§ Order for Second Reading read.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. McKinnon Wood)I beg to move, "That the Bill be now read a second time."
This, I think, is the appropriate occasion upon which to explain this measure. Its primary object is to obtain an undertaking from Parliament that it will, when the time comes, provide moneys in order to make payments to carry out undertakings the Government have found it necessary to give in connection with the conduct of the War. The Bill will extend the statutory undertakings given by the Government under the War Obligations Act, 1914, and the Act of 1915. The Bill extends these sanctions as regards transactions entered into up to the date of the passing of this Bill. It does not sanction transactions entered into after the date of the passing of this Bill, but up to the date of the passing of this Bill. What I said on the Financial Resolution I repeat now, that this Bill deals with engagements entered into up to the present date. Of course, the dominant Clause of the Bill is the first Clause. Now the Government are asking, in precisely the same form as in the Bills of 1914 and 1915, a promise from Parliament that, at some future date, which cannot now be denned, it will find the money to defray certain contingent charges on the public revenue.
There was a good deal of general financial talk on the Resolution, and perhaps I may refer, for the purpose of explaining the object of the present Bill, to one or two elementary propositions which are familiar to all Members of the House. The practice of Parliament is to grant money only for the current year. There are a few exceptions, such as interest on the debt, the payment of the salaries of judges, the King's Civil List, and other smaller matters, but Parliament generally confines itself to making provision for one year. Everybody will admit that in regard to the conduct of the War it is absolutely necessary that the Government should have power to make commitments which extend beyond the year. No Government could conduct a 378 war if it did not have that power. The object of this Bill is to give to the persons with whom the Government enter into these contracts the right to come to Parliament and obtain the money which those contracts have involved. If the Government has entered into a contract which cannot be completed within the year, which goes on to another year or perhaps two or three or more years, it would not be fair to the persons who entered into that contract for the Government not to have an undertaking from Parliament that they will fulfil that contract. That is the sole object of this Bill.
§ Mr. DAVID MASONMay I ask the right hon. Gentleman whether that binds future Parliaments?
§ Mr. McKINNON WOODOh, certainly! If Parliament enters into a contract it would bind future Parliaments necessarily. That is the very object of the Bill. It is the proper and right thing, in accordance with our regular financial procedure which has been established for centuries, that the Government, having entered into these obligations, should come to Parliament and ask for its sanction. That is what the Government is doing at the present moment. Of course, there are cases where we have continuing obligations. For instance, there are contracts for the conveyance of mails and contracts for telegraphic communication which are sanctioned by Parliament by Resolution. Otherwise we come with a special Bill, as we are doing on this occasion. I would remind the House that at the beginning of the War, and even before war was actually declared, commerce was paralysed by the coming of the War, and the Government of that day, with the knowledge and approval of Parliament, entered into a great many obligations. Some of those obligations undertaken at the very beginning of the War are continuing to the present day. I will state to the House some of the facts connected with these obligations. For example, the Government had to give guarantees with a view to the restoration of credit, which covered the acceptance of bills of exchange; it had to inaugurate a system of insurance against war risks for shipping; and, after that, it had to start a system of insurance to cover risk from aircraft and bombardment. These all involve, of course, contingent liabilities on public funds. It would be impossible to bring all these 379 individual obligations before Parliament; therefore a general Bill of this character is now, for the third time, being introduced. The present Bill is exactly parallel to previous Bills.
What is the relation of this Bill to the Vote of Credit? Parliament has given the Government a large sum of money to spend for the various purposes specified in the Vote, but that money has to be spent within the financial year; therefore, although these particular contracts may be sanctioned by the Vote of Credit, it is necessary to have this Bill to sanction contracts which extend into future years. It does not give the Government power to spend money. That is done by the other Votes which the House passes. We merely ask for a general undertaking that Parliament will hereafter vote the necessary money and approves the contracts which the Government has entered into with various people. I have referred to the Government scheme relating to bills of exchange, and the Stock Exchange advances. Hon. Members will also recollect that there was the case of traders with debts abroad. They were quite unable to obtain the money, and it was necessary to give them assistance to avoid bankruptcy. Full details of all these measures have been given to the House.
The House is also familiar with Scheme A for obtaining securities, known as dollar securities, for purposes of exchange. Under this Bill the House is asked to sanction Scheme B, under which the Government is obtaining the loan of large quantities of securities, and is undertaking certain obligations to the lenders with regard to those securities. There is another class of case, arising out of a question discussed in this House and explained by my right hon. Friend the President of the Board of Trade and another which was explained by the Chancellor of the Exchequer. Both these related to the Government purchases of meat and sugar. As the House is aware the Government have been purchasing meat not only for our own Army but for the armies of our Allies, and for home consumption as well. There is a considerable liability on that head, but of course the money on these purchases will be repaid to the Government partly by the War Office, partly by our Allies, and partly by consumers. Then there are the 380 sugar purchases. These are all examples of obligations incurred since the passing of the last Act, but which have been approved, and wore sanctioned in principle, by the previous Act.
A question was asked in a former Debate as to the new obligations incurred, but as I said then, broadly speaking, this Bill does not involve any new principle as compared with previous Acts. The obligations are substantially of the same nature. Still there are one or two new obligations. The first of these is a guarantee given in regard to the town of Scarborough, and the second is in relation to the Anglo-Italian Bank, a matter in which the Board of Trade is concerned. Let me take the case of Scarborough. That town was bombarded very early in the War before any aircraft insurance scheme was in existence. This, however, is not a question of the damage done to the town. It arises from the fact that visitors were driven from the place, and even some of the residents, and the town was put in a position of great financial embarrassment. Various mortgages at short dates were called up, and the town had great difficulty in financing itself. The Local Government Board were appealed to, and they advised us that no place in the country, so far as they knew, had suffered to quite the same extent, and that it was an exceptional case in many respects. They thought it was a matter of temporary depression during the War, and that, after the War, visitors would return and there was no reason to fear that prosperity would not come back to the town, and its financial solvency be re-established. Therefore the Local Government Board strongly recommended the guaranteeing of a loan by the London Joint Stock Bank to the town of Scarborough to the amount of £123,000. With regard to other towns different questions arise. They suffered seriously from bombardment, but not from the same kind of difficulties, and their cases are being considered by the Local Government Board and the Treasury at the present moment. This Bill only deals with Scarborough.
§ Mr. G. FABERWhat about Whitby and Hartlepool, which were also bombarded?
§ Mr. WOODThose are the cases which are being considered by the Local Government Board; their condition was not exactly the same.
§ Mr. PRINGLEAnd does that apply to Lowestoft?
§ Mr. WOODI do not propose to go into the question of the Anglo-Italian Bank. That is a matter for the Board of Trade, and no doubt, if the House so desires, either the President or the Parliamentary Secretary will come down and explain the matter.
§ Sir F. BANBURYI shall desire information.
§ Mr. WOODThe point is this. As the House knows, German financial influence is very strong indeed in Italy, and it was felt it would be extremely desirable that British influence should establish itself there after the War. None of this money has been paid at the present moment, but after a good deal of consideration of the question, it was arranged that an annual subsidy should be given to the. British bank of £50,000 for the first ten years, equal to 5 per cent. interest on the capital, but not to exceed £50,000, and supposing the profits of the Bank exceed 5 per cent., then return in that case is to be made to the Treasury. That obligation, of course, does come under the Bill.
Perhaps I need not say anything more about the first Clause of the Bill, seeing that it expresses itself quite clearly and is exactly the same as the Clause in the previous Act. I have dealt with the case of Scarborough, which is contained in Sub-section (2), and with the Italian Bank. Clause 2 deals merely with a technical matter. Its object is to meet a difficulty which has been urged on the Treasury from time to time by lawyers. The advisers of the Treasury do not think there is anything in the point, but as lawyers hold different opinions, it is desirable it should be made perfectly clear. The point was this: The word "securities" was held by some lawyers to mean money secured by a charge on property. We want to make it clear that the word has a larger meaning and that it carries its usual significance. Another point is the giving of powers to trustees. Very often difficulty was experienced in obtaining the signature of trustees for the loan of securities. Some of the trustees may be abroad or ill. They may even be aliens, and it was therefore decided that where there are two trustees the consent of one with that of the persons entitled to the income of the security is to be deemed 382 sufficient, and where there are more than two trustees the consent of one half or more and of the persons interested is to be deemed sufficient. I think I have dealt with all the points in the Bill, except the one about distringas—a point of a purely technical character which I believe will be dealt with in Committee by the Solicitor-General. It would be a very rash thing for anyone not a lawyer to enter into a discussion of a point of that kind. It is a purely technical point, and I do not think that it need be discussed on the Second Reading of the Bill.
The question may be asked, What is the total amount of indebtedness to which this House is committing itself? Of course, I will give the House as much information as I can, but I think hon. Members will see on consideration that it is a question which neither I nor anybody else could possibly be in a position to answer. Now the loan to Scarborough is a new obligation. We guarantee the bank against loss, but one does not see any probability that there will be any loss in that matter. It is quite impossible, therefore, to put any figure on that obligation. Then, with regard to the British Italian Banking Corporation. I have stated the amount of the obligation. There is aircraft and marine insurance, matters with which the Board of Trade deal. It is impossible to say how far the schemes will be self-supporting. It must depend on the activities of the enemy whether they will involve an obligation or a profit. Then we come to the regulation of foreign exchanges, and that again is a matter on which I cannot possibly put a definite figure. It is a very large amount, as no doubt the House appreciates. It may increase. Take the Foreign Trade Debts scheme. This scheme is practically at a standstill, and the Exchequer liability in respect of it is not likely to exceed about £200,000.
§ Mr. HOBHOUSEBut this refers to past transactions, and surely the Secretary to the Treasury is in a position to tell us what the regulation of exchange has cost up to the present. It is quite clear we cannot say what will be the cost in the future, but this Bill has reference to past transactions, and it is with regard to them that we wish to know the sum involved.
§ Mr. WOODWe are not asking for sanction for the sums spent out of the Vote of Credit. We have got that already. It is for future obligations we are asking: Parliamentary sanction.
§ Mr. WOODMay I illustrate what I mean? Suppose I borrowed from the hon. Gentleman £5,000 stock, and promised to pay him ½ per cent. interest. If I paid him that ½ per cent. within the year I do not need this Bill for that. I need this Bill to commit Parliament to the promise that as long as I keep the securities I pay him ½ per cent. It is quite a simple point. Now take the Foreign Debt scheme. Take the guarantees in connection with various financial measures which were undertaken at the outbreak of the War. The total amount of Bills of Exchange discounted in 1914 was £120,000,000. Of this amount only £62,000 is now outstanding, which illustrates the impossibility of prophesying what amount of expenditure will be incurred. In regard to post-moratorium bills, the total advance to the Bank of England under the scheme of 1914 was £74,000; it is now £26,000. Loans to members of the Stock Exchange originally amounted to £520,000; they are now down to £39,000. I think I have given the House all the information I can about those matters.
