§ Order for Second Reading read.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)
I beg to move, "That the Bill be now read a Second time."
I am happy to think that it will require few words to commend this Bill to the House. It is one of those Measures which, while they arouse no passionate partisanship, are of considerable importance to the well-being of this country. It is not too much to say that were this Bill to be rejected many of the wheels of local activity, so essential to 1549 the nation, would cease to go round. The Local Loans Fund exists mainly for the purpose of providing loans for public works for the lesser local authorities. In its main features this Bill follows the lines of similar Bills in previous years. Its principal provision is the fixing at the sum of £30,000,000 of the maximum amount which may be issued for the purpose of local loans up to the date of a further Act of this kind. That is provided in Clause 2. Clause 1 reappoints for a further period of five years the Public Works Loans Commissioners, whose office expires next year. The remaining Clauses are concerned with wiping off from the assets of the Fund certain loans not likely to be recovered, and the remission of principal and interest or of interest alone in the case of certain items. That is all that there is in the Bill, and it is with great confidence that I commend it to the House.
§ Mr. WISE
I should have expected that the Financial Secretary would have given us a little more explanation of the purpose and reasons of the various Clauses of the Bill. As I understand it, the Bill writes off certain loans as bad debts. About that I have nothing to say because, obviously, that depends on administrative details of which the Treasury, which is very careful in these matters, has fully informed itself. It also proposes to fix the limit of loans which the Public Works Loans Board may make to local authorities for various purposes, for housing, for works of public utility and for a whole variety of things, many of which are set out in the report of the board. I should like to ask the Financial Secretary why the figure is fixed at £30,000,000. If £30,000,000 was an adequate sum when the Conservative Government were in power for loans to local authorities for public purposes, why is it supposed that it is an adequate sum when there is a Government in power who, at this moment, are holding conferences with local authorities and pressing them to undertake all sorts of works which could be financed, as I understand it, under this fund? It seems to me to be a curious situation that the Government should, after a year of pressure, at last have come to the view that they can exercise much more pressure on local authorities to undertake works which will assist employ- 1550 ment and generally help the internal situation, and then in the same week come to the House with a proposal which is exactly on the lines proposed by their predecessors, in an entirely different national situation. There may be some explanation. It may be that the Government think that this Board or the local authorities ought not to be trusted with a larger sum. That seems to be a curious explanation, but there may be another explanation. We ought to be informed what is the view of the Government and why they fix the amount at this particular sum, no more and no less.
The main purpose of my rising is to draw attention to the rather curious composition of the board which the Government proposed to set up, having regard to the Government that is in office. The Financial Secretary has said that the Government merely propose to reappoint the existing board, which was appointed by the Conservative Government five years ago. I have been interested to examine into the functions of the board and into the exact public purposes which they have to perform. As I understand it, the Loans Commissioners, under the Act of 1875, have to consider the propriety of granting a loan having regard to the security for its repayment, and to determine whether the work for which the loan is asked is of public benefit, having regard to the amount of public money, that is to say, £30,000,000, which is placed at the disposal of the Commissioners. Take the first point. These Loans Commissioners have to consider as to the value of the security offered by the local authorities in asking for loans for public purposes. According to the report of the Commissioners, in 16 specific cases, not amounting to a very large sum, they have refused loans to local authorities on the grounds that the rates in the district are too high, and in 47 other cases they have refused loans to local authorities for other reasons. I looked through the list of these eminent City men who are to determine whether the rates in a particular district are too high, and so far as I am aware not one of them has ever had any experience on a local authority in an industrial district.
Take the second point. The Board is to determine whether the purpose for which the loan is required is justified. 1551 They are asked to pass judgment whether the local authorities should have the money for this purpose or that purpose. Moreover, they are asked to pass judgment on the question whether it is desirable, I suppose having regard to the state of the capital market, to make any loan at all. I imagine, since the attitude of the Commissioners will determine the amount which the Treasury is prepared to place at their disposal, that their policy and their advice guides the Treasury a great deal in regard to the total amount which shall be made available. The Financial Secretary is well aware that there is a very strong public controversy raging, and has been for some months, on what is known as "the Treasury view" with regard to the expenditure of public money. The view strongly held by Hon. Members opposite and shared by some of the officials of the Treasury is that it does not help unemployment at all to spend money for public purposes; that the more money you spend for public purposes the less there is for private purposes. That is the Treasury view. It is a view which broadly divides the two parties in this House in regard to the raising of loans and the expenditure of public money for public purposes.
Having regard to the attitude of the Government and the action they are taking elsewhere to persuade local authorities to go ahead with schemes of public expenditure to provide employment, having regard also to the strong views held by the Liberal party and the fact that the Government disagree with the views held by hon. Members opposite on this very important question, one would have thought that in setting up a board to administer money for this purpose the Government would have taken the precaution of seeing that their point of view, and also the point of view of hon. Members below the Gangway, was represented. I doubt very much whether any one of the members of this board would agree with the view, which is in fact the policy, of the Government. It is an extraordinary board for a Labour Government to set up. I say nothing against the individual capacity or their desire to render public service of these eminent peers and bankers, and insurance magnates, but there is not a single one who can be regarded as taking the view of public affairs and public expen- 1552 diture in relation to unemployment, of the desirability of extending the useful activities of local authorities and providing public utilities, which is held on these benches and which is the policy of the Government. Out of 18 members on this board, 10 are bank directors, 13, apparently, are insurance directors, three of them are directors of one single company, and four of them are actually directors of public utility companies which are, I believe, in competition with public utilities which this fund exists to finance and extend.
