PACIFIC CABLE BILL

HC Deb 30 March 1927 vol 204 cc1268-301

Order for Second Reading read.

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Amery)

I beg to move, "That the Bill be now read a Second time."

This Bill, I venture to think, is entirely of a non-controversial character, and is one which need. not delay our proceedings. It embodies an agreement arrived at during the Imperial Conference by the Governments concerned in the administration of the Pacific Cable on certain matters affecting both the constitution and organisation of the Pacific Cable Board, and the finances of the undertaking. On all these matters, discussions have been going on for some years. It had been found difficult to settle some of these points by correspondence, but they were all settled satisfactorily when we were able to meet round the same table. The agreement embodied in the Bill has been communicated textually to the various Governments, which have approved the Measure as it stands. I may add that the Bill not only embodies the agreed modifications of the previous Acts but consolidates and re-enacts them in a single measure. Therefore, so far as the Partner Governments of the Empire are concerned, this is an agreed Bill. It is also, I venture to hope, an agreed measure as between the parties here. To a very considerable extent, the proposals contained in it represent arrangements arrived at after discussions between the right hon. Member for Derby (Mr. J. H. Thomas), who was Colonial Secretary in 1924, and the Dominion representatives who conferred with him. The two main points on which the present measure changes previous legislation are the constitution of the Pacific Cable Board itself and the financial arrangements for building up the reserve fund and for dealing with any surplus. As regards the first point, the House is aware that the Pacific Cable Board is an organisation on which the Governments of Great Britain, Canada, Australia and New Zealand are represented. They are all partners in a common venture, and the extent of their partnership is in the following propor- tions which represent the interests of the different countries in the profit or loss of the venture: Britain, 5/l8ths; Canada, 5/18ths; Australia, 6/18ths, and New Zealand, 2/18ths. On the other hand, in. the composition of the Board the interest of Great Britain has hitherto been represented by three members out of seven on the Board, and also by the right of the British Treasury to appoint the chairman. This preponderance of British control in a joint venture, in which the shareholding interest of the British Government is only a little more than one-fourth, is due partly to the fact that the original capital of £2,000,000 required for the construction of the first cable was advanced on loan by the Treasury, but also because it reflected in some measure the conception of 25 years ago with regard to the natural position which the Dominions and the Government of the United Kingdom, ought to occupy in any joint venture.

In recent years that constitution of the Board has been criticised by the Dominion Government as giving an inadequate share of representation and power to those Governments, as compared with the risks they run in the venture. These matters were discussed very fully with the right hon. Gentleman the Member for Derby (Mr. Thomas) in 1924, and it was then agreed with the Dominion representatives that in future the British representation should be two members on the Board instead of three, and that the appointment of the chairman should be made by the Board itself with the approval of the partner Governments, and that the appointment should no longer be the monopoly of the British Treasury. There were other minor points. One was that the remuneration of the members of the Board, other than servants of the Crown, should be £300 a year, and that the remuneration of the chairman should be increased from £600 a year to £1,000 a year in order to make it possible to secure the services of an active business man. That agreement of 1924 between our predecessors and the Dominion Governments is substantially embodied in paragraph I and in the Second Schedule of this Bill

Let me now come to the finance of the Measure. The original position was that His Majesty's Government advanced £2,000,000 for the construction of the first cable. That cable was completed in 1902 and it was provided for in the original Act of 1901. That Act provided that £77,000 a year should be devoted to the payment of interest and sinking fund on this original advance. In addition to that the Board on its own initiative, as an ordinary business precaution, set aside £30,000 a year to a reserve fund for replacing and deterioration of the cable and other purposes. On this basis of working the Pacific Cable showed during the early years between 1902 and 1914–15 a regular loss which amounted altogether to £713,000 which was paid by the various partner Governments in proportion to their shareholding. Our own payment amounted to £198,000.

After that the whole situation changed, and since then the Pacific cable system has in addition to all the other advantages offered both to the security of the Empire and the cheapening of cable service, brought in a, regular substantial profit. In 1911 the Board came to the conclusion that it was desirable to supplement the original cable by an additional cable between New Zealand and Australia from Auckland to Sydney, and an Act was passed by this House enabling the reserve fund to be drawn upon for that purpose. This represented a very considerable concession made by the Treasury and His Majesty's Government to the Board, for it meant that instead of using surplus money to repay the original loan borrowed at 3 per cent. and having to borrow new money at a higher rate of interest for the construction of new cables, the Board was allowed to accumulate the surplus to reserve for the construction of new cables and to go on refunding the original 3 per cent. debt at a reasonable rate.

Sir FREDRIC WISE

What was the rate of interest?