§ Mr. LOUGHI did not quite understand whether the figure of £120,000,000 was the total amount advanced to the Bank of England to cover merchants' bills, or whether the amount is reduced to £120,000,000.
§ Mr. WOODI gave two sets of figures. The discount of bills of exchange, amounting to £120,000,000, is now £62,000. The total amount advanced to the Bank of England under the scheme of 1914 in regard to post-moratorium bills was £74,000 and is now £26,000.
§ Mr. WOODThat is the obligation which was undertaken in respect of pre-moratorium bills. Of course, we did not undertake the same amount of obligation in regard to post-moratorium bills. In refer once to the question of the hon. Member 384 (Mr. Hazleton), if the Government has entered into an obligation with regard to Dublin, I am not sure that that is not a matter for a separate Vote. If it is not a matter for a separate Vote, it is included in the general terms of the Bill. We do not set forth every obligation in detail.
§ Mr. HOBHOUSEI think my right hon. Friend has caused some misapprehension by his statement a moment or two ago that this Bill was one to give authority in future to meet expenditure incurred by the Treasury in respect of War Obligation Bills.
§ Mr. WOODI made a mistake which is often made by speakers. I am afraid I said thousands when I meant millions. It is millions in both cases—£74,000,000 and £26,000,000.
§ Sir C. HENRYYon gave £120,000,000 of bills discounted, and the figure is now only £63,000.
§ Sir F. BANBURYHe meant millions.
§ Sir C. HENRYIs my right hon. Friend certain on that point?
§ Mr. HOBHOUSEIt is very difficult to extract from the right hon. Gentleman's speech exactly what it is the Government is asking the House of Commons to do or not to do. He told us on Thursday last, and I certainly understood that this was a Bill giving the Government an indemnity for its past expenditure. It was a distinct and clear undertaking, and it was put into the Financial Resolution.
§ Sir F. BANBURYNo, they did not put it in. He said they would afterwards.
§ Mr. HOBHOUSE"Either incurred or to be incurred" was the exact phrase. The Bill is to include "the provision in like manner of money for the fulfilment of any Government war obligations incurred before the passing of the Act." That surely cannot give authority to spend money after this Act has been passed, but he tells us now that this is not merely to give him authority in respect of interest he may have to pay upon money borrowed up to the present moment, but to authorise him for all time, at all events, until this War ends, to pay interest upon the borrowed money.
§ Mr. WOODThat is not at all what I said. My illustration was perfectly clear. I said if I have borrowed money from my hon. Friend, if I can pay the interest out of the Vote of Credit I do not need this Bill, but if I have promised to pay for the next two or three years, Parliament sanctions that payment. It does not provide the money, but sanctions it, and commits itself to providing the money. In other words, it sanctions the bargain but does not give me the money., The money will have to be got by subsequent Votes.
§ Mr. HOBHOUSEThat is quite clear. What my right hon. Friend does not quite understand is that the House is uneasy—I do not think I use the word wrongly—as to what authority is being given to him for the purpose of expenditure. We thought, I certainly thought, that it was to cover all expenditure incurred up to the passage of the Bill, but it now appears that it is to give him authority—not to give him the money; there is a great distinction between the two—to incur expenditure of which he has merely announced the general details to-day.
§ Mr. WOODMy right hon. Friend has quite misunderstood it. Supposing I enter into a bargain after the passing of the Bill. This Bill does not give me any authority; we have to come to Parliament later on and get authority for the future obligations.
§ Mr. HOBHOUSEI will put it in a concrete form. Can my right hon. Friend tell us the amount of money which this Bill authorises him to spend, or can he not?
§ Sir TUDOR WALTERSIt is not for that purpose at all.
§ Mr. HOBHOUSEFor what purpose is the Bill brought in, to authorise the expenditure of what money? My right hon. Friend is a little impatient that the House does not quite understand what it is that we are being asked to do. How much money is covered by this Bill?
§ Mr. PRINGLEThe capital liabilities.
§ Mr. HOBHOUSECapital liabilities if you like, or any other annual expenditure. What is the amount? Take the war obligations of 1914. These are covered in the Schedule to the Act of 1914. War obliga- 386 tions are defined as "payments in respect of the discount of bills of exchange"—he told us the amount which is outstanding—"advances to acceptors of bills, advances to members of the Stock Exchange"—he gave us those figures—"guarantees in connection with bills of exchange and advances to traders"—I do not think he gave us those figures; perhaps he can inform us—"payments on the insurance of ships or cargoes, or dependants of persons of insured ships, loans to Allies or British Dominions, or to Egypt"—no mention has been made about that. These sums are past. Is he not in a position to tell us what advances we have made?
§ Mr. WOODMy right hon. Friend is quite on a wrong tack. If I have lent to the Colonies, say £30,000,000, and to France, say £50,000,000, there is no need to come into this Bill. There are no future obligations.
§ Mr. SPEAKERThe right hon. Gentleman had better be allowed to make his own speech.
§ Mr. HOBHOUSEI am getting into a state of greater bewilderment, which appears to be shared by every Member of the House.
§ Mr. CURRIENo.
§ Mr. HOBHOUSEI except the hon. Member. Ninety per cent. of the Members are unable to understand what this Bill is intended to do. I thought it was to extend the Schedule of the Acts of 1914 and 1915, and to give the Government power, not only to deal with those subjects, but also to deal with the case of compensation for property damaged by hostile action and so forth, and to cover any advance to the British Italian Bank; and I thought in connection with those objects the Secretary to the Treasury was going to tell us, as, indeed, ho promised to tell us last Thursday—what amount of expenditure had been incurred. He made a definite promise.
§ Mr. HOBHOUSEA definite promise to tell us what the expenditure was which was incurred under the Bill, and we agreed not to discuss the details of the Bill because we should get more on this occasion. I think I am in the recollection of the House when I make that statement. With regard to meat and sugar purchases, cannot he tell us what money is being expended? Surely that is not a very difficult question to answer. Does it run into tens of thousands, or hundreds of thousands or millions? I do not understand the principle upon which the authority is asked for, and yet the details and the amounts incurred are withheld from the House. It is impossible to criticise finance if the discussion is to be carried on in this way, and it is impossible for the House of Commons to exercise its control over finance, and we are left in a state of complete darkness both upon the amount involved in the Bill and the purposes for which it is introduced. I am deeply disappointed at the attitude which has been taken up by the right hon. Gentleman in first of all promising us the details and amounts and then giving neither the one nor the other, nor enabling any discussion of any utility to be carried on.
§ Sir C. HENRYI agree with a great deal that has fallen from my right hon Friend (Mr. Hobhouse). When we had the Resolution under discussion I was under the impression that this was a Bill to indemnify the Treasury for engagements and obligations they had already entered into without having submitted them to Parliament. The Preamble of the Bill, which is based on the Resolution, says, "With respect to obligations incurred." I do not think the importance of this measure can be minimised. If the course that the right hon. Gentleman has foreshadowed is pursued it will have a very far-reaching effect, and will give a great deal too much power to the Government and to the Treasury, even in time of War, without coming to Parliament to consult it. I should like some information on these points. The money which will be required to meet these obligations incurred, because that is the object of the Bill—
§ Sir C. HENRYWill the right hon. Gentleman look at the title of the Bill. 388 The obligations incurred will be taken out of the Vote of Credit. I believe he has admitted that. Therefore when Parliament is asked to pass a Vote of Credit, it is not only for the money which will be required for obligations already entered into, but obligations of a character of which Parliament is totally unaware. I consider that those powers are dangerous and should be curtailed. As regards Sub-section (2) of Clause 1, my right hon. Friend said that that was entirely confined to Scarborough. There is nothing about Scarborough in the Bill. When I read the Bill I thought that the Government were taking upon themselves the liability or responsibility to indemnify people for risks that were not insured. It seemed to me that it was saying that any town or any individual who had suffered loss through any hostile action, and had not insured themselves might come to the Treasury and demand compensation under this Sub-section. I am very glad to hear that that is not the intention of the Treasury, and that this Sub-section is brought forward entirely to deal with the question of Scarborough. I should like to congratulate the hon. Member for Scarborough (Mr. W. Rea) in having been so successful in his efforts on behalf of his constituents in this matter. The third Sub-section of Clause 1 deals with the British Italian Banking Corporation, and is intended to help that institution in embryo so as to give it a fair start. I am in full sympathy with the Government in rendering some financial assistance, but I do not like the course they are pursuing. This matter, we were told by my right hon. Friend, is for the Board of Trade, and therefore the Parliamentary Secretary to the Board of Trade will explain the position. I would ask the right hon. Gentleman to remember that this is not the first instance in which the Government have come forward with financial assistance to institutions. I think a Bill ought to have been presented to Parliament with this object. That was the course which was followed before the War in regard to the assistance given to the Anglo-Persian Oil Company. If the Government is going to embark upon the policy of taking interest in and giving money to certain concerns—in regard to which I am in perfect agreement with them—I think it should be presented to Parliament in a Bill and the object definitely set forward in the Bill.
389 With the object of Clause 2 I am in complete agreement. I think the Government have acted wisely in doing all they can to obtain possession of securities with the greatest possible facility. On this point I would like to ask a question which does not come directly under the Bill, but which is arousing a great deal of interest. When trustees deposit with the Treasury the securities upon which they are to be paid ½ per cent. extra interest, can the right hon. Gentleman tell me whether that ½ per cent. is for the benefit of the beneficiaries and can be distributed in the shape of income, or must it be added to the capital?
§ Mr. SPEAKERThat does not arise out of this Bill.
§ Sir C. HENRYI agree, but I thought as the matter affects the trustees and is causing a great deal of interest, the right hon. Gentleman might perhaps be able to give information on the point. I am not satisfied with my right hon. Friend's explanation of this Bill. I think the Treasury take far too great a degree of power, and that before the House gives its consent to the Bill they should require some further explanation.
§ Sir F. BANBURYThe right hon. Gentleman has told us that all the precedents are similar to this Bill. That, I think, is quite true, but there have been only two precedents, one in 1914 and one in 1915,;and those precedents were caused by the fact that this House, both in 1914 and in 1915, were of the opinion that it was necessary and advisable to give the Government of the day any powers that they chose to ask for. Consequently, acting upon that opinion, the House passed all sorts of measures without in the least knowing what they were doing, and without taking care to see that they kept any? control over the Government. I do not want to make any attack upon the Government, but I do not think the Government have exercised those powers very wisely. I think the time has arrived when the House should resume the control with which it parted two years ago and last year. Therefore, I do not think the precedents quoted by the right hon. Gentleman are very good ones. With regard to future obligations, I raised this question in the Committee stage of the Resolution for the expenses, upon which this Bill was founded. I observed that in 1914 and in 1915 it was limited to obligations 390 incurred before the passing of the Act. My right hon. Friend (Mr. Hobhouse) and the right hon. Member for Dublin University (Sir E. Carson) suggested that my point might be met by inserting as an Amendment in the Resolution the word "already," so that the Committee would give power to the Government for obligations already incurred. The Government asked us not to proceed with that Amendment because they said, as they always do say, this could be discussed upon the Second Reading. And then when you come to the Bill, you have already passed the Resolution. My right hon. Friend (Mr. McKinnon Wood) said he would undertake in the Bill to introduce words which would limit the obligations to the obligations already incurred. That has been done. But the right hon. Gentleman now says it also applies to future obligations.
