§ Order for Committee read.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."—(Mr. Chancellor of the Exchequer.)
§ MR. RYLANDS
, in moving, as an Amendment—That, in the opinion of this House, it is desirable that a Select Committee should be appointed to inquire into and report upon the whole subject of local loans, before any alteration is made in the terms under which the Public Works Loans Commissioners are authorized to advance loans to local bodies,said, this was a measure which gave the Public Works Loans Commissioners authority to issue a definite sum on loans for public works. It was also a Bill which proposed to make extensive alterations in the terms upon which these 744 loans should be advanced by the Commissioners. The former part of the Bill was unobjectionable; but the latter part was of an extraordinary character and open to serious question. That was the justification of the hon. Member for Birmingham (Mr. Chamberlain) in not dividing the House upon the second reading, because it was impossible to vote against the necessary provisions of the Bill. The Amendment, however, which he (Mr. Rylands) himself was about to make was one that would not be fatal to the Bill. It was simply to the effect that before any great change was made in the conditions upon which public works loans were to be advanced the whole subject should be referred to a Select Committee, with a view to securing from Parliament a decision which was likely to be satisfactory, and to meet the requirements of the case. He thought the House had reason to complain that the Chancellor of the Exchequer should have, by bringing forward the Bill at so late a period of the Session, placed them in some difficulty in dealing with it. Another reason was, that the right hon. Gentleman, in proposing these new provisions, had advanced arguments in their support which were scarcely justified by the circumstances of the case. The right hon. Gentleman gave a very important justification of this Bill by stating the amount of the losses that had been experienced by the Commissioners in advancing money for local purposes, and said that he proposed by this Bill to save the country from such losses in the future. But he (Mr. Rylands) ventured to say that the right hon. Gentleman's case had entirely failed, because the losses he quoted were on a class of loans advanced at a rate to cover the risk of any such losses. From a Return issued by the Secretary to the Treasury, he found that many of the losses were on loans advanced at the full rate of 5 per cent interest; and ho wished to point out that the losses wore, in the main, upon advances upon what were called "undertakings." They were undertakings got up by localities with a view to making a certain profit on the outlay, and the security had been practically dependent upon the profit so anticipated, and in places where the profit had not been made the undertaking had not furnished a sufficient security, and the Commissioners had 745 met with a loss. But he had also to observe that the very largest loss in that Return was on loans for workhouses in Ireland; and that loss, he believed, was entirely occasioned by the course which the House itself took, and was not a matter within the discretion or responsibility of the Loan Commissioners. It was imposed upon them by the action of the Executive Government, supported by Parliament, and there could be no doubt whatever that the loan was almost in the nature of a gift, and when it was found impossible to obtain repayment of the money it was written off as a bad debt. However, what he wished to call the attention of the House to was the effect of the proposals of the Chancellor of the Exchequer. The Bill struck mainly at two great operations under the Public Works Loans system—one was the loans under the Education Acts, and the other was the loans under the Public Health Acts. These two classes of loans mounted up to by far the largest portion of the money advanced by the Commissioners. In the case of education loans, under the Act they were to be granted at 3½ per cent, and to be repayable within 50 years. In the case of sanitary loans, the rate of interest was to be 3½ per cent, or such other rate as might, in the judgment of the Commissioners of the Treasury, be necessary in order to enable the loan to be made without loss to the Treasury. With regard to the Education Act, it was quite clear that the terms upon which loans should be advanced were part of a deliberate arrangement, by which Parliament sought to facilitate the working of the Act, and the building of schools at the heavy expense which must be incurred within the first few years. The same argument applied to loans for sanitary purposes; the terms were part of the conditions under which the Public Health Acts were passed. Now, with regard to these two great branches of public loans, against which only this Bill would be effectually aimed, he ventured to say that they were for objects of a national character, about which it was not for them to inquire whether the Treasury made a profit or not. When they had an object in which the people all over the Kingdom had an equal interest it was a matter of very little concern whether the 3½ per cent which was 746 charged by the Treasury did, or did not, exactly cover the amount the Treasury had to pay. Practically, the rate charged by the Treasury had been sufficient to recoup its outlay. The Commissioners' Report for 1877–8 showed that, although the loans for educational and sanitary purposes totalled £13,000,000, there were really no losses, because the local authorities paid up their instalments with great regularity. Therefore, the reason given by the Chancellor of the Exchequer was no justification for the provisions in this Bill, which would interfere with the action of the Commissioners in the matter. He (Mr. Rylands) wished to draw a great distinction between loans for national objects and loans for purely local objects; but the Bill did not make that distinction, and that was his chief objection to the measure. He did not object to the Chancellor of the Exchequer taking means to protect the public from a class of loans on which there had been losses. He did not object to stringency being applied with regard to loans for local purposes, which might be in themselves good objects, but still were not objects of a national character. The Commissioners at present were authorized to lend money for all sorts of purposes—for baths and washhouses, bridges, ferries, burial boards, canals, rivers, cattle diseases prevention, churches and parochial chapels, Colleges, emigration, fisheries, harbours, railroads, Law Courts, lunatic asylums, and a number of other objects. He thought there could be no doubt of the propriety of a Committee investigating the desirability of lending money for many of these purposes, which might be properly dealt with by the locality themselves, who might have power to issue debenture stock, and to contract loans on their own responsibility. To show the necessity of some revision of the list of these objects he had quoted, he would mention that on the loans for churches and parochial chapels, amounting to £448,918, a loss had been made of £8,289. He thought that was a class of loans which the Commissioners ought never to have touched, and which ought now to be struck off. [The CHANCELLOR of the EXCHEQUER: They are struck off.] He was very glad to hear that statement from the right hon. Gentleman; but, at all events, the striking off of these loans was a recent 747 event. His reason for referring to these miscellaneous objects was simply to urge that a Committee might, with great advantage, go through the list, with the design of removing such as they thought unfit to be continued under the Public Works Loans Act. But he wished to point out, with regard to these proposals of the Chancellor of the Exchequer, that they did not at all meet the object the right hon. Gentleman had in view. Of course, if his object was to strike at the operation of the Education and Sanitary Acts, he had succeeded; for there was no doubt that, in carrying out the provisions of those Acts, local bodies would be placed at great disadvantage under this Bill. But his Bill, the right hon. Gentleman said, was to protect the country from loss. But it did not do anything of the kind. He proposed to obtain the protection by charging a high rate of interest, which experience had shown to be entirely inoperative in preventing previous losses; and he also proposed that no single body should receive more than £100,000 in advance within a single year. That limitation would probably lead to some inconvenience, and render more difficult the carrying out of certain objects which local authorities had in view; but he (Mr. Rylands) could not see how it would in any way prevent loss and protect the Exchequer. Ho proposed to refer the subject to a Select Committee, simply because he thought they ought not, without the greatest consideration, to do anything likely to interfere with the operation of the Sanitary Act, or of the Education Act. It would be altogether improper for them, by a Bill of that character, to practically repeal important provisions in those two important Acts. He thought, also, a Select Committee would be of the greatest use to determine, after inquiry, how far local loans should be advanced for public objects, and how far facilities should be offered to local bodies for obtaining the means to carry out public objects. He begged, in conclusion, to move the Amendment of which he had given Notice.
