HC Deb 20 February 1903 vol 118 cc407-33

Order read, for resuming adjourned debate on Amendment [19th February] to Main Question [17th February], "That an humble Address be presented to His Majesty, as followeth:—

"Most Gracious Sovereign,

"We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—(Mr. Gretton.)

Which Amendment was, at the end of the Question, to add the words— And we humbly represent to Your Majesty that thirty - three of the fifty - six Ministers of the Crown who constitute Your Majesty's Administration hold among them no fewer than sixty - eight directorships in public companies, and that we consider the position of a public company director to be incompatible with the position of a Minister of the Crown, and that the union of such offices is calculated to lower the dignity of public life."—(Mr. MacNeill.)

Question proposed, "That those words be there added."

MR. FIELD (Dublin, St. Patrick)

said that in dealing with the important matter raised by the Amendment he would speak temperately. In his opinion the House ought to look at this matter from a lofty standpoint. Hon. Members were sent there to protect the weak rather than to increase the power of the influential. He was rather surprised last night at the levity with which some hon. Members appeared to regard the subject. They did not seem to realise that the honour and dignity of the House in the matter of legislative impartiality were to a certain extent involved. The question, in his opinion, involved the fundamental principle of equity, because this House was recognised as a judicial authority from which all legislation emanated. They were charged with the duty of making impartial laws in the interest of public utility. He submitted that if legislators, and especially if they sat on the Front Ministerial Bench, had private interests in connection with the subjects which were brought under the consideration of the House, it was only natural that they should have biassed minds. He would give an example from the past. It was in a Parliament composed of landlords that the Land Laws were made, and it was seen from the Statutebook that the measures which were passed were framed for their profit, and to protect them in their privileges. We lived now in a commercial age when limited liability companies existed in unlimited numbers. He held that it was quite possible, in connection with measures which tended to public utility, such as those promoted by railway companies, shipping companies, gas companies, eletric companies, and water companies, a policy might be followed which was opposed to the general interests of the community. He held that right hon. and hon. Members should not be permitted to remain or to become directors in a concern which was a State protected monopoly. That was a very plain proposition which would commend itself to the commonsense of everybody. They were all elected as the custodians of public and not of private interests.

He should like to know whether any Member of that House would try to defend the present system, and appeal for the support of his constituency as the director of a railway, shipping, or water company. He admitted that hon. Members were directors before they became Ministers, but those positions should be relinquished, because their full time should be given to the performance of their public duties. In the course of his Parliamentary career he had had many opportunities of assisting at deputations on very important matters, and it was almost invariably urged by Ministers that pressure of time would not enable them to go fully into the subjects. The resuly was that the deputations were generally dismissed without receiving that consideration to which they were entitled in regard to matters of immediate public interest. It was quite evident, from the experience of hon. Members in commercial matters, that Ministers had more than sufficient to do to fulfil their public duties without attending to pressing private affairs. But in addition to those public utility companies, there was another class of companies which might be termed dangerous—for instance, Stock Exchange Syndicates. They all knew what a rush there was on these during the war. There were also companies which constructed war vessels and contracted for armaments and war material. Directorships on such companies should not, in his opinion, be held by any hon. Member of this House, and that opinion was more emphatic in regard to right hon. Gentlemen on the Treasury Bench. He was sorry to see that Ministers were not in their places, for this was a matter in which they were directly concerned, and they ought to attend a debate in which their conduct was being discussed. His was a view which had been put forward by many high-minded English statesmen in the past. In the case of Ministers especially, private interest should not clash with public duty. It would be advisable if the House should not allow this occasion of temptation to continue in perpetuity as a possible cause of friction between this House and the people.

Some hon. Members might think that no temptation existed. Let him give an instance. Since he became a Member of Parliament he had had more than one offer of the necessary amount of shares in a company to qualify him for a directorship. He was to receive a modest salary, and need not attend the meetings of the directors. If this form of temptation was put forward to private Members, what temptation, amounting to thousands of pounds, might be offered to a Minister who wielded a power in Society and in the State? Therefore, he held that it ought to be the duty of the First Lord of the Treasury to consider this matter seriously and take away that temptation from his colleagues. They all knew—those at least conversant with public affairs—the revelations which took place in regard to the Panama Canal; and they were also aware of the allegations of American lobbying and the manner in which legislation was there carried on. They likewise knew that the system of American lobbying had been transferred to a large extent to Westminster. He held that under these circumstances a condition of public affairs existed which ought not to be permitted to continue. He was certain that any Member of this House would deplore the adoption of the methods pursued in other countries; and he held that prevention was better than cure. He did not intend to make any personal attack on any hon. or right hon. Member of this House. He put his argument in a temperate manner and entirely from the point of view that they in this House were public men, there in the interest of the public, and not as private individuals doing private work which should not belong to a public position. He submitted, therefore, that the practice of directorships being held by right hon. Gentlemen on the Treasury Bench and their subordinates, or even by hon. Members of the House, should be discontinued unless in the case of purely commercial competitive concerns. With regard to directorships in companies dealing with public utilities which were State protected monopolies—these should be held by no Member of the House. He wished the House to note the distinction he made. Now this was a perfectly plain business-like proposition that would bear examination and could be discussed without heat or loss of temper.

He would give a notable instance of what had occurred in the House. In was said that there were seventy railway directors in this House, and fifty in the House of Lords. Now, when a Railway Bill came before the House, the directors always voted solid for it, no matter what side of the House they belonged to, unless where the interests of one railway company clashed with another. With respect to the London and North Western Railway Company's Bill alluded to the previous night by his hon. friend who introduced the Amendment, that Bill was only under discussion for three hours—that was before the new Rules were passed—when a director of that company actually stood up and moved the Closure, which Mr. Speaker accepted. He did not know whether Mr. Speaker was aware of the fact that that hon. Member was a director of the company under discussion. At any rate that was a position which ought not to be taken by any Member who was a director. He maintained that a director should not have the power to stand up and move the Closure in the discussion of a matter of public interest. If such a method of conducting debates on transit affairs were continued, it might menace the welfare of the community, and impede the commercial progress of the nation. That fact was beginning to be recognised by the non-official Members of the House, and to be accepted by the Press and the people outside. Public opinion should be the breath of the law, and public opinion said that some change in this direction was necessary.

