by a superlatively honest Civil Service. The last people to whom they give any consideration are the unfortunate British traders, who have to earn the money to pay the taxes to support this very honest Administration and its professional advisers. The French, the Japanese, the Burmese, the Singalese and the West Germans are all admirable and honest people, but not quite so honest and so scrupulous as Her Majesty's Government in Whitehall. So we have the ridiculous situation which was mentioned by my noble friend, of rubber, which is for British economy one of the most important articles of commerce, being stopped from being sent by the Mincing Lane merchants to China, which is a traditional market, while the Ceylon Government break into that market for the first time, because they want rice and because they are not quite so honest, so scrupulous and so conscientious as the noble Lord, Lord Mancroft, and his colleagues. As the noble Viscount, Lord Elibank, suggested, we can be certain that as the Japanese become freer of the shackles of American control, and as they gain more and more their sovereignty, so will they turn to their traditional market in China. They must do that to live. They have an increasing population; they have lost many of their old markets, and they must turn to the China market to find an outlet for their manufactured goods and to secure certain raw materials—coal, foodstuffs and so on—which they require.

Perhaps things will improve shortly. What I have in mind is that we may hope that the negotiations in Korea will proceed smoothly and successfully; that higher direction will knock together the heads of the soldiers on both sides, so that we may get an agreement; and that we may then get the beginnings of peace in Asia. I hope that Her Majesty's Government will then be well prepared to knock off quickly these artificial restrictions and allow our merchants and traders to get busy; and I hope that our merchants and traders are getting ready for a change of climate and a change of temper. This is a great market, and we cannot afford to neglect it in the future. May I give just one example? In the constituency of Hull, which I had the honour to represent at one time, we were the pioneers of the soya bean. We brought in soya beans from Manchuria and crushed them into the most valuable edible oil. This country is short of edible oils, and that is why we have to ration margarine, butter, lard and so on. We cannot afford to buy the quantity of fats that we should like, because the main source of supply is in dollar markets. If we could again bring in soya beans there would be more work for my old constituents in Hull and the British housewife would benefit. The soya bean is grown in profusion and most cheaply in Manchuria. That is only one example, and I think it is worthy of consideration.

In the first two months of this year, in spite of all these embargoes and before the new licensing of shipping came in—which I think is also rather unfortunate, unless it is liberally and generously applied—we brought in imports from China, which were badly needed, to the extent of nearly £1,500,000, and our exports to China, in spite of these obstructions, were worth over £2 million. If that could be done in these times of difficulty, with warfare in Korea, and at a time of great obstruction, with many obstacles in the way, what could not be done if the barriers were cast down? For that reason, I believe that the noble Viscount, Lord Elibank, has performed one more of his many services to the country in asking this Question.

4.27 p.m.

LORD TEVIOT

My Lords, I am glad the noble Viscount, Lord Elibank, has raised this matter. As President of the Anglo-Chinese Chamber of Commerce, I should like to tell your Lordships of some experiences we have had in the last two or three years. So far as we have been able to find out, there is a good deal of exaggeration about these large orders—the noble Viscount, Lord Elibank, mentioned an order of something like £10 million. We get information of that sort, and through our Chinese friends we try to trace whether these orders are really going through with these other countries. In many cases the information we receive is that the order is not nearly so large as is represented. So far as the question of licences here is concerned, noble Lords will know the functions of the Chamber of Commerce. We do not embark on any of the business ourselves. What happens is that the Chinese come and ask us where they can procure this or that. So far as I know, we have had no sort of complaint from those sources that they were unable to get a licence to carry out through firms we have recommended the business about which they have come to us. I do not remember that any orders they wanted placed were of strategic importance, and perhaps in that case the licences were granted.

I feel that we should do everything we possibly can to increase the trade between the two countries. The Chinese are only too delighted to assist us in every way. As the noble Lord, Lord Strabolgi, has said, there are enormous potentialities. China is a rich country, with vast reserves of raw materials. Certain feelers have been thrown out to us, from sources that I should not have expected, asking whether we would assist to increase the trade between our two countries. For that reason, I think that if publicity is given to what the noble Viscount, Lord Elibank, has said, and to this debate, it will help to show that here the spirit is willing to help to increase the trade between our two countries.

