Commons Sitting of 30 November 1928

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

QUESTIONS TO MINISTERS.
The following Question stood upon the Order Paper in the name of COMMANDER BELLAIRS:
To ask the President of the Board of Trade whether anything is yet known of the rates of duty mainly affecting British industries in connection with the Spanish tariff that is to come into force on 1st January?
Commander BELLAIRS: May I explain, Mr. Speaker, that I only put this question down for to-day because I was asked yesterday to postpone it until to-day? Otherwise, I should not dream of putting down a question for Friday.

SELECTION (STANDING COMMITTEE S).

  STANDING COMMITTEE B.
  Mr. WILLIAM NICHOLSON reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B (added in respect of the Appellate Jurisdiction Bill): Commander Williams; and had appointed in substitution: Sir Ellis Hume-Williams.
  Report to lie upon the Table.

ORDERS OF THE DAY.
  SUPPLY.
  REPORT [22ND NOVEMBER.]
  CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1928.
    CLASS VI.

      RAILWAY FREIGHT REBATES.
      Resolution reported,
      "That a sum, not exceeding£1,000,000, be granted to His Majesty to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1929, for a Grant in Aid of the Railway Freight Rebates (Anticipation) Fund."
      Resolution read a Second time.
      Motion made, and Question proposed. "That this House doth agree with the Committee in the said Resolution."
      Lieut.-Commander KENWORTHY: I hope that we are going to have a word from the Minister of Agriculture, when he comes in, in answer to certain questions which were put to him during the Committee stage. I did not go out of my way to complain of the absence of the Minister of Agriculture on that occasion, because I had not given him notice; I relied on the Chief Patronage Secretary to have him in the House, and I blame the Chief Patronage Secretary and not the Minister of Agriculture.
      The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell): Thank you.
      Lieut.-Commander KENWORTHY: We certainly had a reply, naturally an inadequate one, from a private Member on the other side of the House, but that is all; we have had nothing from the Minister of Agriculture, and we ought to have something. The Debate in Committee was principally concerned with the effect of this huge subsidy on the coal export trade, and I do not want to go over the ground with regard to that, because, among other reasons, it will on the face of it apparently give some advantage to my own constituency. The main complaint during the Debate was the complaint of the Durham representatives at the unfair discrimination against private mineral lines, but, in addition to
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      that, I took it upon myself to voice certain complaints made to me by working farmers as to the effect on agriculture of the differentiations in the Schedule.
      I am not going over the ground that I then covered, but I drew attention to certain extraordinary anomalies, and I want to ask the Minister of Agriculture whether, before certain products of the soil, namely, new potatoes, were excluded from the benefit of the rebate, potato growers in the West of England were consulted. I understood from the hon. Member who spoke for the Conservative party from the back benches, and who said that the Farmers' Union had been consulted, that the amount of benefit in reduction of freights due to de-rating of the railways, amounting to£800,000, had to be spread in the most economical way over the different branches of agriculture, that a certain quantity of new potatoes came from abroad, and that, therefore, new potatoes had to be excluded, because it was not desired to give the foreigner any rebate on his new potatoes, and, therefore, the unfortunate farmer in the West of England was to be penalised. The awful foreigners to whom we are afraid of giving any benefit are largely inhabitants of the Channel Islands, our fellowciti2;ens in the ancient fief of the Northern Kings, which is as much a part of the British Empire as Scotland is. In fact, it has been longer joined to England than Scotland has. That party, which is always roaring out that we must buy British goods, help Empire trade, and so on, now says, "Oh, no; we must not give any assistance to our fellow-citizens of the Channel Islands, because, forsooth, that may mean giving some assistance also to French growers of new potatoes." That may be all right, but the British grower of new potatoes is penalised.
      There is another case, namely that of graded vegetables. I rarely speak on agricultural topics, but I take a great interest in our premier basic industry, and meet a great many farmers; and I agree with the awful things that they say about the present Government. One of the necessities of agriculture to-day is better grading of products, and better preparation of products for the market, by packing them in a more attractive manner. That is where some foreign growers have had the advantage over us

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      in the past. One of the particular cases that I have in mind is that of vegetables, and vegetables for human consumption, carefully washed and packed, get no rebate. While, however, they are excluded, unwashed vegetables—dirty vegetables dug out of the ground, such as carrots, turnips, and the like, get the 10 per cent. rebate. That is a direct discouragement of better grading and organisation by market gardeners and smallholders.
      The MINISTER of TRANSPORT (Colonel Ashley):Perhaps I may point out to the hon. and gallant Gentleman that this Schedule applies to cattle feeding stuffs, and not to vegetables for human consumption except potatoes. Potatoes were put in for special reasons, in order that certain districts might not be left out of benefit.
      Lieut.-Commander KENWORTHY: The rebate is being given on alleged cattle feeding stuffs but not on food for human beings; but it is common knowledge that in some cases the same food that is used for cattle is also put on the market and sold to the ordinary housewife, and quite rightly too, because it is perfectly wholesome. The point is that it gets the rebate when it has not been washed and prepared for market, but, when it has been so prepared, then this omnipotent Government comes down and says "This is too good a product, and it must have no rebate," the excuse being that some foreigners might be advantaged. I also want to protest against the alleged consultation with the Farmers' Union. We are told that the Farmers' Union were consulted and everything is all right, and this sovereign Assembly has not another word to say. Someone representing the Farmers' Union is consulted, although they cannot speak for all the differing interests of farmers under different conditions in various parts of the country; their reluctant assent to something is obtained; and then the Government come down to the House of Commons and say "Take it or leave it." It is an extraordinary thing that I, a representative of a seaport, who, if anything, wants to encourage imports from abroad, should have to champion the British farmer in this House, while the representatives of agricultural constituencies, many of whom I see on the other
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      side of the House, keep perfectly silent. During the Committee stage they gave me no support, and I invite their support now. I say that this Schedule is unfair to very large sections of British agriculturists, and that it ought to be amended, and I hope that next year it will be amended.
      I want to get, if I can, an assurance from the Minister of Transport—the only Minister having any responsibility on this point who is present—that he will have this matter reconsidered next year, especially after we have had some experience of it. I do not want to put the House to the trouble of a Division on the matter, nor do I want to put my hon. friends opposite in an awkward position. I hope that my generosity will be appreciated, and that the Minister will give me the assurance that I want. I assure him that this Schedule in regard to agricultural products has caused a lot of dissatisfaction among worthy and hardworking agriculturists in different parts of the country, in the East Riding of Yorkshire and in Devon and Cornwall particularly. I hope that the right hon. Gentleman will take in good part this protest from me, and will give me an assurance that the matter will be carefully considered after we have had full experience of its working.
      Mr. SMEDLEY CROOKE: On a point of Order, I wish to ask you, Sir, if it is in order for an hon. Member to call the Patronaue Secretary a factory inspector?
      Mr. SPEAK ER: There is nothing derogatory in being a factory inspector.
      Lieut.-Commander KENWORTHY: I said nothing of the kind. I referred to the Chief Patronage Secretary. I did not mention a factory inspector. The hon. Member should apologise.
      Commander WILLIAMS: Possibly for the first time I am rather in agreement with the hon. and gallant Gentleman. The last time we had a debate which concerned the expenditure of a very large sum of money we spent hours upon hours of the time of the House going into a minute examination of where this expenditure went. The expenditure covers a very wide aspect of national affairs. I do not know that it has been

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      particularly wide this morning, but I want to get right away from that small section of the railway world which considers it a grievance and to try to deal with the matter as a whole. There can be very little doubt that this readjustment of rates in this particular case is really, when you come to boil it down to actual facts, a subsidy on a very large scale indeed. It is an attempt on the part of the State, by giving relief to the railways in certain directions, to make them, in their turn, give direct relief to certain industries which require it, or are said to require it.
      I agree that in this particular respect this readjustment of payment is on the whole likely to be of very great national advantage. If the State is giving relief on the one hand, as it undoubtedly is, by a subsidy to relieve railways of a certain amount of their rates, the State is perfectly justified in seeing that that relief goes in what is the best interest of the country as a whole. But I cannot help thinking that when you get a debate which covers such a wide aspect of affairs it is somewhat extraordinary and somewhat interesting to see that almost the whole of the Socialist party, when they had this extraordinary chance of putting forward their propaganda, used practically the whole of their time on the last occasion on which we discussed it in discussing the rights of a small amount of private enterprise as far as the railways are concerned. I was amazed. It only goes to show how vast is the permeation of the Socialist party that is taking place at present, due mainly to the slow, gradual dripping in of extreme Liberals of a curious type into the party, and the influence of those who get in on the party councils, not I think possibly in the best interests of the party or the nation as a whole. They are old fashioned people with quaint old ideas, and it would be a very curious Socialist party if ever they on-trolled it.
      Lieut.-Commander KENWORTHY: What about the Liberal Unionists in your party?
      Commander WILLIAMS: The Liberal Unionists in our party have a very great rejuvenating effect on the old Tory party.
      Mr. SPEAKER: This is rather raking up old history.
      Commander WILLIAMS: I very much apologise for having been misled, and, of course, I would not dream of pursuing a subject so unpleasant to certain people. I should like to congratulate the Minister of Agriculture and the Minister of Trans port, and everyone else, very much on having, at least as far as this is concerned, in some way kept the interests of a smaller branch of his Department in mind. Coal is to get this 10 per cent. rebate when it is going to be used in the bunkers of fishing vessels. I believe that is almost the only help the fishing industry will get out of this part of this gigantic scheme, and I should like to congratulate the Ministry on having given what I believe is a very valuable, a very useful, and a really substantial benefit to the industry. I congratulate all the Ministers concerned on showing that under a Conservative Government it is quite easy, and is the usual practice of Ministers combining together and really knowing what are the interests of the various Departments.
      Coming to the Schedule itself, the hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Ken-worthy) is one of those who fire at random at a great many objects, and the surprise of the House is almost invariably shown when he happens to make a bull's eye. I cannot for the life of me make out how it is that on this particular occasion the bull's eye which he has hit bang in the middle happens to he carrots. It is a very curious thing that he has got it there, and I honestly think that this very small thing in itself, but in reality covering a very much larger space of ground, is the weak point in this schedule. I should have thought that at present, with a modern Minister of Agriculture, with Modern ideas, if you are setting out to help and to relieve the rate on railway produce you would have looked at the whole scheme from the point of view of those forms of agricultural produce which are most likely to progress and to be prosperous in the future. Corn, we all know, must in tie very nature of things gradually become less easy to grow. [HON. MEMBERS: "Why"?] I should not be in order, because I think corn as such,

