II
asked that Britain should approach Australia to secure for Hong Kong the same tariff preference as Britain enjoyed, in accordance with article 15 of the Ottawa agreement. He pointed out that Hong Kong had granted Australian brandy a preference in the excise duty of three dollars a gallon and had received nothing in return. Cunliffe-Lister refused to take any action minuting that he was not prepared to press for equal treatment in the dominions for British and colonial industries like shipbuilding in which owing to different standards of living the levels of cost were necessarily different. This attitude shocked the civil servants in the Colonial Office. One senior official minuted, 'I have always assumed that the Secretary of State would be the advocate of colonial interests.' The matter was not allowed to rest there in spite of the views expressed by Cunliffe-Lister. Officials consulted the Board of Trade and when that department raised no objection a letter was sent to the Australian High Commission asking for the grant of preference. The Australian government was most unwilling to extend preference to a territory with oriental wages even though it was part of the empire, but eventually granted all the colonies preference at the same rate as Britain in respect of vessels over 500 tons only.
In 1933 Hong Kong manufacturers followed the lead of the Singapore factory in vigorously expanding their exports. Sales to Britain grew from HK$16,190 in 1930 to HK$454,252 in 1933 and to HK$1,823,874 in 1934. British manufacturers protested to the Board of Trade about this competition in their home market and the Board of Trade passed on their complaints to the Colonial Office. Cunliffe-Lister suggested that Britain should confine its preference to primary products and that entry free of duty should be refused to colonial manufactured goods which could compete with an efficient British industry. This proposal did not find favour with the civil service. Instead officials proposed that an interdepartmental committee should be set up to consider the whole question of the industrial development of the colonial empire. The committee was composed of officials from the Board of Trade, the Department of Overseas Trade, the Dominions Office and the Colonial Office. The first meeting was held in January 1934. R.V. Vernon of the Colonial Office was the chairman and was said to have been largely instrumental in drafting the committee's report.
The committee concluded that industrial development in the colonial empire was an inevitable contingency which could not be prohibited or indefinitely retarded; but the committee saw no reason why a conscious policy of the artificial encouragement of industry should be undertaken by the institution of a tariff high enough to protect the products of local industry from imports from Britain or elsewhere. The interests of British manufacturers and of colonial consumers who would have to pay a higher price for products previously imported should also be considered. So the