§ Mr. CHURCHILL
I very much regret that I was not able to be present during the Debate which took place on Friday. 1010 We have been promised that a statement would be made to the Committee as to the view which the Government took in regard to the limit of the expenses under this Clause.
§ The DEPUTY-CHAIRMAN
I must remind the right hon. Gentleman that there are some Amendments to this Clause.
§ Mr. CHURCHILL
I understand that you have already put the Question, "That the Clause stand part of the Bill."
§ Mr. CHURCHILL
I think it would be more convenient if we could discuss the Clause after we have had a full explanation of the intentions of the Government.
Mr. LLOYD GEORGE
I understood that there was an Amendment to be moved in page 2, line 43, which would raise the whole question. That Amendment has been suggested in order to have a Debate in which the whole question can be raised. The Question "That the Clause stand part of the Bill," would come better after we had disposed of all the Amendments. I think it would be better to have an Amendment on the specific issue of the limit to be imposed in line 43.
I am prepared to deal with this matter on the question of the Clause if that is for the convenience of the House.
§ The DEPUTY-CHAIRMAN
I simply announced Clause 2 in order to call upon the first Amendment, and I would remind the right hon. Gentleman the Member for Epping (Mr. Churchill) that it is not in order at this point to discuss the general question. Of course, in this matter I am entirely in the hands of the Committee, but, strictly speaking, the right hon. Gentleman the Member for Epping is not in order at this stage in discussing the general question, more especially in view of the fact that I have before me an Amendment on Clause 4 dealing specifically with this question.
§ Mr. CHURCHILL
I submit that it would be more for the convenience of the 1011 Committee to have this important decision taken upon the Government policy before proceeding any further with the discussion of this Clause and the following Clauses. The statement of the intentions of the Government might affect the view which the Committee would take and such a course might shorten the discussion. Supposing the Government made a statement which the Committee regarded as being very unsatisfactory, undoubtedly there would be a closer criticism than if the Lord Privy Seal was able to make a reassuring statement.
§ The DEPUTY-CHAIRMAN
Might I suggest to the right hon. Gentleman the Member for Epping that this could be done if he would move to report Progress.
Mr. LLOYD GEORGE
I think the whole discussion of this question should be raised by an Amendment to Clause 2 which deals with grants to public utility companies. That is exactly where we desire to raise the question of a limit. The Amendment suggested is to insert in page 2, line 43, after the word "may," the words:within the limits of the amount fixed in advance by the Government Department.That would enable hon. Members to raise the whole issue of the limitation. If we have a discussion now on the whole Clause we cannot move Amendments, but, if an Amendment were moved now dealing with limitations, it would be permissible for my right hon. Friend the Member for Epping to make his speech on that issue.
§ Mr. CHURCHILL
I still submit that it would be for the convenience of the Committee if we could have some statement in regard to the intentions of the Government. I do not wish to take up a controversial attitude by moving to report Progress, and I should be quite willing to move an Amendment to leave out the word "Treasury" in the first line of the Clause.
§ The DEPUTY-CHAIRMAN
I understand the purpose of the Amendment is 1012 to enable the Lord Privy Seal to make a general statement to the Committee.
§ Mr. WALLHEAD
I wish to raise the question of the undesirability of continually having manuscript Amendments placed before the Committee. I assume that some importance is attached to those Amendments, and surely it would be for the convenience of the Committee to have them placed on the Order Paper instead of being handed in at the Table.
§ Mr. CHURCHILL
I beg to move, in page 2, line 41, to leave out the word "Treasury," and to insert instead thereof the words "Board of Trade."
§ I move this Amendment in order that a discussion may take place on this question.
§ Mr. W. J. BROWN
There are Amendments on the Order Paper, and manuscript Amendments have been handed in. Under these circumstances, I want to know whether it is in order for a right hon. Gentleman to move verbal Amendments which take precedence—
§ Mr. LEIF JONES
If the word "Treasury" is left out, it makes nonsense of the Clause. I think we should be told what words it is intended to insert if the word "Treasury" is struck out.
§ The DEPUTY-CHAIRMAN
The Amendment is to leave out the word "Treasury" and to insert instead thereof the words "Board of Trade."
I do not know what the Amendment means, and I do not think anyone else does. The situation is this: A distinct promise was made on Friday that, between then and the Committee stage, an effort would be made to consider the request of the House that some limit should be inserted in the Bill or a 1013 Statement made indicating the Government's views of a limit. We have discussed in all its bearings the difficulty of inserting any figure in the Bill, which we could not—the House itself would have to take that responsibility. The difficulty is, first, that, if you put a small figure, it would look ridiculous, while if you put an extreme figure it would do harm, and in neither case could you justify it on any negotiations which have taken place. I gather that the House accepted that situation, and that what they wanted to know was what was likely to happen between now and when the House reassembled—what was the maximum commitment that was likely to take place, so that, when the House reassembled, the ordinary Vote would be put down, and the House would be in full possession of the whole of the facts.