To leave out from the word "That" to the end of the Question, in order to add the words "in the opinion of this House, it is desirable that a Select Committee should be appointed to inquire into and report upon the whole subject
of local loans before any alteration is made in the terms under which the Public Works Loan Commissioners are authorized to advance loans to local bodies,"—(Mr. Rylands,)
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ MR. THOMSON HANKEY
said, if there was any hon. Member on the Opposition side of the House whom he should have thought would never have made that proposal it was his hon. Friend the Member for Burnley (Mr. Rylands). His hon. Friend was the very last man he should have thought would have made it, because, as he (Mr. Hankey) understood, the sole object of the Bill was to save public money, and to prevent its being lent to an undue extent. There was no reasonable risk involved to any measures proposed by Parliament, such as public education and harbours of refuge. All those matters would go on as nearly as possible as heretofore. But there were other questions which were pressed before Parliament, and among them were sanitary and other works relating to the improvement of towns; and what frightened him was the assertion of the hon. Member for Birmingham (Mr. Chamberlain), who tried to prove to them the other day that as long as they lent money on the security of the rates of large towns no possible risk would be incurred. He would not say that the hon. Gentleman actually used the words "to whatever extent we lend;" but he put it that there was no fear of any application being made which could not fairly be granted, as long as they took those securities. Well, now, he (Mr. Hankey) contended those grants were not for the kind of objects that the Government of this country should borrow money for to lend to private Corporations. There was plenty of capital always ready in this country seeking investment, for all good and useful purposes—that was, all purposes from which the capitalist believed that his money would be returned with interest. But when application was made to the Public Works Loans Commissioners nine times out of ten it was because the money could be got cheaper from the State than from the public. That showed that the public did not think 749 the security so good as Parliament thought it, and he thought the public were very much better judges of what was good security. It had been stated that it was all the same whether money was lent for 20, 30, 40, or 50 years; but he (Mr. Hankey) said there was a very great difference. There was a great risk of what might happen in 30 or 40 years time, which they were not now competent to judge. Flourishing towns had risen up of late years—take Middlesborough, for instance—but who was to say that their prosperity would continue, and that no changes in that respect would take place? Changes were taking place at the present moment. They heard of great difficulties in the manufacturing districts, and those were the very towns which were anxious to borrow money. Ho did not allude to such towns as Birmingham, which had been established for centuries; but it did not follow, because money might be safely lent to Birmingham, that it might be safely lent to other parts of the country. The object of this Bill was to give the Government the power of imposing some restrictions, which would make people hesitate a little before they borrowed money. Tie said that hon. Members on the Opposition side of the House ought to hail such a measure, because they were the parties who were anxious to impose restrictions on the Government of the country becoming great lenders of money, and encouraging speculations of various kinds which he did not think required any assistance. There was no difficulty whatever in all the money that was required for public purposes being found by individuals, except in those cases which were alluded to the other day—cases of a peculiar nature, in which the whole country was interested, such as harbours of refuge, and education. There might be other cases that might spring up from time to time, and in such cases the Commissioners were not likely to act indiscreetly. He should be sorry to see any difficulty thrown in the way of this Bill. He thought it was an extremely right measure, and he was extremely sorry to see it opposed, especially by Members on that side of the House.
§ MR. SHAW LEFEVRE
said, the objection of his hon. Friend behind him (Mr. Thomson Hankey) practically amounted to this—that it would be wise 750 for the Government to make no loans at all. If they followed his advice, they would shut up the system, and practically get rid of all loans. For his own part, he (Mr. Shaw Lefevre) earnestly hoped the Government would accede to the suggestion of the hon. Member for Burnley (Mr. Rylands), and postpone the contentious clauses of the Bill to next Session, and then appoint a Committee to consider the measure. He believed that the more the subject was considered the more it would appear that the groundwork on which the Bill originally rested did not sustain the argument of the Chancellor of the Exchequer, and also that the details of the Bill were not well considered. The main ground on which the Chancellor of the Exchequer founded the Bill was that there had been losses on loans; but those losses were only arrived at by including in the calculation a number of old loans which were made to all kinds of institutions, and which ought not fairly to be included in any such account. The only fair way was to see whether there had been a loss on loans of the same nature as were now being made for education and sanitary purposes. Taking seven classes of loans of old date, made to local authorities on the security of the rates, he found the losses had been very trivial indeed. The loans he referred to were loans to burial boards, loans under the Cattle Diseases Act, loans in respect of Law Courts, loans to local boards, loans for lunatic asylums, loans for public works in municipal districts, and loans for workhouses. They amounted to £9,000,000, of which £2,000,000 remained due, and the only loss had been £1,100. The more modern loans might be reckoned under five classes—Artizans' Dwellings Act, Sanitary Acts, Education, Irish Land Act, and the Land Improvement Acts of Ireland. Altogether they amounted to £17,000,000, of which £16,600,000 was still outstanding; and if they were to draw any analogy from the past he said there was no insecurity whatever in these loans. The hon. Member for Burnley (Mr. Rylands) had already quoted the last Report of the Commissioners, stating that the instalments were being paid with punctuality. Therefore, there was no groundwork for the statement of the Chancellor of the Exchequer. But it appeared to him 751 (Mr. Shaw Lefevre) that the Government itself was in very considerable doubt as to the policy of this measure, because it had consented to withdraw three very important classes of loans from the operation of the Act. So far as he could understand, there were only about seven important classes of loans to which the Bill would apply—namely, Artizans' Dwellings Act, Sanitary Acts, Education, Harbours, Labourers' Dwellings Act, Irish Land Act, and Irish Land Improvement Acts. The Chancellor of the Exchequer had now agreed to withdraw from the operation of the Bill loans under the Labourers' Dwellings Act and the Irish Land Acts. Practically, therefore, the Act would only apply to four classes of loans. There was one other point he would venture to bring under the attention of the Chancellor of the Exchequer. He referred the other day to the final effect of the Chancellor of the Exchequer's proposals, and he asked the right hon. Gentleman whether he could lay upon the Table a statement showing the effect of the four alternative proposals made under the Bill? The right hon. Gentleman had not, apparently, been able to do that; but he (Mr. Shaw Lefevre) had been able privately to ascertain what the effect of those four alternative proposals was, and he would quote them to the House. Under the 2nd clause of the Bill there were four alternative proposals, under which borrowers could obtain money. The first was that they might obtain it at 3½ per cent for 20 years; the second was that they might obtain it at 3¾ per cent for 30 years; the third, at 4 per cent for 40 years; and the fourth, at 4¼ per cent for 50 years. The first proposal would involve the payment of an annuity of £7 a-year. He did not think many local authorities would wish at present to burden the ratepayers with an annuity of £7 for every £100; and, therefore, he did not think they were likely to avail themselves very largely of that proposition. The second proposal involved an annuity of £5 12s.; the third, an annuity of £5 1s.; and the fourth, an annuity of £4 17s. 2d. Looking carefully at the list, he had very little doubt that local authorities would most largely, if not wholly, avail themselves of the third proposal—namely, repayment by an annuity of £5 1s. If he was right in 752 that supposition, the effect of the proposals of the Chancellor of the Exchequer would be, in almost every case, to shorten the term of the loan by 10 years, and to increase the rate of interest from 3½ to 4 per cent. Practically, therefore, it would throw an additional burden on the future in respect of education and sanitary loans of ½ per cent. That was a very serious addition to local burdens, and it was the more serious, inasmuch as it would be the more felt by the present generation, and a less portion of it would fall upon future ratepayers. He must say he thought the proposal was an extremely inexpedient and unwise one. The policy of those Acts of Parliament was wisely to lessen the present burden for improvements, and to throw a somewhat greater burden upon the future. Fifty years might be a long term in some cases; but it certainly was not in the case of education loans, under which land was bought and buildings erected. He presumed those buildings would last more than 50 years; if not, they had been very unwisely built; and if they shortened the term they encouraged people to erect buildings slightly, so that they might not last. Take, again, the case of loans under the Artizans' Dwellings Act. Those were for permanent improvements in the clearing away of "rookeries;" and he could not see why the burden of those improvements should fall wholly upon the people of the present day. The more the subject was looked into, it seemed to him, the more it required investigation, and the more careless were the proposals of this Bill. Certainly, the financial part of it would require careful consideration by a Committee. He was quite certain that the alternative scale proposed by the Chancellor of the Exchequer would not work, and that the scale must be altered, after careful consideration, by the House; but at that hour, and at that period of the Session, it was perfectly impossible to give the necessary attention to the details. Therefore, he again pressed upon the Government the desirability of postponing the contentious clauses, and proceeding only with the non-contentious portion of the Bill.