I do not in the least know what he means by that. He gave an illustration. He said that where they have taken certain securities and have agreed to pay ½ per cent. for a certain time that that might occur in the future. I do not think that is so. That is an obligation already incurred in the past. The obligation was made when the bargain was concluded. The bargain was that ½ per cent. should be paid for a fixed number of years. I think it was five years, or less, but not more than five. That is an obligation already incurred; it is not a future obligation. What the House is afraid of—at any rate, what my right hon. Friend (Mr. Hobhouse) is afraid of—and what I am afraid of, and I think some hon. and right hon. Gentlemen opposite are also afraid of the same thing, is that by the introduction of the words, "future obligations," the Government might enter into obligations after this Bill is passed and say, "That is part of an obligation which we had entered into before." They might have entered into an obligation to spend £50,000, and they might enter into a further obligation to spend another £50,000 and pass it on the argument that the first obligation was only for £50,000, and that as it was the same thing they might continue with it. That, I think, is a wrong principle. I think the right hon. Gentleman ought to have been a little more candid with the House, and to have told us a little more explicitly what the object really was, and so far as he could tell us, what the obligations were. I do 391 not want to make any point about the mistake which was made in regard to £26,000 and £26,000,000, but it is a very wide mistake, and it is really very important to know whether we are spending £20,000 or £20,000,000.
§ Sir F. BANBURYMy hon. Friend reminds me that when he asked about that the right hon. Gentleman repeated it. The right hon. Gentleman says that this Bill does not provide any money. He may be technically right in that statement. On that point I am not quite sure. But I would like to draw his attention to these words in Sub-section (1) of Clause 1:
Section 1 of the Government War Obligations Act, 1914 … relates to the provision of money.What does that mean? Does that not mean that it is to provide money?
§ Sir F. BANBURYThen can Parliament go back?
§ Sir F. BANBURYThen if Parliament cannot go back it does provide the money. It is merely an evasion to say that it does not provide money, if Parliament cannot go back. By passing this Bill we do provide money for the obligations that are incurred under this Bill, either obligations that have been incurred in the past, or, according to the right hon. Gentleman, possibly may be incurred in the future. I do not think it is a wise thing to continue with these sort of Bills. We have not very much to do and we are sitting all the year round, therefore it would be very much better that we should have a separate Bill for all these obligations. We should then know where we are each time, and in that way we should be able to control the details of expenditure, which we are not able to do now. I do not know what the feeling of the House is, and I should not wish to take action unless the House generally agreed with me, but I would like to throw out the suggestion that we should move the adjournment of the Debate in order that the matter might be further considered and the Government might consider whether it would not be better to provide for this money in a different way. Hon. Members 392 who are speaking later might consider whether they desire that course to be adopted. I come now to the question of the British Italian Banking Corporation. We have been told by the right hon. Gentleman that the effect of Sub-section. (3) is to give an income at the rate of 5 per cent. for ten years upon the capital of this bank. That is a very good start.
§ Sir F. BANBURYHe said it gave interest at the rate of 5 per cent. on the capital of the bank. [An HON. MEMBER: "With a limit of £50,000 !"] What is the capital of the bank?
§ Mr. HOBHOUSEOne million is British and one million Italian.
§ Sir F. BANBURYI would ask the hon. Gentleman (Mr. Pretyman) not to be too certain as to what is the amount. My impression is that the amount of capital with which we are concerned is £1,000,000, and if that be so a sum of £50,000 would represent interest at 5 per cent. I will not go into the question whether that is right or wrong. I do not say yes or no to that, but it is rather an extraordinary departure. I do not know where the Labour Members are. They are always talking about subsidies given to rich people. This may be all right, but it is a new departure to guarantee a certain sum to a limited company in this way. I think it ought to be put into a Bill so that the House of Commons might be acquainted with all the facts and the reasons for the proposal, and so that it might express an opinion upon it. As the proposal stands now I should certainly move in Committee to limit the amount. I do not see how this can be called a war obligation. It seems to me to be a totally different thing. It is not limited for the period of the War. It is to go on for ten years. I hope the War is not going on for ten years. Hon. Members will not notice anything in this Clause about £50,000. It is:
"Any obligation incurred in respect of any advance or guarantee given to or for the benefit of the British Italian Banking Corporation."
There is nothing to prevent our being told later by the Government, "Yes, it is true 393 we did say £50,000, but we find now that it is most important to conciliate Italian opinion and Italian trade, and instead of the amount required being £50,000 it is £500,000."I think there ought to be a limit. Is the House going to part with all its control and let the Government do whatever they like in regard to finance If not, I think there should be some limit fixed. If this Clause is not left out and a new Bill brought in dealing with this matter, I shall move an Amendment in Committee to limit the amount. In regard to the questions about trustees which are dealt with in Clause 2, those are rather legal points. I do not think there is very much in them, therefore I do not propose to say anything about them. I do hope that the House will consider what I have said on the other matters. I am not at all sure that it would not be a blessing to the Government if we did move the -adjournment of the Debate.
§ 5.0 p.m.
Sir H. DALZIELI think the importance of this Debate lies in the demonstration it is giving of the fact that the Government have really uncontrolled power in regard to financial expenditure. As I understand the position, it is that the Government take up the view that they are only asking for the approval of the House to these contracts, and that they are not asking the House to endorse their obligations in regard to the future, except so far as it may be a question of interest and so forth, or obligations with regard to past debts. What does that mean? It means that they can go on for three months' time incurring vast financial expenditure as they have done in the past and ask us then to endorse it, and then ask for another Bill of indemnity in three or four months. That is the position. I think it is a very serious position indeed in regard to the control of this House, because we are practically giving them a blank cheque. I have no more idea whether this Bill means a hundred millions, or fifty millions, or whether it means a hundred thousand or fifty thousand. We have had no information whatever given us by the Government. They say it is difficult to give us the exact figures. Perhaps it is in regard to the future, but they must know what has been incurred up to the present time, almost to accuracy. They surely must know, or they can form some general idea of every item included in this Bill of expenditure that has been 394 incurred, and I must express my dissatisfaction at the incomplete statement that has been made on behalf of the Government. It is not a question at all of endeavouring to limit the real opportunity of the Government for taking quick action in regard to the War. We have only to look at the past to see how subservient this House has been. The Government have got every million they have asked for. They are coming in a few weeks for a few more hundred millions. They will get them almost without a single vote against them. That we know in advance. This House has proved its anxiety to help the Government in every respect.
The question is raised whether after more than two years of war the House of Commons can go on without any limit, giving them a free hand in any vast expenditure to which they care to commit the country. They ask for the approval of the House of Commons, and, of course, that gives the Government an indemnity. We all know what the practical working of this means. If the Government have given their name or the name of the Cabinet to any obligation this House could never repudiate it and the country would never repudiate it. Therefore we have a Government to-day which can pledge this country, without asking the House of Commons, to hundreds of millions, it may be. I am not at all sure I am understating the facts from what I know of the loans entered into. They can do all that, and then the House of Commons cannot have a single word to say to it. The only question it has to decide is "Are you going to honour the name of your own Government?" That is not a desirable state of things. I should much prefer, and I think it would be a very businesslike operation, if you were to put all these obligations together and that the Government should, periodically, come and ask for a free hand with regard to a certin number of millions. That would be a far better way. There would be a limit then, and we would know exactly how far we were going and would have the right to deal with new situations which might arise at any minute. I have been disposed to give them a special Vote in addition to the Vote of Credit, an undefined Vote, and then there would be no necessity for coming for any special Acts of this kind.
Look for example at what the Bill is! In the first place, we have no Schedule to the Bill. Why have we not a Schedule to the Bill? Why is it necessary for us to go 395 and hunt up the old Debates and Acts in order to know what these matters refer to? It would not have been any trouble at all to the Government to have put a Schedule at the end of this Bill and you would then have known at once exactly to what it refers. But they care so little for the House of Commons, because the House of Commons is so considerate to them, that they do not think that necessary. I object to reference in legislation. We ought to have it boldly stated on the face of this Bill what it means so that we could understand it without any further reference. My right hon. Friend says there is nothing in regard to the future. I think if you will look at Clause 2 of the Bill you will see at the end that he is asking us to give him permission for actual or apprehended expenditure. Surely an apprehended expenditure must be a future expenditure and not one that has been incurred in the past, otherwise they would put it down as an actual expenditure. I think that it is very vague. I ask the House to notice the number of things that we may be committing ourselves to at the present time. We have been told that the whole expenditure in regard to Ireland for example may be included in this Bill. That is a very important question. It ought not to be smuggled through without the House of Commons knowing it, because the disturbances in Ireland raise a very grave matter of policy which the House would be prepared to discuss when it has the opportunity, and it ought to be boldly stated on the face of the Bill.
Then there is the question of sugar expenditure. We have never had up to this moment any definite statement of the loss or gain in regard to the Sugar Commission. Why has there been all this secrecy? We know perfectly well the Sugar Commission can make a million whenever it likes. It can show a financial success simply by raising the price of sugar. By doing that it can make a million in a day or two, because it has full control. I submit we ought to have some information with regard to whether there has been a loss or gain, and what the exact figure is in regard to the great operations undertaken by that Commission. I may say in passing that there is a great deal of dissatisfaction throughout the country. For my part, I would not willingly give any more money to this Commission before we have had the whole of its operations under review. Thou- 396 sands of poor shops cannot get a sugar supply, while the great multiple shops, through influence, are able to get what they want. One of them has its representative as chairman of the Commission. I think it is a bad tiling to take out one particular firm and put its head on the Commission. That at any rate suggests dissatisfaction to others. These are the men we are voting money for, and we ought to be able to inquire into the whole question. Another matter arising in this Bill is that of compensation in regard to damage that has been done by aircraft or by bombardment of our East Coast towns. I do not agree that Scarborough is an exceptional case. Scarborough has the advantage—I do not suggest for a moment that it has any relation to the decision of the Government—-but it has the advantage of having the Member for Scarborough in the Government, and no doubt he was able to present Scarborough's case in a powerful way, which smaller towns on the East Coast cannot have the advantage of. Why is Scarborough to be treated differently to many of the other towns that have suffered? My right hon. Friend says this loan is given because residents had to leave and because visitors are not going to be so numerous, and therefore these poor people who keep bearding-houses are in financial straits. I sympathise very much with them, but that is not peculiar to Scarborough. Take Lowestoft or even Folkestone, and many of the other towns on the coast. Hundreds of people have been virtually ruined and are on the verge of starvation.
