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      Imperial Preference - I

       Table of Contents

Imperial Conference,2 Downing Street, May 7, 1907

      The economic aspect of Imperial Preference, both from the point of view of trade and of finance, has already been dealt with very fully by the Chancellor of the Exchequer and the President of the Board of Trade, and I desire in the few observations with which I shall venture to trespass upon the indulgence of the Conference to refer very little to the economic aspect, and rather to examine one or two points about this question of a political, of a Parliamentary, and almost of a diplomatic character. I want to consider for a moment what would be the effect of a system of preferences upon the course of Parliamentary business. The course of Colonial affairs in the House of Commons is not always very smooth or very simple, and I am bound to say that, having for eighteen months been responsible for the statements on behalf of this Department which are made to the House of Commons, I feel that enormous difficulties would be added to the discharge of Colonial business in the House of Commons, if we were to involve ourselves in a system of reciprocal preferences. Every one will agree, from whatever part of the King's dominions he comes, or to whatever Party he belongs, that Colonial affairs suffer very much when brought into the arena of British Party politics. Sometimes it is one Party and sometimes it is another which is constrained to interfere in the course of purely Colonial affairs, and such interferences are nearly always fraught with vexation and inconvenience to the Dominions affected.

      Now, the system of Imperial preference inevitably brings Colonial affairs into the Parliamentary and the Party arena; and, if I may say so, it brings them into the most unpleasant part of Parliamentary and political work—that part which is concerned with raising the taxation for each year. It is very easy to talk about preference in the abstract and in general terms, and very many pleasant things can be said about mutual profits and the good feeling which accrues from commercial intercourse. But in regard to preference, as in regard to all other tariff questions, the discussion cannot possibly be practical, unless the propositions are formulated in precise, exact, and substantial detail. Many people will avow themselves in favour of the principle of preference who would recoil when the schedule of taxes was presented to their inspection.

      I, therefore, leave generalities about preference on one side. I leave also proposals which have been discussed that we should give a preference on existing duties. It is quite clear that no preference given upon existing duties could possibly be complete or satisfactory. It could at the very best only be a beginning, and Dr. Jameson and Dr. Smartt, when they urged us with so much force to make a beginning by giving a preference on South African tobacco, have clearly recognised and frankly stated, that that preference would in itself be of small value, but that it would be welcomed by them as conceding "the larger principle." Therefore, we are entitled to say, that before us at this Conference is not any question of making a small or tentative beginning on this or that particular duty, but we have to make up our minds upon the general principle of the application of a reciprocal preference to the trade relations of the British Empire.

      If that be so, surely the representatives of the self-governing Dominions who ask us to embark on such a system, ought to state squarely and abruptly the duties which in their opinion would be necessary to give effect to such a proposal. The question whether raw material is to be taxed is absolutely vital to any consideration of Imperial preference. Although it is no doubt a very good answer, when the direct question is raised,—What are your notions? to say that the Colonies would leave that to the Mother Country, those who urge upon us a system of reciprocal preference are bound to face the conclusions of their own policy, and are bound to recognise that that request, if it is to be given effect to in any symmetrical, logical, complete, satisfactory, or even fair and just manner, must involve new taxes to us on seven or eight staple articles of consumption in this country. I lay it down, without hesitation, that no fair system of Imperial preference can be established which does not include taxes on bread, on meat, on that group of food-stuffs classified under the head of dairy produce, on wool and leather, and on other necessaries of industry.

      If that be so, seven or eight new taxes would have to be imposed to give effect to this principle you have brought before us. Those taxes would have to figure every year in our annual Budget. They would have to figure in the Budget resolutions of every successive year in the House of Commons. There will be two opinions about each of these taxes; there will be those who like them and favour the principle, and who will applaud the policy, and there will be those who dislike them. There will be the powerful interests which will be favoured and the interests which will be hurt by their adoption. So you will have, as each of those taxes comes up for the year, a steady volume of Parliamentary criticism directed at it.

      Now that criticism will, I imagine, flow through every channel by which those taxes may be assailed. It will seek to examine the value, necessarily in a canvassing spirit, of the Colonial Preferences as a return for which these taxes are imposed. It will seek to dwell upon the hardship to the consumers in this country of the taxes themselves. It will stray farther, I think, and it will examine the contributions which the self-governing Dominions make to the general cost of Imperial defence; and will contrast those contributions with a severe and an almost harsh exactitude with the great charges borne by the Mother Country.

      There has just been a debate upon that subject in the House of Commons; but the manner in which that question when raised was received by the whole House, ought, I think, to give great satisfaction to the representatives of the self-governing Dominions. We then refused to embark upon a policy of casting-up balances as between the Colonies and the Mother Country, and, speaking on behalf of the Colonial Office, I said that the British Empire existed on the principles of a family and not on those of a syndicate. But the introduction of those seven or eight taxes into the Budget of every year will force a casting-up of balances every year from a severe financial point of view. It has been said, and will be generally admitted, that there is no such thing in this country as an anti-Colonial party. It does not exist. Even parties, like the Irish Party, not reconciled to the British Government, who take no part in our public ceremonial, are glad to take opportunities of showing the representatives of the self-governing Dominions that they welcome them here, and desire to receive them with warmth and with cordiality. But I cannot conceive any process better calculated to manufacture an anti-Colonial party, than this process of subjecting to the scrutiny of the House of Commons year by year, through the agency of taxation, the profit and loss account, in its narrow, financial aspect, of the relations of Great Britain and her Dominions and dependencies.

      Then this system of reciprocal preference, at its very outset, must involve conflict with the principle of self-government, which is the root of all our Colonial and Imperial policy. The whole procedure of our Parliament arises primarily from the consideration of finance, and finance is the peg on which nearly all our discussions are hung, and from which many of them arise. That is

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