I understand that the debate to-day is to be conducted under an arrangement referred to by the Prime Minister last night, and come to between the Opposition and the Government. We were not parties to that arrangement, but I should be glad if the Parliamentary Secretary to the Treasury will tell us how far the Government propose to go to-day?

We will go as far as we can to-day.

Is it proposed to take the new Clauses today?

I do not think that there is the least chance of that happening.

Would it not be convenient that questions of this description should be put through the recognised Leader of the Opposition?

Other members have their rights.

In reference to the first Amendment on this Clause, I propose to do what was done on the previous occasion. In order to suit the convenience of hon. Members, I am going to allow a general discussion on the question of Imperial Preference on the first Amendment, on the understanding that the general discussion is not to be repeated on the Question "That the Clause stand part of the Bill."

I quite appreciate what you have said about a general discussion, but if during the debate on the first Amendment and on subsequent Amendments any points arise which had better be dealt with on the Question that the Clause stand part I presume that you have no objection to those points being referred to again on the Question that the Clause stand part without, of course, going against the spirit of your ruling.

Any points that require elucidation by a Minister will be admissible, but if hon. Members either voluntarily or subconsciously put questions leading to a general discussion I might be amenable to terminating the discussion.

I beg to move in page 6, line 24, to leave out the word "July" and to insert instead thereof the word "January."

This Clause does not raise what I may call any of the major issues of the Tariff Preference but it brings up a small, though a rather peculiar point. There are preferences granted at present to tobacco grown in the Empire and to wine, dried fruits, plums, raisins, figs, and currants produced within the Empire. This Clause proposes to increase slightly the preference on tobacco, to double the preference on wine and to sweep away all duties upon dried fruit that comes from within the Empire. These proposals were before the Labour Government last year and that Government decided to leave the decision to a free vote of the House and in accordance with that decision these proposals were rejected by the House. I have been reading the debates of last year and I find that the chief argument in favour of these proposals which was addressed to us on these benches was that they were proposals for the purpose of reducing duty and that they would have the effect therefore of reducing prices and were a step towards the old ideal of the free breakfast table.

If I were convinced that that were true I should have no objection to this Clause, but it is not so. The position of these preferences is not the same as the position of the preference, say, on tea. About nine-tenths of the tea which we consume comes from within the Empire. Therefore, if you reduce the duty on that nine-tenths you reduce the duty on tea practically as a whole and tea is cheaper than it would be without the duty, but the position is entirely different when you consider this group of preferences because of the insignificantly small proportion of these commodities that comes from within the Empire. Yesterday I put a question on this subject to the President of the Board of Trade, and the answer is to be found in this morning's OFFICIAL REPORT. I find that these are the figures. In the case of tobacco 7 per cent. comes from inside the Empire and 93 per cent. comes from foreign sources; in the case of wine 7 per cent. again comes from within the Empire; in the case of raisins 24 per cent. comes from within the Empire; in the case of currants 6 per cent. comes from within the Empire; and in the case of plums 5 per cent., and in the case of figs .01 per cent. That being the case, it is evident that the price of these various articles will be determined by the price of the bulk supply that comes from foreign sources; it will not be determined by these 5 per cents. and 6 per cents., these minor fractions that come from within the Empire. For that reason the prices of the articles on which these preferences are given will not be reduced by a shilling to the consumers in this country.

What does that mean? It means that as a result of these preferences some hundreds of thousands of pounds will be lost to the taxpayers of this country. It means that the foreign merchants, employers and producers will not reduce their prices. It means that they will get these hundreds of thousands of pounds and keep them in their own pockets. So far from these preferences leading us towards a free breakfast table, I think it is clear that when once this Clause has been passed, it will make any approach to a free breakfast table something in the nature of political impracticability. What is going to be the position? When you give these preferences we shall see the same situation as has arisen in the case of sugar-vested interests in the Dominions and Colonies grow up behind the preference, and capital is embarked upon the assumption that the preference its a settled fact. The consequence will be that a Chancellor of the Exchequer who wishes to introduce the free breakfast table, who wishes to remove these duties, will find that he cannot abolish the duties without abolishing the preference. That is agreed. Therefore, he will not be able, when dealing with these duties in future, to deal with them with a single eye to the interests of the people of this country.

What does this really amount to? These duties are not preference in the wide sense of the term. These duties simply amount to a subsidy to certain colonial producers. They are a plain out-right payment out of the taxes of this country to certain selected groups of producers and employers in Dominions where the standard of prosperity is higher than in this country and the rate of taxation is lower. Therefore, what we contend is that if you are to argue about this, it must be argued, not as preference but as a subsidy. I do not necessarily object to subsidies of every sort and kind, but I say that this is a subsidy of the wrong kind. We ourselves on these Benches have proposals for bringing down the prices of these articles of food. We have proposals which, as a matter of fact, we have been asking for the possibility of defeating. We have proposals, not only for reducing the price of food, but for stabilising the price of food and for assisting Dominion production by means of State purchase and State marketing in bulk along the lines of the Minority Report of the recent Royal Commission on Food Prices which was signed by Mr. W. R. Smith, one of the Members of the late Labour Government.

Those are our proposals. I should certainly have no objection in principle, if a subsidy were necessary to bring proposals of that kind into operation. But our objection is that this is a subsidy of an absolutely accidental and haphazard kind. What does it do? It picks out a certain Dominion. It gives the advantage to just those producers in the Dominion who happen to come within our tariff system. The result is—this I find from an answer to a question which I put yesterday, and it is very striking—that these preferences will go most to the advantage of Australia. They will give very little advantage to South Africa, they will not give a shilling to Canada, they will not give a shilling to New Zealand, and they will not give a shilling in the reduction of prices to the people of this country. For that reason I beg to move the Amendment.

The chief argument of the hon. Member was that these preferences were not likely to help the home consumer because the production of the Empire is so small as to be negligible in its effect on prices. If that be so, of course the cost of this preference on those particular articles must be correspondingly small. The hon. Member is making too much of the great sums of money that we are going to lose. If we are right in thinking that these preferences will develop alternative sources of supply, then, of course, we shall lose money, but we shall gain money, on the other hand, for the benefit of the consumers in this country, once the Empire production becomes a dominant factor in supply. Of course, in most of these duties, apart from tobacco, we do not imagine that there is going to be any immediate reduction in price as a result, but we are hoping for great indirect advantages and eventual reductions if we can achieve our object of increasing production. The hon. Member gave away the whole of his case, because he stated as an objection to all this policy—I took down his words—

"Capital will be embarked in the Dominions in these enterprises in the belief that Preference is an established fact."

Do we not want capital to be embarked in the waste lands of the Empire? Surely if we can get capital embarked in the production of the raw materials and food which our teeming millions consume, we shall by that means, by the investment of this capital, eventually be able to reduce prices? Of course, this Clause raises no new question. It is embodied in this Finance Bill as a vital part of the policy of the Conservative Government and it will bring to fulfilment an undertaking which was given 18 months ago by the last Conservative Government at the Imperial Economic Conference. It is an omnibus Clause. Sub-section (1) and the second part of the Third Schedule increase the preferences on tobacco, currants, dried fruits and wine of Empire origin. These points were fully thrashed out at the Imperial Economic Conference, and we believe we are in honour bound to bring these preferences into force at the earliest possible moment. I do not want to go into details of the preferences, but before I leave the speech of the hon. Member for Keighley (Mr. Lees-Smith) I would point out that his argument that these preferences are not going to reduce prices certainly does not apply to tobacco. We have assurances from large producers of manufactured tobacco that although these preferences necessarily cannot, from their limited scope, decrease the cost of mixed tobacco, it is intended to give the full benefit on Imperial tobacco to those who smoke it in its pure form. As a result of that, we shall have a class of tobacco on the market cheaper than any which has been hitherto available.

Will you smoke it?

I do not happen to smoke at all, otherwise I would smoke it. But I had an opportunity of trying it during the South African War. When I was struggling to contract a taste for smoking at that time, I used to smoke Boer tobacco quite gladly, and it is a much rawer production than this will be.

Has the right hon. Gentleman the assurance of the Imperial Tobacco Company that these prices will remain reduced?

I am afraid I cannot give specific names, but before these negotiations went through, we had the assurance that, over a large part of the field, the full value of the preference would be passed on to the consumer, and once that is assured, is it not certain that the competition of those manufacturers who supply purely Imperial tobacco will compel any who stand out to conform to the practice which is thus brought into force? There is no doubt that by means of this preference and the discrimination in price between the two sources of supply we shall encourage people to smoke the pure Imperial tobacco.

I wonder why the right hon. Gentleman did not persevere in his efforts in South Africa?

Because when I came here I could not get it. The point I was making when the hon. and gallant Member drew me into the relation of a personal experience was that if we can get a pure Imperial tobacco on to the market, it will inevitably raise the demand for it, develop a taste for that particular article, and improve the quality.

Will the Prime Minister smoke it?

If the effect is going to be as the right hon. Gentleman indicates, why has not the same benefit arisen from Imperial tea?

But it has. The hon. and gallant Member knows perfectly well, and there is no doubt about the fact, that Imperial tea, which is 87 per cent, of the total supply, has been a dominant factor in reduction of prices. These proposals for the increase of Imperial preference go as far as is possible to meet the desires which the Dominions expressed at the Imperial Economic Conference without imposing any additional taxation on food. They are all reductions of food taxation, and for that reason I should imagine they would be heartily welcomed by hon. Members opposite. Of course at the Imperial Economic Conference the question of the McKenna Duties was not raised because at that time the Dominions enjoyed that preference. Since then the duties were brought to an end and having restored them, we further round off a tariff of Imperial Preference by providing advantages in connection with the introduction of silk and hops.

We believe this provision is long overdue. For many years past we have enjoyed preferences from the Dominions. They were given freely long before we offered any countervailing advantages in our market, and these preferences have done much to develop inter-Imperial trade and to keep the demand for manufactured goods in the Dominions in British channels. The Dominions gave us those preferences during the period of their development, and now that they have ceased to be undeveloped estates and are powerful factors in world trade it is necessary that we should do all we can within our Free Trade tariff to give them whatever corresponding advantage is possible. The Dominions are not lacking foreign suitors for the favour of their markets. I know the hon. and gallant Member for Leith (Captain Benn) does not like sentimental arguments on matters of Imperial trade. But I should imagine that he would see that it was really good business to make this gesture to the Dominions. After all, we got a free gift from the Dominions which was far more valuable in proportion to population than that which we are now offering to them. At the Imperial Economic Conference, Mr. Bruce stated that the value of the Australian preference for the year 1922–23 on British manufactures imported into Australia was £7,600,000, and over the whole of the Dominions the preference, Mr. Bruce stated, which Britain received was somewhere between £10,000,000 and £11,000,000. [ Interruption. ] I happen to have heard those figures given by Mr. Bruce, and I looked them up before coming to this debate, but if the hon. Member who interrupts would like to know what are the amounts sacrificed by this preference in each Dominion, I am sure we should be able to have it worked out. The Dominions are making a heavy sacrifice, and have done so for years past, when they got nothing in return, and I urge that at this time, when South Africa, New Zealand, Australila, and Canada either are or recently have been modifying their tariffs, it is a great advantage that they should receive the preferences which they gave freely originally, asking nothing in return, and should no longer be left unrecognised but should find a response from this country.

The Financial Secretary to the Treasury referred, in the course of his speech, to his failure to find tobacco from certain parts of the Empire in this country. If it was the test of loyalty that I had to smoke tobacco from South Africa, I am afraid I should incur a grave risk of becoming a disloyal subject, but, fortunately, tariffs are no test for loyalty. There is no section of this House which has a monopoly of that commodity. It used to be the fashion, but I think it is going out of date, to put everyone down as an anti-Colonialist if he raised his voice too loudly against a preference for our Colonies, but it has become more and more apparent—and I am glad to see the Chancellor of the Exchequer is in his place, because I wish to refer to something that he stated—that the general opinion in the Colonies and here is that we can only exist by working out our own salvation.

Together.

Together, but on different lines—on different economic lines. The Mother Country and the Colonies must consider their own peculiar economic position, and that is the only way we can possibly thrive. The main objection I have to this Clause is that, while it means a loss to the British revenue of £1,474,000, these preferences actually are of no advantage to the British consumer, and alter all is said and done, while we have the warmest feelings for our Colonies—I have many very good friends in our Colonies, whom I have personally visited, and I know Australia and New Zealand fairly well, and entertain the warmest regard for them—our first consideration is for the home consumer, and my principle objection to this Clause is that the home consumer derives no benefit whatsoever from it. Unfortunately, the fact also is that the Colonies derive very little benefit either.

Then why do they want it? [ Interruption. ]

I must ask hon. Members on both sides of the Committee to allow the hon. Baronet to proceed.

If my hon. and gallant Friend, who is a very ardent Colonialist, gives me time, I will tell him what Mr. Bruce, the Prime Minister of Australia, actually does want. It is not this that he wants. This is far too piffling, and the right hon. Gentleman the Chancellor of the Exchequer knows perfectly well that this is just simply the beginning of things. It is the thin end of the wedge, leading to far greater measures. Mr. Bruce will not be satisfied with the taxes on dried fruits, and that sort of thing. What does this mean? I will give my hon. and gallant Friend the figures. In 1922 and 1923 the percentage of Empire goods to the total, in currants, was 6·6 per cent., in tobacco 6·2 per cent. and in wine 5·7 per cent. These concessions are of no practical use to the Colonies which want something more. The right hon. Gentleman referred to capital, and asked us if we objected to the Colonies having capital. Certainly not. They get plenty of capital from this country, but we object to them getting subsidised capital. They can have all the capital they want, and we suggest to them that they should develop on economic, private enterprise principles, as we have to do in this country, and stand or fall by the success of their private enterprise without being bolstered up by the British Exchequer. We will send them all the capital they want if we are sure that what they propose to us are sound commercial investments. There is plenty of capital in this country, but what we object to is that we should send out the taxpayers' money of this country without the people of this country deriving any benefit. What does Sir Joseph Cook say about this? The High Commissioner for Australia said, at the Commercial Association lunch on the 1st May, 1924:

"In order to give an effective preference to Australian and South African dried fruit against the poorly paid labour of Greece and Smyrna, the preference on the full rate of 10s. 6d. per cwt. was the lowest that could be effective."

I think I am right in saying that what is proposed now is of no use to the Colonies or to the home consumers. There are things that can be produced in the Colonies of some use, it is perfectly true. Let them grow those things, and if they are as cheap and as good as others, we shall certainly buy them. Take South Africa, which is a far more prosperous country naturally than the Mother Country, a place where you can buy most excellent land for about £7 an acre, where you can grow all the cotton that Lancashire wants.

When?

As soon as they get sufficient people of your stamp to go out and grow it. What they are short of in South Africa is men. The climate there is one of the best in the world. Their winter's day is something like that which we are enjoying at present. On the east coast, in the neighbourhood of Port Elizabeth, around Grahamstown and other places, this sort of weather prevails there in winter time. They can grow cotton, and why do they not? That is the thing we want. They should grow something that we can buy from them, without encroaching upon the taxpayers of our own country.