What I would have suggested to the Government would be that they should have appointed a House of Commons Committee to inquire into the whole matter, taking evidence and bringing forth a recommendation. Then they would have had a real case to present. But all they say is, "We are convinced Scarborough has a good case," and the cases of everyone else they are dealing with are under consideration. Why should the people in the Midland towns, where they were bombarded by German aircraft over a year ago, not have their case considered by the Government? We know that factories were destroyed. That is no secret in the Midlands and elsewhere. Why should not their case be considered after a year just as well as the case of Scarborough? It seems to me that in the course of a year they ought to have been able to make up 397 their mind on the subject. I beg the Government, therefore, to tell the House what their policy is. Are they going to limit it only to a particular town where the residents have suffered, or are they going to apply it to every town in which real damage and loss has been shown? I think they are starting on a very broad road so far as financial expenditure is concerned when they institute a principle of this kind. I am not complaining of them doing it. I think they are doing a wise thing, because if the Government are so neglectful in the matter of the air service that they could not defend the country after all the money we have given, if they are so relax in their preparation at the Admiralty that German destroyers can come and bombard our coast, then I think it is only right that the people who may have the misfortune, after paying all the taxes of living in those particular districts, should have their cases considered by the Government. They say, "Why should we suffer because of your neglect to make proper preparations?" The Government are opening up, in my opinion, a very wide question indeed when they are proposing to pay compensation where damage and loss have been incurred because of any act of war in this country. I hope they will extend it, but I hope they will do it under proper financial supervision. I agree with my right hon. Friend the Member for the City in everything he said about the Italian Bank. I go further. He seems to forget that the only announcement we have had from the Government was, I think, at Question Time, a very long time ago.
§ Sir F. BANBURYI forgot that. It was a question put by the right hon. Gentleman the Member for Spen Valley (Sir T. Whittaker).
Sir H. DALZIELYes; and that is the only statement the House has had up to the present. As far as I remember the question, they were going to provide almost an unlimited amount of money—
Sir H. DALZIELWell, I am glad there is a time limit of ten years. I must say I was rather interested in the statement my right hon. Friend made about the conditions under which the £50,000 is to be advanced to this bank. Apparently they 398 are to get £50,000 a year—that is 5 per cent. on their capital—out of the British Exchequer, but if by any chance they make a profit it is to be deducted off the 5 per cent. So if they make £10,000 a year we shall only have to pay £40,000. That is rather peculiar finance. What inducement is there to them to make profits at all? The moment they begin to make profits you are going to stop the supply of money. I think that will require a very great deal of looking into. I do not think there is much credit in that to the Exchequer. I think that if I or anyone was running a bank of that kind we should naturally be anxious to get all the money we could from the British Treasury and conserve our interests, and then make a profit after the British obligations had been disposed of. But I think the case is unanswerable against the provision in regard to the Italian banks being placed in this Bill. This is not the way to do it. The subsidising of banking companies is a grave, new departure, and it is not really, as my right hon. Friend stated, a war obligation. It is intended, as I understand, to assist us in capturing German trade in Italy. Well, that cannot by a very long stretch of the imagination be called an immediate war obligation. It may be right, but it is a thing the House of Commons should be invited to express its opinion upon in the light of day and with a square issue.
When this question was raised before an hon. Friend of mine, I think the Member for Elgin and Nairn (Sir A. Williamson), asked if a representation was made in regard to Russia whether the same thing would be done for Russia. I think that is a very good suggestion, as part of our whole policy; but it is after the War, and it ought not to be smuggled through in a Bill of this kind when the House of Commons does not realise that it is really giving its authority to a great and an important departure. What is this Bill? I do not know how the directors of the bank are appointed. I think we were told to see the articles of association. I do not think this House ought for a moment to consent to a proposal of £50,000 a year until we know who the chairman is, who the directors are, who is the Government representative, what the articles of association provide, what the remuneration of the directors is, and what kind of control the House of Commons is going to have over the whole operation.
§ Sir G. YOUNGERThat was given in answer to the question of the Member for Spen Valley.
Sir H. DALZIELMy hon. Friend is totally misinformed. He has plenty of time, and can go to the Library and bring it in now and prove that I am correct.
§ Sir G. YOUNGEROne name only was given, and it said that one director was still to be appointed.
Sir H. DALZIELDoes my hon. Friend suggest that information was given as to the remuneration of the directors?
§ Sir G. YOUNGERYes, £300 a year.
§ Sir G. YOUNGERI have seen them myself.
§ Sir G. YOUNGERNo.
Sir H. DALZIELHe is able to see documents and obtain knowledge which humble Members like myself have no opportunity of doing. What I am trying to present is this: Some of these particulars were given in reply to a question in the House. That is not the way in which to put a question like this before the House. It should be in the form of a Resolution sanctioning it by itself, and the articles of association should be circulated, and Members ought to be able to express their unhampered opinion on the whole policy. Does my hon. Friend suggest that the mere answer to questions in the House is sufficient for the House of Common? to sanction an important transaction of this kind? Nothing of the kind. I agree with my right hon. Friend opposite that that is not the way to deal with this great new departure. I submit that the House has not had sufficient information to enable it to pass this Bill. Even if it were only because of the way in which this Italian bank business has been almost smuggled through in a Bill of this kind, I should object, and in order, as it has been suggested in some of the previous speeches—
§ Mr. DILLONDo not move the Adjournment!
Sir H. DALZIELWhen I got up I intended to move the rejection of the Bill, 400 but in order not to narrow the Debate I will refrain from it now. Meantime I hope that the Government will reconsider the matter and deal with it in a businesslike spirit.
§ Mr. PRETYMANAs two or three questions have been asked about the expenditure connected with the British-Italian Banking Corporation, I hope that the House will allow me to explain the position from the Board of Trade point of view. I am not responsible for the finances of the Bill. The origin of this proposal is probably well known to the House, namely, that a very large proportion of the control over Italian commerce and finance has in recent years passed into German hands. There has been very large German control, and, naturally, Italy is very anxious to get rid of that control; and an arrangement has been made to replace that control, not by British control, but to co-operate between Britain and Italy for the purpose of providing the finances required for the development of Italian resources, and this proposal is the outcome of that. Obviously we should be able in normal circumstances to give very great financial assistance in the development of Italian resources, and had times been normal and had there not been this War there would be no need for any Government guarantee or for any Government interference. The private financial resources of this country would have been quite ample to deal with the situation, and no doubt would have dealt with it unassisted. But in present circumstances those financial resources are not available as they would be in normal times, and it is clearly the policy desired by this House, by the Government, and by the country that, even strained as we are now, we should use our utmost endeavours to advance at the same time the interests of our own trade and commerce and also those of our Allies, and by such action as is possible, either by private individuals or by the Government or by a combinaton of both, that we should take what action is now possible during the War in order that a situation may be created by which both we and our Allies—in this case one Ally, Italy—can profit afterwards. That is the whole object of this Clause, and there is no other.
Hon. Members who have criticised the Clause have suggested that it is a novel proceeding that the Government should finance a private corporation. I admit that it is, but I need hardly remind the House 401 that this War is a novel proceeding. My right hon. Friend (Sir F. Banbury) shakes his head, but I am sure that he would not deny for one moment that the financial position is wholly abnormal and that the normal rules which govern our finance cannot be pedantically adhered to in a crisis like the present. My right hon. Friend is a financial authority much higher than I, but I hardly think that he would really maintain that, if it is to be for the benefit of Italy and Great Britain that an agreement of this kind should be come to now, from which both countries would derive benefit, we should be deterred from carrying out that agreement by a pedantic search for a precedent. Therefore I do ask the House, if no precedent is set on this matter, to consider the case on its merits, and only on its merits.
§ Mr. HOBHOUSEThere is a precedent. The case of the Cunard Company affords the hon. Gentleman the precedent for which he is searching. In that case the Government came to the assistance of a purely British company and gave it a sum down, not a subsidy for ten years, and the repayment of that sum is now portion of the national income. That is a precedent.
§ Mr. PRETYMANIt is a precedent up to a certain point. But I do not want to look for precedents. I do not want to be bound by precedents now when we are at war, and all I am really concerned to show to the House is that the thing is desirable in itself. I am more concerned with that than I am with precedents, and this House will agree that in present abnormal conditions it is not possible for private financial resources to embark upon operations of this kind which, obviously, must depend largely for their success upon the conditions on which the War terminates. Clearly we have confidence that the War will terminate on conditions which will bring this scheme to maturity, but there is a risk, of which the nation which is responsible for the money should be prepared to take some share. We cannot entirely expect private people to take the whole burden on their own shoulders. That has been recognised, and, in coming to the kind of work which this financial corporation would do, they will be in a position to make advances for the development of Italian resources. I can name two particular items, for instance, in which I believe assistance is required. One is in connection with the electrification of 402 Italian railways; another is the irrigation of territories which will increase enormously in value by irrigation works. That is the kind of operation which is required by Italy, and if we can assist this corporation or these corporations to assist financially those operations, Italy would be served and England no doubt will foe benefited largely, through the advantage which will come to our Allies.
§ Sir F. BANBURYThis is a subsidy to Italy to electrify tramways.
§ Mr. PRETYMANWe are not subsidising Italy. There is no suggestion that the money should be given to Italy for this purpose. That would be the last suggestion. Italy will obtain money on fair terms for such purposes. We are not going to give money to the Italian State railways. We are going to assist the corporation to find money which can be advanced for the use of the Italian State Railway on terms satisfactory to both parties. The development of Italian commerce will be furthered, and there will be no question whatever about any obligations incurred, which will be met. And so far as finance is concerned, the corporation—which, I may say, is really the child of the London clearance banks, some thirteen in number—is to receive £50,000 annually for ten years from money provided by Parliament. The State will pay that sum, which represents 5 per cent. upon a capital of £1,000,000. If in any year the corporation is able to pay a dividend above the 5 per cent. represented by the £50,000, after providing in the ordinary way for the charges for reserve fund, and so on, which are necessary in the case of a company of the kind, this excess profit will be halved, and an equal amount will be paid to the State until the whole of the loan has been repaid, and that liability will carry over beyond the ten years for which the agreement is that the State will pay. Therefore the maximum liability of the State will be £500,000. This is a sum that is repaid under that scheme, and if the operation is fully successful the whole of the money will be repaid from time to time under the scheme which I have outlined to the House. That is the proposal. It has received the support of the Board of Trade on the grounds which I have laid before the House, and I think that it is in accordance with the interests, both of this country and of Italy, that this arrangement should be allowed to proceed. I hope, 403 therefore, that the House, in passing this Rill, will sanction the principle that we are justified in undertaking this obligation to help Italy and at the same time to advantage this country.
§ Sir C. HENRYDoes the State receive interest on the money that is borrowed?
§ Mr. PRETYMANThe £50,000 which the Government pays will provide 5 per cent. interest on the capital of £1,000,000. If the transactions of the company in any year produce a profit and from that profit it could pay, let us say 2 per cent. dividend—that is to say, that the company would be able to pay 7 per cent. dividend, then they would take 1 per cent. of this 2 per. cent. profit, and the other 1 per cent. would have to be paid to the Government because they have to pay the Government an amount equal to any dividend which they pay above 5 per cent.
§ Sir F. BANBURYIs that without putting any money to reserve?
