HC Deb 25 June 1913 vol 54 cc1101-27

Resolution reported, That it is expedient to authorise the Treasury to guarantee out of the Consolidated Fund the payment of interest at a rate not exceeding three and one-half per cent. per annum on a Loan to be raised by the Government of the Soudan not exceeding an amount sufficient to raise three million pounds.

Resolution read a second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. BAIRD

No one can be opposed to this policy of assisting the Soudan to develop the enormous resources which obviously exist in that country, but I think we are entitled, before committing ourselves to this very considerable expenditure, or, at any rate, the liability of the taxpayers' money for this expenditure, to hear a little more about the finances of this proposal. On the last occasion when this question was before the House several of my hon. Friends endeavoured to elicit from the Chancellor of the Exchequer some details with regard to the purely financial aspect of these proposals. They were very unsuccessful. The right hon. Gentleman made an ingenious speech, in which he reviewed the position of the cotton industry in Lancashire. He dealt in a somewhat amusing manner with the Soudan, at least it was amusing to anyone who has been out there, and then he proceeded to gloss over everything connected with the finance. The woolliness of the Chancellor's finance was very characteristic. He said the Committee might like to know, when we are guaranteeing a loan of this kind, what the conditions of the Soudan are. That is indeed what we would all like to know, but we got no enlightenment from the right hon. Gentleman. The right hon. Gentleman went at considerable length into the question of the revenue of the Soudan, but failed altogether to deal with the expenditure, which is a thing common to young men and others, who consider that their private income has no visible relationship to their expenditure. When you are dealing with other people's money it does seem to be necessary to see that the gilt is not taken off the gingerbread by the ever increasing expenditure. Here is what the right hon. Gentleman opposite said in regard to the revenue. He pointed out that it had risen from something like £250,000 in 1906 to £1,424,000 in 1912, but there was no allusion whatever to the calls on the Soudan Government and to the sources of expenditure which must be taken into account in considering this question. So little did the right hon. Gentleman seem to have studied the question, that in the middle of one of his most eloquent periods he was interrupted by one of my hon. Friends who inquired what was the denomination of the currency to which he was then referring, and he said:— In 1899 the land there was worth £191,000,000 and the rent £16,250,000. Then there was a great increase in 1912, and he said:— I suppose those figures represent Egyptian pounds. My hon. Friend the Member for Brent-ford (Mr. Joynson-Hicks) interrupted the right hon. Gentleman and asked if they were "Piastres," and the Chancellor of the Exchequer said:— I am not certain what the coinage is. Surely you want to know exactly what it is, and the whole of the statement of the right hon. Gentleman was typified by the doubt he displayed with regard to this particular currency. The upshot of it was that the right hon. Gentleman after his interesting, and eloquent speech, left the House completely in the dark, in my humble judgment, as to the ability of the Soudan Government to pay the interest on this loan which we are asked to guarantee, so that we could not be certain whether this would be a nominal liability which we would never be asked to discharge, or whether in fact we should find ourselves sooner or later obliged to pay out of the British taxpayer's money £105,000 a year as interest on this £3,000,000 loan. That is a very important point, and I trust that the Secretary to the Treasury will find it possible to give us some reassurance on that subject.

