Clause 177. — (Directions and principles to be observed by Railway Authority.)

Orders of the Day — Government of India Bill. – in the House of Commons on 1st April 1935.

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6.30 p.m.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

I beg to move, in page 103, line 33, at the end, to insert: Subject to the provisions of this Sub-section it shall be the duty of the authority, so far as it may be reasonable, to ensure that plant, goods, and material required for the service of the railways shall have been produced within the British Empire and under conditions of labour which are fair, having regard to all the circumstances. The opening words, "Subject to the provisions of this Sub-section" refer, of course, primarily to the words in Subsection (1) of the Clause, namely, The Authority in discharging their functions under this Act shall act on business principles. Quite clearly in asking that that shall be mandatory, that in general there shall be a discrimination in favour of Empire goods, and, secondly, in respect of goods produced under what I might call the fair wages clause, I am still presuming, that the authority will act "on business principles." There is a point beyond which it would not be proper for them to push the preference. It is the practice in this country for the Government to buy goods of United Kingdom or Empire origin so far as it may reasonably be practicable, but I well remember that when my predecessor in the representation of South Croydon was Postmaster-General he deliberately placed an order for some foreign copper wire of a particular kind, because he had come to the conclusion that the practice in his Department was being improperly exploited and that prices were being forced up against him.

We have to recognise that if you apply a too rigid limitation on the powers, there is the possibility of that exploitation, and that is why I phrase my Amendment, "Subject to the provisions of this Subsection." Subject to those business principles it shall be their duty to ensure that plant, goods and material shall be of British and Empire origin. I think that the word "plant, goods and material" cover everything that a railway company would purchase. I did not insert the words "rolling stock," because I assumed that "plant" would cover that. It was in that sense that I drafted the words. If for any reason the words of the Amendment are incomplete, I shall be only too glad to add words so that the Amendment shall be made complete. In any event the intention is clear.

I want the railway board in India to do what Government Departments do in this country. I see no reason why, when we are setting up a new Constitution for India, we should not make it perfectly plain that we in this country and those in other parts of the Empire are entitled to some consideration. I do not believe that in the long run you gain respect from people by what I would call crawling. You get far more respect by standing up for your legitimate and proper rights, provided that you are not selfish in your attitude. There is nothing selfish in suggesting that the largest part of the British Empire should in its purchases, so far as this railway authority is concerned, definitely give a preference to the other parts of the Empire. We in our tariff system in this country extended important preferences to India long before India gave us any preference whatever in return. The preference on tea, which I regret was temporarily terminated by a Government of which I was a junior member—I had no responsibility for that decision, not being a Member of the Cabinet

Photo of Mr Isaac Foot Mr Isaac Foot , Bodmin

You did not resign?

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

There was not much option in the matter, because a General Election took place about a fortnight afterwards, and with the assistance of the electors I was sacked, and the problem did not arise. We have in many directions sought to stimulate the trade of India by our preference. Other things being equal, it is the practice of the British Government to buy the products of India rather than products coming from any foreign country, as a matter of public policy. I think that of all Departments of State in India this railway board will probably be one of the largest purchasing authorities. The only comparable Indian purchasing body will be the military authorities, and so far as they are concerned the position is rather different, because that will not be a transferred subject. It should be definitely a matter of policy that the largest unit in the Empire should make its purchases, so far as reasonably practicable, in the Empire. That is subject to conditions which I hope will attract the interest and support of right hon. and hon. Gentlemen opposite— that the goods in question have been produced "under conditions of labour which are fair, having regard to all the circumstances." That is to say that if the Empire goods were being produced under unfair conditions that would be a disqualification, and equally if it were the case that foreign goods which for some other reason were likely to be purchased were produced under conditions which were unfair, it would be mandatory that such goods should not be purchased.

I am not taking any narrow point of view in the interest of the capitalist class of any class. I take the broad view. There are obviously many reasons which could be adduced in support of the proposal. If we were engaged on the Second Reading of a Bill for this purpose one would be inclined to speak at much greater length, but on the Committee stage, when we have a rather limited time-table, I do not want to trespass unduly on the time of the Committee.

6.38 p.m.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

I have not spoken in these debates before, but I venture with great respect to submit to my right hon. Friend the Secretary of State that this is an Amendment to which he might give sympathetic consideration. As my hon. Friend has said, this country has for a long period of years conferred distinct advantages upon Indian commerce, and India in its economic development owes an immense debt to this country. It is, therefore, reasonable to ask the new Government set up under this projected Constitution to give prior consideration, so far as is reasonable and within the limits of the Amendment, in purchasing materials which are necessary for the maintenance of the railway system of India, to manufacturers in this country. I have the greatest confidence in the discretion and wisdom and statesmanship of my right hon. Friend the Secretary of State, and I am certain that in everything he has done in relation to this great Measure, from the point of view of the people of India and of this country, he has given the fullest consideration to the advantages of both sides. But this is an instance in which he might just consider how important it is to make the situation, from the point of view of the British manufacturer, a little more mandatory than that contemplated in the Bill. Industrially we are having a difficult time in this country, and it is of great importance to us to get every possible order for our workshops. We have had some sad experience in recent times of important railway orders going to foreign countries at the expense of British manufacturers and workmen. In locomotives and railway rolling stock and signalling apparatus, and in various other departments of supply, manufacturers here have been deprived of the opportunity of even tendering on certain occasions.

6.42.p.m.

Photo of Mr Samuel Hoare Mr Samuel Hoare , Chelsea

I approach this proposal with the same desire as My hon. Friend who has just spoken, namely, to do everything that is possible for British and Empire trade; and indeed, ever since I have been at the India Office, that has been one of my main objectives. But let the Committee analyse the situation a little further. Let them ask themselves the question whether the passing of an Amendment of this kind is really likely to improve British trade with India. Let them first look at the history of this question. For many years past we have allowed the Government of India to place its contracts for railway material where it desires, and we have not interfered with the discretion of the Government of India in that respect. The Statutory Commission inquired into this among other economic questions. If hon. Members will refer to page 244 of the first volume of the Statutory Commission's Report they will find that the Commission, having dealt with the convention so far as tariffs are concerned, state this about contracts for railway material: An understanding analagous to the fiscal convention has been arrived at in one other region. The Secretary of State has relinquished his control of policy in the matter of the purchase of Government stores for India, other than military stores. The Government in India, in agreement with the legislatures, are now free to buy stores in India, in this country, or abroad, as seems best to them, and the Secretary of State, though he is by statute responsible to Parliament, has undertaken not to intervene. That has been the practice during the lifetime of many Governments for a continuous period since the Montagu-Chelmsford Report. So far for the history. Now let us look at what have been the results. I have had made out for me a table showing the way in which these orders have been given by the Government of India, acting without official intervention from His Majesty's Government in Whitehall. The result shows that to the extent of 75 per cent. the orders go to Great Britain. That is a very remarkable figure. As things are now, the Government of India, acting without official intervention from London, basing their decisions no doubt on the actual merits of the case, we are now receiving 75 per cent. of these orders as against the 25 per cent. that go elsewhere. I suggest to the Committee that in view of the long period during which we have followed that policy in India, and in view of the fact that we are obtaining already three-fourths of these valuable orders, it would be a mistake, in the interests of British trade, to attempt to go back upon that policy and to impose by statute a policy of preference such as is recommended in the Amendment.

No one in this Committee wishes more than I do to see preferences developing between Britain and India, but I think that the worst possible way to achieve that result would be to attempt to do so by statutory enactments. The history of the British Empire goes to show that it is a mistake to attempt to impose what is, after all, a tariff policy from Whitehall upon any part of the Empire. Therefore, with great difference to what my hon. Friend the Member for Moseley (Mr. Hannon) has just said, I put it to the Committee that it would be a mistake to adopt an Amendment of this kind. I need not go into technical details as to the wording, but I believe that in actual practice it would be very difficult to apply a provision of that kind in an Act of Parliament. Apart from that consideration, it would, as I say, be a mistake to go back upon a policy that has been in existence ever since the Montagu-Chelmsford Reforms. We might save a contract or two in one direction, though I am doubtful even of that, but in the long run we should do much greater injury to British trade as a whole with India. For those reasons, I strongly advise the Committee not to attempt to impose a proposal of this kind upon India by statutory enactment.

6.47 p.m.

