§ Motion made, and Question proposed,
§ "That a Supplementary sum, not exceeding £601,200, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade and Subordinate Departments, including certain Services arising out of the War and Grants in Aid."
§ Sir W. MITCHELL-THOMSON
Unlike the Vote which the Committee has just passed, I think this is a matter which deserves some statement from the Minister in charge. I am not very fond of statements from the Treasury Bench in opening Estimates. I have too much of the old Adam of opposition perhaps left in me, because I think it is a good general rule that the time of the Estimates is the time for the Opposition and not for the Government. Still, I think it is desirable that I should try and do what I can to facilitate discussion on this Estimate by putting the Committee, so far as I can do so, in possession of the relevant facts. I would suggest to you, Mr. Chairman, that that would seem to be a convenient and proper course, because, although this is not in technical form a new service—and indeed it has already been to some small extent the subject of discussion in the House—there has not been any occasion to go very far into the subjects represented in this Vote. Although a statement by way of opening would perhaps be more appropriate to the main Estimate than to a Supplementary Estimate., I think under all the circumstances it would be more convenient that I should say what I can now, and therefore I hope, Mr. Chairman, you will see your way perhaps to allow a little more latitude in the discussion of this Vote than would ordinarily be the case on a Supplementary Estimate, of course on the understanding that, unless there are some new facts between now and the presentation of the main Estimates; I should not desire on that occasion to go into the question again at any great length.
If that be the view of the Committee, I will try as shortly as I can—I am afraid I shall have to make some little demands on the Committee—to put the facts before them. The Committee will appreciate that this is an Estimate for 1811 £601,200, being the estimated balance of the expenditure over revenue in respect of certain contracts entered into between His Majesty's Government and the Australian Zinc Producers Proprietary Association, Limited, a body which comprises practically all the producing companies of this class of mining product in Australia, and which was founded at the instance of, and in consequence of, negotiations with the Australian Federal Government. The questions to which I want to address myself are shortly these: What is the present financial position? What are the future prospects? What is the reaction of the contracts, if any, on the zinc mining industry of this country? How did the contracts come to be made, and why were they made? I think the Committee will appreciate that these are the salient questions, and I will try as far as I can to give the Committee some information with regard to them.
Let me first answer, by way of anticipation, what I think would be a very natural inquiry for any Member of the Committee to address to the Government with regard to this particular Estimate. If I were seeing the Estimate for the first time, and criticising it, I should certainly say to the Government, "Why is there a Supplementary Estimate at all? Why was not this foreseen and provided for in the main Estimate?" At first sight, I am free to confess that seems quite unanswerable, but, like many other questions of a similar nature, it really does admit of a very simple answer when the facts are known, and the facts are these. The Committee will appreciate that these are contracts to take and pay for certain mining products produced in Australia. At the time when the main Estimate was presented, there had been in Australia for many months a very bitter industrial dispute, which had resulted in the complete cessation of all production in this particular industry. It was, therefore, quite impossible at the time the Estimate was prepared and presented to say whether production was going to be resumed at all during the financial year, or, if resumed, at what date it was going to be resumed. It was, therefore, quite impossible to suggest to Parliament any particular sum by way of a Vote under this particular head. Production has since been resumed, and it has accordingly become necessary to ask, as we are now 1812 asking, Parliament for the necessary Supplementary Estimate for the carrying out and the fulfilment of these particular contracts.
Let me come to the question of what are the contracts. But, before I arrive at that point, perhaps I may be allowed to say one word about the general position of the world's zinc industry. I hope the Committee will not think I am attempting to lecture on this point. I am not, and I am only saying what I propose to say on the general position, because I have found from experience, when I had to go into these things, that you could not attempt to deal with the details of the particular problem until you had a sort of general idea in your head. Therefore, perhaps I may be excused if I say something about the general position. Zinc made from spelter, which is derived from crude ore, after a process of concentration, is in peace time normally used for various processes in the galvanising trades, and in the manufacture of brass, and the British pre-War consumption of spelter was 200,000 tons a year. Of that 200,000 tons, 55,000 tons were actually produced by a process of smelting in this country, and of that 55,000 tons so produced here, only a minute fraction came from ore mined in British mines. Very little came from Australian-mined ore. It was practically all derived from ore imported from Southern Europe. That accounted for 55,000 tons out of our total spelter requirements of 200,000 tons. The balance of 145,000 tons came almost entirely from Germany and from Belgium, and the greater part of the Belgian production, or, at all events, a substantial part of the Belgian production, was under the control of German financial interests. Those German interests derived the ore, from which they smelted the spelter, which they subsequently exported from Germany and Belgium, from Australia, and they derived it by virtue of a series of long-term contracts, which they had in Australia, under which they had acquired practically the whole of the Australian output.
So much for the position on this side of the Atlantic. On the other side of the Atlantic, the United States was, and is still, a very large, and always has been a very large, producer of spelter, but America really enters very little into the picture, because the American production 1813 was entirely derived from American domestic ores, and, when produced, very little of that production was afterwards exported at all from that country, and I think I am right in saying that none of it was ever sold in the European market. The total production and consumption for the world's requirements in 1913 was 977,000 tons. With that in mind, I would invite the attention of the Committee to the contracts themselves. I need not go into the technical details. The Committee will find that the essential facts of the contracts have already been admirably summarised in the Geddes Committee's Second Report. It is on page 10, paragraph 6:An agreement was concluded in 1917 as regards concentrates and speller with the Zinc Producers' Proprietary Association (Limited), Australia. This agreement operates until the 30th June, 1930, and is divided into three periods as under:
- 1. From the 1st January, 1918, to the 30th June, 1921.
- 2. From the 1st July, 1921, to the 30th June, 1925.
- 3. From the 1st July, 1925, to the 30th June, 1930.The annual quantity of concentrates the Government may be required to take is fixed by the agreement at 250,000 tons per annum in the first period, and 300,000 tons per annum for the second and third periods. The prices are fixed for the first two periods, and a formula laid down for regulating prices in the third period. There is also an agreement giving the Zinc Producers' Association the right to 'put' 45,000 tons of spelter annually with the Government at ruling market price.That, as I say, summarises the essential facts, with one significant exception. The Committee will see that the Geddes Report makes no mention either of purchase or of selling prices, and I am going to ask the Committee, for reasons which I will give, and which, I think, on reflection, will be obvious, to allow me, while giving them all the information I can, to practise similar reticence with regard to the purchase and sale figures. It has been my fortune to have, I suppose, during the past few years, as much to do, and probably more to do, with the conduct of Government trading than possibly any other single individual, and I say frankly and at once that the more Government trading I have had to conduct, the more I dislike Government trading. In saying that, I must not be thought to be casting any reflection—nothing is further from my mind—upon 1814 the position of the Civil Service. Regarding the civil servant as a trader, the marvel to me always is, not that he does not do it better than he does, but that, with all his handicaps, he does so well. It is sometimes said: "Oh, the civil servant in Government trading is careless, because it is not his own money he is handling." I think that is a very undeserved imputation on the Civil Service.
§ 8.0 P. M.
§ Sir W. MITCHELL-THOMSON
No. My point is this. The real trouble about Government trading is not that the civil servant is careless, but that the civil servant gets to be too careful. Of all the qualities that make for success in business, certainly amongst some of the foremost are intelligence and knowledge to be able to compute the size of commercial risks, courage to take commercial risks, and promptitude to decide when you ought to take them. The first of these qualities is the derivative of experience which the civil servant, in the nature of things, cannot have. It is quite true he can and does call for expert aid, and he does have expert aid given of the very best probably, and freely-given by public spirited men. But second-hand knowledge can never be a substitute for first-hand knowledge. In regard to the second and third of these qualities, the very fact that a man is handling not his own money in his own business, but somebody elses money, makes him slower than otherwise he would be to take risks. In respect to promptitude it is certainly not stimulated by the tradition and the routine of the public service. After a Departmental decision has been taken it has to be submitted to the review and approval of a very vigilant but very overworked Treasury, and time—and precious time—is lost in doing that. That is one real handicap—and the great handicap in Government trading, and it is enough in all conscience—but if to that handicap there is to be super-added an additional handicap, if the unfortunate individual who has got to undertake that trading—and in regard to this particular instance so long as these contracts exist he is forced to go on in Government trading—if in addition to the handicap 1815 to which I have referred he is also compelled to deal with buyers who have been made aware not only of the price at which he bought, but at which he has to sell—I tell the Committee quite frankly that even an approximation to the business results becomes impossible. That being so, I hope the Committee will allow me to practice some reticence in regard to the purchase and sale of these things.
Respecting the stock position, I can give that substantially up to date, and literally within the last few hours, and it is as follows:—Concentrates and slimes in hand at the moment, 786,092 tons, and of spelter 2,286 tons. This is not a very satisfactory stock to have to hold with the world's markets in their present position, because without going any further into the question of purchase and sales prices I can say this: At the present level of world prices they represent prices below those in which the stock stands in the Government books. The actual results of the profit and loss trading account up to date have not been quite so bad as perhaps the Committee might be at first sight led to fear. I am dealing with round figures because, of course, trading accounts are made up year by year to 31st March; therefore I can only deal more or less with round figures. Roughly speaking, the losses on concentrates up to the present date have been £500,000, and the losses on spelter have been £2,200. These figures are not quite so bad as they appear, because, following the practice, which I think is right, the general rule is—though it cannot always be followed—the Trading Accounts and the Profit and Loss Account ought to carry charges—where there are charges—for insurance and for interest on the money advanced. Taking into account those charges, there is a counter-figure in the case of the concentrates against the £500,000 gross loss of £350,000 increase in the Insurance Account, thus reducing the actual outlay to £150,000. In the case of the spelter, with the £2,200 loss, there is a counter-entry of £7,800 on the Interest Account, making a small balance on the right side of £4,700. So much in regard to the present.
What about the future? Frankly, in this matter I am not an optimist. Nobody would be with a stock of this sort, and the world's market in its present condition and the commitments and the 1816 handicap as I have stated. But in view of the extract and summary which I have read from the Geddes Report anybody who said he was an optimistic in that position would be a fool, but pessimism, I am quite sure, would be as bad. I do not think the position is quite so bad as the Geddes Report suggests. I think that Report is unduly black. I quote these words:The extent of the loss cannot at present be estimated—that is quite clear—but it is almost certain to run into several millions.That may or may not turn out to be the case. No man can say at the present moment; but I do say, with some feeling—and I hope the Committee will sympathise with that feeling—that it is a little hard on the unfortunate hawker who is pushing his barrow up and down the world in an attempt to sell his wares to have it proclaimed that these things are not all that they might be. It does make the situation a little difficult. The Geddes Report, I think, paints the prospect in little darker colours than it deserves, and I will tell the Committee why I think so. I told the Committee a short time ago that the world's production and consumption of spelter in 1913 was 977,000 tons. The production last year, as near as I can estimate, was 600,000 tons. Never since the Armistice has the production been over 700,000 tons, or at all events, not substantially lower. If you set those figures against the annual pre-War requirements of 977,000 tons the Committee will see that there does appear to be a certain hole to be filled up, and there does appear to be scope for a rise in demand on prices. That is why I say I think there is a prospect of appreciation; but beyond that, as I say, any forecast as to the future must be a pure matter of speculation.