He would suggest to the Prime Minister, whom they all respected, although they might differ from him on many matters, as the trusted guardian and custodian of the rights and privileges of this House, that he should takesome measures quietly, but effectively, to put an end to the continuance of this objectionable system. He was aware of the fact that the Prime Minister had shown a good example by not being a director of any company. He granted that it was not reasonable to expect that the right hon. Gentleman should, at the close of this debate, abandon his colleagues in office. No; the right hon. Gentleman was the chosen Leader of a great Party, and he would be, as he ought to be, loyal to his official colleagues. But they were in an age in which precedent did not sanctify an abuse. He knew there were difficulties in the way, but the right hon. Gentleman could surmount them. He was aware that heroic remedies or drastic measures were not popular; nor perhaps probable, in the House as at present constituted. They lived in an age of expediency, and when a large question came before the House and was discussed at length and promises given, nothing more was done. However, he trusted that the annual recurrence of this Amendment would impress itself on the minds of those who were responsible for carrying on the business of the House and country. His conviction was that the people outside the House, and many Members inside, were determined that the present state of things should not continue. No worthy effort had ever been attempted without sacrifice, and he hoped the Prime Minister would, at the close of the debate, give some satisfactory assurance that the present system was about to be ended.

SIR GEORGE BARTLEY (Islington, N.)

said that it was unfortunate that this question was raised on the Address, because they could not vote on it since it would be taken as a vote of want of confidence in the Government. In regard to directorships being held by Ministers, it seemed to him to be unfortunate that the rule observed by the late Earl of Beaconsfield and Mr. Gladstone had not continued to be enforced. No one doubted the honour of any member of the Government, or any Member on either side of the House, but it seemed to him that it would be wise if those in charge of the affairs of this enormous Empire should devote the whole of their time to the discharge of their official duties, and not be mixed up with public companies. The real point appeared to him to be that they had a great country to manage, and that as the position of a Minister of the Crown was one of great honour it would be wiser—he would not impute any improper motives whatever, that would be a mistake—not to pass a law, but that the moral feeling and general idea should be that a Minister on taking office should relinquish any directorships he might hold. He regretted the discussion, as it seemed to him to lower the great position of Ministers of the Crown. Further, when they considered the onerous duties which attached to high offices in the Government, it was not reasonable to suppose that men could attend to their public duties as well as to their duties as directors. They could not serve two masters properly, and it seemed to him much wiser that they should relinquish one position or the other.

The experience of the last few years showed that occasions might arise which would give the public an opportunity of saying things which it was not desirable should be said of Ministers of the Crown. Their responsibilities and duties might not come into conflict with their private interests, but the man in the street thought they did, and that tended to lower the dignity of a Minister of the Crown. He should however besorry to see a law passed with reference to the matter. He acknowledged that there were directorships and directorships. Some, no doubt, were above suspicion; still, he thought it would be wiser if there was a sort of general understanding that, without it being made obligatory, it should be the general idea — the correct thing—that when a man took office he should resign duties which did not appear to be quite compatible with his duties as a Minister. That was his view, and he believed that many members of the Government held it also. Having regard to the enormous growth of the country and to the development of trade, it was better that those who had the guidance of the State should not be mixed up with large commercial transactions, which were often associated with the expansion of the Empire. He should be glad to see the rule to which he had referred recognised, but, of course, on the present occasion he could not possibly vote for the Amendment.

MR. SYDNEY BUXTON (Tower Hamlets, Poplar)

said he agreed with the hon. Gentleman in regretting that such discussions should occur, but there was a simple remedy, and that was that the Government should adopt what was really the substantial view on both sides of the House. He regretted also that the matter had to be raised on the debate on the Address, as he should have liked to have had an open vote on it. But it was difficult to raise it in any other way. It could not be raised on the salary of an individual Minister; and, even if it could, that would be still more invidious than raising it as a general principle. He did not think right hon. Gentlemen opposite could complain of the tone and temper with which the debate had been conducted. There was no desire to reflect on the present Government, and his hon. friend who moved the Amendment, though he had to give instances to prove his case, made no personal attack on any member of the Government. In no sense was it a Party question, but he did not think that any previous Government had carried the matter to such an extent as the present Government. The fact that thirty-three members of the Government held sixty-eight directorships seemed to him to be a very serious matter, and one which it was the duty of the House to consider as a matter of principle. The right hon. Gentleman, in discussing the subject a few years ago, seemed to think that it was not only an attack on the Government, but a sort of general depreciation of directorships as such.

They might rightly assume that all the directorships held by the Government were legitimate, but that was not the question. The question was whether a directorship put the member of the Government who held it in a false position. The instance which his hon. friend gave yesterday, of the way in which directorships held by Ministers might be used, was one of the strongest arguments he had ever heard in favour of the Motion. He need hardly say he made no reflection on the Secretary of State for War, but it appeared that in an advertisement of the insurance company, of which the right hon. Gentleman was a director, his name was put at the head of the list of directors, and was printed in large characters. That was done without the right hon. Gentleman's knowledge, and he immediately stopped it when it was brought to his attention. The company was a very respectable company, but was it not quite certain that if the secretary to the company did so, the agents of the company would also draw special attention to the fact the Secretary of State for War was one of the directors of the company? It seemed to him that members of the Government who were also directors were in a serious dilemma. He assumed they were directors because they intended to give attention to the affairs of their companies, but if they did that they were bound, in the present pressure of business, to neglect their public duties. The work of the principal offices of State was enough, and more than enough, to occupy any man's full attention. If a Minister was a director he would either neglect his public duties or the interests of his shareholders and be a mere guinea-pig director.

