HL Deb 28 June 1956 vol 198 cc175-82

5.44 p.m.

LORD BALFOUR OF INCHRYE rose to ask Her Majesty's Government whether since signing the 1951 United Kingdom-Cuban Agreement comparative figures of United Kingdom exports accepted by Cuba in that year compared with 1955 show sufficient compensating advantage for the damage done to the Jamaican cigar industry resulting from decreased exports to the United Kingdom since completion of this Cuban Agreement. The noble Lord said: My Lords, I beg to ask the Question standing in my name. In doing so, I ask leave to detain your Lordships for a very few minutes. The matter is one of some importance. The Trade Agreement mentioned in my Question was signed in 1951, and the chief reason for its signature was the acceptance by this country of raw sugar from Cuba in varying amounts. During the negotiations for that Trade Agreement, the Commonwealth was kept informed, and I personally have no criticism of the conclusion of that Agreement; but what my Question asks is whether the results of that Agreement have proved worth while.

I would ask leave for a moment to examine the then President of the Board of Trade's Press statement which accompanied the White Paper setting out the details of that Agreement. The Press statement by the President of the Board of Trade stressed the value of the reduction of the preference received in the United States from Cuba and stressed the value of the reduction of Cuban duties on some eighty items which can be imported into Cuba from this country. The President of the Board of Trade described it as: of the greatest significance to United Kingdom exporters". Then, warming to his subject, the President of the Board of Trade said: We could now export on equal terms with the United States of America in 85 million dollars of trade. Cuba should be an important export market. In return, we granted Cuban sugar an advantageous and secure position in varying amounts. We also accepted Cuban cigars in direct competition with the Jamaican cigar industry—500,000 dollars' worth in 1952–54, 250,000 dollars' worth in 1955 and 1 million dollars' worth in the year 1956.

Finally, the President of the Board of Trade said that he viewed the Agreement as one of great advantage to the British Commonwealth as a whole. If we look at a part of the British Commonwealth, it is difficult to discern the advantage to Jamaica. Jamaican exports to the United Kingdom in 1950 of cigars, a highly important industry to Jamaica, were worth £465,000. Now they have dropped to £369,000. Look at the facts as against the expectations in the Cuban dollar market. The expectations of the President of the Board of Trade were that this was going to be a great new export market. In 1951, our exports to Cuba stood at £7,400,000. In 1955, they stood at £4,800,000—scarcely a justification for this optimistic statement of the President of the Board of Trade as to the results of this Agreement. Jamaica accepted from the United Kingdom in 1951 £11.4 million worth of imports. In spite of the economic blow that was dealt to Jamaica, in 1955 she accepted over £16 million worth of imports. I repeat that it is hard to discern the advantage to the British Commonwealth, so far as Jamaica is concerned, of this Cuban Agreement, and it is hard to see what justification there is to-day for the optimism which was expressed by the President of the Board of Trade when this Agreement was made. We cannot do anything to help Jamaica in this matter because to-day the duty on tobacco coming into this country is some 58s. per lb. and Jamaican preference is 1s. 6d. per lb.—that is all. It is virtually insignificant and, unfortunately, owing to our tying ourselves to the provisions of the General Agreement on Tariffs and Trade, we cannot give any increased preference to Jamaica. If we raise it to one country we have to raise it to the others; if we reduce it to one, we have to reduce it to the others.

I raise this Question for the reason that I have just told your Lordships: that I want to know from the Minister whether the advantages of the Agreement have really outweighed the disadvantages to Jamaica. I submit to your Lordships that this is an example of where we have granted Cuba advantages and where the promises of increased trade for this country, which we were led to expect when we agreed that this Trade Agreement should go forward, have not materialised. Better by far, I believe, to turn away from the doctrinaire principle, of non-discrimination and regain the path of reasonable discrimination, in order to give a priority of position to those of our own kith and kin within the British Commonwealth—a priority which, in this particular example, is steadily declining.

5.50 p.m.

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT)

My Lords, this is an important matter and I am grateful to my noble friend Lord Balfour of Inchrye for raising it. This is a matter about which I know he feels, and has felt, strongly. The Trade Agreement with Cuba of 1951, to which my noble friend refers, expired in December, 1953, and was superseded by the current Agreement. Both Agreements have been published, but I think it may assist your Lordships if I briefly recall their main provisions.

Under the 1951 Agreement, the Cuban Government reduced the duties on a wide range of United Kingdom goods. For their part, the United Kingdom committed themselves to certain purchases of Cuban sugar and opened an import quota for Cuban cigars, thus relaxing the prohibition which had been imposed during the war. Under the 1953 Agreement Her Majesty's Government secured the renewal of the tariff concessions for United Kingdom exports and, as to Cuban exports, they increased the import quota for cigars but did not renew the sugar commitment. I might add that this Agreement was in no way disadvantageous to this country for, without it, the higher duties which prevailed in 1951 would again have been levied on United Kingdom exports.

On the comparison which the noble Lord's Question might persuade your Lordships to draw, it is, if he will allow me to say so, a little misleading to speak in terms of assessing the balance of advantage as between the industries of Jamaica and the United Kingdom The decision to relax the prohibition on the import of Havana cigars was taken by the Party of noble Lords opposite in 1951, because it was their view, which they stated at the time, that under our international obligations the prohibition could not have been maintained indefinitely. Her Majesty's Government share that view, and I hope your Lordships do as well. It would be contrary to our policy to maintain such a prohibition longer than is justified on balance of payments grounds and contrary to our general policy of liberalising trade.

