Commons Sitting of 9 April 1930

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Cardiff Corporation Bill (by Order),
Consideration, as amended, deferred till Monday next.
Renfrewshire Upper District (Eastwood and Mearns) Water Order Confirmation Bill [Lords],
Considered; to be read the Third time To-morrow.

TRAMWAYS AND LIGHT RAILWAYS (STREET AND ROAD) AND TRACKLESS TROLLEY UNDERTAKINGS,
Return ordered
"of Street and Road Tramways and Light Railways authorised by Act or Order, showing the amount of capital authorised, paid up, and expended; the length of line authorised and the length open for traffic, and number of cars owned on the 31st day of December, 1929, in respect of companies, and the end of the financial year 1929–30 in respect of local authorities; the gross receipts, working expenditure, net receipts and appropriations, the transactions in reserve funds, and traffic and operating statistics for the year ended on the foregoing dates, respectively (in continuation of Return to an Order of the House, dated the 23rd day of April, 1929); also similar particulars relating to Trackless Trolley Undertakings."—[Mr. Herbert Morrison.]

ORAL ANSWERS TO QUESTIONS.

  VISAS CHARGES.
  Mr. DAYasked the Secretary of State for Foreign Affairs whether any negotiations are at present being undertaken by his Department for the purpose of waiving the payment of visas on passports of nationals of foreign countries
  2136
  desiring to visit Great Britain; and whether His Majesty's Government are prepared to negotiate on the basis of reciprocal advantage?
  The SECRETARY of STATE for FOREIGN AFFAIRS (M. Arthur Henderson): No, Sir. It has been decided on financial grounds that for the present no further negotiations with foreign countries should be undertaken for the waiving of visa charges.
  Mr. DAY: Can the Foreign Secretary say whether any time has been decided for the abolition of these visas?
  Mr. HENDERSON: No time has been decided.

  DIPLOMATIC AND CONSULAR REPRESENTATIVES.
  Mr. MANDERasked the Secretary of State for Foreign Affairs what countries have unified systems for their diplomatic and consular representatives?
  Mr. A. HENDERSON: I am making inquiries, and will let the hon. Member know the result of my investigations as soon as I can.

  TRADE AND COMMERCE.

    IMPORT DUTIES, BRAZIL (BRITISH COAL).
    Mr. ARTHUR MICHAEL SAMUELasked the Secretary of State for Foreign Affairs if he has requested the Brazilian Government to reconsider their import duties and bunker duties upon coal at Rio de Janeiro amounting to a total of 10s. 10d. per ton as at present?
    Mr. A. HENDERSON: Yes, Sir. Viscount D'Abernon discussed these duties with the President of Brazil in September last. His Majesty's representative in Rio de Janeiro subsequently again drew the attention of the President and the competent Brazilian authorities to the desirability of reconsidering the duties. I understand that the matter is receiving the attention of the Brazilian Government.
    Mr. SAMUEL: Was this one of the matters raised at Geneva by the President of the Board of Trade?

    EMPIRE MARKETING BOARD.
    Sir NICHOLAS GRATTAN - DOYLEasked the Under-Secretary of State for Dominion Affairs what have been the balances of the sums issued as the grants-in-aid to the Empire Marketing Board which have remained unexpended at 31st March in each year; and what was the total remaining of unexpended balances as at 31st March, 1930?
    The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Lunn): Unexpended balances of sums issued as grants-in-aid of the Empire Marketing Fund have been as follow:

    £

    s.

    d.

    At 31st March, 1927

    …

    365,224

    3

    1

    At 31st March, 1928

    …

    361,983

    5

    0

    At 31st March, 1929

    …

    301,333

    11

    10

    It is not yet possible to say what will be the final expenditure for the financial year just ended, and, therefore, what unexpended balance will remain available; but for the purpose of the estimate for 1930 it has been calculated that the balance may be expected to be in the neighbourhood of £250,000.
    Sir N. GRATTAN-DOYLE: Can the hon. Gentleman say to what use it is proposed to put the unexpended balances when they are ascertained?
    Mr. LUNN: I must ask the hon. Gentleman to put down another question on that matter.
    Sir N. GRATTAN-DOYLE: Can the hon. Gentleman give information to the House as to the probable use to which the balance will be put?
    Mr. LUNN: I am not asked that question.
    Sir ASSHETON POWNALL: Are these balances surrendered to the Treasury as usual, or are they carried forward to a subsequent year?
    Mr. LUNN: The unexpended balances up to now have not been carried over to the Treasury.

    EXPORT CREDITS.
    Mr. DOUGLAS HACKINGasked the Secretary to the Overseas Trade Department the face value of contracts entered into under the Export Credits Guarantee Scheme in respect of exports to Russia during last month?
    Mr. GILLETT (Secretary, Overseas Trade Department): The face value of contracts entered into under the Export Credits Guarantee Scheme in respect of exports to Russia during March amounted to £585,277.
    Mr. HACKINGasked the Secretary to the Overseas Trade Department the face value of contracts entered into under the Export Credits Guarantee Scheme in respect of exports to all countries during the month of March?
    Mr. GILLETT: The face value of contracts entered into under the Export Credits Guarantee Scheme in respect of exports to all countries during March amounted to £999,780.
    Mr. CHARLES WILLIAMS: Is that any increase over last year?
    Mr. GILLETT: Over the whole year there has been an increase, but I cannot remember the actual month.

    MEXICO (BRITISH BONDHOLDERS).
    Mr. A. M. SAMUELasked the Secretary of State for Foreign Affairs whether His Majesty's representative in Mexico has in the last few weeks discussed with the Mexican Government matters connected with the default of that Government's obligations to British holders of Mexican Government securities; and, if so, what was the reply received by His Majesty's representative?
    Mr. A. HENDERSON: Yes, Sir. His Majesty's representative in Mexico City recently discussed this matter with the Mexican Minister for Foreign Affairs, and is now awaiting information as to the plans of the Minister of Finance.
    Mr. SAMUEL: Is the Foreign Secretary aware that we have lost £150 millions of English money in Mexico, and does he not think that the time has arrived when we should really make a push in this matter?
    Mr. HENDERSON: It all depends on what the right hon. Gentleman means by "a push." We are doing all that we can.
    Mr. SAMUEL: Does the right hon. Gentleman not realise that he will never get the Mexican Government to take any

    2139
    steps to fulfil its obligations until he makes himself unpleasant to that Government?
    Mr. C. WILLIAMS: Can the right hon. Gentleman hold out any hope that the Government will do anything in this matter?
    Mr. WISE: Was not this money owing when the last Government were in Office?

  RUSSIA.

    RELIGIOUS SITUATION.
    Commander SOUTHBYasked the Secretary of State for Foreign Affairs if he will instruct His Majesty's representative at the Vatican to endeavour to obtain from the Vatican authorities any information they may have in their possession regarding any religious persecution which may now exist in Russia?
    Mr. THURTLE: Before this question is answered, Mr. Speaker, may I submit to you that it is not in accordance with the Rules of the House? It is most improper and offensive to ask that an official request should be made to a third party to find out information regarding what is happening in the territory of that country with which we are in proper diplomatic relations. May I submit that this question is not only offensive to the Soviet Government, but also to our British Ambassador in Moscow?
    Mr. SPEAKER: If I had thought that this question was out of Order, I should not have allowed it.
    Mr. A. HENDERSON: No, Sir. I do not consider that it is my duty to undertake inquiries of the nature suggested.
    Commander SOUTHBY: Is it not essential that reliable information should be obtained about what is going on in Russia in regard to religious persecution, and will the right hon. Gentleman take this step to find out the true facts?
    Mr. HENDERSON: No, Sir.
    Lieut.-Colonel ACLAND-TROYTE: Is the right hon. Gentleman afraid of knowing the true facts?
    Mr. HAYCOCK: Will the Foreign Secretary get some reliable information from
    2140
    our representative at the Vatican concerning political persecution in Italy?
    Mr. SPEAKER: That does not arise on this question.

    BRITISH RELATIONS.
    Sir A. POWNALLasked the Secretary of State for Foreign Affairs whether he can now say whether the present stage of the negotiations with the Soviet Ambassador will permit him to make a statement before the Easter Recess?
    Captain PETER MACDONALDasked the Secretary of State for Foreign Affairs whether suitable machinery has yet been found for the consideration of British claims upon the Soviet Government; and, if not, whether he can explain the causes of the delay in arriving at an agreement on this point?
    Mr. A. HENDERSON: I hope to be in a position to make a statement on my negotiations with the Soviet Ambassador in the very near future.
    Sir A. POWNALL: Will it be before the Easter Recess?
    Mr. HENDERSON: There is only a few days to the Easter Recess, and it is very difficult to deal with. We are going on as fast as we can, having regard to the other calls on our time.

    BRITISH AMBASSADOR, MOSCOW (RESIDENCE).
    Sir BERTRAM FALLEasked the First Commissioner of Works if he can give any details as to the house provided for His Majesty's Ambassador in Moscow; if the house is a leasehold, and for what period of years, or a freehold; and what is to be the yearly rent or purchase price?
    The FIRST COMMISSIONER of WORKS (Mr. Lansbury): Negotiations for the lease of a house for His Majesty's Ambassador in Moscow are at present in progress, but the terms of tenure have not yet been finally settled.
    Sir B. FALLE: On what grounds is the amount of £10,000 being spent on this house before any agreement has been come to?
    Mr. LANSBURY: There is no money being spent on the house. We are taking a Vote for that sum of money in the event of the money being used.
    Lieut. - Colonel Sir FREDERICK HALL: Will the right hon. Gentleman, previous to any money being expended, send the Permanent Secretary over there to have a look round and to advise the right hon. Gentleman?
    Mr. LANSBURY: I am not at all sure that it would not do the hon. Baronet a very great deal of good to go and inspect it himself.
    Sir F. HALL: I have been there many a time.

  EGYPT.

    COMMERCIAL SECRETARIES.
    Lieut.-Colonel JAMESasked the Secretary of State for Foreign Affairs whether, in the negotiations now in progress with the Egyptian representatives, arrangements are being made for trade commissioners?
    Mr. A. HENDERSON: There is already a commercial secretary at His Majesty's Residency in Cairo, and provision for an Assistant Commercial Secretary has been made in the Estimates of the Department of Overseas Trade. This matter has not been discussed in connection with the present negotiations.

    SINAI PENINSULA.
    Colonel HOWARD-BURYasked the Secretary of State for Foreign Affairs whether, in the negotiations now in progress with Nahas Pasha, any steps are being taken to ensure the stategical security of the Sinai Peninsula and of the Sollum Province?
    Mr. A. HENDERSON: The situation with regard to the Sollum Province is in no way affected by the present proposals. The stategical security of the Sinai Peninsula will in all probability be enhanced by the presence of British forces in the immediate vicinity of the Suez Canal.
    Colonel HOWARD-BURY: Does the right hon. Gentleman mean that troops are to be stationed on the Sinai Peninsula; and is he aware that, for our interests in protecting the Canal, it is most important that we should have possession of the Sinai Peninsula?

    HIGH COMMISSIONER (FIRST SECRETARY).
    Mr. WARDLAW-MILNEasked the Secretary of State for Foreign Affairs
    2142
    why the Acting First Secretary to His Majesty's High Commissioner in Egypt is paid by the Egyptian Government; and how long this arrangement has been in operation?
    Mr. A. HENDERSON: The arrangement in question has been in operation since the middle of January. British officials in the Egyptian service have on several occasions in the past been thus lent by the Egyptian Government to the Residency, and the arrangement has proved to be in the public interest.
    Mr. WARDLAW-MILNE: Has the gentleman in question been brought to this country to advise the Foreign Office or to advise the delegation; and, if to advise the Foreign Office, can the right hon. Gentleman give any reason why the judicial adviser employed by the British Government should not have been brought over?
    Mr. HENDERSON: Yes, one very substantial reason is that he has been there for 10 years; he knows the local position well; he is an Englishman whom we can trust, and the High Commissioner placed such reliance upon his experience and judgment that he requested that he should be allowed to accompany him.
    Mr. WARDLAW-MILNE: I take it that the right hon. Gentleman's reply does not suggest that the Judicial Commissioner is not equally reliable, but, assuming that that is so, is it not strange that the person who was previously in the employment of the financial adviser in Egypt, and who was refused re-employment by a British official in Egypt, should now be brought here to give advice to the Foreign Office?
    Mr. HENDERSON: That may be so, but I was guided in this matter by the judgment of the High Commissioner.
    Captain CROOKSHANK: Are we to understand that the Foreign Secretary is always guided by the advice of his representative in Egypt?
    Mr. HENDERSON: The hon. and gallant Member must understand nothing of the kind.
    Captain CROOKSHANK: Why this distinction between the present adviser of the Government and Lord Lloyd?

    FOREIGN NATIONALS.
    Mr. WARDLAW-MILNEasked the Secretary of State for Foreign Affairs whether any Foreign Governments have addressed representations to His Majesty's Government in regard to the protection of the civil rights and liberties of their nationals in Egypt in the event of the proposed agreement as laid down in the White Paper being carried into effect?
    Mr. A. HENDERSON: Since my reply to a similar question by the Noble Lord the Member for Aldershot (Viscount Wolmer) on the 19th December last, an exchange of views has taken place between His Majesty's Government and the French Government regarding the modifications to the capitulatory regime in Egypt which are contemplated in the present proposals.
    Mr. WARDLAW-MILNE: May we understand from that reply that no action will be taken by the British Government to ratify the proposals put before Egypt without consultation with other Governments; and is the right hon. Gentleman aware that the Italian Government is very interested, having twice as many nationals in Egypt as we have?
    Mr. HENDERSON: I daresay the Italian Government will look after their own interests—
    HON. MEMBERS: They will. [Interruption.]
    Mr. HENDERSON: I have already answered the question on the Paper, and, if the hon. Member wishes for further information, he must put another question down.
    Mr. MARJORIBANKS: Does not the right hon. Gentleman see considerable dangers in these foreign Governments looking after themselves in Egypt?

  CHINA.

    BRITISH SUBJECTS (DEATH AND CAPTURE).
    Sir KINGSLEY WOODasked the Secretary of State for Foreign Affairs whether he can give any information concerning the death at Peitaiho on Wednesday last of Mr. Eric Yorke Scar-
    2144
    lett, the late treasurer of I he Anglo-Chinese college at Tientsin; and who is in control of this district?
    Mr. A. HENDERSON: I have, as yet, no information beyond that contained in my reply to the hon. Member for Willesden East (Mr. D. G. Somerville) on Monday last. But I have telegraphed instructions to His Majesty's Minister in China to make all necessary representations.
    Sir K. WOODasked the Secretary of State for Foreign Affairs whether he has had any recent information concerning the safety of Mr. and Mrs. Porteous, who were captured at Yuanchow?
    Mr. HENDERSON: His Majesty's Minister at Peking reported on the 6th of April that the China Inland Mission in Shanghai had received a demand for ransom for Mr. and Mrs. Porteous to which they were not replying. They were instructing their representative at Changsha, after consulting His Majesty's Consul, to proceed as near as he safely could to the spot and to urge the Chinese authorities to procure the release of the captives. Stir Miles Lampson is continuing to press the central and local Chinese authorities to take immediate and effective action.
    Mr. DAY: Can the right hon. Gentleman say what was the amount demanded for their ransom?
    Mr. HENDERSON: I cannot say.

    ANTI-PIRACY GUARDS.
    Sir BASIL PETOasked the First Lord of the Admiralty whether the shipping companies interested in British trade in Chinese waters have now returned replies to the Government proposals to sanction a further extension of the provision of regular naval and military guards on their ships for a definitely limited period; and, if so, will he state the nature of the replies received?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Ammon): The answer to the first part of the question is in the affirmative. As regards the second part, the replies received accept the Government proposals in principle.
    Sir B. PETO: Do the Government, in connection with these proposals, propose

    2145
    to charge shipowners with the total cost of these armed guards, or with the additional cost due to the special services that they render?
    Mr. AMMON: I should have to have notice of that question.

    ANTI-PIRACY COMMITTEE.
    Sir B. PETOasked the First Lord of the Admiralty whether he can furnish information as to the members of the Piracy Committee, which, under the Governor of Hong Kong, is studying the question of piratical outrages on British ships in Chinese waters; and whether the officers of British ships trading in these waters are adequately represented on this Committee?
    Mr. AMMON: The Anti-Piracy Committee, the nature of whose functions was explained in the answer to the hon. Member on the 26th March (OFFICIAL REPORT, column 398), consists of the Commodore, Hong Kong, who acts as chairman, three naval officers (including the Anti-Piracy Officer), one Royal Marine officer, one Army officer and a naval secretary. Each shipping firm concerned has appointed a representative to deal direct with the Anti-Piracy Officer, so that a constant liaison is maintained between the Committee and the companies.
    Sir B. PETO: Do I understand that there are no representatives of the merchant marine on this Committee, but only that they are allowed to send representatives in the sense of offering advice or evidence?
    Mr. AMMON: The hon. Baronet has missed a part of my reply. I said:
    "Each shipping firm concerned has appointed a representative to deal direct with the Anti-Piracy Officer, so that a constant liaison is maintained between the Committee and the companies."

    AFRICA (LIQUOR TRAFFIC CONTROL).
    Sir N. GRATTAN-DOYLEasked the Secretary of State for Foreign Affairs the duties performed by the bureau at Brussels for the control of the liquor traffic in Africa; and the nature of the services rendered to Great Britain in return for its contribution of £15 in 1930?
    Mr. A. HENDERSON: The duties of the Central International Office established under the Convention of St. Germain-en-Laye are to collect and distribute documents exchanged by the High Contracting Parties with regard to the importation and manufacture of spirituous liquors under the conditions referred to in the Convention. Each of the signatory Powers sends an annual report showing the quantities of spirituous beverages imported into, or manufactured in, the African territories for which they are responsible, and the duties levied under Articles 4 and 5 of the Convention in those territories to the Central International Office, who in turn communicate copies of these reports to the other signatory Powers and to the League of Nations.
    Sir N. GRATTAN-DOYLE: Can the right hon. Gentleman say how the amount of £15 was arrived at as a contribution to this bureau?

    LONDON NAVAL CONFERENCE.
    Mr. MANDERasked the Secretary of State for Foreign Affairs whether the Government are proposing to embody in any agreement arising out of the Five Power Naval Conference the policy of the unanimous resolution of the Eighth Assembly of the League of Nations, 26th September, 1927, that the principal condition of success in the reduction of armaments is that every State should be assured of not having to provide unaided for its security by means of its own armaments and should be able to rely also on organised collective action?
    Mr. A. HENDERSON: I have nothing to add to the statements made in this House by the Prime Minister and myself on Monday last.

  PALESTINE.

    MUFTI OF JERUSALEM.
    Mr. MARJORIBANKSasked the Secretary of State for Foreign Affairs whether the French Government have addressed any representations to His Majesty's Government on the subject of the letter addressed by the Arab Mufti of Jerusalem to the President of the Moslem Council in Beyrut inciting the Syrian Moslems to resistance against the French authorities; and, if so, whether any reply has been given?
    Mr. A. HENDERSON: The reply is in the negative.
    Mr. MARJORIBANKSasked the Under-Secretary of State for the Colonies whether he has yet taken any action on the subject of the Mufti of Jerusalem's letter addressed to the President of the Moslem Council in Beyrut inciting the Syrian Moslems to resistance against the French authorities?
    The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels): This matter has been dealt with by the High Commissioner. The Secretary of State does not propose to pursue it further.
    Colonel HOWARD-BURY: Is the hon. Member aware that the French Government realised the justice of this law and ordered those schools that were closed to be re-opened?
    Mr. SPEAKER: The hon. and gallant Member is answering questions.
    Colonel HOWARD-BURY: Where there is an inaccuracy, may I not contradict that inaccuracy?
    Mr. SPEAKER: This is the time for asking questions and not for giving information.

    SIR H. MCMAHON AND THE SHERIF HUSSEIN (CORRESPONDENCE).
    Mr. COCKSasked the Under-Secretary of State for the Colonies whether the members of the Palestine Commission were given the opportunity of examining an accurate copy of the correspondence which passed between Sir Henry McMahon and the Sherif Hussein in 1915 and 1916?
    Dr. SHIELS: No, Sir. As the Commission have pointed out, it clearly did not fall within the scope of their inquiry to examine and comment upon that correspondence.
    Mr. COCKS: Is the hon. Member aware that on page 194 of the Report the Commission states that they saw this correspondence and that it gave an inaccurate version, and that it was withdrawn on the instruction of the Commission? Why should the Commission have to put up with an inaccurate version when it is within the province of His Majesty's Government to give an accurate version?
    Dr. SHIELS: I would point out that the Commission made it quite clear that all they were concerned with was the interpretation put upon this correspondence, and not with the merits of the correspondence.
    Mr. COCKSasked the Under-Secretary of State for the Colonies whether, in view of the publication of the Report of the Palestine Commission, he will reconsider the question of publishing the correspondence which took place between July, 1915, and January, 1916, between Sir Henry McMahon and the Sherif Hussein?
    Dr. SHIELS: The answer is in the negative.
    Mr. COCKS: In view of general feeling among the Arab population of Palestine that this correspondence promised the Arabs their independence, will the hon. Member reconsider the question and publish the correspondence, so that we may know whether or not the Arabs were promised their independence?
    Dr. SHIELS: This question has been before the House on many occasions and has been considered by various Governments, and it has been decided more than once that it is not desirable to publish this correspondence. I must adhere to that decision.
    Mr. THURTLE: Do not the Government want to play fair by the Arab population?
    Colonel HOWARD-BURY: Is it not very unfortunate that we have not a clear view of this correspondence, and would it not be better to have it published in black and white so that everyone would know what did happen?
    Sir N. GRATTAN-DOYLE: Is it not desirable that this unfortunate feud should not be perpetuated by the asking of supplementary questions in this House or by any further correspondence?
    Mr. COCKS: In view of the unsatisfactory nature of the reply, I give notice that I will raise this matter on the Adjournment of the House at an early date.

    IMMIGRANTS.
    Colonel HOWARD-BURYasked the Under-Secretary of State for the Colonies

    2149
    whether he can give the figures of non-Jewish immigrants into Palestine from 1921 to 1929 and what percentage they bear to Jewish immigrants?
    Dr. SHIELS: I have no figures for the period prior to the 3rd June, 1921. From that date to the end of 1929, some 6,400 non-Jewish immigrants entered Palestine. The number of Jewish immigrants during the same period was approximately 89,900. The proportion of non-Jewish to Jewish immigrants works out at about 7 per cent.

    HAJ AMIN EFFENDI EL-HUSSEINI.
    Captain CAZALETasked the Under-Secretary of State for the Colonies whether Haj Amin Effendi el-Husseini, who is in receipt of a salary of £600 from the Palestine administration, is an official of that administration and under the control of that administration?
    Dr. SHIELS: Yes, Sir. As President of the Supreme Moslem Council the person in question is a salaried officer of the Palestine Government.
    Colonel HOWARD-BURY: Is it not correct to say that the Palestine Government only acts as the intermediary, and that his salary comes from fees from the Moslem courts, which the Palestine Government collects and pays to him?
    Captain CAZALET: Is the hon. Member aware that the Palestine Government paid out of the Palestinian funds for the furniture in the office of the Supreme Moslem Council?
    Dr. SHIELS: I am aware of all the facts of the case. The position, broadly, is that the Supreme Moslem Council has two functions, one, that of looking after religious endowments and the other the religious courts, and it is in virtue of these judicial functions that these payments are made. It is true that the fees of the courts are returned to general revenue.
    Lieut.-Commander KENWORTHY: Is not this the gentleman who has been engaged in propaganda against His Majesty's Government? Is that part of his religious duties?

    SHARIA COURTS (FEES).
    Captain CAZALETasked the Under-Secretary of State for the
    2150
    Colonies, having regard to the fact that the salaries of the members of the Supreme Moslem Council and of the sharia courts in Palestine are paid out of the Palestine treasury, whether the fees received by the sharia courts are paid into the Palestine treasury?
    Dr. SHIELS: Yes, Sir.

    WAILING WALL (COMMISSION).
    Mr. MANDERasked the Under-Secretary of State for the Colonies whether the Government have now decided on the names of the three persons to be appointed as members of the Commission to inquire into the question of the rights and claims of the Jews and Moslems with regard to the Wailing Wall; and whether the names have been submitted to and approved by the Council of the League?
    Dr. SHIELS: No, Sir; the names are not yet definitely settled, but active steps are being taken to expedite the appointment of the Commission.

    ICELAND (SEIZURE OF BRITISH TRAWLER).
    Lieut.-Commander KENWORTHYasked the Secretary of State for Foreign Affairs whether he has any information about the seizure of the Hull trawler "Commander Evans" for alleged fishing in territorial waters and the imposition of a fine equivalent to £694, together with the confiscation of the catch and the fishing gear of the trawler, by the Court at Reykjavik on 4th April; and whether he will consider making some protest against this fine and punishment?
    Mr. A. HENDERSON: Yes, Sir. I am aware of the arrest and conviction of this trawler, and I have requested His Majesty's Consul-General in Iceland to send me a full report on the case, together with a translation of the Court documents. In the absence of more detailed information, I cannot say whether there would be any justification for protesting against the sentence.
    Lieut. - Commander KENWORTHY: Will my right hon. Friend be good enough to let me know when the report is received?
    Mr. HENDERSON: Yes, Sir.
    Rear-Admiral BEAMISH: Have His Majesty's Government found in the past any justification for the Danish or Icelandic authorities' action in this matter?
    Mr. HENDERSON: I am afraid I must have notice of that question.

  ROYAL NAVY.

    CRUISERS ("HAWKINS" CLASS).
    Commander SOUTHBYasked the First Lord of the Admiralty whether he is now in a position to say if it is intended to scrap the four ships of the "Hawkins" class as a result of the deliberations of the Naval Conference?
    Mr. AMMON: I would refer the hon. and gallant Member to the reply given by the Prime Minister on the 31st March (OFFICIAL REPORT, cols. 889–90) to the hon. Member for Chester (Sir C. Cayzer).
    Commander SOUTHBY: As these are four of our best and most efficient cruisers, will the hon. Gentleman be able, if I put this question down again in a week's time, to give me a definite answer?
    Mr. AMMON: That I cannot promise; it will depend upon the discussions that are now going on.
    Major ROSS: Will the hon. Gentleman consider, in certain eventualities, re-arming these ships with 6-inch guns?

    MATES (PROMOTION).
    Mr. THOMAS LEWISasked the First Lord of the Admiralty the number of lieutenants (ex-mates) promoted since the regulations were revised in 1920; the number who have specialised in gunnery, torpedo, navigation, war staff duties, signals, wireless telegraphy, and antisubmarine branches; and when the first one will be due for promotion to lieutenant-commander?
    Mr. AMMON: Of the 55 ratings promoted to Mate under the 1920 Scheme, 50 remain on the Active List. Of these, 30 have been promoted to the rank of Lieutenant. The remaining 20 are not yet due for promotion. The first of the above officers is due for promotion to Lieutenant - Commander on the 1st October, 1931. The following have specialised, or are under training to specialise:

    Torpedo

    …

    …

    …

    1

    Pilot

    …

    …

    …

    5

    Observer

    …

    …

    …

    2

    Submarines

    …

    …

    …

    6

    Surveyor

    …

    …

    …

    1

    Mr. HORE-BELISHA: Can the hon. Gentleman say when the inquiry into the mate scheme is to be opened?
    Mr. AMMON: Not without notice.

    RATINGS (COMMISSIONS).
    Mr. T. LEWISasked the First Lord of the Admiralty what requirements have to be fulfilled before a naval rating is awarded a commission?
    Mr. AMMON: As the reply is rather long, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    Commissions are granted to naval ratings after the necessary periods of training and probation as—

    (1) Mates (general service).

    (2) Mates (engineering).

    (3) Sub - Lieutenant (engineering)—by selection from Artificer apprentices in His Majesty's Ship "Fisgard."

    (1) Promotion to Acting Mate (general service) is by selection by the Admiralty after consideration of recommendations received from the Fleet. The qualifications are that the candidates—

    (a) possess a first class certificate in the Higher Educational Test;

    (b) hold a leading rate in certain branches or have qualified for advancement to leading rating;

    (c) pass the seamanship examination for Mate;

    (d) are between the ages of 21 and 25;

    (e) are medically fit.

    Detailed regulations are contained in Appendix XII, Part 3, King's Regulations and Admiralty Instructions.
    (2) The qualifications for promotion to Acting Mate (engineering) are that the candidates—

    (a) are engine room artificers or mechanicians, or above, and have two years' service as engine room artificers fourth class or mechanician;

    (b) are under the age of 30;

    (c) are medically fit.

    The Admiralty, after consideration of recommendations received from the Fleet,

    2153
    make a selection of candidates possessing the above qualifications to undergo a professional examination afloat. Final selection is made from successful candidates at this examination.
    Detailed regulations are contained in Appendix XII, Part 7, Section III, King's Regulations and Admiralty Instructions.
    (3) Artificer apprentices (not exceeding two a year) are promoted to Midshipmen (E) on completion of two years' service in the Training Establishment, and appointed to undergo a course of instruction with a view to becoming officers of the engineering branch.

    DOCKYARD EMPLOYÉS (PENSIONS).
    Mr. HORE-BELISHAasked the First Lord of the Admiralty if he can now state what steps are being taken to ensure that hired employés of long service in His Majesty's dockyards shall have pensions on retirement; and if he can give the nature of the scheme?
    Mr. AMMON: I would refer the hon. Member to the reply which was given to him on the 2nd April (OFFICIAL REPORT, col. 1258). I have nothing to add to that.
    Mr. HORE-BELISHAasked the First Lord of the Admiralty whether a decision has been reached with regard to the award to dockyards men, who are superannuated or pensioned before the 4th August, the date on which a week's annual leave with pay begins, of a week's leave with pay or of a week's pay in lieu before their retirement?
    Mr. AMMON: Following representations made by the representatives of the men at the last meeting of the Admiralty Industrial Whitley Council, it has been decided that workpeople who are eligible for the grant of annual leave with pay, and who will be discharged on account of age before the week's annual leave with pay begins, may be granted leave with pay on the basis of half-a-day for each month served during the leave year.

    IMPERIAL DEFENCE (DOMINION CONTRIBUTIONS).
    Mr. RAMSBOTHAMasked the First Lord of the Admiralty whether it is his intention to utilise the opportunity presented by the presence of the Dominion delegates to the Naval Conference in
    2154
    London to discuss the question of revising the contributions of the Dominions to Imperial Naval defence?
    Mr. AMMON: No, Sir. A question of this nature would seem to be more appropriate to the agenda of an Imperial Conference.
    Captain CROOOKSHANK: May we understand that the real reason is that the Government do not think that it would be tactful to raise this question, considering that they have "pinched" all the contributions for Singapore?

    INDIAN SUBSIDY (SERVICES).
    Sir N. GRATTAN-DOYLEasked the First Lord of the Admiralty the nature of the services rendered by His Majesty's ships in Indian waters in return for which the Government of India pay £100,000 annually; and upon what date the agreement respecting this payment was made?
    Mr. AMMON: A subsidy of £100,000 has been paid by the Government of India since the year 1891, when the agreement was made, towards the cost of maintaining a squadron of His Majesty's ships in Indian waters. Apart from the defence of India and the protection of trade in Indian waters generally, the services rendered include the policing of coasts and measures in connection with piracy, slave trade and traffic in arms.

    UNITED STATES NAVY (AIRSHIP MOORING MASTS).
    Commander BELLAIRSasked the First Lord of the Admiralty whether any ships in the American Navy have been fitted with mooring masts for airships; and whether any experiments have been carried out in the American Navy in this direction?
    Mr. AMMON: The United States Ship "Patoka" has been fitted with a mooring mast, and the airships "Shenandoah" and "Los Angeles" have both moored to her.
    Sir N. GRATTAN-DOYLE: Will the hon. Gentleman represent to the proper authorities that we in this country have only one mooring mast, in view of the fact that there are two airships, and probably more building?

  MALAYA.

    WILD FAUNA.
    Sir GEORGE PENNYasked the Under-Secretary of State for the Colonies whether he has decided to request the High Commissioner for the Malay States to appoint a commission to inquire into the preservation of the wild life of Malaya; if so, who have been suggested as members of the commission, and what terms of reference have been proposed?
    Dr. SHIELS: My Noble Friend has requested the High Commissioner to appoint Mr. Theodore Hubback, lately honorary game warden in Pahang, to report on the whole question of the wild fauna of Malaya. It is contemplated that a high official of the Federated Malay States Government should be associated with him as assessor. As the suggested terms of reference are of some length, I will, with the hon. Member's permission, circulate the statement in the OFFICIAL REPORT.
    Following is the statement:
    The suggested terms of reference are:

    (1) To report on the existing regulations for the protection of wild life throughout the Federated and Unfederated Malay States.

    (2) To report on the steps necessary to constitute a national park or wild life refuge in the vicinity of Gunong Tahan, including portions of the State of Pahang, Trengganu and Kelantan.

    (3) To report on the existing game reserves and their value or otherwise for the permanent preservation of the fauna of Malaya.

    (4) To inquire into the allegations of damage done to agriculture by wild life: to call for and record evidence bearing on such matters and to suggest methods of dealing with any situations which may be revealed.

    (5) To report on the organisation required to administer the regulations for the preservation of wild life, including the administration of national parks, wild life refuges and game reserves.

    (6) To call for any documents referring to the above subjects.

    RUBBER ESTATES (PAYMENT BY RESULTS).
    Major GRAHAM POLEasked the Under-Secretary of State for the Colonies whether his attentioh has been drawn to the complaints that, since the introduction of the standard wage on the estates in Malaya, a system of payment to the rubber tappers by the number of pounds of dry rubber contained in the latex brought out by each tapper has been introduced; and if he has now received any information from the High Commissioner in Malaya in regard to the extent to which this system of payment by results now obtains on the estates?
    Dr. SHIELS: I would refer my hon. and gallant Friend to my reply to his question of the 23rd January. The High Commissioner has been asked to supply the desired information, but his reply has not yet been received.
    Major POLE: Will my hon. Friend be good enough to let me know when the report is received from the High Commissioner, and the purport of that report?
    Dr. SHIELS: Yes, Sir.