A year or two ago it was said that private interests would in such circumstances always give way. He was sure they would, but it was not a case of a mere shareholder. A director's interests were not private interests. He was acting as trustee for the shareholders, and he was put in a false position when his duty to his country and his duty to his shareholders conflicted, as they were almost bound to do in the existing state of things. The right hon. Gentleman himself had practically admitted the validity of the arguments they had advanced. A year or two ago he said that his colleagues, instead of holding sixty directorships as at one time, held then only forty-one, and he pointed out that it was an advantage that the number of directorships held by Ministers had been reduced by one third. But that forty-one had now increased to sixty-eight, and the right hon. Gentleman's point fell to the ground. Yesterday his hon. friend said that the Chancellor of the Exchequer held two directorships. The right hon. Gentleman shook his head and said he did not; and he himself was very glad that the right hon. Gentleman had given them up. His point was that they could not discriminate between company and company, and directorship and directorship. If it were left to the discretion of individual members of the Government as to the directorships they should or should not hold he had no doubt that a proper discretion would be exercised. But they had no guarantee of that; and it seemed to him it was not possible that the Prime Minister should say to a particular colleague: "You are entitled to hold this directorship, but you should give that one up." No one could tell in which way the interests of a company of which a Minister was a director would come into conflict with that Minister's public duties.

The only rule was the rule which was applied to the Civil Service, and to the Army and Navy, and that was that while a man was serving his country he should not hold a directorship of any sort or kind, on the ground that in the first place it would occupy his time, and on the much more important ground that a conflict of interests might arise. There was one rule, and one rule only, and that was that directorships should not be held by members of the Government.

The case put by his hon. friend yesterday seemed to him very much to the point, namely, that when any Member of this House took an office under Government he had to give up any directorships which he held. The late Secretary to the Admiralty held a directorship, but when he accepted an appointment under Government he had to give it up. What was sauce for the goose was sauce for the gander. They knew the case was stronger in the Civil Service. The argument with regard to the Civil Service was very strong one. Our standard for the Civil Service was far and away the best in the world, and that was largely due, in his opinion, to the fact that as public servants they were not allowed to have any private interests which might conflict with their public duties. That was the standard we should apply to Members of this House as well as the Civil Service. By the Rules of the House no hon. Member of this House was allowed to accept a contract from a Government Department. He regretted that this rule, which was adopted in days gone by, should be of so little use now, owing to the fact that private concerns were now to a large extent turned into limited companies, and thus hon. Members became interested, either directly or indirectly, in Government contracts. These limited companies had been put in the positions of the private concerns, and if it were wrong that any Member of the House should accept contracts from the Government it was equally wrong that members of the Government should be in a position to receive them as directors of limited companies, and so become, directly or indirectly, interested in them. He agreed that if the rule was carried out it might be hard on some Members who were asked to accept office, but, after all, when they came to that House they had to make sacrifices and they should accept the situation loyally.

In regard to the sacrifices they had to make upon taking office he reminded the House that the hon. Member who put forward the Motion had said that the members of the Cabinet divided between them in salaries £93,000 a year, and in that case his argument was still stronger, because one could not say that members of the Cabinet, at all events, were so badly treated by the country that they ought to fall back on the emoluments of directorships. What did such a statement mean? Some members of the Government had received in public money between £600,000 and £700,000, so when they talked of a poor man taking office that was not a factor that ought to be considered in the matter. The fact was that while hon. Members were in the wilderness they were grateful for any manna which might come down to them, but when they accepted office, received the emoluments and divided the spoils of office, they ought to relinquish all other interests which might clash and conflict with their public interests. He heartily supported the Motion.

MR. PURVIS (Peterborough)

said he had never held a directorship, and had never in his wildest dreams imagined himself a member of the Government. He submitted that the question really was whether the House of Commons, the mirror of the people of this country, was ashamed of men actively connected with business affairs. That was the way in which the matter presented itself to him. Was the Government to be composed of mere doctrinaires and pedants who had no practical knowledge of anything actually going on? Was every member of the Government to be a mere academic debater? Was the House of Commons, the representative House of the people of such a country as this, to be engaged merely in talking of things they did not understand, or things which they understood merely from hearsay? They all knew, as was once said by a great debater in this House, that commerce was in England the master feather in the eagle's wing. It seemed to him that this Motion proposed that the Government of the British Empire should entirely consist of bookworms, and that the disqualification for office in the Government should be that Memeber who it was proposed should fill it should still continue to know what he had to do. One of the hon. Members for Durham had said that all directors voted solid. Of course they did, and the same might be said of any body of men who had a community of interests. Why should they not? He thought this Motion was far from consistent with the public traditions of the greatest commercial country of the world.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

I do not think this case ought to be disposed of in the way in which it has been stated by the hon. Member who has just sat down. This is a very serious matter, and has been so regarded by the Government. The hon. Member who has just spoken said it was a very good thing that the members of the Government should be occupied with other things than the Government of the country, but I cannot accept that proposition. I think that men who occupy official positions of great responsibility should devote themselves exclusively to that work and to no other, and that is a proposition to which, in my opinion, there ought to be no exception whatsoever. You do not allow it, as my hon. friend has just now said, in your Civil Service. You do not permit for a moment any one of the subordinates of the Government to appear as directors of companies. Then why in the world should you not apply that principle to the heads of the Government. What is far more important is the notion that a man, the head of a Department of the Government, may be held out as an inducement to the investors of this country. That is a shocking thing to my mind. I have never been a director of a company in my life, and never shall be, but what is the fact? The fact is that the appearance of these names in the prospectus is to give the company a credit which it is not entitled to possess. The notion is that when a man is put forward as a director of any of these companies, he should be occupied with looking after the business of the company, and that should not be the case with responsible Ministers of the Crown. Therefore, it is not necessary, in my opinion, to argue a question of the kind. We know perfectly well of the extremely painful case of a colleague of my own who, being a director of a company, was, through no fault of his own, placed in such a position that he felt bound to resign his position in the Government. No Minister should be placed be placed in such a position—a position in which he is nominally responsible—as to oblige him to resign his office.

