§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr EDE
I want—[Interruption.] Six weeks ago that, would have been meant as a compliment, and I take it as such to-night, but I take it from whence it came, as the old woman said when she was walking across the common and the donkey kicked her. I regret that the hon. Member for Farnham (Mr. A. M. Samuel) has not risen, because here we are dealing with a question of wiping out the debts of the Public Works Loans Commissioners, and the hon. Member for Farnham, with that zeal for economy which he used to display before the crisis but, has lost now that the crisis has arrived, had an Amendment on the Paper on 31st July which would have confined us to wiping out only half these debts. Apparently there have been cases in which loans have been advanced and, when the Board have called for repayment, they have not been able to get the money. The hon. Member for Farnham thought then that his present right hon. Friend, the Chancellor of the Exchequer, was too generous in agreeing to forgo the whole of these debts, though personally I should not have regarded generosity in forgiving debts as the outstanding characteristic of the Chancellor of the Exchequer. The hon. Member for Farnham had an Amendment down limiting the amount to be forgiven by one half. Now the hon. Member is too modest. to stand up and advocate that same policy. [Interruption.] I am encouraging him to be less like the violet that. loves to blush unseen. The question had been proposed and the matter would have gone by default if I had not stepped in.
I wish to ask the Financial Secretary what justification there is for wiping out the whole of these debts. Was his hon. Friend the Member for Farnham right when he tried to limit the amount by one half? After all, his hon. Friend was 235 Financial Secretary to the Treasury in the last purely Conservative Government and he is a man of initiative. When it was a question of patent lighters he could produce a policy of his own, though the Chancellor of the Exchequer had to repudiate it the next day. At any rate six or seven weeks ago the hon. Member thought that the Labour Government were too generous in forgiving these debts. Now it is more necessary than ever to preserve the assets of the nation, yet the hon. Member did not rise when he had the opportunity to press this point on his hon. and gallant Friend. In view of the clear indication of Front Bench opinion six weeks ago, when they were Conservatives pure and undefiled, that only half these debts ought to be forgiven, is the hon. and gallant Gentleman prepared, in the present grave financial situation, knowing probably the appalling tale that is to be told to us to-morrow, to say that half these assets ought not to be preserved—on the books at any rate, we do not say more than that—in the hope that something may he retrieved from the wreckage? That. was what the hon. Member for Farnham wanted my hon. Friend the Member for West Leicester (Mr. PethickLawrence) to do six or seven weeks ago. This sudden change of front ought to he explained to the House because we have been told that this is to he an economy Session. In five or six weeks' time, the hon. Gentleman the Member for Farnham will have to go where the hops grow, and he may have to hop very fast himself if he cannot explain his sudden change of front on this question. I appeal to the Financial Secretary to tell us whether he is prepared to recommend the Committee to follow the policy of the Labour party and the policy of the hon. Member for Farnham.
I should like the Financial Secretary to explain the reason why this particular Clause has been put in the Bill. I have been looking at the Schedule, and I think I have found the reason why the Financial Secretary was not anxious to rise and explain this Clause. Many lion. Members opposite have been joining in the ramp against the late Government for their extravagance and indulging in jibes against the Labour Government for their extrava- 236 gance. A week ago the Financial Secretary indulged in his usual methods of oratory at a garden party in Scotland, and he ridiculed the Labour Government for the way in which they had governed the country during the last. two and a-half years.
On going through the list of individual's whose debts we are being asked to write off, I find that the money was advanced without obtaining proper security, and that is the reason why the Financial Secretary is not anxious to explain. The writing off of these loans is due to the extravagance not of the Labour Government but of the Tory Government. If the Session is extended, and if it is found to be impossible for the Government to proceed to a General Election at an early date, there will be a large number of other debts which will have to be written off in the same manner so far as public works loans are concerned. Before granting all these loans did the Government make inquiries from the banks, and did they ask whether these people were financially sound? Are the Government now acting on the advice of the banks, and are they again taking instructions from the bankers? Have the bankers recommended that all this money should be written off because the debts were irrecoverable? Did the Government, of which the Financial Secretary was a member, make inquiries from the banks when the loans were advanced in order to find out whether these particular individuals were sound financially at that time? These are all matters which have not been explained. The Schedule does not give a sufficient explanation of the reasons why these debts should be written off.
