HC Deb 05 April 1922 vol 152 cc2286-97

Order for Second Reading, read.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)

I beg to move, "That the Bill be now read a Second time."

The first point that I make in connection with this Bill is that it does not involve the raising by the Sudan Government of any further money, but only authorities the re-allocation of certain moneys already raised. In the past, by several Acts the Government have authorised the guarantee of interest on loans raised in the London market for works in the Sudan. The last such Act was in 1919, and guaranteed interest on a loan of £6,380,000. The funds raised were allocated in the Schedule as follows: £4,900,000 was allocated to the Gezireh or Blue Nile dam scheme, £700,000 to the extension of the Sudan railways, and £400,000 to the Tokar Irrigation Railway scheme. This scheme of finance has been somewhat altered by events. The Tokar scheme has been otherwise financed, the requirements having been met by building a light railway from Tokar to Trinkitat, which has been financed entirely out of the revenues of the Sudan. In consequence of that, the £400,000 allocated by the Schedule to the Tokar irrigation and railway scheme is no longer required for the purpose. On the other hand, the money is required for the first item in the Schedule, the Gezireh dam scheme; for the funds provided for that have turned out to be inadequate. This is due to the War and, in addition, there has been the added price of material, and the more important item of the labour employed upon it. The immediate and only purpose of this Bill is to re-allocate the £400,000 no longer required for the Tokar scheme to the urgent necessities of the Gezireh scheme. I would only add the further word that large questions of policy are, no doubt, still involved in the completion of the Blue Nile scheme, both from an engineering and from a financial point of view. The present Bill in no way deals with that aspect of the case. Decisions will have to be taken after most mature consideration on these questions of policy. The Bill only provides funds which, in any case, and whatever the ultimate decisions may be, are necessary for" the purpose of carrying on the immediate works upon the Blue Nile dam scheme. Under the circumstances, I trust the House will be able to give me the Second Reading.

5.0 P.M.

Mr. ACLAND

The Bill seems to come to this: that the Treasury is to be asked to guarantee the payment of £400,000 for the Gezireh scheme which was contemplated when the Bill was before the House previously. There have been many Sudan Loan Acts. I myself was responsible for steering two of them through the House, and there have been several since then. I think it is time we learnt a little more than we have heard this afternoon about the progress and possible prospects of the works. I remember making very rosy anticipations of how, if these schemes were carried out and the completion of the Gezireh Dam was brought about, the Gezireh Plain would be irrigated, and would be able to grow the finest cotton to be grown anywhere in the world. I pointed out how necessary this cotton was for the best work in Lancashire, and how keen Lancashire men were to get on with the work of making it up. That was two years before the War. Up to the present, so far as the House is concerned, we have had no report of the progress made. It seems to me to be not unreasonable that when the Treasury is asked to guarantee interest on this extra £400,000, that we should want to know something of the prospects. I have heard a great deal about this Gezireh work. I am not going to repeat what I have heard, because, after all, it is only hearsay and I might be wrong. Without going into any of the definite suggestions as to waste of money that have been made, I should like to know whether it is not the fact that, during the War, a good deal of work was carried out on the basis that was generally so wasteful, of giving the contractor a pretty considerable percentage for his profit, rather than on the principle of a fixed price for the work done, and running into high expenditure with no very great return to show for it I only ask the question, but I do feel that I wish to know something of the progress of the Gezireh works and how much the Government of the Sudan wish to ask the British Treasury to guarantee. I think until we know a little more about that, the House ought not to give the authority to pass this amending Bill.

Sir F. BANBURY

As I understand the Bill, the result of it is that a sum of £400,000 has been voted to the Gezireh railway and irrigation scheme. I would like to know what happened to the Tokar scheme which enabled this £400,000 to be taken from it. If the Tokar scheme had not been necessary, the £400,000 taken from that would have gone in the ordinary course to the British Treasury for the redemption of debt. I should like to know how it is that the estimate for the Gezireh irrigation works was so badly arranged that the extra £400,000 is necessary. The next thing I should like to know is whether there are any means of ascertaining whether this £400,000 will complete the scheme or whether any more money will be wanted. I should like to know whether the Tokar scheme has been finished, and if it has not been finished, why it has not been finished.

Mr. LYLE-SAMUEL

The right hon. Baronet the Member for the City of London (Sir F. Banbury) says that if this money was not expended on the Tokar scheme it should have gone back to the Treasury, but this is not a money on vote. That is the whole point. What I should like to ask the Financial Secretary to the Treasury is this, what has happened to the Tokar irrigation works and how is the work generally progressing. The interest so far has been raised and paid by the Sudanese Government. The more they themselves are committed by the guarantee, the heavier will be the burden; and unless we have some assurance that the business is progressing in a satisfactory way, then it might ultimately result in our being called upon to make good the guarantee to this fund.

