PUBLIC WORKS LOANS BILL. (Hansard, 22 July 1908)

§ SIR. F. BANBURY
said he was sorry the Government had brought on this Bill at such a late hour. It was in the ordinary course of events a very important Bill which provided that certain sums of money might be taken from the Consolidation Fund and advanced to local authorities. The Bill was originally introduced in 1875, and. the reason for its introduction was that certain monies should be advanced from the public exchequer to public authorities for certain purposes which were clearly laid down in the Act. The fact was that local authorities had not been able to borrow so cheaply as they wished to do, and it was thought advisable to give them the nation's credit for the purpose of carrying out certain works. The whole object of all the Bills founded on that Act had been to provide money for local purposes. That Bill provided for the raising of £3,700,000, a large sum of money, and it also provided for money to be written off for bad debts in Ireland. He would have liked to have said a few words on that question, but as it was so late he would confine his observations to Clause 6 of the Bill. Clause 6, he would venture to say, was a clause 246 which had never been introduced into a Bill of that sort before since the Local Loans Act was authorised in 1875. Clause 6 extended the purposes for which the Public Works Loan Commissioners were authorised to lend money. He thought the House would be rather astonished to learn that the Clause allowed the Public Works Loan Commissioners to lend money to the Territorial Army. He did not think anyone would advance the argument that the Territorial Army was a public work organised by a local authority. The County Associations in connection with the Territorial Army were formed for certain purposes in connection with national defence, and had really nothing to do with local works or local authorities. He would not at that late hour attempt to consider the question whether it was right to borrow money for the Territorial Army, but he wished to remind the House that in the last Parliament when the Unionist Government borrowed money for the purposes of the Army and for the purposes of the Navy they brought forward separate Bills for the purpose, the Military Works Bill, the Military Loans Bill, and the Navy Works Bill. At that time hon. Gentlemen opposite denounced the Unionist Party for doing that, on the ground that it was not sound finance, as the expenses for national defence ought to be defrayed out of the revenue for the year. Yet now they had the Government of purists bringing forward a clause which enabled them to borrow money for the purposes of the Territorial Army, and instead of bringing it forward in a separate Bill as the Unionist Government had done they put it in a Public Works Loan Bill and brought it forward in the early hours of the morning, after the House had been discussing all day the Indian Budget and other things. He was prepared to say that there were not five men in the House who knew of that clause in the Bill. He had only discovered it himself a short time previously. The clause read— The Public Works Loan Commissioners may, in manner provided by the Public Works Loans Act, 1875, as amended by any subsequent enactment, lend any money which may be borrowed for any of the purposes for which a County Association, formed under the Territorial and Reserve Forces Act, 1907, is for the time being authorised by the regulations made 247 by the Army Council under Section 4, subsection 1, of that Act to borrow, and may so lend on the security on which the County Associations is similarly authorised to borrow. Section 4, subsection (1) gave power to borrow money if authorised by the Army Council, but that clause gave power for money to be borrowed for any purpose. It might be used for the men, for the purchase of their uniforms, for the purchase of their ammunition, or for any other purpose, and Parliament would have no control whatever over the purposes for which the money was used. It said in the Bill "in the manner provided by the Public Works Loan Act, 1875." He found in that Act that Clause 9 said that the money might be expended from time to time in making loans for the purposes of any works. Nobody could say that to pay the men and provide them with uniforms was what was known as a public work. The Act laid down that the money must only be expended on works, and therefore it was not right to apply it to other purposes. The first schedule began by saying the works for which the Commissioners might lend money should be docks, harbours, piers, lunatic asylums, fire stations, schoolhouses, waterworks, wash-houses, etc., and it went on—and he believed it was on that that the Secretary to the Treasury would found his argument—or any work on which the Commissioners were authorised to lend money by any Act after the passing of that Act. There was no definition in Clause 6 as to the object for which that money should be advanced. If there was a definition saying that the money should be advanced for drill halls, or rifle ranges, the hon. Gentleman might say he was justified in introducing the clause in that Bill. There was no doubt that the schedule authorised the money to be raised for the purposes of works, but even if the hon. Gentleman would amend Clause 6 so as to prevent the money being used for any purpose other than works he still maintained that a separate Bill should have been introduced, and that the matter should not have been dealt with in a Public Works Loan Bill so that nobody in the House except himself knew that it was in the Bill. The hon. Member for Halifax 248 and the First Lord of the Admiralty, he remembered, took a firm stand on that point when the Unionist Party was in. power, and he hoped they would take an equally firm stand now. He (lid not know of any other Bill of that character containing such a clause as Clause 6. He had reason to believe that the hon. Gentleman was prepared to meet him to a certain extent, and if he would undertake that the money would only be spent on drill halls or rifle ranges, he did not propose, as it was so late, to put the House to the trouble of a division. Still, if there should be any time he reserved his right to criticise the Bill on the Committee stage. If the hon. Gentleman would give the-undertaking he had asked for, he thought the House might allow the Bill a Second Reading.

§ THE FINANCIAL SECRETARY TO THE TREASURY (Mr. HOBHOUSE,) Bristol, E.
said the Bill, as the hon. Baronet had pointed out, with the exception of Clause 6, was the usual Bill which appeared at that time of the year. He thought the hon. Baronet was somewhat unnecessarily alarmed as to the intentions of Clause 6.

§ SIR F. BANBURY
thought the hon. Gentleman would admit that he had been careful to say nothing as to the intentions of the Government. But they might have a bad Government, and they must safeguard themselves against that.