The present Foreign Secretary, when, as Chancellor of the Exchequer, he introduced his Budget, on 30th April, 1919, said that one of the main principles on which British preference should be based was that "It should be substantial in amount." The same sort of sentiment was expressed by Sir Joseph Cook. These concessions are only the beginning. Intimately the preference must be the substantial thing. What they really want is this, and there is no blinking the fact. We have it on the authority of Mr. Bruce. I heard him say so at a dinner of the National Farmers' Union. He said it up and down the country, and this what we have got to be prepared for. They want, in Australia particularly, a preferential rate on what they produce there, which is corn, meat and raw materials. That is what they want, and that is what we object to. They will not be satisfied with anything else, and if we offer them anything else it will create discord. This is what Mr. Bruce said, speaking at the Imperial Conference, on 9th October, 1923: the door to that sort of thing. Mr. Massey wanted tariffs inside the Empire. Speaking at the Empire Producers' Association, in July, 1921, he said:

At that time, the principle of preference was founded upon the taxation of bread and meat, in regard to which special duties were to be imposed, and then the preference conceded to the Dominions. Now it is founded on no taxation of food in any form, but remissions from existing duties.

I think it was a great pity my right hon. Friend was not so explicit at the Imperial Conference as he is now, because he did not say that then. His words were that, "The principle of preference is positively injurious." The right hon. Gentleman did not refer to food or to any kind of commodity. I am sure that his words at that conference—

If the whole of that speech is read, it will be seen that it is an argument directed against the taxation of bread and meat as a vehicle of preference.

I do the right hon. Gentleman the honour of reading every speech of his that I can get hold of. I do it, not for my economic advancement, but for my entertainment.

Excellent!

The right hon. Gentleman clearly cannot come to this House and make statements which really upset all the principles he has ever agreed to. For him to come here and tell us that if we do not agree to put a tax upon figs, currants, and raisins, we are going to lose our Colonies, in the words of the right hon. Gentleman the Financial Secretary, is saying something to-day that he has never believed in in the past. He has said in the past that preference would create disunion and not union, and he has no right to come here to-day and tell us that it is only cementing the Mother Country and the Colonies by giving preferences of this sort. Before I sit down I should like to refer to one or two remarks made by the right hon. Gentleman the Financial Secretary to the Treasury who preceded me. He stated that our Colonies are receiving no benefit from us, and that we must do something of this kind to show—at least I rather gathered—.

I did not put it quite that way. What I did suggest was that this country had preference in the Dominions as a sort of free gift and that, therefore, it was desirable to show our appreciation of it.

I rather gathered that what the right hon. Gentleman meant was that the Colonies gave us a lot and we gave them very little in return.

indicated dissent.

I do not want to misinterpret what the right hon. Gentleman said but I think the way I have put it is what the House understood. You take these preferences that are foreshadowed in Clause 8. Take any preference. Take first of all what the Colonies say they give to us. A reduction in the tariff wall in the colonies is not only an advantage to this country but to the food consumer in the Colonies. [HON. MEMBERS: "Oh!"] Certainly. The people who get the main benefit of the reduction of the tariff wall in the Colonies is not the British exporter, but the Colonial consumer.

Are we, then, to understand from the hon. Gentleman that Imperial Preference always means a reduction of price to the consumer?

What I do say cannot be denied by the right hon. Gentleman and that is that a reduction in the tariff wall in Australia, means to the extent of that reduction, a lowering of the price to the Australian consumer. Therefore, the benefit which he says comes to this country partly, at all events, goes to the consumer in the Colonies. [ Laughter. ]

I would ask hon. Gentlemen to endeavour to restrain their risible tendencies.

It seems to upset some hon. Gentlemen opposite when they have to listen to unpalatable things from this side of the House, but the right hon. Gentleman the Financial Secretary cannot deny the proposition I am putting to him now. I am not saying that the British exporter gets no benefit. Anyone who exports from this country derives some benefit from it. Of course he does. But the main thing is that a reduction in the tariff wall in any country must lower the prices there. Therefore, we are not in this country getting all the benefit that is claimed we are getting by this concession made in the preferential tariffs in our Colonies. The Colonies get other benefits. They get the benefit of our financial credit and the protection of our Fleet. Up to the present all the advantages in the connection between the Colonies and the Mother Country are in favour of the Colonies. I am not a separatist. I hope the Colonies and the Mother Country will continue to forge more strongly than ever the links that bind together the Empire. I sincerely hope so. But I do say that that will not be done by Clauses of this kind in the Finance Bill. These preferential tariffs will create discord. The strengthening of the links will only be achieved by each Colony proceeding on the lines of development, economically, according to the requirements of the respective countries. We in this country have to consider that what our teeming millions require, first of all, is quality and low price. That is the governing factor in this country, and we cannot deviate from that, however, much we love our Colonies. On the other hand, it is for them to develop and to grow those things which we can take from them on an economic basis.

I cannot altogether congratulate the hon. Gentleman, who has just sat down, on his speech. He seems to be living in the year 1907, forgetful that the world has changed and is changing. For my own part, while I always admire the Chancellor of the Exchequer's dexterity as a speaker and intend, with a number of my friends, to support these proposals for Imperial Preference, I cannot admire the rather tepid way in which the Chancellor of the Exchequer has approached this particular aspect of the problem. In no part of the Chancellor's speech was he less convincing than in his justification of the preferences. If I had been sitting behind the right hon. Gentleman, I should have been very sorry to hear such a very bad case put up for Imperial Preference.

On what occasion did I not put up a strong case?

On no occasion did the Chancellor of the Exchequer put up any strong case in the matter. That is what I am complaining of. What he has done on a number of occasions has been to refer to the balances in his Budget. But we are dealing here with a question which, in my judgment, and in the judgment of a good many others on this side of the House, as well as in other parts of the House, touches the whole question of the methods of opening up of new developments of trade between the Dominions, the rest of the Empire and ourselves. We are touching on problems which affect the question of the standard of life in the Empire, which is lowered by the competition of low grade labour inside the Empire as well as outside. We are touch-on the possibility of the development of the British Commonwealth, which gives us at least a possibility of a solution of a part of the tragic difficulties of our export industries, with their unemployment and their sufferings, and the demoralisation which are brought in their train. And yet a Conservative Chancellor of the Exchequer, when speaking of that aspect of the matter, inside as well as outside the House, talked of it almost exclusively from the revenue point of view, and balanced the development of the Empire and the policy of Imperial Preference against the artificial silk stockings of shop assistants and typists, the little fineries by which poorer women seek to add some conveniences and refinement to their lives.

I would like to ask the hon. Gentleman if he will give the quotation to which he refers, to show where on any occasion I have ever connected the tax on artificial silk with the remissions granted by way of Preference.

I have not got any quotation with me, but throughout his Budget campaign, if I may so express it, the right hon. Gentleman has made quite a feature of this question of balances; and I understood that he had balanced what he called the loss of revenue from Imperial Preference, about £1,000,000, against the increased revenue from artificial silk.

No, I balanced the remissions against the McKenna Duties. I think the re-imposition of the McKenna Duties actually pays for these remissions.

. The hon. Gentleman is, then, balancing this development of the Empire against something else. I think he will agree with me that in all these matters he was attempting what he calls balances; and I venture to say from this side, and speaking for those of us on this side who agree very much on this question, that the Chancellor of the Exchequer does not seem to me to be quite so full of enthusiasm on this matter, or to be looking so far into the future on this matter, as some of us who sit on this side.

On the other hand, if we cannot congratulate the Chancellor of the Exchequer, we certainly cannot congratulate the opponents of the Chancellor who try to measure the possibilities of this new policy in the kind of old and cracked measures which one sometimes finds when poking about in a barn—the old measures they used for peas and corn, now with cobwebs formed inside it. The hon. Gentleman who spoke last was attempting to measure the possibilities of this new policy with just such a measure as I have indicated. Possibly that old cracked measure is the inheritance of a past, of a theory, of an old bankruptcy, a theory which was, perhaps, once a suitable one, but which is now bankrupt, the theory of laissez faire , the theory that the world goes on very well without human guidance, excepting the guidance of a conflict of selfish human interests, the theory of the distrust of man's capacity for organisation and for co-operation with his fellows and the theory of the limitation of the possibilities of the future organisation of society by the measure of the mistakes of the past. The possibilities of the British Commonwealth of Nations, a world-wide federation, are measured by those who oppose this policy by the standards of an industrialism which has failed in its essential purpose of providing a secure basis for the life and the prosperity of our people. The hon. Gentleman who moved the Amendment and the hon. Member who spoke just before me are basing themselves upon economics appropriate at a time when our present industrialism was developing but absolutely inappropriate to the present time, when the development of our industrialism requires radical alterations in order to prevent disaster not only in this country but to our Commonwealth. We cannot congratulate the right hon. Gentleman the Chancellor of the Exchequer on his revenue-bound views. We cannot agree with those who measure the present by means which are no longer applicable; and we ask our friends in all parts of the House to examine the preference proposals and the new reasons which are so urgent for their being passed, and to pass them, if not unanimously, at least by a vote representative of opinion in all sections of the House.

It was said at the election before the last one by hon. Members of the Liberal Party that one cannot bind the Empire together by tinned salmon and canned fruits and all that kind of thing. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) was, during that election, very apt at in- venting catch words, very apt at describing a policy with which he himself did not agree in words which, for the moment, tickle the ears of those who are listening to him; but his attempt to deal with these fundamental realities of the needs of our people and with the developing and changing processes of life by inventing catch words is, I think, one of the reasons why the right hon. Gentleman led his party to its present position in the House and in the country. I believe the electors and the public opinion of this country will forgive almost any mistake, will forgive violence of language and even violence of action, and will forgive very grave errors; but the political instinct of this country demands earnest, common-sense application of effort towards the solution of the day-to-day problems of the country, and the country will never forgive that evasion of these fundamental problems which is one of the chief characteristics of the Liberal party. You must deal with dried fruits, you must deal with those elementary things which the last speaker referred to so contemptuously; you must deal with iron and with cotton, because, when discussing Empire politics, it is just as much a fundamental question as it is in housekeeping to discuss the amount of money available. Preference, in my view, deals with the methods by which the Empire housekeeping is to be conducted, and when hon. Members and sometimes right hon. Members say that those who speak on the side of preferences should not talk about binding the Empire together in this way, that it is beneath the importance of so great a subject, I am reminded always of the story of the lately married yokel in a country village. Probably many hon. Members know it, A few days after his marriage he was in a country pub. and a friend asked him "How are you getting on?" And the man said, "Well, it's all right in some ways, but ever since I was married it's Money, Money, Money all the time." The friend said to the yokel. "But what does she do with it?" And the newly-married man said, "I don't know. I ain't give her none." In that way, in regard to preference, it is all very well to talk about the unimportance of these basic necessities of our export and import trade, but we have to arrange these things before we can go on to the greater, the higher and the more spiritual things. If you want to get a consideration of these mundane affairs, if you want to get out of your super-sensitive nostrils the scent of fish and meat, if you want to get away from the consideration of basic matters like iron and cotton, you have to do it by a proper organisation of the exchange of these things, and by ensuring a proper circulation of the house-keeping money of the Commonwealth and make your Commonwealth as attractive as you can.

Turning from these general principles, which I have raised because I think this discussion was in danger of being considered relatively unimportant, to the question of actual values, I have been amazed by statements made to-day and in other debates with regard to the actual value of preference to us. You can estimate it first of all from the point of view of general policy. Preference is not a gift. Preference, whether given by us or to us, is not a gift. If I have one criticism on this subject more than another with regard to the Government's policy it is the unfortunate effect of substituting other preferences. Preference is a method of organisation, and a gift of £1,000,000 is eventually going to be found embarrassing. It is difficult to know what you are going to do with an actual gift of that kind. We do not want gifts, and what we require is organisation, and a revival of our trade and the-setting of our people to work, and for this purpose these preferences are of first importance, because they help to increase the amount of trade with our Dominions and our Colonies inside the Empire. Trade inside the Empire with the Dominions is far more valuable than trade outside. Some hon. Members do not appear to have the least conception of the elementary facts of the situation. [HON. MEMBERS: "Oh, oh!"] I admit that those hon. Members knew the elementary facts of the situation up to 1907, but not since that time.

Why have we now got 1,500,000 unemployed? There are two great groups of reasons. One group is consequent on the War, which has produced economic disorder and poverty connected with the War. The other is due to the raising up in Europe and all over the world of manufacturing competitors, and our exclusion from their markets not only by tariffs, but by their own special methods of com- mercial organisation. While it is true as time goes on, and we get better relations with the world in general, and as the effect of the War and economic disorganisations disappear, we shall have a tendency to recover our position to a certain extent, the effect of the increased manufacturing in other countries and the competition against us, and the exclusion of ourselves from markets outside our own Empire, is going to be more potent in the future, and consequently we cannot hope, unless we abandon the system of development adopted up to 1907 to re-establish our pre-War position as exporters to large areas of the world. That position will not be re-established, and we are not going to get back to that state of affairs.

We have, in fact, to change our methods, to change our minds in order to meet the new position. Our trade development in the past was due to our being early in the field. It was due to the early development of industry in this country combined with the pioneering abilities which were characteristic of the men engaged in trade. Those conditions have gone, and the conditions in the future will depend almost entirely on organisation, and on our skill, and on our power and capacity for keeping the markets of the Empire for ourselves. The Empire markets are enormously more valuable to us than any other country at the present time. Roughly speaking, you may say that wherever there is a British Colony or a British Dominion or British territory of any kind over which the British flag flies there you are certain of having not less than 50 per cent. of the trade, whereas in other countries they will endeavour to keep as much trade as they can for themselves, and they will certainly give you no preference either by selection or otherwise.

Let me now quote in this connection some significant facts. In the year 1924 our exports to foreign nations fell by £4,000,000, but our Empire exports rose by £32,000,000, and I think that is a very important fact. The value of our trade inside the Empire is out of all proportion to the number of people inside the Empire. In 1924 our exports to Central America and South America, which have a population calculated at 86,000,000 per- sons, amounted to £63,500,000. Australia and New Zealand, with only a population of 7,000,000, took from us in the same period exports valued at £81,000,000. That is a fact which I commend to some of my hon. Friends on the Labour benches who disagree with me. These facts have a great deal to do with the coal trade as well as other trades. If you can get the industries of this country working again as we should do, I am convinced that you will only do that by developing your Empire markets. [An HON. MEMBER: "Go over to the other side."] We are extremely good friends on these benches, although we differ slightly.

Take another figure. There are in Asia, outside India, 700,000,000 people, and they took from us in the year 1924 £75,000,000 of exports as against 7,000,000 people in Australia who took £81,000,000 worth. Is that not a very sound reason indeed for encouraging in every possible and conceivable way our trade with Australia? Is not the hon. Member who spoke so slightingly of the dried fruit trade underestimating something which is an enormously greater thing than the question of dried fruits only? Let me put another point. These figures show not only the value to us of trade with our Dominions, but they show the great value of trade with people who have a higher standard of life. They show the value of higher purchasing power which is given by a higher standard of life. Let me commend that reflection to hon. Members on the Labour benches.