§ MR. CHAMBERLAIN
rose to support the Motion of the hon. Member for Burnley (Mr. Rylands), having withdrawn his own Motion against the second 753 reading with that intention. He was perfectly aware that they were in the hands of the Chancellor of the Exchequer, and he should not trouble himself to repeat the arguments in favour of the Motion, because many hon. Members came down only to vote with the Government, and not to listen to arguments. At the same time, he ventured to assure the Chancellor of the Exchequer that if he legislated in haste in this matter he would repent at leisure. There was sufficient proof that throughout this business the complicated details which it involved had not been sufficiently considered by the Government. An additional illustration of that fact was given in this circumstance—that since the second reading on Saturday another important alteration in the Bill had been made by the Government, by the exclusion from the operation of the Bill of an important series of Acts. He waited to hear the reasons for their exclusion. He was very much interested in labourers' dwellings, and was glad to hear of any assistance being given to so good a work; but why was the Labourers' Dwellings Act excluded from the operation of the Bill, while the Artizans' Dwellings Act remained subject to it? They were told, the other day, that inasmuch as, under the Labourers' Dwellings Act, private Companies borrowed money at 4 per cent, it was very undesirable that Corporations should ask for money at a less rate. The argument really told the other way, because it might be said, if private Companies could make a profit of 5 or 6 per cent upon their capital, they, at least, had no claim upon the Public Exchequer; but in the case of Corporations, they not only never made a profit, but they always contemplated a loss. In the case of Birmingham, which was the largest scheme at present undertaken under the Act, the Corporation contemplated a loss of something like £400,000. That had been submitted to the ratepayers, and definitely approved by them, in consideration of the advantages which they hoped to obtain; but supposing this Bill had been in operation when that scheme was discussed the additional charge to the rates, owing to the increased interest of ¾ per cent, would have been something like £7,500 per annum; and that, capitalized for 25 years, would amount to nearly £200,000 754 extra loss. The result would have been simply this. The Corporation of Birmingham had now strained their resources to the utmost that they thought, as prudent men, and as trustees for the future, they could go. In order to improve the condition of the labouring population, and to make a great improvement in the town, they were willing to sacrifice £400,000. But if they had been told they must sacrifice £600,000 they would not have looked at the scheme. He ventured to make a prediction, and to tell the Government that by this Bill they were killing the Artizans' Dwellings Act. They had paraded that Bill throughout the country as a proof of their interest in domestic legislation, and especially in sanitary legislation. They passed it with great pomp and professions, and within two or three years they would now pass another Bill, which, to all intents and purposes, repealed it, and under which, he ventured to say, there never would be again any considerable scheme in connection with the Artizans' Dwellings Act. And then the hon. Member for Peterborough (Mr. Thomson Hankey) told the House that Corporations came to the Exchequer because they could borrow money cheaper with the credit of the nation. Of course they did. Nobody doubted for a moment that the credit of the nation was better than that of any Corporation. He was not certain whether the security was better; but in the market it was bettor, for this reason. Its demands were so much larger; there was a more continuous stream of buyers and sellers. They could sell Consols even on a Black Friday; and he doubted whether they could sell Birmingham Corporation stock under those circumstances. Inasmuch, then, as the credit of the nation was better than that of any Corporation, the nation could, without loss, provided the security was indefeasible, lend money to Corporations at lower rates than Corporations could borrow it for themselves. He did not say it should be done for all the purposes of a Corporation; but he said that under the Public Works Loans Act this had been a matter of distinct bargain in all cases. In the case of the Artizans' Dwellings Act, Parliament went to Corporations, and said—"If you will carry out these schemes we will assist you with money at 3£ per cent;" and then the hon. Member for Peterborough 755 blamed the Corporations because they accepted the offer. If Parliament had said to the Corporations—"You must carry out these schemes with your own money," they knew very well they would not have engaged in the work. But in order to tempt them Parliament said—"You can have money at 3½ per cent;" and then, when they did borrow it, right hon. Gentlemen held up their hands in astonishment, and talked about municipal extravagance. He could not conceive anything worse than a Government stultifying itself in a few years in a matter of this kind. The history of the Education Act was the history of a bargain made by Parliament, with its eyes open, with the local authorities. Previously to 1870, grants were made from the Public Exchequer in aid of the building of schools. Those grants were put a stop to by the Act of 1870; but in consideration of that stoppage it was agreed to lend the credit of the State to a certain extent, and that advantage was to be taken as, more or less, a compensation for the advantage which was surrendered. Now, the Government was going to withdraw that advantage, and to put an extra burden upon the local authorities, who were, practically, consenting parties to the legislation of 1870, because it contained that concession. He must say it seemed to him this was not calculated to induce the local authorities to place any faith in the action of Parliament in reference to similar matters. He complained—he complained bitterly—that this legislation was being hastily carried through upon altogether insufficient grounds. The Chancellor of the Exchequer told them that the Government had lent vast sums of money, and had only obtained 12s. per cent interest. That was a most unfair and misleading statement of the facts. The Government had obtained on all loans of a similar character to those which it was now proposed to make 3¾ per cent, and, inasmuch as it had borrowed at considerably less than 3 per cent—because it had borrowed on Exchequer Bills which were cheaper than Consols—it had made a considerable profit on these transactions. The fact was that the Chancellor of the Exchequer, in order to show his average interest at 12s. per cent, had included the whole of the losses made in the Office of the Commissioners. The total of those losses was 756 £2,095,000. Of that sum, £1,078,000 was lost in Ireland, in loans which were really of the nature of a gift, which were made to the poor country by the rich country, and the repayment of which was never seriously anticipated. The amount also included office expenses, and the loss by a fraudulent clerk in the office, together amounting to £55,000; and then there were the losses on advances made upon the security of undertakings, £442,000. The hon. Member for Peterborough was kind enough to say that there was one class of loans which he and his Colleagues still thought should be continued, and those were loans for harbours of refuge. That was precisely a case in which he (Mr. Chamberlain) would not lend another penny. Much of the money advanced for that purpose had been lost, and more was sure to be lost. It was the very worst possible security, because, in the first place, people were not at all certain whether they would succeed in making a harbour at all, and then, when they had made a good harbour, it was not at all certain that it would not be surpassed next year by a better one next door to it. During the time that these loans had been made, as he had said, there had been a total loss of £2,095,000; of that sum, £2,075,000 had been lost in Irish loans and on loans made on the security of particular undertakings such as harbours, railways, and roads. Only £20,000 had been lost during the whole period that the loan transactions had been going on from losses in connection with loans on the security of the rates. He thought that the sum of £20,000 might be further reduced to £2,000, as the total net loss for advances upon rates in connection with matters under the Sanitary Acts, the Elementary Education Acts, and Artizans' Dwellings Acts. It was most unfair to urge that the Exchequer was suffering very great loss from a continuance of the present system of granting loans to local bodies under those Acts. All these matters showed the necessity of appointing a Committee to consider the subject, and to go into details. They would have to consider what Acts of Parliament would be affected by the Bill, and in what cases it was desirable that loans should cease to be made, and in what cases it was desirable that they should continue. It would be a most important question 757 for them to consider what proportion the loans should bear to the security which was offered. For his part, he would be willing to consent that no loan at all—he did not say loans at a particular rate—but no loan should be granted to bodies whose rates had been pledged to a certain amount. In the case of Middlesborough, for instance, it would be perfectly safe to lend money to that town to the extent of one-tenth of its rateable value, although the value of the property in the town, from exceptional circumstances, had recently become reduced. So long as they found that the rateable value of the property was some reasonable multiple of the amount lent, then they would have an indefeasible security. He had never contended that loans should be made to any amount without any reference to the security offered. It would be for the Committee to consider what would form a sound security, and also what objects were really national, and to carry out which it was desirable to assist the local authorities. They were now, however, proposing to legislate in a hurry, without any reference to the circumstances of the different cases, and without any regard to the considerations that were involved. The right hon. Gentleman the Chancellor of the Exchequer proposed that no sum exceeding £100,000 should be lent to any single local body. The School Board for London, for instance, had an income larger than many a small Continental State; and it was proposed to apply the same rule to the School Board for London as to the local authorities of Little Peddlington. They had lent £100,000 to the Thames Tunnel and Battersea Park, and they deserved to lose that money. But now it was said, without any reference to the circumstances of the case, that £100,000 was to be the largest sum to be lent to the Corporation of Manchester, or the London School Board; and that seemed to him to be such financial pedantry, that he could scarcely believe that the right hon. Gentleman the Chancellor of the Exchequer would sanction it. If a Committee were appointed, it might arrange a scale to limit the amount of loans made in any one year in the proportion of the rateable value of the places to which they were advanced. The right hon. Gentleman the Chancellor of the Exchequer 758 had stated that he would be willing, in the next Session, to refer the subject of local loans to a Select Committee. But why not refer the whole subject to a Select Committee at the same time? He (Mr. Chamberlain) was inclined to think that if Parliament made an arrangement in respect to these loans the Committee might consider that it should not interfere with the arrangements made. What harm could be done by allowing the whole subject to stand over? There were no great schemes in progress; and the greater amount of school accommodation required throughout the country had been provided. He thought that next year very few loans would be taken at the rate which the right hon. Gentleman the Chancellor of the Exchequer proposed. He must protest against the insinuation in the remarks of the hon. Member for Peterborough, and of the Chancellor of the Exchequer, that those interested in the subject, like the hon. Member for Reading (Mr. Shaw Lefevre) and himself, were personally interested in the question of loans and were speaking on behalf of local bodies that desired subsidies from the Exchequer. He repudiated the idea of a subsidy with contempt—they did not want eleemosynary assistance from the Government, or from anyone else. What they had done was done, and they were not then appealing for any further consideration. They would not be injured in the slightest degree by the Bill at Birmingham, for the sums which they were likely to require in the future would be very slight. There were two sides to the bargain. If, on the one side, the nation lent its credit to enable local bodies to obtain considerable sums of money on much better terms than they could obtain it elsewhere; yet, on the other hand, those local bodies were carrying out national objects, and they were expending money on schools and sanitary reforms which Parliament had expressed its earnest desire to see carried out. It was not fair to imply that the Representatives of large constituencies were personally interested in these matters. He did hope that, considering the great complexity of details that was involved in the question, the right hon. Gentleman the Chancellor of the Exchequer might, at the eleventh hour, see his way to refer the contentious clauses to a Select Committee.