In view of that, we have decided that, just as £25,000,000 is mentioned in Clause 1, so we would undertake that there shall be no commitment of any sort or kind to a capital expenditure of more than £25,000,000 as between now and November. In making that statement and in giving that figure I would clearly indicate on behalf of the Government that it is merely a token figure; it is not based upon any negotiations, because, as the Committee ought to know, I have not even started, and cannot start, negotiations, I cannot even issue a circular either to local authorities or public utility companies, until this Bill is through, for the terms and conditions cannot be determined until Parliament itself has determined them. Therefore, I do not ask the Committee to assume, and in fact I go beyond that and say that I do not think—I wish I could think—that even a capital expenditure of £25,000,000 will be undertaken in this period—I do not think so for a moment. But the Government give that guarantee to the House, the same figure as is indicated in the first part of the Bill—though I do not think it will be reached—in order to meet the general view expressed by the House that some limit should be fixed. Accordingly, the figure of £25,000,000 is named by the Government.
§ Mr. CHURCHILL
I should just like to ask the right hon. Gentleman a question before I address myself to the topic. When the Chancellor of the Exchequer spoke on this subject on Friday, he said: 1014If it is the wish of the House in Committee to insert a figure, such as £5,000,000, the Government will agree to that being done, but of course on this understanding. It is impossible at the moment to say whether under this alternative scheme any such figure as £5,000,000 would be a final figure."—[OFFICIAL REPORT, 19th July, 1929; col. 824, Vol. 230.]The Chancellor of the Exchequer was, I believe, understood to be referring to the gifts or grants to be made to these companies under Clause 2. The Lord Privy Seal this afternoon has used the expression "Capital expenditure," and he has mentioned a figure of £25,000,000. I would be very much obliged to him if he would be so kind as to relate these two figures, and explain exactly whether they cover the same ground or not. Is this £25,000,000 intended to be a measure of the gifts or grants which may be made to these public utility companies under Clauses 2 and 4, and is it, therefore, five times larger than the figure foreshadowed by the Chancellor of the Exchequer? How does it stand?
The Chancellor of the Exchequer was, as the right hon. Gentleman has said, dealing with one aspect of the question—he was dealing with a full commitment of the Government. The right hon. Gentleman was present and I think he will acquiesce in what I say. The Chancellor of the Exchequer was dealing with a full commitment of the Government. I am not dealing with that but I am prepared to give an undertaking that between now and the reassembly of Parliament the loans on which interest grants may be made under the Clause shall not exceed £25,000,000. That makes it perfectly clear, as I stated to the House, that, if any body or bodies covered under the Bill came along with schemes of the capital value of £25,000,000—it may be that interest for one year may be paid, or it may be for two years or three years, and, as I have clearly indicated, you cannot lay down the conditions in every case—no capital expenditure above £25,000,000 will be dealt with by the Government between now and the re-assembly of Parliament.
Mr. LLOYD GEORGE
I would like to understand fully what the Lord Privy Seal proposes to do. I and my hon. Friends here have indicated clearly that we will not press him for the insertion of any limit in the Bill, because I think 1015 that that would be a mistake. We were only pressing for some definite guarantee from the Government that before the House met they would not commit the country beyond a certain limited figure. The right hon. Gentleman has now given that limited figure, but there are one or two questions that I should like to put to the Government. These grants apply to two categories. They apply, in the first instance, to public utility companies like railway, water and other companies, which are making a profit. That is under Clause 2. But they also apply, under Clause 4, to public utility bodies—which probably means local authorities and others—that make no profits. I understand that the £25,000,000 will apply to both categories, and that—
No; I thought I had made that perfectly clear. I have not dealt with the St. Davids Committee; I did not mean that at all; I was only dealing with Clause 2—£25,000,000 of capital expenditure.
Mr. LLOYD GEORGE
That is the first question that I wanted to put. My second question is this. I understand that what the right hon. Gentleman means by the £25,000,000 of capital expenditure is the capitalisation of the amount of the guarantee which is given to these companies. The suggestion was made by the Chancellor of the Exchequer that for 10 years, perhaps, the whole of the interest might be paid, that afterwards perhaps one-half might be paid, then one-third, until it reached vanishing point at 15 years. What this indicates is that the Government are proposing something which, capitalised as a liability at this moment, would be a maximum of £25,000,000.
Certainly not. Let me make it perfectly clear. It is that the total capital sum upon which any guarantee of any sort or kind—I thought I had made it perfectly clear before—would be £25,000,000. That is quite clear and definite.
Sir HILTON YOUNG
As I understand it, the definition given by the right hon. Gentleman is not a precise limitation as regards the possible actual expenditure. The capital amount might be quite nominal. If I may illustrate my argument by putting a hypothesis which I do not mean to have any shadow of offensiveness at all, but which I state just to illustrate the possibilities, the nominal capital amount might be artificially reduced, and thus, by fixing a very high nominal rate of interest, a nominal capital amount of £25,000,000 might be made to cover almost any kind of annual grant. I only suggest that to show that there is no absolutely precise definition of the possible amount to be spent.
