Commonwealth and Empire Resources

Part of the debate – in the House of Commons at 12:00 am on 3rd May 1957.

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Photo of Mr James Callaghan Mr James Callaghan , Cardiff South East 12:00 am, 3rd May 1957

I should like to thank my hon. Friend the Member for Eton and Slough (Mr. Brockway) for his eloquent speech, which I found so much in tune with a great deal of the sentiments that I would like to utter. It was a reminder to all of us that industrialisation can be bought at too high a price, and that the consequences upon the living conditions and on the breaking up of the tribal life of the backward and underdeveloped peoples of the world may be so great as to make one really wonder whether unrestricted development of the type of which we sometimes talk and think is really worth while in these areas. If my hon. Friend's speech has done nothing more—and I think it has—it has brought us back to a realisation of our great interest in the underdeveloped members of the Commonwealth.

But we are discussing today not only Africa and its territories, but also those developed areas of the Commonwealth like Australia and New Zealand, which can, at any rate politically, look after themselves. I have enjoyed all the debate, even though I thought I heard many echoes from the debate of four or five months ago. Even then, those echoes were still worth listening to.

Today, we have a second chance—and I put this point to the Economic Secretary to the Treasury—of hearing in a little more detail what is the Government's attitude on a number of these proposals. Speaking for myself and, I know, for a great many of my hon. Friends, I must say that the reply we had last time from the then Under-Secretary of State for Commonwealth Relations, who has since been translated to the Scottish Office, was singularly unimaginative, and I think that it is, in part, the dissatisfaction which many hon. Members felt with that debate that has prompted so many speeches to be made again today.

I should like to congratulate the hon. Member for Shrewsbury (Mr. Langford-Holt) on bringing up this important subject again. I agree with him very much that the basic problem here, as far as investment is concerned, is how this country is to secure sufficient capital savings to enable it to fertilise and water the underdeveloped territories of the Commonwealth.

This is the real problem, and I must say that, apart from the tax remissions that have recently been announced and which appear in the Finance Bill, the attitude of the Government seems to be broadly limited to restricting the Colonies and other parts of the Commonwealth from spending their sterling assets too quickly, and running them down. It is that rather gloomy approach that I contrast with the expansionist and buoyant approach of the hon. Member for Harrow, West (Sir A. Braithwaite), and if I had to choose between him and the hon. Member for Kirkdale (Mr. N. Pannell), I know where my vote would go.

We must approach this problem not in the spirit that we are down and out and that anybody can take advantage of us, because I never did believe that because someone thinks that we fought an excellent battle in 1940 we ought to be looked after now. I repudiate that approach. We have 50 million people in these islands, highly skilled and with very great civic virtues, and I deny the proposition that we cannot stand on our own feet and build our own future. It is in that spirit that I want to see the Treasury and the Commonwealth Relations Office approach this problem.

May I say a word about the Commonwealth Relations Office and its attitude towards other members of the Commonwealth? It is, I think, still obsessed by thoughts of the Statute of Westminster and the fact that twenty-six years ago Australia, New Zealand, South Africa and Canada wanted to break away from the Mother Country in order to live their own lives. That was no doubt true in 1931, when we passed the Statute of Westminster. I am sure that as all children grow up they wish to break away and lead their own lives, but when I talk to statesmen who come here from the Commonwealth I wonder whether they have not explored the limits of freedom and have begun to see that one cannot live entirely unto oneself in the modern world.

The Commonwealth Relations Office is falling a little behind the pace of development, in the view of many other people who are outside these islands. At any rate, I agree with those who say, "Let us really put this to the test with the Commonwealth countries; are they ready to come along with us or are they not?" This cannot be done on the basis of civil servants in the Commonwealth Relations Office talking to civil servants in the Commonwealth. As the hon. Member the Member for Harrow, West (Sir A. Braithwaite) said, this is really a matter for a great debate at the next Prime Ministers' conference.

I would say that this should become the major issue for discussion at this forthcoming conference in June or July: what is to be the pattern of development in the Commonwealth? How are we to secure the capital and the savings that are necessary to make the investment that will be needed to lift all our standards of life and make us more independent than we are today of some of the extraneous resources that some of us do not much care about?

I put this to the Government and to some hon. Members opposite. Is it possible to build up the Commonwealth in the way that we have been talking today and, at the same time, to follow a policy of liberalisation in trade both in Europe and outside of Europe, throughout the rest of the world, and particularly is it possible for us to enter into the Free Trade Area without many more reservations than are contained in the White Paper that was issued since we had our last debate in February, 1957?

It seems to me that the Government were caught napping about the Free Trade Area in its relationship to colonial products. I am sure the Government must know that the French are always ready to put across "swift ones." If I have one abiding recollection of my experience at Strasbourg, it is that the French could out-man™uvre us any day of the week. They are past masters of the art. The Government ought to be ready for that sort of thing, and instead of shedding tears about it they should be aware that it is likely to happen, anyway.