I can understand such a board being appointed by a Conservative Government, but it absolutely passes my comprehension to discover what justification there is for the present Government excluding any representative of labour or the trades unions, any representative of the co-operative societies or any local administrator who is acting as chairman of a finance committee of a local authority—and there are dozens of them now who are members of the Labour party—or any chairman of a co-operative society, which carries on transactions involving large sums of money, or excluding anybody who could be expected to have the smallest sympathy with the objects which this party exists to propound and advance. I should like to know whether the Government intend that the Bill shall be carried through in this form or whether they are prepared to accept Amendments in Committee designed to alter, fundamentally, the composition of this board. I recognise that the Financial Secretary has been very much pressed with other things and may not have scrutinised the Clauses of this Bill very carefully or considered the reaction which this is likely to have on those members of his own party who listened to his admirable and eloquent speech at the Party conference on the desirability of bringing banking under public control in order that the purposes of this party might be expedited. Here is an opportunity of taking a step forward in that direction. I hope he will not lose the opportunity.
§ Mr. C. WILLIAMS
I will not follow the hon. Member for Leicester East (Mr. Wise) into the question of banking and public control, but I was very much amazed with one part of his speech. He said that the men on this board were men of high character, but that it was 1553 not a suitable board for this purpose because there were not upon it representatives of various outside interests. He referred to the trade unions, and wanted to exercise pressure on the Treasury to put people on this board not because they were capable of managing the job but because they represented other interests——
§ Mr. WISE
The hon. Member must not misrepresent me. I said that in the co-operative movement, and in the chair of finance committees of great local authorities like Bradford and Sheffield, there are men experienced in the Labour movement and in accord with the views of this party who are just as competent because of their experience in banking to protect the public interest as the members of this board, indeed, much more competent, because of their knowledge of the problems of local government, to exercise judgment on applications from local authorities. I did not suggest that they should be put there because they represented trade unions, but because they have the knowledge which is necessary.
§ Mr. WILLIAMS
I do not wish to misrepresent the hon. Member, but the explanation he has just made makes his case far worse. He used the word "Labour." This board is entirely above and beyond any party in any way—[Interruption]. I believe the Financial Secretary will agree with me in saying that this board has been appointed because they are the most competent people to carry out the work and not for any political reasons whatever. The Parliamentary Secretary will also agree that the only question to be considered in the composition of this board is the service of the country, not politics. The members of this board should not be appointed because they belong to this or that party, but simply because of their competency. If I am wrong then the Treasury must reorganise the board on this basis.
I desire to put one or two questions on Clause 2, which deals with a sum of £30,000,000. Protests have been made that this is not an adequate sum. If one remembers how long that sum has been circulating, and if one considers the growth of the nation during that time, there is a comparatively strong case for saying that the sum is not adequate 1554 to-day. I am not arguing it. But we ought to have an explanation from the Treasury. Does the Treasury consider the sum adequate? Is the whole of the sum now being used? If the £30,000,000 is in full use there is no need for more, but if directly any sum comes back to the pool there is an immediate demand for it, there would be justification for increasing the sum. I see on the Order Paper the Financial Resolution, and when we come to it I shall have to refer to it in great detail. In the first Schedule of the Bill you are actually remitting a certain sum of money, something well over £100,000. When money is remitted in that way does it mean that the £30,000,000 is reduced? Is there any means whereby, when the Treasury have remissions of this kind, a further sum of money can be obtained so that it may still be used for these particular purposes?
There is one other point of principle that I wish to raise. What is the best way of approaching this Public Works Loans Board in order to get sums remitted for public works, for instance, a harbour which is desperately hard up? Will the Financial Secretary to the Treasury give me direct advice as to how to get a remission of a loan where there is no possibility of the loan being paid back? It is done in Scotland on a great scale. How can we in England have the same amazing luck in approaching the Board as the Scottish people have? We have harbours in just as bad straits as those in Scotland, particularly in the West country. I beseech the Financiai Secretary not to be led away by the extraordinary remarks made by the hon. Member for East Leicester (Mr. Wise) or by the fact that the hon. Member quoted a speech against him. I hope also that he will see that this body is kept entirely outside all party interests.