Photo of Mr Isaac Foot Mr Isaac Foot , Bodmin

The right hon. Gentleman, I think, has given the only reply to the Amendment which is possible. The proposal of the hon. Member for South Croydon (Mr. H. Williams) is one which in the end would serve no purpose. Either the members of the railway authority will wish to trade with this country in the first instance or they will not. If there should arise such a feeling of antagonism and bitterness and political division, that they will have no wish to trade with us or to get their goods, in the first instance, from this country, does the hon. Member think that his proposal will stop them from placing orders elsewhere? Does he think it possible that, even under the wording of his own Amendment, they would not be able to place their orders elsewhere and to claim that they were acting within business principles? If they desire to obtain their plant and materials from this country, that desire will be carried into effect but they will not do it because they have to consult an Act of Parliament. If their own wishes are to be set on one side they will find means of circumventing even the wording which the hon. Member has put upon the Order Paper. The hon. Member for Moseley (Mr. Harmon), in asking us to support the Amendment, used as an illustration what had been done, I think, by some railway companies in this country, in placing their orders elsewhere. That may have been wise or unwise on their part—I do not go into that question—but if that power and that right can be exercised by railway companies in this country—

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

The hon. Gentleman has misunderstood me. I was referring to Indian railways placing contracts in foreign countries.

Photo of Mr Isaac Foot Mr Isaac Foot , Bodmin

I beg the hon. Member's pardon, I thought his reference was to the railway companies here. At any rate, it is admitted that a railway company in this country in ordering its plant, machinery or material is entitled to go to the whole world, under present conditions. They are under no obligation to buy from the Empire, although presumably they would seek to do so in the first instance. But the right to buy where they choose is one which I think no company in this country would surrender. If it were proposed that a legal enactment should be made here restraining the freedom of any great corporation or company in this country, it would be resented by the company concerned. On what ground then can we deny to the people of India a right that would be claimed by every big concern in this country 1 It is hoped, of course, that there will be a close trading relationship between India and ourselves—we shall be discussing the broader question at a later stage—but those of us who have considered this matter are satisfied that there is no possibility of extending trade with India by mandatory provisions in this Bill and by denying to Indians the liberty which we claim ourselves.

Whatever may be the purpose of the hon. Member who moved the Amendment, he will only defeat his purpose by trying to secure statutory and binding force for something which in the end must depend upon the good will and the desire to trade as between one community and another. With the greatest desire to see an extension of inter-imperial trade, so long as it can be brought about irrespective of penalties and statutes, I suggest to the Committee that this Amendment is not the way to achieve that end. This very important railway authority, controlling such vast undertakings and operating over such a wide area, ought to have complete power to carry on these concerns upon business principles—such power as would be claimed and exercised by any company in this country.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Would the hon. Gentleman's condemnation apply also to that part of my Amendment relating to conditions of labour?

Photo of Mr Isaac Foot Mr Isaac Foot , Bodmin

Certainly not. It is not the part of the Amendment about fair conditions of labour but the mandatory part of his proposal to which I object.

6.52p.m.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I do not wish to add anything to the arguments which have been used by the Secretary of State and which seem to me to be conclusive. There is no prospect of any development of preference within the Empire if it is to be based on compulsion. There is however, just one further point which I would put to the Committee in order to suggest that this Amendment standing by itself could have no effect, or that if it is to have any effect at all, it would have to be supplemented by a provision taking over direct control of the Indian tariff. If this Amendment were passed, there is nothing to prevent the Indian Legislature fixing its tariff on railway materials so high that practically no railway material would be bought outside India, and such little as we should supply would be far less than we are supplying to India under present conditions.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

On the other band, if as I believe and hope, we can proceed on the basis of free, mutual co-operation, which already has shown promising results at Ottawa, and develop that policy further, India may well pass a preferential tariff on railway material which, with the Clause as it stands, will make certain that, acting on business principles, the railway authority will buy most of its needs from this country. But I can conceive nothing more certain to prevent any community from giving a preference to this country than saddling it here and now with a mandatory obligation compelling it to buy its materials in the Empire.

6.54p.m.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

I do not wish to follow my right hon. Friend the Member for Sparkbrook (Mr. Amery), because it would be painful to me that we should find ourselves in regard to one part of the Empire viewing the idea of preference from different standpoints. I must in passing, however, refer to the fact that his words were ominous when he suggested that, apart from this Amendment altogether, the Indian Legislature might raise tariffs to a level which would be disastrous to British exporters to that country. I must remind my right. hon. Friend that in connection with the trade agreement which was made only the other day and which seems to have a direct bearing on what he has said, instead of granting British goods free entry it was suggested that there should be a 25 per cent. tariff and even that one-sided arrangement did not appeal to the people who are the masters of the Legislative Assembly to-day. I rise principally for the purpose of commenting on the speech of the hon. Member for Bodmin (Mr. Isaac Foot). Perhaps he does not appreciate that in this Amendment there is nothing discriminatory against India (r Indian manufacturers. All we are seeking to do is to stimulate the use of Indian and other Empire goods among the consuming public in India. There is nothing hostile to the people of India in this Amendment. The hon. Gentleman said that even if we passed the Amendment there would be nothing to prevent the Indian railway authority from going outside the Empire for its materials. I think he has overlooked the fact that the Amendment would make it a statutory matter.

Photo of Mr Isaac Foot Mr Isaac Foot , Bodmin

I said that it would be impossible to devise wording which would carry out that purpose, and such wording certainly has not been devised in this Amendment.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

No doubt the hon. Member will help us with the wording when we come to the Report stage both with regard to this part of the Amendment and also with regard to the other part which he says he supports. He also asked on what ground could we deny the right to a British railway company to purchase its materials wherever it chose. Under our present tariff system it is desirable that purchasers of material here should buy their goods within the British Empire. That is the case under our present preference system. I am not, however, going to argue that matter with the hon. Gentleman. I am concerned here with the mass of Members who supported the National Government at the last Election—and who continue to support them—with this policy in the forefront of their proposals, namely, to give every possible advantage to the people in our own country and the Empire oversea. I hope that there are many hon. Members here who generally support the Government on the constitutional principles of this Measure but yet are consistent to the Ottawa principle, and who will do everything in their power to secure that preference by one means or another shall be extended under these reform proposals in connection with India.

The Secretary of State said he had done everything possible for British and Empire trade. I do not want to criticise him in particular, but when he says that all the successive Secretary's of State since the Montagu-Chelmsford reforms have adopted this policy of throwing away the advantage of the British people and the British Empire, in these trading arrangements, that does not seem to me a matter of congratulation but rather a matter for shame. The more we look at this great and momentous Measure, the more we are struck by the fact that there is hardly a paragraph in it which endeavours to preserve for the British people the fruits of the great and wonderful things done by the British race in India in years gone by. The Secretary of State referred to a paragraph in the Report of the Statutory Commission dealing with the Fiscal Convention and also the question of railway material. I must point out that the Statutory Commission was presided over by a gentleman who at that time was a Free Trader, and to whom all those ideas were repugnant. But this Government has a very different record. It is based upon the confidence of people who believe that we are reaching out for a great Imperial policy of co-operation and reciprocity—

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The hon. and gallant Member is now trying to hang much too wide an argument upon this Amendment, which is limited to the question of the provision of railway materials.

Photo of Mr Henry Croft Mr Henry Croft , Bournemouth

If I have been led astray, it has been by my hon. Friend the Member for Bodmin, who in his speeches a little earlier led me to think that, perhaps, one or two of his arguments have sunk into the mind of the Committee, and ought to be replied to. I think the principle certainly stands; and when my right hon. Friend was referring to the words of the Statutory Commission in regard to railway material and to the Fiscal Convention as guiding the principle—so I understood him to say—I submit that the Fiscal Convention no longer stands. It has gone. We are writing on a clean slate here, and this is the last occasion on which you are going to be able to consider this vital public question. The Secretary of State says that the Government of India under these various Secretaries of State has been so careful for the interest of British manufactures and the British Empire that they have seen to it that only 25 per cent. of the railway material going into India came from foreign sources. Why should that 25 per cent. come from foreign sources? Everybody knows that there was very little difference in the prices. Everybody knows that contracts have gone to Germany, Belgium, Czechoslovakia and elsewhere. Why should thousands of our fellow-countrymen in the Midlands, in Lancashire and in other districts, be deprived of work year after year merely because this House, for some sloppy reason, has not the courage, the wisdom and the vision to lay it down that these railway materials for India henceforth should be provided by Indians or by other manufacturers in the. Empire, unless the price discrimination is such as to make it undesirable?

