HC Deb 09 June 1931 vol 253 cc969-80

Resolution reported,

"That it is expedient—

  1. (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
  2. (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."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


I think it is an abominable proceeding on the part of the Government to bring this very important financial Resolution before the House at this late hour. Throughout the whole proceedings on the Mauritius Loan the Government have not treated the House with any great respect. When we dealt with it last Friday the Under-Secretary of State for the Dominions, although he gave us answers to our questions which were adequate in some respects, quite clearly had not the financial knowledge of the connection between the loan and the Treasury which he should have had. We ought to have been more fully informed about the general finances of Mauritius. We cannot weigh and balance this question properly unless we have from the Chancellor of the Exchequer or the Financial Secretary an explanation of the bearing which this loan of £750,000 has upon the general finances of Mauritius, and for that reason I intend to divide the House against this Resolution. In one sense, as I understand it, this is not an actual loan to Mauritius. I think the position is that we are guaranteeing the interest on the loan for five years and after that period it is to be presumed that the liability of the British taxpayers will cease, but so far as I can see there is no possibility that Mauritius will ever be able to pay off this loan. It will be remembered by those who were present on Friday that Mauritius has been able to pay off previous loans very easily, and no doubt every effort will be made to do so in the future.

12.0 m.

The point I wish to make is that, looking at the trade and industry of the country and judging from the speeches we have heard from the Under-Secretary of State for the Colonies, there is no reason to suppose that our finances are going to improve in the near future. The debt of Mauritius is very much higher than it was a few years ago, and there is a distinct probability that the whole of this loan may eventually fall on the British taxpayer. I am not saying that we ought not to help Mauritius, but I wish to emphasise that the only people we do not help are are own citizens. Every other part of the British Empire is to be helped, and I think it is essential that we should preserve the finances in the heart of the Empire absolutely sound. For this reason, the House ought not to guarantee the interest and the loan in this instance until a first-class case has been made out. It is the duty of the Treasury to dovetail these things in with the position of the British taxpayers. It is highly essential that we should be told the real position of this loan in relation to other loans, because all this money comes out of the industries of the country and interferes with trade. This country affords the best market for Mauritius and it is only by obtaining a good market that Mauritius will be able to pay off her debt to this country. Unless we keep the home market sound, it will be impossible for Mauritius to recover her former financial position. The Under-Secretary told us that there had been a cyclone in Mauritius. That cyclone was almost as devastating in its effect as the Government land tax. We have had a cyclone in this country, and we are in a similar position, because we have a worse Government than we have ever had before. Will the Patronage Secretary to the Treasury inform the House why it is that on all these Financial Resolutions we are never allowed any representative of the Treasury? I have been in three Parliaments before this, but I never knew any time when the House was so grossly neglected by the Treasury. It behoves the House to make a strong protest in the interests of sound finance. I do not wish to deprive Mauritius of its loan, but I must protest against the way in which the Government perpetually treats the House of Commons.

The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels)

I am sorry to hear that the hon. Member is not satisfied with my financial exposition, because I gathered from the discussion that those who were present during the fairly full Debate on Friday last had got all the information which they desired from me. I gave a very full description not only of the object of this Resolution and of the Bill—an object with which everyone sympathises—but also of the financial arrangements in connection with it. I assure the hon. Gentleman that all the financial information which I gave was obtained in close co-operation with my hon. Friend the Financial Secretary to the Treasury; the hon. Member can rely on it accuracy and soundness, and on its being in line with the views of the Treasury. The object of this loan is such that it would be very unfortunate if the hon. Member or anyone else divided against the Resolution. The Bill is a gesture of sympathy with one of our Colonies which has met with a great disaster, and in all parts of the House it is realised that we are doing the least that is possible, and certainly what is desirable, to assist Mauritius at this difficult time. The Second Reading of the Bill which will be introduced as a consequence of this Financial Resolution will, I understand, be taken next Friday, when there will be another opportunity for discussion and for clearing up any points that have not been dealt with fully already. I hope that, in the circumstances, the House will see their way to pass this stage of the Resolution, and that we shall continue in the spirit which was so very well shown on the last occasion when this subject was discussed. I think that the feeling of the House, generally, is one of satisfaction that the Government have taken this method of showing their appreciation of the great difficulties which Mauritius has to contend with at the present time, and that there is a desire to assist the Colony in meeting those difficulties.


