§ (1) The maximum limit on the aggregate capital amount of the loans, the principal or interest of which may be guaranteed under Sub-section (1) of Section one of the Trade Facilities Act, 1921, shall be increased from twenty-five million pounds to fifty million pounds.
§ (2) The period within which guarantees may be given under the said Section one as amended by this Section shall be extended by one year, and accordingly for the words "the year" in Sub-section (5) of the said Section one there shall be substituted the words "each year."
§ (3) For the purpose of meeting the costs and expenses incurred by the Treasury in administering the said Section one, there shall be charged in connection with applications for and the giving of guarantees under the said Section, and other matters arising thereunder, such fees as the Treasury may from time to time prescribe.2120
§ The CHAIRMAN
The first Amendment on the Paper should come as a new Subsection to be inserted at the end of Sub-section (2).
§ Mr. CLYNES
I beg to move at the end of Sub-section (1) to insert a new Sub-section:(2) Sub-section (5) of the said Section shall be amended to provide that the statement to be laid before both Houses of Parliament of guarantees given under that Section shall include particulars of all loans, and the purposes to which they are to be applied, in connection with which guarantees have been given, and shall also include particulars of all loans and the purposes for which they were to be applied in connection with which guarantees have been refused, together with the reasons for such refusal.The object of this Amendment is to secure some much more helpful information on the working of the Act, and to require the Department which finally decides its application to state, in Parliamentary form and in the White Papers which are circulated, the reasons which have induced them to reject applications provided for under the Act itself. Hon. Members may obtain in the Vote Office a few returns which have so far been sup- 2121 plied as to what is being done regarding the various claims, and they will find on reading those Papers; that a few firms or companies or undertakings have secured, in a very large degree, the support of the Act, and guarantees have been given, not only as regards the capital sum, but also of the interest, while, on the other hand, it has been stated in the House, in reply to a question, that about 400 applications have been submitted to the Government for consideration.
I have already asked for some information as to how many of that number have been considered and rejected, and, so far, I have not secured the information. The Amendment would have the effect of placing periodically before the House the necessary information to guide it in its criticism, and to inform it as to how far the terms of the Act in the main were being carried out. I do not regard the terms of this Amendment as being in any sense controversial. I am not offering any criticism of what has been done, but I am submitting these remarks in order that all of us who are interested in the problem of unemployment should have opportunities for submitting to the Advisory Committee such information as may be placed in our hands with regard to the various stages of the Act.
In relation to this particular cause it has been helpful as far as it has gone, but it has not gone very far. My view is that in the main the firms or companies which have received support would, in the ordinary course of things, in the main have secured their guarantees in the ordinary private market, because of the financial substance upon which these various projects rest, or because what they were promoting was to be regarded in financial circles as a paying proposition. All the same hon. Members for whom I am acting, in submitting this Amendment, must reject the view advanced at other stages of this Bill, that the assistance of the Act should be limited to those undertakings which may be regarded in commercial circles as paying propositions. The truth is that if that view were to be entertained and put into practice, there would be no need for an Act of Parliament of this kind at all. The necessity for this Bill arose when it was seen that certain work was advisable in the national interest because it would go in the direction of absorbing large numbers of unemployed, but that work 2122 could not be undertaken because of the difficulty of raising money for the purpose because no immediate profit could be realised in the ordinary dividend sense on such work as the men were required to perform. Therefore this plan for guaranteeing loans and guaranteeing their repayment and the interest upon them was agreed to almost unanimously by the House for the reason that work should not be left undone merely because certain men in the ordinary course of trade would not have ventured upon it and could not do so with any hope of realising a profit for their services.
The results obtained have fallen far short of the glowing accounts that were given and put forward as the certain result of an Act of Parliament of this kind. While we are seeking to make the very best of this instrument, it must not be taken that we, in any sense, accept it as seriously touching the kernel of the problem, because it approaches only the fringe. However, I take the view that, if only ten or ten thousand men in the large army of the unemployed who have been unemployed for so long can be put to useful work, anything we can do to assist that end should be done in the most genuine and non-party sense of the term. I do not regard the Act itself as being anything but supplementary to what might have been done in the ordinary private market, and it should not be regarded as anything more than supplementary to the efforts of those engaged in various profitable undertakings. If we support it on the ground that it is supplementary, I think we should do our best to make it substantial, and my view is that it has not been made the instrument it could have been made, and that is due to lack of useful information and guidance which should have been placed in the hands of hon. Members.
Let me give an instance precisely of what I have in mind. There are such undertakings as will receive substantial help at this time like the Tube extensions, docks, and Harbour Board works. I am in no sense complaining of the support given to these projects so long as they provide work which would otherwise be delayed, or which might not be started at all, and I fully approve of the support this particular Bill gives to them. My own view is that most of the services of 2123 this Act should have been given in respect to undertakings which should be supplementary to ordinary private ventures, which in themselves could not stand in the position of attracting finance in the ordinary profit market, or secure the substantial revenues or loans required to begin the work. Take certain schemes of town planning and housing development such as that, for instance, which was mentioned in the course of the Debate in the early hours of Tuesday morning by my hon. Friend the Member for Bow and Bromley (Mr. Lansbury). My hon. Friend referred to the Eltham Estate, an undertaking on which the promoters are extremely anxious to employ ex-service men. They undertook, in the course of three or four years, to erect some 4,000 houses and a number of shops and to carry on the usual other enterprises that are incidental to these forms of town planning and development. They have persisted in seeking support under this Act, but on each occasion have been told that as they have no assets of the kind usually demanded and as they cannot rely on anything beyond the value of the buildings which may be constructed the money cannot be advanced.
That is not the way to help in reducing the number of unemployed. This Act was meant to supplement the ordinary undertakings that can be pursued for the purposes of private profit. These schemes of house construction and town development are precisely the schemes which should receive the fullest possible assistance from any guarantee or credit which the Government can place behind those who are willing to undertake the enterprise. Nor would this mean a loss to the country. Assume that 500 workmen would for a period of two or three years be employed on work of this sort. Let hon. Members calculate what every week it costs the State and the country to keep these men alive with unemployment benefit. Hundreds of pounds weekly are paid away without any return whatever, and it would be far better that the money thus paid should be used in extending guarantees and credits to enterprises of this sort in order that these men should be absorbed and in order that their work should, in due course make a demand for the work of many other men in different occupations. If men can be put on to labour in these enterprises of town development 2124 and house constructions the houses so constructed will, in due course, call for the labour of men who have to furnish them and for the general services employed in connection with their completion. This Amendment would not have the effect of calling on the Government for the payment of any more money, but it would have the effect of giving Members of Parliament a far better opportunity of seeing how the schemes are being dealt with, and it would require the Government to state the reasons for refusing to place guarantees or credit behind the various applications. That is the main object of this Amendment which I beg to move.
§ The PRESIDENT of the BOARD of TRADE (Sir Philip Lloyd-Greame)
I think it would be convenient if I deal first with the specific proposals in this Amendment, and then say a word or two on the general aspect of the question raised by the right hon. Gentleman. The return which is at present given to Parliament shows in the case of all applications which have been accepted the amount and the purpose for which it is granted and the general character of the undertaking. If I understand the Amendment aright, what the right hon. Gentleman seeks to get us to do is to give a similar return in regard to all applications which have been made and rejected by the Committee, together with the reasons for their rejection. I hope the right hon. Gentleman will not press that Amendment, because whether he thinks that the Act in its administration is sufficiently wide or not, I am sure an Amendment in that form would really defeat the object he has in view. It would be unfair to the firm who made the application and had it rejected, and it would be a deterrent to other firms making applications—particularly the firms on the border line of getting their applications accepted or rejected. Let us see what, the proposal amounts to. A firm comes forward and makes application to the Committee.
This House was most anxious that the Committee should make full investigation of all the circumstances of the firms and of the financial possibilities of the undertakings. The investigation is undoubtedly of a very thorough character. The Committee obtain from the firm details of the most confidential character as to their accounts and reserves and the position of their undertaking. These particulars 2125 are given fully and freely to the Committee. If we were to publish a return of the firms whose applications were turned down, and the reasons for turning down, I say that would be a most damaging thing to the credit of the firms. It would be not only unfair, but damaging. Just think what the position would be of a firm putting forward a project and applying for money under the Act if it were turned down. Would its chances of later on obtaining money from the public not be seriously prejudiced by the publication of a return showing that the Committee had turned their application down? Again, there have been many cases where firms have put forward proposals to be carried out by some subsidiary company, and those proposals may have been turned down by the Committee; not because of the financial standing of the. firm, but on the ground that the proposal was not sufficiently sound. If there were a return showing that the Committee had turned down the application, that might really act not only against the future financing of the proposal, but against the firm which had put it forward, and also against the subsidiary company, and that would be really unfair to both firms. It would also preclude applicants from giving much of the confidential information they now give to the Committee with the same freedom as they would give it to their bankers, and it would ultimately deter firms from coming forward. Therefore, so far from having the effect which the right hon. Gentleman seeks, which is to get more applications, it would very largely deter firms from making application. I hope, therefore, that whatever the right hon. Gentleman may think of the way in which the Act has been conducted, he will not press this Amendment, which I am sure would not help in the object he has at heart.
That really disposes of the Amendment, but, as the right hon. Gentleman has raised the point, I should like to say a word about the suggestion that this scheme has been too narrowly administered and has failed First of all, with regard to information, if there is any information which anyone, whether a Member of this House or not, is able to give to the Committee and which will be of assistance to the firm, they can, of course, be heard by the Committee. What always happens, however—and one has only to look at the Order Paper to-day 2126 to see the proof of it—is this: on the one side there are hon. Members who say: "You must draw your net tighter. We cannot be sure that you are not lotting through schemes which will involve the State in considerable liability." On the other hand, there are hon. Members who say: "Your Committee is too careful; you ought to do much more." Between the Seylla and the Charybdis of these two dangers we have, to steer a middle and a wise course, and the proof is in the result. When we came to the House with the original Bill, we asked for power to guarantee £25,000,000. We come back to the House now, not because it has failed, but because that £25,000,000 is almost exhausted, for we have sanctioned schemes amounting to £22,500,000. I am sure it is wrong to say that that credit has been granted in cases in which it would have been found otherwise. It might have been found otherwise later on, but the effect of the Act has been to cause undertakings to anticipate work which would not have been done so soon. Certainly an Act which, in the course of its running, has absorbed very nearly the whole of the amount which Parliament voted for it cannot be regarded as a failure. The House, when it passed the original Act, insisted most firmly, and I think most rightly, that the Committee should have full and free discretion, and I ask that that discretion may be continued to them.
