§ Considered in Committee under Standing Order No. 71A.
§ [Mr. DUNNICO in the Chair.]
§ Motion made, and Question proposed,
"That it is expedient—
(a) to authorise the Treasury to guarantee the payment of the principal of, and the interest on, a loan to be raised by the government of Mauritius not exceeding an amount sufficient to raise seven hundred and fifty thousand pounds, and to charge on the Consolidated Fund any moneys required to fulfil any such guarantee; and
(b) to authorise advances out of moneys provided by Parliament for the payment of such part, if any, of the annual charges in respect of the loan for any of the first five years of the currency thereof as, in the opinion of the Treasury and the Secretary of State, the government of Mauritius are not in a position to meet as and when those charges fall due." [King's Recommendation signified].—(Dr. Shiels.)
§ The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels)
This week we have been considering domestic matters of great urgency and importance, but to-day I have to bring before hon. Members a subject, also important, affecting one of our oversea territories, in which, although it is not often mentioned in the House, we have a great concern. Mauritius has an interesting history, and is one of a number of examples in the Empire of a territory with non-British culture and traditions which has never failed to show its loyalty and its pride in being a component part of the British Empire. Its geographical position subjects it to severe natural visitations. On the 5th to the 8th of March this year Mauritius was visited by the most severe hurricane from which the island has suffered for a generation. Widespread damage to buildings and property and much immediate distress were caused. A large number of small dwellings was demolished, and several thousands of people were rendered homeless. While the damage to the larger buildings was generally less severe, a hospital was badly damaged and extensive injury was done to state buildings and plant. Roads and bridges also suffered severely from floods, and in addition a substantial proportion, estimated at 30 per cent., of the growing sugar crop was destroyed. This 542 loss was a serious blow, as the sugar crop is the mainstay of the island, sugar forming 98 per cent. of its exports.
Coming as this did at the end of a long period of depression in the sugar industry, during which the producers' reserves have been exhausted, and bearing in mind the shock to confidence it seemed probable that many of the owners of sugar factories would be unable to meet their hurricane losses and would have to close down. This would have meant destitution for the labourers and for the peasant proprietors, by whom a large proportion of the canes are grown. The financial position of the Mauritius Government is unfortunately such that the Government itself is not in a position to give any help to the planters and others who have suffered losses. The long-continued depression in the sugar industry, and the consequent remission of the export duty on sugar, have resulted in the exhaustion during the last five years of the Colony's surplus balance, built up with commendable foresight in the preceding period of prosperity in the industry. In the current financial year, ending on 30th June, there is a prospect of a substantial deficit. There will almost certainly be another deficit next year, and the Governor has indicated his opinion that these deficits cannot be avoided by any ordinary economies in expenditure or by increases in revenue.
In these circumstances, the Mauritius Government is not in a position to meet the cost of repairs and replacements of its own property damaged in the hurricane, or to render assistance to the general community. The actual immediate distress is being met from local funds, including a special relief fund established by the Roman Catholic Bishop and the Anglican Bishop designate. His Majesty's Government in Great Britain has made a free contribution of £5,000 to this fund. The Mauritius Government has also contributed. It is gratifying to notice in this connection the friendly relations between our own Colonies and the neighbouring French Colonies. On the occasion of a similar visitation to the Island of Madagascar the Government of Mauritius was able to render some assistance, and I am glad, on behalf of His Majesty's Government, to express our gratitude for a very substantial contribution which the 543 Government of Madagascar has made to the Mauritius Belief Fund in connection with this recent disastrous visitation. This fund, however, will only meet immediate necessity, and for any real rehabilitation of the economic life of the Colony it is clear that funds must be raised by loan. Owing, as I have explained, to the present financial difficulties of the Mauritius Government, this can only be raised on reasonable terms with the assistance of the guarantee of His Majesty's Government.
Accordingly, as shown in the White Paper, copies of which are in the hands of hon. Members, this Financial Resolution is moved to enable a Bill to be introduced under which it is proposed to authorise the Treasury, subject to certain usual conditions, to guarantee a loan, not exceeding £750,000, to be raised by the Government of Mauritius. We are to guarantee the principal and the interest of the loan, which is to cover the cost of the following: First, the repair and the replacement of Government property damaged in the hurricane, £75,000 being allotted for this. That is the Governor's estimate of the cost of such repairs. Secondly, loans to private persons and companies up to the amount of the losses due to the hurricane by way of damage to property, stock, etc., and the loss of growing crops. The sum of £500,000 is to be allotted for this purpose as a maximum for loans to planters and others. This sum is less than the total loss suffered, but it is expected that some of the proprietors will not require to apply for advances to the full extent of their losses. Thirdly, public works which cannot be financed in any other way. The amount for this purpose is £175,000, and is to be reserved for public works in progress, or likely to be required, which the Colonial Government would have financed, but cannot now finance from its own resources. The conditions precedent to the guarantee to be incorporated in the Bill are set out in the White Paper, and they follow generally the established practice in Bills of this kind, the latest precedent being the Palestine and East African Loans Act, 1926.
