Commons Sitting of 7 February 1933

Preamble
The House—after the Adjournment on 22nd December, 1932, for the Christmas Recess—met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

SPEAKER'S WARRANTS FOR NEW WRITS.
Mr. SPEAKER informed the House that he had issued, during the Adjournment, Warrants for New Writs, namely:
For the Borough of Liverpool (Exchange Division) in the room of Lieut.-Colonel Sir James Philip Reynolds, baronet, D.S.O., deceased.
For the County of Fife (Eastern Division) in the room of Sir James Duncan Millar, knight, K.C., deceased.

PRIVATE BUSINESS.
  HUMBER BRIDGE BILL (by Order),
  Third Reading deferred till Thursday.

  BRIDLINGTON CORPORATION BILL,
  "to extend the limits for the supply of water by the Bridlington Corporation; to confer further powers upon that Corporation with respect to their water, electricity, and other undertakings; to make
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  better provision for the health, local government, and finance of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

  CITY OF LONDON (VARIOUS POWERS) BILL,
  "to confer further powers upon the Corporation of London in regard to certain open spaces; to make certain provision with respect to the Metropolitan Cattle Market and sanitary matters; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  COMMERCIAL GAS BILL,
  "to prohibit the making by housing authorities of conditions as to the form of light, heat, power or energy to be supplied or used in certain cases in the limits of supply of the Commercial Gas Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  DEWSBURY AND OSSETT PASSENGER TRANSPORT BILL,
  "to make provision for the abandonment of the tramways in the boroughs of Dewsbury and Ossett worked by the National Electric Construction Company, Limited; to provide for the running of public service vehicles in substitution therefor; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  DEWSBURY CORPORATION BILL,
  "to confer further powers upon the Mayor, Aldermen and Burgesses of the county borough of Dewsbury with regard to the acquisition, retention, development and disposal of lands; the health, local government, and improvement of the borough; the water, gas, and electricity undertakings of the Corporation; the regulation of stock; the carrying of receipts from all sources to the general rate fund of the borough and the making of all payments out of that fund; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  FRIMLEY AND FARNBOROUGH DISTRICT WATER BILL,
  "to provide for the transfer to the Frimley and Farnborough District Water Company of the undertaking of the Wokingham District Water Company, Limited; to confer further powers upon the Frimley and Farnborough District Water Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  GAS LIGHT AND COKE COMPANY BILL,
  "to confer further powers upon the Gas Light and Coke Company; to prohibit the making by the authorities of districts in the area of supply of that Company of conditions as to the form of heat, light, power, or energy to be supplied or used in certain cases; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  GREAT WESTERN RAILWAY BILL,
  "for conferring further powers upon the Great Western Railway Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

  KINGSTON-UPON-HULL CORPORATION BILL,
  "too authorise the Lord Mayor, Aldermen, and Citizens of the city and county of Kingston-upon-Hull to obtain a supply of water from Farndale and other sources in the North Riding of Yorkshire and to construct waterworks; to abandon certain waterworks authorised by the Kingston-upon-Hull Corporation Act, 1930; to make further provision for the health, local government, and improvement of the city;
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  and for other purposes," presented, and read the First time; and ordered to be read a Second time.

  LONDON AND NORTH EASTERN RAILWAY BILL,
  "to empower the London and North Eastern Railway Company to acquire additional lands; to extend the time for the compulsory purchase of certain lands; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL,
  "to confer further powers upon the London County Council and other authorities; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  LONDON MIDLAND AND SCOTTISH RAILWAY BILL,
  "to empower the London Midland and Scottish Railway Company to acquire lands; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  MABLETHORPE AND SUTTON URBAN DISTRICT COUNCIL BILL,
  "to provide for the transfer to the Mablethorpe and Sutton Urban District Council of the undertaking of the Suttonon-Sea and District Waterworks Company, Limited; to confer further powers on the Council in regard to their water undertaking; to authorise the Council to acquire certain lands; to make further provision for the health, local government and finance of the district of the Council; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  MANCHESTER CORPORATION BILL,
  "to empower the Lord Mayor, Aldermen, and Citizens of the city of Manchester to acquire lands; to construct street improvements and waterworks; and to provide trolley vehicles; to make further provision in reference to their several undertakings, the granting of superannuation allowances, and the health, local government, and improvement of the City; to make provision with reference to the Manchester Royal Infirmary; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  MANCHESTER SHIP CANAL BILL,
  "to provide for the transfer to the Manchester Ship Canal Company of the undertaking of the De Trafford Light Railway Company; to confer further powers on the Manchester Ship Canal Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  MERSEY TUNNEL BILL,
  "to confer further borrowing powers for the completion of the tunnel authorised by the Mersey Tunnel Acts, 1925 to 1928; to increase the aggregate amount of tolls which may be collected in respect of the use of the tunnel and to extend the period of collection; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  NORWICH CORPORATION BILL,
  "to alter the style and title of the Corporation of the city of Norwich; to make provision for the transfer of the undertaking of tile Norwich Electric Tramways Company to the Lord Mayor, Aldermen, and Citizens of the city; to confer upon the said Lord Mayor, Aldermen, and Citizens powers with reference to the running of public service vehicles; to make further provision with regard to their water and electricity undertakings and the health, local government, and improvement of the city; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  PLYMPTON ST. MARY RURAL DISTRICT COUNCIL BILL,
  "to constitute the Rural District Council of Plympton St. Mary the harbour authority for the estuary and tidal waters of the River Yealm; to confer further powers upon the Council in respect of their water and electricity undertakings and in regard to moveable dwellings and camping grounds; and to make further and better provision for the health, local government, and finance of the district; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

  PRESTON CORPORATION BILL,
  "to confer further powers upon the Corporation of Preston with reference to their water undertaking and the finance
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  of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

  ST HELENS CORPORATION BILL,
  "to extend the boundaries of the borough of St. Helens; to confer further powers upon the Mayor, Aldermen, and Burgesses of the said borough with regard to the acquisition, retention, development, and disposal of lands, the electricity arid water undertakings of the Corporation, the health, local government, and improvement of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  SHEFFIELD EXTENSION BILL,
  "to extend the boundaries of the city of Sheffield; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  SIDMOUTH URBAN DISTRICT COUNCIL BILL,
  "to transfer to and vest in the Sidmouth Urban District Council the undertaking of the Sidmouth Water Company and to authorise that Council to supply water and to construct further waterworks; to confer further powers upon them in regard to their gas undertaking; to make further and better provision with regard to the health, local government, and finance of the district; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  SOUTHERN RAILWAY BILL,
  "to empower the Southern Railway Company to construct works and acquire lands; to extend the time for the compulsory purchase of certain lands; to empower the said Company and the London Midland and Scottish Railway Company to construct certain works; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
  STAFFORDSHIRE AND WORCESTERSHIRE CANAL BILL,
  "to confer further powers on and to change the name of the Company of Proprietors of the Staffordshire and Worcestershire Canal Navigation; and for other purposes,' presented, and read the First time; and ordered to be read a Second time.
  YORK CORPORATION TRANSPORT BILL,
  "to authorise the Lord Mayor, Alder- men, and Citizens of the city of York to transfer their light railway, trolley vehicle, and public service vehicle undertakings to a company to be formed under the Companies Act, 1929; to subscribe money towards the share capital of such company and advance money on loan to such company; to provide for the abandonment of the light railways and trolley vehicle routes of the said Corporation; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    EXPORTS TO CANADA.
    Mr. HOLDSWORTHasked the President of the Board of Trade if he is aware that certain articles exported from this country to Canada, which were to be admitted free of duty under the terms of the Ottawa Agreements, have since the date of the Agreements been made subject to duty; and has this been done with the consent of His Majesty's Government?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): If the hon. Member will let me have particulars of the cases he has in mind, I will endeavour to give him an answer.
    Mr. HOLDSWORTHasked the President of the Board of Trade if he is aware that carving knives, which were admitted free of duty into Canada under item 429 of the Canadian tariff when imported from this country, have now been transferred to item 623 when they are imported in fancy boxes and are now subjected to duty; and whether he will make the appropriate representations to His Majesty's Government in Canada?
    Mr. RUNCIMAN: I am informed that carving knives are dutiable under item 429 (b) at 15 per cent. ad valorem. Fancy boxes are dutiable separately under item 623 at 18 per cent. ad valorem. If the knives are imported in fancy boxes and the value of the knives apart from the boxes is not quoted, the duty is levied at 18 per cent. ad valorem on the
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    complete article. I understand that sometimes in the past carving knives have in error been entered duty free under item 429 (d), and that these entries are being revised.
    Mr. HOLDSWORTHasked the President of the Board of Trade if he is aware that a new definition of cotton fabrics, composed of counts of 100 or more, on the part of the customs authorities in Canada, has resulted in certain fabrics manufactured in this country being made dutiable which were admitted free of duty under the Ottawa Agreements; and if His Majesty's Government will make the appropriate representations?
    Mr. RUNCIMAN: Yes, Sir; the matter is now under discussion with His Majesty's Government in Canada.
    Sir PERCY HARRIS: Will representations be made now for a Board to be set up in Canada on this point? I understand that the Government only can make such representations.
    Mr. RUNCIMAN: I shall require notice of that question.

    CANADIAN TARIFF BOARD.
    Mr. MABANEasked the Secretary of State for Dominion Affairs whether he has now received any intimation as to the appointment of the Canadian Tariff Board?
    Mr. GRAHAM WHITEasked the Secretary of State for Dominion Affairs if the Canadian Tariff Board has now been set up; and if British traders have the right of direct access to it?
    The SEC R ETA RY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): The constitution of the Tariff Board was announced by His Majesty's Government in Canada last night. The names of the members are as follow:
    The Honourable George Herbert Sedgwick, Judge of the High Court of Ontario—Chairman. Mr. Milton Neil Campbell, M.P. for Mackenzie, Saskatchewan. Mr. Charles Hebert, B.A., of Montreal.
    As regards the right of access of United Kingdom traders to the Tariff Board I would refer to Article 15 of the Trade Agreement with Canada, which contains an undertaking on the part of His

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    Majesty's Government in Canada that United Kingdom producers shall be entitled to full rights of audience before the Tariff Board when it has under consideration matters arising under Articles 13 and 14.
    Mr. MABANE: Does that mean that producers will have direct access or will their applications have to be endorsed by our Government before they can make them?
    Mr. THOMAS: During the Recess almost all the trades that are appealing to the Tariff Board for revision have been in consultation with the Government. Representations will be made on their behalf. I have already indicated that United Kingdom producers will have full right of audience.
    Mr. HANNON: Can the right hon. Gentleman say whether the representations to the Tariff Board will be made through his Department or the Board of Trade?
    Mr. THOMAS: That is a technical matter. I may say that my Department and the Board of Trade are in joint communication.
    Viscountess ASTOR: The right hon. Gentleman has said that there are three members of the Board, one of whom is a judge, and one a Member of Parliament. Can he tell us the political complexion of the two Members? Is it a non-party Board?

    PORTUGUESE PORTS (FLAG DISCRIMINATION).
    Sir ASSHETON POWNALLasked the Secretary of State for Foreign Affairs whether he has now received a reply from the Portuguese Government to the communication addressed to it by the British Government last August on the subject of flag discrimination?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Yes. Sir. His Majesty's Government have received a reply from the Portuguese Government; and it is under consideration. Meanwhile, as my hon. Friend has doubtless observed, the Customs rebates, to the existence of which we have taken objection, were reduced by the Portuguese Government on the 2nd of January from 8 to 6 per cent. for imports and from 16 to 12 per cent. for exports.

    RUSSIA.
    Mr. MANDERasked the Secretary of State for Foreign Affairs the present position of the negotiations with the Soviet Government for a new trade agreement?
    Sir J. SIMON: Preliminary discussions have taken place, and a further meeting will be held this week. It will not, I hope, be expected that I should discuss the subject-matter of the negotiations while they are in progress.

    STOCK EXCHANGE RESTRICTIONS.
    Mr. WHITEasked the Chancellor of the Exchequer if he has taken any decision with regard to the removal of the embargo on the issues of fresh capital for the conversion of existing issues?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The restriction on conversion issues was completely withdrawn on the 14th January so far as ordinary business transactions are concerned. It is still necessary to retain it for the present in the special case of optional conversion issues which rank as Trustee Securities and involve either underwriting or an invitation to the public to subscribe new cash.
    Colonel WEDGWOOD: May I ask whether the Chancellor of the Exchequer realises the serious effect which his embargo has upon our export trade and whether he is still attempting to force up the price of sterling, which has already risen to a high figure?
    Mr. CHAMBERLAIN: I presume the right hon. and gallant Gentleman refers to the embargo mentioned in the question? If so, then I am not aware of it.
    Colonel WEDGWOOD: I am referring to the embargo on foreign loans. Is that at an end?
    Mr. CHAMBERLAIN: That is not mentioned in the question.

    CANADIAN WHEAT (IMPORTS).
    Mr. WHITEasked the Chancellor of the Exchequer if he can make a statement with regard to the position of wheat imports into the United Kingdom from Canada since the customs decision announced on 21st December, 1932?
    Mr. CHAMBERLAIN: The position in regard to the admission to preference of Canadian wheat imported into this country is fully explained in the statement published in the Press of 22nd December of which I am sending the hon. Member a copy. There has been no change in the position since that date.

    IMPORTS (EMPIRE CONTENT).
    Colonel GOODMAN(by Private Notice) asked the President of the Board of Trade what steps it is proposed to take to prevent abnormal importations from Empire countries of goods to which the Import Duties (Imperial Preference) No. 1 Regulations will apply as from 1st April during the period from the publication of the Regulation to its coming into operation?
    Mr. RUNCIMAN: I see no reason to anticipate any abnormal importation from Empire countries of goods covered by the new Regulations regarding Empire Content which come into force on 1st April next. I am sure my hon. and gallant Friend will appreciate that reasonable notification of Regulations of this character is necessary.
    Colonel GOODMAN: Will the right hon. Gentleman, before finally deciding not to take action, inquire into the increased activities of American companies who take full advantage of the period of grace to flood this country with their goods through Canada?
    Mr. RUNCIMAN: That matter has been inquired into very closely, and we feel that we are in full possession of the facts.
    Mr. LYONS: Can the right hon. Gentleman tell the House what representations have been made in the last few days by the British manufacturers in the trades affected?
    Mr. RUNCIMAN: I could not do so without notice.

  COAL INDUSTRY (OIL EXTRACTION).
  Mr. DAVID GRENFELLasked the President of the Board of Trade whether he can make any statement on the Government's policy with regard to the hydrogenation of coal?
  Mr. RUNCIMAN: This subject is still being actively considered but I am not yet in a position to make any statement of the Government's policy in regard to it.
  Mr. GRENFELL: Are these negotiations proceeding as rapidly and as fully as they possibly can?
  Mr. RUNCIMAN: Yes, they are proceeding without interruption.
  Mr. BATEY: Is the right hon. Gentleman aware that the Prime Minister said in the Debate on the Address that the Government had been considering this matter for some months? When are we going to get an answer?
  Mr. RUNCIMAN: The hon. Member is aware that this is a most complicated, difficult and highly technical subject. He cannot expect it to be dealt with at lightning pace.
  Mr. BATEY: When are we going to have a reply?
  Mr. RUNCIMAN: When a definite reply can be given, it will be given.
  Sir WILLIAM WAYLAND: Is it not a fact that low temperature carbonisation of coal is already a commercial success?
  Mr. RUNCIMAN: I could not enter into a discussion of these rival processes at Question Time.

  BRITISH ARMY.

    TERRITORIAL CAMPS.
    Sir A. POWNALLasked the Financial Secretary to the War Office whether it is now possible to state the decision as to whether Territorial camps will be held as usual during the coming training season?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): Yes, Sir. The Government have decided to include in the Army Estimates for 1933 a sum of money to cover the provision of the normal 15-day camps for the Territorial Army.
    Sir A. POWNALL: In view of the decrease in strength caused by the lack of camps last year, are any special steps contemplated to get the Territorial Army up to establishment?
    Mr. COOPER: Yes, a special campaign of recruiting is contemplated, and I hope a review of the Territorial Army will be held this summer.
    Mr. MAXTON: What is the financial provision that is being made?
    Mr. COOPER: The sum is approximately £900,000.
    Mr. KIRKWOOD: Is not this a case of the present Government turning down what the Labour Government put into execution?
    Mr. THORNE: Does not the hon. Gentleman think £900.000 would be better spent on building?

    MEAT SUPPLIES.
    Sir GIFFORD FOXasked the Financial Secretary to the War Office whether arrangements are to be made during the current year for supplying the Home forces only with home-killed meat wherever available?
    Mr. COOPER: I regret that the cost to Army Votes would be prohibitive.

  NATIONAL FINANCE.

    ECONOMIES.
    Mr. JOHNasked the Financial Secretary to the War Office when it is proposed to restore the cuts made in the pay of non-commissioned officers and other ranks in the Army?
    Mr. HICKSasked the Secretary of State for the Home Department when it is proposed to restore the cuts made in the pay of the police?
    Mr. PRICEasked the Parliamentary Secretary to the Board of Education when it is proposed to restore the cuts made in the pay of teachers?
    The PRIME MINISTER (Mr. Ramsay MacDonald): The present financial situation offers no hope that it will be possible in the near future to restore the cuts in pay as limited by my statement on the 21st September, 1931, in reply to a Private Notice Question by my hon. and learned Friend the Member for South Nottingham (Mr. Knight).
    Mr. LAWSON: Has the right hon. Gentleman noticed that the present financial situation allows him to spend £900,000?

    UNITED STATES (BRITISH DEBT).
    Mr. LEWISasked the Chancellor of the Exchequer if he has any further statement to make on the subject of our War Debt to the United States of America?
    Mr. CHAMBERLAIN: The terms of the invitation addressed to His Majesty's Government to send a representative or representatives to Washington early in March and of the acceptance of this invitation have already been published. I have no further statement to make.
    Mr. LEWIS: Can the right hon. Gentleman give any indication as to whether any, and, if so, which, Ministers of the Crown are to proceed to America to carry out these negotiations?
    Mr. CHAMBERLAIN: I am not able to make any statement on that matter.
    Sir STAFFORD CRIPPS: In view of the statements which the right hon. Gentleman has made in the country on the question of the American War Debt, is he not prepared to make a statement in this House?
    Mr. CHAMBERLAIN: Obviously it is unnecessary to repeat statements that I have made in the country.
    Sir S. CRIPPS: May I ask whether it is not more courteous to this House to make the statements here than to refer hon. Members to reports in the Press which may not be accurate?
    Mr. CHAMBERLAIN: If the House were sitting the statements would, of course, be made here, but the fact that the House is not sitting does not make it impossible for any Minister to make a statement outside.

    SUPPLEMENTARY ESTIMATE (MINISTRY OF LABOUR).
    Lieut.-Colonel Sir VIVIAN HENDERSONasked the Chancellor of the Exchequer what steps he has taken, or proposes to take, to meet the supplementary charge of just over £18,000,000 for the service of the Ministry of Labour during the current financial year without upsetting the balance of his Budget?
    Mr. CHAMBERLAIN: This is only one of many items, some favourable and others unfavourable, that will affect the outturn of the present financial year, and, while the importance of providing all possible savings has been impressed on

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    Government Departments, it is not possible as yet to estimate accurately the ultimate position, or to state what steps, if any, will be required to meet it. I may, however, say that I do not think that increased taxation for the current year will be called for in any case.
    Mr. LAWSON: Is the Chancellor of the Exchequer satisfied that the Supplementary Vote of £18,000,000 will meet the needs of the Ministry of Labour in view of the colossal increase of 180,000 in the number of the unemployed?
    Mr. CHAMBERLAIN: I have no reason to suppose that it will not.
    Mr. LAMBERT: Does the right hon. Gentleman anticipate another Supplementary Estimate on this subject before the Budget?

    ECONOMY.
    Mr. BROCKLEBANKasked the Chancellor of the Exchequer whether he can now make any statement as to recent steps taken to secure economy in expenditure in Government Departments?
    Mr. CHAMBERLAIN: The question of economy continues to engage my closest attention. Public expenditure has been the subject of the most vigilant scrutiny throughout the year with a view to the utmost possible reduction of the annual Estimates for next year now in course of preparation. The important reports recently received from the various committees on Economy are under detailed, examination, and I am personally discussing with my colleagues the issues raised.

    FIDUCIARY ISSUE.
    Mr. RHYS DAVIES (for Mr. MORGAN JONES)asked the Secretary to the Treasury for what period it is proposed to maintain the issue of fiduciary bank notes at £275,000,000?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): The period will necessarily depend on future circumstances.
    Mr. DAVIES: Can the hon. Member tell me what kind of circumstances will provide a basis for determining the period?
    Mr. HORE-BELISHA: The whole matter depends on a recommendation from the Bank of England.

  IRISH FREE STATE.
  Mr. LEWISasked the Secretary of State for Dominion Affairs if he has any further statement to make on the subject of our relations with the Irish Free State?
  Mr. J. H. THOMAS: I have no further statement to make except that the position still remains that the United Kingdom Government are desirous of a friendly settlement provided that it proceeds on the basis of the acceptance of the validity of existing obligations.
  Mr. LEWIS: Are we to understand that the Government of the Irish Free State have not yet shown sufficient confidence in the justice of their case to be willing to submit the matter in dispute to the arbitrament of an Empire tribunal?
  Mr. LUNN: Is the right hon. Gentleman aware that there has been a general election and that the people of the Irish Free State have expressed their confidence in Mr. de Valera and, in view of the strong desire for a settlement, both in Ireland and in this country, will he not initiate negotiations with the new Government?
  Mr. THOMAS: The hon. Gentleman has given notice of a question, and I assumed that he would wait for a reply.
  Mr. LUNN: I shall not be entitled to put my Private Notice Question in view of the question that has been put.
  Mr. SPEAKER: The hon. Gentleman did send me notice of that question. I saw there was one of a similar kind on the Paper, so I could not allow him to put it.
  Mr. THOMAS: That being so, out of courtesy to the hon. Gentleman, I will say that the position of the Government is that honourable obligations have been entered into between two parties, and we believe that they should be the basis of any future negotiations. I have never hesitated to say that we are ready to enter into negotiations, but it must be on the basis that, having made an agreement, they must keep their agreement.
  Mr. MAXTON: Is the right hon. Gentleman satisfied with the results of the policy of the Government up to now?
  Mr. THOMAS: I have got a few hundred thousand pounds more as the result of the increased duties.

  NORWICH CONSISTORY COURT (PROCEEDINGS).
  Sir A. POWNALLasked the hon. Member for Central Leeds, as representing the Ecclesiastical Commissioners, if he can now state the total cost falling on the Commissioners in respect of the recent case in the Norwich Consistory Court?
  Mr. DENMAN (Second Church Estates Commissioner): The total cost has been £8,205 1s. 2d.
  Sir A. POWNALL: Can my hon. Friend say whether any steps are in contemplation to reduce the cost and the publicity, should cases of this sort unfortunately arise in future?
  Mr. DENMAN: As my hon. Friend knows, the Commissioners are helpless in this matter. The question, I understand, is on the agenda of the Assembly now in session, and it will be for them to deal with it.

