§ The CHAIRMAN
An Amendment handed in by the hon. Member for Stockport [Mr. Hammersley]—in page 1, lines 18 and 19, to omit the words "a public utility," and to insert instead thereof the words "any industrial, commercial, agricultural or business"—is not in order as it is outside the scope of the Money Resolution. An Amendment handed in by the hon. Member for Chislehurst (Mr. Smithers) is also out of order for the same reason.
§ Mr. SANDHAM
I beg to move, in page 1, line 19, at the end, to insert the wordsProvided that wherever public assistance is given to a limited liability company the Treasury shall acquire an equitable measure 1000 of control of the company concerned by the appointment of directors on the board of the company.In moving this Amendment, I should like to call the attention of the Committee to the words contained in Clause 3:In this part of this Act the expression 'public utility undertaking' means an undertaking carried on under statutory powers by any body of persons for providing means of transport or communication, gas, electricity, water or power, but does not include any such undertaking which is carried on by a body of persons to whom a grant may be made under Part II of this Act.I have no desire to waste the time of the Committee, and, if my desire for brevity interferes with clarity, it is a result of my inexperience in the House. In dealing with this Amendment, it must not be understood that I am condoning any of the injustices accruing from the usages of the statutory powers of a public utility company, particularly those affecting the holding of debentures. At the same time, I am not unmindful of the remarks of my right hon. Friend the Lord Privy Seal when he said:While I am entrusted with this position, I am not going to ask Parliament to give me any power which means the loss of effective and absolute Parliamentary control. It is rather surprising that I should be accused of seeking to do that, because I have always fought everybody on my own side or on any other side on that question. My record is well known. I have never hesitated to say: 'No. Parliament is the guardian of the public purse and Parliament must have absolute control!'"—[OFFICIAL REPORT, 19th July, 1929; cols. 796–7, Vol. 230.]7.0 p.m.
I desire to move this Amendment, in the first place, as an advocate of Socialism, in the second place because I am a staunch believer in disarming criticism, and, in the third place, because I wish to develop even greater confidence in our present Government. My object is to help and not to hinder the very arduous tasks of the Lord Privy Seal and the Chancellor of the Exchequer. I realise profoundly the gravity as well as the urgency of this great problem and the evil of capitalism, namely unemployment. At the same time, I was moved in the Debate by the prevalent anxiety among right hon. and hon. Gentlemen of both Oppositions to protect the welfare and interest of the funds of the Treasury. I desire to disarm criticism among the community 1001 in general by the introduction of this Amendment and in particular among the business firms and limited liability companies who do not benefit or participate in these schemes for the relief of unemployment.
I am reminded of the position of two very important statutory public companies. One of them had the maximum of capital, but a lack of technique in the industry, while the other company had the technique but lacked the capital. These two companies got together and it was suggested that they should exchange three directors from each of their Boards in order that each might help and watch over the activities of the other. The results secured were certainly very satisfactory. The company that was anxious to receive the capital got what it wanted, while the company which was anxious to get the technique also got what it wanted. In this matter, I am anxious that we, as a House, should have the interests of the House covered by control by representatives on these boards of directors. If this object can be secured as it was secured in the case of the two companies I have mentioned, surely the Government themselves are in an equally satisfactory position to see to it that their representatives on the boards of directors of companies, which are receiving grants or loans, should have an equivalent amount of control and watchful interest over the companies. If that point be agreed, then it covers the object of this Amendment.
At the same time, I assure the Committee that it is not my intention to hamper the Government by pressing this Amendment to its logical conclusion. I am not stiff-necked about this business; as a matter of fact, I am resilient in my attitude. I want to help the Government and not to hinder them. If, therefore, we can be assured by the Lord Privy Seal and the Chancellor of the Exchequer or by either of them that this matter will receive the careful consideration of their Departments, that assurance will to my mind enable this Amendment to be withdrawn, and in that spirit I move the Amendment standing in my name.
