TRADE FACILITIES AND LOANS GUARANTEE [MONEY]. (Hansard, 5 December 1922)

HC Deb 05 December 1922 vol 159 cc1698-722 1698

§ Resolution reported,

§ "That it is expedient—

(a) to amend section one of the Trade Facilities Act, 1921,—

(i) by increasing to fifty million pounds the limit on the aggregate capital amount of the loans the principal or interest of which may be guaranteed thereunder; and
(ii) by extending by one year the period within which guarantees may be given thereunder; and
(iii) by providing for the charging of fees in connection with matters arising thereunder;

(b) to authorise the Treasury—

(i) to guarantee to the extent set out in Protocol No. II, signed at Geneva on the 4th day of October, 1922, and the Annexes thereto, a loan to be raised by the Austrian Government of such an amount as, after payment of the expenses of issue, will produce the equivalent of a sum not exceeding six hundred and fifty million gold crowns; and
(ii) to guarantee the payment of the principal of and the interest on 1699 any securities hereafter issued by the Austrian Government which are to be repayable out of the. proceeds of the loan aforesaid; and
(iii) to make an issue of securities for the purpose of rendering more readily effective any guarantee which may be given by the Treasury as aforesaid and to provide for the redemption of any such securities;

(c) to authorise the Treasury to guarantee the payment of the principal of, and the interest on, any loan raised by the Government of the Sudan for, or in connection with, works for the purpose of irrigating the Gezireh Plain not exceeding in the aggregate an amount sufficient to raise three million five hundred thousand pounds;
(d) to amend the Overseas Trade Acts, 1920 and 1921, by providing that for the purposes of the provisions of these Acts relating to the period within which the powers of the Board of Trade with respect to the giving of guarantees in connection with export transactions may be exercised, the date on which the Board enter into an agreement to give guarantees shall be treated as the date on which the guarantees are given;
(e) to charge on the Consolidated Fund any moneys required to fulfil any such guarantees as aforesaid or required for meeting the principal of, or the interest on, any securities to be issued by the Treasury, as aforesaid, and to provide for the laying before Parliament of statements and accounts with respects to the matters aforesaid."

§ Resolution read a Second time.

§ Mr. PRINGLE
I beg to move, at the end of paragraph (a, iii), to insert the words Provided that no guarantee shall be given in respect of any capital undertaking outside the United Kingdom, or for the purchase of articles in connection therewith, where such undertaking would be in competition with any industry which k for the time being suffering from depression in the United Kingdom. The reason I have put down this Amendment is two-fold. I first of all propose it on general grounds, basing myself on the objects for which the Act was originally passed. The design of those who introduced the Trade Facilities Act in the first instance was to increase employment in this country. But there is a risk that if the guarantees contemplated under the Act are given without adequate inquiry that the result may be not an increase, but a decrease of employment.
You may give a guarantee for the purposes of a capital undertaking or for the 1700 purchase of commodities in connection therewith which may give employment in one industry for a few months, particularly if it is one abroad, and may create permanent unemployment for the workers in some other branch of the industry. In these circumstances there should be a clear direction to the Committee to whom these questions are referred that such a result should not come about. The Amendment has been brought to my mind by reason of an application which has been made to the Trade Facilities Committee. It affects the paper-making industry in this country, and as a section of my constituents are engaged in it— [HON. MEMBERS: "Hear, hear!"]—I thought it my duty to them to take the first opportunity to protect their interests here.
This was why early to-day I endeavoured, under somewhat difficult conditions, to put this matter before hon. Members. I will not repeat the arguments I then used—[HON. MEMBERS: "Hear, hear!"]—briefly, as I think the records of the House will show. The case I have in my mind is this: An application was made to the Trade Facilities Advisory Committee for a guarantee in respect of a new paper-making plant in Newfoundland. I do not know whether or not that application has been granted. But we have to consider the circumstances in which it is made. First of all, that undertaking had been considered by all sorts of people before it came before the Trade Facilities Committee Endeavours had been made to raise capital for it both in Canada and Newfoundland, and they had failed. Similar efforts were made in the City of London. In every case the proposition was turned down, but when it came before the Trade Facilities Committee on the initiative of Armstrong. Whitworth & Co., then the situation was altered, and there is no doubt that the application was favourably entertained.
The point I make, and it is based on the information I have received, is that when this matter was before the Trade Facilities Committee while the applicants were heard by that Committee, other parties interested were not allowed to appear and to state their case. I think hon. Members in all parts of the House will agree that when there is a competition of interest, as there is in this case, all those who are affected in any way or may believe reason- 1701 ably that they can be affected should be entitled to a hearing. What is the position at the present moment? The paper-making industry in this country is depressed. It has been going through a time of very serious difficulty. It is true that for the moment there are indications of improvement. That may be due to the extra work of the General Election, but the fact is that there are at the present time five thousand men out of work in that industry. I say that; in these circumstances this is not the time when the credit of the British taxpayer should be used for the purpose of guaranteeing a competing undertaking outside the United Kingdom. I put it to hon. Gentleman opposite, whether they are interested in that trade or not—is that a wise thing to do in the interests of the industry of this country? The Chancellor of the Exchequer told me last night that it would be two years before this Newfoundland paper works would be producing paper or wood-pulp. That may be so, but have we any right to assume that in two years' time the position of the paper trade in this country will be better? We had a speech this afternoon from the late Prime Minister. He now who was formerly an optimist becomes a pessimist and takes the gloomiest possible view of the prospects of the industry of this country. In the light of that view, based on the extensive information at his disposal, those engaged in this industry are entitled to ask that even two years hence; they should not be subjected to competition which cannot be brought against them apart from the use of their credit as taxpayers of this country. This is only a single illustration, but the same consideration might well arise in regard to other industries in this country. You might have application for cotton mills or jute mills in India. The machinery for these mills would give employment to engineers in this country, but it would increase competition in the cotton and jute trades.
I say that, in view of the risk, it is the duty of this House to see that there is a clear direction to the Committee that decides this matter that all such considerations should be before their minds before they come to a decision. I hope the case I have put will commend itself to the minds of the Government. It seems to me that last night the Chancellor of the Exchequer only afforded a very half- 1702 hearted position to it. He admitted the reasonableness of my case, but endeavoured to discount the fears I have expressed. In a case of that kind, when on the admission of the Government legitimate fears may be entertained, it is the duty of this House to take adequate safeguards against those fears being realised. It is in order to secure that safeguard that I now ask the House to accept this Amendment.