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      for food does not come into the Schedule, but it is obvious that you cannot fairly expect over a long period to compete profitably with corn grown in Siberia, or Canada or any of the other great expanses of the world. Realising that, surely if you are endeavouring to help forward agriculture, the best thing you could do would be to concentrate these reliefs, as far as you could, on those forms of agriculture which are suitable to our district, and in close proximity to our markets. I very much regret that relief could not have been given on the very heavy freightage of the vegetables grown in this country, not only one but the whole of them, to take them into the great town markets. We were given by the hon. baronet the member for Rye (Sir G. Courthorpe) this very amazing reason. Referring to the speech that has been made by the hon. Member for Central Hull he said:
      "If the relief was extended to washed vegetables intended for human consumption it would include the carriage of all imported vegetables as well as the carriage of the home-grown vegetables, because our commercial treaties prevent us from discrimintating between the same classes of goods produced at home and abroad."
      He went on to say:
      "And even if that were not so, it would be impracticable to have two classes of freights on precisely the same goods according to their different source of origin."—[OFFICIAL REPORT, 22nd November, 1928; col. 2012, Vol. 222.]
      The last sentence is a direct reflection on the railway companies and their servants, because if it. is not possible for a railway company to-day—I believe that it is possible—to find out and to know which goods are grown in this country and which are not, their standard of intelligence is far below that of the ordinary Britisher. I readily realise, as one must realise from time to time, the very minute details into which they go in regard to their traffic schemes. I also realise the new spirit on the railways to-day, due on the one hand to the wonderful leadership of the men by the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas), and on the other hand, to the directors. When one realises those things and sees the real efforts which the railways are making to change the old idea of merely getting something on to the line and taking it
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      from one place to another, when one realises that they are trying to-day as they have never tried before to build up their traffic the whole way along the line in order to encourage people to use the railways and to be helpful to every trade and industry, surely it is not too much to expect them to help in this respect. I believe that the railway companies would be the very first to do so if it were made possible, and that they could do so with the greatest of ease.
      There is the further aspect of foreign treaties; and now we get on to a very difficult and possibly rather dangerous factor in this particular scheme. I am not sure that it would really break any foreign treaty if, for example, we gave some form of preference by a reduction of freight on stuff grown in this country as against stuff grown in other countries. To refer to new potatoes for a moment—this does not affect my constituency at all, though I know something about the subject—I do not want to have an unfair rate against produce coming from Guernsey. I will go further 'and say that I do not want an unfair rate against stuff coming from any country. But I do say that when you are readjusting rates in this respect it is certainly not too much to ask that we should endeavour to encourage as far as possible those articles which are most likely to be successful in the future. May I ask a very simple question with regard to this Schedule which has been rather worrying me. The inclusion of manures in this Schedule is one of the best features of the Schedule, because it encourages the farmer to improve the land and consequently encourages the good type of farmer. The Schedule states:
      "Any other substance for use direct as manure, or any manure substance to be mixed and used as manure, when packed and so consigned."
      I imagine that this may lead to a very curious and interesting result. For example, if one sent a ton of fish from a seaport to a factory to be made into manure, I imagine that one would get the 10 per cent. reduction. On the other hand, if one sent a ton of fish to a market to be sold as human food, I imagine that one would not get the 10 per cent. reduction. I should like the right hon. Gentleman in charge of this Vote to give an undertaking, if possible, to take steps to bring the whole consignment of fish

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      generally into the Schedule so that this rather curious anomaly cannot arise. I think that my reading of the Schedule must be correct. Surely, if we included fish generally in the Schedule we should be so widening its effect, and it would prove very helpful, and we should not be liable to have this rather anomalous situation. I do not wish to emphasise that further, though I could ask all sorts of questions as to what would happen if fish went bad and had to be sold as manure and so on. It is an important point which ought to be looked into, and, if possible, one which the Government should readjust so that all fish should come within its scope, for I believe it would prove to be very valuable to the country as a whole.
      I apologise for having taken up very much more time than I ususally do on these occasions, but I have done so because I am convinced that in the interest of the House of Commons it is absolutely essential that we should on these occasions not only deal with comparatively small points, but with the whole of the question under consideration. I believe that in passing this Vote to-day, although it is a large sum of money which we are calling upon the taxpayers in general to pay, the Government are doing something which will prove of very great value to the agricultural districts and which in turn will be of very great value to trade and to the nation as a whole.
      Mr. HARNEY: Notwithstanding the fact that an hon. Member rather treated as a trifling matter the mineral railways which we discussed a few days ago, I am afraid that I must say something on this point, because it really is a very important subject. This morning I received from my constituency a copy of this resolution:
      "That, in view of the grave apprehension there exists as to the effect which the proposals of the Government will have upon this Borough by reason of the colliery companies having their own private mineral railways, the Government be urged to give the owners of private mineral railways the same relief as the owners of public railways."
      I am not going to dwell upon the subject on which I spoke on the last occasion, except to bring out one point. It is conceded that there are 16 collieries involved. It is also conceded that the
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      output of these collieries will represent a third of the whole output of the North Easy, Coast, and it is stated that there are 69,000 employes. I do not think that it would be denied that these collieries have for some time been working at a loss. They are in the hands of their bankers. Their overdrafts have been exhausted, and they are holding orders many of them on the narrow margin of one penny per ton or thereabouts. We all know that if something is not done many of the pits will close, and a large number of men will be thrown out of employment. We received an answer from the Minister of Transport and from the President of the Board of Trade the other day which, I respectfully submit, was not right. They have said to us: "It is true that after the 1st November the collieries about which you are speaking will be handicapped in competition with their neighbouring collieries in Northumberland and Durham by 5d. or 6d. a ton, and they will be handicapped in their competition with the collieries in the Midlands by nearly 1s. a ton." They also conceded that, quite possibly, the effect of that will he very ruinous to these industries, and they say, in effect, "Serve them right."
      The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister): The hon. and learned Member must not misrepresent me. A more complete misrepresentation of my speech to the House could riot be made.
      Mr. HARNEY: I did not happen to hear the speech of the right hon. Gentleman, but I heard the speech of the Minister of Transport, and I thought the right hon. Gentleman followed on the same lines as the Minister of Transport.
      Sir P. CUNLIFFE-LISTER: Perhaps the hon. and learned Member, before he criticises my speech, as he did not hear it, will read it.
      Mr. HARNEY: I am very sorry. I do not think there is the slightest need for bad temper in the matter. I have risen to put forward the position and then to make what I hope the Minister will regard as a helpful suggestion. I am very sorry if I have offended the right hon. Gentleman. I can assure him that I did not mean to do so. The answer, as I

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      understood it, which was put forward by the Minister of Transport was this:
      "What you say may be true, but these private railways had a very good time in the past, and it is just as well now that a good time should be given to their competitors, the public railways."
      Colonel ASHLEY: No, I do not think said anything to imply that. What I did say was that in the past and at the present moment the private lines had a very distinct advantage over the public lines and that what is contemplated under this scheme is that the public railways should be put very nearly on a par as to advantage with the private lines.
      Mr. HARNEY: There is not much difference between us. I accept that explanation. The point is, that the scheme we are now debating, and which we have been debating for some days, is, we are now told, a scheme for redressing the balance of handicaps that existed previously. Surely, that is not the purpose of the scheme. I do not suppose there is an industry in the world in which you will not find some concern more comfortably circumstanced than others. Some are nearer to the railway, some are nearer to the seaboard, and so on. Is it suggested that proposals that are advocated on the ground that they will help industrial concerns and will create more employment are now to be used for the purpose of giving all concerns in industry a fair start? That was never suggested. If it is to be suggested, I want to know what is the difference between the position that I am putting forward on behalf of the private mineral railways and the position of any concern in any industry that happens to be more fortunately circumstanced.
      I do not think that the advantage which the private mineral railway has had in the past has been anything like as important as the Minister thinks. These companies had to build their railways, in the first place. During the stoppage, when they were carrying no coal at all, they had to pay rates, they had to keep their permanent way in order, and they had to keep men employed, while they were suffering loss. Let it be assumed that they had some advantage in the past. What then? I hope the President of the Board of Trade will not turn a deaf ear to what I am about to say, because he was a little annoyed.
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      The relevant answer is this: undoubtedly, it is wrong that after the 1st December the railways that use private lines should be in a worse position relatively to their competitors than they were before the 1st December. I do not think anybody can say that it is not desirable to leave them after the 1st December in the same position as they are in to-day. I could understand the Minister saying, "Well, here is a comprehensive scheme. We cannot deal with all hard cases. There must be some victim for the general good. The grievances of which you complain are inevitable to the whole scheme.' If that can be made out, I agree that the owners of the private mineral railways must grin and bear it, but I think it is a serious blot upon any scheme that leaves such big and such serious hard cases.
      What are the difficulties in the way? The first difficulty is this: the Minister of Transport read a letter from the public railways, and I used strong language about it, because I thought it was a rather hectoring and uncalled-for letter. As I understand that letter, they say: "Our rates on the public railways per ton per mile were always higher than the rates per ton per mile of the private mineral railways." They are possibly right in that statement. Then I take it they go on to say: "If you pass into the pool out of which comes the rebate of freights, three-quarters based on the higher rates, you pass more into the pool than three-quarters based on the lower rates. Therefore, it is not quite fair that the collieries with private railways should draw out of the pool on like terms as collieries that use the public railways, seeing that the rate rebate in the one case is greater per ton per mile than the rebate in the other case." True, but is there not a remedy for that? The fault of the whole scheme is that you are giving collieries the benefit of de-rating that takes place with a third party, and the de-rating may be more in one case than in another. Surely, this ought to be a matter for business men putting their heads together and saying: "How can we find a way out?" With all humility, I venture to think that I could find a way out in an hour in the Library.
      The second difficulty is this. The Government say, in order to prevent the railway companies being at a loss during the anticipated period, when they are