§ MR. J. G. HUBBARD
agreed with the general proposition that it was necessary to save the State from loss in respect of loans to local bodies; but in order to show that there had been a loss, and to bring up the expenditure upon public works to the sum of £85,000,000, it had been necessary to go back to the year 1. A great many matters had been dragged into the controversy which had no reference to the matter in hand. He wished to call attention to the fact that the Public Works Loans Commissioners, by their Report, showed that they had a perfect discretion at present in the matter of the loans. The Commissioners stated that when application was made to them for loans they considered the nature of the work and the expenses connected with it, before granting the loan demanded. Ho held in his hand evidence that the Public Works Loans Commissioners did take considerable latitude upon all questions connected with the loans. The object of the Government was not, he assumed, to make a large profit by these operations, but only to save the Exchequer from loss. He did not, however, feel the slightest doubt that in the case of many of those loans the money might be provided out of the deposits in the Government Savings Banks with very considerable profit to the Exchequer. He wished to mention another incident connected with this very large question. Borrowing by local bodies was not confined to loans made from the Public Works Loans Commissioners. He held in his hand a most interesting Report of the Local Government Board, which contained valuable information upon the subject. The Local Government Board stated that £20,480,000 had been borrowed by the local authorities, irrespective of the Public Works Loans Commissioners, by virtue of the authority of Parliament, and under powers contained in Private Bills. The House should look to the periods during which those loans were taken. He found that, in many cases, repayment was contemplated in 40 years, sometimes in 55 years, sometimes in 70 years, and sometimes in 95 years; and the borough of Bradford had recently borrowed considerable sums, repayable in the course of 100 years. In his opinion, an inquiry into the system of loans, if confined to the operation of the Public Works Loans 760 Commissioners, would only be half an inquiry. There was a very much larger question connected with the loans now obtained by local authorities to an almost unlimited extent under private legislation. He was as anxious as anyone for economy in all matters connected with local expenditure; but he did not think that object would be sufficiently attained by the measure before the House.
§ MR. SCLATER-BOOTH
said, that it seemed to him it would be especially futile for his right hon. Friend the Chancellor of the Exchequer to make a statement at that time upon the Bill. The right hon. Gentleman the Member for the City of London (Mr. J. G. Hubbard) seemed to entertain the idea that the question before the House was as to the extent to which local bodies had contracted debts in former years. In point of fact, it was only a question as to how far the local authorities should be allowed to contract debts in the future with the Public Works Loans Commissioners. On the average of the last few years, the amount of money applied for by the local authorities to the Public Works Loans Commissioners, under 200 or 300 Acts of Parliament, might be roughly set down at £4,000,000 a-year; And the amount of money which had been lent was scarcely the amount which had been applied for by the local authorities. The amount of money authorized by the Bill to be lent, which was £6,000,000, was scarcely half the sum applied for by the local authorities. Between £11,000,000 and £12,000,000 was the sum that various local authorities had estimated that they would have to apply for before the 31st December next. It was necessary to put some check upon the enormous amount which the local bodies applied to borrow from the Exchequer; but he would caution the House that in dealing with the borrowing powers of local authorities they were entering into a very large question.
§ MR. W. E. FORSTER
would appeal very strongly to the right hon. Gentleman the Chancellor of the Exchequer, if not to the Government, whether it was wise or prudent to push that Bill through the House so late in the Session, when it was obliged to be taken in the middle of the night, or early in the morning? It was not usual for a Bill to be pushed forward so late in the 761 Session—he did not think it at all usual to take contentious Business after Supply was closed. Some Bills must be passed, no doubt, and this Bill could be well taken if the contentious clauses were withdrawn. Questions were raised by the disputed part of the Bill, which, at an earlier period of the Session, would have excited very great differences of opinion. The Government had put the question as if it were one between the rates and Imperial taxation. They knew what important questions were raised by the Bill, and how deeply they affected the interests of the country. The Bill would very largely affect the operation of the Education Act, and the Artizans' Dwellings Act, and involved much larger considerations than the mere question of rates and taxes. Surely, it was not right that such important matters should be decided at half-past 1 in the morning. It had become evident, from what had been said in the course of the debate, that two or three very important Bills would be affected by the present measure, if their operation was not entirely hampered, and he did not think that it was right that legislation of that sort should be hurried on. With regard to the Education Act, he spoke from his own knowledge, and could confirm his hon. Friend (Mr. Chamberlain) in the statement that the Bill, as it stood, would affect, in a very largo degree, the proper application of the Education Act. When the Education Act was first brought in it was not contemplated that loans should be for a longer period than 30 years; but it had been necessary to change that system, and the House had accepted the change. Grants had been made to the school boards since that time for longer periods of years. The effect of the Bill would be to make it more onerous upon school boards to build schools than before, and although a great number of schools wore already built there was still a largo amount of work to be done. In many large towns, especially, considerably more expenditure would be required, and the school boards had a right to complain that the original bargain had been departed from. He did not wish to say anything which should be taken as a final opinion upon this question; but he thought that the subject could not be properly discussed at that period of the Session.
§ THE CHANCELLOR OF THE EXCHEQUER
could not agree with the observation of the right hon. Gentleman (Mr. W. E. Forster), that the questions raised by the Bill between rates and taxes were not important. He did not think that too great a latitude to obtain money at less than cost price would be altogether an advantage to the ratepayers. It must be borne in mind, with reference to the Bill, that it did not make much material alteration in the powers for borrowing money which had already been sanctioned by Parliament. In most of the English Acts under which money could be borrowed, there was an express provision that the money should be advanced from the Exchequer at 3½ per cent, or such other rate as, in the judgment of the Treasury, might protect the Treasury from loss. The Treasury was placed in a most embarrassing position with regard to the matter. They were of opinion that to protect the Treasury from loss a higher rate of interest ought to be charged, for the present rate did not leave sufficient margin for insurance against loss. By that he meant that in charging for these loans it was desirable to have some margin that would cover the losses that might be incurred. Losses had been made in respect of some advances upon the security of rates, and it was necessary to make some provision to protect the Exchequer from such losses in future. What was proposed was, that instead of leaving it to the unfettered judgment of the Treasury, which could only be exercised in particular cases, they should lay down, for the future, a general rule. The hon. Member for Birmingham (Mr. Chamberlain) had asked whether they did not stultify themselves by proposing to omit two classes of loans from the operation of the Bill. With regard to the Irish loans, they stood on a different footing; they were for a different object, and were dealt with under other Acts. That being the case, they had thought it undesirable to introduce loans under the Irish Land Act into the Bill. Then, with regard to dwellings for the labouring classes, they also stood in a different position. He proposed to adopt a clause which would give power to the Public Works Loans Commissioners to do what they had not the power to do at present—namely, to lend money for the purpose of erecting dwellings for the labouring 763 classes, for periods not exceeding 15 years, at 3½ per cent. If they were to omit the Labourers' Dwellings Act from the operation of the Bill, then those dwellings would not be built at all. The Act passed in 1866 proposed to lend money for this purpose for a period of 40 years. They proposed now to allow money to be spent for the erection of labourers' dwellings for a period not exceeding 15 years only. They also thought it would be right to extend to the bodies represented by the hon. Baronet the Member for Maidstone (Sir Sydney Waterlow) the same power as was given to the trustees. With regard to the interest, it was thought that 5 per cent ought to be charged; for it was only in the case of a very few Acts, such as the Education and Sanitary Acts that had been referred to, 3½ per cent had been named as the interest. When the Education Act was passed it was supposed that about £4,000,000 would be required by the whole country; but now that sum was required by the London School Board alone. With regard to the larger question that had been raised—namely, as to the erection of dwellings under the Artizans' Dwellings Act, and sanitary improvements in towns, it was necessary to prevent borrowing from the Treasury to the enormous extent which was now going on—one single town having had already £1,500,000—and the provision would not operate injuriously to any particular object or interest. As he had said before, the Government would be ready next Session to appoint a Committee to consider what should be done with respect to loans to local bodies generally. He hoped the House would consent to go into Committee.
§ MR. GOURLEY
wished to make some observations with reference to what had been said respecting the loans to harbour authorities. He considered the loans to the harbour authorities to be made upon as good a security as could be given by the Corporation of Birmingham, or by any other town. The construction of harbours of refuge was a very important work, and in 1857 and in 1858 it was recommended by Parliament that money should be advanced from the National Exchequer for that purpose. He trusted that the right hon. Gentleman the Chancellor of the Exchequer would see the wisdom of excepting from the operation of the Bill the loans 764 which required to be made to harbour authorities. If the money was not lent to the local authorities, harbours of refuge would have to be constructed by the country on different parts of the coast.