From every point of view, this is a matter on which the Committee can support this Amendment, and I hope that the right hon. Gentleman will reconsider his decision. I assure him that what was done by the late Mr. Edwin Montagu and Lord Chelmsford—who joined the Socialist party—and other Members of other parties who have let down British interests in India consistently since the establishment of the Montagu-Chelmsford reforms, is no argument why he should not turn from that kind of vice to the virtue of Conservative and Imperial principles and turn over a new leaf. if he does that, I am sure he will deserve our gratitude.

7.4 p.m.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

It seems to me that the right hon. Gentleman has not dealt with what is actually in the Amendment. The hon. Member for Bodmin (Mr. Isaac Foot) also dealt with the Amendment as if the words "within the British Empire" were not there—and at present the great sub-continent of India is within the British Empire—and dealt with the whole matter as if, instead of these words, the words were "in Great Britain." This is not an Amendment to force the railway authorities to place railway orders only in this country, but merely to ensure that they should place their railway orders either with their own manufacturers, or, if they are not manufacturing what is required, that they should, as far as possible, place them in some other part of the British Empire, including this country. That is the Amendment. When my right hon. Friend speaks of what has taken place since 1919, and gives figures to show that we have in this country alone received 75 per cent. of the orders for railway materials, he seems to omit altogether the fact that we have got this Bill before us. We are not going to have a Government of India such as we have had. We are going to have a Government of an entirely different kind, and probably of an entirely different complexion, and one with different views altogether with regard to these matters. That being so, it is in this Bill that we should think of the future and ask ourselves, What, under these new conditions that we o are going to institute, will be the proper thing in the interest of Indian manufacturers and Indian labour and in the interest of manufacturers and labour throughout the British Empire That is the point.

In view of that, my hon. Friend's Amendment is, in my view, not only perfectly reasonable but absolutely necessary. I am sorry that I cannot agree with my right hon. Friend the Member for Sparkbrook (Mr. Amery)—with whom I usually agree—when he lays it down as an absolut ukase that you cannot hope to benefit the trade of a country or a combination of countries by any legislative method, but only by good will. I say that if that is the rule laid down, it is one that is neither applied nor found to work in the case of any foreign country in its overseas trade. Every other foreign country with overseas possessions sees that those possessions and the home country benefit reciprocally in trade matters. Take France, with her great African possessions. They are treated as if they were part of France, and nothing goes to them except what is made in France.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The hon. Member is again going far outside the scope of this Amendment.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

I am prepared to leave it at that. I cannot admit the argument of my right hon. Friend the Member for Sparkbrook that we must on no account attempt to do this because it is impossible to regulate trade by Act of Parliament. That was the statement he made, and I merely adduce an example to show that if that does apply to the British Empire—and I do not admit that it does—it does not apply in any other part of the world, and that a great deal of the trade of the world is done on very different lines. In view of that, I think we want a further answer from the Government—and an answer which will deal with the facts as they are and with the Amendment which is on the Paper. The facts are that we are putting into India an entirely new kind of Government, and arguments as to what has taken place during the last 20 years have no value as a guide to what will take place in the next 20 years. The other consideration is that the Amendment distinctly includes the produce of India itself, and there is no contest here between us and the policy of borne manufacture for which Mr. Gandhi stands. We are with him. Exactly the same argument applies to this country and any other part of the Empire. That being the Amendment and the situation as it is, I hope we shall have a further explanation from the Government as to why this Amendment should be incontinently rejected, like every other Amendment we have put down in the attempt to improve this Bill.

7.11 p.m.

Photo of Sir Reginald Craddock Sir Reginald Craddock , Combined English Universities

I intervene to say a, few words on this subject, because I am not sure that the Committee is in full possession of all the circumstances which govern this case. Some years ago all goods of this description, plant, rails, etc., being for public purposes, were admitted into India free of customs duty. At a later stage they became liable to the customs duty that would have been imposed if private plant of that description had been bought. That meant, of course—and it is not a question of tariffs really—that what was taken out of the pockets of the State railways, or the railways in which the State was greatly interested, was put back into the general revenues of the country in the shape of customs. The material paid the duty and the duty went to the Government, but the railways were in a very large measure State-owned. So it is the case to-day. A great many of the railways have become entirely State railways; and even in those which remain private companies the proportion of capital held by shareholders and the proportion contributed by the State has been greatly altered, until the capital held by the State is very much larger than the capital held by the shareholders. That is one point in which I would contend that the tariff question really has not much to do with it, because it goes out of one pocket into another to a very large extent.

There is another point—and I know the Secretary of State will correct me if I am wrong. I would like to state the position not only as I generally understood it in India but as I understood it when, after retirement and with the consent of the then Secretary of State, I joined the board of the Burma Railway. The same thing existed in connection with the Burma railway as in connection with other guaranteed railways at that time; that is to say, the board here controlled a great many matters, but to a very large extent they were under the control of the Railway Board in India and of the Secretary of State in England. The Government had a representative on the board to watch the interests of the India Office and the Government of India and to see that no rule was varied. The position, as I understood it then, was not this great question of good will, or tariffs, or preference or anything of that kind.

As I understood it, the matter originated not in the question of fiscal autonomy but in some resolutions passed by the Legislative Assembly that goods required from abroad should be bought in the cheapest market. The Government of India at that time was not responsible to the Legislature and the railways were entirely reserved at the Centre. The Government of India went so far as to make a promise that if the goods were equal in quality and equally effective with British goods from the United Kingdom, and were also cheaper, then they should not be obliged to buy from the United Kingdom but should buy in the cheapest market, always supposing that the goods were equal in quality and durability. The London board had power to ask for tenders, and consequently such tenders came before the board. Some came from firms in this country and others came from, say, Germany or Belgium in respect of particular goods; and the Government member of the board, appointed by the India Office, had to decide and recommend to the Secretary of State whether there were circumstances in which the lowest British tender should be accepted.

The consulting engineer belonged to the very old firm of Rendell Palmer and Tritton, and he used to inspect the workshops in Germany or Brussels, as the case might be, and report as to the quality of the foreign goods. He did this, I think, very fairly. If the quality was about the same he said so, and he did not try to make out that the German or Belgian goods, or whatever they were, were decidedly inferior. He might in some cases have found them inferior, and he did, but in a large number of cases he said they were as good as the British. There was another factor in the case, namely, the promptness with which the goods could be delivered, and if they were wanted urgently and the despatch was going to be slower, in that case he had permission from the Government of India to take the British goods, even if they were slightly higher in price. That was all in redemption of a promise made to the Indian Legislative Assembly that the railway board would buy goods in India if they were available, or abroad if they were not available in India, and that as between foreign countries and the United Kingdom the test should be (1) the price, and the other the quality and durability of the material.

Those were the tests by which the question was decided, and they have nothing to do with good will or otherwise, because the Legislative Council had stipulated that they should be free to buy goods from Germany or any other country if they were cheaper, and the Government of India, which at that time was in no way responsible to the Legislature, had agreed to that. Therefore, the question of tariffs and preferences hardly comes into it, and if hon. Members will look at the Amendment, they will see that it says: It shall be the duty of the authority so far as it may be reasonable to ensure that plant, goods and material required within the service of the railways. and so on. That was exactly the way, as far as it was reasonable, that the practice of obtaining goods required by the railways was carried out, and those were the principles on which the tenders were accepted or not. Therefore, the Amendment, if accepted, would merely be carrying out what has been the custom for a great many years past. It is not a question of giving preference, but simply a matter of choosing material in India and accepting tenders on a reasonable basis. I hope the right hon. Gentleman will be able to agree to some form of words which will continue that practice and still observe the promise made to the Legislative Assembly at that time.

7.18 p.m.

Photo of Mr David Mason Mr David Mason , Edinburgh East

I think the Mover and Seconder of the Amendment are unnecessarily alarmed that trade will not come to this country from India. It is bound to come here, because we promote the finance of those railways on account of the Indian loans which are placed in this country. All Indian loans placed here must go to India either in goods or in service, and hon. Members are, as I say, unnecessarily alarmed, quite apart from one's thoughts upon the question of Free Trade or Protection, in putting down this Amendment. I would like to emphasise the point brought out by the last speaker in the earlier part of his remarks, that most of the railways in India are State railways and, therefore, financed by India. Most of the loans for many years to come will be placed in this market, and all these loans that are placed here and all credits established and created by India in this country must go out to India either in goods or in services.