In addition, the offer of assistance was subject to certain other conditions: First, the Colonial Government to con- 544 sent to an investigation of its financial position by a Financial Commission, to be appointed by His Majesty's Government, with a view to advising on measures to produce a balanced Budget at the earliest possible date. Secondly, in regard to loans to private persons and companies, the loans are to be for a period of years to be fixed according to the circumstances of each case, subject to a maximum, and to be constituted by first law charges on the properties involved, and to be reassessed with reference to the amount of hurricane damage and the borrower's own ability to pay the loan. This offer of assistance, with the conditions, has been gratefully accepted by the Colonial Government, and the Mauritius Council of Government have passed a resolution agreeing to the appointment of the proposed Financial Commission.
It is usual in measures of this nature for the guarantee to constitute the whole liability of the British Exchequer. In this case, however, there is a definite prospect that even with the adoption of the most stringent economy measures, which will certainly be undertaken, it may not be possible for the Colony to balance its Budget immediately, and accordingly Exchequer assistance may be required for the first few years to enable the Colony to provide for the service of the loan. It is accordingly proposed to provide in the Bill for this assistance to be given for a limited period—not exceeding five years—from moneys voted by Parliament. His Majesty's Government felt that it was the duty and privilege of the Mother Country to come to the aid of Mauritius in the present circumstances. The hurricane of March last was a natural disaster on a scale such that the damage caused, if left unrepaired, might, in the existing difficulties of the community and the Government of the Colony, have led to a complete economic collapse. Much of the assistance will be devoted indirectly to the sugar industry of Mauritius. His Majesty's Government do not feel that they ought to or could directly assist that industry merely because it was suffering from depressed prices, like the sugar and other industries of many British Colonies, but the special difficulties resulting from the hurricane, which are most unlikely to be soon repeated, in their opinion, justify 545 special facilities. The advances to be made to the planters will, it should be noted, be limited to the actual expenditure necessitated and undertaken because of the damage caused by the hurricane.
His Majesty's Government have every hope that these measures of assistance will succeed in placing Mauritius once more in a sound position, and they are satisfied that no other method could be -so effective, and at the same time place less burdens on His Majesty's Government. Steps are now being taken for the early appointment of the proposed Financial Commission, which is to advise on measures to balance the Budget of the Colony. It is gratifying to know that the sugar industry of the colony, although it is at present suffering from -the world depression, has been declared, on the high authority of the late Sir F. Watts, to be efficiently managed, and my Noble Friend is confident that it will survive if the effects of this natural catastrophe can be mitigated. On the occasion of the last comparable disaster in Mauritius, the even more disastrous hurricane of 1892, His Majesty's Government also lent assistance by guaranteeing a loan, a large part of which was advanced to the planters. In that case, the whole of the advances have been repaid, and His Majesty's Government have never been called upon to implement their guarantee. Once the present difficulties are over, my Noble Friend is confident that the people of Mauritius will do everything in their power to secure that the same will be the case with the present loan. The natural courage and resource of the people of Mauritius will, I am sure, be stimulated by the evidence which the contribution to the relief fund, and the guarantee in the proposed Bill gives of the continued interest and concern of the people and Parliament of this country for the welfare and prosperity of the attractive island colony of Mauritius.
§ Mr. ANNESLEY SOMERVILLE
I wish to congratulate the Under-Secretary of State for the Colonies upon the statement which he has just made. At the same time, I must confess that, in my view, it is a small and inadequate attempt to settle the big sugar problem which is so acute in Mauritius and the West Indies. Sugar is to the West Indies and to Mauritius what cloves are to 546 Zanzibar. It must not be overlooked that the sugar industry represents more than 90 per cent. of the energies of the island. It has been objected by some people that Mauritius has been unwise in putting all its eggs into one basket, that is the sugar basket, but the answer to that is that Mauritius is subject to hurricanes, that sugar is a product which stands hurricanes best, and also employs the most peasants to the acre.
This is also a matter of employment to the people of Mauritius and to the people of Jamaica. It is also a great shipping question, because Mauritius has been shipping something like 220,000 tons of sugar to this country. I need not stress that point, because I know hon. Members are aware what this means to our shipping trade. The sugar question is also a question of shipping between this country and the West Indies. I would ask why, instead of a system of doles—because this is a dole to a large extent—which will only go a small way, and is not, if I may so put it, a fertilising measure, the Government do not adopt what the whole Empire is longing for, namely, a bold policy of preference. If they adopted that policy, they would get a large measure of support from their own back benches, there would be a sigh of relief through the whole Empire, and you would have a policy that would produce encouragement, work and life, instead of a policy of doles. But we have to-day a Government that believes in doles—
§ Mr. SOMERVILLE
I am sorry if I have gone rather outside the Rules of Order; let me return to the Mauritius. I would parallel the case of Mauritius with the case of Jamaica. On the question of sugar, the Government sent out their own representative, Lord Olivier, to Jamaica. He was a Free Trader; he was opposed to the policy of preference before he went out; but when he reached Jamaica and examined the question he completely changed his views.