Mr. YOUNG

Before I deal with the several points raised, I wish, to reply, in the first place, to the hon. Baronet the Member for the City of London (Sir F. Banbury). In the few observations I made in introducing this question to the House, I mentioned that the Tokar Railway scheme had been otherwise dealt with. The, scheme has been altered and a new scheme substituted for the old one. A light railway is being built instead of the bigger railway which was in contemplation, and that is the reason why it is not necessary to allocate for that purpose the £400,000. That point has quite rightly been taken up by other Members. This money will in no case revert to the Treasury. It is Sudanese money and not British money. As I mentioned, it is not a question of raising fresh money; the money is there. It so chances that this money is urgently needed for the Gezireh scheme for these reasons. Whatever decision may be taken about the general future of the Gezireh scheme, expenditure of this amount, at least, and probably more, will be required on the part of the Sudan Government in order to secure the work that has already been done, and which will last until next June, simply for the purpose of making safe the work already blocked out, and on which large sums of money have been spent.

As regards the general feature of the scheme, there has been no question here of over-estimating. The cause why more money is needed now is the unforeseeable cause of the effects of the Great War. It would be unfair to those who have been responsible for the work throughout not to make that quite clear, that it is the unforeseen, inevitable, unpreventable effect of the War. The House will know, if it has studied the previous Debates on this question, that this is a scheme which has been put forward at different times, and one which is full of commercial promise for the Empire in the very important particular of its cotton interest. A vast area capable of growing cotton can be brought under production by means of these works. Very big private commercial interests are already concerned in it, and have already spent large sums in con- nection with the scheme. Disappointments there have been, as I have said, for the reasons I have given. These disappointments make it necessary to conduct a very close and searching inquiry into the whole scheme. A Report has recently been obtained on the commercial, the financial, and the engineering prospects of the scheme, with a view to a decision being reached on the question of policy as to what is to be done in the time to come. That Report has been received in the course of the last few days, but decisions on that Report have not yet been made. That will, no doubt, be a matter which will come under the consideration of the House at some future time, so that at the present moment it would be premature for me to make any statement as to policy. But I want to make it clear that this allocation for the work already undertaken is not affected by the decisions as to policy, and these decisions cannot be affected by what is done under this Bill. In any case, this expenditure is needed in order to secure the work which has already been done.

Mr. ACLAND

Will my right hon. and gallant Friend consider whether, in regard to the progress made with the Gezireh works, he can make some short statement as to how the matter is progressing?

Mr. YOUNG

I will consider, and favourably consider that suggestion.

Lieut.-Colonel ASHLEY

I did not hear the first part of the hon. Gentleman's speech but my right hon. Friend the Member for the City of London (Sir F. Banbury) tells me he did not make any reference to the question of the status of the Sudan. We have seen during the last few months, and even during the last few weeks, an absolute change in the status of Egypt. Egypt before the War was a semi-Protectorate. During the War it became a Protectorate, and His Majesty's Government, quite rightly, I think, have decided to re-establish the independence of Egypt proper, subject to safeguards regarding the Suez Canal, the rights of foreign nationals there, and other matters. I have been diligently searching the newspapers and answers to questions in this House, but I cannot find out whether a change in the status of Egypt has meant any change in the status of Sudan. Before this new orientation of policy took place in the Eastern Mediterranean, Egypt and the Sudan were ruled by one High Commissioner, though I admit that the High Commissioner in Egypt held a separate post to the High Commissioner in the Sudan, but for all practical purposes Egypt and the Sudan were administered under the same laws, by the same officials, and by the same machinery. The first point I want to know definitely is whether any change has been made in the status of the Sudan? Has it obtained any further measure of independence? Has it been handed over, or is it to be handed over, to the Egyptian Government or is it frankly a British Crown Colony in effect for which this country is responsible? If the answer is that it is a Crown Colony or to be made a Crown Colony for which this country is responsible, I have no objection at all to the principle of this Bill, which seeks to obtain guarantees from the British taxpayer that he will meet the interest on this loan, but if there is any change in the status of the Sudan, if it is to be in a position of semi-independence or linked up with Egypt, then I emphatically protest against a Bill which seeks to impose an obligation on the British taxpayer when he is losing control over the country for which he is to guarantee the loan. Therefore I hope before we give the Second Reading of this Bill that we shall have definite answers to those very simple questions.

