§ Considered in Committee. [Captain FITZROY in the Chair.]
§ CLAUSE 1.—(Increase of amount of loans which may be guaranteed under 11 & 12 Geo. 5. c. 65, and extension of period for giving guarantees.)
§ Mr. WILLIAM GRAHAM
I beg to move, in page 1, line 11, at the end to insert the wordsprovided that such loans shall not be guaranteed in future unless the guarantee is qualified by such conditions as shall ensure the participation by the public in the value et the assets created.The object of this Amendment, which stands in the name of the right Hon. Member for Newcastle-under-Lyme (Colonel Wedgwood), the hon. Member for Dundee (Mr. Johnston) and myself, is to call attention to the large principle which is at stake in this Trade Fa3ilities legislation. That is, as to whether this House should continue longer to give substantial guarantees based on public credit in this country, without having some definite part in the assets which we help to create. The matter has been discussed at such great length in the last Debate that I need not do more now. than summarise the present position. On previous occasions we have asked the Financial Secretary to the Treasury to 318 grant some kind of inquiry in order to find out whether there should be any change in the practice as regards, at all events, future guarantees, and as regards the policy as a whole, and we should not have put this Amendment on the Order Paper if the Financial Secretary had been able to meet us to any extent, but, in the course of yesterday's Debate, he made it clear that he was not prepared to do anything along the lines of an inquiry, and we then gave notice that we should test the principle by the Amendment which I now move.
This legislation is now four or five years old. It was described in its initial stages as a temporary proposal. I think that we were able to show yesterday that for all practical purposes, seeing that some of the guarantees are for a period of 15 years, it must be regarded as a permanent proposition. Accordingly, we are compelled to ask the Government what they propose to do by way of getting some return in respect of the guarantees which we give based on the credit of this country. The scheme has been extended on various occasions. It was extended by our proposals in the summer of 1924. The Financial Secretary now proposes a further extension, which brings the contingent liability upon the taxpayers up to £70,000,000, and hon. Members in different parts of the House suggest that in order to find a remedy for unemployment it may be necessary further to extend trade facilities in time to come.
During the time we were in office, one right hon. Member, who spoke for the Liberal section of the Opposition at that time, suggested that, at once, we should raise the aggregate guarantee to £100,000,000, and there was a certain amount of support for that proposal. But whatever view we take of the aggregate sum, it must be perfectly plain that the House cannot go on indefinitely in this connection giving a guarantee, with a certain effect upon our credit, without coming to a very clear conclusion as to the public right in the assets created. I said in this connection the other clay that unfortunately from that point this does not stand alone. We have a contingent liability, say, of £26,000,000 under the export credits scheme, and we are giving, not by way of guarantee but in actual grants, £5,000.000 for colonial developments under the arrangement of last 319 year. There is a proposal to give another £1,000,000 a year in direct subsidies to schemes of colonial production, and, in short, one could go on almost indefinitely setting out case after case in which we are using either the actual money of the taxpayers of this country, or at least their guarantee for very considerable sums, and we have nothing to show as regards a share or right of the kind which is now suggested.
The reply which the Financial Secretary offers in the difficult, but I always think the greatest, office which he holds, is that we get a return in the amount of employment, which we anticipate or stimulate. Surely, that is not quite an adequate reply in this connection, because we have been able to show that perhaps a great deal of this work would have gone on apart from trade facilities, and that probably we have helped certain people who did not strictly require help, by enabling them to raise their money in the open market on slightly easier terms. In other words, in those cases the subsidy or the benefit of the reduced rate which they had to pay, to say nothing of the value of the guarantee, can be readily measured. It is a very plain gift at the expense of one body of taxpayers of Great Britain.
In opposition to our proposal that there should be a public right in the assets created by these guarantees the Financial Secretary may say that, in such conditions, these people will not avail themselves of the guarantees, under the Trade Facilities Act, that they will hesitate to come forward, and that the scheme will not assist the cure of unemployment. In reply to that contention, may I refer to the very practical value of the guarantee which, beyond all doubt, turns some of these investments into trustee securities, and undoubtedly gives them the benefit, it may he to the extent of 1 per cent. or even more of a reduced rate of interest. in the open market. This, we feel, is a matter of considerable value, but, apart from that altogether, and certainly quite apart from any economic controversy which divides us as to the public ownership and private enterprise. I am certain that hon. Members in all parts of the House will agree that it is a very dangerous thing to go on giving this guarantee 320 without coming to some conclusion regarding our right in the capital assets created thereby.
We cannot dissociate that argument from the circumstances in which we meet to-day, with a, burden of nearly £8,000,000,000 debt, and all sections of taxpayers bearing a heavy burden, and the danger of showing a preference to certain classes of private enterprise at the expense of their brethren when the former are in many cases in a better position than the very people who have to stand by a guarantee of this kind. To test that principle, this Amendment has been put on the Paper. We do not commit ourselves to details. We cannot do that, because it is a very difficult thing, hut we do submit that the issue should be discussed, and we do regard it as so important that, if the Financial Secretary unfortunately finds it impossible to meet us, we shall he compelled to press this to division in the Lobby.
The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness)
The right hon. Gentleman has made it clear that he is moving this Amendment as a demonstration, and as a test of the opinion of the Committee in the direction of widening the scope of the Trade Facilities machinery, and we on this side are bound to resist it because we believe that it would not be in the public interest to extend the scope of this Bill, and to strain machinery which is efficient for its purpose by using it for some wider ends which were not in view when it was originally instituted. The Debate which we had yesterday covered this particular point in great detail, and I do not want to inflict on hon. Members a long speech on the same subject. We cannot foretell how long the Trade Facilities machinery will remain necessary. He would be a very bold man who would foretell the future course of unemployment in this country. but we can fairly point to the decision of the Labour Government last year in renewing the Trade Facilities Acts in exactly the same way as we are doing on this occasion, and leaving the machinery of Trade Facilities untouched, and contenting themselves with the temporary extension of an emergency machinery.
Our answer to the suggestion that the public should take some participation in any concern that gets the benefit of the 321 Trade Facilities money is that the public interest is already adequately secured. The public are to-day guarantors to ensure anticipation of work, which, without this guarantee, would not be put in the hands for some time to come. If we insist on a share of the profits of such work, the advantage offered by the Treasury in giving a guarantee would be lessened, and the incentive to anticipate this work would necessarily be reduced in proportion. In the more speculative class of guarantees, steps are already taken to see that the public gets its share of any large return. We get back part of the stake in the returns earned by the enterprise beyond a certain figure. That class of case is a comparatively small one, because three-fifths of the guarantees which are given are not suitable to the kind of Measure which the right hon. Gentleman suggests.
Under the existing guarantees, which have been issued or promised, of £55,000,000, some £22,000,000 are on account of public utility undertakings, whose dividends are directly or indirectly controlled by Parliament, and Parliament sees that the public does get the benefit, of an increase in prosperity beyond a certain level. Over one-fifth—some £12,000,000—of the guarantees have been for shipping enterprises, and in that. case unfortunately we have very little prospect of considerable dividends being earned on the ordinary shares in present conditions. Apart from the general objection to the proposal of the right hon. Gentleman, there is a real danger in the State acquiring an interest in particular industrial undertakings. In the Debate yesterday it was suggested that it would be very undesirable if, owing to the Trade Facilities guarantee, the State were encouraged to send business, behind the scenes, to a particular company or undertaking. If, for instance, we were to give a guarantee to enable a boot factory to invest in fresh plant, it would be very unfair to competing concerns in the boot industry if contracts from the War Office or other Government Departments were diverted to the company in which the Government had a share or interest at the expense of other companies which had not. this advantage. On the broadest ground of principle we on this side of the House object to the proposal of the right hon. Gentleman, as we see 322 in it an attempt to initiate the public ownership of industries. We do not believe that the State can or should run these industries. We believe that, except in times of emergency, the less the State has to do with controlling the supply of credit to one industry at the expense. of the rest the better, and we certainly can- not accept the suggestion that we ought to have an inquiry to see how, under the guise of the Trade Facilities Act, we can introduce the thin end of the wedge of Socialism.