  WORKMEN'S COMPENSATION.
  Mr. LYONSasked the Home Secretary whether he can now make any further statement upon the matter of compulsory workmen's compensation insurance?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Oliver Stanley): As regards general compulsory insurance, I would refer to the replies given to my hon. Friend on the 17th November and to the hon. Member for Leigh on the 27th October last. As regards development of insurance in the coal-mining industry, my right hon. Friend heard last month from the Mining Association that, except in Lancashire where proposals for a new scheme were still unsettled, insurance of a comprehensive character is now provided by the Mutual Indemnity Associations in each district, and that marked progress has been made in securing that colliery undertakings obtain cover from a Mutual Indemnity Association or Insurance Company. The negotiations for these arrangements have necessarily involved a considerable amount of work, but the association assured my right hon. Friend that they do not anticipate any difficulty in getting matters on a thoroughly satisfactory basis in the near future.
  Mr. MARTIN: Can my hon. Friend say whether any of these schemes include provision for past liabilities in mining areas?
  Mr. STANLEY: As my hon. Friend is aware, the whole of this subject can be debated on Friday on a Private Member's Bill, and perhaps it will be more convenient to leave questions of that kind until them.

  BETTING FACILITIES (TOTALISATORS).
  Captain ARTHUR EVANSasked the Home Secretary if he is now in a position to state whether the Government has decided to introduce legislation at an early date to regularise the position of totalisators on dog tracks throughout the country?
  Mr. STANLEY: With my hon. and gallant Friend's permission, and with Mr. Speaker's consent, I propose to make a statement at the end of questions.
  Captain EVANS(by Private Notice) asked the Home Secretary whether the Government have considered the recommendations of the interim report of the Royal Commission on Lotteries and Betting, and what decision has been reached with regard to the use of the totalisator (a) in tote clubs and (b) on greyhound racing tracks?
  Mr. STANLEY: My right hon. Friend regrets that owing to illness he is not able to be in his place to answer this question.
  As regards the use of the totalisator in tote clubs the Government accept the recommendations of the Royal Commission who were impressed by the spread of the organised facilities for betting and gambling and of the habit of betting and gambling. They clearly state that the use of totalisators for transactions, which in their view are in substance betting transactions, whether in clubs or on greyhound tracks, leads to an enormous growth of facilities for continuous betting and to an increasing exploitation of the gambling instinct of the population at large by persons for their own financial gain. Regarded from this point of view, the totalisator appears to the Commission to be a grave social danger, and their unanimous recommendation is that

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  totalisator betting both in clubs and on greyhound tracks should be brought to an end as soon as possible.
  The Government are advised that the use of the tote in clubs is illegal under the existing law, and they propose to put into force the law with a view to die suppression of these clubs. Should changes in the methods of conducting betting operations through the totalisator in these clubs be adopted, and should it be found that the existing law is inadequate to deal with them, the Government will introduce any legislation which may be found necessary to effect the complete suppression of these clubs.
  The Government are further advised that the use of the totalisator on greyhound racing tracks is contrary to the existing law, which it is the duty of the authorities to enforce. At the same time the Government recognise that, as pointed out by the Royal Commission, the facilities afforded by the totes are only one form of the betting facilities provided on these tracks and that the Royal Commission will be dealing in their final report with the general question of betting facilities on these tracks. The Government do not propose to come to a final decision as to the legislation, if any, which may be necessary to deal with the use of the tote on greyhound tracks until they have had an opportunity of studying the final recommendations of the Royal Commission with regard to other forms of betting. When those recommendations are received the Government will be in a position to review the matter in all its aspects.
  I should add that as regards Scotland, the position is at present different. The High Court. of Justiciary in Scotland in 1930 decided that the use of a totalisator on a greyhound racing track was not in contravention of the Betting Act, 1853. That decision, however, did not proceed upon an interpretation of the part of Section 1 of that Act upon which the English decision was based. I am informed that there is now pending in the Courts in Scotland another case which will enable the law as laid down in the 1930 decision to be reconsidered in the light of the English decision, and until that case is finally determined it is not possible to say whether there is any real divergence between the Courts of the two countries as to the interpretation of the Statute.
  Captain EVANS: Arising out of the latter part of the answer, regarding totalisators on greyhound racing tracks, in view of the fact that the decision, one way or the other, with regard to greyhound tracks, will have an important effect on employment, will the House be afforded an early opportunity of debating this question on a Motion for the Adjournment?
  Mr. STANLEY: That is a question which must be put to the Leader of the House.
  Captain EVANS: Will the Prime Minister be good enough to reply to the question?
  Mr. LEWIS: Arising out of the original answer, will the Under-Secretary say whether, pending the receipt of the full report of the Commission, the Government propose to enforce the existing law with regard to totalisators on greyhound racing tracks?
  Mr. STANLEY: Yes, Sir. It is my right hon. Friend's duty to enforce the law as it stands.
  Sir BASIL PETO: For the sake of clarity will the Under-Secretary say whether that implies that no more of these totalisators will be allowed to be erected, pending the Government's consideration of the final report and their final decision in the matter?
  Mr. STANLEY: I would point out that it is the existing law which my right hon. Friend will enforce, and that that does not deal with the erection but with the operation of totalisators.
  Sir NICHOLAS GRATTAN-DOYLE: Can the Under-Secretary give any indication of the date of the final report which has been so long expected?
  Mr. STANLEY: I understand that we hope to receive it within a reasonably short time.

  INDIA.

    ROUND TABLE CONFERENCE.
    Mr. LEVYasked the Secretary of State for India if he will make a statement on the proceedings and results of the Round Table Conference?
    Captain PETER MACDONALDasked the Secretary of State for India if he can now make any statement as to the result of the Round Table Conference and the policy of the Government in respect thereof?
    The SECRETARY of STATE for INDIA (Sir Samuel Hoare): The results achieved by the third session of the Round Table Conference will be found in a volume presented to Parliament on 31st January (Cmd. 4238). I do not think it is necessary for me to attempt to review these results, satisfactory as they were, since it is the intention of His Majesty's Government to lay before Parliament in the form of a White Paper their full proposals for a federal constitution for India and to invite Parliament before the Easter Recess to set up a Joint Select Committee of both Houses, with power to confer with Indians, to examine and report upon these proposals.
    Captain MACDONALD: Is the House to have an opportunity of a Debate or discussion on India before this legislation is introduced?
    Sir S. HOARE: Yes, Sir; I should think that the House will have many such opportunities.
    Brigadier - General Sir HENRY CROFT: Will there be a Debate on the White Paper?
    Sir S. HOARE: Yes, Sir.
    Mr. ANNESLEY SOMERVILLE: How soon may we expect the White Paper?
    Sir S. HOARE: My hon. Friend will see that in my answer I have spoken of a date before the Easter Recess. It is the date to which we are working, and whether we shall succeed in having it ready by that time, I cannot say. I hope that we shall.
    Mr. KIRKWOOD: Arising out of the reply that there will be many opportunities for the House to discuss the situation in India, will an opportunity be given to the House to discuss the sentences which have been passed on the Meerut prisoners?
    Sir S. HOARE: That is a question which should be addressed to the Leader of the House.

    SITUATION.
    Mr. D. GRENFELL (for Mr. T. WILLIAMS)asked the Secretary of State for India whether he can make any statement as to the present state of affairs in India?
    Sir S. HOARE: During December and January there were occasional outbursts of Congress activity accompanied in some cases by minor disturbances, but the situation continues to be well in hand. The total number of convicted persons undergoing imprisonment for offences in connection with the campaign was 14,815 at the end of December, as compared with 17,145 at the end of November. The interest of many Congress workers has been diverted to M r. Gandhi's campaign against untouchability. The Viceroy has sanctioned the introduction into the Legislative Assembly of a Bill dealing with this question. There have been some disturbances in the Alwar State, but the situation is now quiet. His Highness the Maharaja has appointed a British Revenue Minister and British Inspector General of Police.
    Mr. KIRKWOOD: Is the Secretary of State for India satisfied with the justice or injustice that is being meted out to the Meerut prisoners?
    Sir S. HOARE: I could not possibly question the sentence of a Judge.
    Mr. KIRKWOOD: Does that mean that, no matter what injustice is done to British subjects in India, the Secretary of State for India in this House has no power to interfere?
    Sir S. HOARE: I could not possibly give a general answer to a question of that kind.

  AGRICULTURE.

    LIVE STOCK PRICES.
    Mr. LAMBERTasked the Minister of Agriculture if he is satisfied as to the effect of the measures taken to improve the prices of home-bred live stock; and whether the average prices obtained by home livestock producers in recent months have shown a margin of profit?
    The MINISTER of AGRICULTURE (Major Elliot): I assume that my right hon. Friend is referring to the voluntary arrangements which have been made with

    23
    a number of countries exporting meat (including bacon and hams) to the United Kingdom. As production costs are not uniform, it is impossible to say whether any given prices afford a profit to home producers generally, but my right hon. Friend will be glad to know that since the beginning of the arrangements referred to, the prices of first quality fat cattle have improved from 37s. 3d. per cwt. to 41s. 10d. per cwt., fat sheep from 7¼d. per lb. to 9¾. per lb., and porkers from 10s. 5d. per score to 12s. 9d. per score of 20 lbs.
    Mr. LAMBERT: Does the right hon. and gallant Gentleman propose to take any steps to prevent the continuance of the sag which has taken place in live stock products in the last fortnight?
    Major ELLIOT: The whole programme will be reviewed in the light of the course of prices, but I have every reason to be satisfied with the course of these so far as they have gone.
    Sir B. PETO: Can my right hon. and gallant Friend say whether he is making any early arrangement for continuing, and making more permanent, the restrictions on the importation of live stock?
    Major ELLIOT: Yes, Sir. The extension of this arrangement has been under negotiation on more than one occasion, and a further extension is under negotiation now.
    Mr. MAXTON: Is the right hon. and gallant Gentleman doing anything to see that the people get meat at a cheap price?
    Major ELLIOT: Yes, Sir. The Linlithgow Committee and others are watching, and I have no reason to suppose that retail prices have shown any unreasonable rise.

    BACON INDUSTRY (REORGANISATION).
    Captain P. MACDONALDasked the Minister of Agriculture whether he has yet received any draft schemes for the organisation of the British bacon industry, either from the producers of pigs or the curers of bacon; and what steps Ore is taking to ensure that a scheme on the lines of that recommended by the
    24
    Reorganisation Commission shall be put into operation at the earliest possible opportunity?
    Major ELLIOT: Schemes under the Agricultural Marketing Act, 1931, have been submitted by pig producers and by bacon curers, and I hope shortly to introduce the necessary legislation which will enable effect to be given to the Commission's general proposals.
    Captain MACDONALD: Can my right hon. and gallant Friend say when he intends to introduce legislation?
    Major ELLIOT: I am afraid that I cannot give the date just now.

  ANGLO-PERSIAN OIL COMPANY (CONCESSION).
  Mr. LEWISasked the Secretary of State for Foreign Affairs if he has any further statement to make as to the relations between the Persian Government and the Anglo-Persian Oil Company?
  Sir J. SIMON: The dispute between His Majesty's Government and the Persian Government in connection with the Anglo-Persian Oil Company's concession was brought before the Council of the League of Nations by His Majesty's Government and the Council heard statements on behalf of the two Governments on the 26th of January, Dr. Benes, the representative of Czechoslovakia on the Council of the League, was appointed rapporteur and as the result of his good offices an arrangement has been reached, and has been confirmed by the Council, whereby the Anglo-Persian Oil Company are about to enter into direct negotiations with the Persian Government with a view to a settlement. In the meantime all proceedings before the Council are suspended on the terms that the point of view set out on each side before the Council remains entirely unprejudiced and that, if negotiations fail to produce agreement, the question will again come before the Council for decision. It is further agreed that during the period of the negotiations and until a final settlement is reached, the work and operations of the Anglo-Persian Oil Company will continue to be carried on as they were carried on before the 27th November, 1932, that is before the Persian Government claimed to cancel the concession.
  Mr. THORNE: In consequence of the Government being involved in this question, is our Government going to pay part of their expenses?
  Sir J. SIMON: I should like notice of that question.

  DISARMAMENT CONFERENCE.
  Mr. MANDERasked the Secretary of State for Foreign Affairs if he has any statement to make with reference to the present position of the Disarmament Conference and its relation to the problem of the American War Debt?
  Sir J. SIMON: The General Commission of the Disarmament Conference began a new session on Thursday last, the 2nd February, when the French plan formed the subject of discussion. His Majesty's Government have drafted and circulated to the other delegations a Programme of Work and this has been published in the Press. In their opinion acceptance of this Programme as the basis of the work of the Conference is the best means of pushing on vigorously with the Conference's task. As regards the War Debt question, I have nothing to add to the statements which have recently been made on this subject by my right hon. Friend the Chancellor of the Exchequer.

  CHINA.

    BRITISH RESIDENTS, HARBIN (PROTECTION).
    Mr. NUNNasked the Secretary of State for Foreign Affairs whether his attention has been drawn to the fact that British residents in Harbin have been obliged to organise their own defence corps against local bandits in view of the lack of protection afforded by the Chinese police; and what results, if any, have come from the representations made to the Japanese Government by His Majesty's Ambassador in Tokyo?
    Sir J. SIMON: The report that the British residents of Harbin has been obliged to organise their own defence corps appears to be incorrect, though I understand that armed guards are being employed in some instances. My latest information is that, following upon the representations referred to in the second part of the question, a number of measures have been taken to remedy the
    26
    situation, including the strengthening of the police, two hundred of whom are detailed for protection of life and property in the foreign residential and business quarters. I am informed that British subjects have not been molested during the past three months.

    SHANGHAI DISTRICT COURT.
    Mr. NUNNasked the Secretary of State for Foreign Affairs whether he is able to report any progress in the negotiations for the revision of the Shanghai District Court Agreement which is due to expire at the end of next month?
    Sir J. SIMON: Discussions are still proceeding with the Chinese Government and the other Governments concerned in this matter, and I hope before long to be able to make a statement as to their result.

    MANCHURIA.
    Mr. NUNNasked the Secretary of State for Foreign Affairs the present position with regard to the consideration by the League of Nations of the report of the Lytton Commission on the Manchurian dispute?
    Sir J. SIMON: I would refer my hon. Friend to the official statement by the Committee of Nineteen appointed by the League Assembly, which was published in yesterday's Press. The committee is now engaged in drafting the report which must be made by the Assembly of the League under paragraph 4 of Article 15 of the Covenant, if conciliation under paragraph 3 is finally ruled out.

  KENYA GOLDFIELDS (NATIVE LANDS TRUST ORDINANCE).
  Sir ROBERT HAMILTONasked the Secretary of State for the Colonies if there has been an increase of immigration into Kenya as a result of the recent discoveries of gold and, if so, what are the figures; and what formalities such immigrants undergo and under what conditions they are living and working in the native reserves?
  The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): During the last four months of 1932 the number of immigrants into Kenya was very considerably less than the corresponding figure during any one of the previous six years. I am causing the

  27
  exact statistics to be circulated with the OFFICIAL REPORT. All new immigrants into Kenya who are unable to show that they come to permanent employment are required to deposit £50 or to produce a bond for that amount entered into on their behalf by a reputable resident. Before being granted a permit to seek minerals in a native reserve a prospector must comply with certain conditions prescribed by the Central Lands Trust Board. These conditions include the deposit of a further sum of £25 as a guarantee for the payment not only of wages but also of the compensation for surface disturbance stipulated under the Mining Ordinance of 1931. Those at present engaged in mining operations in the native reserves are to a largely preponderating extent local residents. The mining community lives for the most part in extemporised dwellings, though a few wood and iron houses have been erected. There have been but rare cases of serious illness and visits are from time to time carried out by the local sanitary inspector. The Deputy Director of Sanitary Services has recently made a tour of the mining district and his report is now receiving the attention of the Government of Kenya.
  Mr. D. GRENFELL: Will the right hon. Gentleman inform the House as to the

  —

  1926.

  1927.

  1928.

  1929.

  1930.

  1931.

  1932.

  Decrease from 1931.

  over 1931.

  September:

  European

  …

  …

  496

  506

  501

  720

  662

  368

  383

  —

  15

  Indian

  …

  …

  525

  707

  685

  729

  733

  558

  555

  3

  —

  October:

  European

  …

  …

  629

  801

  701

  792

  883

  724

  750

  —

  26

  Indian

  …

  …

  575

  822

  748

  1,039

  975

  750

  440

  310

  —

  November:

  European

  …

  …

  668

  776

  759

  733

  992

  888

  540

  348

  —

  Indian

  …

  …

  882

  881

  1,313

  999

  780

  664

  378

  286

  —

  December:

  European

  …

  …

  658

  610

  691

  820

  561

  715

  441

  274

  —

  Indian

  …

  …

  1,246

  1,747

  1,018

  1,637

  1,375

  753

  412

  341

  —

  Sir HERBERT SAMUEL(by Private Notice) asked the Prime Minister if an early opportunity will be given for a discussion on the Ordinance relating to the Kenya Goldfield?
  The PRIME MINISTER: I understand that it may be possible to arrange for a
  total number of immigrants who have appeared on the field, and the total number of native people evacuated?
  Sir P. CUNLIFFE-LISTER: I should like notice of the first part of the question, but I can say at once that, so far as I am aware, not a single native has been evacuated. All the proceedings that have taken place and all the prospecting now going on is taking place under an Ordinance settled during the time of his own Government.
  Colonel WEDGWOOD: Can the right hon. Gentleman say whether the House will have an opportunity of discussing this matter?
  Sir P. CUNLIFFE-LISTER: There is a question on that to the Prime Minister.
  Mr. THORNE: Can the right hon. Gentleman say to whom the gold that has been found belongs?
  Sir P. CUNLIFFE-LISTER: All gold in Kenya, whether in the native reserve or in other land, belongs to the Crown.
  Mr. THORNE: What does the Crown do with it?
  Sir P. CUNLIFFE-LISTER: Try to see that it is worked to the best advantage.
  Following are the statistics:
  discussion to-morrow, or to-morrow week, if one of the hon. Members who is successful in the Ballot is agreeable to selecting this as a subject for his Motion.
  Mr. ATTLEE: Arising out of that reply, can the right hon. Gentleman give the House an assurance that no further

  29
  obligations or commitments will be entered into before the House has had an opportunity of discussing the matter?
  The PRIME MINISTER: The Ordinance is in force, as was announced before the House rose for Christmas.
  Sir S. CRIPPS: May I draw the right hon. Gentleman's attention to the fact that there are many rumours current that large commitments are being entered into by the Government in the Colony with regard to licences for prospecting very great areas; and will he give an undertaking that no such commitments will be definitely settled before the House has had an opportunity of discussing them?
  The PRIME MINISTER: That is obviously not a question for me. That is a question for the Minister in charge of the Department concerned. I merely gave an answer on the matter of the time for discussion.
  Mr. MAXTON: Is it quite fair to the House to make the discussion of this rather important matter a question of the luck of the ballot?
  The PRIME MINISTER: As I have pointed out, there will be two opportunities—as a matter of fact, four opportunities—for discussing this subject, and, as the Government have a very heavy programme of legislation, I hoped it might be possible to dispose of the matter in that way. I can assure the whole House that the very last thing the Government intend to do is to suppress discussion on this subject.
  Mr. THORNE: Does not the Prime Minister recognise the amazing nature of the statement which he has just made, that, as a matter of fact, he has no control at all over this matter? Is this not a Cabinet question, and not a question for the chief of one of his Departments?
  The PRIME MINISTER: That was in reference to details of administration. Questions as to details of administration will be answered by my right hon. Friend the Secretary of State for the Colonies if the questions are put down on the Order Paper.
  Mr. D. GRENFELL:Is the House not entitled to ask the Prime Minister, in view of this departure from his own
  30
  policy, whether the granting of further licences will not be suspended until the House has declared its view?
  Sir P. CUNLIFFE-LISTER: If I may answer that-question, there appears to be a misapprehension. The granting of prospecting licences has nothing whatever to do with this Ordinance. The granting of prospecting licences is being done to-day under the Mining Ordinance which has been in force for a considerable time and its terms were settled while the Labour party was in office.
  Mr. GRENFELL: Does not the granting of mining licences in this case involve separate legislation passed a few years ago, and does not the whole matter arise from that?
  Sir P. CUNLIFFE-LISTER: No, it does not. The granting of prospecting licences is entirely done under the Mining Ordinance. There are two perfectly different things. One is the granting of prospecting licences and the other is the granting of leases. All the amending Ordinance does is to cover a temporary period, pending the final report of the Morris Carter Commission, and it merely deals with the granting of surface leases.
  Mr. ANEURIN BEVAN: Is it not clear that if those Members who succeed in the ballot for private Members' Motions are in favour of the policy now being pursued in Kenya, the House will be effectually debarred from an opportunity of discussing the matter?
  Mr. LUNN: May I ask the Prime Minister if he considers it, reasonable for the Government to suggest that a question of this sort, which is causing consternation in all parts of the Empire, should be raised on a private Member's Motion; and would he be prepared to give a day for the discussion of it, as between the Government and the Opposition?
  The PRIME MINISTER: Right hon. Gentlemen seem to forget that there was a, discussion of the whole of this matter before the House rose for Christmas. [Holy. MEMBERS: "No !"] What private Members do with their opportunities today and to-morrow is for them to settle. I merely suggest that it would be a saving of time that they should be used partly for this purpose.

  LENA GOLDFIELDS (ARBITRATION AWARD).
  Sir WILLIAM DAVISONasked the Secretary of State for Foreign Affairs whether he will inform the House what further action has been taken by His Majesty's Government to secure payment from the Russian Soviet Government of the arbitral award of approximately £13,000,000 in favour of Lena Goldfields, Limited, and the result of such action?
  Sir J. SIMON: I cannot make any further statement on this subject at present.
  Sir W. DAVISON: Is the right hon. Gentleman aware that the Under-Secretary informed the House shortly before the Christmas Recess, that he hoped the Foreign Office would be able when the House resumed to say what steps the British Government were taking? Does the right hon. Gentleman expect soon to be able to make a statement?
  Sir J. SIMON: Yes, Sir, I am aware of what my hon. Friend said, and it was quite correct, but I have my own reasons for saying that I cannot make a further statement.

  UGANDA (COTTON-GINNING LICENCES).
  Mr. D. GRENFELLasked the Secretary of State for the Colonies whether he can state the number of licences for ginning cotton given during the last year in Uganda; whether the prices given to the native growers are depressed by any combination between ginners; and whether any licences have been given to Africans for ginning purposes?
  Sir P. CUNLIFFE - LISTER: One hundred and twenty-three licences were issued in Uganda for the ginning of cotton in 1932. No such licences were issued to, or applied for by, Africans in that year, but two were issued to an African in 1931. No combination between ginners operated in the Protectorate during 1932.