I am not prepared to say that it would not be worth our while to pay £105,000 for the sake of developing the Soudan. I think very likely it would be money well spent, but as has been stated in connection with the subject when we, last discussed it, money is now what is technically known as "tight," and therefore the chances are that although the Soudan Government are entitled to sorrow this money at 3½ per cent., it may not be easy for them to get it at that price, and they may have to pay more. We cannot tell what the calls on our resources are going to be, because they are put up in the most light-hearted manner every day, and we cannot be sure that the Estimates of those entrusted with the duty of looking after our expenditure are accurate. So late as yesterday we had an example of the Chancellor of the Exchequer bringing forward proposals, no doubt admirable in themselves, in regard to which the expense is going to be thrown on the taxpayer. This is regarded as a very serious question by hon. Members who probably have as good an opportunity of forming an opinion as to the cost of those proposals as the Chancellor of the Exchequer himself. I think all those points are pertinent when we are considering even so desirable a question as the granting of facilities to the Soudan to raise money which no doubt will be well spent, and will be directly remunerative. so far as this country is concerned. By this expenditure you may improve your markets and sources of raw materials, and do something to justify your position in the Soudan. I am not quarrelling with the expenditure of this money, but I should like to know something more than we heard on the last occasion as to the financial side of the question. In endeavouring to enlighten myself on this point, I thought I could not go to a better source than the last Report on the Finances of Egypt and the Soudan, and there I find on page 57 in the paragraph headed Finance:— The accounts for the year 1912 are not yet closed, but the figures of the revenue and expenditure, as nearly as can at present be estimated, will be as follows: Revenue, £1,758,500; expenditure, £1,658,500; surplus, £100,000. If the Soudan is going to saddle itself with a new liability to the extent of £105,000, it seems to me that the surplus of £100,000 is rather an inadequate sum to meet the ease. But that is not all. Here is a pertinent paragraph which shows the amount of revenue actually collected:— To ascertain the amount of the revenue actually collected in the Soudan, and the actual Budget expenditure of the Civil administration, there has to be deducted trout the revenue side of the account the sum of £335,000 (Egyptian pounds), which is the amount of the contribution paid by Egypt to enable the Soudan to balance its Budget, and from the expenditure the sum of £172,000, the amount repaid by the Soudan to Egypt towards the cost of the Army in the Soudan. On the next page I find the following paragraph:— After deduction of these amounts the figures are: Revenue (Budget Estimates), £1,375,600; anticipated results. £1,423,500; expenditure (Budget Estimates), £1,538,600; anticipated results, £1,486,500. In the first case there is a deficit on the Budget Estimates of £163,000, and, if you take the anticipated results, that deficit is reduced to £63,000. If you have a deficit of this amount it appears that in this country we shall have to put our hands into our pockets to the extent of £105,000. I agree that there are many hundreds of thousands of pounds spent in a far worse way, but let us be clear on the subject, and let us see whether this is an obligation which we shall have to discharge or whether we are simply backing a Bill which you feel perfectly certain will never be brought back. As to the advantages that will accrue from the expenditure of this money, there is no question that they will be very great. The total revenue from Land Tax and Ushr, or tax on rain-irrigated land, amounts to £141,400. There are some interesting details given in this Report with regard to the area of cultivated land in 1912 and the two previous years. If you are going to spend this money in the manner indicated by the Chancellor of the Exchequer, I think you are entitled to anticipate a rise in the revenue, but surely we want to know precisely how much the revenue will be, seeing that at the present moment there is a deficit. We want to know for certain whether there is any justification for the view that this deficit will be wiped out by this expenditure money. I have not seen the figures, which must be given before we settle this question. We want to know whether there will be sufficient balance to pay the interest on this money, the raising of which will take place-under our guarantee. May I remind the House of the items to which, according to the Chancellor of the Exchequer, this £3,000,000 is to be devoted. The right hon. Gentleman said:— There is to be a sinking fund to enable the Soudan to repay the loan in thirty years. The interest is not to exceed 3½ per cent. The purposes I have already indicated to the Committee are, for irrigation, £1,000,000 for the Gezira Delta, £100,000 for Tokar, and £200,000 for Kassalii; £1,600,000 for railway extension; and £100,000 for contingencies; making £3,000,000 in all Obviously in a country like the Soudan every pound judiciously spent on those services is remuneratively invested and you will get the benefit of all the cotton which it is expected will be grown there as soon as it is irrigated. It is perfectly certain that you will get a very good return in the shape of cotton from the expenditure on this irrigation quite equal to the expenditure upon the making of railways. Therefore you are entitled to expect a very profitable source of revenue, and with the general increase of prosperity in the country you are entitled to anticipate that the yield of all those taxes and duties will rise. But there is also going to be a rise in the expenditure at the same time, and that important little item is one which the Chancellor of the Exchequer did not find it necessary to devote any attention to. Even in considering so desirable a method of spending public money as this is, we are-obliged to go thoroughly into the question, and make sure that we are in a position to tell our constituents exactly what we are letting them in for. It is for that reason, even in dealing with a matter which from the point of view of policy I do not for a moment criticise, and in regard to which I rejoice to think this proposal has been made by the Government, I ask the representative of the Treasury to give us some little information on the points I have raised, and on other matters bearing on the financial situation which it is of importance we should have.

Mr. SANDYS

I certainly support the suggestion which my hon. Friend the Member for Rugby (Mr. Baird) has put forward, namely, that those who represent the Government this afternoon should give us more information with regard to the financial questions than they had an opportunity of doing when this question was under our consideration before. If the right hon. Gentleman in charge of this Debate will refresh his memory by an examination of the OFFICIAL REPORT of the previous Debate, he will find that the Chancellor of the Exchequer on that occasion was unable to give a full and adequate reply to many of the points brought forward by hon. Members on this side of the House, because he had only a matter of five or ten minutes to spare, and therefore he was unable on that occasion to deal as fully and adequately as I understood he desired to do with many of the important questions which he admitted had been raised in the course of the Debate. Under those circumstances I think it is extremely regrettable that the Chancellor of the Exchequer should not have been able to be present this afternoon when this question comes up again for consideration. I have no doubt that he with other right hon. Gentlemen is at the Mansion House.

The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman)

The Chancellor of the Exchequer is indisposed, or, no doubt, he would be here.

5.0 P.M.

Mr. SANDYS

We all very much regret to hear the cause of the right hon. Gentleman's absence, but we have no doubt that adequate replies will be given by the right hon. Gentleman who is representing him this afternoon. I regret the absence of the hon. and learned Member for Cork (Mr. T. M. Healy), who took such a prominent part in the discussion on the previous occasion, because he brought forward some arguments which were not in any way answered by the Chancellor of the Exchequer, and I have no doubt, if he had been here, that he would have liked to have dealt with some of those questions again, and to have been more successful in eliciting a reply from the right hon. Gentleman than he was on a previous occasion from the Chancellor of the Exchequer, but possibly, like many others on this side of the House, he was unaware of the exact order in which these questions were going to be discussed, or he would have been in his place this afternoon. I desire most heartily to support the observations, very moderate and just in their tone, which were put forward by my hon. Friend the Member for Rugby. If we wish to ascertain whether the liability which this country is undertaking in connection with this large sum of money being advanced under the guarantee of the Consolidated Fund to the Government of the Soudan is merely a nominal liability, or whether we shall be called upon to pay, it is necessary for us to review some of the circumstances under which this proposal has been brought forward.

There was, I understand, an application to the British Government from the Soudan Government to advance a large sum of money—I believe the sum was suggested by the Soudan Government itself, a sum not exceeding £3,000,000—for various purposes, one of which, of course, was for improving the system of irrigation in that country, and another of which was for railway extensions which everybody must agree are essential for the future development of that country. I believe that the Soudan Government attach particular importance to the grant of money which they intend to allocate to the purpose of cotton growing within their territory. They ask that the British Government should guarantee the interest upon this loan. It was, on the face of it, not an unreasonable request to make. We are, after all, the greatest exporters of cotton goods in any part of the world, and I think, with the exception of the United States of America, we are the greatest importers of raw cotton in the whole of the world. Our exports of cotton goods during the last ten years has increased from what was originally the enormous sum of £70,000,000 to no less than £120,000,000, according to the latest information. It has become apparent to those who are interested in this great industry in this country that in consequence of the enormous development of the trade which has taken place, and also for technical reasons connected with the quality and the price of the raw material, that it is very much in the interests of the industry that even larger supplies than have hitherto been obtained from the Soudan should be got from that part of the world.