Mr. AMERY

I could not give the rates of interest for all the years from 1911 onwards when these transactions took place. I think my hon. Friend knows very well that for most of the time, at any rate, the rate of interest was considerably above 3 per cent. With the construction of the first additional cable it became evident that further cables would be required, linking up Fiji with New Zealand and Australia, and gradually it became clear from the increased volume of traffic that if the cable was to do justice to all the countries affected, we should require a duplication of the whole system. With this object in view the Board, in addition to the £30,000 set aside from the reserve fund from the beginning, devoted practically all its surpluses to reserve. By 1920 it had become quite clear that an additional cable costing over £2,000,000 would be required. Considerable investigations were made between 1920 and 1922 as to the possibility of duplicating by wireless instead of by cable. In view both of the greater running expense of wireless and the high strategical advantage of the cable, as well as of the fact that the latest scientific methods of building cables enabled a far more rapid transmission than hitherto, and while it was realised that wireless was advancing all the time, it was decided definitely in 1922 to lay a second cable of the very newest type. That cable was immediately taken in hand, and was completed right across to Vancouver Island by the autumn of last year at a total cost of something like £2,750,000.

Commander BELLAIRS

The right hon. Gentleman says the cable was completed right across to Vancouver. Where is the other end of the cable?

Mr. AMERY

The main long stretch is from Fiji to Bamfield on Vancouver Island, and we now have a complete duplicate system in operation linking up Australia and New Zealand via Canada. It is an all-red service, not only in respect of British ownership but also because it does not touch foreign territory at any point. I may add that by the Act of 1924 the Pacific Cable System also operates certain cables and wireless in the West Indies and the Caribbean Sea, and provision for continuing those powers is provided for in Clause 8 of the Bill The present position is that we have a very effective second cable and the system is producing a very considerable surplus.

Certain difficulties have, however, arisen under the terms of the Act of 1911. I must remind the House that that Act was passed during a period when the Pacific Cable was running at a loss and when we only contemplated the construction of certain additional cables of no very great cost, and therefore it did not contemplate a very large reserve. That Act provided that any money taken out of the reserve for construction purposes should be replaced together with interest at 3½ per cent. within a period of 35 years. It certainly did not contemplate the building up of a reserve of well over £2,000,000, and the replacement of the reserve under the terms of the Act of 1911 would now impose an obligation on the Pacific Cable Board of paying something like £150,000 a year to the reserve. To do that would cripple the whole finances of the Board and make it impossible to bring down the rates. It would make it equally impossible to clear off the original debt to His Majesty's Government. Furthermore, such an accumulation of reserve is really wholly unnecessary, and it would be quite a disproportionate reserve from the point of view of ordinary business requirements. It was a reserve accumulated for a single specific purpose, namely, the financing of the duplication of the system. Now that that duplication has been completed there is no longer any reason for accumulating a reserve of that magnitude or for accumulating it at so rapid a rate. These considerations were very much in the minds of the partner Governments, and we arrived between us last October at a modification of the Act of 1911 with regard to the disposal of the surplus and the building up of a reserve. These arrangements, which are included in Clauses 3, 4, and 5 of the Bill, I can briefly summarise as follows: The whole of the surplus of the present year, 1926½27, amounting to between £70,000 and £80,000, will be passed into reserve. In future, after the present year, the sum of £10,000 a year, or one-tenth of the year's surplus, whichever is the larger, is to be placed into the reserve, subject to a provision that that reserve may be further increased or may be diminished by consent of all the partner Governments. In the next two years following the present year, after that contribution is paid over to reserve, the surplus, if any, will be distributed among the partner Governments, though, in view of the recent substantial reduction of cable rates consequent upon the building of the new cable, I am not sure that there will be any very large surplus. After the next two years, the surplus will be equally divided between repayment of the original capital and distribution among the partner Governments.

I think that that arrangement represents a very satisfactory position. All the Governments concerned are now in a position to reap the fruits of their previous efforts and sacrifices in connection with the building up of this great Imperial system of communications. They are now in a position to do what has not been done before, namely, to distribute some profits between the Governments themselves. But I want to make it quite clear that the main object of this Imperial cable system is not profits, but service—service to the business community of the Empire and the development of inter-Imperial communications. I may remind the House that, immediately the first Pacific cable was completed, the cable rate to Australia broke from 10s. a word to 3s. a word, and, in spite of the fall in the value of money, the Pacific Cable Board has been able, since the duplicate cable was completed last October, to bring down the rate to 2s. a word for private messages and 6d. a word for cable messages—a very valuable contribution towards better business and better mutual understanding within the British community of nations.

In the second place, we are now in a position to accelerate the repayment of the original £2,000,000. I may mention, in passing, that that sum is now reduced to a total of about £1,270,000. By so doing, we shall set free a larger surplus, whether for further reduction of rates or for distribution of profits among the Governments concerned. Lastly, the Governments concerned are to-day in possession of a very valuable asset in the new cable, which is a cable of the most modern type, guaranteed to transmit a minimum of 600 words a minute, and in that respect, despite all other developments of wireless and other services which are going on, it is, I believe, a valuable asset both to the commercial development and to the security of the British Empire.

