§ As amended (in the Standing Committee), considered.
§ Mr. SPEAKERWith regard to the Amendments which appear on the Order Paper, I notice that they are almost entirely a repetition of the Amendments which were moved in Committee, and were there discussed at considerable length. I do not think that the Report stage should be a repetition of the Committee stage, but at the same time I am reluctant to interfere with any hon. Members who wish to take the decision of the House, and I shall not use my powers of selection unless I find that too much liberty is being taken in the earlier stages of our proceedings.
§ Mr. WILLIAM GRAHAMMay I respectfully ask you whether in the circumstances you would allow a rather longer discussion on the Amendment which raises the right of the taxpayer to a share in the capital assets created. That is the largest principle at stake in the Amendments before the House, and I think I may say, on behalf of my hon. Friends that, if that were the understanding, there would be no difficulty.
§ Mr. SPEAKERI am anxious always to meet the wishes of hon. Members on a Bill in that way. I am glad to know which is the main point.
§ Mr. G. BALFOURSurely, no question arises as to the State getting any portion of the capital assets.
§ Mr. SPEAKERThe point could be raised in the Debate.
§ NEW CLAUSE.—(Accounts of companies in receipt of subsidy to be laid before Parliament.)
- (1) Any company to which a subsidy is paid under this Act shall send annually to the Minister a statement in the form of a balance-sheet, audited by the company's auditors, containing a summary of the company's share capital, its liabilities, and its assets, giving such particulars as will disclose the genera] nature of those liabilities and assets and how the values of the fixed assets have been arrived at, and also a statement of profit and loss, audited in
2112 the like manner. Every such statement shall be made up to such date as may be specified therein and shall be sent to the Minister within ninety days of that date. - (2) If a company makes default in complying with the requirements of this Section it shall be liable on summary conviction to a fine not exceeding five pounds for every day during which the default continues.
- (3) The Minister shall lay before Parliament copies of all balance sheets sent to him in accordance with the requirements of this Section.—[Mr. E. Wood.]
§ Brought up, and read the First time.
§ The MINISTER of AGRICULTURE (Mr. Edward Wood)I beg to move, "That the Clause be read a Second time."
The Clause has relation to the financial position of companies enjoying the subsidy, and requires them to furnish annually a statement of accounts. Upstairs in Committee there was some discussion on this point, and there was a very general feeling that it was right and proper, in regard to these companies who for a period of 10 years will be, through the Subsidy, in receipt of public money, that as full information as possible should be available to the Minister and to Parliament as to the progress of the undertakings. On consideration present to the minds of those who have examined this point was that at the end of the 10 years they wished Parliament to be in as favourable a position as possible for judging on the argument that it was thought might then be advanced in favour of the continuance of the subsidy. That consideration received a considerable measure of support from all sides of the Committee upstairs, and I therefore made it my business to endeavour, as far as might be possible, to produce agreement in order to save trouble when it came to this stage. I, accordingly, had the advantage of some consultation with those who had moved this Clause upstairs, and also with representatives of the companies who are going to be affected by it, and, as a result of those consultations, the Clause on the Paper appears as what we call an agreed Clause, and as such, therefore, speaks for itself, and I think its terms are sufficiently plain. I do not think it will be necessary for me to say more about it than that the object of the Clause is to secure as full information as possible for the Minister, in the first place, and, in the second place, to secure to Parliament all the information that can properly be laid 2113 before it in order to place Parliament in the position that, as I have said, it was felt desirable that it should occupy, of being able to form an informed judgment of the situation at the end of the subsidy period.
§ Mr. A. V. ALEXANDERI want, on behalf of my hon. Friends on this side, to thank the Minister of Agriculture for the way in which he has met us on this particular point. The question was raised in Committee because there was an Amendment, standing in my name, requiring that, in the case of firms who were receiving a subsidy, their accounts should be submitted to public audit. It was made clear that it would be difficult under the law to require a public audit, and, on the whole, I think the Minister has gone a long way to meet us on this question. I will only say further that I think it is a very good precedent to establish, and that in the case of any public money of this kind being voted, not only should the Minister—and, I would hope, Parliament as well, but we-have gone as far as we can—have full information, but that Parliament should always be in receipt of such official statistical and costings information as would enable it to come to a sound judgment, if, at any time, there was a further application, either for a renewal of the grant or for the voting of new money. As the right hon. Gentleman has very largely met us on that matter, and has been very good in consulting us, I only want to say that we accept the Clause as drawn, and thank him for his consideration.
§ Sir JOHN SIMONI do not want to disturb agreement, especially as I agree with the hon. Member for Hillsborough (Mr. A. V. Alexander) that the new Clause proposed by the Minister will improve the Bill, but, without wishing to alter the foundation upon which he has been building, I would ask him to consider, and I would ask the hon. Member for Hillsborough also to consider, whether it is not possible slightly to strengthen the Clause. Those of us who, for one reason or another, from time to time have to try to get information out of balance sheets, and even out of profit and loss accounts, whether in the Law Courts or other places, know that the amount of information they give varies very considerably, according to whether those 2114 who draw them up desire to give details or do not. I am making no reflection on the honourable profession of chartered accountants, but it is well within the knowledge of everybody acquainted with business that, in a great many cases, a balance sheet, though no doubt properly certified by most eminent accountants, shows very little information indeed. It seems to me that, applying the principle which the right hon. Gentleman has suggested, and which is approved by the hon. Member for Hillsborough, we want to be sure that the balance sheet and the profit and loss account are really such as give adequate information.
I notice that the Bill in more than one place, following a very familiar legislative device, speaks of requirements being prescribed by rules, and indeed, as is common in such Bills, the word "rules" is defined, in the last Clause, as meaning "rules made for the purposes of this Act by the Minister." I am not opposing the Second Reading of the Clause, but I suggest that it might be amended by inserting, I think between the first and second Sub-sections, a provision to the effect that such balance sheet and statement of profit and loss shall be drawn up in accordance with rules which will give the Minister from time to time the power to say what he requires. I suggest also that we should insert some provision to the effect that the Minister may require such explanations in relation thereto as may seem to him proper.
After all, if Parliament passes this Measure, it is going to give very large sums, provided by the taxpayer, for the special behoof of select and special interests. That may or may not be justified, but, at any rate, it is a very remarkable and unusual use of public money in this country until very recent years. I rather think my hon. Friend the Member for Ilford (Sir F. Wise) will confirm me when I say that those who have looked into past efforts have not been altogether satisfied as to the skill and wisdom with which the finance of these enterprises has been conducted, and it seems to me that, as a practical matter, it might be very well worth considering whether the Clause could be so extended. I notice that the third Sub-section of the Clause, as proposed by the Minister, secures that
The Minister shall lay before Parliament copies of all balance-sheets sent to him 2115 in accordance with the requirements of this Section.and if we were at the same time to secure that these balance sheets were really in adequate detail, and provision was made about the other documents I referred to. I think Parliament would feel that, while it was committing the taxpayer to a very great outlay on this special class of enterprise, at any rate we had done our duty in securing that proper supervision was exercised over the way in which public money was spent.
§ Mr. AUSTIN HOPKINSONI am entirely in agreement with what the right hon. and learned Member for the Spen Valley (Sir J. Simon) has said, but I think that this object might be much more easily attained, and, therefore, I would like to move as an Amendment to the new Clause to omit from line 4 the word "general," so that it would then read
giving such particulars as will disclose the nature of those liabilities and assetsand so on. That word "general," if it is left in the Clause, makes a very great difference to it, because it enables the auditors to draw their balance sheet in the ordinary way in which a company's published balance sheet is drawn, and leaves them at liberty not to disclose most important facts as to the inter-related holdings of the company in question, and other companies of one kind and another. The right hon. Gentleman has informed us that this is an agreed Clause, and if those with whom he has made this agreement object to this Amendment, I think the House might well consider whether their objection has not got something more behind it than appears at first sight.If, by this agreement, both parties were agreed that the balance sheet ought to be published, and ought to be in the hands. not only of the right hon. Gentleman himself, but of this House, surely that balance sheet should be a true balance sheet, and true not only in what it puts down, but in the sense that it includes everything that is really necessary, so that the general public, and this House in particular, may know exactly what the situation of the company is. If we put in the word "general," the assets and liabilities, and particularly the shareholdings, will be lumped together in the way in which they are lumped 2116 together in an ordinary published balance sheet of a public company, and that prevents us from knowing exactly those points that we most want to know about. Therefore, I beg the right hon. Gentleman to accept this very small Amendment and to omit the qualifying word "general."
§ Sir LESLIE SCOTTI desire, in a very few words, to support the two last speeches that have been made, and formally to second the Amendment.
§ Mr. SPEAKERIf the House be agreed on the principle of the Clause, had we not better read it a Second time, and then proceed with the Amendment? We cannot have Amendments until the Clause has been read a Second time.
§ Clause read a Second time.
§ Mr. HOPKINSONI beg to move, in line 4, to leave out the word "general."
§ Sir L. SCOTTI beg to second the Amendment.
§ Mr. WOODI entirely appreciate the desire of my hon. Friend the Member for Moseley (Mr. Hopkinson), shared by the right hon. and learned Member for the Spen Valley (Sir J. Simon), to make sure that this Clause should in fact produce the effects that are anticipated of it, and I should be anxious to co-operate with them as far as I might in that desire. I do not myself profess to have the legal knowledge that is so useful to those who possess it in matters of this kind, but, as far as I was able to apprehend the wording of the right hon. Member for Spen Valley, I am rather inclined to think that I would prefer it to the Amendment of the hon. Member for Mossley. The hon. Member is perhaps aware that these words in the course of which the word "general" occurs are taken, I think verbatim, out of the Companies Act of 1908. I do not profess to be an expert in company law, and it may be that the word "general" is an undesirable word in that law, but I do not want to set to work in this little Bill to amend the company law. I prefer, therefore, to rest myself upon the fairly broad platform of precedent as it is built in company law. For that reason, I am unwilling to accept the Amendment of the hon. Member for 2117 Mossley, but, if and when the Amendment of the right hon. Member for Spen Valley is moved, I do not think I should find the same objection to it.
§ Sir HARRY FOSTERI hope the hon. Member for Mossley (Mr. Hopkinson) will be able to take the suggestion of the Minister, and will withdraw his Amendment, in order that the Amendment foreshadowed by the right hon. Member for Spen Valley (Sir J. Simon) may be formally moved. The right hon. Member said he did not want to throw any aspersion upon the honourable profession of chartered accountants, but there is no reference to chartered accountants in the Clause. Any layman, under the wording of this Clause, may be the auditor of the company concerned, and, therefore, we have not even got that safeguard, whereas the safeguard suggested by the right hon. Member for Spen Valley, of giving the Minister power under the rules to require further information and to see that he is afforded full and proper information, is such that I cannot conceive any hon. Member of this House objecting to it, and, as an old chartered accountant myself, I may say that I am quite sure that no chartered accountant would object to it.
§ Mr. HOPKINSONOn the undertaking of the Minister, I think my Amendment had better be withdrawn, but I should like him to give us a guarantee that when the Companies Act is amended, so as to get rid of that most objectionable word "general," which has given rise to very great scandals in company law, as I hope it will be amended shortly, the right hon. Gentleman will also arrange to introduce a Bill to amend this Clause so as to follow that precedent.
§ Amendment, by leave, withdrawn.
§ Sir J. SIMONI beg to move, after Sub-section (1), to insert a new Subsection—
(2) Such balance sheet and statement of profits and losses shall be drawn out in accordance with rules, and the Minister may require such explanation in relation thereto as may seem to him proper.I am sorry I was not able to put this down, but I have furnished my right hon. Friend with a copy of this Amendment. The hon. Gentleman the Member for Mossley (Mr. Hopkinson) has withdrawn his Amendment, and I agree with him 2118 in the hope that the Minister's rules, if he accepts this Amendment, will he such as to secure something better than a mere disclosure of the general liabilities, because the whole point of this is to enable businesses to set out fully what is the actual position. May I point this out to the House: it is one thing to criticise the present company law in respect of the requirements of balance sheets or other matters, but, after all, nobody is obliged to put his money into a private company unless he chooses to do it, and he docs it—I will not say with his eyes open—but he does it with the knowledge that he is exercising his choice in so doing. Here, however, we are putting the taxpayers' money into an enterprise, whether the taxpayer likes it or not, and, therefore, there is a much stronger case for having a frankly clear and specific statement as to what are the assets and liabilities, the profits and losses, of the company in question.
§ Colonel COURTHOPEMight I say one word on behalf of several of the companies concerned. I want to make it quite clear that we have not the slightest desire to conceal anything. We do, however, want to avoid publication of matters that are intimate and might be of value to our Continental competitors, though we are willing to disclose them to the Minister. We are also anxious—and this proposal does not at all conflict with our anxiety—that one audit should satisfy the requirements both of this Act and of the Companies Act. It would be a great inconvenience to a company to have two separate audits for two separate purposes. Subject to these few remarks I should like to assure the House that we have no desire to keep back material facts, and I suggest to my right hon. and learned Friend that it should be made clear that the audit is to give the Minister reasonably full information as to what is going on.
§ Mr. HOPKINSONDoes the hon. and gallant Gentleman consider that the disclosure of the shareholders by the company would be valuable information to Continental competitors?
§ Colonel COURTHOPEI am not aware of any objection to disclosure of shareholdings, but the information asked for by the hon. Gentleman the Member for Mossley might be held to require a 2119 complete schedule of bock debts in the balance sheets.
§ Mr. WOODAs I indicated just now, I shall be very glad to accept the Amendment of the right hon. and learned Gentleman, which I think is of value in insuring the result that we seek, but I should like to have the opportunity, suggested to me by my hon. and gallant Friend behind me (Colonel Courthope), to remove any misconception—if any such exists—as to the attitude of the companies. I have no complaint to make, throughout these discussions, of the way in which I have been met by those who are connected with these companies. Indeed, the contrary is the case. I have every cause to thank them for their attitude to me. Therefore, while I am unable to tell the right hon. Gentleman as to the form of rules that the Minister of Agriculture may devise, because obviously that is technical and requires careful consideration, I can assure him and the House that the object, as I see it, shall be to insure, so far as practicable, that the Minister of Agriculture shall be placed in possession of the relevant information.
§ Mr. RUNCIMANInformation as to the use of public money which is here sought for is an altogether different matter from that dealing merely with the publication of processes. My hon. and gallant Friend opposite who has been so closely associated with this industry actually is apprehensive. I notice, however, that in connection with Kenley the company did not hesitate to publish its profits for the year 1923. The profits for that year were made known. I want to suggest to my hon. and gallant Friend that these figures have been given voluntarily, and I am quite sure that he would give what was necessary to the public quite willingly, though I doubt very much whether he would wish to give any information to his Continental competitors. But why should there be apprehension about the figures of the profit and loss account being made public not only by the Minister, but laid before Parliament? The proposal which has been made by my right hon. and learned Friend does not provide for publication. That, I understand, is going to be provided for 'by the acceptance of an Amendment by the Minister when we 2120 come to Sub-section (3), where I should like to add the words, after the words "balance sheets" ["copies of all balance sheets"], the words "profit and loss account, and such explanation." This would provide for the publication of the balance sheet and profit and loss account and any explanation furnished to the Minister. I understand that such explanation as the Minister would ask for would not be an explanation of the processes or the way in which the profit had been made by the processes. It is essential if public money is to be granted that this explanation should be full and frank. Everybody knows that a giant of public money by way of subsidy is open to abuse. It might be possible to use the subsidy—I am sure my hon. and gallant Friend opposite would not do anything contrary to what was right—but he might not always be in control, and there are ingenious people who, if they Were in control of such a company, might use the subsidy provided by the State for improper purposes. The only thing that is asked for in this Amendment, that those purposes should be brought under the eye of the Minister. I go further and will suggest that it ought to be brought to the knowledge of Parliament, for I need hardly point out that it is not the Minister that grants the money, but Parliament, and Parliament has the right to ask, if it does grant public money for full information as to the way in which that money has been used. The proposal that is made will provide for fuller information than which is granted under the very sketchy words of Sub-section (1) as it now stands. The omission of the word "general," as proposed by my hon. Friend below me (Mr. Hopkinson), would certainly have improved this Sub-section. Seeing that that has remained in. the only safeguard we have is the higher standard—if I may say so—than is required by private companies, which can be applied by the Minister in regard to these companies for the help out of public funds.