The cotton producers, who have formed themselves into an organisation known as the Cotton Producers Association, sent out a very important and representative deputation to Egypt and the Soudan in order to make further investigations into the cotton growing possibilities of that country. They sent out at the head of that deputation a gentleman—Mr. Hotton, I think, was his name—who has an un- rivalled position as an expert on this question. He went into the matter thoroughly and visited the Soudan. I do not know whether he actually visited these particular lands with regard to which this proposal is now before the House. I should like some information from the right hon. Gentleman on that point. At any rate, the deputation spent some considerable time in the Soudan, and visited various parts of the country. Their conclusions are embodied in a report, which is practically to the effect that if this country could be properly irrigated it would undoubtedly develop into one of the most successful cotton growing countries in the world. It was pointed out that it was just as important that facilities should be afforded for getting the water off the land as for getting the water on to the land. That point escaped the attention of some hon. Gentlemen who took part in the Debate on the last occasion. The deputation laid particular stress on this fact. They pointed out that unless the water could be got off the land at the proper time it was not going to be of any great use at all. This £3,000,000 which the British Government is asked to guarantee is going to be allocated in the following manner. One million pounds is going to be employed for the purpose of irrigating that district of the Gezira, which is referred to in that portion of Lord Kitchener's report which deals with the Soudan. Experiments have already been carried out in this particular district. "Gezira" is a very familiar word in all parts of Egypt and the Soudan, and it would be interesting to know whether this "Gezira" referred to is actually the same "Gezira" with regard to which the money is going to be allocated. Lord Kitchener says:— The success of the experiment in growing cotton on the Gezira plain and in other parts of the Soudan referred to in my last report has been further verified and confirmed by the results obtained during the year, and the intention of His Majesty's Government to assist financially this agricultural development of the country has been received with the greatest satisfaction by all classes. I should like one or two words of explanation with regard to that statement. Perhaps the right hon. Gentleman will tell us whether this intention referred to in Lord Kitchener's report has any connection with this proposal now before the House, or whether it is something quite different.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Acland)

It is naturally the same.

Mr. SANDYS

No doubt this paragraph was inserted in Lord Kitchener's report with the approval of the Government, but it is rather anticipating a decision of the House of Commons which has not yet been given. That is rather a favourite practice of right hon. Gentlemen opposite, and is one which I think ought to be discouraged.

Mr. ACLAND

We have not spent any of the money. He only says that the decision of the Government is, of course, very welcome in the Soudan.

Mr. SANDYS

No, he goes a little further than that. He says: "The intention of His Majesty's Government to assist financially this agricultural development of the country"——

Mr. ACLAND

The intention, certainly.

Mr. SANDYS

"Has been received with the greatest satisfaction by all classes." I think that is going a little too far. It is an anticipation which no doubt wilt probably be realised. This proposal, or indeed any other proposal, placed before the House -will receive the unswerving support of the Government majority, but I do think it was going perhaps a little too far to have made it so clear to the natives of this particular part of the Soudan that the whole thing was settled beforehand, and that the sanction of the House of Commons was practically a foregone conclusion. Suppose, by some extraordinary mishap, the right hon. Gentleman and his Friends had not on this occasion been able to command a majority, the money would not have been voted, and there would be extreme disappointment and dissatisfaction among these natives, who thought they were going to be benefited, and who found, owing to the action of this House, they were unable to get the money. Surely, it is very much better not to make these definite statements in advance. It would be far better to wait until the sanction of the House has been actually given before making these statements which, if they do not prove to be true, may be a serious disadvantage to our position in the Soudan amongst the native population. It struck me, when reading this paragraph, that the right hon. Gentleman had advised Lord Kitchener to go a little further than was justified in view of the fact that the money had not, at that time, been actually granted by this House. I understand that £1,000,000 is going to be allocated to that district, and that it is hoped it will be sufficient for the improvement and irrigation of a territory amounting to about 5,000,000 acres for cotton growing purposes. Then the sum of £200,000—I hope that the right hon. Gentleman will correct me if I am wrong—is going to be employed in a district called Kassala, and will be used for the improvement and irrigation of about 100.000 acres of land. On the district of Tokar a much smaller sum, only £100,000, is going to be spent, so that the amount of land to be irrigated in that particular district will be considerably smaller than in the other two districts to which I have referred.

Then there is the sum of £100,000 put on one side for contingencies. I am not complaining of that, because, in big undertakings of this kind, it is no doubt difficult to exactly estimate the amount which will actually be required for the purpose of these works. Therefore, I think the Government are justified in having that sum in hand for contingencies. In addition there is a sum of £1,600,000 which is going to be allocated for the purpose of railway extension. The hon. Member for Rugby (Mr. Baird), in the course of his speech, said it was very desirable that those who represent the Government this afternoon should make it clear whether this is really a nominal guarantee or whether we shall have to actually find the money. He did not especially deal with this sum of £1,600,000, which is going to be employed for the purpose of railway extensions. But in Lord Kitchener's Report on the Soudan the railways are dealt with under the heading of "Communications." notice that in 1910-11-12 the revenue of the railways has increased. But the working expenses have also increased, and the percentage of expenditure to earnings has risen from 68.5 per cent. in 1910 to 70 per cent. in 1911 and 73 per cent. in 1912. That is an experience which is not peculiar in any way to railways in Egypt or the Soudan. It is an experience which is being felt in this country, and, indeed, in every part of the world. The proportion of expense is always mounting up to a much greater extent than the actual earning capacities of the line. Consequently, if this tendency goes on, and there is no reason why it should not, we may find that this guarantee of £1,600,000 is a very real liability which we may eventually have to meet. Consequently I hope that the right hon. Gentleman, in his reply, will make some statement with regard to the possibilities of this railway extension and whether it is really going to make a sufficient profit in order to discharge the liability that will fall upon us should, unfortunately, these railways not be a financial success owing to the increase in the working expenses.