The whole story of the Pacific cable is an outstanding example of the value of co-operation between the Governments of the British Empire, and I should like to pay such tribute as I can to the vision and devoted persistence of Sir Sandford Fleming, the chief engineer of the Canadian Government railways, who for 20 years worked at this scheme, before it was taken up by the Imperial Conferences of 1887 and 1894, and enlisted the interest of the Governments of the Empire and, not least, the powerful interest and support of Mr. Joseph Chamberlain. I think I have explained the purpose and object of this Measure sufficiently to enable the House to understand that it simply gives effect to certain changes which have been under discussion for the last three or four years with the other Governments of the Empire—discussion which ended in complete agreement on all sides; and, therefore, I do not think the House need have any hesitation in giving this measure its Second Reading.

Mr. WEBB

I venture to congratulate the right hon. Gentleman on having brought forward a somewhat complicated matter with extreme lucidity, and, further, on being in a position to claim what I hope and believe will be the unanimous support of the House for this Measure. The right hon. Gentleman said that the Bill ought not to be a matter of controversy. I can assure him that, so far as my Friends are concerned, we have nothing to object to in this Bill, which, indeed, does little more than put into; the exact form of an Act of Parliament the provisional agreement which had been arrived at by nay right hon. Friend the Member for Derby (Mr. J. H. Thomas) with the Colonial Governments. It is a wonderful instance, as the right hon. Gentleman said, of co-operation among the Governments, and I think, if I may be allowed to say so, we may congratulate ourselves on its being a wonderful instance of something else—of something which, if we had had the good fortune to bring it forward, would have been denounced by hon. Members opposite as a gross piece of Socialism.

Commander BEL LAIRS

The Governments concerned allow no private competition. They would not allow a private company to lay a cable via Honolulu.

Mr. WEBB

I fail to gather the relevance of the hon. and gallant Gentleman's interruption, but I am glad to have his assent to my statement that this would have been denounced as a piece of egregious Socialism. It is a wonderful example of foresightedness and preparing for future years irrespective of the pecuniary profit of the moment. What is more, it is an instance, as the right hon. Gentleman himself said, of something which is being done, not for profit, but for service. This project has been incubating for 40 years or so. These Socialist projects take a long time in incubation. They are denounced by all practical men, by all business experts, by all the people who are so sure that the theorists know nothing about it; and very often, when the theorists are dead, the project is eventually carried out by common consent and universal agreement. In this enterprise, from the first, private profit has been kept at a distance; no one is allowed to share it. We actually wasted this opportunity of furnishing large incomes to financial houses and to telegraph companies; we even wasted the Income Tax which the Chancellor of the Exchequer might have derived from taxing the profits which he allowed them to make. The Government stepped in and placed at the disposal of this service, which is to be a service for the whole community, Government capital and Government credit. And the whole thing has been carried through with the assent of hon. Members opposite and the assent of hon. Members in the other corner of the House, without, perhaps, their realising that it was being carried out definitely and avowedly on the principles of Socialism.

There is another respect in which it is significant. It has been done with the best advice, with the greatest possible care and skill, and managed, I believe, excellently; but nevertheless, for the first few years, it did not yield what is called a profit. Of course, it did yield a profit, because, as the right hon. Gentleman has just said, it compelled the telegraph companies to reduce their charges immediately, and that reduction of their charges meant, of course, a profit to the community—a profit to the users of the service at the expense of the monopolists who had hitherto been charging more than they needed to charge. Quite rightly, in accordance with all the principles of business, and with all the sanction of political economy, they were charging all that the traffic would bear, and so a new force had to be brought in, entirely on Socialist principles, to compel them to reduce their charges; and that was done without an Act of Parliament to compel them, without any interference with their liberty, without any infringement of their concessions, and without any compensation for what was done. This was done, not by wicked Socialists, but by hon. and right hon. Gentlemen on the other side of the House, belonging to the Unionist party. Under the inspiration of the great Joseph Chamberlain, they carried out this purely Socialist Measure by Socialist procedure, with Socialist objects and Socialist ends. And then they went to the country and thanked God they were not as other men were—those silly, unpractical, theoretical Socialists. Some of these theoretical, unpractical, visionary Socialists saw what was being done, understood it, and rejoiced at it, but they did not necessarily claim the credit of it, because they did not want hon. Members on the other side to wake up and discover bow Socialistic they were without realising it.