  ADELPHI TERRACE.
  Mr. LOVAT-FRASERasked the First Commissioner of Works if, in view of the intended destruction of Adeiphi
  32
  Terrace and the adjacent buildings, he will take steps to get these buildings scheduled for preservation as an ancient monument?
  The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): Unfortunately, I do not think that this is a case in which my Department can take any action. The machinery provided by the Ancient Monuments Acts is not applicable to a group of buildings of this character.
  Sir ARTHUR MICHAEL SAMUEL: Is not the right hon. Gentleman going to take any steps to secure the beautiful Adam decorations in such buildings, which may be of use at South Kensington Museum?
  Mr. ORMSBY-GORE: As I have said, I have no power under the Ancient Monuments Act to deal with buildings occupied and with buildings of this character. It is entirely a matter for Parliament, in its own discretion, to say whether they will pass a Private Bill or not, and under what conditions.
  Mr. KIRKWOOD: Are there no ancient monuments in this House?

  WORLD ECONOMIC CONFERENCE.
  Mr. LYONSasked the Prime Minister if he can now state the date and arrangements for the World Economic Conference; and whether he can give the proposed agenda?
  Mr. MANDERasked the Prime Minister whether any decision has now been arrived at with regard to the date and agenda of the World Economic Conference?
  Mr. BERNAYSasked the Prime Minister (1) the date of the forthcoming World Economic Conference; and whether the agenda of the Conference has yet been prepared;
  (2) if he will take an early opportunity of giving time for a discussion of the economic policy to be advocated by His Majesty's Government at the forthcoming World Economic Conference?
  Captain P. MACDONALDasked the Prime Minister if he can now state which countries will send representatives to the World Economic Conference;

  33
  where it is to be held; and what will be the principal items on the agenda?
  The PRIME MINISTER: The Preparatory Committee of Experts have drawn up a draft annotated agenda for the World Economic Conference, which has been published by the League of Nations, which I should remind the House is in charge of the Conference. A copy has been placed in the Library of the House. The Council of the League have decided to transmit the draft agenda to all States invited to the Conference.
  As regards the date of the Conference, the Council have decided that the convocation of the Conference should not be unnecessarily delayed; that it could not, in view of the necessity for further preparation and the distance to be covered by some of the delegates, take place for at least three months from the present time; and that it should be left to my right hon. Friend the Secretary of State for Foreign Affairs, as president of the Organising Committee, to convene that committee at some suitable date during this period of three months in order to take a final decision on the eventual date of the Conference.
  I have been asked by the Council of the League of Nations to act as President of the Conference. As regards the place of the Conference and the countries to be invited, I would refer to the reply given to the hon. Member for Limehouse (Mr. Attlee) on the 18th October last (OFFICIAL REPORT: Vol. 269, No. 133, cols. 14–15). If it is desired that an opportunity should be given for a discussion of the economic policy to be advocated by His Majesty's Government at the Conference, a request will no doubt be made through the usual channels.
  Mr. BERNAYS: Can the Prime Minister give the House an assurance that at this Conference the efforts of the British Government will be directed to the removal of tariff barriers, which are universally admitted to be one of the main causes of world depression?
  Mr. MAXTON: Do I understand from the reply that the Committee to fix the date may meet at any time in the next three months, and that a further three months must be allowed before the assembly of the Conference, so that it may be six months before the Conference can take place?
  The PRIME MINISTER: No, not that. Invitations will be issued, and three months after the invitations have been issued the Conference may meet. It is a question of travel and preparation. It is not three months after the Committee has decided the date of the Conference.
  Mr. MAXTON: Do I not understand from the answer that the Committee may meet any time within the next three months? It may be three months before the Committee may meet to come to a decision.
  The PRIME MINISTER: That is so. Although I am not in charge of the arrangements, I certainly hope and I shall press upon the Committee at Geneva to give a warning to the Governments., when the agenda is issued to them, that they must be prepared to assemble within three months of that time, if preparations are ready.
  Captain MACDONALD: Have the United States Government a representative on this Committee?
  The PRIME MINISTER: Yes.
  Mr. MABANE: Is it correctly reported that the Prime Minister has made his acceptance of the presidency of the Conference conditional on the Conference meeting in London?
  The PRIME MINISTER: That is so. In other words, it is conditional upon a decision which the League of Nations has already come to.

  UNEMPLOYMENT (RELIEF SCHEMES).
  Mr. HICKSasked the Prime Minister the number of schemes that have been put into force by the Government during the last three months in respect to the provision of work for the unemployed?
  The MINISTER of LABOUR (Sir Henry Betterton): As has already been stated, the Government decided some time ago to discontinue the ineffective policy of attempting to relieve unemployment by a system of State subsidies in aid of public works, and no State-aided schemes for the relief of unemployment have been begun in the last three months.

  CUNARD STEAMSHIP COMPANY.
  Mr. LYONSasked the Chancellor of the Exchequer whether, in view of the probable commercial advantage of the completion of the new Cunard liner, he will consider the advisability of issuing bonds guaranteed wholly or in part by the Treasury to ensure the completion of the ship and in the interests of employment connected therewith?
  Mr. CHAMBERLAIN: I would refer my hon. Friend to my reply to my hon. Friend the Member for Wallsend (Miss Ward) on the 24th November last, to which I am not in a position to add anything.
  Mr. LYONS: May I ask whether the Cunard Company have expressed any view as to the desirability of this ship being built in view of the present Atlantic trade, and whether the Chancellor of the Exchequer can say how many men would be put into work by the completion of this vessel?
  Mr. CHAMBERLAIN: As regards the first part of the Supplementary Question, I have no reason to suppose that the Cunard Company are not still convinced that it is desirable to build a vessel of this sort. As regards the second part of the question, the hon. Member must give me notice.
  Mr. KIRKWOOD: Cannot the Chancellor of the Exchequer get into touch with the Cunard Company with a view to this ship being commissioned because three out of every five men engaged in the shipbuilding industry in this country are unemployed. Cannot he get into touch with the company and get work started on this ship?
  Mr. CHAMBERLAIN: All these matters are under review by the Government.
  Mr. KIRKWOOD: This is too serious a matter for the Government always to tell us that these matters are being considered. They have been telling me that for a year. I want to know what the Government are going to do.

  SUGAR-BEET INDUSTRY.
  Sir G. FOXasked the Chancellor of the Exchequer what is to be the constitution of the committee of inquiry into
  36
  the sugar-beet industry; and when this body will commence its investigations?
  Mr. CHAMBERLAIN: As the beet-sugar and sugar-refining industries are at present conferring with the object of putting forward agreed proposals for consideration, I have decided that it would be an advantage, pending the completion of these deliberations, to defer the appointment of the Committee to which my hon. Friend refers.
  Mr. CHARLES WILLIAMS: Is there any chance of getting this subsidy done away with entirely and the sugar-beet industry put upon a sound basis?
  Viscountess ASTOR: If the right hon. Gentleman decides to take this subsidy away from sugar-beet, will he give the fishermen a chance?

  SUNDAY ENTERTAINMENTS ACT.
  Mr. ROBINSONasked the Lord President of the Council whether he is now in a position to make a statement about the fund to be established under Section 2 of the Sunday Entertainments Act, 1932, for the purpose of encouraging the use and development of the cinematograph as a means of entertainment and instruction?
  Mr. STANLEY: My right hon. Friend the Lord President of the Council is not yet in a position to make any statement about the Cinematograph Fund beyond informing the hon. Member that the prescribed percentage for the purposes of the Sunday Entertainments Act, 1932, has from the 1st February, 1933, been declared to be 5 per cent.

  CARLTON GARDENS AND TERRACE.
  Mr. RHYS DAVIES (for Mr. MORGAN JONES)asked the Minister of Agriculture what is the earliest date that it will be possible to rebuild Carlton Terrace and destroy the kitchens with iron-barred windows that abut on the Mall?
  Major ELLIOT: It is not possible at present to state by what date the rebuilding of Carlton House Terrace could be completed, as this cannot be done until all the existing leases have expired or otherwise become determined.
  Mr. MOLSON(by Private Notice) asked the Prime Minister whether he will give an opportunity for a Debate on the action of the Commissioners for Crown. Lands in granting a lease for the erection of a high commercial building on the site of No. 4, Carlton Gardens?
  The PRIME MINISTER: I would remind my hon. Friend that opportunities will occur to-day and to-morrow in the ballot for Private Members' Motions for this subject to be selected for discussion.

  POOR LAW (OUTDOOR RELIEF).
  Mr. LOGAN (for Mr. T. WILLIAMS)asked the Minister of Health the number of public assistance committees that are acting on the permissive clause of the Transitional Payments (Determination of Need) Act, 1932, in granting outdoor relief; and whether any circular has been issued by his Ministry urging local authorities to adopt the rules governing the granting of transitional payments for the purposes of outdoor relief, particularly in agricultural districts where the sole assistance of the unemployed worker is dispensed by public assistance committees?
  The MINISTER of HEALTH (Sir Hilton Young): I am informed that 48 public assistance committees are acting on the permissive section of the Act. This number includes areas in which the operation of the section is left to the committees or sub-committees with certain limitations on their discretion, and areas in which only part of the section is being applied. I am sendng the hon. Member a copy of the circular letter issued by me on the passing of the Act.

  INFLUENZA.
  Sir W. DAVISON(by Private Notice) asked the Minister of Health whether any organised research is being conducted by to at the instance of his Department with a view to ascertaining the primary cause of influenza, and methods for its prevention, in view of the serious effects on the health and industry of the nation caused by recurring epidemics of this disease?
  Sir H. YOUNG: Investigation into the virus diseases, of which influenza is believed to be one, is continually in pro-
  38
  gress at the National Institute for Medical Research. A special inquiry subsidised by my Department is also being made into the bacteria of the nose and throat with a view to devising methods of prevention of such respiratory diseases as influenza. Hitherto in this and other countries the direct verification of the influenza virus has proved impracticable because the effect of the organisms found cannot be proved experimentally in the absence of any susceptible species of animal. No general method of immunisation is accordingly at present available.
  Viscountess ASTOR: Does the right hon. Gentleman not think that it would be wise if the people would not talk so much about it and think so much about it, because we must remember—[HON. MEMBERS: "Speech!"] Does he not think that it does more harm to talk about it, and would it not be as well to bear in mind what Job said:
  "the thing which I greatly feared is come upon me?"

  RAIL AND ROAD CONFERENCE (RECOMMENDATIONS).
  Mr. LESLIE BOYCE(by Private Notice) asked the Minister of Transport whether, in view of the fact that more than six months have now elapsed since he received the unanimous Report of the Salter Conference, and more than three months since the expiration of the extended time limit for the submission of observations thereon by the highway authorities and other interests concerned; and in view of the increasing importance and urgency attaching to the Salter Report as the result of the recent findings of the National Wages Board, and in view of the harmful effect upon the railways and the motor industry alike of the present state of indecision, the Minister is now in a position to state whether, and if so when, steps will be taken to implement the recommendations of the Salter Conference?
  The MINISTER of TRANSPORT (Mr. Pybus): The Report of the Rail and Road Conference, presided over by Sir Arthur Salter, was signed on the 31st of July last, and since that date representations and detailed comments have been received from a large number of organisations and interests concerned,

  39
  whom it was necessary to consult, and who in many cases required an extension of time in order to permit of consideration. The Government have very carefully considered the report and these representations, and also the relevant recommendations in the final report of the Royal Commission on Transport, and have decided to introduce at an early date a Bill to provide for the licensing and the better regulation of the transport of goods by road. As regards licence duties, I have nothing to add to the answer which I gave to my hon. Friend on 19th December last, to the effect that questions of taxation are a Budget matter and that it is not possible to anticipate the Budget decision.
  Mr. BOYCE: While thanking the Minister for his satisfactory reply, may I ask him to be a little more definite and to state within what period of time he will undertake to introduce a Bill on the subject?
  Mr. PYBUS: A Bill will be introduced as early as possible, and certainly before the House rises for the Easter Recess.
  Mr. C. WILLIAMS: Will the Bill be introduced before we proceed with the London Passenger Transport Bill?

  HOUSING (SLUM CLEARANCE).
  Mr. EMMOTT(by Private Notice) asked the Minister of Health whether the Government's programme for slum clearance is limited to 12,000 houses a year?
  Sir H. YOUNG: No, Sir. No limitation of the sort is imposed in the Government's programme for the clearance of slums. It is intended, by the concentration of assistance from subsidies on slum clearance, and by encouraging the more active administration of the Act of 1930 by the responsible local authorities, to raise the rate of clearance as much as possible, without any arbitrary limitation. The figure of 12,000 houses a year was referred to by me as the estimated number for which, in the light of experience of the working of the Act, it is reasonable to make provision in the Estimates for the coming year, which will be the first year of intensified effort to accelerate the rate of clearance. It is
  40
  expected that after the first year the rate will be increased.
  Mr. THORNE: If any of the local authorities are prepared to go on with schemes for the clearance of slum areas, will the Department give them some encouragement to get on with the work as speedily as possible?
  Sir H. YOUNG: Every possible encouragement will be given by the Department, as I have just said, to the more active administration of the Act of 1930.
  Mr. LOGAN: Do I take it then that in connection with slum clearance in the city of Liverpool, if an application were made for 3,000 houses, the Minister would be prepared to grant sanction for such clearance?
  Sir H. YOUNG: The hon. Member must not ask me, in reply to a question without notice, to give a decision on a particular case. I can only state now what the general principles of administration will be.

  NEW MEMBER SWORN.
  John Joseph Shute, esquire, for the Borough of Liverpool (Exchange Division).
BALLOT FOR NOTICES OF MOTIONS.
  COLONIAL ADMINISTRATION.
  Mr. DONNER: I beg to give notice, that, to-morrow, I shall call attention to the question of Colonial administration, and move a Resolution.
  CARLTON GARDENS AND TERRACE.
  Captain CROOKSHANK: I beg to give notice, that, to-morrow, I shall call attention to the question of Carlton House Terrace and other buildings on Crown lands, and move a Resolution.
  SCHEMES FOR UNEMPLOYED.
  Colonel BALDWIN-WEBB: I beg to give notice, that, to-morrow week, I shall call attention to the question of schemes for the unemployed, and move a Resolution.
  EXCESSIVE TAXATION.
  Mr. BOULTON: I beg to give notice, that, to-morrow three weeks, I shall call attention to the question of the excessive taxation of the country, and move a Resolution.
  INDIA (PROPOSED REFORMS).
  Brigadier-General Sir HENRY CROFT: I beg to give notice, that, to-morrow fortnight, I shall call attention to the proposed reforms in India, and move a Resolution.
  TOTALISATORS.
  Captain NORTH: I beg to give notice, that, to-morrow week, I shall call attention to the question of totalisators, and move a Resolution.
  MINING INDUSTRY.
  Mr. DICKIE: I beg to give notice, that, to-morrow three weeks, I shall call attention to the present position of the mining industry, with particular reference to the export section of the industry, and move a Resolution.
  BROADCASTING.
  Mr. EMMOTT: I beg to give notice, that, to-morrow fortnight, I shall call attention to the question of broadcasting, and move a Resolution.
  HOURS OF LABOUR.
  Mr. LINDSAY: I beg to give notice, that, to-morrow three weeks, I shall call attention to the question of hours of labour, and move a Resolution.
  FISHING INDUSTRY.
  Mr. HOWARD GRITTEN: I beg to give notice, that, to-morrow week, I shall call attention to the deplorable condition of the fishing industry of this country, and move a Resolution.
  PENAL SYSTEM.
  Mr. JANNER: I beg to give notice, that, to-morrow week, I shall call attention to the need for the reform of the penal system, and move a Resolution.
  COMPULSORY INDUSTRIAL ARBITRATION.
  Mr. SIMMONDS: I beg to give notice, that, to-morrow fortnight, I shall call attention to the need for compulsory industrial arbitration, and move a Resolution.
  LANCASHIRE COTTON INDUSTRY.
  Lieut.-Colonel Sir WALTER SMILES: I beg to give notice, that, to-morrow, I shall call attention to the state of the Lancashire cotton industry, and move a Resolution.
  HOUSING (SLUM CLEARANCE).
  Mrs. RUNGE: I beg to give notice, that, to-morrow three weeks, I shall call attention to the question of slum clearance, and move a Resolution.

BUSINESS OF THE HOUSE.
Mr. ATTLEE: Can the Prime Minister state how far, in the event of the Motion that is on the Paper being carried, he intends to go to-night? Does he expect that the House will be kept up late?
The PRIME MINISTER: No, I do not expect the House to sit late, but we must get the Money Resolution on the Housing (Financial Provisions) Bill; and, of course, if the House would give us the Second Reading of the Austrian Loan Guarantee Bill, we should be very glad, but we should certainly not enter upon the discussion of that Bill at an hour after 11 o'clock.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this Jay's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 325; Noes, 33.

Division No. 32.]

AYES.

[4.0 p.m.

Acland-Troyte, Lieut.-Colonel

Balniel, Lord

Brown, Ernest (Leith)

Adams, Samuel Vyvyan T. (Leeds, W.)

Banks, Sir Reginald Mitchell

Brown, Brig.-Gen. H.C. (Berks., Newb'y)

Agnew, Lieut.-Com. P. G.

Barclay-Harvey, C. M.

Buchan, John

Ainsworth, Lieut.-Colonel Charles

Beauchamp, Sir Brograve Campbell

Burghley, Lord

Albery, Irving James

Beaumont, M. W. (Bucks., Aylesbury)

Burgin, Dr. Edward Leslie

Allen, Sir J. Sandeman (Llverp'l, W.)

Beaumont, Hon. R.E.B. (Portsm'th, C.)

Burnett, John George

Allen, William (Stoke-on-Trent)

Belt, Sir Alfred L.

Butt, Sir Alfred

Anstruther-Gray, W. J.

Bernays, Robert

Calne, G. R. Hall

Applin, Lieut.-Col. Reginald V. K.

Betterton, Rt. Hon. Sir Henry B.

Campbell, Vice-Admiral G. (Burnley)

Apsley, Lord

Birchall, Major Sir John Dearman

Campbell-Johnston, Malcolm

Astbury, Lieut.-Com. Frederick Wolfe

Blindell, James

Caporn, Arthur Cecil

Astor, Viscountess (Plymouth, Sutton)

Bossom, A. C.

Carver, Major William H.

Atholl, Duchess of

Boulton, W. W.

Castlereagh, Viscount

Baillie, Sir Adrian W. M.

Bowyer, Capt. Sir George E. W.

Castle Stewart, Earl

Baldwin-Webb, Colonel J.

Boyce, H. Leslie

Cayzer, Sir Charles (Chester. City)

Balfour, George (Hempstead)

Broadbent, -Colonel John

Cayzer, Maj. Sir H. R. (Prtsmth., S.)

Balfour, Capt. Harold (I. of Thanet)

Brocklebank, C. E. R.

Cazalet, Thelma (Islington, E.)

Cazalet, Capt. V. A. (Chippenham)

Heneage, Lieut.-Colonel Arthur P.

Oman, Sir Charles William C.

Chamberlain, Rt. Hon. Sir J. A. (Birm., W)

Hepworth, Joseph

Ormsby-Gore, Rt. Hon. William G. A.

Chamberlain, Rt. Hon. N. (Edgbaston)

Hills, Major Rt. Hon. John Waller

Patrick, Colin M.

Chapman, Col. R.(Houghton-le-Spring)

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Pearson, William G.

Chapman, Sir Samuel (Edinburgh, S.)

Holdsworth, Herbert

Peat, Charles U.

Chorlton, Alan Ernest Leofric

Hopkinson, Austin

Percy, Lord Eustace

Clarke, Frank

Hore-Belisha, Leslie

Perkins, Walter R. D.

Clarry, Reginald George

Hornby, Frank

Peters, Dr. Sidney John

Clayton, Dr. George C.

Horobin, Ian M.

Peto, Sir Basil E.(Devon, Barnstaple)

Cochrane, Commander Hon. A. D.

Horsbrugh, Florence

Peto, Geoffrey K. (W'verh'pt'n, Bilston)

Colfox, Major William Philip

Howitt, Dr. Alfred B.

Pickering, Ernest H.

Collins, Rt. Hon. Sir Godfrey

Hudson, Capt. A. U. M. (Hackney, N.)

Pickford, Hon. Mary Ada

Colville, Lieut.-Colonel J.

Hudson, Robert Spear (Southport)

Pike, Cecil F.

Conant, R. J. E.

Hunter. Capt. M. J. (Brigg)

Potter, John

Cook, Thomas A.

Hurd, Sir Percy

Powell, Lieut.-Col. Evelyn G. H.

Cooke, Douglas

Hurst, Sir Gerald B.

Power, Sir John Cecil

Cooper, A. Duff

Hutchison. W. D. (Essex, Romf'd)

Pownall, Sir Assheton

Cowan, D. M.

Jackson, Sir Henry (Wandsworth, C.)

Procter, Major Henry Adam

Craddock, Sir Reginald Henry

James, Wing-Com. A. W. H.

Pybus, Percy John

Cranborne, Viscount

Janner, Barnett

Raikes, Henry v. A. M.

Croft, Brigadier-General Sir H.

Joel, Dudley J. Barnato

Ramsay, T. B. W. (Western Isles)

Crookshank, Capt. H. C. (Gainsb'ro)

Johnstone, Harcourt (S. Shields)

Ramsbotham, Herwald

Culverwell, Cyril Tom

Jones, Henry Haydn (Merioneth)

Rankin, Robert

Curry, A. C.

Jones, Lewis (Swansea, West)

Rathbone, Eleanor

Davies, Maj. Geo. F. (Somerset, Yeovil)

Kirkpatrick, William M.

Rea, Walter Russell

Davison, Sir William Henry

Knatchbull, Captain Hon. M. H. R.

Reed, Arthur C. (Exeter)

Dawson, Sir Philip

Knight, Halford

Reid, Capt. A. Cunningham-

Denman, Hon. R. D.

Knox, Sir Alfred

Reid, William Allan (Derby)

Denville, Alfred

Lamb, Sir Joseph Quinton

Rhys, Hon. Charles Arthur U.

Despencer-Robertson, Major J. A. F.

Lambert, Rt. Hon. George

Roberts, Aled (Wrexham)

Dickie, John P.

Leckle, J. A.

Robinson. John Roland

Dixon, Rt. Hon. Herbert

Leech, Dr. J. W.

Ropner, Colonel L.

Donner, P. W.

Lees-Jones, John

Ross Taylor, Walter (Woodbridge)

Doran, Edward

Leigh, Sir John

Runciman, Rt. Hon. Walter

Drewe, Cedric

Leighton, Major B. E. P.

Runge, Norah Cecil

Duckworth, George A. V.

Levy, Thomas

Russell, Alexander West (Tynemouth)

Dugdale, Captain Thomas Lionel

Lewis, Oswald

Russell, Hamer Field (Sheffield, B'tslde)

Duggan, Hubert John

Liddall, Walter S.

Russell, Richard John (Eddlebury)

Duncan, James A. L. (Kensington, N.)

Lindsay, Noel Ker

Rutherford, Sir John Hugo (Llverp'l)

Eady, George H.

Lister, Rt. Hon. Sir Philip Cunliffe-

Rutherford, John (Edmonton)

Elliot, Major Rt. Hon. Walter E.

Llewellin, Major John J.

Salmon, Sir Isidore

Elliston, Captain George Sampson

Lloyd, Geoffrey

Salt, Edward W.

