WAYS AND MEANS.

§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I hope that, after all the numerous questions and answers on the subject, there is now no doubt in the minds of the Committee as to the procedure which is to be followed. We cannot introduce the Bill which is to implement the Agreements arrived at at Ottawa until we have obtained from the Committee of Ways and Means the series of Resolutions which are on the Order Paper to-day. When I sit down I propose to move the first of those Resolutions, and I dare say you, Sir Dennis, will then think it appropriate to give some ruling as to whether the Debate should be allowed to range over the whole of the Resolutions or whether each Resolution should be taken separately. In the meantime, I desire to make to the Committee a statement, and remembering the many opportunities which will arise later on in the discussions not only of the Resolutions but of the Bill, to elucidate any details which may be obscure or not fully understood.

I do not think that it will be necessary for me this afternoon to spend too much time in what I may call a purely expository statement. I do not propose to enter into any great detail, but I do want to try to put before the Committee what I conceive to be the real significance and importance of the Conference which was held at Ottawa. After all, we have to remember that although it is possible for the House to alter any one of the agreements there arrived at, that alteration cannot be effective without destroying the agreements. Consequently, what really has to be considered to-day is whether the agreements as a whole do present a result which it is desirable for this House to approve.

In estimating what may arise and what may be the consequences of the Imperial Economic Conference, I think that one must consider, first, what are the conditions under which that Conference was held. The time is long past when any country can suppose itself to be indifferent to what is going on in other countries. The operations of finance and commerce are no longer merely national. They are international. They are so closely entwined that it is impossible that any disturbance of the system in any part 29 of the world should not have its reactions upon every other part. Even the depression and the adversities of small nations in Europe may have an adverse effect upon the trade, and may lock up the financial resources of nations more powerful, more populous, more wealthy than themselves, and we see, if we look across the water, that even the largest of countries, the country with the most, varied resources at its disposal, with huge accumulated wealth and an enormous population—even a unit such as that cannot expect to remain prosperous when all the rest of the world is in the trough of depression. But while it is true that the fall of one country into the bogs and quagmires of adversity is apt to pull other countries down with it till the whole world is in the same condition, so it is equally true that that country which can first place its feet upon firm ground and withdraw itself from the slough, and then hold out a hand to others to help them one by one to stand beside it, can lead the way to a recovery which is confined not to its own borders but which may extend to the whole world. If that be true of a single country, surely it is still more true of a group of nations, and I do not think that anybody would deny that a united British Empire can exercise a more powerful force than the sum of all the forces that can be contributed by each nation acting independently.

Therefore, the success of the Ottawa Conference, if it should result in increased prosperity for a united British Empire, is the largest contribution that that Empire can make towards the restoration of the prosperity of the world. I may add to that that there was something more in the minds of those of us who went to Ottawa. It was, of course, an Economic Conference, as was stated in the words of the Gracious Message which was sent to it by His Majesty the King at its opening. The delegates there were gathered in conference to explore the means by which they may promote the prosperity of the Peoples of this great Empire. But it was, I am sure, in the minds not only of the British delegation, but of all those who were present at the Conference, that, differing as the people of the Empire may in race, in religion, in colour, in language and in the conditions under which they live, yet there are 30 certain aims and ideals which are common to all of them—ideals of peace, justice and freedom, and that if we believe that, as we surely do, then it must be to the advantage not only of ourselves but of the whole of humanity that the British Empire should grow in strength, in power and in unity. I noticed this morning in the daily Press an interview with a great American industrialist who had recently come over here, and he made some comments upon what had taken place at Ottawa. I would like to read to the Committee these words uttered yesterday by Mr. Charles M. Schwab: The Ottawa Agreements are going to hit America. They are going to hit my own concerns, especially in the Canadian market. We must take a wide view. If the British Empire prospers under those agreements, America and all the rest of the world must prosper in the long run. There is something truly statesmanlike in those words uttered by one who is not a member of the British Empire, and I only wish that all our own citizens would take an equally wide, far-sighted view of what is likely to be the most important consequence of our labours and efforts at Ottawa. I do not suppose that there is any difference in the Committee as to the desirability of promoting the unity of the British Empire, but perhaps we do part company when we begin to consider how that unity is best to be achieved. There are those, I know, who are of opinion that the ties which bind the British Empire together are of so delicate a nature that they should be left entirely to the operations of sentiment, and that any idea of strengthening them by means of material considerations is so dangerous that it would be better to leave it alone altogether.

I, myself, in a speech made a little time ago, expressed the view that those ties had in recent years worn dangerously thin in places. I noticed that the late Home Secretary commented in rather scornful terms on that observation—that exactly the same thing was said by Mr. Joseph Chamberlain 30 years ago, and the inference was that this was a bogy which was raised from time to time by those who advocated Imperial Preference in order to frighten people into the acceptance of their views. If I may say so, my right hon. Friend, unintentionally no doubt, misrepresented what Mr. Joseph Chamberlain did say 30 years ago. 31 He used to quote with approval a phrase used by Sir Wilfrid Laurier that either we must come closer together or we should drift further apart. That was not a statement of existing conditions. It was a prophecy of what would take place in the future if certain things were not done. What I said was that the prophecy, in my opinion, had been fulfilled, and that the result of not taking the steps which were advocated at that time had been that there had arisen a number of points on which diversity of views and of interests had come about which had grown, and were continuing to grow, and would continue to grow unless at this stage we did something to reverse the current.

If anyone doubts the truth of that statement I would ask him to consider the position in India to-day and compare it with what it was in 1903. Can anyone say that the ties which bind India to Great Britain are closer to-day than they were in 1903, or that the difficulties, political and otherwise, between us, have not grown more acute in the course of the last 30 years? Or, if India is thought to be an exceptional case, I would remind the Committee that it is in the last 30 years that the competition between the manufacturers and agricultural producers in Canada and in Australia with those in the old country has grown up. It is common knowledge to-day that Canada to a great extent has become dependent upon American finance, that in the absence of any preferential arrangement with the United Kingdom she might find it extremely difficult to refuse a new offer of reciprocity from her great neighbour on the South, which would have definitely linked their fortunes together and to that extent cause a divergence again between Canada and Great Britain. Then, again, consider the events in South Africa where, the Committee will remember, not so many years ago a treaty was concluded between the Union and Germany, under which the Union bound itself not to give any preference to Great Britain without also extending it to Germany, a treaty which was viewed with great anxiety in this country, not only on account of its actual terms, but because it was felt that it again marked a divergence from the path of Imperial unity.

32 All these instances which I have given show that we were approaching a danger point in the history of the Empire; and I suggest, therefore, that the first test which you have to apply to the agreements that were arrived at in Ottawa is, what was their effect upon the future course of Imperial relations? Have these agreements, in fact, changed the direction and altered the tendency to which I have drawn attention? Did the delegates who came there from the various Dominions and from India—did they go away with embittered feelings, feeling that they had only encountered difficulties and friction in their discussions? Did they go away feeling that in future it would be better that each country should go its own road and give up the idea of Imperial unity? Did the Conference, on the contrary, result in a better understanding all round of one another's difficulties? Did it result in a perception of the advantages which were to be attained by each from mutual co-operation? Did it result in a determination to continue the task which had been so well begun? Did the delegates feel at the end that they saw a definite prospect, by closer trading relations with one another, of attaining a new strength and new security for all the countries of the Empire? There is only one possible answer to a question of that kind.

I would like again to call the attention of the Committee to the resolution which was adopted unanimously by the Conference at its concluding meeting. It is in a few words, and perhaps I may be allowed to read it: The nations of the British Commonwealth having entered into certain Agreements with one another for the extension of mutual trading by means of reciprocal preferential tariffs, this Conference takes note of these Agreements and records its conviction that by the lowering or removal of barriers among themselves, provided for in these Agreements, the flow of trade between the various countries of the Empire will be facilitated, and that by the consequent increase of purchasing power of their peoples the trade of the world will also be stimulated and increased. Further, I would call particular attention to the succeeding paragraph: This Conference regards the conclusion of these Agreements as a step forward which should in future lead to further progress and will utilise protective duties to ensure that the resources and industries of the Empire are developed on sound economic lines. 33 There is no uncertainty about the words of that resolution. They strike a note of hope and confidence, and anyone who cannot see that such a unanimity of aim, such a determination to pursue in common the advantages of mutual trade is bound to bring in its train a similar community of thought and action in other matters, must either be blind or else must be wilfully hiding his eyes. The Conference did not confine itself to mere expressions of opinion. There are many points in the Agreements which show how the helm of the ship has been put over, and how all the vessels of the Empire are now being directed upon a common course. I shall allude to some of them again later, but perhaps I may now draw attention to certain features of the Agreements which are particularly significant, think, because they tend to show how in these discussions we have put a check upon those fissiparous tendencies of which I have given several examples already.