§ Mr. CHARLES ROBERTS
I think my hon. Friend has made a point of substance which is well worth the attention of the Government. This is a very exceptional Act, intended to promote British trade, and having that in one's mind surely we ought not to go out of our way to do something which may injure home industries. I imagine it is not beyond the power of the Government that it would be within their province to set up some safeguard against that.

Sir WILLIAM JOYNSON? HICKS (Secretary, Overseas Trade Department)
May I put the facts in a little more detail before the House, as I think hon. Members, after hearing them, will realise that the action of the Committee was not unwise and that it will inure to the benefit of trade. I quite see the point raised by the hon. Member for Penistone (Mr. Pringle), but I should not have been quite so surprised if the speech had been delivered by a full-blooded Tariff Reformer. Apparently, if the hon. Gentleman believes anything at all, he believes that the paper-making industry at Penistone ought to be protected from competition by any mill established in one of H.M. Dominions.

§ Mr. PRINGLE
I say it should be protected from competition subsidised by their own credit.

§ Sir W. JOYNSON-HICKS
It is not the Act itself the hon. Gentleman fears: it is not the fact that the Government guarantee is given for the purpose of relieving unemployment and giving more employment here: it is the fact that guarantees are to be used in this particular case which will have the effect of enabling competition to be established against the Penistone Paper Mill. That is the complaint the hon. Member makes.

§ Mr. PRINGLE
Subsidised competition.

§ Sir W. JOYNSON-HICKS
Seeing that the subsidy has been approved by this 1703 House in the Act of 1921, it is not open to dispute. Does the hon. Member suggest that the Act is not to be used to encourage an order representing something over £3,000,000 to be spent in the engineering shops of Great Britain, because the effect of that will be that the machinery sent out of this country may be used in competition with the paper mills of Penistone? Surely the hon. Member should go a step further and say that no machinery shall be sent out from Great Britain which will compete with industry in Great Britain. That is the logical consequence of the hon. Member's argument. Let me tell the House exactly what has happened in this particular case. The Act was passed, as the House knows, at a time of very great difficulty regarding our export trade, in order to try and get orders here that might otherwise have gone to different parts of the world. This matter was fully considered by an independent committee—not a Parliamentary Committee, because one of the purposes of the Act was that there should be an independent committee set up on which neither the Board of Trade nor politicians in any part of the House should have any power whatsoever.

§ Mr. PRINGLE
Were any shareholders in Armstrong, Whitworth & Co. on the Committee?

§ Sir W. JOYNSON-HICKS
If the hon. Gentleman was going to make accusations of that kind, he might at least have given me notice, and I would have had the whole list of the Committee scrutinised most carefully. But I say at present that there is no foundation for his charge. I invite him to mention any member of the Committee who has any shares in Armstrong, Whitworth & Co. If he cannot mention the name, he has no right to make such a charge against a Committee which is voluntarily doing admirable work. [HON. MEMBERS: "Withdraw!"]

§ Mr. PRINGLE
Is it not in order, Mr. Speaker, when a question is being discussed, for an hon. Member to put a question?

§ Mr. SPEAKER
If the hon. Member who is addressing the House gives way, a question can be put, and the House may judge it.

1704

§ Sir W. JOYNSON-HICKS
I think the House is quite able to judge. The hon. Member does not either withdraw or substantiate the accusation—

§ Mr. PRINGLE
I made no accusation.

§ Sir W. JOYNSON-HICKS
Then the insinuation.

§ Mr. PRINGLE
I made no insinuation either. [HON. MEMBERS: "Oh!"]

