TRADE FACILITIES [MONEY].

HC Deb 19 February 1924 vol 169 cc1594-660

Considered in Committee under Standing Order No. 71A.

[Mr. ROBERT YOUNG in the Chair.]

Motion made, and Question proposed,

"That it is expedient:

1. (a) to amend the Trade Facilities Acts, 1921 and 1922,
1. (i) by increasing from fifty million pounds to sixty-five million pounds the limit on the aggregate capital amount of the loans the principal or interest of which may be guaranteed there under; and
2. (ii) by extending to the thirty-first day of March, nineteen hundred and twenty-five, the period within which guarantees may he given under the Trade Facilities Act, 1921;
2. (b) to authorise the Treasury, with a-view to the promotion of employment in the United Kingdom, to pay, in respect of a period not exceeding five years, an amount not exceeding three-quarters of any interest payable in respect of such portion as is to be expended in the United Kingdom of any loan the 1595 proceeds whereof are to be applied on or in connection with a public utility undertaking in some part of His Majesty's Dominions or in a British Protectorate, so, however, that the amount so payable by the Treasury shall not exceed one million pounds in any one year or five million pounds in all;
3. (c) to amend the Overseas Trade Acts, 1920 to 1922, by extending to the eighth day of September, nineteen hundred and twenty-six, the period within which new guarantees under those Acts may be given, and by extending to the eighth day of September, nineteen hundred and thirty, the period during which guarantees under these Acts may remain in force;
4. (d) to amend Section three of the Trade Facilities and Loans Guarantee Act, 1922 (Session 2), by increasing to seven million pound: the aggregate capital amount of the loan to be raised by the Government of the Soudan, the principal and interest of which may be guaranteed under the said Section."—[King's Recommendation signified.].]

The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham)

I wish to draw the attention of the Committee for a very few minutes this afternoon to the Financial Resolution which I am moving, and which appears on the Order Paper to-day to deal with the problem of unemployment. There are two reasons why I am encouraged to-day to make only a brief statement. First of all, this Resolution is merely a preliminary to a Bill which will be discussed, I hope not at any undue length, by the House. In the second place, the policy recommended in our present proposal has already been endorsed by the House of Commons. For these reasons I feel that only a brief statement of a general character is required at the present time. I would like to deal, first, with that part of the Resolution which proposes to adopt the recommendation of the recent Imperial Economic Conference. Hon. Members will recall that, on the second page of the summary of the Report of that Committee, it was proposed to pay up to a maximum not exceeding three-quarters of the interest on any loan raised in this country for expenditure of a capital character in the Dominions. The terms and conditions of the loan are more or less clearly set forth in the Resolution, and they will be elaborated in the Bill.

I ought to say to the Committee that this represents the adoption of one, at least, of the proposals of the recent Economic Conference, and the whole object of the adoption of this Resolution is to take a step which will minister to employment in this country. The payment up to a maximum of three-quarters of the interest is limited to £1,000,000 in any one year, and to £5,000,000 in all. An application must be lodged within a period of three years, though the proposal itself extends to five years. The fundamental part of the proposition is that it must be capital expenditure involving employment in this country, and at the same time it must be work undertaken by the Colony or the Protectorate. It is one of the conditions embodied in the Bill that it shall apply to work which would not normally be undertaken. That was part of the policy of our predecessors in dealing with unemployment, and it is one of the central parts of this Resolution.

It would be wrong to mislead the Committee by suggesting that this is other than a limited proposal. It is confined to public utility undertakings. It is suggested that the payment of three-quarters of the interest should be subject to review by the Advisory Committee which already exists under the Trade Facilities Act for the purposes of the guarantee behind capital expenditure in this country. I do not know whether I am strictly in order in dealing with that point at this stage, but perhaps I may be permitted to say that this suggestion is one for the Committee stage of the Bill, which must follow the Resolution. In any case there will be ample opportunities for discussing an Amendment of that kind on the Bill. So much in brief summary for that part of the Resolution referring to the recommendation of the Imperial Economic Conference.

Another and a very important part of the Resolution deals with the extension of the date under the Export Credits Scheme. We propose to extend to the 8th September, 1926, the period within which guarantees may be given, to the 8th September, 1930, the period during which guarantees may remain in force. I need not recall the history of the Exports Credits Scheme, which is, of course, familiar not only to those who were Members of the last Parliament but also to the new Members of this House. It was launched in 1919,;primarily for the purpose of trying to assist our trade with certain countries in Europe and the Near East, which was suffering dislocation due to depreciated exchanges and other causes. Hon. Members will recall that the early part of this scheme proceeded on the basis of a grant. At a later date, not very long afterwards, that proposal was amended, and the House of Commons agreed to the system of a guarantee of bills, and that has been the policy followed in this matter of export credits ever since.

I need not detain the Committee with the details of the advance part of the scheme. According to the latest figures, out of the £26,000,000 originally promised by way of guarantee of bills under the amended form of export credits, about £8,500,000 down to a recent date has either been taken up or has been applied for. Therefore there, remains out of the £26,000,000 about £17,500,000 which is available for this purpose, so that it is not necessary this afternoon to ask the House for any further financial provision. All that is required under the Resolution is simply an extension of the date in order that we may continue the policy, we hope, with increasing success, represented in this scheme, and originally introduced in 1919.

I know there are hon. Members who ask what our liabilities may be under schemes of this kind and what possibility of risk and loss is involved. With regard to the guarantee part of the scheme, hon. Members will recall that it provides for the establishment of a reserve fund which we hold as against any risk and possible loss, and accordingly, with all the information now to hand, I think I can safely say this afternoon that in that part of the scheme any possible loss is covered by the reserve fund which will be established as the scheme develops. That is the position, and I hope it will reassure hon. Members in regard to any doubts which they may entertain on this point.

Mr. A. M. SA MUEL

Does that cover any possible loss that may arise out of the assistance given by us to our export trade to Rumania?

Mr. GRAHAM

I am afraid I cannot reply to that question offhand. Information may be available from the Board of Trade later in the evening giving full information on these specific points. As a matter of fact the Board of Trade is responsible for that part of the scheme and I am only dealing with it generally.

Mr. HARCOURT JOHNSTONE

From what source does the reserve fund come which is to indemnify all losses sustained under the scheme?

Mr. GRAHAM

It is a premium which the Government charge in respect of the risks involved. I will get my hon. Friend additional information, but that is the principle on which the reserve fund is conceived. I have summarised two parts of the scheme covered by this Resolution—

Sir BEDDOE REES

rose—

Mr. GRAHAM

I would ask hon. Members to allow me to proceed with my general statement. There will be opportunities later for putting questions with regard to details. My purpose this afternoon is to make a purely general and not a detailed statement. The last part of the Resolution refers to a guarantee of principal and interest in respect of a Sudan loan, and I recognise that that involves a matter of very considerable controversy in the House of Commons; but I am entitled to say to hon. Members that this, of course, is not a proposal of ours. It is a comparatively old story, dating from 1909, and we have succeeded to a set of circumstances of very grave importance, which we are compelled to realise, and we have to make a proposal to-day which I venture to suggest the House of Commons could hardly avoid. T will not take time to indicate the course of legislation since 1909, but hon. Members know that various loans have been raised, and that at a comparatively recent date it was necessary to find £7,000,000 in respect of the work of irrigation in the Gezireh plain, which has very large cotton-producing possibilities. One-half of the £7,000,000, namely £3,500,000, was raised some time ago, and it was hoped at that time that it would not be necessary to come to the House of Commons for any further guarantee as to principal and interest for the surviving £3,500,000. It was believed that by leasing the railways, or some other device, it would be possible to avoid a request of this kind. But these schemes or proposals proved to be impracticable, and accordingly we are asking Parliament in this Resolution to give us powers to guarantee principal and interest in respect of the other half of the loan of 7,000,000, namely £3,500,000 at the present time.

I need hardly say to the Committee, at this late stage in the negotiations in the Sudan, that, of course, these loans are subject to quite strict regulation. There are certain arrangements regarding priority, and there are certain arrangements affecting the revenue and assets, and, as far as we possibly can, we seek to protect the British Exchequer in the matter of liability. On the wider question of policy there is, undoubtedly, substantial difference of opinion. 1 am not competent to deal with that to-day on its political side, but the main and the important consideration is the great cotton-growing possibility of this desert; and there is, in the second place, the prospect of the provision of considerable employment in this country under the large contract which has been placed with a British firm. As regards the cotton-growing possibilities, I think the burden of evidence goes to show that, if this area can be irrigated and cultivated, it will be possible to plant a cotton crop in July, 1925, and my information is that the contract proceeds on that understanding, and that, if the area which is now specially in mind is cultivated, it will be capable of Sending about 70,000 bales of cotton every year to Lancashire, which I think is a consideration of the very greatest importance to an industry which is exposed to peculiar difficulties at the present time —difficulties which I think many of us believe will not be minimised, at all events in the years that lie immediately ahead.

Accordingly, from every point of view, whatever Government is in power in this country, it is necessary to try to take a long view of this situation, and the present Government, after reviewing all the facts, have come to the conclusion that it is our duty to ask the Committee to authorise the additional guarantee contained in this Resolution. In the second place, the Committee will expect me to say a word or two regarding the provision of employment under this contract. Not so very long ago the contract in the Sudan was on the basis of cost and percentage. I have always held the view, which I think is shared by a large number of hon. Members, that that is a very undesirable basis for a contract of almost any description and I am, therefore, glad to be able to tell the Committee that the contract is now let on something resembling an economic basis to a British firm, and that that British firm must make a very large call for plant and engineering and other material in this country, and to that extent there will be a definite provision of employment in Great Britain under this part of the Financial Resolution and under the corresponding part of the Bill which is framed upon it. On these two grounds, without going into the political controversies on this matter, I think I have justified the proposal, at all events from the. Treasury point of view, although I ought to say that no doubt the other Department concerned will be willing to give every information on this part of the question.

I come now very briefly to what is, after all, the immediate and, from many points of view, the urgent part of the Financial Resolution, namely, that part which deals particularly with Trade Facilities, that is to say, the guarantee under the Trade Facilities Acts of capital undertakings—undertakings involving capital expenditure in this country—with a view to the provision of employment. The House has already accepted the principle of this part of the Resolution, and innumerable schemes have already proceeded, after review by the Advisory Committtee estabiished under the Trade Facilities Act. The position at the present time is that the Act expired on the 9th November of last year, and at that time there was a balance remaining, of the guarantee which was available, amounting to between £11,000,000 and £12,000,000. We propose to provide an additional guarantee of £15,000,000 al the present time, and the net effect of our proposal in this Resolution will be that, until the 31st March, 1925, there will be available, by way of guarantee under the Trade Facilities Acts for undertakings involving capital expenditure in Great Britain, a sum of not less than £26,060,000. That, of course, will apply to the later period, subject to the extension of the date, but that is what we are proposing for a period of rather more than one year from the present time, or, perhaps, about a year and a half from the date at which the recent Act expired.

As hon. Members know, the Advisory Committee under the Trade Facilities Acts exposes every scheme to very close scrutiny. I quite recognise that there is a good deal of objection, or at least of criticism, in regard to the decisions of the Advisory Committee. It is very far from our intention to withdraw from this proposal the necessary elasticity which in our judgment it should show; but, on the other hand, I think the Committee will agree, and our predecessors would agree, that we should be failing in our duty if, without proper investigation, we exposed the British taxpayer to a very large liability in respect of undertakings which, after all, must be promoted by private firms or bodies in this country. There is, outside, a good deal of misapprehension with regard to this scheme. We very often hear that it refers to advances or grants, but, as the Committee knows, nothing of the kind is involved. It only provides guarantees—nothing more—and that after the strict, inquiry to which I have referred. Again, there is criticism on the point that the proposal which we are now making is too limited in its character. I have heard it suggested that them is no reason why we should not extend the guarantee to, say, £100,000,000. [HON. MEMBER: "No, no!"] I think there are two very practical replies to a proposal of that kind. In the first place, although this scheme does not involve any immediate charge on the State, and, in fact, has involved only a trifling charge, due to one loss of about £4,000, under all the schemes promoted up to the present time, it is, nevertheless, a liability and a possible burden which we must keep in view; and, although I do not profess to be an expert in these matters, it must, of course, be regarded also from the standpoint of our general credit. That, I think, is a consideration which the House of Commons is bound to take into account.

Apart altogether from an important issue of that kind, there is an immediate and practical issue under this scheme which, I think, affords a full and true reply to the suggestion that we should indefinitely, or almost indefinitely, extend it at the present time. The whole object of the Trade Facilities proposal is to get an early application for guarantees behind schemes involving capital expenditure which will provide employment with the least possible delay. If you indefinitely extend the amount, and certainly if yon extend the date, you encourage the idea that there is plenty of time for applications, and that they may be lodged just as firms find it convenient to do so; whereas, if you keep the proposal on the basis on which we have now placed it, you encourage the idea that applications are to be lodged at an early date with the least possible delay, and in that way we get an early provision of employment under this scheme. At the present time there is almost everything to be said for the last consideration I have advanced, because there will be a real economy to this country if we can get employment now, if I may use that popular phrase. The saving under the Unemployment Insurance Act, in Poor Law relief, and in public health assistance in so far as it arises from ill health due to unemplcyment—the saving under these heads would be very considerable; and it is, therefore, the policy of the Government to try and encourage every scheme which will give early employment. For that reason we have placed this proposal under the Trade Facilities Act in a general category proceeding on that idea, and I venture to hope that, after the House of Commons has looked closely into the scheme, it will support us in that view. I ought to add that, if we find by experience that the applications arc larger in number than we have at present agreed to anticipate, there is no reason why the House of Commons should not consider the extension of the guarantee, and, of course, the necessary adjustment of the date. This is no final or fixed proposal, subject only to the consideration I have advanced regarding the early provision of employment. There is one other restriction which I ought to mention to the Committee in conclusion. After all, while the Government itself might extend the date and enlarge the scope of the guarantee, hon. Members must recall that this money must be raised by firms and undertakings in the ordinary way in the open market, and, of course, they are subject to all the difficulties of the market from time to time. I think that that also encourages the proposition in. the form in which we are now putting it forward.