Let me now come to a point which I know some hon. Members have very much at heart, and the effect, if any, that these contracts have in regard to the general position of the zinc industry in this country. I should like to say at once on that that I have the greatest sympathy and with the industry, but when my hon. Friend the Member for the Forest of Dean (Mr. Wignall) suggests, as he suggested the other day during the Debate on the Address—if I understood him 1817 aright—that the involved state of the industry, and perhaps its total collapse, is due to the existence of these Australian contracts, I feel bound to try and give the Committee some reasons why that is not a fair deduction to be drawn. I am afraid what I am going to say may sound, on the face of it, rather brutal, but I hope my hon. Friend will not think that what. I say is from any lack of sympathy on my part. What I am trying to do is to state facts. It is no use shutting our eyes to these facts. The facts are these: I told the Committee at the outset of my observations that the spelter made from ores formed only a very minute fraction of the total amount of zinc ores raised in Great Britain in 1913. This was 17,300 tons. Of that 11,200 tons were raised by a Belgian company and exported for their own purposes to Belgium. Therefore that did not enter into the total of British requirements. That leaves 6,100 tons or ore, which is really equivalent to something a little over 2,000 tons of spelter produced from ore mined in Great Britain—2,000 tons against a total British requirement of 200,000 tons.
§ Sir W. MITCHELL-THOMSON
I do not want to be led into a controversy, and perhaps my hon. Friend will make his point later when I will do my best to reply, or my right hon. Friend the President of the Board of Trade. I am now dealing with the statement made as to the production from British ores of spelter. I was saying it was only a minute fraction, in point of fact, it was a hundredth part of the total. That production was 6,100 tons, and it came from 20 different mines. The Committee will therefore see that production in this country is very scanty. In consequence the ore is not to be expected to be in form, in character, or composition as it might be; that was always one of the great troubles which the mining industry in zinc had to contend against before the War in dealing with its contracts here.
The real trouble at the present moment is that the industry cannot afford to produce ore in this country at the present level of world prices. We are asked under these circumstances, seeing it is only a small part of British ore, "Will you not buy it? Will not the Government buy it at the Australian price "—Whatever that may 1818 be—"and add the price of the freightage from Australia?" It was with real regret that the Government found themselves obliged to decline that particular suggestion. They had to, because in the first place the proposition was really economically unsound; in the second place—and perhaps this is worse—even if it had been sound it would not have been effective. It is unsound because—I overheard my hon. Friend opposite murmur the suggestion and it was precisely the point to which I was coming—it would be economically unsound because it would be in fact the payment of a concealed subsidy to these industries without the knowledge or without the approval of Parliament by purchasing their products which we do not actually require. It would not only be unsound, but it would be ineffective, because on the figures submitted to us, at the present cost of production, even if we were to purchase at the Australian price plus the freight, the industry in order to live would still require a further subsidy. I am afraid I must say—and I say it with great regret—that for this small struggling industry the outlook at the present level of world prices is gloomy. If the industry is to live at the present level of world's prices the House of Commons must say frankly, "We intend to pay this industry a subsidy." Unless they do that the industry cannot exist, and the existence or non-existence of these Australian contracts does not alter this essential fact.
Why were these contracts made, and why were they made in the form of long term contracts? Those who have read the Geddes Report dealing with these particular transactions will have seen that these contracts date back a good number of years to what I may call the middle ages of the War. The contract of 23rd April, 1917, and subsequent contracts had their origin in discussions which took place at a very much earlier date, and the first trace I have been able to discover of reference to it was on 20th April, 1915, when the then Colonial Secretary, now Viscount Harcourt, referred in this House to discussions with the Australian Government, but they did not become really active until the summer of 1919, when negotiations were opened up with the Ministers responsible in this country. The chief Ministers of this country who dealt with these negotiations were the Colonial Secretary, the 1819 Chancellor of the Exchequer, and the President of the Board of Trade, the Member for Central Glasgow (Mr. Bonar Law), Mr. McKenna, and Mr. Runciman. Those negotiations proceeded during the summer of 1916.
I am not well informed as to the precise course of the discussion, but the outcome of it was an agreed policy, under which, before Mr. Hughes returned home, an agreement was arrived at which was the subject of a correspondence as to technical details with Australia, and it was finally concluded on 23rd April, 1917, and these, with the extension and Amendment of April, 1918, are the contracts with which we are now dealing. Although I am not informed with regard to the details of those discussions, I think we can infer enough to reply to two questions which may very legitimately be asked. In the first place, was due regard paid to the question of price, and, in the second place, was it reasonable to make a long-term contract I think the Ministers responsible could put up a good defence on both points. With regard to price, let the Committee for a moment remember that at that time prices were practically double what they are now for spelter, and it was not reasonable at that time to expect men to anticipate the enormous drop to which I have referred, and which I have illustrated by figures. If any set of Ministers could have been expected to apply commercial minds to anticipating that drop in consumption, I am certain those Gentlemen would rank very high with hon. Members in every section of the House. I do not think it was reasonable to anticipate that drop in consumption. Nobody anticipated it; in fact, every anticipation was the other way, and it was expected that you would have a larger and a sustained demand for these products after the Armistice.
§ Sir W. MITCHELL-THOMSON
They were the then Colonial Secretary, the President of the Board of Trade, and the Chancellor of the Exchequer, these offices being held by the Member for the Central Division of Glasgow (Mr. Bonar Law), Mr. McKenna, and Mr. Runciman. The negotiations took place in 1916 with Mr. 1820 Hughes. It is quite easy, I know, to find fault with what people anticipated in 1916 or 1917, but there are men who fell into precisely a similar error in 1919 and 1920. Therefore, I do not think it is altogether reasonable to say that a drop in consumption such as that that has taken place can have been fairly anticipated by those responsible for this contract, whether in 1916 or 1917. Let the Committee reflect for a moment on the history of these matters. Remember that the Australian people had realised with disgust and dismay that their little industry had fallen into the clutches of German capitalists. This is what Mr. Hughes said in the Federal House of Parliament on 10th December, 1914:Shortly stated, the facts show beyond all question that German capital and German influence exercising a monopoly of the base metal industry of the civilised world; that this monopoly is for all practical purposes so complete as to exclude effective competition; that it covers the whole sphere of the industry, limiting output, controlling markets, determining the channels of distribution, and fixing prices;…that peace holds out no prospects satisfatory or even tolerable to British and Australian interests since it would but revive that complete domination of the industry by German influence, which insures the building up of German instead of British and Australian interests.It is with feelings like that in their minds that the Australian Parliament cut away from this strangle-hold. Raving done that they asked us to assist them to stabilise the industry in the way we have tried to do. Was that a request we could lightly refuse? Could it lightly be refused by men who a few days before had put their hands to the Economic Resolutions at Paris? What were those Resolutions? They were:
- (1)" The Allies declare themselves agreed to conserve for the Allied countries, before all others, their natural resources during the whole period of commercial, industrial, agricultural, and maritime reconstruction, and for this purpose they undertake to establish special arrangements to facilitate the interchange of these resources."
- (2)" The Allies decide to take the necessary steps without delay to render themselves independent of enemy countries in so far as regards raw materials and manufactured articles essential to the normal development of their economic activities."
§ Sir W. MITCHELL-THOMSON
We have it on the authority of the right hon. 1821 Member for Paisley (Mr. Asquith) that the Resolutions were drafted by Mr. Runciman in July, 1915. These contracts are a legacy to the present administration. Under the old Roman law we might have got over the difficulty by renouncing the administration of them, but unfortunately we cannot do so; we can only promise the House that we will do all we can with such commercial aid as we can obtain, to produce the best results for the British Exchequer. That promise, so far as I am concerned, and so far as my right hon. Friend the President of the Board of Trade is concerned, we gladly and freely give to the Committee.
§ Sir W. PEARCE
The Minister has correctly described the situation which induced the Government to enter into these contracts, and it is true that the basis of the industry was held by the Germans up to the time of the War. We persuaded the Australian Government to get rid of their contracts with the Germans, and the Government must have felt some obligation to help the Australians in a very difficult position. But I do not remember that the House was ever advised that such a large transaction was going through. I dare say many things happened during the War, but for a long contract of 13 years to be entered into without the House of Commons being consulted is an extra-ordinary proposition. I believe officials of the Board of Trade and other Departments who had part in the negotiations had warning signals held out to them. There was a Departmental Committee sitting in 1916–17, to which these contracts had to be referred. I was a member of that Committee, and I remember full well that the Government officials had pointed out to them the extra-ordinary consequences that these contracts might carry, and the difficulty of operating with such very large quantities of raw material. I believe it was considered possible for the raw material to be brought to this country and worked here, and that may have been part of the original scheme. I hope that whatever trouble the Government may be in now, they will not try to get out of it by attempting to bring the raw materials to this country to be treated here. The opinion I formed at the time was that the best chance of an economic solution was to do the work 1822 in Australia and to produce the zinc itself on the spot. Ever since I have considered this subject, I am more and more convinced that that is the proper course. The zinc industry passed through quite an extraordinary phase during the War, and for war purposes the development of production in the United States of America was enormous. There was a large production of zinc and it is now impossible to get rid of it. I confess I am rather inclined to agree with the Geddes Report that a very heavy loss is likely to face the Government over these particular contracts. I do not know that there is any way of getting out of them. I should strongly advise the Government, if they can, to cut their losses at the present time. Is it not possible for Australian interests which have already begun to develop the industry, to take over the contracts. I hope the Government will not jump out of the frying pan into the fire by seeking to carry on a complicated industrial operation, of which they cannot have full knowledge. All I can say is that this transaction shows the danger of the Governments taking up propositions of this kind without full knowledge. There are all sorts of snags to be met with in the development of a large property like this. It is only people who have been in the industry all their lives who can reckon up all the factors likely to come in. It is a warning to Ministers that Government operations really must be circumscribed. It is almost certain when a Government takes up a complicated problem like this that disaster will ensue. I rather gather that the Government, in the face of their experience, have arrived at the same conclusion. My object in rising was to admit, as most Members who were in the House at the time will admit, that during the War period the Government had to make an arrangement of some sort, but in making one extending over 13 years, I think they must have been over-persuaded by Mr. Hughes. Having made it, however, I hope they will not enter into any further arrangements making themselves responsible for operations which will involve the bringing of the ores to this country and their treatment here.
§ Mr. BETTERTON
As I was Chairman of the Board of Trade Departmental Committee which dealt with the question of non-ferrous mining, I should like to 1823 say a few words on this question. No doubt my hon. Friend the Member for the Forest of Dean (Mr. Wignall), who was also a member of the Committee, will correct me if I, quite inadvertently, give a wrong impression of the conclusions which we formed. I want, if I may be allowed, to tell the House what in my opinion is the extent of the obligation and responsibility in which these Australian contracts involve this country. I do not think that has been explained by the Parliamentary Secretary or that the hon. Gentleman has given a quite adequate idea of the immense liabilities in which we are involved. The second point to which I desire to refer is this. Beyond any doubt, in spite of what my hon. Friend said, the existence and operation of these contracts has had a most disastrous effect on the zinc-mining industry of this country. My hon. Friend has, I confess, put Some of us in a difficulty when he asked us to be reticent as to the price. I am unwilling to suggest any sum, but I can only say that the price has been stated, and never denied, in every mining paper in the country, and therefore I think I am justified in saying that at this very moment these concentrates—I may remark that, while my hon. Friend has been speaking in terms of metal, I prefer to speak in terms of concentrates, and for this purpose it may be taken, quite rightly, that 22 tons of concentrates go to a ton of metal—at this very moment these concentrates are on offer, and some of them have been purchased in Swansea, at a price which is approximately 75s. per ton. Quite obviously, and without going into details, that involves this country in an immense loss.