As I have said, we have nothing to complain of in this Measure. It sets the seal of a quarter of a century of about as successful a Socialist enterprise as can possibly be imagined; and now, if the House passes this Measure, as it will do presently, we shall have hon. and right hon. Gentlemen next week, the week after, the week after that, and all down next year right up to the general election, protesting that Socialism, the wicked thing that attempts to reduce their profits, that attempts to make them reduce the prices they charge to the public, is sheer confiscation, not to be thought of by those who are the heirs of the wisdom and statesmanship of the ages. They will make broad their phylacteries, and thank God that they are not as other men, and will call upon all the old ladies in their constituencies— and probably, by that time, all the young ladies too—to have nothing whatever to do with a Socialist Government, because it is going to lead to the breaking up of laws, the destruction of the family, and the disruption of the British Empire. This Measure, which has been brought in by the Secretary of State for the Dominions, and of which he is proud, is, as he knows just as well as I do, a Socialist Measure. He knows that it has been carried out successfully because it is a Socialist Measure, that it has worked well because it is a Socialist Measure, because, that is to say, it has not been interfered with by the inter- vention of the private capitalists. It has never had to consider the amount of dividends it has had to pay on its shares; it has measured its success by the services it was rendering, not by the dividends it was paying on capital.

The right hon. Gentleman paid tribute to what he called the partner Governments for their co-operation in this matter. "Partner Governments" is a good phrase, a new phrase, and one which we may welcome, although once in his speech the right hon. Gentleman dropped into the old phrase, "the Empire." The right hon. Gentleman knows that the British Empire has been definitely abolished by Act of Parliament. One of the first things in which I co-operated when I entered this House at the end of 1922, was a Bill which I think was carried unaimously, or, at any rate, by an enormous majority, setting up the Free State in Ireland, and incidentally altering the oath; and that oath of allegiance which had to be taken, and which was embodied in the Schedule to that Bill, incidentally gave a new description, a new title, to what used to be the British Empire. That new title is the British Commonwealth of Nations and that, by insertion in that Act of Parliament, became the title of what was formerly the British Empire. Just as General Smuts said the British Empire had passed away, so the Parliament in 1922 superseded the British Empire, with all the authority of Statute Law, by the British Commonwealth of Nations. That is simply a matter of dry law and though, of course, we shall still constantly linger on using obsolete phrases and terms, it is interesting to notice that the legal title, and the only legal title, of what used to be called the British Empire is now the "British Commonwealth of Nations."

Mr. AMERY

I hope the right hon. Gentleman will forgive me if I remind him of the very important Report of Lord Balfour's Committee adopted by the whole Conference, and in the dominant sentence of that Report it was underlined in italics that the word "Empire" was to be preserved and the Dominions were referred to as autonomous communities within the British Empire.

Mr. WEBB

The right hon. Gentleman is very ingenious, but even he will not venture to set up the authority even of Lord Balfour's Committee against the authority of Parliament. I would remind him, as he is a loyal subject, that this Act of 1922 has not only been assented to by another place but also has the assent of His Majesty the King, which I think puts the seal upon it. I regard that step as a new departure. It is a mistake we are always dropping into talking about this country as governing in any sense the other parts of the British Commonwealth of Nations. His Majesty's Government here is responsible for the government of this country. His Majesty's Government in the Commonwealth of Australia is equally and parallelly responsible for the government of Australia. His Majesty's Government in New Zealand is responsible for the government of New Zealand, exactly in the same sense that His Majesty's Government here is responsible for the United Kingdom. So we have passed away from the assumption that this country, or even this Parliament, governs what used to be called the British Empire and we are now part of the Commonwealth of Nations. This Pacific Cable Bill has afforded an interesting text not merely for this exposition, examination and elucidation of this remarkably successful Socialist enterprise, but also marks a stage in the evolution of what used to be the British Empire.

Commander BELLAIRS

I congratulate the right hon. Gentleman the Member for Seaham (Mr. Webb) and the Socialist party on having discovered one little ewe lamb that they can claim as a success, but I do not know whether it is a very good working example of Socialism. In the first place, private enterprise is excluded altogether. If any cable company in 1902, wishing to bring about competition, had wished to lay a sensible cable from Vancouver to Honolulu, landing rights would never have been granted by the Canadian Government. The result was that private enterprise was excluded altogether and competition was excluded except from the Eastern Telegraph Company. Had private enterprise laid a cable to Honolulu and thence by way of other suitable landing points on to Australia, the cable would have been very much cheaper and it would also have dovetailed in with the American. cable to Honolulu, which would have been an immense advantage strategically and commercially, and instead of going to a barren rock where commerce could not go, the whole Empire would have benefited. But the effect of Government enterprise means a very long span, which means expensive cabling and slow cabling. A long span costs inordinately more than a short span. Not only that, but in giving evidence before the Committee at the time this cable was contemplated, and again when I spoke in public, I said it would be the only British cable cut when war broke out because it went out of the route of commerce, and being out of the route of commerce any raider would not be interfered with. What happened in the War? The cable was cut and it was the only British cable that was cut. It was cut for six months and a considerable loss was incurred. Right up to 1915, as the result of the Government enterprise taking this cable by a long span on to Australia, we incurred a loss and the British taxpayer had to make that loss good. No private company would have contemplated such a route.