    CYPRUS (TURKISH MEMORIAL).
    Mr. GRAHAM WHITEasked the Under-Secretary of State for the Colonies if he will publish the memorial received from the Turkish members of the Legislative Council in Cyprus relating to the terms of the memorial presented to the Secretary of State by the recent delegation?
    Dr. SHIELS: No, Sir. It is not in contemplation to publish the memorial.
    Mr. WHITE: As the memorial presented by the Greeks has already been published, will the Government publish the Turkish memorial?
    Dr. SHIELS: No, Sir; the Turkish memorial was in opposition to the views set forth in the Greek memorial. As the Greek petition was not granted there seems no reason now why the whole question should be raked up again by the publication of the Turkish memorial.

    WEST INDIES (SUGAR COMMISSION).
    Mr. RAMSBOTHAMasked the Under-Secretary of State for the Colonies what part of the expense of the West Indian Sugar Commission is to be borne by the West Indian Colonies themselves; and whether he will consider relieving them of this expenditure if the recommendations of the Commission are not carried out?
    Dr. SHIELS: As regards the first part of the question I would refer the hon. Member to the replies which I gave to the right hon. Member for Stafford (Mr. Ormsby-Gore) on the 29th of January and to the hon. Member for Camberwell (Dr. Morgan) on the 5th of February. I am not in a position to reply to the second part of the question, which is hypothetical.
    Mr. RAMSBOTHAMasked the Under-Secretary of State for the Colonies whether any reply has yet been sent to the representations of the Governor of the Leeward Islands drawing attention to the distress and destruction of the sugar indutry which will result if His Majesty's Government is unable to give effect to the recommendations of the West Indian Sugar Commission; what was the nature of the reply; whether any further communications have been received from other Governors in the West Indies; and what has been their nature and the reply sent in each case?
    Dr. SHIELS: The answer to the first part of the question is in the negative. My Noble Friend has received through the Governor of Barbados a telegram embodying a message from the Barbados Legislature. The message, which is too long to quote here, appeared in the Press on the 4th of April. No reply has yet been returned.

    DISARMAMENT COMMISSION (BRITISH DELEGATES).
    Lieut.-Commander KENWORTHYasked the Prime Minister if he will state who are to be British delegates to Geneva for the next meeting of the Preparatory Commission for Disarmament?
    Mr. A. HENDERSON: As the House has already been informed, as at present arranged Lord Cecil will represent His Majesty's Government.

    CHANNEL TUNNEL.
    Sir K. WOODasked the Prime Minister what course the Government now proposes to adopt with reference to the Channel Tunnel project?
    Mr. A. HENDERSON: The question will be considered by the Committee of Imperial Defence when reports which have been called for on various technical questions involved are received.
    Sir K. WOOD: Is the matter likely to take some time?
    Sir F. HALL: Will it be expedited?
    Mr. HENDERSON: I cannot say what the hon. and gallant Member has in mind when he uses the word "expedited.".
    Sir F. HALL: I am referring to the decision of the Government. Will they go carefully into the matter and let us know whether they are in favour of the Channel tunnel?
    Mr. HENDERSON: I have already said that the matter will be considered when the report has been received.
    Sir F. HALL: And I ask the right hon. Gentleman whether it will be expedited in order that a decision may be arrived at at an early date.
    Mr. HENDERSON: It will be time to take a decision when we have seen the report.
    Mr. MILLS: If the Channel tunnel is to be proceeded with, will it not be a case of excavation rather than expediting?
    Sir N. GRATTAN-DOYLE: Has this matter been brought to the notice of the Committee of Imperial Defence, and have, they considered it?

    FIGHTING SERVICES (ADMINISTRATION).
    Commander BELLAIRSasked the Prime Minister, whether, in the interests of economy and efficiency, the question of placing the Admiralty, War Office, and Air Ministry under a Minister of Defence has been considered; and whether he is in a position to make any announcement as to this proposal?
    Mr. A. HENDERSON: The answer is in the negative.

    EMPIRE SETTLEMENT.
    Mr. ANNESLEY SOMERVILLEasked the Under-Secretary of State for Dominion Affairs how many migrants to Canada have gone out under the £10–passage scheme in the last three months?
    Mr. LUNN: The total number of British migrants proceeding to Canada in the three months ending 28th February last (the latest date to which figures are available) was approximately 2,849. The number proceeding at the £10 rate was approximately 1,464.
    Mr. SOMERVILLE: Is it the intention of the Government to continue this excellent scheme?
    Mr. LUNN: The £10 passage agreement terminates at the end of this year. Some 37,140 persons went to Canada during 1929 under that agreement, and we are hoping to be able to make arrangements for its continuance after this year.
    Captain CAZALET: Do all these migrants go out to agricultural occupations, or are these cheap passages open to migrants seeking other occupations?
    Mr. LUNN: Those who go under the Empire Settlement Act usually go for work upon the land, but the £10 rate is provided for either industrialists or land workers.
    Mr. DAY: Can my hon. Friend say whether any more advantageous terms can be arranged?
    Mr. LUNN: I wish they could be.
    Mr. SOMERVILLEasked the Under-Secretary of State for Dominion Affairs how many migrants have gone to Canada and to Australia, respectively, with assisted passages, under the Empire Settlement Act, during the last three months; and how many applicants are approved for migration in April, May and June?
    Mr. LUNN: The number of migrants proceeding to Canada and Australia, respectively, with assisted passages during the last three months was approximately 2,500 and 1,200. Applicants approved for assisted passages to Canada are provided with warrants on which they book their own passage. Outstanding warrants available to the end of June cover 914
    2160
    persons. Assisted settlers booked for Australia to the end of June at present number 67.
    Mr. SOMERVILLEasked the Under-Secretary of State for Dominion Affairs whether it is the intention of the Government to make a statement of policy with regard to Empire migration and settlement?
    Mr. LUNN: No, Sir. His Majesty's Government do not anticipate that they will be in a position to make any general statement on this question until after the forthcoming Imperial Conference.
    Mr. SOMERVILLE: Can the hon. Gentleman say whether they have taken into consideration the possibility of modifying the fifty-fifty basis of the Empire Settlement Act?
    Mr. LUNN: The whole question of the Empire Settlement Act and any arrangements that can be made to, facilitate migration are now being considered, and the Oversea Settlement Committee have decided upon a special meeting for the purpose of providing material for the Imperial Conference when it takes place.
    Mr. WARDLAW-MILNE: May I take it from that that communications are being carried on with the Dominions regarding the discussions which must take place at the Imperial Conference?
    Mr. LUNN: Yes, Sir.

    ROYAL AIR FORCE (PETROL CONSUMPTION).
    Mr. DAYasked the Under-Secretary of State for Air the cost, based on the average weekly consumption, for petrol used by the Royal Air Force?
    The UNDER-SECRETARY of STATE for AIR (Mr. Montague): I think my hon. Friend will find that the information which he requires is given at page 49 of the Air Estimates, 1930, where the cost of petrol for the financial year is shown to be £580,000.
    Mr. DAY: Can my hon. Friend say how much petrol was used by the Air Force?
    Mr. BENSON: Is the fuel which is used pure petrol or is there any British made benzol?
    Mr. MONTAGUE: I am afraid that I am not a technical expert upon that question. If a question on the subject is put down, I will give an answer.
    Mr. BENSON: Arising out of that answer—
    Mr. SPEAKER: Nothing arises out of that answer.

    AIRSHIPS.
    Sir G. PENNYasked the Under-Secretary of State for Air whether any useful data have been obtained from the flights of the R 100 and R 101; and to what purpose these vessels will now be put?
    Mr. MONTAGUE: As the answer is somewhat long, I will circulate it in the OFFICIAL REPORT.
    Sir G. PENNY: Do the Government intend to give Members of this House another opportunity for a flight?
    Mr. MONTAGUE: That question will have to remain in abeyance for the present.
    Mr. MARJORIBANKS: Will the hon. Gentleman extend the invitation to the Soviet Ambassador and his suite?
    Following is the answer:
    The answer to the first part of the question is in the affirmative. It is difficult within the space of a Parliamentary answer to enumerate the data established by the flights. Some information upon this subject, as well as upon that referred to in the second part of the question, regarding the future use of the airships, was given in my Noble Friend's Memorandum accompanying the Air Estimates, pages 6 and 7, as well as in my remarks upon this subject during the introduction of the Air Estimates on 18th March. To what was then said I need only add that the two airships, essentially experimental in their nature, were built with a primary regard for safety and in conformity with a stringent set of airworthiness requirements. In this respect the design has fully come up to all expectations, and both airships have attained or exceeded the performance predicted for them on the basis of model experiments. The preliminary trials are now complete, and both airships have shown themselves to be thoroughly stable
    2162
    and easy to control. The experience has taught us how to design a safe airship, and we have also learned that it is possible to achieve a reasonable degree of passenger comfort without undue cost in weight.

  TRANSPORT.

    ELEPHANT AND CASTLE (BY-PASS).
    Mr. DAYasked the Minister of Transport whether he can now make a statement with regard to the negotiations that are proceeding for the construction of a by-pass road at the Elephant and Castle?
    The MINISTER of TRANSPORT (Mr. Herbert Morrison): I am not yet in a position to make any statement as the matter is still under discussion with the London County Council.
    Mr. DAY: Can my hon. Friend say when he will be able to make a statement on this matter?
    Mr. MORRISON: I cannot say definitely when the London County Council will come to a conclusion, but certainly the matter is under consideration, and I believe that there is a meeting to-day in connection with it.
    Mr. MILLS: Does it not follow from the discussion on the Charing Cross Bridge that there should be a by-pass to obviate the congestion, because there is already traffic from five bridges converging on that spot?
    Mr. MORRISON: I hope that no hon. Member will try to tempt me to discuss in the House the Charing Cross Bridge at the present moment.

    RAILWAY PLATFORMS (ACCIDENTS).
    Mr. MILLSasked the Minister of Transport if his attention has been called to the increasing number of accidents in alighting from passenger trains; and will he state whether there is any standard width of footboard or any maximum distance of side of footboard from railway platforms?
    Mr. HERBERT MORRISON: I am aware that the number of such accidents has somewhat increased, but I doubt whether many of them would have been prevented if the clearance between the fotboard of the carriage and the plat-

    2163
    form had been smaller. Differences in the length of vehicles and the curvature of the platforms, and other circumstances make it impracticable to prescribe a uniform maximum clearance, but the requirements of my Department with regard to the construction of new passenger lines provide that the interval between the edges of platforms and the footboards of carriages shall be as small as practicable, and special attention is given to this point by the inspecting officers of railways when inspecting new platforms.
    Mr. SANDERS: Has the attention of the inspectors been called to the dangerous gap between the footboard and the platform in the case of curved platforms?
    Mr. PALMER: Has my hon. Friend's attention been called to the fact that the alighting board of the carriage is sometimes below the level of, or dead level with, the platform?
    Mr. COCKS: Is my hon. Friend aware that in stepping out of a carriage recently on to the platform I found the distance between the carriage and the platforms far greater than I anticipated, and that an hon. Member of this House nearly lost his life?
    Mr. MORRISON: I am very sorry. I can only express the hope that the incident happened in the day time and not late at night. In regard to curves in platforms, my hon. Friend will appreciate that it is not always possible to straighten a curve unless one alters the line on the railway, which may cause a great deal of expense.

    ROYAL COLLEGE OF ART.
    Mr. HOLLINSasked the First Commissioner of Works if he is in a position to state what conclusions were arrived at after his consultation with the President of the Board of Education in connection with the recommendation of the Royal Commission on National Museums and Galleries for the erection of a new Royal College of Art?
    Mr. LANSBURY: No decision has yet been reached in the matter.

    SUDAN.
    Mr. WARDLAW - MILNE(for Colonel GRETTON) asked the Secretary of State for Foreign Affairs if he still adheres to the statement as regards the Sudan laid down in the White Paper?
    Mr. A. HENDERSON: Yes, Sir. There is no intention of departing from the principle laid down in Article 13 of the draft proposals of last year.
    Mr. WARDLAW-MILNE: May we take it, as a fact, that the reports to the effect that there is some suggestion of leaving the question of the Sudan open to consideration at some future time are without foundation?
    Mr. HENDERSON: That has not been considered in the Conference as yet.
    Mr. WARDLAW-MILNE: Does not that arise out of the right hon. Gentleman's answer?
    Mr. HENDERSON: I am only answering whether there is any truth in the statement that has been made.

    BREAD PRICES.
    Mr. de ROTHSCHILDasked the President of the Board of Trade whether he is aware that the price of the quartern loaf has been increased; that the decision to effect this increase was made when the price of flour was 35s. a sack; whether it has come to his knowledge that the bakers, having entered into an agreement with the National Food Council not to raise the price of the quartern loaf while flour remained at less than 36s. per sack, are thereby guilty of a breach of faith; whether he is aware that considerable differences exist between different districts as regards the price of the quartern loaf; and whether he intends to take any steps to remedy these discrepancies?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): As was stated in the reply given to questions on this subject by the President of the Board of Trade on 8th April, the Food Council have under consideration the position arising from the recent increase in the price of bread and are in fact, meeting on Friday. Pend-

    2165
    ing the receipt of a report by the Food Council, I do not propose to express any opinion on the merits of the question.

    SPEEDWAY, LINCOLNSHIRE COST (INQUIRY).
    Mr. BLINDELLasked the President of the Board of Trade whether, as a result of the inquiry recently held at Boston in connection with the proposal to construct a speedway on the coast between Boston and Skegness, he has any information to give the House; and whether, when definite decisions are reached in this matter, such decisions will be made public?
    Mr. SMITH: The details of this proposal have not yet been settled by the promoters, and no decision will be reached until it has been more precisely defined, and the interests concerned have had an opportunity of making representations on it, in its more definite form. The decision of the Department will be communicated to all concerned and will doubtless be made public.

    PUBLIC HEALTH (PSITTACOSIS).
    Dr. VERNON DAVIESasked the Minister of Health if he has come to any decision with reference to the prohibition of the importation of parrots into this country on account of the prevalence of psittacosis?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Miss Lawrence): My right hon. Friend hopes to be able to come to a decision on this question very shortly.

    BURNS (TANNIC ACID TREATMENT).
    Dr. DAVIESasked the Home Secretary if the senior medical inspector of factories has reported to him on the tannic acid treatment for burns; and, if so, what decision has been arrived at with regard to its use in factories and workshops?
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): Yes, Sir. My right hon. Friend has received a report from the Senior Medical Inspector. His conclusion reached after careful inquiry, is that this
    2166
    form of treatment is not suitable generally for the first aid treatment of burns at a factory or workshop. It can only be properly given in works where there is an ambulance room properly equipped and in charge of a properly qualified person, and in the treatment of minor burns it has no advantage over sterilised burn dressings. In the case of severe burns it may be valuable where the patient cannot be moved to hospital without considerable delay, but otherwise the protection of the burn by a simple dressing is the proper procedure. He does not, therefore, advise any modification of the existing instructions.
    Dr. DAVIES: Will the hon. Gentleman inform the Home Secretary that there is a very large body of medical opinion which totally disagrees with the advice that has been tendered to him?
    Mr. SANDERS: Would the hon. Gentleman inform the Home Secretary that there is always a considerable amount of dissension in medical circles on all questions?

  UNEMPLOYMENT.

    LEEDS.
    Major Sir JOHN BIRCHALLasked the Minister of Labour if she will state the increase or decrease in the number of persons unemployed in the Leeds district for last week as compared with the same week of last year?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Lawson): At 31st March, 1930, the number of persons on the registers of Employment Exchanges in the Leeds area showed an increase of 7,550 as compared with 25th March, 1929.

    SCHOOL-LEAVING AGE.
    Dr. DAVIESasked the Minister of Labour if the figures in her possession indicate that the compulsory raising of the school age will have a permanent effect in reducing the figures for unemployment; and what is the estimated effect for each of the years 1931 to 1936, inclusive?
    Mr. LAWSON: I regret that no reliable estimates can be given at the present time of the effect of the compulsory raising of the school-leaving age on future statistics of unemployment.
    Dr. DAVIES: Is the hon. Gentleman aware that, throughout the country, supporters of his party are making very definite statements as to the effect on unemployment of the raising of the school age, and will he see that they have some definite figures to go on before they make such statements?
    Mr. LAWSON: I am aware that that statement has been made, and I think it is quite right. The hon. Member asks me for specific figures as to the effect on unemployment. It is quite easy to give figures of boys and girls leaving school and entering industry, but it is another matter to give specific figures when one considers the swift changes of method and machinery, and all that must be taken into calculation. The statement as to the reduction of unemployment is undoubtedly true.
    Sir ARTHUR STEEL-MAITLAND: Does the hon. Gentleman realise that the Lord Privy Seal has stated that it is by no means certain that it is quite right?

    HOUSE OF COMMONS (REFRESHMENT DEPARTMENT).
    Major CARVERasked the hon. Member for the Gorton Division, as Chairman of the Kitchen Committee, if he can state the country of origin of the new potatoes which are now being sold in the Members' dining room; and if he is aware that there is still a large quantity of English potatoes practically unsaleable and of a better quality than those now imported?
    Mr. COMPTON: The new potatoes now being served in the dining rooms are imported from Jersey and Teneriffe. As some Members insist of having new potatoes, and there being no English on sale, the Kitchen Committee endeavour to meet their demands with the next best available. I am aware that there are still plenty of English-grown old potatoes, and last week the refreshment department used 2,016 lbs. against 54 lbs. of new imported. I can assure the hon. Member that directly English new potatoes are in season they will be used in preference to the imported variety.
    Major CARVER: Is the hon. Member aware that a great many of these potatoes now coming in are arriving from
    2168
    Algeria, and are grown by French convict labour, and does he not think that the Kitchen Committee should set an example to the whole country by buying British potatoes while there is such an ample supply?

    POST-GRADUATE HOSPITAL AND MEDICAL SCHOOL.
    Mr. CHAMBERLAIN(by Private Notice) asked the Minister of Health whether he is in a position to state what action the Government propose to take on the report of the post-graduate medical education committee?
    The MINISTER of HEALTH (Mr. Arthur Greenwood): In view of the public interest in this matter, I hope that the House will permit me to make a statement which exceeds the usual limits of a reply to a question.
    The committee was appointed by my predecessor. He was as Minister of Health its chairman, and I succeeded him. The report will be in the hands of Members to-day. The proposal of the committee is that in order to remedy the most serious outstanding defect in the existing provision for the education in medicine of post-graduate students, a British post-graduate hospital and medical school should be established in London. The organisation of the British post-graduate hospital and medical school recommended by the committee consists of an existing public hospital, the Hammersmith Hospital, with 400 beds in modern wards, which on the 1st April became the property of the London County Council under the Local Government Act, 1929, a medical school in conjunction with the hospital; and a residential hostel on a site in central London.
    The committee estimate that the financial provision required to establish and maintain the British post-graduate hospital and medical school, apart from the cost of the maintenance of the beds in the public hospital, which in their view should remain, as it is now, a charge on the ratepayer, will be as follows. First, a capital sum not exceeding £250,000 for building a medical school, which, together with the hospital, will form the main part of the new organisation and for providing educational equipment. Secondly, the sum necessary to maintain the medical

    2169
    school as a recognised school of the University of London. Thirdly, the capital cost of building the residential hostel.
    The Government have accepted the recommendations of the Committee as to the organisation of the British postgraduate Hospital and Medical School. They are much impressed with the importance of securing without avoidable delay the advantages of a proper system of postgraduate medical education in London, not only from the domestic but also from the Imperial and from the international point of view. The Government will accordingly be prepared to contribute from public funds a maximum sum of £250,000 for building and equipping the Medical School as an integral part of the scheme recommended by the Committee; and to make provision for grants through the University of London towards the maintenance of the school on the lines already applied to comparable institutions of University rank.
    The Government earnestly hope that they may secure the co-operation of the London County Council and of the University of London in the scheme as recommended by the Committee and they are entering into communication with those bodies on the subject. The Government understand that an appeal will shortly be made to the public for assistance in the establishment in London of a residential institution to be called "London House" for the use of students from the Dominions not, only in medicine but in other arts and sciences. It is also part of the proposed scheme that "London House" shall offer accommodation to a limited number of British students domiciled in Great Britain and Northern Ireland in order to furnish collegiate association between them and students from the Dominions.
    Such an institution would, in fact, secure the object aimed at by the Post-Graduate Medical Education Committee in recommending the provision of a hostel. The Government are in full sympathy with the movement and they look forward with full confidence to the success of the appeal when it is made as crowning a scheme to which the taxpayer, the ratepayer and the general public will be contributing their appropriate shares.
    Mr. CHAMBERLAIN: I am sure the statement which the right hon. Gentleman has just made will give profound, satisfaction as soon as its full implications are appreciated, and, in congratulating him upon the final success, which I am sure he will agree is largely due to the very distinguished body of surgeons and physicians who constitute the committee, may I ask him whether the hospital which has been chosen is considered to have a sufficient number of beds for the purpose far which it is required, and, if not, whether there is room for extension in the future if it is considered desirable?
    Mr. GREENWOOD: Yes, Sir. The scheme envisaged by the committee makes provision for a larger number of beds than is now available at Hammersmith. The committee were unanimous in their choice of Hammersmith, and there is sufficient available ground for the extension of the number of beds to make the hospital effective.
    Mr. MARLEY: In connection with London House, may I ask whether it is proposed that only Dominion students, not Colonial students, are to reside there and take this post-graduate course? There are post-graduate students from Africa taking a course in tropical medicine. Will they be able to use London House?
    Mr. GREENWOOD: If I am using the term "Dominion" narrowly, I am sorry. The hospital will be available for students from all parts of the British Commonwealth.
    Miss RATHBONE: Will adequate arrangements be made for the training of women students, and will residential provision be made for women students as-well as men students?
    Mr. GREENWOOD: Clearly, both women and men will be included in the scheme, but this is a scheme intended for post-graduates and not far ordinary students. It is to assist people who already possess qualifications.
    Miss RATHBONE: Does the right hon. Gentleman not think it likely that women students will be included among post-graduate students?
    Mr. GREENWOOD: Yes, certainly.
    Mr. HAYCOCK: May I ask whether this post-graduate course will be open to medical Members of this House?

QUESTIONS TO MINISTERS.
Colonel HOWARD-BURY: I desire to ask your Ruling, Mr. Speaker, on a matter which occurred this afternoon. You have always ruled that it is not correct for reflections or insinuations to be made against any distinguished strangers that may be visiting this country. There is here at present the deputation of the Grand Mufti of Jerusalem, and there seems to be an attempt to make use of this House for the purpose of making insinuations against the Grand Mufti. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), in a supplementary question, deliberately accused the Grand Mufti of engaging in propaganda against the British Government. That is absolutely untrue, and it is making use of this House for propaganda purposes. I desire to ask your Ruling upon the matter.
Lieut. - Commander KENWORTHY: May I draw your attention, Mr. Speaker, to Question No. 19, in the name of the hon. Member for Eastbourne (Mr. Marjoribanks), in which this same dignitary is accused of propaganda against the French authorities? May I ask whether it has ever been held in this House, where a dignitary in receipt of Government money engages in illegal activities, that the matter should not be brought to the attention of the Colonial Office?
Sir N. GRATTAN-DOYLE: On that point, may I ask whether it is not most deplorable that these various points in dispute should be repeatedly brought up in this House and discussed, very much to the detriment of the question as a whole, and very derogatory to the mandatory Power?
Mr. WALLHEAD: May I also draw attention to the use that is made of this House for attacking a friendly Power, namely, the Soviet Government of Russia?
Mr. SPEAKER: The original point of Order put to me by the hon. and gallant Member for Chelmsford (Colonel Howard-Bury) was whether it was in
2172
order, in asking a supplementary question, to cast reflections on a distinguished stranger. I can cover all the questions that have been asked with reference to that matter by saying that it is quite out of order either by a question or a supplementary question to cast reflections on distinguished strangers or on other strangers. That covers the whole point.
Lieut.-Commander KENWORTHY: Is it not a question of fact?

WIRELESS TELEGRAPHY BILL.
"to facilitate the use of wireless telegraphy by permanently bedridden persons," presented by Mr. Philip Oliver; supported by Miss Lloyd George, Marquess of Hartington, Sir Frank Boyd Merriman, Mr. Simmons, aid Mr. Cecil Wilson; to be read a Second time upon Tuesday next, and to be printed. [Bill 163.]

MESSAGE FROM THE LORDS.
That they have agreed to,—
London and North Eastern Railway (Number 1) Bill (Certified Bill).
Liverpool Corporation (Number 1) Bill) (Certified Bill), without Amendment.
Milford Haven Urban District Council (Water) Bill (Certified Bill).
Rochdale Corporation (Number 1) Bill (Certified Bill).
Chester Water Bill (Certified Bill), with Amendments.
That they have passed a Bill, intituled, "An Act to authorise the Scottish Central Electric Power Company to raise additional capital; to confer further powers upon the Company; and for other purposes." [Scottish Central Electric Power Bill [Lords].]
Also a Bill, intituled, "An Act to confer further powers upon the Malvern Hills Conservators; and for other purposes." [Malvern Hills Bill [Lords].]
Also a Bill, intituled, "An Act to empower the Lord Mayor, Aldermen, and Citizens of the city of Leicester to provide and work trolley vehicles; to confer upon them further powers with reference to their omnibus and tramway undertakings; to extend the limits for the

2173
supply of water by the Corporation and to confer upon them further powers with reference to their water undertaking; to extend the time for the compulsory purchase of lands for certain purposes; to make further provisions with reference to the finance of the city; and for other purposes." [Leicester Corporation Bill [Lords].]
And also, a Bill, intituled, "An Act to provide for the transfer of the undertaking and powers of the Falmouth Waterworks Company to the Mayor, Aldermen, and Burgesses of the borough of Falmouth; to authorise the said Mayor, Aldermen, and Burgesses to supply water in, and in the neighbourhood of, their borough; and for other purposes." [Falmouth Corporation Water Bill [Lords].]

CHESTER WATER BILL (Certified Bill).
Lords Amendments to be considered To-morrow, pursuant to the Order of the House of 11th December.
FALMOUTH CORPORATION WATER BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for private Bills.
ORDERS OF THE DAY.

  UNEMPLOYMENT INSURANCE (No. 3) BILL.
  Order for Third Reading read.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  Captain CROOKSHANK: If the Minister of Labour is not going to make any observations at all on this Bill I should like to draw her attention to one or two facts. This morning there appeared the latest returns for unemployment, and before we pass the Third Reading of this Bill it would be well to draw the attention of the House to these deplorable figures and remind the Minister of Labour that the money for which she is asking is, on her own showing, going to be insufficient to carry her for more than a few weeks. She declined to make any speech in introducing the Bill on the Second Reading until she was invited to do so by the right hon. Member for Epping (Mr. Churchill), and in my opinion it is a deplorable sign of an apparent lack of interest in the work of her own Department that when important Measures are introduced she does not take the trouble of making an opening speech or getting the Parliamentary Secretary to do so on her behalf. It is a point on which she has been criticised before.
  The object of this Bill is to increase the borrowing powers, a principle which the right hon. Lady in the winter called dishonest and last July called vicious. She has now found it necessary to adopt this principle in view of the appalling increase in unemployment figures which has taken place since the Government came into office. It is just as well, even if the House does not intend to debate the Third Reading of the Bill at length, to focus the attention of the Minister on the fact that the returns published this morning give a figure of 1,677,500 unemployed on 31st March. Those figures are well above what she calls the balancing point of the Fund. It seems most deplorable that at the very moment when we are about to give a Third Reading to an Unemployment Insurance Bill, based on certain actuarial principles, those principles should already have gone
  2198
  astray. The figures in the Press this morning are 38,701 more than the figures of a week ago, and they are 471,900 more than those of a year ago, when the country had the benefit of a Conservative Administration.
  The Minister has asked us not to discuss this matter in any party spirit, and that is a very laudable hope to express, but it is one that comes very ill from anyone who belongs to the Socialist party. Those of us who have been in this House more than five minutes have some small memory, and when we remember the way in which the right hon. Member for Tam-worth (Sir A. Steel-Maitland) and his colleagues were attacked week in and week out and month in and month out, and how every one of us who were candidates at the last election were attacked on unemployment, it is really asking us to show more Christian forbearance than one may expect even during the season of Lent. But the Minister's colleague the Lord Privy Seal, went even further, and on the Second Reading suggested that it would be a good thing if the unemployment figures were no longer published at all. The right hon. Gentleman said that he expected that the figures would improve; that they were not going to get very much worse and that there would be a distinct improvement. I suppose that that is one of the reasons why he thought it might be as well to suppress them.
  That was only last week. The right hon. Gentleman's expectations have, as usual, been falsified. When we have the fact that these figures are 38,701 worse than those of a week ago, and that we have reached the monstrous total of 1,677,500, of course it is not saying very much to express the hope that the figures will shortly come down a bit. We all hope that they will, and, considering the season of the year and previous analogies, they should come down, but if they do so it will not be because of anything that the Lord Privy Seal or the Minister of Labour has done to help them down. I notice that in the publication of these figures during recent weeks there is every time a footnote which says that the increase is due to the operation of the Unemployment Insurance Act of 1930. The Minister of Labour cannot have it both ways; she cannot explain to the public that the increase is due to the Act for which she was responsible, and

  2199
  at the same time have us believe that everything is going well in the employment world.
  Of course, if the Minister is beginning to see that the Act of 1930 is a bad Act, and if she will come along now and introduce a repealing Measure, I am certain that she will have the support of every Member of the party to which I belong; but until she does that I am sure that the Lord Privy Seal's expectations will be disappointed and that the figures will go on rising—and, what is more, they will go on rising the whole time that the present Government is in office, because there is a certain psychological effect with regard to unemployment, one of the chief points of which is that the mere fact of having a Socialist Administration is bound to cause considerable disturbance in the world of trade and industry and employment, and the very fact that every Measure that the Government brings in means increased expenditure out of public funds has its immediate effect on unemployment.
  I would like to give this final word to the Minister. Last night her colleague, the Minister of Health, in speaking on the Money Resolution of his Bill, expressed the view that it did not matter to him how much expenditure went up, that we had a certain standard of social services in this country, that the higher it went the better, and that whether it cost much or little did not matter. He did not care whether estimates were reduced to 001 of a penny or not. I put it to the Minister of Labour that surely the Cabinet, when they are considering the question of unemployment, must take some account of the rising expenditure of the social services? Even if they admitted that there was a certain amount available to be spent on these services, they should surely look into the question of how best to divide the money? If the Minister by her Unemployment Insurance Acts and by the administration of those Acts expends a certain amount, is it not very likely that there is less to go round for other services, however deserving they may be? If the Minister would bend her mind and the minds of her colleagues to that problem, she would be doing the State a much greater service than she is doing at the present time.
  2200
  Of course, no one is going to divide against the Third Reading of this Bill, for the very simple reason that if it is not passed within a very few weeks there will be no money available out of which payments can be made to unemployed persons—not to unemployed persons who have not contributed, but, as the Minister said on the Second Reading, to those who have contributed for years and years and who deserve full benefits if anyone does, because they have made these payments and have drawn nothing. It has to be remembered all the time that those to be considered are not only those who come in and out of insurance, but those who pay in for years and years and then suddenly fall out of work, as in the case of the cotton operatives, to whom the Minister referred. If we did not give a Third Reading to the Bill those people who have for years paid contributions would be debarred from benefits. We take this opportunity of once again calling the Minister's attention to the very deplorable situation with regard to unemployment, and of reminding her that it is entirely due to our having a Socialist Government in this country.
  The MINISTER of LABOUR (Miss Bondfield): I hope that the House will exonerate me from any intentional discourtesy. As a, matter of fact I had half risen from my seat when the hon. Member for Gainsborough (Captain Crookshank) plunged in.
  Captain CROOKSHANK: I did not want to butt in at all, but I know how quickly a question is put, and that if someone does not get up Debate goes by default.
  4.0 p.m.
  Miss BONDFIELD: I think the House agrees that there has been ample discussion of the Bill so far. There is one point and one point only in the Bill, and that is that we are asking the House to extend the borrowing powers by £10,000,000. There is the further fact that the House accepts the position that there is no alternative to this course. I have informed the House that if the live register remains at an average of 1,500,000, the £10,000,000 will see us through this year. This Bill is not brought forward as a settlement or a solution, but as a Measure which is necessitated by the situation which has

  2201
  arisen. I personally have never deceived the House by making any forecast as to the immediate relief of the present situation, because as far as I can see no one can forecast how soon the present trade depression will lift. I hope, as everybody must, that the trade depression will disappear, but my business is to assume the worst and to make provision on the assumption that the register will show no immediate reduction on the present figures. Events are being watched by my Department with the greatest possible care, and all suggestions that are made from time to time in this House are being carefully considered, particularly those suggestions that were made on Friday last, which are being gone into with a very great deal of interest. I have noticed that all parties in this House have expressed themselves very strongly on the question of the manner in which the live register figures are presented. I do not wish to deprive any Members of the parties opposite of their satisfaction in getting figures which are comparable figures, but that is not the point which has been raised. I appreciate that the suggestion that was made by the late Chancellor of the Exchequer was made, not from the standpoint of party advantage, but from the standpoint of the best method of presenting the figures. It is, of course, quite right and proper that I should take every opportunity of keeping the House fully informed of the movement of the figures and as to the finance of the Fund, and this I propose to do. This Bill is recognised as being necessary and since, as has been already stated, it is not intended to oppose the Third Reading. I would ask the House to let me have the Bill now. If, however, there are points to be discussed further, my hon. colleague the Parliamentary Secretary will be pleased to answer them.
  Sir HENRY BETTERTON: I am sure the House will be glad that the right hon. Lady took the opportunity of saying something, at any rate, on the Third Reading of this Measure, because although it is perfectly true, as she said, that it is in form limited in scope, everybody knows that this Bill, as has been shown during the long discussions we have had, raises questions of fundamental importance. We cannot, therefore, get rid of the question merely by saying that
  2202
  it is a matter whether we shall or shall riot raise the borrowing powers to £50,000,000. During the discussions we have had—and I am not going to keep the House very long, because the discussion already has been ample—there was disclosed to the House, in a manner, perhaps, that could be emphasised in no other way, the really serious position in which we are. I have taken part in many unemployment insurance Debates during the last five years. In some respects the discussions we had last week and the week before were amongst the most interesting I have ever heard. They were certainly characterised by a temper in Debate which was not present, at any rate, during the last Parliament. On the other hand, they disclosed a position which, beyond question, is more depressing than that of which anybody in this House has any recollection.
  The figures themselves, as my hon. and gallant Friend has already said, actually stand at this moment at a higher point than at any time since 1922. That in itself, is a sufficiently sinister fact, but, perhaps, the most sinister fact of all is that the Minister of Labour, with gloomy pessimism, says, "Ah, if they do not go beyond 1,500,000 on an average, then, I think, we can carry on to the end of the year," but, as is much more likely, if they average the appalling figure of 1,600,000, then she says, "I shall have to come back in a very few weeks or very few months and ask for more money." That, I think, has brought home to the House the fundamental fact that this is a condition which cannot be allowed to continue as it is, because it is perfectly clear that this policy, if policy it be, is leading us nowhere except to bankruptcy. Therefore, I welcome the right hon. Lady's statement that she is going to give the most serious attention—and I hope we shall have the result of her inquiries as soon as possible—to the most valuable suggestions which were made last week and the week before by my right hon. Friend the Member for Tamworth (Sir A. Steel-Maitland) and the right hon. Member for Epping (Mr. Churchill), but I do not propose to go over the ground which was gone over so fully before. It is perfectly true that some of the causes of the present position are due to world causes, over which the right hon. Lady has little or no control. It is also true