These sums which I have mentioned as being allocated in accordance with the proposals of the Chancellor of the Exchequer amount in all to £3,000,000, and, therefore, I hope the right hon. Gentleman will, in his reply, make it clear exactly where this money is going to be spent and where are the lands which are going to be irrigated practically at the expense of the British Exchequer and the British taxpayer. I note that the Chancellor of the Exchequer did not reply to this particular part of the Debate in the course of his answer on a previous occasion. The names which are used in connection with this irrigation scheme are names in common employment all over Egypt, and I hope the right hon. Gentleman will make it perfectly clear exactly where these lands are situated.

Mr. SPEAKER

The hon. Gentleman has said the same thing now four times.

Mr. SANDYS

I will not repeat it again. It was said on a previous occasion, and no answer was then given.

Mr. SPEAKER

That is no reason for repeating it again and again.

Mr. SANDYS

I must apologise, but I do hope time right hon. Gentleman will make it clear on this occasion who are the owners of the property which is going to be so greatly improved, and which is going to be put on a totally different basis to that it now occupies at the expense of or under the guarantee of the British taxpayer. What I want to learn is, Who does it belong to at the present time? Here are lands of very little value under existing conditions, but when this £3,000,000 of money has been expended they will no doubt be of very great value, and before we definitely allocate this very large sum of money I hope the right hon. Gentleman will make it clear who are the owners of the property which is going to be improved at the expense of the British Exchequer. Personally, 1 think it is highly desirable that the development and improvement of the cotton-growing lands in the Soudan should be undertaken, but I must emphasise the fact that the Soudan is not, as a matter of fact, a British Colony. It is only indirectly under our Government, and we do not know exactly how and when our position there will develop. Therefore, I think we are entitled to have the fullest possible particulars as to how this money is going to be spent. This large sum of money is being allocated for what practically amounts to the protection of an artificial offspring of the agricultural interest in the Soudan, and it is a question whether the money could not be better employed for the purpose of furthering the agricultural interests in this country. I do not suppose that a single penny of this money will go into the pockets of a single British working man. It is perfectly obvious it will not do so directly; indirectly, it may, of course. But I certainly think, in view of all that is necessary to be done for agriculture in this country and all that is required in the way of housing the agricultural population of Great Britain, this House should be very chary and should desire to have the utmost particulars—exactly how the money is going to be expended—before it gives its sanction to the payment of £3,000,000 of British money for the purposes of agricultural development in a country admittedly under our protection, but which forms no part of the British Empire. I sincerely trust the right hon. Gentleman will give this explanation. I want to know where the lands are situated, and who are the actual owners who are going to be so enormously benefited by this large sum of money out of the British Exchequer. There is ample time in which to give us this information. The right hon. Gentleman will not be in the same difficulty as that which overtook the Chancellor of the Exchequer when the matter was previously under debate and when the time at his disposal was so short as to afford him no chance of dealing with the very important questions in a full or adequate manner.

Mr. MASTERMAN

I rise to deal with certain points which have been raised, from the Treasury point of view. The hon. Member who first spoke on this Motion seemed to think that this money was worth spending even if the whole amount had to fall on the shoulders of the British taxpayer. He was strongly in favour of the money being spent, or at least of the loan being issued. But the hon. Gentleman who has just spoken is apparently against the loan altogether.

Mr. SANDYS

No.

Mr. MASTERMAN

That, at any rate, is the impression the hon. Member gave me. He said that not a farthing would go to the British working man. He was very doubtful whether it would be of any use at all in the Soudan. He pointed out that the Soudan did not belong to us, but that it was outside the British Empire, and, therefore, ——

Mr. SANDYS

I am sorry to interrupt the right hon. Gentleman, but he is, no doubt quite unintentionally, misrepresenting me. The point I desired to make was that under the circumstances this loan called for the fullest investigation before it received the sanction of this House.

Mr. MASTERMAN

I fully accept the hon. Gentleman's statement, but I cannot conceive for what reason he dragged in the British working man. I have to deal with the general question so far as it affects the Treasury, and I wish to touch upon the various limitations in that regard. May I, in passing, say I should have thought that much which has been said this afternoon would have been far more appropriate to a Debate on the Bill itself than to this Debate on the Money Resolution. The Money Resolution limits the amount to be raised to a sum not exceeding £3,000,000 and if the hon. Gentleman opposite says on examining the Bill that some of the money devoted to certain districts ought not to be devoted to those districts, or if he says that some of the railways ought not to be built, surely that is more appropriate to a Second Reading Debate, or to the Committee stage, than to the Debate on a Money Resolution, when hon. Members have not the Bill in their hands, a Bill which we are anxious they should have in their hands as soon as possible. In the same way many points raised by the hon. Member who first spoke will be fully answered, and answered to his satisfaction, when he gets the Bill in his hands. The other points he raised can be met either in Debate on the Second Reading, or in the Committee.

Mr. BAIRD

Why not now?

Mr. MASTERMAN

We do not debate Bills on Money Resolutions. That would mean going through the Second Reading stage and the whole Committee stage over and over again. It would be unprecedented in the history of any civilised community. Now the Treasury are asked to guarantee the interest on a loan for thirty years for the Government of the Soudan.