Sir W. JOYNSON-HIGKS
The members of this Committee are perfectly well known, and the hon. Member, before he came down to make his speech, might have inquired who they were. They are Sir Robert Kindersley, a financier of the highest experience in the City of London; Sir William Plender, one of the best-known men in the chartered accounting world; and Lieut.-Colonel Schuster. These three men dealt with the matter in a judicial spirit, considering solely whether it was in the interests of employment in this country that this guarantee should be given.
What was the position? Here was a very important company proposing to establish paper mills in Newfoundland, and the matter was of such importance that the Newfoundland Government has already guaranteed a further issue of £2,000,000 of debentures behind the issue to be guaranteed by this Government. Paper mills were to be founded, and the only question was whether orders should be given for the machinery in this counrty to the amount of some £3,000,000 —of which we only had to guarantee £2,000,000–whether we should get those orders here or whether they should go either to America or to Germany. That was the sole question which this Committee had to consider. The Committee, without any promptings, either political or from Government quarters, dealt with the matter with the utmost care, and they came to the conclusion that, in the interests of employment, in the interests of getting our export trade increased, it was desirable that this guarantee should be given.
Let me say one thing in passing. The hon. Member told us that other parties were not allowed to appear before the Committee. That is not my information. My information is that very strong representations were made by the Papermakers' Association, who, quite naturally, did not 1705 want another competing paper mill established, either in Newfoundland or in any other part of the world. They made the strongest representations against the guarantee. Their representations were fully considered by the Committee, and the Committee came to the conclusion that, in spite of the opposition of the Papermakers' Association, the position of our export trade was such that it was desirable that this guarantee should be given. The hon. Member has no right to have made that second imputation—if he does not like the word" insinuation"—that the Committee did not take into consideration any opposition whatever.
I have been at some pains, since the hon. Gentleman gave notice of his Amendment, to find out what is actually being done for our country in consequence of this Measure. The whole House knows—I need not go over the whole Debate on unemployment which took place a week ago—that our export trade is down by just over £300,000,000 in volume compared with pre-War days. If we could get our export trade up by that £300,000,000 we could absorb, if not the whole, certainly upwards of 1,000,000 of the workers who are now out of employment. That is the object of the House of Commons in passing this Bill in 1921, to get rid of unemployment by means of getting our export trade higher than it was at that time. I do not know what object the hon. Member has in moving his Amendment. The guarantee which has been given is a completed transaction. Tenders have been accepted, and the work is on the verge of being begun. It is true it is going to be done by Messrs. Armstrong, Whitworth & Co., one of the best firms in the country, and I imagine if the hon. Member were to go to the north-east coast, where their works are, instead of to Penistone he would not be quite so favourably received in making the semi-Protectionist speech he has made as if he made it amongst the papermakers of Penistone. The work is now being started. It will cost £3,000,000 and not merely the £2,000,000 we guaranteed. That will all be for the machinery and plant which will be made here, transported to Newfoundland and put up there in the course of the next few years. The contract was actually signed three or four weeks ago, and one of the heads of the firm has left for Newfoundland.
1706 That is the information which I think the House is perfectly entitled to as to the transaction. If the hon. Member has any further accusations to make against either the Committee or the policy of the Act, I should like to hear from him, but I am not prepared to discuss the policy of the Act to-night. That is the decision of the House of Commons come to in 1921 for the relief of unemployment at that juncture. The Act is not a permanent Act. The House is prepared, according to the Resolution we passed yesterday, to extend the Act for another £25,000,000. I believe it is one of the best decisions to which the House has come in dealing with this question of unemployment. I speak in the presence of many members of the Labour party, who are more intimately acquainted with the details of unemployment than I am, but I am perfectly certain they will agree with me that what is wanted to-day in our country is work of a kind which can be done by our skilled engineers and in our skilled machine shops. That work is being provided under the provisions of this contract, and until some much stronger reason has been given than those advanced by the hon. Member, I confidently leave it to the House, and I am sure they will reject his Amendment to-day as they rejected it by a considerable majority yesterday.

§ Lieut. - Commander KENWORTHY
The hon. Baronet at the end of his speech threw a bouquet at the Labour party. He began his speech by reproving the hon. Member for Penistone for Protectionist leanings. I hope he will not take it as personal when I say it is a good example of the Devil rebuking sin. It is refreshing to find the Government in such a state of sanity that they are prepared to indulge in a kind of witch hunt to look for full-blooded Protectionists in this House in 1922. I think the Amendment is perfectly reasonable, and the fact that my hon. Friend gave only one example, namely, that which he knew very well, the case of the paper mills in the Penistone district, is no reason at all for rejecting the Amendment because the hon. Baronet chooses to deal lightly with the objection that the paper-makers themselves made to this policy. The Amendment is put forward to deal with future cases, but the hon. Baronet says he does not know with what object it was introduced. He is a very old and 1707 very skilled Member of this House, if he will allow me to say so. I had the pleasure of sitting on the same side of the House with him in the last Parliament, though we were very rarely of the same opinion, I am happy to say. That is why the hon. Baronet is where he now is and why I am sitting where I am. He knows perfectly well that this Amendment was put down with the object of influencing the Committee in future decisions. We say that that is a reasonable attitude to take up. When this Bill was brought before the House in the last Parliament we were given to understand that in practically every case the expenditure would be for capital works in this country. If there is good business to be done overseas we may be quite certain that capital will find its outlet there. Capital is peculiarly international; it is the only really international thing in the world to-day. If there are higher profits to be earned in some other countries, then patriotism and the idea of doing the work within its own borders never enters into its calculations at all.
Is it altogether a wise policy for us to undertake to subsidise undertakings abroad when there is work to be done in this country? The Government talk a lot about Armstrong, Whitworth & Co. They are quite a good firm of armament makers. In fact, among other armament makers they are almost unique. They are the one great firm of armament makers against whom, so far as I know, no accusation has ever been made. But how about the case of a poor man, with responsibilities and a decent position, who wishes to build a house I Can he come forward and say, "This is a Capital undertaking. Cannot I get a guarantee for the money and go to a builder and get the work done?" That may be a small thing, but if you multiply it several thousand times, you will get houses put Tip. I do not want to go into other things, but very promising schemes in Yorkshire have been turned down because, I suppose, they were not properly supported. The direction to the Committee should be that when it is a case of choosing between these capital schemes, those in this country should be given the preference where Government subsidies are concerned. That is perfectly reason- 1708 able, and I hope my hon. Friend will divide the Committee on the Amendment.