§ The LORD PRIVY SEAL (Mr. J. H. Thomas)
The House will, I am sure, agree that no one could move an Amendment in a more agreeable form than my hon. Friend. Not only do I congratulate 1002 him on the very concise and illuminating statement of his case, but also on his wisdom when he suggested not pressing it to a Division. I would ask the Committee to bear in mind the object of the Amendment. I gather that it is to say, in substance, that, if there is Government money, then in some way there ought to be Government control. That is the view behind the Amendment. I am sure, however, that if my hon. Friend will look at the Amendment he will see how impossible it would be. The Amendment says:Wherever public assistance is given to a limited liability company the Treasury shall acquire an equitable measure of control of the company concerned.The Committee will see at a glance that there would be considerable difficulties as to what was an equitable measure of control. For instance, I have in mind a case where the maximum amount of guarantee is perhaps £2,000,000, but the total capital of the company may be more than £100,000,000. In that case, an equitable part would be a leg or a hand of an individual and not even his head judged from the standpoint of the amount of money invested. It is therefore impossible to talk about an equitable control.
I would rather put it to the Committee in this way. This Amendment is dangerous from the Treasury's point of view, because you cannot have an individual member of a board sharing in the responsibility of a board and then have the Government blamed for his individual actions. That arose in the discussions on the Anglo-Persian Oil Company. A principle is involved in this respect. There is nothing at the moment to prevent the Treasury insisting on having a member on the board if the circumstances warrant them in doing so. On balance, however, I think it is a mistake for me to appoint one member on a board and then hold him responsible for any criticism that follows. The public, too, might then blame the Government because of the action of the Government nominee. For those reasons, I give this assurance to my hon. Friend and the Committee. If, under any circumstances, the Treasury feel that some representative ought to be there, we shall not hesitate to act. To make it a condition would not only be undesirable, but I do not see how it could have a good effect, and for this 1003 reason. Up till now I could conduct no negotiations at all. It is quite true that I have seen all sorts of people, but, so far as discussing any scheme is concerned, I cannot possibly discuss it until I get this Bill. We are nearing the end of July therefore before I can even discuss a scheme, because I cannot discuss schemes until I know the terms. If this Amendment is accepted, it would mean that, before these companies could do anything, they would have to come to Parliament to ask for power to alter their Articles of Association. That would mean further delay. I understand the motive behind this Amendment, but to endeavour to give effect to it is absolutely impossible.
§ Mr. WALLHEAD
I would like to point out that there is another aspect of this question, namely, the fact that without this money many of these companies would be absolutely derelict and bankrupt, and from that point of view—
§ Mr. WALLHEAD
I only wish to draw-attention to the fact that, whatever hon. Members on the other side of the House may say, we in this country are passing through a transitional period in which capital now finds itself unable effectively to carry on without the aid of the State. As far as we are concerned, we are not prepared to come continually to the rescue of Capitalism unless we get some compensation in the way of State control.
§ Mr. D. G. SOMERVILLE
I would like to say a word in favour of this Amendment, because it seems to have certain possibilities. In order to get a State representative on the boards of these companies you would have to get directors appointed and, as directors are always paid, surely it would be very convenient for the Government, if they wished to reward some faithful servant in the Socialist party, to appoint him a director of these companies. This Amendment would also help to carry out the Socialist scheme of gradualness, because by appointing directors to these public utility companies they would gradually get the control and so fulfil the scheme of the Chancellor of the Ex- 1004 chequer. In time, the State and the Government would control the whole of the companies of this country. The Amendment therefore appears to offer advantages to the Government, and I would like to support it.
§ Amendment negatived.
§ Mr. SMITHERS
I beg to move, in page 2, line 18, to leave out the words "the near future," and to insert instead thereof the words:six months after the date upon which this guarantee is made.I bring this point to the notice of the Lord Privy Seal because I think the expression "the near future" is too indefinite. Supposing the Government gave a guarantee to a public utility company and the company did not carry out the conditions of that guarantee and the Government were compelled to take the company to Court. How is the judge to decide upon such words as "in the near future"? I am not wedded to the limit of six months, and I would not mind any other period the Lord Privy Seal thinks better, but I do ask him to fix a definite period.
§ Mr. THOMAS
If I were thinking only of being able to get something done right away I should be delighted to accept this Amendment, but I wonder what the Committee would think if I did accept it. It would mean that a dock, harbour or other company could come along and say, "We want Government assistance for a job that we are going to do ourselves in six months' time."