The right hon. Gentleman the Secretary of State told us that 75 per cent. of the railway material in the past has been purchased in this country, and I believe that, as a result of the close connection between India and ourselves, even more of the loans placed here for financing the Indian railways, which are largely State railways, will go out to India from this country, because there is no other way of getting the credit which is created by placing or floating a loan in this country on behalf of India. Therefore, I would urge upon hon. Members who are concerned about the necessity for putting this into the Statute that it is unnecessary; and I agree that on the much higher ground of freedom, which has built up and made South Africa one of our best customers, this Amendment is unnecessary. We only hold Canada because we granted full autonomy to Canada, and while we are not giving full autonomy to India, the nearer we can approach to that high ground of freedom, the greater will be our credit.

7.22 p.m.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I shall not, I trust, endeavour to retrace at all the arguments which others have used, but I must address myself for a few moments to the basic foundation of the argument of the Secretary of State. His reasoning, his advice, is that we must trust entirely to good will in this matter, that good will will bring us a richer harvest than anything that could be obtained by any mandatory injunction in a measure; and I need not say how he was warmly supported in that contention by the hon. Member for Bodmin (Mr. Isaac Foot). Indeed, it is remarkable how the Secretary of State and the hon. Member for Bodmin think alike. It is a case of two hearts that beat as one. They might have collaborated for a lifetime in the same Government, so harmonious and sympathetic are their views.

But let us look at this question of good will on which everything is to depend Where is your good will? We are told to look at the past, and that in the past, since the Montagu-Chelmsford reforms, 75 per cent. of the orders have been placed in the British Empire and only 25 per cent. elsewhere. But, as my hon. Friend the Member for Barnstaple (Sir B. Peto) pointed out, this is entirely a new situation. This is a new deal. Here we are to have an entirely fresh Constitution, involving a transfer of sovereignty such as did not exist before. Very often, after the sun has gone down, there is a glow in the sky, but even in that case 25 per cent. of the orders went elsewhere, even in those periods, when we are told that we have had good will, 25 per cent. went elsewhere, to our very great disadvantage. But now you are not going to have good will. This Bill is regarded as an affront by every section of Indian opinion, and I must point out that it is these orders which will be used as counters of warfare, not necessarily for trading purposes or on economic grounds, but for counters of political warfare.

Of course they will be used. The tariff is one of the great levers by which the Indian Assemblies will set to work to extort diminutions of the safeguards and to wrest away from the Government those powers that are withheld from them. The right hon. Member for Sparkbrook (Mr. Amery) told us how terribly effective the tariff could be, how by a stroke of the pen, with no discrimination, they could shut out the entire produce of this country and confine purchases entirely to India.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The right hon. Gentleman is again going, like other hon. Members, far beyond the scope of the Amendment.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

With very great respect, may I, on the point of Order, submit that I was directly addressing myself to the arguments of the right hon. Member for Sparkbrook? I certainly had no intention, I can assure you, of going any further upon my own initiative into that field. I only thought I might venture as far as you had permitted him to go, because his statement was so very present in my mind, and no doubt in the mind of the Committee. His statement that it would be possible to confine Indian railway purchases to India alone by merely raising the tariff struck me as so very sinister and disquieting that I thought I might certainly emphasise it.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

So long as the right hon. Gentleman confined himself to the statement of the right hon. Member for Sparkbrook (Mr. Amery), that by the use of tariffs on railway material this Amendment could be rendered nugatory, he would be in order, but it seemed to me that he was going far beyond that to the general question of the use of tariffs by the Indian Government.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I have finished entirely with this point, because it does not arise upon this question except in so far as it was brought in by the right hon. Member for Sparkbrook, and that only as an illustration. The point that I want to make, however, with your permission, is the question of the first set of leverages to procure political advantages, by means of the tariffs, and the second set of leverages by the placing of orders. What will you have when this Bill is in operation? We have been told that it will bring the greatest resentment among all classes in India, and you will have a great political struggle continuing year after year. The Viceroy will be forced to use his powers, and that use of his powers will be resented. What is the remedy? The remedy is to place a large order, unreasonably, irrationally, in a foreign country, and to pick out the foreign country, no doubt, with which it would be most offensive to the people of Great Britain to see this large order placed. I remember very well, when the Irish Free State were given their plenary powers, when there was supposed to be a settlement between us, that the first thing they did when they came to build their great electric plant was to place the order in Germany. Where did they go to buy coal? They went to Poland, to anywhere but Great Britain. That was not because of economic considerations or of any commercial balancing of pros and cons, or profit and loss, but because of political malice. Here also you will have political malice, and the way in which the British Government in India, the Secretary of State, and, under him, the Viceroy will be subjected to pressure will be by the invidious, unreasonable, and hostile placing of orders—orders which could quite well come here, which possibly ought to come here, on economic grounds—abroad. I think that shows how very serious this situation is.

The right hon. Gentleman assumes himself to possess the good will of India. On the contrary, these are the actual counters of political warfare, and I think we must consider it from a new point of view. You cannot predicate good will. You have no right to predicate good will. You dare not even attempt to obtain the assent of any section of Indian opinion for your Measure. You are forcing this upon them, and, of course, they will resent it. Here in their hands is an indefinite series of means of irritation, of means of retaliation and pin pricks, which can be exercised at the expense of British trade and to the annoyance of the British people. Then, no doubt, we shall hear the hon. Member for Bodmin coming forward and saying, "Ah, well, it is true there is not that good will for which we had hoped; now you must remove those political checks which you have hitherto introduced, and then the full flow of sweetness and sympathy will once again be passing between India and Great Britain." I can hear the speech which the hon. Member would make about that. It seems to me that when we are transferring sovereignty, as we are doing, and when we are confronting ourselves with a decade of strife, tumult and irritation such as India has never seen for several generations, we are entitled to take a new view and to make reasonable provision in accordance with modern opinion.

As has been said, no other country in the world would even debate such a matter; it would be taken as a matter of course that an effort should be made to give a distinct bias in favour of and a preference to inter-Imperial goods or goods produced in Great Britain. All the more is that right when the power which claims that consideration is the protecting power by land and sea, and, in addition, is the source from which the credit originates. It is not an unreasonable proposal which has been put forward by my hon. Friend. I am very glad to see the hon. Member for Moseley (Mr. Hannon), because we have not really had in this matter the support for which we had hoped from that great city in the centre of England from whence he comes. On the contrary the hon. Gentleman's case up to now has been a case of what might be said: So shines a good deed in a naughty world. There is another text which occurs to me which says that there is more joy over one sinner that repents than over all the rest of the body that has hitherto continued to march steadfastly forward together. I would urge my hon. Friend to press his Amendment to a division. I shall certainly support him if he does so. It seems that on this occasion we are proposing the special precautions which are appropriate to the situation which is to be created by this Bill, and I trust that in any further discussions we shall not hear from the Secretary of State any more of this fallacious and misleading talk about good will. He says that we must not put anything in about trade because it would upset the Indian four-sevenths of the railway authority; it would upset them terribly and confront their ideas of autonomy and sovereignty and so forth. When, however, you stick in safeguards of every kind which they repudiate and against which they are going to war, that, of course, is not to be considered in any way.

This is only one of many points at which the evils and absurdities of this Bill can be plainly viewed by the British public. There are many such, and as we move along through this long labyrinth of clauses and arguments, we reach a point from which we can turn round and survey the scene. Here is one such point from which you can see that you are creating a political system, a consequence of which will be that the irritation in India will be worked off in striking at British trade by the placing of orders in foreign countries. That is the course upon which the Secretary of State has launched himself and it will have an undoubted result, at the end of all his labours, which will be to our extreme misfortune and suffering.

7.35 p.m.

Photo of Mr Harold Balfour Mr Harold Balfour , Isle of Thanet

If there be one thing that makes me hesitate to intervene in these Debates, it is that I may be called the right hon. Gentleman's good little deed for the day, or that he should think, possibly, that I was endeavouring to ingratiate myself into for Moseley (Mr. Hannon), I am rather his good graces. Like the hon. Member alarmed and unhappy at letting this Clause go through as it is, particularly after hearing the statement of my right hon. Friend the Secretary of State. He seemed to base the argument for the rejection of the principle of this Amendment on past achievements and the good will which has existed since 1917. If you apply the principle of good will as a basis for future policy, you must equally take into account the opposite feeling of resentment. Mental experts will tell you that there are two definite feelings—one of good will with consequent happiness, and the other of resentment with consequent unhappiness.