If I allowed the hon. Member to proceed along that line, he would raise the whole 547 question of Protection. We cannot discuss that question on the Resolution before the Committee.
§ Mr. SOMERVILLE
I wish we could get on to that question. I was using Jamaica as an illustration with regard to the Government policy in Mauritius. I would only add that the policy that I would recommend for Mauritius is one that has been recommended by the chosen envoy of the Government itself. There are various ways in which the island of Mauritius can be helped. The Government have chosen one way, and the least efficient way. What the sugar planters and those engaged in the industry are earnestly asking for is an increase of preference in this country, and there is no need for any fear on the part of the Government that that would cause an increase of price in this country.
The hon. Member must not proceed along those lines. The Question before the Committee is whether this money shall be granted for this purpose or not.
That can be done within the Rules of Order, but, if I allowed the hon. Member to proceed along the lines that he wishes, the real issue before the Committee would be obscured, and we should debate the question of tariffs instead of the Resolution.
§ Mr. CHARLES WILLIAMS
A rather obscure statement was made by the Minister, having something to do with Excise and the financial position of the country. I take it that we should be able to follow that up a little further?
§ Mr. SOMERVILLE
I am sorry to have transgressed the Rules of Order, but I was really endeavouring to follow the line indicated by my right hon. Friend, that is to say, to point out as well as I could 548 an alternative method. The Under-Secretary has proposed a guarantee, and he has also envisaged a certain loss to the Exchequer. I would ask him to substitute for that method one which would not involve any additional cost to the Exchequer, and which—since in all matters we must consider the good of the people of this country—would not cause an increase in the cost of sugar to the people of this country. I say that because, owing to the competition of the sugars of Cuba and Java, there will be no possibility of an increase of price in this country. I hope I am not out of order in saying that there is so much tenderness for the necessity of cheap sugar for the co-operative movement that the Government are genuinely afraid of the policy of preference. I mention that in passing, but I do urge upon the Under-Secretary and the Government that, instead of an inadequate policy of doles, which sterilises and discourages, we should adopt the alternative policy which is earnestly desired by the whole Empire, and which would bring life and hope to our trade and people.
§ Mr. AMERY
In all quarters of the Committee we welcome, even in these hard times, the decision of the Government to help the little Colony of Mauritius in the disaster which has overtaken it, not at a normal time, but at a time when Mauritius has been going through the most severe crisis in its whole history. We also welcome with particular satisfaction the information that the Under-Secretary has communicated to the Committee with regard to the generous and practical sympathy shown by a neighbouring French Colony. There are few fields of international co-operation more fruitful than that in which France and England and other great colonising Powers can take part in neighbourly help in their Colonial sphere. It was always one of my ambitions, when I was in the office in which the hon. Gentleman serves to-day, to encourage contact between French and English Colonial territories and their officials.
Both countries are engaged in a common task of civilisation and development. To that task each brings its distinctive national quality and national genius, but, in carrying out that task, there is a great deal that each of us can 549 learn from the other without sacrificing our essential principles. At this moment France is with just pride showing the world what she has done in the way of civilising work in her great Colonial Empire, and from that point of view I am in some ways sorry that it was not possible for the British Colonial Empire to be represented on an adequate scale at this great International Exhibition—an exhibition whose object is not merely to display the wealth and resources of these Colonies, but to show to the world that the nations of the European West have a sense of responsibility for the great native populations under their charge, and are doing something effective to discharge that responsibility.
When it comes to learning from each other, I think it is worth while to point out the difference in the attitude which we on the one hand and France on the other adopt towards these Colonies. The whole conception of France is that these Colonies are an integral part of France. They subserve the general welfare of France on the one hand. There is no hesitation in the mind of any Frenchman in expressing the view that a colony should be so developed as to contribute towards the prosperity and greatness of France. But they also, on the other hand, recognise complete responsibility on the part of France for the prosperity and development of those Colonies, and for providing them with the revenues which they need, and with the market which they need, for their development and prosperity.
We proceed, in the main, on a different basis. Our idea is that each Colony should stand on its own feet, should find its own level, and should be economically a self-contained unit. There is a great deal to be said for our point of view as inculcating independence in the colonies themselves and as preventing any conception of exploitation of them in the interest of this country. But we must be careful not to Carry our principle too far. Where you have a large colony or a dominion with varied economic interests and widely-spread resources, it can and ought to pay its own way. It can always find a certain internal market to sustain itself. If a disaster, like a hurricane, or a depression, like the depression in the price of sugar, strikes the sugar industry of Queensland or Natal or strikes, say, the cocoa industry in Nigeria, there 550 are large and varied resources over which the disaster can be spread. There are alternative forms of production. There is an internal market. But I think we ought to consider the special case of these small units, such as Mauritius, Fiji, the West Indian Islands and Zanzibar, which are intrinsically far too small to stand by themselves as self-contained units in the modern world, which, under the government of any other country, would be incorporated in a larger economic system, which cannot live by themselves but which depend entirely upon outside markets.