§ Mr. THOMAS
It is no good the hon. Member saying that. That is what the Amendment means, though he has frankly said that he is not riveted to a period of six months, and that his only object was to get some statement from us as to what is in our minds. I have already told the Committee that in the case of the Lord St. Davids Committee I altered the acceleration period from 1005 five years to three years. Therefore, a municipality can be given a grant on the usual terms if they state that they will undertake at once work which in the ordinary course would not be done for a certain number of years, provided that the number of years is a minimum of three—at least, they are entitled to have their case considered. In this case it is difficult to lay down a period. There are certain waterworks and certain electricity undertakings which might say they would not be justified in commencing certain work now and did not intend to start it for 12 months; but I do not think even a period of 12 months would meet the case, and what I have in mind at the moment is a period of somewhere about three years, being the same period as for the Lord St. Davids Committee. Here again the Committee must observe the difficulty that presents itself, because if the putting in hand of an undertaking were to be speeded up by three years there clearly could not be the same claim for assistance as there would be if it had not been proposed to undertake it until five years or 10 years hence. Therefore I do not want to dogmatise. We ought to be free to consider the merits of the schemes themselves and their ultimate value to the community. I certainly could not agree to a limit of six months or even 12 months, and I hope the hon. Member will accept the explanation which I have given.
§ Mr. SMITHERS
I only inserted the term of six months in my Amendment to see whether the right hon. Gentleman was willing to put in any limit at all and I would like to know whether he will do so. May I ask, further, whether the committee or the body which gives the guarantee will have administrative powers to ensure that the work is proceeded with as fast as possible?
§ Mr. THOMAS
As I have said, we cannot lay down a hard and fast rule, and I am sure that a member of the St. Davids Committee who is present will confirm me in that view. All we can do is to issue a set of instructions as a general guide to the committee. Those instructions will be issued in all cases to this committee—certain clearly defined principles upon which they must work, and it will be for the Government to see that the conditions laid down are strictly observed.
§ Sir LAMING WORTHINGTON-EVANS
The right hon. Gentleman has said that these schemes are going to be subject to general instructions. Ought not this Committee to be told what those instructions are—at least in general principle? When the previous schemes were in operation there was a Treasury Minute dealing with them. I referred to it in the House the other day to show what some of the conditions of that Treasury Minute were. If the right hon. Gentleman will tell us now or at some other time what the conditions of the Treasury Minute are he may be able to satisfy us that this rather vague Clause should stand. I, myself, do not object to the vagueness of this Clause. My hon. Friend the Member for Chislehurst (Mr. Smithers) will notice that this Amendment is a limitation on the power of guarantee. I do not want to limit the power of guarantee provided it is used for the purpose of ensuring employment, and I see the difficulty the right hon. Gentleman is under in agreeing to three years or a year or six months; the point is the scheme has to be put forward with a view to providing employment.
§ Mr. SMITHERS
The right hon. Gentleman says the expression "the near future" referred to the guarantee. I would point out that it is a question ofthe probability or not of the scheme in question not being proceeded with in the near future,which means the work and not the guarantee.
§ Sir L. WORTHINGTON-EVANS
The Government are taking the power to guarantee, but in considering whether or not they will do it they take into account whether a scheme would in the ordinary course have been proceeded with in the near future. That is the limitation, and I do not disagree with that limitation; but the right hon. Gentleman has said that conditions are going to be laid down. When I was speaking the other day and said there ought not to be secret instructions but instructions of which the House knew, my suggestion was greeted with cries that it was an unworthy one. I repeat that. The right hon. Gentleman says that instructions will be given to the committee regarding the general lines upon which schemes are to be approved 1007 or not to be approved. I agree that that should be done, but I think the House ought to know what the conditions are going to be.
§ Mr. THOMAS
I am quite sure that the House is entitled to know, but the right hon. Gentleman is mixing the things. I reminded the right hon. Gentleman before, and I repeat now, that those instructions were issued by the Treasury with regard to something as to which there was no statutory power. It is no good the right hon. Gentleman shaking his head.