4.30 p.m.

LORD OGMORE

My Lords, I am sure we are grateful to the noble Viscount, Lord Elibank, for bringing this matter before us this afternoon, because for some considerable time many of us have felt concern over this question of strategic materials. Obviously, none of us would wish war materials to go to China or, indeed, to any of the Communist countries, particularly to those countries who are carrying on the war in Korea. That is not in issue at all. What we are concerned about is whether, by some definition, materials are said to be strategic when really they are not. That is the issue before us this afternoon.

The noble Viscount, Lord Elibank, has cited a number of materials which, he informs us, have been held to be strategic and which certainly seem to be rather odd. If articles like pumps and the other things he mentioned can be regarded as strategic materials, then almost anything can be regarded as strategic. I know that this matter is one which is capable of almost unlimited dispute, because we can all decide in our own minds what is strategic and what is not. Therefore I should like to ask the noble Lord, Lord Mancroft, this question: Who actually decides this important question, and has there been some definition laid down for strategic materials? Obviously, as this is a recommendation of the United Nations, made in May, 1951, the sixty member nations of the United Nations should obey it equally. I agree with the noble Viscount, Lord Elibank, that it is regrettable that some definition was not laid Idown-—if that is the case—by the United Nations at the time. My experience of the United Nations is that they are more inclined to lay down great principles than they are matters of detail which flow from those principles.

I should like to say to my noble friend Lord Strabolgi that Ceylon, a country which he rather castigated, is not a member of the United Nations and, therefore, I suppose, to that extent can be absolved from not complying. Ceylon has long wanted to be a member, but owing to the refusal of the Soviet Union to have her, she has not been able to become a member of the United Nations. Therefore it is perhaps a little hard to castigate her for not complying with the recommendations of a body which will not have her. We have undoubtedly been stopped from sending a number of these materials, and we have been a little concerned, I think, at a report in The Times of March 31 of this year, relating to Senator McCarthy's committee. It appears from that report that Senator McCarthy certainly wishes that there should be a total elimination of shipping to China, and it would also appear that Senator McCarthy and his committee were trying to get the State Department to agree to that policy. That, of course, would be a very serious matter for us.

It is important that we should consider this question seriously, because from my experience in the United States and from letters I have received from that country there is one matter which upsets people in the United States, and that is the suggestion that we in this country are trading with China and with other Communist countries. Another suggestion is that the United States, of course, is guiltless, as is Japan. When I was in the United States I was on more than one occasion tackled on this very point, particularly with reference to Hong Kong. I pointed out that part of Hong Kong consists of a portion of the mainland of China, and the Island itself was entirely dependent upon the mainland for trade—or was at one time, and is now to a lesser extent. This is a traditional trade, and you just cannot cut off trade with the mainland like that. I also pointed out that when the question of Japan's trade with China arose, the American occupation authorities said that they could not stop Japanese trade with China because it was a traditional trade. If those facts were better known among the American public they would not be quite so critical of us as they sometimes are.

I feel that in this case we should try and ascertain from the Government exactly how we stand in this matter of strategic materials; what they are and who decides upon them. For instance, have the Government had any conversation with the United States as to what is to happen with reference to strategic materials and trade with China if the war in Korea, as we all hope, ends? Is a new situation likely to arise, and have the Government made any plans to meet it? Those are points which we on this side are most anxious to ascertain from the Government, and we should be most happy if the Minister could enlighten us upon them.

4.36 p.m.

LORD CHORLEY

My Lords, I should like to add a few words in support of the position which was put by the noble Viscount, Lord Elibank. I hope the Government will be able to indicate that the suggestion which he has made at any rate opens up the possibility of some freeing of trade with China. I am not so much concerned with the undoubted fact that we have lost very heavily from these embargoes at a time when our economic situation is not very bright, as with the fact that undoubtedly this drying up of trade is a great hindrance to the growth of a peaceful relationship between our two countries. Undoubtedly a much larger volume of trade would foster peace, and at the particular time when olive branches are being held out I feel that that is a very important aspect of the matter.