§ Mr. ARTHUR MICHAEL SAMUEL
A Bill of this kind, to the knowledge of those who are old Members of the House, has been brought up at various times during the last five Parliaments and on several occasions during each year. So far as I am concerned I do not propose to offer any strong opposition to what the Bill contains. I would supplement one question put by my hon. Friend who has just spoken. How long is the £30,000,000 to last? One does not like to 1555 over-estimate, but at the same time one wants to know whether this £30,000,000 is supposed to last till the end of the next financial year. If not, we must expect another Bill for another £30,000,000 in the course of a few months. I have heard these Bills discussed during the last five Parliaments but never before have I heard raised the point that was raised by the hon. Member for East Leicester (Mr. Wise). So far from grumbling about the names of the gentlemen who are referred to in Clause 1, the hon, Member ought to join with the whole House in saying how grateful we are to these very able and competent men for giving their time and taking the trouble to look after our affairs without any reward except the baldest thanks of the House. I should like to put on record, on behalf of my party, how profoundly grateful we are.
The hon. Member also made the point that certain Labour financiers were kept out on account of political leanings. There is no particle of truth in the statement. If there are vacancies and there are men of the same opinion as the hon. Member who are equally competent and willing to do the work, I am sure that whatever Government is in power will be very glad of their help. To say that men are kept out because of their political views, whether Labour or Socialist or Communist, would be as much as to say that I would not like to sit on the Board of Norwich Hospital with a manager who happened to be a Socialist. If a man is willing to give the time, and is competent to do the work as well as other people, we are very glad to welcome his help. I would remind the hon. Member for East Leicester that what we are concerned with here is not a party panel, but a body of very able men, whose services command large sums in the City of London, who are willing to help by acting as unpaid Commissioners and to whom we ought to be very thankful. The hon. Member went on to refer to a speech made at the Labour Party Conference by the Financial Secretary on the subject of bringing banking under public control. It would not be in order to debate that question here and now although I should be very pleased to do so. We had a 1556 partial debate upon it when I was in charge of the Currency and Bank Notes Bill, and, if I had to give an answer to the hon. Member upon that question, not in detail but in a general way, I would suggest to him that he should turn up the speech made at the Brighton Labour Conference by the right hon. Gentleman the Chancellor of the Exchequer. The roasting which the Chancellor of the Exchequer gave on that occasion to the hon. Member for East Leicester on this subject we have not forgotten. If he wants an answer to the question of why we should not bring banking under public control I suggest that the answer given to him by the Chancellor of the Exchequer on that occasion is ample for my purpose.
§ Mr. SAMUEL
Yes, and he told the gentlemen who supported that idea, in the politest language of which he is capable, that they were talking nonsense and from that day to this we have heard nothing about it. I recommend the hon. Member for East Leicester to read that speech again. I pass from recalling this very interesting and amusing episode however to consider the main part of this Bill. We see here that these loans have been very largely concerned with Scottish harbours and I do not object to that in the least.
§ Mr. SAMUEL
It is not for the reason assumed by the right hon. Gentleman the Secretary of State for Scotland that I refrain from making any objection to cancelling certain loans to Scottish harbours. It is not on financial grounds, but because the men who will benefit are men after my own heart, namely, the deep-sea fishermen. I was brought up among them on my own native East Coast of England and anything that can be done for them I would like to see done. But as a matter of finance, I must draw the attention of the House to the fact that in the case of Balintore Harbour, for instance, the amount of the loan was £2,000 and the 1557 amount repaid nil and it is stated in the Financial Memorandum that the trustees have been in arrear ever since the year 1893. Then in regard to Thurso River Harbour we find that there has been a £13,000 loan, that the amount repaid is nil, and that the trustees have been in financial difficulties ever since the loan was advanced. There are also loans in connection with Fraserburgh Harbour, Port Ness Harbour, Rosehearty Harbour, Dingwall Harbour, and Scrabster Harbour.
There is an object lesson here which I would bring to the notice of hon. Members who have advocated setting up municipal banks. If these harbour authorities, instead of going to the Treasury, had borrowed the money from local municipal banks—supposing such banks to be in existence—then local people would have had to find the money and would have had to bear this loss, which the Treasury is now willing to bear out of the public purse. I hope that those in favour of municipal banks will take note of the immense amount of harm which would be done in cases of this kind if the money had been borrowed from local municipal banks. I find also loans to individuals—the names of Collington, Curtis, Derry, Grew-cock, Read, Savage and Tudhope are mentioned—and varying amounts are to be written off in these cases. I notice that in every one of these cases in which there has had to be foreclosure there has been a loss. The property concerned has not realised anything like the amount of money lent upon it. As far as I know these properties were valued by the Revenue department. The valuers were State valuers but evidently the values placed upon them have been higher than the amounts actually realised upon them. For instance, in the case of Grewcock we have a loan of £8,100 made on 10th June, 1925, under Section 1 of the Agricultural Credits Act, 1923. The property was valued at £10,800 in April, 1924, and on foreclosure it was sold for £6,500. I am the last in the world to find fault with any man for an error of judgment, for no one knows what is going to happen in the future, but it is impossible to overlook the fact that in every case where there has been the test of sale these values have been found to be far too high.
