§ Further considered in Committee. [Progress, 7th May.]
§ [Mr. JAMES HOPE in the Chair.]
§
Question again proposed,
That it is expedient to make provision for the winding-up of the Naval Prize Fund and the dissolution of the Tribunal established under the Naval Prize Act, 1918, and that for that purpose there should be transferred from the Naval Prize Fund to the Exchequer—
and that the sums required for the payment of the costs, charges, expenses, and claims, liability for which is so transferred should be charged on and be payable out of the Consolidated Fund or the growing produce thereof, and that in consideration for such transfer there should be paid out of the Naval Prize Fund to the Exchequer the sum of one hundred and twenty-six thousand five hundred pounds."—[Lieut.-Colonel Headlam.]
§ The FINANCIAL SECRETARY to the ADMIRALTY (Lieut.-Colonel Headlam)A few weeks ago, when this Resolution was under the consideration of the Committee, my right hon. Friend the First Lord of the Admiralty promised that he would look further into the details of the proposed arrangement between the Treasury and the Admiralty regarding the transfer of the Naval Prize Fund. The two Departments concerned have now examined the matter again in all its bearings and are convinced that the arrangement outlined in the Resolution before the Committee is a just and reasonable one. The opposition to the scheme, when it was discussed here before, was due in the main to la fear that the suggested financial settlement between the Naval Prize Fund and the Exchequer was a somewhat happy-go-lucky proposal for a round sum payment in respect to wholly unknown future claims. The arrangement was discussed indeed as if it were a purely speculative bargain with the chances considerably in favour of the Exchequer. One hon. Member even went so far as to say that the Admiralty was indulging in 2194 a gamble. It was taken for granted by some other Members—I do not under stand why—that, after satisfying all the claims, the Exchequer would be left with a substantial balance.
If I can succeed to-night in making the Committee appreciate the facts of the case, any opposition there may have been to the Resolution will, I hope, be withdrawn. In the first place, as to the propriety of winding-up the Prize Fund by a financial settlement of this kind, it might be well for the Committee to know that the original suggestion came neither from the Treasury nor from the Admiralty, but from the Naval Prize Tribunal itself, which as long ago as 1925 proposed that such a settlement should be considered by the Government. Clearly, even then, the tribunal were of the opinion that the time had come when a settlement fair both to the Naval Prize Fund and the Exchequer should be arrived at. The names of the members of the tribunal should convince the Committee, I think, of the respect to which their view is entitled. They are Lord Phillimore, President, an eminent legal authority; Sir Guy Fleetwood Wilson, an experienced administrator and financier; and Admiral Sir Martyn Jerram, whose name is well known to and highly respected by all naval men. So far from the two Departments being disposed to run hastily into a bargain in 1924, both the Admiralty and the Treasury thought that there were still so many claims outstanding and so much uncertainty about several of them, that it was not possible then to negotiate for a settlement between the Naval Prize Fund and the Exchequer. The matter therefore was not proceeded with.
To day, however, the situation is very different. Many claims have been disposed of during the last three years, and the situation has also been considerably cleared by an agreement which has been arrived at between ourselves and the United States of America, by which both Governments have undertaken not to give diplomatic support to more claims by their nationals. It can now be said, therefore, with reasonable confidence, that all the important claims still likely to be brought against the Naval Prize Fund are known. The figure of £126,500, mentioned in the Resolution, refers to these known claims. It has been arrived 2195 at after a very close and careful estimation of what will probably have to be paid, and it has been made by those who are acquainted with all the facts and have been concerned in the negotiations with the claimants up to date.
Obviously it would not be advisable for me to go into the details as to individual claims. I am hopeful, however, that the Committee will be satisfied with my assurance that the circumstances in each case have been fully considered by the two Departments, and that the sum it is proposed to transfer is not expected to yield any advantage to the Treasury as against the Naval Prize Fund. Such risk of loss as has been incurred is certain to fall on the Treasury. It may interest the Committee to know that the total face value of the claims as they stand is much greater than £126,500. Indeed, it very nearly equals the whole residue of the Naval Prize Fund.
§ Sir BASIL PETOWhat is the total amount?
§ 11.0 p.m.