  2203
  that some of the causes are due, in my opinion, to causes for which the Government are directly responsible.
  It is customary to ask leaders of industry, those engaged in trade in whatever capacity, whether they can give some estimate, whether they can assist this House in forming any conclusion as to what the future is likely to be in their particular industries. The right hon. Lady told us a moment ago with perfect candour that she can make no forecast. Of course she cannot; nor can they, because the truth of the matter is that there is no industry in this country which can foretell with the slightest degree of certainty what is to be the result of the legislation which has been passed by this House, or what will be the ultimate result of the uncertainty produced by the action of the Government. What is the good of asking a shipbuilder or a man engaged in the iron and steel industry, what effect on unemployment the Coal Bill will have; and what is the good of asking anyone engaged in the motor car industry or the silk industry what is the future before him when he has not the slightest idea what course the Chancellor of the Exchequer is going to take?
  One thing clearly emerges out of all this—that for one reason or another a most terrific strain has been put upon the whole system of unemployment insurance, and I confess that it is a matter of regret to me that the right hon. Lady, whom I had always regarded as a convinced and, indeed, in the past, a courageous supporter of a national system of mutual self-help which we call unemployment insurance, should have given way when the first assault was made upon it last November. I thought she would have been the first to resent the implication that this was to be reduced to a mere dole, and I thought she would have striven to maintain the dignity of the system. I am not now going into the question of the genuinely seeking work Section in the old Act, which was repealed, or the provisions of the new Act, but I want to point out that what happened last November really inflicted an irreparable blow upon the whole system of contributory unemployment insurance. The effect was clearly pointed out by the most authoritative of all authorities, namely, the Government Actuary, and I want to
  2204
  refer to it in order to show that this really is a question of principle which must be maintained, or the whole system will founder. This is what the Government Actuary said, as shown in Command Paper 3453:
  "The possibility should, however, not be overlooked that the new provision may have the effect of bringing certain other persons into benefit, for example, married women who have done little or no work since marriage and seasonal workers during the 'off-season.'
  These two classes of cases will serve as illustrations of what in the aggregate may amount to a considerable group of new claimants, consisting of persons who, so to speak, are not really in the market as competitors for employment, but may hold themselves out as such if they are thereby enabled to qualify for benefit. There are, however, no data enabling any estimate to be made of the additional cost arising under this head."
  That means that you have quartered on this fund a limited and favoured class of people who, as Sir Alfred Watson says, are not really in the market competitively at all. But, quite apart from the question whether these particular persons are or are not deserving of what you have given, quite clearly you are giving them something under the Insurance Act which is not insurance. You are giving them, not an insurance benefit, nor, indeed, a dole in the sense that it is necessarily given to those who are destitute, and therefore worthy of relief. You are, in fact, giving a gratuity, something paid out to a limited class who are no more entitled to it than many other people who are left out. That sort of thing drives a hole right through the system of insurance. When the right hon. Lady—who is, after all, the trustee of this fund; the trustee for the State, the employers and the employed—permits an act of this kind, with all respect she is doing something which is utterly and entirely a breach of the trust of which she is a trustee. That, I think, is the real significance, or part of the significance. of what happened last November.
  The right hon. Lady told us that she would go into this question of figures. It is clear to me that as we are going now, the House and the country are entitled to know how the finance is proceeding from week to week, or, at the latest, from month to month, and the right hon. Lady, I am sure, will give us all the information in her power. It seems to me that if we are to know how this is pro-

  2205
  ceeding, and where we are going, we ought, week by week, not only to have figures of those who are on the register of uneployment, but we ought also to have, week by week, figures showing the number of those who are actually receiving benefit, because it tells us very little to be told merely that there are so many on the register of unemployment. We want to know how many there are week by week actually receiving benefit and, as a corollary to this, I think we ought to know week by week the number of claims of those who have been refused for one reason or another by the Court of Referees. That, at any rate, would enable us to have a knowledge of the position we are in, and where we are going.
  There is one other point on a very similar matter to which I want to draw attention. I put a question recently to the Minister of Labour asking if she would state:
  "what is the estimated increased cost falling on the Unemployment Insurance Fund for the financial year ending March, 1931, of the payment of benefit to unemployed persons and their dependants who, but for the provisions of the last Unemployment Insurance Acts, would have been dependent on Poor Law relief?"
  The answer of the Parliamentary Secretary, I confess, surprised me. It was as follows:
  "I regret that information is not available showing to what extent persons who become entitled to benefit under the provisions of the Unemployment Insurance Act, 1930, would, but for the receipt of such benefit, have been dependent on Poor Law relief."—[OFFICIAL REPORT, 8th April, 1930; col. 1978, Vol. 237.]
  Surely there is some estimate in the Department as to these figures. If not, it simply means that the Government have gone into this matter blindfold and without any data on which they can make a statement or give information to the House. I think it is clear that there must be in the Department some means of procuring this very material information. The Lord Privy Seal, and I think also the Under-Secretary of State for Scotland, have both told us that the effect of the Act would be to take many persons off Poor Law relief and put them on the Unemployment Fund. If so, there must be an estimate of the numbers, and if there is an estimate of the numbers we are entitled to have it. I also asked the Secretary of State for Scotland:
  2206
  "what is the estimated total sum for each of the last three financial years expended by the Poor Law authorities for Scotland in the relief of able-bodied unemployed persons, including their dependants; and what is the estimated sum by which these figures will be reduced for the coming financial year by reason of the operation of the last Unemployment Insurance Act?"
  The right hon. Gentleman's reply stated:
  "As regards the second part of the question, it is not yet possible to estimate what reduction will be effected in the expenditure of parish councils on the relief of the able-bodied unemployed in Scotland as a result of the new Unemployment Insurance Act. I propose, however, to call for returns from the large industrial parishes on the matter."—I-OFFICIAL REPORT, 8th April, 1930; col. 1981, Vol. 237.]
  I ask the right hon. Lady now, to do for England and Wales exactly what the Secretary of State for Scotland has promised to do in regard to Scotland. If we could get that information, it also would help us to see the position in which we are to-day. I do not wish to take up the time of the House any longer, but I would again point out that this Bill is, quite obviously the merest stopgap Measure. We are entitled to press upon the right hon. Lady that she should give us as soon as possible—I do not ask for it to-day, but she will have ample opportunity later, of giving it—her considered view upon the very important suggestions which were made the other day by my two right hon. Friends. Speaking, myself, with some knowledge of this subject, I feel certain that unless something is done to re-establish this fund and this principle upon a sound foundation, we are in danger of losing altogether a system which has been, in my view, of infinite value to hundreds of thousands of people in this country during the 10 very difficult years through which we have just passed.
  Mr. ERNEST BROWN: The Memorandum on the Financial Resolution in connection with this Bill, states that on a live register of 1,563,800—the figure on 10th March—the outgoings of the Fund are likely to exceed the revenue by more than £275,000 a week, and in addition to that, interest payments approximating to £1,000,000 are to be made at the end of each of the months of March and September. Can the Minister tell the House what is the estimated excess of outgoings over revenue on the present total of 1,677,000? That will give us

  2207
  some indication of the amount which is being drawn, as compared with the actual number brought on, partly by the decrease in employment, and partly by the administration of the new Act. We have asked several times from these benches if it was not possible to get co-operation on non-party lines in regard to schemes of work. That proposal has not come to anything, but might we not co-operate in order to get a real review of the facts of the situation? The House always listens with profound respect to the hon. Member for Rushcliffe (Sir H. Betterton) both for his knowledge of the subject and for the temper of his speeches, but I cannot forbear reminding him that when he was helping his right hon. colleague the Member for Tamworth (Sir A. Steel-Maitland) to pass the 1927 Act, some of us begged him not to remove the distinction which had previously existed between real benefit and what is now called extended benefit.
  Some of us felt quite certain that if it were removed a point would be reached where, if you attempted to fix permanent benefit on the basis of 30 contributions in two years, you would have one of two results. You would either force hundreds of thousands on to the parish and wreck the rates of the distressed areas, or you would force the removal from the insurance register of all those who could not reasonably be supposed to get employment in their own occupations because their employment record was so bad. We have to look at this problem, not merely from the point of view of the Fund, though I agree with every word which the last speaker said about the danger of uprooting the foundations of actual insurance. We have to go further than that, however, and we have to consider the effect on the men themselves of this growing total of unemployed, and of the merging of those who are not insured, with those who are insured.
  Mr. SPEAKER: I do not think that a question of that kind can be gone into on this occasion. A general discussion on unemployment would not be permissible on the Third Reading of this Bill. I agree that the reason for this Bill is the necessity of providing more money, because of the large number of unem-
  2208
  ployed, and I cannot prevent a certain amount of discussion as to the reasons for the large number of Unemployed, but I do not think that hon. Members will be justified in going any further than that.
  Mr. BROWN: I realise that on the Third Reading the discussion cannot be as wide as on other occasions, and perhaps I was too long in leading up to a point which I think is germane to the Bill. The provisions of the Bill are necessary because the unemployment figures are so high that the present borrowing powers will not cover for a reasonable time the number who are now on the Fund or who will be on the Fund. We have to consider the effects of extending these borrowing powers—first of all on the Fund itself, secondly, on the persons concerned, and, thirdly, on the country as a whole. These three points of view must be taken into consideration, and seeing that we are going to extend these borrowing powers to £50,000,000 I ask, can we not get a review of the facts of the situation? I do not think it possible to get what the hon. Member for Rushcliffe suggested. I do not think it is possible to find, week by week, the number of persons who are actually getting benefit, because there are too many coming in and going out.
  I remember asking the right hon. Gentleman the Member for Tamworth a question on that point when he was Minister of Labour, and I received from him a very able, very intricate, and very detailed answer, covering three typewritten sheets, and explaining that at was not possible to give the information. There are so many changes from day to day, and sometimes from hour to hour, that it would be impossible to get a return of that kind, but what we could get and what we ought to get before it is sought again to increase these borrowing powers—if it is ever necessary to do so again—is a review of the numbers of those who fall into three groups, those who are really insured, those who have a bad insurance record, and those who have an impossible insurance record. I think it ought to be possible to obtain that information.
  Mr. BUCHANAN: What is the purpose of it?
  Mr. BROWN: If the hon. Member allows me to continue he will find that I am not making this proposal without suggesting a reason for it. It would enable us to do what the House in the end will have to do, unless there is a miraculous revival of trade, and that is to separate the one from the other in order that the nation as a whole may be responsible for those who ought not to be on the Insurance Fund, and in order that we may bring our minds to bear on giving to those who are suffering so badly owing to limited incomes and the lack of opportunities to work, the chance of being put on to constructive work. I hope that we shall be able to get such a review, and if the discussions on this Bill and the Financial Resolution help us to get it, then the speech of the right hon. Gentleman the Member for Epping (Mr. Churchill) on Friday last may well prove to be the most remarkable speech delivered in this Parliament.
  Mr. SPEAKER: I must point out to hon. Members that suggestions of that kind cannot be followed up in the discussion on the Third Reading of this Bill.
  Mr. SKELTON: The right hon. Lady speaking a moment or two ago said that it was her duty in this matter to assume the worst, and the worst assumption she had to make in asking the House to grant this extension of borrowing powers, was an average of 1,500,000 unemployed. But in that case "the worst" has already been left far behind, because the present unemployment figure exceeds that figure by nearly 200,000. Recollecting as I do a number of Debates in this House on Unemployment Insurance Bills I must reiterate the observation of my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) that at no stage of these discussions has the Minister made the slightest effort to give any estimate of the future course of unemployment and that the House is being treated scandalously in that respect. I am well aware of how uncertain any such estimate must be, but at all events it would assure us that the right hon. Lady is taking a real interest in the general subject of unemployment, and giving it the meticulous care and constant attention which her predecessor gave to it. This is not the first time that I have had to remark on the very great change
  2210
  between the constant and real interest taken in this question by the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) and what appears to me to be the Minister's rather slipshod way of doing her duty in this House. In my humble opinion, nothing could be more slipshod, at a time when the unemployment figures have reached nearly 2,000,000 than to leave the House without any idea at all of what she considers the probable future of unemployment will be.
  I do not propose to follow the hon. Member for Rushcliffe (Sir H. Betterton) into the causes of the increased number of unemployed in this country. I suspect that any extended discussion on that topic would be out of order, but just as my hon. Friend mentioned one of the sins of commission of the present Government as being to some extent responsible for our difficulties, I should like to draw attention to one sin of omission which, in my judgment, has a connection with the present figure of unemployment. Although trade and industrial occupations may improve, and although the figure of unemployment may be reduced in that way, so long as successive Ministers of Labour refuse to consider the possibilities of our country life, properly organised, as a means of permanently getting rid of unemployment so long will our nation be burdened with a heavy figure of unemployment. So long as no proper steps are taken to make use of the great asset of the countryside, so long will the figure of unemployment be unnecessarily high. It would be improper to speak at greater length upon that topic, but I would urge on the right hon. Lady, if she were still here, that the Ministry of Labour should even now take it into close consideration and look at it largely, fully, and in a detailed and statesmanlike way, to see whether the countryside cannot even now be called in to the assistance of the urban world.
  My hon. and gallant Friend the Member for Gainsborough said something of the very changed language of the Members on the Front Bench opposite now, as compared with the days when they were on this side of the House. I entirely agree but something strikes me with even greater surprise, and that is the complete change of tone, not only of the Front Bench opposite, but of their Back Bench supporters. The Labour party in

  2211
  opposition in the previous Parliaments were never weary of asking questions as to the number of unemployed. There was no day passed on which such questions could be answered when more than one was not asked, but now that their own leaders are responsible, they sit absolutely mum and are apparently careless of the subject, which before filled them with such unholy glee. I must say to my hon. Friends opposite that I wonder that a desire to maintain some reputation for consistency does not make them show at all events some supposed interest in the state of unemployment in this country. It appears to me that so complete an alteration of mood, the supersession of such excited interest by such calm contempt, must indicate to their followers in the country how superficial, how shallow, and how unimportant is their interest in this vast problem. I do not say this in order to stir up any party feeling, but I say it because it is the main impression which I have gathered from the various unemployment Debates in this Parliament as compared with the attitude of mind exhibited by hon. Members opposite only a short time ago.
  It is not by the right hon. Lady or by the Government that any real assistance will be given to this problem. Their efforts, as was so well said by the late Chancellor of the Exchequer the other day, are clearly aimed at getting "the greatest doles for the greatest number," and it is clear that the present demand for an extended loan will many times have to be renewed while the present Government are in office. That must be so, for it is not by the principle of constantly extending the ease with which the dole is to be got—[An HON. MEMBER: "Benefit, not dole!"] I will select my own words, and the hon. Member opposite may select his. I say that it is not by the ease with which the dole is given, and the absence of any real system of preventing its misuse, that you will encourage the people of this country to make the effort which is necessary to get rid of unemployment. A Socialist Government, Socialist legislation, and the easy demand for more millions must simply in the end of the day so imbue the people of this country with a sense of the ease with which unemployment benefit can be got that the energy of this country and of its citizens must, to a
  2212
  very large extent, be shattered. The continuance of the present Government and of a succession of Bills such as this must inevitably bring it about that the energy of our people will be so shattered that every year that the Socialist Government is maintained in office, the problem of getting rid of unemployment will be proportionately increased.
  Mr. TINKER: I would not have risen but for the taunt of the hon. Member for Perth (Mr. Skelton). It is very unfair to Members on these benches to tell them that they take no interest in the question of unemployment. What does this Bill do save deal with the question of giving further relief to a fund which is already badly crippled? It does not require anybody on this side to speak on that subject. When the hon. Member's, party came forward with a Bill some time ago to increase the borrowing power from £30,000,000 to £40,000,000, I got up in the House and said that if they made it £50,000,000 or £60,000,000 to relieve the pressure on the fund, we would all be in agreement with them. We were then in Opposition, but we did not offer anything against that Measure. The present Bill is not a Bill whose purpose it is to get rid of unemployment; it is a Bill for the purpose of meeting the deficiency on the Fund. If any hon. Member opposite can put forward anything to improve the position, we shall gladly listen to it, but if it is merely criticism of the borrowing powers, I would ask them to leave the matter alone.
  This is not the time at all to bring forward measures to put the whole Problem in order. There will be opportunities later on for that, and if hon. Members opposite will take their opportunity then, we will welcome them, but for the moment I think the House should realise the position in which we are placed. The Minister has come forward, in most extraordinary circumstances, with a very open mind, admitting the great difficulty in which she is placed, and asking the House to give her the power to carry on. She has said that she might have to come later for further borrowing powers. Nobody wants her to do that, if it can be helped, but it may be so, and surely, if we realise the extraordinary position in which we find ourselves, we shall all say "God speed your Bill." We here are just as anxious as anybody opposite to

  2213
  help relieve the great difficulty in which the country is placed on this question of unemployment.
  Mr. CHARLES WILLIAMS: The hon. Member for Leigh (Mr. Tinker) and the Minister have both pointed out that in their minds there is no alternative to borrowing. I do not propose now to go into that point, but I wish to draw attention to the speech of the Lord Privy Seal the other day, when he asked that the House should deal with this question of unemployment in a different atmosphere. We have often been told that people like myself, who represent divisions where there is comparatively little unemployment, have not the right, because we have not the knowledge, to intervene in these Debates. If that is the case, it is clear that the speeches of hon. and right hon. Gentlemen and Ladies opposite to which we have been listening for years cannot have been very instructive, if they have been unable to enlighten us in all that time. I accept the position as laid down by the Lord Privy Seal, that this Bill is one which comes very close to the heart and mind of every individual, not only in this House, but in the country as a whole, and I do not want to look at this Bill at present in a controversial way.
  I think there is one fundamental point in connection with the Bill on which it might be easy for the leaders of the parties in this House to come to an agreement. I think that, as a nation, we have found the very best method of advertising the number of our people who are out of work. We put it in week after week—it has been done by this Government and by its predecessors—and if these discussions lead to nothing else, I would like to see it laid down that in some way we could not only reorganise these figures and get them done with altogether, but that, while they are there, we could get some form of figures which would show a truer estimate of the real position of this country, because the present method very often leads to a pessimism which is not justified by the actual state of affairs.
  Mr. SPEAKER: I must point out to the hon. Member that what he is saying has no relation to the Bill itself. The question with which he is dealing is one quite outside the Bill altogether.
  Mr. WILLIAMS: I will keep strictly to the Bill. The Minister told us, in introducing the Bill, that she had to come for the purpose of borrowing £10,000,000, and she said that she was not really borrowing to as large an extent as her predecessor had done, and that she was not such a bad rake as her predecessor; but she must realise that, although on the figures she gave it would seem that she was only raising the amount by between £1,000,000 and £2,000,000, as against her predecessor's £10,000,000 or so, yet you had to add to her figures the £14,000,000 which she had taken from other sources and which had gone into the revenue of the fund. In reality, therefore, although she may be, in her own opinion, not such a rake as her predecessor, if you come to actual figures she has advanced very much more rapidly. There is a point in connection with these figures which I wish to raise. She told us last week that this money was needed because the figures had been raised for different reasons, and last Friday she told us, according to the OFFICIAL REPORT, that the previous week she had said that between 40,000 and 50,000 had gone on to the figures, but that that week it had risen to 67,000.
  Miss BONDFIELD: The first was an estimate; the second was an analysed return.
  Mr. WILLIAMS: I agree, but the thing has gone up, and the estimate was too low for the analysed return. These figures are rising every week, I am given to understand, and I should like to ask the Parliamentary Secretary if he will give us the figure beyond the 67,000 to which they have risen now. I think that is a figure which we have every right to obtain. In her original statement on this Bill, the Minister said that for 1,500,000 people out of work the sum for which she was asking would last till the beginning of next year, or I think she said 1,600,000 until next November. I would like to know how long it will take to arrive at 1,700,000, and for how long the fund will carry us? I am hoping that we shall not reach that figure, but I want the Parliamentary Secretary to tell us, taking the index figure as to the amount which the fund will stand, how much, say 100,000 people added to the fund would cost week by week. It is only by having clearly before

  2215
  us what the addition of 10,000 or 100,000 per week costs in a week and in a year that we can form a real estimate of what we are doing. Can the Parliamentary Secretary, in justification of the request for further borrowing powers, give any particular instance of what is being done to prevent the Government from having to come for an additional sum quite quickly? The hon. Gentleman would strengthen his position enormously if he could tell us that his Ministry are doing something to try and relieve the position, for instance, in the matter of transfers. I only use that as an illustration, but it is a matter in which I think—
  Mr. SPEAKER: The Parliamentary Secretary would be out of order if he answered that question. It is quite out of order.
  Mr. WILLIAMS: If he is not allowed to answer, I would not dream of pressing him. We have arrived at the extraordinarily difficult position that year after year we have the Government coming to us and asking us for increased borrowing powers; and never once during the whole of this Debate have they given us any sort of reason why they cannot take alternative methods. There are plenty of alternative methods, and the Government have never attempted during the Debate to throw any light on this problem. It is an unfortunate position in which the House finds itself after having given the Minister such an easy passage for the Bill. We have hoped again and again that they would be able to tell us that, sooner or later, the present position would come to an end. The Minister was quite frank in saying that she had no alternative whatever. The Lord Privy Seal said something in connection with this question the other day, and it is one of the reasons why I thoroughly dislike this Bill. This borrowing, from a financial point of view, is absolutely unsound in the worst possible way. It will not make it more easy by anything which is done under this Bill, to deal with the unemployment question. The only way in which to deal with it is to cut out this kind of Bill, and to look at the question in a much broader way, and in an Imperial way.
  Mr. EDMUNDS: In addressing the House for the first time, I feel sure, from my experience of the House, that the usual indulgence will be very generously accorded. I would like first, in response to a remark made by the hon. Member for Torquay (Mr. C. Williams) that this proposal to increase the borrowing powers to £50,000,000 is unsound, to remind him of a statement made by the right hon. Gentleman the Member for Epping (Mr. Churchill), who said that he could see nothing wrong in extending the borrowing powers of this fund to the extent of the whole year's income of the fund, which is £58,000,000. I leave the hon. Gentleman to settle his differences with the right hon. Member for Epping.
  I would not have intervened this afternoon had it not been for some of the observations that have been made on the other side of the House, particularly some of the remarks made by the hon. Gentleman the Member for Gainsborough (Captain Crookshank). Quite ungenerously, and in a rather small party spirit, he apparently placed upon the present Government the whole responsibility for the large increase in the size of the unemployment figures. I am willing to admit that, had a Conservative Government been in power to-day, the figures would not have been so large, not for the reason that there would have been less unemployment, but that there would have been fewer people registered and in receipt of the unemployment benefit.
  I speak as one who for the last eight years has had a great deal to do with actual unemployment —as a trade union official, it was part of my daily duty —and one of the most dismal features of the last few years has been the numbers of people who have been cut out of benefit through the harsh and ruthless application of the not-genuinely-seeking-work Clause in the late Act. Speaking on behalf of a large number of unemployed who are in my organisation, I wish to thank the right hon. Lady and the Government for easing that position by the Clause in the Bill which was recently passed. The hon. Gentleman the Member for Perth (Mr. Skelton) said that this was a Government that provided "the greatest doles for the greatest number." I regard that not only as an insult to the present Government, but as

  2217
  a libel on our unemployed. One of the difficulties in my own personal experience has not been the question of not genuinely seeking work; I have had more complaints from the unemployed that preference has been shown at the Exchanges in the provision of work. That has been one of the greatest difficulties of a trade union official, and I resent the insinuation which was made by the hon. Member for Perth, that the unemployed are just looking to this Government to provide doles. I hate the term "dole"; it is an unfair term, but the term has been used, and on behalf of the unemployed whom I represent, I repudiate such an unjust insinuation against the character of the men and women who are out of work.
  The right hon. Gentleman the Member for Epping, when the Financial Resolution on which this Bill is founded was before the House, said that the large numbers who were now in receipt of benefit and who had no real insurable claim to benefit, ought to be considered in the light of being transferred to a reformed Poor Law. The House has to face the position that the unemployed have either to be sustained by grants made from this House or from the Insurance Fund borrowings as authorised by this House, or they have to be sustained by the local authorities. One of the cardinal principles upon which this party stands is that unemployment is a national charge. Were we not to extend the borrowing powers as laid down in this Bill, large numbers of the unemployed would have to be catered for by the new public assistance authorities; and, if those who are not entitled by insurance to benefit, but have come in through the widened provision in the Clause in the recent Act, were struck out, they would have to be sustained by the public assistance authorities. These cases would be most numerous in those areas which are most distressed, and which have been bearing a burden for the last six or seven years. Consequently, they would be totally unable to meet the new burden that such a procedure would cast upon them. It is a great pleasure therefore, to support this Bill, though one has a melancholy feeling that such a Bill should be necessary.
  The hon. Member for Perth cast a reflection on the back benches when he
  2218
  said that we were viewing with calm contempt the increasing numbers of the unemployed. I fling that charge back into his teeth as an unfair charge, and as a calumny upon the attitude of the Members of the party on the back benches here. We are just as much concerned to-day as we were long before the last Election about these rising figures. We would far prefer to see everyone of these unemployed engaged in employment. It is not our fault. These huge figures of unemployed are the product of private enterprise. They are not a product of the system in which we believe. We are supporting a Government which has to deal with this product of private enterprise, and the only thing that can be done at the present moment is to deal with these human beings for whom private enterprise does not cater. Apart from the provision of public works, we have to see that by some means through the Unemployment Insurance Acts, provision for sustenance is made for the men and women who are out of work.
  5.0 p.m.
  Sir ARTHUR STEEL-MAITLAND: The hon. Gentleman the Member for East Cardiff (Mr. Edmunds), who has just spoken, has delivered a maiden speech. He has delivered it with fluency and with emphasis, and because it was a maiden speech, I imagine, Mr. Speaker, that you did not enforce the rules of order as strictly as you have done previously during the Debate. I must answer, if I am allowed, what he has said, though I do not wish to trespass one inch beyond the rules of order. It cannot be allowed to be said without contradiction in this House that the increase in the figures of unemployment is not a real increase, but is due to the fact that people are now allowed benefit who, under the harsh administration of the previous Government, did not get it. That statement must never be allowed to pass current without being contradicted. There is not a shadow of justification for it. As we have been quite definitely attacked about this, I would like the House to consider for a moment who the people are who did not get benefit before but who may be getting benefit now. They were people on the two months file, people on the "dead" file, and people on the files at Kew. In the first place, they were people who were

  2219
  not so sufficiently in want as to have to go to the Poor Law, or they would have been required to register by the Poor Law authorities. They were not, on the other hand, so anxious for employment as to take the trouble to register. What is said in this House is doubtless said in many places throughout the country, that some of this increase is due to people getting benefit under a milder administration than the previous one, and therefore I repeat that there is not a shadow of justification for that statement.
  If I were to endeavour to go into some of the other points—not raised by the hon. Member for Morpeth, but by other Members—I should be travelling outside the bounds of order during a Third Reading speech, and, indeed, I do not want to delay the final stage of this Bill. I know quite well that the Minister will be glad when it has left this House to go to another place and finally comes up for the Royal Assent. It was a most unwelcome baby to produce at the legislative font for baptism, and I am sure she will be glad when it is sent on its way, even with godfathers on this side of the House who wish to keep it as much in order as we can and see to its good behaviour.
  I have one question to put to the Parliamentary Secretary, reinforcing a question which was put by the hon. Member for Leith (Mr. E. Brown) with, as I always say, his usual acuteness in these matters. What, under the present conditions, is the balancing point? New people are coming on to the Fund under the operation of the latest Act, which received its assent at the end of January. Is the balancing paint still 1,200,000, or is it more than 1,200,000? The second question is this: Supposing, as is true at the present moment, that the figures are in excess of that point, what is the additional debt upon the Fund for every additional 100,000 persons? May I ask for the attention of the Parliamentary Secretary, because this is a point of statistics and we ought to know? What we have to consider, first of all, is the cost per week of every additional 100,000 persons upon the Fund over the balancing point; and, secondly, on the average per week, how much does the Fund continue to run into greater debt on account of the interest that is already chargeable on it? My
  2220
  own feeling is that it is somewhere about £100,000 a week under present conditions for every 100,000 persons on the Fund—perhaps not quite so much.
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Lawson): £100,000.
  Sir A. STEEL-MAITLAND: That is practically £1 per person on the Fund, and in addition, the payment of interest on the Fund as it at present exists accounts for, perhaps, another £40,000 a week or £2,000,000 a year. Those are the figures that we would like to have, and I ask for the information for this reason, that only when we know those figures will the ordinary person outside the Ministry of Labour be able to form cone impression of how long this £10,000,000 will last. If £1 per person is correct, and the interest has to be paid in addition, then it means that at the present moment the extra borrowing power of the Fund is being used up at the rate of very nearly £500,000 a week, so that if unemployment were to continue at its present level even this extra £10,000,000 would be absorbed at the end of another 20 weeks or so. As I said the other day on Second Reading, we all hope that this extra high level this week is not likely to continue indefinitely; we hope, at any rate, there will be an improvement soon; but we would like to have some information which will enable the ordinary person to estimate how long the additional credit will last.
  I will deal quite briefly with a point made by the Minister. She was referring to an offer made by my right hon. Friend the Member for Epping (Mr. Churchill) with regard to the weekly figures. I make it again. We would be very ready to join in considering the issue of figures each week which would put the extent and the nature of the unemployment in this country in its true light. We would be quite willing to assist in examining jointly any form of statement which could have that for its object. It would be quite clearly understood, of course, in the light of our past experience, that we should want to have the present figures of unemployment continued at the same time, for purposes of comparison with what has gone before. That is the one point which I would like to make clear once again.
  Miss BONDFIELD: The right hon. Gentleman says "the present figures continued." He is referring, I suppose, to the point raised by the right hon. Gentleman about the figures that are published broadcast to the world?
  Sir A. STEEL-MAITLAND: Yes; we wish to have the present weekly figure, the figure at present published every Wednesday, continued at the same time, so that we may be able to have it for our use for purposes of comparison with the past. This directly affects—or more or less directly—the actual amount of unemployment. I now turn to the second suggestion which was made the other day. Part of the present Insurance system is acutely controversial—the conditions, that is, under what is called the assistance side of unemployment benefit, but part of the system is practically non-controversial. Part however would probably be found to be non-controversial, namely that which concerns a true insurance system for those who would be receiving insurance benefit under a strict definition of the term. Perhaps the non-controversial field would extend even further than that. If we divide, as I know the Ministry and the Treasury are already dividing, the finance of the insurance part of the scheme from the finance of the public assistance part of the scheme, then I think we should find that the nature of the authority required to deal with the public assistance side of any scheme, if it were separated from the true insurance, need not be a matter of controversy. Probably only the conditions under which assistance is given would prove controversial. As we are asked to treat this question in a nonparty spirit, I suggest there could be nothing better from the point of view of administration than to try to see that those parts of this great insurance system, which are probably non-controversial are settled by agreement.
  I do not wish to pursue the rest of this subject of insurance further, because if I were to do so I should at once get on to very severely controversial topics. I should think of the whole three parts of the unemployment problem as we have seen it during the last six months—the amount of unemployment as compared with the statements with regard to it; the nature of the benefit as compared with previous statements made by
  2222
  Ministers with regard to it; and the actual state of the Fund and borrowing as compared with statements made by Ministers with regard to it. I remember reading, as many hon. Members no doubt may have done, a funeral inscription which runs: "Nihil tetigit quod non ornavit" which, being translated, means, he touched nothing which he did not adorn. When the epitaph of the present Government comes to be written with regard to unemployment and unemployment insurance the words will run: "Nihil tetigit quod non desecravit." There is nothing it touched which it did not make in a mess.
  Mr. LAWSON: I welcome the spirit of the right hon. Gentleman's speech, as well as the spirit of the speech of my predecessor in this office. That spirit was to be expected in view of the experience which every Minister gets in a Department such as this, and I shall do my best to exhibit the same spirit in my remarks. May I say that the suggestions which the right hon. Gentleman has made will certainly have the serious consideration of my right hon. Friend But the right hon. Gentleman's speech was not the only one which has been made during this Debate, and I am only sorry that some of the hon. Members behind him are not now in their places. If they had been new Members, one could have understood some of the speeches that were made, because one would naturally infer from those speeches that this is the first Government which has ever come to the House to ask for an extension of the borrowing powers of this Fund. It would be interesting for the House to hear the whole story of the extension of the borrowing powers of the Fund, but I will not inflict that upon hon. Members to-day, though I would certainly say that we are within our rights in reminding the House once more of the legacy into which we came when we took office. The right hon. Gentleman, in that very friendly way he has sometimes of saying very rude things, told the House that we were putting a strain on the finances of this Fund. How anyone with a knowledge of what was done in this connection by previous Governments, can say that utterly passes my comprehension. When we came into office we found that the Fund could only maintain 1,000,000 on the register, and yet

  2223
  there was an average of 1,290,000 on the register during the previous year. Actually the previous Government exceeded the income of this Fund by something like £12,000,000 during the previous 12 months.
  Sir A. STEEL-MAITLAND: We did not incur that £12,000,000 in one year.
  Mr. LAWSON: My statement is based on the facts and figures given by the recognised authorities in the Department. I am sorry that the hon. Member for Perth (Mr. Skelton) is not present, because he used certain words in discussing this question. The first thing which the Minister of Labour found it necessary to do when she came into office was immediately to increase this Fund by £3,500,000, and that has long been accepted as a proper measure of justice to the Fund. The hon. Member for Rushcliffe (Sir H. Betterton) dealt very fairly with the question of the people who have been accepted by the Chancellor of the Exchequer for transition purposes. I sometimes wondered what was going to happen to those people, because the policy pursued before we came into office was very unfortunate as far as they were concerned. I have been asked several questions as to what would be the balancing point. It is 1,240,000, and the average cost per week for each 100,000 increase above that figure would be about £100,000. The cost of the interest would be £40,000 per week. The hon. Member for Torquay (Mr. C. Williams) asked me several questions, to some of which Mr. Speaker took exception, but I think Mr. Speaker allowed him to ask his question in regard to the number of people that had been added to the register up to the 31st March last. The figure is 70,000 The same hon. Member also asked how long the extra £10,000,000 would last with an average live register of 1,700,000. The answer is that it will probably last till about the end of September. The hon. Member for Leith (Mr. E. Brown) asked for a comparable figure with the deficiency of £275,000 a week mentioned in the White Paper, but assuming the basis of a live register of 1,677,000. The answer to that question is £375,000 a week on the assumption that the same proportion of claimants will be entitled to benefit, but I cannot
  2224
  yet say whether this, in fact, will be the case.
  The hon. Member for Rushcliffe asked if we could give the figures showing the amount of the charge transferred from the Poor Law to the Unemployment Fund by the Act of 1930, and he made a certain suggestion. That matter is now receiving very close attention. We cannot give those figures at the present time, but experience may enable the Minister of Labour, in due time, to make some estimate of what the position is in that respect. At present, we can only say that a certain number who were on the register before but not drawing benefit are now getting it, while others who were unemployed, but not on the register, are now registering and some of them are receiving benefit. I think that meets the whole of the points which have been raised in this Debate.
  Sir A. STEEL-MAITLAND: The Parliamentary Secretary has just given some figures to the end of September. I suppose that is on the supposition that the rate of unemployment remains as high as it is at the present time.
  Mr. LAWSON: The figures I gave were on the basis of a live register of 1,700,000. Perhaps I may be allowed to say that there is sometimes a tendency, when people are discussing unemployment insurance, to assume that those who receive benefit are getting money out of an unlimited fund to which they do not contribute. Most hon. Members of this House understand that that is not so. Some of those who have delivered speeches upon the Money Resolution seem to assume that there are people who simply lay themselves out to impose upon the State by receiving this benefit. The truth of the matter is, as the hon. and gallant Member for Abingdon (Major Glyn) and other speakers have said, that the income of this Fund is £58,500,000.
  It is just as well to remind the House of the proportion contributed to the Insurance Fund by its various contributors. The employers pay £17,000,000, the workers pay £15,000,000, and the State pays £16,000,000 plus £10,500,000 for the people who are in the transition stage. Those who have come in contact with the great mass of our workers know that many of them prefer to work for a smaller wage than the amount which they

  2225
  could receive as unemployment benefit. I know a man who worked for five days for 30s. although he would have been entitled to receive 32s. as unemployment pay. That is characteristic of thousands of our workers to-day. That is an indication of the spirit which exists among the workers to-day, and I think it is necessary to make that statement on account of the speeches which we have heard from the back benches on that side and which seem to convey a wrong impression.
  Right hon. Gentlemen and hon. Gentlemen opposite have charged the Government with negligence, with inability and inefficiency, but they cannot get any satisfaction out of the figures which have been given. What is the actual position at the present time? On the very day when the Money Resolution was introduced for increasing the borrowing powers for the Unemployment Fund, we were told that in the nation which was parallel with our own, Germany, unemployment had increased to 3,000,000 persons and the Government had fallen on account of the unemployment question. While we have been sitting here discussing this question for the past few weeks, in America, the nation which has been held up to us as a model, they have experienced an increase of unemployment and the President of the American Federation of Labour has said that the unemployment in America was one out of four of the population. Although I do not say that it is good, I think we ought to have a proper estimate of our own position comparable with that of other nations.
  In view of the fact that we have this Unemployment Fund established, that our people have confidence that out of the Fund at least their elementary needs of life will be satisfied, and that the people of this country are steady and understanding in spite of the grave problems that they have to face, I say that, critical as we may be, we may well be proud of our people and of this system which has been built up, and we can say with some optimism that the courage and industry and ability which the great mass of the workers of this country have shown in the face of these problems will enable us to weather these storms and face successfully the difficulties of the times that are ahead. I do not think that
  2226
  I need further appeal to the House to give the Bill a Third Reading.
  Question put, and agreed to.
  Bill read the Third time, and passed.

