Part of the debate – in the House of Commons am ar 29 Gorffennaf 1926.
The hon. Member for Dundee (Mr. Johnston) has made, as usual, a very interesting speech; and, if I may say so, it was a very able and powerful speech. I do not believe that a single one of his figures or any of his facts, so far as I know, can seriously be challenged. I only knew personally about one or two; for instance, about the Jamaica bananas; hut I am sure all the others are substantially accurate. They really do deserve the attention of the Colonial Office. The hon. Member for Dundee has taken a great deal of trouble to get the facts, and they should either be refuted or admitted and countered. I do not think it is possible to over-estimate the importance of the subject raised this afternoon by the right hon. Member for Derby. On the economic organisation of the Empire, I believe, the whole future of the country and of our working people depend, and it assumes a special significance in view of the Imperial Conference. I think it is worth while to have a look at the general world position in which this country finds itself. The first thing that strikes one is that, as a result of the War, the future economic ascendancy of any country or any organisation must lie with the big economic groups. Mass production has been steadily superseding small production by private firms as far as the heavy industries are concerned. Take the United States at the present time and compare them with Europe, and you will see the difference. You will find, in the one case, a large economic unit, with mash production, and the inevitable prosperity. You will find the other cut up into political divisions, and separated by tariff walls.
Anyone who went to the Inter-Parliamentary Conference at Washington must have had it made clear to him that Europe is beginning to wake up to the fact that it must form something in the nature of a Zollverein, and I believe a Zollverein will come, sooner or later, with Germany at the head of it. When it comes, we will be more up against it than ever, because Germany will have strenuously to compete with us in order to pay reparations. I think the outlook is dangerous so far as our heavy industries are concerned. We are unable to bargain with European States at the present time, owing to the fiscal system which this country has seen fit. to adopt. The attempts which have hitherto been made by the heavy industries in this country to co-operate and combine with those on the Continent have been vain, and, therefore, we are still more or less at their mercy. The argument we have to face with regard to a general lowering of the standard of living is a very vital one at the present time; and it has been appreciated by hon. Members opposite. It is a fact of great importance that these European countries work longer hours and have lower standards of living, and, other things being equal, they must cut us out unless we protect ourselves in some way or another. Neither Great Britain nor the Dominions can, in the present economic organisation of the world, act separately and stand up against these powerful economic organisations. Therefore, our minds must turn more and more to something in the nature of an Imperial Zollverein. We talk a lot about the Empire, but it is time we tried to study it in a more scientific way.
8.0 P.M.
No one has really conducted a scientific investigation into the economic possibilities of the Empire, for instance the transport question. The present Prime Minister in a very remarkable speech he made, when leader of the Opposition, on Imperial Preference, urged the setting up of a committee of impartial, nonpolitical experts to study the whole question of the Imperial economic system. I do beg the Government to put down on the agenda of the Imperial Conference the whole question; and the possible formation of a really strong Imperial economic committee. The present committee is not strong enough and its terms of reference are inadequate in relation to the enormous functions it ought to perform. It might possibly be amalgamated with the Empire Marketing Board, to sit and advise His Majesty's Government as to the whole question of Imperial development and the best methods of State assistance, and to furnish our traders with statistics and other information relating to Empire markets. I do hope that this question will be specially considered at the Imperial Conference. I cannot help thinking that in certain respects the performance of the Government has been a little disappointing as far as Imperial development is concerned. Since December, 1924, with the exception of the passage through Parliament of such preferences as involve no new taxation at all, the Government has not taken any drastic action with regard to Imperial development. I listened to the speech of the Secretary of State with some satisfaction because I think he realises the importance of some of the recommendations of the Imperial Economic Committee. But some of us were anxious about the reception that its recommendations got in this House. There was one rather sinister episode in which instead of £1,000,000 the figure of £500,000 was suddenly put down in the Estimates, which gave offence to the Dominions, and has never been explained. A good deal of talk has gone on both inside the House and outside on the subject of migration, and it will be necessary indeed for this country in the course of the next few years. But remember that General Smuts said at the Conference in 1920 that you cannot fairly claim that the Dominions should take migrants from these islands and at the same time refuse to take the produce of the Dominions.
We must give the Dominions something in return if we are to send emigrants to them. Tariffs I know are ruled out at the moment, but I see no reason why the whole question of Imperial tariffs on a large scale should not be discussed. The case for an extensive preferential system will always break down so long as it is regarded purely as a political issue, but if you discuss it on economic grounds it becomes different. Dominion policy at the present time is one of imposing high tariff walls round each one of themselves, but it is a policy that will most certainly break down. Export trade is reduced and always will be reduced by a high tariff wall raised round an economic unit which is too small in relation to competing units. There are many indications of a move towards general inter-Imperial Free Trade. A revision in Dominion tariffs for Empire products will expand our markets and reduce unemployment. I do not therefore see why we should not be. prepared even to impose a tax on foodstuffs to divert them from abroad, as a quid pro quo. One of the obstacles to any system of tariffs or of import licences such as the hon. Member for Dundee (Mr. Johnston) suggested is the fact that we have treaties with certain foreign Powers, notably Greece, Spain and Germany. Some of them will shortly have to be renewed, and I think they ought to be reconsidered, and that it is worth while considering the whole question of inter-Imperial trade before we renew these treaties.
I have always been very interested in a policy almost analogous to that of bulk purchasing, to which the hon. Member for Dundee (Mr. Johnston) referred I call it a stabilisation policy. I think the Prime Minister at one period of his career flirted with the idea himself. He said:
We must try and see if it was not possible to enter into a scheme by which an enormous amount of the foodstuffs which we required from the Dominions could be obtained from them and distributed at cost price with the least possible margin, and urged that something of this kind should be thought out in order to obtain in exchange for it the free entry of our manufactured goods into those Dominions where they would not compete with their own.