§ Mr. WHEATLEY
I agree with some of the things that have been said by the Secretary to the Overseas Trade Department about the Liberal party on this side of the House. I also agree with a good deal that was said by the hon. and gallant Member for Central Hull (Lieut. Commander Kenworthy) as to the policy of the hon. Baronet. Though I fundamentally differ from them both, I differ more from the Liberals than from the Government on this particular question. It surely is a new Liberalism for hon. Members on the Liberal Benches to preach Protection. If there is one damaging suggestion to make to the world to-day it is that we are likely to be injured by the production of more goods. The very basis of the policy advocated by the two hon. Members who have spoken in support of this Amendment, is that our country is going to be injured because the Government might support the production of more goods in other parts of the world. A greater fallacy was never put before an intelligent people than the idea that its poverty must necessarily be increased by the production of more goods by the human labour available in the world. What a right-about face this attitude on the part of these two hon. Members is, compared with what they were advocating two years ago, and with what they said yesterday. I was not present when they spoke, yesterday, but I am not surprised to learn that they advocated something quite different, because my impression of the party for whom they speak is that they are very seldom, if ever, sincere. This, to them, is all a game, a sort of intellectual fencing for English gentlemen. It has no more relation to the realities of life in this country than has any stage production at which we may spend our hours of leisure. Two years ago, we had these same hon. Members, and hon. Members on the other side, telling the working classes that they were ruining the country because they were not producing more goods within a given number of hours, and telling the bricklayer that if he would lay 700 bricks instead of 300 the building trade would come right. Yet to-day, within a very short period, and when faced with a very serious problem of unemployment, they have nothing better to suggest to the workers than that there 1709 should be less production. We are now told that if more paper is produced in Newfoundland it will injure the people of Penistone.

§ Mr. PRINGLE
I did not say that.

§ Mr. WHEATLEY
No doubt the people of Penistone will be told that the production of more paper at Penistone is going to injure Newfoundland. The Labour party differ in toto from that idea. We believe that the world will become richer the more useful goods are produced. Our objection is not to production, but to the present system of distribution. If hon. Members on this side and right hon. and hon. Members on the other side would advise the working classes to produce more goods, and explain to them how the system of distribution could be brought up to date, and made to keep pace with the production, the world would benefit by the wisdom of its legislation. I protest in the name of the Labour party against this waste of time, against this unreality, at a time when millions of our people are wondering where they will get the necessaries of life.

§ Mr. DARBISHIRE
We have just heard a representative of the sincere party who has discovered how to solve the problem of eating one's cake and keeping it at the same time. He has referred to the question of investing capital in Canada, assuming that you can force capital unnaturally as is suggested by the Government, if it is not flowing there in the ordinary course. You cannot send capital there to produce goods and at the same time keep the capital in this country to produce goods here and provide employment here. It is an utterly impracticable and illogical proposition. The hon. Member's reference, in a sarcastic way, to the sincerity of the party for which I stand evoked laughter from the party opposite, who, for two Elections, had old age pensions in their election addresses and who, when they had the opportunity of placing old age pensions on the Statute Bock, did nothing at all.

§ Mr. SPEAKER
I would remind the hon. Member that this is not a Debate at large. It relates to a small point in the Amendment.

§ 12 M.

§ Mr. DARBISHIRE
I was only protesting. I will not pursue that subject 1710 further. The Secretary for the Overseas Trade Department has delivered a speech which must convince hon. Members that "the recommendation of the Geddes Committee in favour of the abolition of that office shall be carried into effect at the earliest possible moment. I have had some experience of it in the Straits Settlements, and we have driven it out of the place there, because we found it was an absolutely unnecessary and Useless Department, and I trust that when I have any influence in this House —[HON. MEMBERS: "You will not have any!"]—I hope that I may, and that we shall have an opportunity of relieving the taxpayer of the £400,000 a year spent on the Department of Overseas Trade. Did you ever hear anything so illogical as the speech of the hon. Member? The same proposition was put by the hon. Member for the Shettleston Division of Glasgow (Mr. Wheatley). They cannot be logical—these tariff reformers. We had a speech last night from the Postmaster-General, in which my right hon. Friend the Member for Spen Valley (Sir J. Simon)—

§ Mr. SPEAKER
The hon. Member cannot gather up all his lost speeches. He must keep to the question before the House.