Elmley, Viscount

Locker-Lampson, Rt. Hn. G. (Wd.G'n)

Samuel, Sir Arthur Michael (F'nham)

Emmott, Charles E. G. C.

Lovat-Fraser, James Alexander

Samuel, Rt. Hon. Sir H. (Darwen)

Emrys-Evans, P. V.

Lyons, Abraham Montagu

Sandeman, Sir A. N. Stewart

Entwistle, Cyril Fullard

Mabane, William

Sanderson, Sir Frank Barnard

Evans, Capt. Arthur (Cardiff, S.)

MacAndrew, Lieut.-Col. C. G. (Partick)

Savery, Samuel Servington

Evans, R. T. (Carmarthen)

MacAndrew, Capt. J. O. (Ayr)

Scone, Lord

Falle, Sir Bertram G.

McCorquodale, M. S.

Shakespeare, Geoffrey H.

Fielden, Edward Brocklehurst

MacDonald, Rt. Hon. J. R. (Seaham)

Shaw, Helen B. (Lanark, Bothwelll

Foot, Isaac (Cornwall, Bodmin)

Macdonald, Capt. P. D. (I. of W.)

Shute, John Joseph

Fox, Sir Gifford

McKeag, William

Simmonds, Oliver Edwin

Fremantle, Sir Francis

McKie, John Hamilton

Skelton, Archibald Noel

Fuller, Captain A. G.

Maclay, Hon. Joseph Paton

Smiles, Lieut.-Col. Sir Walter D.

Ganzoni, Sir John

McLean, Dr. W. H. (Tradeston)

Smith, Bracewell (Dulwich)

Gillett, Sir George Masterman

Maitland, Adam

Smith, Sir Jonah W. (Barrow-in-F.)

Gledhill, Gilbert

Makins, Brigadier-General Ernest

Smith, Louis W. (Sheffield, Hallam)

Glossop, C. W. H.

Mander, Geoffrey le M.

Smith-Carington, Neville W.

Goff, Sir Park

Manningham-Buller, Lt.-Col. Sir M.

Somervell, Donald Bradley

Goldie, Noel B.

Margesson, Capt. Rt. Hon. H. D. R.

Somerville, Annesley A. (Windsor)

Goodman, Colonel Albert W.

Marsden, Commander Arthur

Soper, Richard

Graham, Sir F. Fergus (C'mb'rld, N.)

Martin, Thomas B.

Sotheron-Estcourt, Captain T. E.

Grattan-Doyle, Sir Nicholas

Mason, David M. (Edinburgh, E.)

Southby, Commander Archibald R. J

Graves, Marjorie

Mayhew, Lieut.-Colonel John

Spencer, Captain Richard A.

Gretton, Colonel Rt. Hon. John

Merriman, Sir F. Boyd

Stanley, Hon. O. F. G. (Westmorland)

Griffith, F. Kingsley (Middlesbro', W.)

Mills, Major J. D. (New Forest)

Steel-Maitland, Rt. Hon. Sir Arthur

Grimston, R. V.

Mitchell, Sir W. Lane (Streatham)

Storey, Samuel

Gritten, W. G. Howard

Mitcheson, G. G.

Stourton, Hon. John J.

Gunston, Captain D. W.

Molson, A. Hugh Elsdale

Strauss, Edward A.

Guy, J. C. Morrison

Monsell, Rt. Hon. Sir B. Eyres

Strickland, Captain W. F.

Hacking, Rt. Hon. Douglas H.

Moore, Lt.-Col. Thomas C. R. (Ayr)

Sueter, Rear-Admiral Murray F.

Hales, Harold K.

Moore-Brabazon, Lieut.-Col. J, T. C.

Sugden, Sir Wilfrid Hart

Hall, Capt. W. D'Arcy (Brecon)

Morris, John Patrick (Salford, N.)

Summersby, Charles H.

Hamilton, Sir George (Ilford)

Morris, Owen Temple (Cardiff, E.)

Thomas, Rt. Hon. J. H. (Derby)

Hamilton, Sir R.W.(Orkney & Z'tl'nd)

Morris-Jones, Dr. J. H. (Denbigh)

Thomas, James P. L. (Hereford)

Hammersley, Samuel S.

Moss, Captain H. J.

Thompson, Luke

Hanbury, Cecil

Muirhead, Major A. J.

Touche, Gordon Cosmo

Hanley, Dennis A.

Munro, Patrick

Train, John

Hannon, Patrick Joseph Henry

Nall, Sir Joseph

Tryon, Rt. Hon. George Clement

Hartland, George A.

Nation, Brigadier-General J. J. H.

Vaughan-Morgan, Sir Kenyon

Harvey, George (Lambeth, Kenningt'n)

Newton, Sir Douglas George C,

Wallace, John (Dunfermline)

Haslam, Sir John (Bolton)

Nicholson, Godfrey (Morpeth)

Ward, Lt.-Col. Sir A. L. (Hull)

Headlam, Lieut.-Col. Cuthbert M.

Nicholson, Rt. Hn. W. G. (Petersf'ld)

Ward, Irene Mary Bewick (Wallsend)

Heilgers, Captain F. F. A.

North, Captain Edward T,

Ward, Sarah Adelaide (Cannock)

Henderson, Sir Vivian L. (Chelmsford)

Nunn, William

Warrender, Sir Victor A. G.

44

45

Watt, Captain George Steven H.

Williams, Herbert G. (Croydon, S.)

Worthington, Dr. John V.

Wayland, Sir William A.

Wills, Wilfrid D.

Young, Rt. Hon. Sir Hilton (S'v'noaks)

Wedderburn, Henry James Scrymgeour-

Wilson, B. H. A. (Cambridge U.)

Young, Ernest J. (Middlesbrough, E.)

Wells, Sydney Richard

Wise, Alfred R.

Weymouth, Viscount

Withers, Sir John James

TELLERS FOR THE AYES.—

Whiteside, Borras Noel H.

Womersley, Walter James

Sir Frederick Thomson and Lord Erskine.

Williams, Charles (Devon, Torquay)

Wood, Sir Murdoch McKenzie (Banff)

NOES.

Attlee, Clement Richard

Greenwood, Rt. Hon. Arthur

Lunn, William

Banfield, John William

Grenfell, David Rees (Glamorgan)

Maclean, Nell (Glasgow, Govan)

Batey, Joseph

Grundy, Thomas W.

Maxton, James

Bevan, Aneurin (Ebbw Vale)

Hicks, Ernest George

Parkinson, John Allen

Cocks, Frederick Seymour

Hirst, George Henry

Price, Gabriel

Cove, William G.

John, William

Salter, Dr. Alfred

Cripps, Sir Stafford

Jones, J. J. (West Ham, Silvertown)

Thome, William James

Daggar, George

Jones, Morgan (Caerphilly)

Tinker, John Joseph

Davies, David L. (Pontypridd)

Kirkwood, David

Williams, Dr. John H. (Llanelly)

Davies, Rhys John (Westhoughton)

Lawson, John James

Edwards, Charles

Leonard, William

TELLERS FOR THE NOES.—

Graham, D. M. (Lanark, Hamilton)

Logan, David Gilbert

Mr. G. Macdonald and Mr. Groves.

HOUSING (FINANCIAL PROVISIONS) [MONEY].
Considered in Commitee under Standing Order No. 71A.
[Sir DENNIS HEEBEBT in the Chair.]
Motion made, and Question proposed,
"That' for the purposes of any Act of the present Session to 'brine; to an end the power of the Minister of Health to grant subsidies under Sections one and three of the Housing, Etc., Act, 1923, and the Housing (Financial Provisions) Act, 1924, and to enable him to undertake to make contributions in certain cases towards losses sustained by authorities under guarantees given by them for facilitating the provision of houses to be let to the working classes, it is expedient to authorise the payment, out of moneys provided by Parliament, of such sums as may become payable in pursuance of undertakings given by the Minister of Health, with the consent of the Treasury, under the said Act to reimburse local authorities and county councils not more than one-half of any losses sustained by them under the terms of guarantees given to societies under paragraph (b) of Sub-section (1) of Section ninety-two of the Housing Act, 1926, where the advances whereof the repayment is guaranteed are made by the society for the purpose of enabling any of its members to build or acquire houses intended to be let to persons of the working classes and the Minister is satisfied—

(a) that the guarantee extends only to the principal of, and interest on, the amount by which the sum to be advanced by the society exceeds the sum which would normally be advanced by them without any such guarantee; and

(b) that the liability of the local authority or county council under the guarantee cannot be greater than two-thirds of that principal and interest."— (Kino's Recommendation signified.)—[Sir H. Young].

Mr. J. JONES: Why is the Financial Secretary to the Treasury not in the House?
The CHAIRMAN: That is not a matter for discussion.
Mr. JONES: Surely we have a right in this matter. It has been advertised all over the country that the Financial Secretary to the Treasury was going to move the Resolution. I want to know why he is not here to do it?
The CHAIRMAN: The hon. Member has been long enough in this House to know well what is the usual practice.
Mr. JONES: I know what the practice is.
4.15 p.m.
The MINISTER of HEALTH (Sir Hilton Young): The Resolution which I rise to move is the necessary preliminary to the scheme, which I have already described to the House on the Second Reading of the Bill, for the enlistment of the buliding societies in an effort to provide housing. I should describe it in the nature of a treaty between the Government, the local authorities and the building societies in order to put at the disposal of the country a very large supply of capital for the provision of houses to let for the working classes. The outline of the scheme is that a certain guarantee shall be extended to the building societies in respect of the advances made by them in excess of their normal advances for building. The liability in respect of the guarantee will be distributed in this way: One-third of the excess will be guaranteed by the local authorities, one-third by the Exchequer, and one-third will remain with the building societies. In practice it will amount to this. The normal amount advanced by building societies is 70 per cent, of the value of the building. That will be raised under this scheme to 90 per cent., and the difference of 20 per cent, will be guaranteed in the manner which I have described, namely, one-third each by the three parties to the treaty.
Those who are less acquainted than some hon. Members with the facts of the building trade will ask how this will work. In practice it will work in this manner in a typical case. The builder who desires to erect buildings will approach a building society for an advance. He will also approach the local authority. The building society will consider and approve an advance of 90 per cent, of the amount that he requires, and the local authority will consider whether to guarantee their share of the advance, and the Ministry of Health, as representing the Exchequer in this matter, will have to consider shouldering their share of the risk. In other cases the housing work will be undertaken by housing companies, housing trusts or housing associations, and they may make the arrangement with the building societies on the one side and with the builders on the other. It may be asked why this guarantee is extended specially to building societies. The answer is that

49
the building societies have got what we want in two respects. They have a very large supply of capital available for the purpose, which is undoubtedly equal to the requirements of the nation. In the second place, they have what is only secondary in importance—the experience and the knowledge of the building trade required in order to bring that capital to bear in the most effective manner. It is a unique and favourable combination of circumstances in view of our requirements.
That being so, and in order to mobilise these great assets for our requirements, we give the quid and the building societies give the quo. In return for the guarantee they extend their operations to new business which has not been their ordinary business in the past. In doing that, they incur additional risks. Their best risk is considered to be the owner-occupier, and they 'are now extending the risk to the security of the landlord who lets the house. The building societies also undertake to find the finance for 30 years, which is in excess of their usual period, and at a rate of 1 per cent, below their normal rate for loans. I think that the Committee will be convinced that under those circumstances we are getting good value for what we offer in return. This is a point to which I would call the special attention of the Committee. I do not know of any other source from which we could get these advantages in return for the guarantee, and because we can get them from the building societies, and from them only as far as I know, we are prepared to give them this guarantee in return.
I will refer to the principal criticism that has been made against the scheme. It is said that we cannot, at the rate which the building societies will charge for their loans and for the length of the period for which the loans will be guaranteed, build the very cheapest sort of house to let at the lowest rents to the least well-paid classes of the wage earners. That is so. It was never contended that you could. I have never contended that you could. The contention is that already, 'at the rates which have been specified by building societies and under existing conditions in the building industry, you can provide small houses at such rents as will meet a large part of
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the demand for houses for the wage earners down to the class just above the very lowest and cheapest of all. In securing that we have secured a great addition to our supply of houses from private enterprise. That is a big step to have made in advance. There is a further matter to be considered as regards future conditions. It is reasonable to expect, in view of present conditions, that in future, by means of this finance, we shall be able to provide houses at an ever-reducing rate. It is reasonable to expect that by means of this finance we shall be able constantly to extend downwards that part of the demand for houses for the wage earners to let which we can provide by this scheme of the building societies.
The reasons are these: When you get private enterprise freely at work on this field of supply you will have competition at work among those who are seeking for this new and desirable outlet for their enterprise and capital, and when you get that competition at work this field of experience will not differ from any other field of experience, and the effect will be to reduce the costs of building. It is well known that when you get the push and go of private enterprise thoroughly interested, you get mass production and improvements in production that reduce cost. You cannot get that until you clear out of the way of the free competition of private enterprise the block of the competition of subsidised houses. That is a preliminary consideration. We know that in the past subsidies have 'always had the effect of increasing costs. I only state that as a fact of natural history. I do not explain it; I only know that it is so. When you increase the subsidies you increase the cost, and when you reduce the subsidies you reduce the cost, and as practical men we are entitled to expect that what has happened in the past will happen in the future.
I have said before, and let me say again in the clearest manner possible, that it would be unwise to embark upon this new epoch of housing, the epoch of no general subsidies, without making what provision we can to insure ourselves against a failure of the housing supply during the transition period. As prudent people we must take every means of insurance to cover that period, and there are such means of insurance against a failure of the housing supply while private enter-

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prise is getting to work and building costs further fall for the provision of the smallest and cheapest type of house.
The Bill allows some scope for myself as the Minister of Health to approve applications for subsidised houses which have already been put forward. The criticism that has been made upon the scheme is that these provisions are too cast iron, that they will result in cutting-out from the subsidy perfectly genuine and bona fide applications for subsidies from local authorities which might be allowed to pass. That criticism is justified, and it will be my object in Committee, in consultation with the Committee to find a reasonable provision which will allow bona fide schemes which were advanced to a reasonable degree to go through under the old subsidy regime. If that be so, we shall be provided with what I may describe as a spring buffer of a large number of approved schemes still to go through under the subsidy in order to cover the difficulties of the transitional period.
Sir PERCY HARRIS: Will this Financial Resolution cover any additional cost which that more elastic interpretation of the right hon. Gentleman suggests?
Sir H. YOUNG: It is unnecessary to raise it on the Financial Resolution, for it is provided for under the existing law. The second insurance against the difficulties of the transition period is that the responsibility and liability of the local authorities as housing authorities to deal with housing conditions in their areas still remains, and if there be any housing shortage in their areas it is their liability to provide for it. As I have already pointed out in dealing with this matter on Second Reading, under existing conditions the local authorities will be able, in fact, to provide houses even at the lowest rents without the assistance of a subsidy. I have also pointed out, as a matter of common sense, in every recent interview with representatives of local authorities, that when the central authority are no longer concerned in watching over the expenditure of subsidies, it is natural that there should be some independence and initiative on the part of local authorities in the provision of unsubsidised schemes.
Anxiety has been expressed as to the maintenance of standards of building
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construction. Let me deal with that a. little more fully than I did on the last occasion. The state of affairs when this Bill passes into law as regards control of standards will be this. The local authorities will have full power both under by-laws and under the Town Planning Act to impose their own standards of housing in their localities, and having most knowledge and most interest they are likely to be the most suitable authorities for the purpose. The Ministry of Health will also retain control by its authority to approve the guarantee for the building societies' proposals. Nevertheless, I recognise that it is not unnatural that there should be anxiety lest there is any recession from the accepted standards of housing as a national service, and in order that there should be no fear on that score let me say now, to save time a little further on, that it is my intention during the Committee stage to accept certain Amendments which are proposed by the hon. Member for South-West Bethnal Green (Sir P. Harris) relating to the size and density of houses which will have the effect of maintaining the present standards in that respect.
There is one other general matter before I pass to some Amendments which have been put forward to the Motion, and that is the relation of this scheme to a matter which we have very much before us at the present time, the general state of employment in the building trade. At the present moment we are a little under the influence of a recent increase in the figures of unemployment in the building industry- I am told by those who have most knowledge of those figures that it is a usual feature, a seasonal increase at this time of the year, but the remarkable fact to which I would like to call the express attention of the Committee is that coincidently with that increase there is a- noticeable and substantial increase in the figures relating to the approval of plans for new construction, so much so as to have led some people to talk in the Press about clear evidences of a boom in the building trade. The real moral is that new construction, and particularly new construction of small houses, is not one of the biggest factors in giving employment in the building trade. Perhaps the biggest factor of all is that of

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repairs, maintenance and decorations. As to that we have a moment, perhaps, in which to comment upon another side of the activities of the building societies at the present time not dissimilar to that which we are leading up to in this Motion. It is a remarkable sign of the forward policy of the building societies that they desire to press ahead, according to advertisements which they have recently sent out, with an extension of their facilities to find finance at low rates for anybody who wants to carry out decorations, repairs and alterations to buildings. I think that is, perhaps, the best symptom of hope for the building trade which we have had for some time. I submit that a scheme for the enlistment of a vigorous effort on the part of private enterprise in meeting the nation's housing needs is the true long-range policy for providing employment in the building industry. There is more hope of employment in such provisions as we are considering to-day than there would be in the plan of a mere continuation of the policy of subsidies, which are no longer needed for their express purposes and which are standing in the way of a vigorous return to more normal enterprise.
Let me make a reference to some Amendments which have been put down to this Motion. We have not yet heard the view of the Chair, but it has occurred to me as not improbable that those Amendments will prove to be out of order as increasing the charge on the taxpayer. The Amendments are mostly in the name of my right hon. Friend the Noble Lord the Member for Hastings (Lord E. Percy) and they relate to the facilitation of the efforts of public utility societies in the provision of houses. I think it will facilitate, and perhaps abbreviate, our discussions at a later stage of the Bill and also to-day if I point out now that the Bill is very narrow in its scope, that it is really only a Bill dealing with the abolition of the subsidy and enlisting building societies' capital. It may be that these Amendments, taken with other Amendments which will be put down at a later stage, will prove to be out of order in relation to the actual structure of the Bill, and that we cannot effectively deal with them on this Measure; but I would say quite expressly that I do not want the Committee to think that because they are out of order now they will not receive
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the consideration of His Majesty's Government. On the contrary, it is recognised that we stand at the beginning of a new epoch in housing—the end of the epoch of the general subsidy and the beginning of the epoch of subsidies concentrating on slum clearance, and it is essential at such a turning of the way that we should review our armoury and see if there are any weapons we can add to that armoury which will be useful in furthering our purpose of providing houses and clearing the slums.
It is my intention at once to start the wheels of an inquiry in order to make such a review. For that purpose I intend to assist myself by the appointment of a committee. I know that the appointment of a committee is apt, in these days, to excite some amusement, but it need not do so on this occasion. It is an absolutely necessary step in order to secure the knowledge which, for many essential purposes, exists only locally. As to the constitution of such a committee, I believe it is not improbable that one may find all the knowledge and experience necessary amongst Members in the House of Commons. What will be the purpose of such an inquiry? In the first place, it should consider those interests referred to in particular by my Noble Friend the Member for Hastings—the facilitation of the effort of public utility societies and of similar organisations. That might be extended, I think properly extended, to a consideration of a more ambitious scheme put forward for a housing corporation for the country as a whole, something in the nature of a super-public utility society. I am sure the Committee will realise that I am not passing any judgment on the merits of those proposals; I am outlining what I believe to be the practical and expeditious procedure of getting at the bottom of what can best be done in these matters.
I think it will save time if on this occasion I make one further statement as to another extension which I should desire to give to this inquiry. When this matter was last before the House the right hon. Member for West Birmingham (Sir A. Chamberlain) made a speech which greatly appealed to the House and the country by its eloquence. He dealt with another weapon in the armoury of the war against the slums, the weapon of reconditioning. I should propose to in-

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clude in this inquiry an investigation of any possible addition in the way of powers of reconditioning, particularly power for the compulsory purchase of houses by local authorities in order that they may be reconditioned, a power which, as far as I can judge, is the only important power they do not possess under existing legislation. The inquiry should include the very essential detail of the price at which such houses should be purchased. In order that we may get a complete picture of any possibly useful new methods and new powers in this regard, I would like myself to give the inquiry a rather wider extension still. I should like it to investigate ideas suggested on this basis—that local authorities are not themselves always the most appropriate persons to hold houses; so that when the houses have been bought and reconditioned there should be a provision for some more appropriate authority to hold them. That would involve the investigation of such proposals as a housing commission for dealing with the houses which had been reconditioned. This would co-ordinate with the proposals put before the nation for a housing corporation. They cannot be co-ordinated at once, because the ideas have not been completely boiled down, and close investigation is necessary before we can extract what is best out of them.
Lastly, although this is a matter which I approach with the utmost diffidence in this House, I think there ought to be some investigation into alternative powers in default of the local authorities. I am prepared to argue that this matter of slum clearance is one of such urgent national necessity that if you cannot get it done by one power you must get it done by another. At any rate we must provide that it shall be done. I have indicated the extent of the immediate investigation which I desire to give to the new conditions which will be established by this Bill. I wish to say two words of caution. It is the policy of the Government, for reasons which I have given to the House, reasons which I believe to be quite unanswerable to those who view them without having committed themselves to a party point of view from which they are unable to free themselves, that there shall be no further general subsidy. Believe me, you will never deal with the slums efficiently
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until you concentrate the subsidy on the slums. Therefore, it is a condition under which the Government and I myself approach this investigation into further powers, that having ceased the general direct subsidy we are not going to replace it by an indirect and concealed subsidy. That is the worst and least efficient method. I make one exception, and I make it with the knowledge and agreement of my right hon. Friend the Chancellor of the Exchequer. I would not exclude from the consideration of this Committee that there should be some extension of financial assistance from the Exchequer to the method of dealing with slums by reconditioning as well as by clearance.
My other word of caution is this: it should not, it must not, go abroad among the local authorities of the country that because we are considering any possible means of increasing the efficiency of our legislation there is any reason why they should delay in putting into force the powers which they have at the present time. These investigations which I propose will not be allowed in any way to affect the powers the local authorities have under the Act of 1930 to deal with slums by radical means of slum clearance. There is no reason why anything which I have said to-day should present the least excuse to any local authority for delaying action which they ought to take in dealing -with slums in their locality. What we do will be by way of additional powers, not in substitution of existing powers, and it will not furnish any reasonable excuse for further delay in dealing with the slums. I have dealt with the Resolution and the manner in which the Government propose to deal with Amendments which have been put down. I will only say in conclusion that the inquiry must be full and must be practical. It shall be my business as Minister of Health to see that the result of this re-investigation of the new conditions shall be put at the disposal of myself and of this House at the earliest possible moment.
4.45 p.m.
Mr. LOGAN: Will the Government be prepared to permit the subsidised municipalities to borrow money at a lower rate of interest for slum clearance?
Sir H. YOUNG: So far as I under stand it, the hon. Member's proposal is a proposal for some form of subsidy.
Mr. LOGAN: No. I am in full agreement with the propositions that are now before the House in regard to the question of houses, but I am wondering, in regard to the reconstruction proposals, whether it is the policy of the Government in dealing with slum clearance, to ease the situation by lending money to the municipalities at a lower rate of interest. It would ease the situation very much.
Sir H. YOUNG: What form of loan? I do not understand the form of loan to which the hon. Member is referring.
Mr. LOGAN: In the right hon. Gentelman's opening remarks, might I point out, he indicated that the building societies were prepared to advance money at 1 per cent, lower rate of interest. I am anxious to know whether there is to be any similar reduction in regard to the lending of money to municipalities for the purpose of slum clearance which will enable them to build houses with cheaper rentals.
The CHAIRMAN: I do not want to cut the discussion down unnecessarily, but it is quite obvious that the hon. Member's question is leading up to a discussion upon something which is entirely outside the scope of the Resolution.
Mr. LOGAN: Of course I must bow to your Ruling, but I would say, with all due respect to you, that if the Minister wants to obviate much discussion later on he might reply to my question. I am deeply interested in this problem, and concessions are being made in the direction that I have indicated. I beard the right hon. Gentleman say that certain suggestions that had been brought forward by the hon. Baronet for South-West Bethnal Green (Sir P. Harris), and by other hon. Members, would be adopted. It would save the time of the Committee if we could get some suggestion from the Minister in regard to the problems that are pressing upon the municipalities.
Mr. THORNE: Might I ask whether, in the course of the discussion upon this Financial Resolution, it will be out of order if any hon. Member mentions the
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question of the rate of interest that is proposed to be paid on loans to the local authorities?
The CHAIRMAN: I do not think that there is any question of loans to the local authorities coming within this Resolution. On the main question raised by the hon. Member, quite clearly the Minister was in order, in introducing this Resolution, in clearing the way, so to speak, by pointing out that matters which this Resolution did not deal with would be dealt with in other ways. That cannot be used as a reason to raise a discussion now on an aspect of slum clearance which comes outside this Resolution.
4.50 p.m.
Mr. HICKS: In rising to take part in the discussion upon the Financial Resolution, I think that it must be pretty clear to all hon. Members, and it has been emphasised by the Minister to-day, that this proposal is a definite one to throw back into the arena of private enterprise the job of supplying houses for the working class of this country. That fact must be borne in mind by all who are taking part in the discussion, and, fundamentally, it is the reason why we are unable to support the Resolution. There has always been a housing problem of one sort or another. In our opinion the great casualisation of labour, and the relative instability of employment for any person in industry, render those persons almost incapable of ever being able to contract for the purchase of houses or to be able to pay rent. So far as I am able to observe, private enterprise has had very few obstacles put in the way of it building houses for the people. The whole story of the supplying of houses by private enterprise for our people has been a very dismal and a very bad one. The master builders of Great Britain were not, in the main, engaged in house building prior to the War. The type of shelter that has been regarded as satisfactory for the working people of this country to live in was a type of construction which the general builder regarded as beneath his ordinary recognition, and it was left to the jerry builder, who manufactured the slums in regard to which the Minister says to-day that the Chancellor of the Exchequer is to be asked to grant additional finance for the purpose of putting a little whitewash or a little paint upon that unsatisfactory form of shelter.