As far as the objects of the Bill are concerned, they are excellent. I can conceive no more pressing problem from the industrial point of view of this country, especially from the outlook of Lancashire, than that there should be an extension of the cotton-growing area. For many years we have been becoming more and more dependent upon cotton from the United States of America, and year by year that great continent has been utilising and consuming more and more of its own cotton, and there is, broadly speaking, a smaller margin which we can get hold of in order to maintain the millions of people in Lancashire and Yorkshire who live by the cotton industry. Therefore, anything that can be done to increase the area where cotton is grown ought not only to be supported, but enthusiastically supported, by this House and by the country. Even in Egypt the cotton-growing area is diminishing owing to the more favourable prices which are received by the fellahin for other products which he can grow more cheaply, and for which he can get a better price. The experiment in British East Africa in cotton growing has not been so favourable as was expected. In other parts of the world the cotton area is not increasing as it should do, and if I receive a satisfactory answer to the first part of my remarks, then I shall welcome this Bill with both hands.

Lieut.-Colonel JAMES

I should like to associate myself with the remarks which have been made by the hon. and gallant Gentleman who has just sat down. There are two points on which I think we ought to have further information. Under the Anglo-Egyptian Agreement of 1899, the Governor-General of the Sudan is appointed by the British Government, and we ought to know whether in future the Egyptian Government will have the right of appointing the Governor-General, with the British Government concurring in the appointment. I think that is a very important point. It has been said in this Debate that the Sudan is administered by the same laws and the same officials as Egypt, but I would like to point out that the laws which hold good in the Sudan are different to the laws which hold good in Egypt, and the codes, both civil and criminal, are entirely different.

With regard to the question of cotton growing, ever since 1899 experiments have been in steady progress in the Sudan, and, generally speaking, they have been entirely successful. It is of paramount importance that cotton growing in the Sudan should be given the utmost stimulus. We have been told that in Egypt at the present moment the cotton crop is decreasing, but that is not because the Egyptian gets a better price for other products, but because of the attacks of disease the crop coming off the land is becoming less and less every year. For many years the Egyptian put all his eggs into the one basket of cotton, and you could see cotton grown four, five or six years on the same land without the slightest regard to agricultural rotation, and now Egypt is paying the penalty for neglect in that matter, and in a few years' time the amount of cotton grown in Egypt will be relatively negligible. Therefore, the sooner we can grow cotton extensively in the Sudan, where it is now more or less being grown experimentally, the better.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt)

I think the House will realise that in the present circumstances it would be very undesirable for me to use any expression which is not quite accurate, or any formula which equally is not quite accurate; and without consultation with the Foreign Office, it is not possible for me to say definitely what is the future position of the Sudan. I may say, however, that substantially it will not change from what it is at the present time. I cannot put it clearer than that without consultation with the Foreign Office, in order to get the proper and accurate form.

Colonel Sir C. YATE

We shall all be glad to hear that assurance from the Home Secretary, and I trust the Sudan will always remain under the control of the British Government. My only regret is that this £400,000 was not taken in addition to the original loan, instead of being simply a transfer.

Mr. SWAN

The agreement made a few weeks ago with Egypt has already been mentioned in this Debate. I want to know whether there has been any guarantee to Egypt that the waters of the Nile will not be taken in such a way as to diminish the economic status of Egypt at all. When this scheme was considered three years ago, it was discussed with a large amount of apprehension as to the amount of water which was going to be taken to reclaim land for cotton growing in the Sudan and whether it was going to diminish the amount of land that was under cultivation in Egypt. Hon. Members know that the destiny of Egypt lies beyond the Sudan, and those in the future, who control the waters from the mountains of Abyssinia, and especially the Blue Nile down to the Sudan, hold the key position as far as Egypt is concerned. It is not sufficient to provide that the water to Egypt is only going to come from the White Nile. We want to secure that the amount of water from the Blue Nile shall not be so interfered with as to interfere with cultivation in Egypt, or to make it impossible in the cotton-growing areas to have a progressive population.

Lord EUSTACE PERCY

I hope the Government will not be asked to enter into the thorny question as to how much of the waters of the Blue Nile will come into Egypt as a result of this agreement. On this question controversy has been settled, and, in fact, it is not a matter of controversy any longer. I quite understand from what the Home Secretary has said that it is impossible to state exactly what will be the position of the Sudan in the future. I think, however, a more important question on the present occasion is how far His Majesty's Government, or any Department of the Government, are responsible for the policy of the Sudan Government in relation to works of this kind. The Sudan is technically a condominium between this country and Egypt. Have the Government any responsibility at all or any control over these works in the Sudan apart from such conditions as they may make contractually in connection with the guarantee of interest on the Sudan loan? If it be true, as I am afraid it is, that no Department of the Government is in a position to exercise any control over the Government of the Sudan, then we are in a difficult position with regard to such works. I am not asking for a legal definition, but I am asking, as a question of fact, how far the question of the Sudan Government is actually under the control of any Department of His Majesty's Government.