§ Mr. DARBISHIRE
I admit that my speeches during the Election did cause the Tories to get very angry. [HON. MEMBERS: "Order!"]

§ Mr. J. JONES
I think that most of us would like to forget our election speeches. I have heard some speeches tonight which are evidently a complete reproduction of the speeches made during the Election by the same hon. Members. Imagine people coming here from Penistone and at the same time forgetting Palestine. We on these benches are not discussing legislation that is going to solve all our problems. What we are discussing is a Bill passed by this House to meet an immediate problem. If we, the Labour party, were in power we would probably pass a different kind of legislation from that which is now under discussion. But the object of this Bill is not a new one. The subsidising of industry is not a new principle in legislation. It has been subsidised before. Some of the hon. Members who have spoken tonight have benefited by subsidies, and would not have been in this House if it 1711 had not been for subsidies, for they could not have afforded to pay their election expenses. But we, the Labour party, are in favour of trying to do the best we can to meet an immediate difficulty. The immediate difficulty is to find work for the people who are out of employment, and in so far as this particular proposal will help to find work for people who are out of employment, some of us at least on these benches are prepared to support it so far as it goes. It does not go far enough, but are not the people of Newfoundland members of the Empire? Is not the problem of our fellow-citizens in other parts of the Empire our problem also? I happen to have been born in a new Dominion just created, and I suggest that if I can do anything in this House to help my fellow-citizens in the new Dominion it would be my duty to do so, and a workman out in Newfoundland is a comrade of mine just as a workman in Silvertown is a comrade of mine. It may be the accident of economic circumstance that by giving work to the man in Newfoundland who is making paper, I may be giving work to an engineer in England making the engines and machinery necessary to produce the paper. Is that a crime? Is it not better for me to subsidise paper-making in Newfoundland for the time being as a temporary palliative than to pay 15s. a week to a man idling in Great Britain? I wish some of our Free Trade Friends would get down to facts, and that they would not always keep on trying to feed the dog on his own tail—

§ Lieut. - Commander KENWORTHY
The new Coalition!

§ Mr. JONES
—by preaching economic platitudes against overwhelming odds. The fact of the matter is that unemployment cannot be solved by people talking theory as against the facts. If the facts do not fit the theories, so much the worse for the theories. And to-day they do not fit. We are up against it. The Labour theory is work or maintenance. You are not prepared to provide either.

§ Mr. PRINGLE
Cheer that!

§ Mr. JONES
I know they will not cheer anything, but we are going to cheer up.

§ Mr. SPEAKER
The hon. Member is now being drawn off the track.

1712

§ Mr. JONES
It is not the first time. I think some hon. Members know my weakness. So far as we are concerned we are not wedded to any particular theory at a time like this. Give us free opportunities, and I am a Free Trader right up to the hilt, but when we are faced with the present position, with Europe in a state of more or less economic bankruptcy and industrial upheaval, we say that legislation of the nature now proposed is not something we can advocate with enthusiasm, but is a proposition we can support with moderation. I do not care who is in it. I am not a shareholder in Armstrong, Whitworth & Company. I am only a member of an ordinary co-operative society, and therefore cannot speak with authority on matters of finance, but if giving this work to Newfoundland is going to give work to engineers in England it is worth doing. I would like to see the Government themselves undertake to do this work instead of giving it to a private individual or firm, but as we are not able to do what we like we must do what we can. I am going to keep all I have and ask for more.

§ Captain WEDGWOOD BENN
This is a very interesting Amendment, and I suppose we all admit that there must be some limit set to the potential load we can lay on the taxpayers of this country through the stimulation of trade by Government guarantee. That is all the hon. Member for Penistone (Mr. Pringle) asks. All he says is, in stimulating these exports avoid stimulating trade which would create competition with our own industries. I do not understand that to be any infringement of any Free Trade principle. Free Trade is not concerned with a potential subsidy. This is a question of subsidy, and the question is, is it wise or not to subsdise an industry which may conceivably enter into competition with industries already depressed in this country and in which people are already out of work? That is the point which the Labour party have to consider, and on which two opinions are quite possible. You may take the view that the stimulation of the engineering trade is a good thing for the stimulation of the paper trade, or you may take the view that what you gain by stimulating the engineering trade you will lose in competition in the paper trade. Free Trade does not enter into it. We are only concerned with the 1713 effect of the subsidy on trade in this country. That is the only question at issue. I am not concerned with the remark of the hon. Member for the Shettleston Division of Glasgow (Mr. Wheatley) that I belong to the "insincere party." I was a member of the "insincere party" when it was 25 strong in this House, and adversity is a good test of sincerity. Let me ask the hon. Member, is he a member of the sincere party? [HON. MEMBERS: "Yes!"] Then why did he vote for this Amendment last night?