§ Mr. BALFOURI rise only to call the attention of the Minister to what may possibly occur if these words be accepted as they stand—
Such balance sheets and statement of profits and losses shall be drawn out in accordance with the rules.Are these rules to be fixed before the subsidy is paid, and, if so, are they 2121 capable of being changed with the change of Ministry? If so, that seems to me to be a point that ought to be looked into. In view of this the Minister I think ought to reserve himself the right of consultation with the right hon. and learned Gentleman with a view to inserting an appropriate Amendment in another place: otherwise there may be confusion when the time arrives for the operation of this Bill.
§ Mr. A. V. ALEXANDERThe new Clause that has been put forward by the Minister has been put forward to meet the representations made in Committee, and in subsequent negotiations where we came to an agreement. I recognise that the right hon. and learned Gentleman the Member for Spen Valley indicated that he did not desire to disturb an agreement but to secure an arrangement which would strengthen the position. There seems, however, to be some point in the observations made by the hon. Member for Hampstead (Mr. Balfour) as to what may result in the event of a change in the personnel of the Ministry of Agriculture. It may well be that the effect of the right hon. and learned Member's Amendment will be to cut both ways, and might in some circumstances have the reverse of the effect desired. Perhaps it would have been better if the legal knowledge of the right hon. Gentleman had been directed to this Bill at an earlier stage than that of "Report, and then we might have made more rapid progress. Unless the Minister is quite sure about the effect of that Amendment I hope that he will be able to tell us that he will have consultation and further legal advice before he finally accepts it.
§ Mr. WOODIf I may say one word by leave of the House, I have taken legal advice on this Clause, and also other advice. The dancer of which my hon. Friend the Member for Hampstead (Mr. Balfour) brought to the attention of the House is, I think, one of substance. Therefore, the suggestion that I propose to make to the House—and I think it will be convenient to follow the lines suggested by the hon. Member opposite who has just spoken (Mr. Alexander), for which I thank him—and in accepting the Amendment of the right hon. and learned Gentleman, to make it quite clear that Should further legal consideration lead me to suppose that it involves fallacies of 2122 which my simple judgment is unaware, that I should reserve the liberty to have those fallacies corrected in another place.
§ Amendment agreed to.
§ Mr. SPEAKERIn regard to the further Amendment in line 1, of Subsection (3), to insert the words "statements of profit and loss and explanations," is it not the ease that these statements are already provided for in the first Sub-section?
§ Sir J. SIMONIf one looks at the form in which the first Sub-section is drawn up, it will be noticed that the second line speaks of the duty of sending annually a statement "in the form of a balance sheet." Further down, in the sixth line, one finds the words "and also a. statement of profit and loss." I venture to think that as the right hon. Gentleman's Clause is at present drawn Subsection (3) has the effect, and as it is drawn it is intended to have the effect, of laying before Parliament only the balance sheet, and not laying before Parliament also the statement of profit and loss.
§ Mr. SPEAKERI see the point. Does the hon. and learned Member move?
§ Mr. RUNCIMANI beg to move, in line 13, after the word "sheets," to insert the words
statements of profit and loss and explanations.I do not know that I need to add to the remarks I made on an earlier Amendment expressing the hope that the Minister and those who have been acting with him will agree to the publication of the profit and loss account as well as the balance-sheet. There is a distinction and often a material difference between them when you come to dealing with public money. I cannot think my hon. and gallant Friend who represents the companies' point of view in this matter feels their position will be at all damaged by the publication of profit and loss accounts. Indeed, if his company is a public company, the information would be published in some form or other. The amount of profit for the year will be known, and what objection there can be to the publication of the profit and loss account according to the rules provided I cannot see. I am quite sure that if the present Minister remains in office, whatever changes may be made 2123 in the rules, he will do nothing to give to the foreign competitors of the industry which he is endeavouring to foster with public money information which would enable them to do injury to the infant industry here. Surely no harm can be done by publishing the results of their profit and loss account for each year, in order that Parliament may know whether the granting of public money for this purpose has been worth while, and whether we are justified in going on with the subsidy, and even in increasing it for a longer period after the present proposal has come to an end.
§ Colonel COURTHOPEI am rather in a difficulty about this Amendment, and as a preface to my remarks I should like to say that the profits which were mentioned in a previous speech about the profits published by the Cantley Company, were, if I remember aright, those included in the balance-sheet. No balance-sheet will balance unless the profit or loss is brought into it from the profit and loss account. Everyone with any experience of company work is aware of that; and so the profit on a year's working, or the loss, will necessarily be included in the balance-sheet which, under this Bill, will be laid before Parliament. The detail of the profit and loss Recount which leads up to that balance of profit or loss is a very different thing, however. Personally I do not see, off-hand, any particular objection to publication, but I am advised, and advised strongly by a very eminent chartered accountant who is connected with several of these companies, and who is the Treasury representative upon the board of one of them, that the details of the profit and loss account cannot be placed at the disposal of the public without danger to the companies publishing them. That is his opinion, and it is one which, on these matters, I naturally accept. I would like to assure the House again that my friends and I have no desire whatever to withhold essential information, and I hope the House will be satisfied by getting the profit or loss as stated in the balance-sheet, without asking for the detail of the profit and loss account.
§ Mr. WOODI hope the right hon. Gentleman opposite will not wish to press his Amendment. As I have already said, the Clause that I have moved was 2124 the result of rather long deliberations and a mutual give-and-take by hon. Members opposite who, in Committee, wished to go a great deal further, and who only gave way on several points in which they were interested because those who represented the companies had given way on other points. Like all compromises it means that neither side got altogether what it wanted. It is impossible for me at this stage to go beyond the undertaking or the arrangement arrived at—as far as I personally am concerned. The House of Commons is obviously completely unbound, and is entirely free to take any action it likes, though I am unable to go beyond what I have said. The right hon. Gentleman who moved the Amendment said he did so because he thought it was not unreasonable that companies receiving public money by way of subsidy should have applied to them a rather higher standard than is required of some who are not, in receipt of such aids. That is quite true, and that is the effect under the Clause I have moved, more especially as it has been strengthened by the Amendment of my right hon. and learned Friend opposite. Therefore I think the right hon. Gentleman may rest assured that there is considerably stronger treatment meted out to these companies than is extended to ordinary companies. For these reasons, I hope the right hon. Gentleman will not feel it necessary to press his Amendment, because if he does I shall be unable to accept it.
Mr. HOPKINSOIMThe right hon. Gentleman's appeal is very moving, but it does not move me a bit. Those with whom he was negotiating were, in the main, hon. Members of this House who have not any sort of conception as to how to read a balance-sheet or a profit and loss statement. The hon. and gallant Member who on this question puts forward the views of the companies did not give us quite a full account of the difficulties which arise when companies publish only a balance-sheet without publishing a profit and loss account. Anybody who has had to deal with these matters will agree with me in this, that it is easy to draw up a balance-sheet, and to bring in a balance transferred from profit and loss account, and yet completely to hoodwink the shareholders and the general public as to what has actually happened.
2125 For instance, it is a very common thing when a company wishes to disguise the fact that it is making a heavy loss, wishes, for reasons of its own—for the further issue of shares—to show a profit, for it to write up its fixed assets. If it shows a profit, not by trading but by writing up the value of fixed assets, it can show that profit in the balance-sheet as profit transferred from the profit and loss account, and in doing so convey no sort of suspicion to the person who reads the balance-sheet as to what has actually happened in the affairs of the company. That is common; I have seen it done time and again; in fact, it is a common device; and it is one of those things which any reform of the Companies Acts will have to deal with very severely. I hope Members of the party who made the arrangements with the right hon. Gentleman on the Treasury Bench will bear that in mind, and will support us in dividing the House on this particular Amendment.
§ Sir J. SIMONMay I add one word to what has been said? It is not because I question the skill with which my hon. Friends above the Gangway have, discussed this matter that I have ventured to make this suggestion, and I am sure they will consider it, as the rest of the House will consider it, with a desire to get the best regulations made. May I point out to the hon. and gallant Gentleman opposite that to tell any business man, or even that inferior kind of being who is principally employed in advising business men when they get into trouble, that a balance-sheet necessarily shows the result of the balance of profit-and-loss account does not carry anybody very far? The enterprises under this Bill are to get a subsidy at a particular rate for four years, a reduced subsidy for a period after that, and the whole subsidy, according to the present Bill, is to run out in 10 years' time. Two things will unquestionably arise under the administration of the Act. There will be a natural inclination on the part of those who are receiving the subsidy to show that they will never be able to make good if the subsidy is reduced. Nothing is more certain than that in three or four years' time we shall have representations of that sort made, I have no doubt, in perfectly good faith.
2126 On the other hand, it would be very important, not only for the public, but for Members of Parliament, to be in a position themselves to judge how far such a contention is justified. It is not a question for the Minister, it is a question for the House of Commons. The Chancellor of the Exchequor does not present a Budget statement by announcing that the taxes will be so much, and telling us to take it or leave it. He has had to produce the accounts of the country in considerable detail, after we have examined the estimates and expenditure of every Government Department. I cannot see why it is improper or unreasonable to say that the profit-and-loss accounts of these companies should, in the same way, be laid on the Table of the House.
5.0 P.M.
Let me make it plain to every hon. Member that I thoroughly agree with the hon. and gallant Gentleman opposite that it would be unreasonable, and, indeed, intolerable, to ask for publication of things which could possibly undermine these companies in contest with their competitors. To ask that they should publish their costings system would be quite ridiculous; everybody is entitled to do those things secretly, in the best way he can. And no sensible man would expect publications of secret processes or of marketing arrangements. I speak in the presence of men of business, who very likely know this subject very much better than I do, but I cannot see why, if it is right for the taxpayer to have the balance-sheet, it is not also right for the taxpayer to have the profit-and-loss account. A member of an ordinary private company expects to see both, and, as has already been said in the Debate, this is not the case of an ordinary private company, but we are acting in this House for the taxpayers of the country, who are being compelled, whether they like it or not, to make contributions towards these particular enterprises. I think, therefore, the least we can do is to ensure that the material which, under these Rules, the Minister secures, will be material which is available for public information, because, otherwise, we shall necessarily be left in the dark.
§ Mr. A. V. ALEXANDERI want, first of all, to say to my hon. Friend the 2127 Member for Mossley (Mr. Hopkinson), who said that hon. Members on these benches who were negotiating with the right hon. Gentleman in this matter were totally incapable of reading a balance sheet, that he must not assume he is the only Member who can read a balance sheet.
§ Mr. A. HOPKINSONI was under the impression that Members above the Gangway were not capitalists, and on that account could not be aware of the evil devices of that class.
§ Mr. ALEXANDERThe whole of this Debate to-day arises from the desire of the Minister to accept an Amendment from these benches to safeguard the public, hut hon. Members below the Gangway seem to have had no interest in the need for practical Measures of this sort for the safeguarding of the public until the "Report stage of the Bill. As a matter of fact we asked upstairs for a public auditor, because the balance-sheets certified by public auditors contain, not only a statement of liabilities and assets, but trade account, cash account, management expenses account, bank account, and profit-and-loss account. I would like to have as detailed a balance-sheet as that in the case of all concerns for which public money is voted, and I might tell my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon) that there is not a point raised this afternoon which has not been pressed before in our negotiations with the Minister and other parties concerned. No doubt my right hon. Friend would have been invited to join in the negotiations if his interest in the matter had been somewhat earlier. We did our best in Committee, and in the subsequent negotiations, to get the fullest amount of publicity possible, and, as we put our position quite clearly in the negotiations, if this point is forced to a Division, the Minister will not expect us to do anything less than to support an extension of publicity.
§ Mr. DENNIS HERBERTWith great deference to my right hon. and learned Friend opposite, I quite appreciate his case for the publication of a profit and loss account, but the right hon. Gentleman's Amendment is for the publication of the profit and loss account, which is to be drawn up in accordance with rules 2128 made by the Minister, and also for the publication of the explanations to be given at the request of the Minister. It seems to me, in that case, if the Minister does his duty, it is practically certain, if any information could do harm to the companies, it would be given either by a profit and loss account in such detailed form as the Minister would require, or in such explanations as he would require. Therefore, I venture to suggest, although it might be quite proper to publish a profit and loss account, it would be very dangerous, indeed, to ask for the publication of the explanations required by the Minister, and it might also be equally dangerous to require publication of such a profit and lose account as the Minister might require to be drawn up, with all the details which his rules might require.
There must be some cases in which Parliament, I will not say is incapable, but is the wrong instrument for dealing with matters of detail, owing to the publicity which must come from their dealing with them. In a case of this kind, Parliament would be entitled to require that even the most confidential information must be given to the Parliamentary representative, and I do think the House of Commons ought to be satisfied, in a case of this kind, that information, which it might be undesirable to publish, should be given to the Minister, and only to the Minister, and not to Parliament, and, therefore, to the public. Of course, if it comes to a question of reduction, or increase of subsidy, or further grant of subsidy, there you get another case altogether. Parliament then may take the matter into its own hands, and say that it cannot agree to continue, or increase, or not reduce the subsidy until it gets this information; but that does not arise at the moment. I do think the right hon. Gentleman will realise that the Amendment does attempt to bring about that publicity of matters which ought to be confidential, and which the right hon. Gentleman claims no wish to make public.
Mr. TREVELYAN THOMSONAs this may be more or less a precedent for the future, we cannot start too well in laying down the lines on which public money is to be granted, and the rules and conditions under which it is to be administered. With regard to the objection raised by the last hon. Member, there is no desire 2129 at all that confidential information should be given, and it is an extraordinary profit and loss account which is going to give away any confidential information. Profit and loss accounts, as a rule, are difficult enough to understand in ordinary, straightforward dealing, without being able to elicit from them any confidential information which some companies are so astute in withholding from their shareholders and the public. Therefore, I do submit, that where public money is being spent on this large scale, the public, as represented by the House of Commons, and not merely by the Minister, no matter how excellent the Minister may be, is entitled to the fullest information. In so far as this is, in the main, a departure from the practice of Parliament in the past, it is very desirable that we should be sure that the lines we are laying down now are sound lines in the public interest, and safeguard the rights of the public. Therefore, I do hope the Minister, on further consideration, can accept the Amendment of my right hon. Friend.
§ Sir H. FOSTERI have been trying to think of some kind of information that could appear in an ordinary profit and loss account, to which any objection could be taken as disclosing secrets to foreign competitors, and I cannot think of one. It seems to me eminently reasonable that the profit and loss account, as well as the item transferred ultimately to the balance-sheet, and the balance-sheet should be published. It is quite true, there are a great many public companies which do not publish profit and loss accounts. I was astonished the other day, when attending a meeting of a company with a capital of £20,000,000, to find that they publish no profit and loss account to their shareholders. The answer was that the old state of things would not be permitted to-day and would be very much resented by the ordinary shareholders. If that be so in the case of an ordinary company, how much more so in the case of companies receiving subsidies out of public money. I listened to my hon. and gallant Friend, because I am sure his statement would be fair, and he did not give us the slightest reason. All he could tell us was that he was advised by somebody else, for reasons which were not disclosed, that it would not be desirable.