My right hon. Friend based his hope for the future on the evolution of good will. Right through, since the introduction of the Bill, we have been told that my right hon. Friend has been hoping for a change in the feeling of resentment. He has all the time said that he hoped this Bill would wipe away the resentment in many quarters. Nevertheless, he has introduced, and we have supported, safeguards in case that feeling of resentment does not die. Equally, if we have that state of affairs, we must allow for a possibility of good will not continuing and resentment taking its place. If we allow safeguards in case resentment does not die, we must allow safeguards in case good will does die. The weakness of the argument of the right hon. Gentleman is that he is basing himself on something in rejecting the Amendment which he has not allowed for in the main principles of the Bill. For those reasons, I hope that the right hon. Gentleman will reassure those Members who are supporting him through the major principles of the Bill that we are not jeopardising the interests of British industry by allowing the false premises of the right hon. Gentleman the Member for Epping to pass unchallenged.

7.38 p.m.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

I appreciate the difficulties, which the right hon. Gentleman the Secretary of State pointed out, in legislating for any particular Dominion by statute. Could not the right hon. Gentleman introduce words to show the view of the House that preference should be given to British Empire goods? I do not want to press him at all, but it is difficult to pass a mandatory obligation on any part of the self-governing Dominions.

Duchess of ATHOLL:

India is not a self-governing Dominion.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

If this Measure becomes law, we make India for all intents and purposes a Dominion.

HON. MEMBERS:

No.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I think that we had better leave that somewhat moot point for another occasion.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

I only want to suggest to the right hon. Gentleman that he should in some form of words indicate the strong feeling felt in the House that it is important to India and this country that everything should be done to make reciprocal trade possible.

7.41p.m.

Photo of Mr Frederick Macquisten Mr Frederick Macquisten , Argyll

This Amendment should be included in the Bill. It is not many years since I addressed 2,000 locomotive workers in St. Rollox. It is all very well the hon. Member for Moseley (Mr. Hannon) saying that we should express a pious opinion in the Bill, but suppose India turned against us, what are we to say to the people in Glasgow who make locomotives? An experience of the so-called concessions has been given by the right hon. Member for Epping (Mr. Churchill) in regard to what happened in Ireland when we abandoned the methods of Cromwell and a lot of employment was taken away from our people. We have no answer to our own unemployed and our own engineers if we do not insert some such provision as this, except that we ought to be ashamed of ourselves for not taking the precaution to protect their daily bread. The Indian railways were practically built by British capital and goods supplied by the North British Locomotive Company. Are we not going to take care of this employment? Is it to be allowed to decline for political considerations and be allowed to go to other countries? Is it to be used as a means of squeezing us for other purposes? I hope the Committee will see that our own working people are protected.

7.42p.m.

Photo of Mr Arthur Molson Mr Arthur Molson , Doncaster

The hon. Member for Argyllshire (Mr. Macquisten) seems to have been dazzled by the highly coloured picture of the right hon. Gentleman the Member for Epping (Mr. Churchill) when he was dealing with this quite small Amendment.

Photo of Mr Arthur Molson Mr Arthur Molson , Doncaster

This Amendment is a comparatively small one dealing with the purchase of railway materials. The right hon. Gentleman proceeded to discuss whether India under the new Constitution would use methods of coercion and boycott and refuse to buy British goods in order to extract further political concessions from the British Government. If the right hon. Gentleman will turn to Clause 12, he will find that it is one of the Governor-General's special responsibilities to see that methods of that kind are not adopted. In Clause 177 it is provided that: the authority in discharging their functions…shall act on business principles, due regard being had by them to the interests of agriculture, industry, commerce and the general public. If they refused to buy good railway material in this country for the express purpose of bringing political pressure to bear upon the Government, not only would that bring the special responsibility of the Governor-General into operation, but they would also not be acting in accordance with Clause 177. I could well understand this argument if it were the only argument that had been put forward, but the supporters of the Amendment put forward two arguments which are inconsistent. The right hon. Gentleman the Member for Epping and the hon. and gallant Member for Bournemouth (Sir H. Croft) suggested that this was going to be a great protection for the working-classes of this country who make railway materials. The hon. Member for Barnstaple (Sir B. Peto) pointed out that this was in no way an attempt to safeguard the commercial interests of this country in particular, but that it was merely required by this Amendment that preference should be given to British produced goods, including goods produced in India. It would, therefore, still be possible for the railway authorities, if they desired, to discriminate against this country by buying all the railway material which they required in India, however uneconomic that might be. Again, I could understand the view of those who are believers in the policy of using force in order to compel India to trade with us putting forward an Amend- ment of this kind if it were likely to be effective for its purpose, but I would point out that the Amendment says that the Authority, "So far as it may be reasonable," shall buy the railway material in this country, and thereby leaves discretion to the Authority. It is quite obvious that in any case of this kind it is necessary to give discretion to the Authority, and therefore it would be perfectly easy for them on every occasion to use their discretion in a perverse way.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

The hon. Member is now arguing against what he said in the earlier part of his speech, when he referred to Clause 12 and Clause 177 and described how the Governor-General would intervene if unreasonable use were made of these powers. Now he wishes to show that unreasonable use could be made of them.

Photo of Mr Arthur Molson Mr Arthur Molson , Doncaster

Really, my right hon. Friend does not do me justice. I drew attention to Clause 12 in connection with the highly-coloured picture which had been drawn of pressure being brought to bear upon His Majesty's Government in this country, which is exactly one of the cases in which it would be possible and necessary for the Governor-General to use his special responsibility. When I referred to Clause 177 I think I added the words "if there is any value in a statutory safeguard of that kind," and I do not believe there is any value in a statutory safeguard of that kind in cases where discretion is left to an Authority to accept one tender for a contract rather than another. Finally, although I could understand the attempt to use force in this way if it were likely to be effective, I am unable to understand how the hon. and gallant Member for Bournemouth (Sir B. Croft) was able to call in the Ottawa Agreements in support of an Amendment of this kind. Among the Ottawa Agreements the most successful was the one with India, where India was given power to negotiate without any interference by the Secretary of State. Those Agreements were entered into willingly and without any coercion, and the Ottawa principle, in so far as it has been successful in the case of the Dominions, and to a far greater extent successful in the case of India, has been that we do not presume to exploit the Empire but leave to the Dominions and to India the power of entering voluntarily into agreements with us.

7.48p.m.

Duchess of ATHOLL:

May I, before the right hon. Gentleman replies, briefly remind the Committee of the indications we have had of how some Indian politicians view this question of British trade? Some years ago the Municipal Council of Bombay placed on their paper a resolution against the purchase of goods from Britain.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

This Amendment has nothing to do with any corporation in India.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

On a point of Order. Surely we are entitled to draw analogies to show what other Indians in responsible positions have done in a like case?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I would point out that we are dealing here solely with railways.

Photo of Mr Frederick Macquisten Mr Frederick Macquisten , Argyll

The suggestion has been made that we must depend on good will, and the Noble Lady was only giving an instance of ill will.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

In any case I cannot see that any corporation has the power to purchase railway material.

Duchess of ATHOLL:

I only mentioned that case as an illustration of how the power to purchase is viewed by politicians in different parts of India. In reply to my right hon. Friend the Member for Spark-brook (Mr. Amery), who referred to the Ottawa Conference, and looked forward to the continuance of Imperial Preference, I would say that he appears to be quite unaware of the hostility to Imperial Preference shown even by the last Indian Assembly, to which I referred the other day, despite the perfectly clear benefits derived in the first year of that system. My right hon. Friend further ignored the fact that the dominant political party in India is now the Congress Party, which has declared its hostility to British trade. These are indications of how prominent Indian politicians view this question of trade with Britain, and we must take account of that attitude. Another indication was found in the fact that two years ago an Indian gentleman, the President of the Federated Chambers of Commerce of India, declared that the time had come when it was necessary for every Indian to use purely Indian goods to the exclusion of all others. So, in spite of the terms of Clause 177, there might be a strong desire on the part of members of the proposed Railway Authority to purchase material in India.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I must point out to the Noble Lady that there is nothing in this Amendment to prevent the purchase by the Railway Authority of the material in India. The sole question arising is as to whether the railway material should be purchased entirely from the British Empire, which includes India, or from foreign countries. The power to purchase in India is not affected by this Amendment.