§ Lieut.-Colonel HEADLAMAbout £278,000. The proposed settlement with the Treasury allows for a substantial abatement from these claims as a result of negotiations or litigation. During the last Debate on this Resolution a suggestion was made that the sum handed over to the Treasury under the settlement should be returnable to the Naval Prize Fund so far as it was not actually spent. As I have already explained, this figure of £126,500 has been most carefully estimated, and nothing in our opinion is less likely than that an unexpended surplus will arise. It will be much the same as the case of the little boy with an apple; we do not expect there is going to be any core. Putting aside this aspect of the matter altogether, in principle a settlement under which the taxpayer takes all the risk and the Naval Prize Fund takes all the advantage is not one to which the Treasury could be expected to agree or one for which the Admiralty could reasonably press. There is also the practical difficulty; that, if the Bill becomes law, it will terminate the existence of the Naval Prize Tribunal, and, once that body ceases to exist, there is no possibility of determining authoritatively and precisely what part of the 2196 sums paid would have been chargeable against the Fund and what against the Exchequer.
It seems to me, therefore, that the only practical alternative to such a settlement as we are proposing in the Bill is that of keeping the Fund and the Tribunal in existence and going on as we are at present. Administratively there is no great objection to this, as the expense involved is very small, but the disadvantage of such a course is that it would not be possible to make any distribution of funds to naval charities before 1931 at the earliest. By an Order in Council of November, 1926, claims for prize money can be met until 1930, and even then, if we keep the Tribunal in existence, if things go on until 1931, we should have to keep some funds in hand in order to meet unknown future claims, because there is no time limit for bringing claims in the Prize Court. If it is admitted that a settlement between the Naval Prize Fund and the Exchequer freeing the former from present and future claims is sound, then the only question for decision is at what amount these claims should be valued. On this point the Government have taken and are proposing to act on the best expert advice, advice which has been given quite impartially, and with the sole object of arriving at a fair and equitable solution.
§ Mr. AMMONI do not wish to delay the proceedings, but I think it is important that it should be made clear, before we allow this Resolution to pass, exactly what has happened to the whole of the money. At first glance it looks like another raid by the Chancellor of the Exchequer on a fund in order to stabilise his somewhat shaky Budget. Perhaps I have not quite gathered the purport of what the Parliamentary Secretary said. I gather that the total amount in the Fund is in the neighbourhood of £287,000, and that a certain sum of money, £126,500, is to be earmarked for possible claims on the Naval Prize Fund. That leaves, in round figures, £150,000. I suggest that there is a possibility of disposing of this money in some other way than that suggested, and perhaps to the advantage of persons concerned with the naval service. It looks as if the money would have been better advanced to naval charities rather than go into the 2197 pocket of the Treasury. If the whole of the claims against the Fund amount to the sum suggested, it looks as if the balance of £150,000 ought to be distributed to various naval charities. That is a point on which I am in doubt.
§ Lieut.-Colonel HEADLAMThe whole £150,000, the whole of the residue is to go to naval charities. That is the object of the Resolution.
§ Mr. HORE-BELISHAI think the hon. and gallant Member has made the reasons for not accepting this Resolution more formidable than before. We are told that there are two classes of claims against the Fund, one by the merchants and the other by the Navy. The hon. and gallant Member has now told us, for the first time, that settlement of the outstanding payments to the merchants is now proceeding. If that be the case, I cannot understand the necessity for the Resolution. The hon. and gallant Member has also told us that if this Resolution were not passed it would be impossible to dispense any of this money to naval charities before 1931; but on the last occasion when the Resolution was before the House he made great play of the generosity of the Fund and gave a list of charities which had benefited from the Fund.
§ Lieut.-Colonel HEADLAMI am afraid that I cannot make myself clear to the hon. Member. The hon. Member is parodying what I said. The point is, that a great deal of this money has already been distributed, but there are outstanding claims against the Fund. What we are proposing to do now is to get rid of those outstanding claims by transferring them to the Treasury, and paying a certain sum of money to the Treasury, and we are asking for £126,000 for that purpose. It is perfectly clear that the claims far exceed the amount for which we are compounding with the Treasury.