This is not only a question of trade, but it is a question of population. We need a redistribution of population within the Empire, and how are we going to get it? The trade in dried fruits and the settlement of men to produce them is the precise way which will enable us to solve that problem and to redistribute our population. Let me point out that every man we settle in the Dominions becomes a purchaser of our goods to a very much greater extent than if he is outside the Empire, and I think that is an important fact. The old-fashioned economics used to disregard the fact that the Empire of the British Commonwealth of nations was developed 20 years ago and it is no slight on hon. Members in this House, whether they sit on one side or the other, to say that they have within the last 20 years changed their views. It is rather an indication that they have been occupying their minds in attending to the very greatly changing conditions of the world. Just let me quote some figures which deal with the purchasing power of people residing, for instance, in Australia as compared with the purchasing power of people who live, let us say, in Turkey. An Australian family of five buys from Great Britain yearly something over £50 worth of produce. A similar family in Turkey buys from us £1 10s. worth of produce. A family in South Africa buys £21 16s. 3d. worth, and a family in Spain £2 7s. 6d. worth. Is it not worth while thinking of the significance of those figures with regard to our own export trades which are so hardly hit at the present time? [ Interruption. ]

Might I appeal to hon. Members in all parts of the Committee to allow the hon. Member to proceed without so much interruption?

I assure hon. Members that I am not angling for cheers from anybody. I am endeavouring to deal with what I conceive to be one of the most serious questions affecting the export trade and the whole industrial and economic life of our country, and I do not care whether I cut across preconceived ideas and shibboleths if I can only find a way of helping the people. It is a matter of complete indifference to me, whatever is sacrificed, if I can be sure that we are going to help our own people, and I do venture to think that in a matter of this kind some hon. Members ought to be willing to sacrifice their much prized intellectual sincerity and consistency, which, after all, may merely be another word for pig-headed obstinacy. I hope that I have convinced my hon. Friends on this side of the House and some hon. Members below the Gangway that we are not in this matter dealing with a question of gifts to the Empire. We are not engaged in dealing with the question of subsidies to somebody out of the taxpayers' pockets. We are dealing with something of very much greater importance, which is going to be a basis for the establishment of an organisation which will lead us out of present distresses into a better condition of things.

On this side of the House, we do not by any means think that a money preference is a complete solution. We want to see all taxes on food products abolished. It is sometimes said that if you give a preference in this way you cannot at a later date take that preference off without breaking the honourable understanding into which you have entered. It is quite true that, if you were going to do nothing else, you could not take this preference off, but you can do something else; you can by other methods, by organisation of transport, organisation of marketing, and organisation of advertising give advantages of greater value to Empire trade than you can ever give by a money preference, and, for my own part, I hope that the time will come when we shall go forward from this first step to a bigger step in organisation, and make our position with regard to Empire trade more secure than it can ever be while it is only buttressed by these money preferences. We have got to do something more than that. We have got to safeguard the standard of life of our own people. We have got to guard against a rise in prices. It is really one of the weaknesses of this particular proposal that it does not guard against a rise in prices. I hear an hon. Member say "hear, hear." It is equally true that under the present organisation of affairs, even with a complete remission of a tax on food, there is no guarantee of a fall in price. We do want some safeguard against a rise in price, and we must organise to get rid of unnecessary intermediaries between the producer and the consumer, a point which has been raised on more than one occasion by the Prime Minister himself.

We must also guard our health conditions. My hon. Friends who are so anxious to guard the consumer ought really to think of the consumer's health, and ought really to think of the conditions under which some of the competing food products are produced in other countries. Let me give one very brief description of what I myself saw in Smyrna in a particular warehouse where sultanas destined for the European market were being packed. There were a number of Turks with very dirty clothes or. and with bare feet engaged walking about and trampling over heaps of sultanas which were on the floor. They were packing these sultanas into boxes of about one and a half feet in length by trampling them down with their feet. I am quite an experienced medical inspector, but I have never seen any feet at any time in any place which came up to those feet in dirt and filth. That particular packing floor was about 10 yards distant from a latrine used by these men. The Committee will forgive me giving these unpleasant details. That latrine, the only place the men had to go to, had on it semi-solid urine and excrement; the men were walking in and out of it, and then trampling on the sultanas. Those who are so very much concerned with the consumer might turn their attention to the health conditions. I do not say that that happens everywhere, and, considering the number of plum puddings and buns I have eaten, I hope it does not; but certainly it happens in a large number of places.

We have to guard, also, the labour conditions. If I may turn back for a moment, in winding up my remarks. I just want to ask hon. Members on this matter to realise quite seriously that the shutting of the foreign markets to us more and more throws open the enormous territory of the Dominions more and more, if we have the wisdom to enter into that market and organise for it. Why should we be poor in a world that is so rich? Why should there be so much unemployment here in our Commonwealth when there are millions upon millions of fertile acres which are unploughed? We have, I venture to say—and I say the same to my friends as well as to some hon. Gentlemen opposite—we have to change our minds a good deal on this matter. We have to turn our minds to new conceptions. The world at the present time is moving to a world order; we are moving towards world organisation; and the economics, and even the politics, appropriate to the old era are not appropriate to the present time. The homeland of these islands has grown and become a homeland spread worldwide—the world homeland of the British Commonwealth of Nations. There are riches in that land if we choose to take them. There is energy and capacity in that land, for it is the heritage of our own people; and there is power to make the British Commonwealth, and the world in general, serve man and minister to his needs, if we take the trouble to create the proper organisation. I want to ask as many of my friends here as can possibly feel that they are convinced, not only by my arguments, but by the arguments of many other speakers who will follow me, to take this step forward, a new step on a new pioneering path, on the path of the development of our community of united nations, which, when we secure it, will make our contribution to the scientific order of the world, will make our contribution to the permanent peace of the world.

From the point of view of one who has spent a good many years in one of our Overseas Dominions, I should like to emphasise the importance of this Clause merely from the Empire point of view, and to add my support to the plea of the Chancellor of the Exchequer, earlier in the Session, that Imperial Preference should be looked upon from the point of view of Imperial diplomacy, and, I would add, Imperial insurance. As it is merely the intention of the Government to reduce some of the existing duties on goods coming into this country, provided they are of Imperial origin, I do not see how any hon. Member can object to the provisions of this Clause on the ground of Free Trade, because, even if any hon. Member should think it is merely the thin end of the wedge of Protection, there is no reason why he should not travel along the path of Imperial reciprocity as far as his tenets permit. It is perfectly true that the proposals in this Clause give very small concessions compared with the concessions that the Dominions give to us in their markets; but, to my mind, the acceptance by this House and by the people of this country of the principle of Imperial reciprocity is far more important than the actual value of any preferences that we can give to the Dominions in our markets here.

I believe that the greatest danger to Imperial unity lies in the lack of knowledge and appreciation of the value of the Empire by the people of this country. I believe it was lack of knowledge and appreciation of the value of the Empire that led this House to repudiate the four Resolutions accepted by the Imperial Economic Conference last year, and I do not believe that hon. Members who voted against those Resolutions realised what a blow was then struck at Imperial unity, and how much that was felt throughout our Dominions. I do not see how the very strongest believer in the necessity of Free Trade for this country can fail to appreciate the value of the preferences that our Dominions give us, and I cannot help feeling that the failure to appreciate the value of those preferences has led to a good deal of trouble. It was the failure to accept the principle of Imperial reciprocity that, I believe, led South Africa seriously to consider cancelling the preference she gives us in her market. Considering the amount of unemployment that that there is in this country, and the present prospects in regard to unemployment, can we for a moment afford to jeopardisise our markets in our own Empire?

If we look at the question purely from the point of view of self-interest, we must not take a chance that the preferences given to us by our Dominions will ever be cancelled by them. I believe it is entirely owing to the preferences that our Dominions give us that we have been able to maintain our proportion of the imports of our Dominions, whereas during recent years we have not been able to maintain our proportion of the imports of foreign countries, because, I believe, they have given us no preference. Therefore, if we take chances in regard to the preferences which our Dominions give us, we are gambling with employment in this country, and we cannot possibly afford to do that at the present moment.

I often hear it said, when I preach on the Dominions in this country, that the Dominions apparently forget that, until comparatively speaking recently, they have been entirely dependent on this country for the funds to develop their own territory, and that they are entirely, or almost entirely, dependent upon this country for naval protection. I submit that they have not forgotten it, and, if one looks at the increases in the preferences that our Dominions have given to us during recent years, I think it is quite reasonable to assume that they have become increasingly conscious of their obligations to this country. To use a platitude, the chain is as weak as its weakest link, or the link that is subjected to the greatest strain, and the link of Empire that is subjected to the greatest strain is undoubtedly the link holding Canada to the Empire, solely on account of the geographical, physical, and commercial conditions obtaining in English-speaking North America. Therefore, I should like to confine my remarks to that country, because I know it well from West to East.

I think, also, that it is particularly apt to talk about Canada with regard to the attitude that I ask hon. Members in all parts of the Committee to take towards this question of Imperial Preference, because, just as our Dominions gave us the lead in this question of commercial preference, so Canada gave us the lead in the attitude which I ask hon. Members to adopt, when, at the General Election in Canada in 1911, the people of Canada repudiated in no uncertain terms the preferential trade agreement arrived at by Sir Wilfrid Laurier's Liberal Government with the Government of the United States. That reciprocal trade agreement would have been of very great advantage to a great many people in Canada. I am speaking from my own knowledge, because in that year I was farming in Western Canada and taking railway contracts, and I was brought into immediate contact with all the purchasers of raw material in the West; but the Western purchasers of raw material supported without hesitation the manufacturers in the East in turning down this proposal, because, although it would have been of immense advantage to me and my friends out there, whether Canadian born or not, we felt that the temporary advantages we should have gained from the commercial treaties, were not to be compared with the risk of weakening the Imperial link. I would submit that there are many difficulties facing Canada; there are many causes tending to draw Canada, just as they did at the time of Sir Wilfrid Laurier's proposals, away from the Empire towards the United States.

There is a propaganda going on towards that end, not promulgated by any individual but by the physical and commercial conditions obtaining in English speaking North America. These conditions I think are worthy of consideration by the House that are tending to draw Canada out of the Empire. These are some of them Canada is only divided from the United States by a boundary line 4,000 miles long, which is entirely undefended, on either side of which people are living talking exactly the same language and using the same units of weights and measurer, and currency. There is only one difference really between the conditions under which they live and that is that south of the line as a rule wages are higher and the cost of living is lower. These are attractions which, unless counterbalanced, are bound to have an effect sooner or later. The railways of both Canada and the United States penetrate great distances into the territory of their neighbours. Their rolling stock is interchangeable, and they are operated on exactly the same system. The International Waterways of the Great Lakes are really common to both countries. The code of restrictions with regard to native born Canadians going into the United States do not apply. The United States in 10 or 15 years is bound to be an importer of wheat. Canada will be an exporter of wheat for another 50 or 75 years. At present there is an import duty into the United States of 50 cents a bushel. As soon as America wants to look somewhere else to find her deficit of wheat, she is bound to look to Canada, and she will hold out the bait of withdrawing that tax of 50 cents. The United States is a newspaper-ridden country. They have already to go to Canada for their wood pulp, or pulp wood. Canada is flooded with American papers, bills and journals, and a great deal of the British news pouring into Canada comes from American journalistic sources and news agencies, some of which are by no means friendly to the Empire.

Canada, on the other hand, has an intense spirit of Empire loyalty and nationality, and would be extremely loth to consider any separation from this country at all unless absolutely forced to do so by economic pressure. She thoroughly realises that the British form of government is much preferable to the form of government south of the line. Furthermore, we thought the administration of both civil and criminal law in Canada was preferable to the way it was administered below us, and also we felt more secure in person and property. Above all, they must realise in Canada that if the British Imperial Parliaments in various parts of the world will only work together in a spirit of Imperial reciprocity, Empire trade will hold out advantages which will doubtless be greater than the perhaps more immediate advantage which can be attained by closer association with her more powerful neighbour in the South. Therefore, in common with the last speaker, I had hoped that this House would accept the principle of Imperial reciprocity without debate, but if this Clause goes to a Division I would ask hon. Members to put aside all party politics and vote on the simple issue as to whether or not they believe there is any value to this country in Empire. By the figures, the people in the Dominions will judge the value the people of this country put upon Imperial relations.

In what I am about to say I want to make it perfectly clear that I am speaking entirely for myself, and that Members of our party will vote with perfect freedom. If for a moment I thought the issue raised in this Amendment was as presented by the last speaker, I would go into the other Division Lobby against the Government, and not with them, as I am going to do. Nothing does so much harm, when you talk of the British Empire, as to try to label those who honestly disagree with you as enemies of their country. There has been too much of that done, and I at least want to dissociate myself from it. I want also to remind my hon. Friends that in the practical issue that we are discussing to-day I think the subject has gone much wider than the immediate Amendment warrants. I speak with authority which cannot be contradicted on those benches when I say the action even of the Labour Government last year did not cause that resentment which has been mentioned. Mr. McKenzie King, on the Floor of the Canadian Parliament, clearly and definitely said, in answer to a question, that he understood when he was in London that there was absolute fiscal autonomy to every party represented there. In South Africa, General Smuts was challenged by General Hertzog, and he himself made it clear that he had always stood for absolute fiscal freedom. That is why I do not want to get this question mixed by assuming that people who take one view are enemies to the Empire.

Let me try to apply the argument again. I will summarise the argument of my hon. Friend who moved the Amendment in this way. He said this was something that the British taxpayer was paying for the benefit of Colonial capitalists—I think that is a fair statement of the case—and no benefit would accrue to the British people from this reduction. I answer that at once by saying I am in favour of a free breakfast table and this remission that is now made, if it is true that the tax is borne by the consumer, must of necessity be for the benefit of the consumer. Our friends say any tax, however small it may be, will in the end fall on the consumer. That is logic. If that be true, it cannot be wrong to argue that any reduction in taxation will equally benefit the consumer.

Not always.

You will be speaking, and you can state your own point of view.

Come over here.

When I go over there, I will go over from conviction. I stop here equally from conviction. The argument that I have just used is answered by my hon. and right hon. Friends beside me on this ground. They say that may be true if the goods coming into the country constitute the majority of those consumed. That is to say in regard to tea, because the bulk of tea is produced within the Empire, the preference must go to the consumer. But, says my hon. Friend, because in dried fruits and tobacco it only constitutes 6 per cent., the preference cannot go to the consumer. My answer to that is this, that even if that were true there would be a double reason for supporting this proposal, in order to make ourselves less dependent upon the foreigner. I feel that I am quite consistent in the action I am taking. I hope that we shall not hear too much of whether the Colonies or the Dominions get most of the benefit. For the short and simple reasons that I have stated, I propose voting with the Government this afternoon.

This is one of those border-line questions in which the fundamental issues of Free Trade and Protection are not essentially involved. That is why it seems to me a perfectly natural thing that there should be people who take a strong line against general Protection who are prepared to speak in favour of Imperial preference on the scale which enters into this particular Resolution. What exercises my mind in this matter, and I believe practically the whole of the party that sits on these benches, and to a large extent other hon. Members in other quarters of the House, are the facts that in the first place we are concerned very closely with the growth, prosperity and unity of the British Empire. That is true no less of the party which sits on these benches than of any other party. To a certain extent it affects this party more than any other party, because we recognise that in one of our largest Dominions, Australia, there are coming into power not only in the component parts but also in the Commonwealth itself, in all probability, Governments representing points of view which are similar to those which we hold in the Imperial Parliament.

