HC Deb 08 May 1900 vol 82 cc1131-43



I will attempt, as far as I can, to follow the good example set me by the First Lord of the Treasury, and I will make a very short speech. The motion which I bring to the notice of the House is no novelty, for it is a well-known motion. Since the last occasion when this motion was before the House Lord Russell, the Lord Chief Justice, within the last month, has declared that the union of the two positions constitutes a perfect scandal in public life. The present Ministry affords a glaring instance of the union of incompatible positions, for of the Ministers who now sit on the Treasury Bench opposite no less than 52 per cent. are directors, while, taking the House as a whole, the percentage of ordinary company directors is only 30. It is a new feature even for this country to have hon. Members who have accepted company directorships even since they have become Ministers of the Crown, and this is a public scandal. I am sure hon. Gentlemen opposite mean nothing wrong, but such a state of things is subject to the grossest misconception. I do not know whether the Lord Advocate—who is a director of three public companies—or the Secretary of the Board of Trade—who is a director of two public companies—is in charge of this question. This subject of commercial statesmen has been denounced by the Governments of Mr. Gladstone and Lord Rosebery. Having regard to incidents in connection with the contracts for the present war, and the influence of the Cabinet in reference to Stock Exchange transactions, the fact that Ministers of the Crown act as directors of public companies gives very good grounds of suspicion to the inference that this is a Stock Exchange Government promoting a Stock Exchange war for Stock Exchange purposes. I beg to move.

MR. STEADMAN (Tower Hamlets, Stepney)

seconded the motion.

Motion made and Question proposed, "That, in the opinion of this House, the position of a Public Company Director is incompatible with the position of a Minister of the Crown, and the union of such offices is calculated to lower the dignity of public life."—(Mr. Swift MacNeill.)


Being a director who is not ashamed of his position, I think it is well that I should reply, and I will do so with as much brevity as the case permits. I am not going to detain the House with more than a suggestion of the difficulty of applying such a self-denying ordinance in the case where a company in name is really a private firm in its nature. Is a man, when he is a partner in a firm, fit to be a Minister, and the next day, on his firm becoming a company, does he become unfit to be a Minister? I will at once proceed to deal with the ordinary public company. The hon. Member has not brought any direct charge of corruption, and probably he would be the first to say that it is very far from his thoughts that any member of the present Government would be guilty of any such thing.


Hear, hear!


But, at the same time, while I say and acknowledge this, I really do not know what is the meaning of the observation which the hon. Member made about Stock Exchange transactions. If that observation did not point to corruption it was mere rhetoric. It is suggested that when a member of the Government is a director of a public company Stock Exchange transactions would be facilitated. The hon. Member has been good enough to class me as a commercial Minister. It is true, as the hon. Member stated, that I am a director of an old-established insurance company and a railway company, but I do not know how this will facilitate such transactions. If the canker of corruption entered public life I could understand how a Cabinet Minister could manœuvre Stock Exchange transactions by being in possession of secret knowledge. If you had a case of that sort to deal with, the position of mere directors of companies would be only the fringe of the matter. But no such charge has been made in my time against any Member who has ever sat on the Front Bench. This proposition is based in the main upon two grounds: the first is that the position of a public company director is incompatible with [the position of a Minister of the Crown.


Hoar, hear!


By incompatibility I presume the hon. Member means that there is a conflict of interests. There might be certain directorships which would involve a conflict of interests, and if there was such a directorship I am certain that nobody on this Government Bench would continue to hold such a directorship. Of course no Minister would continue to hold a directorship which brought him into contact with a Department of the Crown dealing with Government contracts. But in that matter you must, after all, trust to the honour and good sense of those sitting on this Bench. Upon the question of conflicting interests it must be remembered that the interests of shareholders are very much greater than the interests of directors. The interest of a director is pecuniarily nothing, and it is so small that it may be disregarded; but the interest of a shareholder is very often very great. It is not proposed that a Minister of the Crown is not to be allowed to hold any investments in any company for fear that his pecuniary interest might run athwart his public duty. The second proposition the hon. Member puts forward is that the union of two such offices is calculated to lower the dignity of public life.