This is an argument with reference to limited liability companies which, in my opinion, is unanswerable. A Minister of the Crown should run no risk of his character being compromised in this way, and I shall heartily vote for the Motion, unless the head of the Government will give us an assurance that the system will be put an end to, when it will not be necessary to divide upon the question or to record our opinions in regard to it. I know there are objections felt to raising a question of this kind on the debate on the Address, because it may appear to be directed against the Government, but it is quite within their power to prevent such a debate being raised in the future. The Prime Minister has only to give us an undertaking that measures shall be taken to meet the views put forward by those who have supported this Motion. There is no reason why such an undertaking should not be given. The Government have already promised two Bills in consequence of discussions which have taken place on Amendments to the Address, and it is perfectly open to the right hon. Gentleman to give the assurance that we now ask for, that this system shall be put an end to at once, without exception, and that directorships shall not be held by Ministers of the Crown.

I took a part myself in laying down and carrying out the principle that the Law Officers of the Crown should not engage in private business, because it was held that they had quite enough public business to do, and that it was possible that in undertaking private business they might have to deal with matters which came into conflict with their responsibilities to the Government and to the country. Well, that system has been put an end to, and is it for the Government to come forward now and say that these highly paid offices do not furnish enough work for the whole of their time and attention? I venture to assert that it is impossible for any member of the Government to entertain or to put forward such a defence as that. The hon. Member for Peter borough said it was better that people should have some experience in business. May I remind him that there is a period of opposition in which a man can do that; he does not become a Cabinet Minister as soon as he leaves school, and he has ample opportunity to get an insight into business affairs if he chooses. But when a man takes a responsible position such as that of a Minister of the Crown, I say it is only common sense to lay down the rule that he shall give up the whole of his time to the responsibilities of that position. This seems to me to be a proposition which can be unanimously accepted, and, therefore, I hope that the right hon. Gentleman at the head of the Government, accepting and realising his responsibility in this matter, will give us an assurance that this system, or rather this practice, shall be put an end to unconditionally.

SIR WILLIAM TOMLINSON (Preston)

deprecated the application of a hard and fast rule in matters of this kind. He did not suppose that there would be a large majority of the House in favour of saying that a person holding a high position under the Crown ought to be able to devote himself to a business that would take up a large portion of his time. But he did think hardly any one would maintain that no Minister of the Crown ought to be possessed of means other than emoluments belonging to his office. They must not forget that the tendency of the day was to convert property of various kinds into limited liability companies. Sometimes large estates, for the convenience of management, had been turned into companies, but because a man held a position in them it ought not to be any great disqualification to his holding high office under the Crown. There was a great difference between one kind of company and another, and it would be very unjust to say that a Minister ought necessarily to be disqualified from continuing to occupy a position he had occupied in the past.

THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR) Manchester, E.

This is not the first time on which I have had to give my views, and the views of my colleagues, upon this question. I have argued it at length upon many previous occasions. I have also heard on many previous occasions the arguments which have been advanced on the opposite side, and I can only say that I do not see my way to change the opinions which prior to this I have laid before the House. I have no desire to complain of the tone in which this debate has been carried on, although it is true that the hon. Gentleman who moved the Amendment is sometimes misled by the rapid and tumultuous flow of his own eloquence into making something in the nature of a personal attack upon members of the Government.

MR. SWIFT MACNEILL (Donegal, S.)

You did not hear my speech.

MR. A. J. BALFOUR

Oh, yes; you do me a great injustice. I may have been called out on business here and there, but I can assure the hon. Member I have the trend of his discourse clearly in my mind; so much so, that I did not require to refresh my memory by reading the reports which appeared in the newspapers this morning. I remember that the hon. Member chose for attack, of all members of the present Government, the Lord President of the Council, and asserted that he was a director of the Barrow Railway, the Barrow Hematite Iron Works, and of the Furness Railway. He went on to say that one of these companies produced armaments, and also to suggest that a Member of the Government who was also a Member of the Armaments Committee, ought not to be at the same time chairman of a company which produced armaments. Had any of the facts stated by the hon. Gentleman been true, I think the House would have felt that even then the Duke of Devonshire might well have been left out of account in a discussion of this kind; but as a matter of fact, all the hon. Gentleman's facts are untrue. The Committee is not an Armaments Committee. I presume the hon. Gentleman was alluding to the Defence Committee of the Cabinet. Well, that Defence Committee has to discuss very important questions, but it has not to discuss the particular nature of the guns and rifles which are to be used by our troops or by our fleets in the event of war. It is not, therefore, an Armaments Committee at all. The second error into which he fell was the assumption that the Duke was the chairman of a company which made armaments. Well, he is not, so far as I know, the Chairman, or even a director, therefore, the hon. Member is entirely incorrect. I do not believe that the Duke of Devonshire has anything whatever to do with the company to which the hon. Gentleman refers. I believe that some years ago he had, but so far as my information now goes—I have not been able to verify the fact—he is now no longer connected with it.

MR. SWIFT MACNEILL

Perhaps the right hon. Gentleman will permit me to correct him. The right hon. Gentleman refused to give me a list of Ministers and their directorates, and the only means which I, therefore, had was this book, the "Directory of Directors," which I regard as the bible of the Ministry, and in that I find that the Duke of Devonshire, K.G., is described as Chairman of the Barrow Hematite Steel Company, Ltd.