Since 1951 there has been a fall in our imports of cigars from Jamaica from the peak figure they reached while they enjoyed a virtual monopoly of our market for hand-rolled cigars. They now have rather more than half the trade in imported cigars, and Cuban cigars rather less than half. I should perhaps add that Jamaican and Havana cigars together account for only a small pail of our total consumption of cigars, if we include the cigars we make in this country. Your Lordships may be interested to know that our own British machine-made cigars account for no less than 80 per cent. of our total consumption, and the Cuban and Jamaican for only 15 per cent.

My Lords, I will not say anything against the Jamaican cigars. I myself like them, and I think that some of the best Jamaican cigars very nearly approach the Havana cigar. But I am afraid there is no getting away from the fact that the prestige that attracts the Havana cigar smoker must be taken into account. I am told that now, if a choice is offered to experienced cigar smokers, four out of five will take a Havana cigar, despite the fact that they cost between 1s. 6d. or 2s. more. I think perhaps if a cigar is offered to them free, the figure would probably be five out of five. I have confirmed that fact from our own cigar consumption in your Lordships' dining room.

LORD BURDEN

They are not free there.

LORD MANCROFT

As the noble Lord, Lord Burden, says they are not often given free there. It would not, I think, be tactful for me to ask my noble friend Lord Balfour of Inchrye what he himself smokes in the way of cigars, but I think he will agree with me that there is a strong prejudice, perhaps unjustified, in favour of the Havana cigar.

I turn now to our whole export problem—not only cigars. Our total exports to Cuba, as the noble Lord has indicated, declined from £7½, million in 1951 (which, incidentally, included an abnormal shipment of over £2 million worth of buses) to £4 million in 1953: but in the first five months of this year they have been running at an annual rate of nearly £8 million. Over the period of the current trade Agreement our exports to Cuba have been steadily improving. Imports from all sources into Cuba have remained at about the same level, so that our share of the Cuban market has also increased. In particular, the Cuban authorities have this year imported British aircraft for the first time. They have bought three Viscounts and have placed their order for four more Viscounts for delivery in 1958. They have also this year, for the first time, placed an order with a London firm for the printing of bank notes.

As regards our import trade, it is true that there has been a reduction in our imports of cigars from Jamaica, and this reduction is obviously due in part to the licensing of quotas for Cuba. But total imports of all goods from Jamaica to the United Kingdom have increased steadily during the last few years, while total imports from Cuba have fallen off considerably. Her Majesty's Government fully realise, and are naturally in agreement with, the desire of my noble friend to see all possible assistance given to colonial trade. Apart from the substantial benefits which Jamaica and other British West Indian territories derive from the Commonwealth Sugar Agreement, in a remunerative price for a large part of their production and an assured market in the United Kingdom, they have recently been accorded increased preferences here for both bananas and lime oil. In addition, a price assistance scheme has been agreed with British West Indian Governments for citrus fruits, which will cushion the effect of fluctuating prices on the growers. Interest-free loans are also being provided from Colonial Development and Welfare money.

My Lords, we have old and friendly ties with Cuba which we value highly. Our ties with Jamaica are of quite a different kind and of a different value. I believe, however, that our present arrangements place a proper accent on both these ties.

5.58 p.m.

LORD BURDEN

My Lords, may I just say a few words, as apparently the Party to which I belong was responsible for the difficulties in regard to Cuban cigars? May I say, too, that I warmly welcome the explanation given by the noble Lord, Lord Mancroft. In regard to Cuban cigars we need to remember that cigar-making in Cuba is a prestige industry, and the Cuban Government and people have for a long time been fretting under this total prohibition of what they regard as their prestige industry. Undoubtedly, under this prohibition there was growing up a generation which did not know what was the flavour of a Havana cigar. But, quite apart from that, there is to be remembered the wide insurance business which is conducted in Cuba on behalf of British commercial insurance firms—a matter that was not mentioned by the noble Lord, though I am sure he knows of it. I do not want to develop the subject, because it is perhaps rather dangerous, bearing in mind the Cuban feeling on the matter, of which my noble friend Lord Balfour of Inchrye will be aware.

Another factor to be borne in mind in regard to the Havana cigar is this. We in this country depend a great deal on tourism, and in particular from visitors from America, whom we welcome.

LORD BALFOUR OF INCHRYE

May I interrupt the noble Lord for just one moment. At no time in my speech did I say, nor do I wish to convey any impression, that I am against the importation of Havana cigars. I was dealing with the trade position in general, and the fact that we could give a greater preference to the Jamaican cigar so as to allow it to come in at a better rate than one has to pay for one's Havana.

LORD BURDEN

I agree; but in spite of the general explanation of the position put forward by the noble Lord, Lord Mancroft, I think one has to remember that our American friends and visitors smoke far more Havana cigars than Jamaican cigars, and it had been a source of complaint for a number of years that Havana cigars were not available for our American visitors. Apart from that point, I will only add that I think the noble Lord, Lord Mancroft, has given the noble Lord, Lord Balfour of Irchrye, a good deal of information on this point, and I am sure that in some measure he will be satisfied.