HC Deb 10 July 1928 vol 219 cc2143-57

I beg to move, in page 3, line 24, after the word "Treasury," to insert the words "and another shall be a person nominated by the Minister." This Clause of the Bill sets out that provision shall be made in the Memorandum and Articles of the company for a certain directorate. We endeavoured, during the earlier stages of the Bill, to find out what the number of directors would be, but even in the negotiations between the banks and the Ministry nothing has yet been set down as to the number of directors. While that number is as yet unknown, the Minister has agreed that the Government will be satisfied if they secure one director to represent them on the Board. I submit that that is unfair to the Government and also unfair to the individual who will be sent to represent the Government on the directorate and who will be alone in putting forward the views of the Government regarding this scheme. In justice to those who are subscribing £10,000 a year towards the administration of the company, there should be, at least, two directors representing the Government. I tried in Committee to secure that a majority of the directorate would be appointed by the Government, but that proposal did not find favour. We are now putting forward the much more modest request that in addition to one director nominated by the Treasury there should be another nominated by the Minister. I hope the good sense of the House will appreciate the necessity for the proposal.


I beg to second the Amendment.

It was understood in Committee that the probable amount of share capital which would be subscribed to this company would only be some £660,000. The State on its part puts in £750,000 which remains at the service of the company for at least 60 years without any interest whatever to the State. That, of course, is not the only money which the State is risking in this enterprise. The State also undertakes to take up in debentures, for the first five years, £1,250,000, so that from the outset in this company the State will have at stake at least £2,000,000, while as I have said, the company will probably only have some £660,000. In face of those circumstances it seems utterly unwise to consent to the participation of the State in the work of a company composed in that way, unless the State has a voice in the direction of the affairs of the company. In the Bill as it stands the only direct voice which the State will have will be by the appointment of a representative of the Treasury.

We have not been told yet how many directors are to form the directorate of the company, but it is assumed that the number will be somewhere in the neighbourhood of eight. This Amendment makes the modest suggestion that, in addition to the representative of the Treasury, provided for by the Clause, the Minister should also appoint a representative. We submit the Amendment on broad grounds of public policy. The creation of this corporation is for a specific national purpose. It is to give some kind of State stimulus and encouragement to the development of the agricultural industry. If this corporation is to fulfil the purpose for which it is being created, surely it is of the highest importance that there should be close touch between its work and the work of the Ministry which is responsible to Parliament for agriculture. From the point of view of the risk taken by the State in the subscription of capital, and from the point of view of the purposes of the Bill as a whole, the least the Ministry ought to do is to see that there is direct liaison between the Ministry and the corporation.


The hon. Member for Dewsbury (Mr. Riley) has expressed his desire—seeing that he cannot get what he really wants, which is to have a majority of the directors nominated by the Government—that provision should be made for keeping liaison between the Ministry and the corporation. We consider that one director will be quite capable of carrying out that function. The Treasury and the Ministry work together, and the normal method in these Departments is that decisions as to personnel lie with the Treasury, but naturally the director who represents the Government will be charged with seeing that the general intentions of Parliament in passing this Measure are carried out. I may perhaps tell the House what have been laid down by the Treasury as the functions of this Government director. The Government director is to remain as long as Government advances remain unpaid, which means that there will be a Government director for at least 60 years, if not for a longer period. The Government director will be required to give careful attention to the manner in which the company's business is conducted and, having due regard to the security of the Government advances to the company, to see that those advances are utilised for the benefit of agriculture in accordance with the Act. The Government director will furnish to the Treasury from time to time such information as they may require regarding the operation of the company. No remuneration will be paid to him. I think hon. Members will see that this responsibility will cover that liaison for which they are asking, and, as we do not agree with them that control is desirable, I suggest that one director will be quite as effective as two.


How many directors will there be altogether? Has that question been settled?


No. It was proposed originally that the number should be limited, I think, to six or seven, but no final decision has yet been reached. The present state of that question is that directors cannot be paid without a change in the articles of association. Free services of directors will be provided, but as they will not be paid I really do not think that the House need worry about the number of directors representing the banks, because we do not yet know definitely how many banks will participate. At present, there are nine, but this number is not necessarily final, and obviously the number of participating directors must to some extent depend upon the number of banks. I think the object of the Government, which is to secure touch with the company, and to keep the conduct of the affairs of the company in accordance with what Parliament has in view in passing this Measure, will be just as well achieved, as I have said, by one director as by two.


