TANGANYIKA AND BRITISH HONDURAS LOANS BILL. (Hansard, 18 March 1932)

§ The UNDER-SECRETARY of STATE for the COLONIES (Sir Robert Hamilton)
I beg to move, "That the Bill be now read a Second time."
This Bill is based on the Financial Resolution which was introduced the other day and was very fairly and fully discussed. It has been drawn up in accordance with the previous precedents on which such Bills are framed. The reasons that led to its introduction have been very fully discussed. The Tanganyika Loan is for the purpose of restoring the cash balance, which has been reduced owing to expenditure on capital account having been taken out of the surplus balance, and, now that the revenue has fallen owing to the economic difficulties of the country, the currency is so low that they are not able to carry on. The reason for the loan to British Honduras is partly on account of economic difficulties arising from the same sources but more largely owing to the difficulties into which they have been put by the recent hurricane. I hope, with this explanation, the House will let us have the Second Reading.

§ Mr. LUNN
I think we should not allow Bills of this character to go through without some further explanation and some criticism. The first Clause states that the Treasury may, subject to the provisions of this Act, guarantee in such manner and on such conditions as they think fit, the payment of the principal and interest of £750,000 to Tanganyika. I should like the hon. Gentleman to tell me whether that power is usually contained in Bills of this kind. In the legislation that is just now going through it seems as though all the powers of the House of Commons are being transferred to bodies outside. Under the Wheat Bill and the Import Duties Bill we have been handing over powers to Commissions of all kinds. If the Government came forward with the Bill providing that at an early date the House of Commons should cease to exist for a period of years I think they would get it passed with their majority. In view of the number of conferences that 670 Ministers are going to in the near future, I should not be surprised at such a Bill being brought before Parliament. I object to these powers being given in this manner. Whether it has been in previous Bills or not it is a matter that the House of Commons ought to take some cognisance of. I am not opposing the granting of these loans but it is difficult to get the Government to do anything for unemployment and for industry and to provide work at home, while they are paying more than £1,000,000 for these two loans. In Clause 5 (1) it says: The Treasury shall not be precluded from giving a guarantee or making an advance under this Act by reason only that it appears that the Government by which the loan is raised may not be in a position to meet, as and when they fall due, the annual or half-yearly charges in respect of the loan for any of the first five years. I should like to ask the Government to consider whether the period should not be reduced below five years. Five years is a long time when you consider the circumstances of the taxpayers in this country to-day. To ask the British taxpayer to find more than £1,000,000 without any assurance that there is to be any of the principle or interest paid for five years is going a little too far at this time of the day. I admit that in Tanganyika the government has been excellent, and is excellent, and I hope that it will be maintained, I because, after all, it is only a mandatory territory and our actions in Tangankika come before the Permanent Mandates Commission, which is composed of representatives of many countries. As we have a good name in regard to our conduct in Tanganyika, especially during the period of the late Government, I hope that we shall be able to maintain our good results. In these matters it is important that we should not let things go by without saying that we ought to watch carefully the future policy towards the people who always live there—the natives. In the case of Tanganyika, and in the case of British Honduras particularly, where there is going to be work provided of various characters—not as much development work as I should have liked to have seen in British Honduras—the conditions of the natives, of employment and of wages ought to be very carefully watched by the Government lending the loans. I do not wish to see any change in policy in Tanganyika with regard to the natives, but I want it to go forward in 671 every direction. I rose to put those points while at the same time not desiring to take any action to oppose the Bill.

§ The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)
I will answer the last question first. I would remind the hon. Gentleman again that the Tanganyika loan is not a loan for new money to be spent upon some new development. All that is being done is to raise a loan to repay the money which he spent out of income two or three years ago. I am not challenging the hon. Gentleman. I believe that he had a surplus cash balance at the time and was entitled to spend on capital account out of income account, but all that is happening now is that we have to repay to income account the amount of the raid which he made upon that account, and put that account again into funds. No question arises at all as regards the treatment to be meted out to the natives under new works, because all that we are doing is to repay money spent on work which has already been undertaken. I feel sure that under the direction of the hon. Gentleman, whatever works were put in hand as a result of the expenditure of the £750,000, the interests of the native population were properly safeguarded. There is no question of spending a single farthing in future in Tanganyika out of this money, and therefore that consideration is irrelevant.
He asked whether it was customary to put in the powers contained in Clause 1. The words used in the Clause are common form, but they do not in the least take the matter out of the hands of the House of Commons. If the hon. Member will look at Clause 2 he will see that it lays down the broad conditions under which the guarantee is to be given, and those conditions have to be approved by Parliament and from those conditions neither the Treasury nor the Secretary of State can depart. It is wise when you lay down a broad condition which will ensure the security of any Treasury guarantee that there should be a general further condition that the Treasury and the Secretary State must be satisfied as to any other conditions. The Treasury is the watchdog of the taxpayer, and we ought to be satisfied that we are getting the proper conditions which a trustee would ask for in regard to his trustee funds.
672 The hon. Member also raised a point on Clause 5 as to the possibility of one or other of these countries not being able to pay the interest and sinking fund charges during the first five years. The reference in the Clause is not an indication to them, to refrain from paying interest and sinking fund charges during the five years. All that it says is that we shall not refrain from making the guarantee, or in the case of British Honduras making the loan out of the funds of the Public Works Loans Commissioners, if it turns out, or is likely to turn out, that they are not able to pay interest and sinking fund charges during that time. It is the maximum and not the minimum. In the case of British Honduras, for reasons which are well known to the House, seeing that the whole place is derelict, I do not think they could pay the interest and sinking fund charges at once. We are coming to their aid in this way rather than by a direct grant-in-aid, which is better from the point of view of the Treasury and the taxpayer. I do not think that we ought to refrain from doing that simply because they may not be able to pay the interest and sinking fund charges.

§ Mr. D. MASON
The hon. Member for the Rothwell Division (Mr. Lunn) seemed rather worried as to whether the money loaned would help British labour. All loans that are made by this country must stimulate British industry, because they must go either to Tanganyika or to British Honduras either in goods or service. Therefore, a loan made to any British Dominion or Colony must, in the nature of things, stimulate British industry. I think the right hon. Gentleman will agree with that.

§ Sir P. CUNLIFFE-LISTER
I agree.