2130 I say, again, it appears to be almost elementary in the case of an ordinary public company, and, therefore, ex hypothesi much more in the case of a subsidy from the State, that the profit and joss account, which would disclose no improper information or secret processes, but which would merely be a recital—not in too much detail, not such as to show, for example, the costing, which would be improper—of particulars under ordinary heads, of which I cannot conceive any honest public company would object to the publication. As to the suggestion, made more than once, that this Amendment would compel disclosures of explanations given to the Minister, I did not understand the Amendment would cover that.
§ Mr. D. HERBERTPossibly I was under a misapprehension, but I did understand this Amendment to include the publication of the explanations. That is the fatal part of it.
§ Mr. RUNCIMANThe Amendment, as I moved it, was, after the words "balance sheets," to add the words "statements of profit and loss, and explanations," but if the feeling of the House is against the word "explanations" being added, I shall be willing to leave it out, so long as we make cure that we get the profit and loss account.
§ Sir H. FOSTERI am glad that I have elicited that. It is an inconvenience, in matters of such importance, to be obliged to consider Amendments which do not appear on the Order Paper. I hope the right hon. Gentleman will omit the word "explanations," because I see difficulties in publishing explanations, for which a Minister might ask, and which it might be extremely undesirable to publish.
§ Mr. LAMBI am rather in a difficulty. I should like the Minister to state whether the rules and regulations are to be laid on the Table of the House, because, if so, I think it would be a check upon any regulation which might be made in future, as the House of Commons itself would have the opportunity of discussing, and approving or disapproving the regulations.
§ Mr. STEPHENI hope the Minister will accept the Amendment. I do not think, in spite of what so many financial experts tell us, that there is a great deal in it. The hon. and gallant Member 2131 suggested that, on the advice of an accountant, he felt that it would be unsatisfactory to have this Amendment included. Possibly that is due to the fact that accountants are naturally very conservative, but, so far as I can see, there is nothing in the Amendment of very great importance, especially since the right hon. Gentleman is willing to take away the explanations. There has been a lack of understanding on the part of Members below the Gangway with regard to the agreement that was come to, or the engagement that the Minister entered into in this respect, and I notice they still seem to be somewhat uncertain about it. I would like to explain that those of us above the Gangway think that every opportunity should be taken of making plain the position with regard to the expenditure of public money. The representatives of hon. Members below the Gangway evidently did not think on the Committee this was worth while, but owing to the fact that it was opposed by some of us on the Committee, the Minister felt that there was something in our objections, and he agreed to put something in the Measure that would possibly meet the case. We did not agree to the specific words suggested by the Minister or to the specific terms in which it was expressed, but we got a promise that he would try and met us. I believe in this Clause that the Minister is trying to meet us, but I ask the Government to accept the Amendment in addition, because it will not make any material difference to them.
§ Sir GODFREY COLLINSI am sure we all appreciate the sentiments expressed by the hon. Gentleman who has just sat down. I happened to be on the Committee when the original Clause was moved, and the Minister immediately rose, and after his promise the Clause was withdrawn. Negotiations have taken
§ place between the two Front Benches on the Clause we are considering, but there are other interests concerned. We have to consider the interests of the public and the taxpayer, and these interests have not been consulted by the Minister. We have our freedom of action here this afternoon. May I draw the attention of my hon. Friend above the Gangway to how far we have travelled from the original Amendment.
§ The accounts of any undertaking qualified to receive the subsidy under the provisions of this Bill have to be audited each year by a public auditor and laid before Parliament. In the Committee upstairs we pleaded, in the first place, for full publicity of all the accounts; and, secondly, that these accounts should be audited by a public auditor. Consequently we are now met with a small remnant of the original Amendment which was moved upstairs by my hon. Friend above the Gangway. As the House is being asked to find large sums of money for this particular industry, I think the taxpayers have the right to know how their money is being spent year by year. I will not submit any further arguments now, but I hope the Minister will be able to see his way to accept the Amendment.
§ Mr. RUNCIMANMay I point out that the word "explanations" is to be left out.
§ Mr. DEPUTY-SPEAKER (Captain FitzRoy)Perhaps the right hon. Gentleman will move that the last two words be omitted.
§ Amendment made to proposed Amendment: Leave out the words "and explanation."—[Mr. Runciman.]
§ Question put, "That the words, 'and statements of profit and loss' be there inserted in the proposed Clause."
§ The House divided: Ayes. 1st: Noes, 269.
2133| Gretton, Colonel John | MacLaren, Andrew | Snell, Harry |
| Griffiths, T. (Monmouth, Pontypool) | Maclean, Nell (Glasgow, Govan) | Spencer, George A. (Broxtowe) |
| Groves, T. | March, S. | Stamford, T. W. |
| Grundy, T. W. | Maxton, James | Stephen, Campbell |
| Guest, J. (York, Hemsworth) | Mitchell, E, Rosslyn (Paisley) | Stewart, J. (St. Rollox) |
| Hall, F. (York W. R., Normanton) | Montague, Frederick | Sutton, J. E. |
| Hall, G. H. (Merthyr Tydvil) | Morrison, R. C. (Tottenham, N.) | Thomas, Rt. Hon. James H. (Derby) |
| Hamilton, Sir R. (Orkney & Shetland) | Murnln, H. | Thorne, W. (West Ham, Plaistow) |
| Harney, E. A. | Naylor, T. E. | Thurtle, E. |
| Hartshorn, Rt. Hon. Vernon | Owen, Major G. | Tinker. John Joseph |
| Hastings, Sir Patrick | Palin, John Henry | Trevelyan, Rt. Hon. C. P. |
| Hayes, John Henry | Paling, W. | Varley, Frank B. |
| Henderson, Rt. Hon. A. (Burnley) | Parkinson, John Allen (Wigan) | Viant, S. P. |
| Henderson, T. (Glasgow) | Pethick-Lawrence, F. W. | Wallhead, Richard C. |
| Hirst, G. H. | Ponsonby, Arthur | Walsh, Rt. Hon. Stephen |
| Hirst, W. (Bradford, South) | Potts, John S. | Warne, G. H. |
| Hopkinson, A. (Lancaster, Mossley) | Remnant, Sir James | Watson, W. M (Dunfermline) |
| Hore-Belisha, Leslie | Richardson, R. (Houghton-le-Spring) | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Hutchison, Sir Robert (Montrose) | Riley, Ben | Wedgwood, Rt. Hon. Josiah |
| Jenkins, W. (Glamorgan, Neath) | Rltson, J. | Welsh, J. C. |
| John, William (Rhondda, West) | Roberts, Rt. Hon. F. O. (W. Bromwich) | Wignail, James |
| Johnston, Thomas (Dundee) | Robinson, W. C. (Yorks, W. R., Elland) | Wilkinson, Ellen C. |
| Jones, Henry Haydn (Merioneth) | Rose, Frank H. | Williams, David (Swansea, E.) |
| Jones, J. J. (West Ham, Silvertown) | Runciman, Rt. Hon. Walter | Williams, Dr. J. H. (Llanelly) |
| Jones, Morgan (Caerphilly) | Salter, Dr. Alfred | Williams, T. (York, Don Valley) |
| Jones, T. I. Mardy (Pontypridd) | Scrymgeour, E. | Wilson, C. H. (Sheffield, Attercliffe) |
| Kelly, W. T. | Sexton, James | Wilson, R. J. (Jarrow) |
| Kennedy, T. | Shaw, Rt. Hon. Thomas (Preston) | Windsor, Walter |
| Kenworthy, Lt.-Com. Hon. Joseph M. | Shiels, Dr. Drummond | Wise, Sir Fredric |
| Kidd, J. (Linlithgow) | Short, Alfred (Wednesbury) | Wright, W. |
| Lee, F. | Simon, Rt. Hon. Sir John | Young, Robert (Lancaster, Newton) |
| Lowth, T. | Sinclair, Major Sir A. (Caithness) | |
| Lunn, William | Smith, Ben (Bermondsey, Rotherhlthe) | TELLERS FOR THE AYES.— |
| MacDonald, Rt. Hon. J. R. (Aberavon) | Smith, H. B. Lees (Keighley) | Sir Godfrey Collins and Mr. |
| Mackinder, W. | Smith. Rennle (Penistone) | Trevelyan Thomson, |
| Jackson, Lieut.-Colonel Hon. F. S. | Newman, Sir R. H. S. D. L. (Exeter) | Spender Clay, Colonel H. |
| Jacob, A. E. | Newton, Sir D. G. C. (Cambridge) | Sprot, Sir Alexander |
| James, Lieut.-Colonel Hon. Cuthbert | Nuttall, Ellis | Stanley, Col. Hon. G. F. (Will'sden, E.) |
| Jephcott, A. R. | Oakley. T. | Stanley, Lord (Fylde) |
| Joynson-Hicks, Rt. Hon. Sir William | O'Connor, T. J. (Bedford, Luton) | Stanley, Hon. O. F. G. (Westm'eland) |
| Kindersley, Major Guy M. | Ormsby-Gore, Hon. William | Steel, Major Samuel Strang |
| King, Captain Henry Douglas | Pease, William Edwin | Stott, Lieut.-Colonel W. H. |
| Kinloch-Cooke, Sir Clement | Pennefather, Sir John | Stuart, Crichton-, Lord, C. |
| Knox, Sir Alfred | Penny, Frederick George | Stuart, Hon. J. (Moray and Nairn) |
| Lamb, J. Q. | Perkins, Colonel E. K. | Sykes, Major-Gen. Sir Frederick H. |
| Lane-Fox, Lieut.-Col. George R. | Peto, G. (Somerset, Frome) | Tasker, Major R. Inigo |
| Lister, Cunliffe-, Rt. Hon. Sir Philip | Philipson, Mabel | Templeton, W. P. |
| Locker-Lampson, G. (Wood Green) | Pielou, D. P | Thompson, Luke (Sunderland) |
| Loder, J. de V. | Pilcher, G. | Thomson, F. C. (Aberdeen, South) |
| Looker, Herbert William | Power. Sir John Cecil | Thomson, Sir W. Mitchell (Croydon,S.) |
| Lougher, L. | Pownall, Lieut.-Colonel Assheton | Tichfield, Major the Marquess of |
| Lucas-Tooth, Sir Hugh Vere | Price, Major C. W. M. | Vaughan-Morgan, Col. K. P. |
| Luce, Major-Gen Sir Richard Harman | Raine, W. | Wallace, Captain D. E. |
| MacAndrew, Charles Glen | Rawlinson, Rt. Hon. John Fredk. Peel | Ward, Lt.-Col. A.L. (Kingston-on-Hull) |
| Macdonald, R. (Glasgow, Cathcart) | Rawson, Alfred Cooper | Warner, Brigadier-General W. W. |
| McDonnell, Colonel Hon. Angus | Reid, D. D. (County Down) | Warrender, Sir Victor |
| Maclntyre, Ian | Rentoul, G. S. | Waterhouse, Captain Charles |
| McLean, Major A. | Rhys, Hon. C. A. U. | Watson, Sir F. (Pudsey and Otley) |
| Macnaghten, Hon. Sir Malcolm | Rice, Sir Frederick | Watson, Rt. Hon, W. (Carlisle) |
| McNeill, Rt. Hon. Ronald John | Richardson, Sir P. W. (Sur'y, Ch'ts'y) | Watts, Dr. T. |
| Macquisten, F. A. | Roberts, E. H. G. (Flint) | wells, S. R. |
| MacRobert, Alexander M. | Robinson, Sir T. (Lanc, Stretford) | Wheler, Major Granville C. H. |
| Maitland, Sir Arthur D. Steel- | Ropner, Major L. | White, Lieut.-Colonel G. Dairymple |
| Makins, Brigadier-General E. | Ruggles-Brise, Major E. A. | Williams, A. M. (Cornwall, Northern) |
| Manningham-Buller, Sir Mervyn | Russell, Alexander West (Tynemouth) | Williams, Com. C. (Devon, Torquay) |
| Margesson, Captain D. | Samuel, A. M. (Surrey, Farnham) | Wilson, Sir C. H. (Leeds, Central) |
| Marriott, Sir J. A. R. | Sanders, Sir Robert A. | Wilson, M. J. (York, N. R., Richm'd) |
| Mailer, R. J. | Sanderson, Sir Frank | Wilson, R. R. (Stafford, Lichfield) |
| Meyer, Sir Frank | Savery, S. S. | Winterton, Rt. Hon. Earl |
| Milne, J. S. Wardlaw- | Scott, Sir Leslie (Llverp'l, Exchange) | Womersley, W. J. |
| Mitchell, S. (Lanark, Lanark) | Shaw, Lt.-Col. A. D. Maj. (Renfrew, W) | Wood, Rt. Hon. E. (York, W.R., Ripon) |
| Mitchell, Sir W. Lane (Streatham) | Shaw, Capt. W. W. (Wilts, Westb'y) | Wood. E. (Chest'r, Stalyb'dge & Hyde) |
| Monsell, Eyres, Com. Rt. Hon. B. M. | Shepperson, E. W. | Wood, Sir Kingsley (Woolwich, W.). |
| Moore-Brabazon, Lieut-Colonel J. C. T. | Simms. Dr. John M. (Co. Down) | Wood, Sir S. Hill (High Peak) |
| Morrison, H. (Wilts, Salisbury) | Sinclair, Col. T. (Queen's Univ., Belfst.) | Worthington-Evans, at. Hon. Sir L. |
| Morrison-Bell, Sir Arthur Clive | Skelton, A. N. | Yerburgh, Major Robert D. T. |
| Murchison, C. K. | Slaney, Major P. Kenyon | |
| Nall, Lieut.-Colonel Sir Joseph | Smith, R.W. (Aberd'n & Kinc'dine, C.) | TELLERS FOR THE NOES.— |
| Nelson, Sir Frank | Smith-Carington, Neville W. | Colonel Gibbs and Captain Douglas |
| Neville, R. J. | Somerville, A. A. (Windsor) | Hacking. |
§ Proposed Clause, as amended, added to the Bill.
§ Mr. DEPUTY-SPEAKERThe next new Clause (Bent.,? not to be raised in consequence of Act), standing in the name of the hon. Member for Dewsbury (Mr. Riley), is outside the scope of the Bill, and, consequently, is not in order.
§ CLAUSE 1.—(Bate and conditions of payment of (subsidy).
§ Mr. ATTLEEI beg to move, in page 1, line 16, at the end, to insert a new Subsection—
(2) Upon the termination of such period of ten years there shall be allocated to the Treasury from the assets of any undertaking engaged in the manufacture of sugar or molasses, in respect of which a subsidy has been paid under the provisions of this Section, shares equal to fifty per cent. of the total amount of the subsidy paid, such shares to rank for dividend after the payment of five per cent. on the ordinary shares, and the Treasury shall be allocated one representative on the board of directors of such undertaking.This Amendment brings before the House a very important matter of 2136 principle. We are here embarking on a new experiment, and are expending large sums in support of one particular industry. We on this side of the House are not complaining that the State should take a part in experiments with regard to industry, but we do say that, where public money is expended in helping private enterprise, there should be some residuary interest retained for the community. This principle was adopted when monopolies in the past were given to tramway undertakings, electricity undertakings, and similar public undertakings. We have here rather a different departure. We have a huge subsidy granted for ten years to the sugar industry. We all hope that the sugar industry is going to be successful, but we none of us know what is going to be the result of this subsidy as regards the financial affairs of these sugar undertakings. We do not know whether they' are going to make large profits, or small profits, or losses. This Amendment is designed to meet any case, whether the industry is successful or whether it is 2137 unsuccessful. We propose that, after 10 years, a certain amount of assets in these companies should be put into the hands of the State, and that, after a certain dividend has been declared, 50 per cent. of the total amount of subsidy paid should rank for dividend with the capital put up for these companies.As I have indicated, we are here indulging in a very speculative undertaking. No one knows what is going to be the future of the sugar industry. No one can forecast sugar prices. A Royal Commission is now going into the question of food prices, and we gather that many millionaires have become such by making losses over a long succession of years. We do not know that we may not have sugar millionaires in this industry, who will make losses all the time; or it may be that they will make profits, and then, I suppose, they will be multimillionaires. We cannot, however, foretell how sugar prices are likely to move m the next 10 years. Anything that deals with something that has to be grown is affected by climatic conditions. We do not know what may happen to the sugar-producing areas of the world. We do not know what new uses may be found for sugar; we do not know whether, 10 years hence, there will be a sugar shortage or a sugar surplus.