Sir F. BANBURY

The thirty years does not appear in the Resolution.

Mr. MASTERMAN

Surely?

Sir F. BANBURY

I do not see it.

Mr. MASTERMAN

If it does not appear in the Resolution I may say that that is our intention.

Sir F. BANBURY

It is a very important point.

Mr. MASTERMAN

It is thirty years, so that if everything failed, if the Soudan Government should go to pieces, the utmost we should have to face would be a liability of about £100,000 a year. The hon. Member said that even if the Soudan Government could not pay we ought to. He thought it would be worth while doing it, and he only wanted to be clear what the chances were of our having to meet this liability. I can only refer him to the statements made by Lord Kitchener in various reports which we have received in connection with the Soudan Government. With the present expenditure you have an increasing revenue, and you have an especially increasing revenue in connection with the railways. I know the working cost has gone up, but you have a remarkable increase of revenue in the case of the Soudan Railway. It is not intended that this £3,000,000 loan shall be issued all at once. It will be issued from time to time as required, and the Soudan Government are fairly confident that it will result in the expenditure being paid by the amount of revenue coming in, and that there will be so large an advance in that revenue that it will more than cover the loan. Of course, I agree that it is experimental. The Soudan Government could not have raised the loan on reasonable terms without this Government's guarantee. Those who have power to speak, and are specialists in the matter, do believe that a very great development, especially in the cotton industry, may be produced in the Soudan by such expenditure as that which this money is intended to provide. They know that that cannot take place unless some such loan as this is made. Therefore, it is for an Imperial reason, as well as for reasons connected with the desirability of raising larger supplies of cotton from all sources, that this guarantee is recommended to the House. If, in the first few years, the money is not returned, and the interest bas to be borne by the Consolidated Fund, the money so spent out of the Consolidated Fund will be repaid by the Soudan Government in later years, and be repaid with interest.

Sir F. BANBURY

If they can.

Mr. MASTERMAN

Certainly, if they can. All I wish to make clear is that we cannot guarantee that in the first year, when the railway is being built, that you can get the money back. The Soudan Government believe, and give reasons for their belief, that ultimately they will be able to repay all this interest to us, together with interest on any amount which has to be paid in interest in the first few years.

Sir F. BANBURY

The Treasury does take that, risk.

Mr. MASTERMAN

After all, it is an Imperial question, which ought to be considered with a view to the development of one of the largest and most important of the possessions which are subject to the Crown, although I agree a condominium of another nation. I do not think the authorities in the Soudan have any doubt at all that they can carry out this development and repay all the money, but even if they cannot pay all the money, I agree with the hon. Member for the Rugby Division of Warwickshire (Mr. Baird), that it would be worth while for us to advance this interest for this limited time, because it is essential that this country, which is now being held up in every way, but which shows great signs of possible development, with an increasing revenue, an increasing population, increasing railway receipts, and increasing irrigation, is simply held up in all these matters by not having enough capital money to invest. I think it is essential from all points of view that they should have this capital money. I think I have answered all the Treasury questions. Any other questions will be answered by my hon. Friend the Under-Secretary for Foreign Affairs.

Sir F. BANBURY

As the question has been put from the Chair, no Amendment can be moved to the Resolution, but I should like to call the attention of the right hon. Gentleman to several purely Treasury points. I am sorry that thirty years is not mentioned in the Financial Resolution. A thirty years' limit from the point of view of an economist does make a considerable difference in voting the money. I must remind the right hon. Gentleman that as it is not in the Resolu- tion, it will be quite open to the Government to take the thirty years' limit out of the Bill, and, if that were done, we should then be guaranteeing for all time, with no provision made for the determination of the guarantee. Are we to understand that the Government intend to adhere to the limit of thirty years, or whether, when we come to the Bill later on, the Government will allow themselves to be pressed by the Lancashire Free Traders who desire Protection for their own interests to take out the thirty years, and put in an extended period, or take it out altogether? Perhaps the Under-Secretary will answer that question. With regard to the finance of the matter, I will assume for the moment that the thirty years will remain in the Bill. I have been favoured by my hon. Friend with a report of a speech made by the Chancellor of the Exchequer when this Resolution was in Committee. One of the arguments put forward by the Chancellor of the Exchequer for the guaranteeing of the loan by the British Treasury was that unless it were done it would be extremely difficult for the Soudan to borrow the money at a reasonable rate of interest, and that if they were compelled to pay an unreasonable rate of interest, it would seriously interfere with the possibility of success of the enterprise. Supposing the thirty years' limit is allowed to remain, does the right hon. Gentleman think the money can be obtained at 3½ per cent. interest, or anything like it? Would he himself lend to the Soudan Government for thirty years at 3½ per cent. interest, knowing very well that at the expiration of the thirty years there would be no guarantee for the return of his money or the payment of interest? If a loan were put upon the market with a guarantee only as to interest and not as to capital, that guarantee as to interest being for a comparatively short time, and no provision was made for a sinking fund, it is evident that people lending money upon those conditions would require a greater interest than 3½ per cent. What it would be, I am unable to say.