§ Mr. HORE-BELISHADoes the hon. and gallant Member seriously stand there and say that this proposal is one to rob the taxpayers; that he has made a very good bargain with the Treasury and that the taxpayers are to put up the money which the Treasury has consented to give away to him? The proposition is perfectly ludicrous. If that is not the 2198 case, and if the Admiralty is to lose money, then the money is coming out of the pockets of the sailors. In either event, I hope that the House will reject the Resolution. In giving a list of the charities which had benefited from the Fund the hon. and gallant Member mentioned that £100,000 had gone to Greenwich Hospital. He said that there was; a lien against that money. He further said that he proposed to give another £50,000 to Greenwich Hospital, with a lien against that money. Why a lien? This money was to be charged with any prospective claim that might be put forward by the merchants.
§ Lieut.-Colonel HEADLAMAgain, the hon. Member has failed to understand. There are claims for prize money that still may come in. That is a different kind of claim from the claims that are being made by the merchants. The point is, that so long as these claims can be made, we have to be prepared to pay them, and we have until 1931. Until that time comes, the money has been given to Greenwich Hospital, with this lien upon it.
§ Mr. HORE-BELISHAPrecisely. I did not misunderstand. I say that if the money can be given to Greenwich Hospital subject to a lien, it can be given to other naval charities, subject to a lien, Why cannot the money which is being transferred to the Treasury be given to the Royal Naval Benevolent Trust, subject to a lien, so that if the merchants substantiate their claims, the trust will become liable for the money in the same way as Greenwich Hospital? In order to show the hon. and gallant Gentleman that I do not misunderstand him, I will take him through the figures which he gave on the last occasion when this subject was discussed. This is a monstrous proposition and should certainly be rejected, if no argument can be brought forward in support of it. The hon. and gallant Gentleman said the receipts of the Fund were £16,035,000 and the disbursements were: £14,437,000 to the Imperial Fleet; £318,000 to Dominion sailors; £195,000 to naval charities, and £611,500 to shipowners—a total of £15,561,000. Subtracting this sum from the total receipts leaves in the hands of the Admiralty £474,000. Of that sum £123,000 is to be handed to the Treasury, leaving £348,000 in the hands of the 2199 Admiralty. Against that sum £100,000 has been handed conditionally to Greenwich Hospital in the circumstances described, and £195,500 has been earmarked as against claims by sailors, leaving in the hands of the Admiralty £52,000.
The Admiralty, therefore, even if the Resolution is carried, will retain control of £348,000, which means that a staff has to be kept at the Admiralty to administer this sum and, if the sum is handed over to the Treasury, an additional staff will have to be established by the Treasury in order to administer it. When questions are raised about it, whose files are the Treasury going to consult? They are going to consult the files that are at the Admiralty and, therefore, no possible economy is to be derived from handing over the fund to the Treasury. The only argument for handing this money over to the Treasury is that the hon. and gallant Gentleman is making a good bargain. If he is making a good bargain, the taxpayer is making a bad bargain. He says that in the near future all these claims will be determined. Therefore there is no possible object in robbing the taxpayer of this money. I believe the naval charities are being robbed of this money. They would derive great benefit from the use of the money immediately and my suggestion is that the hon. and gallant Gentleman should drop the Resolution and hand the money over to the Royal Naval Benevolent Trust. I observe that he has handed over some to the British Legion. Why? It is not a naval charity and this money is supposed to be given to naval charities under the Act. The British Legion is concerned with other Services. [HON. MEMBERS: "As well as the Navy!"] Certainly, but I say it is not specifically a naval charity. When the Royal Naval Benevolent Trust was established in 1922, the object was to co-ordinate all naval charities and make a central fund, from which all benefits to the Navy could be distributed. That fund is supervised by the Admiralty and administered by the Fleet, and they are the proper bodies to have that money. Heaven forbid that I should make any reflection on the British Legion, but the House of Commons having passed an Act stating that the naval charities were to benefit from any surplus of this kind, that money 2200 should go to the Royal Naval Benevolent Trust. Rather than see it distributed to the British Legion, I would like the hon. and gallant Gentleman to establish a Royal Dockyard Benevolent Trust.
§ The CHAIRMANI hardly see how the distribution of the Fund arises on the Resolution. The main question is that a certain sum is to be payable to the Exchequer and the Exchequer is to take up legal liabilities. After that, presumably there will be a surplus, but this Resolution says nothing as to the distribution of the surplus.