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Since the War, since the efforts that have been made to house the people have been so short of the need, since housing has become a social responsibility—it ought to be a social responsibility, because it is a social service—and since successive Governments have interested themselves in housing and have tried to transfer the energy and desire to the municipalities in order to make the municipal authorities more active in house building, the better type of contractors and builders have turned attention to house building. Our very best builders have developed a technique in house building which, I am sure, is not surpassed in any part of the world. Great firms who have previously had no association with the building of ordinary cottages have come in—I could mention their names, but I do not want to individualise, because I would be leaving out a number who would be entitled to have their names mentioned—and a technique for construction has been developed which, I fear, will be very seriously affected by the present proposals of the Government. Instead of being utilised to make further contributions towards solving the problem of house building, that technique will be allowed to run derelict, and will be wasted. That is a very serious economic fact of which the Government ought to take notice before they make up their minds definitely on these lines, and they should be assured that there is some other agency and service that can come in to" help.
I am not satisfied by any means that the building societies will be able to fill the breach. To call them "building societies" is entirely a misnomer. They are not building societies at all. They have only been lending money; they have never built a house. They are known by the name of building societies, but their knowledge of house building must be of a very limited character. The only possible knowledge that they could have of house construction would be their surveyors going round to examine the type and the quality of houses in order to see whether, if money were advanced, they would have a reasonable guarantee that that money would be safely invested. Their knowledge of house building is very limited indeed. In this proposal to harness the building societies to house building, the societies, so far as I am able
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to read from their declaration, are not bound to anything. It is a purely voluntary matter for the building societies; there is not the slightest bit of compulsion anywhere. It is only if they say, "Well, this looks like a fairly decent investment," that the building societies, at their own discretion, may agree to come into this form of investment.
How are they to be satisfied? What sort of guarantee will the building societies feel that they have, when the casual labourer, or the widow with five or six children, who certainly needs it, wants housing accommodation? What sort of guarantee will the building societies feel that they get, in regard to investing money for building houses for that type of people, of which there are hundreds of thousands in our midst, and for whom housing accommodation ought to be supplied? I thank the Minister for his statement here to-day and for his explanation of certain phases. Who are going to start in any area and say that they are going to build those houses? Who is going to own the houses after they are built? Is the builder going to own them, or are the building societies going to own them? Are the municipal authorities going to purchase those houses after they are built, or are they going to be in the hands of the rack renters? All those questions are particularly important. We have had many years' experience, and we ought not lightly to turn that experience on one side. I refer to experience in housing the people by private enterprise, and to the unsatisfactory form of shelter that they have erected—insanitary, verminous, disease-breeding agencies as they are to-day.
Suggestions are now put forward that we are going to recondition those premises. In 1933, we are saying that we are going to recondition these houses. One would imagine that we had neither material, nor men, nor land, nor capacity available. The Minister has referred to the increase in unemployment, and has tried to diminish its significance by saying that some of it is seasonal, but, with 270,000 or 280,000 men still outside the Employment Exchanges losing their energy and moral, with employers' yards, factories and plant idle, we are talking about a little whitewash and green paint being put on to some of these slums. That seems to me to show a very small understanding of the significance of the

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problem, when we ought to be thinking how far we are able to help our fellow human beings out of these abominable places in which they are living, and to provide for them a decent form of shelter. That is my sincere feeling on the matter.
The Minister holds out great hopes that when private enterprise gets back into the saddle—when it is no longer influenced by subsidies, when there is no petty interference by municipal authorities, when there is no Government interference; although he always holds the end of the stick in the Ministry of Health by saying that, after the builders and building societies and others have got to work, they will go to the municipal authorities and perhaps they will put forward a scheme, and, if they do, the Government will decide whether they will allow it to go through—then, the Minister says, we may have a period of push and go. One would imagine that this opportunity has been denied in the past. What has been done when the opportunity was available? If housing could be carried out by private enterprise, I would not stand in the way, and no one here would stand in the way, but I am confident that in 12 months' time the Government will have to come forward— provided that the nation does not ask them to get out of the way and put us on the other side, as it ought to do at the earliest possible moment—the Government will have to come to the House and tell us that they are sorry that they have not been able to make more progress than they have made, that the building societies have not played the game with the sort of public spirit that was expected, that the builders have found that they have not been able to get on, and that the number of houses is substantially below what had been hoped for as a result of the work of 1933. I feel that the housing of the people will be diminished as a consequence of these proposals.
As regards the type of house, the Minister says that he is going to try to maintain some standard, but that is a thing that we have been trying to get in this country for a long time. I have been more concerned about building up on a standard than about building down at a price, because I am sure that the
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health and well-being of our people, and everything that the State means, is very largely determined by the type and character of the homes in which our people live. We used to talk about three-bedroomed houses, but now we are talking about a room and kitchen. It is a mockery. It is only one decent-sized room divided into four. If the Committee will forgive, me for referring to the deputation which waited upon the Minister yesterday, I listened then to the representative of a very important council speaking of the efforts to build down to the standard of 760 superficial feet. He said that the price was not satisfactory, and their officers were instructed to get out a scheme, not for 760 superficial feet, but for 702 superficial feet, and prices had been secured for houses of 702 superficial feet for a, man and his wife and family. A little while ago, however, we were saying here that 760 superficial feet was the lowest figure that should be reached. That is not all. It is now being suggested that the density should be increased from 12 houses per acre to 20 houses per acre in the same place, and these houses have been measured and planned, both on. the basis of 702 superficial feet and on the basis of 20 houses to the acre. No housing reformer in this country believes that we should have more than from 60 to 80 persons housed on an acre of land if they are to be able to live healthily.
In my opinion, the whole approach to this problem is wrong. We hear it said, parrot-like, that prices must be got down, that there must be economy in this, that and the other, but to-day I heard the Minister saying how prices had increased, and the statement received the approval of Members on the other side. The attempt to bring prices down means that all the ordinary amenities of houses are to be criminated, that bathrooms are to be communal—[Interruption.]— sanction is being given for houses of this type—and picture-rails and so on are reduced to beggarly proportions. That is really a terrible mind; I hoped for a bigger, broader and better mind. I am confident that private enterprise will never go in for building these houses unless there is a profit in it, and there will not be a profit because the industry in which the persons concerned are en-

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gaged will not be sufficiently stable to enable them to pay constant rents or to buy the houses.
Another fact is that the suggested incorporation of the building societies in such a scheme is a purely voluntary arrangement as far as they are concerned. The building societies can either play or not play. A number of them believe that they would be going outside their legitimate functions, and that they will not be able to appeal effectively to those who have contributed to them to enter into such a scheme. They are very apprehensive. Then we have the statement that the subsidy is to remain in the case of slums. The Minister says that the Act of 1930 is to remain, but I believe that in that Act provision was made for houses for aged couples, with the subsidy that was available under the Act of 1924, and I do not think that houses that may now be built for aged couples will be able to receive a subsidy; the subsidy will be only for slums. The Minister said to-day that the figure of 12,000 which has been mentioned did not represent fully the extent of the slums that he himself wanted to see eliminated from our cities. I should hope that no one here would think that 12,000 would be more than a flea-bite as a contribution to the slum problem of this country. London itself is the slummiest city in the world. There are whole areas in London which are nothing but huge slums—
The CHAIRMAN: I hope that the hon. Member will not go into matters which are outside the Resolution.
Mr. HICKS: The figure of 12,000 which was mentioned in the last Debate as being possible of attainment within a twelvemonth is a very small contribution indeed, having regard to the size of the problem of slum clearance, and I would beg the Minister to give his attention to this point, whatever temptations may be put in his way. The right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) described some time ago, in a very eloquent speech, some of the abominable conditions in the districts that he represents in Birmingham, but, when I remember that he and his family have been representing that district for over 40 years, I wonder what has been happening. To attempt to renovate such places is abominable in concep-
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tion and a waste of money; they can never be made really healthily habitable; the conditions as regards sanitation, ventilation, overcrowding and everything else associated with the buildings are so terrible.
I would ask the Minister to see that whatever effort may be made in connection with slum clearance is not put forth in this direction, because it will only mean handing the matter over to private enterprise. Slums are not owned by municipal authorities, and to pay money to the owners of such property is only to give them the opportunity of extracting further rents from houses which ought to have been pulled down long ago. I appeal to the Minister to see that the people are rehoused, and not to believe that the reconditioning of such houses will make an effective contribution to the problem.
In the light of our housing and building experience, we think that the whole approach to this problem is small and mean. We believe that private enterprise can never house the people, but that municipal authorities, centrally directed by the Government, are the best and most effective agencies to make a contribution to the problem. When they have made their contribution in such volume that everyone who wants a house cm have it, then, if you like, you can give private enterprise a chance, because then it will not be able to extract from the competition for healthy housing accommodation the abominably high rents and rates that obtain now. We shall oppose this Resolution, because we think that it is a wrong and improper approach to the problem, and one which the House ought not to pass.
5.12 p.m.
Sir P. HARRIS: I do not quite take the line that has been taken by the last speaker. I made it clear, when the Housing Bill was introduced, that I regretted that the Measures of 1923 and 1924 were to be repealed, for, in the light of experience, I have always desired that every organisation and every agency should be encouraged in the construction of houses. The problem is such a large and varied one, and the conditions in every part of the country are so different, that we want to encourage every kind of machinery and organisation, including private enterprise, municipal enterprises

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and, of course, as this Financial Resolution implies, the building societies as well. I think that an attack on the building societies is unfortunate. They have done a great work. They represent a form of saving which in some ways is more effective and more attractive to the ordinary working-class family than the Post Office Savings Bank and the various friendly societies. That applies particularly to the Midlands. At one time I represented a constituency in the Midlands, and there I learned to admire and appreciate the remarkable work done by the building societies. Hon. Members will know how, throughout Leicestershire and the Midlands generally, the hosiery workers and the workers in many other industries have used the building of a house as a form of saving which is popular and effective, and which, from my point of view as a housing enthusiast, is a contribution to the solution of the housing problem. The hon. Member for East Woolwich (Mr. Hicks) will say that that alone is not sufficient, and I agree with him, but there is no reason why we should not encourage this particular agency.
I am going to vote for this Financial Resolution. I am not going to look a gift horse in the face. Even if it is only a small amount, I am going to take it if it will help, in however small a way, this great fight to provide more houses. That is particularly so at the present time. It is true that the building societies have accumulated more funds, probably, than at any other time in their history. I think the reasons are that the large amount of unemployment makes it more difficult for the ordinary person to invest in house building, even with the small percentage basis that societies insist on, than hitherto. The trade depression that is sweeping all over the country, throwing men out of work and holding up industry, results in the fact that people have not the money to invest in house building and to take advantage of the facilities that the building societies provide. That, I think, is one of the main reasons why the building societies have large surplus funds.
What I want to see—and that is why I am going to support the Resolution—is that some of these surplus funds are used in the right direction, for the provision, not merely of working class houses, but
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working class houses of the right character. The Minister gave an assurance of his intention to accept the spirit of a new Clause that I have on the Order Paper. I attach tremendous importance to an Amendment of this character. As long as the building societies are using the money of their shareholders, or their own, the State has no responsibility, but the moment the State steps in to lend a helping hand in order to give a guarantee against loss the responsibility of the State sets in and, if we are to be partners, we have to insist that the right kind of house is built—not merely that it is not too large or not too expensive or not too highly rented for the ordinary member of society to be able to take advantage of it, but also that some of the evils associated with housing in the past will be avoided.
The Minister made it clear that he will accept Amendments to secure that, in any scheme put forward by building societies which seeks State aid, there should be a limit to the number of the houses to the acre, and that there is to be a specification of the character of the houses to be built in every reasonable detail. I attach tremendous importance to that. I hear stories floating about that the private builder is quite prepared to take the housing problem in hand on one condition, that he has a free hand, and he means by a free hand the right to build as many houses to the acre as he desires, uncontrolled and unsupervised by local authorities. To be forewarned is to be forearmed. We want to make preparations against anything of that kind. When we look at the miles of dreary, drab streets that disfigure our Midland cities and our suburbs, when we remember the back-to-back houses that disgraced mid-Victorian civilisation, we ought in 1933 to be careful to see that proper provision is made, now that the State is going to be associated with the building societies, that these things should not be repeated. There is another and a more practical reason. It is said, both by the enemies and the friends of local authorities, that they do not worry about profit. They have public opinion to satisfy. Naturally, they are careful to see that houses are properly planned, are attractive and conform to the amenities of municipal life. But, in spite of public authorities having that desire to please public opinion, it is specially laid down in the Acts of 1924

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and 1923 that not more than 12 houses should be constructed to the acre. Surely what is reasonable for public authorities should be equally reasonable to private builders and to building societies. With these safeguards, I am satisfied that these moneys should be provided by Parliament.
The Minister made an interesting statement about subsidies. I was sorry that he had not a larger audience. We have been away for six weeks but, in spite of the importance of the occasion, he hardly had the advantage of a quorum. He went out of his way to define his attitude to subsidies. He said he was against subsidies. This Bill was the death-knell to the principle of subsidies. He went on to say he was going to concentrate on subsidies for slum clearance. That was the keynote of his policy. That was the principle that underlay the whole of the last part of his speech, when he explained his attitude to housing as a whole. I am all for slum clearance and I do not want to under-rate the importance of it. On the contrary, I agree with the right hon. Gentleman that it has the first call on public funds. But do not let him put forward too large promises of good results. I have in mind a slum in my own borough which was scheduled for clearance by the local medical officer in 1902. It has taken 30 years, and it would not now be cleared if it had not been for a lot of wire-pulling and a great deal of pressure on the local authority from the Minister of Health and various interests concerned. There are dozens of these spots—not only in London. They are bad enough in London. We are more conscious of them, because they are nearer to our door.
The CHAIRMAN: The hon. Baronet is raising a matter that cannot be discussed on this Resolution.
Sir P. HARRIS: I quite accept your ruling, Sir Dennis, and I was rather surprised that the Minister elaborated his policy about subsidies. I want to be clear how we are to interpret what he said. I wanted to understand whether he was going to take full advantage of the Act of 1930 not merely to clear slums but to deal with what are familiarly called in the Act of 1930 improvement areas.
The CHAIRMAN: I think I have already ruled that, although the Minister was in order in making that reference to the question of slum clearance, it is not sufficient to enable a Debate to be raised on the point.
Mr. LOGAN: When it is being pointed out that a new system is about to come into operation, is it not possible to point out that this new system is detrimental and to advocate a continuance of the present system?
The CHAIRMAN: That may be, but the fact that this system proposes to deal with the question of guarantees for certain advances for building new houses is no sufficient reason for a discussion of something that is entirely different and has nothing to do with the building of new houses.
Sir STAFFORD CRIPPS: Surely one of the most important questions as regards slum clearance is the building of new houses necessary to house the people displaced from the slums? Is one not entitled to deal with that aspect of it?
The CHAIRMAN: The hon. and learned Gentleman is putting the two in the wrong order. We are not discussing slum clearance. We are discussing a particular method of guarantees for loans for building.
Sir P. HARRIS: It is unfortunate that the Minister raised all these issues. He detailed the new policy of appointing a departmental committee to deal with a vast set of new problems which, I should have thought, he had all the information to deal with long ago. He referred to a new housing corporation.
The CHAIRMAN: I am afraid there are many matters of that kind that may be mentioned, but mention of them is not sufficient justification for raisinga Debate which is not germane to the subject immediately before the Committee.
Mr. GREENWOOD: If the Minister makes reference to a question, have we not a right to comment on it?
The CHAIRMAN: The right hon. Gentleman must surely have realised that reference may be made to many things which it is impossible to debate. There would be no limit whatever to the Debate if you could debate at length any matter that was mentioned in any speech.
Mr. GREENWOOD: I am not on the point of long debate, but the right hon. Gentleman's speech raised many points quite outside the terms of the Resolution, and, if we are to be debarred from making a counter statement, this Debate might as well end.
Sir P. HARRIS: I called attention to the fact that the Minister was going outside the scope of the Financial Resolution, and he was not ruled out of order. He spoke for 20 minutes or half-an-hour on all sorts of matters that were quite outside it. I do not dispute your Ruling, Sir—I think it is a good one—but I think the Minister should have been ruled out, and not private Members, when they take up the challenge that he laid down.
The CHAIRMAN: Really I think the hon. Baronet is scarcely thinking what he is saying. If he thought that, he could have raised a point of Order while the Minister was speaking.
Sir P. HARRIS: I did so. I pointed out that he was going very much outside the Financial Resolution in dealing with the subsidies under the 1923 Act.
The CHAIRMAN: As far as my recollection goes, the hon. Baronet did not appeal to the Chair at all. In raising a point of Order now, I am afraid he is developing his remarks into a criticism of the Chair.
Mr. J. JONES: May I remind you, Sir Dennis, that, when the Minister began to address the Committee, I rose to a point of Order whether he was the proper person to do so.
The CHAIRMAN: Order!
Mr. JONES: Then I am going to say "Disorder!" because it was down on the Order Paper that the Financial Secretary to the Treasury was going to raise the matter, and not the Minister of Health.
The CHAIRMAN: I must ask the hon. Member for Silvertown (Mr. J. Jones) to resume his seat, and not to rise when the Chairman is standing.
Mr. JONES: That is all I have to resume.
Sir P. HARRIS: I do not wish to question your Ruling, Sir Dennis, because it rightly comprises the comparatively
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narrow principle of whether we shall give authority to the Treasury to guarantee loans to the building societies. It is clear that the particular proposal outlined by the Minister is outside the Financial Resolution. We can only look upon it as something in the clouds. I think that, especially now that the Patronage Secretary to the Treasury is here, we have a right to ask, as the Minister has referred to a Committee set up by him, for another opportunity to discuss and examine it, and to consider the proposals. It is a reasonable request. I do not blame the Minister for mentioning the matter, but in face of your Ruling, Sir Dennis, it is impossible for me to continue my remarks.
5.31 p.m.
Lord EUSTACE PERCY: I do not think that I shall transgress the limits of your Ruling, Sir Dennis, if I express on behalf of myself and, I think, on behalf of many of my friends, our appreciation of the statement of the Minister indicating that, while the Bill and the present Financial Resolution cannot, in practice, be amended because of the very narrow scope within which they have been drafted, he recognises that a wider consideration of housing measures is necessary if His Majesty's Government are to have a complete housing policy. We appreciate very much that statement, and I reinforce the expression of gratitude by emphasising the reasons which have led some of us on these benches to feel gravely perturbed as to the scope of the Measure. The Minister mentioned over and over again the words "private enterprise," and rightly insisted that it was essential to get away from the regime of general subsidies and to get back to a system of housing promoted mainly by private enterprise. That is correct, but people have a tendency of using the words "private enterprise" in a way which, I confess, I find exasperating. The hon. Member for East Woolwich (Mr. Hicks) believes that there is only one form of private enterprise which is tolerable, and it is the organisation of the trade unions. His ideal is, apparently, a system of society where the State shall control everything except the trade unions. [Interruption.] I did not intend to bring the Committee back to an ancient dog fight, but only to lead up to the statement that the hon. Member for