In the case of Mauritius, as the White Paper shows, 98 per cent. of the exports on which the island depends for its daily bread—because practically all ordinary stock foods, rice and flour and other essentials of life, have to be imported—depend upon a single industry. That industry to-day is in a position, as far as Mauritius is concerned, of almost hopeless difficulty, a difficulty not caused by inefficiency on the part of the Mauritius planters, as the Under-Secretary has clearly indicated, nor indeed to any mere accidental depression in world prices. The actual cost of production of sugar in Mauritius is well below the average cost of production in the world as a whole. Mauritius is suffering, apart from this cyclone which has added to its troubles, from the artificial action of other great States and communities in the world, and we, who are responsible for its welfare, have done nothing to compensate them.
If we believe that Free Trade is the best system for this country and are not prepared to help Mauritius by preference, we ought alternatively to treat Mauritius as part of our Free Trade area, not only from the point of view of markets, but from the point of view of finance, and give it throughout the same assistance and succour that we would give to any county in this country that was going through a period of depression. What is, in fact, happening is that a small colony, because it is a British colony, gets the worst of both worlds. It would be infinitely more prosperous at this moment if it were a French possession. The neighbouring island of Reunion is highly prosperous. Mauritius, producing exactly the same kind of products with a populat- 551 ion of substantially the same race—after all, the majority of the white population are of French descent and have preserved French culture and the charm of French life in their little colony—suffers because it belongs to Great Britain and not to any other empire. It seems to me that that raises a great issue of Imperial responsibility which we ought to face, and which we are not facing. It is no good riding off on the ground that we are not prepared to give fiscal preference. What is the effective alternative through which we are going to exercise our responsibility? The present alternative is nothing more than a temporary dole. I entirely agree with my hon. Friend in laying stress on that. There is nothing in these loans to give the slightest assurance to Mauritius that it can weather the storm in the next few years.
I am rather afraid the right hon. Gentleman is going beyond the terms of the Money Resolution. The White Paper states quite clearly that of the £750,000 which it is proposed to raise by loan, £75,000 is required to repair and replace Government property, £500,000 for making loans to planters in respect of damage to their property, and £175,000 for the construction of public works. The question of the depressed condition of the sugar industry is not raised by this Money Resolution at all, except in so far as It is due to the catastrophe which has befallen the island. If I were to permit a debate on the question of Preference, I can see no end to the discussion.
§ Mr. AMERY
I was not intending in any way to discuss the general question of Preference, but I submit that this grant to Mauritius in its distress raises the general issue of our responsibility to that colony and to similarly situated colonies, of permanently assisting them. I was going on to point out that these particular measures, in which, as far as they go, all sides of the House will readily concur, do not fulfil our responsibility in one way or the other. They are purely temporary and, as far as I can see, there is nothing in the prospects of Mauritius, quite apart from the contingency of another cyclone, which will enable the hard pressed planters to be in a 552 position to repay these loans or to enable the Government of Mauritius to get over the deficits, which would be far more serious than they are if the wise foresight of Sir Hesketh Bell, when he was Governor of the island, had not accumulated a very substantial reserve fund.
We all agree with the actual measures proposed as an alleviation of the immediate situation, but I think we are entitled to ask the Government to face more seriously than this or any other Government in the past has faced the responsibility of this country towards those small units of the British Empire which, in present world economic conditions, cannot live by themselves. You must in some way or other incorporate them in a wider system. You can incorporate them from the point of view of markets or of finance. In one way or another, the appeal that I would make is for a more permanent and far-reaching sense of responsibility towards these small units, which, after all, ought to be proud of belonging to the British Empire, but I am afraid in only too many cases look at the adjoining smaller units, which fly the American, the French or the Dutch flag, and realise that they are sufficient because they are under the Union Jack.
§ Mr. LESLIE BOYCE
I welcome the proposal in the same sense as, I have no doubt, it was welcomed by most hon. Members on this side of the House and by the people of Mauritius, namely, that half-a-loaf is better than no bread, and that we should be thankful for small mercies. It is clear from the Memorandum explaining the Resolution that the proposed loans to Mauritius to be guaranteed by the Treasury are to be limited to the exceptional and abnormal losses due solely to the hurricane which visited the island from the 5th to 8th March of this year. It is the very least that the Government could do. During the past two years, Mauritius, like our sugar-producing colonies in the West Indies, has been faced with a very severe economic crisis which, as we have been told, has been due to surplus stocks and overproduction in the world supply of sugar, and, consequently, an artificially low selling price of that commodity. The seriousness of the economic position of our sugar-producing colonies was made clear to the Government by the report of the Olivier Commission which visited 553 the West Indies in 1929, and by the report of the late Sir Francis Watts on Mauritius. The Olivier Commission recommended, inter alia, that the British preference on Empire sugar should be raised as quickly as possible to 4s. 8d. per cwt., and that the preference should not be reduced below 4s. 8d. until His Majesty's Government had concluded an international agreement in concert with the other Powers to eliminate the disturbing features of high tariffs, or until a single purchasing agency has been set up to purchase all sugar for the United Kingdom, buying Imperial sugar £15 a ton c.i.f., and the other sugar at the market price. If those recommendations had been carried out, it might not have been necessary, in my opinion, for us to have been discussing this Motion this morning. Neither of those recommendations were accepted or followed by the Government.
