TRADE FACILITIES [MONEY]. (Hansard, 22 February 1926)

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill)
This Resolution is the foundation for a Bill with which hon. Members with previous Parliamentary experience will be fairly familiar. The Bill to be founded on this Resolution will be necessary because the existing Act expires at the end of the present financial year, that is at the end of next month, and because the maximum sum which can be guaranteed under that expiring Act is too near exhaustion to last through another year if the policy of this legislation is to be continued at all. Up to the end of last 159 year, 31st December, 1925, the actual amount that had been guaranteed was £63,169,741, and it is estimated that by the end of the present financial year £65,000,000 will have been guaranteed in the same way. As the amount authorised by the Act of last year was £70,000,000, the proposal now is to continue, as has previously been done, the Act for another year and to raise the maximum to £75,000,000, which means, if the estimates prove accurate, as I have no reason to doubt they will, that there will be a sum of £10,000,000 which can be used for these guarantees. I do not know whether it is necessary for me to remind hon. Members of the principles embodied in the Trade Facilities Act, but I will certainly only do so very shortly, because I expect most hon. Members are fairly familiar with them. There are two principles laid down in the Act. The first is that the Treasury should have power to guarantee loans to be raised when they are satisfied that the proceeds are to be applied towards carrying out of any capital undertakings or the purchase of materials manufactured or produced in the United Kingdom and required for the purpose of the undertaking. That is the first condition.
The second condition is really the most important, because it is the origin of the whole of this legislation. The second condition is that the loan is calculated to provide employment in the United Kingdom. When this legislation was initiated in 1921, an Amendment was put into the original Act which, of course, has governed the procedure ever since, by which the guarantees are only given when the Treasury has been in consultation with the Advisory Committee for that purpose. I want to emphasise the position which that Advisory Committee holds, because it is not quite fully expressed in the Act. The Chancellor of the Exchequer in 1921, in the course of the Debate explained what the position of the Advisory Committee would be. He said the Treasury would accept the Committee's recommendations both as regards the loans to be guaranteed and the terms and conditions of such guarantees. And he went on to use this language: The Treasury will not appear in the picture at all. The Committee will have full control ….. The Treasury will not 160 seek to exercise a discrimination between one scheme and another, but will leave it entirely for the Committee to decide. That was in 1921, when the first Bill was being discussed in this House. That was the language used by the Chancellor of the Exchequer in explaining the procedure it was intended to follow. That procedure, I maintain, has been followed from that time until now, and I suggest to the Committee that it is very important that that procedure should be followed. I do not think anyone will suggest, if this system is to be pursued at all, if the national credit is to be used for giving guarantees for the purpose of encouraging employment, that the actual discrimination as to the undertakings to be so assisted should be exercised by anybody except a purely impartial and non-political body. I am now speaking of the general principle which should be followed, and I submit that it is followed.

§ Mr. WALLHEAD
Will the right hon. Gentleman tell me whether any discrimination is being exercised by the Government or by the Treasury, whether any pressure is being brought to bear by the Government or the Treasury on the Advisory Committee?

§ Mr. CONNOLLY
May I ask also which Committee is now acting? The first Committee was set up under the Board of Trade and the second Committee under the Treasury. Which Committee is now acting?

§ Mr. McNEILL
It is a Committee of three members, and I submit that what ever difference of opinion there may be—

§ Mr. WALLHEAD
May I ask the right hon. Gentleman to answer my question as to whether the Government have brought any political pressure to bear on the Advisory Committee?

§ Mr. McNEILL
So far as I can answer, I should say there has been practically none.

§ Mr. TAYLOR
Arising out of that, can the right hon. Gentleman explain why it is that this Committee have refused applications in connection with Anglo-Russian trade?

§ Mr. McNEILL
I do not think that is quite relevant to my present argument, and as the discrimination should rest with 161 the Committee and not with the Government or with the House of Commons, I should be violating that principle if I endeavoured to answer the question. A question like that should be addressed to the Committee. I can well understand the difference of opinion there would have been from the outset as to the principle of this legislation, but I do not think there can be any reasonable doubt that it has had a substantial effect in the way of producing employment and mitigating—[HON. MEMBERS: "No!"]—Hon. Members shake their heads. I do not know whether their information is better than mine, but it is my submission—I will not put the case too high—that it has had a substantial effect in preventing the total volume of unemployment being higher than it has been. I quite agree that it is impossible to estimate with any sort of approach to accuracy how far that effect has gone, because the action and operation of the Act are not traceable directly—