Photo of Mr Roy Wise Mr Roy Wise , Smethwick

Is there not at the end of this Amendment something about the fair wage clause applying?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The reference to wages appears to apply to all the transactions, and so long as the wages paid were fair according to Indian standards, presumably that is all that would matter.

Duchess of ATHOLL:

I pass to the question put by the hon. Member for Bodmin (Mr. Isaac Foot), who asked, "Can you imagine anybody in this country adopting an Amendment of this kind?" I would ask him whether he could imagine any Government in this country doing what the Indian Assembly did last year, namely, continue the tariffs on textiles at the existing high rate after it had been shown that they were giving a diminishing revenue. That seems to me an indication of hostility to British trade even on the part of the last Assembly. When we find political prejudice so dominating the actions of political parties in India, even when they are not in complete power, does that not really show that conditions in India are quite peculiar, and that therefore precautions have to be taken which we should not dream of imposing in any other case? For that reason the reference of the hon. Member for East Edinburgh (Mr. D. Mason) to Canada and South Africa seemed to me to be entirely beside the point, because the conditions in India and the feeling in India and the unpractical things which have been done in India, fortunately find no analogy in any other part of the Empire.

7.52 p.m.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

I am sure that when the speeches of the Noble Lady and her friends come to be read in India, they will do anything but create an atmosphere of good will towards this country. I cannot think how she can assume that it will create good will, and bring about what she calls a reasonable attitude on the part of Indians, when in speech after speech she is accusing Indians of all sorts of actions and saying, in effect, "Although you are in the Empire you are not like anybody else in the Empire." I regard this Amendment as extraordinarily bad business for the Empire. I have always understood that the idea in the case of the Empire was to get mutual trade, but we appear to have given that up for the policy of the "gombeen man," trying to get people into your power by acting as a moneylender and then making them buy at your shop. I think that is a peculiarly low view to take of things, and I am surprised to note that the very people who take that line are those who are always protesting that we went to India for her good, and that we are so disinterested, while all the time they wish to tie India down, so far as they can, to buy in this or that shop. A further point is that while this Amendment endeavours to secure certain advantages to the whole Empire there is nothing mutual about it, because everybody knows that there are parts of the Empire which do not treat India fairly. Why should hon. Members try to impose one condition on India such as they do not impose on the rest of the Empire, unless they do not really recognise India as part of the Empire? But that is the trouble with regard to the attitude taken up by hon. Members associated with this Amendment—they do not really treat Indians as part of the Empire, but as a subject race.

7.55p.m.

Photo of Mr Samuel Hoare Mr Samuel Hoare , Chelsea

I have little to add to what. I said in the earlier stage of the Debate, but I have heard certain observations to which I ought to make some answer. It seems to he assumed by a good many of my right hon. and hon. Friends that I am a very foolish person, a confirmed optimist, always hoping that things will turn out better and trusting entirely to a good will which, in their view, does not exist. Let me say in reply that if I am a terrible optimist they are terrible pessimists. I am inclined here and now to make this suggestion, that for the rest of these Debates we should pair. I will say nothing about good will if my right hon. Friend the Member for Epping (Mr. Churchill) and the Noble Lady the Member for Perth and Kinross (Duchess of Atholl) will say nothing about ill will. Let us leave good will and ill will entirely out of it and approach all these questions on their merits alone. Secondly, some of my hon. Friends who are criticising my views upon this Amendment take the line that at a time when we are making a great change in India we are taking no precautions at all for the future. They seem to have forgotten that we are at the moment considering the setting up of a railway authority to be run on business lines independent of political interference. From the first to the last Clause in this Chapter there are safeguards of various kinds surrounding the business principles on which this authority is to be run, as to the locus standi that the Governor-General has, and as to the influence he has with the members and the chief executive officer. We are taking every precaution. We are not leaving the whole future to chance.

Therefore, I say to those who are supporting this Amendment that they are basing their criticism of the Government upon two false assumptions, first, that we are thinking only of good will as the safeguard of the future, and secondly that we are making no safeguards to ensure that the railway authority will be run on business lines. Let my hon. Friends assume that so far my arguments have not convinced them, but then let them look at the actual Amendment and ask themselves whether it really is going to help British trade or not. My own view is that it is so vague in its phraseology that nobody will be able to carry it into effect, and that the certain reaction which it will have upon opinion in India will be to excite suspicions in the mind of almost every Indian, both in British India and in the Indian States, and make this authority much less likely to give orders to British firms than they would otherwise be. I am sure the immediate effect in India will be to stimulate a movement that has made progress now for many years—to make Indian opinion mobilise itself in favour of restricting these orders to Indian firms and Indian firms alone.

The Committee will observe that under this Amendment it would be perfectly feasible for the Federal board to give all its orders to Indian firms. For these reasons and the reason chiefly that I think that the Amendment would not achieve the purpose of its movers—on the other hand, it would certainly create a great deal of suspicion in Indian minds and on that account would injure British trade almost inevitably, directly or indirectly—I say to the Committee that they would be wise, accepting all the views we hold as to our desire to stimulate British and Empire trade in every possible way, not to impose a restriction in India that would not be workable and that would be greatly resented.

8.1 p.m.

Photo of Mr John Remer Mr John Remer , Macclesfield

The theme which has been passing through the speeches of the hon. and gallant Gentlemen who have spoken from the Opposition benches and through that of the right hon. Gentleman who has just resumed his seat is exactly the same. They have both told us that we who are opposing this Bill are actuated by the same lack of good will towards the Indian people. We should be more readily convinced by the Secretary of State if we saw some evidence of that good will which we rightly hold should be shown to British trade. The hon. Member for Doncaster (Mr. Molson) referred to the Ottawa Agreement. I use it only as an analogy, but the Ottawa Agreement has not been carried out by India.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

We really cannot go into a discussion of the Ottawa Agreement.

Photo of Mr John Remer Mr John Remer , Macclesfield

I have said that I was only using it as an analogy.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

If I allowed the hon. Member to use that as an analogy, I should have another hon. Member getting up to prove that he is wrong. We must keep to the Amendment on the Paper.

Photo of Mr John Remer Mr John Remer , Macclesfield

I will keep to it, and I have no intention of going any further. I was only saying that in reply to the hon. Member for Doncaster. I am more tempted to intervene in this Debate by the speech that was made by the hon. Member for East Edinburgh (Mr. D. Mason). He made the most fallacious statement, which was exploded skyhigh many years ago, that if a loan is raised in London it must of necessity be spent in goods within the United Kingdom.

Photo of Mr David Mason Mr David Mason , Edinburgh East

Goods or services. Would the hon. Member explain how it is liquidated?

Photo of Mr John Remer Mr John Remer , Macclesfield

The hon. Gentleman's argument was proved to be fallacious by the Secretary of State in his first speech in which lie stated that only 75 per cent. of the goods purchased by the Indian railways are bought within the British Empire. It has been proved many times in this House that the amount of these loans is not spent in this country, and that in many cases these loans and credits are used to purchase abroad. But there is a very important question I want to ask of the Secretary og State. He told us in his first speech that 75 per cent. of the goods which are purchased by the Indian railways are purchased from the British Empire. It would be of considerable value to the House to know whether that 75 per cent. is arrived at by value or volume. That is a matter o great importance, for the reason that it is not merely those things, like locomotives, railway carriages and steel rails — the first three items which spring to our mind— which are purchased by the Indian railways. There are a thousand and one different items of stores which are purchased by these railways, and it is in the minor stores, in particular, where this country has lost her trade. I could give many items from the Black Country which before 1917 were almost exclusively bought within the United Kingdom, and which to-day are being bought in any old foreign country which employs sweated labour. It is well known to everybody who has any knowledge of the business of this country that we have lost considerably by the intervention of foreign countries, especially since 1917. It seems to me therefore that if there is to be good will there should be some display of it, particularly by the Indian politicians and various other people in India itself.