1.0 P.M.

In the second place, our minds are exercised by the fact that for some time a preference has been given to the producers in this country by the different parts of the Empire. In the third place, we recognise that a great deal of these products are produced under very much better conditions inside our Empire than they are produced elsewhere. The speech of one of my hon. Friend's who spoke at great length in support of this particular Clause, gave some instances of it. Finally, we on these benches, and in a lesser measure those hon. Members who sit elsewhere, are interested in reducing the cost of food to the consumers in this country. These are the basic facts on which I am called upon, in common with others, to judge this particular Clause and the preference which this Clause proposes to impose and to in- crease. Let us see the actual facts of the situation. In the first place, we must all agree that as far as the actual effect of this Clause is concerned it is exceedingly small. The preference in the current year on dried fruits is only £70,000. In a full year it is only £120,000. On tobacco it is £350,000 this year and £400,000 in a full year. On wine the effect is said to be negligible. Sugar, I need not remind the Committee, is outside the provisions of this particular Clause. Therefore, in the current year the effect is only £420,000 and in a full year just under £500,000. If this Clause stood by itself and had no ulterior consequences of any kind, I think everyone would admit that it could not have any of those large effects which have been spoken of. It would be equally ridiculous to suggest that a total amount of £500,000, even if we include tobacco, which does not apply to the self-governing Dominions in any large measure, can tie the Empire together or, on the other hand, that it can produce any disastrous or serious effects inside this country.

The effect of this remission of taxation will not be, at present, at any rate, to reduce the price to the consumer. I think the Financial Secretary to the Treasury admitted that. Let me point out the reason. Where a tax is levied for revenue purposes only, and where there is no corresponding production inside this country, and no corresponding production anywhere coming in at a lower rate, it is true that lowering the tax does lower the cost to the consumer of the article. But it is well known that the fact that there is any part of the production on which the tax does not fall, or which pays at a lower rate, docs not lower the price, because the price will be determined by the bulk of articles coming in that have to pay the higher duty. So long as the demand is sufficient to bring in such goods, in spite of the duty, in any considerable quantities, it is these goods that will determine the price, and not the goods that come in either free or at the lower rate. The only cases where that would not be true are either where the articles coming in are of a different kind (as is mainly the case in regard to Indian tea and China tea, which are not competing substances at all), or, on the other hand, where so large a bulk of the goods come in at the lower rate that those coming in at the higher rate are entirely subsidiary and cannot fix the price.

By these preferences in themselves, we are not doing what the Colonies want. By no extension of these preferences, providing we confine the preference to goods of the character affected by the present preference, are we doing what they ask us to do. What they really ask us to do is to tax the fundamental necessities of this country in order to give them a preference. That we are not doing by this proposal, and we are not going to do it. Hon. Members opposite, who are enthusiastic supporters of preference and protection, do not suggest that we are going, in this country, to put any substantial tax upon food in the shape of meat or wheat in order to give a preference to the Colonies.

My next point is that the Colonies by their preference to us are not giving us what we want. What we would like to get is Free Trade within the Empire. They do not give that, and they have told us frankly that they will not give that, and we understand and respect their point of view. Those are facts of the situation which cannot be challenged seriously. The one fact that might be challenged seriously has been admitted by the Financial Secretary to the Treasury, at any rate so far as the present is concerned. The first conclusion which follows on those facts is that, even if it were assumed that preference on a large scale would be an effective means of binding the Empire together—preference of a kind which satisfies the different parts of the Dominions, of a kind which really satisfies the people of this country —even if that were really true—and I doubt it. I do not believe that economic bonds would bind the Empire together effectively—it certainly cannot be done either by these remissions of duty or any conceivable extension of these remissions which is likely to be carried through Parliament in this country. This being so, it seems to me that the suggestion that the remissions of duty proposed by this Clause are going to bind the Empire together or represent any substantial step towards binding the Empire together is entirely without foundation.

The next point is the question of good conditions. We, on this side, feel strongly the desirability of producing under good conditions, but the criterion of Empire production is not an adaquate criterion of good conditions. By putting on Empire Preference you do not ensure that the articles will be produced in good condition. It may be in certain cases in favour of good production as against bad production—in the case of currents, sultanas and all those things it may be—but where you are not dealing with self-governing Dominions but with Crown Colonies in other parts of the Empire you may be doing exactly the reverse. Further, I do not think, even if you are favouring good conditions, that you are taking steps which will effectively achieve the purpose which you want to ensure of insuring that the goods coming into this country are produced in the best condition and are not produced in condition injurious to the health of those who produce it.

The final conclusion at which I arrive is that, whatever the purpose you are seeking, you will not by this proposal achieve it. In other words this is the wrong method of achieving an end that may in itself be desirable. I should be wandering too far from what would be in order if I dealt at great length with what are the right methods to adopt. But I think that I am entitled to indicate two points which cover what I believe to be the right methods of dealing with this thing. In the first place I hold that by co-operative purchase we can achieve in the main the result which we want. We can achieve it much more effectively than by this preference duty. Our Dominions are willing to co-operate in that direction and we will confer a great deal larger benefit on them by a larger system of co-operative purchase than by any system of preference and for this reason. When we come to co-operative purchase we need not confine it to matters of such small importance as currants, raisins and things of that kind, but we can extend it to the things of greater importance, such as meat, wheat, apples, and all the things which we are prohibited from dealing with under the present proposals, because a preference on those things would be putting a definitely new tax on the cost of living of the people of this country. Co-operative purchase would probably be effected by the Government of this country from the Governments of those other countries, and we should have a scheme which would do something to bring people together and do it on a scale infinitely larger than the scale on which the present proposals could do it.

With reference to production under good conditions there, again, by co-operative purchase, you can exercise a discriminatory power by insisting that the goods should be produced in proper conditions. Your position in this matter would not be different from that of a municipality giving out a contract. A municipality is able to make the condition that the labour of the contractor shall conform to certain good conditions. It is precisely the same in the case of a buyer on a sufficiently large scale. He can go a very long way to insist on certain conditions which must be carried out by the manufacturers of the goods which he is prepared to buy.

Finally, by a very much larger use of international labour legislation, combined, if necessary, with the provision that the articles bought shall be produced under proper conditions, it will be possible to achieve the ends which many of our friends have in view. Therefore I have no hesitation in voting in favour of this Amendment because, although I share with my friends who take both points of view on this side in the desire to consolidate the Empire, and in the desire to protect labour in this country and in the Empire, and in the desire of employers to distinguish between those whose business is so conducted under good conditions and those whose business is not, I do not consider that the methods proposed in this Clause are suitable for this purpose. Other methods are much more suitable. I do not think that these proposals will make it easier, but I think that they will rather make it more difficult to carry these wider proposals into effect.

I want if I may to refer to the speech of the hon. Member for Anglesey (Sir R. Thomas). The hon. Member quoted an address by Sir Joseph Cook the High Commissioner for the Commonwealth of Australia, and by that quotation appeared to suggest that Sir Joseph Cook was not in favour of preferential duties. He did not say, as he should have done, that Sir Joseph Cook about a fortnight ago wrote a long letter in which he stated definitely that he did not believe it was possible to secure the future of the Empire upon a co-operative basis without the immediate institution of preferential and reciprocal duties. This Debate has been remarkable in this that on the whole the speeches made have kept well away from the usual academic discussion between Free Trade and Tariff Reform which is precisely as it should be and my only regret is that the late Colonial Secretary (Mr. Thomas) should have thought it well to have suggested in this Committee, and through the Press, that in dealing with a matter which concerns not this country but the whole Empire, of which we are the centre, there should be a desire on the part of those holding the conflicting views which we chance to hold in different parts of the House to cause friction between the various parts of the Empire

Surely, in fairness to my right hon. Friend, the hon. and gallant Member ought to recognise that he was merely rebutting a view previously put by an hon. Member opposite, as to what the effect upon Dominion opinion would be if a certain number of people in this House went into a particular Lobby.

Of course, I quite accept that statement. I beg the hon. Gentleman not to imagine that I am trying to create friction or to misquote anyone. That is the last thing I desire. I wish, as one who knows the Dominions and Colonies extremely well, who has been closely associated with them from a very early age, to deal with this matter upon the same lines as the hon. Member for North Southwark (Mr. H. Guest), whose courageous and sincere speech was admired by Members in every quarter of the House. I have listened to the attacks made upon this Clause, and it seemed to me that in the main it centred round this argument—that the amount of goods we are likely to get from our Dominions is not sufficient, as compared with the quantities got from other countries, to benefit the consumer here. I know that the hon. Member for Keighley (Mr. Lees-Smith) gave us figures. Those figures are known to all of us, and there is nothing very clever about them. One does appreciate that at the present time the quantities that are coming in from the Dominions and Colonies are not very great. But how long have the Dominions been going? What are their populations? Surely in the history of an Empire such as ours, four or five decades are as nothing. It will not be 50, 80 or 100 years before the 6,000,000 or 7,000,000 people in Australia, or the similar number in Canada, will become 50,000,000, 60,000,000 and 100,000,000. At the present time the land around the coast line of the Commonwealth of Australia is sufficiently developed to support 100,000,000 people. It wants only a little encouragement from the old Mother Country to get that land developed far more quickly than is the case now.

Is it too much to ask that we should take a wide view, that we should endeavour now, in the early stages, to get the friendly feeling necessitated by inter-Empire trade at work when it can be most beneficial? I do not want to introduce sentiment. Members on the Liberal benches jeered at the Financial Secretary when he mentioned that they abhorred bringing in sentiment. This is the one question in which we can allow sentiment to be introduced. These are people of our own blood. Surely there is nothing very dreadful if we do a little better to them than to others? By mistake, probably, I was sent three or four days ago a packet of leaflets from a Liberal organisation, and in one of them "Free Trade, the Foundation of Peace," I came across this sentence:— competition from foreign countries, and we are going to propose so much that foreign nations will be envious of us.

As to the subsequent prosperity, is not the implication that you must constantly have barriers against the rest of the world if you are to maintain prosperity?

Here is another leaflet. It says—

I look forward to the time, given the encouragement that is asked for, when the things that we get from our Dominions and Colonies will more than counterbalance the goods that at present they take. We have been told that we are not giving the Dominions what they want. After all, it is for the Dominions to say. They have unanimously offered us this Preference. Are we going on taking that Preference year after year and do nothing in return? May I appeal to hon. Members opposite? I do not wish to speak in any party spirit, but merely as one whose sole interest is the development of our Empire. Let us assume that there are parents who have managed to bring up a great family and the family cornea to the parents and says, "Look here, you are a bit down on your luck. We will join with you and see if by combining we cannot do a little bit better so as to place our family as a whole on a basis of prosperity." Suppose the parents were to say in reply, "No, go about your own business; we will look after our own affairs." That is surely not common sense. Someone has said that the Government's proposal is the thin end of the wedge. I hope it is. I hope that Imperial Preference will go on expanding and expanding until eventually we get Preference on every possible thing to which Preference can be applied without damage to the consumer in this country. I do not want to do harm to the foreigner. I say "Treat the foreigner as well as you like, but treat your own kith and kin just a little better." It is something that a number of hon. and right hon. Gentlemen who sit on the other side of the House are coming into the Lobby with us on this question. It shows this—and I hope it will be remarked outside—that, whatever may be our differences of political opinion, there is on this subject a feeling quite apart from politics which is more and more drawing people into the belief that the Empire stands above political principles.

The hon. and gallant Member who has just sat down has appealed to us to support these preference duties upon the ground that they will be a means of cementing together the Empire. I agree with him that the one thing we all desire is to see the Empire cemented together. The question which arises is whether this is the best way of doing so. Reference has been made to an increased volume of trade with Australia. It is perfectly true that we have been doing an increasing volume of trade with Australia during recent years. I believe that within a few years there has been an increase of 60 per cent. in terms of money, and it is equally true that the volume of trade with Canada has increased by 20 per cent. It would also be true however to say that the volume of trade with America has increased by 100 per cent., and there is no preference in that case. The increase in the volume of trade with America was not due to a preference but to the increased debt. The hon. and gallant Member who spoke last omitted another fact. He did not say what return there had been for any preference which we may have from Australia. It is a question how far that preference is of any value to us; it is certainly not looked on by the Australians as valuable as I propose to show later.

The important fact omitted by the hon. and gallant Gentleman is that we have given this advantage to Australia—that she has been able to borrow money in our market at a much cheaper rate than anywhere else in the world. We have lent her money at a preferential rate to the amount of £1,000,000,000. This has enabled her to buy goods in our markets, because the greater part of that money is spent on goods in the country which lends the money. She has a distinct preference there, which enables her to carry on with advantage to her own citizens. If this sum is calculated on the basis of the number of households in Australia, it works: out at from £700 to £800 per household throughout the whole of Australia. When we talk of cementing the Empire, we should remember that the British Empire is two things. One is the British Empire as we know it, and as it is usually referred to, and the other is a great commercial Empire. How are we to serve the interests of a great commercial Empire? By enabling ourselves through free markets to have a surplus for the purpose of investment, so that we may be able to lend on a preferential rate as we do to Australia. That is the way to increase our trade. That £1,000,000,000 is the main reason for the increase in the volume of our trade with Australia. To say that a rebate on raisins is going to cement the Empire is ridiculous.

There was the other argument which we had from the Financial Secretary to the Treasury that if you reduce the tax, then you reduce the price to the consumer. That is true, but on the other hand, in order to make the preference effective, you have to maintain the tax, and in order to give a permanent preference to the Dominions, you must have a permanent tax. That is to say, you are stabilising prices as far as you can, but even supposing that argument to be true, that is not actually the way in which the preference works. Take the Australian case as an example. Australia gives us a preference on certain articles, but they have expressed their view clearly as to the mode of working the preference which they give. They say "First we put on a sufficient duty on the articles we import to protect our home market; having done so, we put on an additional duty as against the foreigner, and in this way we give a preference." Where is the reduction in the price to the consumer? They first see that the price to the consumer is kept sufficiently high to protect the home market, and then put something on over and above that in order to give a preference. They do not regard it themselves as giving any advantage to the mother country. To talk of that as a method of cementing the Empire is ridiculous. The one way of cementing the Empire is by the building up of a greater commercial Empire. It is by enhancing our industries, by enabling us to save a surplus from which we can advance assistance to the Dominions, by increasing our commercial prosperity and we shall enable the British Empire to flourish in a way in which it has never flourished before.