§ MR. GARFIT
said, that the principal object of the opponents of the Bill seemed to be delay and the appointment of a Select Committee. But the question had been for a long time before the country, and they had a great many Acts of Parliament upon it. For his part, he could not see that any good would be done by postponement and the appointment of a Select Committee. The hon. Member for Birmingham (Mr. Chamberlain) had endeavoured to discriminate between large and small loans, the first of which he called "national," and the second "local." But if small places borrowed small sums, and large places greater amounts, yet the objects for which the money was applied was not entirely national, but local. The hon. Member for Birmingham seemed to think that because the town with which he was connected had been the largest customer of the Exchequer, that, therefore, it was the best. It was a rule in commercial transactions that the best customers were those that paid the best, and he did not think that in that light Birmingham could be looked upon as the best customer of the Treasury. It was said by the right hon. Gentleman the Chancellor of the Exchequer that, at the present time, it did not pay to make the loans; and he did not see that there was any other course to pursue, under those circumstances, than to raise the rate of interest. Ho had heard no argument which, in his opinion, in any way met the statements of the right hon. Gentleman the Chancellor of the Exchequer.
§ MR. BARRAN
was sorry that the right hon. Gentleman the Chancellor of the Exchequer had not been able to adopt the proposition of the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster). They had been told that considerable loss had been made by the Treasury; but they had not been told the items upon which that loss had arisen. But they had ascertained from the Report that the money which had been lost had not been in respect of loans made on the security of the rates. He did not think any instance 765 had been given in which those responsible bodies had failed to fulfil their engagements. That being so, he thought they were justified in asking the right hon. Gentleman the Chancellor of the Exchequer why loss should have been sustained by the Treasury, or why money had been lent at too low a rate of interest? It should be remembered that the municipal bodies and Corporations had obtained the money for the purpose of carrying out improvements which were for the general benefit of the nation. The Education Act was passed with the view of providing for the educational wants of the people, and the people had been much benefited by the improved education that had been given. These towns had laid down systems of sewerage, and had taken measures to supply their own, and perhaps a neighbouring town, with pure water; and he thought they were entitled to some consideration from the Government. Those improvements were of national importance, and, in many instances, pressed very heavily upon the ratepayers. With respect to sanitary matters, he might say that the borough which he had the honour to represent—Leeds—had borrowed in the open market, and had not been to the Local Government Board at all. Speaking of the matter in a broad and practical way, he thought that Corporations and districts which had placed themselves in a good sanitary condition were entitled to consideration, and that the burden for what they had done should not be made to press too heavily upon the present and next generation. He thought that it would be very much better to have all these questions referred to a Select Committee, for he thought that the works which the local bodies had been called upon to perform were of such a nature as to call upon Parliament to do something in their favour. In his opinion, it would be better to decentralize, rather than to centralize, upon the Government for advances of money. It would be very much wiser to let the whole question go before a Select Committee next Session, in order that the borrowing powers of Corporations might be inquired into. It was desirable that Parliament should know what liabilities were being incurred by the small, as well as by the large municipalities, and to place them under some control. Personally, he felt there would 766 be some considerable danger in giving power to Corporations, small and large, to issue debentures; he did not think it would be proper to give them power, except under very stringent regulations. Still, that question might be considered with profit to the nation; and he hoped that the right hon. Gentleman the Chancellor of the Exchequer might see his way to acquiesce in the suggestion of the right hon. Gentleman the Member for Bradford. If that were done, they might go on with the Bill and hope next Session to do something to accomplish the object they had in view—namely, to give the best security for the money advanced for sanitary, educational, and other purposes, and, at the same time, to afford facilities by which responsible bodies might obtain money on favourable terms.
§ MR. HUTCHINSON
said, that they had been discussing a subject which had been very variously described. One hon. Gentleman called it a matter of international importance, inasmuch as the Bill involved loans to the authorities of harbours of refuge in which the vessels of all nations were interested. The right hon. Gentleman the Chancellor of the Exchequer had called it a matter of national importance, and the hon. Member for Tipperary (Mr. Gray) had said that the Bill would be an injustice to Ireland, because Ireland would have to borrow money upon higher terms than many places in England had borrowed for the same purposes. He thought that the subject could not be properly considered at that time, and he begged to move the adjournment of the debate.
§ MR. GRAY
said, that he should second the Motion, inasmuch as a considerable number of hon. Members from Ireland who were interested in the subject were not present. It was a most remarkable circumstance that the hon. Member for Boston (Mr. Garfit) had been the only hon. Member to support the Bill, although a considerable number of hon. Members had spoken. He did not think it was any use discussing a Bill at that hour of the morning.
§ Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. Hutchinson.)
§ THE CHANCELLOR OF THE EXCHEQUER
said, it was absolutely necessary to pass the Bill, and he could not con- 767 sent to omit the clauses to which objection had been taken. He must oppose the Motion.
§ MR. W. E. FORSTER
was sorry to feel himself obliged to vote for the Motion for adjournment, for he considered that if ever a Motion for adjournment was reasonable it was so in that case. They had great reason to complain that the Government had introduced so important a Bill so late in the Session. He had ventured to appeal to the right hon. Gentleman the Chancellor of the Exchequer to consider whether it was wise to push through the contentious clauses of the Bill at that time. The right hon. Gentleman had not thought fit to make any reply to his suggestion, and he could only suppose that he was determined to press the Bill forward. It was impossible for thorn to forget that they were dealing with a matter in which the municipal bodies throughout the country took very great interest. The Bill gave rise to questions which, at any other time of the Session, would promote a long and perfectly legitimate discussion; at any other period of the Session the Bill would not be expected to be got through in less than two nights. But what was their position then? It was acknowledged that these debates were read in the country, and there was no doubt that what took place in respect of that Bill would be read throughout the country with very great interest; but at that hour of the morning nothing could appear in the newspapers, and the country would know nothing of the debate.
§ MR. SHAW LEFEVRE
asked what possible object the Government could have in pushing the Bill on at that time. The passing of the Bill would not prevent a great part of the loans which had been applied for being granted in the course of the year. The right hon. Gentleman the Chancellor of the Exchequer had given Notice of an Amendment excepting from the provisions of the Bill those loans which had been applied for in the present year. The Bill would not, therefore, apply, even if it passed, to the great bulk of the loans to be carried through during the present year. If the contentious clauses were now withdrawn, and the present Bill was brought forward at the beginning of next year, there would be ample opportunity for that protection being given to the Ex- 768 chequer which the Government considered necessary.
§ SIR JULIAN GOLDSMID
said, that if the contentious clauses of the Bill were withdrawn, it would, nevertheless, be in the power of the right hon. Gentleman the Chancellor of the Exchequer to let it be thoroughly understood that loans could only be granted out of the £6,000,000 which he was now taking. The Committee could be appointed at the beginning of next Session, and it could then inquire into the whole subject. He thought that that would be a much more reasonable course than pressing forward a discussion of that nature at 2 o'clock in the morning. The right hon. Gentleman must see that there was no time to give it adequate consideration.
§ Question put.
§ The House divided:—Ayes 26; Noes 71: Majority 45.—(Div. List, No. 224.)
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House divided:—Ayes 69; Noes 26: Majority 43.—(Div. List, No. 225.)
§ Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.
§ Bill considered in Committee.
§ (In the Committee.)
§ Motion made, and Question proposed, "That the Preamble be postponed."
§ MR. CHAMBERLAIN
begged leave to move to report Progress, as he thought it unreasonable to go into Committee at the present time. The right hon. Gentleman was well aware that the Bill raised a number of very important questions which required full and careful consideration. The Bill would have a very great effect upon the Artizans' Dwellings Act and the Education and Sanitary Acts, and it was impossible that a discussion of that character could be properly had at that time.
§ Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Chamberlain.)
§ THE CHANCELLOE OF THE EXCHEQUER
hoped that the Committee would not consent to the Motion. He did not 769 suppose that the House would wish to prolong the Session, and that would be the only effect of adopting the Amendment. The hon. Member for Birmingham (Mr. Chamberlain) said that there were many questions to be discussed, and considered that they ought to be taken in a fuller House; but as the House had already decided upon the expediency of going on he did not think the Amendment should be adopted. He would remind the Committee that unless the Bill were passed it would be impossible to grant any loans to local bodies.
§ MR. W. E. FORSTER
said, it was hardly fair of the right hon. Gentleman to say that, unless the Bill were passed loans could not be made. They did not object to the Bill passing, if the contentious clauses were withdrawn. The loans could then be made, and the consideration of the contentious matters could be postponed till next year. The Bill was one which excited great interest in the country, yet it was not introduced until the end of the Session, and they were then asked, at half-past 2 in the morning, to hurry through the clauses.