On the second Parliamentary day of the economy Government it is remarkable that we are being asked to squander money in this fashion. It is rather significant that the National Government, formed to save the financial position of the country, have brought forward as their first Bill a Measure which is simply throwing away public money, because in the past they were very extravagant and did not obtain sound securities for the money which they advanced as public works loans. The Committee is now being asked to agree to a proposal to throw away public money by writing off debts to cer- 237 tain individuals. The Financial Secretary to the Treasury, who in the past has always been very voluble in his attacks on the late Government, now sits silent and does not rise to explain the reasons why we are to proceed with this throwing away of public money. I think he must have been gagged by the bankers and has had the golden muzzle put around him. Why does the hon. and gallant Gentleman not explain these matters to the House? Perhaps he will explain these points at the next garden party which he addresses in Scotland. The Financial Secretary ought to take the Committee into his confidence instead of telling people that the late Government were constantly squandering public money.
Why does the hon. and gallant Gentleman not tell the people that his own Government took over £202,000,000 received from the sale of War stores, and put it into the Budget as revenue received for that year, instead of placing it to the reduction of the National Debt? One of the reasons why this country is in such financial difficulties is because past. Chancellors of the Exchequer, acting for Tory Governments, have been using the finances of this country to balance their Budgets in a manner which, were they to pursue it in connection with a public company in this country, would land them in gaol. I just throw out the warning to the Financial Secretary not to accept any advice that may be given to him by the late Chancellor of the Exchequer, but to consider methods of finance that are a little more sound and are looked upon by people of integrity as being more honest than those which have been followed out in the past. Otherwise, he may find the Lord Advocate being called in, in the same way as he is being called in in the silk scandal, to undertake a prosecution of some individuals who really ought not to be in public office at all.
I am not referring to the hon. and gallant Gentleman. I want to congratulate him, as one Scotsman to another, on being appointed to his present position, but, at the same time, I want him to preserve the traditions of the Scotsman in being a little more cautious about the squandering of money. If he had done so, I am sure he would rather have waited, before accepting his new post, until this Bill had gone through. I hope 238 that at least he will take the House into his confidence, and explain why it is necessary that this should be done by a Government which has been set up in a rush, as quickly as aeroplanes could convey the various Ministers to take their seals. [Interruption.] I want him to tell the people of the country, just as publicly as he criticised the late Government, what are his reasons and the reasons of his Government for throwing away money on the second day of the meeting of a Government that was appointed in order to save money for the country.
§ Major ELLIOT
I will proceed to explain to the hon. Member, whose congratulations I accept, although I must say I wish he had been A little less pointed in making them, for it will cause great distrust on this side of the House in my bona fides if I find myself complimented from that side of the House. [Interruption.] Surely, the essential thing for the country just now is to know how it stands. We are not throwing away this money. This money has gone, and we are telling the country that it has gone. The hon. Member asks who tells us that it has gone. We are told that by the Commissioners of the Public Works Loans Fund, who were confirmed in office by the hon. Member's own Government and by his own Vote, and in whom he placed his financial trust. They said, "This money is not there. Do not deceive yourselves; it has gone." That is a thing which any Financial Secretary ought to tell the country through the House of Commons, and that is why I am telling it now.
§ Mr. McSHANE
I think that Clause 2 is the most important part of this Bill. In reply to what the hon. and gallant Gentleman has said, I should like to point out that, although it is true that the late Government confirmed the Commissioners in their posts, most of the money referred to in this Clause was lost during the administration of the Conservative Government. I do not know whether hon. and right hon. Members have closely examined the Schedule attached to the Financial Memorandum, but on page ix I find an extraordinary account of what has happened:The Public Works Loans Commissioners made an advance of £9,375 on the security of a property known as Great Trench and 239 the Yews Farm, Hildenborough, Kent, having an acreage of 200 acres, which was valued at £12,500 in April, 1925, by the Valuation Department of the Inland Revenue. The borrower fell into arrear with the payment due in June, 1927, under his mortgage, and in October, 1927, the Board took possession of the property in their security. Efforts to sell the property privately failed, and in June, 1928, it was put up for sale by auction.The Committee will note that all this was taking place under the regime of the super-economists who now occupy the benches opposite. It goes on:The board were advised by their Receiver and by the Valuation Department of the Inland Revenue, that the reserve should be fixed at £5,550 (exclusive of timber and valuations, which amounted to £1,399 6s.). The property was sold at this price, and after discharging outgoings and expenses for which the Board were liable, and after discharging the interest outstanding up to the 17th January, 1929, there remained a deficiency of £3,644 11s. 9d.The result was that the gentleman whom they had tried to induce to purchase that property himself became bankrupt, so that the second sale was a bankruptcy sale. It is stated that:The board issued a writ against the borrower for the recovery of this amount, and obtained judgment. A Bankruptcy Notice was served on the borrower, and on the 22nd April, 1929, a Receiving Order was made against bins on the board's petition. The borrower was subsequently adjudicated bankrupt, but no dividend could be paid owing to lack of assets, and after payment of the necessary costs and fees there remains a final deficiency of £3,673 10s. 7d.It is not without significance that this country should now be approaching bankruptcy itself, after administration like that, which resulted in one person after another, in his attempt to purchase this property, becoming bankrupt. I can only attribute that to the malign influence of those who were at the head of affairs at the time.