MR. A. J. BALFOUR

That is a company with which I believe, though I am not sure, the Duke of Devonshire was connected, which did make armaments, but he has not been connected with it for many years. I only mention this because it is really too bad to drag in the Duke of Devonshire, or if he dragged in it should be with some accurate knowledge of the facts. I will pass to what is much more important than the case of any particular Minister—the general principle which, in my judgment, ought to guide the House in coming to a conclusion on this matter. There are only two possible objections that I am able to see to a Minister holding a directorships; one, that it is likely to take up too much of the time which ought to be devoted to the public service, and the other that the mere fact that he is a director may bring him, in that capacity, into collision with some public interest which he ought to safeguard, or, being connected with a company, he may, if that company and its directors become involved in difficulties, through those difficulties bring, I will not say, discredit, but may embarrass his position in the Government and the position of the Government as a whole. Those are two arguments which are urged in favour of the absolute general rule that no member no member of any Government should ever hold any directorship.

Everybody must admit that no man has a right to join a Government unless he is prepared to give the best of his time to the work, or, indeed, to give all the time which the duties of the office require. But does that mean that a member of a Government is never to transact any kind of business of his own? For generations many of the most distinguished, honoured, and trusted members of the Government of this country have been men born to responsibilities which could not possibly be discharged without some expenditure of time, whether in or out of office. Are they to hand over their property to somebody else? Are they to abandon all interest in it?Are they to neglect the responsibilities which the possession of a great property involves? If not, you are driven to the conclusion that it is not inconsistent with the duties of a Minister of the Crown to devote, at all events, some part of his time to his own affairs, or affairs other than those of his office. Nobody can deny that general proposition, it is all a question of degree. A Minister is bound to see that his energies, strength, and health, are given to the service of his country, and that the duties of his office have the first call on all he has to give; but I have never heard the rule laid down, and no such rule can be laid down, or if it were it could not be enforced, that a member of a Government should have nothing to do with any business except that immediately connected with his office. I do not think it will be asserted that any one of the Gentleman who now occupy the Treasury Bench has done other than devote the very best of his energies to the public service. Hon. Gentlemen may disagree with them; they may think them not worthy of the high places to which they have been called; but I am convinced that no man with the smallest acquaintance with the facts will for a moment suggest that they have not laboured hard, at all events, if not effectually, in the service of their country.

I therefore pass to what I think influences hon. Gentleman in their approval of this Motion much more than the question of the amount of a Minister's time that directorships are likely to take up, viz., the argument drawn from undue influence or improper motive — I will not say corruption — or from the fact that a Minister, through no action of his own, may become involved in transactions which he and his colleagues will have every reason to regret. I want very much to know how the mover of this Motion distinguishes the case of a director of a public company from that of a member of a private firm? There are certain legal and technical distinctions between a limited liability company and one of unlimited liability. Is it on those legal distinctions that the whole principal of this Amendment is based? If so, surely it is the flimsiest thing in the world. The hon. Gentleman must base his case on something very different from that. The first question I ask him, therefore, is — Does he think there is a valid distinction between a private and a public company? If he comes to the conclusion, as he must, that the principle if applied to public companies must be extended to private companies, is he prepared to say that no man in business is to take part in the government of the country?

I heard last night a most excellent speech—though I did not agree with it — from the hon. Member for the St. Austell Division of Cornwall, who in supporting an Amendment having reference to some very scandalous frauds in the City, avowedly spoke as what I may call the exponent of commerical morality in the City of London. I notice that the hon. Gentleman is a member of a firm—I have no doubt a most excellent and honourable firm—in the City. When the Party opposite come to this side of the House, is a man like that to be excluded from office because he belongs to a business firm in the City of London? ["No."] Why not? Does a private business take up no time? Do Private businesses not get into difficulties? Are members of private firms never involved in unfortunate commercial enterprises? The proposition is really an untenable one. Unless you are going to lay down that a country, which is, above all, a business country, is to permit every class of man except the business class to compete for the regulation of its affairs, I do not see how the Amendment before the House can be supported.

The hon. Member for the St. Patrick Division of Dublin seemed to limit his objection to what he called "publicly regulated monopolies," by which he really meant, broadly speaking, railway companies. His view was that no member of a Government ought to be a director of a railway company because railway affairs often come before Parliament, and the position of such a Minister as a director might collide with his duties as a member of the Cabinet or of the Government. I am far from denying that the relation which this House bears to all these great corporations presents some difficulties, but the principle which the hon. Gentleman lays down, if adopted at all, must be extended—and I believe he was prepared to extend it — to all Members of this House and of the House of Lords. If you are going to lay down the proposition that no Minister is to give a vote in this House, or take any part in legislation or administration, who is connected with one of the great railway companies, it would be absurd to stop at the Treasury Bench; you must go to the Front Opposition Bench and to the general body of Members. One is in the habit of talking as though the only persons of administrative responsibility in the country were the gentlemen actually holding office at a given moment. We know that that is not the fact. Next in importance to the Ministry for the time being comes the ex-Ministry, who exert an enormous influence on the course of legislation, both in this House and in the other. But will anybody venture to say that Lord Rosebery, for instance, was to blame when the other day he joined the Board of the Great Northern Railway Company? Is he by that action to be precluded from giving his opinion, either in the House of Lords or else- where, upon great questions of public policy in which, directly or indirectly, the railway interest may be involved? The only result of this principle, if driven to its logical conclusion, will be to make public life, not purer, but poorer, by drawing out of it some of the best men now engaged therein. I am, of course, ready to admit that no Minister ought to hold a directorship, or to take an interest in the affairs of any company with which he may have to deal administratively. All will agree that for the President of the Board of Trade, for example, to be a director of a railway company would be most improper.

SIR WILLIAM HARCOURT

Or the Prime Minister?

MR. A. J. BALFOUR

I do not know of any Prime Minister who was connected with a railway company. There may be such, but I should not like to dogmatise. ["Rosebery."] Oh! this introduces interesting and personal elements upon which, fortunately, it is unnecessary to dwell.