We in Great Britain have not had a fair deal in obtaining these orders. The Indian State railways have consistently since 1917 been purchasing from foreign countries. I would like the right hon. Gentleman, if he can, to give us the figures of what proportion of goods was bought from this country prior to 1917. I think that it would be shown on an examination of those figures that prior to 1917 there was at least 99 per cent. purchased within the United Kingdom. I feel that this Amendment, which, after all, says "So far as may be be reasonable" and "under conditions of labour which are fair," should appeal to every Member of this House when we find that this county is subjected to competition where the wages are in many case one-tenth of what are paid in this country. It is an elementary duty of everyone in this House to see that the workers of this country and of the Empire are safeguarded against unfair competition.

8.8 p.m.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

The Secretary of State's argument appeared to me to be inconsistent. He makes an appeal to this House to rely on what he calls good will, and then he goes on to explain that he has himself in this Bill provided safeguards which in his judgment should ensure fair treatment of British trade. Our point of view is that the safeguards in these Clauses are insufficient, and we attach importance to this Amendment because we believe it to be an additional safeguard. It is not really any answer for the Secretary of State to say that in his judgment there might be some way round the wording of this Clause. The effect of these safeguards is cumulative. If we do not think that the safeguards he has provided are sufficient, we are entitled to press for further safeguards asserting in an Act of Parliament the principle that as far as possible goods produced in the British Empire should be employed on the Indian railways. I should not have ventured to trouble the Committee if it had not been for the speech of the hon. Member for Limehouse (Mr. Attlee). It is a deplorable thing to see hon. Members opposite, who claim to represent British labour, not lifting a little finger to help British labour in this matter; instead, they sit and smile sweetly and superciliously, and obviously do not take the silghtest interest in the matter at all

Photo of Mr David Logan Mr David Logan , Liverpool Scotland

How did you help the British seamen in regard to the same question?

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

I certainly should not be in order in replying to the hon. Member on this Amendment. I do think that the speech of the hon. Member for Limehouse (Mr. Attlee) was deplorable; apparently, it represents the view of the Labour party. We regard it as morally right that a preference should be given to British-made goods within the Indian Empire. When we consider all that Britain has done for India, we are morally perfectly justified in asking that this constitutional machinery which we are placing in the hands of Indians should not be used to the detriment of British trade. The hon. Member for Limehouse seems to think that there is something inconsistent between that attitude and the grant of self-government. I deny that absolutely. He seems to think that there is something inconsistent between that and the welfare of the Indians. The prosperity of British trade and the greatness of this nation very much concern the welfare of the Indians. Unless this country is prosperous and powerful, it will not be able to sustain the burden that the Indian Empire imposes upon us, and it is futile to think that a population of 45,000,000 can be supported in these islands if we are deprived of our Imperial trade.

Therefore, I regard us as absolutely entitled on every moral ground to put forward this claim to the Indian people, and we are entitled also to put it forward in the Constitution Act. The hon. Member for Limehouse seems to think that the mere fact that we dare to do such a thing will generate such ill-will against us that we shall lose all our trade. I do not believe that that is the way to get good will. We shall get good will by saying frankly to all and sundry that we do expect a fair deal for British trade in this respect, and if we embody that in our Constitution I believe that we shall gain the respect of the people. It is deplorable that the Labour Party have not the gumption to lift a little finger in this matter.

8. 14 p.m.

Photo of Mr Roy Wise Mr Roy Wise , Smethwick

I understand the eagerness of hon. Gentlemen opposite to proceed to a division. They have made up their minds that they do not in any way wish to safeguard the work of the people they purport to represent. One can understand why they do not wish to do so. It is not to their interest that the British workers should be prosperous. But for discontent none of them would ever be here, and I quite understand that they desire to safeguard their Parliamentary seats. But we have a higher duty than to ensure the return of people like hon. Members opposite. The House would be little the worse for their absence and possibly the people of England would be very much the better off.

I wish, briefly, to reply to one or two points raised by supporters of the Government; not to those raised by the hon. Member for Limehouse (Mr. Attlee), because they have already been dealt with. First, I will refer to some of the remarks made by the hon. Member for Doncaster (Mr. Molson), who put forward an extremely bad case. He seemed to base the bulk of his speech on the contention that the Amendment has no meaning. If I remember his words correctly, he said that the insertion of the word "reason" in the Amendment meant that we gave complete discretion to the board to purchase where and how they would, and that the Amendment had otherwise no meaning at all. I hope I am not misrepresenting his argument. Such is not the case, because the insertion of the word "reason" gives discretion, not to the board, but to the Governor-General. It is for the Governor-General to judge whether they are using reasonable discretion or not, and, if they fail to use what he considers reasonable discretion, he may intervene and supersede the railway board. The amendment therefore has very considerable importance, both for the Indian Federal Railway Authority and for the possible sources of supply in this country from which they may purchase.

The record of the Indian railways has not been overwhelmingly encouraging. Under the present administration purchases of State-subsidised materials have been made already from Hungarian State workshops—to take one example—against materials made in this country under ordinary conditions. It is not as though the Indian railways were free agents. I claim that they are not. Without the intervention of this country, there would be no Indian railways. Without the presence of this country, there would not be one sleeper or one rail laid in India. It was under the guns of our infantry that the railways were laid in India, and it will be with the wealth of this country that future railways will be financed. There is no doubt that we have definite moral claim upon some of the fruits of our enterprise. Wherever we have given benefit we are surely entitled to draw some reward. Had we built the railways to civilise that country purely for the benefit of other people than ourselves, could we have justified the expenditure of the lives of our ancestors in that task? It is only fair to say that the Indian Empire exists, not only for the benefit of Indians, but for the benefit of the English. It is a partnership, and, as a partnership, it should be treated. The partnership is even more emphasised in this case than in any other case in India. The railways are the creation of our capital, brains and labour; surely we are entitled to see that the replacements of those railways come from the same source.

I wish to refer to the speech of the Secretary of State. He accused those who hold the same point of view as I do of creating ill will in India by our speeches, and he said that our suggestion that there might be subsequent discrimination would create ill will in India. I wonder whether the Secretary of State has ever read an Indian newspaper,

whether he realises yet that it is not possible to create more ill will, that every known source is rampant in creating ill will now and that any moderate suggestion put forward in this Committee for safeguarding Great Britain from the consequences of that ill will, which is being fostered by the weakness shown at the moment by our own Government, is not likely to create any further ill will, but rather, on the contrary, to lessen it. We were told by the Secretary of State that if we refrained from talking about ill will he would refrain from talking about good will, but the Secretary of State could not refrain from talking about good will. If he endeavoured to do so, he would be almost a trappist for the rest of this Debate. It would impose a vow of silence upon him because a—

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member seems to be getting away from the Amendment and on to the Bill. I quite appreciate his difficulty in talking on this Amendment further without repeating himself. He has gone beyond the limits of the Amendment.

Photo of Mr Roy Wise Mr Roy Wise , Smethwick

I was endeavouring to reply to the Secretary of State.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I hope that the hon. Member will understand that I do not approve of his reply, because it is not on the Amendment.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 41; Noes, 221.