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      asked to make rebates in freights and when they are not getting against those rebates in freights a rebate in rates, we will pay into the pool£4,000,000. Then they say: "If that estimate happens to be too small, the railway companies are going to foot the rest of the bill." That puts it into the mouths of the railway companies to say, quite legitimately, "You are asking us to dole out on equal terms to the private railways from this fund, and yet if there is a deficiency through doing so we ourselves have to pay for it." If the Government say, "For the good of the country we are going to anticipate this benefit by ten months," I say to them, "What right have you to say that the railway companies who have nothing to do with the collieries and are under no obligation to help the collieries, should foot the bill? If you happen to be wrong in your estimates you should be at a loss. Why throw 50 per cent. of it upon the railways? "The Government are doing this, and the Government should do it entirely. Why not make the supplementary sum sufficient and then let the same rule apply? If the sum is not absorbed it can pass back to the credit of the permanent scheme. The Government are saying: "We are doing all this; we are putting£4,000,000 of Exchequer money in, yet if that is not enough the railway companies are good enough to say that although it is no business of theirs, they will help us out." They have no right to do it because they are thereby creating one of the difficulties we, have now to meet. The difficulty can, however, be met. Increase your estimate to an amount that will more than cover what will be required and any excess can later on be duly credited to the permanent scheme.
      What is the third difficulty? The railway companies say, and I sympathise with them, "We, the public railways, know the amount of coal we carry. We know our collieries and cur books will show exactly the amount of money we have to pay to each colliery, but if the private railways come in how do we know the amount of coal they carry, and if they are cheats "—I do not say that offensively but after all business has to be done on business lines [Interruption]. I may have made an unconscious joke but I will make the point again, that when
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      one business man deals with another and they are making a contract they go to their solicitors and get numerous clauses put in the contract on the assumption that the other fellow may cheat and, therefore, I am saying on behalf of the public railways "if you ask us to allow private mineral railways to share in this pool you are putting us in the position of paying out money on which we have no check to private mineral railways." That is a perfectly sound position. And it is quite easy to give them such a cheek. What is the fourth difficulty of the Government? The Government say: our Supplementary Estimates do not cover this addition of£1,40,000." They could easily bring in another Estimate What is the fifth difficulty? They say: "our De-rating Valuation (Apportionment) Act has been passed and mineral railways have been treated as industrial hereditaments." That could be easily altered by an Amendment. An Amendment has I believe been drafted, which if it was passed would put that matter right.
      Here is a suggestion I make to the Minister. First of all, I ask: are the Government going to take up the position of saying to the North East Collieries, "We know your difficulties; we know that some of your pits will have to close; we know that you will have to dismiss men; we know that we could find the revenue; but we refuse to do so." Are they going to take up that position? If not let them say "We are sorry for you, we would find a remedy if it were possible, but it beyond our wit." If they say that I can understand it. But let us assume that they say: "We will find a remedy if we can." I have stated the difficulties which present themselves to the Department. I may not have a detailed solution to offer, but I make them this offer now: If the hon. Member for Chester-le-Street (Mr. Lawson) and the two hon. Members for Sunderland (Sir W. Maine and Mr. L. Thompson) and myself, with other hon. Members representing the North Eastern area, agree to put our heads together with our own experts and evolve a plan which will bring about the result that private railways after 1st December will stand with their competitors in precisely the relationship they stand to-day and present it

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      to the Minister, and it is water-tight, will the Government. accept it? If they say "Yes" I am willing to put my poor brains into the pool, and we will get our experts and see whether we can evolve a plan. I say again that if the Government deliberately take up the attitude that although this defect is curable they refuse to cure it, then their proposition must fall on their own heads. If they take up the position that this is one of the hard cases beyond the wit of the Department to solve, I offer to do what their department cannot do, and if the proposal we put forward is water-tight, will they accept it? If it is not watertight the fault is ours, not theirs.
      Major GLYN: The speech of the hon. Member for South Shields (Mr. Harney) has been exceedingly interesting, but I cannot quite follow the practical solution he put forward from the point of view of the railway companies. The House should understand one thing, and that is that this scheme is part and parcel of the programme of the great railways to do what they can to help and improve trade, and we have had testimony already to the success of the efforts of Sir Josiah Stamp and Mr. Whitelaw in doing everything they possibly can to encourage trade. During the Debate last week it was suggested that the privately owned railway lines ought to come into the punt side by side with public railways. The only reason why it is impossible for the public railways to consider such a scheme is that the balance has been so made in regard to Hip scheme, through the railway clearing house and the organisation of the railway companies, that it would he quite impossible for the public railways to agree that privately owned lines should obtain from the pool—at the expense not of the coal trade and other traders but at the expense of the shareholders of public railways—any deficit there may be as a result of the year's trading.
      In a great scheme for giving freight relief we must take a broad view and, although there are these privately-owned railway lines in the North-East of England, I do not see why they cannot make their own arrangements to be put on a common basis with other railway companies and, instead of trying to get into the pool at all, that they should say that,
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      although public railways are going to be de-rated from to-morrow, the advantage of that relief is not going to the railways or their shareholders, but is being passed on to their customers, In addition to that, in working the pool it has been arranged that any deficit up to 50 per cent, is met, not by the people who benefit, but by the shareholders of public railway companies. How in common sense or reason this House should expect those responsible for the interests of railway shareholders to agree that their money should be taken out of the pool for the benefit of their actual competitors I cannot understand, and I honestly think that railway companies who have been trying to help trade ought not to have bricks thrown at them simply because they are asked to allow their competitors to take money from their own shareholders.
      There is one other point, and that is that the operation of privately-owned mineral lines is infinitely cheaper in the matter of overhead charges than the operation of the ordinary public railways. Privately-owned lines are not subject to trade union organisation as public railways are; they have not got signal boxes or a permanent way like ordinary railways; they are not subject to the inspection and everything else which, quite rightly for the sake of public safety, the passenger-carrying railways, the public railways, have to submit to. Therefore their running expenses are considerably less. It seems to me that if the public railways are to get the advantage of de-rating as from to-morrow, why should not the privately-owned colliery lines, in so far as their running lines are concerned—not the pit itself—say, "You are relieving the public railways as from tomorrow, why not relieve us also as from to-morrow," and the Government then advance that amount which they would otherwise pay on that part of the property which is liable to rates. If they do that it should be on the clear understanding that they cannot possibly ask to participate in this pool, which is operated by the railway companies and the Hallway Clearing House, and is so adjusted and balanced that it would be quite impossible for the Boards of the railways to agree to what was suggested last week, without sacrificing the interests of their shareholders. I feel quite

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      confident that when this matter is again considered by the House it will be seen that it is not possible, without upsetting the whole scheme, to agree to allow money belonging to the shareholders of the public railways to be, in certain circumstances, paid out to their competitors.
      Sir P. CUNLIFFE-LISTER: The hon. and gallant Gentleman who has just sat down has made a specific suggestion. I do not want to go over again all the arguments which I presented to the House on the last occasion. I am sorry that the hon. and learned Gentleman the Member for South Shields (Mr. Harney) made a speech which entirely misrepresented what I have said. He admits that he has neither heard nor read what I said, and I do not think he is very courteous to the House.
      Mr. HARNEY: I assumed that the Government spoke with one voice.
      Sir P. CUNLIFFE-LISTER: The hon. and learned Gentleman gave an almost equal misrepresentation of the speech of my right hon. Friend which he did hear.
      Mr. HARNEY: I deny that.
      Sir P. CUNLIFFE-LISTER: My right hon. Friend the Minister of Transport is within the recollection of the House.
      Mr. HARNEY: I must protest against that statement. The Minister of Transport got up and said what he said, which was almost identical with what I put before the House.
      Colonel ASHLEY: Not identical.
      Sir P. CUNLIFFE-LISTER: I leave both my right hon. Friend and the hon. and learned Gentleman in the recollection of those who heard them both. I should be very much surprised if my right hon. Friend would accept the paraphrase as bearing any strict relation to what he said. What is the fact?
      Mr. HARNEY: Come over here and engage in an intellectual contest on the subject. You will get the worst of it.
      Sir P. CUNLIFFE-LISTER: I should be glad at any other time to engage in an intellectual contest with the hon. and learned Gentleman. I want now to deal with the merits of the case before the
      774
      House and with the suggestion which has been made by the hon. and gallant Member for Abingdon (Major Glyn). The argument presented to the House and endorsed by the House on the last occasion was this: In de-rating the railways you are doing an act of justice which will be of great benefit to the heavy industries and to coal. You are concentrating that relief in precisely the manner in which the coal industry has asked that it should be concentrated. You have made your alteration in this scheme, not on the motion of the Government or of any Member of the House, but at the direct request of the coal industry and the whole coal industry, and not least of the coal industry of Durham and Northumberland. The railways are going to pass their relief on to their customers, and if there is a deficit in the pool the railways are, under the temporary scheme, to bear the whole, and under the permanent scheme half.
      Mr. HARNEY: Why should they?
      Sir P. CUNLIFFE-LISTER: Because they have agreed to do so.
      Mr. HARNEY: They are not coming forward to relieve the collieries; it is the Government that is doing it.
      12.n
      Sir P. CUNLIFFE-LISTER: I wish that the hon. and learned Gentleman, before he criticises the scheme, would try to appreciate it. It is not a matter for criticism of the railway companies because they say that they are prepared, if there is a large increase in this traffic, to carry part of it at their own expense. Surely that is not fair criticism. What would be plainly unfair would be to ask the railway companies to pay out their relief and possibly to carry a deficit which would not go to their clients at all, but would go to private railways which, so far from being their clients, are in some senses their competitors. Now it is said that in the action taken in passing the railway relief on to the coal trade in just the way in which the coal trade has asked for it, an injustice will be done to these private lines. We dealt with that on the last occasion when this Vote was discussed and on the Rating and Valuation Bill, and the House took its decision. There is no dispute about the figures. I have been most careful, in quoting

      775
      figures of the private lines, to quote only those figures which the private lines submitted to me and the House of Commons.
      Mr. HARNEY: No one is questioning the figures.
      Sir P. CUNLIFFE-LISTER: Yes, the hon. and learned Gentleman did so. He thought that the figures which I quoted were not very fair to the private lines.
      Mr. HARNEY: I said nothing of the kind. The right hon. Gentleman can pretend to get annoyed with me because I had the innocent belief that the Government were speaking with one voice. Now I am entitled to be annoyed. I accepted the figures that the right hon. Gentleman gave.
      Sir P. CUNLIFFE-LISTER: Then there is complete agreement between us. On the figures, which the whole House accepts, what is the position? The position is that all through these years the private lines have had a considerable advantage over the public lines—an advantage of sixpence or sevenpence per ton. That is the average, and we must take the average for comparison. All through these years the private lines, those who send their coal on private lines, have had an advantage of sixpence to sevenpence a ton over those who send their coal on public railways. Even after this Vote is passed and the railway rebates are in operation, the private lines will still enjoy an advantage of something like a penny or three-halfpence a ton. That means that after to-morrow, coal will still be sent more cheaply on private lines than on the public lines. The argument is then advanced that the Government ought not to do this, and the railways ought not to do this, because although, after to-morrow, it will still be cheaper to send coal on the private lines than on the public lines, the private lines will not enjoy as great an advantage as they did before. That is an argument which could, with equal justice, be advanced against the whole of the de-rating scheme. In one district rates are 28s., and there is a factory there. In another district the rates are 105. and there is a factory there producing the same articles. When de-rating comes into force, both those factories will be relieved of three
      776
      quarters of the rates. One will gain three quarters of 28s., and the other three quarters of 10s.
      Mr. HARNEY: That is the great defect of the scheme.
      Sir P. CUNLIFFE-LISTER: The hon. and learned Gentleman is almost alone in his criticism. I find that throughout the whole of industry this scheme is welcomed, because it is a great relief, because it is a fair relief and because the relief goes in the greatest measure where the need is greatest. Let me take another example. A proposal was put forward not long ago—I do not think it got through—that, following a practice not uncommon in other countries, municipalities should be allowed to relieve new factories of rates in order to attract industries to settle in their areas. Supposing that proposal had been carried out, and supposing that to-day you had new factories in a town which were freed from rates altogether by the corporation. Then the Government would come along with the de-rating proposals. Would it be reasonable for the owners of that new factory, which for several years had enjoyed freedom from rates, to say, "You must not de-rate the older factories in this area unless you give us an extra subsidy equal to the difference represented by our present freedom from rates"? That is precisely the position of the private lines.
      Mr. KIRKWOOD: There is nothing in that at all.
      Sir P. CUNLIFFE-LISTER: The House will decide between us as to where the balance of argument lies. That is the position of the private lines. The coal trade who are not bad judges in this matter recognise that, because this matter was canvassed by the whole of the mining association, including the mining associations of Northumberland and Durham, and there was a general conclusion on the matter. The private railways asked the mining associations to support them in their claim that, at the expense of the railways or of the taxpayers, they should receive a subsidy which would keep them in exactly the same relative position, compared with the public lines, as that in which they stand to-day. What was the answer of the coal trade? It was: "We will not support you in a claim