I do not follow the argument of the hon. Member. The loan which is being asked for is due to a catastrophe which happened in those islands, and I cannot allow the general question of tariffs to arise. This loan is for the purpose of meeting a special need caused by an event of nature.
§ Mr. BOYCE
I have no intention or desire to take the general question of tariffs. What I was proceeding to say was, that, if the recommendations of the Commission which the Government set up had been carried out, the economic position in the islands at the present time might have been such that they themselves would have been able to have defrayed, out of their own funds, the damage which has been incurred as a result of the hurricane. I was pointing out that the plight of the sugar-producing colonies, including Mauritius, had already become a desperate one, and that it called for urgent action on the part of the Government before there was any question of this disastrous hurricane having visited the island.
The hon. Member seems to overlook the fact that this loan is being asked for on account of that catastrophe, and not in respect of the situation before it occurred. The loan is being raised for a specific reason, and we must keep, within reasonable limits, to that reason.
§ Mr. BOYCE
I bow to your ruling, and I will endeavour not to go outside the scope of the discussion. What is the posi- 554 tion in Mauritius to-day? There is a population of 410,000 people who depend for their very existence almost entirely upon the sugar industry. All their food has to be imported into the country, and yet, as we have been told by the Minister, 98 per cent. of the exports of the island are represented by sugar. Therefore, the purchasing power and the economic and social well-being of the people depend almost entirely upon the prosperity of the sugar industry. For some time the colony has been selling sugar at a loss. The present preference which we accord to them is not sufficient to enable the planters to recover their production costs, and it is obvious to the Government that they cannot go on losing money indefinitely.
My right hon. Friend the Member for Sparkbrook (Mr. Amery) has drawn the attention of the Committee to the fact that the Government owes a special debt to the Colonies—a debt which they do not owe to the Dominions—because they are governed from Downing Street. The Government have been standing by watching the position develop. The Minister himself has remarked that Mauritius has never failed in its loyalty towards this country. That is perfectly true. There is no more loyal or patriotic part of the Empire than Mauritius, but I submit that the inaction of the Government has put a severe strain upon the patriotism of the people of that Island. For two years they have suffered increasingly from the curse of being a British colony with an unsympathetic Socialist Government at Westminster. As my right hon. Friend the Member for Spark-brook pointed out, if they had been a colony of a foreign power—of the United States of America, of Holland or of France—they would have been in a far better and happier position to-day. We on this side of the Committee welcome this proposal. We welcome it, as I said at the beginning, in the sense that we are thankful for small mercies, and we hope that the Bill will be introduced immediately and expeditiously placed upon the Statute Book, and that the Government will not be satisfied with having merely done that, but will introduce further legislation at an early date in order to bring further relief to the deserving people of our much distressed sugar colonies.
Mr. WARD LAW-MILNE
There are one or two small points with which, first of all, I should like to ask the Under-Secretary of State to deal, if he has not already done so. I apologise for not having been able to hear the first few words of his speech, and, if he has dealt with those points, I do not wish him to repeat what he has said. I notice that in the White Paper there is a statement in paragraphs (c) and (d) of the requirements necessary from the colony before the loan comes into effect, and that the loan will be a first charge on the general revenues and assets of the territory. I am putting the point shortly. The statement, as hon. Members will notice, is that the principle and interest of the loan are to stand before any further loans that may be raised by the colony in the future. I should like to know whether that matter has really been carefully considered, and whether the Government are satisfied that, if the Money Resolution and the Bill are passed in this form, which forces Mauritius to make the repayment of the loan a first charge ahead of any future loans or moneys that the Colony may desire to raise, we are not putting a burden upon the Colony which it really cannot bear. I have no doubt that this matter has had the very careful attention of the Colony, but I should like to know whether the Colony are satisfied that they will be able to shoulder that obligation, or whether it is the case that they have been forced into this position because they must have the money and cannot otherwise help themselves.
With regard to the total of the loan, I agree that owing to the magnitude of the figures with which we are accustomed to deal in this House, it does not seem a very large amount. But £750,000 is a very large amount for a colony like Mauritius to repay, and, although I know that the last loan has been repaid without any burden being placed upon this country, I ask the Under-Secretary of State whether it would not have been better for the Government to have allowed the Colony to raise a larger loan without the guarantee of the principal by this country, but with the guarantee only of the interest. This is not such a far-fetched idea as it may, at first sight, appear. It has been carried out in other colonies. It was carried out, for example, in works which the Nyasaland Government required in connection with the 556 Trans-Zambezia Railway. There the Government of Nyasaland did not guarantee the repayment of the capital at all, but it guaranteed for a period of years the repayment of the interest. It would have been advantageous to Mauritius if they had been enabled to raise a larger loan, or a larger amount in a series of loans, and to have had only the interest guaranteed from this country, the principal being left to be dependent on the future prosperity of the Colony.