Take India as the first example. For the first time India has recognised definitely the principle of Imperial preference. I would like to take this opportunity of paying my tribute to Sir Atul Chatterjee and the very able members of the delegation for the extremely helpful spirit in which they treated the whole negotiations, and for the way in which, not only in dealing with their own agreements, but in all the more general questions which we had to discuss at Ottawa, they so frequently made valuable contributions to our conversations. Under the new arrangements which, subject to the ratification of the Legislature, we have agreed upon, India has given us preferences which cover no less than 26 per cent. of her imports into that country.

As for Canada and Australia, the two Dominions which, of course, are the most industrialised of all, the Committee will remember that for some time they have been pursuing a policy of fostering their own industries. No one would for one moment suggest that they have not a perfect right to do so, and that indeed a further development of those industries is quite inevitable and proper for both those countries. But the policy which they have pursued in the past has been one of very high protection, and in giving that protection to their industries they have protected them not only against foreign competition but also against the 34 competition of the manufacturers of this country. It will be found that in our Agreements with them they have given up the idea that their home markets are to be reserved entirely to the home manufacturer, and they have adopted three fresh principles which are of the utmost importance to this country.

First of all, they undertake that they will not in future protect uneconomic industries, those industries which have not got a reasonable chance of making a success; secondly, that they will so adjust their existing tariffs and so frame any new ones that in articles which they desire to make themselves the British manufacturer shall have a fair competitive chance with the Dominion manufacturer; and, thirdly, that the decision, or rather that the investigation as to how that principle is to be applied shall be taken entirely out of politics, party or otherwise, and shall be entrusted to something in the nature of an impartial tariff commission.

I venture to say that that change of policy on the part of those two great Dominions, with the enormous possibilities for the future increase of British trade with them—that change of policy alone, if we were able to bring back nothing else would have fully justified us in our endeavours to obtain closer trading relations.

§ Mr. LANSBURY

Would the right hon. Gentleman tell us whether the tariff commission is to he made up, say in the case of Canada, of only Canadian representatives; that is to say, will any British representative be sitting with the Canadian representatives in determining these questions?

§ Mr. CHAMBERLAIN

That seems to me a very extraordinary question. I should not have thought that anyone would suggest that the representative of another country should sit as a member of a tariff board to decide what tariff Canada should adopt; but I can tell the right hon. Gentleman that British interests have been assured that they shall have an opportunity of presenting their case to the Canadian tariff board. If the question is meant to be a suggestion that there will not be impartiality on the part of the Canadian tariff board, I hope we shall not start with any hypothesis of bad faith, because the Governments of 35 Canada and the rest of the Dominions are as honourable as our own, and in putting their hands to Agreements such as those which are contained in this Blue Book I am certain that they can be relied upon to carry them out in the spirit as well as in the letter.

Again, I would point to a passage on page 11 of Command Paper 4174, which deals with commercial relations with foreign countries, and under which it will be seen that the Conference approved of the resolutions, stating: That it was their policy that no treaty obligations into which they might enter in future should be allowed to interfere with any mutual preferences which Governments of the Commonwealth might decide to accord to each other, and that they would free themselves from existing treaties, if any, which might so interfere. They would in fact take all the steps necessary to implement and safeguard whatever preferences might be so granted. 4.30 p.m.

This afternoon we have had some questions as to how that provision was going to be interpreted by the British Government. We have already taken steps to fulfil that Agreement by our denunciation of the Trade Agreement with Russia. Also, the South African Union have begun to take steps to free themselves from their obligations under the South African and German Treaty and, under this statement of policy, no treaty will be concluded by them in the future which would in any way frustrate the intention of the preferences which have been arrived at as a result of the Agreement.

Again, there is another feature of these Agreements on which I would like to lay especial stress, and it is that for the first time the whole of the Colonial Empire has been brought into these negotiations. That is a new departure. Not only is it going to give great advantages to many of the Colonies, which will thus obtain preferences in the Dominions which will be of value to them, but I attach great importance to it because it emphasises to everybody that partnership in the Empire does not merely bring advantages in trading relations with Great Britain, but that it extends also to those countries which are to be found in the whole of the tropical regions of the world and which therefore can offer to the more temperate countries something which we cannot supply them from Great Britain. My right hon. Friend the Secretary of State 36 for the Colonies who has, with great foresight and imagination, visualised the trade of the whole Colonial Empire as one which is worthy of encouragement and capable of great development, took an active part in these negotiations, and I think we all felt that we were under a debt of gratitude to him for the persistence and ability with which he put forward the interests of the Colonial Empire.

Lastly, while I am on this point, I would call attention to the fact that the Conference set up a committee to consider the means of facilitating economic consultation and co-operation between the several Governments of the Commonwealth and an examination of what alterations or modifications, if any, in the existing machinery for such co-operation within the Commonwealth are desirable. That is not a permanent committee. It is a committee set up for a particular purpose, but it marks the determination of the Conference that they are not going to rest upon their laurels; that they are not going to remain satisfied with what was actually achieved at Ottawa, but are going persistently to pursue investigation into how further they can open the clogged channels of trade between the various members and how they can improve the machinery which leads to further co-operation. The broad conclusion that I draw then is this: That, apart altogether from any immediate advantages which we may get by the alteration of the Dominion tariffs, the general trend and tendency of the Agreements which we concluded last August was to the lowering of inter-Imperial tariffs and to further mutual cooperation in trade.

I would like to examine a little more particularly how these Agreements are going to affect the people and the industries of this country. We recognised from the first that the results must be necessarily more rapid in their operation in the case of the Dominions than they could be here, but, on the other hand, it is evident that the value of the new preferences which we are obtaining from the Dominions will continue to grow as the purchasing power of the Dominions increases. Therefore, any help that we can give them towards the extension and development and the greater prosperity of their production must, in the long run, inure to our ad- 37 vantage, and now that we have made these preferential arrangements with them I think we may fairly claim that the concessions which we gave them with regard to such commodities as wheat, butter, cheese, eggs or fruit, were made in the interests of our own industrial population.

But there is another aspect of the concessions which is perhaps even more important. They are here as the price that we pay for certain advantages in selling our manufactures in the Dominions markets. During the whole of our negotiations we had very constantly in our minds that we were representing not only manufacturers but also agricultural interests, and, accordingly, our policy—a policy to which the Dominions not only took no exception, but in which I may say they cordially concurred—was that in all agricultural matters our first care should be to help our home farmers and our second to try to give an expanding share of the import market to the Dominions. I think I may fairly-state that, not only by the Agreements into which we ourselves entered but also by the opportunities which were offered of conversation or association between representatives of the home farmers and those who came from the various Dominions, we did lay at Ottawa the foundation of a real Imperial agricultural association. I am confident that what was begun there will, in the future, bring perhaps even greater benefits to agriculture in this country than it does to our industrial community.

Take as an example what I think is the most important part of our agricultural discussions, namely, the arrangement that we made about meat. The meat problem centres round the industry in mutton and lamb in which the prices have fallen to a level which is far below the cost of production either in this country or in any of the sheep-producing countries of the world. One cannot attribute that fall to the general fall which has taken place in commodity prices or the general shrinkage in purchasing power because it goes far beyond that. Whereas the fall in general commodity prices since 1929 has been about 25 per cent. the price of English mutton has fallen from 11.95d. in 1929 to 6.75 to-day and lamb has fallen from 14.11 to 7.5.

§ Mr. WALLHEAD

Not in the butchers' shops.

§ Mr. CHAMBERLAIN

I am talking of wholesale prices. In 1930 fat sheep were selling in England and Wales at 60 per cent. above pre-War levels and last month at 14 per cent. below the levels which obtained in the year before the War. That is a very calamitous state of affairs. It is clear that if it went on much longer sheep farmers must be completely ruined, not only in this country but in all countries where sheep-raising forms one of the staple industries. That would not be in the interests of the consumer. As has already been pointed out to-day, he is not getting the benefit of this fall. It is quite certain that if the sheep farmers were to shut down and reduce their operations, as assuredly they will soon have to do unless something is done for them, we should find a rise in prices which would speedily he reflected in the butchers' shops. Therefore the problem that was before us was "how are we to find some means of raising the wholesale prices of mutton and lamb once again to a reasonable level?" While mutton and lamb formed the kernel of the problem, yet we had to take into account the fact that the prices of all kinds of meat are interrelated; that when one kind of meat is cheap, it does to a certain extent displace other kinds and that therefore you could not completely solve your problem by dealing with the central feature of it alone.

What was the cause of this exceptional and disastrous fall in the wholesale prices of mutton and lamb? That question is not very difficult to answer because you have only to look at the figures of imports during the last few years and you will see how they are related to the fall in price. In 1929 the imports of mutton and lamb in thousands of cwts. were 5,631 and the value was £19,000,000. That works out at an average price per cwt. of £3 7s. In 1931, two years later, the 5,600 had risen to 7,100. The value, however, had gone down to £18,250,000, an average value per cwt. of £2 11s. Taking the first nine months of the present year the imports were 5,705 which is at the rate of 7,607 for the 12 months. The value was £13,000,000 and the average per cwt. was only £2 6s.