Do I understand that this money is coming out of the Exchequer?


There will be no money paid to directors for their services. We provide in the articles of association that the directors will not be paid, but of course I cannot give a pledge that for all time they will not be paid. Anyhow they cannot be paid without a change in the articles of association, and the articles of association will in the first instance at all events provide that they will not be paid.


Nevertheless, this will be money subscribed by the public if there is a company floated. I understand that the total sum involved will be over £2,000,000, and as I was present on Friday when the Government were keenly concerned in associating themselves with running some bookmaking transactions I am concerned that the Government shall consider this Amendment to have an additional director on the company in question. I am very concerned about the suggestion of the Minister that the directors will not be paid immediately. My original question elicited a very interesting statement which I expect other hon. Members as well as myself observed. It appears that the Government are not going to bind themselves down to having directors with no salary for all time so that we can reasonably assume that if Government directors are associated with this company they will be paid.


I am sorry to interrupt the hon. Member, but I am glad he raised this point. I find that I was in error in saying that the Government director will not be paid. It is true that he will not be paid by the Corporation, but I understand the Treasury will probably pay him. He will not get any remuneration out of the resources of the Corporation. I hope the hon. Member will not misunderstand my reference to a possible change of policy in the future. What I meant to emphasise by saying that it was in the articles of association and not in the Bill was that it would be possible without statutory authority to change that provision. That however is not a change now in contemplation. The banks have undertaken that they will put it in the articles of association that directors are to be unpaid, but I want to make it plain that though the corporation will not pay the Government director, it may be that he will be paid by the Treasury.


It is because I believe that Parliament is the guardian of the public purse that I am interested in the position that there is probably going to be a director officially representing the Government on a certain private company that is going to deal with the administration of this money, and therefore, while I am in favour of the Amendment that we should have two directors representing the Government, my own view is that if, as the Minister has stated, the time comes when a paid director will be appointed, his money will come out of public funds, and I think the work in connection with this company should come under the Department of the Comptroller and Auditor-General, who, while not directly responsible to the Chancellor of the Exchequer, is certainly responsible by statutory right to the Consolidated Fund. I support the Amendment because I feel that if the Minister sees it in its proper light it will bring us to that particular direction that all public money expended by this House in this connection should be expended by a statutory officer who is capable of deciding exactly how such money should be spent. I have been careful to observe in this House for some years the manner in which we have been watchful that money voted by this House is used for the particular service for which it is granted. I am sure we should not agree to any sum of money, the interest on which comes to a very considerable amount, being wrongly used. Therefore, we want an additional statutory person who will see that money granted by Parliament is expended in the particular direction that Parliament decided it should be spent.


It was very interesting to listen to the Minister replying on this Amendment, but, however amicable he was in his reply, I do not think even his own friends would suggest that he adduced any reasons why there should not be two directors definitely appointed by the State. I think the Mover of the Amendment was right and that we should have had a majority, but, failing a majority, I think there are many reasons which could be adduced in support at least of having more than one representative of the State, and having, say, one to represent the Treasury and one to represent the Minister. The right hon. Gentleman said that he works in close consultation with the Treasury, and that this director can act as the go-between between the Treasury and himself, but at the same time I take it that, with the agriculture of this country in tie condition in which it finds itself to-day, the Minister is a very busy individual, and the Treasury, with the tremendous schemes that have been initiated by the Chancellor of the Exchequer, is also possibly inclined to be working overtime. The fact that you would have one director representing the Minister and one representing the Treasury would allow both Departments, through their representatives, to discuss the various problems that they may be called upon to face in connection with the conduct of the bank.