On Friday last my hon. Friend the Member for Torquay (Mr. C. Williams) asked one or two questions upon financial points. He has repeated those questions and I do not think he has had satisfactory replies on the exact details of the matters about which he asked. I am chiefly concerned however with the answer which the hon. Gentleman gave to another question as to whether this loan would be used entirely in the purchase of British goods. The hon. Gentleman said that as far as he knew all Government requirements would be purchased in this country. I should like to know if he has since ascertained whether the rest of the money will also be spent in this country. I think that when we show sympathy with Dominions and Colonies they should reciprocate by purchasing their requirements in this country. We are far too apt—if I may say so, the present Government are far too apt—to think internationally. That, possibly, is a good thing but the first and most important thing is to think nationally and we cannot afford, at a time like the present, merely to consider others, when we have so many people in this country who need the fullest consideration from us. Therefore, I ask the hon. Gentleman if he has gone any further into the question raised on Friday. He was only able to tell us that as far as he knew Government requirements would be purchased here and he surmised that the same would apply to the rest of this expenditure but I think we want something a little more definite. We do not want to put it in black and white before our friends oversea that they will not get the money except on such a condition, but we should like to feel that the Colonial Office are bringing home to them the fact that we would appreciate it very much, if they did something to recompense us to some extent for the loans which they are receiving, by buying goods in this country.


I assure the House that I am not rising at this hour for any flippant reason. I wish to ask the Under-Secretary for an assurance that the amount of money to be voted under this Financial Resolution will be adequate, in view of a set of circumstances which I do not propose at this late hour to describe. I would ask him on the Second Reading to tell us exactly the conditions by which this loan will be governed. I ask because of the gravity of the state of public health in Mauritius. The last report available gives a picture which it would be well for us to try to envisage. It says: The Public Health Department is beginning to find a formidable opponent entering the lists in the form of under-nourishment. Increasing numbers of persons are being seen at the dispensaries, whose real illness is not any communicable disease, but the much more insidious condition of defective nutrition. This is an inevitable consequence of the serious economic depression prevalent in the Colony. The rising death rate is largely attributable to this, and there is no sign of the increase slackening; the tendency is towards a further rise. That is Report No. 1503, Mauritius, 1929.

This is a matter, surely, which one need scarcely apologise for raising in this House, even at this late hour. This increasing death-rate can be attributable to us unless we take some adequate steps to deal with it. This is a Crown Colony, and we here are responsible for that state of affairs. I want to ask the Minister if he can assure the House that every possible step is being taken to prevent such a state of affairs from continuing there, because, if it continues, it will be indeed a scandal in Mauritius and a severe blot upon the name of this House.


There is only one point to which the Under-Secretary did not fully reply last Friday, about the finances of Mauritius. My hon. Friend the Member for Torquay (Mr. C. Williams) asked whether there would have been a deficit in the revenues of the Island if this disaster had not occurred, and the Under-Secretary said that even if the disaster which has caused the loan had not occurred there would have been a deficit. Then he was asked how much the annual deficit was, and I do not think he was able to give the figure at the time, or any estimate of what it would have been but for this disaster. I think it is desirable, if he has the figure now, that he should give it, or, if he gives it on the Second Reading, we shall be indebted to him.

As to the point raised by the hon. Member for Walsall (Mr. McShane), there is no doubt as to the possibility that in certain of our Colonies people are suffering from under-nourishment, that is to say, starvation. That is a serious matter, and it is the more serious in that that is not found only in this sugar island, but it is brought out by Lord Olivier in his report that it is a consequence of the present depression in the price of sugar, and is likely to be found in other sugar-producing islands also. The Olivier report said most definitely that there are areas of the Empire, of which the sugar-producing islands are examples, which are entirely dependent on a single crop, and the failure of the crop may lead not merely to depression but to actual starvation amongst the inhabitants. For good or evil, we have assumed considerable responsibility and we are the only source either of markets or of assistance to which these islands can look. The Secretary of State, in reply to the Debate, pointed out that the preference that is given is of substantial assistance to them. He said: 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."—[OFFICIAL REPORT, 5th June, 1931; col. 560, Vol. 253.] It is not very encouraging for those who are desirous of developing the industry to know that as soon as possible this preference is going to be knocked off by the Chancellor of the Exchequer and the existing deficit thereby continued and extended. Still, the desires of the right hon. Gentleman do not always coincide with his performances.