§ Mr. BUCHANAN
I rise as one who did not take part in the Division last night, and I wish to correct the hon. and gallant Member for Leith (Captain Benn) on the question of sincerity. In his constituency there is one of the larges frame manufacturing machinery for the production of paper, that I know of, in this country. I suggest that had this contract gone to the firm of Bertram's in Leith, the hon. and gallant Gentleman would not have opposed the Government subsidy. [An HON. MEMBER: "Their application would not have been granted."] It might not have been, but my point is, that the hon. and gallant Member should not oppose something in Penistone which he would not be prepared to oppose in Leith. That is the test of sincerity. Bouquets have been thrown about concerning the sincerity of a party which at one time was only 25 strong in this House. I remember, however, that the Labour party was a party of one in this House in former times, and that the party has grown and is growing. During the War some of us were in a party of only two or three because we dared to say certain things—

§ Mr. PRINGLE
And nobody in the Labour party would defend you in the House of Commons.

§ Mr. SPEAKER
The hon. Member who is addressing the House must keep to the point.

§ Mr. BUCHANAN
On the question of Free Trade against Tariff Reform I wish to contrast the statement made to-night by the hon. and gallant Member for Leith, with statements made on the same subject during the election. The hon. and gallant Gentleman stated to-night that the Government had no right to subsidise this industry, because it was 1714 likely to create great competition with the producers of similar material here at home. Has not his logic always been, that the greater the competition, the better for the people? Has not his logic always been that the more narrowly you restrict trade and commerce, the dearer you make the article, with the consequent reaction against the big bulk of the people in this country? To-night the hon. and gallant Gentleman says that if we restrict competition we are going to benefit the people. [HON. MEMBERS: "No, no!"] Let me quote his own words, as nearly and as accurately as the memory of a young man will allow me. He said he was opposed to subsidies in industry, when that industry was competing with the people here at home who are producing that commodity. The theory of free Trade—and I am a Free Trader—has been that you have no right to restrict competition as between country and country. Now you are coming along and telling us that we must oppose the Government's proposal, because it is going to intensify competition between country and country. I cannot follow the logic of it.
May I say one word as a new Member of this House? I came here possibly with just the same sincerity as the hon. and gallant Member for Leith—with a sincere desire to raise the standard of comfort, not of the wealthy classes of this country, but of the working classes, and the people whom I represent. I am frankly a believer in the class war theory. I am a Socialist above all other things, and if anything rouses my blood it is this game, this insincere thing that goes on of exploiting the Standing Orders to the last degree, not to raise the standard of the lives or to benefit the people of Hull or Penistone, but to score debating points. I shall never understand the Standing Orders as do my hon. Friends who have brought forward the Amendment, but I do want to say this, that I hope the hon. Members for Central Hull and Penistone will devote their time, not to scoring debating points, but in trying to bring a little more sunshine into the lives of the people.

§ Mr. BALDWIN
rose in his place, and claimed to move, "That the Question be now put."

§ Mr. SPEAKER
rose to put the Question

1715

§ Mr. N. MACLEAN
On a point of Order. The hon. and gallant Member for Leith (Captain W. Benn) has twitted the party of which I am a member because of their votes last night. May I remind the hon. and gallant Member and other hon. Members that at the commencement of the Debate last night the Labour party protested against taking such a Money Resolution at that hour, and their votes throughout were not given because of their interest in any game of make-believe on the part of members of the Liberal party—

§ Mr. SPEAKER
That is not a point of Order which entitles the hon. Member to intervene.

§ Amendment negatived.

§ Mr. SPEAKER
The Amendment handed in by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) is the same as that which was discussed in Committee yesterday morning, and I do not propose to allow it to be moved again.

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

§ Mr. MACLEAN
I think I am now entitled to state what I was trying to tell the House on the point of Order, namely, that the Labour party yesterday voted as a protest against the Government taking the Money Resolution at an early hour in the morning. We are not going to be a party to any make-believe in which parties only want to score tactical points over each other. We are. here in the interests of the workers, and we are going to protest against matters which affect the workers being taken at early hours in the morning when discussion is limited, and is prevented from being conducted in a serious manner.

§ Lieut.-Commander KENWORTHY
I will not follow the hon. Member for Govan (Mr. N. Maclean) with regard to the point he has raised. He and I have often engaged in Debate on matters in which we have felt strongly, but I have never questioned his sincerity, and I will discuss the question of sincerity with him, I hope, in private. I do not wish to go over any of the ground covered last night, but I wish to ask the Government two 1716 questions with reference to paragraph (c) which were not touched upon yesterday, and which, I think, are of some substance. This is a Resolution to guarantee £3,500,000 for an irrigation scheme in the Plain of Gezireh, which, I believe, has an area of about 300,000 acres, and one reason, we are told, why we should vote for this guarantee is that this area, when irrigated and brought under cultivation, will produce long-staple cotton. I have had information since the Debate yesterday that this area will not produce long-staple cotton at all, because of the climate and the soil. If that be the case, the right hon. Gentleman was unwittingly misleading the House and asking us for money under false pretences. I am informed on excellent authority by an ex-civil servant in Egypt, who held a high position at the Ministry of Agriculture and himself is a landowner, who had the temerity to take tea with Zaghloul Pasha and thereafter was dismissed, that the growing of long-staple cotton can only be effected in Lower Egypt. Attempts to grow it in Upper Egypt have failed. The idea of growing long-staple cotton in the Sudan is therefore preposterous and ridiculous; the only cotton grown in the Sudan—