I would not have intervened in the Debate had I not felt bound to say something on behalf of my colleagues from Scotland, in whose names an Amendment appears upon the Paper. They regret that they cannot be present. They are at Ayr Burghs, fighting a bye-election, where the men from the Clyde and the Tay are trying to win the "bonny banks of Doon" to the Labour movement, as we have already won the Tay and the Clyde. Those of us who come from Scotland are astonished that there should be hostility to our Amendment, even on the Labour Benches. We cannot understand why exception should be taken to holding out the right hand of friendship to our labour friends across the sea. The statements made by members in several quarters of the House would lead one to believe that we get nothing in return for anything we may give to our Colonies. The hon. Member for Analesea (Sir It. Thomas), I think, distinctly said that we got nothing in return. I am astonished that a man who evidently has the intelligence necessary to reach the Floor of the House of Commons, should make such a statement. The Colonies have rendered yeoman service to the Empire, and it ill becomes any men who pose as being in the van of progress, as the deserted Liberal party do, to make statements of that kind. When you come to think that we are extending consideration here to our friends, say, in Australia by giving a preference to dried fruits coming into this country, we from the Clyde, at any rate—and it is only for those, my immediate colleagues, that I can speak—do not believe that any preference is the cure to the situation. We consider that the cure is that we should purchase the entire produce of our Colonies, and sell it here to the consumer at cost price.

That is our position. We do not believe that Preference touches the fringe of the question. But we are certainly not in favour of Free Trade, to sweat every part of the world for our aggrandisement, such as the Liberal party would try to drive this country into. That is the reason why my colleagues are at the moment over the border, in order to chase the Liberal party, as far as Scotland is concerned, into the sea. The hon. Member for North Southwark (Mr. Haden Guest), in his speech this afternoon, drew our attention to the awful conditions under which raisins, blue raisins, sultana raisins and currants were produced in the Near East. When he was delivering himself and giving this Committee, and the country at the same time, valuable information, I was astonished that Members here should be laughing, and that I should hear them say, on the Liberal benches, "We know all that." The country does not know what my colleague was stating, and it is my business to do what I can to emphasise the fact, and that is that a little coterie of Britishers, French, and Italians out in the Near East are not only exploiting the consumer here in Britain, but are poisoning our people. The conditions under which the currants are packed and the conditions under which the people work there are a disgrace to civilisation. Talk about the Fair Wage Clause! That Clause is in operation in Australia, and, therefore, it is for our own Colonies that I put in a plea here, as a Socialist, on behalf of the Fair Wage Clause, in operation in Australia, where the fruit is produced under the best hygienic conditions. They are in competition with the Near East, where the conditions are absolutely appalling.

There are Members of this House who, if they cared to do so, could tell the actual facts of how the workers labour, and the awful conditions under which they work, in plucking and packing and dispatching the raisins and currants to this country. And I wish to appeal to Members in every section of this House to stand by us here from the Clyde on this occasion. I want to say, before I sit down, that they have to remember that the last time they followed me into the Lobby, their country approved of the part they played. [An HON. MEMBER: "When was that?"] Against the Prince of Wales' tour. They are not friends of mine. They are our friends when necessity calls. Necessity is calling at the moment, and here we have an opportunity, in my native land at the moment, to use a common phrase that has been used to-day, but may well be used again, of "cementing the British Empire." I am all out for cementing the British Empire. [An HON. MEM-BER: "What about the Communists?"] The Communists can look after themselves. I am all out for the cementing of the British Empire, as I have stated here before, and in that memorable speech when I protested against the Prince of Wales' tour I pointed out, just as I am aixious to point out now, that I believe it is possible to get the great result that my fellow-countryman Robert Burns stated, when he said

how do you expect my comrades to be able to make friends with people who do not understand our language, who have a different literature, who are entirely different from us? We do not say one thing on the platform, and another thing on the Floor of the House of Commons.

In my election address, I have always said that I stood for Clydebank first. Charity begins at home, although it ought not to end there. First let us make ourselves right with our own Empire—with our own people. The sea is getting less and less, owing to man's ingenuity over it. Our Empire is coming closer together. The only thing that is keeping it behind is that the thoughts of men are not keeping unison with the efforts going on in science and engineering. Therefore, while we stand here as Socialists, we are prepared to back the Prime Minister, when he said that he favoured the idea of our purchasing the product of our Colonies, and selling it here in our native land at cost price. That is how we stand; we wish to enunciate that, and let the world at large know the point of view that is held by the men from the Clyde.

As one who was born in a Dominion, I do not wish to approach this subject as one of sentiment or gratitude. Sentiment and gratitude have both been mentioned this afternoon, and reference has been made to what the Dominions did for us during the War. I, therefore, propose to ask nothing in the way of gratitude for the services, let us say, of Australia, who, out of a small population of something like 5,000,000, sent 332,000 volunteers to the War, of whom 58,000 were killed and 137,000 wounded. I propose to treat this matter entirely from the point of view of the benefit that may accrue to the inhabitants of this country, and also I propose to deal with the arguments, often brought forward by Members opposite, to the effect that preferences granted to us by the Dominions are merely eyewash, that those preferences do us no good at all, because the tariffs are so high that we cannot climb over them, and the fact that duties charged on foreign goods are still higher really does not affect the issue.

On the point of whether the preference given to us does us any good, I should like to point out that it even affects my own constituency. I find that in the six months ending last August, New Zealand took nearly as many gloves from us as the whole of Europe, and Australia, nearly three times as many. I think the Committee will agree with me that there is no eyewash about that. In December before last the Controller-General of Customs in Australia stated that France had offered to reduce her Customs on Australian goods by 75 per cent., and the United States had offered to reduce her duties on Australian goods by 50 per cent., if the Commonwealth would give those two countries the same terms as she gave us, and Australia refused. There is no eyewash about that.

I should like to turn to the Union of South Africa. We have all heard of the proposals made of late in that country that the tariffs should be increased from 5 to 10 per cent., and that preference should only be given on a quid pro quo basis. That means if we gave no preference to the Union of South Africa, we should get none. At the present time there is a 3 per cent. preference. South Africa is full of German agents, and I am informed there has already been appointed an honorary Trade Commissioner for the Union in Berlin. Under these new proposals, if we get no preference at all, our export trade to South Africa will be ruined to the detriment of the British manufacturer and the British worker, and in that connection I should like to point out to those hon. Gentlemen opposite who are so fond of telling us that imports pay for exports, that it is equally true that exports pay for imports, and that if we lose our export trade, we shall not be able to have those imports so dearly beloved by Members of the Liberal party.

I have mentioned the argument we so often hear that these Colonial preferences do us no good at all. I should like to point out in the case of Canada between the years 1892 and 1897 our sales dropped by £1,750,000. Then preference was given. Between that time and 1913, they rose by £1,000,000 a year, and in the full volume from £6,000,000 to £24,000,000. I think there is no eyewash about that. With regard to Australia, between 1882 and 1906, our sales went down, although Australia's trading increased from £24,000,000 to £44,000,000, but with preference our sales went up from £20,000,000 in 1906 to £34,000,000 in 1913. Then, during the War, our sales fell, and Australia increased her preference for British goods, and our sales have risen to two-thirds of Australia's total purchases. There is no eyewash about that, and I should like to say to members of the Labour party who disagree with us on this point that they should remember the remarks of the late First Lord of the Treasury on the 28th May last, when he said we should do everything possible to cultivate closer trade relations with our Dominions. Here is our chance What he said was perfectly true, and I would, to the best of my ability, impress on the Committee that if we fail to take the opportunity now, if we fail to recognise the truth of what the late First Lord of the Treasury said, we shall be putting a tremendous brake on trade, a handicap on industry and retarding employment. Many years ago the late Sir Henry Parkes, one of the greatest Dominion statesmen, said that the strongest bond of Empire was the crimson thread of kinship, and I would beg the Committee to do nothing to put a strain too great for that thread to bear.

I have only a few words to say, but I would not like to give a vote to-day without giving a reason why I am going to vote for this preference proposal. I happen to believe in Free Trade, but I am also wholeheartedly a Trade Unionist, and all my time I am particularly anxious to give to those who are making goods under the best or better conditions, every chance possible. There is only one way, so far as I can see, in which we can encourage the better production of commodities which are introduced into this country, and that is, either by keeping them out altogether if they are made under conditions which are not trade union conditions in the importing country, or else by a method of this kind to help our colonies to send us the things they produce under better conditions than those in other countries. I do not agree with my hon. Friend the Member for Keighley (Mr. Lees Smith) when he said a Chancellor of the Exchequer approaching this matter in the future would not be courageous enough to deal with the question, as then might be necessary, from the point of view of the country. If you have on this side of the House a Chancellor of the Exchequer who believed in Free Trade and who was willing and anxious to give Free Trade to the country, he surely would not only abolish the tax put on these things but Preference at the same time. That, however, is not the position we are-in to-day.

There are certain taxes going to be put on. They are going on in relation to other countries whether we like it or not. That being so, I am anxious, so far as I can, to break down, if I may, the effects of Protection by giving to our Colonies a preference in exchange. I should like to see, not only on this side of the House, but on that side of the House, those courageous enough, to say to our colonies: "You are sending us necessary commodities and we are not going to impose any taxes upon you." I trust that that sooner or later will come about in so far as this country is concerned, and if at any time there is a general sweeping away of Protectionist taxes, I should support that general sweeping away. But there is no general sweeping away. There is the imposition of certain taxes on certain commodities— the preference proposal is one which I think is for the benefit of this country, and if it be in no other way it will give the people of the other countries a better chance of better conditions of labour than they otherwise would have.

The only argument that can be adduced against the proposal is this: That by the imposition of such Preference a certain amount of revenue is lest to the country. That is perfectly true, but I am not one of those politicians who decry sentiment. I believe in a certain amount of sentiment. I believe in co-operation on the grounds of sentiment, and also on the ground that the co-operative societies say to me: "We are producing goods under certain conditions: we are giving better opportunities to our workers for doing so." I go to a co-operative society and spend my money there, sometimes paying more than I should at a competitive institution, but I go to the cooperative society because of the better conditions under which the commodities are produced. I say that it is our duty to do our business in such a way as to safeguard the interests of the workers, not only in out own country, but in the British Dominions. If by the imposition of these preferences we force foreign countries to pay attention to the labour conditions that exist there we shall have accomplished a great amount of good. On a previous occasion I was out of order when I wanted to impart some information to the House as to certain aspects of the Wembley Exhibition of last year.

2.0 P. M.

The British Empire Exhibition was for the purpose of advertising Empire productions. You were able to get there fruit grown in the Empire. I bought some. Later when I wanted to buy some more I unfortunately could not get it. That has its lesson for us, and it certainly seems desirable to go further in the way of Preference so as to benefit both the home and the colonial market. Because we cannot at present get all that we should like that is no reason why we should stand still in this matter and not get what we can! That is the argument that seems to me to be put forward by some of my hon. Friends: because you cannot get cooperative markets, because we cannot get co-operative partnership for Empire productions, that we ought to leave things as they are. Some of us are tired of the old Liberal doctrine in these matters. [HON. MEMBERS: "Hear, hear!"] Yes, but we are tired of the old Tory doctrines too. We take a point of view quite distinct from that or this side, of the old Liberal or Conservative doctrine of Free Trade or Protection. We take a point of view which means that wherever possible we ought to help all our fellow-workers by making conditions such that no capitalist in any country is going to get any chance unless his goods are produced under the best possible conditions. I listened to the speech of my hon. Friend the Member for North Southwark (Mr. Guest), who gave us some details about Smyrna and what he had come into contact there; with the kind of work done in the packing of the currants and the raisins. In view of what he said I think many of us should, if need be, do without currants and raisins. My hon. Friend has rendered us a service in telling us these things not only from the point of view of helping to abolish sweated labour, but of the insanitary conditions; and I want to know whether the Liberal party wants us to go on importing articles made under con- ditions such as these? If they do that then small as their numbers are I think they will yet be smaller.

In supporting these preference Resolutions, I do not think that I am in any way going against the great principle of Free Trade. If taxes are going to be put on in spite of me, then I am going to do whatever I can to minimise the effect of those taxes by giving preference here or anywhere else where it will help better conditions of labour. If anyone should corns forward from whatever side of the House and suggest that we should do away with all these protective tariffs I should vote for that and preference would go at the same time. So long, however, as there is Protection I am going to stand up for the Colonies and to see that they get fair play. One must not forget that while it is perfectly true we cannot at present get Free Trade within the Empire—and I am anxious that we should—on the other hand, if we could get Free Trade within the Empire with a Protectionist tariff against other countries, then Free Trade would be worth considering under those conditions. [HON. MEMBERS: "Hear, hear!"] I am not saying that we would necessarily accept it. If we could have Imperial Free Trade, with some barrier against other Protectionist countries, such a proposition would be worth considering. What, however, I say is this: that, after all, it is of no benefit, while we cannot get Free Trade within the Empire, while our Colonies are in the main Protectionists, that we should not recognise the fact that they have given us some preference which is of help to the manufacturers of this country, and, for all I know, may be of benefit to the producers in Australia and elsewhere. At all events, there is no reason why it should not lead to the importation of our motor cars into Australia. Perhaps it does now. There is no reason either against the idea that by and by hon. Members who desire motor cars should not, if Australia becomes an exporting country, get some from Australia if they prefer to do so.

After all, I think the argument is not strictly correct, as certain of my hon. Friends say, that so far as the commodity comes in in small quantity it will make no difference to the consumer. To put the argument that way is to suggest that the bulk is never likely to increase. If so much comes in without any preference and preference is given, what is likely to happen is that the business people in the Colonies will consider the position and will endeavour to send more goods than otherwise. Preference, so far, will encourage them. Otherwise it is no use to them, no use to the Colonies as Colonies or the Dominions as Dominions, though it may be just a little bit of use to a particular importer. I am convinced that we have got to tackle this economic problem; as an experiment we have to show what this will do. If a year or two hence there has not been an increase of these commodities from the Dominions, then we must mark it down as a failure, but if there has been an increase, hon. Members may rest assured that there has been somewhere a diminution in price, which has increased the demand for these commodities. My fellow workers here must not think that some of us who are workers are not looking about to see where we can get Empire products. We believe that they are made under better conditions than some things elsewhere. Reference has been made to places where only things made at home or made in the Dominions are sold. I hope the day will come—and I hope the co-operative societies will assist—when it will be possible for those of us who want Colonial products to get them. If we can get the products of our Dominions through the co-operative societies, I can tell my hon. Friends who are interested in co-operation that there is likely to be a very large sale for them through that source. [ Interruption. ] We cannot get them in all co-operative societies, unfortunately.

I am not averse, like my friend from the Clyde, to trying to cement the Empire together. I believe the British Empire is the greatest reforming body there is in existence. I do. I think it is the greatest standing security against war that we have got, until our friends over there will come to some arrangement whereby all nations will be bound together, as we want to see the British Empire bound together, for the prevention of war. Meantime we ought to encourage our own kith and kin wherever we get a chance. All of us have got relatives abroad. There is hardly a man from our trade unions who goes to the Dominions who, ardent Free Trader as he may have been here, does not change his views when he gets there. That is a fact. We come into contact with those cases. They see that the conditions of labour are better, that the pay is considerably better, not only in relation to our own country, but in relation to foreign countries. As far as I am concerned as a trade unionist, I shall always do what I can, through the economic machinery of our country, to encourage our fellow-countrymen overseas to maintain those better conditions, either by buying their commodities or giving them preference over those elsewhere who make things under the conditions which have been related to us in the course of this Debate.