Moreover, soon after these contracts were entered into, the Government, realising that the total smelting capacity of this country was, at the outside, 170,000 tons, while they had entered into contracts binding them to take a quantity rising from 250,000 to 300,000 tons, realised that in any circumstances, even if the smelting capacity of the country were used to the utmost, it would be. insufficient. Then they set up works at Avonmouth, on which they spent, I believe, some £500,000. Those works, so far as I know, have never smelted a single ounce of concentrates, and I think —the hon. Member for the Forest of 1824 Dean will correct me if I am wrong—that at this moment they are derelict. Therefore, whatever loss we may have made or may make in the future, that £500,000 which was thrown away at Avonmouth must be added to the liability which these contracts have oust us. In spite of what my hon. Friend says, I have not the slightest hesitation, having regard to all the circumstances, of which I am fully aware, in describing these contracts as both reckless and improvident. To-night we are dealing with a Supplementary Estimate for £600,000, and I should like to ask the Parliamentary Secretary or the President of the Board of Trade how many tons of concentrates are represented by that £600,000. My reason for asking that question is this: As the Parliamentary Secretary said, there has been a great strike in Australia, which only finished some 10 months ago. The tot al production in Australia during the last year, according to figures which I have before me, was about 166,000 tons. During the first part of the year the three principal mines in Australia were not working at all. One of them only began to produce in July, another in September, and another not till December. The output from Australia before the War was 500,000 tons. I put it to the Committee that, with the security of these contracts behind them, their output of last year, which was only 166,000 tons, will enormously increase, and that next, year, in all human probability, it will be at least 300,000 tons, which we are under contract to take. If that be so, and if on an output of only 166,000 tons we have to pay something like £600,000, I think it is only fair to warn the Committee that very likely next year we shall have to meet an Estimate for something like double that amount. That is precisely what the Geddes Report said, namely, that the liability would be likely to run into millions.
I should like to make one or two observations in confirmation of what the Parliamentary Secretary said as to the position in Australia at the beginning of the War. It is true that in 1914 the whole Australian output of base metals, which was valued at something like £13,000,000 a year, was in the hands of a German group, of which the three principal partners were Aaron Hirsch and Sohn, Beer-Sondheimer, and the Metallgesellschaft. 1825 They operated through a company with an English name, the Australian Metal Company, which, however, was in fact a German company. The effect was to tie up the whole output of spelter in Australia in 1014, with the result that the price which we had to pay for spelter in a very few months went up from about £22 or £23 per ton almost to £120—certainly well over £100. The Australian producers, as my hon. Friend very truly said, were bound by long-term contracts to the Germans. Some of those contracts provided that in case of war they should be annulled, and in other cases they were to be merely suspended, and the length of the war was to be added on at the end of the contract. I think it may quite well be that, when the Enemy Contracts Annulment Act was passed, those interested in the industry in Australia said, "You have deprived us of our certain market after the War, and we look to you to provide us with another one"; but in spite of that. I fail and always have failed to see, and I am sure the Geddes Committee failed to see, why it was necessary, in the first place, to embark on this contract for no less than 10 years after the termination of the War, while, secondly, it was certain, having regard to the very limited smelting capacity of this country, that, even in the most favourable circumstances, an immense stock of concentrates would be thrown on our hands.
I should also like to say a word or two upon the effect of these contracts on the producers in this country. I thought that the Parliamentary Secretary was hardly as sympathetic towards them as he might have been. He taunted them that they were unable to compete at the market price, but what is the use of talking about a market price when that market price has been artificially depressed by subsidised production? It is futile to talk of a market price, in such circumstances. When my hon. Friend said that they were unable anyhow, whatever happened to compete, the argument would appear to be that, having subsidised the Australian producer and having subsidised this Swansea Smelting Company—because that is really what it amounts to, having regard to the selling price of the concentrates to them—the only person to be left out is the home producer. After all, this is a home industry which 1826 has been going on for 60 or 70 years at least—I do not know how much longer—
§ Mr. BETTERTON
My hon. and gallant Friend says since the Roman times. I have figures for the last 60 years, and that will be sufficient for my purpose. This industry, in which a great deal of capital has been sunk, found employment for a considerable number of men, who lived in isolated and mountainous and remote districts in England and Scotland, and now—very largely, as I am convinced, in consequence of this Australian contract—employers and employed are alike involved in common ruin. This estimate of £600,000, which represents the loss presumably for the year on these contracts, is the measure of the subsidy. From it you may gather the injury which you are inflicting on the producers in this country. What industry in the world can stand against subsidised competition such as those figures indicate? It is perfectly hopeless to contend that any industry can stand against such subsidised competition as that. From the moment that contract was signed, in the view of the Committee over which I presided it was highly probable—and events have proved that we were right—that the contract would be most dangerous to the producers in this country, but the moment the Government began to sell at a price far below the cost price the ruin of the industry in this country became inevitable. It is perfectly true that in relation to the Australian output the output in this country is small. The Parliamentary Secretary gave the figures, which entirely confirm the figures which I have. But the fact that it is small is no reason why it should be destroyed by subsidised competition. Those are the problems which the Committee had to consider, and it appeared to us that, having regard to the immense amount covered by these. contracts, secondly to the long term of the contracts—10 years after the termination of the War, thirdly to the accumulation in Australia, which was then great and is now greater, in the next place to the insufficient smelting capacity here, which under the most favourable circumstances could not have dealt with anything like all the concentrates we could buy, and in the last place to the fact that before the 1827 War Germany took these concentrates from Australia and they did not come to this country at all, there was only one possible way of saving this industry, and having regard to the fact that the Australian output had been secured for 10 years at a certain price we felt that, unless the industry in this country was put upon the same footing, neither better nor worse than the industry in Australia, any other course would be discriminating against our own producers in favour of Australia, and looking back and knowing what I know now, I am absolutely convinced that that is the only reasonable, just and equitable thing to do.
One of the expert witnesses whom we examined, Sir Cecil Budd, who was adviser to the Ministry of Munitions during the War, one of the best-known experts in base metals in this country, entirely agreed with this suggestion which we made to him. I put the question to him quite definitely: "Having regard to the fact that the Government have bought this very large output and having regard to the small amount of our production as compared with the Australian production, do you think it would be fair to ask the Government to purchase the English output in the same way as they purchased the Australian output and on the same footing?" His answer was: "Yes, I think that would be perfectly fair." That view he repeated many times, and in this view that we formed we were fortified by his opinion. The Parliamentary Secretary held up his hands in horror at the thought of subsidies. So do I, but you have subsidised Australia for ten years, and if you treat the English producer as you treat the Australian what you are doing is not giving a subsidy but performing an act of reparation. We are putting him back to where he would have been, as near as you can, if these contracts had never been entered into. I cannot withhold my tribute of admiration of the courage, the patience and the dignity with which all those engaged in this non-ferrous mining industry in this country, whether as employer or employed, have faced this unparalleled situation, and it is difficult to remain unmoved when one observes the pathetic hope that even now the Government will do something to alleviate the calamities which have overtaken them. Trade conditions will improve sooner or 1828 later, but when that time comes those engaged in this industry will be the unhappy spectators of a revival of industry in which they can take no part and no share because their mines will be waterlogged, they will have fallen in and will have been abandoned, and all this very largely in consequence of a contract entered into by their own Government which has had the result of the subsidizing of an Australian industry.
§ Mr. WIGNALL
I beg to move to reduce the Vote by £100.
I want to read two or three words from what everyone is talking about—the Geddes Report. The Parliamentary Secretary read parts of it, but left out some other parts. He said:We are not familiar with the reasons for entering into this long-term agreement. The extent of the loss cannot at present be estimated, but it is almost certain to run into several millions.That has been the position of all of us until to-night. We have tried to get the reason. We were trying for eight months, when you set up the Non-Ferrous Mines Committee. We had your experts before that Committee, your representatives, and we sent special requests for information, but it was all a locked secret. We were never able to get the information. We did not hear as much then as we have heard to-night. That was the thing that was troubling us on the Non-Ferrous Mines Committee during most of the time we sat. After our eight-months session of inquiries, and visits to the various mining centres, we could have added the same summary to our Report that has been made by the Geddes Committee:We are not familiar with the reasons for entering into this long-term agreement.Was not this contract made before the strike began at the Broken Hill Mines? For two years, or thereabouts, the strike continued, and if you required the concentrates, and if they were needed according to the terms of the contract in 1917, you could not get delivery from the mines, because the strike was on, and it continued. If there were dumps there, as there undoubtedly would be, you are receiving supplies at the present time of tailings and middlings, and the waste product of the mine—you had no means of transport then. Your limited shipping could not convey the concentrates to this 1829 country, if you wanted them. Therefore, it was a very easy matter for you to have cancelled your contract, because of the non-fulfilment on the other side, through the strike and the inability to fulfil it. The concentrates were required for the manufacture of spelter; but during the War period spelter was not being used with the galvanising process of sheets. Black sheets were manufactured and they were painted instead of being coated with spelter. Then some composition was invented. Talk about stinking gas, it does not compare with the composition which was used for covering the black sheet. Spelter was not used at that time, and as there was not a great demand for spelter, the galvanising works in this country were closed down during at least two-thirds of the War period, and long beyond that.
9.0 P. m.
To sum up, the Government made a mighty bad bargain. We are willing to make allowances for the War atmosphere. Apparently, somebody got into a panic, and they thought that the price would be maintained after the War. The Parliamentary Secretary of the Board of Trade eulogised them as being clever commercial men. I would not mind taking on their job. They were not very far-seeing. They did not touch the pulse of the market. They did not understand the possibilities involved in it. Consequently, the Government is landed into a great loss, and the taxpayers have to foot the bill. I believe that the Geddes Report underestimates the loss. The hon. Member who represents the Board of Trade thought that their Report was rather exaggerated, and that the reference to a loss of millions ought not to have been made.
§ Sir W. MITCHELL-THOMSON
The Geddes Committee said that the extent of the loss cannot at present be estimated, and I said that that was quite clear. With reference to their statement that the loss would almost certainly run to several millions, I said that that might or might not turn out to be the case, but that no man could say at the present time.
§ Mr. WIGNALL
If we could get the whole history of the transaction in cold figures, I believe that the loss would prove to be millions already. This matter has never been submitted to the House. I 1830 have been a Member since 1918, and I have never heard anything about it. I have looked up the Board of Trade Estimates for the last year or two, and I have found no reference to the matter, and I have spoken to hon. Members who were Members of this House before the last General Election, and they have never heard anything about the matter. We have all failed to get the information that has been so sadly needed. We have been told that this was a contract with the Germans. No doubt that is right. The Germans had control of the market. They had control of the whole output of the mines. Is it not a fact that the German contract price for zinc concentrates was 40s. per ton, pre-war, plus cost of transport? Is it not a fact that the contract which the Government entered into was to accept the production of the Australian mines up to 250,000 tons per annum, the first 100,000 tons at £4 10s. per ton f.o.b. plus transport, and the second 150,000 tons at £4 per ton f.o.b. plus transport, with the option to take any excess at £4 per ton plus cost of transport? You do not want any more of it. You are quite content with the burden you have on your shoulders. The lowest cost under the Government contract is exactly double the contract price in pre-War times in the German markets. If you obtain that you have got to continue to pay £4 a on up to the 30th June, 1930. I do not know whether I am right or wrong, because you have not even to-night laid the actual contract upon the Table. We do not know who signed it or what its contents are. I have been searching about for information haphazard. I am giving you this information. Probably you will reply with a number of contradictions presently, but these are the statements which I have been able to obtain, and I believe that they are correct. To whom have you been selling these concentrates? You have not been selling them to the British people.
§ Mr. WIGNALL
I hope you will pardon me. I will make amends for that. I will not commit myself a second time. I should like to ask, Sir Edwin, to whom have you been selling the concentrates? 1831 [Laughter.] It is worth while doing this to make some of these people laugh. It stirs them up and gives them a little bit of joy in life. To whom have the Government been selling the concentrates that they have been compelled to accept? They cannot say that they have been selling the concentrates to British spelter makers, because the spelter trade has been closed down for the last two years. Not a furnace has been lit, not a pound of spelter has been manufactured, and consequently the Government have had to accept deliveries of these hundreds of thousands of tons of concentrates coming from Australia, and they have had no place to put them except by paying storage for them either in Australia or in this country. It is only within the last few months that the Government have entered into a contract with the Welsh works. I am not blaming them for that. If they have got to make a loss they might as well cut the loss by giving employment in the home industry and enabling the English spelter works to continue. To that extent I am in agreement with them, but that is only a small portion of the whole.