I could not help being interested in the reminiscence of my noble friend, Lord Strabolgi, of the First World War, during which embargoes were imposed to the point when only ostrich feathers could get through. What one fears at the present moment is that embargoes are being placed on olive branches, which is a much more serious business. The noble Lord, Lord Ogmore, who has just spoken, has indicated the strong feeling which exists in the United States on this matter. Undoubtedly it does exist. It is no doubt under very considerable pressure from the United States that this over-rigid—as I am sure it is—series of embargoes have been imposed. I feel that at the present time, as I indicated in a speech which I made in your Lordships' House the other day, there are very strong forces in the United States—Senator McCarthy's name has been mentioned—who are in fact very anxious that there should be embargoes on olive branches, and are taking all the steps they can in order to keep feelings of bitterness and hatred vivid, keen and effective in the United States and, indeed, as far as they can, over the free world. Perhaps I am straying a little from the exact terms of the noble Viscount's Question, but I should like to ask Her Majesty's Government whether they have given their authorisation to this dastardly proposal which is reported in the Press this morning—an attempt to bribe a Chinese airman to commit treason to his own country, which, in the whole history of war is, I think, one of the most terrible things that has ever happened.

THE MARQUESS OF READING

Would the noble Lord look at the Question with which we are dealing on this discussion?

LORD CHORLEY

I said that I was straying a little away on this Question. The lives of people are at stake in these matters at the present time, and there is great feeling throughout this country that this is a very serious business indeed. I hope the noble Marquess will not allow rigid feeling for conventional proprieties of debate to blind him to the fact that millions of people in this country feel that a mistake, and a terrible mistake, has been made by this attempt to bribe soldiers of another State into committing what is no less than treason to their country. Can anybody deny that if this proposal had been made by the other side it would have brought contumely on the country which made it? I hope the Government will be able to find in the Question which has been raised by the noble Viscount, Lord Elibank, this afternoon some method by which the freeing of trade with China may be secured. I am sure that that would be a very valuable way by which peace could be advanced at this critical time.

VISCOUNT STANSGATE

My Lords, I have no doubt that as a matter of procedure and order the noble Marquess was quite right not to accept the point raised by the noble Lord as relevant to the debate, but I hope that that will not preclude him or some representative of the Government from expressing clearly a sense of the indignation which this suggestion has caused. I leave it at that.

THE MARQUESS OF READING

Does the noble Viscount mean this afternoon, in the course of this rather ample discussion that has arisen?

VISCOUNT STANSGATE

Of course not. But the matter is sufficiently serious to require consultation and a proper statement by the Government in due course. Naturally it is out of order to have asked a question which is outside the scope of the debate, but I wish to ask a question which I hope is in order, and it is this. We are all desirous of getting rid of this undertaking not to send strategic material. It must be clearly distinguished from sanctions or embargoes. When the matter was before the United Nations, Sir Gladwyn Jebb was careful to say that we were not engaging in any sanctions against China. In fact, when the first resolution declaring China an aggressor came forward, the Government representative was very chary and unwilling to support it. It was not until an amendment was made (this will be within the memory of noble Lords on the other side)—the Lebanese Amendment—that we accepted the definition of China as an aggressor: and many people thought that that was a mistake. Some months passed before the question was raised of what should be done to make the decision operative, and some time later a resolution calling for the prohibition of the export of strategic materials was proposed. Even then there was some hesitation. It was stated that the purpose of the resolution was to induce the Chinese to abandon hostile action in Korea. That was the sole purpose of this resolution prohibiting the export of those goods to China. We implemented that resolution at least as honestly as any other country, and have kept our word.

What are the conditions on which all this prohibition of the export of strategic material becomes ineffective? It was put on on a specific case, that the Chinese would not stop military operations. But suppose that they do stop military operations: are we then to be bound continuously by a resolution put on for a specific purpose? The specific purpose having disappeared, are we to mix this up with the question of an Asiatic settlement? If within the next few weeks Chinese positive action disappears, are we free from the undertaking which we have honoured in this respect? If I might have an answer to this question, and especially if it were a favourable answer, I am sure it would have a very good reception from commercial circles in this country.

4.45 p.m.