§ Mr. STEPHEN
In spite of the statement just. made by the Financial Secretary, I appeal to him to reconsider his decision. I support the Amendment, because I think there are certain facts which the Committee should take into consideration. It is admitted that this legislation was promoted as emergency legislation to deal with the specific problem of unemployment. When that specific emergency arose, the ordinary industry of the country had got into a position in which it was not able to afford work for the large numbers of people who were unemployed. The industry of the country was quite unfit to provide for the necessities of the people, and this scheme was devised in order that this special period, this time of unemployment, should be tided over. The Financial Secretary said that he would be a bold individual who would prophesy when we are going to get away from the existence of a large measure of unemployment in the country. All the indications are that we are going to be faced, for a good many years to come, with the spectacle of a vast number of the citizens of this country being unable to find employment. Therefore, we have to reconsider this legislation, with a realisation of the fact that these people are a permanent burden upon the community unless we devise ways and means of bringing them into industry again. We have to take account of this scheme as, practically, a permanent feature in the legislation of our country. If we are to go on as at present for another three or four years or for the term of office of the present Government., giving them the benefit of the doubt and suggesting that they are going to last for four years, there is one conclusion we can draw and that is that we shall have unemployment on practically as large a scale as at present 323 if not on a larger scale, while they retain office. Consequently we must go on with this legislation, and if we are going to apply credit belonging to the whole community to private enterprise, it is scarcely fair that the burden should be placed upon the general public without that public having some share in the assets created by this social credit. If any hon. Member here were approached by a friend who asked for £20,000 to set up a business, and if that business were set going and an asset created as a result of the £20,000, the lender would expect to get some return for it. He would not give the money for nothing, but we continue to give away the public credit, while the public obtain nothing in return.
It is suggested that we gain as a community because certain people find employment, but that is not enough for the sums of money that are being guaranteed and for those contingent liabilities which have become a source of alarm to some hon. Members. The hon. Member for Ilford (Sir F. Wise) again and again has said that we cannot go on in this way without considering whether we are not jeopardising the whole of our credit. If that be so, surely the community is entitled to something more than it is getting at the present time from this legislation. The Minister might meet us in this connection. We have asked him for a Committee of Inquiry into the working of the Act, and he has suggested that we cannot have that inquiry. I put it to him again that if the community has to face these ever-increasing contingent liabilities, we are entitled to ask him to consider the setting-up of some committee to see that the interests of the general body of taxpayers are taken into account. I have here a list of the various schemes that have been helped by this legislation, and one can see that ever so much wealth is being created at the public expense. I am quite willing to admit that private enterprise is doing something in the way of directing operations and utilising this public credit., but assets are being brought into being very largely as a result of this public credit, and yet the public have given that credit for nothing. There are not many of my constituents who will get anything out of this scheme. There are not many of the working-class people el this country who will get anything material out of it., but I believe the people 324 of the country are entitled to a share in that on which public credit is being expended. The right hon. Gentleman the Member for Norwich (Mr. Hilton Young) the other day said that the effect of this legislation, which he had a part in initiating, was to confer a public benefit on private individuals, and the Amendment is the very modest proposal that when these public benefits are being conferred on private individuals, the public should share in the assets in return for the credit which has made those assets possible. I hope the Minister will meet us to some extent at least on this proposal. It is not good enough to say merely, "We cannot do this; it is the thin end of the wedge of public ownership." If it is the thin end of the wedge, it was put in when this legislation was initiated, and we cannot afford to go on spending public credit while the people are getting nothing in return.
§ Lieut.-Commander KENWORTHY
I presume the right hon. Gentleman the Mover of the Amendment intends to press it to a Division, and, as one who proposes to support him in it, I shall perhaps be allowed to make a few observations. I am under the disadvantage of not having heard the whole of the Debate, but I was interested in the speech made yesterday by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) on this matter and the proposal to introduce a system of mixed companies—a term which will not be unfamiliar to the hon. and gallant Gentleman in connection with these concerns which. we are bolstering up or assisting by public credit. Whatever the right hon. and gallant Gentleman replies, I shall still vote for this Amendment, and I shall do what I can to persuade my hon. Friends also to support it. Last year, on the 14th April or thereabouts. £15,000,000 was added to the available credit by the Government of which he was so distinguished an ornament. What safeguard was taken to see that the wealth created by that extra credit accrued to the public'? There was plenty of time. The late Government had been in office for some months at that time, and why did they not make this provision? It would be much more difficult for their successors to take it out again. I asked this question of my right hon. and gallant Friend yesterday, but I got no 325 reply, and I would like to invite him to explain why, when the Conservative party are entrenched in this House in overwhelming numbers and in an impregnable position, and we can do nothing but bring moral pressure to bear on them, he chooses this moment to make this valuable suggestion? Is it because it did not occur to him when he was overburdened with the duties of the Chancellor of the Duchy of Lancaster? [An HON. MEMBER: "What are they"] I understand that he rasies the rents for the Crown as a land taxer, that he appoints magistrates as an anarchist, that he—
§ Lieut.-Commander KENWORTHY
I will tell my hon. Friend in private what the other duties of the Chancellor of the Duchy are, and how well fitted my right hon. and gallant Friend was to fulfil them. My right hon. and gallant Friend is a man of very great courage, and I invite him to enlighten me as to why this matter is brought forward now, under these distressing and oppressing circumstances, when there is very little chance of exciting either the consciences or the fears of hon. and right hon. Members opposite to support any such just Measure as is contained in the Amendment.
§ Colonel WEDGWOOD
I am delighted to be called upon in this way to answer for the sins of the late Government. But, as I know very well that the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) will vote for us in the Lobby whether or not I answer, I do not see that I need accede to his request. I am sure that he and his Friends will come into the Lobby with us on this or on any other subject, and we really need not pursue this question much further than to ask why, when he could have made that speech last April, he did not do so. Why did he not then press on the Government of the day, whatever Government it might he, the absolutely, fundamentally sound principles of which he only heard yesterday for the first time, and which he now brings forward in this House? We are all human, not merely Governments, but even back-benchers, and when we do awake to our responsibilities, 326 then all good men respond, to whatever party they may belong.
I listened to the speech of the Financial Secretary to the Treasury more in sorrow than with surprise. It seems to me that he seta a thoroughly bad example to his colleagues on that bench. There could have been nothing clearer than the case stated by my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham), who has a way of putting things pretty clearly and pretty shortly, and the right hon. Gentleman opposite, showing that he had absolutely no sort of reply to our arguments, got up and deliberately misrepresented the whole tenor of that speech, which everybody had heard only two minutes before. You should wait longer before you start that sort of game. We were accused, for instance, of widening the scope of the Bill, but the right hon. Gentleman knows perfectly well that neither my right hon. Friend nor any of us wishes to widen the scope of the Bill. We should be only too. glad if this Measure and the reason for it could be banished into the limbo of forgotten things to-morrow, and all that. we are asking is, not that you should widen the scope of the Bill, but that you should choose business, commonsense methods, instead of applying to it, apparently, the wisdom of the ostrich, putting your head in the sand and saying: We passed the Measure in 1921, and we dare not touch the Ark of the Covenant in 1925, for fear of widening the scope of the Measure, for fear of something far more serious, namely, introducing public interest in private firms.
Good Heavens! That sounds like Bolshevism all at once. Shade of Dizzy ! Who bought the Suez Canal shares? Who was it started a British industry called "British Dyes," with British Government capital? Who was it started beet sugar? This is Bolshevism! Sound business applied to your modern administration and legislation may he called by any name you like, hut it is still sound business, and all that we are asking in this Amendment is that we should be business men. I appeal from Philip drunk—no, I appeal from the Financial Secretary to the Treasury to the back benches of the Conservative party. Just see what we are doing, and I ask you whether, as honest men, you ought not to vote with us in the 327 Lobby to-night. Here you have a Government Department lending British credit at 4½ per cent., so that those firms which are lucky enough to persuade the Committee of three that they should be selected, among all other applicants, for the benefits of this Government credit, are able, alone of their competitors, to get money at 41 per cent., millions of money, £2,000,000 in the case of one firm. They are able to get this enormous subsidy of cheap money.
My right hon. Friend said they might have got ½ per cent. or even 1 per cent. more, but if you look down the list of the companies that have been helped, you will find that many of them could not have got it at under 8 per cent. You are giving these people an enormous cash subsidy, and the right hon. Gentleman comes forward and says: Yes, but we arc getting advantages in return. Do not let us forget that we are anticipating expenditure, and getting work done now that would not be done otherwise for six months. Quite so. The object of the Bill is to get that advantage, but if you can get another advantage at the same time, why not get both? What is to prevent you, as a business man, if you have a company prepared to pay 6 per cent. for a Government guarantee, taking it? Why should you put the British Government in a worse position than your predecessors did when they invested in Suez Canal shares, for instance 7 Why deliberately deprive the British taxpayer of a rate of interest that he is able to get, and entitled to get, without forfeiting one single advantage obtainable under this Act?