  OVERSEAS TRADE [GUARANTEES].
  Considered in Committee under Standing Order No. 71A.
  [Mr. ROBERT YOUNG in the Chair.]
  Motion made, and Question proposed,
  "That it is expedient to amend the Overseas Trade Acts, 1920 to 1929, by extending to the thirty-first day of March, nineteen hundred and thirty-five, the period within which new guarantees may be given under those Acts in connection with export transactions, and by extending to the thirty-first day of March, nineteen hundred and forty, the period during which guarantees so given may remain in force."—[King's Recommendation signified.]
  Mr. GILLETT (Secretary, Overseas Trade Department): In asking the Committee for an extension of the period during which the Export Credits Guarantee Department may go on, I should like briefly to review the previous history of the Fund, and also to say a word or two with regard to the Report of the Committee presided over by Sir Otto Niemeyer. The Export Credits Department was started originally with a view to assisting the export trade of this country, although it was continued at a later period with the special object of attempting to find work for the unemployed. It had three stages, and it is important that I should briefly refer to them, in order that hon. Members who may not be familiar with its history may understand one or two points that are mentioned in the Niemeyer Report.
  The Export Credits Department was set up in 1919, and the first scheme was based simply on the actual advancing of money for the purpose of helping the sale of goods. The experience was somewhat unfortunate, and the losses were rather heavy. In 1921, the first guarantee scheme was brought into existence, and it continued for five years. Under that scheme, guarantees were given up to the extent of 100 per cent., but recourse to the exporter was retained to
  the extent of 57½ per cent. In the whole of that period of five years, the amount of money guaranteed was only about £6,000,000, and the scheme began to show

  2227
  signs of having accomplished the work it had undertaken, but it induced the Government at that time to consider whether there were not aspects of the guarantee scheme that might very usefully be continued, and I think it was the hon. Member for Farnham (Mr. A. M. Samuel), when he occupied the position of Secretary of the Overseas Trade Department, who appointed a Committee under the chairmanship of the right hon. and gallant Member for Ripon (Major Hills), to consider the whole question of credit insurance work. That Committee reported in 1926, and in that year the present scheme as we now know it came into being.
  I might remind the Committee that credit insurance in this country, and, in fact, in all countries of the world, was at that time quite in its infancy, and indeed to-day it is still in a stage which might be called experimental. This scheme, which was started as a result of the Report of the Hills Committee, was copied by several countries on the Continent. Briefly, it is a system of insurance by the exporter in this country sending his goods abroad. A sum of money is to come to him from the overseas importer, and, if he wishes, he can insure that a certain proportion of that money can be entirely relied upon. In order to do this he approaches the Export Credits Guarantee Department and lays before them the proposal which he has to make, with particulars of the goods that he is going to sell, and the period within which he will be receiving the money from the overseas importer. If he is successful in his application, the Department may agree to guarantee up to 75 per cent. of the face value of the transaction that he is undertaking.
  There is one very important point which has to be borne in mind in connection with this scheme, as compared with any other insurance scheme that there may be in this country, and that is in regard to the time when payment is made in connection with any losses that have come about as the result of the transaction. Practically all the transactions now undertaken by the Department are carried out on the financial side by means of bills, and, therefore, it is fairly simple, having the date on which the bill is going to mature, to know exactly the time when the liability will first accrue.
  Mr. ARTHUR MICHAEL SAMUEL: Is the insurance now done entirely by covering the value of the bill? Must there be a bill?
  Mr. GILLETT: As I understand it, in practically every instance the financial side of the transaction is carried out by means of a bill. I was going to say that, when any question of default arises, naturally the Department becomes technically liable for payment. The general idea of insurance is, of course, that the person insured is only going to receive payment for what has been lost. In some cases the process is simple. For instance, when a person's life has been insured, it is only necessary to prove that he is dead and the payment becomes due; and, similarly, in the case of a fire, it is fairly easy to judge what the actual loss is. But when you come to loss of this kind, and are asked to insure a sum of money that is going to become payable in respect of a business transaction of this kind, the question naturally arises as to what the actual loss is. Suppose that the sum is £1,000, that the Department has guaranteed 60 per cent. of it, that is to say, £600, and that the acceptor of the bill has defaulted. In such a case the Department pays almost at once, as soon as the necessary investigation has been gone through, which takes only a few days.
  Hon. Members who are not acquainted with the working of these insurance schemes might think that that is only what would be expected, but as a matter of fact there is no other insurance business at the present time that does pay as rapidly as the Government scheme, and that is one of the fundamental differences between the Government scheme and any private company that is doing this kind of business to-day. A private company, while recognising its liability, says that it must be satisfied that the sum of money is really lost, and any hon. Member who has done business abroad, and has been so unfortunate as to have debts due to him abroad, knows perfectly well that it is one thing to know that a firm abroad has defaulted, but it is quite another thing to know when it will be possible legally to say what payment, if any, they will be in a position to make; and, until you have arrived at that position, you cannot say what the final

  2229
  loss may be. That may be a matter of months, and as often as not it is a question of years.
  To any firm, however large and substantial, it is important, and to a small firm trading with a small margin of capital it is exceedingly important, to know whether on a certain date, or within a few days afterwards, they will receive for certain that sum of £600, or whether they are to be told that they will have to wait for months, or it may be for a year, before receiving any part of it. I lay stress on this, because it is really one of the most important aspects of the Export Credits Guarantee Scheme as it concerns the business community of this country. Many houses, both large and small, have taken advantage of the scheme.
  There is also this added advantage. Under the Contract B scheme, instituted at the time when the right hon. Gentleman the Member for Chorley (Mr. Hacking) was Secretary of the Overseas Trade Department, a document was drawn up by which it was made possible for the exporter in this country, who had arranged to have such a payment guaranteed, supposing that the payment was not going to be made for two, three, or four months, or even longer, to sign what was known as the Contract B form, in which he authorised the Department to pay over to his bankers the money that he was to receive. He was then able to go to his banker and ask him if he would make an advance upon this sum of money, which the banker knew perfectly well would be coming to him under the authorisation of Contract B, from the British Government. Anyone who considers the advantages of such an arrangement can see how beneficial that Contract B scheme has been to those who have been making use of the Department. When you look at the figures, you see the success of the scheme in the considerable increase that there was in 1929 compared with 1928.
  I apologise for explaining a technical term, but in the House, and perhaps more particularly in one or two newspapers recently, statements which have been made from this bench in regard to the Export Credits Guarantee Department have not been fully understood because of the technical terms that have been used in giving answers to questions. I was asked recently what was the number of
  2230
  applications which have been received from a certain country. The word "applications" can be exceedingly vague, in view of the fact that two firms in making applications might have the same piece of business in mind and, further, an applicant might think the business he was going to undertake would be worth £10,000, but when he really got down to it he might find it was only £5,000. Therefore, as any figures in regard to applications would be so vague and unreliable, we have taken the line that it is not desirable to make public statements, simply because they might be entirely misunderstood, and undue importance might be attached to them by people who have not heard such an explanation as I am trying to give now. I referred just now to the case of a man who comes to the Department wishing to do a deal involving £1,000. He asks the Department how much they can guarantee. Under the powers of the present Act we can guarantee up to 75 per cent. The amount usually varies from 60 to 75 per cent. Therefore, supposing 60 per cent. is taken, the Department becomes liable for £600 out of that £1,000. If that has been agreed with the exporter, we speak of £1,000 as being the contract and £600 is the liability. Speaking of contracts, for the first nine months of this scheme ending March, 1927, £365,000 was the amount of business done; for the first full year ending 1928, £2,455,000; for the next year, 1929, when the new contract B had come into being, the figure rose to £4,283,000 and last year to £5,661,000.
  Mr. R. A. TAYLOR: Do these figures represent the liability of the Department?
  Mr. GILLETT: I regret that I have not managed to make it quite clear. These figures I am giving are the contracts; in other words, going back to my illustration of the man who is selling £1,000 worth of goods, they represent not the £600 but the £1,000.
  Mr. W. J. BROWN: Will the hon. Gentleman clear up one point? He gave the figure for 1929 as £4,283,000 and said the figure for last year was something in excess of £5,000,000. That seems to be two different figures for the same year, as 1929 was last year.
  Mr. GILLETT: The financial year ends on 31st March. What I meant by last year was the year up to 31st March, 1930. The only other thing I wanted to mention in connection with last year was the fact that it included Russia, and the amount of contracts entered into with Russia was £1,305,000, all on short term.
  Passing to the next stage in the life history of the Department, it was in 1928 that the scheme came under some criticism from the Estimates Committee, who finally recommended that an expert investigation into administrative expenses should be made. They recommended that the premium should be increased and that there should be commercial accounts. This recommendation was so far carried out by my predecessor that he appointed a small Committee to investigate the whole enterprise. I should like to say a word in regard to the three points on which they laid emphasis. The difference between the Government accounts as they are ordinarily kept and commercial accounts in a concern of this kind is that previously we only provided a direct cash statement. In Government accounts as they were being conducted before this Committee made this recommendation, if you asked what were the accounts for this Department you simply had them on a cash basis. That meant that premiums were coming in, but no reserve was being set aside for the liabilities which the actual fact of the payment of the premiums have really involved. We have adopted that, and we are much indebted to Sir William Plender for the help he gave to the Department in drawing up the new system. The accounts which have so far appeared are only up to March, 1928, and they show a loss of about £16,000. One of the great difficulties of drawing up any accounts to deal with a fund of this kind is that you have nothing to go upon, and no figures upon which you can base your estimate as to what your loss is likely to be. Insurance companies have had years of experience, but there is nothing to go on in regard to this special work and, therefore, we have to make estimates which are somewhat in the nature of guesses as to what the actual loss will be. On that account, therefore, I think it is really better that the accounts should not be made up until probably a year after the actual time.
  Mr. LEIF JONES: Why has the hon. Gentleman only got the accounts up to March, 1928? The Appropriation Account up to March, 1929, gives figures about export credits which seem to be complete.
  Mr. GILLETT: I was talking of the commercial accounts which will be found in the Blue Book, and not the ordinary accounts which are still going through. The Committee hoped the previous schemes would be entirely dissociated from the present scheme. That we have done, but when they ask that they should be entirely dissociated from the Department, that is impossible. In considering how the work of the Department might be made more efficient, they suggested the appointment, of a small executive committee. We are by law compelled to have an advisory committee. It is now suggested not that the advisory committee should be done away with—as a matter of fact that could not be without an Act of Parliament—but that a small executive committee should be formed. They said:
  "We are of opinion that this end would best be served by a small executive committee of three members, whose functions would be analogous to those of a board of directors. In a word, we should desire to see the executive committee in a position to conduct their experiment with full responsibility for its direction and subject only to the rendering of commercial accounts in the form which we have recommended."
  Anyone who read that recommendation must have recognised how very sweeping it is. There is no reference whatever in the report, as far as I remember, to the position of the Minister and his responsibility to Parliament if powers were granted literally on the lines that the recommendation has laid down. I do not believe there is any precedent for the suggestion if it were laterally interpreted. At the same time, possibly it is not intended to be quite so sweeping as the words in black and white would imply, and it was not intended that the Minister should not have power to intervene. However, in accepting the proposal my right hon. Friend has made it quite clear, first of all, that the ultimate responsibility of the Minister to Parliament must remain entirely. It is essential, if the Minister is to be responsible for what is taking place, that he shall be informed by the committee of what is going on.

  2233
  6.0 p.m.
  The difference is, that on many points the committee may come to a decision and go on with their work, but that the manager will keep informing the Minister what is taking place and the Minister will, of course, ask for further explanations, or express his disagreement with them, if he thinks it is necessary to do so. They will not necessarily wait until the ordinary procedure in Government Departments is carried out. There are certain matters on which the Committee are bound by statutory provisions, such as munitions of war and other things of that kind, with which I do not think that I need weary the Committee. There is also the relationship of the Treasury to such a committee. I think that I have mentioned that when guarantees are given, they are given by the President of the Board of Trade after he has had an opportunity of receiving the advice of the committee and after he has received the consent of the Treasury. It is very essential that a new committee of this kind must keep the Treasury informed of what they are doing. New problems have been suggested, new ways of managing the details of this organisation, such as open account, reinsurance, consignment business. All these matters are laid down for the new committee. In regard to anything they do on these lines, they will have to inform the Treasury in much the same way as I have suggested they will have to inform the Minister. It will, of course, be open to The Treasury to make any stipulation in regard to any proposal of that kind.
  There is the question of the position of the staff under the new proposals. We have in the Department at the present time a staff which is mainly composed of the ordinary civil servants. On certain occasions during the last few years a few outside members have been introduced owing to their special technical knowledge. As far as the staff who belong to the Civil Service are concerned, they will remain in the same position. It is proposed to make this Department a distinct Department from the Overseas Trade Department but it will be under the Secretary for Overseas Trade, though not under the Comptroller-General of the Overseas Trade Department. The head of the Export Credits Department will report direct to the Minister concerned. The new staff and the staff of the Export
  2234
  Credits Department will be distinct from the Overseas Trade Department. It will have its own Whitley Council and also its own promotions board. I think that under those conditions there is no reason for the staff to fear that their position will in any way be affected.
  We have asked Colonel Peel, the present chairman of the advisory committee, to act as chairman of the new executive committee, and I am very glad to say that we have received his consent. We have also asked Mr. Caulcutt, the deputy chairman of the advisory committee to act on that committee. Mr. W. R. Blair, one of the members of the Co-operative Wholesale Society central committee, and at present a member of the advisory committee, has agreed to serve, and also Sir Albert Bain, who is a well-known insurance broker. These four will form the executive committee.
  Mr. R. A. TAYLOR: Will my hon. Friend explain exactly what will be the position of the advisory committee after this change has taken place?
  Mr. GILLETT: The position of the advisory committee will be exactly the same as before, because many of the subjects which we hope the executive committee will undertake are subjects with which the advisory committee have not been concerned up to the present time. The work of the advisory committee has largely consisted of receiving the applications, considering them and giving a decision. Questions relating to the conduct of the Department and to making it more efficient, ordinarily speaking, have not been matters which have been considered by the advisory committee or considered as part of their duties. They are only supposed to advise on the actual applications and to say to what extent they shall be accepted or whether they shall be refused.
  Mr. TAYLOR: And that function remains?
  Mr. GILLETT: It has to remain. It is part of the Act of Parliament. We cannot do away with it, as I have said, without passing an Act of Parliament. I hope that I have made it clear that these recommendations have been made with the object of reorganising the Department and to provide greater elasticity of method, but still to retain it under the control of the Minister, and, of course,

  2235
  under the appropriate control of the Treasury. Another recommendation of the Committee is that the scheme should be extended until 8th September, 1934. We have adopted the suggestion with one alteration. We thought that it would be more satisfactory if this corresponded with the financial year, so we have taken 31st March, 1935, instead of the date suggested. Another proposal deals with the suggested increase in premiums which the Estimates Committee has reported. The Niemeyer Committee consider them to be as high as is consistent with sound business. That is the scheme for the reorganisation, one might so term it, of the Department. We hope that under these proposals it may go forward to a period of still greater usefulness in the future. It requires to be better known. I believe that if it were better known in the country many more firms would take advantage of it. We have had much assistance from Chambers of Commerce and from many of the banks in the past, and I hope that we may count on their help and support in the years that are to come. I believe that if we receive their help and support we shall see a very considerable extension of this method, which, as the Niemeyer Committee explained, is a most interesting experiment and one which will prove of great help to the export trade of the country.
  Mr. DOUGLAS HACKING: I am sure that the whole of the Members of the Committee appreciate the speech which has been delivered by the hon. Member and is grateful for the interesting historical sketch which he has given in connection with the various schemes of export credits undertaken by various Governments. I was particularly glad to hear from him the approval which he gave to contract B with which I had some concern when I occupied the position which is now occupied by the hon. Member. One thing which struck me as being of great importance was contained in almost the concluding sentence of the Minister's speech, when he said that he hoped that this last scheme would become better known throughout the country. I agree with that absolutely, but, unfortunately, sometimes our friends let us down. When I was at the Department I remember speaking on one occasion in a
  2236
  certain part of the country and advocating the contract B scheme. A man got up in the room and thoroughly condemned the scheme. He said that it was unsound and that he had not a good word to say about it. I was rather astonished to hear that, especially at a meeting of a chamber of commerce. When I came back to London, having found out the name of the individual, I made inquiries of the Export Credits Department as to who was this man and to what firm he belonged. It was found that he belonged to a firm which had used this scheme very extensively, and presumably the only reason why he had condemned it was in order to keep other people, his competitors, from taking advantage of the scheme. This is the sort of thing the Department is up against. It is unfortunate, but, I believe, it is one of the reasons why the scheme is not better known. I agree with the Minister that he and the Members of his Department should go about the country as much as they can telling the business community of the advantages to be derived from using such a scheme as he advocates.
  The Financial Resolution which we are discussing is, as the hon. Member has said, founded on the recommendation of a committee of experts set up to inquire into this problem. That committee, as he rightly said, was appointed during the time when I was Secretary to the Department of Overseas Trade. I should like at once to thank Sir Otto Niemeyer, Colonel Peel and Sir William Plender for the great care which they have taken, the great patience which they have exercised, and for the splendid report which they have issued. There are, in fact, two reports. The first, in the form of an interim report, was a report made to me. The second report, in the form of a main report, was to the hon. Member. As far as the interim report is concerned, I do not wish to make many observations. I am very glad to see that the committee advocate the desirability of issuing commercial accounts, and the forms which are suggested in their report are most excellent. The forms are clear, concise and easy to understand, and in these respects they differ very much from the Treasury form of accounting to which we are accustomed in this House. The Minister spoke about these accounts, but I am not clear whether these accounts up

  2237
  to 31st March, 1928, have yet been published. I think he said that they were in the Blue Book issued by the Public Accounts Committee. Is that so?
  Mr. GILLETT: I do not know whether it is issued by the Public Accounts Committee, but it is the Blue Book which contains accounts of this kind.
  Mr. HACKING: Unfortunately I have not seen the Blue Book, and probably many Members of the Committee have not seen it. I think that it would be well if some other form of publication could be arranged so that not only Members of this House but people outside interested in this form of insurance might have an opportunity of seeing the position from year to year. I hope that the Minister will consider that suggestion and, if possible, that he will adopt it. The interim report, which many Members of the Committee have seen, was only made available a few weeks before the General Election took place, and there was very little time for the late Government to take any decisions thereon. I should like to know the decision which has been reached by the present Government with regard to the latter portion of paragraph 6 on page 4, where it says:
  "That we (the Committee) consider that in the interests of simplicity and rapid administration the responsibility of the Accounting Officer at the Department of Overseas Trade should rest directly with the Export Credits Guarantee Department, without the intervention of the Accounts Department of the Department of Overseas Trade."
  I am not clear from what the hon. Member said whether it is the intention of the Government to accept that recommendation. If it is, I assume that it means that the Accounting Officer of the Department of Overseas Trade, who is also the Comptroller-General and probably one of the busiest civil servants in the country, would have to accept the responsibility for the accuracy of the accounts of the Export Credits Guarantee Department, without their being subjected to the scrutiny of his own Accounts Department,
  Mr. GILLETT: We are cutting out the Export Credits Department from the Overseas Trade Department. That means that the Overseas Trade Department will have no longer anything to do with the accounts of the Export Credits Department.
  Mr. HACKING: The accounting will be done by the Export Credits Department and kept distinct from that of the Department of Overseas Trade?
  Mr. GILLETT: It will be an entirely separate Department.
  Mr. HACKING: Accounting direct to the Treasury?
  Mr. GILLETT: Yes.
  Mr. HACKING: I am very glad to hear that. So far as the main report is concerned, I am glad to hear that practically the whole of the report has been accepted by the Government, because it is exactly what I would have desired had I been in the hon. Member's position. The examples which I will quote are not many. On page 9, the report says:
  "The permanent use of State credit for the benefit of the particular private exporting firms whose applications may be granted does not seem to us desirable."
  The permanent use of State credit does not seem to the Committee to be desirable, and I am glad to note that the Government have accepted that opinion. I also like the system of commercial accounts and the separation of the new scheme since 1926 from the old scheme. I do not know whether any other Government Department is going to carry out the liquidation of the previous scheme, but I hope they are. That was suggested in the Report.
  Mr. GILLETT: We were not able to adopt that suggestion.
  Mr. HACKING: I think it would have been a good thing to cut out the dead wood, if it had been possible. Undoubtedly, the Department is burdened by losses that took place under the old scheme, but if what is suggested cannot be done, we must leave it at that. I agree, and I think the Committee will agree, that Contract B. should have a maximum of five years for the experimental stage. It is stated in the report that there is no institution at present offering identical facilities to those offered by the Export Credits Guarantee Department. I should like to know whether or not any institutions are moving nearer to the Government scheme. It is very important that they should do so, especially as the recommendation of this expert Committee is

  2239
  that, finally, private enterprise should take over this insurance. It is very important that these outside bodies should now or shortly move closer to us in all respects.
  I like the idea of a small executive committee. I would have preferred to have called it a board of directors, but I agree that it should be subject to the responsibility of the Minister who, in turn, must be responsible to this House. I am very delighted that the Minister has been successful in persuading Colonel Peel to accept the position as chairman of the Executive Committee. Mr. Caulcutt is also an old friend of the Department, and I am glad that he has accepted a position on the Board. He has worked many years on the Advisory Committee. I am not certain whether this Executive Committee will have the sole power, choice, appointment and remuneration of staff in their hands, or whether that is going to be taken out of their hands and put into the hands of the Appointments Board. Perhaps the hon. Member will make that point clearer. The recommendations made in the Report on this point are sound. They are of the opinion that the staff must be chosen from people who have had a great deal of experience in this complicated subject.
  I assume that this Executive Committee will be unpaid. I do not know whether it is a good thing that they should be unpaid, and I would not mind if they were paid salaries, because they have very important work to do and it will take up a great deal of their time. It is perhaps too much to expect that busy men possessing so much ability should give up so much of their valuable time to the State. I would not mind if they received remuneration fitted to their service. If, however, they are generous-hearted enough to do this work in an unpaid capacity, so much the better, and we must be grateful to them. I like the changes that I have enumerated for themselves alone, but still more do I welcome them because they are all changes in the general working of this scheme which are likely to facilitate the final transference of all this business out of Government control. It is the desire of Members of the Committee—it is obvious to anyone who has read the re-
  2240
  port—to make the Department an independent unit run on business lines and thus easy of transference in toto to private enterprise. I congratulate the Government on their acceptance of the principles and advantages of private enterprise, and I hope that the whole business of insurance against bad debts will be safely handed over and taken out of the hands of the State long before the maximum period asked for in the Resolution has expired.
  I should like to make a few observations on the general scheme of Export Credits. We have not been told by the Minister whether the Department is now paying its way. The last figures that I have before me were issued in 1928, when there was a loss ratio of 60 per cent. to 70 per cent. on the premium receipts. That is, the premium receipts were used to pay all the bad debts up to 60 and 70 per cent., leaving 30 per cent. or 40 per cent. of the premium receipts towards paying the cost of administration. The balance of money was insufficient at the time, and there was loss in the running of the Department of between £18,000 and £20,000 a year, on a turnover of about £3,000,000 a, year. I should like to know whether the loss ratio has decreased or whether the administrative expenses are now less than the 30 or 40 per cent. which was left over when the loss due to bad debts had been taken into account. It will be interesting to the Committee to know what has been the largest amount of Government guarantee outstanding at any one time. It cannot be a very big sum especially when, as I understand it to be the case, many of these credits are not longer than for a period of about six months. I would also like to know what is the average percentage of Government liability as compared with the face value of the contracts concluded. In other words, what is the average proportion of risk which is borne by the Government? I should also like to know the average length of credit that is guaranteed. The Committee, on page 9 of their report, refer to the question of short credits. They say:
  "The Committee think the scheme should remain one of relatively short credits."
  On page 8 they say:
  "The major portion of business accepted has been for short credits, eg., up to six months."

  2241
  Does that mean, according to the recommendation on page 9, that the scheme is to remain one of credits only for periods up to six months? I doubt whether they do mean that. If they do, I think that it is rather too short, and that longer credit should be given occasionally.
  Now, I should like to turn to our old friend Russia. The hon. Member, in speaking on this subject on the 5th February, used these words:
  "If Russia desires to raise credits in this country, a settlement with the City on the various debt questions and other questions that still exist and are awaiting settlement is a fundamental necessity."—[OFFICIAL REPORT, 5th February, 1930; col. 1980, Vol. 234.]
  That bond may have been kept in the letter for I recognise, especially after having read the correspondence to which the hon. Member made reference, which appeared in "The Times," the difference between insuring a British exporter against non-payment of debt by Russia, and the actual granting of credit facilities to that country itself. It is, however, quite clear that Russia derives indirect benefit by the purchase of British goods, otherwise she would not buy them. Some of the goods which she wants would not have been supplied unless there had been in existence this export credit system. Further, if Russia fails to pay—she has not failed up to now, I admit that, quite frankly—the British Government would be bound to accept responsibility for a portion of her bad debts. Surely, that comes very near to financing Russia. Although the Government have not broken in the letter the bond they have given, I maintain that they have broken it in spirit. When we were in office, we refused these facilities because we felt that until Russia had recognised and discharged her obligations to British nationals, no financial assistance of any kind should be extended to her.
  Mr. W. J. BROWN: You are not granting assistance to her; you are extending it to the British exporter.
  Mr. HACKING: She has derived benefit. She would be unable to buy certain goods had it not been for the facilities that have been granted. Certainly, to that extent she has derived benefit.
  Mr. BROWN: Would the hon. Member prefer that she should be able to buy them in Germany or America?
  Mr. HACKING: That is not the point The point is that she has derived benefit owing to our extending this scheme to include Russia. There is no doubt about that.
  Mr. MUGGERIDGE: The exporter gets the benefit.
  Mr. HACKING: The exporter gets the direct benefit, but Russia gets indirect benefit, otherwise business would not be done by Russia in this country. I do not recollect the exact amount of debts which are still due to this country by Russia, but I know that one single organisation, the British Union of Russian Bondholders represents over £25,000,000 of claims against Russia. There is no suggestion of any likelihood that there will be any repayment of that sum. I should like to thank the hon. Member for his explanation in regard to certain technical terms used in this House. He admitted that the House had been misled by the use of these terms, and he very briefly quoted an illustration. On the 10th March of this year he stated in this House that 144 definite proposals in respect of exports to Russia involving £3,142,000 had been approved up to the 4th February. The impression created in the minds of certain hon. Members, and certainly on people outside, was that the actual amount of risk undertaken by the Government was the huge sum of £3,142,000. The secretary of this British Union of Russian Bondholders assumed that that was the Government's liability. In fact, that was not even the face value of the contracts concluded. The face value of the contracts was £719,000, and, therefore, only 23 per cent. of the large sum mentioned by the secretary of that association. I am glad the Secretary to the Overseas Trade Department has given the explanation, and I hope that in future he will insist upon his civil servants giving him answers in plain and simple language so that there can be no confusion in anyone's mind.
  I asked the hon. Member a question as to the amount of trade done with Russia during the past month, and he told me that the face value of the contracts was £585,277. That is larger than the trade done with all other countries put together. That amount was £414,503, so that more than half the total volume of business done last month was