      777
      for such an extra subsidy. What we think is a reasonable proposal is, not that you should come into the railway pool, but that your private lines should have exactly the same measure of de-rating as they are going to receive in the permanent scheme, namely, three quarters of the rates on your private lines, and that of course the private lines will keep for their own benefit."
      Mr. HARNEY: Will you do that from 1st December?
      Sir P. CUNLIFFE-LISTER: I am answering the proposals made by the hon. and gallant Member for Abingdon (Major Glyn). The House, last July, amended the Rating and Valuation Measure in order to give to the private lines exactly that position in the permanent scheme.
      Mr. HARNEY: Really, it did not. The Amendment was to enable a colliery using private lines to get industrial de-rating on their lines, and what they wanted was to have transport de-rating on their lines.
      Sir P. CUNLIFFE-LISTER: I am quite aware of what the private railways wanted. I am also quite aware of what the. House did. The recommendations of the mining associations was that these people should have their rates on their private railways relieved to the extent of three-quarters. That is what the House did last July, and, as from 1st October next, these private lines will receive a remission of three-quarters of the rates on private lines. That, I submit to the House is a very fair decision which the House has twice endorsed. But I resist entirely the claim that, either at the expense of the taxpayer or the expense of the railways, we should find an additional subsidy. But this position is put to me: If Parliament has decided that the fair and right thing to do for these private railways is to treat them as industrial hereditaments and allow them three-quarters off the rates on their lines when the permanent scheme comes in on 1st October, if that, under the permanent scheme, is the right and fair relationship between them and the other collieries, would it not be fair, since you are anticipating the relief which is being given through the railways to the coal trade as a whole, to give the private
      778
      lines, over the same temporary period, that relief which they will obtain in the final settlement beginning on 1st October? That seems to be a slightly different proposition, and one worthy of careful consideration. I must maintain absolutely the ground which I maintained last time, that we cannot give an extra subsidy or force the railways to do so. But if we may settle this matter, if all parties in the House are prepared to agree that it would be fair to give the private lines as from to-morrow that measure of benefit which they will get under the permanent scheme, then provided it can be done by consent I would certainly most favourably consider presenting an Estimate for that amount.
      Mr. HARNEY: Is that offer made on any condition? Supposing we were to accept it as better than nothing, but on the understanding that we would still press for the balance, would the Government refuse to agree is it a condition that we should give up agitating for the balance?
      Sir P. CUNLIFFE-LISTER: I could not make a condition that the hon. and learned Gentleman is to give up any agitation, but I propose this to the House as a very fair solution and one which is entirely in conformity with the decisions which the House has twice taken. I must make this plain. It is open to Members of course to move Amendments to the permanent scheme but, I must make this offer—that we should take an Estimate for this amount—contingent upon one consideration. The time at the disposal of the House is very limited. It will not be possible to put down a Vote to take this amount for the four months without implying an additional Vote when the permanent Estimates for the year come in, and I cannot make that offer, if it is going to be asked that we should put this Vote down for a full Committee stage and have these two days Debates all over again, and then take it once more on Report. It is a perfectly fair offer to make. Time is very short, but I promise this, that if it is agreed, I make it retrospective. We may not be able to get the figures completely settled—we may in the course of a few weeks—but whatever is the correct figure, that shall date as from the 1st December and go right through the interim period.
      Mr. ELLIS: Would it be on the existing basis of assessment?
      Sir P. CUNLIFFE-LISTER: Yes. What I want to do is to let them off three-quarters of whatever rates they at present pay on their assessment.
      Mr. HARNEY: Do I understand that the offer made is this, that the rating relief that the collieries would be entitled to receive on their private railways as industrial hereditaments on the 1st October next year, the Minister is prepared to anticipate and to make it come into operation on the 1st December this year?
      Sir P. CUNLIFFE-LISTER: Exactly.
      Mr. HARNEY: I cannot say whether my friends, the owners of these collieries, will be satisfied with that offer, but at all events the right hon. Gentleman makes the offer, and it really ought not to be made dependent on their saying they are not still dissatisfied. I would like the offer to be made without any qualification. I am not in a position to consent to it, or otherwise.
      Sir P. CUNLIFFE-LISTER: I appreciate that. I divide the offer into two parts. No one in this House can do a deal on behalf of the private railways. That is not the way we do business in this House. In this House it is our business to hear all the arguments and to do justice, and I say quite candidly that if we can agree without wasting any time upon it, I am prepared to take the responsibility for proposing to the House what I have suggested. I will present the Vote, and that will be carried without discussion; and, of course, hon. Members can move any Amendments they like when the main Bill comes into Committee. I do not in the least ask the hon. Gentleman not to move an Amendment thee, but I do warn him that of course the Government will maintain the stand which they have taken and will resist on the final Bill, as they have resisted, and resisted with success, here, any such proposals. I do not ask him not to put down an Amendment. I think that would be unreasonable. What I ask the House to do is, if they accept this now by common consent, that we agree that the Vote may be put down and that we can pass that Vote after 11 o'clock one night, and that we shall not be invited to give
      780
      up two days of Parliamentary time or anything of that sort to discuss it. That is the only bargain, if I may so call it, that I ask for on the part of hon. Members.
      I believe that that offer meets absolutely the justice of this case. I know that some of my hon. Friends will not agree with that, but I have approached this question, with my colleagues, really with the fairest possible mind I can, and with a genuine desire to do justice and to benefit the coal trade. I present the solution we have arrived at as a fair solution, and while I do not expect to convince my hon. Friends in regard to the permanent scheme, I suggest that the offer which I make now is one which those who want more should agree to on this particular Vote. I must put it down as a separate Vote, because technically it has to be a Treasury Vote, bat I how all those who take a keen interest in the matter will think that that meets the case.
      Mr. LAWSON: The one satisfactory thing about the right hon. Gentleman's speech is that almost for the first time we have had something like an appreciation of the difficulties that the North Eastern coal trade will be in as a result of this scheme. There was an hen. Member opposite speaking earlier who rather gibed at-us for co-operating with private interests. When such co-operation comes from people like us, it rather suggests that we have been faced and are faced with a very grave situation as a result of this scheme. The tight hon. Gentleman has made a proposal, but as the hon. Member for South Shields (Mr. Harney) says, and as I think my colleagues will agree, we cannot speak on behalf of these interests. While, however, we cannot exactly decide the matter, I think we ourselves would agree that if any arrangement was come to, we would not delay any such arrangement. But let the House understand exactly what it is that the right hon. Gentleman offers. It has been made quite clear that these collieries who own private railways are getting nothing at all until October next year.
      I am not going to spend any time over the argument as to relative costs. I heard the right hon. Gentleman debating that matter of costs on the last occasion and again to-day, and it sounded very

      781
      much like one of the debates that one heard now and then in the Oxford Union, as far as actual effect was concerned, but this is the actual position. The hon. Member for South Shields emphasised the fact that these collieries who own private railways are almost bankrupt. They at least have heavy overdrafts, and I am sure, if I were permitted to mention the size of some of those overdrafts, it would surprise this House to learn how much some of these colliery companies have been losing on these cheap railways that they have been running and the point is that ultimately it will come back upon our own people, either in closed collieries or reduced wages. Let the House understand that quite clearly. What the right hon. Gentleman has offered is this, that the benefit which the private railways will get next year should be brought forward to the 1st December this year. That means that they will get from the 1st December 1½d. per ton. I think the right hon. Gentleman admits that.
      Sir P. CUNLIFFE-LISTER indicated assent.
      Mr. LAWSON: And the average benefit that is going to the other collieries in Durham who run their coal over public railways will be 5¾d. per ton, so that the collieries using private railways are still going to be 4d. per ton worse off in the competitive markets than the collieries using public railways. I do not wish to occupy the attention of the House for any length of time, in view of the offer that the right hon. Gentleman has made, but I do want the House clearly to understand that collieries using the public railway companies would still have, even if the right hon. Gentleman's offer materialises, advantage in the relief of at least 4d. a ton, and, as far as the rest of the companies are concerned, an advantage of 6d. a ton over these private railways. I have not said anything that would make the right hon. Gentleman understand that we do not appreciate the new spirit in this matter, but I think when he does get to grips in that spirit, and discusses the whole of the factors with these colliery companies, he will probably be prepared to go even further than he has in this matter of the private railways, because we have already pointed out that a railway is a railway,
      782
      and a pit a pit, and to make railways parts of pits would lead to certain complexities. I am certain that if this has to go on, other difficulties arising out of this matter will have to be dealt with.
      Mr. T. SHAW: I rise in order to get absolutely clear in my mind what the proposition of the Minister is. I will try to repeat it as I see it, and I hope the right hon. Gentleman will correct me if I am wrong. The Minister has said in effect "You have put down a case which I cannot accept in form, because you have not taken into account certain factors which existed in the position before these proposals were introduced, and which will naturally modify any proposals that are introduced. But while I cannot accept the position you lay down, I am prepared to say that in one certain respect there is a concession I could make, but I want from you some idea or some understanding that if I am prepared to make this concession, and, as a result of making it, I have to introduce a Supplementary Estimate, you on your side are not going to insist on a full discussion again and take up the time of the House." Is that quite correct? Obviously no Member of the House, and no Minister, can limit the power of the House to discuss anything that comes before it. At the same time, it must be always well understood if an offer like that is made by a Minister, and is accepted in good faith, that the acceptation in good faith must be as good as the actual bond, and if we enter into a discussion with the Minister on this point, it will be on an honourable understanding that those who were parties to the discussion will, at any rate, respect to its fullest extent the implied understanding that is made with the Minister. My suggestion is that the Members particularly affected should meet the Minister, and have a discussion with him as to the best way to arrange the concession they can get from him, and if they can make it better, so much the better.
      Sir P. CUNLIFFE-LISTER: There is no dispute on the figures which this concession involves. Only those why have given months of study to the details of the de-rating figures can appreciate what they mean, but all that should be included in this Estimate is the amount which these railways will get when they are de-rated in October. What is re-