I have purposely dealt very briefly and generally with the four parts of the scheme, in order to afford hon. Members in all parts of the Committee the largest opportunity for discussing what is un- deniably an important contribution to the problem of unemployment. We do not suggest that there is anything new in these proposals, but we are confident that, if they Are worked with good will and freedom during the next year or 18 months, they will provide within the four corners of the Dominions, in the Sudan, and in the different countries of the world in which our export credits operate, and also under the trade facilities scheme itself, employment for a very large number of people, and so case that situation of stress, if not of strain, under which this country has suffered during the past three years.

Sir PHILIP LLOYD-GREAME

I am sure the Committee in all quarters will be grateful to the hon. Gentleman for the very clear and lucid explanation which he has given of this rather complex Resolution. I do not rise to offer any opposition to it, because it is the policy which the last Government proposed and were carrying out, and it was also the policy of the previous Government. I was very much interested to hear the hon. Gentleman in his closing remarks say that he was confident that this proposal, when given effect to, would result in finding in the different parts of the Empire sources of employment for very large numbers of the people of this country. I can well remember, when I was on that side of the Table and he and his Friends were on this, and when I was proposing precisely the same proposals which he is now submitting to the Committee, and going rather farther than he goes, we were greeted from that side of the House with the taunt that this was trifling with the subject, that these were useless proposals, that they did not go anywhere near the root of the problem, and that we should have to wait for the time when a Socialist Government came into power to show us how to deal with the unemployment question in a drastic manner. Naturally I am only toe glad that the hon. Gentleman accepts the policy we have laid down. I am quite sure that it is a sound and practical policy, and as long as Socialism in practice takes the form of using Government credit to stimulate private enterprise where private enterprise is engaged on sound undertakings, we can assure the hon. Gentleman that that rather novel form of Socialism will secure the complete assent of all my Friends on this side of the House.

I hope the hon. Gentleman will confirm himself and his colleagues in this very sound faith and that he will give a rather wider outlook to this problem. It. is with that purpose I want to put to the hon. Gentleman, and to those of his colleagues of the other Departments associated with him, one or two questions. In the first place, with regard to paragraph (a), I think the hon. Gentleman would have been wiser if he had put in a rather larger figure. I quite agree with the general grounds he has advanced. I think he was quite right in what he said about the method in which these issues have to be raised. Then he went on to say that, if they found by experience that they wanted a larger guarantee from the House, they could always come back and get it. But the hon. Gentleman has had considerable experience of what happens in regard to Parliamentary time, and I think he would be wise to put into his Resolution a sum which will certainly cover anything, even taking the most optimistic view of what is likely to happen, that he is likely to require in the year and a quarter that this scheme is to run. I should have thought, if there was any prospect of a trade revival, if he administers this scheme with a desire to stimulate enterprise, he might well find the limit of £65,000,000 exhausted. My recollection is that a sum of £38,500,000 has already been sanctioned. Then the Committee continued their work, and there were other schemes submitted to them which they considered, on the assumption, quite rightly, that Parliament would renew the Bill. I think that, out of those schemes which came before them since November last, they have practically approved of something like £5,000,000 or £6,000,000. That, for all practical purposes, means that you have already guaranteed £45,000,000 or £46,000,000, and that all you will have for the next 15 months is £20,000,000. I should have thought, if there was the possibility of electrification on the part of some of the railways, it would have been desirable to put in a larger figure, and I would be glad if the hon. Gentleman could make this figure, say, £75,000,000.

I will give another reason why he would be wise to do that. I hope that it may be possible to combine (a) and (b) in some cases. There may well he cases which will require a grant of interest during the period of construction under the powers the hon. Gentleman seeks to take in paragraph (b), but which might be greatly assisted if they could have a guarantee under the Trade Facilities Act which would cover the whole period of the scheme. In that case he should contemplate the possibility that there would be schemes coming from the Dominions and Crown Colonies which might apply to the Trade 'Facilities Act for a guarantee, while applying at the same time to take advantage of the direct grant of interest under paragraph (b). Therefore I suggest to him that he should consider whether he should not increase the sum to £75,000,000.

With regard to paragraph (b), this was a proposal which was fully thrashed out at the Imperial Conference. We were all unanimous upon the desirability of it, and I am very glad and pleased to see the hon. Gentleman has so promptly adopted it. I only want to ask him two questions about it. I take it he will accept the whole of the Resolution of the Imperial Conference and that these grants will be equally available to private enterprise engaged on work of public utility as they will be to any public authority engaged in public utility work. The second point is with regard to the wording of the Resolution. He says, "For a period not exceeding five years." I take it that that limitation means that in respect to any one transaction the Government liability will not last more than five years, but it does not mean that the scheme will not last more than five years? I take it that the scheme may last eight or nine years, that you will entertain applications for the next three years and that any application so considered may involve grants for a period of five years. It is always difficult to forecast what will be the amount required, but again I should be inclined to suggest that the hon. Gentleman should take a rather larger figure than he has taken. He is proposing to limit it to £5,000,000 in all, and £1,000,000 in any one year. It is quite possible that that may be as much as will be done. But, supposing this scheme went better than he expected, I am sure he will be prepared to ask and I am sure the House will give him, wider powers. When we were discussing this at the Imperial Economic Conference, the representative of India explained what the Indian railway programme was likely to be, that the Indian Government accepted the general principle, 1 think, of the Ackworth Report, and that they contemplated the extraordinary expenditure of £100,000,000 in five years on railway development suggested to the Indian Government that they should expedite this programme and put into the first two or three years what would normally have been the orders placed in this country in those years and in the fourth and fifth years. If the Indian Government would be prepared to consider that, there would be an enormous advantage to this country, and I think also a great advantage to Indian railway development which is terribly behind.

would suggest that an effort should be made by the Government of this country to press upon the Government of India that they should put in hand within two or three years the whole of that railway development programme of £100,000,000. I hope that may he the more possible, because I sec that the Indian Government have made the reform of separating their Railway Budget from the ordinary Indian Budget, and I hope that will mean that it will be more possible to consider this scheme simply on its merits. I should like hint to consider rather carefully before the Report stage whether it would not be wise to put a somewhat larger figure there.

5.0 P. M.

There is a perfectly separate point which I understand is not covered in this at all. This proposal under (b) was a proposal to give grants to public utility undertakings in the Dominions Or Crown Colonies which, once they received that assistance, could carry on on their own. But there- is a great deal of Colonial development which will not come in under this, which requires not merely a grant of interest but requires a direct loan of money from the British Government if the Colony is to undertake its work at once. That applies not so much, or perhaps not at all, to development in the Dominions, but it applies enormously to development in the Crown Colonies. Let me take one example alone, the further development of the Uganda Railway, which is absolutely vital for the development of cotton growing in Uganda. The hon. Gentleman is probably well acquainted with the extension which is proposed, which is partly in Uganda and partly in Kenya. The route of that has been worked out and the proposal has the enthusiastic support of the Empire Cotton Growing Corporation. He will find, if he has not already considered that question that this was a proposal which we considered and which I think even the watchdogs of the Treasury were prepared to admit, but it could not go through on the basis of a mere grant of interest or part interest for a period of five years. It was dependent, so far as part of the expenditure was concerned, on a direct advance from the British Treasury to the Government of Uganda or Kenya. I think he will find, too, that there are other schemes probably when you conic to Nigeria, and the same is the ease when you come to deal with Tanganyika. I know of one very small but if important piece of expenditure on the Lindi tramway. It is another of the cases which the Cotton Corporation have been keen on advocating. You require a direct power for the Government as a Government to make an advance in necessary cases to Colonial Governments. The development of cotton in Africa is simply a question of transport, and that is the view of the Cotton Corporation. You have your experts. I agree a good deal has to be done. You have labour considerations, certainly, but, when you work this out, as I have tried to do, with the Cotton Corporation, you find that transport is the fundamental question.

If you take Uganda, I believe there will be no difficulty about labour there, just as in the Sudan, where it was anticipated that there would be difficulty about labour, in the extraordinary way in which African labour seems to migrate when it has a certainty, the labour came through in the Sudan. I put the thing too high in saying it is simply a problem of transport, but it is a problem which, even given the labour and given the expert assistance which the Cotton Corporation can give, is absolutely insoluble unless you get the transport problem settled, and that problem in these Crown Colonies which have already incurred large expenditure in development will be insoluble unless the Treasury are prepared to take their courage in both hands and, where there is a case made out for cotton development, are prepared to make a direct advance to the Colonial Government in order that they may go on with railway development. I would beg the hon. Gentleman to include in the financial Resolution whatever financial power is necessary in order to enable the Treasury and the Colonial Office to make those direct grants where they are necessary to the Crown Colony Government. He had much better to do it in this Bill if he is going to do it at all, because he will get it in one single Bill. It is a proposal which, I believe, will be supported from all quarters of the House. We have started with cotton development ten years too late. It ought to have been done years ago. The fact that the American cotton crop is going to be consumed in ever greater proportions at home makes every pound you can invest in this way ten times worth while. I believe it is the best investment for unemployment at present or for employment as affecting the cost of living in future, and is one of the best reforms you could possibly undertake, and I most sincerely hope the hon. Gentleman will include it in this Resolution and in the Bill. I can assure him that the power he has taken here, useful as it is in dealing with public utility undertakings in the Dominions, is going to be useless in dealing with these Crown Colony railways and if he has any doubt about that I hope he will ask the Colonial Secretary who, I am certain, will bear me out. In all these schemes which are prepared for Colonial development he should do what we were doing and keep in the closest possible touch with the Empire Cotton Corporation over the development of any of these transport schemes.

There is another provision, which I am sorry to see does not figure in this Resolution, which would be appropriate to it and which applies to expenditure at home. One of the alterations which we made in the scope of the Unemployment Grants Committee was to give them the power to make a grant of part, interest for 15 years to revenue producing public utility undertakings, such as gas and electricity companies. I thought it had been agreed with the Treasury that, not only should there he that power of giving the interest year by year to these companies, but that in any approved ease there should be the power to give, in place of interest year by year, the discounted capital value of the interest granted. We had some evidence that that would be a very considerable incentive to public utility companies, particularly to gas companies, in incurring the necessary capital expenditure in putting down and extending their mains and so on. If that is work which could be done it is valuable work. I hope the hon. Gentleman is not going back upon that proposal. [An HON. MEMBER: "They are doing very well."] Really, that is the kind of interruption which shows that the hon. Member cares more about his class prejudice than about finding work.

Mr. PRINGLE

Why worry about it?

Sir P. LLOYD-GREAME

I do not, and I do not think the Financial Secretary will either. But I hope he is not going back upon that proposal. I would ask him, if he proposes to give the discounted capital value in approved cases, whether it requires financial authority apart from the Estimates. If he does require such financial authority ought not that to be included in the Resolution and in the Bill which will be founded upon it?

I think the increase of the guarantee for the Sudan irrigation needs no apology at all. That irrigation is vital to the development of cotton in the Sudan. I think the full amount should have been taken originally, and I am sure the House will sanction it. My question would go rather in the other direction. I should like to be assured that he is taking full powers now for whatever guarantee is necessary for public issues for the completion of the irrigation of the present Sudan cotton growing scheme. I should be glad if he would deal with the specific points I have raised, and I hope he will see his way to give a further extension and to consider the Amendments which I have suggested. He must move them. We cannot. But I am sure it is right, because I am certain these are the right lines, and now that he has come into practical contact with the problem he will appreciate that there is nothing so good for unemployment as this kind of assistance which helps on the ordinary machine. I hope he will extend it for this reason, that these schemes, which have been of so great help when unemployment has been at is worst, are going to be of most help when trade begins to revive, and just that form of Government assistance is wanted to get behind the machine.

Dr. MACNAMARA

I should like also to heartily congratulate the Financial Secretary on the extreme lucidity of his statement. I greatly admired the ability with which he selected the salient points of a difficult technical Treasury Resolution, and placed them before us so that we could understand them. We are really discussing a Money Resolution which involves a first-class matter of public policy, and although I should be the last to desire to interrupt the general harmony of the discussion, there are one or two things I should like to say. We have been constantly and insistently criticised on the ground that our policy, and the policy of the succeeding Government, has mainly devoted itself to finding money relief as a palliative rather than, as we ought to have done, making work. That has been the general criticism made against us. Further, the number of men we have been able to find work by our several schemes has always rather been spoken of with some amount of scorn and derision. I do not think I put it too high. Hon. Friends on this side will agree that. I am not overstating the facts. We have been told continuously, and in pretty clear terms, that to give money relief without service in return is really a waste of public money, a criminal waste. a sinful waste and a shameful waste. All these terms have been applied to our efforts. I have no doubt some hon. Members say that they are true. Only last Wednesday the Lord Privy Seal said that what we did was simply to buy off the anger or discontent of the unemployed people by giving them grants or bribes. Let it go at that. Here we have, and I am glad to see it, the Labour party's first constructive essay at finding work as a better alternative to money relief. Do not let me be unfair. This is their first, but it will not be their last by a long way. [HON. MEMBERS: "Hear, hear!"] Certainly, and they have not been at it very long. The Financial Secretary to the Treasury says, quite rightly, "This is the same thing over again." The Financial Secretary made that point over and over again. He said the House of Commons had already sanctioned this in principle, and that it has been put into operation by previous Governments.