  2243
  with Russia. I should like to know the average length of credit granted to Russia and the average length of credit granted to other countries. It is strange if longer credit is granted to other countries than to Russia, because it means that the Government put less trust in the Russian Government than they do in individuals in other countries without Government assistance. Then, what are other countries doing in the matter of guaranteeing their exporters against non-payment of debts by Russia? I have seen rumours in the papers, and perhaps they are even more than rumours, that Germany is drawing in her credit facilities; she is reducing the total amount outstanding at any particular time. I hope the Secretary to the Department will make inquiries and find out exactly what foreign countries are doing. If it is a fact that they are not granting the same facilities to Russia, he should find out the reason, and, if it is a good one, act accordingly. I hope the hon. Member will never forget that, although there have been no losses up to the moment, when the crash does come, if it does—and things are not so rosy in Russia at the present time—we lose everything because all the trade is done with the Russian Government. It is not like dealing with individuals in other countries. If we continue this trade with Russia we should certainly never have more than a limited sum outstanding; never more than £500,000 at the most, as the Government's share in the risk which is run.
  I want to refer to the granting of credit facilities in connection with munitions of war. The hon. Member has told us that it is contrary to the Act of Parliament. Will he consider an Amendment of the Act in connection with munitions of war such as ships, guns and ammunition and other material? It is quite true that the late Government did not grant credits in such cases because we also were bound by the Act of Parliament, but I maintain that times are changing and that with all the conventions and treaties in existence it is more difficult for any country to succeed in the race in armaments. Warships and other materials of war for foreign countries are now actually being constructed here. This has been the case for years past. They are always constructed under licence from the Govern-
  2244
  ment, and it is only a small step forward to give credit facilities in such cases. It will be specially justified if the grant or refusal of such assistance makes the difference to our obtaining or losing orders for one of our depressed industries. I hear on good authority that Italy is giving this kind of financial help to her shipyards to build ships of war not only for Italy herself, but also for sale to Greece and Turkey. In the interests of employment at home we must be on the look out, and it will be well worth considering whether we should not extend credit facilities to include ships of war. [An HON. MEMBER: "Battleships for other countries, but not for Russia."] If these ships have to be constructed on any case, why should we not construct them? That is the whole point. I would never suggest that battleships should be constructed here if they could not be constructed elsewhere, but if they would in any event be constructed elsewhere, then in the interests of employment I see no reason why we should not construct them here and find employment for our shipyards where there is so little employment at the present time. Let me come now to the actual terms of the Resolution. We agree with the maximum extension contained in the Resolution. We agree that the term should be extended to 1935 for these new guarantees and we do not, therefore, propose to resist the Resolution. I hope, however, that it will be considered as the maximum, and that it will be found practicable to hand over the whole business of credit insurance to private enterprise long before the limit of five years is reached.
  Mr. RUNCIMAN: The speech delivered by the right hon. Member for Chorley (Mr. Hacking) reminds me of the story of the parson who prayed that there might be no shipwrecks for the coming week, but if there were, then let them be near our island. The right hon. Member is in favour of general disarmament, but if battleships are to be built he would like them to be guilt in this country. Let us hope that one of the outcomes of the existing Conference may be that we shall be able to sell some of them second-hand.
  Mr. HACKING: That would not find employment in our shipyards.
  Mr. RUNCIMAN: I should be prepared to sell them to those Powers which have no seaboard. I am not sure that credit facilities are wanted or would be very useful for that purpose. The inquiry which we are now conducting into the affairs of this Department has enabled the hon. Member the Secretary to the Overseas Trade Department to give us a lucid account of its life and disclosing its internal organisation. As far as I gathered from what he said and from the report of the Niemeyer Committee no one need be afraid of this Department competing successfully on commercial lines with outside organisations which do business in the ordinary way. The department does not make ends meet or such is to be inferred from the report of the Comptroller and Auditor-General who points out that not only have the premiums been inadequate for the purpose of making ends meet but that no allowance is made in the departmental accounts for the use of officers who are not in the credits department at all but are really seated elsewhere. If all the charges were brought in it is clear that there must have been a loss in the year 1928 and in 1929. That loss is not due to any abnormal claims made on the department. It is due to the very heavy departmental expenses. Out of a total gross income of £32,000 no less than £26,900 went in salaries, rent, rates, travelling expenses and staff expenses alone. The ordinary working expenditure of the department absorbed no less than 92 per cent. of its gross income.
  I am constitutionally averse to State trading and I regard this as an example of the way, when the State begins to trade, you find it extremely difficult to make ends meet. No persons in control of private enterprise need be at all nervous of a department which has to spend 92 per cent. of its gross income in salaries, staff, etc. The truth is that the department itself is an experiment, as the Niemeyer Committee described it; and they were quite right. We do not know how it is going to work out. Sufficient time has not yet elapsed to enable us to say whether the claims on the department are going to absorb more than the premiums which have been paid for the insurance of the risks. It would be impossible for us to say that we have enough data to justify the department being closed down, and the right hon.
  2246
  Gentleman the Member for Chorley has made it quite clear that for his part he would regard the closing of the department as somewhat premature. He is looking forward to a further period of life being granted in order to show whether it is going to fulfil the objects for which it has been created. That is the object of the Secretary to the Department. He desires that it should be given a further lease of life in order to see whether under its new constitution it will be able to serve British industry and commerce, and do so without throwing any charge on the general taxpayer. In so far as that is his object I am heartily with him. I believe the scheme ought to be given a further and fuller trial under its new constitution, then we shall know much better where we stand.
  The House need not be at all mystified on the subject of account keeping. The simplest accounts in the world are those of the British Treasury. I know that many people do not think so as they wade through our Blue Books and our Estimates; but it is true. We work on the simple system of putting in the cash we receive and the cash we pay out, but, of course, that kind of account keeping would never do for an account like that of the export credits scheme, where you have liabilities spread over long periods. You have to provide journal entries. There is not a journal entry in the whole of the British Treasury. They do not know what it means, as far as British Government accounting is concerned. They have only a cash book. The sooner the new system is adopted for assisting what is a commercial Department, the better for the knowledge with which the hon. Gentleman conducts his business and the scrutiny which we can exercise over the Department.
  With regard to the directorate, I do not think the hon. Gentleman need be at all afraid of granting a considerable degree of discretion to his three directors, or whatever they may be called. It is essential, if the business is to be conducted well, that it should operate quickly. That, I believe, to be one of the objects of having three men who are devoted to this work and who will each day of the week be able to pass or turn down the credits, so that traders may know exactly where they stand. The Minister is to be congratulated on having obtained the assistance of three excellent persons who can be counted on, not only

  2247
  for their skill, but for complete impartiality. That really is one of the things that we must keep in mind in all these Government trading concerns. It is very easy for partiality to be shown for one set of views or another, or for one set of individuals or another.
  In the speech of the right hon. Gentleman who has just spoken there was the very remarkable instance given of a member of a chamber of commerce decrying the whole system and yet himself, through his firm, having full advantage of the system. That is the sort of thing which obviously the directors must guard themselves against. It is essential that they should be men of unimpeachable integrity and men who are above suspicion. They ought to be above suspicion not only in respect of individual accounts, but also in respect of separate countries. Why should they show any prejudice, as I fear the right hon. Gentleman who has just spoken did on the subject of Russia?
  I would like to say a word or two about the department's attitude to Russia. In the first place one must dissociate in one's mind the debt obligations of Russia and the way in which they can be met. I believe that the total amount certainly the largest amount I have ever heard attributed to Russia as debts to outside creditors, is something under £250,000,000 sterling. That has nothing whatever to do with this department; it, does not even touch the functions of this department. It is really a matter which concerns those who lent money in the past to the Russian State in its various forms, to the old Tsarist Government, to the intermediate Governments which were swept away after the War; to municipalities which used British money for the equipment of their towns with sanitary arrangements, waterworks and trams and to railway companies for the extension of railways and so on. If you take that total lump sum, you can divide it again into its various categories. For instance there are the debts incurred by the old Tsarist régime, those which were incurred by the Government itself. I can imagine them being treated together in one category. Then there is another lot which refer to the time after the War, when there were short and transient Governments. We unfortunately took one side and showed
  2248
  our partiality, against British national interests as it turned out. That is another category. Then there are the advances made—
  The DEPUTY-CHAIRMAN (Mr. Dunnico): The right hon. Gentleman would be digressing a long way from the subject before the Committee if he followed that line of thought.
  Mr. A. M. SAMUEL: On a point of Order. I submit that we must discuss what limitations, if any, should be put on the Financial Resolution, and as the policy of the Resolution depends very much on whether we give the guarantees in this country or that. I submit, with great respect that you might stretch your permission and give us an opportunity to deal with the operation of these export credit guarantees in the widest possible way.
  The DEPUTY-CHAIRMAN: It is not my desire to interfere in any way with the discussion of the reasons why we should or should not give credit facilities to trade with Russia on strictly commercial lines. I was afraid that the right hon. Gentleman was about to discuss whether the subsidising of expeditions to Russia was wise or unwise. That question certainly cannot be discussed.
  Mr. RUNCIMAN: I would not infringe your Ruling in any way. I am satisfied with having been allowed to give that general introduction to the discussion of the credits granted under this scheme in Russia. I was pointing out that all these debts are matters of the past. The way in which they will have to be dealt with must be settled in the City of London or in Berlin and Paris, and by those who may be asked to lend money in future. I have no doubt that they will put their feet down very firmly and say, "We lend no money until you acknowledge an indebtedness about which there can be no question." But that is not the problem of the Minister. His is an entirely different problem. He is asked time after time, by manufacturers and exporters from this country, to grant facilities to them. It is true that in granting these facilities to them he must of necessity be giving some benefit to Russia, but since when has it been our standard in this country that we refuse to trade with those with whom we

  2249
  disagree in politics or religion or anything else, because it may confer some benefit on them?
  How much has the Minister so far given to Russia? The total figure cannot be very large. The total liability in 1928 was just over £1,750,000 for every country, and the total liability up to 1029 was under £3,000,000. The total now cannot be very large, and it represents a comparatively small amount of material. That is the point I want to get at. I am not really concerned with the moral question of repayment by Russia, and the Chairman would not allow me to discuss further the matter of loans. That is a separate problem altogether. The Chancellor of the Exchequer may have to consider conditions if at any time he is asked to guarantee a Russian loan, and I hope that he will think once, twice and many times before he involves this country in a guarantee. The question here is whether you will get an order from some Russian department, a department of State or not, and give employment to our people here, and give profit, I hope, to the concerns which conduct the operations while running the risk of the Russian department refusing to pay up in due course.
  There are two safeguards against that. The first is that the Minister is to follow the advice given by the advisory committee, namely, that they should be short-term credits. That, of course, at once cuts out a very large number of the transactions with Russia which are in prospect at the moment. The Russians have succeeded in placing orders for tractors in the United States and have received years of credit. Locomotives are being built now in American works and the Russians again are receiving considerably longer credit than we can grant here. Very fortunately they have not been buying much in the nature of textile machinery abroad, but have bought nearly all that they require in Lancashire. There the arrangements made have been very simple and have not led, I am assured by those who are at the head of affairs, to the lose of a single £100.
  That leads me to the second safeguard, that of experience. The present Russian Government may have ideas that we do not hold with regard to past debts. Their moral standard may be entirely different from that of the City of London.
  2250
  But so far as current transactions are concerned, I have yet to hear of any bad debts being incurred. From what I can learn, the Russians have been paying up properly and punctually the amounts due. One is bound to say that in all fairness. In commendation of the prudence of British business men, these contracts and supplies, partly paid for in cash and partly on deferred payment, were not entered into by men who were unaware of the risk, but by men who knew what they were doing. Perhaps I may recount my own experience. I have never sold anything to Russia, but I have had boats under charter to Russia, and the Russians have paid up every penny just as punctually and completely as though the vessels had been chartered to an American or French or Italian merchant. That experience ought to encourage others to go into the same field.
  We are sadly in want of work in this country and cannot afford to put any customer on one side. It would be a thousand pities if the Department could be urged not to grant these facilities to Russian transactions wherever and whenever they are advised by the Committee that they can on their merits be granted. Let them not allow the prejudice of politics or country or anything of the kind to enter into the matter. This Department has still to prove itself, but it cannot prove itself successful on a small turnover. It must have a much larger turnover if it is to make ends meet and perform any considerable service to the industry and commerce of this country. I, therefore, urge the Minister not to be too nervous in dealing with the matter because of political pressure from outside. One method ought to dominate all these transactions. The Minister should take them on their business merits and allow no other consideration to creep in.
  Mr. R. A. TAYLOR: I would congratulate the right hon. Gentleman who has just spoken on his very clear and lucid statement of the trading relations between this country and Russia. His speech was in striking contrast to that of the right hon. Member for Chorley (Mr. Hacking), which amazed me. I thought that sentiments of the kind expressed by the right hon. Member for Chorley were completely out of date. I never expected to hear from the Con-

  2251
  servative Front Bench the argument that in order to provide employment we should build battleships and manufacture munitions of war and export them to other nations, possibly to be used for the purpose of killing British seamen and soldiers. I never thought that I should hear a statement of that kind from a right hon. Gentleman who, while he is willing to do that, is quite unwilling to allow this country to send to Russia the tractors, the oil engines, and the excavators that are necessary for the development of that country and its peace and prosperity.
  Mr. HACKING: The hon. Member must be aware that we are manufacturing munitions of war to-day in vast quantities for foreign countries.
  Mr. TAYLOR: The right hon. Gentleman suggested that the credit of the State should be used for that purpose, and that is entirely different from manufacture under ordinary and normal conditions. I am astonished that these observations should have fallen from him.
  7.0 p.m.
  Mr. HACKING: I want the hon. Member to realise that the present Government are giving their blessings to these ships being manufactured at the present time. All that I am suggesting is that it should be extended to include more rather than less.
  Mr. TAYLOR: Apart from that explanation, it is true that the right hon. Gentleman is willing to use the credit for the purposes which he indicated.
  Mr. HACKING: In the interest of employment.
  Mr. TAYLOR: That was not thought to be an appropriate purpose of the Overseas Trade Acts by Members in previous Parliaments, and I am astonished that the right. hon. Gentleman should oppose the granting of credits for British exports to Russia, in view of the enormous losses that have accrued to the State, not as a result of the existing system, but under the scheme of advances which began about 1919. I believe it is a fact that under that particular scheme on a total transaction of £1,750,000 we actually sustained a loss
  2252
  of £1,100,000. That was not the result of careless administration by an inefficient Labour Government. That was the result of administration by a Government of which the right hon. Gentleman was a strong supporter. It is true that considerable losses were made under the second scheme which operated from 1921 to 1926, but those losses have nothing to do with the existing situation and with the question as to whether or not it is a wise thing to extend the operation of the Overseas Trade Credits guaranteed under those Acts for another five years.
  This Financial Resolution raises, in my opinion, a question of vital policy so far as the Labour Government are concerned. I will not go over the ground covered by the right hon. Gentleman who spoke from the Liberal Front Bench when he pointed out how very expensive the work of this Department is in relation to the total turnover. But, even assuming that the later figures given by the Minister of some £6,000,000 a year, even taking that maximum figure, that is only a very small proportion indeed out of the total volume of British exports, which I think amount to about £725,000,000 a year. There is in the Estimate this year an increase of £39,000 in the amount required to liquidate guarantees, and it raises, in my mind, the question whether it is right and proper that this princip1e of using State credit and fixing the charge on public funds should be continued. It is certain that if this Department is to develop into a really useful part of our general credit system there must be substantial changes of policy and of control.
  The right hon. Gentleman the Member for St. Ives (Mr. Runciman) twitted us on this side of the House with using the figures relating to this Department as an example of what happened when the State went into business, bat I would respectfully point out that you have a situation in relation to this Department where the experimental work has resulted in a considerable loss to public funds and where the operations of the Department have been deliberately confined and kept within such limit that it is impossible to get a sufficient premium income to pay the costs. In looking through the report presented to Parliament in December last, I find that the chairman of the Committee expressed the opinion that

  2253
  "the permanent use of the credit of the State for the benefit of particular private exporting firms whose applications might be granted does not seem to us to be desirable."
  If you have the control of a Department of this kind by people who frankly state their definite opinion that it is not desirable that the credit of the State should be used in the direction intended by the Act, you cannot expect your Department to grow into a really useful service—
  Major HILLS: To what Committee's Report is the hon. Gentleman referring?
  Mr. TAYLOR: The Niemeyer Committee. I want to ask the Minister one or two questions. I want to ask him whether it is the intention to add to the present membership of the Advisory Committee a sufficient number of Members of the House of Commons, or representatives of interests other than those of traders and bankers, in order to ensure that the real purpose which Parliament had in view when this legislation was passed shall be properly carried out. There is only one justification for these Acts, and that is that they will bring to Great Britain orders which, were it not for the use of the State's credit, would not in the normal course of business come to this country. The primary purpose of these Acts was to assist in solving the problem of unemployment and the bringing of orders to this country in order that men may be placed at work on the jobs to which they were accustomed. I think the change proposed by the Minister under which a small executive committee is to have even greater powers than is given to-day will render decisions of this committee in matters of policy even less likely to fulfil the purposes of the Acts than those which we have already. Parliament sanctioned the use of £26,000,000 to be outstanding at any one period for guarantees given under these Acts, and on 31st December last, according to an answer given by the Minister, only £4,820,000 had been used, leaving a total of £21,000,000 already sanctioned by Parliament which could have been used for the purposes of financing the export of British goods. Why was that sum not used? It was not used because perfectly sound applications which were placed before the committee, or at least before the officers of the Department, for I
  2254
  am satisfied that many of them never reached the Advisory Committee at all—[Interruption.] I am prepared to substantiate that statement if it is challenged. It has not been used because of the policy of the Administration and of the Advisory Committee in restricting the use of the credit machinery of the Department to short-term credits. I want to draw the attention of the Committee to the present constitution of the Advisory Committee. The chairman, Colonel Peel, is chairman of the National Bank of Egypt. Another member, Mr. Caulcutt, is a director of Barclays Bank. Then there are Mr. C. D. Seligman; Sir Edward Crowe, Comptroller-General of the Department of Overseas Trade; Mr. F. Goldsmith, manager of the National Discount Company; Major Hills, M.P.; Sir William Larke, of the National Federation of Iron and Steel Manufacturers; Mr. W. E. Preston, director of the Chartered Bank of India, Australia and China; Mr. E. R. Pulbrook, of Lloyds; Sir Gilbert Vyle, Chambers of Commerce; Mr. W. E. Wells, director of the Anglo and South American Bank; and the hon. and gallant Member who represents the Portsmouth Division (Captain Hall) and Mr. Blair make up the 13 members of the Committee.
  I am not for one moment suggesting that the members of this Committee have not done their duty and considered fairly and squarely and without prejudice the applications that have been placed before them according to their point of view and according to what they believe to be the purposes of the machinery of this Department; but I would point out that the views expressed in the report to which I have previously referred, that the Department should be restricted to short-term credits, was not the intention of Parliament when the legislation was passed. It is quite clear that it is within the province of the Committee to grant as long as five years' credit for the purpose of assisting exports from the heavy industries, and in the depressed industries of engineering, shipbuilding, and so on, the normal nature of certain classes of transactions is such that credit terms of 18 months, two years, three years, or even five years are quite normal, and, unless Parliament had intended that

  2255
  credits of that length could have been granted under the machinery which was set up, it would never have given power to the Committee to go to that length.
  I suggest that the greatest difficulty which is confronting those who are struggling with the job of maintaining employment in the depressed industries is the difficulty of handling business involving long-term credits on something like equal terms with their competitors. Therefore, I would ask my hon. Friend the Secretary to the Overseas Trade Department whether he contemplates any changes in, or additions to the membership of the advisory committee; whether it is intended that in future the maximum use shall be made by the advisory committee of the powers conferred by Parliament, and whether, in the future, credits up to five years shall be available for the heavy industries in all cases where the business is sound, and where such credits will promote employment in this country.
  I have had to approach both the hon. Gentleman and the Lord Privy Seal from time to time during the last few months with regard to certain transactions relating to trade between this country and Russia. I hope that I do not suffer from a Russian complex. I do not prefer trade with Russia to trade with any other country, but I am concerned that the men in my constituency should get back into the factories, at the work to which they have been accustomed. If we can contribute to that end by means of trade with Russia, or with the Colonies or with the Dominions, or with any other country, then it is the duty of this Government, above every other Government, to make that contribution. I plead for this change of policy, not merely in relation to transactions between this country and Russia, but in order that these credits shall be available for bridging the gap between exporters in this country and markets, anywhere, in any part of the world. I am not pleading that these facilities should be specially extended to Russia, but it so happens that, before the War, Russia was the most important market for the output of the factories in my constituency.
  As I say, I have had occasion to see the hon. Gentleman and the Lord Privy Seal on this matter, and I have placed
  2256
  before the House certain facts. I am glad to say that the resumption of diplomatic relations with Russia has already helped considerably in our Lincolnshire towns. The hon. and gallant Member for Gainsborough (Captain Crookshank), although one seldom hears him expressing any thanks to the Government, ought to appreciate this aspect of Government policy, because it has had the result of materially relieving unemployment in the division which he represents. In the city of Lincoln, a considerable number of men are at work, who would be out of work were it not for the Russian orders which are being executed in our factories. Of course, with the best will in the world, the number and amount of the contracts which can be financed out of the direct resources of firms are necessarily limited, especially when the firms are up against the fact that there is a credit barrage, operating through the banks, which prevents them getting normal accommodation on the execution of large orders for Russia.
  I have been told, and I have every reason to believe that my information's correct, that it was impossible a few weeks ago to get Russian bills discounted at less than 18 per cent. in the City of London. That means that, wherever the orders extend over any considerable period, the rate of discount is so high that it is quite impossible to undertake the work. Immediately bills receive the Government guarantee, they become first-class negotiable securities, and that would enable orders to be taken which cannot be taken at the present time, not only because of the special difficulties in relation to the Russian market, but because of the general restriction on credit, operating through the banks, in the case of trade between this country and Russia.
  I urge upon the hon. Gentleman to alter, at once, the conditions which are being imposed by the advisory committee upon which, as I have shown, banking interests are predominant. That committee declined to look at large scale contracts which could have made an immediate contribution to the solution of the unemployment problem. They declined to consider any applications involving more than 12 months' credit and, in general, their policy is not suited to dealing with large scale transactions in-

  2257
  volving say, contracts of £500,000 or £1,000,000, and those are the contracts which really make a contribution to the solution of the unemployment problem. I ask the hon. Gentleman whether he could not alter the system so that, without increasing appreciably the liability of the Department, he could meet the necessities of certain manufacturers with regard to financing this trade. I ask, for instance, whether a system of 10 per cent. on shipment, 10 per cent. at 3 months, 10 per cent. at 6 months, 10 per cent. at 9 months, 20 per cent. at 12 months, 10 per cent. at 15 months, 10 per cent. at 18 months, 10 per cent. at 21 months, and 10 per cent. at 24 months for machinery used in connection with mines and the equipment of electrical plants, with 75 per cent. covered by insurance, are not terms on which orders could be accepted, the Department seriously considering every proposition on its merits. I do not mean that there should be any wholesale dissemination of credit but that it should be possible to put up a definite contract, involving a definite sum, on those terms for the serious consideration of the Department.
  Up to the present, I have not been able to get any satisfaction from the hon. Gentleman or from the Lord Privy Seal on this important matter. It would be folly of me to overlook the fact that the hon. Gentleman and his colleague have been in a difficult position in relation to this matter. We are all aware that negotiations have been proceeding with the Russian Government. We trust that those negotiations are nearing finality and that a settlement will be reached at any rate sufficiently satisfactory to remove the present financial barrage against Anglo-Russian transactions, and promote the growth of that confidence and good will in the relations between the countries which will automatically clear away many difficulties.
  We are aware of the reactions of this question upon those negotiations, and it may be that the Government feel that in this respect they have a bargaining weapon with which they do not desire to part until they secure a settlement. If that is the reason why the advisory committee have been acting in the way I have indicated, we all hope that circumstances will shortly change and that that difficulty will be swept away. If, on the
  2258
  other hand, the Government are going to leave the position so that whatever their decision and their policy may be, an advisory committee of bankers is to determine what is to be done with monies voted by Parliament, not from the point of view of promoting employment but solely from the point of view of establishing a limited service which will not compete with private enterprise, then it seems folly to risk public money in forwarding such a purpose. We have lost substantial orders this spring because our own manufacturers have not been able to give competitive terms. I quote only two examples given by Mr. Metcalfe in the pages of the "Leeds Chamber of Commerce Journal" a short time ago:
  "An order for 6,000 tons of steel products was refused a few weeks ago, although an earlier order for similar supplies had been executed here. The manufacturers on that occasion had granted deferred payments which they are now unable to repeat. Price, quality, workmanship, time of delivery were all acceptable to the purchasers, so that it was no question of obsolete machinery or high costs of production that lost us this business; it was solely because the makers could not take upon themselves the whole responsibility of granting the Soviet from three to five years' credit."
  The second case to which Mr. Metcalfe refers is in relation to a large order for tractors:
  "The factory to which this business was offered is up-to-date in every respect. Thousands of pounds have been spent on testing these tractors, both in this country and Russia, and they were accepted as satisfactory to meet Russian requirements. Altogether, since January, Russian engineering contracts to the value of more than £3,500,000 which could have been secured by us, had credits been available have been turned over to foreign competitors."
  The credit barrage which is operating in this country and the vendetta pursued by the Conservative party against reconciliation with Russia, are having the effect of diverting employment from the factories of Britain to the factories of America and Germany. At the present time there are 900 Russian engineers in the United States learning the American technique and getting to understand American machinery, and there are 600 American engineers in Russia helping to lay the foundations of American technique there, and expanding the demand for American goods and machin-

  2259
  ery. Seeing that the Government have, in this matter, the support of a large number of Members on the other side of the House, I hope that they will insist that the intention of Parliament shall be carried out, that five year credits shall be available, and that they will discharge their responsibility from the point of view of putting every available man back to work at the job to which he is accustomed.
  Major HILLS: I had the honour of being chairman of the committee which drew up the scheme at present in operation and I am a member of the advisory committee. Both the export credit scheme and also the advisory committee, have been attacked in this Debate from two angles. My right hon. Friend on the Front Bench accused the committee of going too far, and the hon. Member for Lincoln (Mr. R. A. Taylor) thinks it has not gone far enough. I would ask him to bear certain things in mind. The first is that, either you are going to guarantee everybody who asks for a guarantee, or else you are going to act on some principle and some system. Secondly, there is the fact that the insurance of credit is a new and a difficult field of operations. The insurance of credit would have been thought fantastic a few years ago. It would have been thought that credit was a thing that nobody could possibly quote a rate about. The whole field of insurance credit is a new field, and its exploration is due partly to the efforts of the Chairman of the Trade Indemnity Company, and partly to the work of the Overseas Trade Department.
  You cannot say, as the last speaker has said, that you must only consider the amount of business that you would create in this country. You have to consider some principle on which you can guarantee credit. All the applications coming before the advisory committee are considered on their merits, and I want to assure the House that there is no sort of prejudice owing to the constitution or the customs or the Government of Russia. Secondly, the Department does not exist to make profits, but also it does not exist to make losses, and the principle is, as I think the last speaker would agree, that it ought to pay expenses and impose no loss on the taxpayer.
  2260
  I want to say one word on the speech of the right hon. Member for St. Ives (Mr. Runciman), who quoted the criticisms of the Comptroller and AuditorGeneral. I think those are criticisms on the accounts closed on the 31st March, 1929. I do not think we have yet got the Comptroller's criticisms on last year's accounts, for big changes were made last year, and I hope now that the premiums will about pay for losses and expenses and that the whole business will about balance. Anyhow, that was the intention of my committee.
  May I just say one word about those two committees? First c-f all, I was chairman of a committee about three or four years ago that formulated a new scheme, and I had the assistance of some very able friends indeed. We drew up a scheme, which is now in operation, and I should like to remind the hon. Member for Lincoln that the loss incurred was not incurred under this new scheme at all. It was a very serious loss, but it was an old loss, old history, and was incurred when the system was quite different from that which now prevails. Secondly, I want to say a word about the advisory committee. The last speaker suggested a change. He may be right, but personally I do not know where you would find a better committee. I do want the House to be satisfied that every single application is considered on its merits, and when you have to consider guarantees for the payment of a debt or the credit of the importer, you must go to people who are accustomed to that sort of business. I do not see how you can get outside that. The hon. Member says there are more bankers on the committee than he cares to see. I do not know. I have worked with them, and I have found them extremely reasonable people, and it must not be forgotten that the banker has the great advantage that he has means of getting knowledge in foreign capitals that no other business man has got.
  I want particularly to stress the debt that this country owes to the chairman of the committee, Colonel Sidney Peel, and the vice-chairman, Mr. Caulcutt, for they have carried on the work of the committee and have also done a large amount of work between times to expedite the decisions that the committee gives. I think this House has to make up

  2261
  its mind whether it wants the business conducted on the lines of about balancing, or whether it wants to take risks for the sake of encouraging trade or increasing employment here.
  Mr. R. A. TAYLOR: What justification is there for the Act at all unless a risk is taken?
  Major HILLS: Risk means that on balance you lose a certain amount of money. How much do you want to lose? If you want to lose money, it is quite easy to do so. The Act was for the encouragement of employment by taking what I conceive to be the business risk of the insurance of credit. It is for the House to decide, and if Parliament likes, it can risk its money, and it will certainly lose its money, for there is nothing in which money is more easy to lose than insurance, but I put it to the Committee that the scheme on which we are working is a proper scheme on which to work, and if a better committee can be found, I shall be glad to be told its constitution. I do not think we can find a better. I want to say that I do not think the House always appreciates the immense amount of public work that is done by bodies of this sort, composed entirely of unpaid, busy men, who are giving their own time. All that they come in for usually is criticism, and I want to say a word of commendation of the admirable work that they have done. It is a job undertaken entirely from the wish to serve the public and the State. and I want to see that they get fair play.
  The right hon. Gentleman on the Front Bench talked about the transfer of this Department to private enterprise. I stand, if I may say so, half way between the view that my right hon. Friend expressed and the view expressed on the benches opposite. I do not think you can. I think the conditions are quite different from the conditions which would operate in a commercial company which insures credit. In the first place, we are limited to one special trade, export trade, and we are limited to the export of British manufactures. The other great company, the Trade Indemnity Company, can guarantee all credits, for import or export of foreign goods, trade between two foreign countries, and so on. It can guarantee all sorts of credit, and I
  2262
  do not think that any insurance company would take over a business so limited as this business is. I have always seen the very great difficulty in that, and I think there is a middle ground, a "No man's land" between what the commercial company would insure and the risk that is uninsurable. I think there is a middle ground which the State can very usefully hold, and that the State can insure risks that a bank would not take and yet avoid insuring risks that would be too risky. If you are to have this sort of business—and it has helped our trade in the past—I think it must be carried on by the State. I do not think that private enterprise could or would do it
  Just one word about the period for which the credits run. We have power to give long-term credits, but, on the other hand, the Act is experimental, the ground is unknown ground very largely, and I do not think it would be advisable to go too far in giving credit of the very extended period of five years as suggested by the hon. Member opposite. I think you have to go slowly, to make sure of your ground, and to proceed always on the assumption that you do not want to lose money, that you want to guarantee all the credits that you can as long as you believe that at the end of the year you will about balance. I do not think you should go too far in these long-term credits.
  I want to reinforce a suggestion that comes in the report of Colonel Peel, Sir Otto Niemeyer, and Sir William Plender. With regard to delays in dealing with applications, it is not the fault of the Department or of the advisory committee, but it lies in our constitution. We have a committee that meets every Wednesday. They cannot meet more than once a week, and important eases have to go before them. In certain cases the chairman and the Department settle the matter for themselves, and then it comes up for confirmation by the committee afterwards, but all the more important cases go before the advisory committee. Supposing a case is investigated, that takes some time, and then it comes before the committee, we will say, to-day, but it may be that some of the members want further information. It then has to go back and wait till next Wednesday, and that means a delay in many cases.