In reply to the Amendment practically all that the Minister had to say was that he thought that one Government Director would be sufficient. I believe there is an argument that he did not use against two being appointed, and that is that those representing the State would possibly increase the cost to the State, in view of the fact that the right hon. Gentleman stated that possibly the Government nominee would have to be paid. I would not have ventured into this discussion at all had not my interest been aroused by his statement, and I want to get a question answered in connection with this appointment. I want to know whether this one Director is going to have a full-time job. Is this going to be possibly an official of the Ministry who will give out of his normal time the amount of time that is necessary for this directorship? In the articles of association the other people who are to be Directors are to be without fee or reward and are to give their services free. Presumably, they cannot be going to give whole-time attention to this job, and consequently it appears to me that the House should really get to know something more with regard to the position that the single Government representative would occupy. If it is only to be part time, there can be no possible reason why there should not be a similar official from the Ministry of Agriculture. There would practically be no additional cost to the Exchequer because the official would simply go from his Ministry of Agriculture duties to his duties in connection with the corporation. I suggest also that it would have this effect. If the Minister of Agriculture was interested in having something carried through in connection with the corporation, it would be satisfactory to have one of his own officials with the Treasury official whose knowledge would be more on the financial side than on the agricultural side. The Ministry of Agriculture director would be one whose special knowledge was along the lines of agriculture, and I take it that the Treasury director would be an expert in financial matters.

The Minister might have been a little more accommodating in connection with this Amendment. I do not suppose that the other directors, seeing that they would be in a majority, would mind the Treasury director having someone by him to hold his hand, as it were, and to give him a little encouragement and support if he thought that the other directors were not taking the right line. I am sure that the Minister, when he comes to reconsider the matter, will see that there is a real case for this addition. On my assumption that this is not a full time job, it will not cost anything additional. The fact that one of these directors was greatly interested in agriculture and the agricultural policy of the Government, and that the other one was directly interested in the financial administration, would give far more strength to the Government position on the directorate, and would in no way interfere with the other kind gentlemen who are willing to give their services for nothing in the interests of agriculture.


I want to add a point in special connection with the difficulties of the Ministry of Agriculture with regard to efficient administration. There is in connection with the whole of this Bill a certain danger that the corporation, and, under Part II, the banks, will not put their backs into it to the extent required. Activity on behalf of the special interests on the part of the corporation is absolutely essential for the success of the Bill. I might just give evidence of that fact from the well-known Enfield Report on the whole subject of credit, on which this Bill is based. Mr. Enfield says: The success of the proposals.…will depend on their proper and adequate administration by the banks.…and it may be the case that on these very grounds they will meet with some criticism from persons who have doubts as to the willingness or ability of the banks to serve the legitimate needs of agriculture. That is a reason why the Ministry itself should be represented on the Board, and all the more because there is not only the ordinary danger of the Treasury point of view being what we are all familiar with, a rather narrow point of view, but because there is in this case necessity for active direction.


I hope that we shall not vote on this Amendment until we have had some statement from the Minister on this important point. My hon. Friend the Member for Camlachie (Mr. Stephen) called attention to the position of the director who is to be appointed under the Bill, and he asked a very pertinent question as to whether this director will Be a full-time director, or whether, on the other hand, while acting as a director, he will carry on his very onerous and important duties in connection with the Treasury. Perhaps the right hon. Gentleman will reply to that query. The Minister, in replying to my hon. Friend the Member for Rochdale (Mr. Kelly), addressed his remarks purely to trying to show that one director would be sufficient, owing to the relationship between his own Department and the Treasury. We raised this question, however, not merely on the grounds of efficiency, but on the wider ground of public policy. Frequently, during the lifetime of this Parliament we have come to the rescue of industry in one form or another, either in the way of subsidies or credit schemes. In this case, I gather from the hon. Member for Dewsbury (Mr. Riley) that the corporation would be responsible for only £660,000, whereas the State would be involved to the extent of £2,000,000. Yet we are to have only one representative for the State.

The point of our opposition is this. The Government have decided to come to the rescue of agriculture, and their form of assistance in the main involves heavy responsibility or guarantees on the part of the State. We are not interested in the provision made in this case, but to see that the interests of the State are safeguarded. I am really amazed that we have not asked for more than one representative in addition. I should have thought that we might have gone much further and asked for representatives, not only of the banks, the Treasury, and the Ministry of Agriculture, but for the Ministry of Labour, the agricultural workers, and the farmers. We might have tried to extend the representation in all directions, and I venture to think that the seeking of such representation would have been in order. But we have not done that. We have been too moderate. We have asked simply that the operative branch, not the financial branch, of the Ministry of Agriculture should appoint someone who understands the practical side of agriculture to see whether the money is being expended in a practical manner.