§ MR. RYLANDS
said, that, no doubt, the Bill was very urgent; but they had never opposed that portion of the measure for which there was a necessity. They did not take a Division upon the second reading, simply because they did not wish to object to that part of the Bill which had been embodied in Acts of Parliament passed in previous Sessions. At that time of the Session, and in a very thin House, which was, practically, in the hands of the Government, they were asked to pass a Bill which would, really, repeal Acts of Parliament passed in previous Sessions by majorities of the House. He firmly believed that if the discussion which they were then having was known to the country it would excite considerable interest. All they contended for was that it was not right, at that time, to deal with the important questions they had before thorn in the manner which was proposed by the Government. The proper course for the Government to adopt was to pass the necessary part of the Bill only, and to postpone the disputed clauses to another Session.
§ MR. GRAY
observed, that if the Bill were passed in its present shape it would stop the whole machinery of local improvement throughout the country. He 770 did not think that the Government was treating them fairly, and he considered that they were justified in resisting the proposal which was made. He should be sorry to interfere with the progress of Public Business; but he did feel strongly that the Bill would work great injustice, and especially in Ireland. He thought they were right in asking that the clauses of the Bill should be discussed when their constituencies could understand what was going on. He should support the Motion to report Progress, because he thought that the proper course was to postpone the contentious clauses.
§ MR. BERESFORD HOPE
observed, that the hon. Member for Birmingham (Mr. Chamberlain) complained that the Government were pushing the Bill at the end of the Session. On that side of the House they had not forgotten, even if the hon. Member for Birmingham had, how a mine was sprung upon the Government a short time ago. The hon. Member kept to himself the knowledge that there was a defect in the Bill until he could spoil its progress. If he and his Friends had wanted the Bill to pass, they would have told the Chancellor of the Exchequer about it while there was time to make the necessary alterations. The hon. Member for Birmingham would not forget that on the 8th of December a certain Bill was presented and printed, and then a corrected copy re-printed and substituted for the original imprint, and that the first name upon it was that of the hon. Member himself.
§ MR. CHAMBERLAIN
said, the hon. Member for the University of Cambridge had made a personal reference to him with regard to a Bill of which he had charge at an earlier period of the Session. A change was made in that Bill; but it was not made by him, but by the officials of the House. It was a mere verbal alteration of the title, and was not of such a nature as to render it necessary to re-introduce the amended Bill as a new one. His attention was, however, thus called to the Orders of the House, and the knowledge gained he was enabled to use to some advantage on a subsequent occasion. The hon. Member for the University of Cambridge seemed to think that he had taken some unfair advantage of the Chancellor of the Exchequer in the 771 matter. But it was not his business to give information to the right hon. Gentleman the Chancellor of the Exchequer with regard to the ordinary Rules of the House. It would almost be an insult from one in his position to give information upon the Orders of the House to its Leader. The right hon. Gentleman the Chancellor of the Exchequer had refused to withdraw the contentious clauses from the Bill, and if he had done that for personal reasons, he (Mr. Chamberlain) had no hope of his making any concession. There was, really, no reason why he should not comply with the suggestions which had been made. He had it in his power to charge such a rate of interest as might be necessary, if he thought it was for the benefit of the public that it should be done. If the right hon. Gentleman thought the £6,000,000 which he was then asking for was too much he should limit it to £4,000,000. He could easily announce that, under no circumstances, would more than £4,000,000 be advanced.
§ THE CHANCELLOR OF THE EXCHEQUER
was sorry to say that the suggestion of the hon. Member opposite (Mr. Chamberlain) would not meet the difficulties of the case. Limiting the amount which was to be lent would not affect the rate of interest which was to be charged to the various bodies that wished to borrow and presented their claims before the Commissioners. He would rather depend upon the power which the Public Works Loan Commissioners had to charge such sums as were necessary to preserve the Exchequer from loss. That being so, the Government was now asking the House to do, in a more regular form, what the Commissioners already had power to do. He really thought that the disadvantages which would be occasioned to the various constituencies had been very much exaggerated. On the other band, he was satisfied of the danger that would occur to the Treasury if a stop was not put to the largo demands which were now made upon it. That could not, in any way, be exaggerated. He raised the question in Parliament in 1878, and it had been under the consideration of the Government and of the House, not only last year, but during the course of the present year. The original Bill had been before the House for some time, and he must earnestly 772 press on the Committee the necessity of proceeding with the Business.
§ MR. SHAW LEFEVRE
remarked, that the first question they would have to discuss in Committee would be the financial question, which was one that had not yet been touched upon. He did not think that the right hon. Gentleman the Chancellor of the Exchequer had fairly considered the financial effects of his proposal. The details of so important a measure as the present could not be properly discussed in their financial aspect at that time.
§ SIR JULIAN GOLDSMID
observed, that they had been charged with springing a mine upon the Chancellor of the Exchequer. That was unfair, for surely the right hon. Gentleman knew that if there were substantial alterations in any Bill before the second reading it was irregular, and had to be withdrawn and re-introduced as proposed by the promoters. It had been charged against the hon. Member for Birmingham (Mr. Chamberlain) that he had not informed the Chancellor of the Exchequer that the Public Works Loans Bill was therefore opposed to the Orders of the House; but he (Sir Julian Goldsmid) did not think it was the duty of independent Members to acquaint the Leader of the House with the Rules and Orders of the House. He would appeal to the Government not to press on the discussion at that time of the night. A greater part of the hon. Members on the other side of the House were either Members of the Government, or connected with it, and it was unreasonable for them to be asked to discuss a Bill in such a House as that.
§ MR. MONK
observed, that the right hon. Gentleman the Chancellor of the Exchequer had stated that the Bill had been for a considerable time before the House, and the House must be aware of its nature. But there was no opportunity of fair discussion at that time, and independent Members would have no chance of carrying any Amendments against the Government majority. It would only be a reasonable course to -pursue to pass that part of the Bill which was of a continuance nature, and to postpone the contentious matter to another Session. Many hon. Members, representing very large and important constituencies, were strongly opposed to the Bill in its present shape, and he 773 trusted that the Government would see the wisdom of adopting the course suggested.
§ Question put.
§ The Committee divided:—Ayes 22; Noes 67: Majority 45.—(Div. List, No. 226.)
§ Question again proposed, "That the Preamble be postponed."
§ MR. GRAY moved, that the Chairman do leave the Chair. He did so, because the Amendment which stood in his name was one of considerable importance, and he confessed himself physically incapable, at that hour of the morning, of doing it justice. There wore a largo number of Irish Members, who had not yet left London, but who were not then present, who desired to speak on the subject of this Bill, as it applied to Ireland. They desired that Ireland should be exempted from the operation of the Hill; but it was not fair, at that hour—3 o'clock in the morning—to proceed with it. He urged that the right lion. Gentleman the Chancellor of the Exchequer should take those portions of the Bill which involved no contention, and leave the debateable clauses till the following day. He considered that that was a reasonable course to adopt, as it was admitted not to be a matter of supreme importance that Clause 2 should be passed this Session. Only one hon. Member had spoken against the Motion of the hon. Member for Burnley (Mr. Rylands) in regard to the appointment of a Select Committee to inquire into and report upon the whole subject of local loans, before any alteration was made in the terms under which the Public Works Loan Commissioners were authorized to advance loans to local bodies. Therefore, he maintained that the opinion of the House was against proceeding with that clause.
§ Motion made, and Question proposed, "That the Chairman do now leave the Chair."—(Mr. Gray.)