  2263
  The report of these three gentleman advocates an executive committee of three, who would, I suppose, sit almost continuously. Anyhow, they could be got together at any time, and that would mean a very great saving in time. I am perfectly certain, for many reasons, that that would be a very great improvement. It would expedite matters, it would mean that the three members were continually in touch with all the demands for credit that came in, and it would mean that they would get control of the whole of the business and have it in hand once a week. I believe that would be a very valuable reform.
  Lastly, I want to say a word about Russia. I have on previous occasions in this House pleaded for the extension of the Export Credits Guarantee Scheme to Russia before it was so extended. I do not see why, given proper conditions, we should not give credit to exports to Russia. I want again to assure the Committee that in the committee's considerations only the business aspect of the transactions is borne in mind. The Committee has been criticised, but after all, it is a committee of business men, and they are accustomed to judge all matters on business lines. They approach this matter on business lines, and I do not think that any body, however constituted, could possibly judge it otherwise. If you had not a solid rule that business risks should be the deciding theory, you would set out on a sea where there is no shore, and the only end would be the exhaustion of the £26,000,000 credit which this Department is allowed to pledge. I believe that there is a great work before this committee, and that they are doing a great work. They are helping British trade and will help it more in future. I should much regret any change of the system on which this Department is run and which before credits are granted does not regard the risk which would be incurred.
  Mr. PRICE: I listened with interest to the right hon. and gallant Gentleman the Member for Ripon (Major Hills), and I agree with him that this House should decide whether it is fair to take a risk in this matter of export credits, because undoubtedly a risk must be involved in extending credits beyond what has hitherto been the custom. I listened also to
  2264
  see whether he could give any reason why the scope of the Export Credits Scheme should not be extended beyond what it is now, and I was disappointed that I did not hear a sufficiently reasonable reply to the criticisms of my hon. Friend the Member for Lincoln (Mr. R. A. Taylor). Any advance of the Export Credits Scheme very largely depends upon its elasticity. If we look at the Report of the Niemeyer Committee we see something which very much impairs its elasticity. The Report says on page 8:
  "The major portion of the business accepted has been for relatively short credits. e.g., up to six months."
  On page 9 it says:
  "We think the scheme should remain one for relatively short credits. Long credits involve entirely different risks, and it is not, in our view, desirable that such applications should in general be entertained."
  The situation in this country is too serious, particularly in our great northern industrial areas, to take the matter in that sense. We have to take risks in dealing with the terrible problem of unemployment, and those who, like myself, have the honour of representing constituencies where 12 per cent. of the adult population are in receipt of either unemployment benefit or outdoor relief, naturally feel that, in anything which would tend directly or indirectly to stimulate our export trade, we must take risks. This Committee would not be doing its duty if it did not do so. The Niemeyer Committee Report quotes figures of guarantees which have been given, and the total comes to only £4,000,000 a year; the total of our export trade is £725,000,000, so that the guarantees amount to a very small and almost insignificant sum. The reason why it is so necessary for this scheme to be extended to apply to longer term credits than has hitherto been the case is that there are countries with whom we have commercial relations who are not in a position to pay cash down, or even to have short-term credits for large orders for constructural engineering goods. It is a different thing when we are dealing with commercial relations between this country and a highly industrial country on the Continent, but when we are dealing with undeveloped colonial areas, and countries like the South American Republics, Eastern Europe, Russia, the Balkans and so on,

  2265
  these countries are not in a position to pay except on long-term credits. That is even more the case in regard to Russia and Eastern Europe than in regard to the South American Republics, because there there may be companies operating, such as railway companies, which are owned and controlled from London, and there is not the necessity for long-term credits. In Russia, the Government are attempting a great industrial reconstruction of the country. How far they have succeeded it is not for us to say, and it is not for us to inquire into the political and economic theories of the people who are controlling that country, but where it is a question of the business in which our unemployed problem may be partially dealt with, the question does concern us whether we can push our export trade into that country.
  The Government there are not in a position to pay at very early dates, because they are using all their energy and surplus economic wealth to develop the country. Consequently, we must extend our credits at least two years, if not more. Losses of certain orders have been quoted owing to the absence of credit, and I have heard of the loss of an order of £600,000 worth of trawlers, which would have come to this country if the firms concerned could have got two years' credit. Therefore, I plead for greater elasticity in the interests of the credit scheme. I would like to refer to the indirect effect upon world markets generally of the lack of long-term credits to Russia. There is no doubt that the absence of these credits stimulates the Russian Government to pay for their imports by pushing their exports as hard as ever they can, at a time, too, when we have falling prices on the world markets, and over-production in certain important articles of raw material. I know that that is the case in the timber trade. The Russian Government are increasing their export of timber, and trying to export 750,000 standards this year, which is 250,000 standards more than last year, and this at a time when the markets of Europe can only with difficulty absorb what they imported from Russia and the Scandinavian countries last year.
  The effect, therefore, of not allowing Russia to receive these credits is bound to be to make more acute the deflation of prices, and the general trade depression, which have come about owing to a
  2266
  number of causes, and which in this case is being made still more acute by excluding Russia from long-term credits. I hope that the Government will apply their minds and energies to solving this problem as soon as possible. I do not wish to say a word which would make their task more difficult, for I understand that negotiations are going on, and we all hope that they will meet with success. I hope, therefore, that what I have said will help to strengthen their hands.
  Mr. A. M. SAMUEL: I must offer my congratulations to the hon. Member for Whitehaven (Mr. Price) on his skilful speech. He has no doubt been in the export trade, and knows what he is talking about in regard to Russian trade. I notice that there are other hon. Members taking notes, including the hon. Member for Dartford (Mr. Mills) and the hon. Member for West Wolverhampton (Mr. W. J. Brown), and it would be very instructive and helpful if they would oblige us by telling us their views, so that we may know what is the mind of Members on the other side in regard to the export credits scheme. I do not propose to deal now very much with Russia; I hope to deal lightly with it at the end of my remarks. It is within the knowledge of the hon. Gentleman, the secretary of the Overseas Trade Department, that he and I sat on its advisory committee for some years, and that I had charge of this scheme for three years as Secretary of the Overseas Trade Department. Therefore, I have nothing in my mind that is hostile to it. My right hon. Friend, who was the last Secretary of the Department, and I are almost godfathers of the present scheme. Therefore, such observations as I have to offer can have no purpose other than to strengthen it, and we shall be assisted by the views of the hon. Members for West Wolverhampton and Dartford, who both represent industrial constituencies.
  8.0 p.m.
  The hon. Member for Lincoln (Mr. R. A. Taylor) used the expression that there is a credit barrage, and he quoted some statements made by Mr. Metcalf. If I did not misunderstand him, he means that Russian buyers—that is the Russian Government—cannot purchase from us goods which we wish to sell, in order to put our people into work, because there is a credit barrage up against them; a

  2267
  clog owing to a lack of credit. There is not a word of truth in that. I do not impugn the hon. Member's truthfulness, but I impugn his judgment. [Interruption.] I am making no personal reflection on his truthfulness. Here is a synopsis of the figures of Russian trade over the last two years. In 1928 we bought from Russia goods to the value of £21,500,000, and Russia only took from us goods to the value of £4,750,000. She therefore had an unexpended credit here of £16,750,000. What is the good of the hon. Member saying there has been a credit barrage? Here is ample credit with which Russia could buy of us.
  Mr. R. A. TAYLOR: Would the hon. Member apply the same argument to a country like Denmark?
  Mr. SAMUEL: I should apply it to every country's balance with similar figures. You cannot break the laws of economics, or deny the amount of credit.
  Mr. TAYLORThe hon. Member knows perfectly well that in a country like Russia there has to be a longer credit period for all her imports owing to the absence of accommodation abroad, and, therefore, when I say "a credit barrage" what I mean is that orders are being lost owing to the refusal of financial facilities similar to those that have existed in Germany and exist to-day in America. They are being lost because there is a financial barrage against Anglo-Russian trade.
  Mr. SAMUEL: I am sure the hon. Member will not take offence if I give an answer which Dr. Johnson would give: "Fiddle-de-dee!" Russia sold to us goods to the value of £21,500,000; we owe Russia £21,500,000 and we are willing to pay. Russia takes goods from us to the value of only £4,750,000. We in Lincoln and Norwich and Manchester were ready to sell them goods to the value of the credit balance amounting to £16,750,000. What did Russia do with that credit? She could have taken it either in money or in goods. She took it in cash, or exchange instead of in goods. What is the good of deceiving the people of Lincoln by telling them that there was a credit barrage? She had £16,750,000 to spend here and did not. In 1929, we bought from Russia
  2268
  even more than we bought in 1928, and for the greater part of 1929 the hon. Member's own Government were in office and were giving Russia the benefit of the Export Credits Scheme. We bought of Russia goods to the value of £26,500,000. Why did they not buy goods to the value of £26,500,000 from us? They bought goods to the value of only £6,500,000. There was £20,000,000 unspent by Russia, £20,000,000 which Russia could have used in buying goods from us. What has she done with that money?
  Mr. PRICE: Has not the right hon. Gentleman heard of triangular trade between three countries, and not just trade between one country and another?
  Mr. SAMUEL: No, I have never heard of it, although I once wrote a book on bills of exchange. They took the £20,000,000 of credit, and, by a system of triangular exchange, used it to buy goods in Germany or America instead of buying them here. That is the answer I do not wish to be polemical, and I do not say they have used the money for propaganda. I will put that question aside. They used this credit. which they might have used to buy agricultural goods in Lincolnshire, which is the hon. Member's county, or boots and shoes in my county of Norfolk—
  Mr. R. A. TAYLOR rose—
  Mr. SAMUEL: No, I really cannot give way.
  Mr. TAYLOR: But you are making statements reflecting on my honour.
  Mr. SAMUEL: No, I am making statements reflecting on the hon. Member's judgment. But I will leave the Russian matter there.
  Mr. TAYLOR: Will the hon. Member permit me?
  Mr. SAMUEL: If the hon. Member tries to get away with the statement that there is a credit barrage, all I can say is that either I am crazy or that he is ill-informed.
  Mr. TAYLOR: You will not tell that to the manufacturers in Lincoln
  Mr. SAMUEL: I am a retired manufacturer myself. I have been to Lincoln. I addressed a meeting there. I have been in business and have watched firms

  2269
  trying to sell to Russia, and I had to administer this very scheme for three years as Secretary of the Department of Overseas Trade.
  Mr. TAYLOR rose—
  Mr. SAMUEL: No, I cannot give way again. Let us analyse the White Paper. There is an unexpired period of 18 months. It was provided that the guarantees should be given "before the 8th day of September, 1931." The Government are proposing by this Resolution, which we are not opposing, to extend the period until 1940. The scheme which is now being operated is the one which I helped to start in 1926. I went all over England advocating it; it was taken up and brought to fruition by my right hon. Friend the Member for Chorley (Mr. Hacking). I am therefore in complete agreement with the scheme. Let us examine this White Paper and see what the scheme is aiming at, in order to understand what safeguards should be imported into it before it is renewed. As I have said over and over again, and as was said by my right hon. Friend, we were not anticipating that this would become a permanent branch of the Government service. What I wanted to do was to get the scheme well launched, to let the country see what a system of insurance against bad debts in the export markets was capable of; to let exporters see that they could get financial aid if they applied for it; and after a period to let the Great British insurance companies come in and do the business and eventually take the scheme off the hands of the Government and administer it. The House must be very careful to see that we are not being committed to establishing a permanent Department for administering a trading scheme in a manner which was never intended when the scheme was first started.
  The scheme, as we intended it, was to be an insurance against bad debts in the export markets; in other words, to guarantee the credit of overseas buyers. An overseas buyer comes here and says, "I want to buy some tractors, or some boots and shoes, or some cotton, but I must give a bill for them as I cannot pay for them now." He wants to live on the "O.P.M. system"—on other people's money—a system which has been very much overdone. I was brought up in an old family firm in a large provin-
  2270
  cial city and we should have been horrified to deal on a five years' credit system. We never asked for such credit for ourselves, and if a customer had asked for five years' credit we should have said, "This man is living on overdrafts." A five years' credit system is quite wrong—even a two years' or a one year's credit system would be. The proper credit is 90 days, for no man can tell what will happen to him after six months. A man ought to be content with three months' credit. The five years' credit system advocated by hon. Members opposite is unwholesome and uneconomic.
  Mr. TAYLOR: That was your scheme.
  Mr. SAMUEL: I was never in favour of the five years' period. A customer who takes your goods and cannot pay till the end of five years is a very dangerous man to trade with. What was this scheme introduced to secure? It was introduced to increase our export trade. The Minister will bear me out, because he was my colleague on the advisory committee many years ago, when I say that very many applications for credit facilities were lodged with us and accepted, but were not afterwards taken up. We considered them, though the hon. Member for Lincoln would have the House believe the advisory committee intercepted the applications. [Interruption.] I took down the hon. Member's words: "There should be a change in the personnel of the committee. Their policy is unsuitable for contracts. They decline to consider applications. Their policy was unsuitable." He asked for a change of personnel, and implied that the conduct of the committee was unsatisfactory. Often and often we were asked to give facilities and we offered facilities. Later we asked, "Why do not the people who asked for and were granted these facilities come to take up the credits?" and we were told that they had failed to get the orders. It is no use firms saying they cannot get business because they are unable to secure credit facilities or saying that this scheme is not administered efficiently. It is willing to give credit facilities to warrantable schemes, but the business is not secured because the goods are often found to be too dear. The tenders were too high in some cases.
  Mr. MILLS: That is not true.
  Mr. SAMUEL: The Minister knows that as well as I do.
  Mr. MILLS: May I make an appointment with the hon. Gentleman—
  The CHAIRMAN: Order!
  Mr. SAMUEL: The scheme has shown that there is no clog on the export trade owing to the lack of credit facilities—I am not talking about Russia—and the Minister himself can confirm that we are losing business because our goods are too dear. I am not going into the reason why they are too dear, but it is a point which the Lord Privy Seal ought to bear in mind in connection with his efforts to find work for the unemployed. It is not owing to lack of credit facilities. The working of the scheme has shown that the public want credit facilities to be available and it has shown that they can be given, and, what is more, it has shown the great insurance companies that the public are anxious for these facilities. But there should be certain safeguards. The 1926 scheme has now been working for four years, and that is a long enough period to enable us to see whether the risks we are taking in the countries where we are taking them are warranted. We ought now to review the position, to plot out the world, and to see in what areas we have lost money, why we are losing money there and whether the premiums charged are suitable for the risks we are bearing.
  Hon. Members must remember that we can buy business too dearly. There is such a thing as doing a pound's worth of business and paying two pounds for it. We bought £200,000,000 worth of export business in Mexico, all of which appeared in the Board of Trade returns of the export trade, and we have lost every shilling of the money. We held the loan securities for the goods that went out, and were reflected in the Board of Trade returns. We rubbed our hands and said, "Well done! Look at our Board of Trade returns!" But those goods went out as gifts. Loans were raised here to pay for those exports; credit was thus given to Mexico for them. We subscribed loans and so gave employment to the workmen who produce the goods, and those who subscribed the loans held the paper. But instead of the loans yielding interest we have seen to-day, in answer to a question on the Paper, that
  2272
  every penny of the money which was subscribed is now lost. The goods thus went out as gifts. As I say, we can buy business too dearly, if under this scheme we are giving credit to certain countries and are making bad debts. Moreover, bad debts in those countries are made by traders who are not taking advantage of these facilities, and we ought to know what the losses are. We must estimate the value of trade with a country where we suffer large losses by bad debts.
  When we come to the Sound Reading of this Bill, I am going to ask what has been done with credit facilities connected with Rumania? Has what we have done been justified? Can the Secretary to the Overseas Department tell us what are the losses shown in all our credit guarantees between this country and Rumania. Can he tell us what are the losses by default of obligations, for which the Overseas Department has given guarantees in respect of goods exported by British exporters to Rumania. Perhaps it would be better to decline taking further risks. Is the business on balance a loss or an even balance, if not a profit? The same thing applies to another country with which we do a large amount of business. I am sorry to say that I have heard that the amount of trade defaults in Brazil has been very serious. I have also heard, and I hope it is not true, that the nett result of our general export trade to Brazil has been very bad, that a large amount of bad trade debts have been made with Brazil.
  It is a well known fact amongst fire insurance companies that sometimes a company finds it is an advantage to withdraw from a certain area. I was brought up in the City of Norwich Where we have one of the biggest insurance companies in this country. I have been told that for instance it has paid a company to cease writing risks in America, and for the same reason it may pay us to adopt that policy of export credits with certain countries. There are countries where our export trade can be bought too dearly and for that reason we should cease writing Government credit risks in the areas in which we are making undue losses.
  As for Brazil we buy a great deal less commodities from Brazil than she buys

  2273
  from us. Brazil is a rich country and very friendly towards us. She is anxious to buy from us, but Brazil is badly organised commercially, and our commercial developments with that country are also bad. Brazil buys £19,000,000 worth of goods from us, and we only buy about £3,000,000 from Brazil, and that uneven balance ought to be put right. We might use our Export Credits Scheme to stimulate our exports to Brazil, of a less risky character. To accomplish that we should induce the great British firms, who have invested £300,000,000 in Brazil, to place their orders for railway and electric plant with this country. At the present time those companies buy elsewhere. Those great companies, fostered, supported and financed by British capital in Brazil, buy their railway and electrical plant elsewhere, and we export to Brazil a very small percentage of such goods from this country. A development of this kind would stimulate the purchase by us of Brazilian products, and so create Brazilian credits here.
  There is another method by which we could put right any adverse balance in our Brazilian branch of the export credits balance sheet. The hon. Gentleman might take steps to make arrangements with the Brazilian Government and exporters by which we could take more beef and more cotton, more iron ore, manganese and fruit from Brazil. More exports from Brazil would enable Brazil to buy more largely from us, and at the same time would tend to correct the risk of loss by reason of our giving credits to exporters to Brazil. I am very interested in the credits scheme. The hon. Member for Lincoln represents a district which is the centre for agricultural machinery manufacturers, but the hon. Member did not tell us that the agricultural machinery people had accepted large Russian orders under our Export Credits Scheme.
  In 1928, we were told about the large number of people who were out of work, and that if the Tory Government would only open up export credits with Russia we should be able to put unemployment right. We were told that there were 140,000,000 people in Russia who wanted to buy 140,000,000 articles. The whole thing has ended in smoke. Let us look for a moment at the exports. I have had
  2274
  the figures taken out purposely. Our exports to Russia in 1928 for January and February were about £900,000. Our exports to Russia in 1929 for January and February were £825,000, but in 1930 for the same months the amount was only £1,500,000—just £600,000 above the 1928 figures. There is nothing in those figures to confirm the view that the opening up of trade with Russia is likely to put our unemployment problem right. This £1,500,000 worth of goods could all along have been bought out of the £20,000,000 of Russian 1929 credit unspent here.
  Mr. PERRY: May I draw the hon. Member's attention to the Report of the British trade delegation of the boot trade which went to Russia, and came back with the prospect of an order for 3,500,000 pairs of boots, but we were not able to get credit to carry out that order?
  Mr. SAMUEL: I know all about that, and I am surprised that the hon. Member for Kettering (Mr. Perry) should speak of it. I know that the Northampton boot trade asked for credits amounting to £3,000,000 for boots and shoes for Russia. They went to see the Chancellor of the Duchy of Lancaster and he turned the request down. That was not done by a wicked Tory Government, but by one of our plutocratic demagogues who refused the credit those people wanted and merely told them that they should rationalise their trade. That was the only satisfaction the Northampton people got in response to their application for export credits to the Chancellor of the Duchy for 3,500,000 pairs of boots.
  When I was Minister for Overseas Trade, I was badgered by hon. Members for export credits to restore the export of herrings to Russia. I had heard a great deal about the export of herrings to Russia, and how the poor herring fishermen had been deprived of their markets. I spent a fortnight of my summer holiday addressing meetings at Fraserburgh, Buckie, Lossiemouth, and making inquiries at another place the name of which I have forgotten—I think it was either Cullen or Macduff. I pointed out to them that, although they had not sold salted herrings to Russia, that was no fault of the wicked Tory Government or of the wicked Minister for Overseas Trade, namely, myself. I pointed out that Russia had plenty of

  2275
  credit with which to buy those herrings—sufficient to buy all the herrings that ever swam in the sea all that year—if she liked to use her credits. I showed what nonsense it was for anyone to tell the fishermen of the North of Scotland, or of Yarmouth or Lowestoft, that this reopening of export credits with Russia would put matters right in regard to employment.
  Look at the figures. How much have export credits for Russia helped the herring fishermen? The Trade and Navigation Accounts for 1929, page 82, show that in 1927 the value of the herrings sold to Russia was £155,000, and, in 1928, £74,500. [An HON. MEMBER: "That was after the Arcos raid!"] Now that this God-sent Socialist Government has come in, with all the facilities for export credits, the value of herrings sold to Russia in 1929 was a trumpery £22,000. What good have export credits done here? In 1928, January and February, we sold £74,500 herrings to Russia, and in the same two months of 1930 only £84,000 after resumption of diplomatic relations. This whole question of Russian trade is a chimera, and the sooner the Socialist party wake up to it the better it will be for them and for us all. As my right hon. Friend the Member for Chorley has said, sooner or later—it is no use prophesying, but we are entitled to our opinions—there will be a financial disaster in Russia. When it may be I cannot tell; I do not know. I am not going to hazard an opinion about the present system of government there. Probably there is nothing to supersede it, and it will go on. But, as surely as the dawn comes, economic disaster will come; you cannot break the laws of economics. As Lord Passfied, then Mr. Sidney Webb, said to one of his own supporters in this House from the Front Bench opposite, you cannot break the law of supply and demand; if you try to do so, it will break you. What will happen in Russia will be this, and even now it is to be seen in operation. If the present system of extreme Marxian Socialism goes on, sooner or later Russian finances will come down from economic exhaustion, and then Heaven help the man who is caught in the door when the door slams.
  2276
  It is true that the Soviets have never yet defaulted on their obligations to our firms, but it is like a game of musical chairs. You have 14 people and 13 chairs. The music goes on and then suddenly stops, and one man has to sit on the ground. Sooner or later it will be found that, if the Russian financial system continues as it is now, it will stop and then come down from economic exhaustion, and then some one will have to sit on the ground with Russian unpaid bills. If you take risks in Russia, you will have to do exactly what the fire insurance people do with regard to the Wood Street area. There is an area in the City upon which the great insurance companies will only take a limited amount of insurance. I agree with my right hon. Friend that when that time comes we may be face to face with a loss through our risks materialising. Let it then be the case that we have not too much risk running in Russia. At the present time we have the taxpayers' money risked in Russia to the extent of one-third, or even two-thirds, of the export credit guarantees. That is too large a proportion, and the hon. Gentleman should say whether he proposes to take so large a risk again.
  Finally, I want to draw the attention of the Committee to the humiliation of the Labour Government. As I understood it, it was said, either by the Foreign Secretary or by the Prime Minister, that they would give no British guarantee of credit to Russia. British credit to Russia was in 1924, I think, one of the causes of the fall of the Labour Government. Let me remind them of this: Suppose that Greece or Austria came here, as they have done recently in the past, and tried to raise a loan, it was necessary for Great Britain to guarantee the bonds. Thus, when Greece and Austria have raised loans, Great Britain and other countries have put their names on the bonds, and what was the effect? Great Britain with other countries lent their credit and enabled Greece and Austria to raise loans in London; we and they guaranteed the credit of both Greece and Austria.
  The Prime Minister and the Foreign Secretary have declared, here and in other places, that they were not going to guarantee the credit of Russia, but now they are put in this humiliating position,

  2277
  that they have eaten their words. Russian paper cannot be discounted in the markets of Britain. Let Russia buy as much as She likes, and the more she buys and pays for the better I like it. She buys certain things and needs long credits. But the paper or instruments of payment that the Russian Soviet gives to the British exporters, in return for goods, cannot be melted or turned into money with which to pay wages and buy raw materials, because those who are willing to lend money—bankers, bill discounters, and others—are not willing to lend money on or discount bills which bear only Soviet Russian signatures as acceptors. What has been the result? It is a humiliating thing. Great Britain, through the Export Credits Scheme, has put her name upon and guaranteed the credit of those Russian instruments, for without that guarantee of the British Government no money could have been raised upon the instruments by the export traders for wages or raw materials. That is to say, if English words mean anything, the British Socialist Government has guaranteed a short loan to Soviet Russia by guaranteeing Russian credit under Export Credits.
  Mr. MILLS: The hon. Member for Farnham (Mr. A. M. Samuel) has spoken with a great deal of assurance, but has not said a single word in relation to the Report which is in the hands of Members of the House. Listening to his long diatribe, one would imagine that he was just making a few casual remarks about Russia, but at every fifth Second or so he returned to the subject, and one would imagine that the overseas credit operations conducted by him and by the right hon. Gentleman for whom he has such a great fondness were such wonderful success that there was no need to say any more on the subject, except to speak of the betrayal of British honour by the Labour Government. How does that square with the Report which every Member of the House has in his hands? It is a confession from beginning to end that the so-called advisory committee has never functioned, that not one-tenth of the hon. Members opposite know anything at all about the details at the orders that have been put before the Committee by great industrialists.
  The hon. Gentleman is very fond of misquoting, and of reading half truths into statements made on this side of the
  2278
  House and, when challenged, refusing to answer. I will make this challenge to him. If he will make an appointment to meet the managing director of the biggest firm of engineers in Great Britain—a gentleman with a wide and extensive knowledge of every other engineering works in Britain—I will guarantee that that gentleman will give him evidence from a firm of international repute, who have works in all parts of Great Britain, three of them in the Dartford Division of Kent, which I represent, who are willing to trade with Russia, who are anxious to get orders from Russia, whose prices are right as compared with American prices, but who have not the financial facilities behind them that our great competitors have in the American market, who are paying higher wages.
  If the argument means anything at all, it means that the overseas credits scheme was good, but that we are losing trade because we are too dear on account of the fact that English wages are too high. That is what you mean, but you have not the courage to say it. I challenged the Duke of Northumberland himself, that great protagonist of die-hard Toryism, in 1923, and my challenge has never been answered by any of his kinsmen in this House or by himself in all his diatribes in the "Morning Post." He has benefited to the tune of thousands of pounds by exports of coal to Russia, which were paid for on the nail, and I will give the hon. Gentlemen the name of the export manager in Blyth in Northumberland — Aaron Walton. Although the Conservative Government in 1923 brought pressure on him, not to carry on those financial commitments, the undertaking was carried out to the letter by these trading concerns in Russia. After all, there are Members in the House who represent great industrial centres in the Midlands, Wolverhampton and Birmingham, where a very great industry has been built up sending out all kinds of manufactured articles to the inhabitants of the Cannibal Islands. I do not know whether they ask any questions whether the missionaries are eaten before sunrise or after sunset, but I believe an extensive trade is carried on. But it seems to me you have only to mention the word "Russia" in this House and it is immediately assumed that we are attempting to sink the whole

  2279
  system of British credit by trying to do something which is of itself immoral because we dare to mention it.
  The hon. Gentleman must come up against the facts. Before he ceased his connection with Russia as Minister of Overseas Trade, before his chief gave political sanction to the burglary of the premises in Moorgate Street, there were buyings by the Russian Government to the tune of £92,000,000. I ask the Minister, in reply to that long series of allegations, to give a single instance of any default, even to the extent of 1s., with regard to the trading that has taken place between that country and ourselves. As against the hon. Gentleman's assumption of a superior understanding of economics and all the rest of it, let me ask him if he cares to put himself against the Leeds Chamber of Commerce? What did they say?
  "What our manufacturers require most of all is some means whereby Soviet long-term bills, say from three to five years, can be discounted at a reasonable rate of interest and with not more than 30 per cent. recourse on the manufacturers. Early last summer it was officially announced that Russia had been included in the Export credits Scheme. Since then those firms who have tried to obtain long-term guarantees from this Department have found that the facilities offered are so slight and so difficult to arrange, and the interest charges so high as to be of little practical use."
  I am speaking now for a Division which is very hard hit in the matter of engineering employment. The firm of Vickers, which during the War employed tens of thousands of men and women in the manufacture of cartridges and machine guns and high explosive shells, are now turning out agricultural tractors, not only for the Russian market, but side by side with a stable annual output for the Russion market they can arrange their prices for the Colonial market, which is at present the monopoly of American manufacturers. We can give instances of work that can be found not for two but for seven continuous years. This vast country is an El Dorado very badly developed before the War under the Tsarist regime, but now open. I visited Russia in 1921 and went through it from the Polish border to the Asiatic border. On my return I said no one in this country, least of all the industrialists or the Government, seemed to be aware that the new economic policy had been in opera-
  2280
  tion and that commercial travellers from every other country in the world were there doing business, while our own people were still talking in terms of political prejudice.
  Sir BASIL PETO: Is it not a fact that the new economic policy has been turned down and is not operative?
  Mr. MILLS: No, it has not been turned down. Apparently it is necessary for hon. Members opposite to make themselves acquainted with the Russian situation. Practically every big industrial combination from the Baltic Sea to the other side of the Pacific, has got their offices and staffs hard at work. From my division, until the time of that burglary, there were going out from Vickers' works not fewer than 20 omnibuses every week, all ready fitted and painted, down to the name of the town to which they were going. All that stopped. That work has gone to France. Orders were going from every other town in Great Britain. The hon. Gentleman himself knows perfectly well the proportion of pre-War exports to Russia from Gainsborough and Lincoln, and that trade could come back here if we only had the opportunity.
  I do not want to take up time. I have tried to be a faithful and loyal supporter of the Government. I have sat quiet hour after hour and month after month, because the idea is to try to get business through, but my constituents are out of work by the thousand. It is not due to the fault of the Lord Privy Seal but to the short-sighted policy of hon. Members opposite, who will not take any note of changing world conditions. There is no question that the world has changed. If only the people who started the War had any idea where it was going to finish, they might not have given the word "go," because outside this country the occupation of Kings has been scheduled in the list of dangerous occupations. Germany, Austria and other countries, including Russia, have gone west. The books in the Library will prove that the removal of the Tsar was not the work of the British Labour party or of the Bolshevists. It was the deliberate policy of the Allied Governments. It was the only condition on which the United States came into the War.
  The CHAIRMAN: The hon. Member is digressing from the Resolution.
  Mr. MILLS: I must apologise for attempting to get down to the historical genesis of the hon. Gentleman's prejudices. But I leave it at that. I only hope it will be borne in mind. I will repeat what the hon. Gentleman derided. If there are 150,000,000 people who only export raw materials and who need manufactured articles, it will want much more than his method of thinking to convince the electorate that the exchange of their raw materials as against our manufactured articles cannot be to the good of the country that we represent.
  Sir B. PETO: I am sure the Committee will have realised that the hon. Member for Dartford (Mr. Mills) was not in any way responsible for prolonging the Debate on this question, because it was obvious that such a pressure developed in him that he had to find vent in speech here no matter what the occasion. I have only risen because I ventured to interrupt the flow of the hon. Member's oratory for one moment in asking him whether he was not aware that the new economic policy which he was, apparently, applauding, and which he regarded as a reason for export credits being granted in greater measure even than is proposed, was no longer the policy of the present administrators of Russia. He told me, in effect, that my intervention was nonsense, and that the new economic policy was still in force. I would only suggest to him that he should renew his acquaintance with Russia and visit it again from the borders of Poland to the Caspian Sea and then, I think, he would find that private trading has entirely been abrogated, and is a thing of the past. May I ask him to consider what is the effect of the granting of export credits on what I may term the old economic policy, the policy of paying your debts? If it is argued that the payment of debts is wrong, because they were incurred under some other régime, I suggest, whether a new economic policy be in force or not—I still maintain my opinion, which is very well known, and has been made amply clear in the public Press—that the real bar to the development of industrial exports to Russia is the fact that those who preceded the present generation of industrialists have been robbed of everything which they sent to Russia.
  It is no answer to say, as the hon. Member for Dartford said, that certain
  2282
  people received immediate payment for the contracts which they made. I do not know whether the hon. Gentleman is a fisherman, but if he is, he will know that there is such a thing as ground-bait—something scattered in the water to attract the fish. I suggest that that is very likely the reason why we have had these prompt payments on the first transaction. Taking the trade done by this country in Russia in recent years as a whole, it has been some four or five to one against us. The Russian Government who are the sole arbiters and the sole controllers of all the export trade to Russia, have amassed immense credits in this country. In one recent year they amounted to no less than £13,000,000, not a penny of which was spent in purchasing goods to find employment for the people of this country. [HON. MEMBERS: "Why?"] These credits were used for buying goods made in other countries, because we are such fools that we cannot protect our own working classes and see that they have fair play. The hon. Member who moved the Motion on the Paper has my heartfelt sympathy, because it must be very hard and uphill work to try by export credits or any other means to develop the export of industrial products from this country, particularly to such a country as Russia, considering its past with regard to transactions in this country, and the fact that Russia and the Soviet Government feel that they can send any quantity of their products here and set up any amount of credit in this country, and that they can buy the very minimum of goods which find employment for our people. They can use these credits in other markets, and then come to the hon. Member on the Front Bench opposite, and ask for fresh credits to be set up under this export credits scheme.
  Mr. PERRY: There is one point which I should like to bring to the attention of hon. Members. One has been interested in the direct conflict of opinion between the views of the right hon. Member and the hon. Member who have spoken from the Front Bench opposite. The hon. Member for Farnham (Mr. A. M. Samuel) rather minimised the possibility of doing trade with Russia. On the other hand, the right hon. Gentleman the Member for Chorley (Mr. Hacking), in his criticism of this scheme, pointed out, in answer to a question, that the amount granted or

  2283
  guaranteed during the month of March, this year, amounted to about £585,000 as against only £400,000 to all other countries. He rather stressed the point that too much credit was being guaranteed with regard to trade with Russia. I think it would be better if the right hon. Member and the hon. Member had tried to settle the difference between them. I hope that it will be a long time before we have again to listen to such an argument as that put forward by the right hon. Member for Chorley when he urged that in regard to the construction of warships or the manufacture of munitions of war it might be desirable to consider how far State guarantees could be used to secure those contracts for this country. It is bad enough, many of us on this side think, for munitions of war to be made in this country and then to be used by other countries against us. Maybe the right hon. Gentleman wants an object lesson. I would ask him to go to the town of Bedford, where he will find the usual war trophy, on which there is this inscription:
  "Presented to the town of Bedford by the 5th Bedfordshire Regiment. Captured at Gaza."
  On reading it I imagined deeds of heroism by the youth of Bedford and the county in the capture of that gun. Then I walked round to the other side of the gun, on which I found this inscription in letters much bolder:
  "Made by Sir George Armstrong, Whitworth & Co."
  That is bad enough, and I submit to the right hon. Gentleman that it would be ten times worse if the women whose homes have been rendered desolate by the War, and who have read that inscription, were also reminded that by such credits that gun had been transported abroad and then used against us.
  Mr. HACKING: Does the hon. Gentleman suggest that that gun would not have been manufactured if it had not been manufactured in this country?
  Mr. PERRY: I do not think so for a moment. It would be infinitely worse if the women whose homes have been rendered desolate had to think that British taxpayers' money had been used to guarantee the credits under which that gun was supplied.
  Mr. HACKING: Is the hon. Member aware that the Italian Government is at present giving credit facilities to the builders of ships of war, and as a result many of the ships previously built in this country, and finding employment for people in this country, are now being built in Italy, and finding employment for Italians? If these ships are to be built, I would prefer that they should find employment for British citizens.
  Mr. PERRY: The particular point I want to impress on the Committee to-night is in connection with the point to which the hon. Member for Farnham referred relating to the boot and shoe industry. The boot and shoe industry at the moment, like many other industries, is suffering from acute distress. Out of about 120,000 employéthere is an average unemployment of, roughly, 13 per cent. and only 75 per cent. of the productive capacity is being utilised. The boot and shoe industry throughout the country has been looking round for extended contracts. They found that the tariffs in Germany and Italy are practically closing those markets against us. They found also that in Paris, in Egypt, in Canada and in Australia the tariffs are making trade more difficult. At the same time, they are pressing upon the Government to continue their efforts not only in the direction of a tariff truce but also in regard to the reduction of tariffs.
  The men who control that industry can be congratulated on having one of the most up-to-date industries in this country, and they have pressed this point of view upon the Government. Their representatives, who went on a British trade delegation to Russia, found that Russia, with a population of 150,000,000, immediately after the revolution was only producing 13,000,000 pairs of boots per year in her State factories, In the year 1929 the production from the State factories had increased to 40,000,000 pairs, while the village handicraft and other factories were producing an additional 35,000,000, making a total of 75,000,000 pairs of boots per year. The estimated need for Russia for the year 1930 amounts to 110,000,000 pairs of boots. These two representatives of the boot and shoe industry of this country were offered on the spot to take orders

  2285
  for 35,000,000 pairs of boots, provided that the usual guarantees could be arranged. They asked for the continuance of similar conditions for five years. The delegates came back to this country and took steps, through the usual channels, to obtain credits.
  While supporting the extension of the period of the Export Credits Scheme I want to emphasise the need for greater elasticity in regard to administration. Sixty per cent. guarantees is hardly enough to meet the circumstances. Let me quote one case. An order was being sent to this country for £200,000 worth of nets for fishing purposes. An application was made to the Export Credits Committee, who were prepared to guarantee 60 per cent. or, roughly, £120,000, but the banks refused to allow the firm credit to the extent of the £80,000. The result was that the whole of the order was lost and it has been transferred to Germany. Those who control the boot and shoe industry of this country, particularly in the county of Northamptonshire, are anxious to press upon the Export Credits Committee that 60 per cent. of guarantee is not quite good enough, and that the six months' term is hardly long enough.
  I appeal to the hon. Member who has charge of that Department that in the formation of the new executive some extended powers should be given to them in order to extend the facilities for British manufacturers, so that they may extend their trade with Russia. I am told that in the course of 11 years not a single case of default has occurred in regard to the payment of bills. I can assure the hon. Member for Barnstaple (Sir B. Peto) that our own co-operative movement has done hundreds of thousands of pounds worth of trade with Russia during the last two years, and not a single penny has been in default. I have heard of cases where the account has been met days before it was due. I should like to see more elasticity shown in the policy of the executive not only in the granting of credits but in the term of the credit; then some chance would be given to the boot and shoe industry to secure some share of this great potential trade with Russia.
  9.0 p.m.
  Mr. W. J. BROWN: Anyone listening to this Debate who had not in front of
  2286
  them the terms of the Resolution which we are discussing and the Report of the Committee appointed to consider the Export Credits Guarantee Scheme, would imagine that there was really a big fight going on between the two sides of the House. They would imagine that on this side we were sensible of the fact that there was available in Russia a very large potential market for British goods and that our Government and all the Members on this side desired to utilise the Export Credits Guarantee Scheme in order to make that market available. They would imagine from the speeches delivered from the other side that there was a profound determination on the part of hon. and right hon. Members opposite to prevent us from doing anything of the kind. I propose to look at the arguments which have been advanced from both sides of the House and to show that those arguments do not reveal a great conflict between the two sides of the House or, rather, if there is a conflict that it is confined to argument and does not bear upon the Resolution before the House. I propose also to show that there is no practical difference between the position occupied by the Minister to-night and his predecessor in office, in spite of the controversy that has raged between them to-night.
  We are told from the other side that there are two main reasons why the Russian market should not be made available by means of the Export Credits Scheme. One reason given is that Russia ought not to require long-term credit and that if she does, there is something wrong. The second reason is that there is so heavy a financial risk involved in long-term credits to Russia and so great a probability of a Russian collapse that the risk involved is too great from the point of view of the British Exchequer. The criticism that Russia ought not to require long-term credit is a criticism which ignores completely the nature of the situation in Russia. When any predominantly agricultural country is engaged in the process of building up its own industry, such a country invariably turns to other and more developed parts of the earth for the necessary capital to do it. It was in that way that Australia, Canada, South Africa and other parts of the world have been developed. It was in that way that the Argentine, Mexico

  2287
  and some of the other places which have been referred to by speeches from the Front Bench opposite have been built up. If Russia were seeking to float loans on the London market for the purpose of carrying through her industrialisation programme there would be nothing sinister or significant whatever in that fact. The very fact that by our own financial policy we have made it impossible for Russia to float loans in this country makes it inevitable, if exporters in this country are to do business in Russia, that the State must come to the aid not of Russia but of the British exporter who does business with Russia. The first argument of hon. Members opposite will not bear investigation.
  The second argument, as to the risks involved, is to me a curious argument. The late Financial Secretary to the Treasury referred to the losses incurred in Brazil. He was gravely doubtful of the value of the Rumanian business and highly condemnatory of what had happened in Mexico. But not one hon. Member opposite has been able to produce a single word of criticism against Russia and, indeed, the Secretary for the Overseas Trade Department frankly confesses that at no stage has the Russian Government failed in its obligations in regard to post-War contracts and loans. In regard to pre-War loans, are hon. Members opposite asking this Government to become a debt collecting agency for Russian bondholders in this country; and, if they are, is the Front Bench proposing to respond to that invitation? It will be a strange world indeed in which the first Socialist Government in England acted as a debt collector against the first Socialist Government in Russia in respect of loans contracted by the Tsarist regime.
  Sir B. PETO: Is the hon. Member not aware that recognition of the Soviet Government and the reception of their Minister here was on two conditions; to stop propaganda in this country and in the Empire, and a reasonable settlement of what he calls pre-War debts?
  Mr. BROWN: I am much obliged to the hon. Baronet, and if what he says is correct, and far be it from me to dispute it, it all confirms what I was saying, that the difference between the two Front Benches is much more apparent than real. The real issue is not between the two
  2288
  sides of the House but between the people sitting on the Front Bench and those sitting on these benches. That is the only ideological clash in this House. For the rest of the House we have continuity of policy. Granted that the argument against the use of this scheme to Russia will not hold water, we have next to ask ourselves whether it is worth while for this country to utilise that market. I was in Russia rather later than the hon. Member for Kettering (Mr. Perry). I was not there as a Cook's tourist, for a week; I spent some months in the country. I found a tremendous continent, still nine-tenths peasant, engaged in creating a modern large scale industry, and requiring for industrialisation purposes and for the purpose of intensifying its own agriculture, imports on the widest possible scale from the rest of the world. I found that there were between 200,000 and 300,000 villages in that country, each village being the centre of an agricultural district, and in the whole of Russia, from one end to the other, only 8,000 tractor ploughs. There is room in Russia for something like 300,000 tractor ploughs, which we can make in England.
  Within the last few weeks an attempt has been made to get 5,000 of these tractors made in this country by one of the largest engineering firms in England not a small struggling firm whose credit is not too good, but one of the largest engineering firms which was willing to undertake it and, indeed, had done a tremendous amount of preliminary work on the job. The offer was for an order of 5,000 tractors provided credit could be given for three years, and further, an offer was made of a similar order for each of the next three years. Altogether something like 20,000 tractors depended upon whether this question of credits could be arranged or not. That order has fallen through. Another order that has fallen through is one for something like 20 steam trawlers, a very big order from the point of view of the shipbuilding industry. One could keep the Committee half an hour with case after case where the business has fallen through not because our people do not want it, not, because our prices are too high, not because Russia does not want our goods, but because there is a 12 months' limit placed by the Department of Overseas Trade on the guarantee which is given under this scheme.