There is another point that should be referred to, particularly because of criticisms that were made to-day and yesterday in the House. I notice, from page iv of the Schedule, that a considerable sum has to be written off because certain piers and harbour works have got into serious disrepair. This Government was described yesterday as simply a breakdown gang. I should have thought that, instead of writing off this money, the breakdown gang would have 240 been sent up to repair those piers and harbours, and, quite frankly, I think the country would be much better off if they were engaged at that job instead of the job in which they are engaged at the present time. I agree with my hon. Friend the Member for Govan (Mr. Maclean) that the severest criticism that can be made of this Government at the moment is that its first Measure is one to sqander thousands upon thousands of the nation's money, while to-morrow and on the ensuring days it is proposed to take money from unemployed men and women. When this Government has finished its job, it will be hailed by the country with nothing but execration, and will be condemned as a Government born under the malign influence of bankers whose influence can be seen already, and will he felt throughout. The appointment of this Government reminds me of an appointment that was made—
§ The TEMPORARY-CHAIRMAN (Captain Bourne)
The hon. Member seems to be getting somewhat distant from Clause 2.
§ Mr. McSHANE
Clause 2 is in effect wiping out a considerable amount of money. There are unemployed men who will need that money later on. I am only showing that the influence which is already persuading the Government to do this is the influence which practically compelled the House to sanction the appointment of Sir Ernest Gowers at £7,000 a year. A great proportion of that money also, which we object to, might well have been spent in helping the unemployed. I hope the House will divide on this Clause and will reject it. It will show that we are, at any rate, making some attempt to save whatever we justifiably can without inflicting hardship on poor people.
§ Lieut.-Commander KENWORTHY
Can the Financial Secretary give us an explanation as to one of these firms whose debt to the State we are asked to expunge? Who are Messrs. Clinch and Goddard? This is a firm that got money out of this wonderful Committee that the hon. and gallant Gentleman boasts about. He told us a little while ago that it was all right and that we might be cerain that our money would be safe. This was during the Conservative Government that preceded the late Government. 241 The date was 31st January, 1925. It was in Worcestershire. The firm was allowed an advance of £9,000 on a certain farm, called Hill End Farm. Was this a private firm, and what public work were they doing? The other thing is this. It goes a long way back. In 1905, in the time of the Balfour Government, a loan was made which we are asked to expunge by this Clause which we are asked to rush through by hon. Members who, I suppose, want to go off to some place of entertainment. Who are these Brownies Taing Pier Trustees? Apparently they are men of straw. They were in some semi-public position and they received these large sums of money which are now lost. Now that we have another Conservative Government, we want to see that public money is not loosely and inefficiently used in the same manner.
§ Major ELLIOT
I have rarely seen the hon. and gallant Gentleman in such good form, but I wish the subject of his amusement could have been communicated to us. We should have appreciated the joke as much as he did. But I had great difficulty, owing to his laughter, in making out exactly what was the complaint that he was bringing against us. It appeared to be that we had lent money to a place with a humorous name. I am sorry that it appears so funny to him. It is a harbour in the Shetlands. It is the resort of those fishermen with whom he served with great distinction in the Great War, whose cause he has often pled before the House. These expenditures were incurred for the purpose, as the Memorandum states, of putting the pier, hauling slip, and so on into proper operation. Disaster fell upon the port. It is not nearly so funny to the fishermen as it is to the hon. and gallant Gentleman. It means the wrecking of the port and the stopping of the livelihood of the herring fishermen. The herring fishing industry was disorganised in 1915 and 1916 and, since that time it has not been possible to collect the revenue. It is, perhaps, a little ungracious to complain of the Public Works Loans Board for not grinding out the last sixpence and maintaining on the hooks of this great nation book debts which it is impossible to collect and from which no revenue now exists.
As regards Messrs. Clinch & Goddard, I beg the hon. and gallant Gentleman to accept my assurance that these debts have been gone into most carefully. 242 They represent bankruptcy, destitution, and the failure of an enterprise entered into with the assurance of security sufficient to convince even the flinty hearted Commissioners of the Public Works Loans Board that they had a reasonable chance of success. These things have failed, and they have to be written off. It is rather a matter of tragedy than of laughter.