§ Mr. PRETYMANThey have to repay the money somehow, and they cannot pay a dividend above 5 per cent. without paying the Government some equal share of what is over 5 per cent. If there happen to be 2 per cent. above the 5 per cent.—
§ Sir F. BANBURYCould they put that to the reserve?
§ Mr. PRETYMANThey could.
§ Mr. HOBHOUSEWould not that postpone their liability to repay?
§ Mr. PRETYMANI take it that it will not be suggested that money would be put to reserve with that object. I hope that the interruption does not suggest that. I hope my right hon. Friend does not suggest that a corporation of this kind has gone into this matter on the purely financial ground of making money. I think that we are indebted to this corporation, who have taken this matter up on patriotic grounds, and only desire to be allowed by this House to ask it for some assistance which would be of advantage both to Italy and this country. I should be really very sorry to hear—and I think my right hon. Friend would be sorry—to hear it suggested that the proposal put forward by this bank is merely for the purpose of making money, and that rather than repay the money they would purposely put it to 404 reserve. I hope my right hon. Friend does not make that suggestion; if he does, I strongly repudiate it.
§ Mr. FABERPersonally I am very much obliged to the hon. Gentleman for the information he has given us about this British-Italian Banking Corporation. I have a perfectly fresh and free mind on the subject. I did not hear the answer given in regard to the matter in the House on a previous day, and I know nothing about the details. I want to look at the subject absolutely broadly. I perfectly agree with the hon. Gentleman that we do not want to rake up the archives of precedents. We are living in such extraordinary times that we have to go on from hand to mouth. But there are two questions which arise—first, is it the right thing to do, and, secondly, is this the right way of doing it. With regard to the first question, I say at once that it is the right thing to do. We cannot begin to sow our seed in these matters too soon. We have been telling the Government day after day that they are always waiting to see, and that now we ought to prepare for the period after the War. Therefore, do not let us be hypercritical when the Government are doing the right thing, and doing it now. We must cast our glance to the after-war conditions, and we have got to do all we can to oust the Germans. That is our commercial duty to our own country. Italy is one of the greatest of our Allies, and certainly, if we can help her financially to oust the Germans, to put it in homely phrase, it would be better for Italy and better for us. We can extend this scheme much further, and go on to Russia, but, so far, the Government are making a beginning and are doing the right thing.
But are they doing it in the right way? I am not quite so sure about that. It is a tremendous departure—although that will not frighten me—for the Government to guarantee a private corporation. They have never done it before, and it ought not to have been done in a Sub-section of a Clause of a Bill of this kind, by which public attention is not really directed to a matter of this importance. I will not use the phrase used by a right hon. Gentleman on the other side of the House, that it was smuggled in. I am sure the Government have not any intention of that kind; I believe that they have the best intentions; still, I submit that this ought to have been a Government matter. After 405 the War our banking will have to be revolutionised, if we are to keep our trade and get more trade. We shall have to make new departures, and old-fashioned banking has got to be reconsidered, and, whatever may be the new-fashioned banking, there are various questions which will arise. Who are this British-Italian Banking Corporation to whom the Government have extended the wing of their financial protection? The hon. Gentleman states that this corporation, whoever they may be, is the child—I think that is the phrase he used—of the clearing banks. The clearing banks are a very important combined financial power. Does the hon. Gentleman say that this corporation is a child born of all the clearing banks, or how many of them?
§ Mr. PRETYMANI do not know whether it is of all the clearing banks, but I believe a large proportion of them have taken some interest in it.
§ Mr. FABERThe hon. Gentleman put it very broadly that this corporation was the child of the clearing banks, and I think he said most of the clearing banks. If it be that this corporation is the child of the clearing banks, that is a very powerful guarantee to have behind it. If it only means that two clearing banks, however important, have taken shares in this bank, that does not appeal to my mind; I should not be satisfied. I want to know if those banks represent the opinion of the banking world of London, and, if they do, still I should infinitely prefer that it was a Government Motion; in fact, in any case I should prefer that it was a Government matter. I do not see why a corporation should take up a matter of this kind. The hon. Gentleman said that they were doing it patriotically for the sake of the country. That is not quite so, because, patriotic though I am sure they are, they are obtaining a guarantee for ten years at 5 per cent. up to £50,000 a year. Will the hon. Gentleman answer me as to the clearing banks?
§ Mr. PRETYMANThe information which has been given me is that there are two clearing banks who are principally; concerned, the London and County Bank and Lloyds Bank, I think.
§ Mr. PRETYMANThat is correct.
§ Mr. FABERI think this is much too big a matter to be dealt with in this way, especially as it may lead to other schemes; and is the Government always to be providing guarantees? You ought to have had a Government scheme from the first. But it is no good my multiplying words. I have stated my views. The Government are doing the best they can, but one-wonders sometimes whether, in the press and rush of these mighty problems, they are doing the best thing.
§ Mr. PRETYMANWhat does the hon. Member mean by a Government scheme?
§ Mr. FABERI mean a Government bank, like that of France, and other countries. Germany has Government banks. We ought never to have done it in this way. We ought never to have provided the company with a guarantee by the Government at all. I doubt if this matter has been thought out. I doubt if you have had the time to think it out. I should have thought that if the Department had bad time to think it out, they would have weighed the pros and cons on a matter of this moment—as to whether it should be confided to a corporation or whether the Government should initiate the new banking system in their own way and make it a Government bank. I have said all I have got to say; it may be that I am wrong; it is merely a matter of opinion. As regards one or two other points, I think that this Bill has been shockingly badly drawn. It says that it is "to make provision with respect to obligations incurred." We have been discussing for the last hour and a half whether the operation of the Bill is limited to obligations incurred or, somehow or other, whether there may not be read into it obligations to be incurred. It would clear my mind very much if the hon. Gentleman could tell me now definitely, after all the observations that have been made in the House in the matter, whether this Bill is confined to obligations already incurred or whether it extends to obligations to be incurred?
§ Mr. WOODIf my hon. Friend will look at line 12 in the Bill, he will find that it is most expressly stated "for the fulfilment of any Government War obligation incurred before the passing of this Act." How the English language could express it more clearly than that I do not know.
§ Mr. FABERThen the speeches which have been made in this House have pro- 407 ceeded apparently on a misapprehension. Have they proceeded on a misapprhension?
§ Mr. FABERWhat frightened many hon. Members, or made them feel uncomfortable, was whether the Government were getting the sanction of the House to say "Yes" to "obligations already in-curred," and then say, in fact, that they were going to incur fresh obligations. Three or four of these speeches we have beard proceeded on the assumption that, although it is not in the Bill, that some-bow or other it was meant.
§ Mr. WOODI explained the matter as clearly as I could, but there was such a very loud conversation going on on the bench immediately below me that I am afraid I was not heard, but I could not help that. I quoted those very words.
§ Mr. FABERPersonally, I am satisfied. Under the Government War Obligations Act of 1914 certain obligations incurred were sanctioned by the House, and the Act of 1915 sanctioned further obligations. Now comes this Bill, which extends that to any obligations incurred up to the date of the passing of the Bill, and the Government have not done anything they ought not to do. If that is so, personally I am satisfied.
§ Mr. PRINGLEI want to know what those obligations are. Do you know?
§ Mr. FABERI think it would be much more satisfactory that we should know specifically, just as in the earlier Bill they were put in the Schedule.
§ Mr. WOODThe Schedule is continued by this Bill as it was in the first Bill and the second Bill, with the addition of one or two things which are expressly mentioned in this Bill, so that it is exactly on the same model as the last Bill.
§ Mr. FABERSub-section (2) of Clause 1 mentions damage by aircraft, or by enemy bombardment, although we are told Scarborough is only referred to.
§ Mr. FABERBut it seems as if these words could be applied to any place. The Sub-section says
so as to include obligations incurred in connection with the present War in 408 respect of compensation for damage to property resulting from any hostile action against His Majesty or action taken for repelling such action, and loans or guarantees of loans made for the benefit of places damaged or affected by any such action, either actual or apprehended.
§ Mr. WOODThe only obligation is in the case of Scarborough. The whole thing is conditioned by the fact that this gives power to settle obligations incurred under the Schedule with the addition of one or two things. Supposing we give a Grant to any other place, or if we did something which comes under these words in regard to any place, we should have to come to Parliament to sanction it, just as we had to come for sanction for past obligations.
§ Mr. FABERIt is very obscurely worded. If Scarborough is the only place aimed at, you might really have put it in the Sub-section and got rid of a number of very obscure words. Then we have the other words "either actual or apprehended," and the right hon. Gentleman has told us that this only refers to the past.
§ Mr. WOODThe apprehension of raids might prejudicially affect the town. I think the words are perfectly harmless.
§ Mr. DILLONThe right hon. Gentleman the Financial Secretary, speaking on the Financial Resolution, emphasised two propositions. First of all he said that the whole of the obligations which were to be guaranteed or legalised by this Bill would be scheduled, and I want to direct his attention to the fact that there is no Schedule. I quite understand that the explanation which he has given, namely, that this Bill, in order to be understood must be read in connection with the two previous Acts, and that you must carryforward the Schedule of the first Act and the amending propositions of the second Act and add to them those mentioned in this Bill. I desire to say with regard to this legislation which deals with finance—and finance of a very extensive and indefinite character—that I think it is very undesirable that a Bill should be intro- 409 duced into this House covering these large obligations without setting forth what obligations we are covering. I think there ought to be, in accordance with what the right hon. Gentleman himself promised on the Financial Resolution, a Schedule to the Bill, in which, as far as was consistent with public policy, everything covered by the Bill ought to have been set forth. We should not be driven to go and get Statutes and go back to the previous Acts in order to ascertain what we were actually called upon to do. I think that proposition is all the more sound because we are engaged in wholly unprecedented legislation. It is war legislation. I may recall the way in which in the late autumn of 1914 endless Bills were put through this House without anybody in the House taking the trouble to read them, or knowing what they were about. The times were, of course, terrible, and people simply trusted absolutely to the Government. The whole three stages of those Bills, many of them long and important, went through often within ten minutes. That being so, I think after two and a half years have elapsed, and when the House of Commons is beginning once more to find its legs, I think the Government ought not to take as a precedent the very serious precedent created in 1914, and, as it were, improve on it by introducing this Bill. The second statement which the right hon. Gentleman emphasised on the Financial Resolution was that this Bill makes no provision at all with regard to money, and provides no money. I confess when I read the Bill in the light of his explanation I thought that at least there we were on safe grounds. Now observe the extreme inconvenience and, in fact, the vice, for I think that is not too strong a word, in these great financial measures giving unheard of powers to the Government of legislating by reference in the obscurest possible way. When you come to examine this Bill in the light of the first of them, here is what Clause 1 of this Bill says:
Section one of the Government War Obligations Act of 1914 which, as extended by Section one of the Government War Obligations Act, 1915, relates to the provision of money for the fulfillment of Government War obligations.That is exactly what the right hon. Gentleman said the Bill did not do.