§ MR. W. E. FORSTER
said, he had travelled a good deal that day, and wanted to go home to bed. He could not help wondering why it was that the right hon. Gentleman the Chancellor of the Exchequer was so determined in this matter. He could not help thinking 774 that what fell from the hon. Member for the University of Cambridge (Mr. Beresford Hope) explained the matter—namely, that the Chancellor of the Exchequer had felt aggrieved by what had been said by the hon. Member for Birmingham (Mr. Chamberlain), and that this had something to do with the efforts to pass the Bill. He (Mr. W. E. Forster) would put it to the Committee generally whether the course pursued was fair? The principal objectors to the Bill knew nothing whatever of the mistake that was made as regarded the hon. Member for Birmingham, and they ought not to be punished because of the misdeeds of others. They felt it a punishment to be called upon to discuss the Bill at that hour, especially as it was almost unprecedented in its character; and from the fact that it was only submitted for second reading on Saturday last. He really could not help thinking that there was a degree of personal feeling in the matter. He felt obliged to think so. Before he left the House he would suggest that the Chancellor of the Exchequer should agree to have the whole matter thoroughly looked into next Session; and that in the meantime, if any loans were required, he should use his own discretion in the matter.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he should be ashamed of himself if he allowed any such feelings as those referred to to influence him in regard to the Bill. The hon. Member for Birmingham (Mr. Chamberlain) lost the opportunity of discussing this Bill, but through no fault of his (the Chancellor of the Exchequer's). He could assure the Committee that he was entirely guided in the course he pursued by his sense of what was right, and by the feeling that it was absolutely essential, if they wished to put the whole system of public loans upon a proper footing, to pass a Bill of this character. It had been stated to be a mutilated Bill; but he had purposely had it cut down to the lowest point. In regard to applications for loans that had been already sanctioned, or which were in such a condition that the Government considered that they ought, in equity, to be treated upon the old footing, he proposed that the old footing should be continued. With regard to the future, he was perfectly willing to agree to a proposal that at 775 the beginning of next Session the whole question of local loans should be considered. All that he was now asking for was that they should put the system upon a regular footing, according to the principles which had been perfectly calculated by those who were responsible for the financial affairs of the country. He must apologize to the hon. Member for Reading (Mr. Shaw Lefevre) for a neglect on his own part in regard to the Returns that were asked for; he was sorry that he had not received them in time to admit of their being printed, and laid upon the Table of the House. The question now before them was whether the Committee would agree to the granting of the annual sums, and that the rate of interest be regulated upon the principles which had been described. He earnestly hoped that the Committee would agree to those proposals of the Bill.
§ MR. STEVENSON
said, it seemed to him the Government were making a stand upon what they would call a point of honour, and they seemed determined to make no concession that Session; while they were prepared to submit the debateable points next Session to the Committee of Inquiry. Surely it was reasonable that they should not proceed with the contentious clauses in the Bill, but should go on with the non-contentious ones.
§ THE CHANCELLOR OF THE EXCHEQUER
remarked, that if that were done it would draw upon them, during the next six months, an influx of applications.
§ MR. SHAW LEFEVRE
said, that the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster) had made a practical suggestion, which it was hoped would be carried out. They objected, at that hour of the morning, to decide upon a scale of charges, and so forth, and to limit the loans in a particular way. He thanked the Chancellor of the Exchequer for offering to supply him with the Returns ho asked for. There wore four different and alternate proposals relating to the Returns, and they ought to be in the hands of other hon. Members before this question was decided. He was sure the Chancellor of the Exchequer would admit that it was impossible to go on with the discussion upon the present occasion, under all the circumstances.
§ MR. J. G. HUBBARD
imagined that those authorities who were entitled to ask for loans for public works had already sent in notices for loans during the next financial year upon conditions which could not be altered; and if that were the case, no new regulations as to loans for future applicants could be required before next Session.
§ SIR JULIAN GOLDSMID
urged the Chancellor of the Exchequer to proceed only with the non-contentious clauses of the Bill, and re-introduce the contentious clauses next Session. He could, under existing powers, take care that in the future there should be no loss to the Treasury. Some of the proposals were reasonable, but they required full discussion.
§ MR. CHAMBERLAIN
said, that after the courteous explanation of the Chancellor of the Exchequer in reference to the part he (Mr. Chamberlain) had taken he would be excessively sorry if he were the cause of any annoyance to the right hon. Gentleman.
§ THE CHANCELLOR OF THE EXCHEQUER
cordially accepted what the hon. Member for Birmingham had stated. There was no feeling left in his mind in regard to the matter.
§ SIR JULIAN GOLDSMID
trusted that after this affecting reconciliation the Chancellor of the Exchequer would see his way to accept the compromise offered, which, he must say, was a reasonable one.
§ Question put.
§ The Committee divided:—Ayes 21; Noes 66: Majority 45.—(Div. List, No. 227.)
§ Question again proposed, "That the Preamble be postponed."
§ MR. G. PALMER moved to report Progress. The question, he said, was not thoroughly understood by local bodies. He spoke on behalf of a borough which was perfectly independent, and that never wished to borrow money without paying adequate interest; but he maintained that the subject should be more widely discussed.
§ Motion made, and Question put, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. G. Palmer.)777
§ The Committee divided:—Ayes 19; Noes 66: Majority 47.—(Div. List., No. 228.)
§ Question again proposed, "That the Preamble be postponed."
§ SIR HENRY HAVELOCK
proposed that the Chairman do now leave the Chair. He said that the borough he represented had as great an interest in this question as any other. He thought that the action taken by the Chancellor of the Exchequer was due to a personal feeling, and would be the means of preventing the Bill being properly dealt with. The Committee was certainly not in a position to properly discuss the Bill then, considering the lateness of the hour. He hoped that the Chancellor of the Exchequer would not further trespass upon that sacred day, the 12th of August.
§ Motion made, and Question proposed, "That the Chairman do now leave the Chair."—(Sir Henry Havelock.)
§ THE CHANCELLOR OF THE EXCHEQUER
said, he did not wish to trespass upon that "sacred day" any more than was necessary; but he desired to get the Business over, in order that it might be disposed of at a reasonable time, so that hon. Members might not be any longer kept in town.
§ MR. SHAW LEFEVRE
urged the Chancellor of the Exchequer to make the concession that was asked for. It was an unreasonable request, he maintained, to urge the adoption of the 2nd clause at that late hour.
§ MR. WHITWELL
thanked the Chancellor of the Exchequer for having adopted a new system in regard to public loans; but he felt that a question had arisen of very considerable difficulty. They had now proposed certain rates upon which loans were alone to be advanced. A great deal of money had been borrowed at 4 per cent, and if the Chancellor of the Exchequer put the rate at 4 per cent a difficulty would occur. He was sure that many hon. Members must feel that what was proposed would add considerably to the expenditure of boroughs. If the security were bad, he did not care how high was the rate charged; but that should not be the case when the security was good. He opposed the Bill, as ho considered 778 the subject ought to be referred to a Select Committee.
§ MR. GRAY
wished to know why the Government were keeping them up at that late hour, ruining their health, and spoiling their tempers, without doing any Business? There was really a great pressure put upon hon. Members to oppose the Bill, and deputations had waited upon them on this matter. The Government had shown great determination and strength of will in regard to it; but if it were passed it would be a very serious matter for boroughs. Really, the difficulty involved was very much greater than some hon. Members would imagine. The object of the Bill was bad—the Government wanted to commence things at the wrong end. The Chancellor of the Exchequer said he would be delighted if some such scheme could be matured and carried out as would enable authorities to borrow upon security; but what was proposed was for temporary convenience, and the Government did not care what inconvenience was thrown upon local bodies. He did not think the scheme a comprehensive one; and even if the inconvenience he complained of were removed, he did not think they were justified in passing such an important measure at the end of the Session, when it could not be thoroughly discussed. It would create a serious difficulty so far as local authorities were concerned, and it would be no relief to the Imperial Exchequer. He did not think there was anything unreasonable in the proposal he had made, and ho hoped that hon. Members on that side of the House would persevere in what they considered to be a fair proposal. They had taken up a reasonable position. The Chancellor of the Exchequer was asked to supply certain Returns; but, instead, he brought down some statement in manuscript. It was a reasonable request that the clause should be postponed until the Returns were printed; and if that were agreed to there would not be a loss of temper. He (Mr. Gray) did not intend to lose his temper, because he was accustomed to this sort of thing. He would not urge this did he not think it a reasonable request. He maintained that the Government were using their majority in a tyrannical manner. The Chancellor of the Exchequer had disclaimed the idea of being actuated by 779 pique; but, no doubt, from a feeling of annoyance, he had pledged himself to pass the Bill. If it were not passed, there would be no loss to the Exchequer involved in that which they asked for, and he suggested that the matter should be dealt with in a business-like way.
§ MR. HUTCHINSON
thought it would be an unpleasant reflection that the last few days of the Session had been distinguished by an exhibition of feeling on the part of the right hon. Gentleman the Chancellor of the Exchequer. He thought that the objections of those who were now offering the strongest opposition to the Bill ought to be considered. Hon. Gentlemen who were now obstructing the progress of legislation were those who had hitherto not taken part in any movement of that character, and the fact that they had made it their duty to do so on that occasion showed clearly what importance they attached to the measure.
§ MR. BLAKE
did not think it right for a minority to attempt to coerce a majority. If any principle were involved he should certainly vote with the minority. He could not, however, see that that was the case, and he trusted that the Government would not give way in the matter. There was a great point of principle involved in the question as to whether it was right that a minority should attempt to force its will upon a majority.