Do not let us quibble. I have already said that up to now I am unable even to issue a Circular to any body. I want the Committee clearly to understand what is meant. I have explained, and I repeat, that there is no such shady transaction as that indicated by the right hon. Gentleman the Member for Sevenoaks (Sir H. Young). Who are the bodies concerned? They are all bodies under statutory obligations to this House. That is the first thing to keep in mind. They have all to prove their case, first to a Government Department, then to a business Committee, and then to the Treasury. I submit to the Committee that, surely, that is a check and that no such shady transaction could pass muster with a business man.
Sir H. YOUNG
Of course, I do not for a moment suggest, any shady transaction; I was only venturing to point out to the Lord Privy Seal that the limitation which he proposes is not a specific monetary limitation on the commitments or grants which may be made out of the Exchequer. That is a point of substance, and not a quibble. Next I should like, again without a shadow of ungraciousness, to express regret that the limitation is not to be inserted in the Bill. I do not for a moment suggest that an undertaking given by the Lord Privy Seal is not as absolutely binding as an Act of Parliament, but, in a matter of financial regularity, it is of more than 1017 formal importance that the forms under which the national business is transacted should be maintained, and I do suggest that it would be desirable that those who in future may be referring back to precedents and so forth should be able to find this limitation standing on the same authority as the power to make the expenditure.
§ 8.0 p.m.
§ Sir L. WORTHINGTON-EVANS
I am afraid that the Lord Privy Seal has not given us a very definite limitation. He says that the capital sum in respect of which grants are to be made shall not exceed £25,000,000, but the grants may under the Bill be for 15 years. Let us assume for a moment that the interest is 5 per cent. If a grant is made for one year on £25,000,000, it is £1,750,000; if it is made for 15 years it is £18,750,000. The undertaking that the right hon. Gentleman has given is that the power taken by the Government is to be anywhere between £1,250,000 and £18,750,000. That is playing with the House. That is not really giving a limitation; it is not really stating what the Government's intention is; it is taking so wide a margin that it is not a security at all. I can understand that for platform purposes the Chancellor of the Duchy of Lancaster might say that under Clause 1 £25,000,000 is to be the limit of the capital in respect of which guarantees are to be given, but let us leave the platform. Let us look at where we are now, in Committee of the House of Commons, with the duty to consider our expenditure and the powers to be given to the Government. The Chancellor of the Exchequer on Friday intimated that the total liability of the taxpayer in respect of grants was £5,000,000. [HON. MEMBERS: "No!"] It is clearly recorded in the OFFICIAL REPORT. I thought that was a short and sufficiently accurate way of stating it. He did not pledge himself to that. He said he would consider it between Friday and Monday, but he did mention the figure of £5,000,000 as a possible limit of the financial liability. If you are going to have a limit at all, let it be a limit of the taxpayers' money. Do not let it be a limit indirectly of the capital sum to be guaranteed when it may be £1,250,000 or it may be £18,750,000.
§ Mr. CHURCHILL
I understand we shall be able, on the Question that the 1018 Clause stand part, to discuss this matter further and I should like to ask leave to withdraw the Amendment, which I moved for the purpose of allowing the question to be raised now, and to thank the Lord Privy Seal for the information he has given.
§ Amendment, by leave, withdrawn.
§ The DEPUTY-CHAIRMAN
The next Amendment, in page 3, line 3—to leave out the words "public utility" and to insert instead thereof the words "industrial, commercial, or agricultural business"—I have to rule out of order as outside the scope of the Bill.
§ Mr. J. W. BOWEN
I beg to move, in page 3, line 17, after the word "Kingdom," to insert the words "to the need of area development."
I should imagine that maiden speeches are very fast losing their popularity and attraction, so far as this Parliament is concerned, at any rate. I can only, therefore, hope to secure the indulgence and tolerance of the House for a few minutes in order to attempt to make a modest contribution. The Amendment is designed to assist the Government and not to retard the progress of the Measure. My difficulty, rather, is that there is a connection between my Amendment and Part II of the Bill. The right hon. Gentleman might be able to help me later on as to the drafting of the Amendment in that connection. In considering the Bill before us, and the power to be given to the Treasury, we recognise that in any contribution towards the solution of the problem of unemployment there should be kept in view the next step in a constructive effort. In other words, unless there is some co-ordination or connection in the proposals, there is likely to be failure before the proposition gets very far. The Treasury is, rightly, the authority to secure that co-ordination, but in connection with the vast proposition that is before us in this Bill, and the probability of something more developing, we have to have regard to possible difficulties arising from wasteful competition. I want to suggest that the Bill does not give the Treasury sufficient authority to prevent that. If I may give some indication of what I mean, I should like to ask my right hon. Friend to tell us, in regard to road and railway transport, to what extent competitive schemes will be dis- 1019 couraged. Unlimited competition will probably mean the downfall of efforts in the direction of either assisting railways or making roads. The Treasury may possibly find some conflict between business aims and public requirements. Road and railway competition has become notorious, and therefore, when it is proposed that there should be some regard to the development of railways and an extension of road making, it is pertinent to ask whether the Treasury has sufficient power to see to that matter or not.