That is a reflection on his character.


I should think it a great pity if the fact that my desires do not always coincide with my performances was regarded as a reflection on my character. The difficulties of this island are an example of the way in which the ebb and flow of the economic tide may suddenly leave a whole area that is dependent on one staple crop completely stranded. The disquieting thing is not the rate in respect of the hurricane disaster, because on that we should be ready to agree without any discussion at all. One wants to throw a lifebelt to a man struggling in the sea with as little discussion as possible. If it is the case that the revenue has been in deficit for four years, that a considerable amount of public debt has accumu- lated, that it is doubtful whether there will be a surplus of revenue in the near future which will allow it to pay off the loans, the whole position in coming to the House for this loan is no other than that which was presented by previous Governments.


What is the hon. and gallant Gentleman's suggestion? Is he prepared to move an Amendment to cancel past debts and make this a gift and not a loan?


The question is a very pertinent one, and no doubt it would be of great interest to develop the case. I do not think that it would be in order upon the Resolution before the House. But one might say that the preference which has already proved so valuable—and it was referred to by the Under-Secretary of State—could reasonably be very considerably extended. The assistance that that has given—and it is given in the case of the French Island—would be a much more valuable thing than a loan, which in the long run will turn out to be, as the hon. Member for Gorbals (Mr. Buchanan) says, a gift. We shall have done nothing but ladle out some money and in the course of a few years find ourselves and the Island in exactly the same difficulty as now. There is the case of the reconstruction of Austria. Doles, loans and subsidies were made to the country of Austria, and they were inefficacious. The reconstruction of finances was undertaken, and after that, the country was able to live on its own. I do not wish to enter upon the whole question of Colonial Preference.


Should we not be able to assist if we stopped the beet-sugar subsidy here?


I do not know how far I should be allowed, even by way of illustration, to discuss the beet-sugar industry. I do not think that it is contended that the amount of sugar produced in this country seriously infringes upon any market which is available to colonial sugar. An increase of preference would be of great assistance to the Island. It would not be necessary to take the very drastic step of stopping the growth of sugar-beet in this country in order to encourage the growth of sugar in Mauritius, when we consider the large amount of sugar that we import from other countries.

The difficulty of this colony is a running deficit and not a temporary deficit. The hurricane has been piled on the top of another and greater disaster, the disaster of the collapse of the staple crop, which has led to actual deterioration amounting to disease in the case of the natives of the Island. For all those reasons, it is well worth while considering whether a temporary remedy is not in fact a thing which will be of great assistance not merely to Mauritius but to this country, and whether, instead, some alternative remedy should not be provided. I refer to the comments of the Under-Secretary of State as to the great assistance of the sugar preference, and ask whether that preference could not be extended?


If I may, by the leave of the House, reply to some of the points which have been put forward in the short discussion we have had, I shall be very glad to do so. The hon. Member for Bromley (Mr. Campbell) raised a point with which I dealt thoroughly on the last occasion, namely, the question of the use of British materials. As I pointed out, as far as Government work was concerned, the material would, as a matter of course, be purchased through the Crown Agents in this country. I said in regard to the other materials that were to be used that we are not giving the loan but only guaranteeing the loan, and I do not think that it would be wise that it should be a condition of our guarantee that any goods required should be purchased in this country. I said that, from my knowledge of the record of Mauritius, it was practically certain that all that could be purchased in this country would be so purchased, but that the main expenditure was on labour and that therefore it would not be desirable to press the point that all the money spent should be spent in this country.