1558 It may be said by the Treasury that prices have fallen since 1923–24. My reply is that no one ever expected prices to continue at the level at which they were then and, in making a valuation for a mortgage which is to extend over a series of years, allowance is always made for possible variations in values. I suppose some such allowance has been made here, but the mere fact of these people coming to a Government Department to ask for assistance by way of loan, showed that they could not conveniently have got the money elsewhere, and that ought to have suggested to the valuers very close and careful inquiry. Yet we have the fact as I say that in every case where the revenue values have been tested by sale they have been found to be too high. Therefore, I would ask the Financial Secretary to have a word with the Government valuers and to ask the reason for this state of things. There may be quite a valid reason for this discrepancy in values. I do not doubt the capability and efficiency of those who made these valuations but evidently they have not taken the precautions which I think they ought to have taken. I ask the hon. Gentleman to deal with that point and also with my query as to how long the £30,000,000 is going to last.
§ Mr. WALLHEAD
I rise to reinforce the argument of my hon. Friend the Member for East Leicester (Mr. Wise). I cannot accept the theory that these appointments are of a purely non-political character. In many case I think they are appointments in return for services rendered. I find that one of these gentlemen was a Tory candidate, unsuccessfully three times and successfully once. It is just possible that he is rewarded for the services he has rendered to the Conservative party in losing three elections by being appointed to a position of this description.
§ Mr. C. WILLIAMS
What sort of reward is it to be appointed to a board for which you get no salary or pay and no emoluments whatever, but have to give your services free on a great many occasions?
§ Mr. WALLHEAD
There are all kinds of rewards in the public life of this country for which men receive no financial consideration, and my hon. Friend knows that many of these posts that carry no salary with them at all are regarded as 1559 honourable and desirable things and of use in other ways than the mere receipt of a salary. Everyone in public life knows that there are certain individuals who desire to be appointed to certain offices because they regard it as honourable, and not only so, but it is often a paying proposition in many ways, and it seems to me that the argument of the hon. Member opposite does not carry very much weight.
Most of these Commissioners are appointed for the purpose of assisting public authorities by the loan of rather cheaper money than they can get in other directions, and inasmuch as they are almost wholly violently anti-Socialist and opposed to the advance of municipal services, they would be likely to oppose many of the applications that they might receive. The hon. Member for Farnham (Mr. A. M. Samuel) raised a question in regard to certain loans, but those loans were moneys advanced to the landed interests. There have been refusals of loans to public authorities on the ground that their rates were too high, but private landowners have money advanced to them, and that money is a dead loss. There are very few dead losses on loans to public authorities in this country. There is none reported here, and in any case, if the money serves a public, communal purpose, it is of value to the community in some form or another.
The hon. Member for Farnham stated that there were no vacancies, but of course there are vacancies. All these seats are vacant now, because under the Statue the Commissioners all vacate their seats, and it was open to the Government to appoint an entirely fresh board if they so desired. I think my hon. Friend the Member for East Leicester has raised a very pertinent point indeed. If the Front Bench of the Labour and Socialist party believe in the capacity of members of their own party up and down the country, they might place some faith in them by giving them admission to a board of this description, in order to prove their capacity and to establish a point of view that is possibly necessary on such a board.
Take the name of the first gentleman mentioned in the Bill. Is it any wonder that he might be expected to oppose advances to a local authority in a dis- 1560 tressed area? Most of the distressed areas are mining areas and have been through a prolonged industrial struggle, and we know the point of view of the gentleman mentioned, Lord Hunsdon. In 1926 Lord Hunsdon declared that the Germans were our enemies in time of war and that we used starvation as a weapon against them, but that the miners were our enemies now and that starvation was a proper weapon to be used against them also. In face of a statement of that description, a Labour Government once more places this gentleman in a position like this! I say that under the circumstances a Labour Government would have been justified in telling this gentleman that he was unfit to hold any public office anywhere, and if they will not say it, I will say it on my own behalf and on behalf of those hon. Members on this side who accept my point of view.
There is another question. My own local authority is in some difficulty. Some years ago we had an unfortunate catastrophe, which arose from natural causes. There was a flood, and a culvert burst, and a child was washed into the culvert. The various Government departments said the local authority should rebuild that culvert, and plans have been passed. The cost of the culvert will run into something like £4,500, but in course of the rebuilding of the culvert and the carrying of it in a certain direction to make it absolutely safe, it is found to be necessary to demolish 20 cottages that have been condemned for years past, not as insanitary, but as unfit for human habitation. The local authority, which is the Merthyr Tydvil Corporation, have plans approved for the building of 20 cottages to take the place of the 20 cottages which they propose to destroy, and the cost of these cottages will be about £8,000. The whole job is held up because they cannot raise the necessary loan of £13,000.
It is a very necessary piece of public work, and it will find some employment for the men in that area who are unemployed. They have come to the public Departments, and there is some demur. Whether the demur is now with the Ministry of Health, or whether it lies with the Public Works Loans Commissioners, I am not quite sure, but, at any rate, if it comes from the Public Works Loans Commissioners, I want to know whether 1561 the Government have any power at all to say that the Commissioners shall exercise some extended discretion in the matter. What are these public authorities to do? The work is necessary, and it seems to me that a body such as this is the proper body for supplying the funds that the local authority needs, but if persons like Lord Hunsdon are to have a word in it, I can quite imagine what he would have to say to a mining district like Merthyr. We may suppose that he still regards miners as potential enemies, and, if so, he might think it was a good thing to keep them living in houses condemned as unfit for human habitation, as a punishment for their industrial and political sins.