§ Mr. THOMAS
Those instructions were issued after the power had been taken. This Bill regularises the position by laying down the conditions. The Bill says, first, that no scheme can be considered which does not mean an acceleration of work. That was contained in the Treasury instructions. The Bill also mentions the condition that the scheme must find immediate employment. That was a point, too. The third point is that when the House meets in November any instructions given to the committee can be communicated to the House. But I put it to the Committee that with the restrictions laid down here, which are essential, surely an opportunity might be given to the committee itself to be guided by their experience. In the case of the St. Davids Committee there were changes from time to time based on experience.
§ Sir L. WORTHINGTON-EVANS
But the right hon. Gentleman does not know his own Bill. My hon. Friend was perfectly right in calling attention to the vagueness of these words. I was honestly trying to help the right hon. Gentleman and suggested that though these words are vague we ought not to make them so precise that they will interfere with his reasonable administration; but when the right hon. Gentleman says he is going to issue instructions to the committee I ask him why he cannot let us know what those instructions are to he, because then we should get rid of this vagueness and he would get the power which he requires.
Mr. LLOYD GEORGE
I hope the hon. Member will not press his Amendment, 1008 because I do not see that it can achieve the object which he has in mind. The effect of the Amendment would be that the Government could utilise the credit of the Treasury in any case where without that guarantee there would be no probability within six months of the scheme being initiated. So far from its being a limitation, I think that is almost an extension of the powers of the Lord Privy Seal. I do not agree with my right hon. Friend that on the whole the guarantees here are not adequate. I do not know whether my memory plays me false, but I think that on the whole they are practically the same powers as existed under the Trade Facilities Act. First of all the Government have to be satisfied that the scheme will provide employment. The second consideration, and perhaps this is the more important, is that in the near future—the insertion of this six months would not make a penny of difference one way or the other—
§ Mr. SMITHERS
I have said more than once that the term "six months" was put in the Amendment only for the purpose of drawing attention to the vagueness of the present wording. I am not wedded to the term of six months if the right hon. Gentleman the Lord Privy Seal would agree to either two years or three years.
Mr. LLOYD GEORGE
That is where I think it would be a mistake. What the Government have to be satisfied about is whether, without utilising the credit of the Treasury, there is any chance of the work being proceeded with in the near future. Whatever schemes there are it is vital that they should be initiated at the earliest possible moment. I would not have a limit of six months. We have the winter in front of us, and should there be any prospect of a scheme being initiated, provided the Government use their credit to assist it, which would not have been started without that credit, then I think we ought to give the Government a free hand. I am glad to take this line with regard to this particular scheme, because I took a very strong view with regard to the limitations in the matter of the free gifts or grants. I shall have something to say about them later on, as I anticipate there will be a statement from the Treasury Bench, because we were promised on Friday that one would be made.
1009 This, however, is a totally different matter. This is a question of the utilisation of the credit of the Government for the purpose of initiating work, and I trust that after the explanation given by the Lord Privy Seal it will not be necessary to divide on this Amendment. I do not see that it is desirable to restrict unduly the powers of the Government with regard to the utilisation of the State credit for the purpose of initiating schemes at the earliest possible moment. With regard to the instructions which have to be given, I have no doubt that the Lord Privy Seal will be in a position to inform the Committee, but naturally he wants his Bill first before he can issue his Minutes.
§ Mr. PYBUS
As the member of the Unemployment Grants Committee to whom the Lord Privy Seal has referred, I would like the Committee to concede the very widest powers as regards anticipation. It is a very serious and difficult matter to be too rigidly bound to fixed rules to administer schemes which come from the different authorities. If you have a fixed rule regarding anticipation and the time which a scheme must be started, you may find that one of your very best schemes has been turned down. With regard to the danger of schemes not proceeding as quickly as promised, which was raised by the hon. Member for Chislehurst (Mr. Smithers), I can assure him that under the Lord St. Davids Committee schemes, if the work is not finished by the time arranged, a portion of the grant may be lost. For these reasons and as a result of some experience I urge the Committee to give the Committee the very widest powers.
§ Mr. ERNEST BROWN
I think, if a period of six months is fixed, the proposal would be quite hopeless, and I hope the Amendment will not be pressed.
§ Amendment, by leave, withdrawn.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.