I think that sums up the whole position. The statement was made about April, 1924, during the Debate on the Budget of the right hon. Member for Colne Valley (Mr. Snowden) during the discussion on Imperial Preference. I cannot go into all the details of this idea of a stabilisation policy at present. I would urge hon. Members to read the speech of Mr. Bruce, the Australian Prime Minister, at the 1923 Imperial Conference. I will read from it one or two of the most pregnant sentences. He said that the stabilisation policy to which he referred appears to require for its true functioning some form of national reserves. He proposed under this system that the British product should be left entirely free and uncontrolled and the British farmer would be free to market his goods precisely as at the present time. But that foreign supplies should be controlled by a National Purchase Corporation for either wheat or meat, the corporation to buy from foreign countries the difference between what the British and Dominion producer could supply and the total requirements of the country. He elaborated the scheme at some length, and I have no doubt he will bring it before the Imperial Conference again in October. We must also consider the growth of producers' organisations in the Dominions. In New Zealand you have a Meat Export Control Board, a Dairy Export. Control Board, and a Fruit Export Control Board, all with statutory powers given them by the Government. In Australia a Dairy and Fruit Board, and in South Africa a Fruit Board. In Canada you have since 1923 the most phenomenal growth of wheat pools. The organisation on a large scale of Dominion producers has from time to time provoked an outburst of hostility in the British Press, but it has not had the slightest effect. These organisations have steadily grown and will grow. They have done a great deal of good to the producer in those countries. It is part of a world movement to which we shall have to conform
whether we like it or not. It is a movement away from small competition and towards co-operation and combination as far as producers are concerned. We ought to do all we can to encourage it, because it is the only kind of Socialism that is worth having.
I agree with a lot of the things which the hon. Member for Dundee (Mr. Johnston) said on these questions. The Report of the Royal Commissions on Foodstuffs at paragraph 111 entertained the possibility of a milling combine in this country, as against a producers' combine in the foreign countries. If the milling combine ever came into existence and if it proved to be satisfactory, one might well suggest that it should be given statutory powers, perhaps in combination with the Food Council, to control imports of wheat and meat in the interests of the Empire. I urge the Secretary of State to put down also for consideration at the Imperial Conference the possibility of forming an Imperial pool the interest and capital of which might be guaranteed by the Imperial Governments and which would intervene at its discretion to steady prices on the lines suggested by Mr. Bruce. This question of the stabilisation of prices is going to be absolutely vital in the future. It is the one thing that producers and above all farmers must have. If we could steady prices we should have achieved perhaps more than anything else. The whole object is to create artificially a lag in economic changes to give time for the necessary adjustments to be made, and to eliminate temporary movements altogether. It is obviously a policy that ought to be forwarded by every possible means, and the best way to do it is by Imperial co-operation. I hope the currency question will also be considered at the Conference. At the last Conference the question of the issue of Imperial Treasury Bonds for discount in authorised banks throughout the Empire was favourably considered and it might be further considered. In the meantime I agree that we ought to go ahead as far as we can with the idea of voluntary preference as laid down by the Imperial Economic Committee.
In our own interest it is vital that the purchasing power of the Empire for manufactured goods should he increased, and this is entirely conditioned by markets. We have plenty of arguments on our side. It can be shown that the Dominions depend entirely on us for protection and defence. The Australian Navy and New Zealand Navy, as such, are not the slightest use; they make no sort of adequate grant to the British Exchequer in proportion to the amount of safety they receive. We have got a lever against them, and we can also say that we do our share of Imperial trade as well. For instance, in 1924–25 we took 44.10 per cent. of Australia's exports, the next largest purchaser taking only 10.43 per cent. We also supplied Australia with 45.20 per cent. of her imports. That is merely an example of the benefit both sides could derive from a careful development of inter-Imperial trade. I have not dealt with the constitutional issue. I believe the economic unity of the Empire is the necessary precursor of any form of diplomatic unity. It is no use having diplomatic unity if you have not economic unity, and I think any proposal for better constitutional relationships ought to come from the Dominions themselves.
A more effective system of Dominion representation in London must be achieved before long. We cannot afford to have a repetition of incidents such as were connected with the Lausanne Treaty, the recognition of Russia, or the Treaty of Locarno. Each one of these occasions gave great offence to the Dominions, but I must say that I think that the recognition of Russia by the right hon. Gentleman the Leader of the Opposition, without even informing the Dominions, was about the worst thing that was done. We cannot go on like that. We must have somebody in London to consult with on matters of urgency.
In conclusion, I beg the Government to take up a policy of Imperial development with vigour and enthusiasm and to take this Conference in October very seriously. I think it would be a pity if, in our attempt to capture any available Liberals there are, we were to abandon ourselves to the triple policy of laissez faire, deflation, and rigid Free Trade. A horrible combination. I cannot see that it is going to get us out of our difficulties and, even if we run the risk of momentarily arresting the tramp of Liberal feet from the Opposition side to the Government Benches, it would be worth while to do so, rather than to accept the doctrine of the laissez faire school of the last century. The Prime Minister, not so very long ago, said that "Cheap goods make cheap men." That is a much more Tory doctrine and a much more sensible doctrine, and I could wish that the Government would take up that line of policy more vigorously. It seems to me that they run a grave danger of accepting all the Liberal doctrines and discarding all the real Tory doctrines. I hope the Prime Minister, who has the vision, will carry out a great constructive policy; I know of none more calculated to appeal to the imagination of the people of this country than Imperial development; and I do not know of any man better capable of formulating such a policy than the Secretary of State for the Dominions, if he is allowed to do it by his colleagues.