Hear, hear!


The hon. Gentleman is a versatile Member of this House, and I have heard him discuss many subjects, but I confess with pleasurable surprise that I look forward to the prospect of hearing him as a guardian of public dignity. What fallacy underlies this? Is it a confusion of the directors of companies with the promoters of public companies? The two words are very different, but the hon. Member spoke not only of directors but also of promoters. I am not aware that any of the Ministers of the Crown are promoters of public companies. Of course, there are companies and companies. If Members on this bench were directors of bogus companies; if they allowed their names to be used in a prospectus to "catch flats," then I should say they were doing a thing very unworthy of the position they occupied. But no such charge has been made against us. As to the opinion of Lord Russell, I am not going to deal with what he said, because I have not seen his speech. All I can say is that there are many things which a Minister of the Crown might do in connection with a public company without doing anything which does not conduce to his dignity or to his position. There must be a discrimination made, and I think it is idle to confound, without any distinction, the position of persons who are directors in old - established and perfectly responsible concerns with those who have mixed themselves up with bogus companies, and who have acted as a sort of "flat catchers" with the public. I go further and say that it is an advantage to the public service that this Bench should have upon it—[An HON. MEMBER: Oh, oh!]—I am stating my opinion, and the hon. Member by saying "Oh, oh!" will not alter it—men who have a certain cognisance of public affairs and business. If you are appointing a Royal Commission on any subject you appoint men who know something about it, and I feel that a great deal of our knowledge, such as it is, which we place at the service of the House so far as we can, has been learned by direct contact with great business concerns It has been said, Why not give up these directorships while in office? You cannot do it. It is easy enough to go in and out of a certain class of company, but with old-established companies it is quite impossible to expect to be able to do it. Seeing that there is practically no real abuse, and that there is no particular charge against any person, I think personally that this is really, if I may say so, a case of mock purity. It is perfectly impossible to avoid a theoretical conflict of interest, because what do we deal with in the House of Commons? We deal with the whole range of human affairs, and it is perfectly impossible to say in all the subjects we deal with that it would not be possible for the lines of contact to meet where they would mean conflict with personal interest. The only thing we can do is to have trust in a man's character, and so far as character is concerned there is no scandal alleged against any one of us. Un-less the House of Commons wants its affairs conducted by some body of secluded philosophers, it is a great deal better to have persons who do know something about business affairs, and who have practical business experience, and can utilise it for the benefit of the House.


This is a renewal of the discussion we had last year on, I think, the Address in reply to the Queen's Speech,* and the right lion. Gentleman has given the same reply that was then made to the arguments that were advanced on that occasion. The right hon. Gentleman has very truly said that there is no idea of any scandal or any imputation of corruption, but what we say is that from two points of view the system is objectionable. In the first place, a Minister ought to give the whole of his time—that is, apart from his own private affairs— to the work which he has undertaken to do, and either he is neglecting his duty as a director—in which case he is not behaving very fairly to the business in which he professes to have a share in managing—or pro tanto he is neglecting his duty to the Crown and to the country. That is one view. But the other view is much more serious. It is this. We think that no one in a responsible position, such as a Cabinet Minister, ought to be publicly connected as a director with any institution whatever which might have interests differing from and conflicting with the public interest. The right hon. Gentleman spoke of himself as being a director in two or three companies. I rather think he is what is called an extraordinary director in one of the Scotch banks.


I am an ordinary director.