My Amendment, I think will help the Government in that connection. Railways and roads are different forms of traction. Roadmaking cannot be denied. Roadmaking, however, can be regarded to some extent as a subsidy to commerce, and, as railways are a national highway for commerce, they ought to be expected to make some contribution to unemployment, because they have statutory privileges; they have public obligations, and they have also moral responsibilities to their own special community. We have seen how they have encouraged the community who have trained themselves and lived and had their being at places like Crewe and Harwich, but in such places there are hundreds of men discharged from their work or on short time; the municipalities are powerless, and the community itself is apprehensive lest worse should befall them. Therefore, the simple question I should like to put to my right hon. Friend is: Will the railways be expected to carry a little more of that burden if grants are to be made? I should be prepared to take some risks, because of the desperate needs of the situation, but I am anxious to get the best results and to encourage the Government in their great task. I think, however, it would be wise of the Treasury to take powers which I do not see in the Bill to ensure that they are satisfied that the need of area development proposed by any public utility company is such as to satisfy them and such as would not lead to further unemployment which competition of a wasteful nature would bring about.
Let me first congratulate my hon. Friend on a very able speech giving a very clear indication of his interest in Crewe. I am quite sure that his constituents, when they read it, will 1020 congratulate themselves on their wisdom in having sent someone who can so adequately and so early look after their Interests. Therefore, I not only appreciate and understand the Amendment, but I am going to give my hon. Friend reasons why, having made his speech, he should now withdraw the Amendment. I rather gathered that its only object was to see, as far as it is humanly possible, that in all the schemes that are considered some definite object shall be in view. That is to say, if, for instance, you are looking at a dock, the only improvement you would sanction at the dock would be something that would facilitate the shipping at the dock. If you are looking at railways, you will only sanction a development which would tend to the general comfort of the passengers, and ultimately to a cheaper and more efficient transport. When you are looking at roads, you should say, "How many corners can I cut off?" So you go on from stage to stage, and I have it all in my mind, but I am sure it is much too dangerous ground at this stage to ask me to say what will be the balance as between railways and roads. What has to be kept in mind is that improvements are necessary in both. It is not a question of merely assuming that you can use one against the other. It is not a question of assuming that one is better than the other. It is a question of realising that both need improvement and, if that improvement can be brought about simultaneously with finding employment, that, after all, is the only test we ought to apply. My hon. Friend having indicated not only short time at Crewe but pensions for the railway men at Crewe, all of which are kept back by the poverty of the railway companies, he should be able conscientiously to support the Bill, which will bring about efficiency and enhanced prosperity from which the people of Crewe, whom he so ably represents, will be the first to benefit.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. CHURCHILL
I have now had a very few moments to consider the effect of the statement the Lord Privy Seal has 1021 made, and I am bound to say it confirms the general impression, and the first impression, I formed when the schemes were presented to the House. It shows that he is proceeding with prudence and caution and with due regard to the susceptibilities and the principles and the authority of the Treasury. I must say I think the debate that took place on Friday and the earlier debate, have really been of very great advantage, because we have clearly ascertained, not the final but the immediate limits of the Government scheme for dealing with unemployment and, as I say, those limits are extremely modest, and rightly so, because undoubtedly it would have been easy for the right hon. Gentleman to put a very sensational figure into his Bill, or into his speeches, and then he would have found he would not have been able to spend the money in the time or would only have been led into wanton and wasteful expenditure.
Therefore, as I say, I think that it is reassuring to the Committee to be in possession of the full statement he has made to us this afternoon. I am very glad that the Government have deferred to the sense of this House now in Committee in placing us in possession of their scheme and of the maximum limit of their scheme as far as the present period is concerned. £25,000,000 is the mass of capital development in respect of which the Government may make grants of interest between now and the next assembling of the House in three months' time. It is quite true that the commitments into which the Government may lead us may extend for as long as 15 years, but even if the commitment is at its maximum of 15 years, as I calculate, the total commitment that can be made in the next three months will not exceed £18,000,000 or £19,000,000 sterling. Taking the 5 per cent. guarantee as covering loans during the whole 15 years within the limit of this £25,000,000 capital development, the total amount will not exceed £1,500,000 a year, or £18,000,000 or £19,000,000 in 15 years.
I do not really feel that I have the slightest reason to alter the view which I have taken throughout this discussion, that this is a very moderate and circumspect proposal. There has never been in these discussions any collusion between the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and myself. [Interruption.] When I say 1022 no collusion I expect to be believed. I expressed the opinion which at first sight was, apparently, the only line to take. I wish only to say that although there has been no collusion, in my view there has been no inconsistency. I took the view throughout, and I take it now, in the possession of this much fuller information, that the scheme is ordinary and sagacious. I said that the Chancellor of the Exchequer won the first round, and in my opinion he has won the second round. That is my view. It is true that the right hon. Gentleman the Member for Carnarvon Boroughs drew attention, and I am very glad he did so, to the serious financial vagueness of this particular provision. The Government have met that, and the Chancellor of the Exchequer has acknowledged the advantage of the measure of the discussions which have taken place in the House.