I want to make provision in caw this proposition, which is being started by State money, turns out to be very successful. We are giving this guarantee to the company for 10 years, which will give them, time to get on their legs. In this Amendment we are proposing to allow them 5 per cent. even after the 10 years, and it is only after they have already had a 5 per cent. dividend that we ask that the community should come in and share in the profits, of the industry. I do not think that this is an unreasonable request. I do not think it can be said to upset the bargain that has been made with the people who have put up their money for this industry. A point that is generally put forward against any variation of the terms of this Bill is that people have been induced to put their money into this industry in the hope of making profits, and that they have been induced to do so by the 10 years' subsidy. We are told that the real object of this Measure is to help British agriculture and to help the 2138 country, and we are also told that capitalists are eminently patriotic. I want to see whether their patriotism is something more than a sort of general word of patriotism. I want to see whether it is a 10 per cent. patriotism, or a 5 per cent. patriotism, or what sort of per cent. patriotism it is. I am only suggesting that they should be patriotic after they have got 5 per cent., so I do not think we are making too large a demand upon them in that way.
We also suggest that, after the 10-year period, there should be one representative of the State on the board of directors of each of these undertakings. We have already had a precedent, in the case of other semi-State undertakings, for having some State representation on the board of management, and I certainly think that, if the taxpayers are making the sacrifice they are making for the sake of this industry, we should have a guarantee that the industry is going to be carried on in the interests of the country, and not in what are, possibly, the narrower interests of the shareholders, because it is quite possible to develop this industry in the interest of the country or in the interest of the shareholders without those two interests coinciding. That is found to be the case very often, especially in any dealings with foodstuffs. I do not think it can be said that we are making an unreasonable demand in asking that the State should come in after this 10-year period. I do not suggest that I should tie myself down absolutely to the figures in the Amendment: I am prepared to accept a reasonable compromise on the matter; but I think the Amendment does enshrine a valuable principle.
It may be said that the community are-going to get an advantage, in return for the subsidy, in the prosperous state of agriculture and in the great value of a new industry to the country. I admit that we all hope that we are going to have those advantages, but I do not see why, because we are going to have those advantages, we should forego the possibility of recouping ourselves for our expenditure in setting up this industry. The one does not rule out the other, nor is it necessary, to my mind, in order to have a new business that is going to be an advantage to this country, that we should have to pay a very high price to the 2139 capitalists who put their money into it. After all, this may be the first of a series of Statutes of this nature, because I understand that, with the exception, possibly, of the hon. Member for Mossley (Mr. Hopkinson), practically all the House has now departed from the old laissez faire. attitude, and we do not know what may not come up in this Parliament or the next. If we are going to have any of these further subsidies, or any more of what I should call attempts to get State action in industry in the wrong way, let us lay down, right away from the start, the principle that we are not going to give this assistance to private enterprise in an industry without retaining for the community some interest in, some advantage from, and some control over the industry.
§ Mr. BARNESI beg to second the Amendment.
This Amendment has already been reduced as compared with the Amendment we proposed in Committee, and I sincerely hope that in its reduced form the Minister will be able to accept it. In the first place, the Amendment deals with the necessity for the State sharing in the asset created, and I think it is essential to remind the House that no asset would be created without the financial assistance guaranteed through the subsidy. The promoters of the sugar beer industry in this country have quite frankly admitted that they cannot establish the business, they cannot erect these factories, they cannot create an asset that will yield them profits and dividends, without this subsidy from the community. If that be the case, surely it is only reasonable and fair that the community should share in the assets which itself it creates. In Committee the Amendment put forward the proposition that the State's share of the assets should be equal to the total subsidy paid. We have now reduced that to 50 per cent. of the total amount. The Amendment next deals with the dividends that this asset in the form of shares earns, and here, again, I think we have erred on the side of generosity, because we permit the private shareholders to have the first claim on the dividend-earning capacity of the undertaking up to 5 per cent., and the shares that ultimately, if this Amendment 2140 is conceded, will be allocated to the Treasury, will only take their proportion of profit after the private shares have taken the first 5 per cent. The Amendment does not go anything like as far as I personally should wish to see, and the reasonableness of the claim will, I hope, enable the Minister to meet us.
The final point in the Amendment is that the Treasury should have some representation on the boards of directors of the undertakings which benefit from this subsidy. I submit that that is essentially a necessary precaution. This industry will be created as a result of a very generous subsidy from the State. It cannot be separated, even at the end of 10 years, I venture so suggest, from some reaction in various ways on governmental policy. The natural demand of this industry will be always to retain, for instance, the present Customs Duty on sugar; and I also consider that any industry which is created by a subsidy will have the natural urge and tendency to demand a continuation of that subsidy at the end of the 10 years laid down in this Bill. One of the only ways in which you can test the equity of any subsequent demand from this industry, either for a retention of the subsidy as laid down in the Bill or for the retention of any remission of the Excise Duty on sugar, is by the Treasury having some nominated representative on the board of directors, who will be able to understand the policy of the control, who will be able to know whether that policy has been operated to its fullest business efficiency in the period laid down in the Bill, and who will be able to indicate to the Treasury the policy that will be pursued. From these three points of view I consider that this provision is essential, reasonable, and necessary if the interests of the taxpayer are to be safeguarded.
§ Mr. WOODI listened with great attention to the arguments which have been advanced by the Mover and Seconder, and it is, as they said, a subject which occupied a good deal of the Committee's attention during its deliberations. I, of course, appreciate the fact that hon. Members opposite have reduced their demands by 50 per cent. I think, since we considered it upstairs. That is a very encouraging sign of progress on which I should like to congratulate them, and to hope that the- 2141 next few days may be as prolific of progress as the last, because it is evident that if they can continue to make such satisfactory progress, the gulf which at present divides us will shortly disappear, and we shall be in complete harmony. That will prepare the Committee for the intimation that it is not possible for the Government to accept the Amendment even in the modified form in which it is now moved, but I think it would be discourteous to those who support it if I did not try to give some reasons why I have to oppose that negative to their suggestion. Reading the Amendment, I do not think anyone can fail to be struck by what appears to be almost a confusion of thought between capital and revenue. The proposal is that at the end of the period of 10 years, there shall be allocated to the Treasury, representing the taxpayers, a number of shares equivalent to 50 per cent. of the money which has been given to the factory by way of subsidy. In other words, hon. Members opposite seem to be seeking to estimate the amount of the capital claim which the Treasury in their judgment may make in relation to the revenue which has gone through the hands of the factory in the preceding 10 years. Those two things have no kind of relation the one to the other.
We have discussed over and over again what the subsidy is designed to do. The subsidy is in the strictest sense of the word current revenue of the company. It is given to them by the wisdom of the State to achieve perfectly definite objects. Those objects are to ensure that farmers will grow this crop. They are tied down to pay the farmer a minimum price to induce him to grow it, and a subsidy is paid designed to enable the factories to get over the early stage of their establishment during which they may be expected to be gradually establishing themselves on a basis of knowledge and experience equivalent to their principal Continental competitors. Therefore to suggest that that subsidy, which is revenue in the sense that it is only passing through the company's hands and is being disbursed immediately to someone else, is to be treated as capital, and is to furnish a measure by which the Treasury may proceed in 10 years to assess its claim, is to confuse two unconnected and irrelevant groups of things. That is my 2142 first objection to the Amendment. My second objection I do not develop, but it is one that hon. Members can develop themselves. The Mover of the Amendment also referred to it. It is a great fallacy—and I suspect it is a fallacy which is partly responsible for the just that divides me from hon. Members opposite on this matter—to suppose that the State gets nothing back by this subsidy except by some such direct financial transaction as the Amendment suggests The State, as I see it, in the whole matter is pursuing a perfectly straightforward business arrangement. Those who represented the State appraised and weighed up for themselves what they were prepared to pay in order to secure results which they thought worthy of effort. They arrived at a certain figure and the results they sought to secure were a great national purpose of great value. Therefore even without any financial transaction such as is suggested here, the House would be wrong if it supposed the State was going to get no result or reward or return.
Lastly, I should like to put this to hon. Members whose minds, perhaps, are not already entirely made up. This participation which is suggested in the Amendment is either going to have a value or it is not. If it is not going to have a value, obviously, it is not worth doing from the hon. Member's point of view. If it is going to have a value it is not less obvious that the companies must begin at once to create a reserve in some form out of which they will be able to meet those obligations which will come upon them in 1934. In other words what you are doing by this Amendment is to lay on the companies from this day henceforth a definite new obligation of a very onerous character, because only by accepting that obligation can they place themselves in a position to meet the stipulation you seek to incorporate in the Bill by the Amendment. If that were so, by what reason and by what law of equity does the Mover of the Amendment suggest that by it you are in no way departing from the agreement, the undertaking, and the bargain which was made with these people who have put up their money, and in putting up their money have gone into the factory business, on the strength of the State inducement? If they had known that you were going to make this 2143 new obligation on them, do you suppose you would have got them to agree to raise money and go into the sugar business on the terms we are incorporating in the Bill'? Of course, you would not and everybody knows it.
If you had suggested this stipulation to them you would have had to raise your terms in order to offer an equivalent inducement to that which you incorporated in the bargain that right hon. Gentlemen opposite made and on the strength of which they had induced men to invest their money in this enterprise. It is, therefore, to my mind quite clear that not only would it be a breach of faith at this stage to go back on the agreement on which money has been supplied, but the instant you did it, you would so much have depreciated the inducement that you gave the people that you would find their whole enterprise arrested and checked, and cut off short, and unless and until Parliament was prepared to reconsider the terms of the inducement, they would find no development and no enterprise in this business that Parliament has tried to stimulate. Therefore it is impossible for me to accept the Amendment. Of course, I appreciate the intellectual doctrines and motives which have prompted hon. Members opposite to move it. I do not agree with them, as they will probably have gathered, and I hope on second thoughts, in order to preserve the harmony which has entirely characterised our discussion, they will see their way, after having had such discussion as they think necessary, to spare the House the necessity of proceeding to a Division.
§ Mr. W. GRAHAMI regret in many ways that the right hon. Gentleman has not met us on any point in this Amendment. Certainly we are obliged to press it to a Division, because we feel that it raises a principle of very great and growing importance in the State. Let me make it perfectly plain in the first place on the actual phraseology of the Amendment itself, that we on this side do not necessarily bind ourselves to its precise terms. I entirely agree with the Minister if he suggest that, in the event of the House of Commons agreeing to this principle, probably some better method might be found of carrying it out. I do not dispute that in the least, but we have to remember that we have arrived rather 2144 late in the day in this discussion when in fact it has been agreed to give a subsidy, and when we are only trying now to safeguard an important principle, namely, that the community shall have some right in the capital asset which the subsidy and the credit of the community sought to create. During the whole of our discussion upstairs, and I think during the discussion on the Second Reading, that principle was never really challenged in any part of this Chamber. You never attacked the argument that you could not give public money without being perfectly certain that you were going to have some right in what you had helped to build up. Sc that I do not worry very much at the moment about the precise terms of the Amendment, if we make it perfectly clear that we are after what we believe to be an important principle.
6.0 P.M.
In the second place, the Minister opposes the proposal because he argues that we are in fact getting a definite benefit for the State in the creation of this new industry, and he seems to suggest that we on our side hold the view that we are not getting a benefit if that kind. On that point, I think, he has altogether misunderstood our argument, or we may not have put it clearly, but we have always said, quite candidly, those of us who have supported the Bill, that you are going to help create a new industry in the country, and many of us were driven, with some reluctance, to submit to the idea of a subsidy simply because we considered that expenditure of money better than the giving of an unemployed donation, which did not create any capital asset at all. That was the plain choice that we put to ourselves, and, accordingly, we got over the difficulty of a subsidy, but we hold on to the importance of safeguarding the principle that I am discussing. The Minister says we are going to get the benefit of this extended industry. The very same argument would apply to any other enterprise in the State. In point of fact in taxation, directly and indirectly, we are giving a great many subsidies, and unfortunately we rarely have a public asset in respect of that kind of subsidy, although I do not suppose one could be very long at the Treasury without coming to a conclusion that the time has come to review that class of legislation. We do at the same time confer a very real benefit upon the people 2145 who are going to get this £3,000,000, or whatever it may be. We are certainly going to give them a public utility return at the very lowest, and probably something more, and we are doing all that at the expense of people who are struggling along under a load of £800,000,000 per annum of taxation at present. I do not think for a single minute that the Minister can press unduly that argument of gain or benefit to the State. We recognise that, and we merely ask that the taxpayers shall participate in the benefit in some definite and ascertained way.
The third point which the Minister argued against this Clause, is that our proposal involves a breach of agreement with the people who have put up money for these beet sugar factories, and have supported the industry in other ways up to the present stage. There can be no validity in that argument, because all that was on the Order Paper when we left office, at that tragic moment in our rational history, was a Financial Resolution which indicated the subsidy which we were going to give to this new industry, but did not specify the terms of the Bill which was to be introduced. It was a Resolution which the House of Commons was perfectly free to amend in any direction it pleased. There is no breach of agreement, because all that was on the Paper was the Financial Resolution.
That Financial Resolution was on the Paper for a considerable number of days, and before and during that time, no doubt, capital was being subscribed and arrangements made either to start or to extend this industry. Every man who issued a prospectus in respect of beet sugar, and everybody who had any connection with it, knew perfectly well that there remained to the House of Commons, and must remain to the House of Commons, perfect freedom to turn down the Bill if it so pleased, and certainly perfect freedom to give the subsidy under such conditions of public protection as this House might decide to enforce. Therefore, there can be no breach of agreement from the point of view that the Minister has suggested, because, strictly speaking, anybody who subscribed capital to these undertakings could have no definite notion until the Measure is on the 2146 Statute Book, which will be a month or so hence.
I have tried to cover as briefly as possible the three points which have been argued by my right hon. Friend in opposition to our proposal, but there remains one large consideration with which I will deal in a sentence or two. In reality, we are giving very much more to this industry, if we really knew it, than the direct subsidy which is embodied in this Bill. Many of these beet sugar factories are coming forward and asking for guarantees under the Trade Facilities Acts in respect of the capital expenditure they are undertaking, and the employment they hope to find. I make no complaint about that. They are perfectly entitled to do so, but the practical effect of that is that they will be able to raise money for the capital expenditure, with the guarantee, on rather easier terms than they could raise it without the guarantee, and I am not sure that the existence of this Bill, with its subsidy, will not also help them in the same direction.
You have therefore, to add to the immediate subsidy you are giving, the benefit you may confer upon them under the Trade Facilities Acts, and if you add these two things together you will find that you have done a very great deal for one new and, no doubt, important industry. In respect of that, you have absolutely nothing to show as the property of the taxpayer, save the general benefit of work which flows from industry, which applies equally to any other enterprise in this country which has not the benefit of £3,000,000 subsidy under an Act of Parliament. I know the difficulty that is in my right hon. Friend's mind. He argues with great kindness and geniality, which we all recognise, but in effect his last sentence is this: "I do not want public ownership or Socialism by this route." Very well, then do not take public money in this way. If you are going to take public money to the tune of £3,000,000 or more under this Bill, do let us be able to look the taxpayers in the face and say that we have some actual capital asset, having regard to the fact that we are giving the fullest protection during the 10 years subsidy period to this new industry.