What does a Treasury official know about these practical matters? I have the greatest regard and admiration for their financial experts, lout they know little of the practical side of agriculture. They may well be able to say whether the financial manipulations are all right, but not whether the money is being wisely applied. It is not sufficient for the Minister to say "This director will be quite effective and one is enough," and to ignore the principal point made by the hon. Member for Dewsbury (Mr. Riley), which was that the State and the community were guaranteeing in one form or another vast sums of money as compared with the £660,000 of the company which is involved. I would like the Solicitor-General to satisfy us upon this point. Particularly I would ask him to address himself to the question of public policy, and further to say whether this director's appointment will be a full-time job, or whether he is to be a Treasury official going in now and again to have

a look at some papers and satisfy himself as far as he can within a limited time, then going back to the Treasury to some other task. In that case his mind will never be concentrated on this work; he will be occupied with the worry and anxiety associated with financial problems, and incapable of giving concentratated attention to the question of whether the policy adopted is a wise one and in harmony with the main provisions of this Bill.


I think the speech of the hon. Member for Wednesbury (Mr. Short) needs a reply, and I would ask the Solicitor-General if he will give an answer, even out of sheer courtesy.

The SOLICITOR-GENERAL (Sir Boyd Merriman)

I am quite ready to do my best to answer the questions. The answer to the question of the hon. Member for Camlachie (Mr. Stephen) as to whether the nominee of the Treasury will be a whole-time official is that he will not necessarily be a whole-time official. The hon. Member for Wednesday has assumed that a person nominated by the Treasury will necessarily be a Treasury official. On the contrary, although it is possible that a Treasury official may be appointed, it does not in the least necessarily follow that a Treasury official will be appointed, and I think it may be assumed that the Treasury will appoint somebody who fulfils all the requirements which have been indicated by hon. Members opposite.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 110; Noes, 193.