I come now to the broad consideration which I think ought to influence the House, even if the arguments I have already adduced are ineffectual. An hon. Gentleman opposite said the members of the present Government would have no reason to complain if they were forbidden to hold directorships because they had had the fortune, good or evil—I really do not know which—to be in office for a large number of years, and, during that period they had drawn their official salaries as members of the Government. Yes, a great many of my colleagues have been in office for a number of years; but, looking at the constitution of this country, and to the forces which determine the fate of the Government at any moment, can you count, in the future, on long tenure of office by any particular set of Ministers? Judging the future by the past, how can you say that this is likely to be the ordinary rule. I remember the first Government I was in—the Government of 1885—which lasted, I think, about eight months—I am not sure that it lasted quite so long. The next Government, for anything I know, may have a life as brief and interesting as the Government of 1885. The Minister who has to select his colleagues, if this rule be laid down, will be absolutely obliged to say to this or that gentleman who may be eminently qualified to serve his country, "I ask you to take office under me. I think you will be eminently suited to manage this or that particular Department." The reply will probably be, "How long is the Government going to last? Is it to be a matter of six months or six years?" Probably a Minister will be forthcoming who will say, "The signs of the times are doubtful; the majority at my back is not large, and I can certainly hold out no prospect that this Government will be anything more than a temporary or passing arrangement." The gentleman will probably reply, "How can you ask me to give up my business work, on which I largely depend, for a tenure of office which, by your own confession, may last no longer than three months."

I am not arguing that this rule affects the men who do take office, because there are many who make great personal sacrifices in order to take up office. My point is that it is injurious to the country, and that it limits the choice of the Minister of the day. [Laughter]. Hon. Gentlemen opposite laugh, but there may be moments when every Minister called upon to form a Cabinet may find some difficulty in selecting a colleague. I know there are always at least ten gentlemen qualified, in their own opinion, to fill the place. But whether that be so or not, no one will deny the general truth of my contention. It is not an easy matter to form a Cabinet. It is not at all an easy business, and every artificial difficulty you put in the way is an injury not to the Party, not to the individual, not to the Minister, but it is an injury to the country; it is an injury which you ought not to inflict by laying down any hard and fast rule of this kind, which would be absolutely illogical and absurd unless you extend it from public companies to all kinds of business. I am aware that there is supposed to be something disgraceful in being the manager and director of a public company.

MR. SWIFT MACNEILL

No, no!

MR. A. J. BALFOUR

I do not think I am in the least misrepresenting the tone of the comments made by the hon. Gentleman who moved this Amendment. He talks of it being discreditable to a Minister to hold one directorship, he says he is still more guilty if he holds more, and if he holds three or four directorships he becomes almost a criminal. I think such attacks, instead of being in the interests of commercial purity, have precisely the opposite effect. I believe that a man of unspotted honour who gives his labour to the direction of a public company does the very wisest thing he can do in the interests of this commercial country. No one has ever thought it worth while to ask me to become a director, and I can assure them, especially after the criticism which has been so freely made this afternoon, that I should regard any such requests from an honourable company as a very high compliment indeed. I strongly object, in the public interest, to this notion that a person is doing something he ought not to do, something which he ought to be ashamed of, if he accepts the responsibility of aiding one of those great corporations which carry on so much of the business on which the country itself so much depends. Such energies and such brains as Providence may have given to any persons in this country may well be used in this manner. I cannot withdraw from the position I have held heretofore on this question. I am certain everyone of my colleagues in the Cabinet who still hold directorships have carefully considered whether they are such as to permit them to discharge with credit the duties of the office to which they have been called. Some of them have consulted me on this particular point, and I have always found them fastidious to the last degree in the decisions to which they have come. I have not pressed my views upon them; I have not asked them for information, and I do not mean to ask them. I have absolute confidence in their honour and discretion, and I believe it is confidence in the honour and discretion of the public men who are called to office in this country, and not in any hard and fast illogical rule laid down by this House, that the credit and honour of public life in this country for all time will depend.

*MR HEMPHILL (Tyrone, N.)

said that if the hon. Member divided the House on this Amendment he should certainly support him. He should do so without imputing to any member of the present Cabinet the desire to do anything dishonourable. He took his stand on what he regarded as a fundamental principle of right, which was that no man should ever be placed in a position in which there might be a conflict between his interests and his duty. The members of a Cabinet exercised quasi-judicial duties; they determined what measures they should introduce and what Bills they would support which were introduced by others. One of the fundamental principles of law, ethics, and morality was that no man should have an interest in any case in which he had to exercise judicial functions. That was the foundation of his objection. The objection to Ministers being directors had been put by speakers on both sides of the House upon two grounds. In the first place it was said that being a director took away some portion of the time which otherwise would be devoted to the public service. There was a great deal in that objection, but if that were the only one he thought possibly that it might be got over, although it appeared rather inconsistent that Members of the Civil Service should be precluded from holding directorships in public companies. He rested his objection on the higher ground that Ministers who were directors of great public companies should not hold those directorships while they were members of the Cabinet. Occasions must arise in the course of their deliberations in the Cabinet when the interests of those particular companies would be more or less involved. It was impossible to disabuse the public mind of the belief that the fact of Cabinet Ministers being members of public companies would operate upon the policy which they would advocate in this House. That was a most alarming state of things, and would tend greatly to shake public confidence in the integrity and the honour of the House of Commons.

The First Lord of the Treasury had endeavoured, by a sort of reductio ad absurdum, to get rid of the argument in favour of this Motion, and he said that if they pushed this argument to its extreme conclusion, no great landowner ought to be a member of the Cabinet. Could anything be more remote from the question they were now considering than such a suggestion? Did they expect that officers in the Civil Service should have no property? Was there going to be a rule to say that no man should enter the Civil Service unless he disposed of all his private property? How could that be compared with the fact of Cabinet Ministers being directors? A Cabinet Minister who was a director must either betray his trust to his company or to his country by letting the interests of the private body of which he was a member prevail over his duty as a Cabinet Minister.

