PUBLIC WORKS LOANS BILL. (Hansard, 19 July 1923)

§ Mr. SHORT
I have raised the Question of the provision of Clause 3 of this Bill in reference to the Eyemouth Harbour Trustees, but have been unable to get any satisfaction from the Financial Secretary to the Treasury, though I received no reply which was not in accordance with his usual courtesy and charm of manner. I have had an opportunity of looking up the Paper to which he called my attention, and while it makes some matters clear it leaves me in doubt. Clause 3 concerns the loan to the Eyemouth Harbour Trustees under the Harbours and Passing Tolls Act, 1861. The provisions of that Act, which are very comprehensive, prescribe the authority which can borrow the rate of interest which can be paid, and the period within which the principal and interest must be paid off. The period, I understand, is 50 years. I would like the right hon. Gentleman to say precisely which Section of the Act of 1861 applies in the case of this loan of £10,000? We are told in the White Paper that there was a Memorandum made in connection with this loan on 11th March, 1892. I have made inquiries in the Library, but I have not been able to get a copy of this Memorandum. At any rate, we are told that the sole security for this loan is with the Fishery Board for Scotland and con- 2682 firmed by Section (3), Sub-section (2), of the Public Works Loans Act, 1901. I should like to call the attention of the House to that particular Act. Whereas, pursuant to an agreement made in the year one thousand eight hundred and ninety-two, the sum of ten thousand pounds was advanced by the Public Works Loan Commissioners to the Eyemouth Harbour Trustees on the security of the harbour revenues, with the collateral security of the Fishery Board for Scotland, and it has been arranged by the Public Works Loan Commissioners, with the consent of the Treasury, that, on payment of the sum of five hundred pounds to the Fishery Board for Scotland, the Eyemouth Harbour Trustees should be released from their liability in respect of the said loan of ten thousand pounds, without prejudice to the liability of the Fishery Board for Scotland to repay the said loan; Therefore the said agreement is hereby confirmed, and, on payment of the said sum of five hundred pounds, the liability of the Eyemouth Harbour Trustees in respect of the said loan shall be extinguished. There is not a single word in the White Paper representing the section that I have now read from the Public Works Loans Act, 1901, and there is nothing to indicate—though I presume the provisions of that Act were carried out—in the White Paper that this £500 was paid, and thereby the liability of the Eyemouth Harbour Trustees done away with in consequence of the payment. In fact, the White Paper is entirely lacking in explanation, and it does not indicate, so far as I can see—though there may be something included in the Memorandum which is not before us and a copy of which I cannot get, though I have made application in the Library—whether the liability of the trustees was wiped out by this particular Section, though I gather from the peculiar wording of the Act of 1901 that such was the case.
From the White Paper we gather that the amount of the loan was £10,000, the amount repaid (including amounts remitted) £5,943, the amount of principal outstanding £4,057, and the amount to be remitted £200. These figares do not convey to any ordinary Member of the House any fair idea of what has actually taken place. It would appear that under Section (3), Sub-section (1), of this Act the Eyemouth Harbour Trustees have already been made a free grant of £23,352, and that at a later stage under Section (2), Sub-section (2), of the Act of 1901 we have made a further grant of some- 2683 thing in the neighbourhood of £9,500, assuming that they cleared their liability by making a payment of £500. All this is done on the security of the Fishery Board for Scotland, and what I want to know is whether the liability of the £9,500 has been met by the Fishery Board out of the money provided by the taxpayers of this country, and, if so, to what extent, because when this loan was granted it was clear that it was granted in accordance with the provisions of the Act of 1861 and on the understanding that the principal and interest would be paid within a period of 50 years. There has been a distinct departure from the powers granted under the Act of 1861, and it would appear, as I know of nothing to the contrary, that the taxpayers have had to meet this liability. I make this reservation, however, that it may well be that under the Memorandum of March, 1892, to which I have referred, the condition in reference to the surplus herring branding fees explains what I, at any rate, do not understand at this moment.
Therefore, I could not resist this opportunity of giving the right hon. Gentlemen another chance to explain, with his usual courtesy and good will, what is the exact meaning of his own Memorandum. I have been long enough in the House to have noticed the way in which the right hon. Gentleman used to handle matters from below the Gangway on this side, and the charm and the courtesy which he usually displayed then and which he has displayed since he has been on the Government Front Bench. I think I have submitted sufficient evidence to show that there is occasion for explanation. There are matters not fully and completely explained in the White Paper, and, in those circumstances, I venture, at this late hour, to request the right hon. Gentleman to make a little clearer what he has attempted to put in the White Paper, and which appears to me to be incomplete.

