DIRECTORS OF PUBLIC COMPANIES AND GOVERNMENT CONTRACTS BILL. (Hansard, 23 April 1913)

§ Mr. SWIFT MacNEILL

I beg to move "That leave be given to introduce a Bill to restrain directors of incorporated trading companies, contracting in their corporate capacity, concerned in any contract, commission, or agreement made for the public service from being elected or sitting as Members of the House of Commons."

I introduce this Bill simply to direct, as far as I can, the public attention of the country to one of the most glaring and indefensible anomalies in our whole law of Parliament. An object-lesson illustrating that anomaly was amply furnished last Monday, when the Motion was made and carried that the seat of Sir Stuart Samuel should be vacated. The law of Parliament in reference to contracts is that a gentleman who is a Member of the House of Commons doing business by himself or being a member of a private company, or having any interest to the extent of one penny in any Government contract, thereby absolutely vacates his seat and is rendered ineligible to be a Member of the House of Commons. That law has been strained very considerably in times past. In 1847, Mr. Cowan was interested in a contract with one of the State Depart- 388 ments. He knew nothing about it, but he instantly vacated his seat. In 1874, a Member for Falkirk Burghs found that he was interested in some small contracts with the Post Office Department, and he had to vacate his seat. Within the last few days Sir Stuart Samuel, who belongs to a great firm which had entered into a transaction, of which he knew nothing whatever himself, with the Government, which was an extremely beneficial transaction and saved the public funds something like a quarter of a million of money, had to vacate his seat. If, instead of being a private contractor or a member of a private company, a Member of this House is a member of an incorporated trading company, he can have any number of contracts with the Government. As a matter of fact, it is possible for a man to be an incorporated company himself and to contract with himself as head of a Government Department, but the investment of one sixpence in a private company utterly voids the seat. There is no limitation, no definition, and no principle under which this striking anomaly can be in any way justified. The way in which the Samuel case was brought before the House of Commons was somewhat peculiar. The hon. Baronet who first raised the question whether Sir Stuart Samuel was or was not affected in his Parliamentary status by this contract was the junior Member for the City of London. The hon. Baronet who raised that question in the House is himself, under the provisions of an exception to the Contractor's Statute, allowed as a director of an incorporated public company to contract with the Government. The directors of those companies may be Members of Parliament, and the hon. Baronet is himself contracting with the Government every day. He is a director of the Great Northern Railway Company and enters into contracts quite properly with his eyes open with the Government as a Member of Parliament, and his Parliamentary status is not in the slightest degree affected, and yet the hon. Baronet the Member for the City of London can put the law in motion to deprive an hon. Member of his seat in this way. I think that is a very strong reason why this law should be abrogated.

I should be sorry to extend the provisions of the Contractors Act to every shareholder in an incorporated company, but I think we might certainly extend it to the managing directors who enter into contracts, and are kept perfectly safe and allowed to be Members of Parliament, 389 and to contract with Government Departments. I sometimes think that the hon. Baronet the Member for the City of London, who is a Friend of mine, need not have gone to this extent, and I think he might have refrained from his desire to cast out the Stuart Samuel mote by thinking of the Banbury beam. I have seen in my own experience a company composed almost exclusively of relatives having relatives in the Cabinet, and they have had contracts again and again with the Government under this Act, and they have been perfectly safe. I have seen on the Treasury Bench a Gentleman who was a Minister of the Crown, who, after he became a Minister of the Crown, was appointed a director of a company, having contracts with the Government, and defending them from the Treasury Bench. It is useful to remember about these things that this contract question materially affects us in the matter of strikes, the railway business, and questions like the coal strike, when it is remembered that there are seventy-seven railway directors in this House, and no fewer than fifty directors of coal mining companies in this House. The Chancellor of the Exchequer in his speech yesterday naturally defended himself in regard to the increase of armaments. Let me show how the contract business in this House tends to the increase of armaments. I do not wish to introduce a personal matter or say anything offensive to anyone, and I will therefore omit to mention the name of the Gentleman to whom I am referring. I will read a paragraph from the speech which the Gentleman alluded to, made in the House of Commons. He was a director in a large shipbuilding company, and in a Debate dealing with the increase of armaments he read as follows from a letter from a correspondent, My correspondent says: 'I am quite convinced that the German Emperor has an arrangement with Krupps, and, if necessary, that firm could make the complete armaments of ten battleships in any one year—of course, given a few months' time to collect material for them; also Germany could build that number of battleships in a year; in other words, Germany, while gradually creeping up, could suddenly, before we knew where we were, level our Navy.' Within a fortnight after that speech was delivered, we find the directors of this company stating that they had had a very bad year but their prospects were decidedly better than they had been. The chairman recalled the fact that at their last meeting they had just been restored to the Admiralty and War Offices lists of Government contractors. Later on the cheery news appeared in the "Times" 390 that the firm with which this hon. Member was connected, had been invited by the Admiralty to tender for one of the "Dreadnoughts" in that year's programme, and eventually they got the "Dreadnought" to build.