The conclusion is obvious. What you have to do if you are to restore the prices which have been ruined by this excessive increase in importation into a market of 39 which the capacity was not increasing is to regulate the supply of imports until you reach some reasonable relation between what the market can take and what is going to be offered to it. A duty on foreign meat would be useless for this purpose, in the first place because the foreigner would pay the duty and send in the meat just the same and, in the second place, because the excess was not coming from the foreigner. The excess was coming from the Dominions. If you take the 12 months which ended in June last and compare it with the average of the five preceding years, you will find that New Zealand increased her exports of mutton and lamb to this country by no less than 30 per cent. and Australia increased hers by 80 per cent. It is therefore perfectly clear that if you were to have any sort of arrangement which would offer a reasonable chance of raising wholesale prices, you must get the Dominions to play their part by regulating the supply, and it was the recognition on their part of the necessity of that course which led them to make the arrangement which is set out in the Blue Paper.

Fortunately, this problem is not nearly so complicated as the problem in the case of articles which are sold in many markets. There is only one market for surplus mutton and lamb, and that is the United Kingdom, and there are only four main sources of supply. You have the home farmer, you have the Australian farmer, the New Zealand farmer, and the Argentine; and what we hoped for was that it might be possible that the producers in these four cases would come together and make a voluntary arrangement among themselves under which they would regulate their supply according to an agreed programme and consequently obtain the required rise in wholesale prices. Of course, such an arrangement would have to be subject to the approval of the British Government, and it would have to be subject to the general lines of policy which the British Government might lay down, but in any case it was clearly not possible to work out and carry to a conclusion so large an arrangement as that in the time that we had at our disposal at Ottawa. What we did do, therefore, was to come to a temporary arrangement with the Dominions which 40 were interested, which was to last for 18 months and which the Committee will find set out in the Declaration of the United Kingdom, attached to Schedule H which follows upon the Australian Agreement.

Without going into any details now, I may just mention that this temporary programme provides for, first of all, a progressive reduction in the imports of foreign mutton and lamb into this country during the 18 months; secondly, a fall in the importation of chilled beef which is not to exceed the figures of the year which ended in June last, a year in which, I may mention, the imports to this country of chilled beef were only 93 per cent. of the average of the five preceding years; a standstill on the importation of Dominions mutton and lamb, and only a moderate increase in the importation of Dominions frozen beef. That is the arrangement, and I am happy to say that, although I do not imagine the producers in and exporters from the Argentine are particularly enthusiastic about the arrangement, they have at any rate agreed to work it, and I am very pleased indeed to think that they are accepting the position in so practical and helpful a spirit. Under this programme, the importations of mutton and lamb should go back to what I might call normal rates in 1934 and there should be a gradual rise in the wholesale prices of these articles, but it will be observed that under Article 8 the British Government have reserved the power to remove the restriction if it should appear that at any time the producers are not able to meet the reasonable requirements of the consumers in this country.

This is admittedly an experimental plan. It remains to be seen how far it will be able to achieve the results that we desire, but for my part I believe that it contains at any rate the elements that are necessary towards the successful solution of one of the most difficult problems that this country has to face. During the period of experiment we shall be considering and consulting with others as to the possibility of making a permanent scheme, and if we find, as I hope and believe we shall find, that it has enabled us to get over the major difficulty in the case of mutton and lamb, the market for which is in this country, then it will have proved an object lesson which we 41 may find extremely useful when we come to deal with the more complicated problem of the commodities which are sold in world markets.

I have asked the Committee to judge of the results of Ottawa by the broad tendencies which are to be found in our Agreements. At the same time we were successful in bringing back a series of immediate improvements in the preferential tariffs against this country, which are of substantial value at once to our industry and to our employment and which in time are bound to grow larger and larger. I think we have reason to be very grateful to the late Home Secretary and his friends, who went about frightening the people of this country so much as to the alleged worthlessness of the schedules when they were published that when the public really saw what was in them they were full of enthusiasm and were glad that we had been able to make such substantial gains at once.

I am not going, as I have said before, into any great detail, but perhaps I may just call attention to some of the salient features of these schedules. In the case of Canada, over 40 per cent. of the imports from the United Kingdom will enjoy in the future lower duties than have been given formerly, and goods which in 1931 amounted to over 8,000,000 dollars will now be admitted free of duty altogether into Canada. That includes a number of lines of steel and iron, chemicals, and other important industries. In the case of Australia, we have agreed upon a formula applicable to all goods which are not competitive as between Australian manufacturers and British manufacturers, under which increased preference will be given in every case to the British import.

As to the rest, the tariffs will be reviewed by the Tariff Board, which is already in existence, and indeed that review has already begun, and substantial reductions in the tariffs on British goods have already been made. In addition to that, prohibitions on certain British imports which existed have been abolished, and surcharges and primages which have been found very hampering to British trade have already been removed from an extended list of goods. In the case of New Zealand, wherever there is an existing duty upon British imports, that duty is going to be reduced by an amount 42 which varies from 5 to 12½ per cent.; and in South Africa we have an increased preference on goods the imports of which were valued in 1931 at over £6,000,000. India I have already mentioned, but I may say that the preference, which includes such important articles as woollens, hardware, heavy chemicals, building and engineering materials, and boots and shoes, covers goods the value of which in 1931 amounted to nearly £29,000,000.

Putting all that together, I think I am justified in claiming that we have brought back with us solid advantages for the manufacturing industries of this country which will be put into immediate effect, but I repeat once again that the value of what we did at Ottawa is not to be judged by its immediate effects and cannot be estimated unless we take into account the tendencies, the trends, and the increased purchasing power, which will increase the value of the preferences we have got.

I understand that these Agreements are going to be vehemently opposed by that minority section of the Liberals which now sits below the Gangway on my right. That does not disturb me very much, because I am quite satisfied that the country, which is not fettered to-day by old fiscal prejudices, will take a wider view than they, and that the people of this country are not going to be either frightened or bullied out of the enjoyment of what we have been able to get for them at Ottawa by any bogies which may be put up by Liberal Free Traders. I do not think it will be desirable that I should try to anticipate criticism from them until they have had an opportunity of formulating it, but I would venture to address to my right hon. Friend one word of friendly warning. Do let him be very careful not to make himself ridiculous. Nothing looks more ridiculous than for a man to make a public prophecy one day and to have that prophecy falsified the next, and I would therefore suggest to him that he should abstain from prophecies and that in particular he should beware of two. Let him not suggest that the cost of living is going to be increased by the Ottawa Agreements or that the Ottawa Agreements are going to make it impossible for us to negotiate fresh commercial treaties with foreign countries. He may remember, perhaps, that on the 4th February last he said: 43 Now 10 per cent. is to be added to the cast of flour, rice, margarine, condensed milk, tinned salmon, and all those things which are the clay-to-day food of the working class people."—[OFFICIAL REPORT 4th February, 1932; col. 324, Vol. 261.] At that time the cost-of-living index was 47; to-day, seven or eight months after, it has come down to 41. Therefore, I say to him, "Keep off prophecy," and I do hope that he will address himself, not to niggling details, but rather to the broader issues which I have tried to put before the Committee. Do not let the Committee think that the question before us this afternoon and during the next few days is whether or not it would have been better to stick to Norwegian cod-liver oil. Let it not even think that the question is now whether we should have Protection or Free Trade, for that question has been settled. The question is rather whether, after consideration of the results achieved at Ottawa, Parliament is going to translate into reality the vision of a strong, united, and prosperous Empire, which, by its own strength and by its own example, will be able to lend a helping hand to a distressful world.

The CHAIRMAN

I think, perhaps, before the discussion proceeds, that it may be useful if I can get the approval, or otherwise, of the Committee to the course which I suggest with regard to the Debate. I gather from what has taken place at Question Time that it will probably meet with the approval of the Committee. It is that we should follow the same course as was adopted in the case of the Resolutions dealing with the Import Duties Act in February last, that is, the course analogous to the Budget Debates. If the Committee approve of that, it will mean that there will be a general discussion on the Resolution which has been moved by the Chancellor of the Exchequer; that discussion will range over all the Ways and Means Resolutions which are on the Order Paper. When the Debate conies to an end, all the Resolutions will be put one after the other without further debate, leaving the Resolutions to be considered separately on the Report stage. I hope that that will meet with the approval of the Committee generally.

§ Sir JOSEPH NALL

At what stage of the proceedings will there be a discus- 44 sion on the import of bacon and pig products, which was not dealt with by the Chancellor?

The CHAIRMAN

The question of what the Chancellor referred to in his speech does not affect the suggested arrangement. The Debate will range over the whole of the matters which are dealt with in the Ways and Means Resolutions.

§ Sir HERBERT SAMUEL

In assenting to the suggested arrangement, I hope that it is to be understood that it will not preclude any discussion upon the Procedure Motion which is to be moved to-morrow, and that we shall not be taken to be assenting also to the principle of that Motion.