I only intervene in this Debate because of an interesting speech made some time ago by the hon. and gallant Member for Dartford (Colonel McDonnell). He told us he was familiar with the condition of things in Canada, and that the spirit there was altogether in favour of Preference. He ended his speech by suggesting that the issue in this Debate was between those who are for and those who are against the Empire, a remark which called forth the observation from the late Colonial Secretary, that if that were the issue he would vote in the Lobby against the Government, contrary to what he had intended doing. I had the advantage or disadvantage of being nine years in Australia, and for most of that time in the Senate, and for 18 months I took part in framing the first Commonwealth tariff. The House should know that the view commonly put forward that the Dominions were, to a man, so to speak, in favour of this reciprocal preference, and that the Little Englanders of this country were the only obstacle in the way, is not really true. In the Dominions there is a division of opinion on this subject, as there is with us. I know from reading that that division exists in Canada, and I know as a fact that it exists in Australia. I was a member of Sir George Reid's (the Free Trade) party which, curiously, in that country is more or less the capitalist party, the Protectionists there being represented by those who hold the opinions of members of the Labour party here. It is true that the Preference party were the stronger, and that we were always in the shades of oppo- sition; but we were a strong party, and the view taken by Sir George Reid and followers of his like myself was this.

We were, of course, as much in favour of cementing the Empire as those of the other side. We believed as strongly as anyone that the best possible thing that could happen would be to gather together all those territories painted red on the map, and have a ring fence all round and no fences within for though that would not be quite Free Trade we should be doing a great deal, not merely for the Mother Country, but for the extremities and for the world at large, in that you would secure good will and harmony over a quarter of the world's space and among a quarter of mankind, and do a great deal to end strife throughout the world. That was common ground; but we differed from the preferential people in that we said, "Your method is not the best one, you will defeat the very thing you are aiming at." I believed then, 20 years ago, as I do now, in the arguments upon which I then formed my conclusions. In the first place, it is my firm conviction that economically this Preference will prove futile, and that politically it will prove unwise. I say that economically it will be futile for this reason, that though it is true each side can approach towards the other a little way, it is a very little way before they come to a dead stop. Why do I say that? Look at the Dominion point of view. One certain thing is that the Dominions never will, or will be allowed by their people to, advance an inch further than is requisite for giving perfect shelter to their home industries. Their country is studded with little infant industries, of which they are very proud, and their whole idea is to make their Dominions big, self-contained units. There they have votes as we have. Australia has towns with subsidised factories, giving employment to the great bulk of the people, and there they have picture houses, football fields, and all the amenities of life. The broad acres, however are not well known. The Australians imitate us in everything we make, and they imitate our institutions and our manners, and if they want to give a real Preference to this country they can only do it at the expense of their home manufacturers. They say, "We get something from foreigners, but the way we give a Preference is not by lowering a tariff against the mother country, but by raising it against the foreigner, and we are ready to place in the hands of the British manufacturers what we can take away from the foreigner in this way."

Then there comes a definite stop. In this respect I am trying to give a true picture of what I have seen myself. Unless we get some advantage over the foreign importers in regard to these things, the preference is really useless. In this way we advance to one another just a little bit, and then we come to a dead stop, and what do we gain in that way? You have not got one inch nearer your purpose, but you have done something which in my opinion is politically unwise, and you are attempting to achieve something in this way which you can never fulfil. The hon. and gallant Member whose speech caused me to intervene has had some experience in Canada, and he said that there was a strong tendency for Canada to amalgamate with America. There you have a strong tendency working in Canada towards the west, and do you think the tendency towards us will be greatly strengthened if you have a preference? The result will be that you will have bargaining and the Canadian will say, "You see what we are putting up with; we are giving you a preference and what are you going to give us?" Take the case of Australia. The President of the Board of Trade said they were offering us a preference amounting to above £7,000,000, but that is all nonsense. The Australians on the strength of that statement will say, "We are giving you £7,000,000 in preferences, and you are giving us only £1,500,000, and you must give us some-more." In that way you will get this irritating system of bargaining, and you will substitute a footing of business for a footing of affection, and you will get back to the old dangerous days of George III, when we lost America because of our interference with her fiscal system.

Immediately following that you had Burke in this House indulging in oratory, and he told us that the way to strengthen our Colonies and unite them more closely to us was to adhere solely to a basis of mutual confidence and leave our Colonies absolutely free to work out their own commercial destiny. From that period began the new system of colonisation, and the Colonies established Governments of their own. They are now free and working out their own salvation in their own way, and the result has been that the independence they got has become rooted in their own soil. I am sure that Australia, Canada and South Africa and all the Colonies are as anxious as the most imperialistic people in this country to weld the Empire more solidly together.

I am sure that nothing would be better for them or us, especially in our European markets where the trade in coal is dropping off, than to achieve that solidarity, and then if we were true to one another we could defy the rest of the world. You are not, however, getting any nearer to that desirable state of things by the institution of these little trumpery bonds that will never bring you really together, but which while they are not strong enough to effect the purpose sought, are sufficient to irritate and disjoin forces, and which are likely to undermine that loyalty and affection Which has sprung up under the system which we have hitherto adopted.

I do not rise to continue the Debate at this stage at all, but only for the purpose of putting before the Committee the position of the Government with regard to the progress of business. We hope and expect to get this afternoon Part I of the Finance Bill. The Clauses which follow raise no point of serious controversy. It may be that a few observations will have to be made upon them, but they do not raise any point of substance. We have not moved to extend the hour of the sitting, and, therefore, we have deprived ourselves of any weapon which the Government have of prolonging the Sitting. I am sure that will be recognised in all parts of the Committee. If it be understood that we are going to get to the end of Part I before we separate, it might be the wish of the Committee to continue the very interesting, the remarkably interesting, Debate that is taking place on this broad issue of Imperial Preference until within quite a short time of the closing of the Sitting. That would be entirely agreeable to the Government. But if, on the other hand, the remaining Clauses are to be discussed, then I would appeal to the Committee to bring this general discus- sion to a close in time to allow that to be done. If we can dispose of Part I to-day, we shall be able to begin the important Income Tax, Super-tax and Death Duties discussion in the full light of Monday and devote the very important hours of Parliamentary sitting to their consideration. That, I think, would be a reasonable and businesslike way of managing our affairs. I only put it before the Committee, because, if this Debate is to be continued until nearly four o'clock, we should expect the other Clauses to go through without debate, but, if that is not to be the case, we would ask the Committee to close this Debate at an early moment.

In view of the interest in this Debate and the very large number of Members who are anxious to take part in it, I do not think that it is possible that it should be terminated now. Indeed, I do not think we could be more profitably employed between now and four o'clock. An understanding, however, has been reached between the Government and our own supporters that the whole of the Committee stage of the Finance Bill shall be concluded by Wednesday. Therefore, it is a matter of indifference to the Government how the time up to Wednesday is allocated between the different portions of the Bill, and, as we attach greater importance to particular parts of the Bill than to others, I think it remains with us, and not with the Government, to decide the length of debate on particular items in the Bill.

I should myself readily agree to that if only the right hon. Gentleman were in a position to speak for all sections of the Opposition, but that is our difficulty, and it is a very obvious one. I am sure that the hon. and gallant Member for Leith (Captain W. Benn) will wish to deal with the Committee in a reasonable spirit, and perhaps he will let us know his view.

This point has just been sprung upon us, and I have not had an opportunity of discussing it with my hon. Friends, but, speaking for myself, I should be inclined to think that the present Debate might stop in time to get the other three Clauses this afternoon, because there is nothing controversial in those Clauses.

May I ask whether the right hon. Gentleman proposes himself to make any contribution to this Debate?

I spoke at some length on this matter in the small hours of the morning, and I had not contemplated making any lengthy contribution to the discussion now, but I can, if desired, contribute to the Debate and make some reference to one or two points that have been raised.

Of course, our attitude will be considerably modified if we have the knowledge that the right hon. Gentleman is going to defend his proposals. We would make some sacrifice to know what is his new point of view. There is another thing. This Clause only deals with the readjustment of existing preferences. I presume, if any overflow of debate be necessary, it will be raised for a brief interval on the Clause which abolishes the Section in the Act of 1919. The third point I would make is this. The right hon. Gentleman knows quite well that he has the power of terminating the Debate on this Clause at any time he thinks fit, and, if he would give us some few minutes to examine them, we should be quite prepared to agree to Clauses 9, 10 and 11. I suggested that to the Parliamentary Secretary to the Treasury, but he, in an airy way, said that he hoped to get the Income Tax Clause as well.

If it will expedite business, I will make the few remarks that I have to make at the present moment. The Debate which has taken place has been a very remarkable one, particularly as it has been sustained by speeches from the benches of the official Opposition. [ Interruption. ] That is a very limited way of putting it. We certainly do not consider this question of Imperial Preference a Liberal, a Tory, or a Socialist question; it is really a national question, and it stands upon a national basis since the extremely controversial issues have been by general consent eliminated I remember this Imperial Preference controversy from its very earliest days in 1904 and 1905, and I am bound to say that I believe, if the proposals which are now put forward by the Government had been put forward by the Conservative Government of those days, they would even in those distant days have won a very great measure of general agreement. But it was the conviction of that great statesman, Mr. Joseph Chamberlain, that it was essential to the full development of Imperial re-union that taxes, moderate taxes, but still effective taxes, should be imposed on corn, on moat, and on dairy produce, and that, after these taxes had been imposed, there should be given a rebate of a preferential character to the Dominions in return for concessions on their part more considerable than any they had yet given affording us entry for our manufactures into their markets. That was how this great controversy began. I do not wish to go into all the details. It is really no use the hon. and gallant Member shaking his head. I lived through every hour of it, and I know every detail of it.

I am afraid that the right hon. Gentleman has forgotten that, when the matter was very acute in 1907, he expressly stated that the preferences on existing duties were useless, that they would be only a beginning.

I am speaking on 1904 and 1905, when that was the great issue on which this country was torn in halves, when political parties to a very large extent readjusted themselves, when a number of important Members and Ministers of the Conservative party differed from the Colonial Secretary of those days, and one of those great cleavages in public life occurred which occur only at rare intervals of, perhaps, a generation in our affairs. After that, the controversy was maintained for six, seven or eight years, on the basis that, if you wished to give a preference to the Dominions, you must put a tax on food; and for my part I have tried to explain in former years—20, 15, 10, or five years ago—I have always tried to explain that I believed it would be a great danger to enter into a hard-and-fast bargain with the Dominions about reciprocal preferences based upon the taxation of bread, meat, or other fundamental necessaries of the people's life. Those articles are subject to fluctuations due to world conditions, but the moment there was a rise in price, as there has been in the course of this year, now in one article and now in another, while the great mass of the people of this country are living under conditions, on the whole, much poorer than those of their fellow-subjects in the Dominions, and are dependent for their food upon external sources to a degree unparalleled in any other equally important community in the whole history of the world—in the event of such a rise in price, undoubtedly there would be a very strong agitation against the duties which had been put on for the purpose of giving preferential rebates.

Out of that would come successive alterations of policy, the duties being repealed because of a great or sudden rise in the prices of foodstuffs here, which would be attributed, possibly quite erroneously, to the duties. The duty would form only a very small contributory factor in the rise in price; but, owing to that rise in price and the con-sequent irritation, it would be upon the duty that public anger would be concentrated. If, then, you had a fixed commitment with the Dominions for a reciprocal Preference in return, you would have a direct division between this great political community here and our kith and kin in the great Provinces and States of the Empire beyond the seas.

That was the danger, and that was the view which I have personally always adopted and which I take at the present time. It is a tremendous danger of producing a collision between the great mass of the working people here and in the Dominions and weakening the bonds which bind the Empire together. As everyone knows, we have had at successive elections successive party struggles and convulsions on these matters, and, after a while, the advocates of Imperial Preference definitely altered the basis of their policy. They did not in the least admit that they had been wrong in the view which they took, and which Mr. Joseph Chamberlain took, that the real way to help inter-Imperial trade and give the benefit to the Dominions which the Dominions require would be to give them a preference in regard to the food and raw materials they produce. Those who held that view did not recede from it, but they recognised that it was fraught with dangers to the political stability of this country and the situation here which placed it outside the sphere of practical politics. Therefore, for at least 10 years past, the Conservative party has always repudiated any intention of imposing taxes on basic foodstuffs for the purpose of giving preferential rebates to the Dominions, and that is a fact with which we have to reckon.

That is a tremendous change in the situation. The hon. Baronet the Member for Anglesey (Sir R. Thomas) seems to ignore the fact that the whole of this controversy, so far as it affects British polities, has been changed by the removal of the proposal to tax bread and meat. That immense event passed without, apparently, having made the slightest impression upon the hon. Baronet's mental comprehension. From that moment a new era dawned in regard to Imperial Preference. It is quite true that the policy which is open is a much more restricted policy, a much more modest policy, and, in some ways, a less effective policy, but it is a policy which, for the purposes of Imperial unity, has the very great advantage of commanding the assent, not only of a great majority of the people of the country, but of important elements in every part of the country.

Then came the War, and then there happened what no one, not even the most ardent Imperialist, had ever dared to expect would happen. Scores and hundreds of thousands of the valiant manhood of the Dominions, upon whom we had no claim either in law or by any constitutional right, poured over to take part in defending the cause in which our lives were engaged, and in which not only the lives of those in this island but also the liberties of Europe were involved. Then, at the height of that War, we were forced into a coalition of all parties, and, as I said the other night in the small hours of the morning—[ Laughter ]—that is an Irishism; I mean the other day in the small hours of the morning—the Labour party, at a full, responsible official meeting, authorised its representatives to take part in stemming the tide of national peril. They were represented in the Government, headed by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), which came into office in the closing hours of 1916; and in 1917, the representatives of the Dominions being gathered here to supervise the whole field of the War and to watch and co-ordinate the progress of the Dominion Armies which were fighting side by side with our own, they set to work and covered the whole field of Imperial organisation, and they passed this Resolution of 1917, which is now eight years old—I am not going to read it to the House, because it is in everyone's mind—affirming that, while perfect liberty and perfect freedom should be enjoyed by every independent portion of the British Empire, no one being under any obligation compulsorily to do anything that did not arise out of the natural consideration of their own particular circumstances and interests, nevertheless, so far as it possibly could be done, there should be an effort to develop inter-Imperial trade by means of differential duties in regard to Empire produce.

The hon. and gallant Member for Leith (Captain W. Benn) is not bound by that Resolution. He was away fighting at the Front, but, had he been here, I have not the slightest doubt that he would have fully associated himself with it. But the Leader of his party in the House of Commons is associated with that Resolution in a more prominent manner than any other living statesman. He was the head of the Government who proposed it, and Mr. Asquith and other prominent members of the Liberal party were here; but not one single challenge was made against this principle that, without our being committed in any way to the taxation of the basic foodstuffs of the people, we nevertheless should try our beet, as occasion served, to foster inter-Imperial trade and assist inter-Imperial development. That is the foundation on which we all stand to-day, and the extraordinary manifestation in the discussion this afternoon which we have seen on the benches of the official Opposition, and which we know is a consequence of and a sequel to very serious, tense and earnest discussions of a private character which they have had out of doors, has itself shown that the broad policy and principle of fostering the development of trade within the Empire, apart from the taxation of the food of the masses of the people, are passing increasingly out of the realm of ordinary party controversy. That is a tremendous advance, and it is far from my intention to say any word which should in the slightest degree hamper or restrict that process of thought. It is not at all for us on this side of the Committee to try to claim a monopoly in these matters of good will towards the Empire as a whole. It is not our wish in any way to do so. But the more you can keep really controversial and party-splitting issues out of the area of Imperial development the more surely you will be able to build up a great consensus of unity on a basis of freedom and good will. I say to the hon. and gallant Gentleman and those who sit around him who think even these rebates from existing duties, which we have put on entirely for our own purposes, are in themselves objectionable, that is a view which they are perfectly entitled to hold. But considering how greatly this controversy has been changed by what has taken place in the last 20 years, considering the position which was adopted formerly by this country, in the hour of great stress in 1917, such differences as they have on the subject ought to be expressed in a very moderate manner and not stressed in a way to cause a needless appearance of Imperial disunity.