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East Woolwich, who has a great knowledge on this subject, would, I think, impress the Committee more if he did not seem to address the Committee with such a complete freedom of any sense of personal sin or responsibility for the state of housing. After all, the head of a great trade union might be said to have some responsibility for the present state of housing of the working classes, and, indeed, those of us who know the state of organisation of the building industry and the problems which face it cannot absolve either the building trades union or the building employer from all responsibility for the present relative inefficiency of the building industry in the building of houses.
But private enterprise, even when it is not used exclusively to indicate trade unionism, is too commonly used to mean only the sort of private enterprise which is provided for in the Bill—the small man building and owning a few houses, the small landlord and the small builder. It is true—and it has been, I gather, the basis of the policy of the Government— that when costs in any industry tend to be too high and are out of relation to the costs of other industries—that, although the hon. Member for East Woolwich does not seem to realise it, is the point at issue—it is only necessary to bring down the cost of housing because it is so much higher in relation to the costs of other industries in which the dwellers in those houses have to earn their living. It is true that when you get an indiscriminate society where the costs are unduly and disproportionately high, the activities and the competition of small producers tend to bring down prices. When the Government introduced their Bill and the Resolution their eyes were fixed exclusively upon that fact. But there are a good many people, both in this House and in the country, who realise that another consideration has to be given. No private enterprise can be effective in supplying any great staple commodity unless it includes mass demand and mass supply as well as small demand and small supply.
While it is true that the building industry would be much benefited by a return to conditions where the small man desired to own a house or two to let, and where the small builder was called upon
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to meet the demand, on the other hand, the building industry, if it is to be restored to real efficiency in the matter of solving the housing problem, needs another kind of demand, namely, a demand on a large scale, and one which can be met by mass production, and which will give both the employer and the worker in the industry a security of continuance of work. I hope that the hon. Member for East Woolwich will not think that I am trespassing too much upon his concerns if I say that we all know that, not only in the building industry but in all industries, the one natural check on the output of the individual worker is the feeling, "Well, if I get this job finished, who is going to guarantee me that I shall get another one after it?" The enterprise of the small investor in house property and of the small speculative builder, essential as it is to a complete solution of the housing problem, will never give the worker in the building industry the feeling of security, that the cheaper a house is produced the more houses there will be to produce, and that therefore he has a secure prospect of continuous work. I have always been in favour of issuing to the building industry the challenge, "If you will show yourselves realty efficient in the production of working class houses on a large scale, you shall be guaranteed a demand for such houses on that scale."
The Minister, I think, was under the impression that because I had put down certain Amendments with reference to the relation between local authorities and public utility societies, I was particularly interested in the local public utility society building 100 or 200 houses in a particular city. I am not. I put down such an Amendment because I thought that there was a vague chance that the Amendment would be within the scope of the Financial Resolution, and I was certain that no other Amendment on that subject could safely come within the scope of the Resolution or the Bill. The project which I have always had in mind, and which I advocated two years ago and again last year, is the one which the Minister mentioned of the statutory housing corporation able to operate nationally and to focus and mobilise the demand for houses upon a very large scale as a challenge to the building industry, and on condition that the build-

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ing industry can contract for and produce those houses at a cost within the means of the great masses of the working men of this country. Therefore, I welcome the statement of the Minister all the more that he is going to appoint a committee which will consider the whole range of what a housing policy based upon private enterprise really means. He is dealing at the present moment only with a bit of private enterprise. It is essential, if you are to get away from general subsidies, to deal with private enterprise as a whole, realising that private enterprise includes, not merely the individual initiative of the small men, but the co-operative initiative of bodies of men, with, if necessary, the encouragement of the State and the local authorities, able to focus a very large demand for production. I would add one word if, Sir Dennis, you will not think that I am transgressing the Euling of the Chair. There was a point mentioned by the Minister in relation to the proposed committee which was also taken up by the hon. Member for East Woolwich, who poured scorn upon it. The Minister mentioned the idea of giving local authorities power to purchase houses in order to recondition them. When we speak of the question of reconditioning we are not mainly thinking of the great homogeneous slum area where all the houses can be condemned as insanitary houses. We think of that most dangerous phenomena of our civilisation—the areas which are progressively becoming slum areas while you are paying attention to the actual achieved slum area over there. I do not believe that that is to be dealt with, as the Minister suggested, by the purchase of the houses in question. I believe rather that the Improvement Area Provision of the Act of 1930 should be so extended so as to make it possible either for the local authority or for a great public utility society—
Mr. GREENWOOD: It is.
Lord E. PERCY: —to come into the improvement area, take it over and administer it as trustee for all the owners of the houses in the area.
Mr. GREENWOOD: It is.
Lord E. PERCY: I think that the right hon. Gentleman will see that it is not possible to go into that matter. It would take me far outside the Rules of Order
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if I endeavoured to go into the problem of slum clearance. It is that idea of a local authority acting on a large scale as administrative trustees for the owners of the houses, rather than the advocacy of any expenditure of public money on purchasing these houses, that is in our mind, and I hope that the Committee's investigation will extend to that. I thank the Minister for the very receptive mind he has shown with regard to various suggestions urged upon him. Our only anxiety on this side of the House—we agree with the lines of the Government's policy—is that the Government shall not be content with what is only a mere fragmentary, little beginning of a housing policy, but that they shall produce & housing policy which shall provide for the full mobilisation of all private initiative and also all public initiative in this country.
5.46 p.m.
Mr. LOGAN: I would claim the attention of the Committee to the Resolution dealing with this finance. A Financial Motion cannot be dealt with unless reasons are put forward against it. In my opinion it is impossible to deal with any Financial Resolution unless reasons can be given why it should not be agreed to. I trust that a certain amount of latitude will be given when we are dealing with this purely financial subject. It has been stated by the Minister, in asking for the adoption of the Financial Resolution, that an old system is to pass out and a new one is to come into operation. In other words, the responsibility of the municipalities in regard to housing is to pass out and it is to be put into the hands of private enterprise, or building societies, or trust bodies. The great system of housing is to be transferred to these new bodies and we are asked to sanction such an arrangement, although as a precautionary measure we are told by the Minister that he will keep an eye on the question of new building and see that the municipalities are kept up to a right and proper mark so that they may supply what is absolutely essential if the building societies do not fulfil their obligations.
I should have thought that every opportunity had been given during the last 12, 14 or 16 years for building societies to come along and to help with housing, not only in regard to the new houses required but in regard to slum clearance.

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Have they done so? They have not done anything of the kind. We are now told that this great responsibility is to go into the hands of the building societies. Let me take the position of the city of Liverpool and see how the new provision will apply there. I presume that we are to have the building societies coming into a municipality which has been doing great work up to the present time. But for the check by the Ministry and steps that have been taken to prevent the Acts of the Labour Government being worked, we should have been able to carry on, like other municipalities, with this great work. We are now finding that the responsibility is being shirked by a National Government. In regard to housing, they say: "We are not able to take the responsibility. We do not want that responsibility to be cast upon the National Government. Therefore, we will get rid of it. In regard to the growing demand for houses, let us deal with private companies and hand the responsibility over to them."
The National Government have done nothing but divest themselves of responsibility. How can an existing irresponsible Government carry on responsible office? If they are responsible, why do they not face the housing problem all over the country as it ordinarily presents itself and not come to the House of Commons and ask it to free the Government from responsibility, when every hon. Member, whether he represents the National Government, the Labour party or the Liberal party, knows how pressing is the demand for houses and how urgent is the necessity for the Government facing their responsibility in regard to the demand for 1,000,000 houses, rather than adopting the subterfuge of getting rid of their responsibility? We are told that building costs have dropped and that there was never such a favourable time for the building of houses. Yet we are told by the returns this week that 180,000 more people are unemployed and that we are on the borderline of having 3,000,000 unemployed.
The TEMPORARY CHAIRMAN (Mr. R. J. Russell): The hon. Member is going beyond the limits of the Resolution.
Mr. LOGAN: With all due respect, I would say that this Financial Resolution
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means that instead of saying what you would like to say, you have to think it. It is typical of the National Government, because it makes one speechless in regard to things that one would like to talk about. Members of all parties must feel their obligation with regard to the question of housing. I do not want to make any kudos from the party point of view in regard to the borrowing or lending of money for the building of houses, but as a member of the Housing Committee of Liverpool I am unable to understand why we should turn over our big responsibility with regard to housing to these great financial bodies that are coming along. It seems to me to be financial jugglery. I can call it by no other name. It is like Cinquevalli, throwing up the golden coins to see how much they are going to make. The Minister knows that it is a question of how much money can be made. The lending of this money is not going to be a benevolent work. If it is to be on a cash-down basis and not a credit system, called for every Monday morning as required, I am afraid that the proposition will be of no benefit to the thousand and one of our poor people. Why should the Government not go along to the money-lending interests and say: "We are a bankrupt body of National Members. We are not able to run finance because it entails certain responsibility. It means unpleasantness. It may lose us our seats. Therefore we want to take it out of the orbit of electioneering. We would like to get out of anything that means difficulty in regard to soliciting votes, and we think it would be well for you to come along and lend money at certain rates of interest." We are assuming a great responsibility by getting rid of our responsibilities to a money-lending body, instead of the Minister seeing that the municipalities do their duty. What is the necessity for getting rid of a system which has been so successful in putting up many houses and in getting rid of an election difficulty?
The TEMPORARY CHAIRMAN: The hon. Member is straying somewhat from the question.
Mr. LOGAN: With respect, I am giving an analogy. I am trying to show why this new system should not be brought into operation, as against the system that is already making provision

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for housing. I am supporting a system which carries with it responsibility as against a system which,, if we agree to this Resolution, will take away responsibility from this House with regard to the question of finance for housing. I claim that if I am able to prove that it is proposed to place into other hands an authority that ought to be exercised in regard to finance by this House, I am justified in my argument. In regard to the question of rental, cheaper housing, the control of properties and estates which we are going to place under these other bodies, I say that is a responsibility which we ought not to be asked to sanction. Coming from a city which has done so much for housing, as one who knows the responsibility attaching to the control of great housing estates, and feeling that due provision cannot be made for the housing of the people by the system proposed, I feel that I am justified in appealing to those who are in responsible positions in regard to housing in the country to say that the Government's proposal in this respect is not a right and proper thing.
The right hon. Member for West Birmingham (Sir A. Chamberlain) gave a very graphic description, almost reminiscent of Dante's "Inferno", of housing conditions in Birmingham. I know of equally bad conditions in Liverpool. There is one part of the Exchange Division where there are thousands of slum houses and many instances of nine people living in one room. Surely, it is not a right thing that this House should place in the irresponsible hands of moneylenders, who are only out to exercise the power of lending money on security, work of housing which ought to be exercised under the public enterprise of the municipalities. If private enterprise is to receive the support of the House of Commons in this respect I shall wonder why we come here as public representatives looking after housing problems. The Government's proposal is condemnatory of the policy of the National Government. Look at the squalor, misery and overcrowding which exist in Liverpool to-day. Bad as it is, I believe that we can retrieve the situation and do great things under the present scheme; but if we are going to put into private hands the finances of this nation, with the political jugglery to which it will lead, I feel that
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it is good-bye to the population of this country getting any houses at all. Let me deal with the question of slum clearance —the 12,000 houses. It is only a flea-bite, and unworthy to be mentioned by any Minister in this House.
The TEMPORARY CHAIRMAN: The hon. Member is now going beyond the terms of the Resolution.
Mr. LOGAN: This question was intro duced by the Minister of Health, and I understand that when any Minister makes observations in this House and deals for 20 minutes with a particular matter—
The TEMPORARY CHAIRMAN: The hon. Member must obey my Ruling.
Mr. LOGAN: The question was raised —whether it is relevant or not I do not know—by the Noble Lord the Member for Hastings (Lord E. Percy), who knows a great deal about houses, but not of the type of house with which I am more acquainted. He dealt with one or two-things which were totally irrelevant, but there was no question of pulling him up. I know something about slum property. I do not belong to any noble house or to the house of David, but I feel this question very deeply, and this Committee ought not to be asked to sanction a financial proposition like this. I think it is quite relevant for me in this discussion to bring forward any point which is contrary to this policy and to point out that under the present scheme we are able to deal with certain matters with which we shall not be able to deal if the present proposal is carried. I should have thought that I was perfectly justified in putting the scheme which is now in operation against the new system proposed. Surely that is right and proper. Why should there be a Ruling that we are not to talk about the disabilities which the new order will bring in?
The TEMPORARY CHAIRMAN: I must call the hon. Member to order. We are discussing the Financial Resolution.
Mr. ANEURIN BEVAN: The Minister of Health referred to many matters not contained in the Financial Resolution, as did also the Noble Lord the Member for Hastings (Lord E. Percy). I do not want to cast any aspersions on the Chair, because you are only following the Ruling of the Chairman of Committees, but I do

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ask that the same latitude should be extended to those who are opposing this Motion as to those who support it.
The TEMPORARY CHAIRMAN: It is quite clear that I have allowed quite as much latitude to the hon. Member for the Scotland Division (Mr. Logan) as was allowed to the right hon. Member for Hastings (Lord E. Percy). If hon. Members are to go wandering here and there we shall never get any further and I must ask them to discuss the Resolution, and to obey the Ruling of the Chair.
Mr. LOGAN: I do not want any latiture. I want exactly the same scope as every hon. Member is justified in taking when he is replying to another speech. If I have been irrelevant I have been replying to irrelevancy—to the irrelevant observations of responsible people, who should have known better than to deal with irrelevancies. I cannot be blamed for my reply to the speeches of those who bold responsible positions. This Financial Resolution is asking the Committee not to assume any further responsibilities in the matter of housing. I wonder what we are here for? What has housing to do with the House of Commons? Why cannot notices be put up to the effect that so many houses are wanted, and ask for tenders? This House of Commons comes back after a recess, and when it is asked to deal with housing we have empty benches; we say that we are sick and tired of the whole business and are prepared to turn it over to money lenders. Such a policy is all wrong; it is not the proper way to deal with this matter. The Minister of Health by a tricky Motion like this gets the House entangled, and we are not able to debate the question on the Financial Resolution now before us. I trust that the Committee will turn it down.
6.8 p.m.
Sir GEORGE GILLETT: The hon. Member for the Scotland Division (Mr. Logan) in saying that the whole of the control of housing is to be taken out of the hands of local authorities has overlooked the fact that the subject in which he is particularly interested, slum clearance, still remains under the control of local authorities and receives a subsidy under the 1930 Act. I welcome the speech of the Minister of Health, because it helps to clear away some of the diffi-
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culties which some of us felt in regard to this Motion. It amazes me why hon. Members opposite should think that because private enterprise provides the larger part of the housing of the people, naturally it must not provide the houses of the working classes. Hon. Members opposite entirely overlook the fact that the reason why various Governments have had to assume the obligation of giving public funds in the form of subsidies in order to induce local authorities to build these houses has been because the price of commodities and the cost of finance made it impossible for private enterprise to put up houses at a cost which would allow of rents which the working classes could pay. The great fall in the price of interest as a result of recent conversions, has now made it possible for private enterprise to provide houses at such a figure that virtually they are within the range of payment possible by the working classes.
It is most interesting, in connection with the history of subsidies, to notice that when a subsidy has been removed a fall in the cost of housing has taken place almost at once. There is no industry which is so honeycombed with cartels and trusts as the building industry. Anyone who has been in this House for a number of years will remember how often criticism has been made as to the difficulties of getting any reduction in the price of commodities because it was being held up by some trust or combine. It is recognised in all parts of the House, and by the Labour party, that the building of houses of all kinds has been increased because of the handicap in regard to the state of the industry. Today, with the altered value of money and the fall in the cost of commodities, it is now possible for these houses to be brought within the range of the working classes. I admit that there is still a slight gap to be covered, but experience shows that the moment the subsidy has been removed there comes a fall in price; and this may cover that gap.
There is one other way in which I notice this problem is to be considered, and that is the proposal made by the Minister of Health to draw upon some of the surplus funds now lying idle in our financial system. Those who have been considering the general condition of the country have asked why it is that the

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large surplus funds in our banking system to-day are not finding an outlet in industry. It seems to me that the Minister of Health is wisely attempting to do something which men of all shades of opinion agree is one of the things which will help to a trade recovery in this country. Over and over again the question of housing has been one of the first subjects mentioned, and by using these funds, which are now waiting for investment, the necessary houses may be provided. One of the criticisms made against the scheme is that the period of 30 years is rather too short to provide sufficient time to enable the loans to be repaid at a rate which would allow the houses to be let at a rent payable by the working classes, but I hope it may be possible for the Minister to approach the building societies to ascertain whether the period can be extended.
The reference in the Minister's speech to a proposal for a committee to survey the whole problem of housing commends itself to me. As long as houses have to be built, it is not essential that the building should be done by local authorities. It seems to me essential that we should be assured that local authorities are going to feel responsible for watching the methods by which building in their districts is developed. I conclude from the speech of the Minister that one of the tasks of the suggested committee is to take a survey of the housing needs of the whole country, to watch over and to report to him how far the various municipal authorities are fulfilling their duties in the matter. At the same time that does not necessarily mean that the local bodies themselves may not be building houses; it would not be correct to assume for a moment that that is the position. But I feel that the idea of the Minister, to have some body that is to supervise the whole problem, removes one of the difficulties which face us at the present time.
I welcome the Minister's statement that if it should be found, in regard to slum clearance schemes, that local authorities are not sufficiently active, the Minister will be prepared, if necessary, to see that some other authority takes over the duty that has been neglected. I feel that the Minister is making a very interesting experiment in the altered conditions under which we are living to-day. It is very
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important that the use of the money now awaiting investment is to be tackled by the Government. At the same time the Government are providing for the oversight that is so necessary. There is no reason to fear that the means that are now suggested will not help to supply the required number of working-class houses without the subsidies that Governments hitherto have provided.
6.17 p.m.
Sir FRANCIS FREMANTLE: I do not want to take up much time in supporting this Resolution, in view of the narrow way in which it has been drawn up, and the necessity for us to keep, as far as we can, within the terms of the Resolution. But I am bound to ask that we might be able to discuss the problem which was put before us by the Minister. This Resolution is to supply the money for the scheme of the Government. We must be sure that there is not in sight any alternative which would induce us to vote against the Resolution. Therefore we have to consider the scheme of the Bill as a whole, and consider whether that is the only scheme for which we should guarantee the money. Various useful suggestions have been made. The scheme is to enable the Minister to make contributions in certain cases, but it does not say that those contributions must be to building societies only. Therefore I take it that it is in order for us to consider whether any other suggestion has been made or could be made for which guarantees could be given or loans made. That, of course, is the point of the Noble Lord's Amendment.
I think a great many of us feel much sympathy with those who urge the advisability of generally encouraging that kind of private enterprise which is free from the objections of the Opposition to private enterprise and has the advantage of being detached from the trammels of municipal voting. I refer to public utility societies. There are two reasons why one does not think it necessary, or perhaps advisable, to suggest that the Government should include public utility societies and such forms of private enterprise in their guarantees or in their scheme. The first reason is that public utility societies must necessarily be limited in their scope by the individuals who are sufficiently philanthropic to give their time and their money, or to get

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money from their friends for the purpose. I think these societies do an admirable work in. their areas. We know of many instances and no one would dispute the splendid value of the work. But it is no big solution of the problem to bring them into this scheme. Indeed it is suggested that probably they can, in one way or another, get as much money as they are able to deal with from the sources which they tap already. I do not think that that is altogether the case, but I am certain that we could not give them a very large amount of money to play with, or work with, because they are not in a position to extend their activities on a very large scale. But that is no reason why we should not eventually come to the suggestion which has been made by the Noble Lord, of a large statutory public utility society to fill in the gaps in the present housing difficulty.
I, therefore, come to the second reason why I think it is perhaps as well that the Government did not include such a proposal in their scheme at this moment. Anything that would interfere with the clear-cut line of the Government's change in housing policy would invalidate the incentive to private enterprise and the building industry generally to take up this work. If there were any suggestion that the Government should give loans to local authorities or public utility societies, more than they have done in the past, it would make less clear-cut the change in policy which is now being introduced. On that change of policy the first consideration is that houses which hitherto have been a paying proposition will continue to be solely in the hands of private enterprise without any question of municipal competition. That in itself will be an incentive to private enterprise, in certain areas of the country, to build where hitherto the municipal authorities have been building the class of house in question. That will, I hope, open a good field for employment in the building industry. In the second place it is proposed to throw the burden of the building of houses that are to be let at the low rental required, on the new scheme, with the help of the building societies. I hope that that will be a success. I am bound to say that I am not yet convinced by the optimistic statements of the building societies' representatives.
Sir H. YOUNG: On a point of Order. This matter is of importance as affecting later stages of the Bill. As a matter of fact, there is nothing in the Resolution which gives any power in relation to public utility societies. It was because of that that I dealt with public utility societies in the way I did, and I submit that my hon. Friend is now pursuing a subject which is beyond the scope of the Resolution.
Sir F. FREMANTLE: That may be true, but at the same time, unless the possibility that the Minister himself foreshadowed is that the whole of this Committee revolted against him by throwing out his Resolution and bringing his scheme to an end, we must consider what the alternatives are and what are the reasons why we should still support his scheme, although it does include what he has mentioned. I shall not pursue that point any further. I think we ought to have assurances from the Government. We must express some doubt as to whether this scheme, with the help of the building societies, is going to produce houses at the rentals which are wanted. On different occasions different rental figures are given. I am certain that what is wanted, and what we must have if we are to be satisfied, is a rental, roughly speaking, of 8s. in the country and 12s. in the towns, including rates. That is what is needed for the particular class for whom we have to provide. Houses of a higher rental will be supplied in the ordinary way, apart from this proposal, by the operations of the builders, especially when the question of rent restriction has been settled as I believe it is to be settled in another Bill. But I am not sure that under this proposal we shall be able to get down to the level that is required, that is 8s. and 12s., including rates.
On the other hand do not let us be too frightened if we cannot get down to that figure at the present time. Let us recognise that even if we do not get down to that figure now we are helping the movement if we get down to 15s. or 18s., including rates. Everyone who knows slum areas and the conditions in industrial towns knows of innumerable instances of families who are spending 15s. and 20s. a week for bad accommodation in only a couple of rooms. We had evidence in the Rent Restrictions Departmental Com-

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mittee of the existence throughout the country of scandalous and disgraceful cases of sub-tenancies in which the most miserable accommodation was provided at the most exorbitant rates—rates for which people could easily have had complete houses as long as those houses were provided for them within reach of their work. I suggest to those of my friends who are housing enthusiasts like myself that we are not helping the whole housing movement, if we are not trying to get down to that level of rent at which I suggest we must aim.
The third point in connection with this epoch-making change of policy—as I consider it—is its effect in focussing attention upon the slum. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) will have the immense responsibility and credit of having this policy reinforced by the National Government to prove out the merits of his own Act. I wish that more had been made of that aspect of the change of policy when it was originally proposed before Christmas. Had that been done, we should have been spared six weeks of considerable doubt and anxiety. That doubt has now very largely been set at rest by the Minister's statement. I welcome very much the announcement that we are to go full steam ahead on the slum policy and that we are not confining ourselves to the 12,000 houses suggested. As I mentioned in the course of a previous Debate on the subject, that figure is intended not as a restriction on activity but as an estimate of the most to which a local authority would be likely to attain in this year, even with the best will in the world, namely, double the pace of last year. The Minister has emphasised that the Government intend to bring pressure to bear in that direction.
Some may say that the Act of 1930 dealing with slum improvements will never solve the problem. I am doubtful myself whether it will do so without amendment, and indeed it is likely to require drastic amendment, but we cannot discuss that question to-day. Let us comfort ourselves with this idea—that we are going to give another good 3'ear's trial to focussing attention on the slum problem while doing away with the attention which local authorities have hitherto had to pay themselves to actual building
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construction. We are going to give a trial to that system. Let us see what happens, and if we find, as we probably shall find, that it is necessary to have Amendments in one direction or another I hope that we shall have the support of the Minister for an amending Measure on larger lines next year.
I wish also to express my thanks to the Minister for having cleared up another point. That is on the question of the date of submission of schemes which will still qualify for the subsidy. In connection with the cutting off of subsidies by the new proposals, the Minister gave us to understand that there would be considerable latitude in his Department as to schemes which had actually been prepared and had been to all intents and purposes submitted, and which should still qualify for the subsidy. If we look at the Bill, however, we find that under its terms the Minister is not allowed to give a subsidy for any scheme that has not been submitted before 7th September. I am not clear as to the actual working out of the Minister's promise of this afternoon, but he has told us that any scheme which has been actually prepared in a bona fide manner before 7th September will qualify for the subsidy. I think the Minister said that no amendment of the Bill would be required in that respect and that there were other legal provisions by which the Ministry, apparently, could decide what schemes had properly been submitted to qualify for the subsidy and what had not. I grow very much afraid when the Minister or the Department say that they can, by administration, interpret a Measure rather laxly when the Measure seems to be quite clear in its terms.
Sir H. YOUNG: The hon. Gentleman does not seem to have understood what I said. What I said was that in Committee I hoped with the assistance of Members of the House, to arrive at a reasonable arrangement, involving, if necessary, a modification of the present wording of the Bill, which would enable that class of applications to which reference has been made to be dealt with by my Department.
Sir F. FREMANTLE: I am sorry if I did not properly follow the Minister's statement, but perhaps other equally thick-headed persons with myself may be glad to have that explanation. As I took