The maximum of loans guaranteed under the Trade Facilities Acts is to be raised from £50,000,000 to £65,000,000, and the period of the Act is to be re-enacted so as to run to the 31st March, 1925. The second proposal is for the encouragement of development work oversea, and the Government undertakes to pay three-quarters of that part of the interest of a loan raised for such purpose as may be spent in this country. Only one million in this respect is to be spent in any given year, and not more than £5,000,000 in all, I cordially associate myself with my right hon. Friend who has just spoken, and think the Financial Secretary would be wise to give himself a little financial elbow room in regard to that proposal, and to make it more elastic, and to make provision for a larger expenditure, if it be expedient. The third proposal is an extension of the period of operation of the Overseas Trade Facilities Acts. The Financial Secretary says: "I do not want to raise the maximum of export credits allowed because there are only about £8,000,009 now extant, and £26,000,000 is the maximum." Finally, the Government of the Sudan is to be guaranteed in respect of a loan up to £7,000,000 as against the £3,500,000 previously enacted.

So far, so good, but with every desire to praise, and with every desire to make allowance, does any hon. Member honestly say that these proposals represent anything approaching the requirement of the Labour Government's undertaking. [HON. MEMBERS: "No!"] I am glad to hear that. I suppose it will he requited hereafter. [HON. MEMBERS: "You will not have to wait long!"] Hon. Members say that we shall not have to wait long. I am glad to hear that. Last Tuesday, the Prime Minister said that all what we and previous Governments had done was to nibble at this question of dealing with unemployment. I wonder what the Prime Minister calls the present proposals. I will leave it at that: The only direct Treasury expenditure involved in this is a certain, indeed, I will not say a certain, £1,000,000 for each of five years. As regards the rest, it is simply a collatoral guarantee of loans, for which the direct security is such, that the Treasury's repose at night need not be interfered with for any single five minutes. As regards experot credits, there is no direct grant there. The Financial Secretary told us about the reserve fund. I congratulate the Treasury on this scheme they are getting off very well.

The King's Speech of the late Government promised an extension of the Trade Facilities Acts and the export credit schemes. Its promised aid from public funds for assisting the execution of public enterprises throughout the Empire was rather more than is here proposed. The late Government promised direct grants from public funds, which is rather better for them than long guarantees. There is, therefore, nothing new n any of these proposals, and the Financial Secretary does not claim that they are new Their proposal is rather less, when I take the last point, than was promised in the King's Speech of the late Government. The maximum under the Trade Facilities Acts to-day is £50,000,000. We began by making it £25,000,000. The late Government made it £50,000,000, and I gather that £42,000,000 have been exhausted. On the 16th October £36,000,000 were exhausted. The scheme ran on until some date in November, when the Act expired, and I gather that £42,000,000 of loan guarantees were extant. Therefore, £8,000,000 of the original maximum are left, and with the £15,000,000 additional now proposed the total will be £23,000,000. That is what the Board of Trade will have to deal with under the trade facilities scheme if this Bill passes, and they have a year in which to deal with it.

The Prime Minister made reference last Tuesday to a very remarkable document which was signed by Sir Allan Smith on behalf of the industrial group. It was a remarkable letter, which was sent on the 24th July last, to the late Prime Minister. Last Tuesday, the Prime Minister said that the letter was under consideration, and that proposals arising out of it would he made later on. I am paraphrasing his statement. That remarkable letter pressed in detail the urgency of railway electrification, the extension of tube railways, the re-conditioning of railways, canal and inland waterway development, a Lower Thames tunnel, a Grimsby floating dock, and a dock extension scheme for the London Pert Authority. If a fraction of those proposals were put in hand under the Trade Facilities scheme, the Government would reach their £65,000,000 in no time. I will, at this point, read a sentence or two from an appeal to the Nation by the Labour party itself: Unemployment is a recurrent feature of the existing economic system common to every industrialised country, irrespective of whether it has Protection or Free Trade. The Labour party alone has a positive remedy for it. We denounce as wholly inadequate and belated the programme of winter work provided by the Government.… that is, the late Government, which authorises the prospect of employment for only a fraction of the unemployed in a few industries. The Labour party has urged the immediate adoption of national schemes of production work. How far will the extension of the maximum from £50,000,000 to £65,000,000 under the Trade Facilities Acts give you the immediate adoption of national schemes of production? I press that point. I am bound to believe that my hon. Friends are sincere and honest in the appeal they made to the nation. They claim, above all, to be solicitous about those who are out of work. In view of their own promises I say that their present proposals do not go far enough, and they will have to be gingered up considerably. In the "Evening News," on the 15th January, there was an article written by the Lord Privy Seal headed: Finding two million jobs. What labour would do. I cannot hold the Lord Privy Seal responsible for the headline. I imagine that he was not responsible for the headlines, but he did say: The schemes of the Government.… that is, the fete Government, and, of course, it would be no lees true of the preceding Government, provide work for only about one in twelve of the unemployed. Can nothing be done for the other eleven? They are not going to do it this way. I press them, and I am entitled to press them, on this point. With all the emphasis I can put behind my words, I associate myself with the proposal that the maximum under the Trade Facilities Acts should be extended, because it is the immediate and fruitful thing now before us for the development of actual work in this country; it will give immediate employment and widen the resources of trade facilities when good times come again. It is a vital proceeding. I press the Government about this point. My right, hon. Friend the late President of the Board of Trade has just suggested £75,000,000 as the maximum to which the trade facilities schemes should be raised. Of course, I follow all that was said about the inexpediency of going too far, but I would point out that the Government have a year before them, and if they were able to implement one-tenth of the honest professions that they put before the people they will want, not £50,000,000 or £65,000,000, but £100,000,000. [HON. MEMBERS: "Would you vote for that?"] Yes, certainly, I would vote for it like a shot. I press for all I am worth the suggestion made by the late President of the Board of Trade. Instead of adding £15,000,000 to the maximum, and making it £65,000,000, if the Government would make it £75,000,000 a forward step would have been taken, not a very long one, because nobody can claim that it would be a big step. We are waiting for a. good deal More, and my hon. Friends have, told us that we shall not have to wait long. If the Government do what I have suggested, I shall be satisfied that I have not made this appeal in vain.

Mr. SHORT

I desire to congratulate the Financial Secretary to the Treasury on the very clear and concise statement which he has made upon this interesting though complex question. The right hon. Member for Hendon (Sir P. LloydGreame) said that this is a question which is not new to the House, and ho chaffed those on this side, as did my right hon. Friend the Member for North-West Camberwell (Dr. Macnamara), on their general attitude towards this question. I recall my right hon. Friend the present Prime Minister chaffing the ex-President of the Board of Trade for indulging in some form of Socialism. If I recall the words aright, he used the phrase "dabbling in Socialism." The complaint now made by the two right hon. Gentlemen who have spoken is that this does not go far enough. The complaint is that we have not brought in some revolutionary measure, not introduced at this very early stage the first great fundamental change in our economic system which would initiate real Socialism. I suppose that this is the real charge levelled against us. Of course, the right hon. Member for North-West Camberwell does not overlook the fact that the Labour party is not in power. It has taken office in very exceptional and very difficult circumstances. It is facing its responsibilities, as the Prime Minister said, with the hearty co-operation of all parties, and it is tackling those responsibilities in the interests of the country. But what would be the position of the right hon. Gentleman later on? He has already indicated his satisfaction with this proposal and has suggested that we should give guarantees to a maximum of £75,000,000.

Dr. MACNAMARA

Certainly.

Mr. SHORT

And he went so far as to say that he would vote hundreds of millions of pounds.

Dr. MACNAMARA

I did not.

Mr. SHORT

The right hon. Gentleman perhaps spoke in heat, and may have forgotten what he has said. He may have an opportunity before we go out of office of giving his support, but 1 think that we shall find him wanting. In the past few years we have had wide experience of unemployment, and of the administrative and legislative vagaries of the right. hon. Gentleman and of the right hon. Gentleman opposite, and when we look on the state of the country to-day we see that they have very little on which to congratulate themselves.

Dr. MACNAMARA

You are taking up our schemes.

Mr. SHORT

We are taking up your schemes at a very early date, but we are not taking them up because we are satisfied with them. When the Government brings forward those more drastic Measures, which the right hon. Gentleman complains are not produced to-day, possibly I shall be more willing to support it than he will be. A great deal has been said this afternoon by both the preceding speakers as to my hon. Friend's demands being largely an extension of the proposals incorporated in the two previous Acts of 1921 and 1922. While I am pleased with the desire of the Financial Secretary, I should have liked him to give us a little more evidence to justify his faith, and the faith of his Department, in the proposals which he now advances.

I believe that some hon. Members opposite would give guarantees for an enor- mous amount if they thought that it would bolster up the system of private enterprise. I do not think that there is any limit to the amount of money or credit of this country which they would be willing to use just to bolster up what they term private enterprise. We have been passing through very abnormal times. The conditions have been very peculiar, and I will not deny the cumulative effects of the various proposals which have been brought forward and embodied in the different Acts to deal with unemployment; but, nevertheless, no one who views the problem as I see it, and who appreciates the number of people who are unemployed, can be satisfied with what has been done up to the present. Under the Act of 1921 we gave guarantees to the extent of £25,000,000. That was increased under the Act of 1922 to £50,000,000, and of that sum £40,000,000, I understand, has been used in the way of guarantees.

We have also given, I think, under the Act of 1922 a substantial loan to Austria. I should have thought that the Financial Secretary would have given us some indication of the benefits derived from that scheme, but he said nothing about it. He made some reference also to the loan to the Sudan, and said that, if it were possible to do this, that and the other, this further grant will of course be available to be used in the interests of the great enterprises of this country. I should have liked him to produce some evidence as to the direct value to this country which has arisen from these proposals. The White Paper shows guarantees to the extent of £38,250,000 under these various Acts. My right hon. Friends who have spoken seemed to get very excited and enthusiastic about the provisions of these various Acts, but I would remind the House that we were told by the right hon. Gentleman only yesterday that there were 176,000 fewer unemployed people to-day than a year ago. I do net know whether the right. hon. Gentleman the Member for North-West Camberwell is proud of the record of his Government or of the Government which preceded his Government either in connection with the provisions of these two Acts, or any other provisions which they have made, when he remembers that the decline in the number of unemployed during the last 12 months is only 176,000. It is all right for the right hon. Gentleman to talk about the wonderful provisions and the extraordinary good that have arisen from these Acts, but unemployed working men and their wives and families have grown tired and sick of the promises that have fallen too often from the lips of right hon. Gentlemen who have occupied prominent positions in the political life of this nation. They are asking for some more tangible solution than has been put forward.

The sum of £38,000,000 has been guaranteed. Take one item. We have guaranteed to the Finance Company of Poland, Limited, £1,250,000. How is the guarantee to this Polish company to benefit the working people of this country? I hope that the Financial Secretary will explain this later on in view of the fact that we have almost as many unemployed to-day as we had 12 months ago. I do not complain of the Government having brought forward this Money Resolution, but we should not be satisfied with their proposals if they wore to be limited to this. I have sufficient confidence that the opportunity will come soon, when those who are now faced with the task of dealing with this problem will deal with it wisely and judiciously, and I think that they will ultimately deal with it in a manner which will redound not only to the interests of this country, but that when they do formulate their proposals, as I believe they will from time to time, we shall not he given the support of my right hon. Friends but rather challenged with their opposition.

Lieut.-Commander BURNEY

I will not follow the last hon. Member who has expressed feelings of despair in reference to everything that has been done by the present Government, as well as everything that was clone by previous Governments, without making any constructive suggestion whatever in the course of, his speech. I rise to make a suggestion to the Financial Secretary with regard to this matter. The Act which is designed to increase employment in this country has now been in operation for over two years. In that time we have guaranteed only £38,500,000. Is there any method by which the machinery of this Act could be improved in order that the rate at which it is used by commercial interests could be increased? So far, the majority of the guarantees have been given to com- panics already in existence, to companies which are able to show profits over a considerable period of years, and upon which there is practically no possibility of loss. Under the existing Act that provision is very necessary, because the Government has no method of recouping itself for any loss on any guarantee. As this House realises, it is only a guarantee: it does not provide any actual money. It provides money only if and when the companies to whom the guarantee has been given happen to fail.

It seems to me that if, after two years, we have used only £38,500,000, there should be some method by which other ventures and companies, which at present are not able to utilise the machinery of the Act, might be brought under it. I, therefore, suggest that the Department might consider dividing the benefits of the Act into two classes. In the first case, the existing type of company. Which is now assisted, could remain. In the second case, snore speculative companies might be assisted. I remember a speech in the last Parliament by Sir Alfred Mond, who pressed the then Government strongly that the Trade Facilities Act should be made a little more open and free in its assistance. Let me take an analysis of the existing companies which have been assisted. Practically every one of them has been assisted only to the extent of raising money at about one-half or one per cent. less than the rate at which they could raise it in the open market. What is wanted to stimulate the wheels of commerce is to start those new enterprises which are going to open new countries and new mines, to lay railways and so forth. But with any new venture there must be a. certain amount of risk.