My right hon. Friend spoke as if there was some special merit about an All-Red cable from the strategical point of view. There is no merit whatever. What we desire from the strategical point of view is that the cable shall follow a commercial route, and whatever is useful to commerce will be useful to the Navy as well. I had hoped when they duplicated this cable they would have taken the common-sense method of landing at Honolulu, a busy port through which British shipping goes, and so we should have had an alternative route by the American cable as well. We have here a monopoly cable which is practically restricted to Empire enterprise only. It can only land cables at Empire stations. I turn to Clause 8 of the Bill. I see: The Board may, subject to the approval of all the partner Governments, undertake as agents for and at the expense of the Governments of any parts of His Majesty's Dominions any work in connection with telegraphic communication whether by means of cables or by means of wireless telegraphy within the sphere of their operations or within the Caribbean area. I should like to ask if it is possible for these cable companies to operate outside the British Empire, because you are excluding private enterprise, and what we desire is to have a monopoly of cables, just as we have a large monopoly of shipping, and it is from the date when all this red agitation1 started that we began to lose our monopoly over the cable systems of the world.

Mr. AMERY

As far as the powers conferred by the Bill are concerned, there is nothing to prevent the Pacific Cable Board operating anywhere in the Caribbean area.

Commander BELLAIRS

Had it been private enterprise, it would have been of great assistance to British shipping, because nearly every foreign port carries a predominance of British shipping, and it is one of the disadvantages of associating these things with the Government that you stand in the way of progress to a degree which is hardly estimated and which I am sure the right hon. Gentleman opposite has no conception of.

Mr. KIRKWOOD

I should like to ask the Minister a question or two. The Second Schedule provides that, if all the partner Governments so agree, the salary paid to the chairman may exceed £l,000 a year. What are the conditions of employment of this chairman? I also see that There shall be paid to every other member of the Board who does not hold such office of profit as aforesaid such salary not exceeding £300 a year as the Board may determine. What are the conditions of employment? What hours have they to work? How many hours a day and how many days a week? Or is it a part-time job? This is getting rather alarming in this British Empire of ours, because I do not follow the idea whether you call it the British Empire or the British Commonwealth of Nations. A rose by any other name smells as sweet to the working class who are always on the verge of starvation, and it is them I am speaking for to-day. You would not think, when we are discussing such a Bill as this, when we have been lectured time and time again from that Treasury Box about economising, that this country could afford to pay certain wages. It has been stated there that this country cannot afford to give the working class a comfortable living, yet here, without any compunctions of conscience, the Colonial Secretary suggests 5.0 p.m.

that the chairman of this Board is to get as much wages in a year as an engineer gets in eight years, or a miner in 10 years, and yet this is the same Government that used all its influence to crush the miners down to accepting starvation wages. How long is the House going to stand this? They are always telling me that there is no such thing as classes. I am told I am always making a mistake when I say there is a class struggle in society. I have an open mind, Come let us reason together. I am here to reason with the Minister, to see if he can give any proof to me that there is not a class struggle in society. When one of my class, a working engineer, presents himself for a job, the conditions of his work are laid down to him. It is stated how many hours he will have to work, and that, if he makes a mistake, he will get a right "telling-off," and the chances are he may get the sack. I want to know if this chairman, who is to get £l,000 or more a year, and the members of this Board, have conditions laid down to them in the same manner as are laid to the working classes? Have I to go away again confirmed in my belief that there are two distinct classes in society, not in France, or Germany or Russia or China, but here? The class I represent have to turn out to work every morning, register when they go in and when they come out, and the amount of work they turn out is not judged by themselves but by someone else. Will this chairman have to come under the same category as my class? Will he require to attend to his duties and give of his very best? Will he be required to embody his entire personality in it? Or is this going to be another case of simply giving a job to some friend of the present Government, some Tory who has done good work for the party, or to some late Member of the Labour party, who has sold out to the Tory Government? If these questions are not answered in a satisfactory manner, I may be prepared to put further questions.