A further question arises as to the financial position of the Soudan at the present moment. My hon. Friend told us that there was a deficit, but I do not know whether he pointed out that the revenue of the Soudan is a decreasing revenue. The revenue for 1913 is estimated at £1,631,000, whereas the revenue for 1912 was £1,710,600. Yet it is at this moment, with a decreasing revenue, that the right hon. Gentleman comes forward and proposes that a loan should be raised to be advanced to these people The Chancellor of the Exchequer, who I ma sorry to say is not here, although I understand the reason, in his speech made a statement which is quite inaccurate. He was talking about the debt, and said:— The Soudan up to the present has not paid its way. It has now squared its accounts, and in a very short time it will pay its way. It has not squared its account. There is a deficit at the present moment upon accounts, and, in addition, it is actually in the position of having a declining revenue. It is evident that for some considerable time the Soudan will not be able to repay the interest on the loan we are going to advance to them. I cannot conceive it possible that the loan can be raised at par at 3½ per cent. With regard to the other points which arise on this Resolution, I think the right hon. Gentleman will allow that I have a right to criticise the Resolution as a whole, because I object to it as a whole. It is no use saying to me that we can amend part of it in the Bill, because I should object to the Bill. I object to it for the reason that we are now spending such a very large sum of money, that I do not think it is advisable that we should go into fresh commitments abroad or at home. We are going into this commitment abroad, not because we are going to make anything out of it for the nation as a whole, but because we are going to provide cheap cotton for some parts of Lancashire. I see below the Gangway opposite an hon. Member who made a speech during the Committee stage of the Resolution, in which he congratulated himself and his Friends upon the fact that Lancashire, at my expense and at the expense of my hon. Friends here, is going to benefit by getting cheap cotton which we have paid for. That may be a good thing for Lancashire. My hon. and gallant Friend thinks it is. As I do not happen to have any connection with Lancashire, I see no reason whatever why I should be compelled to provide Lancashire with means for obtaining an increased trade. I have never been one who advocated Protection in that way. This is rank Protection. Lancashire is to be protected at the expense of the taxpayers. That may be right or wrong. From my point of view, I think it is wrong. I do not believe in protecting one industry only. That the proposal should come from hon. Gentlemen opposite, who are supposed to be apostles of Free Trade, is something I should never have believed possible, but I must say that the last year or two has convinced me that hon. Gentlemen opposite can do anything. I never even believed that they could come down to this House and demand that a certain portion of England in which they are interested—they have not even the excuse that that portion of England is badly off, because I believe it is that portion of England which is doing better at present than any other part of the United Kingdom——

Sir FREDERICK CAWLEY

We want that to continue.

Sir F. BANBURY

Let it continue through your own enterprise and industry. Do not let them come to me and say, "Please subscribe in order that we may obtain something which is going to benefit us." I am naturally of a generous disposition, but I object very strongly to generosity of that description. I have given two reasons why this Resolution should not be passed; one is the financial reason which, as I have some slight knowledge of finance, I venture to say is a very serious one, and the other is the more general reason, that this is a Protectionist measure, designed to benefit one part of the Kingdom at the expense of the remainder. The hon. and learned Member for North-East Cork (Mr. T. M. Healy) has said that he has always been convinced that at the bottom of his heart the Chancellor of the Exchequer was a rank Protectionist, and that the majority of hon. Gentlemen opposite were in the same boat. I am rather inclined to think the hon. and learned Member is right, especially as I see no signs of dissent from hon. Members below the Gangway opposite, who have always been strong opponents of any kind of Protection in any shape whatever. I feel myself at liberty to vote against the Resolution, and I shall certainly be prepared to do so if any hon. Gentleman on this side will support me. I am rather afraid from the speeches made by hon. Gentlemen on this side of the House that they are a little bit inclined to support this Resolution.

Sir HENRY CRAIK

Hear, hear!

Sir F. BANBURY

My hon. Friend is fired with a patriotic desire to benefit the Soudan as being part of the British Empire. I, too, like to benefit the British Empire, but I do not care to benefit it by doles—doles to landlords in the Soudan. An hon. Gentleman opposite is against doles for landlords if they are Englishmen. I do not know what line he is going to take now, but I should not be surprised if he were to support this Resolution. That is the difference between him and me. If I am going to give any doles to anyone, 1 prefer giving them to an Englishman rather than to a Soudanese. I really think if hon. Gentlemen opposite desire to show their consistency, they should vote against this particular Resolution, which, after all, is nothing but a dole to landlords. I shall have much pleasure in voting against the Resolution if I can get anyone to go into the Lobby with me, and if the hon. Gentleman, in his capacity as Whip, will allow me to do so.

Mr. OUTHWAITE

The hon. Baronet says this is virtually a loan to landlords in the Soudan. If I have the opportunity I am going to oppose it on this ground with him, unless we get further information from the Front Bench. When the Chancellor of the Exchequer was introducing the Bill he rather suggested that these were Government lands, and left it rather indefinitely, and I am entirely with the hon. Member (Mr. Sandys), in wanting to know more about these lands, to whom they belong, and who is going to benefit by this great expenditure. I am glad the light seems to be dawning on the Opposition benches and that hon. Gentlemen realise the truth that public expenditure results in the increase of the value of land, which goes into private pockets. If the Chancellor of the Exchequer says this is Government land, he is not in agreement with the official report of the annual federation of master cotton spinners, which says:— It is very unfortunate that the land in the Gezira belongs to the natives and not to the Government. The Government has to rent the land necessary for working certain farms. At present it is sold at 20 piastres, 4s. 2d., per acre. When the water is available, the value of that same land may be anything from it £10 to £l5 per acre and more. This surely is a case for a large application of an unearned increment tax. The whole construction of the canal might be paid for out of this unearned increment. If that is the case, there seems to me no need whatever for the loan. At any rate, it seems to form a very good argument for sonic assurance being given us that if a loan is granted and this enormous increase in value takes place it should be made part of the security for the loan.