Division No. 275.] AYES. [8.42 p.m.
Adamson, Rt. Hon. W. (Fife, West) Cove, W. G. Henderson, T. (Glasgow)
Adamson, W. M. (Staff., Cannock) Cowan, D. M. (Scottish Universities) Hirst, G. H.
Alexander, A. V. (Sheffield, Hillsbro') Dalton, Hugh Hirst, W. (Bradford, South)
Ammon, Charles George Dennison, R. Hutchison, Sir Robert (Montrose)
Attlee, Clement Richard Edwards, C. (Monmouth, Bedwellty) Jenkins, W. (Glamorgan, Neath)
Baker, J. (Wolverhampton, Bilston) Forrest, W. John, William (Rhondda, West)
Barker, G. (Monmouth, Abertillery) Gardner, J. P. Johnston, Thomas (Dundee)
Barnes, A. Gibbins, Joseph Jones, Henry Haydn (Merioneth)
Barr, J. Gillett, George M. Jones, Morgan (Caerphilly)
Batey, Joseph Gosling, Harry Kelly, W. T.
Bowerman, Rt. Hon. Charles W. Graham, D. M. (Lanark, Hamilton) Kennedy, T.
Broad, F. A. Greenall, T. Kirkwood, D.
Bromfield, William Grenfell, D. R. (Glamorgan) Lansbury, George
Bromley, J. Griffith, F. Kingsley Lee, F.
Brown, Ernest (Leith) Griffiths, T. (Monmouth, Pontypool) Lindley, F. W.
Brown, James (Ayr and Bute) Groves, T. Lowth, T.
Buchanan, G. Grundy, T. W. Lunn, William
Buxton, Rt. Hon. Noel Hall, F. (York, W. R., Normanton) Mackinder, W.
Charleton, H. C. Hall, G. H. (Merthyr Tydvil) Maclean, Neil (Glasgow, Govan)
Cluse, W. S. Hardie, George D. March, S.
Compton, Joseph Hayes, John Henry Montague, Frederick
Morris, R. H. Sitch, Charles H. Viant, S. P.
Morrison, R. C. (Tottenham, N.) Slesser, Sir Henry H. Watson, W. M. (Dunfermline)
Murnin, H. Smillie, Robert Watts-Morgan, Lt.-Col. D. (Rhondda)
Naylor, T. E. Smith, Rennie (Penistone) Wellock, Wilfred
Oliver, George Harold Snell, Harry Welsh, J. C.
Owen, Major G. Snowden, Rt. Hon. Philip Westwood, J.
Palin, John Henry Stephen, Campbell Wiggins, William Martin
Paling, W. Stewart, J. (St. Rollox) Williams, C. P. (Denbigh, Wrexham)
Potts, John S. Strauss, E. A. Williams, David (Swansea, E.)
Purcell, A. A. Sullivan, J. Williams, T. (York, Don Valley)
Rees, Sir Beddoe Sutton, J. E. Wilson, R. J. (Jarrow)
Riley, Ben Thorne, G. R. (Wolverhampton, E.) Windsor, Walter
Robinson, W. C. (Yorks, W. R., Elland) Thurtle, Ernest Young, Robert (Lancaster, Newton)
Scrymgeour, E. Tinker, John Joseph
Scurr, John Tomlinson, R. P. TELLERS FOR THE AYES.
Sexton, James Townend, A. E. Mr. Allen Parkinson and Mr.
Short, Alfred (Wednesbury) Trevelyan, Rt. Hon. C. P. Whiteley.
Acland-Troyte, Lieut.-Colonel Ford, Sir P. J. Moore, Lieut.-Colonel T. C. R. (Ayr)
Agg-Gardner, Rt. Hon. Sir James T. Foster, Sir Harry S. Moore, Sir Newton J.
Albery, Irving James Fremantle, Lieut.-Colonel Francis E. Morrison, H. (Wilts, Salisbury)
Alexander, E. E. (Leyton) Gadie, Lieut.-Colonel Anthony Nall, Colonel Sir Joseph
Alexander, Sir wm. (Glasgow, Cent'l) Galbraith, J. F. W. Neville, Sir Reginald J.
Allen, Sir J. Sandeman Gates, Percy Newman, Sir R. H. S. D. L. (Exeter)
Applin, Colonel R. V. K. Glyn, Major R. G. C. Newton, Sir D. G. C. (Cambridge)
Apsley, Lord Grattan Doyle, Sir N. Nuttall, Ellis
Balniel, Lord Greaves-Lord, Sir Walter Oakley, T.
Beamish, Rear-Admiral T. P. H. Greene, W. P. Crawford Oman, Sir Charles William C.
Berry, Sir George Gretton, Colonel Rt. Hon. John Pennefather, Sir John
Bevan, S. J. Hacking, Douglas H. Penny, Frederick George
Birchall, Major J. Dearman Hall, Lieut.-Col. Sir F. (Dulwich) Perkins, Colonel E. K.
Bird, E. R. (Yorks, W. R., Skipton) Hamilton, Sir George Peto, Sir Basil E. (Devon, Barnstaple)
Bourne, Captain Robert Croft Hanbury, C. Peto, G. (Somerset, Frome)
Bowater, Col. Sir T. Vansittart Hannon, Patrick Joseph Henry Preston, William
Boyd-Carpenter, Major Sir A. B. Harland, A. Radford, E. A.