The CHAIRMAN

That is necessarily so, because the Procedure Motion is to be moved in the House and not in Committee of Ways and Means.

§ Mr. LANSBURY

I took it for granted that the course you have suggested would be agreeable to the right hon. Gentleman and his friends, as it is agreeable to us. Of course, the Procedure Motion is entirely different. When the Chancellor of the Exchequer opened his speech, he said that all parties were agreed on bringing about as far as possible closer agreement and closer economical arrangements with the Dominions. So far as we are concerned, that is correct, but, as the right hon. Gentleman said, we disagree fundamentally on the methods. I will not trouble the Committee by bringing those forward to-day, but I would suggest to the right hon. Gentleman that, if he is at all interested in our views, he might consult with his right hon. Friend the Prime Minister, and, when he has a spare hour, read our proposals in "Labour and the Nation", in the drawing up of which the Prime Minister had so important a share. We want a united Commonwealth of British Nations, and we want it, not for the purpose of dominating the rest of the world, or to stand aloof in any way from the rest of the world; we want a British Commonwealth of Nations which shall within itself carry on its business in a co-operative manner as laid down in "Labour and the Nation", and not in the competitive way which we are discussing this afternoon. From that we all hope—and 45 there was a time when the Prime Minister hoped—that we shall be able to lead on to international co-operation. That is the fundamental difference between ourselves and the Chancellor of the Exchequer.

I listened to the Chancellor's speech very attentively, but I was not able to gather that he expects from these arrangements any great benefits for the people of this country, at least for some time to come. He is relying on tendencies to benefit the unemployed and the traders of Great Britain. It is certain, as was obvious from the very first, that the Dominions have driven a bargain which has given them a tremendous gain right away without our people gaining anything at all. I want to make one or two things quite clear. I and my friends cannot associate ourselves with the notion that there is in the world to-day anything like Free Trade in the old accepted sense of the word. The trade of the world is dominated very largely by trusts and monopolies within which men who call themselves Free Traders and men who call themselves something else manage to work together for the purpose of exploiting some parts of the world and the markets of the world. At one end of the Thames Embankment there is the great Unilever House which, together with the International Supply Stores and the Co-operative Society, very largely controls the whole of the foodstuffs of the country, with the exception of wheat. At the other end we have the Imperial Chemical combine which takes jolly good care to crush out competitors and in every way to smash Free Trade. We are under no delusions about that, and there is nothing in these proposals at Ottawa that interferes with that sort of monopoly or would break it down.

We are told that these Agreements are to lead to better relationships, but I am not going to prophesy because that is always dangerous. What is happening to-day in the Parliaments of Australia and Canada is proof that in both those countries there is considerable opposition to the proposals. Mr. Mackenzie King made even more bitter speeches against the proposals than the right hon. Gentleman, the Member for Darwen (Sir H. Samuel) or any other speaker in this country. Mr. Scullin in Australia has taken the same line, and, as far as I 46 understand their speeches, their object is to put the trade of their countries first all the time. Mr. Scullin has said that he looks forward to the industries which they can establish in Australia being heavily protected against any imports from any parts of the world. That is reported in the "Times" to-day. The right hon. Gentleman was shocked when I asked him who were the people who are to man the various commissions which are to determine whether an industry may be competed with or not. I cast no aspersions on any Canadian business man or any persons in Canada or Australia who may form part of these commissions, but blood is thicker than water, and it is difficult when you are trying to decide whether an industry—[Interruption.] It would be difficult for me, though it might not be for the Prime Minister, sitting in London to decide, without having a prejudice in favour of my own people, whether a particular industry should be competed with or not. What I think about myself I think about people in Canada.

So far as I can understand the Chancellor's speech and this Blue Book, I cannot see whence any new work for our people in this country is to come at all. I would ask anyone who is to speak for the Government to answer this perfectly simple question. If we do not buy wood from Russia, but buy it instead from Canada, does not that mean that we will not send to Russia certain goods that at present we are sending there, but that we will send perhaps some entirely different goods to Canada? That process will not increase employment or trade one iota. I would like to hear the President of the Board of Trade on that point. I want someone to tell me how these proposals are going to increase trade. I can see that they will change trade, like a woman who goes shopping. She may shop here to-clay and to-morrow may go into the next street. She has not increased the volume of trade; she has just shifted it from one place to another.

It may be due to my lack of intelligence, but after listening very attentively to the right hon. Gentleman, I did not gather that he could put his finger on any place and say, "Here trade will be increased; here employment will be increased." That is really the condemnation of the whole of this policy. Nothing 47 has been done at Ottawa, so far as I can gather, to deal with any great development of either Canada or Australia. All that the Government are doing is to shift trade. Had they gone to Ottawa and said, "We are prepared to raise a great loan in order to develop the undeveloped portions of your Dominions," there might have been something to be said for them, but I understand that the whole question of migration or development has been shelved altogether, and instead this trumpery set of proposals is brought forward. For the life of me I cannot understand how the Prime Minister can be supporting them, because many times I have sat at his feet listening to him on subjects such as this, and so far as I can remember he has always taken the view, in his speeches and his writings, that we gain nothing by simply shifting business about from one place to the other, but that what the world needs is an expanding consumption of goods which are being produced. The right hon. Gentleman spoke just now about the difference between wholesale prices and retail prices, but I would point out that there is nothing in these proposals to deal with the intermediate people who are scooping up the profits. The right hon. Gentleman the President of the Board of Trade is a great authority on transport. Perhaps he can tell us whether these exorbitant profits are going to the shipowners who carry the goods. Somebody is getting them. I should have thought that the gentlemen at Ottawa who were oppressed and depressed because of the fall in wholesale prices and the high rate, relatively, of retail prices, would have set their minds to discover how that came about. Nobody opposite has ever told us, because if they were to start telling us a lot of their friends would have to be improved out of existence. Not a single proposition in these arrangements they are making deals with that matter at all, though until it is dealt with we shall make no progress whatever.

Now I want to say a word about India. I do not agree that the people who were said to represent. India at Ottawa did represent even the business side of the community there. They were not chosen by any body representative of Indian business men in India. I received a number of resolutions from chambers of com- 48 merce, and Indian business people generally, protesting against the kind of delegation that was being sent to speak in their name. I am very doubtful indeed if the arrangements which have been come to will be accepted by Indians themselves. On that matter I am expressing my doubts, and time will very soon prove whether I am right or not. There is no sense in any one saying that the Indian people have agreed to this. They have not agreed to it, because they have never been asked, and there is no authority in India at present to speak in the name of India from either a business or an industrial point of view.

On the question of this House being bound for a number of years by what has been done, I have taken the trouble to get the opinion of people who understand the constitutional and legal position, and I am told that it is impossible for one Parliament to bind another Parliament. We cannot to-day pass a Resolution to give effect to all that is contained in this Command Paper and fix it on the necks of the British people for five or 10 years. The electorate of this country has a right to say at the next election that the whole of these things shall be cancelled. I know that people will say, "Yes, but the Government have entered into a Treaty, and it is a very serious thing to upset the sacredness of Treaties." But we should remember that Parliament is embarking on an entirely new and novel policy which has never been before the electorate. I think that neither the Prime Minister, nor the Lord President of the Council, nor the Chancellor of the Exchequer will say that at the last election the electors gave them a mandate to do what is being done now. I know it is said they gave them what has been called a "doctor's mandate," but they did not give them a mandate for quackery. [Interruption.] I mean fiscal quackery. You have called it that many a time. The sort of nonsensical rubbish the Prime Minister is now supporting he has denounced as fiscal quackery over and over again, and I am only using his own language. The nation thought they were electing a set of men more wise than anybody else, but discovered very soon that they were scattered in all directions.

There are two points on this that I wish to make. One is that it cannot 49 be said that India has agreed to these arrangements; and the second is that we have no power to bind the British people for more than this Parliament. We can hind them for this Parliament, but at the next election they can break away from these agreements, and already in the Dominions we are being told by leading speakers of the Oppositions there that they intend to break away from them. It is no use talking as if even we had something fixed with the Dominions. Then we come to the Colonies. I see the Secretary of State for the Colonies is here. Perhaps when he speaks in the discussion he will tell us whether the people of the Colonies have been consulted in this matter. So far as I understand things, they have not been consulted at all. [Interruption.] Well, you have probably consulted the Governors, but there was not time for you to consult anyone else, because you signed the Agreements and came home.

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)

The right hon. Gentleman has been good enough to put a question to me. I was in consultation with the Governments of every Colony for months before I went to Ottawa, and discussed with them in advance both what I should ask for and what I should give.