Supposing there were some ten companies, each of which was a new company and with each of which there must be the inevitable risk associated with anything that is new. If they were granted a loan, say, equal to the amount of money provided by private capital, and if the Government were to take, say, 10 per cent. in bonus shares of ordinary stock for their guarantee, it would allow one company in ten to fail, because the profits of the other nine companies would reimburse the Treasury for any loss which had to be made good under the guarantee in the other companies. If that could be done, it would bring within this Act the whole of these new development companies. It would be necessary to have a strong investigation board, so that only thoroughly sound ventures or companies would he assisted, but I think it would be quite possible to guard that, and one would also always have the guarantee that if private enterprise had to put up the amount of money equal to the loan so granted, the whole of the loss would fall upon the private capital before it could fall upon the guarantee given by the Government. If that could he done I am sure that there are large numbers of development enterprises for which the whole of the machinery and plant could he manufactured in this country. The majority of those enterprises will, no doubt, be abroad, and, perhaps, if the Financial Secretary would lock favourably on the suggestion, he might make better terms for those companies engaged in development within the Empire than for companies engaged in development outside the Empire. I would go so far as to say that. I do not think any company should be assisted unless it is within the Empire.

Sir ROBERT THOMAS

The words "trade facilities" always has a charm for a business man. I was in the House when the Coalition Government introduced this Measure. I was one of those m ho then thought that their offer of £25,000,000 was really tinkering with a very great question. When the late Government supplemented that £25,000,000 with another £25,000,000 and made it £50,000,000, I thought that it was still tinkering with a great problem; and now, when we have a Labour Government offering to increase the maximum amount to £65,000,000, I am still of opinion that it is tinkering with the problem. Up to the present the scheme has achieved neither the object of the Coalition Government nor that which the Conservative Government had in view, namely, to increase trade facilities and to decrease unemployment. Therefore, I think I am justified in saying that up to the present this problem has been tinkered with. I can excuse the last Government, because their faults sere so numerous that just another fault did not matter much. But I really did expect something better from a Labour Government which, during the whole time it was in opposition, professed that it could improve trade and solve the unemployment question. It is not enough to say that they have not had sufficient time. They had all the time that they were in opposition. We were constantly told that they expected to come into power at no distant date, and they had abundant opportunity of evolving a practical scheme to increase trade and diminish unemployment. It is no excuse to say that they have only just come into power. I am surprised that the Financial Secretary should come forward now with only the same old re-hash, but with just a little more of the hash consisting of water and potatoes, and with less meat. I expected more meat from him; I expected something more substantial. What about Credit Banks? The Financial Secretary to the Treasury has always placed great value upon brains. I think I have heard him say in this House that brains are the most valuable asset we possess in this country.

Mr. W. GRAHAM

I did not say so.

Sir R. THOMAS

The hon. Gentleman says he has not said so. He ought to have said it. I would have expected him to come forward with a proposal whereby brains and talent could have a chance in this country. It is not the man with capital who is always the best man to develop industry. With all her faults, Germany never committed that sin. Take the quebracho industry in South America. That industry was founded by a poor boy from Germany who, not because he had great assets at his command, but because he was picked out by a far-seeing German Minister who saw in him character and ability—was picked out, financed, and sent out to the Argentine, and he was the founder of that great quebracho industry which to-day exports to all parts of the world huge quantities of extracts used for tanning purposes. I expected the Financial Secretary to have come forward with an offer to assist by credit facilities the wonderful talents in this country. That is a thing one would expect from a Labour Government. I would not expect my right hon. Friend the Member for Hendon (Sir P. Lloyd-Greame) to bring in anything of that sort, because he does not believe that there is any salvation except in the capitalist system. But, the Financial Secretary to the Treasury ought not to commit that error. Although he says that he never advocated a policy of subsidising brains, yet I hope that to-day he will give us some promise that ability and talent in this country is to be assisted. That would give his party real kudos. An hon. Member of the Labour party interrupts to say that he has a scheme. I hope he will get up and tell us what it is, because I am very sorry that the Front Bench of the Labour Party are rather poor in any scheme which has been put forward to-day.

There is one other matter to which I wish to refer. A great deal can be done to improve our Consular service. The subject is germane to this Resolution. I brought it before the House in the Parliament before the last and several others have done so.

Mr. HANNON

On a point of Order. Has this subject anything to do with a Money Resolution under the Trade Facilities Act?

The CHAIRMAN

The hon. Member seems now to be travelling rather wide of the Resolution.

6.0 P.M.

Sir R. THOMAS

I do not wish to transgress the rules, but we are dealing with trade facilities, and anything connected with trade facilities surely is germane to the present discussion The Consular Service has a great deal to do with the advantages—[laughter.] The Noble Lord the Member for Hastings (Lord E. Percy) laughs. Perhaps he has not had much experience of the Consular Service, though, unfortunately, these positions are usually occupied by members of his class, who go either into the Church or into the Consular Service, and do not particularly shine in one department or the other. I have travelled around the world twice, and perhaps my Noble Friend has not done so. I have seen how our Consular Service is worked. I have seen how the Consuls of other countries pay attention to commercial travellers and traders and take the trouble of introducing them to potential customers. Many of our Consuls who belong to the select class think it is infra dig to have anything to do with trade, and therefore I would suggest to the Financial Secretary that he should pay a, little attention to that Department, because I am perfectly certain he will facilitate trade very considerably if he does so. In conclusion, I urge upon the Government that when they next attempt to deal with this I problem they should present really comprehensive proposals which will go to the root of trade depression and will also go to the root of the unemployment evil.

Mr. T. JOHNSTON

I am sure the Committee has been exceedingly interested in the expositions of the class trouble which we have had from the benches below the Gangway. The social revolutionaries, the Bolsheviks, have attacked the Mensheviks on the Front Government Bench for not going far enough on the revolutionary path. That will, perhaps, form a fitting subject for the speech which is to be delivered from the benches opposite by an hon. Member who has been making a special study of election literature and speeches. I trust he will pay as much attention to the revolutionaries below the Gangway as to the Mensheviks on the Front Government Bench. It must be perfectly obvious to the Committee that what is now before us does not at all represent the Labour party proposals regarding unemployment. It is only smart debating —or perhaps not smart debating—on the part of the right hon. Gentleman the Member for North West Camberwell (Dr. Macnamara) to pretend that these extensions of the Trades Facilities Acts represent the proposals which the Labour administration intend to make for the relief of unemployment. The Financial Secretary said he had inherited a large part of these proposals, and if I gathered aright, he questioned the wisdom and validity of part of them. But he has inherited them and I suppose in his legal phraseology he would call them a damnosa h[...]reditas. Certainly there is one part, namely that relating to the Sudan loan, of which I think he might have given a more detailed explanation to the Committee. He said there was strict regulation of this loan and the Committee will be indebted to him for an explanation as to how this guarantee is regulated. Certainly at the Public Accounts Committee upstairs we never seem able to get before us any official whom we could cross-examine regarding this expenditure at Gezireh in the Sudan. We were told that the Sudan was not a Crown Colony, that it was not a Dominion, that it was not a Protectorate, but somebody discovered at last that it was a Condominium—what that is, I never was able to understand.

However, the Sudan seems to be governed by an army officer—a GovernorGeneral—with a nominated council. The nominated council and the Governor-General appear to be the Government of the Sudan referred to in the White Paper. From paragraph (d) of the Paper one would gather that the Government of the Sudan was getting the money. Nominally perhaps it is, but the Government of the Sudan does not operate with the money. It is not irrigating the plains or growing cotton; it is handing over the work to a private syndicate. Over that syndicate this House, as far as I can gather, has no, control whatever. A year ago or thereabouts a loan of £3,500,000 was guaranteed. To-day we are asked for a further guarantee of £3,500,000 and the late President of the Board of Trade this afternoon indicated that, in future, further guarantees will be asked for in connection with this project. We have, arrived at a state of affairs where £13,000,000 is not to be the limit of the total sum which this House has to guarantee. Further indeterminate sums have yet to be announced. The Financial Secretary to the Treasury said there was strict regulation of this loan. It is about time. Certainly, part of this money already spent was not so strictly regulated. There was a period in which this money was paid out like water to a foreign contractor on a 10 per cent. basis. He was to get 10 per cent. of the total sums expended, as his profit. Exactly what sums he pocketed I do not know, but, ultimately, the facts were brought to the notice of the Treasury—I believe through an official of the Sudan Government—and the contract was stopped, a heavy payment having to be made to the contractor for the stopping of the contract. There did not appear to be very strict regulation up to that point. When this contractor was cleared out of the way, it appears a British firm secured the contract. I should like from the Financial Secretary, a clear, definite statement as to what control the Treasury, or the Foreign Office, or the Colonial Office, or any other Department of the Government has—what control the British Government and. this Parliament has—over the expenditure of public money in the Sudan as operated by this British syndicate. We were told by the Financial Secretary that in 1925 he expected there would be 70,000 bales of cotton.

Mr. GRAHAM

The position, strictly speaking, is that under the contract which is now being completed this work must be overtaken by 1925, and it is expected that these 70,000 bales will be forthcoming sometime after that date.

Mr. JOHNSTON

Then, I understand, 70,000 bales of cotton are expected after 1925. At what price? Is there any guarantee that steps will be taken to ensure that this syndicate is to be regarded as a public utility company, and is to have its profits regulated so that Britain will get the benefit of cheap cotton? Up to last year this syndicate was paying 35 per cent. What steps are being taken to ensure that the consumers in this country will get cheap cotton? That is a question to which we should get an answer. The Committee should also get some information as to how the natives in the Sudan are being treated. What compensation was paid to the natives who were compulsorily removed to make way for the Gezireh scheme. What wages are they receiving? Is it true that their salt and sugar taxes have been tremendously increased? What relation have this scheme and the proposals of this afternoon, to the statement made by General Smuts quite recently in London, when he appealed to the Government of this country to go ahead developing its cotton resources in Africa, because there was an illimitable supply of cheap labour? Is cheap labour the basis of the scheme? What are the terms upon which labour is being paid? What guarantees have we against the exploitation of these poor natives in the Sudan by this syndicate, backed up by moneys and guarantees provided by this House? What guarantees have we that the natives are being treated fairly, not to say generously? Is it the case that their old ancestral common lands have been taken from them? Is it the ease that those ancestral common lands are now being irrigated by a. syndicate which is making fabulous profits, and is it the ease that petitions made, not by, but on behalf of these natives have been turned down by the Government of the Sudan and have never been allowed to reach London at all? What proposal is the present Government making for the more, democratic government of the Sudan, particularly in view of the large expenditure in public money and in guarantees which this House has given?

Mr. AUSTIN HOPKINSON

About a week ago I happened to be speaking to a somewhat prominent industrialist in Lancashire, and in the course of conversation I said: "Have you had any of these trade facility credits in your business?" He said: "Good Heavens! What do you take me for? Do you suppose I would touch them?" I venture to say that that is what is thought of these trade facility moneys and credits from the point of view of the more respectable industrialists of this country. After all, what is this plan of trade facilities? It is simply what our hon. Friends on the Labour Benches have been putting forward in their programme year after year. It is the socialisation of credit, and nothing else. It is putting the control of credit to a certain extent in the hands of committees more or less under a Department of State; in other words, ultimately the democratic Government of the country is to decide who is to have credit and who is not to have credit, and I venture to say that that is socialisation of credit, and nothing else. When this plan of socialising credit was introduced by the Coalition Government, and subsequently confirmed by a so-called Conservative Government, it was justified on the ground that it was a stimulation of trade, and thereby one method of decreasing unemployment in this country, but it never occurred to either of those Governments, any more than it has occurred, apparently, to the existing Government, that if you extend credit in one (Erection you inevitably contract it in another.

As a matter of fact—and I think anybody engaged in legitimate industry in this House will confirm me in this—there has been no restriction of credit whatsoever for legitimate industry in this country during the last few years. I may say that I myself have had to call, through the ordinary sources, for considerable credits for capital expenditure, and I have never found the least difficulty in getting it at very reasonable rates, indeed. But if the Government is to come in and say to various firms who cannot raise money on reasonable terms, or on what they think to be reasonable terms, that the whole credit of the taxpayer—for it is the taxpayer who finds the credit—is to be put behind their concerns, it simply means in the long run that there must be a contraction of credit allowances for legitimate business in other directions. When these economic factors are not absolutely obvious and plain to everyone, when these effects are not seen, they are neglected invariably by all politicians. Nevertheless, although we may not see the definite effects, it must inevitably be the case when these credits are granted, that if you strain credit in' one direction you must contract it in another, that you cannot at any given moment erect a structure of credit without taking the material from some structure of credit already in existence.