What have the Government done with all the other hundreds of thousands of tons that have been delivered to them? Have they been selling to other countries, selling to Belgium or France or selling to Germany through the other countries? We have a right to know. We do know this, that while our spelter works are closed down spelter has been coming into this country. Has this spelter been made out of the Australian concentrates that should have been delivered in this country and has been diverted to Belgium, Germany or France and is now coming back? That is the way to make Germany pay. I am not irritated so much at this though it is irritating to find the Government making such a bad bargain, but my greatest irritation is that the bad bargain of the Government has displaced all the workers in the British lead and zinc mines. In speaking of the number of mines working, you did not take into consideration the lead produced and you must work out the blende to produce the lead. You have got to take the two together and you have got to realise its actual value and what it means, and, though this amount of which you have spoken is small, it represents, when the mines are fully employed, 1832 practically 5,000 men employed. So you have got to add to your loss the loss of capital in the mine, the loss of profit arising out of the working of the mines, and the loss of work to at least 5,000 people who might have been and could be employed in the British mines at the present time.
Then there is the £500,000 which the Government gave for that monument that exists at Avonmouth. Is it not a fact that the Government also advanced another £500,000 to put up spelter plant in Australia? Was that a loan? If a loan, has it been repaid? Was it a gift? If not, what form did it take? If it has been erected, is the plant working and are we receiving the metal from these mines? There is tragedy in these things. I know that, no matter what we say, it is impossible for the Government to cancel their contract with Australia because they have tried to do that and have failed, and the private people interested in these Australian mines will hold you fast to the letter of your contract. Although we have not seen it they have got it all right, and they know that they have got you tied hard and fast until 1930 and they will hold you tight to your £4 for delivery of the hundreds of thousands of tons. You have got 700,000 tons of concentrates on the dock sides in Port Pirie to-day. I suppose that it must be about 1,000,000 tons by this time because it has been accumulating every day. You have got at least 780,000 tons on your own estimate lying there for transport to this country. It costs a lot of money to let it lie there. It costs more to bring it over here, and when you get it over you have got to sell it to other countries, and you have got to sell it at a lower price, than you have paid, because you cannot include in the price the subsidy which you have given.
Having come to the conclusion that it would be impossible to break the contract, I would not ask you even to try to make terms with them or to buy them out. That would not help us a hit. I would not ask you to appeal to them for the sake of British industries to cancel your contract. Very well then, if we fail there, if there is no hope in that direction, why cannot you accept the lesser of the two evils and take over on the same price the output of the British mines, as recommended by the experts who were called before us, and by the unanimous 1833 decision of the Non-Ferrous Mines Committee. You say yourselves that it is only 6,000 tons, but every spelter maker will tell you, through Sir Edwin Cornwall—
§ The DEPUTY-CHAIRMAN
The hon. Member will recollect I said he was to address me, but it is not for me to tell the Government what to do.
§ Mr. WIGNALL
I want to tell the Government through you, Sir, that every spelter maker will tell you, and by "you" I mean the Government, the responsible representatives of the Government here, that the British ore is absolutely necessary for them to produce good metal. A mixture of the British ores with the Australian concentrates means a better metal and cheaper production. Through the Deputy-Chairman I say to the Government that it will pay them to enable the British mines to continue their operations. It should be done if it were for that purpose alone. You say it only means 6,000 tons, and that it is a very small proportion for the needs of the moment, but every 100 tons of blende that is raised represents about 70 miners employed, and that is worth considering. The amount of the subsidy you would have to give is a small fragment compared to the mighty subsidy you are already giving to the Australian mine-owners. If you cannot get your contract cancelled or annulled or terminated in some other way, then think of those who are unemployed and who have been unemployed. Think of the dreary future before these miners. Think of those who have been brought up to that business and who, when trade was bright, had the chance of getting to other industries, but to-day find every door shut against them. They are unemployed with a very bad outlook of remaining unemployed. By the time this contract terminates, every mine in the United Kingdom will become derelict and absolutely ruined beyond redemption. That is a monument to bad management if you like. That is business ability and business foresight.
§ Mr. WIGNALL
No, I am not too generous. I am bound to give them credit for making a bad bargain. As I have said, every mine will become derelict and flooded, capital will be lost and labour destroyed beyond the possibility of redemption. Before it is too late, before it is impossible to recover, I implore the Government through you, Sir Edwin, to take steps at the last to save these British mines from utter extinction.
Sir C. LOWTHER
I rise with great diffidence to speak after such experts as the hon. Member for Rushcliffe (Mr. Betterton) and the hon. Member for the Forest of Dean (Mr. Wignall), and also with a great deal of diffidence, because this is the first time I have had the honour of addressing this Parliament. I can assure the Committee that, whatever other faults I may have, I will never trouble them by being too long either on this or on any other subject. I do not wish to go into the question of the original contract. I look on that as a War matter, and we have got to write off our bad contracts against our good contracts. I have no intention of climbing into the genealogical tree of this contract to chop at its branches nor of attacking Gentlemen now on the Treasury Bench for contracts made long before they occupied that dignified position. Rather am I interested to know how best we can get rid of the bad effects of this contract on our industry. I am perfectly certain that if the Government had been able to get out of this contract they would have done so, and I think it is justifiable to assume that they have made every effort in that direction.
Speaking for a constituency where there are a very considerable number of lead and zinc miners, I feel particularly interested and it is for those men in my constituency that I am now speaking. They are most seriously affected, as owing to the incidence of the Government contract, every lead and zinc mine in my constituency is closed and the men are out of work. Now, lead miners are not easily transported labour. They live up on the hillsides and in out of the way places. Supposing that the coal mining industry of Cumberland were in a flourishing position, a certain number of them might find employment there, but that unfortunately is not the case. A number of our coal mines are among the poorest 1835 and they will he the last to come into production. They have plenty of unemployed of their own to deal with, without being called on to absorb these unfortunate men thrown out of work by the shutting down of the lead and zinc industry. There is another point. The men working in the mines are thrown out of work, but these mines of which I am speaking are not big concerns—I do not think any of the lead mines in this country are very large concerns—and all the shareholders are local people who have put their savings into them. It may be said that they have speculated, but they put their savings into local lead mines which have been running for a very long time. I took the liberty just now of correcting an hon. Member about one which has been running since the Roman days and the shareholders looked upon it as a good steady investment. These local shareholders are now deprived of a large portion of their income and that again produces unemployment because they are able to employ fewer people locally and are able to consume less. So there is not only the direct unemployment, but the indirect unemployment.
This Government contract is one of long duration and the thing we have to look forward to is to keep these mines alive until brighter times come and the Government contract falls in. The maintenance of idle mines during long periods is a very costly matter. The people who have lost a great portion of their income, and indeed of their capital, are not in a position to go on putting up money year after year for the maintenance of idle mines. The result of that will be that in a short or a long period, according to the special circumstances of each mine, these mines will fall in and will become derelict and useless. The Government contract will not have caused temporary unemployment but permanent unemployment, and the killing of a small but a very worthy little industry. Furthermore, if the zinc trade is killed, a thing which the zinc concentrates contract is doing, then the home lead mining industry will be killed also. There are very, few mines in this country where the zinc is separable from the lead. The lead and zinc are worked together, and very often the little amount made on the zinc represents the profits of the mine, the lead representing the working expenses. 1836 Already these lead mines have gone out of operation and—I speak subject to correction—I believe that we are buying lead from abroad instead of working our own lead at home.
The only equitable course seems to be to include the home mines in the provisions of the Australian contract. We shall be told that that is subsidising an industry, and the usual capital will be made of that expression; but that is not quite just. Already we are subsidising an industry, not in this country, but in one of the Dominions. If we are doing that already, what harm can there be in extending it by a finger's breadth in order to save a good many men from unemployment in this country? We have sat in this House for many hours working out grandiose schemes or lesser schemes to try to deal with unemployment. Surely, here and now we have, for the expenditure of a very small sum, an arrangement by which we can give immediate employment to men who are immediately ready to go to work in mines which they know, under owners and supervisors whom they know, which mines are already in existence. It is not speculative or conjectural work; it is something we know can be got working to-morrow if once the owners and managers know that they are going to be able to get a decent price for the ore which they produce. The amount will be very small; the obligations of the State, if it were to buy ore on the terms recommended by the Departmental Committee, would be very small. The payment to the home mines for the next five years, I am given to understand, would not amount to the total subsidy now being paid to the four great Australian mines in one month. The present Australian output is, roughly, about 250,000 tons. Our production in the third year from now is estimated at 3,000 tons, or an increase of 1.2 per cent.
That is not very much to ask for. If better times come, if trade revives, then the amount which the Government are losing on the contract w ill be less, and the amount lost on this trfling proportion will equally be less. The cost to the country will be very small indeed. Indirectly, I consider that the cost will be less to the Government, than it is now through out-of-work donation, through poor relief, and, incidentally, through work being done extremely indifferently 1837 by unemployed men working at a job which they do not know. The home production is very small compared with that of the Australian mines, but it represents a very long-standing industry in this country, which is absolutely threatened with extinction at the present moment. I am glad to endorse the statement made by the hon. Member for the Forest of Dean (Mr. Wignall), that the addition of British ore to the Australian ores in the smelting process gives a result which is better than that produced from the pure Australian ores, and can at the same time he produced at a more favourable price. I beg to press the President of the Board of Trade to include the home mines in the provisions of the Australian contract for the purchase of sine concentrates. That is not subsidising an industry, but is a small act of reparation which is perhaps going to save a very modest and very hard-working industry.
§ Colonel P. WILLIAMS
I think we can divide the question into two parts. The first part was the policy of controlling the spelter trade. Everybody who is connected with the spelter trade before the War broke out knew perfectly well that it was in German hands. The German control limited the quantity of spelter that any firm in this country could buy, and it limited the time over which it would sell; the result being that, on the outbreak of war, the whole of the galvanising works of this country found themselves either denuded of their stock of spelter or with an insufficient stock to carry on for more than a very short time. It was apparent that the Government had to take some steps to safeguard the position and to prevent the zinc trade from getting back into German hands. Therefore the policy adopted by the Government of the day was a perfectly sound one. Unfortunately, the contract which had been made with the Australian zinc producers was an exceptionally bad one for this country. I believe that the Government have got an exceedingly bad contract, but I cannot agree with my hon. Friend the Member for the Forest of Dean (Mr. Wignall) that they should add to their commitments by taking on another exceedingly bad contract with the home producers. I regret very much that the home mines are stopped, but I do not think you ought to call on the British taxpayer to 1838 take over another load of responsibility in order to keep them going.
The Government ought very seriously to consider how they are going to deal with this contract. Are they going to bring the concentrates over to this country, and thereby incur very heavy charges for transport? I understand—I speak subject to correction—that the contract price is somewhere about £4 a ton, and that the cost of bringing the ore over to this country is another £4 10s., making a total cost of something about £9 a ton delivered in this country. What commitments have the Government got in regard to transport to this country? Have they booked freight very far in advance Have they long-dated contracts for the conveyance of the ore at excessive prices considering the market value of freight to-day, or are they fairly clear? Would not the right policy for the Government to adopt be to cut their loss? They have got 250,000 tons of concentrates to take per year. Had they not better sell them in Australia, to those who will buy them, to the ordinary trade, and say: "The loss was so much, that was our insurance for controlling the supply?" Let them sell on short-dated contracts, in order that they may be quite certain that if the necessity arises again they will still control an entirely adequate supply of this metal for our own uses.