These are points which are well worthy of attention, because it is clear that the Colony, apart from this disaster, which we are glad to see is being dealt with, is not in a position to face the repayment of large loans under ordinary trading conditions. We on this side, probably many hon. Members on the other side, and certainly the bulk of the people in the country, are looking eagerly for another Government to be in office, with a different fiscal policy and a preferential tariff under which there might be a chance of a colony like Mauritius once again experiencing prosperity. While the present fiscal conditions prevail the Colony may not be in a position to find the money for the repayment of a loan issued under conditions which might prevent it in the future from raising any loans at all. Unless there are steady and prosperous conditions in the sugar industry the future financial position of the Colony may be one of great difficulty.
I should like to know from the Under-Secretary whether these points have had the attention of the Government, whether it is too late to raise them now and whether negotiations with those who represent Mauritius might not make it possible for the Colony to have a system under which her future finance would not be entirely handicapped by the conditions of the loan. I have not the ability of the hon. Member for Windsor (Mr. A. Somerville) in getting within the Ruling of the Chair a statement upon the difficulties which all the sugar Colonies have to face, but I agree with the right hon. Member for Sparkbrook (Mr. Amery) that if we are not prepared to work on the same terms as other nations do with their Colonies, within a tariff or preferential system, we must be prepared to give our Colonies financial and other help on a basis which this country so far has not shown any signs of doing.
§ Mr. C. WILLIAMS
. Everyone will join in the chorus of sympathy with the very loyal people who inhabit the Island of Mauritius. I shall view the Financial Resolution with a rather more critical eye than has been done by other hon. Members, but I shall do so because I realise that the raising of money for any purpose often has an effect upon people in a way that is not thought of at the time. The Under Secretary of State referred to the deficit of the Mauritius Government. I understand that there will be a deficit for the year ending the 1st July, 1931, and I presume that the deficit is entirely due to the hurricane. Supposing there had been no hurricane, would there have been a deficit? Unless we have that information we cannot tell what is our real position in advancing the money. We have to look at the security. The Under-Secretary did not state the amount of the deficit. Is it £100,000 or a larger sum? That is one of the things which in a shrewd prospectus is very often hidden. The hon. Member would be well advised to be frank about the position and then he can approach us with all the more confidence.
We might be given some information as to what probability there is that at the end of, say, two years the inhabitants of Mauritius, by means of taxation, will be able to start paying back the money. I find from the White Paper that a sum of £75,000 is required for the repair and replacement of Government property damaged in the hurricane, and £500,000 for loans to planters and others in respect of hurricane damage to property. The latter sum may include plant for sugar making, assuming that the plant has been destroyed. With respect to the amount required for the replacement of Government property, the Under-Secretary mentioned the hospital. Is that property being replaced? There is a further sum of £175,000 for the construction of public works. In each of these cases there must be a large amount of material coming from outside Mauritius, and as we are finding £750,000 I should like to know whether that material is coming from within the British Empire? We have a right to a guarantee that the money shall be spent in that way. I am more in favour of this guaranteed loan than some of the 558 other guaranteed loans, but I will nut refer to them otherwise hon. Members opposite might be perturbed. Will the Under-Secretary state the amount of the previous loan and what period elapsed before it was paid back. Unless we are given this information it is impossible for us as representatives of the taxpayers to judge whether we are justified in asking them to allow us to vote this loan. What is the total debt of Mauritius at the present time? There must be some debt; if there is not it is a very peculiar place. I want to know the total amount of the debt before this £750,000 is added to it, so that we can judge whether we are justified in making this additional loan, and also the revenue of Mauritius', say, for the last five years in order to judge what chance there is of repayment. It is much better to deal with these matters in Committee now, although, of course, this Money Resolution must be followed by a Bill.
There are several other questions that I desire to put to the Under-Secretary of State. Presuming that we grant this loan, what guarantee can he give us that the inhabitants of these islands, when they have rebuilt their factories and reestablished their works, will be able to sell the goods they produce? Has he taken any steps to see that they will be able to sell their goods? I am not going to say anything this morning about tariffs, but if we are to guarantee this loan I think the hon. Member should tell us that he is taking steps to improve the methods and machinery by which these people will be able to sell their goods after they have been produced, that he has taken steps to provide better facilities for them for marketing their goods. Now I come to another side of this question. We are being asked by the Financial Secretary to the Treasury to make this loan, but the Financial Secretary is absent. He has not come down to the Committee to explain the position, and I must protest very strongly at the absence of any financial advice this morning. It has always been the custom of the Treasury in the past to explain these loans and it is impossible to vote for a loan of this kind, apart from sentiment, unless we know what proportion it bears to other similar loans. Only the Treasury can tell us that.