§ Mr. CLYNES
Before saying anything as to withdrawing this Amendment, I should like to ask whether the right hon. Gentleman contemplates that, in connection with the increased sum to be guaranteed, generous consideration will be given to those who come forward wishful to get the guarantee for promoting these town planning and house construction undertakings. My point was, and I think it has been admitted, that, in the main, the great big undertakings which have secured the guarantee were undertakings which would have obtained their money in the ordinary private market in the ordinary way, either now or very soon, and that most of the guarantees have been given in the case of these very large undertakings. What I am anxious for is that the supplementary efforts, the new ventures, like many which have been put before the Committee, should receive more generous terms and consideration, 2127 for the purpose of finding work, than has been the case up to now. Further, I should like my right hon. Friend to say about what number, out of the total of 400 applications, have not received by support whatever from the Committee.
§ Sir P. LLOYD-GREAME
With regard to the last point, I do not think I could answer with precision, but if the right hon. Gentleman means how many of the schemes which have been put before the Committee have been approved, that is given in the White Paper which accounts for the £22,500,000. As I have said, a number of other schemes are now under consideration, and upon these it would, obviously, be improper for me to express any opinion. With regard to the question of these housing schemes, if a scheme comes forward and the Committee, judging of it as they do of other schemes, are prepared to recommend it, certainly it ought to go through. Attention was drawn in the course of the Debate to one housing scheme which has been approved. The House, however, did insist upon the Committee having its discretion, and the object of the Bill was to get employment. Every one of the schemes which has been approved has given a large measure of employment, and I think it would be contrary to the spirit and purpose of the Act, and would be wrong, were I to say that any class of scheme should be treated differently from another class. Therefore, whatever the scheme is, whether it be a scheme to build a ship, or to build a house, or to build a railway, it must be left to the Committee to decide the question of its financial merits.
§ Mr. LANSBURY
I should like to ask the right hon. Gentleman one question. A scheme has been sanctioned for the Powell. Duffryn Company, but the one which was put forward, I think, at Twickenham was turned down, and I should like to know if anyone can tell us why. It seemed to me, on the face of it, to be an excellent scheme.
§ Sir P. LLOYD-GREAME
Obviously, the hon. Member is trying to draw from me just the kind of information which it would be unfair to those who brought forward the scheme to give. Speaking generally, however, those schemes of which the Committee have approved, as reasonably sound financially, have gone 2128 through, and those of which the Committee have not so approved have not gone through.
§ Colonel WEDGWOOD
I think we might have some sort of reply on the really important question how far this assistance is being given to private capital, and how far to local authorities or public utility societies. Looking through the list of schemes, one finds only two, and those for very small amounts, in the case of which guarantees have been granted to public authorities. Nearly all the schemes, like those of the Powell Duffryn Company, the Calcutta Electric Supply Company, Messrs. Beardmore, and Messrs Harland and Wolff, have been schemes put forward by-big companies. It would be only fair that a certain definite proportion—I should have thought at least half—should go to assist schemes brought forward by local authorities or public utility societies. At the present moment I do not think the Government could do better than go in for a number of schemes for garden cities. The garden city is exactly the sort of scheme that private capital finds it very difficult to undertake, because it is necessary to wait so many years for any return on the money. The garden city at Letchworth, for instance, which has been going now for just over 20 years, is on y just reaching the dividend-paying stage. If this money could be used to facilitate schemes like that, promoted by public utility societies, whose rate of interest is limited, or by local authorities, then, although they might not be such financially sound ventures, they would, at any rate, redound to the benefit of the public, instead of merely to the benefit, ultimately, of the private shareholders of the concern that gets the guarantee. Unemployment is dealt with under either scheme. The same number of unemployed will find work whether you give it to the Powell Duffryn Company to build houses or to the London County Council to build houses, but in one case the public ultimately benefits and in the other case the 2129 benefit must, largely go to the company, which wants cheap houses for the accommodation of its servants.
I wished to ask the question the hon. Member has asked. For instance, will the Government give the same advantages and the same help to local authorities in building as they will to private firms? I think the right hon. Gentleman ought to consider that because there is going to be great pressure brought on this side of the House by people interested in housing, and we feel exactly like the hon. Member opposite, not that we are against private enterprise, but as long as the Government has got to help it—and it will give just as much work to the men—the first call is to help housing.
§ Mr. CAIRNS
We have some dry docks being made in my constituency and the people say thay can get the money cheaper and easier outside than under this scheme. I should like to ask the Minister if he understands that case. It is in the neighbourhood of Blythe. We have been dealing with it for six months. They say they can get money cheaper outside. Witt he explain whether that is so?
§ Mr. WISE
I should like to suggest to the right hon. Gentleman that the companies that receive Government subsidies should make a return every three months to the Board of Trade in the shape of a statistical report which may be useful to the Government in watching the security and keeping in touch with it.
§ Mr. PRINGLE
I think it is of great importance that the attention of the Committee should be drawn to this fact, that in the guarantees already given local authorities have figured to a small extent. Practically all the assistance has been given to large private companies or great railway companies. That was not the original intention when this Act was introduced a year ago and when its objects were publicly advertised. Public authorities were put in the forefront and these private undertakings were only mentioned in the second place. The first Sub-section of the original Act says:If the Treasury are satisfied that the proceeds of any loan proposed to be raised, whether within or without the United Kingdom, by any Government, any public authority, or any corporation or other body of persons.2130 There you have Governments and public authorities put in the forefront, whereas in the work actually done practically nothing has been done to assist local authorities, particularly in this all-important work of housing. I think the right hon. Gentleman the Member for Platting (Mr. Clynes) has drawn attention to a very important matter in respect of the very small detail that is offered in these quarterly returns by the Treasury. We get practically no details at all as to the loans or the objects for which they are granted, and I believe, now that this matter is being dealt with a second time, it is the duty of the Committee to insist that much greater particulars should be given, first of all as to the people who are being assisted and, secondly, as to the objects for which assistance has been granted.
§ 9.0 P.M.
§ Mr. PRINGLE
It may be that the Committee is too strict but the opportunities given to us are too few. I am not on the procedure of any Committee. I am on the question as to the information which is granted to this House, and it is the duty of this House to see that adequate particulars are given when money is dealt with to this extent. I quite agree that the President of the Board of Trade put forward some cogent reasons for not giving all the particulars which are suggested in this Amendment, and I think it is somewhat difficult to dispose of all his arguments, but, at the same time, I do not think all those argument were of equal value. He said, for example, that an undertaking which was applying for assistance might be of such a speculative character that it would only appeal to speculative investors and if these were turned down it would ruin the chance of the speculation. I do not think it was the original object of this Act to encourage what were merely speculative undertakings. The object of the Act, in the first instance, was to encourage the immediate undertaking of necessary works which were only being delayed on account of bad trade, the idea-being that if this financial assistance was given the undertaking would be encouraged to take them in hand now at a period of unemployment and so do something to lessen the hardship arising from unemployment. We had no idea 2131 that speculation was to be encouraged. I believe speculators should not depend on a public guarantee. In these circumstances, the speculator takes the risk if he comes before the Committee. I do not see that we should be deterred from insisting that the reason for the refusal of an application should be given just out of regard to the susceptibilities of speculators and to their chances in future of floating their concerns on the market. Then he said there might be a case of a perfectly sound company with a subsidiary seeking a guarantee for a particular work and that this work might only be turned down because of reasons connected with that work, but the rejection might react upon the credit of the company. If the reason was stated in a report to this House it could not affect the credit of the company. If the reason was stated to be simply and solely the uncertainty of an individual proposal that could not in any degree affect the general credit of the company. So both the reasons he put up for refusing to put forward in a statement to the House both the refusals and the reasons for rejection, as well as the acceptances of applications with the reasons for those acceptances, do not hold good, and I should regret very much the withdrawal of the Amendment. I think some further concession should be granted by the Government.
§ Sir SAMUEL CHAPMAN
Last week I made a few remarks on the question of housing which have brought me an extraordinary number of letters from all parts of the kingdom. This morning there happened to come a letter from a society, not in my constituency, which I know nothing about, which it is very appropriate that I should mention at this moment. It is from the Grange Co-operative Building and Investment Society, Limited, and they are asking the very same questions that we are asking the Minister just now, whether it is possible that societies, like co-operative building societies, should receive some assistance at this moment from the Government. My correspondent says:The society has not erected any houses since 1910. The demand for houses is clamant. What we feel is that some assistance is required and building societies could overtake a great deal of arrears, and if some assistance could be given by way of actual subsidy towards the increased cost of building and by the lending of money at a 2132 moderate rate of interest the societies could at once proceed. I may say this society is run by working men who are all tradesmen, and you will see that the costs of management are very small. If encouragement were given to building societies of this kind—.
§ The CHAIRMAN
I think the hon. Member is going rather wide of the Amendment. The purpose of the Amendment is that full particulars should be shown. It is going rather beyond that to urge the claim of a particular class.
§ Mr. SHORT
The President of the Board of Trade has offered some arguments in opposition to the Amendment, but I do not think they are strong enough to justify the turning down of the principle involved in the Amendment. We are entitled to ask for some further consideration and for an expression on his part of some willingness to incorporate in the Bill some form of words which will meet our desires and satisfy those on this side of the House. He has displayed great anxiety respecting thy credit of firms who may from time to time make application for assistance. He is very anxious to obviate any action on his part which would in any way injure the credit of those firms in the future and their opportunities of developing their particular industry. That anxiety is praiseworthy in many respects, but a limit should be put upon the attitude of mind of the right hon. Gentleman in this matter.
Under this Bill, the people of this country are providing £50,000,000 of the taxpayers' money in an attempt to improve employment by providing work in one form or another. The money is being guaranteed, and it is essential that we should know, not merely the object for which the money is to be guaranteed, but we should have particulars of the various schemes that come before the Committee. We are the custodians of the public purse and are entitled to ask for requisite information. If the President of the Hoard of Trade in some memorandum or in some form of words in the Bill clearly and specifially stated the object of the Bill and the type of scheme to be encouraged that would rule out, as the hon. Member for Penistone (Mr. Pringle) said, speculative schemes. I do not think it would in any way act as a deterrent to employers or business men approaching the Committee. The right hon. Gentleman's attitude will 2133 encourage, those who apply to think that they have some reasonable expectation of having their hopes realised by having in some form or other obtained some information prior to making their application.
Why are we not taken into the confidence of the Government before the deed has been actually done? We are to provide £50,000,000 of the taxpayers' money, and then we get something in the nature of an Estimate indicating that a loan of £1,000,000 has been guaranteed to a certain company, or that a loan of £120,000 has been granted as in the case of the Powell-Duffryn Steam Coal Company If we had known that such an application was coming from such a company, with such resources, as was indicated in the Debate last night, I doubt whether this House would have tolerated the consideration of such an application. As representatives of the taxpayer we ask for this very legitimate information. We are providing millions for the purpose of assisting and subsidising private enterprise, we are, therefore, entitled to know, not merely the object for which the money is guaranted, but who are the people who are receiving this financial assistance, before it is finally settled. On the other hand, we are informed that money has been lent to some person or firm of whom we know nothing.