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down the Minister's words, they were to the effect that this was provided for under the existing law, and that no Amendment was necessary. However, the Minister now says that he is going to amend it in Committee so as to make the necessary provision. I am very glad of that, and in that connection I wish to mention one point which a good many housing people are apt to forget, namely, the work of various trusts, and, in particular, endowed trusts which are building on a large scale, and very sucessfully, for working class populations. These trusts have a considerable number of schemes which have been brought before the Ministry unofficially. In the ordinary way, the officials of a trust bring a scheme privately to the Ministry and discuss it with the Ministry and when they have settled the general arrangements of the scheme—perhaps after several weeks or months—they go to the local authority and the local authority then brings the scheme officially to the Ministry. It is only when that last stage has been reached that the scheme in legal language has been submitted to the Ministry.
There is in particular one trust, the Sutton Dwellings Trust, which has on hand at present five big schemes—Stoke-on-Trent, Leeds, Salford, South Shields and Bradford. These schemes have been submitted unofficially to the Ministry, but I do not think that one of them has been submitted officially by the local authority to the Ministry. It is satisfactory to know that such schemes as those will, presumably, be allowed to pass. It is justifiable that they should be passed because they have been drawn up on what maybe termed apre-1933basis, that is to say, on the basis of a subsidy and of prices adjusted to the subsidy. I think it is quite justifiable, therefore, under the new proposals, to allow schemes of that kind still to have the subsidy, but it is certainly necessary to see that no new schemes are produced on the strength of any relaxation. I thank the Minister for his promise of an Amendment in that respect and despite the necessity for watching carefully I believe that, on the whole, we shall see light coming out of the darkness as a result of this epoch-making change if we all do our parts, as we Members of Parliament ought to do,
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in persuading local authorities to go full steam ahead with slum clearance.
6.40 p.m.
Mr. A. BEVAN: It has been very instructive to note the difference between the welcome given to this Financial Resolution by two Conservative Members and the welcome accorded to it by the hon. Member who is the National Labour Member for Finsbury (Sir G. Gillett). The hon. Member offered his congratulations to the Minister, but the hon. Member for St. Albans (Sir F. Fremantle) at the conclusion of his speech dealt a most damaging blow to the whole structure of the Resolution. If the subsidy is no longer necessary as an inducement to the building of houses because the withdrawal of subsidy, in the language of the hon. Member for Finsbury, has always led to a reduction in building prices, then why is the hon. Member for St. Albans so apprehensive that the applications to which he referred will not be considered by the Minister? If the logic upon which Conservative policy is based is correct, namely, that the withdrawal of a subsidy leads towards an increase in the building of houses, how can the hon. and gallant Member square that assumption with his anxiety that the subsidy should be retained in those cases?
Sir F. FREMANTLE: Simply because of the lag in the adjustment of prices and wages in the building trade.
Mr. BEVAN: But the houses will have to be built on the basis of existing prices, and not upon the basis of bills of quantities made at that time.
Sir F. FREMANTLE: On the basis of the prices that will exist in six (months' or nine months' time.
Mr. BEVAN: If the hon. Member's anxiety is as to the future of building prices, that anxiety is only intelligible if the prices are to go upwards. What encouragement is there for the building societies which have schemes of house building? Exactly the same considerations which will serve as a deterrent to local authorities already provided with subsidy, will exist in far greater measure with respect to those societies which are now asked to reverse their whole policy and to support the building of houses directly where formerly they merely advanced money for the purchase of houses.

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I submit that on this matter the Noble Lord the Member for Hastings (Lord E. Percy) is perfectly correct. He raised the question of what actually constitutes private enterprise in the building industry, but Conservative Members have become so muddled in their ideas of how to approach the housing problem that one after another they are giving their support not to this Financial Resolution but to the intention of the Minister to set up a, committee to survey the whole question so that we are not really discussing a Resolution dealing with a policy which will build houses. What is under consideration is not housing policy at all but merely the destruction of municipal housing construction under the guise of a new housing policy.
The same social considerations that led the late Mr. John Wheatley to make his plans for housing in 1924 exist today in even greater measure. There is no security of tenure among the working classes. The industrial population is more stirred up and more migratory to-day than it was in 1924. You have only to consider the extraordinary drift of population from the North and West, and the South and South-East, to see that it is absolutely impossible for working-class houses to be built by building societies at reasonable rentals on the old principles. The actuarial basis of the building of property is too narrow to carry the risks involved, and therefore it has been the accepted policy of the Government that the actuarial basis must be, not the local authorities, far less the building societies, but the nation, supporting housing construction by subsidies. It is surely incumbent upon Conservative Members to show what substantial difference there is in the working-class population to-day as compared with 1924. All the factors that led to the uncertainty of working-class house construction then exist to-day to an exaggerated degree. I therefore submit that the Minister ought to be told that the proposal now before the House, so far from being a housing policy, is merely a means of shelving housing consideration for some time to come.
It is a most extraordinary thing about this National Government, presided over by a would-be, or so-called, or past Socialist Prime Minister, that Tory principles are given all the substance and Socialist principles are given committees.
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Whenever a Socialist principle is involved, it is put into a committee, but whenever a Conservative principle is involved, it is given place immediately. The giving of a guarantee to private enterprise, in the form of building societies, is typical Conservative legislation. The House of Commons has always been regarded as the place where Tories share the swag among their friends. You have been sharing the swag for a year and a-half. Every industry in Great Britain has been permitted to come forward and have its share of the swag, and now the building societies have their share, too. You are going to guarantee them against loss. You cannot even come forward to-day and assert that building prices have fallen sufficiently, or that there is sufficient security in the building industry, to enable private enterprise to build houses competitively, because you have to promise State and municipal security to the building societies. You are, in fact, pumping the oxygen of State security into a. tottering industry, instead of coming forward openly, and saying that this industry for the last 10 years has not been able to do its job, but has been kept artificially alive by money provided by the State, and that if the job is to be done intelligently at all, it must be done on the basis of a State plan and a State drive behind it, with the State able to take a survey of the whole population and to build houses in those districts where houses will be required, not merely where they are required. The State plan should be before, not after, the fact.
The considerations advanced by the hon. Member for Finsbury strike me as rather extraordinary. Indeed, the more I hear the speeches of those who were Ministers in the last Labour Administration and who have gone over to the Conservatives, the more I understand how I found it easy to quarrel with the Labour Government, and the more deeply grateful we are that they have gone over to the Tory party. We are well rid of them. The Labour ship might be able to float now that it has thrown, that ballast overboard. The hon. Member's observations amazed me. When are we going to have a Socialist contribution to the National Government? It is supposed to be a National Government with a Socialist tinge, but we have not even had a tint of Socialism yet from them. The hon. Member said that as a

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consequence of low building prices and cheap money, the point is being reached where houses for working class occupation at reasonable rentals can now be put in hand with expectations of substantial success. But I understood that the whole policy of the National Government was devoted strenuously to trying to raise prices all round. We have had statements from the Minister of Agriculture and from the Chancellor of the Exchequer that the Government's policy is to do their very utmost to raise prices, because industry is being destroyed by artificially deflated prices.
Sir F. FREMANTLE: Wholesale, not retail.
Mr. BEVAN: Really, if I may say so without any desire to offend, the hon. Baronet who interrupts me is quite irrelevant. All the talk about the gap between wholesale and retail prices will not bear a moment's examination. The Noble Lord the Member for Hastings smiles with his customary courtesy and vacuity. The position is this, that if the retail industries are able to extend such a resistance to the fall of wholesale prices, that same capacity to offer resistance will be there in their effort to pass on the in crease in the wholesale prices, and the retail prices will respond. No one has yet come forward and told us who swallows up the difference between—
The CHAIRMAN: I think the hon. Member's enthusiasm has been leading him away.
Mr. BEVAN: It is not my enthusiasm at all; it is the irrelevancy of the interruptions.
The CHAIRMAN: Then I hope the hon. Member will not follow a bad example.
Mr. BEVAN: I am obliged for the rebuke, Sir Dennis. I ought not to follow a bad example, and I shall not do so; I will confine myself to the question under consideration. If it is the Government's avowed policy that prices should be raised as quickly as possible, and every instrument which the Government have at their disposal is to be devoted to that end, what security are you going to offer to the building societies to enter into long-distance contracts? The building societies will say, "No, we cannot do that. We want to know, first of all, what the situa-
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tion will be." The Government, with one-half of their policy, are destroying the other half.
To take another point, one of the main difficulties about housing is that the need for housing is not uniformly distributed over the country, and that the financial attractiveness of building houses is not distributed in proportion to the need for houses. There are certain areas in the west and north where housing is wholly bad, where the local authorities are already so burdened with loan charges that they are unable to undertake the building of more houses, yet where the housing need is as great as in any part of the country. Will the building societies build houses there?
Lord E. PERCY: Will the local authorities?
Mr. BEVAN: Certainly they will not, I am not arguing that the initiative in the construction of houses should be anywhere except with the House of Commons. The building of houses should be a part of national reconstruction, initiated and carried through by the State. Even the local authorities themselves, as instruments of house construction, have failed, and consequently you should have a more imaginative and ambitious national housing policy. The Noble Lord envisaged the gathering together of all the interests now engaged in building construction, and the attempt to get them to work co-operatively upon a wide plan. You need to impose an obligation upon a statutory authority, not allow the housing legislation to be permissive. That is how we distinguish between private and public enterprise.
Lord E. PERCY: I do not think there is very much between the hon. Member and myself, if he will answer this question: Does he think that this House of Commons, or this great housing corporation, should impose fixed wage rates upon the workmen in the building industry?
Mr. BEVAN: I could not follow the Noble Lord's strictures upon the building industry. I thought that in 1924 the building industry operatives—
Lord E. PERCY: If the hon. Member will allow me, he proposes that the House of Commons should regulate the whole

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building industry to build houses. Does he agree that, as part of that policy, they should regulate building trade wages?
Mr. BEVAN: If the State undertook the construction of houses, the wages of the workers engaged in the construction of houses would have to be matters of agreement between the State and the building trade unions.
Lord E. PERCY: But why of agreement? You are not going to agree with the building trade employers; you are going to impose your will on them.
Mr. BEVAN: I am not speaking about the building trade employers; I am speaking about superseding them, and I submit that a distinction between public and private enterprise is that in public enterprise the initiative rests with the publicly elected authority and in private enterprise it rests with the private individual; and wherever the initiative has rested with the latter, housing construction has failed. [An HON. MEMBER: "Not wholly!"] No, not wholly, because nothing wholly fails anywhere, not even the Tories. There might be partial success, but everyone admits that it has lagged far behind the needs of the case, and you are now faced with a requirement of 1,000,000 houses. The building industry wanted 15 years' security of tenure, and the housing programme of the 1924 Government offered security of tenure. The building industry took an enormous number of apprentices on the basis of that security, and the Conservative Government in 1925 destroyed it. Lads all over the country, who had signed their indentures in the building industry, were put on the scrapheap, and many local authorities which had been parties to the indentures had to stand by and see their signatures dishonoured. Therefore, if security of tenure is a necessary condition for the building industry, why did the Conservative Government, of which the Noble Lord opposite was a member, destroy it?
Lord E. PERCY: We never repealed the Act; we carried it out.
Mr. BEVAN: You adhered to the letter, but you destroyed it in the spirit. You had to adhere to the letter. The subsidy was reduced, and sanction was refused to the local authorities so that,
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in very many cases, they were unable to provide security of employment.
Lord E. PERCY: The subsidy was reduced according to the provisions inserted in the Act by Mr. Wheatley. The statement that sanctions were refused has no foundation.
Mr. BEVAN: Provision was made for reconsideration of the subsidy, but not for its reduction. The subsidy could have been reconsidered without such a provision, for this House can reconsider a subsidy whenever it likes without a provision of that kind being put in an Act. The Conservative House of Commons need not have taken advantage of that provision.
The position we take up is that State money ought not to be provided for the bolstering up of private enterprise in any form. The provision now before the Committee is not adequate to deal with housing. There are many parts of the country sorely needing houses, which will not get them, because only those areas industrially prosperous will be attractive enough for the building societies to construct houses in them. In great stretches of this country no houses will be constructed. We believe that the country is prepared, ready and anxious for the construction of houses on an unparallelled scale. You cannot open the newspapers without seeing letters from all sections of society urging that this is one direction in which a great national need can be met, at a time of crisis, by a bold and determined Government. Yet we are asked, on the first day on which Parliament reassembles—with 400,000 more people unemployed this year than a year ago and 180,000 more out of work than a month ago—to discuss a Financial Resolution which will not provide for the building of houses at all—which will simply allow initiative to pass out of the hands of the State into those of private enterprise. Young men, members of the Conservative party who have come from the industrial districts, ought to be ashamed that they allow a blase Prime Minister to prevent them from doing a job which has to be done. They ought to say that there are 200,000 building workers out of work; that houses are needed, and that slums should be cleared. They should say, "Let us show that Great Britain has some initiative."

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There are plans in the Ministry of Health for a housing board. Even the Liberal party last April, through the mouth of one of the Members for Cornwall, pressed for a national housing scheme. Here is a great National Government facing a very great crisis, anxious to solve the problem of unemployment, which gave £10,000 to charity and neglects the one opportunity to put hundreds of thousands of men in work. This is the contribution the National Government have to make towards the greatest problem of the twentieth century. The sooner the present Government pass out of existence the better. I hope this Debate is being noted by the country. I hope the country sees that all the Conservatives can do is to come along to the House of Commons and hide their social and political bankruptcy behind intrigues and manoeuvres of this description—hide their political corruption behind a Financial Resolution. I hope the country knows that the Government are handling its money to the moneylenders, and that the Government are supporting the factors. Not only is this House not facing up to its obligations, but is cynically handing out money to people who are the richest in Great Britain, for the rentier people are the richest. It is well known that the Chancellor of the Exchequer has been complaining that many are avoiding Income Tax, and here we are going to find public money for just those people. A case has not been made out for the Bill and, if the National Government are going to avoid being regarded as a mere makeshift, cynical, blasé and bankrupt Government, they will reject the Resolution and ask the Minister to bring forward a scheme more in the nature of what is needed to solve the housing question.
7.8 p.m.
Miss RATHBONE: The Minister in his speech to-day has made certain concessions for which we are grateful. There is the extension of the period of grace, and he has promised to accept the Amendment of the hon. Member for South-West Bethnal Green (Sir P. Harris) safeguarding standards. He has also promised a committee to consider reconditioning, and a super-utility society and schemes of that sort. But I do not think the concessions he has made have really couched the objections, which are the
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gravamen of our opposition to this Bill. These objections really centre round one point. Nothing he has said has really satisfied us that the Bill will secure a supply of houses for the poorer paid wage earners. The Minister himself has admitted that it will not do so, and that he hopes to meet that need through the slum clearance scheme which he intends to encourage. I think there are two fallacies which underlie the case put forward by the Minister. One is that the Wheatley subsidy is no longer necessary because, owing to the fall in building costs, there is only a difference of 3d. to 6d. between the full economic rent of houses to-day, as compared with the rents at which these houses have been let in the past with the aid of the Wheatley subsidy.
That involves, really, two assumptions which we cannot accept. One is that the Wheatley houses at the very best were meeting the need. They were not. As everyone knows who has had the allocation of houses built under local authorities, the rents that have had to be charged, even with the aid of the Wheatley subsidy, have been far too high for the majority of the poorer wage-earners. Thousands of the wage-earners who are in those houses are paying the rents at the cost of pinching the food bill and leaving the family not really enough on which to live at a decent standard of life. Many of us who have been watching the operation of the Wheatley Act have been looking forward to the day when the fall in prices would, with the aid of the Wheatley subsidy, enable houses to be let at a rent which would be reasonable. Now that that day has come and when every conceivable circumstance is in favour of municipal houses— when there is cheap money and abundant labour—the Minister chooses this time to stop the subsidy, If we had the Wheatley subsidy now, and for the next two years, then for the first time we might have made houses to let at reasonably low rents. Is the Minister quite satisfied with the efforts he is making on behalf of the slum dwellers when he remembers the warning of Mr. Wheatley when he was criticising the Greenwood Bill in this House? It seemed to some of us almost a case of Satan rebuking Sin when Mr. Wheatley warned the House of the danger of making of slum dwellers a peculiarly privileged class so that in future they

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alone would be able to command decent dwellings at low rents. The great hardship of the working of housing schemes in the past is that they have benefited only two classes. They have provided for well-to-do artisans and the lower middle class on the one hand, and the slum dwellers on the other.
The CHAIRMAN: The hon. Lady has dealt with almost every aspect of the housing question except the particular one before us.
Miss RATHBONE: I thought I was in order. I was trying to show that the Financial Resolution we were discussing, in making it impossible to continue the Wheatley subsidy was cutting out just those classes which require the most attention. The other point I want to make is that we have no guarantee that private enterprise, even if it wishes to do so, will produce houses cheap enough. I notice that the hon. Member for St. Albans (Sir F. Freemantle) spoke of the ideal as being a rent of 12s. in the towns, and 8s. in the country. He was speaking in terms of London. There are many provincial towns and cities such as my own Liverpool in which the unskilled labourer would be unable to pay 12s. because it would represent one-fourth of his entire income. The assumption is that private enterprise may be able to provide houses, not at 12s., but at 13s. or 15s.; but, even if that is possible, what is the reasonable cause for supposing that it will be done? When has private enterprise even tried to grapple with the poorest section of the demand? When did it do so even before the War? We have still, as everybody knows who has anything to do with the administration of housing in great cities, a considerable unsatisfied demand for the kind of house that private enterprise can produce—the 15s. to 25s. house. We wish all success to private enterprise in meeting that demand, but because it exists why should we suppose that private enterprise is going to cater for the poorest class of workers and do it at the cheapest price? Is it not mere common sense to suppose that as long as builders can let houses of a little better class than the lowest and charge for them considerably more than the economic rent, they will continue to build the better class of house and charge a great deal more than the economic rent? Cases have been
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brought forward to-day of the profiteering in subletting and of respectable working men in the big towns and especially in London paying 15s. and 20s. for one and two rooms. These cases prove what an immense field there is for profiteers. Why should we suppose that private enterprise is not going to take advantage of that field?
The right hon. Gentleman said that he was going to accept the Amendment of the hon. Member for South-West Bethnal Green to safeguard standards. If I remember aright, that Amendment aims at doing something more than safeguarding standards. It safeguards the density of the houses that are to be put up and the dimensions, but it also asks that they shall be let at certain limits of rent within the capacity of the working-class to pay. I would ask the right hon. Gentleman if he will be good enough to let us know whether his kindly intentions with regard to that Amendment include a provision that safeguards the letting at reasonable rents.
Sir H. YOUNG: I am afraid that the hon. Lady did not hear the whole of my sentence when I was referring to the Amendment in question. I said that it was my intention to accept in substance the Amendment of the hon. Member for South-West Bethnal Green in relation to size and density.
Miss RATHBONE: It is just as I feared. I noticed the Minister's omission to mention rents, but I hoped that it was only an oversight. There is, therefore, to be a guarantee that the private builders, on whom we are to depend for practically the major part of the supply of houses for everybody but slum dwellers in the next two years, will work under certain conditions as to density and dimensions, but there will be no conditions laid down as to rents, nor, presumably, as to whether they intend to sell or let. The houses are to be intended for letting to the working-classes, but is there any safeguard that that intention will not be changed between the period when the house is put up and the loan is acquired on favourable terms, and the finishing of the transaction? Suppose the private builder finds that there is a demand and that he can sell the houses at a considerable profit; or suppose he finds that he can let at 50 per cent, above the

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minimum economic rent. Will there be any safeguard at all? Since when have private builders been such philanthropists that they have considered the needs of human welfare and the market that needs to be filled rather than the market that is most profitable, and when have they ever sold the article which they have to sell at the minimum economic price?
I trust that local authorities may be persuaded to step in to fill the gap and build working-class houses not only for slum dwellers, but for other working-class people without the aid of a subsidy, and I think that they ought to do it. History is against us there, however. They had the chance of doing it for 50 years before the War under the long series of Acts that were put on the Statute Book. How many local authorities took advantage of them? Liverpool built a larger number of houses under those Acts than any other city, and they built only 3,000. Without the constant prodding of the Ministry I fear that the efforts of local authorities are likely to dwindle. They will build for the slum dweller under the inspiration of the Ministry, but that work is inevitably slow because of the elaborate transactions involved, the clearing up of insanitary property, and so on, and the Minister's estimate of 12,000 houses as the largest number likely to be built will prove only too true an estimate of what is practicable as long as building with the aid of subsidies is limited to the slum dwelling. I think that we shall have a better Bill or rather a less utterly bad Bill than we feared at first because of the concessions that the Minister has promised us to-day, but nevertheless the Bill has sounded the knell for many years to come of the kind of housing development which we hoped was going on under the aegis of the Acts that were put on the Statute Book by previous Administrations.
7.22 p.m.
Mr. ALBERY: There is one aspect of the relations between the building societies and the State about which I want to ask a question. The building societies have lent a lot of money in the past mainly at 6 per cent. A few of them have reduced the rate, but only a few. Among the many people who borrowed money from them are school teachers,
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civil servants and various others who have suffered cuts in wages. I wonder whether the Minister has considered whether the proposal contained in this Financial Resolution may in any way hinder a reduction coming about in the rate of interest that these borrowers have to pay. The arrangement of the Government creates a fresh outlet for the money of the building societies. If that fresh outlet were not created, the gradual paying off of loans at 6 per cent, would in time perhaps compel the building societies to make a reduction in the rate of interest which they have been charging in the past. On all grounds, financial and economic, such a reduction is reasonable and should come about in the near future. It is well known that anyone with good freehold property can borrow money at something like 4¾ and 4½ per cent. Has the Minister discussed this matter with representatives of the building societies? Will what he is doing in any way tend to keep up the rate which the societies are charging on the sums borrowed from them in the past, and has he had any kind of assurance from them that they have the intention of reducing the very high rate of interest which many of those who borrowed from them in the past are at present paying?
7.26 p.m.
Sir JONAH WALKER SMITH: I wish to call the intention of the Committee to the limitation of the provisions of this Financial Resolution and of the Housing Bill to houses to let. I suggest that the Minister of Health should consider the extension of his proposal to the sale to owner-occupiers of the class and description of house that he proposes to get built under his scheme. So far as I can judge, he seems to have proceeded upon principles something like this. He has assumed, and I think rightly, that houses of a value of £350 and upwards are of particular interest to potential owner-occupiers, and that the building societies and speculative builders will look after the interests of those potential owner-occupiers perfectly well under conditions as they exist to-day. He appears also to have assumed, and I think in this respect wrongly, that houses of the value of £250 to £300 are of no particular interest to the potential owner-occupier, or he must have assumed that there is no potential owner-occupiers for houses of that small