Therefore, although 1 am afraid I am almost alone in my protest against this policy, I feel that I must protest against it, because, after all, we have to consider the opinion of people outside this House, and though we congratulate ourselves on these wonderful devices, these wonderful tricks in juggling credit from one direction to another, and say what enormous benefit we are doing to the country, yet, in the long run and ultimately, the fact remains that we are simply juggling with credit, and we are not doing any good to anyone on earth, and particularly not to anyone in this country. When I say that, however, I do not forget that it is just possible that in some instances we are benefiting a certain number of industrialists abroad. For instance, I know that among other credits which we as taxpayers are supporting is one of a million and quarter sterling to some company operating in financing undertakings in Poland, and I venture to say that that company has been refused credit, in all probability, by the usual credit merchants, that is to say, the bankers, for the simple reason that no banker and no credit merchant in the world expects that company ever to be paid for what it does in Poland. In other words, what we propose to do is to take people, firms, or individuals who cannot raise credit from the ordinary credit merchants, in the ordinary legitimate way, and to provide them with credit at the expense of the taxpayer, which is ultimately the expense of the worker in this country. One can go on doing this sort of thing indefinitely without the results becoming apparent, as I have already suggested. For instance, at the present time, credits are easy to obtain for any legitimate business, and although we are financing, or rather providing credits to, firms to the amount of millions of pounds—perhaps, ultimately, to as much as £50,000,000 or £60,000,000 or even £70,000,000—the amount involved is so small in comparison with the total credits used in industry in this country that possibly legitimate business may still be able to get credit for its own purposes on reasonable terms through the ordinary channels, namely, the bankers. Nevertherless, although the difference may be fractional, there is a difference, and we are deceiving ourselves, I say, if we think we can ever give these credits without contracting credits in other directions.

Sir ROBERT ASKE

These proposals are of great importance, not merely for the reasons which have been given, that they are framed in order to create employment, but because, with the exception of the housing schemes, which, of course, affect the building trade, these are the only proposals in the policy of the Government as outlined in the statement of the Prime Minister which can in any way give employment to those engaged in the skilled trades in this country. They are not ambitious proposals at that, and the Government apparently does not expect very much from them, because the amount of credit facilities is do be no more than was allocated last year, whereas under the Export Credits scheme, only the unexpended balances are supposed to be sufficient. Hon. Members on the Labour Benches nave suggested that these are not the only proposals which the Government have in mind, but, with respect to those hon. Members, I would submit that the problem of unemployment is a present day problem, that the crisis will never be greater than it is to-day, and surely, if the Government have any practical proposals which they can put forward for relieving the serious depression in the skilled trades, it is the duty of the Government to put forward those proposals now, and if they have any proposals of that kind, they will receive every support and sympathy from these benches. I would say that we on these benches had hoped and been led to hope for greater things, for new ideas, for a wider vision, and if these simple proposals are the culminating point, after all the close study and the weighty consideration which the Government have given to the question of unemployment in the skilled trades, one must confess that the mountain has been in labour and has brought forth a mouse.

My object is to encourage the Government to greater optimism in the potentialities of trade facilities. I do not think it is just to this scheme to regard it merely from the experience of the past, because the success or failure of these schemes depends, not upon the bare machinery, but upon the policy pursued by the Administration. It is quite possible, by adopting a too conservative policy, by declining all risk, by insisting upon an amount of cover behind the guarantees equivalent to a gilt-edged security, to stifle the demand for the guarantees and thereby largely to neutralise the effect of the scheme, whereas, on the other hand, it is equally possible, by backing hazardous and speculative ventures, to run the country into grave 'risk and loss, and it is quite obvious that the true policy of the Administration lies in the golden mean between the two.

With respect to the hon. Member for Mossley (Mr. Hopkinson), it is not the opinion of the industrialists of this country that these trade facilities are not valuable. On the other hand, it is the opinion, as I can assure the Government, of a large number of the most eminent and experienced industrialists that the administration of the scheme has been far too cautious, and much too narrow. I am not making any reflection in any way against the Advisory Committee, because the Gentlemen who compose it have undoubtedly worked conscientiously and faithfully, hut it is only natural that in the absence of a definite lead from the Government, placed as they are in the position of trustees for the nation, they should be inclined to anticipate that if there should be any call under the guarantees, it would be attributed by the Treasury to want of care on their part. Consequently, it is only natural that the Advisory Committee should be very chary in granting guarantees, which, although not involving as much risk as commercial men normally take in their own businesses, having securities against their guarantees, yet which might, if untoward circumstances occurred. such as war, or riots, or revolution in the foreign Governments concerned, eventuate in some loss under the guarantees.

Those considerations undoubtedly are very apt to incline the Advisory Committee to grant these facilities principally either to wealthy corporations which are just as well able to raise these loans on the open market without the guarantee, although perhaps not at quite so cheap a rate, or else to incline them towards wealthy concerns which can put up a very large margin of cover behind the guarantees. At all events, that is the opinion of a large section of the commercial community, and if one analyses the list of grants which have been made, we must appreciate that there is a good deal in the criticism they make. The point that I wish to make is that the Government should exercise more enterprise in the way in which these schemes are handled, and if they did, there would, in my submission, be a requirement for a larger amount under the scheme. I quite agree with what hon. Members opposite have said, that the amount provided under this scheme is not sufficient if the administration is of a more generous and enterprising character, without involving any risk at all.

With reference to what the hon. Member for Mossley said, it is not merely a question of these facilities- being provided on terms on which loans are ordinarily raised on the market. What these facilities are specially intended to provide for is this situation, that there is a great field for British enterprise in foreign countries to-day, but the people who want to buy our goods, the people who want to make contracts with us, are unable under actual conditions to pay for them now. They can provide sound securities, securities on their works, erected or to be erected under the schemes which would be dealt with under the facilities, their plants, their revenue, bank guarantees, deposit of currency, and so forth, but they cannot pay now. On the other hand, the industrialists of this country are not in a position to lock up their capital over a period of years. If our business people can be afforded facilities to meet this situation by which their commitments will be backed to a fair and reasonable extent by the State guarantee, without requiring the provisions of excessive margins of security, or without compelling the persons guaranteed to lock up much of their capital, there is no doubt in the world that there are plenty of people in this country who are both able and eager to take advantage of the guarantee. Therefore I would respectfully press upon the hon. Gentleman in charge of the Resolution not merely that he should increase the amounts which are intended to be provided in it, but that he should take steps to ensure that the administration of these facilities shall be dealt with on a broadminded, courageous, business basis, taking sound commercial risks, having always the assurance that the Treasury have behind their guarantee securities which are given by the persons guaranteed, and the full solvency of those-persons themselves.

I would submit that this policy would pay the country, because even if there should be some call under any of the guarantees—and the calls have been very nominal, as the hon. Gentleman pointed out, up to the present—that is not necessarily a loss, because the projects which would have been dealt with under the guarantee would have placed in work a large number of the men engaged in the skilled trades of the country, who would otherwise have been a charge on the State as unemployed. In the nature of events that work would have preserved a high level of craftsmanship, which necessarily must deteriorate by disuse and unemployment, and it could never he to the advantage of a great industrial community like ours that the skill of the finest workmen in the world should rust when they are able and willing to work. In the next place, it would prevent the demobilisation of labour in the industry, and, moreover, by getting in touch with foreign customers at the present time, when our country alone is able and willing to accommodate them, we should have a great chance of permanently securing the trade of those countries.

There is one other consideration, the last I will raise. It is suggested that this is socialised credit. I would submit to the Committee this consideration, that British credit, which stands higher today than ever it did, is the product of the manual skill, and the thoroughness and the genius of the British workman, combined with the wise direction of management as applied to the capital resources of the country. That credit represents the stored-up energy accumulated by those forces in good times and in bad over a long series of years. It is the reserve on which the country can fall in time of need, and it is the duty of the country now, in these times of unparalleled depression and unemployment, to place that credit as a buttress to the factories, the mills and the shipyards of the country, to place it at the hack of the workman and his tools by a much more liberal and generous grant of facilities under this scheme than has hitherto been placed.

Mr. SULLIVAN

I have a great deal of sympathy with those who have spoken, and their criticism of the Government. I do not want to criticise those who have spoken, but I notice that they all begin on the same strain and end at the same point. The Labour Government has not introduced a social revolution, and hon. Members seem disappointed. We need to guarantee the expenditure of the money under discussion. I want to make some reference to the great facilities given in this proposal. I have an idea that we will require to extend it oven to a greater extent than either the late Government or the previous Government anticipated. It may be that our industry requires a lift, and can be helped in that way. I took pleasure in noticing that the right hon. Member for North-West Camberwell (Dr. Macnamara) has taken up my idea of a very large sum, although he admits that his Government began at £25,000,000. He has more imagination now in Opposition than he had when he was in power, and he talks quite freely about the big sums that we should guarantee. Like him, I want to do something more, but I want to suggest that we might extend it a little further than he has suggested.

It will have been noticed, from statements made in the course of this discussion, that we have been financing some industry in Poland. I would like the Member who replies on behalf of the Government to tell us something in connection with the factory there. I would like to know who owns it, and who controls it, and, further, whether we are doing something that will help to create unemployment in this country as a result of British credit. I also want to draw attention to one of the countries we have been helping, namely, Austria. The Coalition Government passed £30,000,000 of credit to Austria. The Conservative Government were a little more modest and allotted £20,000,000. I think the Prime Minister stated that the Allies were finding part of that, but we had to pass it. I would like to know if his optimism has been rewarded to any extent and if our Allies, who have never paid interest on War debt, have considered the trifling sum of £50,000,000. One of the peculiar things in connection with the Austrian credits is this, and Protectionist members of ire late Government made some reference to it, I think, during the Election. We advanced money in the way of credits to Austria to help their industries, and then one of the leading Members of the Government referred to that as dumping. The people of this country, however, were not told that not only were the Austrian goods produced as the result of British credit, but the Government of this country gave them facilities to hold an exhibition in. London in order to get a market for the goods they had produced. I think when we make a statement we should go the whole length, and deal with all the facts.

We have a wonderful outlet for our credits. At the Lausanne Conference, I read in the paper, the Russian Government suggested that they would get guarantees to the amount of £400,000,000. That was laughed at at that time, but since then a sum of £300,000,000 has been under discussion, I think, in some circles in this country. At one time £300,000,000 was a lot of money, but during the War we learned to talk in thousands of millions, and £300,000,000 to-day is not as much as it was in 1914. In addition to recognising the Government of Russia, if we could extend those guarantees there, I have an idea that it would do more for trade in this country than any of the other schemes. The Russians have vast supplies of raw material. The raw material coming here s tinned into manufactured material, and I think we would benefit immensely by a suggestion of something like that. We have been told that they are short of rolling-stock and engines. We require orders of that kind, and I venture to suggest that a generous gesture of that kind might do more to cover the difficulties existing between Russia and Great Britain than anything else. I know this will be heresy to some people, but we have already spent money on Austria, and I think there is under consideration the giving of something to Hungary. If we can help those countries that practically hold out nothing to us in the way of trade, but only competition, I suggest that there is greater profit in helping a country like Russia in that way than some of the others. If we are risking the money to a certain extent, we create employment in this country, save the money that would be paid out in doles, and benefit the industrial worker.

I regret that the total sum is £5,000,000. I would like to help the Dominions in order to create a new market, and I think that this Government ought to take a more generous view, not on the lines suggested by some hon. Members on the other side. The proposal is to guarantee public utility societies, but I notice that hon. Members go outside that suggestion and add private undertakings. I think the hon. Member for West. Stirling (Mr. T. Johnston) told us quite enough about private undertakings. We want to know more about these private undertakings than the Minister has yet told us. We want to know where the money is going, how it is being spent, and what likelihood this country has of getting something in return. All I want to say in connection with the Sudanese business is that Egypt is in a very troubled state just now, if we can believe the papers. We do not know what the future is going to bring forth so far as Egypt is concerned. We are spending millions of the taxpayers' money by way of guarantee to the Sudanese. I think it is a bit of a gamble. At any rate, we will guarantee, if the present 3½ millions is passed, thirteen millions [...] money. It may be said that hon. Members have suggested that we are only carrying out the policy of the last two Governments. I want to state frankly that I should like to cut adrift from the policy of the last two Governments. I am not prepared to support 3½ millions for the Sudanese Government, for them to give to some syndicate which is making some 35 per cent. profit.

The Labour Government, I think, ought to have given a clear lead in this matter. Supposing we had taken the suggestion so very generously given from different parts of the House, and stopped the trade facilities, that stoppage would have been the talk of the House! As a matter of fact every party in the House is in favour of the policy. Yet speaker after speaker suggests that we have no right to carry forward that policy. I am independent enough to say that if a policy is good I do not care what party puts it forward I am prepared to back it up. If a policy is bad, as is this guaranteeing of money to the Sudanese, then I think we ought to scrap it. That is my position, and unless the Minister can give us more guarantee than he has given my opposition is the same to-night as it was when the matter was under a Conservative Government.

Mr. W. GREENWOOD

This Bill is one which I believe to be a good one, and which I support wholeheartedly, no matter what is done by other Members on this side of the House, because I approve of the assurance given to us by the Prime Minister that he proposes to help industry all that he possibly can. I believe that that would be one of the best means of relieving the unemployment problem. I agree with him that the present Government will have a better chance of dealing with some of these things than the last Government had, and for this simple reason, that it will not be so hide-bound by precedent as previous Governments have been. In cases of an abnormal kind it is sometimes necessary to do things that at normal times would not be warranted or desirable. I should like to make a plea to the Government—I believe it could be done—that in this Bill there should be some consideration given to an industry that is passing through a. very difficult period just now. I refer to the cotton-spinning industry of Lancashire, and especially to the American section of it.