As usual, the French, at the last moment, introduced a proposition relating to the Messina Convention to the effect that the products of the French colonial territories and of the other Messina countries should be included in the Free Trade Area. So far as I know, our Government had not even given any thought to the possibility of that happening before they had declared themselves in favour of the European Free Trade Area.

So far from talking this afternoon about whether we are going forward with great schemes of Commonwealth expansion in trade, we ought to be considering what is to be our attitude to the Free Trade Area in the light of this last minute development on the part of France and the other Messina territories. I hope that we shall have some answers from the Economic Secretary to the Treasury. I speak as one who has a great affection for France, but I know that France looks after her economic interests, and we ought to make sure that we look after ours. I do not think the Treasury has thought this business out yet.

I want to put some questions to the Economic Secretary to the Treasury on the Free Trade Area, and I should like a clear indication of the Government's mind on the problem. I am glad that the Economic Secretary is to speak, because he is capable of answering these points. Let us, first, consider the results of bringing in the French Colonies. If the Free Trade Area agreement is entered into, will it mean that we shall continue to grant preferential concessions to Commonwealth produce? Because if it does not mean that, if we are excluded from doing so, why should we imagine that the Commonwealth and Colonies will be willing to continue to grant preferential concessions to British exports? Either it must be one or the other. I say to the Economic Secretary that this seems to me to be the most important question to be answered and on which we have as yet had no guidance about the views of the Government.

On the question of the liberalisation of trade, I ask the Economic Secretary this. I think it historically true, if we review the history of the last ten years, that, however desirable liberalisation may be in theory, a dose of liberalisation of trade, at any rate in the short run, is always followed by a balance of payments crisis; the balance of payments crisis gives rise to retrenchment; retrenchment gives rise to a credit squeeze; the credit squeeze seems to give rise to higher rates of interest, and, in the long run, to less investment in the Colonies.

This sequence of events may not be a causation, it may just happen every time. I ask the Economic Secretary: suppose that the Free Trade Area agreement comes into force and we go through this miserable sequence—obviously, if the Free Trade Area means anything at all it will mean more imports from the Continent of Europe into this country, we shall not have more exports without more imports—and the sequence is a balance of payments, I will not say "crisis" a balance of payments deficiency—shall we be able to reimpose quantitative controls?

As I understand this memorandum on quantitative import restrictions, according to paragraph 19—I am referring to Cmd. 72—we can, in certain circumstances. The question which follows is that if we enter into this agreement, can we ensure that if we have to reimpose quantitative restrictions we can treat the Commonwealth at least as favourably as the Free Trade Area? It seems to me that the whole purpose of this Free Trade Area is to ensure that it would be the most favourable trading unit and that territories which are not included in it will in some way or other be discriminated against. If we are to have to impose any controls on imports at all, are we bound on entering this Free Trade Area to exclude or make it more difficult for our own Commonwealth to send its imports to this territory? That is a fair question which I think the Government have to answer.

I ask this third question. We understand, as a result of the last minute intervention by the French, that the Common Market colonies produce will be imported freely into the Common Market itself. The question follows, therefore: what is to be the position of the Commonwealth or colonial products? Are they to be allowed to enter freely into the Common Market area, or are they to be discriminated against? If they are to be discriminated against, that is something else to be smoothed out before we can consider signing an agreement of this sort.

I do not wish to speak for too long, but I should like to ask two more questions, and the first is this. One of the things which I think has become more and more clear to us since the war has been the need for stability among primary producers. Part of this element of stability has been the necessity to enter into market arrangements, longterm agreements, bulk purchase contracts, and the rest of it. I am asking everyone to put aside his ideological considerations. Let us face the fact that, whether we like it or not, there are at least some territories ready to enter into long-term contracts and agreement, and some territories which certainly would not be averse to market arrangements that would secure bulk purchase.

Certainly, we on this side are ideologically more committed to it than hon. Members on that side, but I ask the Economic Secretary this: will he undertake not to bind a Socialist Government in such a way that we cannot enter into bulk purchase agreements and long-term contracts which could be and, in certain circumstances, might be desired by some members of the Commonwealth as being in their interests as well as in our interests? I believe that to be an important question which has to be answered in relation to this Free Trade Area.

My last question is this, and it is in relation to the expanded schemes of investment which we have debated today. Are we to be free under these Free Trade Area proposals to work out reciprocal trade agreements on the basis of British investment in the sterling area following our own investment?

I say this to the right hon. Gentleman, and I say it also to the hon. Member for Shrewsbury, that unless and until we get clear and satisfactory answers to these questions, the passage of the hon. Gentleman's Motion today will be a mockery. It really will. We cannot foresee any substantial expansion in Commonwealth trade unless we have at least these guarantees and conditions worked out and reconciled even with the Free Trade Area.

My own approach would be this. I should like to see the Free Trade Area and Common Market come into being. I would approach the problem not with the view of wrecking them, but with a view to trying to reconcile our basic needs and desires as substantially a debtor country.