§ Mr. LANSBURY

Certainly, but you never consulted the people of the Colonies. [Interruption.] Well, it is all very well to shrug your shoulders, but the unhappy people in the Colonies will have to pay the tariffs, and it seems to me that is a sufficient ground for the people to repudiate what you have done in their name, quite without any authority whatever, constitutional or otherwise. Then it has been argued that this policy will lead to the lowering of tariff walls all round. I read the "Times" to-day and I find that Mr. Lyons, the Prime Minister of Australia, is boasting that they have raised the tariffs on 400 articles in order to take a little bit off to give us a preference. That is what you call "leading to the lowering of tariffs." I really do not understand how right hon. Gentlemen opposite can make any such statement. The fact is that if we go in for this sort of policy it will inevitably lead to other nations following our example.

I come now to the question of Russia. When I was First Commissioner of Works many questions were put to me 50 about the use of Russian timber, and the present First Commissioner of Works, if he consults the files and consults his officers, will know that they advised me, as I told the House in answer to questions, that timber such as Canada could send would not replace and could not replace the timber which we got from Scandinavia and from Russia. I was also informed that it was extremely difficult to make sure that the American soft woods coming through Canada did not come forward as Canadian woods. This is something as to which there need be no discussion on the facts. The Office of Works were very emphatic to me that it would be a very costly business for their building arrangements if we stopped taking timber from Scandinavia and Russia. The quality and the life of the timber for building purposes was infinitely superior. Now we are told that without any investigation whatsoever we are to give notice to cancel the trading agreement in order that we may be free to deal with something that may not be there, namely, dumping. Everybody knows that what Canada wanted was to have the advantage of the markets without Russian competition. When we come to the question of cheapness and the question of dumping, what really is meant? I think this country dumps when it wants to, just as much as any other country. [Interruption.] Yes, but the difference with Russia is this, as I think Mr. Bennett or someone else said, that in the case of a country which is organised on a nationalised basis it is very difficult to compare their costs with the costs prevailing in a country like ours, where we have to pay rent, profit and interest to people who do practically nothing at all. I should have thought that the right hon. Gentleman, being a good Socialist, would want to assist a Socialist Government in carrying on a Socialist experiment.

I hope we are going to have a public inquiry into this business of Russian dumping, and the charges made against Russia generally. I have heard the Noble Lady and others speak on this subject, and I know the sort of statements that have been made, but up to the present none of them have been brought to the test of proof, and before ever we cancel our trade with Russia, 51 which at present is very profitable to our people—because millions of pounds' worth of trade has been done and not a, penny has been endangered—we ought to have a real public inquiry, so that the public may know why such a step is being taken.

§ Vice-Admiral TAYLOR

Will Russia submit to that public inquiry?

§ Mr. LANSBURY

The people who are making statements may be called upon to give their evidence, and I think that then it will be proved that it is no evidence at all. If what the hon. Gentleman says is correct, the Government have taken their decision without having had any inquiry into the matter. So far as I can judge, there will be no immediate benefit to any worker or trader in this country, and it is simply a shifting over of business. I should have thought that during the Recess, and during the 12 months that the present Government have been in existence, they would not have had their eyes on the ends of the earth, but would have faced the terrible problem of unemployment and the terrible condition of British agriculture. The latest figures show conclusively that less land is now under cultivation, and fewer men are employed and, generally speaking, the condition of agriculture has gone from bad to worse.

Side by side with that state of things there are tens of thousands of acres of land lying derelict, and thousands of acres which need saving from flooding. There are millions of people out of work, and the only thing that happens, so far as the Government are concerned, is that they have gone out to Ottawa to see how they can help our friends in the Dominions to shift trade from one place to another. I want to enter my very strongest protest against British agriculture being left where it is. I know it will be said that the Government have made some arrangements for organising the supply of certain articles such as foodstuffs, which we hope to develop in this country, but while we are hoping, talking, and arguing about tariffs and Free Trade, people in this country are starving, and the greatest asset that the nation possesses in natural wealth is depreciating and getting out of cultivation. These propositions which the House of Commons is to spend two or three weeks discussing will not bring a 52 shred of prosperity or of peace or contentment to anyone in this country. Perhaps that is too extreme, and I may be told that certain trades may benefit. We are told that 5,000 or 6,000 men have been employed in new industries in this country. That is perfectly true, but 30,000 men have been added to the unemployed dock workers. That is proved without a shadow of a doubt by the figures of the Ministry of Labour.

The world to-day is looking for a lead from this country, and from the Prime Minister because of his past. People have thought that from a Socialist of his standing there would have come a lead in the direction of international co-operation and international good will. I am certain that we shall enter the World Economic Conference prejudiced and hindered by these proposals, and any chance that we may have had of bringing about international co-operation is almost at an end. What is the matter with the world? The Chancellor of the Exchequer talked this afternoon of the depression round the world. What is the matter with our own country and with the world? Only this, that mankind has not yet done what the Prime Minister has over and over again in his career said must be done, and that is to find a way to consume the quantity of products resulting from the ever-increasing productive power of the world. That is what we have to do, and it is nonsense to think that putting on tariffs and cutting a bit off here and there to improve one country at the expense of another will increase consumption. Will some hon. Member who speaks after me say in what way this will increase consumption? If the Minister of Agriculture speaks let him tell me in what way these proposals will benefit British agriculture.

The one thing and the only thing which is needed, and which statesmen, economists, and all of us should consider, is to find out why it is that in the midst of plenty people should starve, why when there is abundance people should go without. It is of no use telling me that you want better relationships with the Colonies and Dominions. I want better relationships with all the peoples of the world, and I believe that you will get them only when you get away from the old principle of putting barriers between nations, when we break all the barriers down and sweep away the insane com- 53 petition of money markets and monopolists, and in their place establish true co-operation.

§ Mr. HANNON

The Committee has long been accustomed to the methods pursued in the House by the Leader of the Opposition, and nobody in the present circumstances would expect him to give a testimonial to the Prime Minister, the Chancellor of the Exchequer, or the Lord President of the Council. The right hon. Gentleman says that he can find no good in anything that has happened at Ottawa. My opinion is that he finds no good, or prospect of good in anything which emanates from the present Government. That is not the attitude of the great mass of public opinion in this country towards the conclusions reached at Ottawa. I believe that in every branch of public life, and in every phase of our industrial activity, there has been a wide appreciation of the sound foundations laid at Ottawa as the beginning of a new outlook in the development of our Imperial relationships.

I am sure the Committee would like to acknowledge gratefully the careful, comprehensive and illuminating speech made this afternoon by the Chancellor of the Exchequer. The Leader of the Opposition has asked repeatedly what will come to the working people of this country from the Ottawa Conference. The right hon. Gentleman was in office for a considerable time, and he had ample opportunities for making proposals to the Government of which he was a member. I do not think he can say that, at any time during the period when he was a responsible Minister, he made any contributions which can be quoted to his credit, as having found employment for the people of this country. He charges the present Government with having done nothing at Ottawa. I ask him whether it is not something to have brought together at a Conference all that is best in the thoughts of our Dominions and Colonies to devise schemes for a closer relationship of imperial marketing, and for giving opportunities to manufacturers in this country of a wider sphere of salesmanship overseas, at the same time giving to our own people in all parts of our dominions a preferential position in our market for their raw materials and foodstuffs. Is not that the beginning of an era which all of us 54 who have dreamed of a united Empire have been looking forward to for a generation?

The right hon. Gentleman always infuses into his speeches a certain element of fire and force, and he has inquired ardently and energetically, why something has not been done for agriculture? The Chancellor of the Exchequer, in addressing the House, made it clear that all through the discussions at Ottawa the principle was observed that the agriculture of this country should have the first consideration of British statesmanship in relation to these proposals. I know of my own personal knowledge and intimate association with agricultural questions for a long time past that everything that the Leader of the Opposition has said with regard to agriculture is quite true. Where would he begin? Where would he start his great process for the improvement of the agricultural situation in this country? What happened at Ottawa was that, all through the deliberations, the interests of agriculture were kept before the Conference by the delegation from the United Kingdom and that view was accepted quite frankly and in the most friendly spirit by the delegations from the Dominions. The Leader of the Opposition, in his attack, gave no credit to the delegation from this country for the difficulties with which they were confronted at Ottawa. I believe that no delegation from this country to any Conference had a more difficult and embarrassing series of problems to face than the United Kingdom delegation had to face at Ottawa, and they faced them with courage, with resolution and with success. If the right hon. Gentleman would only read dispassionately, fairly and in that judicial temperament which is always marked in this House, the proceedings of the Conference in the two Blue Books which have been issued, I think he would agree that more credit is due to the delegation than he is inclined to give to it this afternoon.

The Committee, I think, was particularly interested in what the Chancellor of the Exchequer said in regard to meat. There is no doubt that there is great disturbance among the farming community of this country as to the policy to be pursued by the Government in relation to the importation of meat. The livestock industry of Great Britain is one of our 55 greatest national assets; its value far exceeds that of any other branch of food production. Therefore His Majesty's Government, in dealing with the matter of the import of meat, and its limitation or arrangement and quantitative imports, must constantly keep in mind the extent to which our farming community depends for its future prosperity on a revival of the livestock industry of the nation.