There is a frightful amount of misconception about public ownership and Socialism. I say with perfect candour, 2147 that we are not entitled to use public money, and to go on using public money in such a way, without making this perfectly plain, that this is only one application of a much wider policy of the State. We are committed already to £70,000,000 of guarantees and contingent liabilities under the Trade Facilities Acts. We have given £5,000,000 to the Colonies for schemes of development in which we have no capital right of any kind. We are going on doing that, and we arc doing it at a time when our debt is £7,700,000,000 and our annual taxation is £800,000,000. I do appeal to the House to support the Amendment.
Mr. T. THOMSONThe form of the Amendment seems to be open to considerable criticism, yet it seems to me that it has a sound principle behind it. We are giving preferential treatment to one selected industry whose purpose is to build up a profitable business in this country where one does not exist at the present time. Public money is being used and public credit is being advanced for this particular purpose, and it seems to me to be not unreasonable that the public if there are profits should have a share in that to which they have so largely contributed. I cannot see any very dangerous doctrine of Socialism or anything subversive of sound government or sound financial business in that proposition. Surely, partners in business and those who put up capital are entitled to a return on that which they have subscribed. Surely, because the capitalist in this case happens to be the State there is no reason why it should be deprived of that return which it would have got if it had subscribed the money in a private capacity. Therefore, I support the Amendment.
Why should one industry have all this advantage which it is honed will accrue, at the expense of other industries? The rest of the industries in the country are to contribute through taxation to the subsidising of this particular industry, and if the industry is going to make large profits, it is perfectly sound from the business point of view and from the point of view of equity, and the national point of view, that the State should have a share in the profit It is only if profits are made. It is only after a considerable percentage has been paid on the share 2148 capital, before anything can be allowed to the public. The method of ascertaining the share seems to me somewhat ingenious, if not fantastic. There is a confusion of actual values and revenues, out the method of calculating the amount is perhaps only a minor matter, because it is the principle which is at stake. When the Minister was speaking one felt certain qualms in voting for the Amendment if the right hon. Gentleman was correct when he said that there would be a breach of bargain if the Amendment were carried. I have been reassured by what has been said by the late Financial Secretary to the Treasury that there is no breach of any bargain made between f-he Chancellor of the Exchequer in the last Government, and those interested in the provision of sugar-beet factories.
There can be no breach, if we look at the Financial Resolution that was put on the Paper. Beyond that, I take it that there was no undertaking in any private negotiations between the late Chancellor of the Exchequer and those interested in sugar beet which would lead them by any chance to regard this proposal as a breach of agreement. Whatever proposals are made, the House of Commons, as the trustee of the public purse, has the last and final word, and is entitled to Jay down conditions. Therefore, in so far as We are assured that there is no possibility of any breach of a bargain that was made by the late Government, I shall be glad to support the principle underlying the Amendment, which I take to mean that where public money is expended in private enterprise, and profits accrue, the public are entitled to a share of the profits. It is important when we are launching out into newer fields, and when public money is being given and will be still more largely subscribed towards private enterprise in one form or another, that we should at the very outset safeguard the public and see that its interests are protected, and that it shall have a share in any profits which through its agency may be built up.
§ Mr. MACKINDERI support the Amendment for the important reason that the Minister in refusing it is laying down the principle that the British people, through the British Government, can advance money up to almost any amount and secure absolutely no return for it and no opportunity for having con- 2149 trol as to how that money shall be spent. The sugar beet industry is one of the most important experiments that this country could undertake. It is an experiment which may land us, if it is successful, into much more important excursions in connection with other industries. I believe that with State assistance any undertaking can be made a financial success. That is an opinion which I hold, rightly or wrongly. I have a feeling that if the sugar beet industry does turn out to be as successful, as we hope it will be, there may be an opportunity for other new industries to start with prospects of a great measure of success, with support from the Government, which may react in favour of the British people as a whole. It is not only an investment on the part of the shareholders, but on behalf of the British public.
The Minister tried to tell us what the State would get back as a result of the money invested. I was not quite clear what ho said we should get back. I do not know whether we shall get cheaper sugar; I do not think we shall. I do not know whether we are going to get an illimitable amount of sugar. I cannot see what benefit the public is going to get back as a result of putting this money into the enterprise. The fact remains, that several millions of money will have been invested by the British public in a new concern, and no opportunity is going to be given for the public to get anything back for the money which is being invested. If this scheme proves successful, I say from my point of view and that of my friends that we shall be prepared to introduce new schemes which will not only provide an opportunity for work, but an opportunity for trade extension in this country, which we think as much about as do hon. Members on the other side. I want this scheme to be a success, but I want the results of the success to come back not only to the gentlemen who invest their money in the way of shares but I want some of the benefit to come back to the British people who are, so to speak, investing some of the small coppers which otherwise they might get in the way of relieved taxation.
One point which the Minister has not even attempted to answer is the suggestion that the Treasury should be allocated one representative on the Board of Directors of this undertaking.
2150 Not a single hon. Member on the other side of the House would think of investing his money in any concern to the tune of millions of pounds and not expect to have a representative to help in deciding how that undertaking should be conducted. At least, it is due to the House that the Minister shall explain the reason for ignoring the latter part of this Amendment, and let us know exactly what is the attitude of the Government on this matter. I hope that the mover of this Amendment will press t to a Division, because T believe that we should have some adequate return, especially from this new infant industry, and, if the State is to provide such a large part of the capital, it should have direct representation on the directorate and be entitled to a share of the profits after a certain time.
§ Colonel WEDGWOODI hope that the House will give this question a little more consideration before turning down the Amendment. This is no minor Amendment. It is a question of enormous importance to the whole future of the country. If we can indicate now that any future assistance from the State will be coupled with the certainty of Government control over the industries subsidised, and at the same time with a certain return to the taxpayers in the shape of a contribution to revenue in return for the subsidies, then not only shall we have established a very sound principle, but, as the hon. Member has said, we shall make it possible to go further. This Amendment applies to a particular industry, which is the first industry that has been subsidised to any large extent by the Government. It refers to the sugar industry. All over the Continent of Europe the beet sugar industry in the past has been subsidised by Governments, and we have seen in every one of these countries enormous wealth created by the beet sugar refineries. We have the name of Lebaudy, which is known all over the world, the Emperor of Sahara, who made millions through the assistance which was given by the French Government to that industry.
It seems that most hon. Members think this business which we are assisting to establish will be a failure, or will have great difficulty in paying its way, even with the subsidy, and that when the subsidy ceases there will be no profits to 2151 be made. That may be the case, but it has not been the experience in other countries. We do know that one particularly rich man is putting his money into this thing, and he counts on making the sugar refining industry in this country a great success. He is putting millions into it, though no doubt he will get a Government guarantee before the money goes into it. If it be possible therefore that this sugar industry may develop into a gigantic financial success, as hon. Members contemplate in time, then, when such a gigantic success as that shall be built up by the advancing of £3,000,000 of the taxpayers' money, we shall have no control over that enormous monopoly, and at the same time no share in the enormous dividends paid. In such a case surely we should be criminal to throw away the chance of having something to say in the business.
Great play has been made with the terms of the Amendment, but the terms of the Amendment are of no importance. The important point is, first to have control over the management of this concern through representation on the Board of Directors—and against that proposal no arguments have been advanced—and second, that the State shall be in the position of a deferred shareholder, and that, after a certain rate of interest has been paid on the capital, the State shall come in as a deferred shareholder and take the profits. If there be a loss it has to be borne by the State, but if there be a profit over and above a certain reasonable interest—I do not say that it is certain that there will be—we should be criminal to throw it away. The Minister of Agriculture talked a great deal about the advance which we have made on this side of the House since the question was debated in Committee, and said that we had reduced our demands from 100 per cent. of the money advanced to 50 per cent. He knows as well as anybody else that it does not matter whether it is a 300 or 50 or 1 per cent., and that if you are going to raise capital and you get a certain definite income and the State gets all profits above that income, it does not matter about the nominal value you attach to the deferred shares. The principle is that anything over a certain amount shall go to the State.
2152 Against that no argument has been advanced. The people who advance their money are safe. They will get their fixed rate of interest. The public on the other hand will get some security against the price of sugar being unreasonably raised in times of scarcity by this monopoly, and will also get a reasonable share in any prosperity to which it may attain. I hope that hon. Members will not look on this question as a matter of Socialism against individualism. It is a common-sense business proposition. No man, on his own initiative, would put these enormous sums into any business without asking either for the right to control it or some reasonable share in the profits made. We have no right to deal with the taxpayers' money in a different way from our own. We are trustees for the taxpayers of this country. To throw away the possibility of having a substantial return, to throw away all control, as an abstract demonstration against having anything to do with State control, is derogatory of our duty as trustees for the money of the public.
§ Mr. WALLHEADI am somewhat struck with the attitude of hon. Members opposite with regard to this question. I would not subsidise at all except the State got something in return. This is a case in which the much-vaunted private enterprise finds itself entirely at a loss, and while hon. Gentlemen opposite criticise us tremendously for wanting to utilise the resources of the State in the public interest they are not averse to calling on the State to invest sums of money to assist private enterprise to do what otherwise it would fail to do. I was astonished at the attitude taken by the Minister with regard to this question of finance and his sub-division of the moneys into revenue and capital. I understand from the right hon. Gentleman who spoke from this Front Bench a moment or two ago that the total amount of money likely to be subscribed under the subsidy may run to about £3,000,000. I should be interested to know that the amount of private capital proposed to be put up is £2,000,000 to £3,000,000 so far as the immediate future is concerned. Assuming that the amount of capital subscribed is £3,000,000, and assuming that the full subsidy will be paid over to the extent of another £3,000,000, why should the Minister attempt to divide this £6,000,000 2153 into two watertight compartments, and say that £3,000,000 is for buildings and machinery, and that it is capital which would be entirely lost unless the State subscribed £3,000,000 more, which is to pay no return whatever so far as the State is concerned. If you like you may turn it round and say that the £3,000,000 is capital subscribed by the State, and that the £3,000,000 subscribed by private enterprise cannot expect a revenue. There is no sense in sub-dividing it.
It comes to this, that the whole £6,000,000 is capital. £3,000,000 for buildings and machinery, and £3,000,000 as the cost of establishing the business, and the State has to provide £3,000,000 and is to get no return for it except these vague returns of which the Minister has spoken. That does not seem to me to be a business proposition, and, Socialist as I am, I should refuse to assist private enterprise in this particular way with State money unless it is prepared to recognise the public subscription by giving the State a share or control in the undertaking. I agree with what has been said by my right hon. Friend. Here is a big business that may become a vast monopoly, and we have seen enough of the operations of monopolies to want to avoid the establishment of further monopolies by all means in our power. If there is to be a monopoly, I believe in a monopoly in the public interest and not in the interest of private individuals. So far as my economic theories are concerned, I do not think that I need apologise for them, but if I were an individualist and believed in private enterprise I would not come to this House pleading for the money of the State and then attack the Socialist principle which I was invoking for my own assistance so far as this particular business was concerned. I would endeavour, as far as possible, to stick by what I professed, and I am amazed that hon. Gentlemen who come here and denounce us in this House for attempting to establish the principle of the utilisation of public powers for the public good, should also come here to invoke these public powers in the interest of a handful of men who think that by the utilisation of State funds they can obtain the means of establishing a great monopoly from which they expect to reap a rich harvest for themselves.
§ Mr. CLYNESrose—
§ Sir MALCOLM MACNAGHTENOn a point of Order. May I ask if this Amendment is in order without a Money Resolution to support it? It is an Amendment which proposes that, after a certain lapse of time, certain companies are to pay certain moneys to the State. I submit that this Amendment is not in order without a Money Resolution to support it.
§ Mr. TAYLORThis is money to come.
§ Mr. SPEAKERIf the hon. and learned Member's suggestion be that this is a taxing proposal, the point is one which should have been submitted to me at the beginning of this Debate. I had not considered it from that point of view, and I do not feel that I ought at this moment to withdraw the matter from the House, when it is about to come to a decision.
§ Sir M. MACNAGHTENIs it not proposing, it is true after the lapse of 10 years, to tax these particular companies if they show profits, and profits must represent money?
§ Mr. WALLHEADrose —
§ Mr. SPEAKERThis is a point of order which was addressed to me. I must say that the point which has been raised may have something in it, but it should have been raised at an earlier moment in this discussion. I could then have dealt with it. I have doubts about the matter, and I think that the doubt should be given in favour of the Amendment. I am not prepared to withdraw the Amendment from the House, at a moment when the House is about to come to a decision on the matter.
§ Mr. DUNCANMay I ask your guidance on another point? Is it not within the competence of the House to lay down a condition in a matter of this kind, where the credit or money of the State is used to create private enterprise?
§ Mr. SPEAKERAs I have decided to allow the Amendment, I need not follow that argument.
§ Mr. CLYNESI am sorry that I did not bear the speech of the Minister of Agriculture against the Amendment earlier in the Debate. There has been a succession of speakers in favour of the 2155 Amendment, and a sustained and solid silence on the part of hon. Members opposite. No doubt hon. Members opposite are relying for victory on the weight of numbers when they go into the. Lobby. I understand that the right hon. Gentleman in his speech did not touch at all upon one point in the Amendment. I want to direct his attention to that point and to submit that it deserves some answer. We have argued against what might be termed the financial part of this Bill, and have contended that after a 5 per cent. dividend is paid to those who have their money invested an apportionment of shares shall accrue to the State. I understand that the right hon. Gentleman has commented upon, if he has not answered, that part of the case, but he has said nothing as to securing for the State some degree of representation in the conduct of these great undertakings. The Amendment specifically asks for such representation on the Board of Directors. I submit that among the right hon. Gentleman's first duties as a Minister of the Crown is the safeguarding of the State's interests in relation to public money, and that unless he does meet this demand with some argument, he is deliberately evading a Parliamentary service. Accordingly, I ask that he should give to the House, before the Division is taken, some reply to that part of the Amendment.
§ Mr. WOODIt is only by leave of the House that I can speak again. I owe the House an apology for not having, in my earlier observations, directed my attention to that point of the Amendment. My attention was mainly concentrated on the other and larger issue raised by the Amendment. I do not now wish to delay the House in coming to a decision on the point. In reply to what the right hon.
| Division No. 45.] | AYES. | [6.38 p.m. |
| Adamson, Rt. Hon. W. (Fife, West) | Clowes, S. | Griffiths, T. (Monmouth, Pontypool) |
| Adamson, W. M. (Staff., Cannock) | Cluse, W. S. | Groves, T. |
| Alexander, A. V. (Sheffield, Hillsbro') | Clynes, Rt. Hon. John R. | Grundy, T. W. |
| Attlee, Clement Richard | Connolly, M. | Guest, J. (York, Hemsworth) |
| Baker, J. (Wolverhampton, Bliston) | Cove, W. G. | Guest, Dr. L. Haden (Southwark, N) |
| Barker, G. (Monmouth, Abertillery) | Davies, Rhys John (Westhoughton) | Hall, F. (York, W. R., Normanton) |
| Barnes, A. | Day, Colonel Harry | Hall, G. H. (Merthyr Tydvil) |
| Barr, J. | Duncan, C. | Hartshorn, Rt. Hon. Vernon |
| Batey, Joseph | Dunnico, H. | Hastings. Sir Patrick |
| Bowerman, Rt. Hon. Charles W. | Gibbins, Joseph | Hayes, John Henry |
| Bromley, J. | Gillett, George M. | Henderson, Rt. Hon. A. (Burnley) |
| Brown, James (Ayr and Bute) | Graham, Rt. Hon. Wm. (Edin., Cent.) | Henderson, T. (Glasgow) |
| Buchanan, G. | Greenall, T. | Hirst, G. H. |
| Cape, Thomas | Greenwood, A. (Nelson and Colne) | Hirst, W. (Bradford, South) |
| Charleton. H. C. | Grenfell. D. R. (Glamorgan) | Hore-Belisha, Leslie |
§ Gentleman has said, perhaps I may quite shortly indicate one reason which in my mind is effective against assenting to that part of the Amendment. I think that the Amendment would have been not only intelligible, but would have had more force behind it, if it had been directed to securing representation of the Treasury on the Boards of businesses to which the Government and the taxpayer had a definite capital commitment. That is a procedure which is very often followed under the Trade Facilities Act. But this case is very different. There is no capital commitment for the taxpayer. All that he is invited to do is to pay by results to factories whose results enable them to claim payment. From the point of view of the State and from the strict financial standpoint it is evident that the State is only interested in the question whether the factories pay or not from the point of view of the success or failure of the main purpose for which this policy is introduced. That is to say, if the factories fail, the State obviously saves money directly. If the factories succeed the State has to spend more money. Therefore, unless it be suggested that the presence of the Treasury representation would make the management of the factories more efficient, I cannot think that there is any strong argument for the inclusion of a Treasury representative on these Boards, as there might be if the State had definitely sunk or found the money for the establishment of the enterprise. That, therefore, is my reply to that part of the Amendment, and I regret that for these reasons I am unable to alter the advice which I gave to the House earlier.