I ask the Committee to observe that of the £70,000,000, so far only £40,000,000 have been guaranteed, and there arc £30,000,000 still to give. If you vote against the Amendment to-night, you vote that when the British Government give the credit of this £[...]30,000,000 they shall merely be entitled to take 4½ per cent., and not the maximum they can get. Say it. is only 1 per cent. That, on £30,000.000, is £300,000 a year. which is not to he sneezed at, even in these days when we talk in millions, and if you can get that without sacrificing a single advantage, why on earth should you not do so? I will give the Committee a particular example. Take the case of the 328 Athens electric power station. There is a company borrowing £2,000,000 of our money, and I do not think it is even a British company—a company which is taking £2,000,000 on a British credit.
§ Colonel WEDGWOOD
Yes, but it is not a British company; that is to say, the directors and the shareholders are not British, and they are getting this £2,000,000 of credit. But it does not matter whether or not it is a British company, whether it is British or Greek, they could no more borrow that £2,000,000 at 4½ per cent. without British credit than they could fly. It is doubtful whether they could raise the money anywhere in the world without this Act. I am not complaining of the loan. I think it is an excellent thing, but I say that that company would have been prepared to pay, not 41 per cent., but 7 per cent. for that money, and, if so, why on earth should we not get the advantage of it? They would have ordered British machinery, and they would have had everything manufactured here in Great Britain. The whole of the £2,000,000 would have been spent here probably, and we should have got a better rate of interest and a share in the assets. I do not particularly tie myself down to any method, but I dare say they would he prepared to allot to us in ordinary shares the equivalent of the value of our credit and the argument used by the right hon. Gentleman opposite, that it would be a terrible thing if the British Government were interested in some company, that they might place contracts with that company and so act unjustly towards other competitors, does not apply in the case of the Athens company, or the Polish company or the Lithuanian Government. Those three cases, altogether borrowing nearly £6,000,000 under this Act, were every one of them prepared to pay a higher rate of interest than you are getting from them, and every single one of those cases has happened since our Government left office. We could have made a handsome thing out of it, but the right hon. Gentleman opposite turned it down without an argument, or a thought, or any consideration whatever, on the ground that it, is a Socialistic stunt.
§ Lieut.-Commander BURNEY
Why did not the right hon. and gallant Member 329 urge all this upon the right hon. Member for Central Edinburgh (Mr. W. Graham), who is sitting next to him, when he was in power last year?
§ Colonel WEDGWOOD
The cases I am bringing forward, where the biggest possible profit might have been made, have occurred since the present Government, came into power, and even if we made a mistake a year ago, all the more reason for sensible men doing the right thing when they see what is the right thing. It is only the pig-headed, obstinate people who adhere to wrong-headed courses, and one of the weaknesses of statesmen is that they think they must go on persisting in being wrong, after they see a thing is wrong, for fear somebody on the Back Benches might twit them with having changed their mind. It does not alter the strength of my case, whatever the last Government did or did not do. The strength of my case is that you should apply business principles to business questions, and get the best bargain for your country under the circumstances. But you are tying your hands by preventing the Committee of three getting these terms, and all that we ask in this Amendment is to allow your Committee to get the best possible terms for the country, in order that we might not give British credit without getting the best possible terms for the British public, and that we might not create for private persons assets in which we do not have t share when they are created.
§ 7.0 P.M.
§ Mr. CLYNES
I think the Committee is entitled to a more ample answer to the speech of my right hon. Friend (Mr. W. Graham) who moved this Amendment than we have heard from the right hon. Gentleman the representative of the Treasury. I want to submit to my right hon. Friend that the main ground of the argument was adequately stated by my hon. Friend the Member for the Camlachie Division (Mr. Stephen) who drew attention to the probability of the permanence of this kind of legislation. It appears to us to have passed the stage of a temporary expedient. We last year made certain additions to the volume of the guarantees provided by the State. We were not the majority Government; we could not introduce new principles with any hope or expectation of embodying them in legislation. But this is a Govern- 330 ment with a great majority behind it, faced with a prospect which did not confront us, and I assert deliberately that the first duty of a Government is to preserve, to pursue, to seek, the interests of the State. Not a Party interest, not a class-view interest, but the interest of the State is the immediate duty of the Government. We want, in the words of the Amendment, to ensure the participation by the public in the value of the assets created. Created by whom? Created how'? By public credit. And is it not the most reasonable thing in the world—call it the thin edge of the wedge if you like of Socialism—that assets created by State credit should in part be enjoyed by the State, and that some kind of acknowledgment or some portion of the profit or assets so created should accrue to the Government that provides the means for creating those assets?
There have been in this discussion somewhat confusing terms used. Very much misunderstanding is shown by the public outside these walls. Some have thought that loans were provided by the Government; others that grants were made by the Government. There is; of course, in this regard neither grants nor loans. What is done is that the great background of State credit is used in order to enable persons who otherwise could not raise money to raise that money. Our view now is that the State is entitled to some share of the assets created by the enormous credit that it is able to employ. As my right hon. Friend has pointed out, the principle of this Amendment is not even new. The State already does possess in many parts of the world property because of its application of the principle. Indeed, it may be that the principle has been applied by previous Conservative Governments. Is it to be said—if not inside these walls by hon. Gentlemen on the benches opposite, certainly outside these walls—that this is a more reactionary Government than any previous Conservative Government we have had? I ask the right hon. Gentleman not to be afraid of the thin edge of the wedge, and to stand up and do his duty by the State and get for the State the benefit to which it is entitled.
§ Mr. J. BAKER
I think the House is entitled to be told something more than we have had. Under the circumstances obtaining at the present time, in all 331 probability the bank rate will be raised on Thursday next. That, I suggest, ought to have the serious consideration of those controlling trade facilities grants. It certainly will have a serious effect on the industry of this country. Whilst we are considering the question of the rasing of our bank rate, we ought to be also considering the effect of that bank rate on employment in this country. It is not sufficient to be willing to grant cheap loans to induce employment, if at the same time we are pursuing a financial policy that is going to negative the one that we are trying to pursue under the Trade Facilities Act. Personally, I think this type of legislation is good, but it is too late in the day to say that this Amendment is introducing the thin edge of the wedge. We ought to recognise the fact that this Trade Facilities legislation is simply drawing private enterprise out of the mud. Private enterprise has failed in this country. The country itself has had to come to the rescue, and we ought to recognise that. Probably it would not be a proper thing for a Government to go hawking loans around the country to see whether they could get 5½ or 6½ or 7½ per cent., but is it the proper thing to grant a loan to one group of people and not give the same facility to another group? I was told, for instance, the other day, that there is an iron and steel works in this country trying to remodel itself. It gets so far with its reorganisation, and then it is held up for the want of further capital and cannot get it.
The hon. Member is now making a speech which should be made on the Second Reading. It is not appropriate to the Amendment now before the Committee.
§ Mr. BAKER
I am sorry if I am out of Order. It was not my intention deliberately to be out of Order, because I want to see this thing dealt with. I am not talking against time, or anything like that. Here is a suggestion that seems to me to be definitely unfair. We have granted a loan to a company at 4½ per cent., and that company issues a second debenture at 7½ per cent. Yet we are told that this Government, which is virtually giving, say, a 3 per cent. assistance, to that company, is not entitled to share in that advantage, because of some fear of some ultimate theory with 332 which the right hon. Gentleman opposite does not agree. The public, or the taxpayers rather, ought to get some advantage. The right hon. Gentleman, in his reply, said the public got a share, because they were able to invest in the company getting the loan, and then they got their share. But surely only a very small section of the community is able to invest money in that way. So far as I am concerned, I have always believed that you had to have money before you could invest it. That rules out the immense majority of the people of this country. There is a further thing that the Government might take into consideration in this Act. There is another section of the community that cannot get any advantage so far as investing is concerned, but is employed in some cases by these firms. Some steps should be taken to safeguard the interest of the work-people of these firms who get the advantage of the Trade Facilities Act.
§ Mr. HARDIE
I want to ask the right hon. Gentleman if he will deal with the question of new industries; and, further, will he answer this question? Will he say whether the £to be provided as credit is to have a ratio of £1 against £1 of watered capital, or against LI of actual stock?