I hope the Government will respond to the invitation of my hon. Friend the Member for East Leicester and accept certain Amendments with regard to the personnel and the position and functions of this board. I think the point is a legitimate one which can be fairly put forward. In the list of names there are chairmen of public utility companies who may be expected to be associated with other public utility companies. If it is right politically to put on these particular chairmen who may be expected to have association with other like people, it cannot be wrong to place upon this board chairmen of finance committees of public authorities who may exercise a like influence in a Socialist direction as against an anti-Socialist direction.
§ Mr. MANDER
I desire to associate myself with the remarks of the ex-Financial Secretary to the Treasury, and to say how deeply grateful this House must be to the various members of the board who have been rendering voluntary service of great value, with no reward, for a number of years past. I do not think there is anyone who would not wish to render them all gratitude for their services. The hon. Member for East Leicester (Mr. Wise) has raised a very important matter of policy which is not dependent on the personnel of this particular board. He has raised a question as to whether, seeing that there has been a change of Government with a different outlook, and, presumably, with a different policy, any use is being made, when opportunity presents itself, by bringing in a Bill of this kind, to extend the opportunities for development work in 1562 different parts of the country. The Bill seems to be a mere reproduction of what has been going on for many years past, and we might have a statement from the Financial Secretary as to whether there is any change and any advance.
The Government have been singularly unsuccessful up-to-date in dealing with the unemployment problem, but one is given to understand that they are now contemplating, or nearly in the act of, turning over a new leaf. But is there any evidence of a new leaf in this Bill? The Liberal party have got very genuine views on matters of this kind. We have put forward the idea of a board of national investment with bigger and wider powers than anything in this Bill, so that the flow of capital into local loans and other directions might be influenced to a very considerable extent. But I quite understand that Liberal policy is much too progressive for the present Government, though we hope that they may now think whether there is not something in these proposals after all. There are two views on this matter. There is the conservative view, if pill like, the careful view, that you want to spend as little money as you can on development of a public nature for certain specific reasons. There is the other view, that as long as the work, the whole undertaking is of a constructive nature, which is going to give something in return either now or in the distant future, and is not merely in the nature of relief work with no permanent value, it is a good thing to spend as much money as you can, and to raise loans for development in different parts of the country.
It is well known that we on these benches associate ourselves with that plan of national development and re-equipment. Just as various manufactories and industries in different parts of the country were urged by the late Lord Privy Seal, and are endeavouring in their own way, to realise and bring up-to-date their own industries, so it should be the policy of the State to use its powers to rationalise the national services, and it might well be possible by a measure of this kind to extend the opportunities for finding work for the unemployed through measures of a reconstructive value. On the question of a board of national investment, I do not know whether I am in order, but I shall 1563 certainly, in Committee, put down Amendments to convert this Measure, as far as possible, into one containing a board of national investment with very much wider powers than any contemplated in this rather unimaginative Measure, if I may say so. I hope that the hon. Gentleman will be able to show that this Bill is not a mere repetition of what has been going on year after year and decade after decade, but that there is something new in it, something vital which shows that the Government have at last turned over a new leaf, and are going to cut their way through all the obstacles, and thereby set going schemes of a constructive value that will find work for hundreds of thousands of those who cannot now get it.
§ Mr. J. JONES
I thought I could not listen very long to some of the lectures we have heard this afternoon. I might remind some hon. Members who have been addressing us that none of us, not even the youngest, knows everything. None of these lectures were ever delivered to any other Government.
§ Mr. JONES
A good job, too! As far as we are concerned, we quite appreciate our shortcomings, and recognise our handicaps. I do not agree with this Board. You cannot get away from the fact that the first interest of bankers and insurance magnates is to consider the interests of the people they represent. It is all humbug to say that politics have nothing to do with it. Their politics, after all, are their bread and butter politics. Let a Bill be introduced into this House interfering with the privileges of insurance companies, bankers and ship-owners, and then see what kind of politics we get—the politics of the gentleman from the Prudential. We Labour men are told that we have no right to be on these boards, because we have not the necessary knowledge and experience. As a matter of fact, it is not because we have not the knowledge or experience; it is because we have not the 1564 necessary class bias. I belong to a municipality, one of the oldest from an orthodox point of view. We are judged not by what we have done, but by what we are capable of doing. We are judged by our financial position, which is not our fault; it is our misfortune. We in West Ham to-day are paying one of the highest rates in the country. Compare us with Westminster. A penny rate in Westminster brings in £30,000, while a penny rate in West Ham brings in £5,000; so that in order for us to carry out the same responsibilities—and we have greater responsibilities; we have a greater population of poverty-stricken people——
§ Mr. DEPUTY-SPEAKER
It is perfectly obvious that we cannot enter into discussions upon the relative rateable values of various corporations.