I am quite certain that the way in which any private firm would have dealt with a contract of this sort, if they could not get accommodation from the seller, would have been to have cut their loss and to minimise it as far as possible. They would not have attempted to bring the ore over to this country and thus incur heavy charges for so doing, or have run the risk of making further large losses in transit, for charges in commissions, and so on. I should like to emphasise what my hon. Friend said about the Avonmouth works. We have heard of that disastrous experiment; but there is an Australian experiment. What are the terms of that contract, and the terms upon which money has been invested in Australia? Is it possible for the Government to recover that amount of money? These are matters which the Government ought to clear up. I do not blame them at all for controlling the zinc trade. I think they did quite right, that that policy ought to be continued, and that they should take care that they keep 1839 that trade in their hands. At the same time, they should apply ordinary business methods to their contracts, and should take care that the next contract is not disastrous.
No one who knows anything about the fell-sides of the North Country in which these mines are situated, or has seen the scattered homes of those who world in them, but must sympathise in the greatest possible degree with them in the conditions in which the policy we are now discussing has placed them; but they are to be congratulated on having found in the hon. and gallant Member for Penrith (Sir C. Lowther) someone who has very ably championed their cause. The hon. and gallant Gentleman has proved to the House that he is the possessor of a heart very closely associated with the district of these people. The charge against the Government is a three-fold charge. First, that they made a bad bargain; second, that that bargain has resulted, and will result, in a very considerable burden upon the taxpayer; and, third, that the result of that bargain is to produce a state of unemployment in this country and to risk very valuable national property, the lead mines that exist here. The Government's answer, as I understood it from the Minister who presented the Vote, is, first, that the bargain is not theirs, that it was made by their predecessors; second, that it is not so bad a bargain as it seems; and, third, that the results which are deplored have not arisen from the bargain. That seems a fairly full and complete answer, but upon examination it can be shown that there are some flaws in it.
After having said what I have said about the speech of the hon. and gallant Member for Penrith, I am sorry that I am obliged to climb up the genealogical tree and to chatter in the branches. My hon. and gallant Friend seemed to be up the trunk, and I do not like to leave him in that solitary position. The question of the responsibility for this bargain, while it is, perhaps, not very pertinent at this stage, is one that must be considered a little, in view of the fact that the Minister was engaged in shifting the responsibility from this Government to its predecessor. Hon. Members to my left say that that is justifiable. When I was listening to the Minister's speech, 1840 there came into my mind a judgment given recently in the Courts, in which the judge, referring to two witnesses, said one of them remembered too much and the other remembered too little. As I listened to the Minister, I felt that he was at one and the same time remembering too much and remembering too little. Within the life of this Parliament, in May, 1919, a question was asked about this contract, and the answer given by the Secretary for Mines, to a Member on this side of the House, was that the zinc concentrates contract was made in April, 1918. The Minister in charge of the Vote has taken us a great deal further back to-night. He got back, first of all, to 1917, and then to the Paris Resolutions of 1916. Finally, he landed on a speech made by Mr. Hughes in Australia in 1914. As I understood him, the whole trend of his argument was that whatever this bargain may be, it is not a bargain for which this Government or the Government immediately preceding it was responsible, that if there be responsibility it must attach to previous Ministers, particularly to Mr. Runciman, who was President of the Board of Trade.
I have noticed a growing habit on the part of the Government to father all their bad bargains on Mr. Runciman. If it be a bad bargain that was made with regard to Railway Agreements, it is put on to Mr. Runciman. It is that very fact which raises some doubt in my mind on this occasion, because I remember that when one looked closely into the matter of the Railway Agreements, one found that if Mr. Runciman was as responsible at all, it was a most nominal responsibility, for he was appointed only the night before the Agreement was concluded, and the real responsibility rested with the present Prime Minister. Of course, these Gentlemen are not in the House now to defend themselves, and I take that as some excuse for probing this matter a little on their account. The comment I make is this: That while the Minister was perfectly clear about many points of detail and appeared to have ransacked the archives of the Board of Trade or the Colonial Office, or whatever Department has the papers—we have not seen them—and informed himself of everything that occurred so far back as 1914, when it came to exact details of the contract he was not informed about 1841 them. That was a very curious lacuna in his story, because that is the material point.
As he stated the position, one understood it as being this: That on the outbreak of war the Australian Government found that their whole market for these concentrates was cut off, because they had been going formerly to Germany. On the other hand, we in this country found ourselves in the position that we were exposed to a very great shortage of what was essential, spelter, and it was the most natural thing in the world that the Australian Government and the British Government should come together and make some arrangement to meet the situation. That was not only natural, but commendable. But there is all the difference in the world between being responsible for coming together and for discussion, and being responsible for an actual agreement and contract arising out of the discussion. It is upon this point that the Minister was extremely vague..He fixed the responsibility for the coming together and for the discussion upon those early predecessors of his, but when it came to the question as to who made the actual contract, who fixed the price and the term of years, he had no information to give the House.
Probably this knowledge may repose in the breast of the President of the Board of Trade. I believe he assents to that. In that case, we shall no doubt get the information. I suppose that the Minister in charge of the Vote had to leave something of interest to his right hon. Friend. It may be that the President of the Board of Trade is able to fix precisely the actual responsibility for this contract. If he is able to do so, I hope he will do so, because at present the impression is given that certain gentlemen, formerly Ministers, but not now Ministers or Members of this House, are responsible for this extremely bad bargain. It would be very unfortunate and unfair if they were placed under that imputation without the responsibility being theirs. If they are responsible, they must accept the responsibility. I gather that before this Debate ends, the Minister will clear up that point.
After all, however, the question of the responsibility is not now a material point. The question is: How are we to get out of this difficulty in which we find our- 1842 selves? I think that to find a way out we must look for a moment at the way in, and the way we got into this difficulty was the fact that what in course of time had become the natural market for the Australian concentrates was cut off. These concentrates found themselves naturally coming to Germany and to Europe, and from them was produced the metal which came to this country. That destination was blocked, and the effort and the aim of the Government at that time was to prevent these concentrates ever finding their way to Germany again, if possible to destroy the German trade and the German manufacture of spelter, and to establish it either in Australia or in this country. That being the object of the Government at that time, we are now able to see how entirely futile a thing it is to attempt to divert from a natural path the course of trade. We have got here another example of the impossibility of hurting Europe and hurting Germany without hurting ourselves.
What has happened here? You had the Government dealing with this particular article, and the result is that they have produced in this country unemployment and shut up mines. Is not that precisely what has happened, on a very much larger scale and in a very much greater industry, by the action of the Government in regard to the German merchant marine? What took place there was that they got a vast amount of tonnage in ships, as here they have a vast amount of tonnage in ores, and by their action and their disposal of ships they produced exactly the same situation in the shipyards of this country that has been produced in these mines. Coal is the same thing. They took from the Germans millions of tons of coal, and the effect of doing so and of disposing of that coal was to produce the coal stoppage in this country. [HON. MEMBERS: "Oh, oh!"] Hon. Members query that statement, but I will not be led away into an argument, although, if the House desired it, I should be perfectly willing to take up that point. I simply make my point, that what has happened here is that, in the endeavour to divert trade from Germany to hurt German industry, we have only succeeded in hurting ourselves.
What is the way out? There is the suggestion of cancelling these contracts, and if it could have been done fairly that 1843 probably would have been done, but it cannot be done. The contracts are there, and they are no doubt perfectly firm and secure, and they must be maintained. That way out is not possible. The suggestion has come from both sides of the House that to this big burden should be added a smaller burden, and that, as we have subsidised Australian industry to a very considerable extent—because there is open proof that there are Australian mines which are opening and commencing work simply on the strength of this subsidy and earning their profits purely and entirely out of it—we should follow the same process in regard to the English mines. I do not feel, much as I sympathise with the people who are working in these mines, that that is a path upon which it is really safe to enter. The Government have themselves resisted it, because, for one thing, they might be asked to do the same thing in other directions. If lead and zinc mines are to be subsidised, tin mines might have to be subsidised and coal mines also, and there would be a broad road there that would lead to financial destruction.
I suggest to the Government that the path pointed out by my hon. and gallant Friend the Member for East Middlesbrough (Colonel P. Williams) is the right path. Dispose of these things in Australia, leave trade again to follow its natural course, and if these ores stay in Australia they will find their way through their own channels back again to the old markets. An hon Member says, "Good old Germany!" What does the Genoa Conference mean but that we are out once more to reconstruct Europe and to set trade moving back along its old channels? Here is an opportunity for the Government to give some practical evidence of their desire to do that and to secure a double benefit—not only to benefit Europe, but to do something to relieve the situation at home here. Again, if this ore is left in Australia, you save a great amount of carriage, because it is estimated to cost the Government something like £4 or £4 10s. a ton to bring these ores here from Australia. That loss might be cut, and by reversing the present policy you might do much to relieve the situation.
§ Lieut.-Colonel PARRY
I wish to ask the attention of the President of the 1844 Board of Trade to this contract. The hon. and gallant Member for Penrith (Sir C. Lowther), who made a very able maiden speech to-night on a subject he had very much at heart, brought before the attention of the right. hon. Gentleman this point, and he quoted his own district, and may I also be allowed to quote an area in my own constituency. I refer to the area which is very well known as the Halkyn mining area. According to the recent Royal Commission sitting on metalliferous mines, it was declared to be the wealthiest lead mining area in this country. The position there to-day is that there is not a single chimney smoking or a single shaft working, and there is not a single miner engaged in mining. I am not going to say that all this is due to this present contract, but I am going to say that these mines, which could work, cannot work to-day owing to the hardships imposed on them by the condition's of this contract.
The real position there is this, that many of these mines have now gone below the water line in working. Negotiations have been going on, and are still going on, in regard to arrangements by which these mines can he unwatered, and this wealthy area once more become a real hive of the lead-producing industry. Very soon it will be necessary to ask for capital in order to work these mines, and, in my view, and the view of mining experts, it will be practically impossible to obtain the necessary capital to work this area while this contract is in force. I would really ask the right hon. Gentleman to consider that the men in this district, where they have been working for years, where they and their families have been for generations, are now practically unemployed. The lead miner is not an easy man to find work for, even in normal times, and to-day, with all the unemployment about, it is practically impossible to obtain employment. I would ask the right hon. Gentleman to give very sympathetic consideration to this point, namely, whether he cannot consider some way to relieve the distress of these districts, and find employment for these miners.
§ Mr. SWAN
This agreement, like the coal agreement, has had a very disastrous effect on the workers in my constituency in particular. The coal agreement cast miners out of work and closed mines. 1845 Here we have another agreement, which has acted, and is acting, as an absolute boomerang on our people. Instead of striking at Central Europe and the Germans, our men have been hit very severely. In the light of promises and pledges made to them, they hoped that, instead of the industry being closed down, there was a great possibility of the industry being developed. Instead of that, we find two-thirds of the miners out of work, and the taxpayers involved in a charge owing to this agreement, and another tax imposed on the community in having to provide unemployment pay. I, therefore, desire to second, if necessary, the Amendment of my hon. Friend, to reduce this Vote as a protest, for I think a strong protest ought to be made against this agreement. Hon. Members have spoken about honouring pledges and agreements that have been come to with other nations. We made pledges to the soldiers, one of them being that they should come back to a new world, whereas they find themselves on the scrap heap, due to regulations made years ago, in which they have had no say. If a quarter of this money had been spent in the development of these areas the men out of work in these lead regions could all have been found useful employment, and the mines could have been developed there again. Consideration ought to be given to the possibility of cancelling that agreement, and using some of the money as a subsidy, or in some way developing these regions. I hope the Government will take steps either to cancel the agreement, or to come to the assistance of the miners to an amount equal to the transport of the tonnage.