Under the Trade Facilities Act and credits, we have for long done what we possibly could to help business in foreign countries. I believe it is very essential that we should turn our attention now to giving credits to the industries in our own country. At the present time in Lancashire there is a very serious condition of affairs. It has been brought about—apart from the usual recognised capital in the industry—by the withdrawal, at call, of capital which is now being taken from the industry—capital that the industry sorely needs if it is to carry on with efficiency. The position now is this, that there is no more additional capital being brought into Lancashire at the present time, and a great deal of misery and misfortune is being caused to a great many in all grades of society in Lancashire by the fact that it is impossible at present to find the capital that is needed. It may be said that the system to which I refer, the loan system in the cotton mills of Lancashire—and it has been said, by previous Chancellors of the Exchequer—is a system which ought not to apply. That may be so. It is very easy for people to be wise after the event. But this system of loans subject to withdrawal in Lancashire is a system on which the greater part of the large cotton spinning industry has been built.

In days gone by, when this industry was prosperous, there is not the slightest doubt but that it was a very considerable asset to this nation. It is not only because of the needs of the industry, but because I believe it is essential, in the interests of the Government itself, that the industry should be looked after, and that the industry should be given back that credit which the industry itself was so willing to give, and did willingly give, during the War to help the War, that I speak as I do. Some of that credit should be given back to the industry to help it, and to help the industry to win through in what is a very grave crisis brought about by the aftermath of the War. It may be said that if the Government, through this system of credit, were to take over any loans in the cotton spinning industry, that would be a very dangerous precedent, and it might entail very serious loss. The best answer I can give to that is to say what has been done, and what has happened in the past.

So far as can be computed, for fifty years in the Oldham district, which is the biggest centre of this system and the biggest centre of the cotton spinning, not only in Lancashire but in the world— during fifty years the total capital losses can be written down as certainly less than half of 1 per cent. My suggestion is this: that the Government, by co-operation with the leading banks, could easily evolve a system whereby there would be no risk at all to the Government, but where they would simply give their credit. The industry itself is not asking for any subsidies, but simply that that credit which the nation gave to its own nationals, and in the same degree as it gave to the nationals of other countries, should he given here. It surely could do this. It could surely arrange a scheme with the banks to take over these loans. I would suggest a rate of interest of a half per cent. above the bank interest, and another half per cent. to go towards a guarantee fund. I am certain that that could be arranged, and that there would not be the slightest loss entailed upon the Exchequer of this country. The advantage would be that that would give to this industry something which it is losing, and that is not only the capital which we all know from bitter experience it is impossible to avoid in dealing with an industry that previously had about three-quarters or five-eighths of its total trade in exports. That is the reason why this industry, perhaps, has suffered more than any other, and the losses have been very considerable. There are men, aye, and women too, engaged in it who have sunk their all in it, men who are very rich, and also a great many who are very poor. Hon. Members would perhaps have been surprised if they could have seen a meeting held at Oldham about a week ago, which would have shown them that the question of holding capital in these mills is certainly not confined, as hon. Members might suppose, to one particular class of the community. There were over 5,000 persons gathered together. The feeling prevalent amongst them was shown by this gathering, and that is, something will have to he done, and soon, if the industry is to survive and to go on as before, really as a great asset of the nation

To the Members of my own party who think that this is asking something that is almost an impossible project I would say, by way of reminder, that perhaps one of our greatest financiers of recent years, the late Prime Minister, Mr. Bonar Law, to whom I mentioned this matter about six months before his death, said that there was nothing at all outside the bounds of practical politics in the proposal which I then suggested to him. It is not only essential for the trade that something should be done. I would appeal to the Government that if they possibly can they should, at any rate, give an assurance that they will confer with the banks—because we ask for nothing more if they will do that—to see if something could not be arranged which would prevent what is becoming a loss, not only of the capital of the people in Lancashire, but has further results. I am sorry to say that some of the people are losing what I think is more important even than their capital. They are losing their faith in the future. They have been going through a tremendously hard time. Many of them have fought hard against circumstances during the last four years. A great many, I will remind hon. Members, have gone under. A great many more will go under unless something is done.

The industry asks for no gifts, but I do think we are entitled to ask for a return of that credit which we so willingly gave during the war time to help to win the War. A return of this credit will help those concerned to "keep their Find up "till such times as are sure to arrive when the cotton spinning industry conies round again. I have lived long enough to see times of depression before. I certainly will not say that I have ever seen a time quite so bad as the recent one has been. At the same time, there has never yet been a depression in the cotton industry but what it has been succeeded sooner or later by a turn in the right direction. That turn will come again. In my judgment it will never come without there is peace throughout the world, because we, as a big exporting nation, unfortunately are dependent more on a general resumption of the normal trade of the world than any other industry. It is because of that, because I think this Government, as I have said before, not being afraid of precedent, will take bolder steps than the last one did that I shall very heartily support this Bill. I hope the Government will take the suggestion I have made into consideration, and confer with the leading bankers to see whether something cannot be done, without any risk whatever of capital loss by the Government, and which, while it would be a very great improvement to the trade of Lancashire, in the long run would be in the best interests of the Government and of the country.

7.0 P. M.

Mr. COMYNS-CARR

I ask for that indulgence which the Committee always gives to a new Member while I endeavour to deal with some points which seem to me to have a great bearing on the subject of this Resolution, but which, so far as I have been able to find out, have not yet been touched upon. The right hon. Gentleman the Member for Northern Lanarkshire (Mr. Sullivan) told us that he regretted that the Labour Government had not departed from the policy of the last two Governments with regard to the matter with which we are dealing to-night; and from a very different point of view I con fess that I share that regret. I am not intending to oppose the development, by means of the Trade Facilities Acts, of the resources of this country in the way of new railways, new roads, new docks, electric supply works, and similar public under-takings, which in my opinion can be carried out most advantageously during a time such as that through which we are passing, when the general trade of the country is depressed and when both capital and labour can be spared from the general and usual trade channels to the undertaking of special work of this kind.

My disappointment arises rather from the fact that in my opinion these developments could be stimulated to an immensely greater degree than they will ever be under these proposals, and at no cost and no risk of cost to the taxpayers of this country, if only the Government were to attack the fundamental problems which at present restrict such developments, instead of merely dealing with them by means of guarantees. As long as undertakings of this kind are exposed to the conditions which prevail, a very large number of them cannot be carried out in such a way as to be self-supporting, and, although no doubt it is true that the Treasury has not up to the present time been called upon to contribute anything substantial under the guarantees which it has already given, I should be very much surprised to be told there is no risk of any serious losses to be met.

I can make my argument clearer if I take a concrete case, because it shows not only what I believe to be the risks but also what I believe to be the remedies. One of the undertakings which has been guaranteed already under these Acts is the extension of the tube railway from Golders Green to Edgware. That is a desirable undertaking in itself, but I shall be very much surprised if the Treasury is not called upon to pay, and to pay heavily, under that guarantee in the years which are before us, because, even at pre-War costs of railway development, undertakings of that kind hardly, if at all, succeed in paying their way, and under those costs, as they stand to-day, I have a very strong suspicion that, under present conditions, they must result in a substantial lose. What happened when that guarantee was given? The very first thing that happened was this. I happened to notice it in the local papers of that district. Local auctioneers immediately announced an auction sale, and stated as the principal attraction of the property which they were offering for competition, that it was opposite to the proposed new tube station. There can be no doubt that the consequence of the building of that railway extension, at the expense ultimately, as I believe it will be, of the taxpayer, or at all events at the risk of the taxpayer, has been to add many thousands, and more than thousands, of pounds to the value of land in the neighbourhood of Edgware and similar districts, just as the building of the original tube to Hampstead and Golders Green resulted in the addition of many thousands of pounds to the value of land which up to that time consisted mainly of dairy farms, and which is now built over by the Hampstead Garden Suburb and other building developments.

In exactly the same way, if you take the main roads which have been constructed during the last few years with assistance from these Acts, you have only to travel over any one of them to see auctioneers' announcements stating that valuable building frontages are offered for sale. I was pleased to notice in the speech of the right hon. Gentleman the PrimeMinister immediately after the Adjournment, that it was proposed to tap some of that value which has been given by means of these undertakings by a tax upon land. My point, however, is that that does not go far enough. because the essential fact of the situation is that undertakings of this kind, instead of being carried out by ones and twos with Treasury guarantees under these Trade Facilities Acts, could be carried out by tens and twenties tomorrow, and could be financed at no expense whatever to the taxpayer if those who are going to carry them out had the benefit of, and could offer as security for the capital which they require to raise, or the loan which they require to obtain, the increased land value which they themselves are about to create.

In saying that, I am giving not merely my own opinion but the considered opinion of a Committee presided over by the right hon. Gentleman the Member for the Exchange Division of Liverpool (Sir Leslie Scott), who held office in the late Governments. That Committee, of which I was a member. inquired into the question of the acquisition of land for public purposes, and heard the representations from the railway managers of the country. They told that Committee that they had plans ready for the extension of railways and the opening up of new railways which would develop new industrial and residential districts in all parts of the country but that they could not carry them out owing to the impossibility of financing them under present conditions. They gave the Committee example after example of cases where new railways had been built, even in pre-War days, which had resulted in heavy losses to those who had found the money to build them, while at the same time those railways had resulted in putting into the pockets of adjacent landowners ten times, and in one case, eighteen times, the value of the land which existed before the new railway was built. They further told the Committee that if only they could have a charge upon those increased values sufficient to cover them against loss on the cost, of construction of the line, they would not require to come to the Treasury or to anybody else for the purpose of financing those undertakings, but that they could finance them in the City at once on the security which they would then be able to offer. That Committee unanimously recommended that this proposal should be carried out., arid that powers should be given to public utility undertakings as well as to public authorities to take a betterment charge on the increased value which they themselves proposed to create, and that they should be given that power at the time when they were embarking on that undertaking, so that they would be able to raise the necessary funds and to finance the undertakings without any cost to the country at all.

I contend that under this system which we are pursuing and which I regret to-see that the Labour Government is con- tinuing to pursue we are curtailing enormously the amount of development which might be undertaken. The mischief of it is not merely that public money passes into the hands of private individuals but that the undertakings are not carried out owing to the fact that, as long as private individuals are in a position to annex that money, the undertakings can never be made to be self-supporting, and therefore cannot be carried out. Undertakings of this kind, such as railway extensions, road extensions, new docks and harbours, and the great schemes of hydro-electric power supply, which have been several times under the consideration of this House, could all be carried out provided that those who provided the money for them could be assured that the results were not going to be diverted into the pockets of adjacent landowners, but at least were going into the pockets of the undertakers to a sufficient extent to guarantee them against loss.

Not only do they require a guarantee of that kind, not at the expense of the taxpayer, but out of the new wealth which they themselves are going to create, hut they require also that which was equally recommended by this Committee but which was never carried out by either of the Governments which have been in power since its report was made, namely, an amendment of the present system of obtaining powers for carrying out undertakings of this kind, so that they can obtain them more quickly than they can at present. The present machinery for obtaining powers for carrying out local development works is cumbersome and out of date. Years are wasted before undertakings can be commenced. In times like the present, when it is vitally important to find work to relieve unemployment, work of a genuinely productive character, we cannot afford to have time wasted by ancient regulations. At present powers can only begin to be obtained for work of this kind by giving notice in a November or in a December. If the promoters miss the November or December, they have to await till the following year. The Committee of which I have spoken recommended that all ancient anomalies of that kind should be swept away. These undertakings also cannot afford to be burdened, as they are burdened at the present if they are carried out by public utility corporations, with the cost of the excessive compensation payable under the antiquated Lands Clauses Act. The Government which introduced the Land Acquisition Act of 1919 should have extended the application of that reform (to public utility undertakings. Nor can these undertakings be carried out successfully if they are to be burdened with rates imposed, as they are at present imposed, on the cost of the improvements which they themselves are carrying out. What we are doing by this system of guaranteeing loans at the expense of the Treasury is simply to feed with public money all these cankers which at present are hampering development, instead of going to the root of them and cutting them right out.

There is only one other matter to which I wish to refer, and that is, that part of the Resolution which deals with the extension of the time for export credits. It is a most remarkable thing that money which was sanctioned by former Parliaments for the purpose of export credits has not been used. An enormous part of it has never been applied for and is still available. I venture to offer this suggestion, without any disrespect to the eminent gentlemen who compose the Committee to which application has to be made for these credits. In my belief one of the principal reasons why that money has not been applied for and has not been used is that those who conduct commercial undertakings are extremely timid and chary of exposing their financial position to anybody whom they regard as possibly in business similar to their own, and to anybody other than those people to whom they are accustomed to go for accommodation of this kind.

If ever that system of export credits is to be made a success, in my opinion, it will have to be worked through the banks, and not through any Committee, however, eminent or disinterested. If you allow people to apply to the banks, and if they approve and are prepared to participate in the granting of a loan, then let it go forward to the Committee, and you should not require the applicants to submit their financial affairs to an examination by any Committee, and then you will get these export credit facilities actually used. I am convinced that no amount of extension of the time or the limit will carry us any further forward in encouraging our export trade, because you will not get commercial people to submit their financial affairs to an inquiry like that which is imposed upon them at the present time. I do not wish to oppose this Resolution, because, bad as I believe the system is under which it is sought to use public money in the encouragement of developments such as those which are contemplated, I would rather see them encouraged by a bad system than have no system at all. I hope the Government will devote their attention to a real remedy which will promote these, developments on a large scale, and not impose the risk of a heavy burden in the future on the taxpayers of this country.