§ Mr. JONES
I accept your decision, but I thought I was in order in trying to point out that one of the functions of this Board is to give reasons for not granting local authorities money for carrying out public improvements. I was introducing West Ham as an illustration of the position in which local authorities find themselves. We are one of the highest rated boroughs in Great Britain, and, although our rates are high, relatively they are lower than the City of Westminster. We do more service and spend more money on public welfare than the City of Westminster. This board can be altered if the Government intend to give their own people a chance. We do not give way to people on the other side of the House. I have been here long enough to know that all the brains are not on that side of the House, and that some would not be here at all if it were not for their banking accounts. Their cheque books brought them here, not their ability, and yet they are the people who say, when we have a board to deal 1565 with great public schemes, that the only people who can judge these matters are the people who have been born in the purple, and who have gained their position, not because of any capacity, but because they have control of money. This board is not satisfactory, and the local authorities throughout the country are not satisfied with the kind of people on it with whom they have to deal.
§ Mr. PETHICK-LAWRENCE
By the leave of the House, I will deal with one or two points that have been raised. With regard to the valuations with which the hon. Member for Farnham (Mr. A. M. Samuel) dealt, as everyone knows, in the last few years there have been tremendous drops in the value of property. The business of the valuer is not to speculate and say what he thinks the value of property will be in a certain number of years, but to decide the value of property at the date of the valuation. Money is lent on a proportion of that value; in ordinary circumstances, that proportion would be two-thirds, but this House decided that the proportion in certain cases should be three-quarters. There is therefore neither any criticism on the valuer nor on those whose business it was to carry out the policy which this House imposed. With regard to the amount of £30,000,000, there is nothing really limited. Another Pubic Works Loans Bill can be brought in at any time. There is no specific date to which this £30,000,000 runs. The amount brought in to any one Bill can run until the next Bill has been introduced, and, if the estimate which had been made, that this sum would probably last until the summer of next year, proved to be unfounded, and the money was required before that date, it would be perfectly possible, as has been done on previous occasions, to bring in a second Bill earlier than was anticipated. Therefore, the limitation of £30,000,000 is not in any sense a limitation if suitable or desirable opportunities for lending this money were found to a greater extent than had been anticipated.
There have been two further criticisms, one of the policy and one of the personnel. With regard to policy, which was stressed by my hon. Friend the Member for East Leicester (Mr. Wise) and by the hon. Member for East Wolverhampton (Mr. Mander), I do not 1566 consider that this particular Measure is the one through which new lines of policy should be struck out for unemployment. That really belongs to different parts of the machinery which the Government have set up, and this is not the particular medium through which that should be carried out. This Measure is more for the normal and ordinary apparatus of lending, mainly to local authorities. With regard to personnel, it is not a party personnel. That is not to say that every person who takes an active part in political life has a political label, but these people are not chosen for party reasons, but because they fulfil certain qualifications, particularly with regard to banking experience. This board does not have much say in policy, but acts in accordance with the policy laid down by this House. The main function of the board is to deal with matters of security, and it is as judges of security that we require bankers for this purpose.
§ Mr. WISE
Is not part of their function, as defined in the Public Loans Act of 1875, to determine whether the work for which a loan is asked would be of such benefit to the public as to justify a loan out of public money, having regard to the amount of money at their disposal? That is an issue of policy. They have to judge as to the state of the capital market, and therefore as to the desirability of diverting moneys to public purposes, and to that extent, as I have no doubt they would argue, from private purposes in which as bankers, insurance magnates or company promoters, whatever they may be, they are personally interested.
§ Mr. PETHICK-LAWRENCE
The hon. Member is not correct in this sense, that, in carrying out their duties in matters of policy, they conform to the wishes of this House. They no doubt have a certain discretion, but they exercise that discretion along the lines which this House enjoins. It is, however, essentially in regard to matters of security that they are appointed. I have been asked if I were prepared to accept amendements in Committee, and my answer is that I am certainly not prepared to accept any Amendments which will drastically alter the provisions of the Bill. I do not subscribe to the criticisms of the fitness of these persons for the particular functions for which they have been appointed.
§ Mr. PETHICK-LAWRENCE
I cannot keep on giving way. I have had one long interruption from the hon. Member for East Leicester, and it will destroy the argument if I keep on giving way. I say that I cannot subscribe to the criticisms of their fitness for the particular functions for which the Board had been appointed. They are able and distinguished men, who have given voluntary and effective and suitable service, for which our thanks are due. Therefore, I could not for a moment consider accepting any Amendment which would displace any of these men from the Board, and, still less, sweep out the whole of the existing members. It would be a slight upon them which would be wholly undeserved, for, though these criticisms has been made to-day, so far as I am aware there has been no complaint of the decisions they have given in these matters. One would imagine that hon. Members were voicing a long series of complaints against the board's decision, but, so far as I know, that idea is absolutely and entirely without foundation. The criticisms made here have been made for the first time. However, I do not want to be too rigid in my view, and if it be suggested that there is an angle of vision—economic, not political—on these matters which is not wholly represented by the Members whose names are in this Bill I am open to consider adding, not a large number of names, but one, or possibly two, names.