A loan has been granted to Messrs. Harland and Wolff, a firm of great standing in the shipbuilding industry. This firm recently took over the engineering side of the work of the Port of London Authority. No doubt they took it over on terms acceptable and pleasing to themselves and equally pleasing to the Port of London Authority. They are cabled upon to perform in future all the engineering work of the Port of London Authority, and a large number of engineers of the Port of London Authority have been dismissed as the result of the transaction—men who had been in the service of the Port of London Authority for years were dismissed.
§ The CHAIRMAN
It is not in order on this Amendment to raise the particular question of Harland and Wolff.
§ Mr. SHORT
I accept your ruling, but I think I am well within my right in saying that Messrs. Harland and Wolff are 2134 to widen a dock, and that they have got this loan for that purpose. We ask for particulars in connection with these guarantees. Has the dock anything to do with the engineering work of the Port of London Authority? If so, why could not the Port of London Authority, with its great resources of over £3,000,000, provide the necessary capital for such an extension in the interests of the port life of this great city? There is a grant of £100,000 to the Lee Conservancy. I have had something to do with the Lee Conservancy, and if one of my hon. Friends who represents East Ham had been here he could have spoken with authority on the matter. If we are to guarantee millions of money to subsidise private enterprise, we are entitled to ask what wages are going to be paid, and what hours are to be worked. Are these people going to maintain a fair rate of pay and a fair standard of hours? How many people are going to be employed, and what period will it take for the performance of the work involved?
The President of the Board of Trade put forth a series of arguments which, on the surface, appear to be important, and appear to justify in some; measure his attitude, but they do not justify the entire turning down of this Amendment. If he cannot accept the policy of my right hon. Friend, can he suggest some other form of words? The right hon. Member for Platting (Mr. Clynes) is not tied to the words of the Amendment, and if the President of the Board of Trade desires, he can produce some form of words which will give the necessary information to us, to the House, and to the public. Not only can he give us the information, but as regards those applications in reference to which he thinks publication of the reasons of refusal might injure the particular firm, from my experience of Parliamentary life and the ready way in which Ministers, in replying to questions, escape giving just the information which we desire, I have no doubt that the reason for the refusal of the application could be put in such a form as not to injure the firm while at the same time giving to the House and to the country some particulars which would justify the expenditure of these guarantees, which we all welcome, because we hope that they will be instrumental in alleviating the distress and misery in our midst, and tend to promote a better and happier state in our industry.
§ Sir P. LLOYD-GREAME
If I were to give an explanation at all, it would not be of the camouflaged kind which the hon. Gentleman suggests. It would be a plain honest statement of the reasons such as he who runs could read. I was in a way one of the fathers of this scheme, and I am afraid that this proposal would impair seriously the purpose in view. In reference to the local authorities I can assure my hon. Friend that they have exactly the same right to come forward under this scheme as anybody else. There is no prejudice on the part of the Committee against local authorities, but local authorities have not come forward to any great extent. They have in a certain number of cases, which have been approved, but I would point out that many local authorities which can raise the money very cheaply do not require to come forward. Many of these local authorities, like Manchester, enjoy such good credit that the desire to invest in their stocks is very great. I believe that the City of Manchester can borrow almost more cheaply than the Government, and many local authorities who borrow extensively do not require to come forward for this guarantee. I am very adverse to say anything to induce people to come forward who can raise money in other ways. With regard to local authorities who do require assistance, I would like to point out that there is a scheme quite apart from this which is specially designed to meet their case. The terms of this scheme are specially acceptable and they can—
§ The CHAIRMAN
The right hon. Gentleman is going beyond the scope of the matter under discussion. He is now going into another subject.
§ Sir P. LLOYD-GREAME
I apologise for transgressing, but there are these other schemes to which I will not further allude at present.
§ Mr. A. J. BENNETT
I regret that I had not the privilege of hearing the speech of the right hon. Gentleman the Member for Platting (Mr. Clynes) in support of this Amendment, but while I am in favour of the first portion, I am not in agreement with the latter section. I quite realise the point that we want to be certain when the Government are giving guarantees that undue influence is not being brought to bear. We want to feel that influential firms do not get 2136 preferential treatment. That suspicion has been aroused. Probably it is quite unfounded, but for that reason more than any other I am so strongly opposed to all forms of Government protection, whether financial or fiscal. But I think in this ease that the remedy would be worse than the disease. I think that it would be unfair to publicly pillory firms who have applied for guarantees and have had them refused for any reason whatever. As regards the first part of the Amendment, I do urge the right him. Gentleman to consider it favourably. I am not speaking with any idea of factious opposition. Far from it. I shall always be prepared to support the Government in any scheme which, in my opinion, tries to remedy such a great evil as unemployment. But, after all, what is being asked for here is very reasonable. All that is asked is that we shall give publicity, and surely when it comes to a question of lending public money, no publicity can be too great. I was very much struck on reading a question and answer given on the 27th November on this point. I quote from the OFFICIAL REPORT:MR. BRIGGS asked the Chancellor of the (Exchequer what guaranteed the Treasury have stated their willingness to give under the Trade Facilities Act. 1921, since the 50th June, when the last list was published?MB. BALDWIN: The statement laid before the House on the 23rd instant (House of Commons Paper No. 3) shows those agreed to be given up to the 30th September last, and the following is a statement of those agreed to be given since that date:The Treasury has agreed since the 30th September to give guarantees in the following cases:"—OFFICIAL REPORT, 27th November, 1922; col. 304, Vol. 159.]And then comes a long list giving a total of £5,375,000. As a man in business all his life, it struck me as extraordinary that no more details were given. If shareholders in a company have a right to ask their directors at periodic intervals to give details of the operations which they have carried out, surely it is not too much to ask the Government to give similar details of what they have done when dealing with the taxpayer's money. I think that that is all that the Amendment asks for.
§ Sir P. LLOYD-GREAME
I do not want to interrupt my hon. Friend because I think that we both have the same object in view. In the returns which are made the purpose of the loan is stated.
§ Mr. BENNETT
Would they give the following details which I, as a business man, would like to know? Do they, for instance, give the terms of repayment of the loan? Do they give full information as regards limitation of the interest on capital? Have the Government ever considered this? The object is not to provide extra profits for private firms but to provide employment. Surely there should be some limitation on the profits that the particular firms concerned can make out of this public money. We do not want it to be said that by this policy we are simply increasing the profits of certain firms. I must say—I am speaking with a lifetime of experience in business—that I cannot help being rather struck by the firms that have asked for this guarantee. Is it reasonable to ask any business man to believe that concerns like the South Eastern and Chatham Railway Company, Limited, are not able to raise the capital they require for carrying out improvements? Does it not rather suggest that they are trying to add to the profits of their shareholders by, through this Government guarantee, being able to borrow money at a cheaper rate than they would otherwise be able to do? These are questions upon which we may differ, but surely it is only reasonable that, we should have information. An hon. Gentleman has quite rightly said that we are the custodians of the public funds.
There is one other consideration to which I should like to refer, namely, that in certain cases the Government guarantee has been given in such a way as to induce the investment of private capital. I want to refer to one particular case. The Government had representations from the Kelham Sugar Factory. The Government gave a guarantee, and as a result—
§ The CHAIRMAN
The hon. Member is going beyond the scope of the Amendment. He really cannot go into the wisdom or otherwise of the particular guarantees.
§ Mr. BENNETT
I bow to your ruling, Sir. I was only trying to emphasise this point, that in that particular case the Government gave a guarantee, and as a result of that a great many individuals in this country were induced to invest in this undertaking. The result was that a 2138 good many of them lost their money. I am not going to labour the point, but I am merely stating that when it comes to a question of the Government giving a guarantee they cannot be too careful with regard to the guarantee they give. Above all, I think they must be very careful indeed to give full publicity to the facts. I do not suggest that the Government should come and ask for the approval of Parliament before they sanction these schemes, but I do say that the mere fact of their having to give full particulars to this House will make them a little more careful, and that is what we want.
§ Mr. NICHOL
I should like to call attention to some of the statements which have been made by the President of the Board of Trade He has pointed out that the main reason for not guaranteeing the money to various municipalities and local authorities is that those authorities can quite easily, on their own credit, raise money at lower rates of interest than even the Government can. Precisely the same argument applies to some of the companies which we find in this list. I think hon. Members have a reasonable case when they ask for further information about the firms or other bodies that are getting these guarantees. For instance, we have as a Government this year already handed over a very great deal of money to one firm that appears in this list. I notice that the Powell Duffryn Steam Coal Company has had an amount guaranteed to them of £120,000. It is not 10 months ago since this same firm received from the Treasury £081,854 as repayments of the Excess Profits Duty and the Coal Awards. If they had merely laid aside just about one-sixth of the money they got from the Treasury nine months ago, they could quite easily have built those cottages without any guarantee at all. I notice that that particular company, during the last 10 years, has paid, free of all tax, a 20 per cent, dividend.
§ The CHAIRMAN
The hon. Gentleman is going outside the Amendment. I do not say that this might not have been relevant on the Question that the Clause stand part of the Bill, but the particular Amendment now before the Committee is one dealing solely with publicity.
§ The CHAIRMAN
I have said that it would be relevant on the question that the Clause stand part of the Bill. That question will be put separately.