§ Question put, "That those words be there inserted in the Bill."
§ The House divided: Ayes, 123; Noes, 290.
2157| Jenkins, W. (Glamorgan, Neath) | Richardson, R. (Houghton-le-Spring) | Thomson, Trevelyan (Mlddlesbro. W.) |
| John, William (Rhondda, West) | Riley, Ben | Thorne, W. (West Ham, Plaistow) |
| Johnston, Thomas (Dundee) | Ritson, J. | Thurtle, E. |
| Jones, Morgan (Caerphilly) | Roberts, Rt. Hon. F. O. (W. Bromwich) | Tinker, John Joseph |
| Jones, T. I. Mardy (Pontypridd) | Robertson, J. (Lanark, Bothwell) | Trevelyan, Rt. Hon. C. P. |
| Kennedy, T. | Robinson, W. C. (Yorks, W. R., Elland) | Varley, Frank B. |
| Lansbury, George | Rose, Frank H. | Viant, S. P. |
| Lawson, John James | Salter, Dr. Alfred | Wallhead, Richard C. |
| Lee, F. | Scurr, John | Walsh. Rt. Hon. Stephen |
| Lowth, T. | Sexton, James | Watson, W. M. (Dunfermline) |
| Lunn, William | Shaw, Rt. Hon. Thomas (Preston) | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| MacDonald, Rt. Hon. J. R. (Aberavon) | Shiels, Dr. Drummond | Wedgwood, Rt. Hon. Josiah |
| Mackinder, W. | Short, Alfred (Wednesbury) | Welsh, J. C. |
| Maclean, Nell (Glasgow, Govan) | Sinclair, Major Sir A. (Caithness) | Wheatley, Rt. Hon. J. |
| March, S. | Sitch, Charles H. | Wignall, James |
| Maxton, James | Slesser, Sir Henry H. | Wilkinson, Ellen C. |
| Mitchell, E. Rosslyn (Paisley) | Smith, Ben (Bermondsey, Rotherhithe) | Williams, David (Swansea, E.) |
| Montague, Frederick | Smith, H. B. Lees (Keighley) | Williams, Dr. J. H. (Llanelly) |
| Morrison, R. C. (Tottenham, N.) | Smith, Rennie (Penistone) | Williams, T. (York, Don Valley) |
| Murnin, H. | Snell, Harry | Wilson, C. H. (Sheffield, Attercliffe) |
| Oliver, George Harold | Spencer, George A. (Broxtowe) | Wilson, R. J. (Jarrow) |
| Palin, John Henry | Stamford, T. W. | Windsor, Walter |
| Paling, w. | Stephen, Campbell | Wright, W. |
| Parkinson, John Allen (Wigan) | Stewart, J. (St. Rollox) | Young, Robert (Lancaster, Newton) |
| Pethick-Lawrence, F. W. | Sutton, J. E. | |
| Ponsonby, Arthur | Taylor, R. A. | TELLERS FOR THE AYES.— |
| Potts, John S | Thomas, Rt. Hon. James H. (Derby) | Mr. Warne and Mr. Charles |
| Edwards. |
| Lister, Cunliffe-, Rt. Hon. Sir Philip | Perring, William George | Stanley, Col. Hon. G. F. (Will'sden, E.) |
| Locker-Lampson, G. (Wood Green; | Peto, G. (Somerset, Frome) | Stanley, Lord (Fylde) |
| Loder. J. de V. | Philipson, Mabel | Stanley, Hon. 0. F. G. (Westm'eland) |
| Looker, Herbert William | Plelou. D. P. | Steel, Major Samuel Strang |
| Lord, Walter Greaves- | Pilcher, G. | Stott, Lieut.-Colonel W. H. |
| Lougher, L. | Power, Sir John Cecil | Stuart, Crichton-, Lord C. |
| Lucas-Tooth, Sir Hugh Vere | Price, Major C. W. M. | Sykes, Major-Gen. Sir Frederick H. |
| Lumley, L, R. | Raine, W. | Tasker, Major R. Inigo |
| MacAndrew, Charles Glen | Rawlinson, Rt. Hon. John Fredk. Peel | Templeton, W. P. |
| Macdonald, Capt. P. D. (1. of W.) | Rawson, Alfred Cooper | Thompson, Luke (Sunderland) |
| Maclntyre, Ian | Rees, Sir Beddoe | Thomson, F. C. (Aberdeen, South) |
| McLean, Major A. | Reid, Captain A. S. C. (Warrington) | Thomson. Sir W. Mitchell (Croydon, S.) |
| Macmillan Captain H. | Reid, D. D. (County Down) | Titchfield. Major the Marquess of |
| Macnaghten, Hon. Sir Malcolm | Remnant, Sir James | Vaughan-Morgan, Col. K. P. |
| McNeill. Rt. Hon. Ronald John | Rentoul. G. S. | Wallace, Captain D. E. |
| Macpherson, Rt. Hon. James I. | Rhys, Hon. C. A. U. | Ward, Lt.-Col. A.L. (Kingston-on-Hull) |
| Macquisten, F. A. | Roberts, E. H. G. (Flint) | Warner, Brigadier-General W. W. |
| Mac Robert, Alexander M. | Robinson, Sir T. (Lanes., Stretford) | Warrender, Sir Victor |
| Makins, Brigadier-General E. | Ropner, Major L. | Waterhouse. Captain Charles |
| Manningham-Buller, Sir Mervyn | Ruggles-Brise. Major E. A. | Watson, Sir F. (Pudsey and Otley) |
| Margesson, Captain D. | Russell, Alexander West (Tynemouth) | Watson, Rt. Hon. W. (Carlisle) |
| Meller, R. J. | Rye, F. G. | Watts, Or. T. |
| Merriman, F. B. | Salmon, Major I. | Wells, S. R. |
| Meyer, Sir Frank | Samuel, A. M. (Surrey, Farnham) | Wheler, Major Granville C. H. |
| Milne, J. S. Wardlaw- | Samuel, Samuel (W'dsworth, Putney) | White, Lieut.-Colonel G. Dalrymple |
| Mitchell. S. (Lanark, Lanark) | Sandeman, A. Stewart | Williams, A. M. (Cornwall, Northern) |
| Mitchell, Sir W. Lane (Streatham) | Sanders, Sir Robert A. | Williams, Com. C. (Devon, Torquay) |
| Monsell, Eyres, Com. Rt. Hon. B. M. | Sanderson, Sir Frank | Williams, C. P. (Denbigh, Wrexham) |
| Moore-Brabazon. Lieut.-Col. J. T. C. | Sassoon, Sir Philip Albert Gustave D. | Wilson, Sir C. H. (Leeds. Central) |
| Moore, Sir Newton J. | Savery, S. S. | Wilson, R. R. (Stafford, Lichfield) |
| Morrison, H. (Wilts. Salisbury) | Scott, Sir Leslie (Liverp'l, Exchange) | Winterton, Rt. Hon. Earl |
| Nail, Lieut.-Colonel Sir Joseph | Shaw, Lt.-Col. A. D. Mel. (Renfrew, W) | Wise. Sir Fredric |
| Nelson, Sir Frank | Shaw, Capt. W. W. (Wilts, Westb'y) | Wolmer, Viscount |
| Neville, R. J. | Shepperson, E. W. | Womersley, W. J. |
| Newman, Sir R. H. S. D. L. (Exeter) | Simms, Or. John M. (Co. Down) | Wood, B. C. (Somerset, Bridgwater) |
| Newton, Sir D. G. C. (Cambridge) | Sinclair, Col. T. (Quean's Univ., Belfst.) | Wood, Rt. Hon. E. (York, W.R., Ripon) |
| Nuttall, Ellis | Skelton, A. N. | Wood, E. (Chest'r. Stalyb'dge & Hyde) |
| Oakley, T. | Slaney, Major P. Kenyon | Wood, Sir Klngsley (Woolwich, W.). |
| O'Connor, T. J. (Bedford, Luton) | Smith. R.W. (Aberd'n* Kinc'dine. C.) | Wood, Sir S. Hill (High Peak) |
| Owen, Mafor G. | Smith-Carington, Neville W. | Yerburgh, Major Robert D. T. |
| Pease. William Edwin | Smithers, Waldron | |
| pennefather. Sir John | somerville, A. A. (Windsor) | TELLERS FOR THE NOES.— |
| Penny, Frederick George | Spender Clay, Colonel H. | Colonel Gibbs and Captain Douglas |
| Perkins, Colonel E. K. | Sprat, Sir Alexander | Hacking. |
§ Mr. SPEAKERThe next Amendment in (he name of the right hon. Gentleman the Member for North Norfolk (Mr. Buxton), to leave out paragraph (b) of Sub-section (1), is out of order, because it involves an increased charge.
§ Sir DOUGLAS NEWTONI beg to move, in page 2, line 29, at the end, to insert the words
including the cost of any portion of the manufacture of the said plant or machinery which can be more efficiently carried out in the factory than before delivery.
§ Mr. MAXTONOn a point of Order. I understand that the previous Amendment has been ruled out of order. Those Members who are on the Back Bench did not hear the reason for declaring it out of order.
§ Mr. SPEAKERThe reason is that the removal of paragraph (b) would enable, or might enable, more people to come in, and claim the subsidy. Therefore it increases the charge upon the Exchequer, which cannot be done on the Report stage of the Bill.
§ Sir D. NEWTONIt is quite possible that a better form of words might be found to give expression to this proposal than those which I have used in this Amendment. The purpose of my Amendment is to ensure that the 75 per cent. mentioned in paragraph (b) shall be fairly and properly assessed. If this Clause in its present form is interpreted literally, it might prove to be the case that no adequate account would be taken of machinery, which was for convenience or economy erected in the factory itself, instead of being delivered into the factory complete. At the same time, this would be an integral and necessary part of the plant as a whole. If the Clause does not take into account the value of the necessary pipes and joints and communications which may be required to make the machinery and plant effective, I suggest there is grave danger of doing damage to the new factories, and there is danger of the factories being unable to obtain the amount of machinery which they may require front outside sources.
2161 The primary purpose of this Bill is to establish sugar factories on the most up-to-date and scientific principles, and to help the distressed industry of agriculture by providing this new business. It is essential that those factories should be established on the most efficient lines if they are to survive after the period of 10 years following which they will come into the open world of competition. The margin provided in the Bill is, in any case, a narrow one, even if you are going to establish the most efficient factories, and the Amendment provides that whore machinery or plant, such for example as a molasses tank made in England and fitted up ready for use by English workmen is to be delivered in sections—if it can be more efficiently delivered in that form—it shall not be assessed at a lower figure than if it is the final finished work, and that the cost of the whole plant, including the cost of pipes and joints which may be made in the factory on the spot, shall be taken into account in arriving at this figure of 75 per cent. If this be not done, the Measure may prove unworkable. It may be necessary, in order to comply with the Bill as now drafted, to set up special erecting shops, just outside the factory boundaries, and erect plant there, and then drag it into the factory so as to get over this arbitrary line. In order that the machinery may be set up in the most economical way, T beg to move the Amendment.
§ Sir HENRY CAUTLEYI beg to second the Amendment.
One of the conditions on which the subsidy is to be granted is that 75 per cent. of the machinery shall be manufactured wholly in Great Britain. In the case of sugar factories great deal of the machinery and plant is actually erected on the site, and the result of this provision as it stands might be that if the most economical way of building plant and machinery were adopted, the 75 per cent. of British manufactured machinery would be difficult to obtain. I really believe that it is necessary in many cases to have some small percentage of foreign machinery. I think it is a desirable Amendment in itself, and makes for the easier and better provision of machinery for the factories.
§ Mr. WOODI am not sure that I have correctly appreciated the purpose of the 2162 Mover of the Amendment, and, if I have correctly appreciated his purpose, I am not sure that these words would carry it out. I confess, as the words stand, that they appear to me to have the effect of reducing the percentage of machinery that is required to be British. I do not think that is my hon. Friend's intention, but I am advised that may be the effect of his words, and I asure him and other hon. Members that it would not be possible for me to accept an Amendment which was likely to have that effect. I have therefore turned my mind to the possibility of re-drafting the Amendment in a sense conforming to what I believe to be the hon. Member's desire and to the purpose which I myself should have entertained. After a long effort, I have had to abandon the attempt, and I have been reluctantly driven to the conclusion that it is impossible to graft on to the Amendment the words which would be necessary to make it discharge the purpose which I believe him to entertain.
The suggestion I make is that, if he withdraws his Amendment, I will do my best between now and the time when the Bill will reach another place, to see whether the point of substance which I understand is in view can be met in another place. [HON. MEMBERS: "What is it?"] The point of substance I believe to be this: The hon. Member contemplates the possibility of any piece of composite machinery being delivered into the factory, and being valued at a certain figure, let us say, £1,000. He contemplates the possibility of it being more economical to receive that composite machinery into the factory, not assembled, but in its different parts unassembled, in which case it would presumably carry a slightly lower value than in its assembled state, although, in fact, it is the same identical article, only in a different stage of evolution. If am right in thinking that is my hon. Friend's point, I think it is a legitimate point, but I do not think these words meet it, and I therefore ask him to withdraw his Amendment now, and between now and the Committee stage in another place, he and I and others will try to find words which will solve the difficulty.
§ Amendment, by leave, withdrawn.
2163§ CLAUSE 2.—(Fair wages to be paid by employers in receipt of subsidy.)
§ Mr. WIGNALLI beg to move, in page 3, line 28, after the word "shall" to insert the words
be those agreed upon by the Industrial Council, if any, representing the employer and the persons employed, existing in connection with the undertaking, and in the event of there being no such Industrial Council or, failing agreement on the part of such Industrial Council, the wages shall.
§ Mr. WOODPerhaps the hon. Member will allow me to interrupt him to say that in another form I think I could accept this Amendment, but I am not able, for technical reasons, to accept it in the form in which he proposes it.
§ Mr. WIGNALLI am prepared to accept another form of words if it embody the principle.
§ Mr. WOODPerhaps I may read the words which I propose to substitute for those suggested in the hon. Member's Amendment. I propose, after the word "shall," to insert these words
except where paid at a rate agreed upon by a Joint Industrial Council representing the employer and the person employed, be.
§ Mr. WIGNALLI am prepared to accept those words.
§ Amendment, by leave, withdrawn.
§ Amendment made:
§
In page 3, line 28, after the word "shall," insert the words
except where paid at a rate agreed upon by a Joint Industrial Council representing the employer and the person employed, be."—[Mr. Wood.]