      783
      quired is to get a decision as to whether we shall do one of two things. It is not merely a mathematical calculation. It is a little more than that because it requires the division in each of these cases into two assessments. Whatever is the right figure, I think the right thing to do is, not to have a discussion between Members of this House. While I have given the undertaking that on the present basis of assessment I can give the amount for the ten months, the job rests with the experts of the Ministry of Transport, the Ministry Health and my department to consult with private railway owners and agree what the figure is. We want to reach an agreed figure, but I will give this undertaking, that the figures which I put in the Supplementary Estimate will be amply large enough to cover the results obtained by this calculation.
      Mr. HARNEY: I understand that the right hon. Gentleman, on behalf of the Government, says that he will do on 1st December what in the ordinary course would be done on 1st October next?
      Sir P. CUNLIFFE-LISTER: Yes.
      Mr. HARNEY: The figure is really a matter to be ascertained by his department and the owners of the collieries. The adjustment of that figure between colliery owners and himself is also a matter between the colliery owners and his department. All that he asks us to bind ourselves to, I take it, is that while we are to be at perfect liberty, when the general Bill comes on for discussion, to raise any Amendments we like, in order that he may put this thing through if he brings in a Supplementary Estimate at 11 o'clock, we will not debate it.
      Sir P. CUNLIFFE-LISTER: That is exactly my point.
      Mr. SHAW: On that understanding, I think I can say, on behalf of my hon. Friends, that our recommendation to them will be to facilitate in every possible way the Supplementary Estimate the Minister will produce.
      Sir P. CUNLIFFE-LISTER: I am very much obliged to the right hon. Gentleman, and, of course, I will carry out my undertaking to the full.
      Mr. TOMLINSON: I would like to say a word about Part II of the Eleventh Schedule. I am sorry the Minister of Agriculture is not on the bench. I would have liked to compliment him on the drawing up of this Schedule, which, in my judgment, will bring the maximum of benefit to agriculture. There is one point, however, to which I would like to draw attention. In the Schedule are the words "Treacle for cattle feeding, consigned direct to farmers." I quite recognise the necessity for including the words "Treacle for cattle feeding," but it will be remembered that every encouragement has been given to small farmers to buy their "feeding stuffs" from a co-operative society or trading society, and smallholders would want to buy small quantities which they would get through these societies, to be delivered in five or ten cwt. lots, and as the wording in the Schedule stands the societies would have been eligible for the rebate, because it is stated that it must he "consigned direct to farmers." Could not the Minister see his way to withdraw these four words? There may be special reasons against it, but they do not appeal to me. While I recognise that the Schedule, on the whole is drawn up in such a way as to bring benefit in the best possible way to those parts of agriculture that are most affected, and I am very glad to support the Schedule, I do suggest that it might be improved in the way I have mentioned.
      Colonel ASHLEY: I will deal very briefly with the couple of points raised by hon. Members. With reference to the speech of the hon. Member for Lancaster (Mr. Tomlinson), I would point out that it is impossible to make a change in the Schedule on this particular Vote, because the contract depends upon what is in here. Under the scheme, I have to decide in a judicial capacity what the Schedule means, but I will undertake, if the hon. Member will communicate with me privately, to consider the point which he raises before the permanent scheme comes on for discussion in Committee of this House. The hon. and Gallant Member for Torquay (Commander Williams) wants to know whether fish for food consigned from a port gets the rebate, and, if it does not, why fish for manure should get it. This Schedule, except in the case

      785
      of potatoes, which obviously are included for human food, because certain districts practically do all their business in potatoes for food, deals only with feeding stuffs and manures.
      Commander WILLIAMS: If that is so in the case of potatoes, why not for certain districts where fish is their only business?
      Colonel ASHLEY: Because this is not a Bill mainly to help the Torquay fishing industry, but agriculture as a whole. My right hon. Friend the Minister of Agriculture has taken a great deal of trouble over this Schedule. He has been in constant communication with the Farmers' Union on the matter, and we really cannot go behind the recommendations of the Farmers' Union as representing agriculture as a whole. [Interruption.] Yes, agriculture as a whole.
      Mr. JAMES HUDSON: The Farmers' Union are not the only body concerned.
      Brigadier-General CLIFTON BROWN: Does not the right hon. and gallant Gentleman think that members of the Agricultural Council of England better represent agriculture as a whole, and why not take their advice?
      Colonel ASHLEY: The Minister of Agriculture has not only consulted the Farmers' Union, but other bodies representing agriculture, and he has done his very best to make this Schedule 'as complete as possible, and agreeable to the industry as a whole. The question of fish can, and will, be considered when the Schedule for the permanent scheme comes up for consideration.
      Lieut.-Commander KENWORTHY: If, as the right hon. and gallant Gentleman says, foodstuffs must not get any rebate, why is milk in bottles and churns included? That is not for feeding pigs, but for human consumption.
      Colonel ASHLEY: It is included for the same reason that potatoes are included, because certain districts in certain aspects of the industry would not get their share of the benefit unless milk and potatoes had been included.
      Mr. A. V. ALEXANDER: May I repeat. a question which I put in another form on the Committee stage of the Vote l Apparently the Government have found it desirable to come to some
      786
      arrangement with the Farmers' Union for including in the Schedule agricultural commodities which are used for feeding purposes and not for industrial purposes, and I asked the Government on the Committee stage why it was that they had selected for the rebate in railway freights only coal to be used for industrial and export purposes, and why no relief is to be given to any coal produced for consumption by the domestic consumer. It is quite plain in the coal trade that a number of collieries which are concerned in producing coal for domestic consumption are in a bad way, and have actually had to resort to an agreement for restriction of output in order to get certain results in the home market. If the Government have been able to agree with the productive side of the agricultural industry that certain commodities of that industry intended for human consumption should have the advantage of the railway freights, why should not the people who use coal for home consumption have the same relief?
      Colonel ASHLEY: We consulted the Mining Association and other bodies representing coal, and they were strongly in favour of a concentration on coal for export, coal for steel and iron works, and coal for bunkers. They were in favour of that, and we took their advice. The Government are also in favour of it, because the whole object of this Vote is to help the most depressed industries. The most depressed section of the coal trade is that of export coal. Therefore, we wish to concentrate on that, and not to dissipate our energies over the whole coal trade, with the danger that a certain part of this relief might not go into the pockets of the producer of coal, hut into the packets of the middleman.
      Mr. WALLHEAD: Is the right hon. Gentleman aware that, although the Government are determining that the railway companies should not put this subsidy into their own pockets, already the coal shippers who are shipping export coal have raised their charges Is, a ton, and have thus taken away all the advantage which the Government have given?
      Colonel ASHLEY: The only thing that the Government can do is to see that the advantage is passed on to those who use the railways, and send their coal. No

      787
      Government can possibly legislate so as to make the economic forces react exactly equally after the coal has left the railways.
      Mr. WALLHEAD: So the Government action is worth nothing.
      Mr. A. M. WILLIAMS: As the fishing industry is also depressed, and as the Minister of Agriculture has consulted the Farmers' Union, will he, before he decides finally, also consult the representatives of the fishing industry?
      Colonel ASHLEY: Certainly.
      Lieut. - Commander KENWORTHY Lieut. - Commander KENWORTHY rose—
      Mr. SPEAKER: I must remind the House that we are not in Committee now.
      Question put, and agreed to.

    WAYS AND MEANS.
    REPORT [22ND NOVEMBER].
    Resolution reported,
    "That, towards making good the Supply granted to His Majesty for the service of the year ending on the 31st day of March, 1928, the sum of£1,575,710 be granted out of the Consolidated Fund of the United Kingdom."
    Resolution agreed to.
    Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, and Mr. A. M. Samuel.

    CONSOLIDATED FUND (NO.1)BILL
    "to apply certain sums out of the Consolidated Fund to the service of the year ending on the thirty-first day of March, one thousand nine hundred and twenty-nine," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 24.]
    PUBLIC WORKS LOANS BILL.
    Considered in Committee, and reported, without Amendment; read the Third time, and passed.

AGRICULTURAL CREDITS (SCOTLAND) BILL.
Order for Second Reading read.
The LORD ADVOCATE (Mr. William Watson): I beg to move, "That the Bill be now read a Second time"
This Bill is on the same lines as that which was introduced for Scotland last Session, but with one small alteration. Its title has been somewhat altered, in order that it may be possible, if it be thought desirable to alter Part II so as to bring into operation in Scotland an equivalent of the chattel mortgage portion of the English Act. As in the case of the English Act, the Bill is divided into two Parts, Part I dealing with what I may call for convenience long-term credits and Part II dealing with short-term credits. Under Part I it is proposed to set up an Agricultural Security Company with capital of various kinds, to enable it to make advances to farmers and others. The object of this Part of the Bill is primarily to assist the tenant farmer who is likely to be disturbed in the occupation of his holding through the sale of a part or a whole of the estate—a not uncommon thing in these post-war days—when he can only safeguard his position as a tenant by buying the farm holding himself. The proposed company is to be in a position to make advances to farmers who can buy their farms but are not in a position at the time to find the whole of the capital necessary to make the purchase. The company would also be able to relieve farmers who have already bought their farms, but who have had, for instance, to give a bond over their property for, it may be, a large part of the purchase price. It would give them, I think, a form of security which may have advantages over the existing forms of advance they can get, because the ordinary bond is a mere bond carrying interest with it and providing at some date, which may be uncertain, for the repayment of the capital. We think that a form of security which would give a moderate return of interest to be paid, coupled with a gradual reduction of the capital liability by instalments, might be of advantage to farmers.
It may interest the House to know that the acquisition of farms by their tenants has become much more common in recent