§ Mr. NICHOL
Then I shall leave that point. I really think, however, that these particulars require to be given long
§ before the House is committed, as it apparently is, to giving guarantees to firms that can quit* easily afford the money.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes 139; Noes, 211.2141
|Division No. 24.]||AYES.||[9.34 p.m.|
|Adamson, W. M. (Staff., Cannock)||Henderson, T. (Glasgow)||Pringle, W. M. R.|
|Alexander, A. V. (Sheffield, Hillsbro')||Hill, A.||Richards, R.|
|Attlee, C. R.||Hillary, A. E.||Richardson, R (Houghton-le-Spring)|
|Barker, G. (Monmouth, Abertillery)||Hirst, G. H.||Riley, Ben|
|Barnes, A.||Hodge, Lieut.-Col. J. P. (Preston)||Roberts, Frederick O. (W. Bromwich)|
|Batey, Joseph||Hogge, James Myles||Rose, Frank H.|
|Bonn, Captain Wedgwood (Leith)||Jenkins, W. (Glamorgan, Neath)||Saklatvala, S.|
|Bennett, A. J. (Mansfield)||Jenkins, W. A. (Brecon and Radnor)||Salter, Dr. A.|
|Berkeley, Captain Reginald||John, William (Rhondda, West)||Scrymgeour, E.|
|Bonwick, A.||Johnston, Thomas (Stirling)||Sexton, James|
|Bowerman, Rt. Hon. Charles W.||Jones, J. J. (West Ham, Silvertown)||Shaw, Hon. Alex. (Kilmarnock)|
|Broad, F. A.||Jones, R. T. (Carnarvon)||Shinwell, Emanuel|
|Bromfield, William||Jones, T. I. Mardy (Pontypridd)||Short, Alfred (Wednesbury)|
|Brotherton, J.||Jowett, F. W. (Bradford, East)||Simon, Rt. Hon. Sir John|
|Buchanan, G.||Jowitt, W. A. (The Hartlepools)||Simpson, J. Hope|
|Burgess, S.||Kenyon, Barnet||sitch, Charles H.|
|Burnle, Major J. (Bootle)||Kirkwood, D.||Smith, T. (Pontefract)|
|Buxton, Charles (Accrington)||Lansbury, George||Snell, Harry|
|Buxton, Noel (Norfolk, North)||Lawson, John James||Snowden, Philip|
|Cairns, John||Leach, W.||Spencer, George A. (Broxtowe)|
|Cape, Thomas||Lee, F.||Stephenson, Lieut.-Colonel H. K.|
|Charleton, H. C.||Linfield, F. C.||Stephen, Campbell|
|Clarke, Sir E. C.||Lowth, T.||Stewart, J. (St. Rollox)|
|Clynes, Rt. Hon. John R.||Lunn, William||Sullivan, J,|
|Collins, Pat (Walsall)||MacDonald, J. R. (Aberavon)||Thomas, Brig.-Gen. Sir O (Anglesey)|
|Cowan, D. M. (Scottish Universities)||M'Entee, V. L.||Thorne, G. R. (Wolverhampton, E.)|
|Darbishire, C. W.||McLaren, Andrew||Thorne, W. (West Ham, plaistow)|
|Davies, Rhys John (Westhoughton)||Maclean, Neil (Glasgow, Govan)||Thornton, M.|
|Duncan, C.||March, S.||Tillett, Benjamin|
|Dunnico, H.||Marshall, Sir Arthur H.||Trevelyan, C. P.|
|Edmonds, G.||Martin, F. (Aberd'n & Kinc'dine, E.)||Walsh, Stephen (Lancaster, Ince)|
|Edwards, C. (Monmouth, Bedwellty)||Maxton, James||Warne, G. H.|
|Emlyn-Jones, J. E. (Dorset, N.)||Middleton, G.||Watson, w. M. (Dunfermline)|
|Entwistle, Major C. F.||Millar, J. D.||Watts-Morgan. Lt.-Col. D. (Rhondda)|
|Foot, Isaac||Morel, E. D.||Wedgwood, Colonel Josiah C.|
|Gray, Frank (Oxford)||Morrison, R. C. (Tottenham, N.)||Weir, L. M.|
|Greenall, T.||Mosley, Oswald||Westwood, J.|
|Grenfell, D. R. (Glamorgan)||Muir, John w.||Wheatley. J.|
|Groves, T.||Murnin, H.||White, Charles F. (Derby, Western)|
|Grundy, T. W.||Murray, R. (Renfrew, Western)||Wignall, James|
|Hamilton, Sir R. (Orkney & Shetland)||Newbold, J. T. W.||Williams, David (Swansea, E.)|
|Hancock, John George||Nichol, Robert||Williams, T. (York, Don Valley)|
|Harbord, Arthur||Oliver, George Harold||Wilson, R. J. (Jarrow)|
|Harney, E. A.||Paling, W.||Wood, Major M. M. (Aberdeen, C.)|
|Hay, Captain J. P. (Cathcart)||Phillipps, Vivian||Young, Robert (Lancaster, Newton)|
|Hayday, Arthur||Ponsonby, Arthur|
|Hemmerde, E. G.||Potts, John S.||TELLERS FOR THE AYES.—|
|Mr. Ammon and Mr. Fred Hall.|
|Agg-Gardner, Sir James Tynte||Bird, Sir R. B. (Wolverhampton, W.)||Caine, Gordon Hall|
|Ainsworth, Captain Charles||Blundell, F. N.||Cassels, J. D,|
|Alexander, Col. M. (Southwark)||Sowyer, Capt. G. E. W.||Cayzer, Sir C. (Chester, City)|
|Allen, Lieut.-Col. Sir William James||Brass, Captain W.||Cecil, Rt. Hon Sir Evelyn (Aston)|
|Apsley, Lord||Brassey, Sir Leonard||Chapman, Sir s.|
|Archer-Shee, Lieut.-Colonel Martin||Briggs, Harold||Churchman, Sir Arthur|
|Asquith, Rt. Hon. Herbert Henry||Brown, Brig.-Gen. Clifton (Newbury)||Clarry, Reginald George|
|Astor, J. J. (Kent, Dover)||Brown, J. W. (Middlesbrough, E.)||Clay, Lieut.-Colonel H. H. Spender|
|Astor, Viscountess||Bruford, R.||Clayton, G. C.|
|Baldwin, Rt. Hon. Stanley||Bruton, Sir James||Colfox, Major Wm. Phillips|
|Balfour, George (Hampstead)||Buckley, Lieut.-Colonel A.||Colvin, Brig.-General Richard Beale|
|Banks, Mitchell||Bull, Rt. Hon. Sir William James||Conway, Sir W. Martin|
|Barnett, Major Richard W.||Burn, Col. C. R. (Devon, Torquay)||Courthope, Lieut.-Col. George L.|
|Becker, Harry||Burney, Com. (Middx., Uxbridge)||Craig, Capt. C. C. (Antrim, South)|
|Bellairs, Commander Carlyon W.||Butler, H. M. (Leeds, North)||Cralk, Rt. Hon. Sir Henry|
|Berry, Sir George||Butt, Sir Alfred||Crook, C. W (East Ham, North)|
|Betterton, Henry B.||Button, H. S.||Crooke, J. S. (Deritend)|
|Birchall, Major J. Dearman||Cadogan, Major Edward||Davidson, J. C. C. (Hemel Hempstead)|
|Davidson, Major General Sir J. H.||Hunter-Weston, Lt. Gen. Sir Aylmer||Roberts, Rt. Hon. Sir S. (Ecclesall)|
|Davies, Alfred Thomas (Lincoln)||Hurd, Percy A.||Robertson, J. D. (Islington, W.)|
|Dawson, Sir PhiliP||Hutchison, G. A. C. (Peebles, N.)||Rothschild, Lionel de|
|Doyle, N. Grattan||Hutchison, W. (Kelvingrove)||Roundell, Colonel R. F.|
|Du Pre, Colonel William Baring||Jackson, Lieut.-Colonel Hon. F. S.||Ruggles-Brise, Major E.|
|Edmondson, Major A. J.||James, Lieut.-Colonel Hon. Cuthbert||Russell, William (Bolton)|
|Ednam, Viscount||Jephcott, A. R.||Russell-Wells, Sir Sydney|
|Elliot. Capt. Walter E. (Lanark)||Johnson, Sir L. (Walthamstow, E.)||Rutherford, Sir W. W. (Edge Hill)|
|Elvedon, Viscount||Jones, G. W. H. (Stoke Newington)||Samuel, A. M. (Surrey, Farnham)|
|England, Lieut-Colonel A.||Kennedy, Captain M. S. Nigel||Sanders, Rt. Hon. Sir Robert A.|
|Erskine, Lord (Weston-super-Mare)||King, Captain Henry Douglas||Sanderson, Sir Frank B.|
|Eyres-Monsell, Com. Bolton M.||Lamb, J. Q.||Sandon, Lord|
|Falcon, Captain Michael||Law, Rt. Hon. A. B. (Glasgow, C.)||Sheffield, Sir Berkeley|
|Falle, Major Sir Bertram Godfray||Lloyd-Greame, Rt. Hon. Sir Philip||Shepperson, E. W.|
|Fawkes, Major F. H.||Lorden, John William||Singleton, J. E.|
|Fermor-Hesketh, Major T.||Lorimer, H. D.||Skelton, A. N.|
|Ford, Patrick Johnston||Lort-Williams, J.||Somerville, A. A. (Windsor)|
|Foreman, Sir Henry||Loyd, Arthur Thomas (Abingdon)||Sparkes, H. W.|
|Forestier-Walker, L.||Lumley, L. R.||Stanley, Lord|
|Foxcrott, Captain Charles Talbot||M'Connell, Thomas E.||Steel, Major S. Strang|
|Fremantle, Lieut.-Colonel Francis E.||Macnaghten, Hon. Sir Malcolm||Stewart, Gershom (Wirral)|
|Furness, G. J.||McNeill, Ronald (Kent, Canterbury)||Stott, Lt.-Col. W, H.|
|Galbraith, J. F. W.||Makins, Brigadier-General E.||Strauss, Edward Anthony|
|Ganzoni, Sir John||Margesson, H. D. R.||Stuart, Lord C. Crichton-|
|Garland, C. S.||Milne, J. S. Wardlaw||Sueter, Rear-Admiral Murray Fraser|
|Gates, Percy||Mitchell, W. F. (Saffron Walden)||Sugden, sir Wilfrid H.|
|Gilmour, Lt.-Col. Rt. Hon. Sir John||Mitchell, Sir W. Lane (Streatham)||Sykes, Major-Gen. Sir Frederick H.|
|Gould, James c.||Molson, Major John Eisdale||Terrell, Captain R. (Oxford, Henley)|
|Gray, Harold (Cambridge)||Moore, Major-General Sir Newton J.||Thomson, Luke (Sunderland)|
|Greaves-Lord, Walter||Morelng, Captain Algernon H.||Thomson, F. C. (Aberdeen, South)|
|Greene, Lt.-Col. Sir W. (Hack'y, N.)||Morris, Harold||Thorpe, Captain John Henry|
|Greenwood. William (Stockport)||Morrison, Hugh (Wilts, Salisbury)||Tryon, Rt. Hon. George Clement|
|Grentell, Edward C. (City of London)||Nesbitt, J. C.||Tubbs, S. W.|
|Guinness. Lieut-Col. Hon. W. E.||Newman, Colonel J. R. p, (Finchley)||Wallace, Captain E.|
|Hacking, Captain Douglas H.||Newman, Sir R. H. S. D. L. (Exeter)||Ward, Col. J. (Stoke upon Trent)|
|Halstead, Major D.||Nicholson, Brig.-Gen. J. (Westminster)||Waring, Major Walter|
|Hamilton, Sir George C. (Altrincham)||Norton-Griffiths, Lieut. Col. Sir John||Warner, Sir T. Courtenay T.|
|Hannon, Patrick Joseph Henry||Oman, Sir Charles William C.||Wafts, Dr. T. (Man., Withington)|
|Harvey, Major S. E.||Ormsby-Gore, Hon. William||Wells, S. R.|
|Hawke, John Anthony||Paget, T. G.||Weston, Colonel John Wakefield|
|Hay, Major T. W. (Norfolk, South)||Pease, Rt. Hon. Herbert Pike||Wheler, Col. Granville C. H.|
|Henn, Sir Sydney H.||Pennefather, De Fonblanque||White, Lt.-Col. G. D. (Southport)|
|Hennessy, Major J. R. G.||Penny, Frederick George||Whitla, Sir William|
|Herbert, S. (Scarborough)||Perkins, Colonel E. K.||Winterton, Earl|
|Hiley, Sir Ernest||Peto, Basil E.||Wise, Frederick|
|Hoare, Lieut.-Colonel Sir S. J. G.||Pollock, Rt. Hon. Sir Ernest Murray||Wolmer, Viscount|
|Holbrook, Sir Arthur Richard||Pownall, Lieut.-Colonel Assheton||Wood, Maj. Sir S. Hill-(High Peak)|
|Hood, Sir Joseph||Privett, F. J.||Woodcock, Colonel H. C.|
|Hopkins, John W. W.||Rawson, Lieut.-Com. A. C.||Worthington-Evans, Rt. Hon. Sir L.|
|Horne, Sir R. S. (Glasgow, Hillhead)||Reid, Capt. A. S. C. (Warrington)||Yate, Colonel Sir Charles Edward|
|Howard, Capt D. (Cumberland, N.)||Reid, D. D. (County Down)||Yerburgh, R. D. T.|
|Hudson, Capt A.||Remer, J. R.|
|Hume-Williams, Sir W. Ellis||Richardson, Lt.-Col. Sir P. (Chertsey)||TELLERS FOR THE NOES.—|
|Colonel Gibbs and Major Barnston.|
Question put, and agreed to.