Mr. MAXTON

I am sorry that the House is not showing a greater interest in this very important Measure. We from the Glasgow area are intensely interested in it, for historical reasons first of all. The first submarine cable that was ever laid in any part of the world was really laid from the laboratories of Glasgow University by the late Lord Kelvin. Probably he was a fellow-countryman of the Financial Secretary to the Treasury, but I do not hold that against him; he was a great man in spite of that. Since then the citizens of Glasgow have been always keenly interested in the development of submarine cables. I agree with the right hon. Gentleman the Member for Seaham (Mr. Webb) that the party on these benches have some satisfaction in seeing this Measure of absolute, definite public ownership and control being brought before this House by a Tory Minister of State. But the very fact that it is a great experiment in public ownership and control is a very strong reason why we on these benches should see that it is started along lines which will make for success, that will make it of real value to the users and a model as to the way in which it treats its employés, because we are not anxious to hear that standing argument which is always brought against Socialism and public ownership. Right hon. and hon. Gentlemen opposite, when they want to bring a strong argument against Socialism and public ownership schemes, always tell us that the present publicly-owned schemes are failures, and that you never get from a publicly-owned enterprise the same service that you can get from a privately-owned one that is run for profit. I am prepared to agree that our public services, directed and controlled by Governments who do not believe in public ownership, have not given the general satisfaction that those of us who are interested in the success of public ownership would desire that they should have.

Is it surprising that publicly-owned enterprises should fail when the higher command and direction have always been in the hands of men who desire that they should fail? If the right hon. Gentlemen of the Conservative Cabinet do not believe that public enterprise can be made a success, then they do not set out, in shaping any public enterprise, in the right frame of mind. If they assume necessary failure before they start, they are very likely to have failure as a result. The right hon. Gentleman the Secretary of State for Dominion Affairs explained that this was not a profit-making scheme; he said that it was for service, not for profit. Presumably, that is why the community is going to be allowed to handle it. If it had held out any prospects of real profit, then probably private enterprise would have taken care that that profit went into the hands of capitalists and not into the hands of the whole community. Therefore, this scheme, I presume, will not be judged by the profits it can show, but by the service that it renders to this nation and to the other partners in the concern. One thing should be carefully watched in launching this enterprise. It is true that the State official who is in charge of an enterprise that is partly commercial and partly in the nature of public service, is hampered in his work by the fact that he has not frequently that freedom of initiative that he ought to have. I would like it to be made certain that the directors of this company, because it is simpler to speak of it as a company, although it is publicly-owned, should have the same freedom of initiative, the same independence of control, as an ordinary board of directors of an ordinary private company would have. That does not mean to say that they are to be left to control it in whatever way they please, but that, between one shareholders' meeting and the next, they are not subject to petty interference.

I presume that the remarks made by my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) are fairly correct, namely, that the directors of the Pacific Cable Board will be mainly decorative people. They will not go laying cables or sending messages, but they will probably meet three times a year. The Suez Canal directors, I gather, do not meet at the Canal every afternoon. I cannot imagine the right hon. Gentleman the Member for Hillhead (Sir R. Horne) taking a hand in opening the sluicegates. From the comparative regularity of his attendance here, I assume that the meetings of the Suez Canal Board are not so frequent as to prevent a person having other interests and other activities. I am assuming that the members of this Pacific Cable Board are only going to be called upon to provide the company with their very special, very expert, and' presumably very rare knowledge about four times in the year. If there was a monthly meeting, the directors union would be probably protesting about overwork, and I presume that four times a year will be as frequently as this Board will be called upon to meet. Have we anything like an assurance that the responsible man and his subordinates in this publicly-owned company are to have some freedom of initiative to carry on the work, for which they are actually responsible without unnecessary interference? I agree with the criticism against public ownership; that the whole thing may be rendered stupid, futile, and useless if every day the men who are running it are to be interfered with. There is no need that that should be done to the people who are actually doing the work of this company and who have all the rights, powers and initiative that an ordinary board of directors would grant to their trusted employés. I do not want to say too much about remuneration. By custom it has been well established that £l,000 payment to the chairman of a company is not an inordinate sum. The hon. Member for Dumbarton Burghs does not seem to be able to understand that this type of intelligence which the chairman of a company must have and always does have—

Mr. BUCHANAN

Four times a year; £250 a week.

Mr. MAXTON

It is not a question of how often he exercises that great intelligence but it is the fact that he possesses it. It is like the Wild Birds Protection Bill. The rarer it is, the more you must treasure it and stimulate it. A thousand pounds a year, I can assure my hon. Friend the Member for Dumbarton Burghs, is practically what might be called the standard rate for that class of work. I am strongly inclined to vote against the Second Reading on the ground that it is proposed, quite lightheartedly, to hand over these sums to these people before we have had any description of the duties that are to be undertaken by them. Perhaps the right hon. Gentleman may have some satisfactory explanation, but at the moment it is of interest to notice how very easy the Government are prepared to come forward and ask for £l,000 for this one man, for this spare-time work. Only last night there was tremendous excitement in the House because a board of guardians in Chester-le-Street had paid a woman 8s.