§ MR. BARRAN
regretted very much to have to take the course he had done in respect to the Bill; but no other course had been open to him. In order to show the importance the House attached to the measure, he might say that he had had a long resolution sent to him from the Leeds School Board, which body had borrowed money from the Public Works Loan Commissioners. The Board was composed of persons of different political opinions—extreme Radicals, moderate Whigs, moderate Conservatives, and old-fashioned Tories; but they had come to an almost unanimous decision that if the present Bill was passed, as proposed by the right hon. Gentleman the Chancellor of the Exchequer, it would really be a breach of faith between the school boards and the country. Believing that to be the case, he had been under the painful necessity of resisting the Government on that occasion. It gave him no pleasure 780 to do so; but he had-felt it to be nothing-less than his duty. On previous occasions he had entertained strong feelings against the obstruction which had been brought to bear to prevent the passage of Bills calculated to promote the best interests of the nation. But he considered that the present measure would do a great injury to the nation, and, feeling that, he regretted that the Chancellor of the Exchequer could not see his way to act upon the suggestion made to him by the right hon. Gentleman the Member for the City of London (Mr. Hubbard). It had been shown by the right hon. Gentleman that all application for loans had been made that year to the Commissioners. There would not be the least difficulty, therefore, in sending out a Circular informing all those who should apply for loans that until the House had decided upon the terms upon which the loans should be in the future granted the loans would be refused. There could be no reasonable complaint if that course were adopted, and it seemed to him that that would be a simple solution of the difficulty. He trusted that course would be adopted, for they could not accept the Bill in its present shape.
§ MR. GRAY
remarked that, so far as he was concerned, he had no desire to obstruct Public Business, and he had really acted conscientiously in opposing the Bill. He was merely taking a course in regard to a particular measure which he deemed it to be his duty to do. He had taken part in nothing which could be considered as obstruction of Public Business; but it was within the right of every Member to oppose, even to the extent they were prepared to go, a measure which was likely to be mischievous. It was fully within the right of every hon. Member composing a minority, representing one-half of the independent opinion of the House, to resist the progress of Business at 1 o'clock in the morning. It was a most reasonable and proper thing. It was right that the public should know upon what grounds objection to the Bill was taken; but they all knew very well that the public would know nothing whatever of the proceedings in which they were then engaged, as no report would be published in the newspapers, and the only means of knowledge of what took place would be from Hansard, which would not be published till long after the 781 House had risen for the Recess. Upon that ground hon. Members, he maintained, were abundantly justified in the course of action they were pursuing to resist the measure, though they were in a minority of 3 to 1, especially when the Government were not able to show that any mischief or inconvenience would result from the postponement of the contentious clauses—and no reason whatever had been shown why the proposal made a short time ago should not be accepted. It had also been explained to them that all loans for the present year would not be affected by the Bill, and that the terms upon which they would be granted had been settled. Nothing, then, would be easier than to issue a Circular to all local authorities stating that future loans must be considered to be subjected to whatever terms Parliament might arrange. In the meantime, the Government wanted to have a triumph in passing the Bill; but be considered it would be a very poor triumph.
§ Question put, and negatived.
§ SIR CHARLES W. DILKE
said, be distinctly heard the voices of the hon. and learned Member for Kildare (Mr. Meldon), the hon. Member for Tipperary (Mr. Gray), and the hon. Member for Birmingham (Mr. Chamberlain), when the Motion was put, against it.
§ Question again put.
§ The Committee divided:—Ayes 16; Noes 66: Majority 50.—(Div. List, No. 229.)
§ MR. STEVENSON
thought that the contention on the Bill had reached a point which showed the great difficulty of the subjects which the Bill was supposed to touch. The Bill seemed to him to be a reversal of legislation which had been deliberately entered upon by Parliament 20 years ago, in discharge of the great national duty of saving life and property from shipwrecks.
pointed out to the hon. Member that he was anticipating an Amendment of which he had given Notice upon Clause 5.
§ MR. STEVENSON
hoped he was in Order in pointing out the vast importance of the present measure, and the necessity of not hastily deciding upon it. It was intended by the Bill to check borrowing powers by local authorities, and with this view the Government took power largely to increase the percentage to be charged for loans. They proposed, in fact, to check expenditure by taxing the local authorities to the extent of £50,000 a-year. But most inconsistently they were aiding local authorities by grants from the Imperial Exchequer to vastly larger amounts. He (Mr. Stevenson) felt that the proposals of the Bill were such that they were thoroughly justified in the course which they had taken. They had a very high authority, the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster), on their side, who had told them before he left the House that they were amply justified in what they were doing. The Government had deliberately refused the suggestion of the right hon. Gentleman the Member for the City of London (Mr. Hubbard), who had shown that there would be no necessity for passing the Bill. It seemed to him to be beginning at the wrong end to pass a formal Act of Parliament, making a change, and then to subject the wisdom of that change to the decision of the Committee of the House in the ensuing Session. However unwilling to join in the opposition to the measure, he felt himself justified in doing so. The measure would be a most unpopular one, and would have the effect of increasing the cost of necessary public improvements. He begged to move to report Progress.
§ Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Stevenson.)
§ MR. CHAMBERLAIN
remarked, that if it were undesirable for them to continue the discussion of the clauses some time ago, it was still more undesirable to continue it now. One clause would produce a discussion upon the Education Act, and he did not think they should be asked to do that in the absence of the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster), to whom the House had always been accustomed to look upon in matters connected with 783 education. That was an additional reason why the consideration of the clauses should be postponed to a more convenient time. He had been endeavouring to think what it was that really separated them from the right hon. Gentleman the Chancellor of the Exchequer. The right hon. Gentleman had said that it was a very small matter in their point of view. As he understood the right hon. Gentleman, he had promised them that a Committee should consider the subject next Session; and they were, therefore, only dealing with a state of affairs between that time and the appointment of the Committee. Their great objection to the Bill passing in its present form was that it would prejudice and influence the work of that Committee. If Parliament were to pass a measure dealing with and regulating the loans to local authorities, the Committee would not be disposed to interfere with the arrangements already made. If that difficulty could be got over, he saw no reason why they should continue their opposition. If he understood the right hon. Gentleman the Chancellor of the Exchequer rightly, his difficulty was that unless a measure were passed very large claims would be established in the interval, and would have to be got at a future time. He would point out that works of the kind for which loans were made could not be created on the spur of the moment. No school board would build more schools, because it would lose its chance of getting a loan at a later period; and it was not likely that any sanitary work would be undertaken by a Corporation merely from fear of losing a loan. He had been trying to consider how the difficulty of the right hon. Gentleman the Chancellor of the Exchequer could be met to his satisfaction. He had an Amendment on the Paper—he proposed to leave out all Clause 2, after the word "Act," and to add, after line 18—Or such other rate as may be necessary, in order to enable the loans to be made without loss to the Exchequer.In the case of the Education Act, the rate fixed for the loans was at the discretion of the Treasury. By the adoption of his Amendment, instead of the clause as proposed by the Bill, it would be in the power of the Government to raise the rate of interest on loans for 784 the ensuing year to such a point as they deemed necessary. At the same time, the objection would be met—namely, that the Act would not prejudice the consideration of the question subsequently. He trusted that the right hon. Gentleman the Chancellor of the Exchequer would be able to adopt the suggestion he had made, and enable them to retire from their opposition to the Bill.
§ THE CHANCELLOR OF THE EXCHEQUER
said, that it was very much to be regretted that hon. Gentlemen, instead of beginning to discuss the principles of the Bill, which they might have done three hours ago, should have expended so much of their strength and the time of the Committee by declining to enter into the consideration of the Bill. Such a question as that raised by the hon. Member for Birmingham (Mr. Chamberlain) upon the 2nd clause of the Bill was one very open to discussion, and he should be prepared to discuss it, so soon as the Committee was allowed to do so. But so long as they were discussing the question of reporting Progress it was impossible to go into Committee.
pointed out that the hon. Member was not at liberty to discuss the Amendment on Clause 2, which stood in the name of the hon. Member for Birmingham. That would form a proper subject for discussion when the Committee reached it.
§ MR. SHAW LEFEVRE
suggested that the Motion to report Progress should be withdrawn, and that the hon. Member for Birmingham (Mr. Chamberlain) should then be allowed to propose the Amendment to the 2nd clause, as, from the speech of the Chancellor of the Exchequer, it was evident that he was prepared to make concessions which would remove the objections to proceeding with the Bill.
§ MR. CHAMBERLAIN
would make a similar appeal to the hon. Member for South Shields (Mr. Stevenson), because he understood the Chancellor of the Exchequer to intimate that he would give favourable consideration to his Amendment.
§ Motion, by leave, withdrawn.
§ Question, "That the Preamble be postponed," put, and agreed to.
§ Clause 1 (Short title) agreed to.