§ Mr BRIGGS
I beg to move, at the end of Sub-section (2), to insert a new Subsection:(3) No 6uch guarantee shall be given under this Section unless the applicants are possessed of assets equal to the amount of the guarantee, and in every case where such guarantee is given the amount guaranteed shall rank as a first charge upon all the assets and property of the company, firm, or individual to whom the guarantee is given in priority to all other charges and incumbrances whatsoever.This Amendment is moved solely to prevent the giving of these guarantees to risky or financially weak enterprises. I am aware of the high standing of the Advisory Committee, and I would not for one moment say a word against their characters; but I do say that I am not prepared to acknowledge that the Advisory Committee are infallible, and while I am not prepared to recognise 2142 that they are infallible I see considerable danger in the increased laxity of control by the Treasury. Let me read one extract from a speech by the Financial Secretary to the Treasury on the Second Reading of the Trade Facilities Bill in 1921, which shows what position was then taken up by the Treasury. He said:At the same time it is recognised—nay, indeed it is claimed—naturally by a Treasury Minister, that in so vital a matter as the pledging of the nation's credit it is impossible that the Treasury should demit ultimate responsibility, and it is impossible that this House should not hold the Treasury responsible to it for its action in such a matter."—[OFFICIAL REPORT, 25th October, 1921: col. 764, Vol. 147.]Then he went on:It will therefore be essential that the Treasury should remain ultimately responsible for the derisions of the Committee, 2143 and that in order to exercise that responsibility it should have power in law to withhold its consent, if need he, to any decision of the Committee."—[OFFICIAL REPORT, 25th October, 1921; col. 764, Vol. 147.]Only six months after he seems to have rather changed or weakened in his view, for in May of this year, speaking on the question of the Grampian Electricity Supply Bill, he said:Into the merits of this Bill I will not venture to go. It is not a matter for me to discuss. From the Treasury point of view it is enough that the Advisory Committee, to whom the consideration of these matters has been delegated under an Act of Parliament, is in favour of the Bill."—[OFFICIAL, REPORT, 23rd May, 1922; col. 1133, Vol. 154.]That means that it was sufficient for the Treasury that the Advisory Committee had come to a decision and that the Treasury were prepared to accept the decision. We are, therefore, in the position of having an Advisory Committee with power to distribute these moneys, £50,000,000 in all, practically uncontrolled by the Treasury. That is in effect what this means. Many examples could be given of the evil consequences of such a position. One of the worst examples that could be given, is that which hon. Members who were in the last House will remember, as the Grampians Electricity Bill. In that case, a company with practically no assets whatever and which had no prospect of any immediate customers, brought a Bill before this House, under which they fully expected to receive a grant of £2,000,000 from the Advisory Committee. I should like to read a paragraph which appeared in the "Financial News" in May, 1922, regarding that Bill. It stated in effect—Sir Robert Home over and over again, during the Committee stage of the Trades Facilities Bill, said applications for guarantee which gave most opportunity of immediate work should have preference. There is no immediate work in this Grampians scheme. It is a great financial risk. Is it right to give a guarantee which turns a speculative adventure into a gilt-edged security.I am not going to pursue the matter. The terms of my Amendment show my intention and my desire. We are all aware of the unwisdom of some of these schemes. We are all prepared to state that we are not willing to have these public monies distributed entirely through the hands of the Advisory Committee, 2144 however excellent that Committee may be, without this House having a single word in the matter. Because of this and because of the risk we are running in giving the Treasury this power, and because also of the fact which perhaps all the Members of the Government themselves are not aware of, that three Members of the present Government voted with me in the Division Lobby last May against the Grampian Bill, I am very hopeful that the Government may see their way to accept the Amendment.
§ Mr. CLYNES
I trust the Committee will not seriously entertain the idea of supporting this Amendment. If it were carried it would, in effect, destroy the Measure. It would take away all discretion from the Committee. It would give support only to those who are able to raise sufficient support in the ordinary financial market. It would so restrict operations as to completely prevent any sort of undertaking from securing the form of State support which this Measure has been designed to secure, for the purpose of finding employment. Private enterprise is being reinforced by this Measure, because there are so many men out of work. The effect of the Amendment would be to drive private enterprise back upon its pre-unemployment resources and to say to it, that if it can raise the money well and good but it is not to get any help from the State. The reason why, in this instance, a Coalition Government or a Conservative Government has extended the State hand of help to private enterprise is because it costs the State so much to keep men idle. I think, on balancing, it will be found that the effect of any State guarantee, either in relation to the payment of the interest or the repayment of loan, is that in the end the State saves money. I should like the President of the Board of Trade to address himself to that point. I suggested to him in my former remarks that the view might be taken that the whole value of the operation of the Act is in the great saving which accrues to the State from their finding work through the agency of these different undertakings. I grant that there may be here and there a case like that mentioned by the Mover of the Amendment, where assistance has been given through, perhaps, an excess of generosity on the part of the Committee 2145 or an unfounded desire to enlarge the opportunities of employment, but that is no reason for completely destroying the Committee's discretion and reducing the Act to a nullity. It would be impossible to extend any effective State aid if we began by saying that no guarantee was to be given unless the applicants were possessed of assets equal to the amount of the guarantee. Any applicants possessed of such assets could easily secure the money in the ordinary private market—even more easily than by coming before the Committee. I hope the Amendment will not be persisted in, or, if it is, that no countenance will be given to it by the Government.
Lieut.-Colonel SPENDER CLAY
I am afraid I cannot follow the argument of the right hon. Gentleman who has just sat down. Does not he realise that the effect of these trade facilities is to enable firms to borrow money a great deal, cheaper than they would be able to borrow it if they were not backed by the State? Therefore, perfectly solvent firms, who may, perhaps, have a considerable overdraft on the bank, are enabled by means of this scheme to borrow money a little cheaper than otherwise. The Amendment proposes that no loans be given unless there are assets equal to the amount of the guarantee. I think it is a perfectly reasonable arrangement, and the proviso is only put in as a safeguard for the State. After all, we do not wish to finance wild cat schemes. It is only a reasonable provision, at any rate, that, the State should have the first call on any assets which may be available. I have the greatest faith in the Gentlemen who have been kind enough to undertake the duties of the Committee. They have given their services voluntarily, and have helped the State in a very unusual manner. Personally, I am no believer in voluntary work. Voluntary work is too apt to be carried out in the way that seems easiest, and at certain times of year, when people wish to go away, they are liable to drop their voluntary work and leave other people to carry on. It is far better from the State point of view, as from the business point of view, that people should be paid. These gentlemen, however, have carried out their work very ably, and I do not think sufficient gratitude has been expressed to them or sufficient recognition given to the services which they have rendered. The Amend- 2146 ment would be of assistance to the Committee. It would at once rule out any companies which might not be solvent, and might have wild cat schemes which would take up a considerable part of the time of these very busy men. With a qualification such as the Amendment put forward such schemes would be ruled out altogether. Therefore, I think there is a great deal of substance in the Amendment, and I sincerely hope the Government will accept it.
§ Sir P. LLOYD-GREAME
I sincerely hope my hon. Friends will not press this Amendment, as I think it would be most unfortunate if they did so. As a matter of fact, where the loans are raised they are raised in almost every case on a mortgage or debenture, and the Committee, to whose sagacity as well as to whose energy both the supporters of the Amendment have paid such a tribute, are really admirable judges of what is a reasonable proposition, and to say that they could recommend no scheme which did not make the loan a first charge upon the assets of the company would actually have ruled out some of the very best schemes we have had. Take the two big railway schemes which have been sanctioned—the big Underground proposal, involving £6,500,000, I think, and the South-Eastern scheme, which one hopes to see pressed on as rapidly as possible, where something like £5,500,000 is involved. Both those schemes are schemes where the security is certainly fully adequate, but where it is not, and could not be, a first general charge upon the assets of the undertakings, and there may be quantities of cases where the security is perfectly good enough, but where, as a matter of fact, there is some first general charge already created. Therefore, I would most sincerely appeal to my hon. Friends not to press the Amendment, but to leave it to the discretion of the Committee.
Let me take another instance. They want to see the development of Imperial trade. You might very well get the case of a railway which we were most anxious to develop in a Colony, which might be opening up a cotton-growing area. In the nature of the case the assets would come into being as the capital was expended and the railway created. It might very well be that in a year or two or in three years that would be a sound revenue-producing proposition, and yet 2147 we should be, under this Amendment, absolutely precluded from helping a scheme of that kind. I therefore appeal most sincerely to my hon. Friends not to persist in their Amendment, as we have got this admirable Committee to administer these schemes.