789
years, and at the present time there are about 13,000 occupying owners in Scotland. This number is about one-sixth of the total number of agricultural holdings in Scotland, but if we take into account the fact that the crofters' holdings in the crofting district form nearly a third of that number, and also that a good many holdings are not bona fide separate holdings, but are held in groups of two or more, probably about one-fourth of the ordinary farm land of Scotland is occupied by occupying owners. The process of transfer, I think we may say, is still on the increase. Further, as costs of production have gone up the farmer has since the War been in greater need of working capital for financing his ordinary day-to-clay operations on the farm. That has made it if anything more difficult for him to find the capital necessary to finance such transactions as we have in view at the present moment.
The Bill proposes to set up machinery by which a farmer in the position described can come to the company and obtain an advance on a long term reducible security, with the usual provisions as to two-thirds of the estimated value of the land on which it is secured. The House will appreciate at once that there are advantages to the peace of mind, if not to the peace of pocket, of a farmer to know that these advances may be spread over a period up to 60 years, to know that he has a fixed amount each year to find, and that he will not run the risk of having the bond called up, at the usual notice it may be, but still at an odd time when he may not be in a position to meet it. Further, by the annual reductions the principal is all the time being gradually paid off, instead of having to be found all at once. Hon. Members will recall that under the Agricultural Credits Act, 1923, it was possible to obtain from the Public Works Loan Board an advance somewhat of this nature. During the few years since that Act came into operation I understand that about£500,000 was advanced in Scotland to some 160 farmers, which goes to show that the average advance would be about£3,000. I think it is right to say that the system seems much appreciated by those who have taken advantage of it, and it is anticipated that a company specially formed for this purpose in Scotland would soon be better known amongst Scottish farmers than were the
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facilities obtainable from the Public Works Loan Board. The principal agricultural societies in Scotland have passed resolutions in favour of the Bill.
With regard to the finance of the Bill, it is intended that the Security Company should raise a share capital of£125,000 and the Board of Agriculture is to make advances up to a similar amount to establish a guarantee fund. No interest will be payable on those advances for 60 years, but at the end of 15 and again of 30 years there is a provision for raising the question of repayment if the Progress of the company is so good that there is surplus money available for meeting that situation. Reference to that will be found in Clause 2, Sub-section (h). The working capital of the company is to be raised by Means of the issue of debentures, just as in the case of the English Act. The Treasury are authorised by the Bill to secure the under-writing of those debentures up to£800,000, and to subscribe to the debentures up to the amount of£200,000. It is impossible for us to say precisely what the interest. charged to the farmer will be, but it will be affected mainly by the nits of interest at which the debentures can be obtained, because the debentures are going to be the main working capital of the company, as the dividends on the share capital are limited to 5 per cent. and the share capital will only go a little way towards financing the operations of the company. I should point out that the Government are not concerned to find loans at a specially low rate of interest, and perhaps I may suggest a reason. If the money available for this purpose were too cheap it might stimulate sales and possibly drive up the price of land, which would not be to the interest of the tenants who desire to purchase.
On the other hand there is a condition providing for a rate of interest which is a little below that rate. At the same time the Treasury is to be authorised to pay£1,750 per annum for 10 years towards the administrative expenses, and that should help to keep down the rate of interest which is to be charged to the borrowers. My right hon. Friend wishes me to say that be is at the present time in negotiation with the banks, as was done in the case

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of England for the setting up of this company, but he is not in a position at the moment to say that that will be arranged or that other arrangements will be made. The Secretary of State also asked me to say that he will undertake to be in a definite position to inform hon. Members before this Bill comes to the Committee stage what arrangements are to be made in regard to the company. Of course that is a matter which will be most conveniently discussed in the Scottish Standing Committee.
With regard to the second part of the Bill its purpose is to enable agricultural co-operative societies to finance their operations by offering to the banks their stock of merchandise as securities for advances. There are trading societies dealing in farmers' requisites, and marketing societies, and there has been a notable development during the past few years in that direction in Scotland. In the case of the marketing societies the milk agency is a very striking illustration. The marketing societies are frequently not in a position to immediately dispose of the produce taken from the farmers, and sometimes they hold it up in order to get a better market both in their own interest and in the interest of the farmers. It would, however, be an advantage that they should be in the position to get advances on the stocks which they so hold when they come to settle with the farmer, and this proposal will help them to finance such an operation. The possibility of that being done will tend to increase the membership of co-operative societies by attracting more people to those societies. The position of the society is that it is actually buying the class of produce sold by its members and in that way they are qualified to offer the stock hack and so forth which is held as security for the advance. Obviously the other class of societies which are trading with the farmers and selling different articles must have their stocks, and there again we think it will be very useful to have the power to advance money on the stocks.
There is one well known society in the North-East of Scotland which carries on large operations on that principle. As far as the proposals of the Bill are concerned, it does not deal with or provide for any cases of credit given directly by
792
those societies to individual farmers, but it is obvious that that possibility will be facilitated by this Measure. I should say that in the English Act there was a provision giving security to the farmer for his stock and machinery, but that form of security is not very familiar to Scottish law and from what the Secretary of State for Scotland has been able to gather there are, or there have been grave doubts as to whether the using of that form of security if introduced into Scotland would not tend to adversely affect the credit of the farmer in other directions.
Sir HENRY CAUTLEY: Have the Government only just discovered that?
1.0 p.m.
The LORD ADVOCATE: We have never had that provision in 1.0 p.m. Scottish Bills before and my right hon. Friend has now seen some signs which are favourable to a proposal of that kind. In order to afford an opportunity of discussing that matter within the terms of this Bill the title was altered, otherwise it would not have been posible under the Bill to deal with that point. I think this will he a useful Measure to some extent. in dealing with the agricultural industry.
Mr. A. V. ALEXANDER: The right hon. and learned Gentleman has referred to agricultural co-operative societies and marketing societies, and he said that those societies sometimes held up produce in order to get a better market.
The LORD ADVOCATE: I did not use that expression in any offensive sense. It is merely a matter of business.
Mr. ALEXANDER: The right hon. Gentleman said that those societies would be able to offer their stocks of merchandise as security for advances. In the case of financing a consignment of produce from the farmers to a society in Scotland, I suppose it must be the property of the society, because that is very important.
The LORD ADVOCATE: The credit will enable them to pay to the farmer. That is the intention of the Bili as drawn. I want to say in the first place that this Bill should be of some service to the agricultural community in Scotland; and in the second place, having got a precedent

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in the English Act, we should not be slow to take any help we can get from similar proposals in Scotland.
Mr. WILLIAM GRAHAM: As the Lord Advocate has indicated, the Hill for England, on substantially similar lines to this, was taken, if I remember rightly, in May of the present year, and at that time it was added that a Measure would be introduced applicable to Scotland. That is the Bill which we are discussing this afternoon. In some respects it is unfortunate that this Bill has come before the House on a Friday, when so few of my Scottish colleagues are present—though I make no complaint on that account—because the question is one of undeniable importance to Scottish agriculture. We do not intend this afternoon to divide against the Bill, but there are certain considerations which should be put plainly and clearly to the House, and I am encouraged to put those considerations because it is quite obvious that the Lord Advocate holds out nothing more than a very limited hope in connection with this Measure.
We must relate all these agricultural credits, and other devices to help the agricultural community, to the broad position of farmers in the presence of legislation of this kind. Since 1896 we have embarked on the Agricultural Rates Acts and the structure of that legislation is now completed by the proposals which the Government have submitted to the House of Commons, under which, with the exception of dwelling houses, all rates on agricultural land will be swept away. Under other Sections of the Finance Acts of recent years, concessions have been given in regard to maintenance, property repair, and other items; and, in the third place, the Government have just proposed a further concession relating to agricultural produce, in that part of their de-rating proposals which is applicable to railway freight rebates which have to be passed on, in the form of reduced charges, on commodities of that kind in this country. All of these concessions have been given, and others which I dare not take time to describe.
We do not dispute, in this part of the House, that agriculture has been passing through very difficult times in many parts of the country since prices broke in 1921; but the fact remains that that
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is not peculiar to agriculture, and other sections of industry have had no concession of such a kind under the ordinary fiscal or taxation law. One consideration, which I press again, is that we should not embark on further legislation, either in Scotland or in any other part of fie country, until, under the Income Tax system, we know exactly how the farming community stands, and that was plainly in the minds of the Royal Commission on the Income Tax in 1919, when they recommended that farmers should be put on the ordinary Schedule D profits basis, and that the basis of one time the annual valuation, as it is now, or two times as it was at that date, should be swept away. The Government do not take that fundamental step. They systematically refuse to take it, although it was unanimously recommended, and they go on with one device after another, of which the latest illustration is this Agricultural Credits Bill applying to Scotland, corresponding to the Measure applying to England which was introduced earlier this year. Accordingly, we repeat that fundamental plea this afternoon, as being one which is in every way just arid fair to the agricultural community, since there can be no complaint on the part of anyone who is only asked to pay taxes on the profits that he actually earns.
Turning to this Scottish Measure, I should like to ask the Lord Advocate one or two questions. The finance of the scheme is tolerably plain, that is to say, we have the guarantee fund covering a capital of£125,000, the underwriting of the£800,000 of debentures a quarter of which the Government themselves propose to take up, and the contribution of rather more than£1,700 a year to the administrative expenses of the scheme. The real question is whether in Scotland—I am not going to speak for England at the moment—this device is going to help us in the very least, in the presence of the undoubted criticism of at least part of the banking institutions, and of what those institutions would very likely do on their own initiative. When the Minister of Agriculture introduced the English scheme, he paid a tribute to the support of the banks and the encouragement that they had given—a tribute which some of us found it very difficult to understand, because the real truth was that the banking institutions, or

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several of them, were strongly critical of this plan, and urged over and over again, quite openly, that they could provide all the facilities and credit which were required, and that the scheme which it was proposed to set up would very likely have little real application.
What has happened in England? The Government carried the Bill of May, 1928, and, within the past few days, an announcement has been made regarding the setting up of the corporation and the terms and conditions on which it is going to proceed; and no one will dispute that that corporation is just a shadow of the banking institutions, who, for all practical purposes, are in control of the situation. Are we going to achieve anything by establishing this machinery, and probably duplicating some part of it, if it be the case that the banks would themselves provide this credit wherever appropriate security was offered to them? That reminds us of the position of a certain class who, presumably, have always been very much in the minds of Members of the House as possible applicants for this credit. I refer to people who entered upon their holdings, or incurred responsibilities in regard to them, during the boom period of the Corn Production Acts between 1917 and 1921. These men, in many cases, financially, to use a popular phrase, bit off far more than they could ever chew, and leading bankers have told me and others quite openly that, if devices of this kind are intended to help men in that position, they simply cannot be entertained, and in any ease are not desirable, save, perhaps, in a limited number of cases where these men might be able to turn the corner.
We passed from that legislation into the atmosphere of the drop in prices and the depression, and, therefore, the real test before us now is whether the terms and conditions available under this legislation will be better than the banks themselves can offer. It was pointed out, in the discussion on the English Pill, that in all probability the terms would not be very much better than 6 pet cent., and, taking the case of Scotland, if the corporation emerges in Scotland—rather gathered from the Lord Advocate that it is still the subject of negotiation—when we have added up the terms and conditions of this capital and these de-
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bentures and the other items, I do not see much prospect of an improvement on that state of affairs. If that be the position of affairs under this corporation, which presumably is to come into existence in Scotland as in England, what better off are we than we are now in the presence of the ordinary banking credit, whether by way of overdraft or in any other form? I confess that I think that all that will happen under this legislation will be that we may get the corporation, probably, in Scotland substantially on the lines of the English corporation, and that the experience of the Act of 1923 will be so far repeated. I am not sure that this is not a weaker proposal than that of the Act of 1923, because, after all, if we relate these plans to the Public Works Loans Commissioners, they do try to go near to 5 per cent. in their advances where the conditions are suitable, and, on the face of things, it is doubtful whether that will be approached or achieved under this Bill. I do not want to pour cold water on agricultural credit for a single moment. I believe that a great development of co-operation among agriculturists in Scotland, according to all the information that is given to us, is urgently necessary, and I think that many of these societies, wisely developed on sound lines, can do the greatest good. But the financial structure of the Bill does not hold cut any real hope of progress in that direction, and accordingly, while we do not oppose it to-day, and reserve our criticisms for the Committee stage, I think it would be wrong to suggest to Scot tish agriculture that in all the circumstances this will lave more than a very limited application.
Sir H. CAUTLEY: I always listen with interest to what is said by the late Financial Secretary, but I begin to think he has rather a bee in his bonnet about the profits of farmers, because he is constantly advocating that they should be assessed under Schedule D, apparently with the idea that it would be a profitable transaction for the Government.
Mr. GRAHAM: That is not my case at all. I only wish to put it on a basis on which we can know exactly what they are doing. We want the facts.
Sir H. CAUTLEY: Of course, the right hon. Gentleman is well aware that there