LORD MANCROFT

My Lords, with one sentiment expressed in this debate, I certainly agree: it is indeed an onerous and difficult subject. I should like to add my own adjective and say that it is a delicate subject—and I do not think that in saying so I shall be misunderstood. I shall attempt to confine myself to the subject of the Question that I have been asked specifically, and to the supplementaries which arose out of that Question, and not be taken over wide fields into which attempts have been made to lead me. It might be thought convenient if I were to remind your Lordships what are the principles upon which the policy of Her Majesty's Government is constructed in this difficult matter.

As I informed the noble Viscount, Lord Elibank, on March 24, the policy stems from the United Nations resolution of May 18, 1951, calling on all members to take all possible steps to prevent the export to China of any goods which would be of military and strategic importance to the Chinese Forces in Korea. The United States and Canada maintain an almost total embargo on trade with China. The United Kingdom keeps strictly to the terms of the resolution by banning exports which it considers to be strategic. Some other Western countries' controls do not include all the items on our lists. There are, of course, bound to be divergences of opinion, as has been suggested in this debate, on what materials are strategic, especially where general classifications are involved; but this divergence is confined to a very few items, and considerable progress has been made since the publication of our original list in bringing other countries up to the same level; and we are continuing these efforts. It is also true that certain goods have found their way to China through loopholes in the control system applied by different Western countries. Of course, these evasions have been galling and irritating in the extreme to reputable firms in this country who have maintained their cooperation in the policy of denying these goods to China. As each country in turn is tightening up its control system, evasion has now become much more difficult.

As to the actual question which stands in the name of the noble Viscount, Lord Elibank, the noble Viscount has suggested the appointment of a Committee to assist the Board of Trade in relation to exports of non-strategic materials to China. I cannot imagine that the noble Lord has in mind the need for a Committee to organise an export drive to China in non-strategic goods. If he is thinking of that, I think the answer is that we consider the existing channels of trade, as mentioned by the noble Lord, Lord Strabolgi—

VISCOUNT ELIBANK

I never had them in mind.

LORD MANCROFT

I am glad to hear that. We should prefer to leave that to the normal channels of trade and the trade organisations set up by the Government of China, all of which are adequate to secure any business which the Chinese are willing to place in this country. What the noble Viscount probably has in mind is a Committee to advise us on whether goods should be considered to be strategic. He has referred to a previous Committee set up in days gone by. Experience of a similar type of Committee set up under the terms of Part II of the Safeguarding of Industries Act, 1921,was not very encouraging.

VISCOUNT STANSGATE

That is not what the Government said at the time.

LORD MANCROFT

The Government of 1921 or the Government of 1930?

VISCOUNT STANSGATE

We attacked this Committee repeatedly in another place, and we were, of course, assured by the Government that it was working very satisfactorily.

LORD MANCROFT

Perhaps we may look at that in the light of history. When the Committee was abolished the noble Viscount was, I believe, Secretary of State for India.

VISCOUNT STANSGATE

The noble Lord's father was an extremely active and very distinguished supporter of the Government. I myself was an undistinguished member of what I am glad to think was a thoroughly hostile Opposition.

LORD MANCROFT

We are obviously going a long way from the subject matter of the Question if we delve into what were my father's activities and the noble Lord's activities on the Act; but, in point of fact, it was repealed; and the reasons for the repeal, as stated by the President of the Board of Trade at the time—

VISCOUNT ELIBANK

Is the noble Lord referring to the amendment also? He referred only to the original Act. That Act was amended by Command Paper—I forget the exact number—and the amendment made a material difference.

LORD MANCROFT

I do not quite know how an Act can be amended by a Command Paper. However, perhaps I may continue—I do not think that the matter is more than a technical point at the moment. As I said, the reasons for the repeal, as stated by the then President of the Board of Trade, were that only nine applications under the Act of 1921 had been received, and in riot a single case had the applicants established a case that the goods were being sold below the cost of production. The history of this duty suggested that it was difficult to apply in practice, but I think I can give the noble Viscount some comfort in this respect, because, as he probably knows, there is in being an inter-Departmental Committee, a strong inter-Departmental Committee, with adequate technical assistance, to advise on the strategic value of goods which are referred to it. That is, of course, the nub of the whole question which we are debating this afternoon.