At Question Time to-day there was a question about a new Inspector-General of Constabulary who has been appointed to a new job at 57 years of age and £1,000 a year. He retired seven years ago, presumably having exhausted his usefulness, on a pension of £600 per annum. Now, the Home Secretary appoints him to a more responsible post, although he is seven years older, at a salary of £1,000 a year, rising to £l,500, and he is to be pensionable again when he retires. Two weeks ago, when we were discussing the Air Estimates there was a question about the Chief of the Civil Aviation Department who was drawing a salary of £2,000 per annum out of the public purse and at the same time acting as director of a petroleum company. I want to be quite sure that if this Bill is to be assented to, we are not assenting to the reckless use of public money to assist the political friends of the Government that happens to be in power. It is an old gibe that the British Empire was a great system of outdoor relief for the impoverished sons of the upper classes. I do not want to see a great experiment in public ownership and control spoiled by the appointment to decorative posts of a number of people who are probably unable to earn an honest living in the ordinary fields of enterprise.

While it is safeguarded in the Second Schedule, paragraph (8), that the members of the Board and the chairman of the Board shall be persons who do not hold any offices of profit under the Crown, there is nothing to prevent such persons from holding offices of profit anywhere else so long as such a person does not hold an office of profit under the Crown he is permitted to hold any position. Such a person may be the director of 12 private companies and, as we have found it in other cases, he may be the director of a company whose interests may be in antagonism to the interests of the public Board which he is controlling. He may be a member of any other private company, and the only thing from which he is debarred is the holding of some office of profit under the Crown. I want to be assured that not only is he not to hold an office of profit under the Crown but that he is not to be a person who is drawing pension after having retired from an office of profit under the Crown.

I have seen on other occasions a great predilection in favour of appointing retired Judges to chairmanships. There is a superstitution that a retired Judge is a man with some special aptitude for chairmanship. He may be. He has sat in the chair long enough, and slept in it frequently enough, to know all about chairs; but is he the type of person who has a commercial mind, who has driving force and will not be content in carrying out in a humdrum way the cables already there, but will use this scheme as a basis on which to extend the cable system in every way and to extend its usefulness? I would like to see this scheme which is, in the main, a good thing, looking forward not only to an all-red group which, as has been said, arouses international antagonism—because when you are out purely to establish a British Empire industry you are inciting other countries to form an alliance against you—but I would very much like to believe that it is only the basis of a great internationally-owned telegraphic service in which not merely should there be four partners, consisting of Great Britain and three British Colonies, but that the nations of the world interested in this business should be equal co-partners in it and taking an interest in promoting its efficiency and success.

Did it ever strike the right hon. Gentleman that in all the Bills we produce, the remuneration of the fellows at the top is always safeguarded by Statute? Come what may, the man with a thousand a year as a living wage is secure. He can rely upon that salary. Well or ill, working or idle, eating or sleeping, he can count on getting his salary, by Statute. The whole force of the Imperial bond is put behind the man at the top: the decorative man. In connection with this business, there will be telegraph boys, operatives, cable men, linemen, engineers, seamen, presumably a cable ship will be required; but from the beginning to the end of the Bill there is not one scrap to safeguard the livelihood of these people who will be actually performing the service. I know that we cannot complicate the Bill with a whole lot of unnecessary and unimportant details, but is the question of the livelihood of the people who are going to run the industry an unim- portant detail? Is that an unimportant detail in the eyes of the Government? It is a most important thing in the running of any industry that the persons engaged in it, the persons who are doing the hard necessary work, should have something like a definitely assured livelihood. If there had been even some general Clause saying that fair wages would be paid to the workers in the industry, I would have regarded it as being a Measure which desired to be fair as between one class and another; but when I find that the chairman of the Board and the members of the Board have their remuneration very carefully safeguarded and there is not even one general side reference to the workers, whether they be messenger boys, operatives, engineers, linesmen or seamen, I am strongly impressed with the fact that although the right hon. Gentleman may have become an academic Socialist, or, having regard to his early reputation he may have reverted to the academic Socialism of his earlier years, and while he may have earned the claim to that distinction, or have re-established a claim to it, he has not that conception of Labour and Socialist freedom which I am glad to say I have, and which I wish to further in this House.

Mr. STEPHEN

I notice that the right hon. Gentleman and the Financial Secretary to the Treasury show no disposition to give any answer to the questions which have been put to them. We shall require an answer before we are prepared to give this Bill a Second Reading. I am not convinced that this Bill, which has been described as a Socialist Measure, is a Socialist Measure. One hon. Member opposite had some question in his mind about the route that is to be taken. The idea seemed to be that there is no profit in it for private enterprise. The hon. and gallant Member for Maidstone (Commander Bellairs) had some idea that private enterprise might have found profit if the route had been different, and there was a sort of pathetic, hungry look about his face when he spoke to-day which seemed to suggest that there was, possibly, something which has been lost to private enterprise in this connection.