§ Mr. DILLONHere is what Section 1 of the Act of 1914 says, "There shall be paid out of moneys provided by Parliament." That is the language and the exact words of an Appropriation Bill. That Section goes on to say, "or if these moneys are insufficient, there shall be charged on and paid out of the Consolidated Fund or the growing produce thereof all such sums as may be required, etc." That is very strong language, and if it does not provide money, what does it do?
§ Mr. WOODAs I have stated again and again, it sanctions promises given by the Government, but it does not provide the money.
§ Mr. DILLONThen what is the meaning and force of those words?
§ Mr. WOODNo Government could conduct a war without entering into contractual obligations, and the people with whom those obligations are entered are entitled to say to the Government that they should get the sanction of Parliament for them. Undoubtedly in that sense-Parliament authorises the Government and commits itself to find the money. Of course a good deal of the money for these objects is provided in the Vote of Credit and will be paid out of the next Vote of Credit. If the matter goes on beyond the: period of the Votes of Credit, then undoubtedly Parliament will have to provide the money.
§ Mr. DILLONI am not quarrelling with, the whole procedure. I am quarrelling with the way in which the Bill was drafted and explained to the House. What I want to know is, what is the meaning of the words, "shall be provided out of moneys provided by Parliament, or, if they are insufficient, shall be charged and paid out of the Consolidated Fund"?
§ Mr. WOODThe Government having entered into contracts with these people, Parliament says we will carry out those contracts and provide the money to do so.
§ Mr. DILLONDo not these words authorise the Government, if it runs short of the money voted by Parliament, to pay out of the Consolidated Fund?
§ Mr. DILLONVery well, then, we are told this Bill is not providing money?
§ 6.0 p.m.
§ Mr. DILLONI have been a long time in this House, and have taken a very great interest in the financial debates. I have followed them closely. I have never yet heard a Minister come down and say that the words of an Act of Parliament authorising and enabling the Government to pay money out of the Consoldiated Fund provides no money. It is the most astonishing use of language I ever heard. I do not complain of the policy. I am not quarrelling with the policy, or with the sound financial policy that the Government should come to us for the authorisation of these payments or obligations. What I complain of is that the House of Commons was not told clearly by the Government what they were asked to do. Certainly I complain of the fact that this Bill has been drafted in such a way that there is no doubt whatever that the average Member of this House is asked to vote blindly. The average Member really does not in the least know what he is doing. The Secretary to the Treasury himself has to get up again and again, and attempt to explain the Bill. I venture to say even now that there is not one Member in the House who, if he were cross-examined as to what he is doing or what obligations he was incurring by voting for this Bill, would be able to give a clear and detailed answer. A Bill of this kind, following on the practice and spirit of our procedure in finance, above all, ought to be clear and definite.
When an hon. Member challenged the Government to limit themselves in a previous Act, and to give details and information about the loans we are going to make, he actually moved and carried an Amendment—I refer to two or three years ago—by which the Government were forbidden to give loans. I remember on that occasion that I intervened and succeeded in getting that wiped out. I say that to show that I do not raise this criticism unnecessarily; that I do not desire in the least to tie the hands of the Government in these great transactions. On the contrary, I think we ought to give them the utmost possible liberty in these matters—liberty which we would not dream of giving them in peace time, in dealing with foreign nations, neutrals, our Allies, secret service, and so forth. What, however, I am entitled to ask is that when the House of Commons exhibits that spirit—and no legislative assembly in the history of the world that exhibited that spirit more 412 generously and more unreservedly than have the House of Commons in the conduct of this War—that the House of Commons should be treated frankly, and that the Government should come forward with a desire, and a manifest desire, to take the House into its confidence so far as the public interest will allow, and state what are the limits. I say that in regard to the general drafting of the Bill.
With regard to the other important question, I must say the arguments have not convinced me. Do not the Government see, the danger of the new system? The Government have got into throwing something upon the floor of the House and saying. "Vote for it, it is a war measure." Therefore, any question which is calculated, or which they think calculated, to raise controversy or debate, they frame into a war measure, and say, "It is the War; run it through the House." That is a most dangerous thing. I think the right hon. Baronet the Member for the City of London is quite right and wise to protest against that. There is no man in this House who will raise any objection to the question of even large sums to loosen the hold and grip of German finance, for those of us who have been in Italy know only too well what an awful evil it has been for Italy; and also for Russia. It would be in our own interest, and we would reap an enormous reward. It would not be waste of money. But these are great questions. They are dangerous questions. The House of Commons, therefore, ought to be accorded a full opportunity of Debate in order that, if we are going to subsidise these great institutions, we may see that they are built upon sound lines. There is no question of favouritism, of private interest or concern in these matters. I think, really, it is nothing short of a great blunder on the part of the Government to introduce a matter like the Italian Bank into this Bill when it ought to be treated as a war emergency measure.
§ Mr. D. MASONThe hon. Gentleman who has just spoken got to the heart of this question when he said that though technically, as the Secretary to the Treasury pointed out, we were not actually providing money, that this really is a money liability Bill. Anyone having one of these obligations can immediately discount it, or, have an advance upon it, and therefore it is a liability on this House or the country. Very properly the hon. Member opposite pointed out that this is for an 413 unlimited amount. The right hon. and learned Gentleman the Member for the University of Dublin pointed that out when the Resolution was before the House. He said that we were asked to give a blank cheque to the Government. I do not think that we should be called upon to do that either from the past history of Government finance or from the principle enunciated. The Government on the Resolution were asked by my hon. Friend behind me the Member for Lanarkshire for some idea of the extent of these obligations. They could easily give us this from time to time by an estimate of the amount of their capital expenditure in the past, so that, of course, there would be a basis for enabling them to state their liability in the future. To be asked to subscribe to an unlimited amount seems to me really to exceed the powers of the Government, and to take no account of the generosity of the House, which has been most ample towards any commitments which the Government have made upon us for finance and money to carry on this War.
May I also support what has been said by the hon. Member in regard to the Italian obligations? While we are all anxious to extend trade—and"we shall have to extend our own trade to meet our obligations after this War—I think to be asked in a War Obligations Bill—so-called—to subscribe to and give power for advances to certain banks in regard to some particular business in Italy is not right. It should certainly come in a separate Bill. We do not know what we are doing in regard to that particular obligation. We have no control over it. The hon. Member very properly said that we supported and endorsed the principle that in the case of public money there ought to be governmental or public control. He told us plainly that the passing of subsidies for banks who may have the intention of advancing their trade—no doubt their legitimate interests—ought to carry with it some control by this House, seeing that taxpayers' money is involved. There ought to be proper control. I do not think we are supported or encouraged by the Government's past financial record in connection with this War to support anything giving them practically unlimited powers. It has been well sail that "finance is not a matter of mere arithmetic. Without sound finance no sound government is possible, and without sound government no sound finance is possible." The first of these War 414 Obligations Bills which came before the House is now an Act. It had within it a scheme for the mobilisation of American and other securities. That was debated in this House. The right hon. Baronet the Member for the City of London and many others took exception to that method, a method that they regarded as that of unfair taxation, and of penalising a certain section of the community. They also took exception, as many of us did, to the whole principle involved in that particular method of finance. We were told that that particular scheme was to regulate or support the rate of exchange, and to prevent gold exports. It has not done that. In a sense it has proved utterly inefficacious to carry out the objects for which we were asked to subscribe. It has to a certain extent maintained the exchange with America. But we were told that the object of maintaining the exchange with America was to curtail the exports from America to this country. The effect of artificially supporting the exchange with America has had an entirely opposite effect, because exports from America to this country have never been so great in their history.
The other day a question was put down by my hon. Friend the Member for Hyde, Cheshire, who asked the President of the Board of Trade the extent of the exportation of paper from America to this country. Here, again, was evidence that the policy which we are asked to subscribe to, that of giving unlimited powers to the Treasury—because the right hon. Gentleman the Secretary to the Treasury said he could not state what the amount would be and the number of millions involved in their mobilisation of further securities—is unsound finance. We are asked to give these powers to take securities. We are all probably very willing and patriotically anxious to give all necessary-powers to the Government, but we want to know the financial scheme for which the Government intend to use these powers. If we find, as I think I shall be able to show, that this particular scheme is not a sound one, and has brought about the very opposite effect to that which the Government said it would, I think we may pause when we are asked to give the Government still further powers. The hon. Member for Hyde, in his question to the President of the Board of Trade, dealt with the importation of paper from 415 America. I think most Members will agree, when we are told by the Chancellor of the Exchequer, as we are always told by the Chancellor of the Exchequer, that this policy of artificially supporting the rate of exchange is for the purpose of enabling us to pay for the munitions from America, that certainly paper enters very little into the manufacture of munitions.
What were the figures? The export of paper from the United States to this country during the years in which we have been engaged in the War—which paper was used for printing, writing, paperhanging, and other purposes—was in 1913, the year previous to the War, 157,171 cwts. In 1914 the figure had increased to 262,121 cwts. In 1915 it had gone up to 413,000 odd; while for this year, from January to October, the figure was 531,100 cwts. There we see, as I have said time after time and pointed out to the Government when we entered upon this policy, the entirely contrary effect to that which the Government submitted to the House it would have. It has enormously stimulated the export of commodities from the United States to this country, to the detriment of the manufacturers and traders in this country. If you take the monetary value, you find that the export of paper altogether amounted in 1913, as given in the same answer of the President of the Board of Trade, to £230,000, in 1914 to £262,000, in 1915 to £438,000, and in 1916 to £745,000. That, I think, surely shows the unsoundness of their policy. Why does it stimulate the export of commodities from the United States to this country? For a very good reason. One of the risks the American trader, when he is trading to this country, has to run is, of course, the rate at which he can sell his draft on London, and he has to take that risk into account. The rate varies round about 4–86 and 4–76, and lower, and it rises or falls according as the exchange is favourable or unfavourable to this country. These powers which the Government are asking us to give them, as I say, are detrimental to British trade, and are really putting a premium on American trade. The Government say they wish for powers to support artificially the rate, and prevent gold from flowing from this country to America. But in effect the Treasury says to the American trader, "Do not distress yourself 416 about the rate of exchange at which you can sell your draft. We will buy all your drafts at 4–76½."
Some of us pointed that out when the first Bill came before the House. We pointed out that this action of the Treasury was most unsound, that it would probably have the effect of stimulating American exports, that it would play into the hands of the American exporter, and that we are practically using up our resources which we ought to hold. We do not know the extent of this War. We all wish for a successful and speedy close, but we cannot tell how long it may go on, and we cannot afford to fritter away our resources in unsound financial expedients, which I have demonstrated would have exactly the opposite effect to that which they are intended to have. On a former occasion I gave examples with regard to American trades, and I think, if you study the enormous increase of exports from America to this country, you will see that they do not by any means represent munitions, and that the policy of the Government has really been a profligate one. It has just been another means of raising money by the most extravagant form of finance, and has had the effect of enormously stimulating the export of American produce and commodities to this country, to the detriment of the British trader and of the British manufacturer. That, of course, is contained in the Bill. That is one of the main powers. Very little has been said about it. Most of our discussion has been on the Italian banking matter, which is a very small matter compared with the millions involved in this policy of giving power to the Government to mobilise securities and to use them for that purpose.