§ Mr. WARDLAW-MILNE
I do not think there is anybody in this House who will not have a certain amount of sympathy with the idea underlying the Amendment. If we are going to look on this Trade Facilities Act purely as a business proposition, as to whether it would pay the Government or the nation to invest certain money in the industries of this country, then in my opinion the sooner the Trade Facilities Act is dispensed with the better. That is not the position as I understand it. The Trade Facilities Act is purely and simply a question of providing a guarantee to enable certain work to be done which would provide employment, and which would provide that employment earlier than would otherwise be the case. If we are going to consider the question of the factories or industries which are going to be guaranteed in this way merely as business propositions, then a wide field of a totally new character enters into the question. We are up against a factor of this kind: Is Class A the right kind of thing for the nation to invest in? Will we get a bigger profit in 333 investing in Class B? There is no end to that kind of thing if we once begin. The principle underlying this Amendment opens up a completely new field, which is utterly apart from the whole idea on which the Trade Facilities Act was originally started. I should deprecate very much the passing of this Amendment, not because I do not like to see the nation getting a good return on its investment—everybody would like to see that, looking at it from the point of view of an investment—but looking at it from the point of view of providing employment, it seems to me the whole principle underlying this Amendment is wrong.
§ Mr. RUNCIMAN
So far as I am concerned, I shall vote in favour of the Amendment. I could not accept the interpretation which has been put by the last speaker upon this Act. It is true that the initiation of the Act was for the object of relieving unemployment and the only justification given by the Government for it is that it does relieve un-employment. In some other directions, as I endeavoured to point out to the House yesterday, it creates unemployment. That is not the point. From the point of view of the beneficiaries there is
|[Dvision No.27.]||AYES||17.15 p.m|
|Adamson, Rt. Hon. W. (Fife, West)||Henderson, Rt. Hon. A. (Burnley)||Sexton, James|
|Adamson, W. M. (Staff., Cannock)||Hore-Belisha, Leslie||Shlels, Dr. Drummond|
|Alexander, A. V. (Sheffield, Hillsbro')||Hudson J. H. Huddersfield||Short, Alfred (Wednesbury)|
|Ammon, Charles George||Jenkins, W. (Glamorgan, Neath)||Sltch, Charles H.|
|Attlee, Clement Richard||John, William (Rhondda, West)||Slesser, Sir Henry H.|
|Baker, J. (Wolverhampton, Bilston)||Johnston, Thomas (Dundee)||Smillie, Robert|
|Barker, G. (Monmouth, Abertillery)||Jones, J. J. (West Ham, Sllvertown)||Smith, Ben (Bermondsey, Rotherhithe)|
|Barnes, A.||Jones. Morgan (Caerphilly)||Smith, H. B. Lees (Keighley)|
|Barr, J.||Kelly, W. T.||Smith, Rennie (Penistone)|
|Broad, F. A.||Kennedy, T.||Snowden, Rt. Hon. Philip|
|Bromley, J.||Kenworthy, Lt.-Com. Hon. Joseph M.||Stamford, T. W.|
|Brown, James (Ayr and Bute)||Kenyon, Barnet||Stephen, Campbell|
|Buxton, Rt. Hon. Noel||Kirkwood, D.||Sutton, J. E.|
|Charleton, H. C.||Livingstone, A. M.||Thomson, Trevelyan (Middlestwo. W.)|
|Clowes, S.||Lowth, T.||Thurtle, E.|
|Cluse, W. S.||Lunn, William||Tinker, John Joseph|
|Clynes, Rt. Hon. John R.||MacDonald, Rt. Hon. J. R. (Aberavon)||Trevelyan, Rt. Hon. C. P.|
|Collins, Sir Godfrey (Greenock)||Mackinder, W.||Varley, Frank B.|
|Compton, Joseph||MacLaren, Andrew||Vlant, S. P.|
|Cove, W. G.||Maclean, Nell (Glasgow, Govan)||Walsh, Rt. Hon. Stephen|
|Davies, Rhys John (Westhoughton)||March, S.||Watson, W. M. (Dunfermline)|
|Day, Colonel Harry||Maxton, James||Watts-Morgan, Lt.-Col. D. (Rhondda)|
|Dennison, R.||Montague, Frederick||Webb, Rt. Hon. Sidney|
|Duncan, C.||Morrison, R.C. (Tottenham, N.)||Wedgwood, Rt. Hon. Josiah|
|Edwards, C. (Monmouth, Bedwellty)||Murnin; H.||Welsh, J. C.|
|Fenby, T, D.||Oliver, George Harold||Westwood, J|
|Garro-Jones, Captain G. M.||Palin, John Henry||Wheatley, Rt. Hon. J.|
|Graham, Rt. Hon. Wm. (Edln., Cent.)||Parkinson, John Allen (Wigan)||Wignall, James|
|Greenall, T.||Pethick-Lawrence, F. W.||Wilkinson, Ellen C,|
|Grenfell, D. R. (Glamorgan)||Ponsonby, Arthur||Wilson, C. H. (Sheffield, Attercliffe)|
|Groves, T.||Potts, John S.||Wilson, R. J. (Jarrow)|
|Hall, G. H. (Merthyr Tydvll)||Roberts, Rt. Hon. F.O.(W.BromwIch)||Windsor, Walter|
|Hamilton, Sir R. (Orkney & Shetland)||Robertson, J. (Lanark, Bothwell)||Wright, W.|
|Hardle, George D.||Robinson, W. C. (Yorks, W. R., Elland)|
|Hartshorn, Rt. Hon. Vernon||Runciman, Rt, Hon. Walter||TELLERS FOR THE AYES.—|
|Hayday, Arthur||Scrymgeour, E.||Mr. T. Griffiths and Mr. Warne.|
|Hayes, John Henry||Scurr, John|
§ an actual grant of a distinct advantage by the State in that the money that they are able to obtain from the money market at a good rate gives them an advantage which may be measured in some cases at one, and in some at two, and in some cases at more than three per cent. That advantage is given to some concerns and not to others. It is given very often to concerns which have not been successful in war competition. They have not been able to hold their own. I can see no justification for resisting this Amendment. I must confess that when I examined the Amendment closely I did not altogether approve of its wording, but it is the general principle which lies behind it that seems to me is right. As justification for resisting this Amendment, what it amounts to is that the Government does not believe that the public purse should participate in the benefits which they themselves create under this Act. I do not agree with that, and I shall have to go into the Lobby against it.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 107; Noes, 248.335
|Division No. 26.]||AYES.||[4.0 p.m.|
|Adamson, Rt. Hon. W. (Fife, West)||Benn, Captain Wedgwood (Leithi)||Dalton, Hugh|
|Alexander, A. V. (Sheffield, Hillsbro')||Broad, F. A.||Davies, Evan (Ebbw Vale)|
|Ammon, Charles George||Bromley, J.||Davies, Ellis (Denbigh, Denbigh)|
|Attlee, Clement Richard||Brown, James (Ayr and Bute)||Davies, Rhys John (Westhoughton)|
|Baker, J. (Wolverhampton, Bliston)||Buxton, Rt. Hon. Noel||Day, Colonel Harry|
|Barker, G. (Monmouth, AbertIllery)||Cluse, W. S.||Dennison, R.|
|Barnes, A.||Compton, Joseph||Duncan, C.|
|Barr, J.||Connolly, M.||Edwards, C. (Monmouth, Bedwelity)|
|Beckett, John (Gateshead)||Cove, W. G.||Evans, Capt. Ernest (Welsh Unlver.)|
|Alexander, E. E. (Leyton)||Forrest, W.||Neville, R. J.|