Of course, I could not be expected to accept names suggested on the spur of the moment but if my hon. friends have certain individual names in mind and will submit them to me without delay, then between now and the Committee stage I am open to consider whether those gentlemen have the necessary qualifications and are prepared to render the very onerous service which is implied; and in the event of my being satisfied on these points I would incorporate them in the list in Committee. I am not prepared to go further. I could not possibly accept any proposal which would have the effect of casting a slur on the way the present Members of the Board have discharged their duties, nor of making so great a change as drastically to alter the personnel of the board.
§ Mr. C. WILLIAMS
I put the hon. Gentleman a question as to how decisions about remitting these loans are arrived at, and I would like him to give me an answer.
§ Mr. PETHICK-LAWRENCE
It is done in the ordinary business way. How does an ordinary man who is looking over his book debts arrive at the conclusion that it is no good keeping certain names on his list? He comes to the conclusion that it is out of the question that he will ever get the money, and therefore he strikes them off; and I think that is what is done here.
§ Mr. DEPUTY-SPEAKER
The hon. Member for East Leicester (Mr. Wise) has already spoken and interrupted at least once. Mr. Womersley!
§ Mr. WISE rose——
§ Mr. WOMERSLEY
In reply to the criticisms of the hon. Member for Silver-town (Mr. J. Jones), I would like to say that I have had some little experience of dealing with this board. I am doubtful whether the West Ham municipal council have ever made an application to this board. The board were not set up to deal with great municipalities like West Ham and Grimsby, which can go into the open market and get money on better terms than they would from this board and it seems out of the question for the representative of a district which has never applied to the board to criticise them in this way. The criticism levelled at the board by local authorities has been rather on the ground that they have been too careful of the national interests and the national money, and therefore I am rather astounded to see this list of bad debts to be wiped off, knowing how careful the board have been about not lending to local authorities unless good and sufficient security could be offered.
1569 I am in thorough agreement with the Financial Secretary to the Treasury about the personnel of the board. No Members of Parliament are serving on it, and it cannot be said that the members have been appointed for political motives. They have been appointed for their special knowledge of the subject. We have been told that they receive no remuneration for their services, and therefore they are doing just as great a public service on behalf of the community as are Members of Parliament. The hon. Member for Silvertown said the Members had been placed on the board simply because of the accident of birth or because of their cheque books. I join issue with him. I say they have been appointed on account of their special knowledge. Would he agree that one of these gentlemen should be appointed to be a bricklayer in preference to a Member of his own union? I am sure he would not. Even if the right hon. Member for Epping (Mr. Churchill) were to apply for the job——
§ Mr. J. JONES
On a point of Order. I do not mind being misrepresented, but I object to what I said being twisted round so as to give it a totally different meaning. I did not say these gentlemen were appointed to this board because of the accident of birth or their possession of cheque books. I said there were certain Members of this House who had got here because of their cheque books, because we have seen nothing else of them.
§ Mr. WOMERSLEY
If I misunderstood the hon. Member I am very sorry, but I certainly understood him to say that certain members of the board had been appointed not because of their ability but on account of other considerations. If that is not so, what is the objection of hon. Members opposite to the members of this board? Do they say the members are not competent? If they put forward that argument, it has been dissipated into thin air by the statement of the Financial Secretary. My experience of the board has shown me that they are men who have public service uppermost in their mind, and these criticisms are quite out of the way. If it be possible to add the names of any men who have an expert knowledge on these questions of finance, I think the Financial Secretary would be quite wise to accept them, 1570 but for goodness' sake do not let us introduce the political element, or we shall made it very difficult indeed for the board to function at all. I hope hon. Members opposite will bear in mind that certain people criticise the board because they have not granted loans, not being satisfied with the security; but, from the point of view of the taxpayers, if it has erred at all, it is on the side of safety first, and perhaps it is desirable that that should be so.
§ Mr. WALLHEAD
My criticism is that the losses mentioned in this schedule have been due to advances made to private persons. There is no loss on a loan given to a public administrative body like a town council or an urban district council.
§ Mr. WOMERSLEY
That does not alter my arguments that these people have been scrupulously careful for many years past. There has been a great upheaval in financial matters. Between 1920 and 1922 we reached the peak of speculation and inflation, and since then we have come down rapidly. I think the record of this board is a very good one. It has adopted the policy of safety first. There are cases in which the board would have been justified in granting the loan under the powers which they possess, and they have not done so. In some of those cases it has turned out that they have acted in the best interests of the nation and the taxpayers as a whole. I resent the criticism of the personnel of the board, because I am satisfied that there is no political bias whatever. Those who appoint the members of the board consider each appointment on its merits, and they bear in mind their capacity to deal with questions affecting the nation as a whole, as well as the interests of those who wish to borrow money. If we could only get a little closer working between the various departments concerned and those who put forward unemployment relief schemes it would be better for those who are anxious to see something substantial done to re-leave those who are out of work.