§ MR. HOBHOUSE
said he was glad of the acknowledgment of the hon. Baronet as to the excellencies of the present Government. It came as a surprise to him that anyone should think that the Government was prepared to borrow money on loan for the purchase of buttons, or anything of that sort. The object of the clause to which attention had been called was to extend to the Territorial Forces that power of proceeding by way of loan which the auxiliary forces already had. He would be very happy to give to the hon. Baronet the assurance he desired, and he did not think that under the circumstances there should be any further objection to the Second Reading of the Bill.

§ MR. GRETTON (Rutland)
asked what sum was likely to be expended under the Bill on the Territorial Forces. If the hon. Member could not give him an answer then, perhaps he would be able to do so before the Committee stage of the Bill was reached.

§ MR. HOBHOUSE
said the sums mentioned in the schedule were very nearly the same as those which were inserted in the Bill last year arid in years before. The sums taken were not to cover specific amounts required, but that the Treasury might have such sums as they thought necessary.

§ MR. RAWLINSON (Cambridge University)
said that even if the assurance which the hon. Baronet had asked for were given, they ought to have a very clear statement from the Government why that method of procedure had been adopted. It was a new proceeding to borrow money in that way. A very similar point had been raised in the year before last. If that principle was extended, instead of coming on the Estimates for a particular loan it could be got under the Public Works Loans Bill, which ought to be reserved for matters which needed no discussion in the House.

§ MR. T. M. HEALY
thought the House was entitled to some explanation with regard to the proposed remission of loans in regard to certain railway companies. There were two clauses in the Bill of a remarkable character, one of which remitted a certain sum of money which he thought the Midland Company had agreed to bear. They ought to have some explanation why an important company like that should get a grant from the Crown equivalent to £17,000. Another loan was equally remarkable—the loan relating to the Fishguard and Rosslare Railway Company. That company was largely under the Great Western of England. He was not objecting to these loans; he was only asking for information, and he was deprecating the suggestion which would hereafter be made by the Treasury, that they had constantly given Irish loans and could not get the money out 250 of Ireland when, as a matter of fact, so far as he could understand, the Treasury were remitting now two sums, one of £17,000 and the other of £7,000, making a total of £24,000, to two railway companies, both of which had very large English connections. They were entitled to know. When this Railway Act was being passed some years ago, when the present Member for East Worcester was Chancellor of the Exchequer, he (Mr. Healy) strongly objected to the Bill. He said— You ought to dandle these little Irish companies on your knees instead of breaking them up and selling them in splinters to English companies. But the Treasury foreclosed on the Irish companies on the pretence that the English Midland was giving them the whole of the debt. Now they found that, instead of the truth being told by the Government, as a matter of fact a sum of £17,000 was still left due and a Bill was brought in, when it was supposed that everybody had forgotten the transaction, to remit the £17,000 due from this English company. The Secretary to the Treasury was new to his office and was not responsible for what was done by the Treasury seven or eight years ago, but their hatred and abhorrence of the Treasury was great, and every Public Works Loans Bill since he had been in that House was a job. He always read every line of a Public Works Loans Bill. They were monuments of Treasury incapacity, and Board of Works (Ireland) incapacity, the gravest of the follies of the English Treasury and the Irish Board of Works. Seven or eight years ago a solemn promise was given that the Midland Company took all the responsibilities of the Limavady Railway. Let them look back to the debates he raised at that time and they would find from the statement of the then Chancellor what a splendid thing he said it was, and how the British public could not be any longer out of their money with these peddling Irish companies. The statement was that the great English company was taking over the whole of the liabilities, and that was the excuse given for breaking up the little Irish line and selling it for a song to the English company. They sold it for the small amount of the 251 mortgage, and the whole of the Irish shareholders were swindled out of then debt. Now, seven years after, a fresh story had to be told. They found that the English company had not taken over the Treasury debt, and they had to bring in a Bill to wipe off this sum of £17,000. The House was entitled to know the reason of that. He would like also to know why £222 was being remitted. £227 had been borrowed and £5 paid off in the course of thirty years. There was a statement made the other day in the House that the Board of Works were continually remitting loans to tenants. He found on looking at the Bill that the remission of loans to landlords amounted to the sum of £250 and the remission of loans to tenants—he was judging by their names—to a sixth of that. These facts should be borne in mind. When Irish Members went to the Treasury and were met with the statement that the Treasury were continually making loans to Ireland which were not paid back, it should be remembered that the persons to whom the Treasury were remitting loans were English railway companies and Irish landlords.

§ *SIR SAMUEL SCOTT (Marylebone, W.)
said he entirely agreed with the Member for the City of London (Sir F. Banbury) with regard to tacking on to this Bill such a clause as Clause 6, though he approved of the object. He would like to ask whether it would be made quite clear that these loans were for permanent works, as otherwise county associations might be misled.

§ MR. HOBHOUSE
said he could assure the hon. Baronet that the Treasury would take every care that something in the nature of a permanent asset was provided. He would like to assure the Member for North Louth that the effect of his speech upon him would be that he would scrutinise with the greatest care every possible suggestion in regard to loans from any quarter of Ireland whatever.

§ MR. T. M. HEALY
Why is this money to be remitted?

§ MR. HOBHOUSE
I thought that matter would probably come up in Committee. If the House permits me I shall make a statement then. It will be more convenient that I should do it in the Committee stage.