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is the alternative system, and it is open to any farmer to be assessed, at his own wish and request, under Schedule D. I have not the figures before me, but that option has been availed of a great deal, because they find it more profitable to themselves. In reference to the second point, that the banks would give all the credit that was necessary and therefore the Bill is unnecessary, I am not an authority on banking practice, but I have always understood that the one security a bank declined was a loan secured for a long period on real estate.
The object of the Bill is twofold. It is to secure long-term loans to farmers, or those interested in agriculture who have the security of real estate. The advantage of a long-term credit is not so much in the lowness of the rate of interest, though it is believed that will be lower than any loan from a private lender, but the loans will be secured on the terms that they are repayable by instalments. With the provision that those instalments, which consist partly of principal and partly of interest, are repaid punctually, the borrower has nothing to fear from what is the constant dread of a private mortgagor, that the money may suddenly be called in at a very awkward time whereby the borrower may suffer very serious loss. If this corporation does its work and these long-terms are given ii will be of immense value to a certain class of borrower, those who have assets of the nature to which I refer, but only to that limited class of farmer.
That really is not the ground on which I have intervened. I am particularly interested in one observation made by the Lord Advocate, when he pointed out that he had made a most marked difference in this Bill from the English Bill. He has limited the bill of sale business—giving bills of sale on chattels to the co-operative society—and he has done something further. He has distinctly left out the provision that those bills of sale should be secret. He has required that they shall be published and that it shall be known that money has been borrowed. I should like to ask the Lord Advocate why it is that the Scottish Bill has departed, so far as short-time credits are concerned, from the English Bill. The Lord Advocate used exactly the same expression that I used in opposing the Third Reading. I urged with all the power I
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possess that for a farmer to give a secret bill of sale on all his assets was almost certain to destroy his credit, and that a secret bill of sale, making the bank a preferred creditor over every other creditor, was contrary to honest dealing, that it put it in the power of a man to prefer one creditor and to include in his mortgage goods that he had just bought and give security for them to the bank, and that industry could not be carried on like that.
I assume there has been some communication between the Scottish Board of Agriculture and the English Minister. I should like to know whether any farmer has availed himself up to this date of the short-time credit facilities provided by the recent Act. The few bankers I have seen have told me that there has not been a single case up to now, and I do not think the facility ever will be used. I thought., and still think, it was a most foolish piece of legislation, contrary to the interests of the farmers, and contrary to straight dealing, and it was most undesirable that it should be put on the Statute Book. For these reasons, I congratulate the Scottish Ministry on the line that they have taken on this Bill. I think it wholly admirable. I do not know hut I thoroughly suspect that the Scottish farmers themselves will have nothing to do with the same bills of sale. The Lord Advocate has himself agreed with that view, and the Secretary of Scotland too, and I shall be glad if the right hon. and learned Gentleman will confirm my opinion.
Sir ROBERT HAMILTON: Any Measure that tends to improve the facilities for farmers to obtain long-term credits on business lines must, I think, be to the interest of the industry generally. Although, like the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), I do not expect any very great things from this Bill, I think that, at any rate, it will fill a gap that wants filling at the present time. As the hon. and learned Gentleman the Member for East Grinstead (Sir H. Cautley) pointed out, one of the greatest objections and one of the greatest difficulties the farmers have in regard to the question of long-term credits is that they are always afraid that the outstanding sum may be called in by the banks. If the loans made through this corporation which it is pro-

799
posed to set up can be extended and paid off over a long period of years and the farmer is thereby relieved of the difficulties from which he now suffers because of the fear of having his outstanding debts called in, I think the whole House will favour this Measure being applied to Scotland. With regard to the criticisms which have been made by the hon. and learned Gentleman the Member for East Grinstead on the differences between the Scottish and English Bills, I think that the differences are always in favour of the Scottish Bill. I agree with him. I understand that there is not going to be a Division to-day, and, of course, we reserve our criticisms for the Committee stage.
Mr. A. V. ALEXANDER: I have been very interested indeed in the remarks of the hon. and learned Gentleman the Member for East Grinstead (Sir H. Cautley) because I remember his examination of the English Bill and the criticisms which he addressed to the English proposals at that time. It is very interesting to find that in the Scottish Bill the basis of Part II is entirely different from that of Part II of the English Act. For the information of the hon. and learned Gentleman—if he has not seen it—probably I can account for the fact that that change has been made. The "Scotsman" of the 10th May, when the English Bill was passing through the House of Commons, contained a report of a meeting of the Scottish Chamber of Agriculture. I find that at a meeting of the Council of that body when a motion was moved that the general provisions of the English Bill should be applied to Scotland, there was a heated discussion as to the application of Part II of the Bill for short credits, and that the previous question was carried by 10 votes to four. So that the Council of the Chamber of Agriculture in Scotland were evidently very much against applying to Scotland the short-term credits' part of the English Act at least with regard to individual farmers.
I entirely agree with the general criticism which the hon. and learned Gentleman has made of the English Act. The Lord Advocate indicated that they have broadened the title of the Bill from that originally produced, so that there might be some discussions in Committee if anyone wanted to secure that the
800
English provision should be applied to Scotland. While it is obvious that the Lord Advocate is not pressing that point, the fact that he is leaving it for discussion in Committee makes it a matter for the House to watch very carefully, because it ought not to be assumed that a wrong Measure which has been applied in England should apply to Scotland.
Although this is a Scottish Bill, I should not be quite true to my convictions in the matter if I did not say something about the first part of the Bill on the same lines as that which I said on the English Bill. I agree entirely with what my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) has said on the general question of long-term credits. I would also point out, with regard to the finance of the Bill, that while the banks probably would not want to give a great deal of long-term credit on real estate, as the hon. and learned Member said just now, they are to be induced to give long-term credit by means of a State subsidy. If you take the finance of the Bill, you will find that you are to advance up to£125,000 for a period of 60- years free of interest. Therefore, you make, in effect, a gift to the banks—that is if the loan is given for the whole period —of something like£375,000 by way of interest. In addition you are going to give£1,750 a year for 10 years for the ordinary administrative expenditure. You also undertake a not inconsiderable contingent liability for subscription by the Treasury to debentures if and when required. Those are very considerable subsidies for the banking institutions that will form the Land Corporation when it is set up. It seems to me that it is very unsound indeed for this House, whether in respect of Scotland or of England, to vote such large sums of public money and to undertake considerable contingent liabilities unless it can get, at the same time, a guarantee from the banks who will be the constituents of the Land Corporation.
I do not agree with the view—I know it is a debatable point submitted by the Lord Advocate, that the means provided by a Government Department of reducing the rate of interest at which money can be borrowed to buy real estate would necessarily induce a very large sale. I always understood that the Tory party in the past had desired that as many

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people as possible should be able to obtain ownership of their farms or their holdings. For that purpose, I should have thought that the Tory party would have moved directly to get money for people who are able, at any rate, to put up part of the capital required to buy their farms or holdings at as low a rate as possible. As a matter of fact, I do not think that such a subsidy could possibly command a great change in the market price of holdings or farms. After all, when you go and buy a farm or a holding you judge it upon the outgoings. You consider what are the outgoings of the place and what are likely to be the profits to be made. What is important is whether either the sitting tenant or seine moving tenant decides that it will he more to his advantage to own the holding or rent it from a landlord. I should have thought that from the Tory point of view they would do what they possibly could to secure direct ownership of the farms and holdings, but under this scheme there is no guarantee at all that after we have paid this public money, either by annual grant or by loan free of interest over a considerable number of years, a reasonable rate of interest will be obtained under these long-term credits at the bank.
I think it is a very great pity that we have got into the habit lately of making considerable grants from State funds without securing any really adequate quid pro quo from the private interests. We have made a protest here on many occasions. We made a protest in regard to the subsidy to the beet sugar industry. We protest against money going to private interest without guarantee as to what shall happen in the future, and without giving to the State a share in any capital assets that may be created. We do say that if we give public money we ought to have a guarantee to this Rouse that the farmers who are to make applications for long-term credits should get a guaranteed low rate of interest charged upon the mortgages which they may take out for the purpose of purchasing their farms or holdings.
I do not want to repeat all the items which I could give in support of that claim, but I want to ask one or two questions of the Lord Advocate. I am not quite clear about the point I put to him during his speech. It is much more desirable under Part II of the Bill that
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the short-term credits should be arranged through the co-operative societies. The agricultural credits which have been most successful in the countries which have adopted agricultural credits have been arranged through the local cooperative credit societies, and that has been due to the fact that when the credit is arranged it is arranged by men upon the local co-operative societies committee who know much about the individual would-be borrowers, whether they can be relied upon, whether they are good farmers, and so on. In the case of the societies as we know them in Scotland, they are mainly marketing societies, so far as I am aware, and a great deal will depend upon whether the credit under Part II of the Bill can be given upon stocks which are forwarded for sale to the society as agents.
The LORD ADVOCATE: Clause 5 (2) provides that
"The property which may be affected by such a charge shall be the stocks of merchandise from time to time owned by the society in pursuance of the objects which it has been formed to carry out."
Mr. ALEXANDER: That means that there may be some cases where the credit cannot be given to the extent which is desirable. That is the very point to which I should like the Lord Advocate to pay attention before the Bill goes to Committee. I do not want to discuss the point further on Second Reading. Another point is the definition of a bank. In the definition Clause the definition of a bank is very different from that which appears in the English Act. Clause 9 (2) says:
"'Bank' means any bank having power for the time being to issue bank notes."
If we look at the English Act we find that a bank means any bank, society or corporation doing banking business which is recognised by the Minister. That is a very different arrangement from that which is proposed in regard to Scotland. I regard that as an essential difference and an essential point. In England and Wales a considerable amount of the business done by the agricultural co-operative societies is done in connection with the larger co-operative institution which had for that purpose its own bank. I am glad to say that the Minister of Agriculture in the case of England and Wales recognises the co-operative bank for all