§ Mr. G. BALFOUR
I waited, before making any remarks in connection with this matter, until I had heard the reply of the President of the Board of Trade, because I am quite sure that all hon. Members have the same object in view, namely, to see the Trade Facilities Act used to the greatest advantage in providing employment and in relieving unemployment, and, secondly, to see that it is not used in any manner which would in any way unduly jeopardise the guarantees given by the Government or the capital represented. The President of the Board of Trade referred to an illustration of a railway which was to be built and developed, and which would probably ultimately he successful, and I am quite sure that such a scheme would rightly be approved by the Kindersley Committee, but on one condition—and I think this is really the anxiety of my hon. Friends in moving the Amendment—and that is that the total amount of money invested in that railway should not be the amount of money under a guarantee given under the terms of this Act. I am quite sure it will satisfy my hon. Friends if the President of the Board of Trade will indicate the opinion of the Government by saying that the intention is that advances shall be made to companies incorporated or registered with an authorised and subscribed capital from other sources, and that they shall only come on the Government for guarantees in respect of capital which has already been subscribed in reasonable proportion to the amount to be provided by the Government. I am sure that that is a right and proper precaution. It is a prudent precaution which should be adopted, and I feel sure the President of the Board of Trade will have no hesitation in saying that that is the opinion of the Government. If he will do so, I shall be satisfied, and so, I think, will my hon. Friends.
§ 10.0 P.M.
§ Sir P. LLOYD-GREAME
I deprecate putting anything into this Bill which would fetter the discretion of the Committee, and, of course, the responsibility 2148 of the Treasury remains, but I may say that in practically every ease that I have looked at exactly that policy has been followed. In the Newfoundland scheme you had a couple, of millions guaranteed by the Government, but a couple of millions were added to that guarantee by the Newfoundland Government. I do not make a positive pronouncement, but I could give many eases which I know have come before the Committee where they have said to the promoters:" We will assist you in this, provided you are able independently to raise some capital to rank after it."
§ Mr. G. BALFOUR
In view of that pronouncement, I think it is very valuable that the Amendment should have been moved, because we have now the pronouncement of the general principle on which they expect the Committee to act, namely, that advances should be made to companies which have already raised a sufficient sum from other sources to be a reasonable security for the guarantee made by the Government.
§ Amendment, by leave, withdrawn.
§ Motion made, and question proposed, "That the Clause stand part of the Bill."
§ Mr. PRINGLE
On a point of Order. I handed in a manuscript Amendment. Am I to understand that it is ruled out of order because it was a manuscript Amendment?
§ The CHAIRMAN
The hon. Member will understand nothing of the kind. The Amendment was ruled out of order, partly because it was barely legible, and partly because it professed to amend some previous Act, and I was not able to construe it as so amending it. I do not say it was out of order, but I did not see fit to select it.
§ Mr. NICHOL
I wish to draw attention to some facts concerning one of the companies whose name appears in the list. 1 pointed out that the Powell-Duffryn Steam Coal Company had a guarantee given to it for £120,000, for both principal and interest, for a period of 30 years, for the erection of cottages. It was used as an argument that the reason for not giving this guarantee to municipalities and local authorities which have power to build such cottages was that they could raise money 2149 on quite suitable terms. I notice, however, that early in this year there was no necessity for this particular company borrowing money at all, either from the Government or from the public on their own security. They had, only a matter of 10 months ago, given to them from the Treasury as repayment of Excess Profits Duty, and as part of the whole award, a total sum of £681,854. I notice that if only one-sixth, or rather more than one-sixth, of that sum had been set aside for the erection of these cottages, there would have been no necessity for borrowing at all or for applying to this Committee for a guarantee. In addition, I venture to suggest that a company of the financial standing of this one is in no need of a guarantee. From the year 1912 to the year 1921, their profits have varied from £236,000 to almost £614,000 in 1920, their best year, and last year they were £335,358 in pocket. I advisedly say "in pocket," because the Chairman's address, which I remember very well, as it was reported in the financial newspapers, was a report which opened the eyes of a very large number of the miners and the working classes generally in Scotland.
If there was one thing that was more noticeable than another in the recent Election, it was the facts surrounding this particular company. The chairman, in his address to the shareholders in March, or thereabouts, pointed out that they had had a very bad year, that their coalpits had been shut for a matter of 2 to 2½ months, and, in addition, the export price for coal had been completely destroyed by the Government's policy on the reparation coal. It is curious how the chairmen of these companies, the friends and supporters of those who are on the opposite benches, so often let the whole cat out of the bag. He pointed out to his shareholders that they had a net loss of £346,496 on the year's working, but he said the shareholders need not worry, they had reclaimed more than twice that out of the Excess Profits Duty and the Coal Award from the Government as a dole—not 15s. a week dole, but one of £681,854, and they would be able to give the shareholders their usual 14¼ per cent. I venture to say that those facts are known throughout the length and breadth of the industrial Midlands of Scotland, and if the Government are looking for some reason for the wiping out of the Con 2150 servatives in the Midlands of Scotland, that single fact was a very potent one during the recent Election.
I notice also that on the 7th March of this year this particular company made an appeal to the country for a debenture stock. On that date they asked for £1,500,000 7 per cent. First Mortgage Debenture stock, and they got the whole subscribed within 15 minutes of the opening of the lists. I suggest that a company of that standing is not a company which needs to come, cap in hand, to a Treasury which is always complaining, and has been complaining for the last four years, that they have no money to give. Such a company should be the last one to come to the Committee and ask for any guarantee. I think there is no necessity either for them to borrow the money. They merely ask for the guarantee for this money to save a very small marginal percentage.
I have another objection. I have an objection in fact to the particular purpose for which this guarantee was given. In my own constituency there are two villages, one in particular, where practically every house is owned by the Calico Printers' Association. It is a case where the house is tied, where the ownership is vested in the employer, where the rent is deducted before any wage is paid on pay day, where there is every petty tyranny, a tyranny which applies not only to the. breadwinner, but to every member of the family, as I have known personally myself, because I lived within half a mile of the village for 25 years.
If any guarantee is to be given for the erection of cottages within this particular area, is there no local authority prepared to tackle this question? Then we would have houses, at least under public control, built by public money or by public guarantees under public control, and in which the householders would have a little freedom, not only of movement, but of thought. I suggest that in that particular instance a very grave injustice has been done by the Committee. If such cases are to come up repeatedly before this House, whether the facts are given beforehand, and the House can settle the question on the merits, or whether the facts come out after the event, and become known to the public—and I think, in 2151 future, they will become better known to the public than in the past—the Government may look out for trouble, not only in this House, but in the country.
§ Mr. SHORT
In the first place, I would like to say that in the course of my speech on the Amendment moved by the right hon. Member for Platting (Mr. Clynes), I made some reference to Messrs. Harland and Wolff, and indicated that I thought they were proposing to spend some portion of the grant on the widening of the dock in the London area. I find the dock is not to be widened in London, or within the London area, but in the neighbourhood of Glasgow. It is incumbent upon me to make that explanation, so that no words of mine may cast any reflection on Messrs. Harland and Wolff on the one hand, or the Port of London Authority on the other.
Reference has been made by the right hon. Gentleman to the grant of some £6,500,000 to the South Eastern and Chatham Railway Company, and also to the grant of £5,000,000 to the Underground Railway Company for various extension work, and in the case of the South Eastern and Chatham Railway for the electrification of suburban lines. We on this side of the House have not hesitated to give a warm and generous support to this Measure. That does not imply that we are satisfied with all the provisions incorporated in the Bill, and I should like to ask, in connection with these grants, what power has the Committee in connection with the regulation of wages and general conditions of labour appertaining to the expenditure of so large a sum out of the public funds for the promotion of the interests of private undertakings? I can conceive that this railway company, after it has electrified its lines, at some later stage of its; existence being in conflict with the members, say, of the National Union of Railwaymen. Having developed their resources and put their organisation, their railway lines and general traffic resources into better condition to make increased profits at the expense of the public funds, they may be in conflict with organised labour over questions of wages and conditions of work. Therefore, we are entitled to ask the right hon. Gentleman whether the fair wages clause will operate in this and in other cases? These are the condi- 2152 tions and particulars which I think we are entitled to receive, and to expect a definite answer in connection with.
I should like to refer to the point raised by the hon. Member below the Gangway, a point which is extremely pertinent, and one of great substance: that is in connection with the profits which are to be made. I myself could never generate enormous enthusiasm for a Bill of this kind, because I believe some of the principles underlying it are defective and unwise; but having regard to the extensive unemployment in our midst, I could not be a party to opposing anything which I thought would promote the welfare of the unfortunate multitude, assist in any way to recover trade, and put industry upon its legs. When I recall that we are going to assist these great private undertakings to the tune of some £50,000,000, so as to put them in a better position to make profits, rind make them out of the exploitation of the needs of the community, we are entitled to ask, what do they propose to do in respect to the profits accruing from the increased business which we hope will follow as a result of the developments?
I am not complaining, and I hope hon. Members opposite will not think that I am complaining, of the guarantees or loan of this money for the purpose under review. As I have said, while we on this side have not hesitated to support the Measure, and shall continue to do so, I do think that when public money is being used—and if I understand it aright in opposition to the opinions of hon. Members opposite, in so far as it may be termed a subsidy to private enterprise—because they do not believe in that—they believe private enterprise should run on its own account and stand upon its own legs—when we are doing what we are, we are entitled to ask the Government to give us some assurances that the general conditions of labour will be satisfactorily maintained, and, further, that there will be some regard to the profits arising from chose extensions in that they may be used in some measure to promote the general interest, and not go altogether into the pockets of the directors and shareholders of the particular companies concerned.
§ Mr. HANNON
My hon. Friend opposite may make his mind easy that these schemes, at all events, those approved and the schemes in contemplation, will 2153 cost the taxpayers of this country nothing at all. Many of these schemes have been receiving expert advice over a long series of years. They have had expended upon them the most careful thought and the most competent advice in the country. The hon. Member opposite must remember that the real reason why the State has been asked to assist these enterprises at the moment is in order to provide, with the least possible loss of time, employment for people who are now without work and the means of subsistence.
What, however, I rise for is to ask the President of the Board of Trade to give us some assurance on two points. Firstly, will he assure the House—and I am quite sure he will have a satisfactory response on this point, but I ask so that it may be placed on record—in respect to all guarantees that are approved under this Bill that a condition will be attached that all contracts must be carried out with British material and British labour? Obviously, British labour will play a very large part in all those contracts. I only mention it for this reason, that I understand one contract has been given to an American firm, and it is not at all unlikely that that firm might introduce into its works some skilled labour from the other side of the water. I should like some assurance, as far as it can possibly be given, that all skilled labour—[HON. MEMBERS: "And unskilled, too!"]—brought into the carrying out of these contracts should be British labour, and all materials should be British materials.