Mr. HANNON

May I offer my respectful congratulations to the hon. Member who has just spoken on his admirable speech. Although I do not agree with everything that he has said, his speech is certainly an index that interesting discourses will come from him in this House in the near future. I may say that I do not propose to move the Amendment standing in my name to the money Resolution. During the sittings of the Imperial Economic Conference I think it was understood, and I think it was expressed in one of the recommendations of the Conference, that proposals coming from the overseas Dominions and Dependencies with the recommendation of the overseas Governments should not be submitted to an Advisory Committee in this country, but should be accepted on the recommendation of the Dominion Governments, and should be approved in consultation with the particular Department concerned. If that was the recommendation of the Imperial Economic Conference no one would like to interfere with it, and on that ground I do not propose to move my Amendment. With regard to the first paragraph of my hon. Friend's Motion, I would like to suggest that an Amendment be inserted at the end of paragraph A, that guarantees under that paragraph, before approval, should be submitted for the approval of the Advisory Committee. I suggest, to the Financial Secretary that the same proviso should also be inserted after paragraph C. The Financial Secretary may say that this point is covered by the provisions embodied in this money Resolution, but I think it would be better if a proviso were inserted in each of these cases in the Resolution now before the Committee.

I agree entirely with what has been said by the hon. Member for Hendon as to the amount which is being provided by the present Government additional to what was provided by the late Government. Those of us who have read the speeches of right hon. and hon. Gentlemen opposite previous to the Election, and during the course of the Election, would have imagined that there would be bold schemes of broad vision brought forward at once from the benches opposite. But as a matter of fact the scheme put forward by the Financial Secretary is a very modest and moderate one, and it shows within what rigid limitations hon. Gentlemen above the Gangway are going to be kept by hon. Gentlemen below the Gangway. I was astonished to hear the right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara) complaining of the want of enterprise in the development of industry on the part of hon. Gentlemen belonging to the Labour party, more especially remembering the important part which the right hon. Gentleman himself played in putting them in office.

Mr. PRINGLE

He was disappointed.

Mr. HANNON

I would like to call the attention of the Committee to a letter written by the right hon. Gentleman the Member for North-West Camberwell. During the course of last summer a series of representations were made to the late Prime Minister to encourage the application of public credit to the development of a, number of schemes in this country, and foremost amongst them was the electrification of railways. After mature consideration and the examination of a series of reports prepared by eminent engineers who stand at the head of their profession in this country, it was agreed that great schemes for the electrification of railways were possible in this country. The Industrial Group, after examining all the arguments put forward, pressed upon the late Prime Minister the desirability of extending, as far as possible, public credit in that direction.

A few years ago an elaborate report was made on the importance of carrying out electrification of the main line to Brighton. It was shown that there would be an immense saving in the working expenses of the line, that the transport capacity of the line would be enormously increased, and that it would be a great advantage, from the public point of view, as well as from the point of view of the railways, that this scheme should be carried out. The wisdom of that proposition was justified last year when a distinguished Belgian and a distinguished American engineer confirmed these proposals, but so far nothing has been done. In the neighbourhood of Liverpool Street there is the possibility of a large scheme of electrification, and on the North Eastern Railway between Newcastle and York projects for electrification have been under consideration, and all these great schemes can only he carried out by some extension of public credit within limitations which will safeguard the taxpayer.

Mr. WALLHEAD

Is it the contention of the hon. Member that the railway companies have no existing reserves, larger even than they ever had before, with which they could carry out these improvements?

Mr. HANNON

It is true that the railway companies have very considerable reserves, but they are all earmarked for carrying out large schemes which were neglected and got in arrear during the War. The railways of this country were not kept up to the usual standard of capacity for inland transport during the War, and therefore it was necessary for the railway companies to devote considerable time and expense to bringing their railway system up to date. The reserves which hon. Members opposite talk so much about are very properly being employed for that purpose. My contention is that under these schemes an immense amount of valuable opportunities for the employment of skilled labour in this country will be found if only these credits are extended more generously to railway companies. The railway companies, having regard to the interests of their shareholders and the obligation of maintaining the efficiency of their lines, cannot undertake large expenditure of this nature without the assistance of the State, and I suggest that it will be a very admirable departure in public finance on the part of the Government if the representative of the Government will consider as generously as he can these proposals which have been under the consideration of his predecessors.

The real reason why I am pressing this point is its influence on the employment of skilled labour. No scheme which could be recommended for consideration by the Government will tend more to employ skilled labour than schemes of electrification. I think hon. Members opposite will all agree that if you can find employment for skilled labour in its own particular field it is much better than expenditure on relief works. From a public point of view, it would be of immense advantage to have these schemes, which are eminently desirable, financed; because they would be a distinct encouragement to the employment of skilled labour. Another recommendation is one relating to water transport in the Midlands. I represent a constituency which is one of the greatest commercial communities in this nation, and in Birmingham we desire to develop, if we possibly can, the enlargement of our water transport facilities between Birmingham and Worcester. Hon. Members of this House know that we have had a series of Commissions sitting on water transport for years past, and of all the futile and hopeless reports which have been prepared by Commissions and Committees none have had a more unhappy fate than those reports. After a good deal of examination of the various schemes which are possible in the Midlands, my right hon. Friend the Member for Ladywood (Mr. N. Chamberlain) recommended, through the Report of a Committee of which he was chairman two years ago, that certain schemes should be taken up for definite consideration by the Government. One of those schemes was taken up, namely, the Trent scheme, and that is now being effectively carried out.

In Birmingham, however, we are desirous of developing a scheme which would enable us to bring a larger volume of traffic from the Severn up to Birmingham, thus facilitating the transport of our goods and raw materials up and down that waterway. We do not suggest that this will in any way interfere with railway communication, although, of course, it is well known that a constant struggle has been going on between the railways and the canals. We suggest that it would he a valuable addition to railway trans- port, by enabling a very considerable volume of heavy traffic to be carried. I would ask the Financial Secretary if he would be kind enough to refer to previous correspondence which has taken place with his Department on the subject of the development of this inland waterway between Birmingham and Sharpness, and whether he would consider the desirability of receiving a deputation to submit to him proposals which might advantageously be supported under the provisions of the present Resolution.

I hold very strongly that, in order that this Resolution may meet the full requirements of the Bill which will follow it, and which will deal with schemes of the nature of those which are already in progress and which are contemplated, by the Government, the amount should he increased to £75,000,000. I am quite satisfied that, if reasonable facilities are given, if a somewhat generous consideration is extended to the schemes submitted to the Government, a great number of schemes will he brought before the Treasury for the consideration of the Advisory Committee, and it will very soon be found that the amount of money which the House is now invited to provide will be exhausted. The hon. Gentleman knows that during the past few years the Advisory Committee, owing entirely to its sense of responsibility to the Treasury, has been imposing upon schemes conditions which the hon. Gentleman might see his way to relax a little. In point of fact, very few of the guarantees which have been approved by the Advisory Committee have been so approved on security less valuable than that which might be considered by any ordinary bank. Hon. Members may think that these schemes, so far as they have gone, have not been of distinct advantage to the industrial community, but we have evidence on every side that, where credit facilities of this character have been provided, industry has had an opportunity of reasserting itself, industrial organisation has been extended, and opportunities for employment have been found for workmen. I congratulate the hon. Gentleman on bringing forward this Resolution. I appeal to him to enlarge the amount which he proposes to make available, and I think he will not find on this side of the House any opposition to his continuance of the wise and careful policy in the development of industry and the finding of opportunities for employment which has been pursued by my right hon. Friends above the Gangway during previous years.

Mr. WALLHEAD

My association with Lancashire has been long enough for me to understand the regard and consideration that must be paid, by anyone who has any association with that county, to the cotton industry. I would suggest, however, that the remarks of the hon. Member opposite are too belated to be made here; they should have been addressed to the Government of the party to which he himself belongs. The Lancashire cotton trade suffers in many directions. If I remember rightly, the late Prime Minister, speaking at the Manchester Constitutional Club just before the Election, said that, if he were connected with the Lancashire cotton trade, one thing that he would fear most was the constant draining away from Lancashire of high-class machinery that was sent to India to be used in competition with the labour of Lancashire. That is a fact of which every one connected with the Lancashire cotton trade is only too well aware. There is a. constant export of high-class, up-to-date machinery to countries where the wages paid for labour are very low and the hours of labour are very long. I was astonished, however, after reading that statement of the late Prime Minister, to discover that in the last proposals of the Conservative Government, before it went out of office, there was a suggestion that £1,000,000 should be guaranteed to the firm of Tata for the purpose of enabling them to enlarge their textile trade in Bombay. As a matter of fact, almost before the echoes of the late Prime Minister's speech had died away, Messrs. Tata did advertise for capital in this country, and held out the guarantee of the late Conservative Government. Here, therefore, was the late Prime Minister deploring the danger to the Lancashire cotton trade from the extension of the cotton trade in India, and at the same time helping that very same trade, which injures Lanca shire, by guarantees of credits on a very large scale.

Sir P. LLOYD-GREAME

Is not the hon. Member wrong in saying that that guarantee was given for the cotton industry? Was not the guarantee given to the Tata Company under the Trade Facilities Act a guarantee in respect of a hydroelectric power station?

Mr. WALLHEAD

Yes, but it does not seem to me to matter much whether it was for hydro-electric power or for spinning frames. The whole thing was used for the development of the textile trade of Bombay. If it is to be argued that the Government are justified in assisting the development of cheap electricity for the Bombay cotton trade, why did they not do the same thing for the Lancashire cotton trade, and discover the same reasons? I can well understand that the hon. Member for Moseley (Mr. Hannon) finds this Debate somewhat disconcerting. Time brings tremendous revenges, and probably gentlemen who at one time occupied seats in this Chamber are now turning in their graves to hear the principles that they once derided gaining ground so rapidly on the other side of the House of Commons and on this side below the Gangway.

It undoubtedly is the fact that Capitalism, which is partially decrepit at the present moment, is turning to a semi-Socialistic form of assistance. It has been suggested that the Financial Secretary should cut himself adrift from all this, and I would do that in so far as such assistance is given to private enterprise. Private enterprise should help itself or go down. It must either maintain itself on its own philosophy and by its own efforts or it must look to us for assistance. That is a perfectly honest and fair position to take up, but at the present moment the difficulty is not a shortage of capital in the country. It is not a question of there being no money for investment, provided that the investment can be made generous enough. I find that when the "Daily Mail" required £8,000,000 there was sufficient money in the country for £40,000,000 to be offered in five-and-twenty minutes. That does not show any shortage of capital. Again, when the Japanese Government wants money on very attractive terms—something in the neighbourhood of 7 per cent.—I find that it is over-subscribed in a few minutes. Why do these firms come to the State for cheap money for development purposes in the Crown Colonies and in the Dominions? They come because there is going to be no immediate return upon the money, or because, if there is going to be a return, it is not going to be large enough. They then come here wanting a guarantee of public money to help them out of their difficulties. To me that does not seem to he quite a sound policy.

The Financial Secretary said that he had inherited these schemes. He has, and he has inherited something else also, namely, the opportunity, which hon. Members on both sides of the House utilise to the fullest extent, of gibing at his inheritance, and at the conditions which he is thereby compelled to impose. What is the use of the cheap gibes we are constantly getting at the Government? The leader of the Liberal party has recently told us, in connection with a slight departure from what he considers to be principle on the question of Poplar, that, if we deviate in the slightest degree from the straight line, he will at once turn the Government out. What is the use of telling the Government they cannot do things, while at the same time party leaders are telling them that they will not be allowed to do those things? The whole thing is humbug; it is cheap political by-play that is unworthy of the situation. No sensible person supposes for a single moment that the suggestions put forward this afternoon constitute the stock in trade of the Labour Government for dealing with unemployment. They deal with a temporary expedient that gives an opportunity for immediate action. But what is the difference? I have been long enough in this House to hear proposals of a similar description treated as though they were absolute solutions of the unemployment problem. We have been told repeatedly that these proposals would solve the problem. The difference between us and those on the other side and below the Gangway is that they regarded these things as a solution in themselves, whereas we have merely regarded them as a means to an end for developing something of a far more radical character.

I agree that these proposals cannot he regarded in any sense as solving the problem, and I am sure that, if hon. Members will possess their souls in patience and wait until the proposals of the Government are produced, they will discover something into which they can get their teeth far more than at the present moment. I shall support these proposals, naturally, because, as I have said, they are a temporary expedient and will help in a slight degree. The sum, however, is altogether inadequate. The right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara) mentioned £100,000,000, but everyone who understands the situation in the industrial world to-day knows that even an expenditure of £100,000,000 is not going to wipe out unemployment. It is not a question of the expenditure of £100,000,000, but of hundreds of millions, even £1,000,000,000 or more, before it will be possible to absorb the large number of unemployed people that we have at the present moment. In any case, however, whatever it may cost the country, the cost will be little compared with the loss that constantly accrues to the country through the holding up of the labour of millions of willing workers who could produce wealth, but are prevented by circumstances over which they have no control. I agree with the hon. Member who spoke about land values. I agree that those values ought not to be created and then absorbed by those who have done nothing whatever in return for what they get but I should be in favour of those values being taken by the companies who carried out the original enterprise. I hold that these values are social values and should come to the community, and, so far as we are concerned, we will not entertain proposals of a character opposed to that principle. These values are created by the activities of the community and should come back to the community responsible for their creation. I hope that along these lines we shall ultimately develop.