Then the right hon. Gentleman is a live director in a Scotch bank, and is not what is very stupidly called in Scotland an extraordinary director, who is merely a figurehead, and has nothing to do with business, a system which I hope will not continue much longer. The question is one of sentiment largely, no doubt, but we in this country have happily been free for two or three * See The Parliamentary Debates [Fourth Series], vol. Ixvi., pages 971–996. generations from any imputation of mercenary motives or corrupt motives on the part of our public men, a thing which can be said of few other countries. This is a matter which, so far as it goes, at any rate gives rise to suspicion, and it is desirable to avoid the very appearance of suspicion so far as we possibly can. That a Member of Parliament or a Minister who has a great landed interest in some part of the country should become a railway director is a very admirable and proper thing, but if he assumes the position of a Cabinet Minister he should resign his directorship. The company would only be too glad to get him back again when he had a few months leisure from the affairs of State. There is no necessity why Ministers should continue to be directors or why they should not divest themselves formally of these obligations—they may be entanglements—in order to devote themselves to the duty which the Queen and Parliament expect of them. That is the whole question. It is a matter of sentiment, no doubt, but it is a sentiment which goes very deep. The Lord Advocate drew a very fine distinction when he stated that private business might be sometimes quite as much a tie upon a man in an undesirable way as a directorship. That is all very well, but the great body of the people would, I believe, be better satisfied in their minds if they knew that all the members of the Executive Government were free from anything which could possibly savour of suspicion.

MR. WEIR (Ross and Cromarty)

The Lord Advocate especially called attention to the companies in which he is interested, and I therefore feel entitled to make a few observations with regard to them. The right hon. Gentleman, although he receives a salary of £5,000 a year over and above his fees for contentious business, tells us that it is no matter that he is an ordinary director with a great amount of responsibility of the Bank of Scotland, the Great Northern Railway, and the Standard Life Insurance Company. I would ask the right hon. Gentleman whether the Bank of Scotland has not to do with company promoters, whether it has not financial transactions with them, and whether the directors have not to be consulted in regard to such matters. The right hon. Gentleman talks of gaining experience in the busi- ness world, but I should have thought that, as a lawyer, he had a good chance of getting experience in the Courts as to how companies are managed and business is carried on. I regret very much indeed that right hon. Gentlemen who sit on the Treasury Bench should be directors of public companies. In the last debate on this subject the Chancellor of the Exchequer asked for evidence that anything ever went wrong. I call attention to one company that went wrong from which a member of the Government was receiving £5,000 a year. I refer to the English Bank of the River Plate, the shares of which are now of very little value. I maintain that a member of the Government receives a salary from the Government to do the work of the Government, and until all Ministers keep clear of public companies, suspicion will not disappear. The Lord Advocate has not only his own work to do in this House, but he has also the work of the Secretary for Scotland to attend to, in addition to the directorship of three commercial companies, and I say it is impossible for him, however energetic he may be, to give attention to all these matters. The first claim not only on the Lord Advocate, but on every member of the Government, is to do the work of the nation, and as long as they are members of the Government they should arrange to drop their directorships and take them up again if they wished, and if they were so hard up for fees, when the Government went out of office; but during their tenure of office let thorn stick to the interests for which they are paid.

* MR. JOHN BURNS (Battersea)