|Alexander, Sir Wm. (Glasgow, Cent'l)||Foxcroft, Captain C. T.||Newman, Sir R. H. S. D. L. (Exeter)|
|Allen, J. Sandeman (L'pool, W. Derby)||Fremantle, Lieut.-Colonel Francis E.||Nicholson, O. (Westminster)|
|Applin, Colonel R. V. K.||Galbraith, J. F. W.||Nield, Rt. Hon. Sir Herbert|
|Ashley, Lt.-Col. Rt. Hon. Wilfrid W.||Ganzoni, Sir John||Nuttall, Ellis|
|Atholl, Duchess of||Gee, Captain R.||O'Connor, T. J. (Bedford, Luton)|
|Balfour, George (Hampstead)||Gilmour, Lt.-Col. Rt. Hon. Sir John||Ormsby-Gore, Hon. William|
|Balniel, Lord||Goff, Sir Park||Owen, Major G.|
|Barclay-Harvey, C. M.||Greene, W. P. Crawford||Percy, Lord Eustace (Hastings)|
|Barnston, Major Sir Harry||Grenfell, Edward C. (City of London)||Perkins, Colonel E. K.|
|Beamish, Captain T. P. H.||Grotrian, H. Brent||Pete, G. (Somerset, Frome)|
|Beckett, Sir Gervase (Leeds, N.)||Guinness, Rt. Hon. Waiter E.||Philipson, Mabel|
|Bann, Sir A. S. (Plymouth, Drake)||Hacking, Captain Douglas H.||Pielou, D. P.|
|Bethell, A.||Hall, Lieut.-Col. Sir F. (Dulwich)||Pownall, Lieut.- Colonel Assheton|
|Betterton, Henry B.||Hall, Capt. W. D'A. (Brecon & Pad.)||Price, Major C. W. M.|
|Birchall, Major J. Dearman||Hammersley, S. S.||Radford, E. A.|
|Bird, E. R. (Yorks, W. R., Skipton)||Hannon, Patrick Joseph Henry||Raine, W.|
|Blundell, F. N.||Harland, A.||Ramsden, E.|
|Boothby, R. J. G.||Harrison, G. J. C.||Reid, Capt. A. S. C. (Warrington)|
|Bourne, Captain Robert Croft||Harvey, G. (Lambeth, Kennington)||Reid, D. O. (County Down)|
|Brass, Captain W.||Harvey, Major S. E. (Devon, Totnes)||Remer, J. R.|
|Bridgeman, Rt. Hon. William Clive||Hawke, John Anthony||Remnant, Sir James|
|Briscoe, Richard George||Headiam, Lieut.-Colonel C. M.||Rhys, Hon. C. A. U.|
|Brittain, Sir Harry||Henderson, Capt. R. R. (Oxf'd, Henley)||Rice, Sir Frederick|
|Brooke, Brigadier-General C. R. I.||Henderson, Lieut.-Col. V. L. (Bootle)||Roberts, Samuel (Hereford, Herel)rS)|
|Brown-Lindsay, Major H.||Heneage, Lieut.-Col. Arthur P.||Ropner, Motor L.|
|Brown, Brig.-Gen. H. C.(Berks, Newby)||Henn, Sir Sydney H.||Ruggles-Brise, Major E. A.|
|Bull, Rt. Hon. Sir William James||Hennessy, Major J. R. G.||Russell, Alexander West- (Tynemouth)|
|Bullock, Captain M.||Henniker-Hughan, Vice-Adm. Sir A.||Rye, F. G.|
|Burman, J. B.||Herbert, S. (York, N. R., Scar. & Wh'by)||Salmon, Major I|
|Burton, Colonel H. W.||Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.||Samuel, A. M. (Surrey, Farnham)|
|Cadogan, Major Hon. Edward||Hohler, Sir Gerald Fitzroy||Samuel, Samuel (W'dsworth, Putney)|
|Campbell, E. T.||Homan, C. W. J.||Sandeman, A. Stewart|
|Cassels, J. D.||Hope, Capt. A. O. J. (Warw'k, Nun.)||Sandon, Lord|
|Cazalet, Captain Victor A.||Hope, Sir Harry (Forfar)||Sassoon, Sir Philip Albert Gustave D.|
|Cecil, Rt. Hon. Lord H. (Ox. Univ.)||Hopkins, J. W. W.||Savery, S. S.|
|Chamberlain, Rt. Hon. N. (Ladywood)||Howard, Captain Hon. Donald||Shaw, R. G. (Yorks, W.R., Sowerby)|
|Chapman, Sir S.||Hudson, R. S. (Cumberl'nd, Whiteh'n)||Shaw, Lt.-Col. A. D. Mc!. (Renfrew, W)|
|Charteris, Brigadier-General J.||Hume, Sir G. H.||Shaw, Capt. W. W. (Wilts, Westb'y)|
|Christie, J. A.||Huntingfield, Lord||Shepperson, E. W.|
|Churchman, Sir Arthur C.||Hurst, Gerald B.||Slaney, Major P. Kenyon|
|Clayton, G. C.||Hutchison,G.A.Clark (Midl'n & P'bl's)||Smith, R. W. (Aberd'n & Klnc'dlne,C.)|
|Cobb, Sir Cyril||Cllife, Sir Edward M.||Smith.Carington, Neville W.|
|Cochrane, Commander Hon. A. D.||Inskip, Sir Thomas Walker H.||Smithers, Waldron|
|Cohen, Major J. Brunel||Jackson. Lieut.-Colonel Hon. F. S.||Somerville, A. A. (Windsor)|
|Colfox Major Wm. Phillips||Jacob, A. E.||Spender Clay, Colonel H.|
|Conway, Sir W. Martin||Jones. G. W. H. (Stoke Newington)||Sprot, Sir Alexander|
|Cooper, A. Duff||Jones, Henry Haydn (Merioneth)||Stanley, Col. Hon. G. F.(WIll'sden, E.)|
|Cope, Major William||Kennedy, A. R. (Preston)||Steel, Major Samuel Strang|
|Cooper. J. B.||Kidd, J. (Linlithgow)||Stott, Lieut.-Colonel W. H.|
|Courtauld, Major J. S.||King, Captain Henry Douglas||Stuart, Hon. J. (Moray and Nairn)|
|Courthope, Lieut.-Col. George L.||Kinloch-Cooke, Sir Clement||Styles, Captain H. Walter|
|Craig, Captain C. C. (Antrim, South)||Lamb, J. Q.||Sykes, Major-Gen. Sir Frederick H.|
|Craig, Ernest (Chester, Crewe)||Lane-Fox, Lieut.-Col. George R.||Tasker, Major R. inigo|
|Crook, C. W.||Lister, Cunliffe-, Rt. Hon. Sir Philip||Templeton, W. P.|
|Crookshank,Cpt.H.) Lindsey, Gainsbro)||Lloyd, Cyril E. (Dudley)||Thomson, F. C. (Aberdeen, South)|
|Curzon, Captain Viscount||Locker-Lampson. G. (Wood Green)||Tinne, J. A.|
|Dalkeith, Earl of||Loder. J. de V.||Vaughan-Morgan, Col. K. P.|
|Dalziel, Sir Davison||Looker. Herbert William||Waddington, R.|
|Davies, A. V. (Lancaster, Royton)||Lougher, L.||Warrender, Slr Victor|
|Davies, Ellis (Denbigh, Denbigh)||Lucas-Tooth. Sir Hugh Vere||Waterhouse. Captain Charles|
|Davies, Sir Thomas (Cirencester)||Luce. Major-Gen. Sir Richard Harman||Watson, Rt. Hon. W. (Carlisle)|
|Davison, Sir W. H. (Kensington, S.)||Lumley, L. R.||Watts, Dr. T.|
|Dawson, Sir Philip||MacAndrew, Charles Glen||Wells, S. R.|
|Dean, Arthur Wellesley||McDonnell. Colonel Hon. Angus||Wheler, Major Granville C. H.|
|Dixey, A. C.||Maclntyre, Ian||Williams, Corn, C. (Devon, Torquay)|
|Doyle, Sir N. Grattan||McLean, Major A.||Williams, C. P. (Denbigh, Wrexham)|
|Drewe, C.||Macmillan. Captain H.||Williams, Herbert G. (Reading)|
|Duckworth, John||Mac Robert, Alexander M.||Wilson, M. J. (York, N. R., R Ichm'd)|
|Eden, Captain Anthony||Maitland, Sir Arthur D. Steel-||Wilson, R. R. (Stafford, Lichfield)|
|Edmondson, Major A. J.||Makins. Brigadier-General E.||Windsor-Clive, Lieut.-Colonel George|
|Elliot, Captain Walter E.||Manningham-Buller. Sir Mervyn||Wise, Sir Fredric|
|Ellis, R. G.||Margesson. Captain D.||Womersley. W. J.|
|Elveden, Viscount||Marriott, Sir J. A. R.||Wood, B. C. (Somerset, Bridgwater)|
|England, Colonel A.||Meyer, Sir Frank||Wood, Rt. Hon. E. (York, W.R., Ripon)|
|Evans, Captain A. (Cardiff, South)||Milne, J. S. Wardlaw-||Wood, E. (Chest'r. Stalyb'dge & Hyde)|
|Everard, W. Lindsay||M itchell, S. (Lanark, Lanark)||Wood, Sir Kingsley. (Woolwich, W.).|
|Fairfax, Captain J. G.||Moore, Sir Newton J.||Wood, Sir S. Hill- (High Peak)|
|Faile, Sir Bertram G.||Moore-Brabazon, Lieut.-Col. J. T. C.||Woodcock, Colonel H. C.|
|Falls, Sir Charles F.||Moreing, Captain A. H.||Yerburgh, Major Robert D. T.|
|Fermoy, Lord||Morrison, H. (Wilts, Salisbury)|
|Fielden, E. B.||Murchison, C. K.||TELLERS FOR THE NOES.—|
|Ford, P. J.||Nall, Lieut.-Colonel Sir Joseph||Commander B. Eyres Monsell and|
|Forestler-Walker, L.||Nelson, Sir Frank||Colonel Gibbs.|
Question put, and agreed to.