We had a Debate the other day, in which many took part, with regard to the advantages of funding the Floating Debt. But there again our Debate was of little or no value, because we read in the "Times" that the Government are again issuing short-dated securities in the New-York market, and I say there is nothing in the action of the Government to demand from the House of Commons this blank cheque and to encourage us to give them these powers. They have made no case. They are unable either to give us the facts with regard to past expenditure or to encourage us to give them these unlimited powers, because if you study their finance you will find it has been most 417 wasteful, and in many instances has had the opposite effect to that which was intended. I hope I have said sufficient to show that we regard with very great gravity this Bill, and that we ought, if we believe these things, to take our courage in both hands and act upon it. It is no use criticising the Government and their finance unless we are prepared to act on our convictions, and I entirely support my colleague when he showed a willingness to move the, adjournment of the Debate because of the dissatisfaction which exists with regard to this particular measure. Of course, if there is a desire by hon. Members, as no doubt there will be, still further to develop this point, it would be inadvisable to do that at this stage. There has not been a single speech in support of the action of the Government, and yet we are asked to support them when they are unable themselves to command any support, and apparently have no followers here. They ask us to give these powers when they are unable to make their own case, and unable to give us any facts with regard to their past capital liabilities. They cannot tell us in regard to the future. If we study their financial transactions we find in many instances they are falsified by the actual results, and I shall certainly support the adjournment of the Debate when it is moved.
Mr. HAZLETONI am not going to follow those who have taken part in this Debate in discussing the merits of the proposal contained in this Bill. I am only concerned to say a few words following my hon. Friend the Member for East Mayo (Mr. Dillon) with regard to the procedure which this Bill involves, and I do venture most earnestly to support the case he has made that the Government, in putting forward this Bill, are adopting a most extraordinary procedure, and one which they have not at all fairly, properly or frankly explained to the House. For a great part of the discussion, the other day, and for the most part of this discussion to-day, it has been very difficult indeed for hon Members thoroughly to grasp what the procedure in this Bill means at all. It has been pointed out that we have had to go back to the former Acts, with which this is connected, of last year and the year before. But it is a remarkable thing that when we turn to the Act with which this is related, which was passed in 1914, Clause 1, which 418 governs this equally, as my hon. Friend the Member for East Mayo pointed out, says:
There shall be paid out of moneys provided by Parliament or, if those moneys are insufficient, there shall be charged on and paid out of the Consolidated Fund, or the growing produce thereof, such sums as may be required.What is the meaning of that? The Financial Secretary, last week, speaking on the Resolution, used these words:Of course, if these obligations can be met out of the Vote of Credit within the limits of the financial year, there is no necessity to bring in this Bill."—[OFFICIAL REPORT. 23rd November, 1916, col. 1654. Vol. LXXXVII.]I agree. But why is it necessary to bring in this Bill merely because the obligations extend over more than one financial year? I say that if the Government came down to the House of Commons and explained fully the contracts into which they had entered, and asked for the approval of the House of Commons, that would be one thing, and I could thoroughly understand that course of procedure upon their part. But in this Bill they come down without giving us practically any particulars with regard to these contracts at all, and ask the House of Commons to commit itself to the approval of them. We do not deny the Government anything that is necessary for the prosecution of the War. We do not desire to do so. But I think the key to the mystery that has prevailed so long is contained in the Act of 1914, which says that the moneys for these contracts shall be provided by Parliament, or, if not, out of the. Consolidated Fund. In other words, sup-posing two or three years hence we discover that the Government have mishandled a contract in such a way as to be to the national disadvantage. It is admitted by the Financial Secretary to the Treasury that later on, say, two or three years hence, in connection with these continuing contracts, the Treasury and Government will have to come to Parliament for the actual money to pay the current expenses of those contracts. This Bill to-day prevents Parliament two or three years hence from going into the merits of those contracts and from saying, "Having looked into this matter, we consider this is a contract the Government ought not to have made in these particular terms, and we decline to pass the money." What would happen? It is perfectly plain the Government could snap its fingers at the House of Commons and turn round and 419 say, "We do not want Parliamentary sanction for this; we will pay it out of the Consolidated Fund." This is what this Bill is for, and it has not been explained to the House that if in two or three years' time Parliament does not see fit to sanction these contracts, the Government can pay for them out of the Consolidated Fund, without the sanction and against the wishes of Parliament. I think the Financial Secretary to the Treasury ought to have explained that to the House. I ask him to deny that that course is possible; I challenge him.
§ Mr. WOODI have no desire to deny it. I will be perfectly frank. If Parliament sanctions a contract it must, of course, satisfy its obligation. I have never made any secret about it.
§ Sir F. BANBURYOh, yes. The right hon. Gentleman said distinctly that this did not provide money. Now that does provide money, because it allows the Government to mortgage the Consolidated Fund.
Mr HAZLETONI think the position is becoming distinctly clearer, and we are to understand now from the Financial Secretary to the Treasury that if for any reason, after investigating these contracts, Parliament does not approve of them later on, it has not got the power to upset them. It has not got the power to refuse to pay, either, because if it does so the Government will proceed, under the powers given by this measure, to take the money for those contracts out of the Consolidated Fund. I do not know whether there is any precedent for an extraordinary measure of that kind. I certainly know that in the Bill as passed in 1914, after the outbreak of war, this House did not give that examination to the measure at that time which it is now shown these financial measures require, and, for my part, I do say that it is an extraordinary and an unprecedented course which the Government is taking in this matter, about which they have not been frank with the House. While I know the House will not desire for one moment to stand in the way of the obligations necessary for the carrying out of the War, I hope it will refuse in this case, as in other cases we have had within the past few months, to allow the Government to follow this extraordinary procedure, and will compel them to withdraw this 420 measure, and follow some procedure more in accordance with precedent and with what is right.
§ Sir EDWARD CARSONThis discussion has gone on now for a considerable time, and I think it would be well that the House should see exactly where we stand and what it is we are asked to do. I do not profess to be an expert in financial procedure. I know the ways of the Treasury are very dark and mysterious, but, in my opinion, if this Bill means anything, it means that we are now to endorse all the financial obligations which up to the present moment the Government have entered into, all their contracts, all their obligations in reference to damaged property, and another matter about which I wish to say something, and that is the Italian Bank. If that is what we are asked to do we must go a step further. We are asked to endorse all these contracts without having the slightest intimation given to us as to what they are or even an estimate of what they amount to, and not even an estimate of what they will cost this country in future years. Is that what we are asked to do? If it is, all that I can say is that it seems to me that the whole procedure is a farce. If the representative of the Government gets up and says, "We have no way of telling the House of Commons what the obligations are into which we have entered and we cannot estimate what they are going to cost the country—it may be millions, but the House of Commons is not concerned because we shall charge that as a mortgage upon the Consolidated Fund, and we cannot let you know even to an approximate degree what it is we are doing," then I say it would be far better to boldly pass an Act which would avoid these things altogether, and say that so long as the War goes on the Government can enter into any obligations they like. It really comes to that. I am not saying that they may not be right, and I certainly am the last person to wish in any wise to prevent the Government enter ing into any contract so long as they take care to give it careful consideration, which is invariably done in all these matters. I do not think, however, that we ought to pretend that we exercise control over these things, and have the responsibility for them put upon us, if we are to be furnished with no material upon which to form our judgment I am very much interested in the second Sub-section, because I am told that the obligations 421 mentioned there relate to the unfortunate transactions in Dublin. We have often tried to get out of the Government exactly what are the arrangements they have made in regard to that matter.
§ Mr. PRINGLEThe right hon. Gentleman said it was only Scarborough. [An HON. MEMBER: "Another time he said it was Dublin!"]
§ Sir E. CARSONSub-section (2) provides that
The Schedule to the Government War Obligations Act, 1914, shall be further extended so as to include obligations incurred in connection with the present War in respect of compensation to damage to property resulting from any hostile action against His Majesty or action taken for repelling such action.If the right hon. Gentleman tells me that it means that the Government intend putting in words securing compensation for damage to property resulting from any hostile action inflicted by a belligerent Power, of course that would make it clear.
§ Mr. WOODIt is conditioned by the words "incurred before the passing of the Act." We do not take future liabilities.
§ Sir E. CARSONThat is my point. We know the Governmnet have incurred obligations in reference to property destroyed in Dublin.
§ Sir E. CARSONI thought all the money for these things' was to come out of the Vote of Credit.
§ Mr. WOODThis Bill does not apply to money paid for future obligations, but it applies to obligations incurred up to the present but extending into the future Supposing we have entered into an obligation to pay interest this year, or the next year, or perhaps for four years, that undertaking of the Government is now sanctioned by Parliament. What has been done for Dublin has been paid—
§ Sir E. CARSONIndeed, it has not.
§ Mr. PRINGLEHas the obligation been incurred with regard to Dublin?
§ Sir E. CARSONThere is a Commission sitting in Dublin which has to estimate losses not merely with reference to property, but with reference to individuals.
§ Sir E. CARSONReally, the right hon. Gentleman does not know what it does do. He told us the other day that when the Bill came on it would contain full information and tell us every obligation.
§ Sir E. CARSONIt would be far better to say that this is a formal state in the carrying out of the obligations of the Government. For my part, all I can say is that I have not the faintest idea, and I do not believe any hon. Member of this House has, in regard to what this Bill is going to do. I now come to Sub-section (3), which provides that
any obligation incurred in respect of any advance or guarantee given to or for the benefit of the British-Italian Banking Corporation is hereby declared to be an obligation undertaken in connection with the present War.Are we going to enter into this banking operation in support of some particular bank without all the details being put before us? This strikes me as an extraordinary proposal. What is this banking corporation going to do! I agree with what the right hon. Baronet the Member for the City of London (Sir F. Banbury) said, that the subject of the British-Italian Banking Corporation is a matter which ought to be included in a separate Bill, and we ought to be able to thoroughly thresh it out as a separate matter, because it is quite plain that, having declared it to be an obligation in connection with the present War, it shows we are doing something which is not really an obligation connected with the present War, and we are declaring by an Act of Parliament that it is such an obligation, otherwise it would come as an ordinary obligation under the other words of the Section. Under these circumstances it is very difficult to know what to do. I do not wish in the slightest degree to impede the necessary business of the Government or prevent them getting the money, but I feel it is very difficult to vote away 423 money coming from the taxpayers, perhaps for many years to come, without being given the slightest indication of the amount, or the nature of the various sums which are asked for. I suppose that all that I can do is to say to myself, "Trust the Government and have confidence in them." I suppose that is the best thing to do. As far as I am concerned if this Bill goes to a Division I should not feel it my duty to oppose it, but I think the right hon. Gentleman ought to take note that we shall expect in Committee very much more elaborate details than we have had up to the present, which will enable us to know what we are voting for. I would suggest also that the Government might show a little more interest in the matter and be here to answer the speeches which have been made from all parts of the House, and not leave us always in a fog as to what is being done. The whole position is most unsatisfactory, and for my part I say that I think the House is being asked to take part in what is really little less than a farce.