The Lord Advocate has told the House of Commons, in what I venture to say is a very serious matter, that if the resolution moved by my hon. friend is passed we shall be embarking on a career of mock purity that will in no sense be practical, and may be inquisitorial. I am rather sorry that the Lord Advocate has to-night ventured to take that view, especially with his knowledge of the conditions that weigh with judges and magistrates and members of town and county councils in connection with companies in which they happen to be personally interested either as directors or shareholders. I will deal with the mock purity argument first. I may be wrong, but I believe that, with all its faults, the British House of Commons is far and away the best legislative assembly in the world. It is rightly called the Mother of Parliaments, and I believe that the Mother of Parliaments should not, under the régime of company promoters and Ministerial directors, be made the mistress of monopoly. If it is mock purity that makes all of us jealous of the good name of the Mother of Parliaments as the freest, most disinterested, and most incorruptible body in the world, that is a kind of mock purity that ought rather to be encouraged than otherwise. Now I come to the impracticability of the motion. It cannot be urged that it is impracticable, because the last Government, thanks in no small measure to the moral courage and prescience of the late Mr. Gladstone, decided that whenever a Minister took a directorship that could be at all questioned he should have to choose between his private interests and his public service. Then as to the motion being inquisitorial, I do not think it is. When a man receives Her Majesty commission as a member of the Government he should concentrate practically all his time in the patient, diligent and honest discharge of his Ministerial work. If he wants money he should abandon the loaves and fishes of Cabinet rank. If he wants to acquire wealth let him stay out of Parliament, with Mr. Hooley and the other gentlemen who are anxious to get into Parliament in order that they may obtain political power to make still more money. We do not want Mr. Hooley or Mr. Bottomley in this House of Commons as private Members, but as public decoy ducks for financial schemes. If you allow Cabinet Ministers to take directorships the duties of which they cannot faithfully discharge as long as they hold office, then the dregs and scum of the Stock Exchange can gain admission also, especially when we know the directorships are given after election to Parliament for services rendered in this House to their companies and monopolies. Now I come to precedents. As one who has been before Her Majesty's Judges on several occasions, I must frankly say that the English judiciary is as able, as impartial, and as disinterested as any judiciary in the world. I say that because the closer I have got to Her Majesty's Judges, especially when I received a sentence, the more I approved of their ability and probity. But what does the law say with regard to judges? It says that judges are to be exempt from deciding cases in which they are either directly or remotely connected. There is one celebrated case, that of Lord Chancellor Cottenham, whose decision was reversed by Lord Campbell because he had a very small interest in the case he decided. If that be true of Judges and Lord Chancellors, it is equally true, or should be made true, of Members of Parliament. Let me come within the four walls of this House. What does Parliament do? We begin our proceedings every day with one of the finest pieces of pure English that one can listen to; the admirable prayer enjoining us to put private interest on one side and to subordinate private prejudice in the public interest. I want the First Lord of the Treasury to be more reverential than I am, and to interpret that prayer, not only in its spirit, but also in its letter. Then, again, take our Private Bill Committees. This House has passed a Standing Order of the most rigorous character, that all members of Committees on Private Bills shall be free from all local and personal interest in all Bills referred to them; and the effect of that has been that, short of the judiciary, there is no tribunal regarded with more respect and confidence and more entirely trusted than our Private Bill Committees. Why do they evoke respect and confidence? Simply because the House of Commons insists that all members shall be free from personal or local interest or prejudice, and every railway director or labour leader knows that he will get a fair hearing from these Committees, and that his case will be decided on its merits, and that no taint of suspicion is possible as regards their decision. Coming from the judiciary and our Private Bill Committees, we know that the London Municipal Corporation Act of 1835 contains a clause which is generally respected and adhered to, that no man can vote or speak on any subject in which he is directly or indirectly concerned; and the result is the undoubted honesty and straightforwardness of our municipal life. But let me go from public bodies to municipal corporations and companies themselves, and here we have a Daniel come to judgment. Under the Companies Clauses Consolidation Act we find that a director of Company A, who is also a member of Company B, is debarred from voting on any contract between the two companies. Even the London Stock Exchange shows Parliament an example and a precedent in this direction, because the Stock Exchange will not quote any company unless the directors are prohibited from taking an active interest in the affairs of another company in which they are also interested. If that be the position as regards the Stock Exchange, municipal corporations, Committees of this House, and our judiciary, surely it ought to apply also to our Cabinet Ministers. What are the facts? Twenty-five Ministers out of forty-four hold forty-one directorships. I am not complaining of their holding these positions as private individuals, but I say that such a number of directorships is incompatible with that public trust and confidence which holders of public office ought to evoke. I do not even question the financial bona fides of any of these companies, but this I do say, that either these companies, be they railway, gas, or water companies, are not getting value for the money paid to these Ministers as directors, or if the companies are getting value, the country is not getting value for the £2,000, £4,000, or £5,000 paid to them in salaries as Ministers of the Crown. The Lord Advocate, with that legal ingenuity which characterises the legal mind, especially in Scotland, said that we ought to bring forward cases and charges against individual Ministers. We do not want to do that, because if we start bringing personal charges against Ministers we reduce the debate to a low level and prevent ourselves from determining this question from the point of view of high principle. For instance, it is well known that the Duke of Devonshire, than whom politically and personally there are few better men in this country—indeed, I would rather go tiger hunting with the Duke of Devonshire than with all the South African millionaires rolled into one—is connected with one of the Naval armament companies who supply ironclads for our Navy. I make no complaint. Then again Lord Selborne is connected with the P. and O. Steamship Company. When Lord Selborne was in this House no one had greater admiration for him than I had, but I say that a company which receives something like £400,000 from the Government in the shape of subsidies for carrying mails ought not to have as a member of its board a Minister either in this House or in the other. Then I conic to railway directors. I make no complaint of the Home Secretary or the First Commissioner of Works for being railway directors. The companies with which they are connected are probably very good companies, but what I want to point out is this——