§ 10.0 P.m.
§ Mr. G. LAMBERT
Might I suggest to my right hon. Friend the President of the Board of Trade that he should be a little more open to the House and the country as regards this contract? Let us have as much publicity as possible upon it. I do not believe in secrecy. There is no doubt the Government, or the Government of 1914, '15, '16, '17, or '18—I do not know—has been led into a bad contract. The responsibility has been placed upon Lord Harcourt, Mr. Runciman, Mr. McKenna, and the present and late Leaders of the House. As I understand it, there was another gentleman who was rather a villian of the piece, and that was the present Prime Minister of Australia, Mr. Hughes, who took a very prominent 1846 part in squeezing the British Government of that day. What is the good of this reticence? It is known perfectly well to all the people who want to know it. It is very well known in Australia, at any rate. A friend of mine sent me some quotations the other day from a very responsible newspaper, the Sydney "Bulletin," of the 20th October, 1921. This paper throws a little side-light on the history of the matter, and I hope I shall be forgiven if I read a few extracts:The British Government went into zinc in mid-War owing to the squeeze by Hughes and the zinc producers crowd, and also, seemingly, to some extent in gratitude for the grit the digger was showing in France. The Broken Hill Companies provide the zinc concentrates, and, if they have it to sell, also spelter. The British Government has to take the concentrates under its 10 years' contract, but the zinc market is shocking, and all poor John Bull can do is to pay up and stack the stuff till the clouds roll by, or a willing buyer, at a price, turns up.The Australians know all about it, so I hope we shall be afforded a little information.One willing buyer is the Electrolytic Zinc, which is made up in the main of the Broken Hill Companies.…Thus Broken Hill, as the producer, has sold to Father Bull at a price that brings in a good profit, now buys back from Father Bull, who, apparently, has to shoulder a big loss. Then, still, under the 10 years' contract, the electrolytic zinc made from the re-bought concentrates presumably goes back to Father at a premium on the current market price of spelter.We should like to know, is this so? I am always a believer in publicity to help out the Government.So if the market does not come to the rescue it looks as though Father Bull will be landed with two big losses on the one lot of stuff. In that case Hughes—That is the Australian statesmaninstead of having squelched the Hun Zinc industry has merely succeeded in putting the British Government in an awkward hole.The Government would be in an awkward hole if there was a real regular strong Opposition here of almost equal number to themselves.Hughes should be told to cable all the correspondence and reports to show the arguments used to the British Government to induce it to enter into the contract.That is what the Australians say. Let us know more about it meantime. This Australian paper goes on to say:Meantime the less people talk about patriotism and their unselfish affection for Father Bull the better.1847 I suggest that the President of the Board of Trade, who has all the contracts he has made in this matter, should give us the information for which we ask. It is not only that the British House of Commons have a right to demand it. There is too much secrecy in these matters. Only to-day I was told that we could not have the money cost of the troops in Palestine because it would be misleading. But you cannot treat the House of Commons like that. The House of Commons, after all, is the guardian of the public purse. They are the representatives of the taxpayers, and if the taxpayers are going to spend millions on whatever it may be they ought to have the fullest information. That is a demand nobody can resist. The Government have no right to spend this £500,000 without the British public—that is the taxpayer—knowing something about it. It is no use the hon. Gentleman talking about being reticent as to the figures; you will have to bring them out, if not now, some time later. You have kept this thing corked up for three years, ever since the Armistice. You have a 10 years' contract. How many millions is it going to run us into? Let us know that.
I am not blaming the Government, but let us know what we are in for. Surely right hon. Gentlemen on the Front Government Bench cannot resist that request! My hon. Friend says it depends upon your purchaser, and what the market will be. Let us know what you have paid. What objection is there to that? Everybody in Australia who matters knows it. The zinc producers' crowd to which I have referred all know what price you have paid. Do not imagine that every man in the trade does not know what price you paid for this thing. Therefore let the President of the Board of Trade make a clean breast of it. Let him say: "I will tell you all about it." I asked a question about this the other day. I asked for all this information. I put a question to the President of the Board of Trade. I quote from the OFFICIAL REPORT:Mr. LAMBERT asked the President of the Board of Trade if he will state the terms of the purchase of concentrates in Australia; what is the price to be paid? How much has been paid? What quantities of such concentrates have been sold? To what firms, and at what prices?1848Mr. BALDWIN: I Will shortly make a full statement on these matters in connection with a Supplementary Estimate and perhaps my right hon. Friend will not object to awaiting that statement." —[OFFICIAL REPORT, 13th February, 1922; col. 648, Vol. 150.]I should like to draw my right hon. Friend's attention to that reply. Perhaps he will not object to make that statement. I am awaiting it. We want a full and complete statement of our liabilities. Exactly what was paid. Exactly what sums have been spent since. Exactly what contracts have been entered into to dispose of this spelter. I firmly believe that the Government in their own interest—but I will not say that, because after all, they are under a responsibility and my right hon. Friends opposite are not responsible; they were not in office when these contracts were made. I firmly believe that in order to get the British taxpayer out of the mess he has been put into by this zinc-producers crowd, we had better have full information and then see what we can do by way of help and advice. Therefore I rose for the special purpose of asking my right hon. Friend the President, of the Board of Tra—he is an honest Minister, he has nothing to conceal—to give the House of Commons and the country full details of the contract which the Geddes Committee says may run the taxpayers into millions of money.
§ Captain ELLIOT
For the past two years I have had many of my constituents suffering great hardship and loss because of these contracts of the Government. In my constituency we have an ancient mining community on the hills who have suffered the almost total destruction of their market. Certainly during the last nine months they have carried on under tremendous difficulty, in which they have been put largely because of this contract of the Government. My hon. Friend opposite mentioned the question of prices. I think it is worth while to have some statement as to the prices which were circulated in my constituency, which is a lead-mining constituency. Constituents of mine understand that the Government is using the British taxpayers' money to buy these concentrates and to dump them on the market here below the cost of production, thereby knocking our mines entirely out of action, and refusing 1849 even the poor consolation that would enable our people to share in that advantage.
It was stated so long ago as July, 1920 —our people were so informed—that, though the Government were going to buy these Australian concentrates, they were not going to dump the goods on the British market with the British taxpayers' money and then call on the British taxpayer to pay the unemployment donation to men put out of employment by this policy. In 1921 that policy apparently had been dropped. The present information about the prices seems to be what was referred to by the last speaker who made his point on it. I ask the Government either to affirm or deny this statement: whether or not it is a fact that at present the Government are selling a blend of spelter at 75s. per ton in Swansea which cost well over 160s. a ton? It is obviously impossible for the mines of this country to meet the competition of a Government which buys goods and dumps them down at a low cost price in this country, and the economic absurdity of using the taxpayers' money to throw the taxpayer out of employment, subsequently levying the taxpayer still in employment to pay out-of-work donations to these men, must be manifest at, all. The amount of money required to extend the matter to the miners of this country must be relatively small. The output of the mines in this country is not anything like sufficient for the lead consumption of the country, and there is an absolute necessity for a revision of the terms of this contract. Two Committees appointed by the. Government themselves have reported in favour of the development of a scheme in the district of which I happen to be the Member. There are two mines there, and it is suggested that a deep tunnel should be driven to drain these mines and to bring into action the mines which are becoming water-logged, and many shallow veins which have already gone out of action owing to this water-logging going on at the depth at which these mines at present are being worked. But it is obvious that nobody is going to put money into a product which is being bought by the Government with the taxpayers' money, and which dumps concentrates here at 75s. per ton, as against a cost of production of 160s. per ton! My constituents have put the case to me that in 1917 a committee 1850 recommended that this was an excellent field for the development of a metalliferous area, one of the richest in Scotland, by means of this tunnel to drain both the mines. This scheme was again recommended by the Mines Commission of 1920, of which a Member of this House was the Chairman. The Government have taken no action in respect of these two reports, although all these things have been worked out, and the report of a Departmental Committee appointed by the Board of Trade, with more than one Member of this House on the Committee, has stated that there is a good case for a development of this kind, and there is a chance that it would do more than can be done by paying unemployment donation to these men. The tunnel which was recommended would cost £200,000, but after spending that you would have a tunnel, and the mines would be clear. To drain the mines which are going to produce lead for this country is surely better than paying unemployment donation. Hon. Members opposite may think that this is State Socialism.
§ Captain ELLIOT
At any rate, it is a scheme which offers some chance of a return, and it is worth while the Government looking into it. Most Socialist schemes offer nothing in return for the money which you are going to throw into them, but when you have a thing reported upon favourably by two Committees, I think the matter is worthy of the consideration of the Government. If the Government continue to dump their goods on the top of these mines, how are you going to keep the mines going? The Government is not consistent about many things, although there is no doubt about it that when it gets a straightforward wrong-headed scheme of this kind you can rely upon it killing English trade. The Government should tell us what they are paying for these Australian concentrates and what they are selling them at here. We want to know whether it is true, as asserted in the Scottish mining area, that they are dumping these things here at about half the cost of production. They should at least tell us whether they are willing to purchase the material turned out by the British mines, which are just as important as the mines of Australia, and it is much better to develop our resources here than in Aus- 1851 tralia, because the transport of these materials overseas is beset with all manner of interruption before they can be shipped to Great Britain. If at least they say, "We are not dumping goods against your people and your own money"; if they say, "We are prepared to enter into a scheme for the development of those areas if you can show there is something to be gained thereby"; if they will only give us the privilege of saying to us, "We have examined your case, we are ready to answer the figures you have brought forward, we think there is nothing in your case," we will accept that statement.
At least let them do us the honour of admitting that this subject has been reported upon by two Committees of Members and non-members—Committees which have reported favourably on development schemes for metalliferous areas, which are being held up. Let them at least recognise that patriotism like charity begins at home, and that the miners in this country did as much for the Empire in the days of its trouble as did those in Australia. That is what we ask. Mr. Hughes made his fame as a great man by speaking up for Australians. Let our Prime Minister realise that his brother Welshman did not make his name by speaking up for British or Welsh miners. When the Cabinet has got our two millions of people back into employment, then it can set about helping the Australian miner to get employment. Their duty is in the first place to the miners of this country, and then, after that, to the miners of Australia.
§ The PRESIDENT of the BOARD of TRADE (Mr. Baldwin)
I think we have had a very interesting discussion, and I am quite sure that those Members of the Committee who were in the House when my hon. Friend the Parliamentary Secretary to the Board of Trade spoke will agree with me that he made a very fair and thorough presentment of his case. I say that because I have noticed that one or two speakers who did not hear my hon. Friend rather assumed he had overlooked various points on which he had touched, I think, fairly fully. I will just allude to one point put by the hon. Member for Newcastle (Major Barnes) and I do so in order to get it out of the way, as, for the purposes of 1852 this Debate, it is not really a very material point. It is as to the original responsibility for these contracts. It is a responsibility which must be shared amongst a great many men. It is not always fair to judge of the past in the light of present conditions, for it is an anachronism which is very apt to mislead. At the time this contract was made there is no doubt that the strongest arguments could be used for it. That is generally admitted and the only point I want to put to my hon. Friend is that the details as to prices and so forth—every-thing except details of administration, were settled with Mr. Hughes before he left for Australia in the autumn of 1916. I just give that information because my hon. and gallant Friend asked for it. It is not that I think it has any very direct bearing upon what we are now discussing.