§ Lieut.-Commander KENWORTHY
I beg to move, in page 1, line 11, at the end to insert the wordsThe additional five million pounds to be used exclusively for such capital undertakings as arc not able without such guarantees to secure the loans applied for.I am sorry to say that my hon. Friend the Member for South Bristol (Sir B. Rees) has been called out of the House, and therefore I am moving this Amendment in place of him. I hope the House will excuse me from making a speech which I have not had the opportunity to prepare before hand. I can understand that from the beginning of the working of this Act certain of the wealthier countries have been able to get guarantees in order to start work at the earliest possible moment; but we have had some years' experience of the working of this Act, and I submit to the Committee that it is time we tied down the Government to supporting only concerns which, although they may be perfectly sound, would not otherwise be able to get a loan to carry out their undertaking. I am going to give one or two examples of concerns that are not only well known in this country, but all over the world—great, wealthy, well-established corporations who surely to goodness ought to be able to get the money they require in the usual way, and who during the last few years have been assisted not only by the last Government but by the previous two Governments. Let me read out a, list of the names. Powell-Duffryn Colliery Company, which is one of the soundest concerns in the whole world. has gone to the Government and got facilities under this Act. Surely it was never the intention of Parliament that a company like that should be aided! There is Messrs. Harland and Wolff—he name a household word every-where. They have been able to get a Governmvnt guarantee in this way. There is the Anchor Line, the Pacific Steam Navigation Company, the Union Castle Line, well-known shipping companies whose securities might be termed gilt-edged, who have come and claimed assistance under this scheme. Where the Government is permitted to give these guarantees to an unlimited amount, it means that these great corporations are getting large sums, and that there is then very much less for other and smaller concerns.
338 I submit to the Committee, for example, that when the Londonderry Collieries had obtained facilities under this Act, there was not one additional man given employment. If this Act had not been in existence the firm could have gone to the money market, or to the banks, or to the public in the ordinary way and have got the money they wanted. There is a tremendous amount of money lying in the bank waiting for profitable investment to-day. Get some well-secured foreign loan, like the Greek Refugee Loan, and the thing is subscribed many times over. I am told that the banks are almost glutted with amounts of £1,000 or £2,000 waiting for investment. Therefore, I say, that it is unnecessary for these great concerns, with a splendidly re-established credit, to come to the Government for any guarantee, or to work out of the ordinary in order to get financed. For the reasons I have given, and many others which, if my hon. Friend had been here he would have put before the Committee very much better than I have done, I beg to move the Amendment.
The principle embodied in the Amendment is already observed by the Committee as a matter of general practice. Therefore, it would be both unnecessary and unwise to include it in terms in the Statute. At the present time the Committee satisfy themselves that, failing the guarantee, the applicant would not find it possible to carry out the new undertaking as a commercial proposition, and it is the invariable practice of the Committee to turn down applications in which the companies could, and on reasonably industrial terms, would, carry out the undertaking on their own credit. The Amendment as it is framed would actually be a retrograde step from the present position. Whereas the Committee applies this principle in all cases, and has invariably done so, this Amendment would limit the restriction to the extra £5,000,000 of guarantees to be given over and above the £65,000,000 authorised last year, and of which £10,000,000 are still not allocated. So if we accepted this Amendment the position would be that for £10,000,000 of guarantees the Committee would be absolved from following that salutary principle which they have always observed, and this 339 embargo would apply only to one-third of the resources which are to be made available.
It may be a drafting point, but I must bring it to the notice of the Committee. I think it would be very inadvisable, even if the Amendment were redrafted, to put it into the Bill, because the Committee might well be hampered by a statutory embargo of this kind. After all, it must be a matter of opinion whether or not an undertaking can raise money for a particular proposal on its own credit. We have had suggestions this afternoon that this Committee of business men have failed effectually to carry out their own rules. If these rules were embodied in an Act of Parliament, these three gentlemen would find themselves in a most unenviable position Generally speaking, they have been very free from any serious criticism. It has been recognised that they have fulfilled their difficult task with great judgment and great ability, but we have been told this afternoon that in the opinion of hon. Members opposite their judgment in certain respects has been deficient. We were told during the discussion on the last Amendment that they could have struck better bargains, could have got better financial terms, which, by their neglect, were lost to the country; and on this Amendment we have been told on the authority of the hon. and gallant Member who moved that in his opinion many of the guarantees were given to undertakings which quite easily could have raised credit without State assistance.
I think the committee would probably be very unwilling to carry on their responsibilities if they were tied down by Statute in that way, and if it were open to people to take them to Court, perhaps, on what can only be a matter of opinion, a matter which they decide on their best judgment, with the best advice given to them, and with the advantage of their great commercial experience. In these matters, it is very undesirable to interfere more than we need with the judgment of this committee, and knowing, as I do, the way these gentlemen carry out their work, and the trouble they take to inquire into all 340 the proposals which are brought to them on their merits, I am certain it would be quite impossible to drive them into any particulars course of action.
Lieut.-Colonel Sir F. HALL
I have been looking carefully at this Amendment, and I cannot understand what it means, because I have heard many discussions in this House calling attention to cases in which the committee have made advances where the security, in the minds of some hon. Members, has not been quite as good as it should be. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) gave a list of names of firms as to whose stability there is no question which had secured guarantees. Does he recognise the fact that if you are to get an increase of business you have got to borrow your money as cheaply as you can in order to compete with other undertakings in other countries? What is the meaning of these words in the Amendment? The Amendment says that the money is to be used exclusively for undertakings which are not able "without such guarantee to secure the loans asked for." What does the hon. and gallant Gentleman mean by this? Those who know anything of this expert committee will not deny that they have carried out their work in an exceedingly able manner, and have made the most careful inquiries, and now an Amendment is brought forward which says: "Oh, but you must not give your money to good undertakings, where there is security; you are only to advance this £5,000,000 to such concerns as cannot get their money without guarantee from the Government." I think my hon. and gallant Friend had not considered the Amendment when he got up to speak about it, and that he must be wishing now that he had not moved it at all. If it means anything at all, it means that you are to advance money to concerns which are not able to go into the city and get money on reasonable terms, which is one of the most remarkable proposals ever brought before this House, especially after some of the criticisms which have been hurled at the committee. Any committee, I do not care how good or how expert they are, are likely to make mistakes sometimes, and I would rather they did make mistakes occasionally, for otherwise they would be sitting waiting for the most gilt-edged proposals to come 341 forward. I cannot think that anyone who considers the wording of this Amendment can say it is one which commends itself to him, and if it is pressed to a Division I cannot believe anyone with any conception of what its meaning is can possibly support it. I hope we shall not waste much more time on it.
§ Mr. RUNCIMAN
This Amendment illustrates the difficulty in which the Government is bound to be placed so long as the Trade Facilities Act is administered on its present principles. On the one hand, an excellent committee of three, who do their work as well as any three men in the country could do it, are told that they must not run risks. The Treasury is constantly reminding them that they must amply secure the advances, or the guarantees, or whatever you like to call them, which come under the Act, and they take very careful steps, by the mortgaging of properties, and by personal guarantees, joint and several guarantees, and the like, to make sure that they do not lose money. Then there is this Amendment from my hon. and gallant Friend (Lieut.-Commander Kenworthy) and those who think with him, desiring that there should be no granting of loans to concerns which are able to borrow money elsewhere in the open market. In the dilemma in which the committee is placed, of having to decide, on the one hand, whether they are going to advance money to concerns which are not good enough for the money market to advance money to, and, on the other hand, whether they are to secure the State against loss, what are they to do?