§ CLAUSE 4.—(Repayment of amounts improperly obtained and penalty for false statements, etc.)
§ Mr. WIGNALLI beg to move, in page 4, line 31, at the end, to add the words
(3) If it is found at any time that any person who has obtained any payment by way of subsidy is paying to persons employed by him in connection with the manufacture of sugar or molasses wages less than those settled by the Industrial Court under the provisions of Section two of this Act he shall, in respect of each offence, be liable on summary conviction to a penalty of fifty pounds.7.0 P.M.I am afraid that my second Amendment is not going to be accepted as easily as 2164 the first Amendment I moved, because on the first Amendment there was some ground of agreement. I am rather inclined to think, from what I know, that there is not the same ground of agreement on tins second Amendment. The real purpose of the Amendment is the sequel to what has been previously stated. In examining the Bill, we found that there were safeguards and conditions made to practically everybody concerned in the manufacture of beet sugar—the interest of all was safeguarded—except the workmen engaged in the production of the commodity with which he is dealing, and on the Committee stage we moved certain Amendments which were very sympathetically considered and very readily met by the right hon. Gentleman (Mr. Wood). It is possible for an industrial council to be set up covering the industry, or it is possible for any other form of board to be set up in connection with the industry, but it is altogether another thing to keep them intact and to keep them working singly. In the sugar refining industry there was an industrial council existing for some considerable time when the rates of wages were fixed in connection with the industry. If the employers refused to accept-the decision to pay the wages agreed upon, they adopted a remedy which has been undoubtedly the weakness of the industrial council; they backed out of the council and by backing cut of the council they refused to carry out their obligation which was undoubtedly involved as being part of the industrial council, with the result that one or two firms refusing to pay crippled the whole thing and destroyed the machinery that had been set up to obtain this sane and sensible method of adjusting wages and maintaining good feeling and good-fellowship in the industry.
We are trying if it be possible to prevent a repetition of that occurring. This is the bone of contention. We provide here a penalty in connection with the agreement arrived at, and we say that if an offence is committed a penalty of £50 shall be imposed. I know this is a new departure and that it is advancing a new principle, a new idea, into industrial life, and one that may not be acceptable or palatable to a good many people, but we have got to realise a certain phase in industry, and it is manifested in various 2165 ways as wages advance. I am prepared to say from my experience that there is a good deal of human nature in all sorts of employers, and, if they can take advantage, by reducing wages or paying low wages, they will certainly do so, armed with the same old story, "Well, the cost of living is much cheaper in the country than it is in the town. There is not so much to pay for rent. Consequently, if you save a bit in that way we must have it out of you." We arc trying to prevent that, and, for that reason, we have tabled this Amendment, in the hope that it can be carried and put into effect. I do so with the full assurance that there is no hon. or right hon. Member of this House who does not desire to safeguard the interests of the workmen just as much as he desires to safeguard the interests of those who have invested in the industry. This State subsidy makes the industry practically a State-owned concern for some years to come: for at least 10 years we can say it is State property, and, consequently, we ought to see that the workmen are safeguarded and given a fair chance. For that reason. I hope the House will accept that Amendment, as it completes the order of things which was started in Committee by the right hon. Gentleman (Mr. Wood) accepting or agreeing to an Amendment which brought into existence the form of agreement and, added to it, by allowing industrial councils to be the means of settlement. If this part be added, it makes the thing complete, and it will be for the interest and the good of the community at large.
§ Mr. B. SMITHI beg to second the Amendment.
It is obvious, as we have accepted the principle of the Amendment preceding this one, that some form of safeguard should be instituted. In almost every phase of the conditions under which subsidy is given, there is protection or a penalty, except when it comes to the workpeople. The Association, assuming the re-forming of the Whitley Council, is a purely voluntary one. We find already existing refiners whose very great fear is that the establishment of the new refineries in rural areas will be instituted against them detrimentally, not only to them as employers but to the industry itself. Being a voluntary industry, we feel that it should not be allowed to happen as has previously happened when 2166 a rate of wages is agreed upon, that an employer should be able to slip out and not conform to the conditions or agreement arrived at, thereby breaking down the council and bringing down the wages. The principle of the Amendment has been accepted that if there is not a council the fair wages agreement should apply. Surely it is not going too far to say that if the principle of that Clause is not carried out by employers a penalty ought to be imposed upon them. The Minister met us on the first Amendment. If a person obtains any payment by way of subsidy that would bring him within the purview of it. I do not know whether the Minister will argue in that way. If so, probably we shall be satisfied, but the fact remains that the time has arrived when this House, in agreeing to legislation for subscribing to the wellbeing of industries by way of subsidy, ought to ensure that the workpeople employed in that industry are adequately paid in common with other classes of workpeople.
§ Mr. WOODThe Mover and Seconder of this Amendment were, quite accurate in stating that in Committee, when this question was under consideration, there was a very thorough consensus of desire to make the most effective provision possible to cover the conditions of those employed for wages in this new business to which public money is being devoted. Considerable effort and thought have been directed to the best way of doing it, and the hon. Member (Mr. Wignall) who introduced the Amendment, I think, was conscious of the difficulties attached to his Amendment and in the same way of the difficulties attached to the solution I have suggested; or, indeed, any solution which can be suggested. It really is a choice of evils which course, on the whole, it is wisest to adopt. I have suggested, and I still suggest, as things stand now, that the House should proceed upon this principle. Where there is an Industrial Council we take their agreement, and where there is no Industrial Council, or where it does not agree, we bring the Fair Wages Clause into operation. If there be any dispute about the Fair Wages Clause we will submit that to an Industrial Court.
I want to emphasise why I stop there instead of going on one step further. Hon. Members opposite suggest the im- 2167 position of a penalty of £50 on summary conviction on any employer who fails to carry out an award. It is not through any friendliness to employers in this respect that I take up that position, or that I do not believe that it might be in the power of the employer or some small minority group of employers to affect the well-being of the industry, to deliberately wreck machinery that is set up and is calculated to do so much for the general harmony of the whole industry. It is not that. If that were the only consideration I should have no hesitation at all in accepting the Amendment, but my difficulty is this. The House will bear in mind that both these Industrial Councils—with which you, Mr. Speaker, have been so closely connected, and of which, I think, you were the parent—and these Industrial Courts were established on a wholly voluntary basis. Indeed, I suspect, although I cannot claim to speak with authority on the matter, that one of the reasons that they have been so successful is that they have been established and maintained upon that wholly voluntary basis. I cannot doubt that the instant you alter that voluntary basis and make them, directly or indirectly, of a compulsory character you will alter the whole atmosphere in which they function, for that is, of course, what you are doing by this Amendment. In this Amendment they propose to endow the Industrial Court with compulsory powers vis-à-vis the employers. Are they sure that, if they start on that road, the next move will not be to endow the Industrial Court with compulsory powers vis-à-vis the unions? Are they anxious to see that? A great many of their colleagues outside this House, I suspect, are not, and I, therefore, venture to warn them of the results that may follow from entering on this path.
Lastly, I would suggest to them and to the House that, if we are to introduce compulsion into this Industrial Council and Industrial Court hierarchy at all, it should be done rather by means of general legislation than by means of wholly exceptional legislation in regard to one very small industry, as it is proposed to do in this Amendment. Therefore, recognising indeed that my plan is not a perfect one, but recognising what 2168 are, I think, the more weighty objections, on the long view, to the plan suggested by hon. Members opposite, I must regretfully state my inability to accept the Amendment, and express my hope to them that they will realise, as I am sure they do, that I have done my best to meet the objections that we all have at heart together, and that, on consideration, they will not think it necessary to press the Amendment to a Division.
§ Miss WILKINSONWith regard to the Minister's suggestion that, if we seek to give compulsory powers against the employers, they may in turn seek compulsion against the unions, is it not a fact that these are only minimum wages, and that in the Trade Boards Act, which is working quite well, while it is open to the unions to ask for more, the employers cannot pay less, so that, as a matter of fact, this principle is already established in the minimum wage legislation of this country? With regard to the point that the success of the joint industrial councils has been due to their voluntary character, while I dare say that that was true in the early days, I would like to ask whether the right hon. Gentleman considers that that can now be maintained, in view of the experience of the Soap Joint Industrial Council, where, when the wages began to fall because of the slump, the great Soap Combine, the Lever Combine. simply smashed the machinery by saying: "This is merely a voluntary wages board, and we are not bound by it," and simply reducing their employés wages, without any reference to the Joint Industrial Council at all. While I can quite see the force of the argument that, if you are going to alter the whole basis of joint industrial councils, you had better do it by a general Rill rather than by a special Bill, I would like to ask whether the Minister docs not consider that a very useful experiment might be made with this particular Sugar Joint Industrial Council, because it is a subsidised industry, and because the Government have very special powers in this respect, and that it might be very much more difficult for them to undertake the enforcement of such a thing on the Soap Council until the matter had been tried out in some smaller sphere. I would like to ask whether he does not think a very useful ground for experiment might be found in this particular Sugar Industrial Council.
§ Mr. SHORTWhile the House will appreciate the very friendly tone and attitude of the Minister towards this Amendment, I think there will be some disappointment in many directions at his failure to accept it. He seems to have stressed the argument that industrial councils as they exist to-day are voluntary in their character, and that there is nothing in law to enforce any decision at which they arrive, and he seems to think, therefore, that it would be wise and judicious on our part to maintain that principle in so far as this particular industry is concerned. We are incorporating a new principle in this industry, in that we are assisting in the creation of a new industry by bringing to its aid the financial support and credit of the country. Consequently, it seems to me reasonable that we should not merely seek to lay down conditions of employment and to secure, having regard to the financial support that the State is giving to the industry, fair rates and wages, but (hat when those rates of wages are fixed, even by voluntary associations, we should go further and seek to enforce them by some statutory means. That is the purpose of the Amendment, and I should have thought that the right hon. Gentleman, having gone so far, and shown his goodwill and anxiety, which we all appreciate, in the matter of the wages of the workers in this industry, would have been willing to have gone a step farther.
On the other hand, he feels that there might be some danger in the application of this principle of compulsion. He does not suggest, if I understood him aright, that it would create any discord in this particular industry. He does not foresee, I gather, any danger in that respect, but he seemed to suggest the possibility of some danger accruing to the trade union movement. Upon that matter, I think the trade union movement can look after itself. I think we are strong enough to prevent anything being forced upon us unless we desire it in some measure. We have not been afraid of Trade Boards. I know that they are dealing with what are termed "sweated" wages, and that Trade Boards exist for the purpose of improving the standard of living of people engaged in such industries, but we have here a grave danger that something similar might obtain in this industry, because of the low wages that are paid 2170 in rural areas, and it is because of that very danger that my hon. Friends put forward their previous Amendment, which the Minister was good enough to accept. If that danger exists, or is likely to exist—and it is acknowledged by the acceptance of the previous Amendment that it is likely to exist—it seems that we ought to go a step further, and enforce the wage when it is once accepted and agreed upon.
The Bill in its present form is by no means a perfect arrangement. It is not an arrangement which will guarantee a very high standard of living for the workers in the industry. No one can say what is likely to happen under the Amendment which has been accepted, but, on the other hand, it seems desirable that, once having established something in the nature of a council, and that council having arrived at some satisfactory wage, we ought to be in a position to enforce the agreement reached between the parties. T had hoped that my right hon. Friend would have been disposed to regard this Amendment with greater friendliness. I regret that he has not been able to do so, and, as I have said, I am afraid there will be some disappointment in. many quarters.
§ Mr. FENBYI, like hon. Members above the Gangway, appreciate to the full the friendly attitude of the Minister with regard to this question, but I fee] that there should be something binding to make this Clause fully operative. T quite agree with the Minister that the more agreement we can have in industry, whether it be in agriculture or in any-other industry, the better it is for master and for man, but I am entirely at a loss to understand the attitude of the Minister when, if I heard him rightly, he suggested that there should be no compulsion in this particular ease. You have, as he knows, and as the House is very well aware, the Agricultural Wages Board Regulations, and you have certain penalties connected therewith, if, in a given area, an employer pays a man less than the amount named in the Order which is applicable to that particular area, the Order having been confirmed by the Central Wages Board. I should like, if I could, to agree with the Minister that every person engaged in this and every other industry is a perfectly honest and honourable man who 2171 will do everything fair and square to everybody with whom he has to deal, but, unfortunately, the facts are against him, and I think a penalty is suggested in this Amendment, not in order to do harm to the good employer. He does not need looking at, but it is the individual who would take advantage of a Section of the Act which allows him, without a penalty, to do something which the Act never intended that he should be allowed to do, and I would like to appeal to my right hon. Friend in this matter. I know him as a very good agriculturist and a very fine landlord in my own county, knowing agriculture from A to Z, as it were, from the point of view of landlord, of farmer, and of labourer. I know his fair-mindedness, and I appeal to him, not only on behalf of the good employer, but in the interest of the man who is not quite so good, and also in the interest of the men who have to work as workers in this particular industry. It has been said that it is a new matter that has been taken up. It is a new venture. Let us do everything we can to make the Act. watertight, and it seems to me, unless I misread this particular Amendment—and the right hon. Gentleman agrees to it all, I believe, except the penalty—that unless the penalty is put in. the Clause will not be operative at all.
§ Mr. C. DUNCANAs one who, as a trade union leader, has had something to do with the administration of the Agricultural Rates Act, may I tell the House that thousands and thousands of pounds have been obtained from employers who were not carrying out the Act, and following judgments obtained in the Courts. The employers were not paying the wages that had been fixed by the Agricultural Wages Board. On this side of the House, perhaps, we sometimes overdo the purely workman's side of the case, but I have been rather surprised that in this Debate we have not had some expressions of opinion from some of the employers, because the matter is just as vital and important to them as it is to the workmen represented by the Labour Members in this House. I know of a case which happened quite recently—it was not in this particular industry—where one employer who was not a member of the Industrial Council was paying rates of wages which enabled 2172 him to compete unfairly in price with the products that he was selling. A dispute took place, and the rest of the employers in that particular industry gave their help to the men in the dispute, because they recognised that this particular employer, if he were allowed to carry on in this way, would have the men in a bad position and trade would go in the wrong direction. After all, what is the position in regard to this Amendment? The case has got to be tried: the offence has to be proved, though there may be something novel in the application of the principle of this industry.
May I remind the Minister of a discussion that took place in this House during last Session, when the whole question was whether the awards of the industrial councils should or should not be enforceable. It must be within the memory of the Minister himself that this Resolution was carried almost unanimously by this House. That is a very important decision. It should indicate to the Minister that, after all, he is not taking a very extreme plunge in this question of seeing that the circumstances which are certainly new and novel in this particular industry are considered in the way we suggest. There surely ought not to be any very great hesitation in accepting either this particular Amendment or the suggestion that in some other form the matter might be reconsidered at a later stage.
§ Mr. A. V. ALEXANDERThere is another aspect of this question than that put by hon. Members who have recently spoken, which I would ask the Minister to consider in the light of the concluding words of my hon. Friend (Mr. Duncan) who has just sat down. This is a Fair Wages Clause on the basis of a contract between the Government and the sugar-producing firms by way of subsidy. If it is not possible for the Minister to accept the Amendment which my hon. Friend has put on the Paper, is it not possible for him between this stage and the consideration of the Bill in another place to devise a form of words which would impose a penalty on the same basis as a penalty is imposed by a local authority where the Fair Wages Clause is abrogated by a contractor?