Mr. ACLAND

I would have quoted to the hon. Member that passage on page 105 if he had not already quoted it to me. It is a fact that this land belongs to the natives. It is also a fact that the land is almost entirely valueless unless it has water, and it is the fact that the Government of the Soudan can make what charge for water they like. Therefore, you would get a fair return in one way or the other, either for charging for the water which is supplied, which alone makes the land of higher value, or else—and this has the advantage of getting rid of the indirect boundaries, which are rather a difficulty in the present ownership—by saying to the first owners, "We will give you free water for a part of your holding if you hand over the remainder of it to the State." That is a good bargain for both. The State gets land in its possession which it has not got now, and the native gets land properly irrigated, of considerable value, in place of a large amount of land of practically no value. In either case it is certain that there will be a return—we hope an increasing return—to the State from the scheme of irrigating this land; but really you cannot get that return in advance. The extra money which the State will get, either for its water or by obtaining part of the land, can only accrue to the State when the water is supplied, and that is what the money is wanted for. I can try to answer, in addition, some of the points which have been made with regard to the merits of the case by other speakers. It is a fact that the deputation which went out did actually see this experiment in process of working. They say:— We found that in the middle of the desert a miracle bad happened. All around, although the soil was probably the most fertile in the world, the country was bare as a billiard table, with only the merest vestige of vegetation. In the midst of this desert, thanks to the supply of water, we found a real oasis. We saw probably the most luxuriant crops of cotton that have been produced anywhere. These words show that this was actually seen by the deputation which went out, and is not only reported by hearsay. With regard to the point that it is necessary to get water off the land as to get it on, they say this: It is almost an axiom of irrigation, as they are now beginning to realise in Egypt, that one must spend almost as much money in taking water off the land as one has spent in irrigation works to pour the water on to the surface. That luckily, in the case of this Gezira plain, is provided for in the natural slope of the land. The hon. Member who raised the question did not seem to be quite certain whether the Gezira scheme referred to by the right hon. Gentleman the other day was the same as the Gezira, scheme mentioned by Lord Kitchener. It is the same. There is a very excellent map in this Report which shows the Gezira plain lying between the Blue and the White Nile, and the natural slope of the land from the Blue Nile towards the White Nile is such that the problem of getting the water off the land once you have got it on happily does not arise. I am not sure if I can satisfy the hon. Baronet (Sir F. Banbury). It is always a pleasure to hear him say he has a very generous disposition in general, but on every particular matter which we ever discuss that generosity, for some excellent reason, does not become apparent. We heard him make that familiar statement with equal pleasure this afternoon. We quite recognise, as he said, that he was perfectly justified in objecting to this, because he objects to everything, and therefore we cannot take any exception to his attitude. But really he was wrong in this matter that we were proposing to give this guarantee to the Soudan when they were revenue. There is included in the accounts now in the state of having a decreasing for 1912, but not in the accounts for 1913, a contribution by the Egyptian Government. That is balanced to some extent also in the accounts for 1912, but not in the accounts for 1913, by a payment to the Egyptian Government. The contribution by the Egyptian Government is required in order to make the Budget of the Soudan balance. This year, for the first time, it is possible to finance the Soudan entirely on its own resources, and if the hon. Baronet will add up the revenue from purely Soudan sources, leaving out both the contribution by the Egyptian Government and the payment to the Egyptian Government, he will find that there is an anticipated increase of about £200,000, and not a deficit.

Sir F. BANBURY

I admit that is right.

Mr. ACLAND

When we introduce the Bill the hon. Baronet will be in a better position to criticise it further. It will provide that a guarantee must not be given until the Government of the Soudan has provided, to the satisfaction of the Treasury and the Secretary of State, for the establishment of one or more sinking funds for the purpose of the repayment of the principal loan, or any instalment thereof, within a period not exceeding thirty years. I think he will agree that he will be in a better position for bringing home any delinquencies to us when the Bill is introduced, printed, and circulated, so that the matter may be as clear to him as it now is to me.

Sir F. CAWLEY

The hon. Baronet seems to think this scheme was brought forward as a Protectionist dodge entirely to benefit Lancashire. It is nothing of the sort. It is a great Imperial measure to benefit the Soudan, although Lancashire gets some indirect benefit by having a large supply of cotton, and I do not think the House ought to grudge it. The hon. Baronet thinks that he and his Friends do not get any good from any one particular trade being prosperous. I do not know any place outside Lancashire which will benefit more from the prosperity of the cotton trade than London. We do not want to saddle the Soudan with the expense of going to a financial company, which will get all the profit. We want to give the inhabitants a fair chance, and the money is sure to come back.

Sir F. BANBURY

I have no objection to the hon. Baronet and his Friends in Lancashire advancing the money. I should look upon it as a patriotic action.

Sir F. CAWLEY

They would have to pay very flinch higher interest to a private company, and so the Soudan would be saddled with a debt twice as great as it will be now. Therefore, in the Imperial interest, this country ought to find the money to develop the Soudan. The only benefit Lancashire can get is in having a full supply of cotton, and considering the enormous increase in the cotton trade within the last few years in Lancashire, it is not only a question for Lancashire, but a national question. While our exports of cotton goods have increased by leaps and bounds in the last few years, the export of cotton goods front Germany since 1906 remains almost stationary. Therefore the hon. Baronet ought not to object to Lancashire benefiting incidentally. The City of London will have some share in the prosperity of Lancashire.

6.0 P.M.

Mr. WEDGWOOD

The hon. Baronet said quite truly that this loan, which we are to guarantee, would not particularly benefit Lancashire, and he went on to say that it would benefit the inhabitants of the Soudan. I want to know whether it will benefit the inhabitants of the Soudan, because that seems to me to be the only possible justification for pledging British credit in this way. We have had a similar scheme to this introduced for Egypt. We did not find the money in that case. Egypt found it itself. But we know quite well what has been the result to the people of Egypt of these great schemes of irrigation. It has not been the people of Egypt who have benefited, and it has not been the people of Lancashire who have benefited. The people who have benefited are the landlords of Lower Egypt. In what has already occurred in Egypt you have an admirable example of the result of such barrages and irrigation works as are proposed to be established in the Soudan when they get this cheap money. I think those who are pledging the credit of this country in this respect have a right to ask from the Government that they should be told whether this is land, the value of which is bound to go up in the Soudan, as in Lower and Upper Egypt, and whether it belongs to the Government or to private landlords.