Braithwaite, Major A. N. Harrison, G. J. C. Raine, Sir Walter
Brass, Captain W. Harvey, G. (Lambeth, Kennington) Ramsden, E.
Brassey, Sir Leonard Harvey, Major S. E. (Devon, Totnes) Rawson, Sir Cooper
Briggs, J. Harold Haslam, Henry C. Remer, J. R.
Briscoe, Richard George Headlam, Lieut.-Colonel C. M. Rhys, Hon. C. A. U.
Brooke, Brigadier-General C. R. I. Henderson, Capt. R. R. (Oxf'd, Henley) Rice, Sir Frederick
Broun-Lindsay, Major H. Henderson, Lieut.-Col. Sir Vivian Roberts, E. H. G. (Flint)
Brown, Col. D. C. (N'th'l'd., Hexham) Hills, Major John Waller Ruggles-Brise, Lieut.-Colonel E. A.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hilton, Cecil Russell, Alexander West (Tynemouth)
Buchan, John Holt, Captain H. P. Rye, F. G.
Burman, J. B. Hope, Sir Harry (Forfar) Salmon, Major I.
Butler, Sir Geoffrey Hopkins, J. W. W. Samuel, A. M. (Surrey, Farnham)
Cassels, J. D. Horlick, Lieut.-Colonel J. N. Samuel, Samuel (W'dsworth, Putney)
Cautley, Sir Henry S. Howard-Bury, Colonel C. K. Sandeman, N. Stewart
Chapman, Sir S. Hudson, R. S. (Cumberl'nd, Whiteh'n) Sanders, Sir Robert A.
Christie, J. A. Hume, Sir G. H. Sanderson, Sir Frank
Churchman, Sir Arthur C. Hunter-Weston, Lt.-Gen. Sir Aylmer Savery, S. S.
Clarry, Reginald George Hurd, Percy A. Shaw, R. G. (Yorks, W. R., Sowerby)
Cobb, Sir Cyril Jackson, Sir H. (Wandsworth, Cen'l) Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)
Cockerill, Brig.-General Sir George James, Lieut.-Colonel Hon. Cuthbert Simms, Dr. John M. (Co. Down)
Cohen, Major J. Brunel Jephcott, A. R. Skelton, A. N.
Colfox, Major Wm. Phillips Kindersley, Major G. M. Smith-Carington, Neville W.
Conway, Sir W. Martin King, Commodore Henry Douglas Smithers, Waldron
Cope, Major Sir William Knox, Sir Alfred Somerville, A. A. (Windsor)
Couper, J. B. Lamb, J. Q. Southby, Commander A. R. J.
Courtauld, Major J. S. Leigh, Sir John (Clapham) Stanley, Lieut.-Colonel Rt. Hon. G. F.
Craig, Sir Ernest (Chester, Crewe) Little, Dr. E. Graham Steel, Major Samuel Strang
Croft, Brigadier-General Sir H. Long, Major Eric Streatfeild, Captain S. R.
Crooke, J. Smedley (Deritend) Looker, Herbert William Sugden, Sir Wilfrid
Crookshank, Cpt. H. (Lindsey, Galnsbro) Lougher, Lewis Templeton, W. P.
Davies, Maj. Geo. F. (Somerset, Yeovil) Luce, Major-Gen. Sir Richard Harman Thom, Lt.-Col. J. G. (Dumbarton)
Davies, Sir Thomas (Cirencester) Lumley, L. R. Thompson, Luke (Sunderland)
Davies, Dr. Vernon Macdonald, Capt. P. D. (I. of W.) Titchfield, Major the Marquess of
Dawson, Sir Philip MacDonald, R. (Glasgow, Cathcart) Tryon, Rt. Hon. George Clement
Dixey, A. C. MacIntyre, Ian Turton, Sir Edmund Russborough
Drewe, C. Macmillan, Captain H. Vaughan-Morgan, Col. K. P.
Eden, Captain Anthony MacRobert, Alexander M. Waddington, R.
Edmondson, Major A. J. Maitland, A. (Kent, Faversham) Wallace, Captain D. E.
Elliot, Major Walter E. Makins, Brigadier-General E. Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Ellis, R. G. Malone, Major P. B. Warner, Brigadier-General W. W.
Fairfax, Captain J. G. Margesson, Captain D. Waterhouse, Captain Charles
Fanshawe, Captain G. D. Merriman, Sir F. Boyd Watson, Sir F. (Pudsey and Otley)
Fermoy, Lord Mitchell, S. (Lanark, Lanark) Watts, Sir Thomas
Fielden, E. B. Mitchell, W. Foot (Saffron Walden) Wayland, Sir William A.
Finburgh, S. Monsell, Eyres, Com. Rt. Hon. B. M. Wells, S. R.
Williams, A. M. (Cornwall, Northern) Withers, John James TELLERS FOR THE NOES.
Williams, Com. C. (Devon, Torquay) Wolmer, Viscount Captain Bowyer and Sir Victor
Williams, Herbert G. (Reading) Womersley, W. J. Warrender.
Wilson, R. R. (Stafford, Lichfield) Yerburgh, Major Robert D. T.

Resolution agreed to.