§ Mr. HORE-BELISHANo, but I am saying that this money should not go to the Treasury at all and that under the Naval Prize Act it ought to be going to naval charities. The hon. and gallant Gentleman has admitted that a large sum has been handed over and that a further sum is to be handed over to Greenwich Hospital. I say that the sum of money here, namely, £126,000, should go to the Royal Naval Benevolent Trust, subject to exactly the same lien as has been imposed on the Greenwich Hospital money. I cannot resist the conclusion that this Bill is another Clause of the Economy Act of two years ago, which took away £1,000,000 of the health insurance fund of the sailors and soldiers, and I can assure the hon. and gallant Gentleman that if he proceeds with this Resolution, the Navy will not forget it.
§ Sir B. PETOI want to ask the hon. and gallant Gentleman to influence his right hon. Friend the Chancellor of the Exchequer to hand over something in the nature of conscience money. The Chancellor of the Exchequer sometimes receives conscience money, but on this occasion I want him to pay some out. That is why I have put down an Amendment to reduce this £126,000 to £100,000. The hon. Member for Devonport (Mr. Hore-Belisha) is very anxious that no one, not even the British Legion, should share any of this money with the naval charities. I want to ask, What are naval charities? All this Naval Prize Fund arises out of the late War, and I am sure it will not be disputed that the Merchant Service, together with the Navy, neither of whom could have carried on without the other, were equally responsible for the taking of these prizes out of which the Fund arises, and all of them 2201 suffered equal loss. The Committee may perhaps remember that in 1919 the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) had an interview with the representatives of the Merchant Service, and after various cases had been pointed out to him in which on naval service men of the Merchant Service had lost their lives and left widows and dependants and so forth, the right hon. Gentleman made a very definite pledge.
§ The CHAIRMANI do not see how this arises on this particular Motion. It may possibly arise on the Bill that is to be set up, but this is merely a question as between the fund and the Exchequer and not as to its ultimate distribution.
§ Sir B. PETOI appreciate the point, Mr. Hope, but this is the last opportunity I shall have to get something which is now going to be handed over to the Exchequer as an addition to the sum which will be available for naval charities; and, therefore, I put my Amendment on the Paper with a view to trying to get the Chancellor of the Exchequer to take a slightly additional risk in respect of these claims which, we are told, came from Greek merchants and others, against the Naval Prize Fund, and now do what has often been pressed on the Admiralty, and that is to take a rather more liberal view of what are naval charities.
§ The CHAIRMANI do not see how the hon. Member can do this by his Amendment. It does not seem to me to have any such effect whatever. There is a certain legal claim on the Naval Prize Fund pending, which has to be transferred to the Exchequer. After that, there will be some over in the Naval Prize Fund which apparently will be distributed according to an existing scale, but this giving of more or less does not affect the distribution of the surplus at all.
§ Sir B. PETOI had hoped that possibly or probably if they had a larger fund at their disposal, they would take a rather more liberal view, and, therefore, I wanted the Admiralty to have rather more, and the Chancellor rather less.
§ The CHAIRMANThere will be, presumably, the Second Beading of a Bill, on which these points should be raised. They do not come under this Resolution.
§ Lieut.-Commander KENWORTHYI must draw the attention of the House to what happened on 7th May, when we had this matter before the Committee. On that occassion there was a discussion, in which a number of Members took part in all parts of the House, and the point of view was put clearly that the bargain or the arrangement come to between the Admiralty and the Exchequer needed reconsideration. I moved an Amendment that the money that we were handing over to the Treasury should be held on trust to the Admiralty, so that if there were less money required to meet the claims of the merchants, the naval charities would get the benefit of it. I did not press that matter to a Division, although I was supported in all parts of the House, and I got a promise from the First Lord, who said that he was quite ready to examine this question further, and that if I were to withdraw my Amendment he was prepared to look into the matter. He said he did not wish to do any injustice to the men, but he wished to make a good bargain. Where is the First Lord of the Admiralty to-night? I know the hon. and gallant Gentleman has done his best to make a rather complicated matter clear, but the First Lord, from the time we dealt with the Naval Estimates, except for an occasional Prayer Book Debate, has not graced the Assembly very much with his oratory. When it is a question of a sum running into hundreds of thousands of pounds, taking the two sections together, the First Lord, who is supposed to be looking after the interests of "Poor Jack," and not merely looking the part, ought to be here. We ought to have a word from the First Lord as to why he has not been able to find any concession that could be given.