Mr. ACLAND

As the hon. Member was not here when I spoke, perhaps he will allow me to interrupt him. I made it quite clear that the land is owned by the natives, and that the only way for the State to get back the extra value for the expenditure on the land, is either by charging them for the water, or by arranging with them, as can be done, that they shall exchange a certain quantity of useless land, which they now have, for a lesser quantity of irrigated land.

Mr. WEDGWOOD

I do not gather whether the land is owned by peasant cultivators. Are they peasant cultivators or speculators?

Mr. ACLAND

Peasant cultivators.

Mr. WEDGWOOD

Then in that case I think it is very important not to rely merely on a water rate to get hack the increase in the land value. The result in Egypt has been to drive out the peasant cultivator. There was a case in Upper Egypt where certain people bought a village, and where there were riots in trying to gel the people out. Wherever you get speculative value in land, there you get big landowners and moneylenders. At present 1 per cent. of the landowners own 45 per cent of the land in Upper and Lower Egypt, so that you have proof positive there that all these irrigation works have resulted in the land getting into few hands. If that is to be the result in the Soudan as well, it will not be for the benefit but for the enslavement of the people there. They will be forced to part with their land to moneylenders and others who will reap the benefit of the expenditure of our money, and to talk of getting it back through water rates is perfectly ridiculous. You can only charge for the water. You cannot charge for the benefits conferred by having water and barrages. I think the Government which is going to lend this money has a right to protect the interests of the people of the Soudan. I do not say anything about benefiting Lancashire. I do not think that Lancashire or any other part of this country will get any particular benefit. You have a right to say to the Soudan before you go to the enormous expense of putting in barrages that the increased value of the land shall go back to the public pocket. I do hope that even at this eleventh hour it may be possible with the willing co-operation of Lord Kitchener to have some such scheme established there. This is only one scheme. There will be other schemes which will develop the equatorial provinces of Egypt, and it is desirable that these should not only be paying schemes, but that the increased money value of the land should go back to the Treasury, and that the benefits of the operation should go to the whole people, and not to a small percentage of moneylenders and landowners.

Sir HENRY CRAIK

I have in some respects the financial purism of my hon. Friend the Member for the City of London (Sir F. Banbury). It is not only with surprise, but with something like overwhelming astonishment I find that there is opposition to the proposal, which was made by the Under-Secretary. I do feel that I am bound to protest against what I think is the rather poor and petty Little Englandism in opposition to this loan. I think that one of our duties when we got hold of the Soudan, was to develop the country for the benefit of the people. It was depopulated during the war, something like 10,000,000 of the population had perished under the Mahdi. If hon. Gentlemen had seen it when it was depopulated, and suffering from the devastation which was wrought during the war, they would know how overwhelming was the duty laid upon us to develop the country to the utmost of our power when we came to be faced with the responsibility for it. It is all very well for hon. Members to speak of this as a country over which we have a Protectorate. We have a condominium and not a Protectorate, and hon. Members know that, means that the administration of the country is in the hands of the Sirdar. It is not a question of a Protectorate like that over Egypt. It is a question of a condominium, which throws upon us responsibility for developing the country, and I am not going to associate myself with any refusal to carry out the burden which is laid upon us. We are told by the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) that this will only repeat all the evils of the barrage system in Egypt. Has the hon. Gentleman considered what the position in the country is? Who is talking of a barrage either on the White Nile or the Blue Nile? The hon. Member must know that a barrage there would be absolutely out of the question. Hon. Members do not consider how delicate is the position we occupy with regard to Upper and Lower Egypt at this moment. If there was power in the Soudan to take water freely from the Nile during all seasons of the year, the result would be the starvation of the people and the defertilisation of the country. From August to February the amount of water that may be taken from the Nile is strictly limited in the interest of Lower Egypt, and it is absolutely necessary for us to hold the balance between those two parts of the country. We deprive the Soudan of the free use of the water which they could have. Does not that place upon us all the greater obligations to see that they get. the water they require?

No one talks of a barrage for the Soudan. They require artificial irrigation, and that cannot be carried out without capital, and the capital is not there. Where are you going to get it? Do hon. Members who object to this loan think that speculators should go into the country and get hold of it? Do they think that the people of the Soudan would be dealt with easier by speculators than by the Government? Do, they think that they will be more just to the Soudanese and more merciful to the tenants? If you do not have such a loan, the inevitable result will be that these speculators will be only too ready to go in and get hold of the land, and squeeze the natives out of the benefits resulting from what we are doing to develop the country for the natives. We cannot do it except by taking a certain burden upon ourselves. No doubt this is a burden for which we are responsible in the eyes of the world, but in this case it is the very small and insignificant burden of guaranteeing a loan, the interest on which will be £100,000 a year, and which will be repaid not only by the development of the country, but by the opportunities which will be given for British enterprise. It is all very well for my hon. Friends to say, "How will the British workman benefit?" He will benefit by the development of commerce of this sort. If this Motion goes to a Division, I can only assure the hon. Gentleman that he will have my support for the new loan, which will be beneficial to the Soudan and redound to the credit of this country.

Bill ordered to be brought in by the Chancellor of the Exchequer, Sir Edward Grey, Mr. Acland, and Mr. Masterman. Presented accordingly and read the first time; to be read a second time upon Monday next, and to be Printed. [Bill 220.]