The right hon. Gentleman the Financial Secretary for the Treasury has told us that this Amendment embodies the rule which they have always followed. I was surprised to hear him say that. If he will reflect for a moment or two on what the Amendment actually says, as interpreted by my hon. and gallant Friend who takes to himself its authorship, or, at any rate, its advocacy, or if he takes it in plain English, as it is on the Order Paper, I feel he will think twice before he says the committee of three have followed this rule in the past. We know from the instances which have been quoted in the House, and the long list which has already appeared in the Press, 342 that, it would be quite impossible for the Committee of three to say that concerns like the Seaham Harbour Authority, one of the colliery companies named, the shipping company—or the larger shipping companies anyhow—which have been mentioned, all of which are very well known concerns with first-class credit—I think it would be unfair to say of them that they have not been able to borrow outside, and yet the right hon. Gentleman tells us that this Amendment embodies the rule which was followed by the Committee of three.
Perhaps I did not make myself clear. The right hon. Gentleman talks as if I had been speaking of the firm. Well, if I was talking in terms. of firms I certainly created a wrong impression. What I meant to say was that the Committee would take the whole new venture on its merits, whoever might be the proposer, whether it be a firm or company which is being floated for the purpose, or a great and established industrial undertaking like the Seaham Harbour Authority. They do not look at it from the point of view of the credit of that firm as a whole, but of the offer which the firm would make if it went to the market on the undertaking which is brought before the Committee and not on the credit of the firm as a whole.
§ Mr. RUNCIMAN
That further explanation will, I hope, relieve the Committee of the aspersion, or the indirect aspersion which would naturally Have been thrown upon them in the carrying out of their instructions. If they had followed out the exact meaning of this Amendment they could not have fulfilled the Treasury requirement that they should not jeopardise the security on which the guarantee was given. The truth is that interpretation put on the action of the Committee in our earlier discussions, and on an earlier Amendment, is nearer the truth than the explanation we have received now. Those instructions are that they should advance money to such concerns as will undertake the provision of work in advance of their programme, and as I looked through the questionnaire, to-day and yesterday, I could see nothing in it which would fulfil the requirements asked for by my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) in the Amendment which is now before the Committee.
343 I do not know how far the right hon. Gentleman (Mr. Guinness) would consider it necessary to make this an instruction to the Committee. For my part I think it would be as well that he should revise the whole of his instructions to the Committee, but if this did find a place in them it would be inconsistent with the instructions already given. It only shows how dangerous the whole administration of this Act can become, and how difficult it is to provide for all the conditions which are required by this House, the Treasury and the borrowers. My hon. Friends have succeeded in ventilating this subject. They have received a new interpretation from the Financial Secretary to the Treasury, under which the Committee will make advances in the future, and I can only express the hope that in the announcement of those terms we shall find that the extension of the borrowing powers of these concerns will not he unduly fostered under the Trades Facilities Act, and that we shall find the national security in no degree weakened.
§ Lieut.-Commander KENWORTHY
After what my right hon. Friend has said, I do not wish to press the Amendment, and I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Mr. MAXTON
I beg to move, in page 1, line 16, at the end, to insert a new Sub-section:(3) A policy committee shall be set up which will be responsible to the Treasury for the consideration of national requirements and the promotion of suitable schemes in this connection.On the Financial Resolution I tried to persuade the Financial Secretary to the Treasury to anticipate my wishes in this matter by himself inserting some amendment of this sort in his new draft of the Bill. He has not seen fit to do that, assuming, I suppose, that this Bill is of such a temporary nature, being for one year only, that it is not desirable to add to the machinery of the Act in any way. But it has now been renewed on three occasions. It was in the beginning a temporary Measure to deal with unemployment, but the fact that long credits have been given and that there is no sign of any diminution of the number of unemployed, would lead one to conclude that for many years to come we shall be re-enacting this particular legislation, and it seems to me that it is now 344 possible to make some improvements in the Act other than merely the improvement of adding a little more to the credits given. I believe that the Financial Secretary made out the case quite strongly against. myself and others who suggested that the present Advisory Committee should have some say in policy and should be influenced by political considerations. I think the case is very well established that these men, who, I understand, are very capable in their own particular line, namely, the granting of credit, should be limited to the consideration whether each particular proposition brought before them is a sound proposition commercially, and is such that the nation may fitly put its credit behind them. But there is undoubtedly a case made out, if this Act is to perform its function in relieving unemployment, for some general consideration being given by someone to the wider national requirement.
When the Bill passes out of our hands as a temporary Measure we cease to have any interest in it and have very little control over it. The whole manipulation of the matter goes into the hands of the three members of the Advisory Committee. While, theoretically, the Treasury retains control over them, in practice the three members of the Advisory Committee are above control and criticism. It has been brought out in the Debate, both on the Financial Resolution and on the Second Reading of the Bill, that there are hundreds of schemes which would be well worth going ahead with from the national point of view and which would have a very large effect in reducing unemployment. But there is no one to stimulate the initiation of these schemes. One hon. Member on the Liberal Benches made a very able speech on the Second Reading of the Financial Resolution, and cited three or four schemes which could be put into operation in India if the backing of this Bill were put behind the people there for the raising of the necessary capital—schemes for bridge building, railway and tram line laying, all schemes which would have an immense effect in easing the burdens of unemployment in the locality which I represent in this House. Yet there is no one on the Government Bench, there is nobody inside the machinery of this Bill, who has any right to go and examine those schemes or to get into touch with the persons who would 345 be responsible locally for setting the schemes going, or to see whether the proposition can be pushed forward. Again, I think it is desirable that someone should be made responsible not merely for looking around to see schemes that they may initiate and stimulate, but to see what effect the guarantees that are being given at present in particular industries will have on the question of unemployment, not merely this month or next month, but two or three years hence.
On every occasion that this question has come before. the House in the last two years I have pressed very strongly for special consideration to be given to shipbuilding schemes. During the two years that I have been here I imagine that shipbuilding has secured a bigger proportion of the guarantee than any other individual industry. I am anxious that the shipbuilding industry should be made as active and as successful as possible. I am not anxious that shipbuilding prosperity at the present moment should be created in an artificial way, which would in the long run destroy our shipbuilding industry altogether. I am not anxious that we should palliate unemployment in shipbuilding districts just now at the expense of creating later on a complete collapse and widespread unemployment. Therefore, I think it is the duty of the Government to have some responsible person who would survey the whole shipbuilding industry of the country, the shipping needs of the world, the productive capacity of our existing shipbuilding yards, so that now we may take the necessary steps which will be good for the industry in the present and in the near and distant future. I do not want to see arising in my area the position that has arisen with reference to housing, simply because no national foresight was exercised. We have to-day in the West of Scotland (which is not dissimilar from other industrial centres in this respect) a great shortage of houses. In pre-War days, by foresight, by planning ahead, by definite national and Governmental responsibility, that great shortage need not have assumed the terrible proportions that it has assumed. We could have had a reasonable amount of decent housing in existence in the West of Scotland. But not only did we allow the housing to fall into disrepair and not to keep up to the requirements of the community, but we allowed our men who were skilled and trained in the house-building 346 line to emigrate, and the stagnant state of the trade prevented new apprentices coming into it, so that to-day we are faced with a great shortage of houses—an emergency on which we have to take Governmental action and which we have to face now with a shortage of men, of material and of organisation.
I can see exactly the same thing developing in the shipbuilding industry if no foresight is exercised. There is no member of the Cabinet who is responsible for exercising such foresight with reference to shipbuilding or any other industry. The Prime Minister proposes under his Safeguarding of Industries legislation to set up Committees which will deal with certain industries that want to be safeguarded, that is, certain industries that are subject to a certain type. competition. But he has not got just now in his whole Front Bench of Ministers and Under-Secretaries, and he has not got in the corporate capacity of his Government, any individual or group responsible for taking a long view of the essential industries of this country, such as shipbuilding. I believe that within a few years we shall find that there is a world demand for shipping. It is a question of one's confidence in the future, but I personally have complete confidence that the world is not coming to an end because a Conservative Government has got into power. It is a big danger but it will riot come to that. I am convinced that in future there will be a great demand for ships, that the world's carrying trade will increase, that the consuming power of the peoples of the world will increase and that with the increase of that consuming power the demand for ships to go across the seas will be immediately increased. With that will come a demand for more ships.