So that we really congratulate ourselves in both cases. We have a moderate scheme, and we have a correct financial procedure. I am bound to say that I do not see why this limit should not be mentioned in the Bill. The Chancellor of the Exchequer certainly spoke of the subject as if the £25,000,000 could be inserted in the Bill, naturally only of a temporary character, but the Government do not feel that they wish to make an insertion. I should not wish to press them unduly. I am very anxious that they should feel that we have not hampered them in any way in their treatment of this great problem of unemployment. We have never sought to impose a limit upon them. We have asked them to express their view as to what the limit should be. That was their responsibility. They have acted up to their responsibility, and they have told us what the limit is, and for my part I think that it is a very moderate limit. I am bound to say that I do not think they could possibly have adopted a more modest limit as far as this coming period of three months is concerned.
It only remains, as far as this House is concerned, to wish the right hon. Gentleman success in spending wisely and judiciously these limited sums to which he has now the power to commit us. But, before this Clause passes from us, and now that we have before us the limit of the Government scheme, I must reiterate my opinion, which I have expressed several times, that the effect of 1023 these schemes upon the volume of unemployment will be utterly negligible. However skilful the right hon. Gentleman does his work, however shrewdly and thrifty he makes his bargains, whatever competent business men he calls to his aid, I must express my conviction that whatever the future course of the unemployment figures may be, they will not be appreciably influenced or affected by anything he has proposed in this Bill, not only in the next two or three years, but during the whole course. The levers which are being applied may be well polished and placed in the right positions, may have heaving upon them the full strength, energy and adroitness of the Lord Privy Seal, but they are levers which are miniature levers. They are not capable of moving this vast mass. We have heard of using a steam-hammer to crack a nut, but it is the other way round. He is throwing a nut into a steam-hammer. I cannot imagine anyone believing that proposals on this scale, however useful they may be in some respects, will be a solution of this hideous problem of 1,200,000 persons unemployed which has played such an immense part in all our political and social controversies, and is undoubtedly the main preoccupation of all who are responsibly concerned, in Office or in Opposition, with the affairs of this country. No, Sir, the evil is gigantic and the scheme is modest in the extreme.
I do not blame the right hon. Gentleman for the course which he has taken. More especially do I think that he has a right to proceed with caution when there is, to put it mildly, very grave doubt as to whether even modest applications will produce modest results, when there is very grave doubt whether the launching of the scheme will have any effect whatever upon unemployment, and will not create as much unemployment by a transference of credit from other quarters. There was a battleship which sank in the Mediterranean many years ago and they endeavoured to raise it, but after six or seven weeks they found they were pumping the Mediterranean in and out of the battleship which was sunk, and it may well be that the. Treasury view, which has so consistently been put forward in the many discussions which have taken place since the War, is 1024 economically correct. As I have said, I am not in a position to range myself in absolute endorsement of that view in its entirety. I think that the efforts which all of us have made under every Government that has taken place since the War to try to mitigate unemployment by favouring and fostering public works and stimulating enterprises preclude me from taking that view in its entirety. The right hon. Gentleman might perhaps say that there is no such thing as a Treasury view, and that there is only the Chancellor of the Exchequer's view. I do not think that is true. Where it is a matter of politics, of course, only the Minister is concerned, but where you come to highly technical matters, whether connected with the defence forces or with finance or with public health, in some respects, in regard to these technical matters, apart from political matters, the view of these expert officials, who give their whole lives to the study of these questions, is a matter which acquires an independent and separate validity.
§ Mr. CHURCHILL
I do not understand that. The point is, what is the truth. The question is, can you by borrowing money and spending it upon public works, diminish the volume of unemployment? If you can, then everyone will be very glad, and we will support the Lord Privy Seal's scheme with greater confidence than we do. If you cannot then, of course, it is no use encouraging hopes amongst unemployed persons that they are going to have relief from their sufferings through the application of a remedy which it is believed will not be effective at all. However that may be, I maintain that the scale upon which the Government proposals have been framed is not of a character to enable any appreciable effect to be made upon this great social evil. I do not intend to press this matter any further, because the right hon. Gentleman has been most conciliatory with the Committee to-day, and the Government have given us further information. I think there is one point, on Report, that I will speak upon when the time comes. 1025 Meanwhile I will support the right hon. Gentleman in getting this Clause through.