§ Mr. EDE
In the Debate on Tuesday night, after the hon. Member for Wednesbury (Mr. Short) had raised the point to which he has just alluded, I raised another, and the right hon. Gentleman, when he came to answer, frankly said that he knew nothing about it, and that 2684 his officers knew nothing about it either. Since then, I have taken the trouble to inform myself on the point, and I find that the facts are precisely as I stated them. As this is a matter of considerable importance to all local authorities in the country whose rateable value is less than £200,000, I think I am justified in raising it again, to see if the right hon. Gentleman can now give us some further information. In 1919, certain local authorities obtained loans from the Public Works Loans Board at a certain rate of interest on a mortgage of their local rates, with the understanding that if the rate of interest at which the Public Works Loans Board borrowed money increased the rate of interest which those local authorities paid should also be increased.
As a matter of fact, the local authority in which I am interested—I have since discovered that there are many other local authorities in the same position—about five or six months afterwards had their rate of interest increased by one-half per cent. That was the peak. Since then the rate of interest has fallen. What I asked the right hon. Gentleman the other night, and what I repeat to-night is: does he intend, now that the rate of interest has fallen, to give the benefit of that fall to those local authorities which were placed at a disadvantage owing to the rise in the rate of interest? Inasmuch as the Public Works Loans Board covered themselves against any rise in the rate of interest, I think they should now share with these local authorities the benefit they are receiving from the reduction of the rate of interest.

§ The FINANCIAL SECRETARY to the TREASURY (Sir W. Joynson-Hicks)
I think there is a good deal in what the hon. Member for Mitcham (Mr. Ede) has said, but, if he will forgive me, I do not think it is quite what he said on the last occasion. I understood him then to say that a local authority which had accepted a loan at the rate of 6 per cent. was called upon later on to pay 6½ per cent.

§ Mr. EDE
I corrected only to-day my speech in the OFFICIAL REPORT, and I remember I stated that it was set out in the mortgage deed that the rate of interest would go up, if the rate of interest in the country went up.

§ Sir W. JOYNSON-HICKS
As far as that is concerned, I will make inquiry. But I understood that the hon. Member was to give me particulars of one or two cases.

§ Mr. EDE
I did not get much time yesterday. I had to have some sleep.

§ Sir W. JOYNSON-HICKS
As to that, I fancy we are all in pretty much the same position. Still, if the hon. Member will let me have details, I will make inquiry, and if the facts be as stated I will consider whether a reduction should be made. The hon. and learned Member for Wednesbury (Mr. Short) takes great interest in the Eyemouth Harbour Trust. He has had an opportunity of gaining a fuller knowledge of the facts by reading the White Paper, and he has fully enlightened the House in regard to them. It is not necessary therefor for me to add anything much on the matter. He has said a good deal about Eyemouth Harbour, but he has not told the House why it was built or what it was intended to do. As far as I understand it was built for the convenience of fishermen who desired to fish in those waters.

§ Mr. PRINGLE
That is usually what these harbours are for.

§ Sir W. JOYNSON-HICKS
I rather expected the hon. and learned Member to give the House that information. Curiously, this is a case in which the Scottish people seem to have got the better of the English people. The harbour was built in 1,867, and £10,000 was borrowed from the Public Works Loan Commissioners for the purpose. Frankly the undertaking proved to be a complete failure, and the only chance we have of getting the money back is from red-herring branding fees. I mentioned these facts on the Second Reading, and some hon. Members for Scotland then exhibited great glee at the fact that at last they had got level with the Southern, and had got something out of England for nothing. The harbour is a failure, and the money is lost. The only security we have is from the herring branding fees payable to the Fishery Board of Scotland. This is a very small source of revenue, and has fallen off of late years, because of the 2686 depression in the herring industry. The hon. Member told us that £4,000 had already been lost. Every year, in order to keep the amount of money in the Loan Fund right, we have to come to Parliament for this small sum of money if Scotland is not able to repay it. For the last two or three years she has not been in a position to pay it. Perhaps, if the herring fishery improves to any extent, there may be more fees for branding, and we may not have to come to Parliament in future years for the money. £200 is the sum they are called on to pay yearly, and if it is not forthcoming this House has to make the deficit good. That is done in this Bill, and I hope hon. Members will, as in former years, kindly pass this Measure.

§ Mr. PRINGLE
I think the admission of the right hon. Gentleman should be put on record—that the only case in which Scotland has benefited from her connection with England is this case, and that the benefit is to the extent of £200 a year.