asked the Chancellor of the Exchequer whether the present quota preference system for Colonial sugar will be continued after the end of the financial year 1937–38; and, if so, in what form?
§ Sir J. Simon
On the 6th May, 1937, the then Lord President of the Council informed the House that in the event of the International Sugar Agreement coming into operation it was the intention of His Majesty's Government in the United Kingdom to invite Parliament to stabilise the existing rates of Imperial preference for a period of five years similar to that covered by the Agreement. He added that the additional Colonial preference would also be continued, subject to a minor modification of its terms, on which a further announcement would be made.
I am now in a position to announce that His Majesty's Government propose, on the assumption that the International Sugar Agreement will come finally into force, to agree to a continuance for the period covered by the Agreement of the additional Colonial preference of 3s. per cwt. on a quota of 360,000 tons, subject to the following alterations in the terms of that preference as announced in 1934 in Command Paper 4555.
First, the price of sugar above which the special preference will be liable to alteration will be 6s. 6d. per cwt. c.i.f. instead of 7s. per cwt. as at present. The new price of 6s. 6d. per cwt. is regarded as an appropriate compromise between the improved position among Colonial sugar producers generally since the special preference was first introduced in 1932 on the one hand, and on the other hand the increase during that period in charges, notably freights, over which the Colonial producer has no control. His Majesty's Government reserve, however, the right to reopen the matter if there is any further substantial alteration in the position.
Secondly, if in consequence of a rise in sugar prices the special preference has to be reduced the reduction will be applied not to the special preference rate but to 1547W the amount of tonnage eligible, a reduction of 90,000 tons or 25 per cent. being made in the quota for each rise of 6d. per cwt. over the price of 6s. 6d.
I may add that the price upon which the special preference is to be determined during a particular financial year will in future be the average for the first six months of the International Sugar Year, instead of the last six months of the calendar year as at present. Thus the special preference for the financial year 1938–39 will be determined by the average of prices from September, 1937, to February, 1938.