Mr. LLOYD GEORGE
I, also, have had an opportunity since the Lord Privy Seal made his statement of considering this matter and of consulting with my right hon. Friends, and with my hon. Friends who are associated with me, and we are of opinion that the Lord Privy Seal has redeemed very faithfully the undertakings given by the Chancellor of the Exchequer last Friday. I have risen to express satisfaction with the statement that he has made. So far as I am concerned, any opposition or criticism which I was directing against this Clause has been completely mollified. I had some misgivings, on merits, about these grants to these companies, but if the right hon. Gentleman says that he cannot find the necessary opportunities of providing work for the unemployed in the coming winter without embarking upon schemes of this character then, whatever misgivings I may have had, I shall certainly not convert my misgivings into an opposition to his proposals. His responsibilities are very great indeed, and it is the business of the House of Commons to do all in their power, within the means at their disposal, to assist him to carry through his great and very anxious undertakings. For that reason, I wish to express my satisfaction.
May I also express satisfaction at the statement that the right hon. Gentleman made in reply to the hon. Gentleman for Crewe (Mr. Bowen). I have always been a little afraid of the right hon. Gentleman's railway obsession. It is a very natural one and a very honourable one for him, but I have always been a little afraid that he concentrates, in regard to his projects, rather too much upon the railways, to the exclusion of—[An HON. MEMBER: "Roads!"] Not merely roads, but other things as well. There are a great many other things which I hope the right hon. Gentleman is considering, which could provide employment. I was glad to hear him destroy completely the illusion that if you develop road schemes you necessarily do harm to the railways, or, on the other hand, that if you develop the railways you must necessarily injure the roads. The roads and the railways are both 1026 partners in a great undertaking, assisting each other in the transport facilities of this country, and I was very glad to hear the right hon. Gentleman say so. It will completely dispose of a great many arguments which I heard during the General Election, in criticism of certain schemes with which I was associated.
With regard to what was said by my right hon. Friend the late Chancellor of the Exchequer, I fundamentally repudiate everything that he said. I utterly disagree with everything he said, except that he accepted the Lord Privy Seal's proposals. I think that what he said was heresy of the most indefensible character. The idea that if you spend money in this way you will not promote employment and that you may really prevent useful employment in other directions, is a doctrine which I never heard of outside the Treasury, and that doctrine was engendered in the Treasury during the time that it was presided over by the right hon. Gentleman. I certainly never heard of it in the past. When I was Chancellor of the Exchequer, I was responsible, with the full sanction of the Treasury, for setting up the Development Board. It is perfectly true that at that time we did not get as much cash as I should have wished, but I never heard the doctrine put by the Treasury that you might not use national credit for the purpose of developing agriculture and other industries. What is true of agriculture must be equally true of other industries, if there is no credit that you can get without the assistance of the Treasury. The real point is, whether you are spending money for the purpose of making employment, for some purpose of re-equipment and reconstruction and for something that enriches the nation, or whether you are throwing your money away.
§ Mr. CHURCHILL
I should be misleading the Committee if I ever suggested that the Treasury view is that no development should be done by public money. What I said was that development by borrowed public money would not be beneficial in reducing unemployment.
Mr. LLOYD GEORGE
I think the right hon. Gentleman went far beyond that. He gave the extraordinary illustration about the derelict battleship, and about pumping the same water in and out. If you were able to raise some 1027 treasure by those means, the money might be well spent. The whole point is whether the money which the Lord Privy Seal is asking this Committee to vote is to be used for the purpose of improving the transport of this country, or for the purpose of improvement by means of drainage or by improving the quality of the land, or for any other purpose which enriches the country and makes it a country that will provide useful and healthy employment for the people who dwell here. That is really the whole question. It is not this country alone that goes in for these development schemes. I could provide examples for the right hon. Gentleman where public money has been used in ways of this kind, in the Dominions and in the United States of America, where they are contemplating raising huge sums of money upon public credit for the purpose of assisting agriculture and the commerce of the country. The same thing applies in France, and in Italy more particularly, where there are enormous schemes of land reclamation for the purpose of providing employment for the surplus population. I should be very sorry indeed if any party in this House, and especially the Conservative party, were to commit themselves to a policy like that. It would be fatal to the future of this country with its enormous population and with the growing competition which makes it very doubtful whether we shall recover within the next 10, or 15, or 20 years the necessary export trade to enable us to provide employment. If the Conservative party commits itself to the proposition that public credit is not to be used for the purpose of developing the natural resources of this country, and of the Dominions and Colonies, it would be a fatal day for the prospects of this land. I am entirely in disagreement with the doctrine which I understood the right hon. Gentleman laid down, and I hope that he will take time not merely to consider the proposal of the Lord Privy Seal but also to reconsider that very extraordinary doctrine.
I have come to the conclusion that half-past eight in the evening is a much better time for the consideration of a Bill than 12 or one o'clock in the day: the whole atmosphere seems better. Let me say, first of all, 1028 that I fully appreciate the late Chancellor of the Exchequer's handling of the situation. He wound up by saying, "You are going to do nothing." In that case all I can say is: "Thank you very much for your support for doing nothing." The right hon. Gentleman has raised an issue which will have to be fought out sooner or later. This is not the time to do that, but I want to say this quite frankly for myself. I am not unmindful of the difficulties but the position shortly stated is this. The right hon. Gentleman says that if you raise £100,000,000, or £50,000,000, the net result will be that credit will be restricted by the banks, and that whatever employment you may find in spending the £100,000,000, it is more than counterbalanced by other industries suffering as a result of the expenditure.