§ Mr. PRINGLEI beg to move "That the Debate be now adjourned."
The sole question underlying the discussion which has been going on for two-and-a-half hours is whether the House of Commons is to know what it is doing. The procedure the Government have adopted both on the Resolution and the Second Reading seems to be cunningly devised for the purpose of keeping us entirely in the dark. On the Committee and Report stages of the Resolution I endeavoured to elicit from the representative of the Government what was included under the Resolution upon which this Bill is based. He then told us that the details would be given when the Bill came on for the Second Reading. On that occasion he said:
Our position is not an unreasonable or an unusual one. We shall bring in a Bill which gives all the details, and the House will be able to express its opinion on any one of them.Can any hon. Member who has listened to the whole of the Debate and the cross-examination to which the right hon. Gentleman has been subjected say that the House has really received any substantial information regarding the details of this Bill? Take, for example, Sub-section (1) of Clause 1. It is drafted in such a way as to conceal altogether what is being done. It refers to the Statute for 1914, which was passed as an emergency 424 measure. We all remember that every one of the Acts passed in the autumn of 1914 was described as emergency legislation, and this Act was published in the manual of emergency legislation, and as the House believed that was an emergency measure it allowed it to go through with very slight discussion. There was only a discussion on the Treasury scheme in regard to bills of exchange initiated by the late Sir Arthur Markham, but apart from that, owing to the emergency character of the legislation, the House gave the Government power without any real discussion. Now the Government both this year and last year include by reference, not for one year, but for the purpose of further years, the powers which were secured in that way simply by emergency proposals. The right hon. Gentleman has not even taken the trouble to tell us this afternoon what was in the Schedule of that Act. There are five paragraphs in the Schedule of the Act of 1914. The first deals with guarantees given to the Bank of England in connection with the discount of bills of exchange, advances to acceptors, and so on. The second relates to guarantees given in connection with bills of exchange drawn by traders having debts due from abroad which are not immediately recoverable. The third refers to payments on contracts of insurance or reinsurance against war risks of ships or cargoes. The fourth deals with any loan raised by any of the Powers allied in the present war or by the Government of Egypt, or by the Government of any of His Majesty's Dominions or any British Possession or Protectorate. The fifth covers the maintenance or assistance in connection with the present War of food supply, trade, industry, business or communications in the United Kingdom or in any other country, or the relief of distress in the United Kingdom or in any other country.It is true that the right hon. Gentleman in his speech gave us details of what had been done under the obligations incurred in respect of bills of exchange, but he gave us no information as to the payments on contracts of insurance or reinsurance, and nothing as to loans contracted on behalf of the Allies or the Colonies. I do not suggest that from time to time as these loans are incurred, the details should be given to the House, but I think for the complete year the Government should state the amount of the loans which have been advanced The most important of 425 the obligations here mentioned was not explained. The maintenance or assistance in connection with the present War of food supply, trade, industry, business or communications in the United Kingdom or in any other country, or the relief of distress in the United Kingdom or in any other country. We know that in November, 1915, the obligations incurred in that respect were expected to be very small, but we are now on the eve of very large operations taking place, and very much larger obligations than were then considered possible have been undertaken during the present year. It is at least the duty of the right hon. Gentleman to listen. I am going to put some questions to him. We have made extensive purchases of wheat during the last year. About a year ago the hon. Member for West Toxteth (Mr. Houston) asked the Prime Minister whether ho would make a statement regarding wheat and give us an opportunity for a discussion. The Prime Minister promised an opportunity for a discussion, but from that day to this no information has been given. Now that the Government are asking for an Act of Indemnity in respect of these obligations, they should tell us what money has been spent on the purchase of wheat and what has been the result of the transactions up to date. They certainly ought to tell us what has been the result of their transactions in regard to meat. We know that there have been very large transactions. They also ought to state what has been the result of their transactions in regard to sugar. These are only some of the foodstuffs in respect of which contracts have been made, but the right hon. Gentleman, in explaining this Pill, and admitting it is a Bill of indemnity and a Bill authorising further payments, has not thought it right to inform the House of the details of a single one of these transactions. That is a position which the House of Commons should not accept. It should insist, when such an indemnity is being asked for, upon being informed of the details in respect of which the Government are to be indemnified, and also the details of the contracts in respect of which payments will have to be made in the future, because undoubtedly extremely large payments arising out of these contracts will yet have to be made. Neither in respect of the indemnity for the past, nor in respect of the payments which are to be borne on the Consolidated Fund in the future, has 426 there been a single word of explanation given by the right hon. Gentleman.
Beyond this we know that the Schedule of last year's Act is also involved, and the right hon. Gentleman has not taken the trouble to mention a single one of the paragraphs in that Schedule. We have the relief of dependents of persons on any merchant ship or fishing vessel. He might surely have told us what had been spent in this matter up to date. Then there is compensation in respect of persons killed or injured on any merchant ship or fishing vessel, contracts of insurance against war risks of the personal effects of masters, officers, seamen, and fishermen, and payments in respect of aircraft and bombardment insurance contracts. When we passed the Act of last year it was understood that the insurance was going to be sufficient to cover both aircraft risks and bombardment risks.
§ Mr. WOODI very fully explained, in moving the Second Reading of the Bill, that this was not a case of risk or of the payment of damage or anything of that kind. I explained that it was a guarantee to the bank in respect of advances and not a grant in any sense.
§ Mr. PRINGLEI was intending to deal with that Clause later. I am pointing out that by this Bill we are extending the kind of compensation which formerly we thought would be required to be paid in respect of either losses by bombardment or from aircraft. Then we have the arrangements for restricting enemy supplies. We know that very large operations have taken place in connection with those arrangements, and the House is surely entitled now to some details as to the finance of past operations. I am not asking for an estimate of what may be required in the future, but we know that very large operations have taken place, and now that the House is asked for an indemnity it surely ought to know the details of those operations in respect of which the indemnity is required. Then there are the arrangements for the regulation of foreign exchanges. That matter was very fully discussed during the Debate on last year's Act, and my hon. Friend the Member for Coventry (Mr. D. Mason) has stated very cogently again to-day, as he stated then, the reasons why he thinks that was an unsound operation. Further, there is a scheme for enabling securities to be placed at the disposal of the Treasury in connection with foreign 427 exchanges, and any exchange of obligations with any powers allied with His Majesty in the present War. All these things are involved in this Bill, taut it is only in respect of two or three things that the right hon. Gentleman has thought it worth while to make any explanation. I have mentioned quite a number of these matters where the House should insist upon an explanation before it gives a Second Reading to this Bill. The right hon. and learned Gentleman the Member for Dublin University (Sir E. Carson) told us that we ought to insist upon information being given in the Committee stage. We shall not get an opportunity, because this is merely a reference. It says:
Section one of the Government War Obligations Act, 1914, which, as extended by Section one of the Government War Obligation Act, 1915, related to the provision of money for the fulfillment of Government War Obligations incurred before the passing of the last-mentioned Act, shall be further extended,and so on. You cannot move Amendments effectively in the Committee stage so in any way to restrict the action of the Government. In the same way Sub-section (2) does not give us a great opportunity. The real opportunity is the Second Reading of the Bill, because the whole thing is involved in the re-enactment of the previous Acts. Beyond the re-enactment of the previous Acts there is, I agree, very little in the Bill. My complaint is that the right hon. Gentleman has not told us what is involved in the re-enactment of the previous Acts, and the House of Commons should not consent to that re-enactment without far more information than he has yet consented to give. I go on to this interesting Sub-section (2). The right hon. Gentleman told us that it only related to Scarborough. Why was all this very minute and subtle drafting devised for the purpose of dealing with what he calls "the peculiar case of Scarborough." Why did he need to say that the Schedule was to be extended so as to includeobligations incurred in connection with the present War in respect of compensation for damage to property resulting from any hostile action against His Majesty or action taken for repelling such action, and loans or guarantees of loans made for the benefit of places damaged or affected by any such action, either actual or apprehended.428 Why should he require to deal in an obligation already incurred with losses only apprehended? Is that something due to the peculiar position of Scarborough? Is he not only going to pay for losses which actually arose from the last bombardment, but also for losses which at present are only apprehended? It requires a little more explanation. We know, of course, the peculiar position of Sear-borough in being represented by a member of the Government. It is true that he is an unpaid member, but this may be the solatium. I desire to point out that Scarborough is not the only place that has suffered either from bombardment or aircraft raids. It is not the only place that has suffered from any hostile action against His Majesty or action taken for repelling such action. Let the House notice the very wide terms. Has any contract already been entered into in respect of any other place, or is there any such contract in contemplation which will be completed before the passing of this Act? Because, mark you, it saysany obligation incurred before the passing of this Act.The right hon. Gentleman has told us that the only obligation so far incurred is in respect of Scarborough, but I think he ought also to tell us whether there is any contract now in course of negotiation which may be completed before the passing of this Act and in respect of which it is necessary to have this Clause in the wide terms that I have just read. Obviously those wide terms are not necessary for the purpose of covering the sole case of Scarborough. I think I have made out a case for some further explanation from the right hon. Gentleman in respect of Sub-section (2). I now come to Subsection (3). I think it is wise for the House to look at the extraordinary form of this Sub-section, and I hope Mr. Speaker will in future look at it. It says:Any obligation incurred in respect of any advance or guarantee given to or for the benefit of the British-Italian Banking Corporation is hereby declared to be an obligation undertaken in connection with the present War.7.0 p.m.Apparently the Government think that they can get any sort of obligation brought into an omnibus Bill of this kind simply by the expression, "It is hereby declared to be an obligation undertaken in connection with the present War." I could give instances of very large obligations for 429 procuring indemnities in the same way. I might suggest, for example, a scheme, which has found great favour among my own friends, for a Mid-Scotland canal uniting the Firth of Forth and the Clyde. It could not be completed during this War, but then the obligations in respect of the Italian-Banking Corporation are not confined to this War; they are to extend ten years after the War. This canal might now be undertaken, and it might take ten or fifteen years to construct. Then the Government might obtain the consent of the House of Commons to it by bringing in a Bill saying, "Any obligation incurred in respect of the canal is hereby declared to be an obligation undertaken in connection with the present War." I submit to the House that this is not the proper way of dealing with the obligations of this country. When they are making new obligations in respect of the country surely it is the duty of the Government to introduce a measure which will convey to the House full knowledge of the details of the plan which they propose and not seek to smuggle it through in a Sub-section of an omnibus Bill of this kind. I think the case I have put to the House of the attempt now being made by the Government to smuggle through large measures of legislation without giving adequate information to the House is an attempt which should not be tolerated, and I desire to ask the House now to mark its sense of the contempt with which it is being treated by insisting on the adjournment of the Debate.
§ Mr. R. LAMBERTI beg to second the Motion.
§ Question put, and negatived.
§ Original Question, "That the Bill be now read a second time," put, and agreed to.
§ Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Rea.]