Mr. ARNOLD WILIAMS

I hope we may now come back to the subject under discussion. I take it we are discussing the Trade Facilities Act and not half-a-dozen other things. We hope the Government will bring forward other schemes for dealing with unemployment, but they are not under discussion at the present time. I take it that the Trade Facilities Act is for one specific purpose, that is, for dealing with unemployment. If it can be proved that the present working of the Trade Facilities Act does not solve the problem of unemployment, then we must try to find a way in which it can be made to fulfil that purpose. We must look at this from the point of view of risk. There are four kinds of risk; what we call the insurance risk, the business risk, business speculation and gambling. I submit that the way in which the trade facilities have been granted do not come within any of these four headings of risk, but are something far and away above them. You have a Committee administering the trade facilities in the sense that if there are losses they will be called to book. It seems to me we can only deal with trade facilities in three different ways. (i.) We can only make it adequate by extending the time not only to March, 1925, but even beyond that; (ii.) by extending the amount: (iii.) and by seeing what the Government can do with a view to relieving the existing Committee from a responsibility which is too heavy for them.

There have been one or two points mentioned which call for some reply. The hon. Member for Mossley (Mr. A. Hopkinson) built the whole of his remarks upon the assumption that if you give credit in one place you restrict it in another. Time and time again throughout the Debate we have heard the suggestion that the Government is granting money. It seems to me that a fallacy lies in the speech of the hon. Member for Mossley. The Government is not granting credits, but simply assisting some businesses to get credits that they might not possibly be able to get otherwise. There is quite a big distinction there. The position so far is that unemployment has only decreased by 176,000 in the last 12 months. It is safe to assume that, while other schemes have been in operation, the trade facilities have not done very much. Those businesses which have been granted assistance by way of guarantee could have obtained money irrespective of this scheme. It should not be beyond the power of the Financial Secretary and his colleagues to devise a means by which the State need not necessarily take a large risk and yet make it possible for other businesses to obtain credits of this kind. We have had references this afternoon by one of my own colleagues to the tube railway. He says the Treasury is to be called upon some day to find money there. I submit that that is wrong. The most that can happen is that the Government will have to find money, but it will probably find the money on a prior charge and get a reasonable rate of interest on it. There is a distinction between losing money and getting a reasonable return for it. Another point has been made to the effect that all the money has not yet been used, that it has not been applied for, but there is a. big difference between money being applied for and being granted. This money has been applied for, but it has not been granted. May I sum up my three points; I am strongly in favour of trade facilities, but I would like the, time extended; the amount increased, and I would like to see it dealt with on more lenient terms.

Mr. W. GRAHAM

I am very reluctant to interfere in any way with the time that would otherwise be occupied by this Debate, but, unfortunately from our point of view to-night, there is a private Member's Motion at 8.15. The Government attaches very great importance to getting at least the Committee stage of this Resolution if we possibly can, and I want, therefore, to make a special appeal to hon. Members in all parts of the Committee to let us have at least this stage of the Resolution before the private Member's Motion is taken. I am encouraged to make a request of that kind by the fact that hon. Members who have not so far taken part in the Debate will have an opportunity of further discussion on the Report stage of the Resolution, and they will have an opportunity on all stages of the Bill which must follow. I earnestly appeal to the Committee, looking to the urgency of the problem and the fact that the Trade Facilities Act has expired, to give us this stage of the Financial Resolution to-night. I will try to deal very briefly, not with all the questions raised by hon. Members, because many of them are really more appropriate to the Second Reading of the Bill, but with some of the questions of a more urgent character Dealing with one or two points put by the hon. Member for Moseley (Mr. Hannon), let me explain that under the principal Act the Advisory Committee must be consulted, and I therefore think that the suggestion he made is unnecessary, for in any event it would be an Amendment that would fall to be taken on the Second Reading or the Committee stage of the Bill rather than to be put down for incorporation in the Financial Resolution. Then the hon. Member referred to the importance of assisting railway undertakings under the Trade Facilities scheme. I have no doubt the House is aware that a considerable measure of assistance by way of guarantee has already been given to railway enterprise. There are two schemes, the City and South London, which has been assisted with a guarantee covering £6,500,000, and the South Eastern and Chatham Railway, which has been assisted with a guarantee of £5,500,000. There are, of course, other schemes under consideration. Hon. Members will recall that the railway companies in this country are from some points of view in a strong position under the legislation of 1921. It is true that the sum of £51,000,000 provided under that Act was in respect to war-time agreements, but as the Act has worked out in operation, I think it is perfectly fair to suggest that it has contributed in no mean way to the strong position of the railway undertakings, and I think it is fair to expect them to do a great deal without coming under this scheme, which is designed in the first place to assist people who require a guarantee and who might not be able to get on in business if a guarantee should not be forthcoming. That seems to me to be a very fair principle to lay down, when we remember that we are dealing with the money of the taxpayers of this country, and that we must look to all the facts of the situation under every scheme before we give the benefits of the Trade Facilities Act. In reply to the hon. Member for Stockport (Mr. W. Greenwood), I ought to say at once-that I have not had an opportunity personally of considering in detail the very interesting scheme he put forward, and I think it would be unfair to hint and to the Committee if at this late hour of the Debate I should, attempt to reply to him. I will undertake to consider the scheme in detail, to meet any representations he cares to make, and to see Low far we are able to meet the proposals he has put forward.

8.0 P. M.

Coming to the introductory speech of the right hon. Gentleman the former President of the Board of Trade (Sir P. Lloyd-Greame)—and here, in passing, I should like to express my gratitude for the kindly references which he and other Members of the Committee made to me— I should like to deal with the question he asked, and to say that we on this side of the House do not pretend that this scheme is in any way a novel scheme or a solution of the problem of unemployment. It is only one part of a series of schemes which the Government will present to the House in successive weeks. But we do not underrate in any way the contribution which may be made to the solution of unemployment under the four heads of this Resolution. Much of the discussion has turned on the sum of £65,000,000 which we have fixed under the extended guarantee. I agree that, looking to the state of industry in this country and to the mass of unemployment, the aggregate amount of £65,000,000 is perhaps, from some points of view, a trifling sum, but we must remember that this applies strictly to the period falling between November, 1923, and 31st March, 1925, and that during that time an amount equal to about £22,000,000, to be precise, will be available. All that has got to be raised by the industries themselves in the open market. We could quite easily, by a stroke of the pen, increase the amount to £75,000,000 or £80,000,000 or even £100,000,000 under this proposal, but we very definitely took the view, having regard to the urgency of the question, to keep to this figure, because we can always extend it on short notice if that course is decided upon. I want to place this further consideration before the Committee. In the course of a few weeks the Government will require to indicate more plainly than I can indicate to-night the kind of financial burden or obligation which many of our proposals will involve. We must, therefore, place this scheme, which goes to an amount of £22,000,000 now outstanding in a little more than a year, in strict relation to all the other schemes which we are to bring forward, and finally we must put the aggregate under this scheme and the others in strict relation to the problem of the country's credit as a whole. I do not mind very much what Government is in power in this country when I say, without fear of contradiction, that any Government which impairs the credit of the country only makes it a hundred times more difficult for it to carry out the very schemes which it intends to pursue; and at the Treasury, though my experience there has certainly been very brief, that is the kind of consideration which we are in duty bound to keep in mind. These are the wider arguments behind the suggestion which we make in this proposal for £65,000,000, and I am going to ask the Committee not to press us for a larger sum by way of guarantee. There is not the slightest doubt that a great deal could be done by this means, and we have a perfectly open mind as to its extension in future.

The right hon. Gentleman suggested a combination of paragraphs (a) and (b) of the Financial Resolution. The effect of that combination would be to link up in some way the proposal for strict trade facilities, that is the £26,000,000 or £22,000,000 scheme, between November next and March, 1925, with (b) the second proposal, covering the £1,000,000 per annum by way of payment of a maximum of three-quarters of the interest on loans raised in this country by the Dominions, Governments or Protectorates for works of a public utility character. On that point the strict position is that the Colonies and Protectorates could come now to the Trade Facilities Committee, but I see no difficulty whatever in arriving at a kind of working agreement, as I conceive it, between the first two parts of this Resolution. If the right hon. Gentleman would be content with that assurance at the present stage, I think we shall be able to meet him when the matter comes to closer detail. I am satisfied that there will be no particular difficulty on this point. Other questions were raised regarding the precise scope of the Resolution adopted by the Imperial Conference. The right hon. Gentleman asked me Whether this provision which we intend to make under (b) of the Resolution would apply to companies which were engaged in works of a public utility character—I understood the question to be where the companies themselves were not strictly of a public utility description. The definition of public utility company has always been difficult.

Sir P. LLOYD-GREAME

That was not precisely my point. My point was whether you would give this contribution of interest in a suitable case, whether the public utility undertaking was carried on by a municipality, a Government, or a private company.

Mr. GRAHAM

My reply on that point is that I am afraid, generally, of course, the proposal must subscribe to the conditions of a public utility undertaking. I am afraid I must adhere to that generally at the moment, but where the work is of a public utility character, I do not anticipate any difficulty in practice. Beyond that at this stage I cannot go, because, of course, the difficulties of establishing any kind of private enterprise in the Dominions are considerable.

Sir P. LLOYD-GREAME

This is rather an important point. If the hon. Gentleman will look at the Resolution of the Imperial Conference it is specific on the point. These public utility undertakings might be under either public or private control or management.

Mr. GRAHAM

Yes, but the right hon. Gentleman will appreciate that they are still of a public utility character. Provided we are agreed on that point, I do not anticipate any difficulty under the other. I hope I have made that point plain. As regards the other question he asked regarding the Indian railways and grants in Kenya and Uganda, I think at the moment they are really beyond the scope of this Resolution, and as proposals applying to those areas will be presented to the House, I could not undertake at this stage to say they will be covered by a scheme of this kind. They involve political and other difficulties which at this stage I dare not take time to explain.

Points were presented by one or two other hon. Members to which I must offer only a very brief reply. The right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara) suggested that, after all, the liability of the Treasury under our proposal was not very much more than £1,000,000 per annum for five years, that criticism referring, of course, to proposals arising out of the Resolution of the Imperial Economic Conference. That is perfectly true as regards the payment of the sum but, of course, the House will agree that it raises a very large issue if any Government in this country is going to embark upon advances or grants or loans perhaps on other than the terms in which we are trying to help industry in different parts of the World at present. This proposal to pay up to a maximum of three quarters of the interest on any loan raised in this country by the Dominions would cover an amount of about £26,000,000 or £27,000,000, if we assume that the loans were raised at about 5 per cent., and, of course, if they were raised at less than that the amounts to be covered would be greater. T suggest at this stage, since, after all, this is the first appearance of a Resolution of this kind, that it is by no means a negligible contribution for a Government to make, especially as the matter is purely experimental and only time can tell how far public utility undertakings in the Colonies and Dominions and Protectorates will avail themselves of this arrangement. I offer these facts in reply to the criticism which the right hon. Gentleman made.

Then there is one other large question which arises from his speech. We have succeeded to this legislation. Everything has to be done to stimulate employment, and while criticism of the exact form of this proposal has been launched in Debates in previous Parliaments, hon. Members generally have concluded that, after all, we shall have to continue the system, at all events for the time being. In such a state of affairs we can only take the best steps we possibly can to see that the taxpayer is not involved in loss, and while the conditions laid down by the Advisory Committee are strict, on the whole, from the taxpayers' point of view, there is justification for a good deal of this Resolution. I will say a word or two later about proposed administrative changes, but up to the present time we have been able to guarantee a very large sum of money—£38,000,000 or £40,000,000 —and the only loss we have incurred has been on one small scheme applying to a brickwork which landed the State for a contribution of rather less than £4,000. So I think, on the whole, that reflect^ credit on the way this work has been carried out, and while 1 agree that it is desirable to have a good deal of elasticity, still no Advisory Committee under any Act of Parliament is entitled to take too great a risk, because any loss that accrued would wipe out any immediate gain in the provision of employment. These are things that we have to keep very clearly in view.

The hon. Member for Uxbridge (Lieut.-Commander Burney) suggested that we might try to improve the machinery of the Advisory Committee under the Trade Facilities Acts. That has been the subject of consideration in the Treasury during these weeks. I cannot to-night make a definite statement as to what form any change in the administrative Regulations will take, but we are very sincerely desirous that, subject to the conditions I have tried to lay down in the earlier part of my speech, we should give the greatest measure of freedom, and I hope, perhaps at an early date, to be able to make some definite statement on that point. In view of the shortness of time, I have been compelled to leave out any reference at all to the question of the Sudan loan, and I have done so after consideration for a reason which, I am sure, the Committee will appreciate. On the Second Reading of the Bill which will follow this Financial Resolution there will be an opportunity for hon. Members further to discuss the position in the Sudan, and I hope also, if it is required, there will he an opportunity for the Foreign Office to give explanations and information which are within their province and not within mine. For that reason, looking to the fact that much fuller information will be provided than I can offer the Committee to-night, I trust hon. Members will not expect me to go into a detailed reply on the question of the Sudan.

Mr. T. JOHNSTON

Will my hon. Friend give an assurance that the provision of this money now will not commit us to facilitating operations in the Sudan, and enabling them to raise cotton which they would be able to sell at any price they like in the British market?

Mr. PRINGLE

I wish to give notice that a reply will be expected from the Foreign Office on the Report stage.

Mr. GRAHAM

The time has nearly expired and I dare not attempt to give a reply, but I am satisfied that the information which will be given by the Foreign Office will meet hon. Members on this point. There is a very great deal of information to give, and I entirely agree that the House is entitled to have it. In view of the appeal I made earlier, I ask the Committee, because this is really a matter of urgency, to give us the Committee stage of the Financial Resolution.

Mr. A. M. SAMUEL

rose—

Mr. MORGAN JONES

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

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, and agreed to.

Resolution to be reported To-morrow.