My view is that it all turns on how far you can expand your own credit within the gold standard. It turns on that absolutely. There are fundamental differences on this subject I know. The greatest financiers in the City are divided. I have heard excellent views on either side, but if the policy of the right hon. Gentleman is correct, then we have, whether we like it or no, to accept the fact that 1,200,000 men are doomed for all time, unless some unforseen economic change comes to their rescue. If that policy is to be accepted there is an end to this country. The people will not tolerate it; and there is no reason why they should. They would have the right to say: "No, we demand something better, and we are going to have it." I have never represented that this Bill with its limitations is to be taken as the measure of my view as to what is necessary. If it was I should not be worthy to sit here for two minutes. It is not by a long way the measure of what we shall have to do, but it is a step, the first step, and a necessary step, to deal with the problem immediately. There will be many other steps to follow, and they will all cost money. I do not want to deceive the House. But I submit that we are taking a practical step in saying: "Do not let us waste money on unnecessaries." For instance, if our trade is suffering as the result of a lack of efficiency at the docks, which I can show to 1029 be the case, that we cannot compete with the foreigner because some of the plant at our harbours and docks is absolutely obsolete, surely anything which will tend to find employment and make us more efficient to compete with the foreigner must in the end be of advantage to the community.
In spite of all criticisms I am going along that path, and I am going to see how far in the expenditure of public money we can add to the improvement and efficiency of the country as a whole. There will be other stages to follow, which are necessary, and I shall not hesitate to ask the House for its approval. I thank the Committee for the tone of this Debate. I have endeavoured honestly to give all the guarantees that it is possible to give, and I believe we shall be able to do something between now and November. At any rate, I will give a guarantee to the Committee that we will do all we can to falsify the predictions of the right hon. Gentleman and that when we re-assemble in November he will be the first to say: "Well done: I was wrong, you were right." I hope the Committee will assist me in getting the Third Reading of the Bill this evening.
§ Mr. E. BROWN
I only want to detain the House for a few moments. I interrupted the late Chancellor of the Exchequer and said that the technical answers you get from technical experts depend on the technical questions put to the technical experts; and if the right hon. Gentleman during the last five years, instead of sitting for the Epping Division, a delightful seat from the point of view of employment, had sat for his old constituency, Dundee, he might very well have drafted his questions about unemployment from an entirely different point of view. No hon. Member who sits for an area in which there is a large number of unemployed will accept for one moment that it is the Treasury doctrine which has been enunciated by the right hon. Gentleman to-day. It may be the Treasury doctrine given to the right hon. Gentleman in answer to his particular type of question, but it is not the whole doctrine and, therefore, private Members hope that the right hon. Gentleman will be kind enough to put his own point of view so that we may be able to deal with it on its merits. Those who have large numbers of unemployed in their con- 1030 stituencies understand that this is only a beginning. We take the words of the Chancellor of the Exchequer on Friday as meaning exactly what he said:The House must really understand that any figure that we may suggest cannot be regarded as a final figure. We shall claim freedom to come to the House if we have schemes which we think are practical. We shall claim freedom to come to the House at any time and ask them to increase the figure."—[OFFICIAL REPORT, 19th July, 1929; col. 824, Vol. 230.]From the point of view of those who sit for areas where there is grave unemployment the sooner the Lord Privy Seal comes to the House and asks for bigger figures the better we shall be pleased.
§ Mr. MUGGERIDGE
It appears to me that one point has been overlooked in this Debate, and I should like to bring it to the notice of the Committee. We are committed to the expenditure of a sum of money for the purpose of aiding many private limited company undertakings. Those undertakings are not run exclusively in the public interest. They are run ultimately to provide a profit, or at any rate a certain rate of interest, for those who have contributed money to them. I am not objecting to that, but I do regret that the House is allowing Part II to go without putting in a precautionary provision such as this: that if we are going to spend the taxpayers' money in refreshing these undertakings, which have not been managed so well that they do not stand in need of the refreshing capital that we are proposing to pour into them—if we are to use the taxpayers' money for that purpose, we ought at least to take the precaution of seeing that when in future we choose to become the possessors, by purchase, of these undertakings, the money that we are spending now in the shape of grants will be deducted with interest from any compensation that is paid to these utility concerns. That at least ought to be guaranteed. Otherwise we are making a very bad bargain for the taxpayers, and we may be forced into the position that taxpayers will be compelled to buy back their own money. I am glad of the opportunity of making my protest, because I can see the time coming when these national utility concerns will become national in the true sense of the word.