He therefore dismissed that argument as almost puerile and absurd. The suggestion that his hon. and learned friend the Member for South Donegal made a personal attack on the Duke of Devonshire was also unworthy of the First Lord of the Treasury. Surely the House of Commons was not to be overshadowed and overpowered by any name, however great. Surely the maxim of the law, that "the King can do no wrong," was not to be extended to read "the Duke of Devonshire can do no wrong." Why was that introduced unless it was to throw dust in the eyes of some hon. Gentlemen opposite and create a prejudice at the outset against the principle of this Amendment? They were not here dealing with any particular individuals. They were dealing with a broad fact, and that fact was recognised in almost every department of the State. Any man who knew anything of the law knew that judges who were shareholders in a company could not sit and hear any case in which that company was interested, no matter how remote the interest was. The principle was recognised that there should be no conflict between the interest of the individual and the duty of a judge in the administration of justice. How did that differ in principle from the case involved here? If a director in one of those great gain-making companies, such as the Peninsular and Oriental Company, went into the Cabinet and a question was raised, the decision of which might materially affect the interests for good or bad of that company, how could they expect the public, however undeservedly, not to come to the conclusion that that man had not an unbiassed judgment in determining the question. It was obvious to any fair-minded man that there was a fundamental principle at stake which was violated by the evil against which this Amendment was levelled.

It was said that it would be a very hard thing when choosing a Cabinet to ask any hon. or right hon. Gentleman who happened to hold a directorship to give up that directorship. He could not see the hardship of that. Cabinet Ministers were well paid for their services, and to make use of a homely phrase, "There are as good fish in the sea as ever were caught." If an efficient candidate for the Cabinet could not accept the office because of his holding a directorship in some great public company, there would be plenty of others equally good to fill the place. Therefore, there could be no suggestion that any public loss or inconvenience would result from such a state for things. The other suggestion of the right hon. Gentleman would be that if they extended this to its logical conclusion, no shareholder in a company ought to sit on the House of Commons. That, of course, was quite a different thing. Some people thought that if a Bill was brought forward seriously affecting the interests if a company, an ordinary unofficial

Member who was a shareholder should hesitate to record his vote. A director was a trustee for the whole body of those who had elected him to that position. Take the case of the London and Globe Finance Corporation. If any of the right hon. Gentlemen who were now members of the Cabinet, deservedly respected as they were, had been directors of that company, would the fact not have involved more or less a reflection, not only on the directors themselves but on their colleagues? He trusted that hon. Members would by their votes show that in their opinion the important declaration contained in the Amendment should be the guide in the formation of every Cabinet. This Amendment was not a Vote of Want of Confidence in the Government of the day, but it gave hon. Members the opportunity of honestly recording their opinion as to whether the Cabinet should be above suspicion, and whether there should be any violation of the principle that no man should be in a position where there was conflict between his duty and his interest.

Question put.

The House divided:—Ayes, 109; Noes, 147. (Division List, No. 5.)