§ Mr. W. GREENWOOD
May I interrupt the hon. and gallant Gentleman—

§ Lieut. - Commander KENWORTHY
No, I do not wish to give way. The hon. Gentleman will have his opportunity in a few moments, and we shall be delighted to hear him, for he is an acknowledged expert on this matter of cotton. I am told on the authority I have mentioned that it is only Ashmouni or short-staple cotton, brown in colour, that can be grown in Upper Egypt. Long-staple cotton is known in Egypt as Sakellarides, the name of a Greek who discovered it was possible to grow this cotton by a careful selection of the seeds. This long-staple cotton is very strong and is particularly needed for motor-car tyres, aeroplane wings, and other special purposes. Incidentally I may say he made an enormous fortune, lost it in gambling, and is now a pensioner on the Egyptian bounty. If it be true that this cotton cannot be grown in the Sudan, I think this question of guarantee should be reconsidered, because one of the strongest arguments used by the right hon. Gentleman in charge of the Bill was that all 1717 Lancashire, all political parties, all classes both the capitalist and the proletariat, were in favour of this because they wanted long staple cotton. That is my first question. My second question is in the interests of the people of the Sudan. I consider that before we vote this guarantee we should be informed as to the question in the interest of the Egyptians themselves. They are workmen, and they are fellow subjects of ours. I hope I shall not be accused of insincerity if I put a word in for them.

§ Mr. WHEATLEY
What about Newfoundland?

§ Lieut. - Commander KENWORTHY
The hon. Gentleman did not listen to my speech last night; that is perfectly obvious by his interruption. I am told that in order to get a greater output of cotton in Egypt the old three-field system has been abandoned, and the two-field system has been introduced and crops are obtained alternatively. As a result the soil of Lower Egypt has become exhausted—[An HON. METVIBEE: "The Sudan!"] I am talking of what has happened in Egypt, and I am asking that we shall have guarantees of good husbanding in the Sudan. The result of this change from the three-field system of antiquity to the two-field system has been a decrease in the production. That showed that the soil has become impoverished through over cultivation of cotton. I want to ask the hon. and learned Gentleman in charge of the Measure whether His Majesty's Government are alive to this in the Sudan and that he will see that no attempt to get quick returns from the soil is allowed to impoverish the land with which we are now dealing to the detriment of the people who were there, after all, before we went there. My third point is this. I understand that a syndicate has been formed for the exploitation of the land that is to be irrigated by this undertaking. This may be true, but I ask for information. Since the Debate this morning there has been little time to look up the facts and I am willing to stand corrected. Are we as a settled policy in the Sudan going to encourage the native farmer to cultivate his own cotton and other crops by his own enterprise or are we going to allow the land to be alienated as in South Africa and exploited by these great syndicates? Is that our policy in the 1718 Sudan? Is the new economic Imperialism swaying the Foreign Office under the new Government. Are we going to give everything to the benefit of great syndicates who, no doubt, will produce great dividends for a few years, or are we going to encourage, wherever possible, under supervision and instruction, the native Sudanese farmer who is only a premature agriculturist at present. There is no reason why he should not become prosperous like the West African farmer. I think that is a point of substance. I consider it is right to have these three points in the interest of the inhabitants of the country with which we are dealing.

§ The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill)
I do not in the least complain of the three questions put to me. I will only say that I think it was rather unnecessary that so much heat should have been developed in putting them. The first question is as to whether this land, which is to be irrigated under this scheme, will or will not bear crops of long staple cotton. [An HON. MEMBEE: "The hon. and gallant Member says it will not!"]

§ Lieut. - Commander KENWORTHY
Well, I am impressed.