In the Schedules which have been submitted to the House there are several matters of great interest to every hon. Member who is concerned with the prosperity of our Dominions overseas. For instance, there is the duty of 10 per cent. on maize. Imagine what that means to the great maize-growing community in South Africa. I had something to do with agricultural problems in South Africa a great many years ago, and am glad to have played some part in developing the export of maize from South Africa to this country; and nothing can help a very large section of the farming community on the South African veldt more than the preferential treatment of maize coming from that great Dominion into tidy, country. In the case of dairy produce, as to which preferential arrangements have been made, we are conferring a distinct advantage, not merely upon the particular Dominions concerned, but upon the people of this country. I am satisfied that the late Minister of Agriculture has done an immense amount of useful work in directing the attention of our farming community to the expansion of enterprise in the direction of greater production of dairy produce, and the preferential arrangements which are set forth in this Resolution will have a distinct advantage in encouraging progress along that line.

I am glad to observe that substantial rates of duty are to be attached to condensed milk and milk powder. It has always been difficult to understand in this House why milk powder or condensed milk should be imported into this country at all. Having regard to our own production of these commodities, surely it ought to be possible for our farming community to provide all the substances of that nature that we require for our own purposes. I think that perhaps on certain subjects, like those of linseed and cod liver oil, the late Home Secretary may have something to say. I am not sure that the late Secretary for Mines would not be interested in the question of cod 56 liver oil, and he might possibly extend his helpful support to the late Home Secretary in making clear to the community how dangerous it was to put a duty upon a commodity like cod liver oil.

I am glad to think that those of us in this House who have fought for Imperial Preference and closer Empire relationships for the last 30 years have seen the day when these Resolutions have been brought before the House, and all of us who are associated with Birmingham are proud to feel that the statesman who submits these Resolutions to us is the son of the man who first taught us the real meaning of Imperial association and Imperial partnership. I hope very much that these Resolutions, giving effect to the findings of the Ottawa Conference, will mark the beginning of a new era in Imperial relationships, and in establishing new confidence in the possibilities of our own Dominions and Colonies; and that, while affording great fields for our manufacturing enterprise, they will at the same time, by extending preferential treatment to our own people, indicate how much we appreciate their co-operation for the economic advantage of the Empire as a whole. I hope very much that the Resolutions will be carried in this House by a large majority, and will be the basis of a great new expanding policy which year after year will contribute more and more to the uplift of our people in all parts of the Empire—Dominions, Colonies and Dependencies. I am confident that at Ottawa the Leader of my party in this House, the Chancellor of the Exchequer, and every one of our delegation, made a contribution towards the improvement of the economic possibilities and future prosperity of our people to which no estimate can at the present, time be attached. I hope that the exposition which we have had this afternoon from the Chancellor of the Exchequer of the policy that is being pursued by His Majesty's Government will commend itself to every section of the people of this nation.

§ Mr. McGOVERN

I have listened very carefully to the statement made by the Chancellor of the Exchequer, and I must confess that, in applying to it the mind of a worker, I cannot find any indication of benefits that will accrue to the class that sent me to this institution. I was 57 very anxious to know whether I was misjudging the situation when it was stated that trade was going to be developed and employment was going to be found for the workers of this country. The statesmen of this country and of every part of the British Empire went to Ottawa to discuss the making of trade agreements in order to get rid of their glutted stores to a poverty-stricken British Empire; but, before they can get rid of the stocks that have already glutted the markets in every part of the British Empire I should assume that the very first thing to do would be to increase the purchasing power of the people in order that they might be able to purchase this accumulation of articles which we find in the stores and warehouses in every part of the Empire. Statesmen went there from Britain, from New Zealand, from Canada, from India, and from Australia, but nobody has been able to convince me as to where a market is to be obtained for the goods that are already glutting the markets. Take, for example, Australia. They want to sell their meat, they want to sell their sugar and their dairy produce, but we have the contradiction that in Australia the workers who could consume these goods are starving. We have Australian statesmen going to Canada looking for a market to unload the surplus product of the workers' energies, while at the same time we have 50,000 Australian migrants living in tents and camps who cannot get the ordinary essentials of life to develop the bodies of their children.

Where is this market going to be found? You go there from Great Britain trying to unload your goods in different parts of the world, but in every place that you go to where private enterprise is predominant you find the same poverty-stricken working class who are denied the purchasing power to buy those goods. Is there some market in some part of the world that I have never heard of? Are there some workers in some part of the land whose purchasing power is steadily on the increase? Everywhere you go you discover that a poverty-stricken working class is being asked to purchase and consume goods, while at the same time you are urging a continual reduction in the standards of their purchasing power in those countries. You have applied a means test to your working class; you 58 have cut the unemployment benefit of your workers; you have gone round the vicious circle time and again cutting wages; and you are engaged at the present moment in another attempt to go right round the scale and lower the purchasing power of the people.

The man who three or four years ago could manage to get a suit of clothes every year is only able now to get one every two or three years, if he is able to get one at all, and every move that you make within your present order of society in the direction of decreasing the purchasing power of the working class is adding to the chaos and confusion within your private system of society. Germany does the same; India follows suit; Canada plays the same game. No matter where you go, they are all engaged in measures of economy, and every measure of economy that is produced produces the need for a further economy, because, if you add to unemployment, as you are bound to do, in every part of the world, you are unable to consume the goods that are being thrown up in a scientific age by the energy that is applied to the machine, and you are glutting the markets of the world. We have to-day a machine, I am told, that can mix and shape and make 4,000 loaves of bread per hour. Thirty years ago a baker could only have made, in an eight-hour day, as much bread as would supply a very small number of people, but a boy of 16 operating that machine can turn out 4,000 loaves of bread per hour. You would think that what was wrong to-day was that there was no food and none of the other essentials of life. To hear the talk about stimulating agriculture, one would think that we were short of potatoes, that we were short of wheat, that we were short of vegetables; but the whole world is glutted with these things, and every country is saying, "Let us throw up tariff walls in order to prevent the foreigner from invading -our country."

The statement made by the Chancellor of the Exchequer to-clay was a mass of contradictions. He approved of tariffs being applied, and for the last 12 months this Government have applied their mind, their energy and their intelligence to the application of tariffs; but the right hon. Gentleman comes here to-day and hails with glee every lowering of tariffs and the allowing of free imports 59 to come into a particular country. I cannot understand it. I simply say that since I came here—and I have a very short experience of this House—in 1930, and came to closer grips with the people who are ruling or running the destinies of this country, it has seemed to me that you are engaged in, to use a working-class phrase, a "game of cod," that you are making the people of the world believe that you have the power to put this system on its feet. You have had 39 conferences since the end of the War, and after every conference, instead of putting it on its feet, you have been more successful in putting it on its back, where it ought to be. You go on telling people that prosperity is round the corner. It is the old story that I used to hear Philip Snowden telling at a later period: "Are you going to throw us out just when prosperity is dawning, so that the Tories may come in and take the credit of the trade revival?" You have gone on since 1918 with that game of hypocrisy and make-believe, asking the people to take you seriously as having a positive remedy for unemployment.

6.0 p.m.

I am antagonistic to the Labour party in this way also. They tried to make the people believe that, if they were on those benches, they could cure unemployment. I remember in the 1929 election campaign saying on platforms that I disagreed with the statements made on Labour platforms that the Baldwin administration was responsible for the unemployment figures. I said that, if they still increased under the MacDonald administration, their opponents would be equally entitled to say that he was responsible for unemployment. No statesmen are responsible for unemployment. It is inherent in the system of society, and it is no use kidding people any longer that you have a solution for this problem. Australia goes to Canada and says, "Take our coal in exchange for your meat, sugar and wool." They say, "We have our own coal mines which we hate recently developed. We are looking for a market for our coal." "Will you take our ships?" They, say, "We have established our own ship-yards." "Will you take our woolen goods?" "We have our own woolen factories." "Will you take our cotton 60 goods?" "We have our own cotton factories." The whole world is producing and we get at Ottawa a large number of people who are all sellers. They are all trying to sell the same things at Ottawa. They want to sell boots and clothes, ships and coal. They all go there as commercial travellers, but none of them wants to buy. They are all wanting to see what they can get out of the other fellow. You talk about trading within the Empire. If you cease to-morrow buying anything from Germany, are you not destroying the power of Germany to purchase goods from the rest of the world?

What is the use of trying to make us believe that statesmen have some great ability compared with the ordinary man, or with a student in an economic class in a working class area? I remember when I used to look in the Labour newspapers at the Will Thornes and the Crooks and others whom I thought the great giants of the Labour movement. I wished I had the ability and intelligence of these men. Then I came to closer grips with them and I found that, instead of giants, they were pigmies, who had no great intellectual ability. I was brought into closer relationship with these people than with others on the National Government side but the F. E. Smiths, the Bonar Laws, the Asquiths and the Lloyd Georges were all professional politicians attempting to make the world believe that they could put the world right if the stupid unintellectual section of the people would only put their trust in them. They had a bottle, two spoonfuls from which would put the whole world right. They were going to put the war-weary and poverty-stricken world in a good state. But they got to Ottawa, and what happened there? Nothing of any consequence to the world except that the Dominions Secretary played cards and the Leader of the House smoked his pipe. The Labour party claimed representation there but, instead of saying in an honest fashion that Ottawa is a sham and a make-believe, they staked a claim for their own vested interests. They went there taking their technical advisers, just as Arthur Henderson was sitting at Geneva representing the National Government that he condemns. He comes from Geneva, where his hotel expenses are being paid by the National Government, and goes to Leicester and 61 condemns the hand that feeds him. It is the greatest sham and humbug in the world.