May I repeat to the noble Viscount, Lord Elibank, the offer which I made to him some weeks ago? It is, I think, important, because this Committee is dealing with a constantly changing problem. There is no hard and fast rule laid down—that is, of course, a point which several noble Lords have touched on. The offer made at the time of the noble Viscount's first Question was that the Government, and hence, too, this Committee, would willingly consider every individual case, and I asked the noble Viscount to bring forward cases, which he has now done. I said that the Government would willingly consider any individual case where it was thought that injustice was being done or that strategic requirements were not really being fulfilled. I repeat that offer to the noble Viscount. The points which he has made this afternoon will be most seriously considered by that Committee, because I readily appreciate that it is not possible to lay down any hard and fast rule, to say, "This is clearly right; this is clearly wrong; this is strategic and this is non-strategic." That is the purpose of this Committee. This Committee will willingly consider any points put to it from the noble Viscount, and I will make it my business to see that the points he has raised this afternoon are brought to the notice of that Committee.

VISCOUNT ELIBANK

I am much obliged to the noble Lord but there is this difference: the Committee now in existence is an inter-Departmental Committee: the Committee set up under the Safeguarding of Industries Act, an ad hoc Committee, was an outside Committee of independent members. This is merely going from the Licensing Export Department to the Departmental Committee.

LORD MANCROFT

This is an inter-Departmental Committee, and I have no reason to believe that it will not do its tasks satisfactorily.

I should like to try to deal with one or two of the individual points that have been raised in the course of this debate. The question of pharmaceuticals was raised by the noble Viscount, Lord Elibank, and by the noble Viscount, Lord Stansgate, the last time the matter was raised, but not, I think, on this occasion. The situation is as follows. Although pharmaceuticals are not included in our China embargo lists, pharmaceuticals of certain types—antibiotics, sulpha drugs and anti-malarials—are regarded as useful to an army in the field. It has therefore been our policy to restrict exports to China to the pre-Korean war level so as to meet only civilian needs. Until recently, most Western European producers were unwilling to restrict their exports in any way, basing their refusal on humanitarian grounds. Thus, large quantities of pharmaceuticals found their way to China and frustrated the object of our rationing controls and the embargo imposed by the United States and Canada. Lengthy discussions on this subject have taken place, and I can inform the noble Viscount that my right honourable friend the President of the Board of Trade hopes to make a full statement on this detailed and particular subject in the course of a very few days.

LORD OGMORE

May I ask the noble Lord whether keeping drugs from a sick soldier is now regarded by the United Nations as humanitarian?

LORD MANCROFT

I really think it would be better if the noble Lord were to wait and study the statement to be made in the near future by my right honourable friend.

LORD OGMORE

I am asking the noble Lord now. What does he mean—"wait and study the reply"? We are having a debate in the House of Lords. I am not going to wait for any reply. I want the noble Lord to reply now.

LORD MANCROFT

It is no good the noble Lord getting angry with me.

LORD OGMORE

I have never heard such a suggestion.

LORD MANCROFT

I was given no notice that the question of pharmaceuticals would be raised to-day. I took the opportunity yesterday to find out what the situation was in that respect. I find that lengthy discussions are now being concluded and in the course of the next two or three days a detailed statement will be made by Her Majesty's Government. I do not wish to be bullied into going any further than that.

Then there is the question of Ceylon. This question has really been answered for me by the noble Lord, Lord Ogmore, who pointed out a fact that is sometimes forgotten, that Ceylon is not a member of the United Nations. The situation on the rubber and rice position, is, as I understand it, as follows. Since the shortage of rice in Ceylon became acute, and particularly since the possibility arose of Ceylon obtaining rice from China in return for rubber, informal exchanges of view have taken place between Her Majesty's Government and the Government of Ceylon. Her Majesty's Government in the United Kingdom have at no time made any formal representations to the Government of Ceylon on this subject, appreciating Ceylon's urgent need of rice in order to protect her standard of living. Whilst it is not customary to give particulars of representations made by the United Kingdom Government to Commonwealth Governments, I can assure noble Lords that the United Kingdom Government did express their concern, before the agreements were signed, at the conclusion of agreements involving the supply of rubber on a large scale to China.

VISCOUNT STANSGATE

Does the noble Lord think that this class of pressure by this country on one of our Dominions helps the consolidation of the Commonwealth?