  2289
  May I remind the Committee that when the original Act was passed power was taken to give guarantees up to a period of five years. The late Financial Secretary to the Treasury expressed himself as against such long-term credits, but the House when it passed that Bill evidently had in mind that credits of that length might be necessary and desirable from the point of view of this country, and five years was provided in that Act. During the years when hon. Members opposite were in power the power given by that Act was not utilised. Of a total sum of £26,000,000 which was authorised we are still in a situation in which only about £5,000,000 has been utilised. Our own Front Bench cannot be expected to accept responsibility for that situation up to May of last year. But in May of last year we fought an election, and from every Labour platform we drew attention to the size of the Russian market and the failure of hon. Members opposite to utilise the machinery of that Act to make that market available. We pledged ourselves that when we were returned to power we would utilise that machinery.
  The conditions governing trade with Russia and the circumstances under the late Government may be attributable to the personnel of the Advisory Committee which dealt with business under this scheme. The right hon. Gentleman has said that the members of the Advisory Committee are public spirited, unselfish seeking servants, doing honorary work for the State with a single eye to the good of the State. I am not going to suggest a word which conflicts with the description of the members of the Advisory Committee given by the right hon. Gentleman, but when you have a Committee which consists predominantly of bankers it would be more than human to expect them to forget that they are bankers, and when you ask them to operate a scheme which, in effect, provides an alternative source of credit to the banks it would be idle to expect a Committee of that description to operate the scheme in the way it ought to be operated from the point of view of the people of this country. It has taken nine months of pressure to get a Labour Government to put two Labour men on that Committee. They are still in a hopeless minority, and it has taken us nine months to get that change carried out.
  2290
  I do not know how much good those two solitary individuals will be able to do on the Committee, surrounded by an overwhelming majority of bankers.
  But something worse has happened. The Government have accepted the Report of a sub-committee on the work of the Export Credits Scheme, and that Report proposes in effect the virtual supercession of the advisory committee itself. If English means anything, the real power of determining applications under this scheme hereafter will not rest in the hands of an advisory committee meeting at infrequent intervals, but in the hands of a small executive committee meeting at very frequent intervals. The acceptance of the Report means that. Of whom is the executive committee to consist? The chairman is to be Colonel Peel, a banker. Another member is Mr. Caulcott, another banker. The third member is Sir A. Bain, connected with insurance and banking. The only individual of the four who can reasonably be expected to bring to bear upon this problem the same point of view as would be brought to bear by Members on these benches is Mr. Blair—an admirable appointment—whose name is connected with the Co-operative Wholesale Society.
  In the name of common sense I ask, how does a Labour Government expect to be able to apply a Labour policy through instruments of this kind? We are sometimes told that if we differ from the Front Bench we ought to express that difference elsewhere. This question of the utilisation of the machinery of this credits scheme has been raised at party meeting after party meeting. The response to everything which has been said in other places on this subject is the announcement that we have had from the Minister to-night, and that announcement is that he proposes to centre the power of administering this scheme in the hands of four individuals, one of them indirectly connected with the Labour movement and three predominantly connected with banking and insurance, and that he does not propose to remove the 12 months' limit upon the duration of guarantees given under the scheme.
  Let me conclude by saying that the struggle between those who sit on these benches and those who sit on the Front

  2291
  Bench is not a struggle between those who desire Socialism and those who do not. The desires of the people who sit on this bench are much less ambitious. We are not asking the Front Bench to give us Socialist legislation. Our efforts are concentrated upon an attempt to get them to do some modest things—things which it is within their power to do, like altering the administration of this particular piece of machinery. If a Government, situated as this Government is, cannot muster up courage enough to over-ride a few bankers on an issue of this kind, can it ever function as an instrument of Socialism in this country, even if it has a massed battalion of supporters behind it?
  In the last nine months the trade with Russia under this scheme has amounted to £1,305,000. Of that amount, not more than 60 per cent., or about £800,000, represents a possible liability of the Department. We have improved trade with Russia to the extent of about £1,000,000, and yet it is within the knowledge of nearly everyone who sits on these benches that the Russian trading agencies are authorised to place orders in this country to the tune of £20,000,000, provided that reasonable terms of credit can be arranged. It may be true that the Lord Privy Seal is not responsible for the recent upward rise in the unemployment figures. When we go to the country we may be able to pass that on to world causes. But there are some things that we cannot pass on to world causes, and some things for which we shall be held personally responsible. Those are things which are within the power of a minority Government, situated as our present Government is, and if it is not within the power or will of a minority Government to handle this kind of problem with some kind of courage and firmness, then for the life of me I find it very difficult to understand why we fought the last election.
  This is continuity of policy carried to a point where the difference between the two sides is reduced to one of debating; there is no substantial difference of policy whatever. I urge upon the Minister that he should take his courage in both hands, that he should scrap the 12 months' limit, and that he should appoint four good Labour men for once
  2292
  in a way. We have appointed 36 committees since the Government took office, and I believe that not more than half a dozen of them have Labour chairmen. If you appoint capitalist agents to produce the reports of committees you will get capitalist reports from them. It is no good getting capitalist reports and then pretending that you are bound by the terms of the reports. If you care to put four decent Labour men in charge of this job, and give them power to abolish the 12 months' limit, you can carry out a greatly expanded trade with Russia and redeem one at least of the promises that were made to the country at the last election.
  Mr. GILLETT: I propose, very briefly, to reply to a few of the questions raised in the Debate, and if there are any overlooked there will be ample opportunity to reply to them on the Second Reading. Questions were put to me by the right hon. Member for Chorley (Mr. Hacking). He asked for a further explanation of the arrangements in connection with the staff of the department. I had explained that that section of the staff which belonged to the Civil Service would come under the usual regulations of the Civil Service, and would have a Whitley Council and a promotion board consisting of some of the higher officials, in order to advise. The only other point raised in the Debate in regard to the staff was the question of special appointments. Perhaps it was not clearly understood that there have been a few special appointments from outside the Civil Service of men who are specially qualified to deal with work of this kind. The idea is that future appointments of that special character would be in the hands of the executive committee, but the appointment of members of the Civil Service would remain much the same as the present. The second question I was asked was, what was the maximum outstanding liability at the present time? The answee is £4,000,000. In reply to the third question, the liability is generally above 60 per cent.
  Mr. HACKING: For all countries?
  Mr. GILLETT: Yes, all countries. The fourth question was, what was the average length of credit for all cases? It is about six months. Hon. Members who are interested in the work of the Depart-

  2293
  ment might take note of that answer, because it gives them an idea of the policy of the committee, quite apart from the Russian question, as to the length of time for which this business should be done. As a matter of fact, I believe it will be found that if you take the average length of credit for all countries, you will find that the Russian credit figure is rather longer than the average.
  Mr. R. A. TAYLOR: Is that for the same class of goods?
  Mr. GILLETT: It may not be strictly comparable in that respect. The other point with which the right hon. Member dealt was the question of what was the ultimate goal of this Department. I did not deal with it in my opening remarks, because I thought I would not raise the question, and I rather wondered that the right hon. Member dealt with it at all, because one of the instructions which his Government gave to the committee was that they were to advise on the question how the transference of the business might be made into private hands instead of being under the control of the Government. As a matter of fact, the report hardly deals with that question at all. There is one passage which the right hon. Gentleman himself quoted, but he did not quote the two lines which follow immediately afterwards. The committee said:
  "We do not think it is now possible to indicate the final form which this particular piece of financial machinery had best take."
  That was really all that the committee seemed to have thought it necessary to give to the right hon. Gentleman in order that he might have information as to how this transfer might be made into the hands of private concerns. As a matter of fact, suggestions are being made from both sides of this Committee that in dealing with these recommendaions it necessarily follows we have to deal with the same position as the right hon. Gentleman. My own personal view is that it is nothing of the sort, just as we find in the position which we have to face to-day that we have to support schemes of rationalisation, which it may be thought, and has been urged, are open to criticism. I, myself, when addressing a Labour meeting was criticised because we were helping towards schemes of rationalisation. My answer was that while it was essential, it did not necessarily clash with
  2294
  the ultimate ideals which we may adopt as to our final policy. I cannot honestly see that this would necessarily affect the question of whether some future Government may decide to retain the business in its own hands or do what the right hon. Gentleman wants to do, and hand it over to private concerns.
  I look at it purely from the present position, and my belief is that a small executive committee would be likely to administer it more efficiently than the present one. I think my hon. Friend who spoke last misunderstood the actual work which we would ask that committee to do. We cannot delegate to it the work of the advisory committee, because the advisory committee has to be consulted under Acts of Parliament. We really want this Committee to consider a number of points dealing with the methods and the way in which the Department of this kind can be conducted. There are a number of technical points which have been under consideration, at any rate in this Department, but in regard to which we want to get a set of men who will devote their entire attention to the matter and express an opinion as to whether they think in this way or the other the work will be helped on. I do not see, as a matter of fact, that it would have any effect upon the actual decisions that are arrived at in regard to recommendations. for guarantees.
  Mr. W. J. BROWN: I understand then, that the Government are accepting this report?
  Mr. GILLETT: No, the hon. Member is making a great mistake in thinking that the Government are adopting the report as such. I tried to make it clear that we were making reservations. We have put in various restrictions as to the rights of the Minister and the position of the Treasury in order to guard the position of the Ministry and Treasury. I hope it will not be thought that this report has been adopted as such.
  Mr. BROWN: I heard the hon. Member speak, in his earlier statement, of the reservations to which he has just referred, namely, the powers of the Minister, the Board of Trade and the Treasury. But these are paragraphs of the report which I should like him to say whether he is adopting or not. The report says:

  2295
  "We are of opinion that this end will best be served by a small executive committee of three members whose functions would be analogous to those of a board of directors and at whose meetings the manager of the department would be present. This executive committee should have powers to decide all questions of policy falling within the province of the Act—such questions as re-insurance, the nature of the risks to be insured … the precise details of insurance policies to be issued and like matters."
  Mr. GILLETT: I very much regret that I should have failed to make it quite clear that we are not proposing to appoint the executive Committee in the way that the hon. Member suggests. I thought this Committee understood that. I explained the position in regard to the Minister and the Treasury and the other points not referred to in any way in the report. These are the reservations which we have put forward in order to reserve a suitable amount of control in the hands of the Minister, which we feel is absolutely necessary. I said earlier that the suggestion to give powers to the executive committee to use the credit of the British people on the lines referred to was quite unprecedented, and I did not believe there had ever been a case in which powers had been given to private individuals in that way. I thought I had made it quite clear that we have not adopted it in the full sense.
  There are numbers of other matters to which I will refer later in the Debate which will follow. The hon. Member for Farnham is one of the worst sinners, and I am not going to answer his questions because nothing would be more foolish than to discuss in this House the credit position of certain other nations. It may have been one of my misfortunes to have been born in a banker's family and to have been a banker for many years, but one thing I have learned is to use caution in dealing with credit. Therefore, I am afraid that the hon. Gentleman will have to remain unsatisfied so long as I have anything to do with this Department. I cannot congratulate the hon. Gentleman on the manner in which he twisted the statement of my right hon. Friend the Foreign Secretary in regard to a Russian loan. It is well known that at that time an embargo had been placed on this Department dealing with Russia, and my right hon. Friend the Foreign Secretary said then that we were not
  2296
  going to guarantee a loan to Russia. However much the hon. Member for Farnham may assume a simplicity in regard to financial affairs, I am sure that he knows perfectly well the difference which exists between a loan and anything of the kind that we are doing in this department. I can hardly imagine, now that we have taken off this embargo, that the reference of my right hon. Friend the Foreign Secretary could be understood as referring in any way to this Department.
  Everybody knows perfectly well that my right hon. Friend did not refer to the work of this Department, and it is only one of the brilliant inventions the hon. Member for Farnham to suggest that he did so. The hon. Member apparently thought he could twist the terms of my right hon. Friend's statement. He did not say that my right hon. Friend spoke about a loan, but he used the word "credit" in order that it might seem to apply to the work of this Department, and that, I think, was hardly worthy of the hon. Member's position. At any rate, I entirely repudiate his suggestion. I say that what we have done and what my right hon. Friend desires to do is perfectly consistent with what was stated, and we propose to go on with those matters.
  The only other matter to which I would refer is in regard to Russia. The Russian problem, referred to particularly by the hon. Member for Lincoln (Mr. R. A. Taylor), is only part of the larger question of long-term credits, and, if hon. Members will allow me, I would prefer to deal with that larger question of long-term credits when the Second Reading of the Bill is taken. I shall be very glad to do so then, and I think that will be a more suitable occasion. Indeed, I am not even sure whether you, Mr. Young, would allow me to deal with this matter on this Financial Resolution in the way in which I want to deal with it—touching on rather larger aspects of long-term credits than those directly involved here. In these circumstances, I shall not add anything further at the moment, but if there is any point which I have overlooked, and if hon. Members draw my attention to it, I shall try to answer on the Second Reading of the Bill.
  Mr. R. A. TAYLOR: Would the hon. Gentleman reply to the specific question

  2297
  which I put to him, as to whether any instructions are to be issued to the effect that the maximum use of the powers given by Parliament is to be the policy of the Government, and that, if necessary, credits up to five years are to be regarded as normally within the province of the Department.
  Mr. GILLETT: That is a point with which I shall be very glad to deal when I discuss the whole question of long-term credits on the Second Reading of the Bill.
  Question put, and agreed to.
  Resolution to be reported To-morrow.

  RESERVOIRS (SAFETY PROVISIONS) BILL [Lords.]
  Order for Second Reading read.
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Clynes): I beg to move, "That the Bill be now read a Second time."
  I invite the House to give a Second Reading to this Bill which provides better safety provisions in connection with reservoirs yet to be constructed in this country. I am hopeful that the Bill will, to-night, receive a Second Reading without serious opposition, and I shall respect the right of other Members by giving them the opportunity to offer some observations upon the principles which I propose very briefly to outline. I begin with the knowledge that this is a very dull and uninteresting subject, but, at the same time, questions of life and death and questions concerning safety of the public are involved in the proposals which I now submit. Indeed, the history behind this Bill has been a tragic succession of grim experiences. It is a Bill to strengthen the law for the protection of the public against disasters arising from the bursting of reservoirs. At the end of 1925 there was a terrible disaster in the Carnarvonshire mountains. The dam of a reservoir burst, a mass of water rushed down upon a village, 16 lives were lost, and very considerable damage was done. A similar occurrence, fortunately with less serious consequences, had occurred not long before in Scotland; and it was then thought desirable to review the position
  2298
  and to consider whether the law in some respects ought not to be changed.
  The result of that review was rather disturbing. It appeared that private persons and industrial concerns could construct reservoirs on private property without any special statutory authority or safeguards, and while it is, no doubt, usual to employ engineers with special experience of reservoir construction, this has not always been done. Moreover, even minor works may cause considerable damage and loss of life in the event of their giving way. Secondly, even if the reservoir was properly designed and constructed, it ought not only to be regularly watched, but also to be inspected specially and thoroughly at intervals to see whether the natural and other conditions have altered. This again is the best but not perhaps the invariable practice.
  In these circumstances, the late Government decided that a Bill should be prepared, and communications and conferences took place with various members of the engineering profession and representatives of the large water supply undertakers. The proposals were discussed both generally and in some detail, and there appeared to be general agreement that legislation was desirable on the lines embodied in the Bill which was introduced by the late Government. There are two or three particular points on which it is recognised that there is some difference of opinion yet, and these will no doubt be discussed during the Committee stage, but having regard to the consultations mentioned and the marked absence of criticisms received at the Home Office since the Bill was published, I hope the provisions of the Bill will prove substantially non-controversial.
  The Bill is designed to ensure that new reservoirs are constructed under the supervision of a civil engineer who is an expert in this particular class of engineering work, and that both new and existing reservoirs are specially and thoroughly inspected from time to time by such a qualified engineer. The normal interval between such inspections would be 10 years. Secondly, the Bill is designed to put members of the public and local authorities who are likely to be affected if a reservoir collapses in a

  2299
  better position to ascertain whether proper precautions have been taken and are being taken, and to bring an alleged failure to do so even before the Courts. Thirdly, the Bill is designed to strengthen the law as to liability to compensate victims of any disaster.
  I submit that generally the underlying principle of the Bill is to emphasise and in some respects increase a responsibility which no longer should be denied. It is not proposed to transfer any of the responsibility to a Government Department. This would not only impose on the Department a very difficult task, but would tend to lessen the sense of responsibility of the undertakers, and to that extent would be inconsistent with the object of the Bill itself. Local inhabitants and others interested in houses and other property in the neighbourhood have very meagre facilities for discovering whether the reservoir owners or undertakers have taken proper precautions, and apprehensions of a disaster of this kind, however ill founded, may give rise to considerable public alarm, which might be dispelled if further information as to precautions taken were obtainable. Again, in the case of some of these reservoirs which have been erected under statutory authority, people cannot obtain damages in the event of water escaping and injuring their persons or property, unless they can prove negligence on the part of the undertakers, which is not an easy thing to do. It is true that in a number of cases private Acts authorising the construction of works of this kind have contained a provision preserving the undertakers' common law liability for damage in the event of the reservoir bursting, irrespective of proof of negligence, but this is by no means universal.
  I submit that changes in the distribution of population, and in particular of the geographical aspects of our country, have increased the need for a Bill of this kind, and that we ought to prevent disasters in the future of the kind I have aready alluded to. Therefore, in view of the need for greater precautions, and being convinced that there is no party or political capital whatever in these proposals, and that all sides of the House equally are anxious to protect both life
  2300
  and property, I submit this Bill for a Second Reading.
  Sir B. PETO: I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."
  In the absence of my right hon. and learned Friend the Member for Ealing (Sir H. Nield), I rise not so much to oppose the whole principle underlying this Bill, as that would indeed be difficult after the very engaging speech of the Home Secretary, but in order that we should have adequate debate and the opportunity of pointing out some particulars, underlying the principles on which this Bill is constructed, which render it certainly, in my view, inefficient for the purposes for which it is introduced and undesirable from various points of view. The Home Secretary has pointed out what was the genesis of this Bill. It was, as he said, the disaster which occurred in Wales in respect of a reservoir, a disaster in which 16 people were drowned. That occurred in 1925, and a Bill, after some discussion, but without any adequate opportunity for the great water undertakings of the country to represent their case to the Home Office, was introduced by the late Government. It was in the nature of panic legislation, because while these disasters—and the right hon. Gentleman quoted two—are possible of occurrence, he did not mention any disaster which had occurred through the breakage of any reservoir constructed by any of the great water undertakings of the country.
  I rather regret that the Home Secretary did not explain to the House why the Bill that was introduced earlier and that appeared on the Order Paper for a long time, the Reservoirs (Safety Provisions) Bill, had been withdrawn and another substituted and passed through another place, which only appeared, except for one or two very small verbal alterations, to effect one alteration. I notice that an application to Quarter Sessions is substituted for an application to the Railway and Canal Commission. That is the main difference, but my hon. Friend the Member for Cambridge (Sir D. Newton) and I had a Motion on the Paper to reject the earlier Measure for a long time, and our main reason for objecting to this

  2301
  Bill is that in Clause 8 of the old Bill, which is Clause 7 of the present Bill, it says:
  "Where damage or injury is caused by the escape of water from a reservoir constructed after the commencement of this Act under statutory powers, the fact that the reservoir was so constructed shall not exonerate the undertakers from any indictment, action or other proceedings to which they would otherwise have been liable."
  I ask the House to notice the word "after." There is no question that the present state of the law is not satisfactory, and the British Waterworks Association and the other waterworks organisations of the country do not dispute it. Reservoirs are constructed sometimes under statutory powers, in some cases with special clauses limiting or enforcing the Common Law right of the public against the undertaker, and in fact with very varying provisions as to the liability for damage in the case of failure. That clearly requires some alteration, and there may be room for difference of opinion on the question of whether all statutory water undertakers should not be placed in the same position. But that is not what the Bill proposes to do. It sweeps away one anomaly in order to create another, because the reservoirs constructed prior to the passing of the Bill will have their liabilities under Common Law, or under particular Clauses in the Private Bills under which they have statutory powers for the construction of the reservoirs. Those that are constructed after the Bill will be in a totally different position as to liability to the public.

  That is not a satisfactory way of dealing with this question, and there seems to be no good reason for either perpetuating the present anomalous position or of getting into another anomalous position, in which the owners of certain reservoirs will be liable for negligence only, and the owners of certain other reservoirs under this Bill will be liable for any failure of their works. The Municipal Corporations Association and the British Waterworks Association put forward objections to the Home Office as long ago as 1928, and the Bill was actually introduced into the House on 11th June, 1928. Only two of the suggestions which were put forward by those Associations, whose members own by far the greater number of reservoirs in the country, have been incorporated in the earlier Bill, and both
  2302
  those alterations are perpetuated in the present Bill. One of them adds certain words in Clause (2, a), and the other one is a definition as to what is a large reservoir. Both these were minor matters, which clearly ought to be in the Bill, but it is only in respect of these particulars that either this or the late Government have listened to these Associations.
  The principal objection which I have to the Bill is Clause 7. That appears to me to involve an important modification in the Common Law applicable to statutory undertakings. The Home Secretary referred to the fact that under the present Common Law all these undertakings have certain liabilities. Clause 308 of the Public Health Act of 1875 says:
  "Where any person sustains any damage by reason of the exercise of any of the powers of this Act in relation to any matter as to which he is not himself in default full compensation shall be paid to such person by the local authority exercising such powers and any dispute as to facts or of the amount of compensation shall be settled by arbitration in manner provided by this Act."
  10.0 p.m.
  We have already certain Common Law provisions which apply to all undertakers who own these reservoirs. Under the Common Law, undertakers are not responsible for damage caused by the escape of water from the reservoir, if it is constructed under statutory powers, unless they are negligent in the execution of those powers. We shall now have under this Bill two classes of reservoirs—those that were constructed prior to the passing of the Bill, where certain very limited liabilities as to damage under Common Law obtains, and others where these much more extended responsibilities are imposed. I do not think that it is satisfactory to deal with the question in this way.
  It does not matter very much to the water companies, because even if they are to construct reservoirs in future with a greater liability for any failure, it will not be possible for them to exercise greater care in the construction, or to employ more eminent engineers than they have done in the past, because they employ the most eminent engineers in the country in the construction of these great works, It is quite clear that what they will have to do is to insure against this new liability. All that will happen is that the insurance companies and the under-

  2303
  writers will get a new and very profitable business, because the Home Secretary has not quoted a single case in which there has been a failure of one of these reservoirs hitherto. They will have to insure, and there will be some premuim quoted, and, whatever it is, it will be very profitable to those who undertake the business.
  Mr. KELLY: Why should they go to an insurance company?
  Sir B. PETO: I should say that in all cases where a new liability of that kind is put upon anybody, that is the usual procedure. Whatever liability is imposed under this Bill will ultimately be translated into an increase in the water charges. It is a fresh liability and a fresh expense. That is all that it amounts to. I have also grave objection to Clause 2, which provides far inspection of these large reservoirs as defined in the Bill by qualified independent civil engineers. When these water companies construct reservoirs, they employ the very best and most highly qualified engineers obtainable in the country, and it is inconceivable to suppose that any water company constructing a reservoir will not have in their employment an engineer who will be upon the panel as provided in Clause 8, and therefore an engineer qualified to inspect these reservoirs. Therefore, all that Clause 2 does is to provide some more jobs for civil engineers. I will call the attention of the House to the fact that in the proviso under. Clause 2, Sub-section (2) it says:
  "Provided that, if in the case of a reservoir in course of construction at the commencement of this Act the engineer responsible for supervising the construction of the reservoir becomes a qualified civil engineer within the meaning of this Act, this subsection shall apply as if the reservoir had been constructed after the commencement of this Act."
  That means that if, after the construction of the reservoir, the engineer becomes a qualified engineer, then instead of inspection taking place in three years, as in the case of a reservoir constructed before the commencement of the Act, inspection need only take place after 10 years. Therefore, already, the Bill provides that if the undertaking employs an engineer of a character to become a qualified engineer it does away with the necessity of inspection for seven years.
  2304
  Where an undertaking such as a waterworks employs, as it practically always does, an engineer who will certainly qualify to go upon the panel of inspecting engineers, it is quite unnecessary to employ an outside engineer, of no better qualifications, and with less detailed knowledge of the construction of the reservoir itself, to go round inspecting the other engineer's work.
  I have only to put it like that for the House to see that we are not attaining any additional security for people who happen to reside in a valley below a reservoir, but only providing inure fees for civil engineers. I do not object to that, any more than I object to lucrative business being provided for Lloyds underwriters, and for the great insurance companies, which is what is being done under Clause 8. Clause 1 is really no more than a recital of the ordinary procedure followed in the construction of reservoirs. It is, so to speak, mere padding—I do not like to use a harder word—put in to make it appear that the Bill is really doing something, even though it is doing very little, if anything.
  For all the reasons I have given, I do not think there is now any justification for the present Government proceeding with the Bill. I can quite well understand why it was introduced two years ago, shortly after this disaster—though I would point out that it did not arise from a water company's undertaking—but it is applicable to every reservoir in the country, no matter how eminent the engineer who was responsible for its construction, and I regard it as a piece of legislation which the Government might well drop. It is an inheritance. I do not suppose it will meet with any serious opposition, but at the same time I have felt bound to put forward these views, which are held by the water companies, with regard to both Clause 2 and Clause 8. Clause 2 is unnecessary and Clause 8 of the original Bill—it is Clause 7 now—only relieves the present anomalous position by making the position still more anomalous, creating an artificial date—"the passing of this Act"—before which there will be one liability and after which there will be another liability. I apologise to the House for the inadequacy of the reasons I have submitted on this technical problem, which would have been better dealt with by a

  2305
  legal Member or one more closely associated with water companies undertakings than I am myself.
  Mr. BALFOUR: I beg to second the Amendment.
  I have very much pleasure in doing so. I am quite sure that the object which the promoters of the Bill seek to achieve would be approved in all quarters of the House as a right and proper object, because all would desire to protect people from any calamity arising from the bursting of a dam or the overflowing of water in such quantities as to cause disaster; but when I find a Bill framed in this manner and containing Clauses which, from the point of view of achieving the object of the promoters, are quite unnecessary, I must support the Amendment and say that I totally disagree with the Bill. I say without the slightest reservation that I will give whole-hearted support to a Measure which will give the fullest possible protection against the possibility of such calamity as the Government desire to prevent, but this Bill strikes me as using a steam hammer to crack a nut—to use an old illustration. While it is our duty to protect people against disaster, we have an equal duty, perhaps even a greater duty, to see that it is not done in a manner which is troublesome, irritating and unnecessary to the proprietors of these undertakings.
  Unless it is the desire of the Government to have an army of unnecessary officials—and I feel certain that is not their intention—they would be well advised to introduce a new Bill aimed directly at the object they have in view. This Bill might apply to all the canals in the country. All, or nearly all, of our canals are, in parts, at a level higher than that of the ground immediately adjoining—I think those are the words of the Bill; and the Measure also affects a whole mass of subsidiary reservoirs which could under no circumstances be a menace to anybody. It refers, also, to great dams built in a manner which everyone knows can never be a menace—it does not matter whether we inspect them or not; if any disaster arises from them, it will be due to some act of God, some flood, which no prior inspection would disclose. I would support the most rigorous Measure to make certain that these works are properly constructed at the time they are
  2306
  built, but, once they are constructed then let inspection be limited to the special cases where there is some reasonable cause to apprehend danger.
  This Measure will not protect the public against disaster. In the case of the Dolgarrog Dam, the damage was done in the construction originally, and I question whether if this Bill had been in operation at the time we should have been protected against that disaster. It was built by one of the most eminent firms of engineers, whose certificate as to its construction would have been accepted by everybody. The damage was done when that reservoir was constructed, and no amount of inspection would have disclosed the danger except that there might have been some apprehension on the part of the proprietors prior to the flooding. This was known, and it did not require an inspection by an outside authority. Does anybody suggest that, so far as the dams of the Metropolitan Water Board are concerned, they will be made more safe by having a specially appointed inspector. It is to remove all unnecessary work of that kind that I second this Amendment. I do so in no spirit of hostility whatever to the real object of the Bill. [HON. MEMBERS: "Oh!"] I fail to understand the frivolous manner adopted by hon. Members opposite. [An HON. MEMBER: "Not frivolous!"] I think I am quite right in interpreting the interruptions of hon. Members as frivolous.
  Mr. KIRKWOOD: The hon. Member said he was not hostile to the Bill.
  Mr. BALFOUR: I am not hostile to any Bill which would be a definite guarantee against any disaster overtaking the people due to the construction of a dangerous dam. We have a duty in the House to see that in remedying an evil we do not put on the Statute Book and perpetuate in our Measures things which are unnecessary, troublesome, and expensive. I am not speaking on behalf of the people engaged in these things, but on behalf of the people who ultimately have to pay, namely, the actual consumers.
  I earnestly appeal to hon. Gentlemen opposite seriously to consider this matter, because in the past hon. Members have had an anxious regard to make sure that when they were remedying an evil they were not at the same time trampling upon the liberties of the sub-