I do not say you do not desire to do the best you can by your trading agreements without disturbing your class or vested interests. You would lift men from the gutter and place them in a decent position in society but, when it comes to the vested interests of the ruling classes, they have to be bolstered up at the expense of the poverty and degradation of the great mass of the community. The workers are not looking to Ottawa now. They are developing a tendency to look to themselves to solve the problem. This Ottawa Bill will no more increase the purchasing power of the people than the Anomalies Act passed by the Labour Government, than the means test that they sought to defend, than the wage reductions that they imposed on the civil servants. They served their time as place-hunters and office-seekers on those benches and they are engaged to-day in a great game of shadow boxing, attempting to make the world believe that they are sincere. They are no more sincere than the men on the other side. It is the pot calling the kettle black. They are all engaged in a conspiracy to defraud, rob and plunder the poor. Unemployment is not going to be solved by Governments. It will be solved only when you rid yourselves of the present social system, when the working class take power into their own hands. The Prime Minister knows that he is engaged in a great game of sham and make-believe. He knows that the social system is going into decay and demoralisation, and he knows that the working class are awakening to the facts. As they rid themselves of their faith in politicians they will not look to Ottawa but to their own power and strength to rid themselves of poverty, destitution and despair. Yon may talk about what Joe Chamberlain said 30 years ago. What does it matter what Joe Chamberlain said 30 years ago? Who cares what he said then, or what the right hon. Member for West Birmingham (Sir Austen Chamberlain) says to-day? The working classes are knocking at the door. They are demonstrating. They are showing their teeth, and I hope they will go on showing their teeth until they pull the whole social system down and put in its place a system of security for themselves.

62 You talk about postponing action under the means test because of the Ottawa discussions. This is not important. The only important thing is to rid the world of poverty. The store houses were filled by the labour, the ability and the intelligence of the working classes and, when they liberate themselves from their chains of slavery, tied to your economic system, they will empty the store houses. They have the right to decide who shall control the means of life. At 56 meetings in the last three months I have encouraged them to have faith in themselves and not in political parties or individuals, who are all engaged in the game of scramble for vested interests. I have told them they must have faith in their own power to uproot the social system and put a real system, based on economic justice, in its place, a moral system, a civilised system and a real system. Unless they do that, they are going to he burdened with this top-heavy gang of quacks who are attempting to make us believe that Ottawa is going to produce results. Ottawa produced only one result. It gave a large number of clerical assistants and typists the finest holiday they ever had It gave to a large section of politicians a very fine holiday indeed. If they are going to go on kidding the world with this stuff that is being put across to-day, 99 hours out of 100 spent in this House are spent on useless talk. I am going back to-night to Glasgow to stir the work-class to social revolution and the uprooting of the present system and those hypocritical institutions which are keeping the people in slavery and passing so much dope every day across the wires and through the Press. The people themselves will have to solve the problem and not be kidded any longer by those who adorn the Front Benches, with fat salaries as professional politicians.

§ Sir H. SAMUEL

The reasons which have led some of my right hon. and hon. Friends and myself to resign from the Government have been publicly stated and have been fully discussed. The incident took place some weeks ago. There is no disrespect to the Committee if I do not on this occasion offer to it any explanation. I am sure the Committee itself would prefer to proceed with the urgent and important business which is now before it rather than receive from us further personal explanations. But it will be quite clear, from the view that 63 we take of the Ottawa Agreements, that it would be impossible for us to express the opinions which it is incumbent upon us to express while remaining members of the administration. Our speeches on an occasion such as to-day would either have been weak and perfunctory, casting discredit on the sincerity of those who made them, or else, if they were vigorous and uncompromising, they would, made from that bench, put an undue strain even upon the great tolerance of the House of Commons.

The Chancellor of the Exchequer said that we in this House are all at one in desiring to promote the unity, the welfare and the prosperity of the great commonwealth of nations to which we belong. He said further, with which we will all agree, that the lowering of barriers to inter-Imperial trade would be a long step towards that goal, and that it would be of service not only to our Empire, but, through the prosperity and progress of the Empire, to the whole world. With that we whole-heartedly concur, and if that were the whole result of the Ottawa proposals we should receive them with complete and cordial approval, and give them our utmost support. If, indeed, these were measures to promote Empire Free Trade they would have no heartier advocates than ourselves, but those measures for the reduction of tariffs are only olio side of the picture, and my right hon. Friend passed over without a word the other side—the imposing of fresh duties, the raising of fresh barriers here and all over the Empire. Look at this particular Resolution which we are discussing to-day. Examine its terms. Every clause of it is the imposition of fresh taxes, fresh duties and fresh restrictions upon British trade. The lowering of inter-Imperial barriers of which he spoke is excellent, but wider in their scope are the measures raising the extra-Imperial barriers.

My right hon. Friend the Lord President of the Council, when he went to Ottawa and made the inaugural speech, which is printed in the Blue Book which has lately been circulated, drew attention to the fact—I am quoting his own words —that of the trade carried on by the Empire, 70 per cent. is with foreign countries and only 30 per cent. among ourselves. Seventy per cent. with foreign 64 countries, that is the trade we are trying to restrict; 30 per cent. among ourselves, the trade we are trying to promote and develop, and yet we are told that measures which are to facilitate 30 per cent. and to hamper 70 per cent. are measures for the enlargement of the world's trade and are in essence a liberating policy.

The Chancellor of the Exchequer mentioned one aspect of these Agreements to which not very much attention has hitherto been given, though it is of very great importance—their effect upon the Colonial Empire, upon those Colonies which are not self-governing, the Crown Colonies. That is one of the most serious of all the aspects of this question from our point of view. Here you have vast native populations, tens of millions, upon whose contentedness and loyalty everything depends. They are now becoming educated, alive, alert. They watch these matters. Hitherto they have been free to purchase whatever they wanted from any country in the world as freely and as cheaply as they could obtain it. Now the Imperial Government, have directed their Governments and have secured the co-operation of their Governments, in imposing taxes upon the imports into their countries from foreign countries. If they are willing, well and good, but I think that we should be exceedingly careful not to allow any suspicion even to grow up in the minds of those masses and among the sensitive native populations that the government to which they are subjected is being conducted not solely in their interests, but partly, at all events, in the interests of the country which exercises that power.

Furthermore, mark the effect of this new policy—because it is new in this colonial part of the Empire—mark its possible effects upon the outside world. It is a wonderful thing that this one small Island exercises a degree of political control over one-quarter of the whole of the globe, 400,000,000 of people, one-fourth of mankind; and the rest of the world looks upon it sometimes with envy, sometimes with admiration, and sometimes with criticism, but always with a considerable degree of toleration. It is because it is felt—it is known by all students of Imperial affairs in all countries—that while we bear many of the burdens of civilisation and carry civilisation, through the devoted labours of our administrators and others, into the 65 dark places of the world, the whole of the world may share in the benefits of order and progress, railway building and the promotion of commerce. They recognise that. But now for the first time our Colonial Empire—and this may be only the beginning—is to be made, to as great an extent as we find it possible to do it, into a preserve for British manufacturers. It may be an immediate financial and material gain. [Interruption.] Yes, it may be. You may get this, but think of the later effects upon the future of the Empire. Do not think of this moment but of 10, 20, 30 years hence. The danger is that the opinion of the world, not at the moment, will gradually change in its aspect and its attitude to Great Britain and the Empire, and, subtly, gradually, imperceptibly there may grow a less feeling of friendliness which may be of supreme importance to the whole of our Commonwealth perhaps in days of difficulty and distress. These are some of the objections to the Ottawa Agreements and they are fundamental to the whole policy embodied in them.

There is another very grave objection to which public expression has been given and to which the Chancellor of the Exchequer has made no reply. It is the Constitutional objection to these five-year Agreements; to agreements imposing new taxes, which, by mutual arrangement with each Dominion, are not to be lowered for a period of five years. Others of the taxes may be lowered within the five years if the assent of the various Dominion Governments has been obtained. We assert that this is wholly contrary to the practice of the Constitution and to all precedents. Of course, we are not so foolish as to suggest that there cannot be any such thing as an international or Imperial agreement covering a period of years. That would be ridiculous. No one has ever suggested such a thing. We have alliances that cover long periods. We have commercial agreements. We have agreements dealing with debts and guarantees, and it is ridiculous to suggest that at the end of each Parliament all these are to be invalidated, a clean slate is to be made and that a new Parliament can write anything fresh. No one for a single moment has suggested that. If that doctrine were ever to be advanced it would make impossible any binding agreements at all between nations. Of course, no one has suggested 66 anything so foolish. All our commercial agreements contain a clause—it is common form—that they are terminable sometimes on three months' notice, sometimes six months' notice, and occasionally 12 months' notice.