In Clause 1 (2) there is a statement about "the representatives of the Board of His Majesty's Government." Is this some new form of Cabinet that has been introduced? "The Board of His Majesty's Government." Possibly, it is another instance of the bad draftsmanship which has characterised Government Measures. In future the Government will have to make their phraseology a little more clear to show what is meant. Paragraph 7 of the Second Schedule says: Any representative member of the Board may appoint a deputy to act on his behalf at any meeting of the Board at which he is unable to be present, and if a deputy has been so appointed and his appointment notified to the Board he shall be entitled so to act, and, while so acting, shall possess all the powers of a member of the Board. It seems that the members of this Board are to be able to say to any other person, "You might go and take my place at the meeting of the Board." That is not conducive to good and efficient business, and if this is an experiment in Socialism, and inter-Imperial Socialism at that, we must have matters safeguarded as fully as possible. We are evidently going to have a chairman at a salary of not less than £1,000 a year, and when I read those words "not exceeding £1,000"I wondered whether an attempt was being made to revert to the practices which prevailed in the days of Walpole when there were plenty of jobs found for the supporters of the Government. We have had people appointed to the British Broadcasting Corporation and the Electricity Board, and now there is this Board to be set up. Evidently an attempt is being made to provide for needy supporters of the Government. I am rather curious to know what restrictions will be placed upon the chairman, whether his job is to be a full time job or not, and how much time those associated with him are going to give to their duties for their £300 a year. This House would be foolish to assent to the proposal that the members of this Board shall be able to hand over to any deputy the work of carrying on the business of this company.

It is suggested that the representatives on the Board of the Government shall be appointed by the Treasury. The Treasury will have something to do with the first appointment, and possibly they will be able to appoint sound careful people, but will the deputies to whom they may hand over the business be first-class men. I do not think that is a satisfactory way of doing business. Is the Treasury going to have any say as to whether the deputy is a satisfactory person? The member of the Board might himself be all that the Financial Secretary to the Treasury could desire, but while the Treasury may approve of him, it does not mean that the Treasury will be able to approve of his friends and relatives. Nearly everybody makes undesirable acquaintances in his lifetime, and this House should require a little more explicit information from the Minister in order to ensure that the interests of this inter-Imperial and experimental brand of Socialism in this Bill are not going to be destroyed by some incompetent friend of a gifted gentleman approved by the Treasury. I hope we shall get a satisfactory reply, otherwise the only alternative is to go to a Division in order to make sure that we are not taken as being assenting parties to an experiment which is not going to be run on proper lines.

Mr. AMERY

By the leave of the House I will answer in a few sentences the questions that have been put to me. May I again remind hon. Members that this Bill represents an agreed Measure between all the Governments interested in the Pacific cable. As regards the remuneration of the members of the Board it follows the agreement already arrived at more than two years ago between the right hon. Gentleman for Derby (Mr. J. H. Thomas) and the Dominion Governments. The Dominion Governments at that time asked for remuneration for members of the Board, not because such remuneration will be usually required, because in most cases they are servants of the Crown, but in case one or other Government might wish to appoint some business man outside the staff of the High Commissioner's Office and would have to pay at any rate the minimum that would induce a director to serve. As regards the chairman, the Dominion Governments were anxious that the salary paid should be such as would secure the services not merely of a retired civil servant, who would add £600 to his pension, but which would secure the services of an active, able business man, and there is no question of the absolute limitation on the chairman to do this work and no other work at all. You would not secure under ordinary conditions a man to manage an immense undertaking of this sort for £1,000 a year. I might add that the figures here—and this answers the point of the hon. Member for Bridgeton (Mr. Maxton) as to the pay of other employees —are limiting figures. They fix the limit beyond which remuneration shall not be paid.

Mr. MAXTON

Not so far as the chairman is concerned.

Mr. AMERY

Yes, if the hon. Member will allow me. The chairman's remuneration is limited normally, but there is a special provision that if the partner Governments agree that it is desirable, they may go beyond that limitation. It is an exception to the normal limitation. The Board meets normally every month, but when special business has to be done it meets more frequently. The chairman, of course, has to be in attendance a good deal oftener. The hon. Member for Bridgeton asked if the Board has reasonable freedom of action. That is so. It conducts the ordinary business of the Pacific cable as a commercial undertaking without interference. If, on the other hand, new questions of policy arise, if they wish to construct a new cable or enter upon any new sphere of activity, naturally it would have to ask permission of the various Governments. The hon. Member also asked a question with regard to the employees of the Board. I am glad to be able to assure him that the terms are satisfactory in every way. It is impossible to lay down set terms for men who are employed in England, Australia, New Zealand and Fiji, but everything is done for their comfort, and in the outlying stations special provision is made for their comfort, while social recreation is provided at the cost of the Board, which also makes a contribution towards the pensions fund. In this respect I think everything is satisfactory.

Mr. MAXTON

Before the right hon. Gentleman concludes will he tell me this. The Board is to meet monthly. Where is it to meet? Is it to be domiciled in this country?

Mr. AMERY

The Board is domiciled in London, and all its members are usually within very easy call.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Amery.]