I would begin by reminding the Committee of two or three of the smaller points which have been raised in the course of the Debate, before I come to the larger question. The hon. Member for Limehouse (Sir W. Pearce) said that he hoped we had no intention of manufacturing. We have not. We have no intention of manufacturing. The hon. and gallant Member for East Middlesbrough (Colonel P. Williams) said that he hoped we would apply business methods in dealing with the contract. We shall. The hon. Member for Limehouse, and several other hon. Members, said, "Cut your loss," and the hon. Member for the Forest of Dean (Mr. Wignall) asked, "Why did you not nit your loss before?" There is no provision for cancelling under any such conditions as arose during the time that he mentioned. I have always been an advocate of cutting your loss, and I should like to do it with this contract. I have been told to adopt business methods, but is there any man of business in the House of Commons who thinks it is an easier task for me to try and cut the loss by getting the contract cancelled after what has been said in this Debate about this contract—after what has been said about the Prime Minister of Australia by the hon. Member who spoke last?
These are just the difficulties that we have when a Government takes to trading. No one in the House of Commons is more strongly against Government trading than I am, but until this con- 1853 tract is cancelled, and so long as I am at the Board of Trade, I have to do the best I can for the taxpayer with regard to this contract. It is a difficult task at the best of times, and every minute spent on discussion of the contract makes it more difficult. Nevertheless, I am in agreement with my right hon. Friend the Member for South Molton (Mr. Lambert). I have always been, and I think my right hon. Friend will give me credit for being, an advocate of laying everything that I possibly can before the House of Commons. I agree with him that the British House of Commons has a right to demand it; I agree with him that the British House of Commons is the guardian of the public purse. But in a case like this, although the House of Commons has a right to demand, and, if it insisted on its demand, could force, the publication of what, as my hon. Friend said, we feel must be withheld, it would, to the same degree that it forced that, cease to be the guardian of the public purse. [interruption.] Perhaps hon. Members will wait a moment. With regard to selling prices—and here, I think, no one will disagree with me—if all selling prices are disclosed, and the markets in which the sales are made, you will make it impossible for us to sell on any reasonable terms. You make a difficult task an impossible one. I do not 1.Ilink I need elaborate that point.
§ Mr. BALDWIN
I have been asked for full particulars of all prices. My right hon. Friend the Member for South Molton (Mr. G. Lambert) asked me. He has been saying, as others have, what a bad contract this is. It does not make my task easier to go to the Australians and say, "The whole House of Commons has risen up and said that this is the rottenest contract that ever was made," and then to say, "What will you take to let me out of it?" I do not know whether my right hon. Friend, who is so fond of publicity in business, ever tried to sell a horse, but if he did I do not suppose he would go into the market and say, "I have a horse to sell; he has got broken knees and is a roarer, but I should like you to give me the best price you can for him." That is very much what would happen to the unhappy man who tries to get out of a con- 1854 tract on the best terms he can when all his friends say it is the worst contract that ever was made. As a matter of fact this contract at the moment is a bad one, as everybody has said. But I do not think anyone can forecast what the result of the full term working of the contract would be, if the contract is not cancelled in the interval. When spelter rises to a certain point, and not too great a point, above where we now are, we shall cease to lose money, and if spelter rises substantially, the contract would show a profit, and it was estimated by good judges not so very long ago that with normal trade, with normal ups and downs, the contract in the latter part of its existence ought to show nearly as much profit as it probably will make loss in its earlier years. It entirely depends on the world market for spelter. But, nevertheless, my own view is that, whatever the prospect of the world market may be, the right thing is for the Government to get out of this contract as and when opportunity arises, and that is my policy. The hon. Member for the Forest of Dean raised one or two points apart from the main subject of his speech, and in answer to him I would say we have not made any sales so far in Germany, and I would tell him and other hon. Members who are interested in the particular point that the Government have not subscribed £500,000, or any sum at all, to put up a smelting plant in Australia. It is quite true that at the time of the original discussion that subject was raised, and I do not know how far at that time the Government may have been committed, but nothing has been paid, and we recognise no obligation now as to anything that may have been said at that time.
The next point that has been raised in this Debate has been a kind of by-product of the contract itself, and it has been raised by hon. Members interested in lead and zinc mining in this country, who have pleaded very earnestly and very strongly for support for the industry in which they are interested, and they have alleged with great force in support of their contention that the trouble from which the lead and zinc industry is suffering is caused directly by the existence of the contract for zinc concentrates. I think there is a certain amount of confusion in their minds. My hon. Friend 1855 who opened the Debate gave some interesting statistics on this question to show the problem in its proper proportions so far as the Debate was concerned. I should like by way of preface to say a word or two on the question from this aspect. I am sure hon. Members, and particularly those who have spoken on this matter, will believe me when I say that the matter of the lead and zinc mines in England and Wales and Scotland has given me occasion for a great deal of very serious consideration and in some aspects has been very distressing.
There is no doubt that in these industries there has been a great deal of suffering. I have seen deputations from people interested in these industries, and I have discussed the matter with them very fully. Certainly, the problems with which they are faced are very grave, because there is no doubt in my mind, and I do not think there can be any doubt in the mind of anyone who reads the Report which was presented to this House by the Committee presided over by the hon. Member for the Rushcliffe Division (Mr. Betterton) that, economically these industries are not able to stand without assistance, unless it may be in one or two peculiarly favoured districts where they may be singularly fortunate in the quality of the ores they work. Speaking generally, they cannot stand, economically, unaided. The existence of the Australian zinc concentrates contract is having no effect one way or the other at the present time on the position of these mines. If the contract were not in existence, and, therefore, no Debate took place on the subject, there is not a single works in Great Britain that would be attempting the manufacture of spelter, because the world price for spelter is such that it cannot be made in this country, and there would be made no demand for the English ores. It is quite true—and I do not think my hon. Friend the Member for the Forest of Dean would object to this —that during the winter, when unemployment was at its height, and when we were searching in every direction for means of helping the unemployed, the British Government, having large quantities of concentrates on their hands, sold a limited amount, for a limited time, to the British spelter makers, on condition that they would restart their works with these con- 1856 centrates. The concentrates were sold at a price which was calculated to allow them to make spelter without loss at the world's present price.
Having regard to the circumstances I think the Government were perfectly right in doing that. They were able, by means of having the contract, to release, although at a substantial loss, a certain amount of concentrates with the object of aiding the unemployed in certain districts in Great Britain where unemployment was rife. It may be said, "Why not take the English zinc ores into this contract?" If the English zinc ores were taken in at the price paid for the Australian ores, they could not be sold. The zinc ores mined in this country would cost considerably more than it costs to bring the concentrates to this country. The only way in which the Government can help the zinc ore miners is not by buying material for the British smelter, or buying their products, but by directly subsidising them. That may or may not be the right policy. I would remind the Committee that these particular industries were carried through the War by subsidies, and very rightly so. There was no objection to that in those days. Since the War, subsidies have been extended to industries in this country. But by now I do not believe that the House would sanction any further subsidies and I am sure that the country would not.
I would like to say a few words on this subject to the Committee, because it is one that touches us all very closely. There is no appeal which could be made which has a better prima facie case or is calculated to move our sympathies more than this case which has been put this evening. The way it was put by the various Members who spoke, their temper and language and knowledge of the subject, the deep human sympathy they showed, all those things move the Committee and make us wish that we could give them what they want. But the country is face to face with a very grave financial situation. We are trying, some may think very unsuccessfully, to resist new expenditure and cut down old. Whether we reach the figure suggested by the Geddes Committee or fall short of it, there is no doubt that in cutting down much hardship will be caused, hardship to individuals and to groups and classes of men; and if the House 1857 of Commons is. going to let its heart rule its head each time those who are about to be hurt by the application of the axe cry out for help there will be no economies possible at all, and our finances will become worse. I congratulate my hon. and gallant Friend the Member for Penrith (Sir C. Lowther) and I hope that he was less nervous than I was when I was making my maiden speech. It is quite true that the amount of subsidy required to meet the particular case to which he referred would be small, and I do not believe that it would be a large amount if it lasted over the term of five years. But if we concede the principle, even though it is only to the width of a finger, as my hon. and gallant Friend has said, we should next have an appeal, delivered possibly with less eloquence but with equal force of argument, that would ask for a subsidy the breadth of a man's hand, and so we should go on. If you give one subsidy you cannot resist another, and as long as you lay down the rule that you are not going to give subsidies to industry in this country directly or indirectly you cannot break it.
It is true that this contract at this moment, in this extraordinarily depressed state of the world's spelter market, may be, and probably is, operating as a subsidy to Australia. I would remind him that in the making of this contract there was nothing in the nature of a subsidy, either contemplated or granted, and such subsidy as exists to-day is purely fortuitous and temporary. The contract is with us, and we have to administer it. I shall do my best, in conjunction with my hon. Friends, to make the best bargain I can for this Committee and for the taxpayer, in getting rid of as much of the products from Australia as we can. As I said earlier, when the opportunity presents itself I shall do all I can to bring the contract to an end, holding as I do that the very last function of a Government should be, in times of peace at least, to indulge in ordinary commercial trading.
I would like to point out to my right hon. Friend that he has missed one point of criticism directed at him. He says quite truly that the state of our national finance is desperate, and he deplores that any Government should 1858 undertake a policy of subsidisation. That is not the whole point. I do not know if the right hon. Gentleman was in the House at Question Time to-day when it was pointed out that the Government had deliberately undertaken to increase the monies available for the relief of unemployment from, I think, £10,000,000 to. £18,000,000, of which £13,000,000 had been expended. Some part of the criticism upon this Vote has been on these lines—it is not asked that there should be subsidies, but it is asked that ordinary measures of exploitation should be undertaken which would enable the industry to compete, at least on reasonable terms, with the zinc concentrates coming from Australia. That is a point I would urge the right hon. Gentleman to consider. It is not an altogether immaterial point. As he truly says, subsidies would be unfortunate. Anything which the Government can do to increase the terms upon which the British industry can reasonably compete with the material which is imported into this country under the terms of the Government contract should be undertaken. The right hon. Gentleman made no reply on that point, but it seems to me here is a field where reasonable exploitation of the national resources could be undertaken. I can only express my regret that the right hon. Gentleman has not dealt with it.
§ Sir F. BANBURY
I understood the right hon. Gentleman to say that in 1916, when Mr. Hughes was over here, the arrangements for this contract were made. On page 7 of the Estimates, under Sub-heading Q 11, we find:Provision to cover the estimated cost to. His Majesty's Government of zinc concentrates which the Government may be required to take during 1921–22 under a contract entered into on 9th April, 1918.Under the next Sub-heading we find:Provision to cover the estimated cost to His Majesty's Government of spelter which the Government may be required to take at market prices during 1921–22 under a contract entered into on 23rd April, 1917.Therefore, according to this Supplementary Estimate, two contracts were entered into, one in April, 1918, and the other in April, 1917. I have no doubt there is an explanation, but it does not seem to tally with the statement of my right hon. Friend, neither does it tally with the statement that the Government was not responsible for the contract. I 1859 do not say that my hon. Friend was at the Board of Trade, but he was a member of this Government in 1917 and 1918.
§ Sir W. MITCHELL-THOMSON
Unfortunately for me I had not the good luck to have the right hon. Baronet in his place when I was making my statement. I pointed out then that there were two original contracts, one for spelter and one for concentrates. Both bore the date 23rd April, 1917, and both were the result of negotiations which lasted over many months. The contract for cencentrates was amended by a subsequent contract, dated 1918.
§ Sir F. BANBURY
It is perfectly clear that the actual contract was made when this Government was in power. It does not matter when the negotiations were entered into. It may have been by a preceding Government, but the contract which was binding, was not entered into until this Government was in power. Therefore they cannot say that it happened before this Government was responsible.