§ Lieut.-Colonel HEADLAMI told the hon. and gallant Member that the greatest trouble had been taken to see whether the arrangement was liberal or not by the First Lord's instructions, and it has been done.
§ Lieut.-Commander KENWORTHYApparently the trouble has been so great that the First Lord is exhausted and cannot be here to put this matter before Parliament. This is, after all, the Assembly that decides these matters. 2203 We have the duty of seeing that the Treasury does not squeeze out one extra penny that could go otherwise to naval charities or to the benefit of naval causes. On the last occasion we had the Financial Secretary to the Treasury, the hon. and gallant Gentleman, and the First Lord of the Admiralty all trying to explain this thing, and the House was not satisfied. Now we have only the hon. and gallant Gentleman, and I believe that the House is still not satisfied. At any rate, I wish to ask this question before we leave this matter. I would first draw attention to the simple fact that you have here a number of claims which are not being heard; only notices have been given of them, and the Treasury and the Admiralty legal advisers are able to meet in conclave and decide that they will be met by a sum of £126,500. When one receives what one regards as a fictitious claim and finds that the sum is worked out to the last shilling and the last penny, one's suspicions are heightened. When I see a sum like that, I only wonder why 6s. 8d. was not put on the end of it.
When were the last new claims against the Fund received? It is nearly 10 years after the end of the War and surely there must be some limit to the claims? Who are the principal claimants now, other than Americans? Are there claims from the Continent, and is there any reason why the House should not be told what nations are still claiming? If the claims were good ones, surely it is obvious that the merchants would have made them long ago. They would not have waited all these years, because if the present Government remain in office very much longer we may be landed in a new war and then they will have little chance of getting their money. It is doubtful whether valid claims can have been made in recent times. Why was it not possible to carry out the, original suggestion made in May last? The Government have had two months to look into the matter. Why should not this money be held in trust and why should not the Treasury agree that if they have made a mistake and over-estimated the possible claims by merchants against the Fund that in that case the residue should go to the naval authorities? I do not want to controvert your ruling, Mr. Hope, as to discussing 2204 where the money should go, but at question time I did raise one rather hard case, and I would ask the hon. and gallant Member when he has money at his disposal to recommend that a portion should go to assist these particular men.
§ Captain FANSHAWEI do not think the hon. and gallant Member can have as short a memory as he would like us to believe. He knows perfectly well that there is no time limit to these claims and the hon. Member for Devonport (Mr. Hore-Belisha) knows that there has been no robbery, but that a just decision has been arrived at between the Admiralty and the Treasury; and that just solution is that £126,000 will be paid to the Treasury in respect of the claims known of at the present time. That leaves £157,500 to be disposed of, and we learn from the Memorandum that this will be given to naval charities. Without wishing to go against your ruling, Mr. Hope, I should like to ask the hon. and gallant Member to see that some of the money should go to deal with tuberculosis among the men of the Navy.
§ The CHAIRMANThat is going far beyond the scope of what is permissible.
§ Mr. TINKERI wish to say that I think the Government are justified in the step they have taken. What do their opponents say? That the whole of this £278,000 ought to be given to charities. I should have thought that they were in earnest in this matter. After all, this money is prize money, and it is to meet claims for that purpose. A certain amount ought to be handed back to be kept in order to meet these claims. I shall support the Government in this matter.
§ Lieut.-Commander KENWORTHYI think some reply should be given to the questions which have been put.
§ Lieut.-Colonel HEADLAMIn answer to a question, I said that it was considered inadvisable to make public the nature of the claims in existence, but if the hon. and gallant Member for Central Hull would care to come and see me, I will explain the matter.
§ Mr. HORE-BELISHAIs he prepared to give a guarantee that if there is any money left after meeting these claims— 2205 and there may be a considerable sum—it will be diverted to naval charities?
§ Lieut.-Commander KENWORTHYI do not want any details, but surely we can be told the date of the last claims? Were they made within the last three years? Is there any reason why that information should not be given?
§ Lieut.-Colonel HEADLAM indicated dissent.
§ Resolution to be reported To-morrow.