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the functions of the Act. I cannot understand why it is thought necessary in Scotland that some different process should apply. Why should not, if I may so put it, the senior co-operative financial institution in England and Scotland be able to undertake credits under the terms of the Bill for the Scottish co-operative credits societies in exactly the same way as is provided in the English Act it can be done in England and Wales? I would ask the Lord Advocate why a difference has been made in regard to Scotland. If he cannot answer that question to-day, will he give consideration to it before the Bill goes to Committee? It is obviously awkward for an English Member who happens to be interested in the subject, because he will not be on the Scottish Standing Committee to examine the Bill and except for the short time available on the Report stage there will be little opportunity to deal with the point.
It seems to me that the Government are a little premature in presenting this Bill. When the Minister of Agriculture for England brought in the Bill which has now become an Act for England and Wales he was able to give the House very full information as to the arrangements that he had made with the English banks. He paid a fairly strong eulogy to the banks for their help. The Lord Advocate now brings in this Bill and says that he is sorry he is unable to state that there is any arrangements with the banks. He hopes it may be possible to give particulars of some arrangement that will be made, when the Committee stage of the Bill is reached. The House ought not to be asked at this stage to proceed with a Bill guaranteeing certain financial credits and grants when there is no arrangement between the Government and the people who are to receive the advances. Having regard to what happened in regard to England, I have no doubt that the Government will carry the Bill if they will present a provisional agreement or contract made with the banks who will form the corporation, but to-day there is no arrangement presented to the House. The Lord Advocate seemed to suggest that the banks may not come in at all and that the Government may have to make some other arrangement through which the credits can be given. I should like the
804
Lord Advocate to tell the House frankly whether there is any difficulty with the banks. Are the banks declining to come in? If so, have the Government any definite alternative in their mind in place of the suggested arrangements with the banks? If the Lord Advocate cannot answer these questions, it seems to me to be unreasonable to ask the House to give a Second Reading to a Bill with such important financial provisions in it without any definite arrangement or contract having been made between the banks and the Government.
Question put, and agreed to.
Bill read a Second time, and committed to a Standing Committee.

AGRICULTURAL CREDITS (SCOTLAND) [MONEY].
Considered in Committee under Standing Order No. 71A.
[Mr. JAMES HOPE in the Chair.]
Motion made, and Question proposed,
"That, for the purpose of any Act of the present Session to secure in Scotland by means of the formation of a company and the assistance thereof out of public funds the making of loans for agricultural purposes on favourable terms, and to facilitate the borrowing of money in Scotland on the security of agricultural assets, and for purposes connected therewith, it is expedient—

(a) to authorise the payment out of the Consolidated Fund, or the growing produce thereof, of such sums not exceeding one hundred and thirty-five thousand pounds as may be required for making advances to the company to be formed under the said Act and for procuring the underwriting of debentures or debenture stock to be issued by such company as aforesaid for raising sums not exceeding eight hundred thousand pounds;

(b) to authorise the payment out of moneys provided by Parliament of sums not exceeding one thousand seven hundred and fifty pounds a year for ten years as contributions towards the cost of administration of the said company;

(c) to authorise the payment into the Exchequer of sums paid by the said company by way of repayment of or interest on such advances as aforesaid."—(King's Recommendation Signified.)—[The Lord Advocate.]

Mr. W. GRAHAM: I do not want to press the Lord Advocate unduly on this

805
question, but under the circumstances we must ask him his intentions under the Financial Resolution. It is clear that this plan can only go ahead in Scotland in terms of a corporation subsisting on the lines of the English Corporation which has been formed. In that case, and before we pass the Financial Resolution, the House deserves to know the exact position of any negotiations with the hanks and whether, in fact, there is any prospect of a company of this kind being established in Scotland substantially in terms of the English Corporation.
The LORD ADVOCATE: I will gladly give what information I can, but the right hon. Member for Central Edinburgh (Mr. W. Graham) will understand that negotiations are still going on and it is a little difficult and delicate to say anything about them. I have said already, and I will say again, that if the banks fail to come in there is every prospect of an alternative form, but we do not anticipate any difficulty in the formation of this company. Naturally, we should prefer to follow the English scheme and we are at present negotiating with the banks. I hope the right hon. Gentleman will not press me to say anything further. We have been criticised for not bringing this Bill in sooner and at the same time as the English Bill. It is obvious that time is going to be short this Session and we took advantage of this opportunity to get the Second Reading and also the Financial Resolution which will enable us to get straight on to Committee, which is the important stage. That is the reason for introducing the Bill now, and I have undertaken that the House shall be in possession of certain definite information with regard to the formation of the company before the Committee stage. I have said that before and I repeat it now, and I suggest that there is sufficient justification for proceeding with the Bill.
Mr. GRAHAM: I understand the undertaking of the Lord Advocate to be this —as far as I am concerned I shall be satisfied—(1) that before the Committee stage is taken the Secretary of State for Scotland will be able to tell us whether he has made definite arrangements with the Scottish banks, and (2), failing that arrangement, whether he intends to go ahead with a separate company inde-
806
pendent of the banks which will, of course, be a manifest departure from the practice adopted in England.
The LORD ADVOCATE: That is exactly the undertaking I have given.
Mr. SHINWELL: I have no desire to do or say anything which will deny to the agricultural interests of Scotland the privileges which are given on this side of the Border, but it seems to me that the Lord Advocate should give the Committee a reasonable assurance that this scheme will bear fruit. Clearly, no purpose is served by passing this Measure and going into Committee unless we have an assurance that the negotiations which are proceeding are likely to give satisfactory results. It is all very well for the Lord Advocate to say that he will furnish evidence when the Committee meets. What is the purpose of asking the Committee to agree to a Financial Resolution which involves the expenditure of public money for a purpose which at the moment is in the air'? The Lord Advocate cannot be allowed to ride off in this extremely perfunctory fashion; throwing this Financial Resolution at our heads and saying, "Take it or leave it."
We are entitled to some evidence in support of the proposal that this expenditure is essential, and I am amazed that the Lord Advocate should ask us to accept a proposition like this without submitting any evidence in support of it. I am afraid that this scheme will come to nothing. The farming interests are not very anxious about it; there is no likelihood of a company being promoted and the banks themselves are not very keen. The Lord Advocate has said that if the banks do not come in some other company will be formed. I am not quite clear about that. If the present negotiations—assuming that there are negotiations, which is a large assumption—fall through, the alternative proposals might then disturb the Clauses in this Bill. We are entitled, I think, to some further explanation. We do not desire to divide the Committee on the matter but the Lord Advocate must not assume that our desire for conciliation entitles him to refuse a reasonable explanation, which in the circumstances should be forthcoming, that there is a likelihood of the scheme coming to fruition and that our discussions and further deliberations will be justified.
The LORD ADVOCATE: I will answer the hon. Member in a sentence. It is our anxiety to make sure, as it is the anxiety of all hon. Members, that this Bill shall get through this Session, and we are therefore very anxious to take advantage of this opportunity to get it through the first stage on the Floor of the House. That is the reason why we are introducing the Bill at this moment; there will be plenty of time and opportunity to discuss it later. I prefer to wait until the negotiations are put forward in a definite scheme. I have given the Committee quite frankly the reasons why we have brought forward the Bill for Second Reading to-day and also for moving the Financial Resolution. One of the worst services I could render this scheme, even if I felt I was entitled to do so, would be to disclose the present stage of the negotiations, or say what the prospects are. Surely the hon. Member will accept my assurance that they are going on. I am sure the Committee will accept that assurance. I have been asked whether I can give an assurance that there is a reasonable prospect of the scheme going through and the company being formed. I think I have used an even stronger phrase as to the prospects of the scheme going through in some form or other, but at this stage of the negotiations I am unable to say definitely whether it will be through the banks.
Mr. HARDIE: May I press the point still further. The banks are the only people mentioned in the Bill.
The LORD ADVOCATE: The Bill covers any form of company.
Mr. HARDIE: Yes, I know, but we expect the banks to form this company. Failing the banks, what is there in the Bill which enables any alternative company to be promoted? Will the 'insurance companies be free to form this company? Will an ordinary company he recognised under the Bill?
The CHAIRMAN: I must point out that we are not discussing the Bill but the Financial Resolution.
Mr. HARDIE: Under the provisions of the Bill, what other method is there for carrying out the terms of the Financial Resolution?
Mr. A. V. ALEXANDER: Really this is very unsatisfactory, and the Lord Advocate himself apparently recognises that fact. I can imagine what would have been said in 1924 if my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) had come and asked the House to pass a Money Resolution which was to give public funds to some private corporation formed either by the banks or by other persons with whom no definite agreement had been made and no contract signed, and about whom no information was available. What an amazing position it is! Upon that we are asked to pass a Resolution governing the whole business. It seems to me to be a policy of Bedlam as far as Parliamentary procedure is concerned. The Lord Advocate cannot possibly justify it. What is the defence? It is that, after all, the Government want to secure the passage of a Bill for which there may be limited Parliamentary time. That is all. Yet the Government admit that they introduced a Bill in almost entirely the same form, with the exception of the extension of title, last Session. They have had the Bill before them for consideration since then. Now, in December of the same year, they come and ask for a Money Resolution and have no terms of contract and no arrangement made with the banking interest concerned. If the arrangement with the banks fails, is it not reasonable for Members to ask who are the other interests with whom the Scottish Office are confident. that they can make an arrangement? When we were dealing with the English Act we were told quite plainly who they were. The Bank of England took a certain proportion of the shareholding of the corporation to be subsidised by public funds, and the rest of the shareholding was taken by four banks. The Lord Advocate really is asking the Committee to give him a blank cheque. We have already said that we do not. want to offer opposition to the principle of the Bill, but really the Lord Advocate is not treating the Committee with the respect that it deserves by leaving it in this position.
Question put., and agreed to.
Resolution to be reported upon Monday next.

NORTHERN IRELAND LAND BILL.
Order for Second Reading read.
The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Lieut.-Colonel Sir Vivian Henderson): I beg to move, "That the Bill be now read a Second time."
2.0 p.m.
This Bill is a very small and non-contentious one. When the Act of 1925, dealing with land purchase, was passed, it was contemplated that, so 2.0 p.m. far as Northern Ireland was concerned, it would be completed by the final appointed day, which was 27th May, 1929. Owing to the fact that the number of holdings involved has proved to be very much larger than was originally estimated, we find it necessary to postpone the final day beyond that which was originally fixed. The first Clause of this Bill deals with the necessary consequential provisions amending the financial procedure under the 1925 Act and enabling the annuities to be paid by the tenant and the settlement to be
810
made by the Commission with the vendors in accordance with the original Act. There is nothing in the Clause in the way of new legislation. Clauses 2 and 3 are small Clauses dealing with certain omissions in the Act of 1925 which, from the drafting point of view, was found not to have been quite satisfactory in these respects. Again there is nothing new in that.
Question put, and agreed to.
Bill read a Second time, and Committed to a Standing Committee.
The remaining Orders were read, and postponed.
Whereupon Mr. DEPUTY - SPEAKER adjourned the House without Question put, pursuant to Standing Order No. 3.
Adjourned at Two Minutes after Two o'Clock, until Monday next, 3rd December.