This is the only road at present along which we have been able to advance. Of course I had to provide for a £1,700,000 loss of revenue in consequence of these reliefs which were given to the Dominions, and not all those reliefs will reach the consumer. A portion will reach the consumer, and it is hoped that as the development of Imperial supplies over perhaps a whole generation grows, and a larger proportion of our British consumption is based upon Imperial production in sugar, in tobacco, in tea and so on. in that proportion the Dominion importation will increasingly dominate the price in the home market. So far as tea is concerned it already dominates the price in the home market. The great reductions which have taken place in tea through the preferential rebates are a ruling factor in the price of tea here, and 87 per cent. of our tea is got from Imperial sources now. Sugar is on a different footing, and there, I agree, the effect of the sugar preference is not likely to reach the consumer at the present moment. But it will operate in stimulating the production of sugar in the West Indies, and within the Empire and the increased production of sugar will have the general effect, through economic agencies and indirectly, of providing a certain relief to the consumer. We look forward to an increasing production of sugar not only in the British Empire, but through our beet sugar policy here at home, and in so far as we become able to rely on Empire-produced and home-produced supplies of sugar, surely we are on a sounder and surer foundation for all our economic arrangements. There are many things that we shall have to buy from outside the British Empire for many years to come. But in so far as we can, without adding at all to the burden upon the consumer, foster the development of these supplies within the Empire, surely we are looking forward to a sounder economic basis and one which is in entire accord with the great conception of Imperial unity.

When you come to tobacco, there, again, there is a definite advance, and some advantage will directly and immediately reach the consumer as the result of the increased Preference. The Imperial Tobacco Company—I have obtained their permission to mention their name—which is the great dominating company, have informed me that they propose to make the whole arrangement effective upon the price of Empire tobacco at a halfpenny an ounce, retail price, lower than any other tobacco. We have also received assistance from some of the large cooperative concerns who deal with the public direct. I do not wish to mention their names because I have not obtained authorisation to do so, but they have co-operated in a very helpful spirit. This is only a beginning. There is not the slightest reason to doubt that the development of the resources of the British Empire, whose variety and extent are equalled only by the variations of the entire globe, will produce undoubtedly an increasingly successful culture of tobacco. Every effort of science is being, and will be, employed under the stimulus of these Preferences to eliminate the rank character of certain products and to reproduce the conditions which have been successfully realised on the American Continent. I do not doubt at all that the progress of a few years will make Empire-grown tobacco an article not only in far more general use but of a far higher quality and at a cheaper price than we have seen of that kind in the market at present.

Is it not a fact that Empire-grown tobacco of high quality is smoked by many Members of the House now at 1½d. an ounce cheaper than the same class of tobacco grown in America?

I am very glad to hear it. It only shows that a certain portion of the ground over which we wish to travel has already been accomplished. I only make this point to illustrate the principle. As it seems to me, there is a great measure of general agreement. The controversial and party aspects of the question, which largely arise in regard to food, have been removed, and there is a very great broad consensus of opinion in favour of doing all we can, by rebates from existing duties which we have imposed for our own purposes, to foster the development of inter-Imperial trade. In expressing that opinion, as the Committee will do by a Division, which I have no doubt will contain features as significant as those which the Debate has already produced, we shall only be making good in the quiet years of peace the definite affirmations which were put forward by a Government representing all three parties in the State during the critical and dire crisis of the War.

The interest shown in this discussion is an indication that we are not considering this question of Imperial Preference and the subjects under discussion by themselves. As a matter of fact what we are discussing is two alternative policies, one that aims at stimulating trade throughout the Empire by the imposition or the retention of food taxes, and the other which I advocate, the stimulation of trade throughout the Empire by a more scientific organisation in the production, marketing, and grading of Empire products in this country. The policy that has been supported this afternoon will lead to conflict between the producer and the consumer. The policy which I have outlined will lead to harmonising the interests of the producer and the consumer.

If we take these duties by themselves, they would not very largely affect the position. I do not think that any hon. Member would assert that this particular preference will largely increase the volume of trade from this country to the Dominions and from the Dominions to this country, but what hon. Members on the other side know is that they do not depend upon these duties alone. What they depend upon is that these preferences are simply a step in a policy which is to be developed stage by stage until we have a fiscal system here with taxes sufficiently high to make preferential rates operate as a tariff, just as the Colonies operate their tariff towards us. I regret that in this matter the policy of exaggeration is likely to creep in. Hon. Members opposite have dwelt very largely upon the preference given to us by the Dominions, and the advantage which we get from it, which I readily admit, because we operate against a lower tariff in our Dominions than we do abroad. We admit at once that there is a preference in that respect; but hon. Members opposite use that as an argument as if the Dominions were always giving advantages to this country and receiving nothing in return.

If we were to balance the advantage of Imperial dependence, by the action of this country in our responsibility for finance, in carrying the burden of intercommunication, in financing and developing the Empire in connection with that "crimson thread which binds the Empire together" to which one hon. Member referred, it will be found that these islands, from the point of view of the maintenance of the Army and Navy, which is wholly necessary, because of the trade communications throughout the Empire, the annual load of taxation which we impose upon ourselves and the burden of the debt of past wars, the taxation which is thus represented more than compensates, as our contribution to the connections and the development of the Empire, for any advantage that we get through Imperial Preference. Therefore, those hon Members who exaggerate the importance of the preference that we get are belittling in every direction the contribution which this country makes.

3.0 P. M.

It is no argument on the question of preference to gibe at the present position of the Liberal party or of Free Trade. The position of that party has nothing to do with the question of preference or Imperial development. This question should be considered primarily, from these benches at any rate, with regard to the policy that we hope to advocate in the near future if we become the Government again. The utility of Imperial preference depends absolutely and entirely upon taxation on food. If there were no taxes on dried fruit, tobacco, sugar and tea, Imperial preference would fall to the ground. Imperial preference is only possible as a means of stimulating trade with our Colonies and Dominions, providing you have a system of food taxation in this country. If we could take that matter by itself, I should not quarrel with the Preference Duties at the present time. What I quarrel with is the inevitable development of this policy, which will lead the party with which I am associated into difficulties in the future. We stand for the abolition of food taxes.

Every hon. Member from these benches who has supported these Preference proposals has said that he stands for the abolition of food taxes. What does that mean? Any person who stands for the abolition of food taxation and supports Imperial Preference is stimulating Dominion trade on false foundations. Immediately you cut the ground from Imperial Preference by the abolition of food taxation, you take away the artificial support from Dominion trade. Therefore, you are leading the Dominions into a false paradise if you are against food taxation. Hon. Members opposite are consistent in their position. They believe in indirect taxation. They believe that a certain proportion of the revenue of this country should be raised by indirect taxation of certain foodstuffs. They are not befooling the Colonies and the Dominions. They say, "Whilst we hold the political power we shall continue to give you a Preference," in the same way that the Dominions say to us, "Whilst we believe in Tariff Reform and Protection, we shall give you an advantage by allowing you a lower rate of tariff on your goods."

If hon. Members on these benches say to the Empire that when we get political power we shall abolish all food taxes, then, economically, they are doing the worst possible thing for Dominion trade. At one stroke, trade and industry cannot adjust itself to a change of Government. Trade conditions in the Dominions, developed for 10 years under a policy of this sort, cannot be remodelled immediately, or within 12 months, if Labour comes into power. What the Labour Government will find will be that there will be a strong body of opinion in the Dominions, Labour and otherwise, that will oppose the abolition of food taxation in this country if we follow a policy of this sort. They will be entitled to say that the Labour Government of this country has let them down, if we stand for its abolition later on.

What is our alternative? What is the Socialist alternative? We have the problem in our own country. How is it that for the last 50 or 60 years British agriculture has steadily declined, when every person in the country would like to see the conditions of agricultural life restored? It is not because as individuals we do not want to see a better state of British agriculture, but it is because there are certain economic causes and influences in this country that irresistibly express themselves apart from political parties. We on these benches are not responsible for the overbalanced state of British industry. You are responsible. You are responsible for building up this country for 100 years of economic development on the basis of your primary trades being export trades. Having developed for 100 years on those lines, you cannot scrap great industries in this country, such as the mining industry, for instance. The mining industry cannot be helped under this policy, but if all the subsidies that have been used on sugar beet growing, on trade facilities, on export credits, on Imperial airways and things of that sort, had been mobilised for the purpose of re-organising the coal mines of this country, you might have done something for the miners. But this policy is nothing compared to the policy or problem of a million and a quarter men unemployed in this country.

The hon. Member's arguments must have some connection with Imperial Preference.

The connection is that there are certain economic policies in this country which may be related to this problem of unemployment, and though I cannot develop that argument I will illustrate it in this way. The reason we must have, in a sense, a world-wide market for our food supplies and raw materials is because for many years and many generations we have built ourselves up on the basis of being an exporting nation. Now when we come to settle the supplies of food products, from my knowledge of the demands of the consuming public of this country, there is always a natural preference on the part of the purchaser first for home-grown products, secondly for Imperial products, and lastly for foreign products. Why do we fail in the home market and in the Imperial market? We fail because there is no Government direction on a scientific basis for marketing grading and organising supplies to meet the palate and taste of the people of this country.

If my friends here would concentrate on that they would lead step by step towards the socialist commonwealth ideal in which we believe. Then they are on sure foundations as far as building up the Empire economically is concerned. [HON. MEMBERS: Protection.] Protect If you like when the people get the advantage, but in this case we see the capitalists getting all the advantage. They are simply putting the subsidy from the taxpayers of this country into their own pockets, as they have done in the case of sugar. There was a preference of 4s. 8d. on sugar, yet so far as the general sugar sold on the British market is concerned, only 2d. and 3d. a cwt. went to the consumer, and all the rest of the additional subsidy of taxation went into the pockets of the Imperial growers and the people who finance the trade. The people who finance the trade sit on that side of the House, and not on this side, and they appeal to sentiment in this matter on the ground that it represents a general reduction of taxation. It is nothing of the kind, because if you have a certain bulk of imports coming into this country on which taxation is levied, and you relieve the growers or importers in a certain direction, you must make up that difference by additional taxation which has to be paid by the people of this country. If you want really to develop Empire trade—on which I do not think there is any difference in the House—it is merely a question of method, and of how far we can develop policies to coincide with the ultimate aims of the economic organisation which we have in view.

The policy advocated by the Conservative party is an Imperial policy, entirely in line with the system in which they believe, and I do not say that they are dishonest in believing it. They believe in private enterprise, and the system of organisation of Imperial preference fits in with capitalism, but it does not fit in with the economic system which we advocate. What fits in with that economic system is what we have previously asked for, that is the Government operating for the people, purchasing the total baulk output of the Colonies, assessing and adjusting the market price of the articles, insuring both to the British agriculturist and the Imperial agriculturist, a market which we provide here—because we are largely industrialists and a great consuming population—organising the production and the transportation of that food into this country, removing the toll of interest on capital, and the toll of the middleman, so that ultimately the products find their way into the British market at the rock bottom cost of production and of distribution. That is not Free Trade, but it is the Socialist policy, and the more we follow the policy of the Tory party, the less we shall be able to follow our own policy, and the more we are bound to weaken the development of public opinion, which, we think, provides the only solution. It is because I believe that Imperial Preference necessitates the maintenance of the taxation of food in this country, and, secondly, because those who do not agree with food taxation will simply be fooling the Dominions if they support a policy of this sort, that I oppose these Preferences, and not because I do not consider the necessity and desirability of developing Imperial trade.

I wish to express one point of view which occurred to me when the hon. and learned Member for South Shields (Mr. Harney) was speaking. I appreciate the argument which has been put before us by the hon. Gentleman who has just spoken, but since he recognises that the course which the Government propose is consistent with the capitalistic theory in which we believe, and since that is the system under which we are living at the present time, we had better carry out our policy without regard to what we ought to do if another state of things were set up. The hon. Member will not think me guilty of discourtesy if I make no further reference to his argument. With regard to the hon. and learned Member for South Shields, the main gravamen of his attack upon any arrangement with the Dominions was, that by business negotiations you set up conditions of irritation which were very inimical to the prevalence of Imperial sentiment. I wish to demur entirely to any such theory. The view that because you are doing business with a person and engaged in negotiations with him you and he must necessarily be irritable to each other, is a complete fantasy in the minds of people who use that argument. If you are engaged in doing business day after day, you find that you make your friends among those whom you come to know and whose friendships you value because of what you know of them in business.

Let me refer to South Africa. The Prime Minister of South Africa announced in the House of Commons there that he was not going to continue the Preferences to Great Britain except upon a quid pro quo basis, but he was. prepared to enter into arrangements with other countries which gave South Africa something for what South Africa in return gave them. Does any hon. Gentleman suggest that arrangements which the South Africans are able to make, say, with Germany or Belgium or the United States, are going to bring South Africa into a condition of hostility with those great countries? On the contrary. There is nothing I would deprecate so much as that these people should find their business friends amongst other nations instead of among us. This matter seems to me to be of the greatest possible importance to this country. Suppose, for example, that Australia and Canada were taking the same course as that which is being taken in South Africa. Is there a single business man in this country who could look on with equanimity?

The hon. and learned Member for South Shields spoke mostly about Australia. Let me give to the Council one or two instances of what Australia does. Everyone knows that the cotton trade of Lancashire is in a condition of very great depression. Where does it find one of its best markets at the present time? It finds it in the great Commonwealth of Australia. Why? Because although Australia puts a 15 per cent. tariff against cotton piece goods coming from any other part of the world, it allows our cotton piece goods to go in free. Can you go down to Lancashire to-day and tell the people there that you believe in a system which would bring about the result that Australia would deprive you of the Preference you now enjoy because you refuse entirely to treat with them? How far are hon. Gentlemen opposite who so violently oppose preferences and tariffs prepared to maintain that position in our present condition of trade? Take again the case of the tinplate trade. The Australians allow tinplates from this country to enter their markets free from any tariff, but they put a 10 per cent. tariff against tin-plates from every other part of the world. Anybody who knows how the Germans are striving to develop their tinplate trade will realise what a great opening it would be for Germany if suddenly she were allowed to get into the Australian market on the same basis or nearly the same basis.