It may be said that that is difficult to do, because, in the case of these contracts the only remedy by way of penalty is to 2173 withdraw the contracts. I want to submit to the Minister that the basis ot this Bill is a contract between the Government on behalf of the community, and those who are responsible for this new industry; and if the Minister, having regard to a wages dispute, and the award of the Industrial Court having been made—it may be in the interests of the workmen concerned—and not being accepted by one of the firms obtaining the subsidy, a fair penalty is to withdraw the subsidy until the firm pays a fair wage. If the right hon. Gentleman is prepared to meet my hon. Friend in the able case that he put up, he would probably withdraw the Amendment; if he could be assured that between now and the next stage of the progress of the Bill through Parliament, he would consider words to meet this particular point of view.
§ Mr. WOODThe whole course of this Debate exhibits the danger to which the hon. Member for Wednesbury (Mr. Short) has unconsciously drawn my attention, which is that it is always very difficult, if anyone makes a concession at all, to find the next logical place at which to stop. Hon. Gentlemen opposite have quite properly and fairly used the argument that having once begun one ought to go rather further and stretch the concession that has been made. The hon. Lady the Member for East Middlesbrough (Miss Wilkinson) and the hon. Member for Wednesbury (Mr. Short) both drew my attention to what, of course, I was quite familiar with, and that was the existing state of the law in regard to a possible wages dispute, and they also mentioned the law in regard to trade boards. What they said was perfectly true. It is quite true that in those cases the boards have compulsory powers.
But the suggestion that I submitted to the House when I spoke last is of rather a different nature. I do not wish to give any encouragement to the arguments which had been used that the trade boards and the Agricultural Wages Committee are one and the same thing. The suggestion put forward is that I should, by the Amendment, take such a step as to endow bodies which possess what have hitherto been voluntary powers with compulsory powers. The hon. Lady for Middles-borough says, with sweet reasonableness: "Would it not be very wise to experiment and see how it works?" My own 2174 view is that in a matter of this kind an experiment cannot be made without affecting the general principle that is involved, and it is desirable to consider first before you try this new principle. Therefore, with the greatest regret I must express myself unable to accept the Amendment that has been moved. As to my hon. Friend who spoke from below the Gangway, I have only to express my own appreciation of the kind manner in which he spoke, and to assure him that I am alive to what he says, and am as anxious as he is, and, indeed, as any Member, to try to get the best solution that we can find for a difficulty of which we are conscious. The hon. Gentleman who spoke last made a suggestion to the House that I myself have had in mind. I should like to see this Clause made as effective as it can be made. I am conscious of the difficulty of doing it. I am not sanguine of being able to overcome that difficulty. I am quite prepared, however, to apply my mind to the problem again, as he suggested, between now and the Bill reaching another place. If we can find a solution I shall be very glad. I do not wish hon. Members opposite to in any way consider me as pledged to succeed, because, quite frankly, I am not very sanguine of being able to succeed. I will do my best to review the whole question again in the light of this discussion, which has been an extremely useful one. If hon. Members, on that understanding, are willing to withdraw their Amendment, I can assure them that what they have said will have the fullest consideration.
§ Mr. G. SPENCERIn the case of a dispute now, has not the Minister the right, to send the case to the Industrial Court; and if the Industrial Court decides, what power has the Minister to enforce the decision that has been arrived at?
§ Mr. WOODThe hon. Gentleman of course realises that the question he has put has been the difficulty around which the whole discussion has turned. It is to find the most satisfactory answer to that question that I am now again taking this into consideration.
§ Mr. ALEXANDERI am sure my right hon. Friend will do as he has done before, and consult us as to any possible form of Amendment.
§ Mr. WIGNALLOn the assurance that the right hon. Gentleman will take this matter into further consideration, I ask leave of the House to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ FIRST SCHEDULE.—(Rate of Subsidy.)
§ Sir G. COLLINSI beg to move, in page 6, to leave out Column 2.
The object of the Amendment is to reduce the rate of subsidy from 19s, 6d. per cwt. to 13s. for the first few years during which the subsidy is to be granted, and for the last remaining four years to make it as it is in Column 4 in the Schedule. In Committee upstairs I raised the question of the rate of subsidy, and I pleaded with the Minister at that time to grant a subsidy not of 19s. 6d. or 13s., but of 6s. 6d. This afternoon I am choosing a more moderate course, and I hope that I may have, perhaps, same concession from him. It was indicated during the course of our proceedings this afternoon that a certain concession was being made to my hon. Friends above the Gangway. To the interests of the refining industry, which I do not disguise from him I represent in the House this evening, he has held cut no concession of any sort, and the Amendment which I move would have the effect of reducing the rate of subsidy for the first four or five years. It is the high rate during the coming years which raises anxiety in the minds of the reining industry. I have no desire at this late stage to repeat any of the arguments I advanced on former stages of the Bill. I apologise to the House for raising this subject this evening. I have already wearied the House on this subject in the past. But the refiners do fear that with a high rate of 19s. 6d. their interests may be severely affected. They do not fear the lower rate so much. In a later stage this evening the House of Commons will De asked to vote a sum of £516,000 towards the beet-sugar subsidy for the present year. If that large subsidy is to come from the pockets of the taxpayer this year, when only a very few factories are arranged and in working order, what will be the position a few years hence when this subsidy is well known and further factories are put up? I move my Amendment not only in the interests of the sugar refiners, but in the interests of the British taxpayer as a whole.
§ Major CRAWFURDI beg to second the Amendment.
§ Mr. E. WOODI am sure the refining industry can in no sense complain of the manner in which the hon. Member who represents them has been able to champion their cause. He has lost no opportunity of presenting their case, and explaining what they conceive to be the hard treatment this Bill metes out to them. He did it first of all on the Financial Resolution, then on the Second Reading of the Bill, afterwards on the Committee stage, and now here this evening; and he cannot feel that ample opportunity has not been afforded for the consideration of their particular grievances. I would only remind him and other hon. Members that the question he is concerned with is not, and has not been for some years, a new question. On Second Reading I said that, in one form or another, the question had been before successive Governments and successive Parliaments ever since about 1912. On successive occasions the refiners' case has been examined by Departments, by Governments and by Parliaments, and. unfortunately, has not succeeded in securing their assent. That is a significant chain of historical events. I hope I need only tell the House this evening that if they were to accept the hon. Gentleman's Amendment they must be under no apprehension as to what they would be doing. They would completely wreck the whole Bill. The hon. Gentleman might just as well succeed to morrow in carrying a Motion that the Bill be read a Third time on this clay six months, as carry this Motion to-night. Let nobody be persuaded by his eloquence and his powers of persuasion into supposing this Amendment is merely a minor alteration of a schedule. I have never concealed the fact that I believe the refiners are suffering at the present moment, and passing through a period of hardship and difficulty, but all the investigations and researches I have been able to make have led me to believe that their difficulties are due to foreign competition, and that they are using this Bill as a peg on which to hang a claim for protection against foreign competition. That is a perfectly natural and entirely legitimate desire on their part, but it is not a reason for refusing assent to this Bill, which I hope 2177 the House will continue to accord by rejecting the Amendment of the Ron. Baronet if, as I rather hope he may not, he finds it necessary to go to a Division.
Question, "That the words proposed to be left out stand part of the Bill," put, and agreed to.
§ Mr. ALEXANDERI beg to move, in page 7, line 29, at the end, to insert the words
and for every increase of one shilling per hundredweight in the market price of sugar over the standard price of thirty-five shillings per hundredweight the rate of the subsidy shall be proportionately reduced.In moving this Amendment on behalf of my hon. Friend (Mr. Barnes), I want to put very strongly to the right hon. Gentleman a point of view which has already been expressed in Committee, and to which we do not think an adequate reply has been made. We are very much obliged to the Minister for the very courteous way in which he has dealt with us all the way through, but he has not met us in regard to the principle contained in this Amendment. His courtesy has extended to seeing that the farmers are given something out of the subsidy by getting a guaranteed price for their beet; the people who put up the capital have the interest on their capital virtually guaranteed on account of the subsidy; although we have not yet got to the position we desire to reach respecting the wages of the workmen, we have, at any rate, made a start by getting some basis of machinery for securing their wages; but as far as the taxpayers and consumers are concerned, we have no safeguard for them in the Bill. I take it the rates of subsidy in the schedule were agreed upon by the Minister, in consultation with the interests concerned, on the basis of the price of sugar at the date on which the subsidy operates.
§ Mr. ALEXANDERWell, in consultation with the right hon. Gentleman's advisers.
§ Mr. ALEXANDERWell, whoever agreed to them, it does not very much matter to my argument. The point is, What was the price of sugar on the date from which the subsidy would operate?
2178 It was round about 31s. or 35s. per cwt. I take it that the rate of subsidy laid down was such as to allow a fair margin of profit to those who would he engaged in this new industry at that price of 35s. per cwt. It is perfectly reasonable for us to say, in seeking to protect the consumer and the taxpayer, that if the price of sugar goes up to such an extent that profits on the capital of these undertakings in a subsidised industry are largely increased, the rate of subsidy should be reduced pro rata with the increase in profits accruing from the higher price of the commodity. That is a perfectly sound economic proposition which, I think, will appeal to Members with business acumen in all parts of the House.
§ Mr. ALEXANDERThat is a very interesting interjection, because my experience of the negotiations with those concerned in this sugar industry is that they have never hesitated to come forward when prices have gone the other way. They first started with 6s., then the figure rose to 25s. 8d., and I prophesy that at the end of four years, when the subsidy should go down from 10s. 6d. to 13s., we shall be asked to maintain it at 19s. 6d. I venture to prophesy that, It is a perfectly sound course for us to ask the Minister, as head of a public department, and concerned for the interest of the. taxpayers, to see that if there be any likelihood of undue profit being made by an increase in the price of the commodity a corresponding advantage be given to the taxpayer by a corresponding reduction in the rate of the subsidy.
§ Mr. BARNESI beg to second the Amendment.
I think that the best argument for this Amendment is the statement made by the Minister himself, when moving the Second Beading of the Bill, that in his opinion the production of sugar in this country would not affect world prices. What does that mean? The net cost of sugar, and the world's price of sugar, has varied in the last two years from 22s. per cwt. to 40s. I am eliminating the tax, which, when sugar was 65s. per cwt., was 25s. 8d., and now that sugar is down to 33s., is 11s. 8d. If the Minister is well grounded in his argument that the 2179 quantity of sugar we shall produce in this country, even under favourable conditions, will not affect the world price, then I think the Minister and the House must meet this argument. The factories are obviously being established on the cost of production of sugar to-day, and if that is the case, and there is any future increase in the price of sugar, our demand is a quite reasonable one. I think it is largely recognised in the trade to-day that the price of sugar is about as low as it can possibly get. [HON. MEMBER: "No, no !"] Oh, yes, it is. The world price before the War, eliminating tax, was 15s. or 16s. per cwt. To-day, again eliminating tax, the net cost of sugar is about 22s. per cwt. Making allowance for the change in relative values in that period, there is very little difference to-day in the cost of production, in view of the increased prices prevailing. There was not the remotest possibility of reducing the cost of sugar in the 1914 period. Therefore, I think we can argue that we have more or less got to rock-bottom prices at the present moment. This subsidy has been given on that basis.
What will happen in the future? Let me take one very possible contingency. We know that when America went dry the population were driven on to sweet drinks, which meant an abnormal increase in the consumption of sugar. That had the effect of causing a temporary world shortage, and forced up the world price throughout Europe as well as America. There is an increasing tendency for other nations and districts to go dry, and I think it is a natural assumption, even if we do not get prohibition by legislation, that the demand for sugar throughout the world will increase. Therefore, all natural tendencies will be in the direction of forcing up the price of sugar. If that happens we may get a rise of 5s. or 10s. a cwt. in the world's price, but the expenses of production in Great Britain will not necessarily increase, because the cost of transport will not move upwards nor will wages move upwards. It follows, of necessity, that if the market price of sugar rises by 2s., 5s. or 10s. per cwt., that will be a clear profit, given to them by the rise in world price.
The hon. Member who moved this Amendment mentioned that the investor was secured, the farmer was secured, and 2180 that there was a desire to secure the workmen, but he omitted the fact that the engineering industry has also secured its price and its guarantee. When, in a previons Amendment, we asked that the taxpayers should get their security in the form of a share in the assets it was defeated. Now we ask that the consumer and taxpayer should get an advantage if there be any increase in the world price. It is a businesslike demand, which can be justified on all grounds.
§ 8.0 P.M.
§ Mr. WOODI must confess to a certain feeling of disappointment that the hon. Member should have felt it necessary to put down this Amendment again, because although the hon. Member for Hillsborough (Mr. A. V. Alexander) was not present when we discussed this matter in Committee, I had at cue time the hope that my eloquence had been successful in convincing the hon. Member for South-East Ham (Mr. Barnes). [HON. MEMBERS: "Oh!"] Yes, I had been so unwise as to cherish the hope that I had convinced the hon. Member for South-East Ham that this Amendment was essentially a wholly improper Amendment for one so wise as himself to lend his support. As I was apparently not successful, I can only re-state what are the principle arguments that make me unable to accept the Amendment. I pass by the fact that the effect of it would be, of course, to make the subsidy a very variable quantity. The first common ground that everybody who has considered this problem has reached is that wherever you put your subsidy, if you want it to produce results, it must be an assured subsidy; people must know where they are. Under this plan, it would, of course, vary from day to day, from week to week, or from month to month, with the price of sugar, and it would be an uncertain quantity.
And what is the standard price? I observed that the hon. Member had the good sense to say very little indeed about what was the standard price of sugar. He, of course, knows much more about it than I do, but I should be surprised if he differs from me in saying that you have on the same day one price of sugar in London, one in Liverpool and one in Glasgow. Which should be the standard price, and in what way should the standard price be arrived at for this 2181 calculation? I do not think the hon. Member has any very satisfactory answer to give. Then he said that the Amendment must be reasonable, because it is evident that the subsidy must have been calculated in relation to the price in June, 1924, since when the price has altered. But if that was the basis of calculation, I am, of course, bound to accept what he said, and he, indeed, is more likely than I am to know, because it was his Government that made the arrangement. But I have always supposed that the calculation as to subsidy was arrived at, in the main, by trying to arrive at some figure that would represent a sort of rough compromise between the possible fluctuations of price, the value of the remission of Excise, and so on, bringing all these considerations into view.
Therefore, I do not think it is a final argument to say that, because the price has altered since the subsidy was fixed, the subsidy itself should be rendered liable to variations. It is also proposed that the subsidy should be reduced as the price of sugar rises, on the assumption that the mere fact that the price of sugar is rising, implies that the manufacturer is making bigger profits. Let hon. Members apply their minds for one moment to see how fallacious that argument is. It is quite true that the world price of sugar is likely to be regulated, of course, by the world output of sugar, but it is not at all impossible that you might get a rise in the world price of sugar coincident with a simultaneous rise in the manufacturing costs in the British factory. The manufacturer in England might find, and is quite likely to find, his cost of transport going up, his costs of labour higher, and yet the very moment his manufacturing costs are increasing against him, you will come down, because of some chance fluctuation of world price, and reduce the subsidy. I submit that is not a reasonable proposition to make.
Lastly, the corollary, which my hon. Friend below the Gangway pointed out by way of interjection, which I thought was quite inadequately taken up by hon. Gentlemen opposite—the corollary of this plan would be, that if the price of sugar fell, the profit of the factory would be reduced, and, therefore, the subsidy ought to rise. You really cannot have it both ways. You must have it one way or the 2182 other, and I suggest, therefore, that that very simple test of the unwillingness of hon. Members opposite to face the position if the price of sugar fell, and their unwillingness to link that with a revision of the subsidy in an upward direction, is a very fair test of the very unsatisfactory character of their proposal. For these reasons—and I apologise for giving them at rather greater length than I intended, but I think the Amendment is one of importance—T must invite the House not to accept the Amendment, and I hope the hon. Gentlemen will not feel it necessary to divide the House.
§ Amendment negatived.
§ Bill to be read the Third time to-morrow.