§ Mr. McNEILL
He says he was informed. I did not quite gather the weight of the authority that gave him that information, and I will only give him a little of the information upon which I rely. I do not profess to balance that against him. We have experience to go upon. The Sudan Government, before embarking upon work of this sort and coming to this House for sanction to a loan—it was a very wise thing to do—they thought they would try whether the land would grow the crop that they desired or not, and some 12,000 acres, not of any one part of this area, have been put under crops of this sort for 10 years. Last year about 6,000 acres were so treated, and the report given by the experts under the Egyptian Government commented most favourably upon the experiment. But that is not the only evidence I have. I mentioned last night that a deputation was received not long ago at the Foreign Office. That deputation was introduced, as I stated, by the right hon. Gentleman the Member for Paisley, and his chief spokesman was the Member for Platting 1719 (Mr. Clynes). The deputation represented a great number of interests in Lancashire, and I would like to tell hon. Gentlemen those who were represented—The Empire Cotton Growing Association, the Federation of Master Cotton Spinners' Association, the Cotton Spinners and Manufacturers' Association, the Bolton Master Cotton Spinners' Association, the United Textile Workers' Association, the Liverpool Cotton Association, the Manchester Cotton Association, the Manchester Chamber of Commerce, the British Cotton Growing Association, the Lancashire Parliamentary Committee and the Empire Development Parliamentary Committee. These were bodies who presumably have some knowledge of the cotton trade, and I do not think they are bodies who would be likely to embark light-heartedly upon a scheme without having conducted their investigations at least as far as the hon. and gallant Gentleman has conducted his. These bodies have put on record their considered opinion, and their considered opinion is that the Sudan is a most promising possession in the Empire so far as production of long staple cotton is concerned. I do not think it is necessary to carry the matter further, and I venture to think that the House will regard the authority which I have been able to quote, at least as good as that of the hon. Gentleman until at any rate he can bring greater authority against it. The second question put to me—a very legitimate question—was as to the method of cultivation. Here, again, I do not know where he derives his information. But this is where he appears to develop the maximum of heat and the minimum of light, because he assured the House that upon his own knowledge or some better authority that a two-crop rotation was to be the method of cultivation—so I understood him to say. That is not the case. The method of cultivation is one-third each year under cotton, one-third each year under leguminous crops, and one-third fallow. That is the method of cultivation to be pursued. The hon. Gentleman displayed some anxiety on behalf of the native population and their rates of wages, which I entirely share. I may tell him that the arrangement is, that the one-third, which each year is to be devoted to the cultivation of leguminous 1720 crops, is to be given entirely to the agriculturist. The hon. Gentleman also asked a question with regard to a syndicate.
I quite understand that the very mention of the word "syndicate" is one which always makes hon. Gentlemen opposite sit up. They immediately suspect some very nefarious, grasping financial arrangement. I have freely to confess that in this transaction there is a syndicate involved, but I think it is a most innocent and praiseworthy one, and should have the support of the hon. and gallant Gentleman for the part which it is playing. First of all the syndicate is a syndicate of gentlemen who carried out for the Sudan Government the experimental work to which I have already referred, and, therefore, they are a body who have some familiarity with the country, and they are experts in the cultivation of this particular crop. The arrangement is this. The Sudan Government has entered into an agreement with this syndicate, and the cultivation and management of the area comprised in the agrement will be conducted on exactly the same lines as those of the experimental area were conducted. Under this arrangement the Government, the tenant cultivators, and the syndicate form three co-partners in the undertaking, and the proceeds or profits—which I hope there will be as soon as the scheme gets working—are to be divided in definite proportions as follows: the cultivator 40 per cent., the Government 35 per cent., and the syndicate 25 per cent. The hon. Gentleman and the House will naturally want to know what the syndicate have to do in return for that 25 per cent.: therefore I will enumerate what the syndicate have to do. They have at their own charges to construct and maintain all subsidiary canalisation throughout the area, and such services as drainage, roads, bridges over the subsidiary canals as may be required. Then they have to level and clear the land for irrigation and cultivation, and they have to provide this important item—provide, maintain and work the necessary factories. They have to provide and maintain any store house, dwelling house, offices and other buildings, machinery, stores and supplies as may be required to carry on the work. They have got, generally, to manage and supervise the letting of the land, the cultivation by the tenants, and the collect- 1721 ing, storing and marketing of the crops. They have to maintain an adequate staff to instruct the cultivators, because, I need not remind the House, the syndicate represent the expert knowledge which is not common knowledge there as it is in the Southern States of America. It is an art which has to be learned, and it is part of their duties to instruct. Then they have to make loans to tenants for seeds, implements and cattle.

§ Lieut.-Commander KENWORTHY
Do I understand that the native cultivator is never allowed to raise his own cotton crop at all and never allowed to raise food crops?

§ Mr. McNEILL
That was not what I meant. The hon. and gallant Gentleman will see in a moment. This arrangement with the syndicate is temporary. The syndicate in a certain number of years will disappear and the cultivator will be on his own. In the meantime, the leguminous crop, which is one-third of the cultivated area each year, is for the benefit of the man actually engaged in the cultivation. As far as the cotton crop is concerned, he gets his fixed proportion as I have described.
The last and not the least important of the functions to be discharged by the syndicate is to see that the sanitary regulations are carried out, a very important matter for the prevention of malaria. They have, accordingly, to supervise the sanitary conditions within their area. I said just now that the syndicate is only a temporary arrangement in order to set the thing going and to teach those engaged in the cultivation how to carry it on. The period for which the syndicate will be part of the machine is 10 years, during the time that the irrigation scheme comes into operation, but there is to be the right of an extension for a further period of four years, provided that they carry out their obligation fairly and to the satisfaction of the Government. That is to say, that they are there for 10 years certain, and, if it is thought desirable, in the light of the experience of those 10 years, the period 1722 may be extended for another four years. At the end of the 10 years, when the syndicate will disappear, the Government will take over their part of the undertaking, and the syndicate will then receive payment for the subsidiary canals, roads, bridges, expenditure on factories, offices, stores, buildings, heavy farm implements, and so on. That is to say, at the end of 10 years there is to be a settlement of accounts, by which the syndicate is to be paid for the actual capital expenditure they have incurred. In the meantime, the scheme will be set going, and we all hope it will be a success and produce long-staple cotton. Afterwards, the syndicate, which has caused so much suspicion in the mind of the hon. and gallant Gentleman, will disappear altogether.

§ Bill ordered to be brought in upon the said Resolution by Mr. Baldwin, Sir Philip Lloyd-Greame, Sir William Joyn-son-Hicks, and Mr. Ronald McNeill.