Division No.133.]AYES.[8.23 p.m.
Applin, Lieut.-Col. Reginald V. K.Goodman, Colonel Albert W.Peto, Sir Basil E. (Devon, B'nstaple)
Atholl, Duchess ofGreene, William P. C.Raikes, Henry V. A. M.
Bailey, Eric Alfred GeorgeGretton, Colonel Rt. Hon. JohnSanderson, Sir Frank Barnard
Balfour, George (Hampstead)Gritten, W. G. HowardSomerville, Annesley A. (Windsor)
Boyd-Carpenter, Sir ArchibaldHunter, Capt. M. J. (Brigg)Taylor, Vice-Admiral E. A. (Pd'gt'n, S.)
Broadbent, Colonel JohnJones, Sir G. W. H. (Stoke New'gton)Thorp, Linton Theodore
Burnett, John GeorgeKnox, Sir AlfredTouche, Gordon Cosmo
Chorlton, Alan Ernest LeofricLees-Jones, JohnWayland, Sir William A.
Courtauld, Major John SewellLennox-Boyd, A. T.Wells, Sydney Richard
Craddock, Sir Reginald HenryLittle, Graham-, Sir ErnestWilliams, Herbert G. (Croydon, S.)
Erskine-Bolst, Capt. C. C. (Blk'pool)Lockwood, John C. (Hackney, C.)Wise, Alfred R.
Evans, Capt. Ernest (Welsh Univ.)Macquisten, Frederick AlexanderWolmer, Rt. Hon. Viscount
Everard, W. LindsayMills, Major J. D. (New Forest)
Fielden, Edward BrocklehurstNunn, WilliamTELLERS FOR THE AYES.—
Fuller, Captain A. G.Perkins, Walter R. D.Mr. Remer and Mr. Donner.
NOES.
Addison, Rt. Hon. Dr. ChristopherAttlee, Clement RichardBernays, Robert
Agnew, Lieut.-Com. P. G.Banfield, John WilliamBlindell, James
Albery, Irving JamesBarrie, Sir Charles CouparBossom, A. C.
Allen, Sir J. Sandeman (Liverp'l, W.)Batey, JosephBoulton, W. W.
Anstruther-Gray, W. J.Beaumont, Hon. R. E. B. (Portsm'th, C.)Bowyer, Capt. Sir George E. W.
Aske, Sir Robert WilliamBelt, Sir Alfred L.Braithwalte, J. G. (Hillsborough)
Assheton, RalphBennett, Capt. Sir Ernest NathanielBriscoe, Capt. Richard George
Brown, C. W. E. (Notts., Mansfield)Herbert, Major J. A. (Monmouth)Paling, Wilfred
Brown, Ernest (Leith)Hicks, Ernest GeorgeParkinson. John Allen
Buchan-Hepburn, P. G. T.Hills, Major Rt. Hon. John WallerPatrick, Colin M.
Burgin, Dr. Edward LeslieHoare, Lt.-Col. Rt. Hon. Sir S. J. G.Pearson, William G.
Butler, Richard AustenHope, Capt. Hon. A. O. J. (Aston)Penny, Sir George
Cadogan, Hon. EdwardHornby, FrankPetherick, M.
Campbell, Vice-Admiral G. (Burnley)Hudson, Capt. A. U. M. (Hackney, N.)Pickthorn, K. W. M.
Caporn, Arthur CecilHunter, Dr. Joseph (Dumfries)Power, Sir John Cecil
Cassels, James DaleHunter-Weston, Lt.-Gen. Sir AylmerPownall, Sir Assheton
Cayzer Maj. Sir H. R. (Prtsmth., S.)Hurst, Sir Gerald B.Ramsay, T. B. W. (Western Isles)
Cazalet, Thelma (Islington, E.)Inskip, Rt. Hon. Sir Thomas W. H.Ramsbotham, Herwald
Cazalet, Capt. V. A. (Chippenham)Iveagh, Countess ofRamsden, Sir Eugene
Chapman, Sir Samuel (Edinburgh, S.)James, Wing-Com. A. W. H.Reid, William Allan (Derby)
Cleary, J. J.Jamleson, DouglasRoberts, Aled (Wrexham)
Colville, Lieut.-Colonel J.Jenkins, Sir WilliamRopner, Colonel L.
Conant, R. J. E.Jesson, Major Thomas E.Ross Taylor, Walter (Woodbridge)
Cooper, A. DuffJohn, WilliamRuggles-Brise, Colonel Sir Edward
Cripps, Sir StaffordJones, Morgan (Caerphilly)Russell, Albert (Kirkcaldy)
Crooke, J. SmedleyKer, J. CampbellRutherford, Sir John Hugo (Liverp'l)
Crookshank, Capt. H. C. (Gainsb'ro)Kerr, Lieut.-Col. Charles (Montrose)Salmon, Sir Isidore
Croom-Johnson, R. P.Kerr, Hamilton W.Salter, Dr. Alfred
Culverwell, Cyril TomKirkpatrick, William M.Sandys, Duncan
Daggar, GeorgeKirkwood, DavidSelley, Harry R.
Davidson, Rt. Hon. J. C. C.Knight, HolfordShakespeare, Geoffrey H.
Davies, Edward C. (Montgomery)Lamb, Sir Joseph QuintonShaw, Helen B. (Lanark, Bothwell)
Davies, Rhys John (Westhoughton)Lansbury, Rt. Hon. GeorgeShaw, Captain William T. (Forfar)
Davies, Stephen OwenLawson, John JamesSimmonds, Oliver Edwin
Denman, Hon. R. D.Leech, Dr. J. W.Smiles, Lieut.-Col. Sir Walter D.
Dickle, John P.Leighton, Major B. E. P.Smith, Sir J. Walker-(Barrow-in-F.)
Doran, EdwardLeonard, WilliamSmith, Tom (Normanton)
Duckworth, George A. V.Lewis, OswaldSmithers, Sir Waldron
Dugdale, Captain Thomas LionelLiddall, Walter S.Somervell, Sir Donald
Duggan, Hubert JohnLlewellin, Major John J.Soper, Richard
Duncan, James A. L. (Kensington, N.)Loder, Captain J. de VeraSotheron-Estcourt, Captain T. E.
Dunglass, LordLoftus, Pierce C.Spencer, Captain Richard A.
Eastwood, John FrancisLogan, David GilbertSpens, William Patrick
Edmondson, Major Sir JamesLovat-Fraser, James AlexanderStanley, Rt. Hon. Lord (Fylde)
Ellis, Sir R. GeoffreyLumley, Captain Lawrence R.Stanley, Rt. Hon. Oliver (W'morland)
Eimley, ViscountLunn, WilliamStones, James
Essenhigh, Reginald ClareMabane, WilliamStorey, Samuel
Evans, David Owen (Cardigan)MacAndrew, Lt.-Col C. G. (Partick)Strauss, Edward A.
Evans, Capt. Ernest (Welsh Univ.)Macdonald, Gordon (Ince)Strauss, G. R. (Lambeth, North)
Fleming, Edward LascellesMacDonald, Malcolm (Bassetlaw)Stuart, Lord C. Crichton-
Foot, Isaac (Cornwall, Bodmin)McEntee, Valentine L.Sueter, Rear-Admiral Sir Murray F.
Fremantle, Sir FrancisMcEwen, Captain J. H. F.Sutcliffe, Harold
Galbraith, James Francis WallaceMcKie, John HamiltonThomas, James P. L. (Hereford)
Ganzonl, Sir JohnMcLean, Major Sir AlanThomson, Sir Frederick Charles
Gardner, Benjamin WalterMaclean, Nell (Glasgow, Govan)Thorne, William James
Gault, Lieut.-Col. A. HamiltonMcLean, Dr. W. H. (Tradeston)Tinker, John Joseph
Gillett, Sir George MastermanMainwaring, William HenryTitchfield, Major the Marquess of
Gluckstein, Louis HalleMakins, Brigadier-General ErnestTrain, John
Goff, Sir ParkMailalleu, Edward LancelotTryon, Rt. Hon. George Clement
Grattan-Doyle, Sir NicholasMargesson, Capt. Rt. Hon. H. D. R.Tufnell, Lieut.-Commander R. L.
Greenwood, Rt. Hon. ArthurMason, David M. (Edinburgh, E.)Turton, Robert Hugh
Grenfell, E. C. (City of London)Maxton, James.Wallace, Sir John (Dunfermline)
Griffith, F. Kingsley (Middlesbro', W.)Mayhew, Lieut.-Colonel JohnWard, Irene Mary Bewick (Wallsend)
Griffiths, George A. (Yorks, W. Riding)Meller, Sir Richard JamesWard, Sarah Adelaide (Cannock)
Grimston, R. V.Milner, Major JamesWardlaw-Milne, Sir John S.
Groves, Thomas E.Mitchell, Sir W. Lane (Streatham)Warrender, Sir Victor A.G.
Grundy, Thomas W.Molson, A. Hugh ElsdaleWhiteside, Borras Noel H.
Gunston, Captain D. W.Monsell, Rt. Hon. Sir B. EyresWilliams, David (Swansea, East)
Hacking, Rt. Hon. Douglas H.Moore, Lt.-Col. Thomas C. R. (Ayr)Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Hamilton, Sir R. W. (Orkney & Zetl'nd)Moreing, Adrian C.Womersley, Sir Walter
Hammersley, Samuel S.Morris-Jones, Dr. J. H. (Denbigh)Worthington, Dr. John V.
Hanbury, CecilMorrison, G. A. (Scottish Univer'ties)
Harris, Sir PercyMorrison, William ShephardTELLERS FOR THE NOES.—
Haslam, Henry (Horncastle)Ormsby-Gore, Rt. Hon. William G. A.Lieut.-Colonel Sir A. Lambert Ward
Heneage, Lieut.-Colonel Arthur P.Orr Ewing, I. L.and Major George Davies.

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

Clause ordered to stand part of the Bill.

Clause 178 ordered to stand part of the Bill.