§ Mr. W. GREENWOOD
I very much regret to learn from the right hon. Gentleman that he intends to get out of this contract as soon as he possibly can. I understood him to say that very good expert opinion had led him to believe that at the end of 10 years, with normal trade and the ordinary ups and downs, there was every probability that the profits would quite balance any loss that had been made. If that is so, and if he is, as he said, dealing with the matter purely from the business point of view, surely it would be in order to let the contract go on. I should regret the cancelling of the contract on other grounds. If we follow out the causes of unemployment we shall find that in a great many cases it has been
§ brought about because contracts have been cancelled—not only between individuals in this country but between this country and other countries. Granted that the Government made a bad contract when this was entered into, all of us who are blessed with what we in Lancashire term after wit will realise that that is so. But had the War been carried on another two years, none of us in Febraury or March, 1918, could have felt any sense of security that it would have been over in November that year, and this contract would have had a very different appearance. The Government, even more than any individual, ought to show that great respect for a contract, and for the keeping of a contract, which has always been the good reputation of Englishmen.
§ Mr. LAMBERT
Before we vote, I should like to ask a question with regard to the sum of £62,500 "for provision to cover the estimated cost to His Majesty's Government of spelter which the Government may be required to take at market prices during 1921–1922." Why should there be a loss on that when they are required to take it at market prices?
§ Sir W. MITCHELL-THOMSON
If the right hon. Gentleman looks at the Estimate, he will see that the amount taken is estimated at £62,500, with an Appropriation-in-Aid of £52,500. The reason for that is that, spelter being deliverable in the United Kingdom, we cannot be quite certain whether we should have, during the last few days or weeks of the financial year, such a quantity of spelter arriving and put upon is as we should not be able to sell.
§ Question put, "That a sum, not exceeding £601,100, be granted for the said Service."
§ The Committee divided: "Ayes, 79; Noes, 167.1861
|Division No 12.]||AYES.||[10.56 p.m.|
|Adamson, Rt. Hon. William||Davies, A. (Lancaster, Clitheroe)||Hancock, John George|
|Ammon, Charles George||Davies, Rhys John (Westhoughton)||Harmsworth, Hon. E. C. (Kent)|
|Banbury, Rt. Hon. Sir Frederick G.||Davison, J. E. (Smethwick)||Hartshorn, Vernon|
|Barker, G. (Monmouth, Abertillery)||Edwards, C. (Monmouth, Bedwellty)||Hayday, Arthur|
|Barnes, Major H. (Newcastle, E.)||Edwards, G. (Norfolk, South)||Hayward, Evan|
|Barton, sir William (Oldham)||Elliot, Capt. Walter E. (Lanark)||Henderson, Rt. Hon. A. (Widnes)|
|Benn, Captain Wedgwood (Leith)||Galbraith, Samuel||Hirst, G. H.|
|Betterton, Henry B.||Gillls, William||Hodge, Rt. Hon. John|
|Bowerman, Rt. Hon. Charles W.||Glanville, Harold James||Hogge, James Myles|
|Bromfield, William||Graham, D. M. (Lanark, Hamilton)||Holmes, J. Stanley|
|Brown, James (Ayr and Bute)||Graham, R. (Nelson and Coine)||Irving, Dan|
|Cairns, John||Griffiths, T. (Monmouth, Pontypool)||John, William (Rhondda, West)|
|Cape, Thomas||Grundy, T. W.||Jones, Morgan (Caerphilly)|
|Carter, W. (Nottingham, Mansfield)||Guest, J. (York, W.R., Hemsworth)||Kiley, James Daniel|
|Cecil, Rt. Hon. Lord R. (Hitchin)||Gwynne, Rupert S.||Lawson, John James|
|Coote, Colin Reith (Isle of Ely)||Hall, F. (York, W.R., Normanton)||Lowther, Maj.-Gen. Sir C. (Penrith)|
|Lunn, William||Rendall, Atheistan||Thomas, Rt. Hon. James H. (Derby)|
|Maclean, Nell (Glasgow, Govan)||Richardson, R. (Houghton-le-Spring)||Thomson, T. (Middlesbrough, West)|
|Maclean, Rt. Hon. Sir D. (Midlothian)||Roberts, Frederick O. (W. Bromwich)||Thorne, G. R. (Wolverhampton, E.)|
|Malone, C. L. (Leyton, E.)||Robertson, John||Watts-Morgan, Lieut.-Col. D.|
|Mosley, Oswald||Rose, Frank H.||Williams, Col. P. (Middlesbrough, E.)|
|Murray, William (Dumfries)||Royce, William Stapleton||Wilson, James (Dudley)|
|Naylor, Thomas Ellis||Sexton, James||Wilson, Rt. Hon. J. W. (Stourbridge)|
|Newbould, Alfred Ernest||Shaw, Thomas (Preston)||Wolmer, Viscount|
|Parkinson, John Allen (Wigan)||Short, Alfred (Wednesbury)||Young, Robert (Lancaster, Newton)|
|Parry, Lieut-Colonel Thomas Henry||Sueter, Rear-Admiral Murray Fraser||TELLERS FOR THE AYES.—|
|Poison, Sir Thomas A.||Swan, J. E.||Mr. W. Smith and Mr. Wignall.|
|Agg-Gardner, Sir James Tynte||Falcon, Captain Michael||Pease, Rt. Hon. Herbert Pike|
|Ainsworth, Captain Charles||Ford, Patrick Johnston||Peel, Col. Hn. S. (Uxbridge, Mddx.)|
|Amery, Leopold C. M. S.||Forestler-Walker, L.||Perring, William George|
|Armitage, Robert||Forrest, Walter||Pollock, Rt. Hon. Sir Ernest Murray|
|Armstrong, Henry Bruce||Fraser, Major Sir Keith||Pownall, Lieut.-Colonel Assheton|
|Astbury, Lieut.-Com. Frederick W.||Fremantle, Lieut. Colonel Francis E.||Prescott, Major Sir W. H.|
|Atkey, A. R.||Gee, Captain Robert||Purchase, H. G.|
|Bagley, Captain E. Asbton||Gibbs, Colonel George Abraham||Rae, H. Norman|
|Baldwin, Rt. Hon. Stanley||Gilmour, Lieut.-Colonel Sir John||Raeburn, Sir William H.|
|Balfour, George (Hampstead)||Gould, James C.||Raw, Lieutenant-Colonel Dr. N.|
|Barker, Major Robert H.||Green, Joseph F. (Leicester, W.)||Rees, Sir J. D. (Nottingham, East)|
|Barlow, Sir Montague||Greene, Lt.-Col. Sir W. (Hack'y, N.)||Remer, J. R.|
|Barnett, Major Richard W.||Greenwood, William (Stockport)||Remnant, Sir James|
|Barnston, Major Harry||Guest, Capt. Rt. Hon. Frederick E.||Renwick, Sir George|
|Barrie, Sir Charles Coupar (Banff)||Hacking, Captain Douglas H.||Richardson, Sir Alex. (Gravesend)|
|Bartley-Denniss, Sir Edmund Robert||Haslam, Lewis||Roberts, Rt. Hon. G. H. (Norwich)|
|sell, Lieut.-Col. w. c. H. [Devizes]||Hennessy, Major J. R. G.||Robinson, S. (Brecon and Radnor)|
|Bellairs, Commander Carlyon W.||Hilder, Lieut.-Colonel Frank||Robinson, Sir T. (Lanes., Stretford)|
|Bird, Sir William B. M. (Chichtster)||Hills, Major John Waller||Rodger, A. K.|
|Blair, Sir Reginald||Hinds, John||Roundell, Colonel R. F.|
|Borwick, Major G. O.||Hohler, Gerald Fitzroy||Samuel, A. M. (Surrey, Farnham)|
|Boscawen, Rt. Hon. Sir A. Griffith-||Hope, J. D. (Berwick & Haddington)||Sanders, Colonel Sir Robert Arthur|
|Bowyer, Captain G. W. E.||Hopkins, John W. W.||Sassoon, Sir Philip Albert Gustave D.|
|Boyd-Carpenter, Major A.||Horne, Edgar (Surrey, Guildford)||Scott, A. M. (Glasgow, Bridgeton)|
|Bridgeman, Rt. Hon. William Clive||Hotchkin, Captain Stafford Vere||Seager, Sir William|
|Brown, Major D. C.||Howard, Major S. G.||Seddon, J. A.|
|Bruton, Sir James||Jodrell, Neville Paul||Seely, Major-General Rt. Hon. John|
|Buchanan, Lieut.-Colonel A. L. H.||Johnson, sir Stanley||Shaw, William T. (Forfar)|
|Buckley, Lieut.-Colonel A.||Jones, G. W. H. (Stoke Newington)||Shortt, Rt. Hon. E. (N'castle-on-T.)|
|Bull, Rt. Hon. Sir William James||Jones, J. T. (Carmarthen, Llanelly)||Smith, Sir Harold (Warrington)|
|Burgoyne, Lt.-Col. Alan Hughes||Keliaway, Rt. Hon. Fredk. George||Stanley, Major Hon. G. (Preston)|
|Burn, Col. C. R. (Devon, Torquay)||King, Captain Henry Douglas||Steel, Major S. Strang|
|Carr, W. Theodore||Lambert, Rt. Hon. George||Stephenson, Lieut.-Colonel H. K.|
|Casey, T. W.||Lewis, Rt. Hon. J. H. (Univ., Wales)||Stewart, Gershom|
|Cautley, Henry Strother||Lister, Sir R. Ashton||Strauss, Edward Anthony|
|Cecil, Rt. Hon. Evelyn (Birm, Aston)||Lloyd, George Butler||Sturrock, J. Leng|
|Chadwick, Sir Robert Burton||Locker-Lampson, Com. O. (H'ting d'n)||Sugden, W. H.|
|Chamberlain, Rt. Hn. J. A. (Birm., W.)||Lorden, John William||Sutherland, Sir William|
|Clough, Sir Robert||Loseby, Captain C. E.||Taylor, J.|
|Coats, Sir Stuart||Lyle, C. E. Leonard||Terrell, Captain R. (Oxford, Henley)|
|Cobb, Sir Cyril||Macquisten, F. A.||Thomas, Sir Robert J. (Wrexham)|
|Cory, sir C. J. (Cornwall, St. Ives)||Maddocks, Henry||Thomson, F. C. (Aberdeen, South)|
|Courthope, Lieut.-Col. George L.||Mallalieu, Frederick William||Thomson, Sir W. Mitchell- (Maryhill)|
|Cowan, D. M. (Scottish Universities)||Manville, Edward||Wallace, J.|
|Curzon, Captain Viscount||Mitchell, Sir William Lane||Walton, J. (York, W. R., Don Valley)|
|Davidson, J. C. C. (Hemel Hempstead)||Moison, Major John Eisdale||Waring, Major Walter|
|Davies, Alfred Thomas (Lincoln)||Mond, Rt. Hon. Sir Alfred Moritz||Warner, Sir T. Courtenay T.|
|Davies, Thomas (Clrencester)||Montagu, Rt. Hon. E. S.||Wheler, Col. Granville C. H.|
|Davies, Sir William H. (Bristol, S.)||Moore-Brabazon, Lieut.-Col. J. T. C.||Windsor, Viscount|
|Dawson, Sir Philip||Morden, Col. W. Grant||Wise, Frederick|
|Dean, Commander P. T.||Morris, Richard||Worsfold, T. Cato|
|Dockrell, Sir Maurice||Murchison, C. K.||Young, E. H. (Norwich)|
|Doyle, N. Grattan||Nail, Major Joseph||TELLERS FOR THE NOES.—|
|Edgar, Clifford B.||Neal, Arthur||Colonel Leslie Wilson and Mr.|
|Edwards, Allen C. (East Ham, S.)||Newman, Sir R. H. S. D. L. (Exeter)||McCurdy.|
|Edwards, Major J. (Aberavon)||Nicholson, Brig.-Gen. J. (Westminster)|
|Elveden, Viscount||Pearce, Sir William|
Original Question put, and agreed to.