My other point is, what supervision does he propose to introduce to make perfectly sure that the money guaranteed in respect of these gigantic schemes will be expended with the least possible risk to the community and with the greatest possible assurance that it will be employed for the purpose for which it has been guaranteed. I think that there ought to be some expert advice at the disposal of the Treasury apart from the Committee charged with the administration of this Measure so that the Government will be in a position to take care that the money guaranteed should be applied for the purpose intended, and under such supervision as would make their administration for that purpose satisfactory to the mass of the taxpayers of the country.
§ Mr. MARCH
I want to say a word or two about these loans, although a good deal of that which I wished to say in regard to the Port of London Authority has already been said. I wish to refer to the adoption of the schemes relating to local authorities. I was at the Trade Union Congress last September and a very large number of complaints were made there by delegates from all over the country about this Committee turning down the schemes of local authorities, in most cases with the excuse of shortness of money. If that is so, we are keeping on talking and talking and doing nothing, because our schemes have been rejected by this Committee, of which I know nothing. We have heard pretty good references given to it by some hon. Members opposite, who possibly know something about it, and they have the greatest respect for their recommendations.
I certainly think that when local authorities have presented schemes which have been turned down because of the shortness of money many months back, possibly there has been a revival in the money market and there should be some ways and means of those authorities having their schemes reviewed, with the possibility of giving them an opportunity of getting on with what they desired to do. Some of them desire to get on with road work, but it is mostly housing work they wish to do. The borough that I represent is very desirous of getting on with another little housing scheme, and their object is to house the people who are now living in a slum area. We have had an inspection and we have consent to get those people out, but the trouble is where are we going to put them when we get them out? We have no space but this piece of land. This scheme has been before this Committee. Every endeavour has been made by the council to get the Committee to approve it, but the reply has been that money is scarce and that our scheme would prove too expensive. I would like to ask the Minister if there is any possibility now of reviewing that decision and of giving us an opportunity of housing these people. The medical authorities are anxious that the people should be removed from this congested area, and if we get power to do that then under another part of the Act we might proceed to clear the slums and start rebuilding. Surely ways and means can be devised by the Committee to afford 2155 the local authorities a chance of getting on with works which they desire to proceed with. We are anxious in our district to relieve the ratepayers of the burdens now imposed on them, and therefore we are anxious to get facilities to proceed with the proposed schemes.
Judging from the speeches we have heard to-night, the old saying, "Unto him that hath shall be given" is going to prevail. Unfortunately we in our district are "the" Have nots." We have only the poor people whom other people do not desire to have. At the best of times in our district we have 25 per cent, of casual employment. Now we are living in abnormal times and we have a very large number dependent on the dole, as the Press which represent the other side describe it, ignoring the fact that it is unemployment benefit for which the men have contributed. Many men cannot get even that because of the casual nature of their employment and consequently they are driven to the Board of Guardians for assistance to keep body and soul together. These men desire work, and when they come down to this House to see someone from whom they hope to extract a promise they cannot be seen, they are sent away and go naturally in a bad temper. Before that temper finds vent in other directions we are anxious that the Government should do something in the way of finding work for them by sanctioning schemes which, in the opinion of the local authorities, are suitable and reasonable and calculated to benefit the district. Therefore, I hope that the remarks I have made will give the Minister an opportunity of saying whether there is a possibility of reviewing some of these cases which were turned down some months ago.
§ Mr. PRINGLE
The criticism which has been offered, not only at the present stage, but at earlier stages of this Bill, indicates that there is not much general satisfaction with the anomalous method of administering the Act, namely, by a Committee of the Board of Trade. Here is a Committee with tremendous powers, which it exercises unchecked. It is true that it is for the purpose of conferring an advantage upon the unemployed, but, while it can confer an advantage on the unemployed, it can also make the fortunes of many private individuals, 2156 and it is a strange anomaly that the list of successful applications under the Act during the past year shows that the benefits have been practically monopolised by profiteers, by speculators, and by railway companies. Examples have already been given, and I have no desire to take up the time of the Committee by repeating what has been already said, but I will mention in particular the Powell Duffryn Company, which has been already referred to at considerable length without any attempt being made to meet the criticism that has been offered in regard to it. There are also the railway companies. The House gave powers to increase railway rates, but what was the object of giving those powers?
§ Mr. PRINGLE
I can understand the desire of the hon. Gentleman to interrupt the proceedings, but I can assure him I was not referring to him as a profiteer. [Interruption.] I was aware of that, but I was simply wanting to prevent him from thinking there was any personal allusion in my speech. I was pointing out that more than a year ago Parliament allowed the railway companies to increase their charges, mainly for the purpose of enabling them to raise capital for extensions and developments. In the case, particularly, of the Underground, which is the largest beneficiary under this Act, a special Act was passed to enable them to increase the charges upon the workers of London, so that they would be able to do what they are getting special facilities for doing under this Act, without any help at all. It is a very strange thing that, Parliament having intervened to enable them for the first time to pay a dividend on their ordinary shares, the Government should again come to their rescue and. by giving this guarantee, enable them to increase the profits of the shareholders. This is doing more than was intended when that power was given to the Committee, There is another reason why I believe that these powers should not be given to railway companies. When these railway extensions are being made, an enormously increased value is given to the land, and I am surprised that no protest is made here when, not only by private enterprise, 2157 but by private enterprise subsidised by the public, this increase in the value of the land is being created, and no charge is being made upon that increase. The right hon. Gentleman laughs. I have here the Second Report of the Committee of the Ministry of Reconstruction, which deals with the law and practice in relation to the acquisition and valuation of land, and on page 17 of that Report I find the following recommendation. I may mention that the late Solicitor-General was the Chairman of that Committee. Here is the precise recommendation at which the President of the Board of Trade laughs:The case of the railway companies is typical. It must he admitted that railways have the most essential means of encouraging and promoting industry and development, but during recent years new railway enterprise in this country has been dwindling almost to the point of stagnation For the year 1914 there were 111 Private Bills deposited in Parliament, of which only two were for new railways of any length, whereas, as recently as 1899, 270 Bills were deposited, of which 57 were railway Bills proposing new works. The cause of this stagnation is stated to be financial, and we are assured that if the companies could secure some portion of the value created by their undertakings they would need no further incentive to initiate extensions and thus stimulate industrial development.There is a way to do it without making any charge upon the public, without any guarantee from the State at all. Take the extension which has gone out to North London. There has 'been an enormous increase in the value of land because of that contemplated development, and neither the railway company nor the public are allowed to benefit from it. If either the one or the other were allowed to benefit, the guarantee would be unnecessary. I take the recommendations:We think there is great force in this argument and as the consideration of many undertakings of public utility is delegated by the State to private promoters we think the principle of betterment, applicable in the case of undertakings promoted by the State or by local authorities, should also be applicable in the case of private undertakings authorised in the public interest.I hope the right hon. Gentleman will not show such a superior attitude to proposals to which his colleagues have given their support. This was part of the great policy of reconstruction of the late Government, and the President of the 2158 Board of Trade has shown sufficient elasticity to be a devoted member of both Governments. His adaptability has led to his promotion, and in these circumstances he need not show such a superior and such a contemptuous attitude to recommendations of former colleagues.
There is another case I should like to deal with. There is the point of more money for shareholders, to which the hon. Member for Mansfield (Mr. A, J. Bennett) referred. I think most hon. Members in the House were delighted to hear that admirable speech, and many who remember his predecessor, the late Sir Arthur Markham, will be glad to see chat his shoes are filled by such a capable successor. He referred to the limitation of profits. Directions should have been given to this Committee to see that where such a guarantee was given there was a limitation of profits and also safeguards as to the working conditions of the men employed, but you have this Committee without any direction at all from this House. I do not believe there has ever been a Committee created with such powers, to which such an unlimited discretion has been granted before. But there is also the case of Harland and Wolff. This is a case of subsidising a growing shipbuilding trust. I do not think it is in the public interest. It is a menace. It is a misfortune that all the smaller ship-repairing firms on the Thames should be squeezed out by Harland and Wolff. Every man in East London who is an engineer or is in the shipbuilding trade is at the mercy of Harland and Wolff. He is tied body and soul to Harland and Wolff.
§ Mr. PRINGLE
All I have to say in reference to the hon. Member's statement is, first, that it is not true—
§ Mr. PRINGLE
I happen to know some of them also. Secondly, if it were true I would not care. I think my hon. Friend knows me well enough to know that in the past I have not been afraid to criticise Liberals, and that I was quite willing to criticise Governments when Labour Members would not. That can be borne out. In the meantime, I am concerned with this menace of a shipbuilding trust, 2159 which the Government is helping to create, and which it should be our duty, no matter to what party we belong, to do our best to combat and prevent. It was on these grounds that it was my desire to move an Amendment giving directions to this Committee and preventing them doing things of this kind. Unfortunately, owing to the illegibility of my writing, and owing to the authority of the Chair, I was unable to move such an Amendment, but I am content now that I am able to make this protest.
§ Mr. J. JONES
I am neither a Free Trader nor a Protectionist. I am a social democrat—a Socialist in economics, and a democrat in politics. The people of the country have decided upon a policy, and a Government have been selected—the present Government have not been selected; if they had, they would not have been here—and we are now discussing the question how to meet an immediate difficulty. It has been decided by those in authority, although they may not be as authoritative as they should be, that they will subsidise private enterprise, without guarantees to the public. It is very nice on the part of Members of the Government, and those who support them, to recommend that private companies should be subsidised at the expense of the State, but those of us who are members of local authorities find that we cannot get subsidies at the expense of the State. Circulars have been issued to us asking us to propose schemes to provide useful work for the people. I come from a district where we have 25,000 men out of work. Nearly all these men are going every week to our Board of Guardians, and we are paying out at the rate of £26,000 a week unemployment relief, not merely for the purpose of finding relief for destitute people, according to the Poor Law, but to find relief for men who otherwise ought to be at work, and we are asked by the Government, by circular, to provide work schemes. The Government is continuous. There is an apostolic succession. Eight hon. and hon. Members are on the Treasury Bench by accident, but they cannot get away from the fact that they supported the policy of those who went before them. We received circulars asking us to provide schemes for our own district to try to find relief or work for the unemployed, and we have sent schemes up. What has happened? 2160 Nearly all the schemes have been turned down. If it is good enough to subsidise railway companies, why cannot the Government subsidise local authorities? They will not do it. They tell us that we cannot employ men except under certain conditions. They tell us that if we put men on work useful and necessary for the public service, we can only pay them 75 per cent, of the union rate of wages. The result has been that we have had to hand over to contractors work which ought to have been done by public authorities. Perhaps that is another subsidy to private enterprise as against a public authority.