§ Lieut.-Commander KENWORTHY
The hon. and gallant Gentleman has misrepresented me. I am grateful for the information he has given.
§ Major ELLIOT
It may seem very funny, but these two farmers entered into the difficult, arduous and uncertain occupation of cultivating the soil of this Land. They are not foreign bankers or rentiers, but people who attempted to make a living by cultivating the soil, and were able to show what they thought, and what the Public Works Commissioners thought, was reasonable security. An advance of 75 per cent. was made, but owing to depression in farming these people passed into bankruptcy, for the enterprise failed. These cases are examples of that decline in the prosperity of our major industry of agriculture which all of us deplore. Although it is a pity that public money has been lost, yet, on the whole, if we have to lose public money at the ends of the earth or in our own country, I am sure that ail of us in every part of the Committee would prefer, at any rate, that our own people should have the first help. Instead of public money being invested in investments far overseas, it has been I asked and lost, I frankly admit, in these ventures here at. home. We have done our best, the Labour Government and the present Government. This represents a long, continuous survey of these unfortunate men's affairs. I do not know whether more money will not yet have to be written off in regard to farming ventures in this country.
The hon. Lady the Member for East Middlesbrough (Miss Wilkinson) spoke of the gesture that this House was making to the local authorities to cut down this loan. What sort of a gesture are the Commissioners likely to make in reply to the criticism we have heard in the last hour or so from the opposite side of the Committee about debts which have to be written off? Are they not likely to say: "We must watch still more 243 closely and stringently all the schemes brought before us, and not trust farmers and little herring ports. The money may be lost and have to be written off, and then the unmeasured criticism, the powerful sharp criticism of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) and the hon. Member for Walsall (Mr. McShane) will be hurled upon us. We will play for safety and lend no money." And these people will find their defenders have done them a very bad turn. These examples represent the wreckage and the wastage of a great effort. All one can say is that these cases have been examined by the competent authorities, who tell us that the money is not there. I ask the Committee to accept their assurances and not to go further into the miseries which each of those separate cases represent. These cases will be published in the local newspapers and elsewhere with the criticisms that this Committee have made upon them, and it would injure people whom no one in this Committee would wish to injure.
§ 9.0 p.m.
§ Mr. LOGAN
I should like to ask the Financial Secretary to the Treasury a question. Are we to understand, in regard to the wiping off of this debt, that it has been in the books as an asset? Has there been a scrutiny in the Treasury by accountants and those expert in finance to show that, as far as the Department is concerned and as far as the Conservative party are concerned, we have been carrying on the books of the Treasury what is known as assets, but which any business man would have wiped off long ago? I am told that the sins of the parents are visited upon the children unto the third and fourth generations, and are we to understand that the sins of the past regime of the Tory party are now being visited upon this House under what is known as the co-operative coalition party? Are we to have more examples of this? Is this only the first that has come along, or are there any more? We heard yesterday that everybody will have to tighten their belts. We are told that it is a 10 per cent. reduction only, and that 1s. 8d. off 17s. for a man unemployed will not be very much; it is only to be a national sacrifice. I am certain from what I have heard of the discussion to-night there is very little 244 seriousness from the point of view of business. A discussion has been going on in this Committee over the sum of £13,889 19s. 1d. No doubt the 1d. must have been for a, stamp.
This House, I am told, has to consider in extremis the whole finances of the nation. What do we find? The whole nation is said to he in a panic, and on matters of public importance the nation outside is anxiously waiting to hear what is the object of the National Government. The Government now conic along and say that this is an opportune time to say to the Opposition that we must wipe off the debts referred to in this Bill. It may be the appointed day of salvation, but if this is the way you are going to save the nation, I am afraid you will have to get a better accountant at work and come along with a better book of words sc far as we are concerned. Is it not idiocy, having told the whole nation of the difficulties of the finances, to come forward and say: "Wipe off the debts which we have been holding as good debts in our books"? If one had been the manager of a chip-potato shop, he could not have carried on the business in a worse fashion. You can look at the matter as you like, but I believe that if I were managing a business for some of the Members on the opposite benches, I should have been sent about my business if I dared to have said to my employers that they, should wipe off debts at a critical period. Do you not think it time that you should close your books altogether, give up the business and let someone come in who can run the show? Let those who sit on the Front Bench, instead of dealing with questions of accountancy, face the issue squarely, and say: "This is our first lamentable attempt to present something to the House which we wish to get rid of." In the name of all that is good and holy, get rid of yourselves, because you are not fit to manage any business.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.