I do not propose to oppose this Financial Resolution, but I must issue a warn- 559 ing and a protest that in the matter of these loans we are building up a great debt which in itself is a burden on trade and industry. This loan of £750,000, unless there is a guarantee that the whole of it or nearly the whole of it comes back to this country by way of buying goods and materials here, will have to come out of the trade and industry of this country. That is a point which is rarely considered. There is one other question upon which I do not propose to expand—I am not good at expanding—and that is in relation to what the Under Secretary of State said about excise. I did not quite understand his remarks. What is the trouble about the Excise duty? He intimated that it had a great bearing on this question. If he will read his speech without correction he will find that I am not very far wrong. The reason for this loan is that the island was prosperous until it suffered from the world depression; and since then there has been the hurricane. Do I understand that the hurricane has necessitated this loan? I hope we may have an answer to these questions, and then I shall follow the further stages of the Bill in a very friendly manner.
I will not follow the hon. Member for Torquay (Mr. C. Williams) in his expansive speech, but there was some substance in one point he made, and that is the propriety of attaching a condition to loans of this character that the materials required should be purchased within the British Empire. The policy of this country has been to hand out these loans without any condition at all as to how the money should be expended, whereas practically every foreign country which becomes a lender of money attaches a condition to a loan that a substantial part of it shall be expended in the country which makes the loan. Take the United States of America in its relations with the South American Republics. Conditions are attached to the loans that the money shall in whole or in part be spent in the United States, and it would be a very sound and practical policy for this country to attach similar conditions to these loans. There is a sum of £175,000 for the construction of public works in this unhappy island which has suffered this misfortune at the hand of nature. Can the Under-Secretary use his influence to have as large a proportion of 560 that sum as possible expended in this country? No doubt a great deal will be required for construction work and must be of a quasi manufactured character. It would help this country if the Secretary of State would use his personal influence to see that as much as possible of this money is expended in this country. I congratulate the Government heartily on bringing forward this Resolution, and I hope that the Bill will have an easy passage. Every gesture to help our struggling colonies, and particularly the Crown Colonies, which suffered so much in the War, is constructive statesmanship.
§ Dr. SHIELS
I have to express my appreciation of the sympathetic reception of this Resolution by the Committee. It will not, I think, be necessary to take much time in dealing with the points raised. The hon. Member for Windsor (Mr. A. Somerville) spoke of this measure as a dole. That is surely a wrong way of looking at it. It is rather an expression of practical sympathy with the Colony on a very exceptional occasion. The hon. Member was, of course, leading up to what I was afraid would hardly be avoided—some reference to Preference as a panacea. He and other hon. Members had some difficulty with the Chair in speaking of Preference in connection with this Resolution, and I do not propose to venture into this field to any great extent. But I would remind the Committee that there is at present a substantial Preference on sugar, amounting to an average of 3s. or 4s. a cwt. To those who receive this Preference it adds over 50 per cent. on the world price. In respect of Mauritius it means that assistance is given by the British taxpayer to the extent of about £750,000 annually. This Preference has been continued by my right hon. Friend the Chancellor of the Exchequer in spite of his well-known desire to have a free breakfast table as soon as possible.
The right hon. Member for Sparkbrook (Mr. Amery) spoke of the differences between French and Colonial policy. It does not follow, however, that the advantages are all on the one side. In regard to the proposition which he put forward, in favour of such colonies as Mauritius being members of a larger economic and political unit, I will only say that we know from experience that these colonies value very much the con- 561 siderable amount of autonomy which they possess under the present system. If the ideal which the right hon. Gentleman put forward were achieved, it would almost inevitably, from the consequent greater centralisation, involve the loss of something that is very much appreciated by the Mauritius people at the present time. The hon. Member for Kidderminster (Mr. Wardlaw-Milne) referred to certain financial points. These, of course, as he suggested, were all carefully considered before this matter was finally determined. I would remind him that the terms are quite usual in these cases. They have been accepted by the Government of Mauritius. They are reasonable in themselves, and there is no sufficient reason to believe that they cannot be met. The bon. Member spoke about a proposed larger loan. The reply to that is that Mauritius has not asked for a larger loan. If and when it does the Government will be prepared to consider it. I suggest to him that a loan of the kind proposed, of which the principle is not guaranteed, might not be issuable on reasonable terms. That is a side which has to be remembered.
§ Mr. WARDLAW-MILNE
The Under Secretary says that if a larger amount of money were eventually required by the Colony the matter might be reconsidered, but the point that I put to him was that Under the terms of the White Paper it would appear to be impossible for that to happen, because this loan is to be a first charge above and beyond anything in future. It seemed to me that that was such a rigid condition, that I wondered whether he and the Government of Mauritius were satisfied that in the next 40 years it would never occur that Mauritius would want to raise money, and whether this condition would not be a handicap.
§ Dr. SHIELS
I understand the hon. Member and was about to answer that point. There is no reason to suppose that Mauritius will be precluded from raising future loans by reason of the priority given to this one. The 1892 guarantee loan had the same priority, but that has not prevented Mauritius since then raising a number of loans on its own credit and without the guarantee of the Imperial Government. While I appreciate the anxiety of the hon. Member, I think he will find that there is no real danger.