The trouble is that many of the smaller authorities are not able to go into the money market to raise a loan. They go through the process of getting permission to borrow and asking for assistance from the Unemployment Grants Committee. 1571 After that they have to appeal to the board for the amount of the loan that they require. There is need for some official who can take up cases, and work them right through the Departments. Under the present system, the applications for loans go through a number of Departments, and they are sent backwards and forwards until the schemes are approved. The larger authorities can borrow money in the open market, and then they can get on with the business. When the right hon. Gentleman the Member for Derby (Mr. Thomas) was Lord Privy Seal he often complained about the delays which occurred before schemes for the relief of unemployment were approved.
If we could possibly arrange for a particular official to see these schemes put through all the Departments, I am sure we should get on much more quickly. I am not complaining that there is any obstruction. All these local authorities work under regulations, and they have to go through all the formalities which have been laid down by this House. If we could arrange a short cut through the various Departments, I am certain that would be in the best interests of all those who desire to relieve unemployment. The difficulties that face the small local authorities in borrowing money in the open market are very great, and the only chance they have of borrowing money is through this particular board. That is why I am anxious that the Second Reading of this Bill should be passed, and I hope the Financial Secretary will bear in mind the suggestion which I have put forward to expedite unemployment schemes when applications are made for a loan.
§ Mr. SIMMONS
It is quite true that some slight concessions have been promised, but they are not sufficient to satisfy hon. Members on the Labour benches, and we do not believe that what is proposed will have very much effect in the direction of assisting the solution of the unemployment problem. The Financial Secretary has dealt very briefly with this Bill, and we are expected to open our mouths and shut our eyes, and take what the Government chooses to give us. We strongly object to the inferiority complex on our Front Bench. We 1572 have been told that the members of this board are not selected for their political opinions, but it has already been admitted that not a single Labour representative is to be found among them, and that is tantamount to saying that there is no Labour or Socialist person who is capable of serving upon this board. I say, quite frankly, that up and down the country, we have on our local authorities people holding Labour and Socialist views serving on finance committees, and upon other important public bodies, who are discharging their duties with as much ability as the people of the class who have been appointed on this board.
It is all very well for hon. Members to talk about the disinterested service of the members of this board. Labour and Socialist representatives give their services on our local government bodies because they desire to serve the public, but the people who are giving their services on the body appointed under this Bill will do so because they want to help the class to which they belong. The members of this public body represent banking and the interests of their own class, and consequently they bring a bias to bear when matters come up for discussion on this board. It is all very well to say that the board cannot be altered. We all know that at the end of five years it is quite competent to clear out the lot of them, and replace them by an entirely fresh board. When you have a municipal election, one-third of the members have to retire from the borough council. I know what happened in Sheffield when the Labour majority was returned—
§ Mr. SIMMONS
Because people hold an office for a period of years that is no reason why they should continue to hold the same office after there has been a change in the administration. In Sheffield, the change of administration meant a wiping up of the whole of the retiring aldermen, and I suggest that the change of administration on the Front Bench here should mean the wiping off of at least the first name on that list—the name of a person who went out of his way to insult the working classes of this country, who went out of his way to 1573 use against the miners stronger language than any Socialist or Labour Member would ever use against his opponents; and there are others, I dare say, who could be dealt with in the same way. I suggest that our Front Bench are too much inclined to think that the people on the other side have all the ability, and that the people on our side have none. I appeal to them to remember, when they are appointing commissions of this kind, that there are in the ranks of the Labour and Socialist movement men of as much ability as, if not more than, the kind of people to whose appointment we are asked to assent this afternoon.
§ Question put, and agreed to.
§ Bill read a Second time.
|Name of Borrower.||Amount of Loan.||Amount of Principal to be remitted.|
|Fraserburgh Harbour Commissioners||40,000||15,334||17||4|
|Balintore Harbour Trustees||2,000||2,000||0||0|
|Thurso River Harbour Trustees||13,000||13,000||0||0|
|Mr. Everard Collington||4,700||457||3||1|
|Mr. Ernest William Curtis||2,025||956||4||1|
|Mr. John Derry||2,775||890||16||5|
|Mr. William Grewcock||8,100||2,050||19||9|
|Mr. George Underwood Alexander Bead||1,620||247||17||8|
|Mr. James and Mrs. Susan Savage||2,750||434||12||11|
|Mr. Gavin Tudhope||4,500||1,331||3||5|
§ (2) all arrears of interest due to the Public Works Loan Commissioners in respect of two loans of fifty thousand pounds and forty-five thousand pounds, respectively, to the Fraserburgh Harbour Commissioners;
§ (3) the unpaid balances of principal and all arrears of interest due to the Public Works Loan Commissioners in respect of loans to the Port Ness Harbour Trustees, the Rosehearty Harbour Commissioners, and the Dingwall Harbour Commissioners;
§ (4) all arrears of interest due to the Public Works Loan Commissioners and outstanding on the thirty-first day of March, nineteen hundred and thirty, in respect of a loan of thirteen thousand pounds to the Scrabster Harbour Trustees."—(King's Recommendation signified).—[Mr. Pethick-Lawrence.]
§ Mr. PETHICK-LAWRENCE
The explanation of what is required under this Resolution will be found in the Financial
§ Bill committed to a Committee of the Whole House for Monday next.—[Mr. Pethick-Lawrence.]