Down in the East End of London we are not getting the amount of money that we ought to get. Under this Bill we are going to be left out of these schemes. The question of Harland and Wolff does not matter. We are going to be wolved. We want a great scheme of reconstruction in the East End of London. We have proposed it but have not the means of carrying it out. The Port of London Authority is going to spend £15,000,000 on improvements on the Thames, north and south, but I happen to be a member of a local authority whose roads lead to the Victoria and Albert Docks, probably the most important docks in Great Britain at the present time, and while millions of money are being spent on railway and dock accommodation we cannot get a penny to improve the roadways leading to the docks. We have had to borrow £1,000,000 during the last 18 months to give our people doles, and if we could provide them with work we should be able to carry out necessary improvements. I have tried, to put this ease many times. I am not an expert but we could find work for large numbers of men who are now drawing relief from the guardians and doles from the Labour Exchanges, if money were available to carry out useful work.
Those of us who sit for East London constituencies are fed up with this continuous talk of sympathy. We do not want your sympathy. We want reason and justice, and we are not to be satisfied until we get them. We are prepared to support this, not because we like it, but because we cannot help it. We have got to take medicine sometimes, because there is no other way out of our difficulty in the immediate circumstances. In our district we have proposed six 2161 schemes, four large and two small. The two small ones have been accepted and the four large ones rejected. Why? In whose interests? They would enable us to put thousands of men to work. Our rates are 25s. 8d. in the £. They are high because of our low rateable value. Though our rates are high, they are lower than Westminster in comparison with the rateable value of the two districts. People who live in Westminster make their money in West Ham. What is the use then of asking us for schemes of employment, when you subsidise railways and shipping companies and refuse to subsidise us?
We are working in the public interests. They are not to be blamed for working in their own interests. I give them credit for it. They are class conscious; our people are not. They know where to put their bread. They cast their bread upon the waters, and it will return to them a thousandfold. We do not know on which side of our bread the butter is, because we have no butter; it is nearly all margarine. I wish to know if, when the Government are going to subsidise people, they will give us an undertaking that they will subsidise the local authorities as generously as they are prepared to subsidise private companies? If they will do so, we will guarantee to find them sufficient schemes to provide work for at least half the people out of employment. Let the Government give us the same guarantee as they are now giving under this Bill to the people who are privately interested. All we say is this: "We are willing to co-operate with you, but we want a fair deal—we do not want private enterprise, so called—private enterprise has very often been recognised as public robbery, and we are not going to submit to it. In the East End of London, to-day, any number of schemes are in the hands of the local authorities. They have been sent up here and rejected. Therefore, we ask the Government if they are prepared to give us equal consideration with the private companies, whose interest they seem so well able to protect?
§ Sir P. LLOYD-GREAME
The hon. Member who has just sat down has said that he regarded this Bill as medicine which he proposed to take. I think he will find it a satisfactory tonic. Another 2162 hon. Member challenged one of the schemes which have been put forward because a guarantee had been given to the Powell Duffryn Company in order to build houses. He said that it had something to do with the defeat of some Conservative or other candidates in Scotland. Whatever be the reason of the defeate any candidates may have sustained in Scotland, I am perfectly certain that it was not due to the fact that the Government had enabled a number of houses to be built. As regards housing schemes which are brought before the Committee, both in respect of those which they accept and of those which they reject, the principle that the Committee must decide each case upon its merits must apply.
§ Sir P. LLOYD-GREAME
Those are matters which the Committee must decide. Certainly, I am sure this Bill would never have got through the House if that discretion had not been given to the Committee. There may be cases for doing an utterly uneconomical thing, but if you are considering them on that basis it has to be proposed as a specific thing. If you are going to have a great subsidised housing scheme, that has to be defended upon its merits.
Another point was raised as to the inclusion of too many conditions. One hon. Member said that we ought not to have given the guarantee to the two railway companies, which, in the case of one of them, has meant about 20,000 people being put into work, without requiring from them some security that they would never fall foul of the railway trade union. I sincerely hope that harmony may prevail on the railways for many years, but I do think that it would have been an unfortunate step to introduce a guarantee of that kind.
§ Sir P. LLOYD-GREAME
I will tell the hon. and gallant Gentleman why not. If you are going to hedge round every 2163 one of these schemes with one hundred and one conditions, you will not get a single one of those schemes through. Every practical man realises that to the full, and the last people who would put it forward are those who speak in the interests of the railway men, who know very well how to look after those interests. As to the local authorities, I have already said that they are to be treated in exactly the same way. As to a point raised by one of my hon. Friends, I have said that in many cases the Advisory Committee, no doubt, would require ordinary capital in front of their debentures. That, of course, does not apply to local authorities, which have the security of the rates. I can conceive other cases where the security in itself was good, and it would not be necessary to raise ordinary capital as a first security. I have not ruled out cases of that kind. There was only one other point with which I need deal, and that is the natural anxiety that where this guarantee is given British labour and material should be employed to the fullest possible extent. I agree entirely with that suggestion. As a matter of fact, in all contracts a provision is inserted:That all plant, machinery and materials required in connection with the said works shall be purchased in Great Britain at the lowest price (ceteris paribus) on a competitive basis under contracts requiring the contractors to certify on their own behalf and on behalf of their sub-contractors that the plant, machinery or materials to be supplied under such contract will be wholly of British manufacture, and the company shall enforce such stipulations and report to the Treasury any modification of or failure to give any such certificate.
§ Mr. LANSBURY
You can put in a provision regarding foreign materials and labour, but not one about fair trade union wages.
§ Sir P. LLOYD-GREAME
What is the object of this Bill 1 Surely its object is to create employment. Does the hon. Member suggest that it is not wise to 2164 insist on British labour and British material?
§ Mr. LANSBURY
That is not the point I raised. It is a provision regarding the wages paid that we want to have inserted.
§ Sir P. LLOYD-GREAME
Is the hon. Member carrying his principles of free importation so far that he would allow this foreign material to come in? [Interruption.]
§ Mr. LANSBURY
Is the right hon. Gentleman entitled to put into our mouths words that we never used?
§ The DEPUTY-CHAIRMAN
If the hon. Member does not agree with what was stated, he has the right to speak afterwards, and to contradict anything that has been said. It does not do any good to interrupt.
§ 11.0 P.M
§ Sir P. LLOYD-GREAME
I was just going to say—as soon as I could get a chance—that I do nor, want to misrepresent the lion. Member for Bow and Bromley (Mr. Lansbury). We had a discussion on one of the Clauses, at an early hour of the morning, and I think the hon. Member will remember that I tried to see how far we could meet the cases he had in mind. When there are interruptions flying to and fro, in the manner of an election meeting, one is a little apt to answer in the manner of an election meeting. I believe we have all got exactly the same object in view—to get as much employment as possible. That is the object which the hon. Member and I have at heart, and though it may be we differ in many ways, we can on this matter decide on taking a practical step on which we are both agreed. We have had a very full discussion on this matter. [HON. MEMBERS: "Withdraw!"]
§ Sir P. LLOYD-GREAME
We have had a very full discussion, as I think my hon. Friend the Leader of the Labour party will agree. We discussed this particular proposal on the Financial Resolution, and I do not believe there is any real desiie to continue the discussion now, and for the general convenience I ask that the Clause be now accepted.
§ Mr. MacDONALD
I do not propose to stand between the Committee and its decision for more than a moment, but I think it my duty to enter a caveat against the interpretation which my right hon. Friend the President of the Board of Trade put upon an interruption from this side of the House. I quite agree there was a great deal of noise going on when the interruption was made, but the right hon. Gentleman was quite wrong in stating that the gist of the interruption—the meaning of the interruption—was this, that my hon. Friend the Member for Bow and Bromley (Mr. Lansbury) desired to remove the condition of the contract quoted by the right hon. Gentleman. Quite the contrary. Whether that be sound policy or not under normal conditions, all my hon. Friend wished to impress on the right hon. Gentleman was, that if he put in one set of conditions, why should he not put in two? If he requires that contracts must be completed by British labour, why may he not also say that the pay given to British labour shall be at a fair rate? I only venture to rise so that immediately after the right hon. Gentleman's speech the records of the House may give a full explanation of what the interruption amounted to.
§ Lieut.-Commander KENWORTHY
I propose to put one question, and I shall be very brief. It is a practical question, affecting a large part of the country, including my own constituency, and that is my excuse for putting it at this late hour. A municipality like that represented by the hon. Member for Silvertown (Mr. J. Jones;) can bring forward comparatively small schemes for work for the unemployed within its own borders, and they are dealt with on their merits, but there are certain schemes really of national importance, which are nobody's business, and which many people think this would be a very suitable time to undertake. Sixty years ago a Bill was introduced into this House for the purpose of constructing a tunnel under the estuary of 2166 the Humber in order to join the City of Hull, with its 300,000 inhabitants, with the people of Lincolnshire, with its 500,000 inhabitants, and, incidentally, to shorten the communications between the East of Yorkshire and the South of England. It passed this House, and in another place it was thrown out only by the casting vote of the Chairman. When it passed this House, the inhabitants of Hull were very elated. They had bonfires in the streets, and there were great local rejoicings. That is a very big scheme, representing no engineering difficulties, and it does not affect the City of Hull alone, but it affects really the whole country. Such a scheme can hardly be brought forward by the local governing body. The railway companies will not touch it. They have their own vested interests and their line round by Goole, and it really is a matter that can be undertaken only by the nation as a whole. My complaint is that in certain eases of this sort schemes will not be initiated by the Committee. What I want to ask the right hon. Gentleman, or the Prime Minister, as he is being consulted, is what is the procedure for getting a scheme of this sort brought forward. Should a deputation come from the Lord Mayor and Corporation of the City of Hull? I have approached the Government on this matter, and they have said they are favourable to this scheme, but, so far, they have not had any proposal put before them. Whose business is it to put forward a proposal? That is what I would like to ask the right hon. Gentleman, and I do not ask of my own initiative, but at the request of the Lord Mayor of the City, and I think, in spite of the lateness of the hour, I am entitled to a reply to a very reasonable question.
§ The PRIME MINISTER
Since the hon. and gallant Member has appealed to me, it seems to me that the simplest method would be for the hon. and gallant Member, as the representative of the City, to get up a company and then come and ask the Committee for assistance.
§ Lieut. - Commander KENWORTHY
The Prime Minister has not quite got the point, which is rather an important point. It is not my business as a Member representing the City to start companies. They are started for profit-making. These schemes are not primarily for profit-making, in the words of the Government them- 2167 selves, but to provide employment, and this scheme will have the advantage of improving communication, and thus benefiting the whole community. Now, may I have a serious reply? The amounts we are paying in unemployment benefit would go far towards making this tunnel and really improving the communications between the South of England and the East Coast, which is important.
§ The PRIME MINISTER
I did give, I thought, a reasonable reply, because it is not necessary that a company should be formed to make a profit. Many companies are formed for other purposes. I had the feeling that it was the general desire not to have any discussion beyond what is actually necessary, and I am afraid I rather encouraged more discussion by my own interruption.