§ Dr. SHIELS
I believe so. The hon. Member for Torquay (Mr. C. Williams) asked a number of questions. I am always impressed by the interest which the hon. Member takes in a large variety of subjects, and by his great desire for accurate information regarding them. It is true that there would have been a deficit supposing that the hurricane had not occurred. I thought I made that clear in my earlier statement. In regard to Government property, the hospital will certainly be replaced. He asked, as did also the hon. Member for Moseley (Mr. Hannon) about the money being spent in this country. It is true that there is no condition to that effect laid down in connection with this guarantee; but it must be remembered that we are not lending the money; we are simply giving a guarantee. From what we know of the outlook of Mauritius it is practically certain that all possible material will be so bought. No doubt there will be the greatest amount of expenditure on labour, and there is a fair wage clause in connection with the work which is to be done on the island.
§ Mr. C. WILLIAMS
Will any representation be made of the feeling of the House of Commons that the materials if possible should be of British origin.
§ Dr. SHIELS
I feel that it is really unnecessary to make such a representation and that it might not be desirable to do so. I believe it to be practically certain, from the record of Mauritius and all we know about it, that British materials will be used as much as possible. In regard to the Government property the material used will be purchased in this country as a matter of course. I do not think it would be necessary and it might not be wise to put in a specific condition of that kind as regards the other expenditure. The hon. Member asked about the total debt. It is £2,800,000. In regard to other help, I would like to say that the Empire Marketing Board has taken a consistent interest in Mauritius and has done its best to help in various ways. All this is appreciated by the people of Mauritius who are not, I think, likely to accept the view of an hon. Member on the back benches opposite who suggested, in effect, that it was a curse to be a 563 British colony. I think if the hon. Member gave our British colonies the choice of being other than British colonies, he would be impressed by the response.
§ Mr. HANNON
As my hon. Friend the Member for Gloucester (Mr. Boyce) is not in his place, I would like to say that it ought not to go out from this Committee that he made a specific statement of that kind. The impression which his statement conveyed to me and the impression which I am sure he intended to convey, was that in certain circumstances, having regard to the fiscal policy of the British Empire, and particularly the fiscal policy of this country, it was a misfortune to be a British colony. I hope it will be clearly understood that he did not make the statement attributed to them by the hon. Gentleman.
§ Dr. SHIELS
I would not wish to do the hon. Member for Gloucester (Mr. Boyce) any injustice and I gladly accept the hon. Member's view of what he said. I have dealt, I believe, with most of the points raised in the course of the discussion. Again, may I say that I appreciate the reception which the Resolution has received from the Committee. It is what one would have expected and I shall be very grateful if the Committee can now see it way to come to a decision.
§ Mr. REMER
I would not have intervened but for the concluding remark of the hon. Gentleman with reference to the speech—to which we listened with considerable admiration—of my hon. Friend the Member for Gloucester (Mr. Boyce). What my hon. Friend said was quite different from the construction put upon it by the hon. Gentleman. He pointed out that certain other islands, mentioning the Island of Reunion, sometimes called the Ile de Bourbon, were under the French fiscal system, and he pointed out that the people of Mauritius might well think that they would be more prosperous under French rule or American rule than under British rule, in existing circumstances. My hon. Friend went out of his way to pay a tribute to the patriotism of the people of Mauritius and therefore I think that the hon. Gentleman's remarks upon his speech were wholly uncalled for. The 564 Government, by this Resolution are doing a great service to the Island of Mauritius, but I submit that if it had not been for the fiscal policy of the Government before the disaster took place, there would be no necessity for any loan. I presume that the Island of Reunion was visited by the same hurricane, but I have yet to learn that the French Government have had to make a loan, showing that by their fiscal policy they have been able to avoid that necessity. I have no intention, however, of going further into that subject, but I think that the hon. Gentleman is seriously to be called to task for his remarks about the speech of my hon. Friend the Member for Gloucester.
§ Mr. C. WILLIAMS
I put some serious questions to the Under-Secretary and I think he might have had the courtesy to answer more of them. I propose to repeat two of them and I think I am justified in expecting an answer. The first is, what is the deficit on Mauritius at the present time, and, the second is, what was the total revenue of Mauritius say, a year ago? These are two fundamental points and if the Under-Secretary cannot give us the information now, then that information ought to be given at a later stage.
§ The UNDER-SECRETARY of STATE for AIR (Mr. Montague)
There is the Library.
§ Mr. WILLIAMS
It is no answer in this Committee to tell Members that they can go to the Library. The arrogance of Members on the Front Bench is becoming overwhelming. They will do this kind of thing to the Liberal party one day and then there will be trouble.
§ Dr. SHIELS
The public debt, I understand, is £2,800,000 and the annual revenue is a little over £1,000,000. I hope that information will satisfy the hon. Member.
§ Mr. WILLIAMS
Cannot the hon. Gentleman let us have the amount of the deficit. It is sometimes difficult to get information of that kind at a later stage.
§ Question put, and agreed to.
§ Resolution to be reported upon Monday next.