§ Mr. MACQUISTEN
Provided the expenditure creates assets, there can be no 1031 fault in encouraging it. If it is unwisely spent, of course it will be a national loss. I suggest that the Government or the State has assets of its own in which money might be wisely spent before any goes to the outsiders. I can mention an asset in Scotland on which a satisfactory sum might be spent and employment might be given to a large number of men. For 100 years the State has owned a canal at the head of the Peninsula of Kintyre. Although it has belonged to the State, up to 1913 it has always paid its way and has been of immeasurable convenience to fishing craft and small vessels. It is only nine feet deep. As recently as 1913 the route of the canal was surveyed by engineers, who reported that a 20-feet sea canal could be made for less than £800,000, with one lock instead of the 15 that are there now. Such a development would enable reasonably sized ships to use the canal and to save 100 miles of sea journey through stormy waters. The traffic is there, but reasonable facilities are necessary. The scheme would open up a large tract of land for settlement and would provide employment for many thousands of men for several years, and the very class of men to whom we wish to give employment, namely, the miners. Why do the Government not take up a scheme of that kind? There must be many other State-owned assets of the kind in the country. The Government should begin with these. I put a question to the Minister of Transport about this scheme. It would mean not only an improvement in transport, but supplies of fresh fish for the people in Glasgow, better facilities for conveying country produce, and the development of a splendid area on the other side of the canal. It would all be of the greatest benefit to the Scottish people.
§ Lieut.-Colonel Sir A. LAMBERT WARD
The Lord Privy Seal asked that he might get the Third Reacting of his Bill to-night. I submit that in the case of a Bill founded on a Money Resolution it is not possible for him to do so.
§ Mr. SMITHERS
I regret very much that I feel compelled to say a few words. I hope the Chancellor of the Duchy 1032 realises that I am anxious that the Government should get the Bill. In all sincerity I am anxious to support any scheme which will help unemployment. I want, however, to refer to a sentence in the speech of the Lord Privy Seal. He said that there were more schemes to come and that they would all cost money, and he added that his policy was to expand the credit of the country as far as he could within the gold standard. Some hon. Members on the other side of the House seem to think that it is easy to raise money, and that the mere raising of it will cure unemployment. I want to thank the Government for coming down to the House and limiting the expenditure under this Bill, and for letting the country see that the Treasury is still using effective control. I want to try to put right a point of view expressed by the Chancellor of the Duchy at a meeting reported in the "Times" of to-day. He is reported to have said:Mr. Churchill and Mr. Lloyd George combined to put a limitation on she amount of money that the Government would spend before the autumn.Let me return to the Lord Privy Seal's statement about extending credit within the limits of the gold standard. There is a limit to the amount of money that you can raise, and you may raise it on such conditions that the harm to the unemployed will more than outweigh the good that can be done by putting some men back into work with the small amount of money that you raise. We have talked a lot in the last few days about Treasury control. The Lord Privy Seal said the other day that the Chancellor of the Exchequer for the time being was the Treasury, and was in control. But there is a much sterner and harder master of our financial possibilities than the Chancellor of the Exchequer or the Treasury. I can only explain it as being, owing to our insular position and our complete dependence upon credit, the economic facts prevailing throughout the world. I take it that Treasury control means that when any Government puts up a financial proposal for the examination of Treasury experts, those experts tell the Gvernment how far they can go, and what will be the result of that particular financial proposal. The limit to the amount that any Government can spend is the limit which they can raise without depreciating the price of Govern- 1033 ment securities or damaging national credit. We have to-day talked about £25,000,000 under Clause 1 of the Bill and £25,000,000 under Clause 2 of the Bill, and I understand that further grants are liable to be made under Clause 4. Presuming for a moment the sum to be £50,000,000, the State is assuming a liability of £2,500,000 a year in interest, supposing the money to be raised at 5 per cent. or thereabouts. You may get some men back to work, but the Government will put round the neck of the country as a whole—not of the capitalists, but of the country, because it will tend to increase the cost of living to the whole community by increasing taxation—an annual liability of £2,500,000 per annum.
I repeat that there is no one more anxious than I am to help the unemployed, but I wish to point out that in raising these large sums of money, we ought to remember our present commitments and make a survey of our existing debts. I have before me the financial statement for this year. When the Government talk of raising large sums of money, I would remind them that in the year 1929–30 there are £65,000,000 of liabilities falling due to be met. In the year 1930–31 there are £134,000,000. In the year 1932–33, £121,000,000; in the next year there are £265,000,000; in the year following that £116,000,000 and so on up to 1947. It is also to be remembered that our total national debt is £7,500,000,000. Let us by all means make-grants, as far as we can afford them, to help the unemployed; but if anything be done whereby the gold standard is affected or our pound sterling depreciated in terms of dollars, then the raising of that money must do more harm than it can possibly do good. Therefore I would ask the Chancellor of the Duchy of Lancaster not to go into the country saying "We could not carry out our schemes because the Opposition would not let us vote the money." Let him rather own up to the difficulties, and be sincere and say that the position and the safety of this country in relation to the world make it impossible to raise an unlimited amount. If we over-borrow or over-tax, we shall create a situation which, far from diminishing unemployment, must tend materially to increase it.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.