In regard to the point raised by the hon. Member for Walsall (Mr. McShane), I have to say that the amount is the amount that Mauritius asked for after a very careful investigation of the damage done and the reparation required. In regard to his very interesting point about public health, especially in connection with under-nutrition, I am sure that we are all in sympathy with what he said. There is one very interesting point about that, especially in connection with this industry, both in the West Indies and in Mauritius. As the hon. Member for Kelvingrove (Major Elliot) probably knows, in some of the West India islands the sugar industry does not take the form of large plantations but of smallholdings. That to some extent is the case also in Mauritius, and, when you get that, you always find that a certain amount of food supplies are associated with the main crop, and the result is that, whenever there is any suggestion of famine, those who are in these smallholdings are generally secure of the fundamental necessities of life. These subjects are very closely considered in the Colonial Office, where we have a medical adviser constantly in touch with all these matters.


Has there been any improvement since the lamentable information given by the hon. Member for Walsall (Mr. McShane)? Has any more recent information been received?


I believe there has been an improvement. Of course, I did not know that this subject was going to be raised. I will take a note of it, and on the Second Reading Debate I hope that we shall be able to give information as to the latest aspect of this public health question. The hon. and gallant Member for Kelvingrove reminded us that there was only one item that I was not able to give. The sum was £210,000; that is, the estimated deficit at the end of June this year——


On the revenue of £1,000,000?


Yes, a little over £1,000,000. I might, of course, follow the hon. and gallant Member into the very interesting region of preference, but I do not think it desirable to do at this late hour. Not that there would not be something to say on the other side. I would remind the hon. Member that only one year before we came into office the suggestion was made to the then Chancellor of the Exchequer that one shilling extra preference should be put on, and he did not see his way to do it. There is not, therefore, any very great party advantage in connection with preference for the sugar industry. I would remind the House also that we have in the Colonial Empire many other depressed industries such as rubber, copra, coffee, tea, and so on, and that we have to be careful that we do not appear to be giving help to one industry and neglecting the others. I think I made it clear on the last occasion that the financial position of the loan has been Very carefully gone into, and that we have every reason to believe that this loan will not only be sufficient to tide Mauritius over its difficulties, but that the arrangements made for repayment will be well within the capacity of Mauritius to carry out.


The Under-Secretary of State for the Colonies has quite deservedly earned for himself the reputation of being both courteous and well-informed. I think that there is no doubt that he and others have made out the need of Mauritius for the loan of this money. But there are other things to consider besides the need of Mauritius, and that, in my judgment, is where the Treasury comes in. I am glad to see that the Financial Secretary to the Treasury, who has been lurking in the corner on your right for some time, has now moved up to a more central position, because I hope that he will give us some information on the financial aspect of this subject. I am sure that the expression on his face is most encouraging at the present time. I am, of course, well aware that the Treasury is not being asked on this occasion to advance this money, but that it is being asked to undertake to guarantee the interest on the loan. Therefore, quite clearly, the Treasury is undertaking—I am glad to see that the Financial Secretary to the Treasury is getting some coaching on this subject, about which, no doubt, he knows very little—although the Treasury is not being asked to advance the principal of this loan, yet it is being asked to undertake to guarantee the interest, as and when it falls due, provided that Mauritius is unable to pay itself. Therefore, the Treasury is undertaking a contingent liability, and I should like to know what provision the Treasury is making, if any, to meet this liability if and when it falls upon the Treasury, and, if not, why not?

Secondly, I should like to know what effect the raising of this loan in the open market will have upon the available supplies of credit to be used for other purposes, industrial purposes, because we all recognise—all your sensible Members of Parliament Ho, but I do not know if that includes many Members on the opposite benches—that that is one of the reasons why we are suffering to-day from the growth of unemployment. The available supplies of credit and capital are not in the present circumstance sufficient to set the wheels of industry going, and absorb the whole of the unemployed. In considering this loan which is to be spent in the Colony of Mauritius, it is of great importance that we should be informed what effect it must have upon the available resources of credit and capital in this country; Of course, this is a subject upon which it would be possible, nay advisable, to have a long, careful and detailed Debate, but, in view of the lateness of the hour, and of the well-known desire of hon. Members opposite not to work overtime if they can possibly avoid it, out of deference to them, I will bring my remarks to a close in the hope that the Financial Secretary is not quite asleep and will give some answer.

Bill ordered to be brought in upon the said Resolution by Dr. Shiels and Mr. Pethick-Lawrence.