LORD MANCROFT

I did not use the word "pressure" in any way at all. I should repudiate it. I should be unhappy to think that the noble Viscount was able to read the word "pressure" into the very mild words that I used.

The noble Lord, Lord Teviot, and the noble Lord, Lord Strabolgi, both voiced the hope that normal trade with China in non-strategic goods would be encouraged, and that all would be done to allow these old channels of trade to flow as freely as they used to do in the days when they were so lucrative and satisfactory to both sides. It is clearly, without any doubt, the policy of Her Majesty's Government to encourage legitimate trade with China. Textile machinery, I think, was one item mentioned. Such machinery can be exported from the United Kingdom to China. In January and February of this year we exported £150,000 worth of textile machinery. I give that only as one example. It appears to me that there are three things we can do. We can say, "The United Nations have passed a resolution to which we have agreed. It was ill-defined; it took away from us some of our sovereign power; it has now acted very harshly upon our traders; it is not running to our satisfaction. Other countries are not abiding by it as faithfully as we are, and are profiting thereby. We will now tear up the whole agreement and repudiate it, or we will slide out of such clauses as are to our disadvantage." My Lords, I do not think that anybody would seriously agree with that point of view.

VISCOUNT ELIBANK

It has not been suggested.

LORD MANCROFT

It has been hinted at.

The second point put forward by more than one noble Lord is that we should attempt to make other nations fall in line more completely and more scrupulously with us. That is a point of view I myself put forward when answering the Question of the noble Viscount, Lord Elibank, some weeks ago. I repeat that we are meeting with some success. We have not yet met with complete success. We have succeeded in reaching agreement with various nations who hitherto have not agreed with us on a large number of detailed commodities, and, as I say, we are meeting with increased success. It is the policy of Her Majesty's Government to continue with these negotiations and with that policy of trying to bring other nations who are not acting as scrupulously, or as accurately, as our-selves into line, so that our policies shall be the same. I am certain that that is the right policy in this difficult matter.

The third thing we can do, and which we are doing—and I renew my promise to the noble Viscount—is to keep under constant supervision the lists of articles that we consider to be strategic. The noble Lord, Lord Strabolgi, produced our old friend, the ostrich feather. It is almost impossible to devise a list upon which there does not eventually appear an ostrich feather situation unless you keep it under constant review. I am not suggesting for one moment that if the list were laid before anybody a flaw could not be found in it and a good case be put up for the transfer of commodity A to another list. But we have the best advice we can take in this matter, and the lists are under constant review. I have given a guarantee, and I repeat it again, that all the various commodities and the points arising out of the Question put by the noble Viscount, Lord Elibank, will be carefully considered; and that, I am certain, is the best method of meeting the legitimate and understandable difficulty which the noble Viscount and those who have supported him have raised to-day.

My Lords, I will endeavour to give noble Lords answers to those questions which I have not been able to answer, which have been put to me and of which I did not receive notice. I am sorry that some of these questions strayed so far from the original Question as to take me slightly by surprise. The noble Viscount, Lord Stansgate, asked the important question, "When does the situation end?" All I can say is that the situation, as he put it before the House, seemed to me to be reasonable and correct, and I would not differ from the proposals he put forward. I think quite clearly it would be reasonable to say that the restriction upon strategic goods which was put upon China as long as the warlike activities were pursued in Korea, cannot possibly be extended to any general overall peace plan stretching far and away beyond Korea. As I understand it, that is the situation, and I thought the sentiments which he expressed in that case were unexceptionable, and, unless I am contradicted from higher and better authority, I think that that statement was correct.

VISCOUNT STANSGATE

I am very grateful indeed to the noble Lord.

LORD MANCROFT

I am sorry if my reply has, of necessity, been somewhat jumbled but I have dealt with a number of detailed points. I would conclude only by expressing the agreement of Her Majesty's Government as to the importance of this matter, and the sympathy of Her Majesty's Government with those legitimate traders who, in the interests of the United Nations, cur own foreign policy and our desire for peace, have been themselves personally penalised. I think we owe them a debt of gratitude for the scrupulous way in which they have attempted to help this country in carrying out their part of an agreement, from which I am quite certain this House would not wish to see us retreat at all.

VISCOUNT ELIBANK

My Lords, I beg to thank the noble Lord for his very comprehensive Answer to my Question.