My right hon. Friend the Lord President of the Council in his speech the other day said that the whole of my argument is disposed of by the fact that we had made an agreement with Greece to the effect that the duty upon currants should not be more than 2s. That agreement is an admirable example. By that agreement, if we desire to impose higher duty on currants, if we gave notice to Greece to-day we could do it next year. I am quite prepared to accept the argument of my right hon. Friend the Member for Sparkbrook (Mr. Amery) in a letter of his in the "Times," and the argument of my right hon. Friend the Lord President of the Council. I accept wholly their view that these Agreements are analogous to our commercial treaties. I accept that, if they are willing also to accept the common form of our commercial treaties, which is, that they are all terminable at short notice.

§ Mr. AMERY

As my right hon. Friend has referred to me, perhaps he will forgive me if I remind him of the treaty made with Japan in 1911 by the Government of which he was a Member which was for 10 years definitely, and only provided for denunciation after the end of 10 years. It is a treaty under which we bound ourselves not to impose duties on silks and certain other articles, and which treaty, in fact I believe, limited our freedom when we introduced the first Safeguarding Measure after the Great War. That was a treaty which could be denounced in short periods of months; it was for twice the period of the Ottawa duties, and then only denunciable after that date.

§ Sir H. SAMUEL

My right hon. Friend is perfectly well aware that the common form of commercial treaties is that they are terminable at short notice.

§ Mr. AMERY

That was exceptional.

§ Sir H. SAMUEL

It may be, but the fact that my right hon. Friend has discovered one exceptional treaty does seem for the moment to suggest that it is a general rule in commercial treaties to make them terminable at short notice 67 and that the one he quoted was the exceptional provision. I confess that although I was a. Member of the Government in 1911—I think I was Postmaster-General at the time—I had no very active part in making that agreement.

§ Mr. GRITTEN

Did you resign?

§ Sir H. SAMUEL

There are two differences between that case and any other similar case. You may find one other, possibly, in our commercial history. There are two differences. The first one, which I have no doubt the House will not accept, is that there is a distinct difference between forbidding a lightening of taxation and forbidding an increase of taxation. With that this House is very familiar, for it allows any of its members to propose at any time a reduction of taxes upon the people but does not allow any of its members, except Ministers of the Crown, to propose an increase. Similarly, while it may be for a period of years permissible to say to some other country, "We are willing not to increase our taxation," it is a different thing to bind ourselves in all circumstances not to reduce taxation. There is another reason to which I shall refer. My right hon. Friend interrupted me and took me a little off my argument, but I will come back to the second reason in a moment. Before that I was anxious to say that in one of these Treaties embodied in this Blue Book—in the Indian Treaty—there is a provision to this effect: This Agreement between His Majesty's Government in the United Kingdom and the Government of India shall continue in force until a date six months after notice of denunciation has been given by either party. So it cannot be so very wrong and so very foolish to suggest that with the Dominion Agreements also the same provision should be inserted as has been already inserted by our delegates at Ottawa in one of the most important Agreements which they signed. I would press very strongly upon the House, if I may, this suggestion, that in these Agreements there ought to be inserted a six months' notice. I quite recognise that with the present House of Commons it is not to be expected that they will consent to veto or to postpone the Agreements which are now before us, but I do think that this House, if I may respectfully suggest it, would be well advised to express its views and to im- 68 press upon the Government that the assent of the Dominions should be obtained to inserting this six months' notice, which would get rid of this part of the constitutional objection to these Agreements.

6.30 p.m.

After all, that ought not to be impossible to obtain, for it is far from being the case that these Agreements are universally approved in the Dominions, and particularly that the five years term is unalterable. In Australia the late Prime Minister, now Leader of the Opposition, Mr. Scullin, has given formal notice in the Australian Parliament that he and his party will not be bound by the five years' Agreement. Looking at it from exactly the opposite position from ourselves but agreeing with us on the constitutional point, the Opposition in the Australian Parliament has declared that it will not agree to bind itself by this five years' provision whatever the United Kingdom may do. In Canada the late Prime Minister, now Leader of the Opposition, Mr. Mackenzie King, has stated in Parliament that he regards this five-years proposal, to use his own words, as "fundamentally wrong," and if he comes into power—and certain by-elections in Canada indicate that he represents a large measure of public opinion—he proposes that a Government under his leadership should propose an all-round reduction in Canadian tariffs, at least to the level of 1930, the date before they were enormously raised by the present Prime Minister, Mr. Bennett. He says that he would give a 50 per cent. all-round preference to British goods, without any bargaining, as an act of good will from Canada herself. Therefore, there can be no insuperable reason why, if the opinion of this House were unanimous, the Government should not accept that proposal and ask the Canadian Government to agree to the insertion in the Agreement of the provision, word for word, which has been inserted in the Indian Agreement.

There is another matter which is of vital importance in connection with these Agreements. Our Constitution, of which we sitting on these benches are the guardians, may be illogical, and indefinite, but it is elastic, it is practical, it works, and it is an unrivalled instrument of Government. It does not de- 69 pend upon law and formal regulations, but it depends for its smooth and successful working upon traditions, conventions, gentlemen's agreements, and give and take between opposing parties, call them what you will. It works because all parties recognise the importance of continuity of policy in international and Imperial affairs. We all recognise the great evil of sudden reversals of policy when a new Government comes in and a new Parliament is elected and that it would be disastrous if after each election we were to reverse obligations undertaken with other countries, whether in the Empire or outside. Yes, but there is a reciprocal obligation on the Government of the day not to try to tie up its successors in matters of keen controversy.

Let me take a hypothetical case. It is a hypothetical case from the last Parliament. Suppose that our friend the late Mr. William Graham, whose loss we all so deeply deplore, when he was engaged in negotiations with foreign countries, which did not succeed, for commercial agreements, had taken certain steps. Suppose he had arrived at some understanding, say, with Germany that in exchange for advantages which he might have thought adequate, but which others did not think adequate, he was willing to agree that for a period of years German goods sent into this country should not be taxed. Suppose he made an agreement with Argentina that, in exchange for advantages which he thought might be sufficient, Argentine wheat and meat should not be taxed, and he signed an agreement which should apply for five years or possibly 10 years. What would the Conservative party as a whole have said about that? They would have said: "You are pushing the matter too far. Make your agreement if you like, but we believe in protection for British manufacturers against German goods, for the sake of our own manufactures. We also believe in preferences that will necessitate a tax on Argentine meat and wheat, and we cannot allow you to bind us for five years or 10 years and to say that in no circumstances during that period shall our policy be adopted." The Conservatives would have said, with the utmost emphasis: "That is unconstitutional. It cannot be done." And undoubtedly they would have been right. Here we 70 have the converse. This is a matter of keen political controversy, very different from the Japanese duty on silk in 1911, which no one troubled about at all.

§ Mr. AMERY

I would remind my right hon. Friend that the tariff issue was very acute in 1911.

§ Sir H. SAMUEL

I do not suppose that there is a single Member of this House who knew that there was that treaty with Japan in 1911. Certainly, it was not any great election issue at that time. But this is a point of great importance. You have here a great issue dividing public opinion. Some may think that there is a majority on one side arid some may think that there is a majority on the other. Certainly, it will be a great issue whenever a General Election or a by-election takes place. The issue to which I ask the House to give serious attention has been frequently discussed in Parliament. When my right hon. Friend the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer in 1926 he introduced a Budget embodying the stabilisation of Imperial preferences for a period of 10 years. That is a much stronger measure than the imposition of duties. At that time my right hon. Friend who is now President of the Board of Trade used this language: I satisfy myself, therefore, to-day with merely registering my objection to the Protective duties for which the right hon. Gentleman has made himself responsible, and with saying for the last time on this Budget, that in so far as he has attempted to stabilise or render permanent the Protective tariff, such as it is at the present time, he has entered into an obligation which naturally will not be honoured by his successors and has done nothing whatever to give to the Dominion trader or to the trader in this country that settled and unvarying policy which is one of the best assets that a business man can have in dealing with forward business."—[OFFICIAL REPORT, 21st July, 1926; cols. 1251–2, Vol. 198.] The then Chancellor of the Exchequer, the right hon. Member for Epping, said: The hon. and gallant Member (Captain Bean) has introduced a phrase that has not been heard for many years. He speaks of the distinction between a free preference and a locked preference. I think I drew that distinction in those days but the hon. and gallant Member must attach to that distinction the meaning that was attached to it at that time. A free preference, in my opinion, is a preference such as we are giving now. It is given because, as far as we can see, it will do us no injury and we hope that