  2307
  ject. In the House of Commons we must have regard, in season and out of season, when remedying an evil, to see that we are not perpetuating an even greater and more lasting evil than that which we seek to remedy. I should be in favour of the introduction of a simple, clear-cut Bill providing that in the construction of dams you should make sure that they are safe when you build them, but we should not worry every undertaking throughout the country which has some minor dam by a whole body of inspectors. You should strike at the root of the evil—you may embarrass me in in any work I might construct—but do not restrict the liberty of the subject by passing a totally unnecessary Measure.
  Major OWEN: I rise to support the Second Reading of this Bill. I feel that I am to some extent personally responsible for the Bill, and I would remind the hon. Member for Barnstaple (Sir B. Peto) and the hon. Member for Hampstead (Mr. Balfour) of the circumstances which brought the Bill into existence. The hon. Member for Barnstaple referred to it as a piece of panic legislation, but I would remind him that the calamity at Dolgarrog occurred as long ago as the 2nd November, 1925. As the representative of the constituency in which the accident occurred, I immediately brought the matter before this House, and to my amazement, and the amazement of the House, I found that there was no Government Department which had any responsibility whatsoever in the matter. A coroner's inquiry was held, and what was the result? It was definitely shown that there had been culpable negligence on the part of somebody, but no one has ever been brought to book for that terrible calamity; no one has been punished; the fault has not been brought home to any individual or any group of individuals.
  The position to-day is exactly the same as it was at the time when that accident occurred; nothing has been done. As the representative of that area, I asked the then Home Secretary to hold a public inquiry, but he had to admit on the Floor of the House of Commons that he had not the power to order such an inquiry. That there were only 16 lives lost was simply due to a fortuitous circumstance. Most
  2308
  of the inhabitants of the village happened to be in a cinema that night. Had they been in their own homes the number of people who would have lost their lives in that calamity would have been far greater than it was.
  After all, the position is not one that can be treated so lightly as the two hon. Members who have just spoken have treated it. They tried to impress the House with the fact that it is going to cost certain authorities a certain amount of money in the way of inspection now and again; but what has this enormous calamity cost the county of Carnarvonshire? Have the hon. Members taken into consideration the fact that to-day the county council of Carnarvonshire has not yet paid for the damage done by that accident? That is a far greater sum than any authority would ever be called upon to pay in connection with the inspection of reservoirs all over the country. In addition to that, what is the position of people living in the same county, where there are two other reservoirs of a similar character? There was a sense of panic throughout the whole county for a very long period, and that sense of panic still remains.
  The hon. Member for Hampstead said that the cause of this accident could not have been detected by inspection. It could have been detected by inspection. The report of the engineers appointed by the company itself shows quite clearly that, as the hon. Member said the construction was defective in the first instance, that the retaining wall had only gone down in several places a few inches into the solid clay, whereas according to the specification it should have gone down six feet. The accident was not due to the dam bursting. The superstructure was all right, but the basis of the whole retaining wall was on unsound material. That was the whole reason for the accident. Had the dam been inspected during construction, it would have been possible to prevent the putting in of the kind of work which was put in in that dam.
  Mr. BALFOUR: I made it quite clear that that is the right thing to do. I said, let these things be inspected at the time of construction, but, having done that, do not impose all these other burdens which are unnecessary.
  Sir B. PETO: Will the hon. and gallant Gentleman bear in mind that under Clause 2 all that is provided is inspection either within three years of the commencement of the Act or, if it is after the commencement of the Act, within 10 years of the date of the preliminary certificate?
  Major OWEN: I do not wish to quarrel with the hon. Baronet on that point. In the case of reservoirs that are already in existence, it would be a relief to a very large number of people living in the neighbourhood if they had an inspection within less than three years. The quarrel I have with the Bill is that the inspection is delayed for a period of three years We know perfectly well that, with an extra amount of rainfall, the retaining walls are not really safe. I obtained the First Reading of a Bill as long ago as December, 1926, but up to now nothing has been done. Time and again I put questions to the Home Secretary in the last Administration with regard to this. Finally, I was put off with a promise that a Bill would be brought in by the Government itself.
  The Bill that I introduced avoided the difficulties the hon. Member for Hampstead has in mind. I am anxious that this Bill should have a Second Reading. It can be changed, if necessary, in Committee, but it is really a matter of essential importance for the safety of a large number of people. After all, if we are going to develop our hydroelectric power, a good many more of these dams will be put up all over the countryside. In addition to that, we had a, severe lesson last summer in the shortage of water, and public bodies will have to undertake works of that kind pretty soon in order to secure a sufficient supply for our big population. It is essential, therefore, that a Bill of this kind should be put upon the Statute Book as soon as possible. I welcome the fact that the Government have saved time by introducing it in another place and that a great deal of the difficulties and weaknesses of the Bill have already been removed.
  Dr. FORGAN: In the last Parliament a discussion took place on the disaster that occurred in the West of Scotland, caused by the bursting of a reservoir of considerably less than the 5,000,000 gallon limit mentioned in this Bill. At a later
  2310
  stage the Home Secretary might be prepared to consider the desirability of bringing within the provisions of the Bill smaller reservoirs, because a number of them in the past have led to loss of life.
  Commander SOUTHBY: I am sure the House is in agreement in deploring the terrible accidents that have been referred to, but it is essential that we should not legislate for particular occurrences, but for the whole question of reservoirs and their safety as a general matter. I cannot help thinking that there are difficulties in this Bill to which this House should pay some attention. The representative body—the British Waterworks Association Executive Committee—are not against a Bill to safeguard waterworks and the people in the country, but they are calling attention to certain points in this Bill which they think are unnecessary. The adequate protection of the people or the adequate supervision or inspection of waterworks is an essential which the whole House agrees should be properly carried out. But in Clause 2 of the new Bill, although it differs in one slight material point from the original Bill, provision is made for periodical inspection by an engineer who is not an engineer of the company.
  I would suggest that where a company has a qualified skilled engineer, it is unnecessary that an outside independent engineer should come in to inspect a reservoir under the charge of a man who is already understood to be fully qualified, and who can pass any examination which the Government may think is necessary and be on a panel approved by them. Under the original Bill as it was drafted, the examination was to take place periodically by an independent engineer alone. In the Bill as it has come down from another place, the difficulty has been met halfway by saying that the independent engineer is to act in conjunction with the resident engineer of the undertaking.
  I would suggest to the right hon. Gentleman that it would be better, and it would meet the wishes of the water companies, who act under Statute, and who are only too anxious in this case to meet the wishes of the Government, in order to ensure safety that this inspection should be left to the qualified resident engineer of the company. It is

  2311
  not necessary to duplicate officials who have to look after these undertakings. I agree that you should have your inspections as often as possible in order to provide for safety. I think that an inspection after a 10 years' interval is probably much too long a period for safety as regards a reservoir.
  There is another point to which reference was made in the able speech of my hon. Friend the Member for Barnstaple (Sir B. Veto). It relates to Clause 7, which only applies to reservoirs constructed after the passage of the Bill. As my hon. Friend pointed out, in Common Law, as it stands at present, water undertakers are not responsible for damage when the reservoir was constructed under Statute unless negligence in the execution of their powers can be proved. I really do not see why there should be any special modification as far as reservoirs constructed after the passage of this Act are concerned. I do not see what are the special grounds for exempting undertakings from the existing Common Law. We should avoid burdening this particular Bill with things which will not apply to all reservoirs, but only to those reservoirs constructed after the passage of the Act.
  I suggest to the right hon. Gentleman that he should take notice of these two particular points. I have no desire to oppose the Second Reading of this Bill, because I believe it is necessary to have suitable legislation. At the same time one should safeguard the position of the existing companies which operate under a Statute, and who are only too anxious to carry out their duties to the public as efficiently as possible. I think that if those two points could be met, the Bill would have very little opposition amongst the water undertakers of the country.
  Mr. REMER: My object in rising is to congratulate the right hon. Gentleman upon this Measure and to regret that my two hon. Friends and I are on this occasion found in disagreement. I hope that they will not delay the passage of this Bill, because I am satisfied that it is a very vital and necessary Bill. The whole tenor of their remarks has been that the water undertakings of this country are safe. The information which I have is to the contrary, and that there
  2312
  are at the present time several water undertakings about which eminent people have the gravest doubts as to whether they are safe.
  I can give concrete evidence on this question from my own constituency. Very recently, the Macclesfield Corporation completed a new reservoir, which was opened this year. They had been receiving their water supply for the Borough of Macclesfield from an old reservoir which had been in operation. since, I think, the year 1845. When the new reservoir was complete they had an inspection made of the old reservoir, and it was discovered that the old reservoir was unsafe and that an important village or locality, which is rather a large place, situated at the foot of that reservoir had for the last 20 years at least been living in the shadow of death. Here is a reservoir which, more or less by accident, was found to be unsafe. Had there been a periodical examination, such as is proposed in this Bill, there would have been prevented the great danger which, happily, has been averted.
  The hon. Member for Carnarvonshire (Major Owen) has had a little controversy with the hon. Member for Hampstead (Mr. Balfour) with respect to the Dolgarrog reservoir. It is clear that if an inspection had taken place of that reservoir at the time and the danger had been discovered, the reservoir could have been emptied and the danger removed. It is very easy to say that the borough water engineers are thoroughly competent to deal with these matters, and I have no doubt that they are, but the water engineer in charge of a reservoir as his everyday job looks after the reservoir and not at the vital points so much as a man coming into inspect it with the deliberate object of seeing to its safety. From all these points of view the Bill is most desirable. It may require amendment in Committee, but I submit that it is a Bill that requires to be passed into law as speedily as possible.
  Major LLEWELLIN: I do not rise to suggest that this Bill should not be read a Second time, but I desire to draw attention to one or two points. In Clause 5 it is proposed to allow any appropriate person or any county council or local body to apply to the court of quarter session and that court on such application

  2313
  may make such order in relation to the reservoir as seems to them to be required in the interests of safety. I am not saying that a court of quarter sessions is not a good court, but when you are giving such tremendous power to a court, I think you should give a right of appeal from its decision. Only if a case is stated is there the right of going to the High Court; under this Bill there is no right of appeal on a point of law. In giving such powers to a court of law there should also be some right of appeal. Probably this Bill will go to a Committee upstairs, where some of us will not be able to raise these particular points. Therefore, I hope the Home Secretary will bear that point in mind and, if possible, give some right of appeal in these cases. The court might order the whole of a reservoir to be closed, which would be dreadful from the point of view of those who get their water from it. Large areas may have their water supply cut off by reason of the order that is made. I think Sub-section (3) of Clause 4 should be more clearly defined. It says:
  "If the undertakers contravene or fail to comply with the provisions of this Section they shall be liable on summary conviction to a fine not exceeding twenty pounds."
  There should be an adequate time limit within which to comply with these provisions, after which it shall be an offence against the criminal law of this country. I agree with Clause 7 of the Bill, and I see good reasons why it should only affect undertakings that are constructed after the passing of this Bill. Retrospective legislation should be avoided unless it is absolutely necessary. The only other point is with regard to the question of the qualified independent civil engineer. I do not think an inspection by such an engineer is necessary in a case where the water undertaking can prove to the satisfaction of the Minister that they have such an engineer themselves. For instance, the Metropolitan Water Board, obviously, has such an engineer, probably far better qualified than any ordinary civil engineer, and in such a case as that he should be allowed to make these inspections and reports as to the condition of the reservoir. Where the water company has already a fully qualified man his inspection should be sufficient. It is only a source of irritation and a certain amount of unneces-
  2314
  sary expense to call in an independent civil engineer, and where the Home Secretary is convinced that the engineer in charge is a fully qualified person I think he should be allowed to make these inspections without calling in an independent civil engineer.
  Mr. C. WILLIAMS: I wsh to ask a question with regard to Sub-section (4) of Clause 2. If a local authority or other authority is going to enlarge a reservoir I understand that it is able to use its own engineer for the purpose of the enlargement and that his certificate will be sufficient. I realise that in many cases that is adequate, particularly so in the case of some of the larger authorities or of an authority which employs an engineer with great knowledge of local conditions and the structure of the reservoir itself. But I ask the Home Secretary to look into the matter carefully, and to see that the safeguards are adequate. My next point relates to Clause 8, which deals with the panel of engineers. 1 would like to know approximately how many engineers it is proposed to put on that panel. I realise that in work of this kind it is necessary to have properly qualified men, but on the other hand I do not want to see this panel too small or so closely rigged round with safeguards as to prevent men getting on to it. It does not necessarily follow that the man who can pass the best examinations is best qualified for such a panel. A thoroughly sound and experienced man is, of course, needed.
  I remember the case of a reservoir, which was seemingly perfect in every possible way, but there was a fault in the subsoil a considerable distance from the reservoir. Only a practical man with local knowledge could have known of that particular condition. That side of the matter should be considered in choosing the panel. There is a further and most important point in reference to large electrical developments with large reservoirs for supplying power. It is essential that in these cases there should be proper construction and inspection. Clause 11 has been worrying me very much. I do not see anyone representing Scotland on the Frant Bench, but would one of the legal authorities whom I see present explain exactly what is meant by Sub-section (3) of this Clause, which says:

  2315
  "Any expenses incurred under this Act … shall be defrayed out of such rate payable by owners and occupiers in equal proportions as the council may determine."
  I entirely fail to see how the Council can determine under this Act anything except equal proportions. I would like an explanation of these words which seem peculiarly muddled and vague. I understand the Government are rather apt to put this Bill on to the shoulders of their predecessors, but I am very much inclined to think their predecessors would never have put in a phrase so vague and incapable of definition. The House is entitled to have this and other points which have been raised by hon. Members cleared up.
  Mr. CLYNES: I should like to acknowledge thankfully the attitude of mind which hon. Members have shown towards the principles of this Bill. I purposely avoided referring to the matters of detail covered in the Clauses. We are indebted to hon. Members who have taken part in this short Debate for having greatly assisted us at the Home Office by what they have said and enabling us the better to prepare for the Committee stage. I can assure the House that when that stage is reached, these suggestions—purely Committee points, of course—will be dealt with in the most broad-minded manner by those who have to deal with the Bill at that stage.
  Sir B. PETO: In view of what the Home Secretary has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Main Question put, and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee.

  SUPPLY.
  REPORT [8th April.]
  Resolutions reported;

  SUPPLY.
    CIVIL ESTIMATES, 1930.

      CLASS VII.
      1. "That a sum, not exceeding £220,100, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for Expenditure in respect of Art and Science Buildings, Great Britain."

      2316

      2. "That a sum, not exceeding £428,370, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for Expenditure in respect of Employment Exchange and Insurance Buildings, Great Britain (including Ministries of Labour and Health and the Department of Health for Scotland)."

      3. "That a sum, not exceeding £853,600, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1931, for Expenditure in respect of Sundry Public Buildings in Great Britain, not provided for on other Votes, including Historic Buildings, Ancient Monuments, and Brompton Cemetery."

      4. "That a sum not exceeding, £158,480, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for Expenditure in respect of Public Buildings Overseas."

      First and Second Resolutions agreed to.
      Third Resolution read a Second time.
      Motion made, and Question proposed. "That this House doth agree with the Committee in the said Resolution."
      Mr. MANDER: I desire to raise briefly, one or two points in connection with the sum required for ancient monuments. If I may respectfully say so, the right hon. Gentleman is himself one of the most distinguished of the ancient monuments on the Treasury Bench and I trust he will long be spared to ornament either that bench or the one opposite. Some time ago he undertook to spend a good deal of money with a view to giving employment by restoring various historic buildings throughout the country. I should like to ask whether that is included in this Vote. I would ask the right hon. Gentleman not to be content merely with doing routine work of that kind, however important, but to be bolder and to use imagination and undertake much more important excavation work. Would he not consider, from the point of view of giving employment and national advertising, the purchase of one of the ancient Roman sites in different parts of the country and excavating it and keeping it in a permanent condition so that the people of this and other countries may be attracted to see it? I suggest he should give particular attention to the case of

      2317
      Uriconium, which has been buried beneath the soil for 2,000 years. There are many acres of agricultural land which might be purchased and excavated—
      Mr. SPEAKER: I do not see any reference to Uriconium in the Vote.
      Mr. MANDER: I was suggesting that, instead of spending the money in this Vote on the particular purposes the right hon. Gentleman has named, he should divert some of it and use it in the way that I have proposed.
      Mr. SPEAKER: Those are matters which cannot be raised on the Report stage of this Vote.
      Question put, and agreed to.
      Fourth Resolution read a Second time.
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Captain BOURNE: This Vote was reached very late last night and I had not an opportunity of putting a question which I propose to ask now. It is in relation to the old mission building in Moscow. It will be within the recollection of the First Commissioner of Works that before diplomatic relations with Russia were broken off, in 1927 or 1928, there was a mission house in Moscow in occupation of the British Government. I am not clear as to whether that building was surrendered or not, when diplomatic relations were broken off. I know the building personally, and it would seem to be a suitable building for our Embassy, and I merely ask whether that building is now available, or whether it has been surrendered to the Russian Government, rendering it necessary now to negotiate for new building. I also submit that if it is necessary to negotiate for the acquisition of a new building, we ought to try to find one somewhere in the same quarter as that building, because that is the quarter where most of the foreign missions in Moscow are established, and it is a very great convenience to our staff there, who have not very much chance of recreation, to be within reach of the other diplomatic staffs in that city.
      The FIRST COMMISSIONER of WORKS (Mr. Lansbury): I am very glad to answer the hon. and gallant Member's questions. The house to which he refers
      2318
      has been in our possession all through the recent period, and is still in use, but the unanimous report of the officials sent out from my Department and of the Ambassador on the spot is that it is not large enough or convenient enough. The house for which we are negotiating is immediately opposite the Kremlin and is one of the best houses in Moscow. It is the house which the Ambassador himself considers suitable. We think that, at the beginning, that house will not be able to accommodate the whole of the staff, because there are additions—commercial people and others—and we may have to use both houses for a time, but ultimately it is hoped we will be able to bring the whole staff together.
      Question put, and agreed to.

      HOUSING (No. 2) [EXPENSES].
      Resolution reported,
      "That, for the purposes of any Act of the present Session to make further and better provision with respect to the clearance or improvement of unhealthy areas, the repair or demolition of insanitary houses and the housing of persons of the working classes, to amend the Housing Act, 1925, the Housing, etc., Act, 1923, the Housing (Financial Provisions) Act, 1924, and the other enactments relating to housing subsidies and for purposes connected with the matters aforesaid (hereinafter referred to as 'the said Act'), it is expedient to authorise the payment out of moneys provided by Parliament—

      (i) of annual contributions towards any expenses incurred by local authorities in connection with any action taken by them under the said Act for the clearance or improvement of unhealthy areas, or for the demolition of insanitary houses, or for the closing of parts of buildings and in connection with the provision and maintenance of the housing accommodation rendered necessary by any action so taken, but so, however, that such a contribution shall be payable during a period of forty years only, and shall not exceed an amount ascertained in the following manner, that is to say—

      (a) subject to the special provisions contained in the next succeeding paragraph the amount shall be, so far as regards persons displaced from houses in an agricultural parish, the sum of two pounds ten shillings, and so far as regards persons displaced from houses in a parish not being an agricultural parish the sum of two pounds five shillings, multiplied in either case by the number of persons of the working classes (being persons whose displacement is shown to the satisfaction of the Minister to have been rendered neces-

      2319
      sary by such action as aforesaid) for whom accommodation has, with the approval of the Minister, been rendered available in new houses; but

      (b) if the Minister of Health certifies that it is necessary to provide rehousing accommodation in buildings of more than three storeys on the site of a clearance area, or on a site which has been, or is to be, acquired or appropriated for the purpose with the consent of the Minister, then, so far as regards displaced persons for whom such accommodation has, with the approval of the Minister, been rendered available, the amount shall be the sum of three pounds ten shillings, multiplied by the number of persons of the working classes (being persons whose displacement is shown to the satisfaction of the Minister to have been rendered necessary by such action aforesaid) for whom such accommodation has, with his approval, been rendered available;

      (ii) of annual contributions towards the provision, to meet the needs of aged persons, of houses of smaller dimensions than those specified in Sub-section (2) of Section one of the Housing, etc., Act, 1923, not exceeding, however, in the case of any such house, two-thirds of the contribution which might under that Act or under the Housing (Financial Provisions) Act, 1924, be made towards the provision of a house of the specified dimensions;

      (iii) of any additional sums which may become payable under the previous enactments relating to housing subsidies by reason of any provision of the said Act which—

      (a) amends Section five of the Housing (Financial Provisions) Act, 1924, in regard to the dates at which the Minister of Health and the Department of Health for Scotland are required by the said Section to review and, if they deem it expedient, revise the amount of the contributions payable by them in respect of the provision of houses;

      (b) substitutes, for the purposes of the Housing (Financial Provisions) Act, 1924, an amended definition of 'agricultural parish' so far as regards houses for the provision of which proposals may be approved by the Minister of Health after the first day of April, nineteen hundred and thirty; or

      (c) provides that, as from the first day of April, nineteen hundred and thirty, the amount of an annual payment to be made to a local authority under Section seven of the Housing, Town Planning, etc., Act, 1919, Section eight of the Housing Act, 1921, or Section six of the Housing, etc., Act, 1923, may, instead of being determined on the basis of the estimated annual loss resulting from the carrying out of the scheme in respect of which the payment is to be made, be determined either on the basis of the actual loss so resulting, or on the basis of the estimated annual
      2320
      loss so resulting, or on the basis of actual income and expenditure as respects some items required to be brought into account and on the basis of estimated income or expenditure as respects other such items;

      (iv) of any expenses incurred by the Minister of Health under the said Act in exercising any powers of a local authority, subject, however, to the recovery of those expenses from the local authority in the manner provided by the said Act."

      Resolution agreed to.

      NAVY AND MARINES (WILLS) BILL.
      Order for Second Reading read.
      Motion made, and Question proposed, "That the Bill be now read a Second time."—[Mr. Ammon.]
      Commander SOUTHBY: can we have some explanation of the Bill?
      The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Ammon): This Bill is not controversial, but is simply intended to put people in the Navy on the same lines in making wills as ordinary citizens.
      Commander SOUTHBY: I want more information about what it is doing, and I think the House is entitled to have that information. Though I do not wish to oppose it in the least, I should like—
      It being Eleven of the Clock, the Debate stood adjourned.
      Debate to be resumed To-morrow.

      CLERGY PENSIONS (OLDER INCUMBENTS) MEASURE.
      Miss PICTON-TURBERVILL: I beg to move,
      "That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Clergy Pensions (Older Incumbents) Measure be presented to His Majesty for Royal Assert."
      11.0 p.m.
      I hope the House will agree that this is a Measure that is long overdue. It has been one of the tragic aspects of the Church of England that men after long and faithful service have received no pension. Until 1926 there was no uniform system of pensions at all, and even the Pensions Measures of 1926 and 1928 did not include the older men of 55. This

      2321
      Measure remedies that defect, and in future, if this Measure receives the Royal Assent, every incumbent over 55 who is either infirm horn old age or who from mental or physical incapacity cannot discharge his duties will of right have a small pension, ranging from £150 to £175.
      This puts an end to the uncertain and chaotic condition of the pensions for the older clergy. As it applies only to those over 55 years of age, the other clergy having already been provided for by the Measures of 1926 and 1928, it is obvious that this Measure is but a temporary Measure. After 20 or perhaps at the most 30 years there will be no longer any need for it. The Ecclesiastical Commissioners have set aside £1,500,000 to meet the expense of the scheme, and I would like to point out that it will bring no cost to the State at all. This Measure has been approved by the Ecclesiastical Committee of both houses, and it has been carried through all its stages with the support of the Ecclesiastical Commissioners and the Pensions Board. This Measure will put an end to a tragic condition which has too long obtained in the Church of England.
      Major Sir JOHN BIRCHALL: I beg to second the Motion.
      Mr. MANDER: I desire to support this Measure, and at the same time to ask one or two questions, because I do not think that a Measure of this importance, containing 17 Clauses, ought to be allowed to go through as a matter of course without careful examination by this House. The Measure will perform an admirable service, and provide pensions for a number of gentlemen who thoroughly deserve assistance and support of that kind. The hon. Lady referred to a sum of £1,500,000 as having been put aside by the Ecclesiastical Commissioners. The sum mentioned in the report of the Ecclesiastical Committee was £1,250,000. I do not know whether that was a slip?
      Miss PICTON-TURBERVILL: It was a slip.
      Mr. MANDER: It is a regrettable necessity that the clergy should be called upon to make contributions for the pensions of the others, but it is impracticable to find the money by any other means, and as it is a temporary Measure, it was thought better to deal with it along
      2322
      those lines, and ask the existing clergy to make some sacrifice for their older colleagues. Was this Measure carried through the Church Assembly at every stage unanimously? Were there any divisions, and if so, what was the relative proportions supporting and opposing? I notice that the Channel Islands are excluded. There is no doubt some good reason for that, but I should like to know why the older clergy of the Channel Isles are not going to be allowed to receive this pension.
      Mr. EDE: I desire to compare this Measure with one which we passed the other night, and to mention certain omissions. As this is connected with ecclesiastical matters, I suppose that it will be no surprise to the House that it is drawn up on strictly scriptural lines on the basis that "to him that hath shall be given." This Measure, as compared with the one which we had the other night, requires more defence than it has had. We had my hon. Friend the Member for Carlisle (Mr. Middleton) the other evening actually suggesting, on the Measure we then had for giving pensions to the Ecclesiastical Commissioners, that he would like to see a pension of the full salary and allowances that are at present being paid given to men who are getting an income far in excess of anything likely to be obtained by the pensioners under this Measure. I cannot help thinking that those people who bear the burden and heat of the day might have received from one of the richest churches in Christendom rather better treatment than they are receiving in this Measure.
      I should like to draw attention to the omission from this Measure, and from all pensions measures of the Church of England, of the curates of the Church. I understand that hon. Members were persuaded by Government Whips to go into the Lobby the other night in support of the Measure by the tale that they were voting for a pension to my hon. Friend, and that they were voting for pensions for poor curates. Neither by that Measure nor by this will curates of the Church of England get a single penny pension. I hope that it will not be long before this great Church and the Ecclesiastical Commissioners will be able to bring before the House a scheme that will

      2323
      assure a pension to people who have never been beneficed clergy, but have throughout their career been curates.
      Miss PICTON-TURBERVILL: In reply to the questions raised, I would like to say, first, that the sum of £1,500,000 was a mistake; it ought to have been £1,250,000. I thought I had said that. The Third Reading of the Measure was passed unanimously in the Church Assembly; though, no doubt, it was the subject of a number of proposals in committee. I very much value the suggestion of the hon. Member for South Shields (Mr. Ede) that the sum is too small, but I assume that it is as much as the Church is able to give at present. The fact that the Channel Islands are not included is due to the fact that their inclusion presented too many difficulties. As far as the question of pensions for curates is concerned, I can only say that progress on that subject must be made step by step. We began with beneficed clergy of a certain age and now we have made an advance on that beginning and I have no doubt that, eventually, curates will be included.
      Mr. SCRYMGEOUR: I regard this Bill as a step in the right direction. It is gratifying to know that the Church is putting an end to what has been in the past, an absolute scandal. We have seen struggling, earnest Christian men who have laboured in connection with the wealthiest Church in the country, left unprovided for in their old age. Even now curates, another section of the arduous workers for the Christian Church, are left out of the scheme. The Measure is gratifying as far as it goes, but I must express my regret that it does not go to the full length it ought to.
      Question put, and agreed to.
      Resolved,
      "That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Clergy Pensions (Older Incumbents) Measure be presented to His Majesty for Royal Assent."
      The remaining Orders were read, and postponed.

      COAL INDUSTRY (ANTHRACOSIS AND SILICOSIS).
      Motion made, and Question proposed, "That this House do now adjourn."—[Mr. T. Kennedy.]
      Mr. HOPKIN: I desire to call attention to the position in regard to anthracosis and silicosis. As far back as last July I put down a question to the Minister and I was told that anthracosis was simply a blackening of the lungs. On the 18th November an answer was given to me that there was no evidence that the blackened condition of the lungs described as anthracosis was a cause of disablement. When I further asked if attention had been called to the dissatisfaction that exists, I was told that no complaint had been received. The colliers in the anthracite districts feel that my hon. Friend has been wrongly informed and, further, that sufficient attention has not been given to a matter which for them, is a question of life and death. No indication has been given that anthracosis is to be placed on the Schedule at all, no evidence is forthcoming that the Ministry are aware of the growth of silicosis, and nothing has been said to show that the 50 per cent. of free silica is to be abolished.
      Taking the case of anthracosis first, the question arises: Does anthracosis exist at all? I would beg my hon. Friend to turn his attention to the evidence which has been given by Dr. Griffiths in about six post-mortem examinations in the Cross End district. He has described the effect of small anthracite coal dust on the lungs. In every case he said that the condition of the man was due to the effect of the small anthracite dust on the lungs. Indeed, it is practically impossible to say, until a man has died and his lungs have been incinerated, whether what was in the lungs was silica or anthracite dust. After the post-mortem examinations recently held this is the type of verdict which has been returned: "The cause of death was fibrosis of the lungs due to a combination of silicosis and anthracosis." The House is aware that there are two difficulties as regards the position of the men. First of all, before a man can have compensation he must have worked in 1929 and afterwards, and, secondly, there must be 50 per cent. of silica in the

      2325
      rock in which he is working. The very fact that 50 per cent. is put down shows that it has no scientific basis whatever. I ask the House to picture what the position of these men is in the mine. There they are, hundreds of feet below the earth in a small heading nine feet by five feet. There they have these infernal drills going, and the whole of the air is so full of the slack dust that they cannot see the lights from their own lamps. I am certain that Dante in all his dreams never dreamt of such a hell as this. It is because these men have to breathe this dust for eight hours per day, that you have a number of men between 20 and 40 in one district alone who are disabled because of silicosis. It is an interesting fact that about a fortnight ago a man was gassed and died. After the post-mortem examination it was found that
      "the pleurœ of the lungs in every part was firmly adherent and bound down. The lung substance was heavy with coal dust, and felt hard and gritty in places; striated with coal marks on pleural surfaces."
      There is another case of a man still in work, 35 years of age, who in two or three years would inevitably have to cease work and die. I have here the case of a man who has been certified as suffering from silicosis and the certificate is as follows:
      "I hereby certify that the present condition of the workman, ascertained by my examination is as follows: Clinically and radiologically there are evidences of an early silicosis. These manifestations do not in themselves appear to indicate a serious incapacity for work."
      This man could not draw any compensation and, if he dies, his dependants will not have a penny piece. I have had the advantage of seeing a report by Dr. Griffiths, who has taken an active part in fighting the disease of silicosis. He says:
      Take the case of one man, John Hunt.
      "It was pitiful in the extreme to watch him go to work. I should imagine that it took him more than an hour to walk a mile to the colliery. They go on for months with this kind of breathing until finally they cannot get even out of their beds. One can easily hear in the neighbouring roomy of the house their efforts at breathing. The air is continually bubbling through mucus and sputum which they have great difficulty in clearing. There is a certain amount of blueness through failure to oxygenate the blood. It is tragic to watch these men absolutely die. Their courage is wonderful.
      2326
      They are very uncomplaining and all they worry about is leaving their families unprovided for and knowing the cause is their own hard work."
      The fact is that this Order is merely a pretence that the workers have any protection. It is no protection at all. There is not a case in the whole of the anthracite industry in which the rock contains anything near 50 per cent. of free silica. The miners in this district are looking with hope to the Labour Government at least to grant them this small measure of justice. I would ask my hon. Friend two specific questions. Firstly, is he or is he not going to schedule anthracosis; and, secondly, is he or is he not going to remove this limitation of 50 per cent. of free silica? I have here a specimen of the dust in which these men work. What does it matter whether they breathe 5 per cent. or 50 per cent. of this dust? They die from it, and I say that they ought to be entitled to compensation for themselves when they are alive, and compensation for their dependants when they are dead.
      The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): I can assure my hon. Friend and the House that there is no lack of sympathy or consideration on the part of my right hon. Friend in relation to the question of silicosis and the very evil and disastrous effects that fall upon the unhappy victims of this complaint. It is recognised that coal miners working in mines in which silica rock is present may and do contract silicosis, and the "Various Industries" scheme provides for such cases. For instance, paragraph 2 (2) of that scheme applies to workmen engaged in drilling and blasting silica rock in or incidental to the mining and quarrying of other minerals; while paragraph 2 (4) applies to workmen engaged in handling or moving silica rock in connection with such work; and these words are intended to include, inter alia, workmen employed in hard headings in coal mines.
      Mr. HOPKIN: I am sure that my hon. Friend would not wish to leave out the essential part, which is as to the 50 per cent. of free silica.
      Mr. SHORT: My hon. Friend must give me an opportunity. I have only been on my feet for a few seconds, and surely I

      2327
      am entitled to make some statement. I will come to the 50 per cent. of free silica. My hon. Friend must not think that I am antagonistic at all, but I should have expected him to bring forward some more concrete evidence than he has submitted to-night. As I was saying, the words I have quoted are intended to include workmen employed in hard headings in coal mines, which, so far as the Home Office has any evidence, is the only work in coal mines which gives rise to silicosis. For the purposes of the scheme, silica rock is defined as including quartz, quartzite, ganister, grit-stone and chert, but it does not include natural sand, or any rock containing less than 50 per cent. of free silica, and it is this last limitation which my hon. Friend questions. Apparently he would give the impression to the House that persons working in rocks containing less than 50 per cent. of free silica have contracted silicosis and have been unable to obtain compensation.
      Let me say at once that there may be rocks other than those specified in the definition which are met with in mining operations, and do not contain 50 per cent. of free silica. This is all a question of evidence. So far as the evidence in the possession of the Home Office goes, not a single case has been produced to show that compensation has been prejudiced because of this limit. The Miners' Federation, for instance, when the scheme was under consideration, expressed the view that the introduction of this limitation would have the effect that has been mentioned. The Miners' Federation up to this moment has not produced a case, though I have been told to-night that the Lancashire and Cheshire Miners' Federation is about to submit—
      Mr. HOPKIN: I have 20 here.
      Mr. SHORT: If my hon. Friend had sent that, evidence, as he has been requested not once or twice, to the Home Secretary it would have considerably assisted in an inquiry. If grave injustice is being done, as he has sug-
      2328
      gested, my right hon. Friend would have been assisted in his investigations, but up to this moment my hon. and learned Friend has not produced that evidence. We are prepared to investigate all cases submitted to us from the Miners' Federation or any other source. We are prepared to go fully into the matter and my right hon. Friend will review the position of the 50 per cent. in relation to the facts that become known and will sympathetically consider any action, legislative or otherwise, that may be necessary. So far as anthracosis is concerned, once again we are in the same difficulty as regards evidence. For instance, as far as I understand the position, there is little or no evidence in the possession of the Home Office or the Mines Department that the inhalation of coal dust, even for a considerable period of time, produces such a condition of the lungs as might be scheduled as an industrial disease. Once again my right hon. Friend is prepared to consider all the facts and all the evidence. I cannot commit my right hon. Friend or the Government as to what their future action may be, but I can say that we are prepared to make the fullest investigation provided the evidence is given to us upon which we can proceed to review the situation.
      Mr. HOPKIN: Is my hon. Friend prepared to send an inspector into the anthracite district, particularly into the Cross Hands district, where he will have abundant evidence of anthracosis and silicosis?
      Mr. SHORT: I can give my hon. Friend an assurance that we are prepared to send an inspector if he will give us evidence of the cases which he says he has in his possession.
      Mr. HOPKIN: Certainly, with pleasure.
      It being Half-past Eleven o'clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.