I move this Amendment in the hope. that when the demand comes for more ships, first of all Great Britain, by having exercised foresight through a Committee such as I am proposing, will have a mercantile marine which is cleared of all its obsoletes and all its obsolescents. I think you can legitimately do that with your mercantile marine, although privately owned, just as you do it as a routine thing with your Navy. There are sailing to-day too many merchant ships which arc a disgrace to the British fag and are a danger to the lives and 347 limbs of the men employed on them. and of the passengers who travel by them. I wish that the Financial Secretary to the Treasury would not look at me in such a pathetic way, and then glance at the clock. It would be far better to consider that this is a point of substance to which it is worth while giving a little time, and to recognise that we cannot get through this Order to-day. Perhaps he is not aware how pathetic he looks. It has quite disturbed the train of my thoughts to think that I am harrowing the soul of the right hon. and gallant Gentleman by keeping unduly long before the House a Measure which I know is a very great favourite of his. I do not want to deprive him of his friends any longer than is absolutely necessary. I think that this Policy Committee could see that we had a mercantile marine which was absolutely the finest thing in the world, and shipbuilding plants and skilled men standing ready round about the various shipbuilding centres eager to build ships for any part of the world that demanded them.
I put it that under the present Advisory Committee, with no real Cabinet or Ministerial responsibility for initiation or control or direction of the general effects of this scheme, we have schemes corning up before the Advisory Committee haphazard from any particular business firm which thinks that by getting money at a lower rate through the State guarantee they can make a commercially profitable venture on the building of a ship. There is no national view, no long view, and I suggest to the right hon. and gallant Gentleman that he should not oppose my suggestion. It gives him a very wide latitude as to the nature of the Committee that he may set up. The Advisory Committee cannot deal either with the initiation of schemes or with their co-ordination so as to fit them in with national necessities. They are limited to mere decisions as to whether a particular proposition is absolutely sound. But something else in this direction is urgently required. I hope that the Financial Secretary will accept. the Amendment, himself giving consideration to exactly the form that the Committee shall take and the type of individuals who will constitute it.
§ 8.0. P.M.
The answer to the hon. Member is, I think, that the exist- 348 ing Committee carries out all the functions which he has suggested in his speech as being desirable. They do carefully examine what will be the effect of any good scheme on our industrial position, and they do take steps to see that they encourage useful schemes, and avoid giving assistance to schemes which are designed to increase what I may call luxury production. For instance, they scan very carefully any scheme which involves building, so as not to divert—
§ Mr. MAXTON
They scan schemes after they have come up. They have no power to initiate or stimulate the coming forward of schemes. They have nothing to do with that, as I understand it.
I think the hon. Member may not be aware of the efforts the Committee make to stimulate schemes. The Committee have taken great trouble, for instance, to get harbour schemes brought forward. They have had discussions with representatives of the shipping industry, and they have discussed on what basis such schemes might be launched. But., unfortunately, their efforts so far have proved unavailing. The Committee at the present time, I think, do all the work which a policy committee of the kind suggested by the hon. Member could possibly carry out.
New industries are given a full and sympathetic hearing by this Committee. I do not believe that a committee of the kind suggested by the hon. Member, which would have, apparently, many functions to carry out, could do this work any better than the gentlemen who now perform it. There has been really no criticism of the way in which this present Committee do their work, and the only suggestion is that they have not produced a sufficient diversity of schemes. They do take steps to show to all possible applicants a readiness to hear their needs, and the conditions under which they will recommend a guarantee. The hon. Member mentioned the case of India, and suggested that financial assistance might be given there. I would remind him there is a special committee to deal with schemes of financial assistance for Imperial development, and that committee 349 has got expert advice. The India Office has a representative on it, and the Colonial Office has a representative on it. They are in close touch with openings in the British Dominions beyond the seas, and that committee is empowered, as the hon. Member probably knows, to give three-fourths of the interest up to five years on any loan raised for Imperial development.
No new committee is going to get us out of the position that policy must be decided by the Government of the day. The hon. Member mentioned shipping. It happens that during the short period in which the present Government have been in office, the question of policy with regard to British shipping has been before the. Government. I do not believe that any committee could have given more. expert advice on that subject than was available to the Government through the Board of Trade Shipping Department. The subject was carefully thought out between the Treasury and the Board of Trade, and the organisation which, as the hon. Member knows, exists to deal with unemployment schemes, was closely interested in the decision to which the Government might come. No new committee is going to take away the ultimate. responsibility of the Government. The proposed new committee would keep in touch with the Government through a Department, and I do not think you would really get any new advantage by setting up an additional committee, which would merely be an unnecessary cog in the. machine which already exists.
Mr. TREVELYAN THOMSON
If he will forgive me for saying so, the Financial Secretary to the Treasury has curiously misunderstood the purport of the Amendment, and the speech of the hon. Member who moved it. He referred to the fact that the committee has already powers to do a great deal that has been suggested. He used the word "stimulate," I suggest there is a considerable difference between stimulating and promoting, and I understand that the difference in principle between what the committee is doing now, and what this Amendment foreshadows, is that this committee should have the power to initiate and to promote certain national schemes on their own undertaking, and without waiting until they were brought to their notice either by local authorities or by private 350 companies. I submit that if this Bill which we are now considering is really to touch the question of unemployment, which, in certain districts, is, unfortunately, getting worse, and which is really hanging like a dark cloud over certain sections of the country, it is essential that something more should be done by this Measure than merely the lending of money to those who are prepared to extend or carry out existing schemes.
The hon. Member who moved the Amendment referred to shipbuilding, and there is no doubt that that industry is in an almost appalling condition. Members have referred to the returns of the Ministry of Labour for last month, from which it is seen that in certain districts, for instance, the North-East coast, 43 per cent. of the industry are out of work, and that has been going on for three or four years. Whatever the remedy may be—I do not suggest for a moment that it would necessarily follow on the lines suggested by the Mover of the Amendment—but whatever the remedy may be, it is essential that something should be done, and surely it is a national responsibility that works of the character of national utility might very well be established under such a committee as is here foreshadowed, and in that way deal in a practical manner with this appalling problem. I submit that it is all the more necessary that you should do something of this sort to-day, because hon. Members will have noticed the extraordinary thing that in budgeting for the forthcoming year there is less provision made for relief schemes for dealing with unemployment generally than last year. I do not know if that is because the Government consider local authorities will not be able to spend so much, but whether that is so or not, it is all the more incumbent upon the Government and this House to recognise our national responsibility, and we should be prepared to do all in our power to initiate work for the unemployed.
There is such work as land reclamation, the development of our water power, and the development of our electricity, and a large number of other schemes which local authorities themselves cannot undertake, because they do not receive any direct advantage from those larger schemes. They cannot combine together to form joint authorities for the initiation and promotion of these schemes, and it 351 therefore rests with the national authority to take a large vision, a, wide outlook of the future, in order to make this provision which is so essential. On this question of unemployment the short view has been taken for the last five years. All Governments have been responsible. Each Government in turn has brought in temporary measures—mere palliatives—to relieve the immediate necessities, and, at the end of four or five years, we find we are in a worse position than we were when we started to deal with this question. Therefore it is essential that the Government should take a broad and long view of the national responsibilities, and should accept this Amendment and establish a Committee which will be charged with the responsibility, on national lines, of dealing with this tragic question of unemployment. By doing that they will deal with the question much more thoroughly and much more effectively than by the lending of £15,000,00 or £20,000,000 to existing companies and existing authorities. Therefore I do appeal to the Government that they should give a sympathetic consideration to this Amendment, because the powers which the Committee have at present, or, at any rate, the work they are now doing, does not in any way touch the principle underlying this Amendment, which is. after all, national responsibility for the initiation of large schemes, which shall use the national credit of the country in order to provide work for those who so badly need it.
§ Mr. MACLEAN
I want to join in the appeal that has been made by the hon. Member for Bridgeton (Mr. Maxton) and the hon. Member for West Middlesbrough (Mr. T. Thomson). The Financial Secretary to the Treasury has made it appear that the Amendment which has been moved by the hon. Member for Bridgeton is unnecessary, that the Advisory Committee which at present exists have been examining these schemes, and, to use his own words, the present Advisory Committee do consider policy, and they do consider the effect of schemes which are submitted to them. I suggest to the Financial Secretary that that is not sufficient.
No, I would not dream of suggesting the Closure. I am only going to appeal to the hon. Member. He will get an opportunity on the next stage of the Bill.
§ Mr. MACLEAN
I would like to accede to the request, but at the next stage we do not have the same opportunity as on the Committee stage. As the right hon. Gentleman knows, a Debate on the stage following the Committee stage is much more restricted, and, consequently, I am sorry I cannot accede to his request. This is the first time I have spoken on this particular question this Session, and I hope I shall be able to produce something of substance to contribute to the Debate.
§ It being a Quarter past Eight of the Clock, further Proceeding was postponed without Question put, pursuant to Standing Order No. 4.