Rea, Russell Shipman, Dr. John G. Weir, James Galloway
Redmond, John E. (Waterford) Sinclair, John (Forfarshire) White, Luke (York, E. R.)
Redmond, William (Clare) Soares, Ernest J. Williams, Osmond (Merioneth)
Reid, SirR. Threshie (Dumfries) Spencer, RtHn. C. R.(Northants) Wilson, Henry J. (York, W. R.)
Roberts, John. H. (Denbighs.) Strachey, Sir Edward Wilson, John (Durham Mid.)
Roche, John Sullivan, Donal
Roe, Sir Thomas Thomas, Sir A.(Glamorgan, E.) TELLERS FOR THE AYES—Mr. MacNeill and Mr. Schwann.
Rose, Charles Day Trevelyan, Charles Philips
Samuel, Herbert L. (Cleveland) Warner, Thomas Courtenay T.
Sheehan, Daniel Daniel Wason, John Cathcart (Orkney)
AYES.
Abraham, W. (Cork, N. E.) Dillon, John Lewis, John Herbert
Ambrose, Robert Donelan, Captain A. Lundon, W.
Barry, E. (Cork, S.) Doogan, P. C. MacDonnell, Dr. Mark A.
Bayley, Thomas(Derbyshire) Douglas, Charles M. (Lanark) MacVeagh, Jeremiah
Beaumont, Wentworth C. B. Duffy, William J. M'Govern, T.
Black, Alexander William Farquharson, Dr. Robert M'Kean, John
Boland, John Fenwick, Charles M'Kenna, Reginald
Brigg, John Ferguson, R. C. Munro(Leith) Markham, Arthur Basil
Brunner, Sir John Tomlinson Ffrench, Peter Mooney, John J.
Bryce, Right Hon. James Field, William Murnaghan, George
Burke, E. Haviland- Flavin, Michael Joseph Murphy, John
Burns, John Foster, Sir Walter (Derby Co.) Nannetti, Joseph P.
Buxton, Sydney Charles Harcourt, Rt. Hon. Sir Wm. Nolan, Col. John P. (Galway, N.)
Caine, William Sproston Hayden, John Patrick Nolan, Joseph (Louth, South)
Caldwell, James Hayne, Rt. Hon. Chas. Seale- Norton, Capt. Cecil William
Cameron, Robert Helme, Norval Watson O'Brien, James F. X. (Cork)
Campbell, John (Armagh, S.) Hemphill, Rt. Hon. Chas. H. O'Brien, Kendal (Tipperary Mid)
Campbell-Bannerman, Sir H. Horniman, Frederick John O'Brien, Patrick (Kilkenny)
Channing, Francis Allston Jacoby, James Alfred O'Brien, William (Cork)
Condon, Thomas Joseph Jones, David B. (Swansea) O'Connor, James (Wicklow, W.)
Craig, Robert Hunter Jordan, Jeremiah O'Dowd, John
Crean, Eugene Joyce, Michael O'Kelly, Conor (Mayo, N.)
Cullinan, J. Kearley, Hudson E. O'Kelly, James (Roscommon, N.)
Davies, Alfred (Carmarthen) Law, H. Alex. (Donegal, W.) O'Malley, William
Davies, M. Vaughan- (Cardign) Layland-Barratt, Francis O'Mara, James
Delany, William Leese, Sir Jos. F. (Accrington) O'Shaughnessy, P. J.
Dewar, John A. (Inverness-sh.) Leigh, Sir Joseph O'Shee, James John
Dilke, Rt. Hon. Sir Charles Levy, Maurice Power, Patrick Joseph
NOES.
Allhusen, Agu. Henry Eden Fitzroy, Hon. Edw. Algernon Pretyman, Ernest George
Anson, Sir William Reynell Flower, Ernest Purvis, Robert
Archdale, Edward Mervyn Forster, Henry William Rasch, Major Frederic Carne
Arkwright, John Stanhope Gardner, Ernest Rattigan, Sir William Henry
Arnold-Forster, Hugh O. Gordon, Hn. J. E.(Elgin&Nairn) Reid, James (Greenock)
Atkinson, Right Hon. John Gore, Hn. G. R. CGrmsby-Salop Remnant, James Farquharson
Bailey, James (Walworth) Gore, Hn. S. F. Ormsby- (Linc) Renwick, George
Bain, Colonel James Robert Greene, W. Raymond- (Cambs) Ridley, Hon. M. W.(Stalybridge)
Baird, John George Alexander Gretton, John Ridley, S. Forde(Bethnal Green)
Baldwin, Alfred Groves, James Grimble Ritchie, Rt. Hn. Chas. Thomson
Balfour, Rt. Hn. A. J. (Man'r) Hain, Edward Roberts, Samuel (Sheffield)
Balfour, Rt. Hn. G. W. (Leeds) Halsey, Rt. Hon. Thomas F. Robertson, Herbert (Hackney)
Bartley, Sir George C. T. Hamilton, Rt. Hn Ld. G. (Midx) Ropner, Colonel Sir Robert
Bentinck, Lord Henry C. Hardy, Laurence (Kent, Ashfd) Rothschild, Hon. Lionel Walter
Bignold, Arthur Harris, Frederick Leverton Royds, Clement Molyneux
Blundell, Colonel Henry Helder, Augustus Sadler, Col. Samuel Alexander
Boscawen, Arthur Griffith- Hogg, Lindsay Samuel, Harry S. (Limehouse)
Bowles, Capt. H. F. (Middx.) Hope, J. F. (Sheff., B'tside) Seely, Maj. J. E. B(Isle of Wight)
Brodrick, Rt. Hon. St. John Hoult, Joseph Sharpe, William Edward T.
Bullard, Sir Harry Howard. J. (Midd., Tott'ham) Shaw-Stewart, M. H. (Renfrew)
Campbell, Rt Hn J A (Glasg.) Jessel, Capt. Herbert Merton Simeen, Sir Barrington
Carson, Rt. Hon. Sir Edw. H. Knowles, Lees Sloan, Thomas Henry
Cavendish, R. F. (N. Lancs.) Laurie, Lieut.-General Spear, John Ward
Cavendish, V C W (Derbysh.) Law, Andrew Bonar (Glasgow) Stanley, Lord (Lancs.)
Cayzer, Sir Charles William Lawrence, Sir Jos. (Monm'th) Stone, Sir Benjamin
Cecil, Lord Hugh (Greenwich) Lawson, John Grant Sturt, Hon. Humphry Napier
Chamberlain, Rt. Hn. J A (Worc) Legge, Col. Hon. Heneage Talbot, Lord E. (Chichester)
Chapman, Edward Loder, Gerald Walter Ersk me Thornton, Percy M.
Clive, Captain Percy A. Long, Col. Chas. W. (Evesham) Tollemache, Henry James
Cochrane. Hon. Thos. H. A. E. Long, Rt. Hn. W. (Bristol, S.) Tomlinson, Sir Wm. Edw. M.
Coghill, Douglas Harry Lonsdale, John Brownlee Tuke, Sir John Batty
Cohen, Benjamin Louis Lucas, Reg'ld J. (Portsmouth) Valentia, Viscount
Collings, Right Hon. Jesse Macdona, John Cumming Walker, Col. William Hall
Colomb. Sir John Chas. Ready Malcolm, Ian Walrond, Rt. Hn. SirWilliam H.
Corbett, T. L. (Down, North) Maxwell, W JH.(Dumfriesshire) Welby, SirCharles G. E.(Notts.)
Cox, Irwin Edwd. Bainbridge Middlemore, John Throgmorton Willox, Sir John Archibald
Craig, Charles C. (Antrim, S.) Mitchell, William Wilson, John (Falkirk)
Cranborne, Lord Montagu, G. (Huntangdon) Wilson, John (Glasgow)
Crossley, Sir Savile Moon, Edward Robert Pacy Wilson-Todd, Wm. H. (Yorks.)
Cubitt, Hon. Henry Morgan, David J (Walthamstow) Wodehouse, Rt Hn. E. R. (Bath)
Davenport, William Bromley- Mowbray, Sir Robert Gray C. Wortley, Rt. Hon. C. B. Stuart
Denny, Colonel Murray, RtHn. A Graham(Bute) Wrightson, Sir Thomas
Douglas, Rt. Hon. A Akers Nicholson, William Graham Wylie, Alexander
Doxford, Sir Wm. Theodore Nicol, Donald Ninian Wyndham, Rt. Hon. George
Durning-Lawrence, Sir Edwin Palmer, Walter (Salisbury) Wyndham-Quin, Major W. H.
Faber, George Denison (York) Parkes, Ebenezer
Fardell, Sir T. George Pemberton, John S. G. TELLERS FOR THE NOES—Sir Alexander AclandHood and Mr. Anstruther.
Fellowes, Hon. Ailwyn Ed. Percy, Earl
Finch, Rt. Hon. George H. Platt-Higgins, Frederick
Finlay, Sir Robert Bannatyne Plummer, Walter R.
Fisher, William Hayes Powell, Sir Francis Sharp

Main Question again proposed.