I believe I am right in saying that the Duke of Devonshire resigned the directorship to which the hon. Member refers when he took office.


I am delighted to hear it. It only gives additional point to my argument and emphasises the encomium which I ventured to pass on the Duke of Devonshire. What I wish to point out is this—that if you allow Ministers and Under Secretaries to belong to companies it encourages ordinary private Members to go in for company promoting and directorships to an extent which is discreditable. For instance, there are 586 Peers, and of these 435 are directors of companies. I do not want to take the House of Commons through the whole Hooley disclosures, or through the revelations in regard to Earl De la Warr, which reflected no great credit on him. Look at the effect on the telephone, railway, and water companies. The appetite grows with what it feeds on, and if Ministers are to be allowed to have forty-four directorships, the evil will increase. We have seen directors of water companies who are paid £1,000 or £2,000 voting on their own Bills after having said their prayers, and going the length of standing in the division lobby, and when Members come in and ask how to vote, saying, "Oh, it is against the London County Council vote for monopoly." Now, that is becoming a scandal. The Spectator, a competent and well-written journal, which has a true conception of the dignity of public life, says that there is a strong probability that if this sort of thing is not checked, we may witness an approach to such a condition of things that we can see in South Africa and elsewhere. Coming from that paper to the Financial News, facilis descensus Averni. The present is essentially a time when members of the Government should not leave themselves open to the breath of suspicion that they are personally interested in trading concerns. The telephone debates in which Directors take a conspicuous part in this House are becoming a perfect scandal.


The hon. Member is now discussing another question—namely, the well-known rule of the House which prohibits Members from voting on matters in which they are interested. The resolution before the House refers to the question of the holding of directorships by Ministers.


I accept your ruling, Mr. Speaker. I was trying to point out that the encouragement given in high places to financial log-rolling is such that we shall have this House losing its just reputation. To what extent that encouragement is given in high places can be seen by anyone who reads the papers, like the Birmingham Post and the Investors' Review. When the telephones or the low-flash oil come on for debate the lobbying has become a perfect scandal. The Whitehall Review for August, 1899, said that "last session lobbying had become not so much a line art as a perfect scandal." Now, I do not know whether that statement in the Whitehall Review is true or not, or the statements contained in the Birmingham Post—than which no paper has a more competent and excellent representative in this House; but this I do know, that last year when the Low Flash Oil Bill and the Telephone Bill came on for discussion the lobby of the House of Commons was crowded by men who ought not to have been there. I know that pressure was brought to bear on hon. Members in the inside lobby by men who ought not to have been within the precincts of the House at all. I know that these financial touts and commercial tide-waiters are encouraged to do their dirty work, derogatory to the character of British public life, because we allow Ministers to hold directorships. It is because I am jealous of the honour of this House that I support this resolution. It is the poor man who should support such a resolution, because poor men, as a rule, are unjustly accused of lending themselves to this kind of thing. I appeal to the First Lord of the Treasury, in these days when people outside are not so keenly interested in politics and Parliamentary life, not to still further slacken their interest by allowing it to be said, as it can be said, that directly a man comes into this House, or is nominated by Her Majesty to a high position, he is at once, pounced upon to subserve the private interests of this company or that company, instead of the public interest. I appeal to the First Lord of the Treasury to do no more than Mr. Gladstone did to discourage guineapiggery, and to make every Minister con-