Colonel WEDGWOOD

I am not going to enter into the question of whether the proposed loan is likely to interfere with the water supply of Egypt, because that has been the subject of legal proceedings in Cairo, and we need not bother about it in connection with this loan. The Egyptian Government is a partner in the Government of the Sudan, and in that way they will make their voice heard as to these proposals. I want to ask on what principle we act in guaranteeing loans of this character. It seems to me that, particularly latterly, this Government has developed to a rather extraordinary extent the idea of guaranteeing loans to other Crown Colonies or to States of doubtful position such as the Sudan. It is a policy that in the past has involved the taxpayers of this country in considerable expense. There were loans guaranteed to Turkey on which we had to pay interest. It must not be assumed that because the interest is paid at the present time we are always sure that our liability will not be called upon. I do not like the indefinite expansion of this idea that you can involve the future taxpayer in heavy expenditure, and wash our hands of any responsibility either for the finance or for the way in which the money is spent.

Here we have in this Gezireh case an estimate which has been enormously exceeded. The scheme has cost a large sum beyond the original estimate, and that excess is now being financed by us and we are to guarantee interest on the loan which the Sudan raises. Probably owing to our guarantee the Sudan is raising the loan at from 1 per cent, to l£ per cent, less interest. By the transfer of this loan from the Tokar Railway to the Gezireh, they are able to get money for the Gezireh at this reduced rate of interest, and that is really a free gift from this country. It is all very well to say that the gift costs us nothing at the moment. It may cost our descendants a large sum of money, and although in this case the transfer of the loan may be perfectly justifiable, I would ask the Secretary of the Treasury to call a halt in these financial arrangements. It is a dangerous path to follow, and may end in financial straits, not only for his successor, but for the generations that succeed us.

Lieut.-Colonel Sir S. HOARE

We ought to have some answer from the Treasury Bench to the important question asked by my Noble Friend the Member for Hastings (Lord E. Percy). I quite understand the Home Secretary does not wish to go into the details of the future settlement, but the question of my Noble Friend referred to the position to-day and not to the future settlement. My Noble Friend asked, what is the control exercised by the Government over loans of this kind I We ought to have an answer to that question. If the Home Secretary cannot give one, then the Under-Secretary for Foreign Affairs ought to be here to explain the kind of control that is at present exercised, how it is done, and is it done through the High Commissioner in Egypt or by the Foreign Office here? I suggest that the House is put into a most objectionable position when it is asked to pass a Measure of this kind without really know- ing anything as to the kind of control we exercise. I hope, therefore, we may have an answer to my Noble Friend's very pertinent and very useful question.

Sir J. D. REES

The speeches, I have heard, which have been delivered have been rather critical on this Bill, and, without presuming to criticise the critics, I should like to say that I believe that the objects this Bill has in view are very good and we could not do better than pursue a policy which stimulates the cultivation of Egyptian cotton. Year by year America is consuming more and more of her own crop, and we are getting smaller and smaller supplies of the class of cotton which is grown in Egypt, and of which we hardly get any quantity from other places in the British Empire, except, perhaps, Nyassaland. I did not like this discussion to close without saying a word in favour of the objects of this Bill.

Mr. YOUNG

I will say a word or two in reply to the question which has been put as to the extent of the control which is exercised over the expenditure of sums such as these upon works like the Blue Nile Dam. As to the relations between us and the Sudan there are, of course, two branches of that subject. The first was raised in the question by the Noble Lord the Member for Hastings (Lord E Percy) and was reinforced by other speakers, but on it Members of this House are, of course, as much in possession of the facts as anyone can be. The relations between the Sudan and Egypt and Great Britain are well known. The extent of the administrative control exercised under such circumstances over the Government of a State which has the status of a State like the Sudan is also well known. The control is very real and effective. These are matters of common knowledge. What is more important is what immediate additional control can be exercised. That is embodied in the terms on which this money is provided. When the Sudan, or anyone else, comes to the British Government and asks for the assistance of British credit in order to enable them to raise a loan they ask in substance for money from the Exchequer. When that request is made, and when we consent to give a guarantee we impose conditions in one form or another. Practically what is done is this. We look at the problem and see whether it is a good paying proposition or not. We look at the scheme which has been prepared for carrying out the work to see whether it is a practicable scheme. We look at the financial organisation and see whether efficient machinery for financial control has been established by those asking for the money. All these things are done through the agency of the British Treasury with such expert knowledge as the Treasury can bring to bear on such a topic when the proposition is put to the Government. Such were the precautions taken at the time at which this guarantee was first asked for, and these precautions will be repeated if any further guarantees be asked for. In that way we secure a practical, efficient, and businesslike administration of the funds which are raised under the guarantee.

Sir NEWTON MOORE

The hon. Gentleman representing the Treasury has informed us that certain precautions were taken when the guarantee was asked for. I think he might have told us further the extent of the land that is to come under the scope of the scheme, the terms on which the land will be let, what people will hold it, what rent will be received, and whether that rent will be a first charge to provide for the interest on this loan. The hon. and gallant Gentleman spoke only in a general way. We want a little more definite information.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Hilton Young.]