It strikes me, when I hear these arguments being put forward, that the people who adduce them do not realise these risks or they would not continue to oppose all suggestion of negotiations with our brethren, and to say that such negotiations must only end in irritation and hostility. This at the present time is a matter of vast importance. If hon. Members look at the figures of trade they will find that our exports to the world, in general, have, more or less, kept up during the early part of this year as compared with last year, although they have gone down far below the figures to which we were accustomed before the War. Study those statistics during the first four months of this year and you will find that to every other part of the world except our own Dominions and possessions, our exports of manufactured goods have gone down by a large number of millions and the balance has only been redressed by the increased amount which the Dominions have taken. It seems to be vital at the present time that we should continue to enjoy those preferences from our brethren, and in my belief we can only continue to enjoy them if we show that we appreciate their value instead of depreciating them as is too often done in this House.

No, no!

If I am wrong in that statement, then how do hon. Gentlemen opposite look at the prospect of losing the advantages of these preferences? Obviously they would have no ground of complaint if any Dominion chose to withdraw the preferences. Are hon. Members prepared to face that situation and are they prepared to tell the traders of this country: "We are no longer to have these preferences because of the theory which we alone among the countries in the world at the present time are prepared to advocate." I am not looking at this matter from the point of view of sentiment but from the point of view of our sordid self-interest and in my view the parts of the Budget which deal with the granting of preferences to our brethren overseas are the parts which will most inure to the benefit of the people of this country.

I desire to reply briefly to the right hon. Gentleman the Chancellor of the Exchequer and the right Eon. Gentleman who has just spoken. It is a mistake to suppose that we referred to the preferences given us by the Dominions as "piffling" preferences. We never referred to them as such. We said it was this halfpenny on raisins and this penny on sultanas and that kind of thing which was "piffling." There is a great case to be made out by the right hon. Gentleman and his friends for a great inter-Imperial Preference system, but it must be based on the taxation of food and raw materials. I wish to refer to the exploitation of the War by the right hon. Gentleman as a reason for pressing his case. During the War a great many things were done. The McKenna Duties were imposed, though a great many people at that time who had certain economic and political convictions and who would have opposed those duties fiercely did not do so because their minds were engaged in other things. What has happened in regard to the McKenna Duties is that the concessions which were made during the War and the points of view which were foregone for reasons of unity at that time have been exploited by Tariff Reformers and Protectionists subsequently in order to try to drive us along the road which they wish us to follow. That is one of our main complaints. As regards the Resolution of 1917, does the right hon. Gentleman say that it binds the freedom of any of the constituent parts of the Commonwealth? Clearly not. Otherwise, if it binds us, it binds the other Dominions, and if they have a complaint against us, we should have a complaint against them, as, for instance, South Africa, if they agreed to change their system.

Nothing can bind the future of any British Parliament or legislative assembly, but a promise solemnly made in these circumstances is a factor which every Parliament which had regard to national continuity would take into consideration.

It depends on what the right hon. Gentleman means by "national continuity." He would not dare to attempt to impose on the Dominions the same sort of obligations he wishes to impose on us. It is an offence against the liberty of the Empire that he is committing when he attempts to bind us by this Resolution, and any offence against the liberty of the Empire is cutting at the real root of the Empire, because the Empire is based entirely on the complete freedom and autonomy of all its constituent parts. He said, in language that really was not worthy of him, that the great Dominions sent over their men, and so on. Has he forgotten that Mr. Joseph Chamberlain told us, some years before that, that if we did not do what he wanted—and that was very much more than this; that was the taxation of food and raw material—the Empire would melt? The Empire's reply to that in the hour of danger was to show that the Empire was founded on kinship and common ideals and a common belief in liberty. So far from what happened in the War being a support of the right hon. Gentleman's argument, it is a complete refutation of it. It showed that, preference or no preference, tariffs have nothing to do with the unity of the Empire in which we all glory.

The right hon. Gentleman and hon. Members opposite will make a great mistake if they are going to try and tie up Tariff Reform with patriotism, because, if that is done, if nobody can be a patriot without being a Tariff Reformer, you are indeed dividing the Empire. The right hon. Gentleman went on to say another thing which I do not think could have been very pleasing to those sitting beside and behind him. He said that their complete policy had changed. Has he any warrant or authority for saying that? He said, "Have you overlooked the great historic fact that the late Mr. Joseph Chamberlain's policy has been thrown away?"

No.

Well, has it?

It is a mistake to misquote. It is no secret that it has been changed, having regard to the declaration made by the Prime Minister.

It is not a question of paper declarations. It is a very important point, because a declaration is simply a matter of temporary expediency. [HON. MEMBERS: "Oh!"] I mean no offence by that. It may be quite possible to say: "We believe in this thing, but we will guarantee not to do it for the period of one Parliament or for a year." That is a matter of expediency, and indeed a characteristic of the advocacy of Protection and Imperial Preference has been that it has been constantly limited by expedients owing to the necessity of getting the support of the electors. That is the whole story of the food taxes and all the rest of it. But I would like to ask the right hon. Gentleman, leaving aside the question of election pledges, what is really the policy of his party in this matter. Have they abandoned the whole programme of Mr. Joseph Chamberlain or not? He based his case against my hon. Friend on the ground that a great historic thing had happened in that they had abandoned a material part of Mr. Joseph Chamberlain's whole policy. Well, have they?

The declarations of the Government in regard to the taxation of food are of the most specific-character.

The right hon. Gentleman is riding off again on an ad hoc declaration binding for the period of this Parliament or in particular circumstances. Has the party which has adopted him and made him its leader in financial matters repudiated the policy of the late Mr. Joseph Chamberlain? Can he answer that? No, the right hon. Gentleman knows perfectly well that the real enthusiasts in the party opposite, the men who give the momentum to that great; party, believe in Mr. Joseph Chamberlain's policy up to the hilt. They have said so time after time. There was the right hon. Member for Ladywood (Mr. N. Chamberlain). I did not observe him cheering when it was said the policy of Mr. Joseph Chamberlain had been abandoned. The Colonial Secretary is absent, but he has made it clear repeatedly that the whole policy of Mr. Joseph Chamberlain stands, and, of course, there are many hon. Members opposite—I think the majority—who would say the same, What is the real objection to these things? It is not only that they cause irritation and friction. My hon Friend quoted many examples, and there are many other examples. The right hon. Member for Hillhead (Sir E. Home) entirely misunderstood the situation. You can have very good business relations with people, but families are not bound together by business ties, and when they do begin to discuss wills and things of that kind, so far from those being bends of union, they very often cause discord even amongst those united by blood.

The second point is, that these little preferences and rebates are not intended to be the whole matter. Hon. Members opposite know, and all their speeches show, that in support of these preferences they are not supporting Part II of Schedule 3, but are really supporting a policy which, in the end, can only lead to the taxation of the food of the people, and once this policy of Imperial Preference gets to the stage in which it can be of the least use as a commercial bond between the Empire, then the people of this country will learn that to them the Empire means higher prices for the ordinary articles of consumption. That is the end of the whole matter. These Preferences are part of a larger policy which would be disastrous to the Imperial unity, of which we are as sincere advocates as Members opposite. It is a very dangerous thing to label any party as disloyal to the Empire. We are entitled to command respect for our convictions when we say that we are as much in favour of, and as passionate in our love for the Empire, as any other party in the House; but we do not believe that you are by this sort of thing, by the bolstering up of the interests of a few—and it is only a few—and by tariffs and preferences—we do not believe that that is the way to do it at all. But what is the good of quoting the speeches of the right hon. Gentleman the Chancellor of the Exchequer? He has made those speeches and explains them from time to time. He knows what are the real bonds of Empire. Now, however, he is forced to come forward and to define them on grounds the falsity of which he himself has proved time after time. It is because of this, because these things are bad and a source of irritation, and because they lead to something which will be disastrous that we intend to go into the Lobby against them.

The trend of the Debate this afternoon, to which the Chancellor has referred, has been somewhat remarkable, and there are just two or three definite things I want to say at the end of it. The Chancellor of the Exchequer referred to some of the speeches which had been made from these benches. I have no complaint to make of the way in which he conducted his part of the Debate, but I want to say, first of all, in regard to what he said about Free Trade in its relation to labour conditions that we on this side do not think that the form of the Government proposal would have any beneficial effect in putting those conditions right. We have been told about the labour conditions particularly in connection with the dried fruit trade. One would imagine from what has beep said that there were only two other sources from where to obtain dried fruit, apart from the Empire, and that these were Greece and Smyrna. That is absolutely contrary to the facts. I want hon. Friends to remember that if they support this policy they are not merely putting up a barrier against the importation of dried fruit from these places, but they are also putting up a barrier against dried fruit supplies from such places as California and Spain. Our experience, those of us who know something of the trade of the country, and buy, is that the public demand, and will have, the best quality of dried fruits, and the best of these come from Spain and California. How is that position going to be changed by giving a slight preference in regard to the duty?

Mention has been made specifically by my hon. Friend the Member for North Southwark about the conditions under which some of these products are handled before they are sent to this country, but the great majority of the fruit imported into this country from the districts referred to comes from perfectly reputable and well-conducted houses, and it would be quite wrong to say that it was handled under bad conditions. There are heaps of people like ourselves who buy direct from the Levant and who are able to get the quality they require and under good conditions. If you are going to adopt the policy suggested it means that you are likely to restrict the importation from that particular part of the world, while at the same time you are not certainly going to help the conditions under which the work is carried on.

I would like to say a word in reply to the right hon. Gentleman the Member for Hillhead (Sir E. Home). He has claimed of late years to have great business experience. It is not very long since the right hon. Gentleman was, I think, a lawyer in Scotland, but nowadays he speaks with very great authority as a man who, apparently, has been in business for years. Even so one frequently finds that when he makes speeches his facts are not very reliable. He spoke this afternoon about the balance of trade as between the world and the Empire, and asked the Committee to draw certain deductions from what the trend of trade has been in the last four months. I submit they are quite unjustified. In 1913 our imports from foreign countries were 75'09 per cent. of our whole imports, and in 1923–24 they had fallen to 73 per cent. Imports from the British Empire in 1913 were 24·91 per cent., and in 1923–24 26·95 per cent., an increase of rather more than 2 per cent. The exports of British produce to foreign countries in 1913 were 62·82 per cent. of the whole of our exports, and in 1923–24 63·74 per cent., in spite of the fact that there was reduced consuming power throughout the whole world. On the other hand, for those two periods our exports to the British Empire as a whole were reduced by nearly 1 per cent.

Are you speaking of manufactures?

All British products. Therefore, there is little credence to be placed in the figures given to us by the right hon. Gentleman the Member for Hillhead. He gave figures for the first four months of this year. In reply, I am saying that those figures are no guide at all by comparison with the stable figures for a whole year before the War and a whole year after. We prefer to rely upon those figures rather than to take the figures for a short period since the advent of the Tory party to office. [ Interruption. ] Everybody knows that trade has been much worse since the Tory Government took office. Last year there did appear to be some hope of trade improving as the result of that wicked Socialist foreign policy.

Let me say to some of my friends on the benches behind me, that there is no guarantee at all that by the adoption of the preference policy suggested in this Bill we shall improve the conditions of employment in this country; none at all. I challenged the Chancellor of the Exchequer, when on the question of sugar the other night, to give me a single case in which preference had been adopted in which there had been a reduction in the price of the article concerned to the consumers in this country. We have not had an answer. That could not be proved either in the case of sugar, dried fruits of any other things. It means, therefore, that the great proportion of the burden of this preference has to be borne by working-class people. They have to pay the same price for the article as if there were no preference, and as the margin of preference does not reach the Treasury, the effect of preference is to help to depress rather than to improve the general conditions of the workers of this country.

Further, there is no guarantee that the preference will be an advantage to the producer in the Empire. The right hon. Gentleman referred to tobacco in the course of his speech. I wonder whether the Chancellor of the Exchequer has heard that in the last five years representations have again and again been made to this country from Nyassaland that the preference which was given on tobacco did not mean any real advantage to the producer of tobacco. They have to sell their leaf practically in one market only, that of the Imperial Tobacco Company, which is a world combine. When the Chancellor of the Exchequer tells us that the Imperial Tobacco Company are offering a new article on the market at a reduced price, he might have also said that the co-operative societies were pioneers in this matter, having put a wholly Empire-grown tobacco on the market at so low a price as 7½d. per oz.

I should like to have pressed that matter a little more, but at the time I had not the authority of the co operative societies to do that. If the hon. Gentleman has that authority, it is all right, and I hope he will give them the credit.

The Chancellor will find by experience that when I speak for the Co-operative Movement, I speak with authority. Let me say that there is no possibility of the Empire producer getting advantage of Preference so long as the Government follows up the policy announced with regard to rings and combines. In Liverpool to-day, if you want to go into the market and buy Colonial or other products or buy dried fruits, you have to go through a close ring. At the Board of Trade last year I received a deputation in regard to a London ring of dried fruit merchants, and there is no chance of an ordinary

person trading outside this ring. I submit to the Chancellor of the Exchequer on that point alone that we should be-entitled to consideration, and when produce can be fairly marketed, then we might consider a Preference. We have been working for years trying to develop closer relationship with the Colonies. I may say that during the last 12 months we have enabled the Western Australian Wheat Pool to market successfully when the whole world market was against us, and they have assisted us in reducing the price of bread in this country by direct co-operative contact. This is a much better policy than introducing piffling and pettifogging proposals such as those which we are now discussing.

Question put, "That the word 'July' stand part of the Clause."

The Committee divided: Ayes, 277; Noes, 93.

The other Amendments to this Clause are out of order.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

I understand it is the desire of the Committee to get this Clause and, I think, the next three, so that we may deal with Income Tax on Monday. I assume it that the Division which has just been taken has been a Division on the whole Clause, and that, therefore, no further discussion is necessary.

I think we may regard the Division which has just taken place as a satisfactory expression of our view, and, therefore, we do not propose to divide on the Question, "That the Clause stand part of the Bill."

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 9 ( Definition of value for purposes of ad valorem duties ), 10 ( Provision as to re-importation of certain goods charged with duty by Act ), and 11 ( Extension of s. 14 of Finance Act, 1924, to tea shipped as stores ), ordered to stand part of the Bill.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Mr. Churchill. ]

Committee report Progress; to sit again upon Monday next.

I beg to move, "That the Bill be now read a Second time."

This is a Bill on which my name is, and I hope it will be allowed to go through so that it can be examined by a Committee. It deals with the question of trusts and combines, and the Prime Minister has expressed himself favourable to legislation of some sort. Therefore I hope hon. Members will give it a Second Reading and allow it to go upstairs.

This is a Bill which deals with a very important subject, and I think the House will be very ill advised to send a Measure of this description upstairs without some examination. The business of the Committee is already very onerous and there are a number of Bills of first-class importance under consideration. For that reason alone, and at this period of the Session, I think the Bill should not receive a Second Reading. I do not find the name of the hon. and gallant Gentleman who moved the Second Reading on the back of it, and I am not quite sure why he has intervened as being in charge of a Bill which is not his own. He has not given the House such great confidence during the recent week as to his judgment that we should take hurriedly in hand the very interesting matters presented to the consideration of the House. The Bill provides for the collection of information with respect to trusts and combines and aims at restraining abuses thereof. There has been recently a very searching inquiry into the proceedings of trusts and combines and a very lengthy report has been made.

It being Four of the Clock, the Debate stood adjourned.

Debate to be resumed upon Monday next.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at One Minute after Four o'Clock, until Monday next (15th June).