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class. I think that he is wrong there, and that it would be much better that his proposals should be extended to houses for sale. I can see no reason why a man who is compelled or who desires to live in a small house of the class and description under consideration should not have the same facilities, if he wishes to become an owner, as are recognised as being necessary if he merely wishes to become an occupier and renter. If the right hon. Gentleman will only add this second string to his bow so that his provisions applied equally to houses for renting and houses for sale, he will get a much greater number of houses built of this particular description. That is apparently his ardent desire, as it must be the ardent desire of most hon. Members.
I have not been able to appreciate why there should be a restriction in the encouragement of the owner from the Government side of the Committee. I could have understood it much better if it had come from a Socialist Government, because the Socialists are not in favour of private enterprise nor of private ownership. They are greatly in favour of the activities and the control of local authorities and public ownership. I could have understood if a limited proposal of this kind had come from the Opposition side, but I cannot understand it coming from the Government. I should have thought that occupying-ownership would have been encouraged, instead of being seriously discouraged, as appears to be the case under the present provisions. The only reason I have gathered which has prevented the application of these principles to house ownership is that the building societies are not in favour of it—that they will not permit what is regarded as the very favourable terms in regard to the period of repayment and the rate of interest granted in the case of houses to let to be applied in cases of occupying-ownership. I do not know whether that is the case or not, but if it be so I do not think it is a very good reason.
I do not underrate the desirability of getting the greatest co-operation with this modem Croesus, the great building societies of this country, but I do not regard their activities as particularly ultruistic. They have increased their liabilities and their assets enormously in the last 20 years, and they have also in-
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creased their profits to an enormous extent. In the last 20 years their assets have increased from about £60,000,000 to £420,000,000, and their liabilities have increased to about £400,000,000. Therefore, they have made a sum approaching £20,000,000 in profit—profit or anything you like to call it. So far as I am concerned, inasmuch as it is an increase of assets over liabilities it is a profit, by whatever name it may be called. Why they should not be agreeable to allow the same terms as are to be offered in the case of houses for letting in the case of houses for occupying-owners I do not know. If that is the stumbling block, and if the Minister would really like this scheme to apply to a rather wider sphere than he has proposed, I would suggest that he should confer again with the building societies, because, if the matter is put properly to them he should not have very great difficulty in securing their co-operation. Even if he failed to secure that co-operation, I should not like it to be assumed that we are tied absolutely and entirely to the building societies in order to carry out such a scheme. Great as is their wealth, the credit of this country is equally great, and if they will not play the game as it should be played the game should not be thrown up for that reason. Money could be found from some other source—perhaps not with equal convenience, but certainly it could be found. I should like to impress upon the Minister, whether the building societies will acquiesce or not, that if it be his desire, as I believe it to be, to get the greatest possible number of houses of this small type erected he should make these financial provisions apply equally to houses for owner-occupiers as to houses to let.
7.34 p.m.
Colonel CHAPMAN: I handed in an Amendment on the lines which have been put forward by the hon. Member for Barrow-in-Furness (Sir J. Walker Smith) with the object of securing that the Bill should be extended to include houses for occupying owners. I think it is the desire of hon. Members on both sides of the House that men should have the opportunity during their working lives of becoming the owners of their houses. If, when a man gets to the age, rather early now, when he tends to be put on the industrial scrap heap, and has to go into retirement on a small pension, he and his

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wife have 20s. a week from their old age pensions and a house to live in which has been paid for, with a garden in which to grow vegetables, their position will be very much better than it would be if having to pay 6s. or 7s. a week rent. I cannot understand why the Minister has not included houses for owner-occupiers. When he spoke in December he said the provision of houses for owner-occupiers had reached saturation point, but he was referring then to houses of between £500 and £750. The opportunity has now come for the working man to buy a house for between £300 and £350, and there is an urgent demand for houses of this type by many persons who want to own them. I know of one case in the city of Newcastle-on-Tyne of a building society which has inaugurated a scheme under which 90 houses have been built by small builders and everyone of them has been sold. I know a builder, with whom I have business connections, as I am myself secretary of a building society, who in the last 18 months has built more than 100 houses in West Hartlepool, all of this small type, and all for owner-occupiers.
The Minister said the building societies were about to advance along a new line, that it had not been their practice in the past to finance houses to be let. I regret to say that the Minister has been very much misinformed if he really believes that to be the case. Ever since building societies have been working it has been the custom to advance money both for houses for owner-occupiers and for houses to let. He said the owner-occupier house was the best risk, and yet he has suggested to the building societies that they should charge the existing rate of interest in the case of the best risk and that in the case of houses to let the rate should be 1 per cent. less. That will put a burden on the small owner-occupier, because he, paying a higher rate of interest, will be contributing towards landlords getting cheap money with which to build houses to let. I am rather afraid the Minister will be disappointed over the arrangement made with the building societies. The negotiations have been carried on by a small committee, no doubt appointed by the National Building Societies Association, but they are men who are connected with the very big societies. I take out the names of four
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of them, and find that the societies they represent have assets of no less than £125,000,000. But there are a thousand building societies in the country, and up to last week the National Building Societies Association had not communicated with the societies individually to feel their pulse and to see whether they will really support this scheme.
It may be possible in London at the moment to borrow large sums of money at a low rate of interest, but it is not possible in the country, and even if it were possible would it be wise financially to borrow at a low rate of Interest, 3 or 3½ per cent., and to lend over a long period of 30 years? I think it will be found that the board of very few building societies will assent to such a proposal. Moreover, building societies are co-operative societies, working for the benefit of their members. Is it just that existing members, by whose contributions the funds have been built up, should now be asked to forego a reduction of interest, forego the opportunity of sharing in cheap money, in order that the societies may lend at a lower rate of interest upon houses to let? Very soon, I fear, the members of building societies will turn out their boards of directors who carry on along those lines. Moreover, I feel sure there is a very great market for houses for owner-occupiers. If the Minister will only widen the scope of the Bill to include owner-occupier houses he will get more houses built, and, after all, that is the object of the Bill—more houses and more employment.
I am afraid the Minister is doomed to disappointment in the matter of the assistance he is to get from the building societies. I would rather the Government borrowed for 30 years at 3 or 3½ per cent, and lent the money out on the security of the houses, if need be through building societies or through the municipalities. In that way alone, in my view, are we going to give that rapid impetus to building which all desire. The Parliamentary Secretary said in December that only 10 per cent, of those in the building trades were actually engaged in the building of houses. I notice that of the 274,000 men in the building trades who were out of work in December, 60,000 were carpenters and bricklayers. Could they not be engaged in building small houses, if the demand were there?

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Every operative in the building trades is capable of sharing in this work if the opportunity is presented to him. I ask the Minister to include owner-occupiers. He envisages a rent of 12s. a week. If a man can borrow £350 at 4 per cent, for 30 years his redemption payments, his rates and his repairs will amount to only 11s. 4d. a week, and at the end of the period he will own his house. What the Minister proposes is that he shall pay 12s. a week during those 30 years, and at the end have no house. I sincerely ask the Minister to make such an Amendment in his Bill as will allow owner-occupiers of houses to be included.
7.43 p.m.
Mr. J. JONES: This discussion of the housing problem takes us back to the days when one of our leaders used to say that as long as the people were poor they would be poorly housed. To-day we are talking of small houses for poor people and big houses for rich people. The Government are devising methods under which they are not dealing with the housing problem at all but are proposing to scrap all existing machinery in order to establish a principle in which they believe—that the State should not be responsible, either nationally or locally, for housing the people, but that this must be done by private enterprise. I do not care what organisation it is which is to find the money, whether the banker, the co-operative society or the building society; we all know they have to run their business for profit, and that if there is no profit there will be no houses, either for the owner-occupier or the weekly tenant. Consequently, some of us on these benches are not enamoured of these financial proposals, because they come down to this—those who can afford to pay can have and those who cannot afford must go without. An hon. Member who spoke not very long ago said that he wanted to see a great co-operative movement in the country, a kind of society in which people were working together for a common end. If he will try to put his mind forward a bit he would understand that that is what we on these benches stand for. We want to make the country into a great cooperative society.
If you come down to my constituency, I will show you men who go down to the docks every morning hoping for the
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chance of half-a-day's work. That is all that they will get, if they are lucky. They come away at dinner-time, knowing that they are beat for that day, and that they may not get another chance for the rest of the week. Such a man has to go to a room, and not to a house, a room for which he is charged anything from 5s. to 6s. a week. Very often the landlord is not a person who comes from outside but a man who lives on the premises. The landlord may be a dock labourer himself who is looking for some safeguard and trying to guarantee the occupation of that house for himself by charging his tenant so much a room. We have landlordism even among the workers them selves. The situation is that when you are talking about housing you have to ask yourself how you are going to deal with the problem by the methods that you propose. There is no attempt to deal with it, so far as cases such as I have quoted from the East End of London are concerned. The same is true of cases that might be quoted from Liverpool, Glasgow, and other seaport towns. The people in those towns form no inconsiderable part of the population. There is nothing in the Bill to hold out any hope of dealing with that part of the problem.
The borrowing of money does not trouble me much. I am a member of a loan club, and I know that there is something handy when I want a quid. I have to pay it back, with interest, of course, or else the promoters of the club would not trust me next time that I wanted to borrow. Hon. Members must realise that the present proposals are only playing with the problem of housing. If private enterprise could have solved the problem, the problem would have been solved donkeys' years ago. I have read the report of the Royal Commission on Housing which was published 30 years ago, and almost everything I have heard in this Debate to-day is a recapitulation of the evidence that was then brought forward by social workers, leaders of religious organisations and politicians of all sorts, who came along and pointed out the terrible conditions which constituted the housing problem. The same conditions exist to-day. The possibilities of improvement have been exhausted, and now the National Government has come into existence, a Government composed of all the brains and all the people

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who know things. They have come along with a new proposition. They say, "Let us scrap the old machinery and begin with a new proposition," which is that as private enterprise has failed up to now, we are to give it a new lease of life.
We shall be discussing this problem 12 months from now in this House, when this Government have nearly reached the end of their tether, and we shall be hearing the same things that we have heard to-night. There is no way out of this problem except by doing what we did from 1914 to 1919 onwards, treating housing as a national responsibility which must be met. If there was a question of a foreign invader, or of a foreign Power trying to interfere with our national interest, we should all get together for the purpose of preventing it. Here is an invader which means disease and death. I have just been reading the report presented by those in authority over the Army in which they state that 50 per cent, of the candidates who offered themselves for military service in the last 12 months have been rejected as physically unfit. More and more of them are going down, and we say that that is due to bad housing conditions, to the growth of slums and to the crowding together of people who cannot afford to pay heavy rents. We have overcrowding, malnutrition and all the effects of such bad conditions of living. Now the Government say: "That is no job of ours. We will get out of our responsibility." I am very sorry that some hon. Members who used to belong to our party are making themselves partly responsible for a policy of this character. It is our business. For every man, woman and child who may be deteriorating physically, suffering mentally, or going through the mill on the present occasion, all of us are responsible in our own way.
It is not right that we should be sitting here discussing how private enterprise will be able to make money. Building societies have made much money; I am told they have £560,000,000 in accumulated capital, of which £460,000,000 belongs to five of them. That money has been made by people who have been thrifty in days gone by. Now the societies are asked to lend money out again on good security. That is the national security, because the Govern-
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ment are behind it and the societies are to be guaranteed to the amount of 10 per cent, of the amount of the money that they have. Surely it is right to say that if the nation can hand out responsibility to private companies it might do something on its own in the direction of making the housing of the people a national responsibility and not one for private enterprise, as is proposed in this Resolution.
When the Bill to which this Resolution relates is in full operation, there will still be no solution of the housing problem in my constituency, and we shall get no advantage out of it. On the contrary, we shall be handicapped in our efforts to meet the situation in our district. We have done our best in difficult circumstances. On one side we arc bounded by the river, and on the other sides we are bounded by other authorities. Inside our own area we cannot do anything more to relieve the housing problem. We are circumscribed in every direction, and other authorities are in the same position. The present proposals of the Government are merely a subterfuge and do not help us. They are an attempt on the part of the Government to get out of their responsibility, and to say, "Thank God, we are not as other people are," and to leave other people to carry the baby.
7.53 p.m.
Mr. PRICE: I rise to oppose this Resolution and the principle for which it stands. One would think that the housing problem was at an end, but it would be interesting to hear what the Prime Minister thinks about these proposals. I have heard him on many occasions speak on the housing conditions of this country, and have heard him condemn the conditions as he found them just after the War when private enterprise had been responsible for them. Here is a Financial Resolution that proposes to change the policy on housing that has been accepted by the State since 1915 or 1916. The policy was inaugurated owing to the fact which became evident to all local authorities and to all men and women interested in the future well-being of our citizens, that somebody had to take responsibility for housing the people in reasonable and humane conditions. To-day, medical officers of health in nearly every part of

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Great Britain are still contending that there is a shortage of houses, and particularly of the type of house that is suitable to the man with low wages. The present proposals make no provision in regard to that type of house. They take away the authority's responsibility, but do not say where the responsibility is to be put. It is evident that it is not for the building societies to go round to see how many houses are wanted for working-class people. Their business is and has been ever since they were inaugurated, rather different.
An hon. Member said that we should find some difficulty when the building societies were called into this business, and that there would be a lack of progress in building the houses that are needed. What is the general position to-day? In nearly every town, the people who are short of houses are the people who have low wages, and not the men who are anticipating buying their houses. If is of no use for any hon. Member to suggest that here is a splendid opportunity for working-men to become the owners of houses, because there are very few working-men who have any chance of becoming the owners of their own houses. They have difficulty enough in paying low rents. By the present proposal you are taking housing away from the local authorities, who are the foremost who ought to say what houses are necessary, and who are entitled to fix the rent. The National Government are reversing the policy that has been in operation for a good number of years. For the first time we can say that the working people have had houses built to a decent standard, a standard far better than anything they knew before. This is particularly true in mining districts. What was the type of house that we usually had to live in as miners 20 years ago? They were long rows of houses for which the landlords could charge us what they liked, and we lived in insanitary conditions. Since the municipalities have been empowered to build houses, some decent houses have been built.
The National Government, quite in keeping with their policy ever since they took office, say to the local authorities and to the medical authorities: "Henceforth you shall have no say at all in the building of houses. It shall depend upon private enterprise." We know that the
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only condition upon which the building societies will take any part in the scheme is that they shall draw a fair amount of interest on the money that they will lend for their houses. Who is to have a voice in the fixing of the rents? Will that be loft to private enterprise? We have an opportunity, now that money is cheap and any number of men are unemployed in the building trade, of allowing the local authorities to compare the rents that they are already charging with houses that can be built cheaper to-day, and so to bring about a general reduction in the cost of building municipal houses in nearly every town in the country.
The present proposals hand over, lock, stock and barrel, to private enterprise the future well-being, so far as housing is concerned, of the population of the country. If there was a time when the Government ought to have continued its policy of house building, it is now, because every possibility is in their hands. The local authorities have any amount of difficulty. They have the power to get loans, but compulsory powers have to be sought. Now the National Government say: "Henceforth housing shall be dependent purely upon private enterprise." There is nothing in this Bill, apart from slum clearance. We have had it admitted during recent Debates upon 'agriculture that so far as rural housing is concerned it is the agricultural worker who suffers. I agree with what was said by an hon. Lady earlier in the Debate, when she suggested that the National Government are checking the betterment of housing for many years to come. I hope it will not be long before we have an opportunity of reversing the policy and of handing back responsibility for housing to the proper authority, namely, the local authority which is responsible for the good health of the population. On these grounds, we on this side of the House feel very keenly about this matter, and shall oppose the Resolution.
8.0 p.m.
Mr. ARTHUR GREENWOOD: We are now discussing what is cynically described as a Financial Resolution. I have on many occasions supported and opposed Financial Resolutions, but in almost every case the Financial Resolution has been one which provided certain monetary assistance for some public purpose. In

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that sense this Resolution is misnamed. This Financial Resolution, which, according to the Rules of the House, must be moved and carried, provides nothing; indeed, it takes away from local authorities certain financial assistance which they have enjoyed in the past. I listened with great interest, as I always do, to the speech of the Minister of Health—full of archaic phrases, full of economics which have been dead for three-quarters of a century. I watched his face, wreathed in smiles as it was, when he referred to individualism or private enterprise, and I saw on his ever-changing countenance frowns when he talked about the activities of local authorities; but to-day he is, at least, a changed man.
I remember when the right hon. Gentleman moved the Second Reading of his Bill, and I remember the speech that he made to-day. It was conciliatory; there were a few concessions. I suppose he realises now, after the two months that have intervened since he introduced his Bill, that he is, perhaps, the most unpopular Member of this most unpopular Government, and he is now prepared to make concessions which no doubt he always meant to make, but which he had not the courage to put in his Bill, because they might have offended some of the people, in the House and out of it, who are supporting the Bill. He talks about his Bill as a treaty—he used that term this afternoon—between the Government, the local authorities and the building societies. Eight years ago I was concerned with a treaty of a far better kind than this. It was a treaty between the Government, the local authorities, and every body concerned with the building industry. At that time, local authorities were in a normal state of mind; they were not panic-stricken by the Government, as they have been during the past 18 months. This treaty is not a treaty with the people who are concerned with building houses; it is a treaty between people who are concerned with lending the money to build houses—which is entirely different — panic-stricken local authorities who have been dog-beaten and bludgeoned by the Minister of Health for 18 months, and the Government, which is in no frame of mind to do anything reasonable or decent in this matter of housing.
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The Minister, again with his face wreathed in smiles, referred to the return of competition, to the push and go of private enterprise. The problem that we have to face to-day is due to the push and go of private enterprise. The problem that we have to face to-day is that of large numbers of local authorities having in their midst a large proportion of houses built 60, 70, 80 or 100 years ago, in the dark ages, in an age of ignorance, when there were no restrictions on building, and when private enterprise had the time of its life. Our problem to-day is not the post-war problem; it is an accentuation of it. Our problem to-day is a problem created, first, by the development of our industrial system, and, secondly, by the fact that private enterprise, full of push and go, has left this country with, not scores, but hundreds of thousands of houses built 70 or 80 to the acre; and the Minister, with a smile and a smirk on his face, says we are getting back to the push and go of private enterprise, of the people who have led us into this difficulty.
The right hon. Gentleman spoke about clearing out of the way a block of housing subsidies, and he guarantees 8s. per house per year as a maximum. That, in principle, is a subsidy, just as much as £7 10s. a year is a subsidy. The right hon. Gentleman is just salving his conscience. He is trying to get rid of subsidies on the one hand, and playing up to the vested interests in the country, while on the other hand, knowing what the state of public opinion is, he is trying to do something which gives an impression of Government activity. If the guarantee were 8d. a year, it would be a subsidy just as much as £x per year per house for 40 years is a subsidy. He has admitted that we are to keep the subsidy that I introduced in 1930. Even the right hon. Gentleman, much as he might have liked to do away with it, because he hates subsidies, keeps that. This, if I may say so, is not honest politics. Believing that private interests, on the one hand, desire, as right hon. and hon. Gentlemen opposite are entitled to do, to restore public enterprise, and coming out and saying, "We are getting rid of this horrible thing," they keep it undisturbed for slum clearance, and, instead of a subsidy of pounds per year, they keep a subsidy of shillings. The principle is still there.

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Then the right hon. Gentleman used the hoary argument—I have replied to it so often that I cannot do so again—that subsidies increase prices. That is something which, in his curious archaic phraseology, he calls natural history. I cannot enter into that question again. I am sorry that the right hon. Gentleman has only heard me deal with it once, but his predecessors have heard me deal with it many times. He—and, when I speak of the Minister, he is not alone among his colleagues—is trying to play two games. He will keep subsidies or guarantees when it pays him, but he is prepared on general principles to denounce any such thing. I was interested to hear a Private Notice Question that was put this afternoon. I referred, when I followed the Minister, to the question of the maximum clearance of 12,000 houses a year, and the Private Notice Question to-day was very significant, and very opportune, as it happened, because now we learn that that is not a maximum, but is only an estimate. That is in the nature of a concession to the growing feeling on the part of the public against the right hon. Gentleman's general policy.
I was also interested by the right hon. Gentleman's phrase about "insurance during the transition". He said that the responsibilities of local authorities still remain, and that is true. The powers and duties conferred by Parliament on local authorities as regards housing remain in their entirety. When those powers and duties were first given, times were different. The modern local authority knows that those powers and duties, ever since the War, whatever Government has been in office, have been implemented and assisted by the State financially. Now, if anybody cares to read the reports of medical officers of health, they will know that in some towns the housing situation is actually worse than it was at the end of the War; in other towns it may have been ameliorated. But the Minister keeps those statutory powers and duties, and yet deprives hard-driven local authorities—as hard-driven as the Government and the National Exchequer—of the financial assistance, except for one narrowly restricted purpose, which in all the postwar years they have been led to expect they would get, which in 1924 it was assumed they would get for 15 years, and
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which in 1929 I assumed they would certainly get for live years.
I was very much interested to hear the Minister speak about housing standards. I remember that on the Second Reading of the Bill he never breathed the words "housing standards"; it was only when Members on this side of the House and supporters of the Government raised it that the matter came before the House at all. Now we learn that this question of housing standards is to be safeguarded. It is so important that, if the right hon. Gentleman had really thought about his Bill before he introduced it, he would have realised that the question of housing standards—the question of the size of the houses, of their real quality, of the number of houses to the acre, of the rents of the houses—ought to have been included in his Bill if he intended, as he does, to hand back the whole question of the normal treatment of housing to private enterprise. Now we are told that he is prepared to make certain concessions, owing, no doubt, to the very healthy pressure which has come upon him during the last two months, since the House rose. It is on record that private enterprise wished to get back—it has been said, not once, but many times—to the building of houses at 30 to the acre. The Minister knew that before he introduced the Bill. If he did not, I can give him many authoritative newspaper cuttings from the people concerned. Why did he not do it then? The truth is that he is now very reluctantly going to give way. I shall be interested to see what Amendments he accepts and what proposals he makes as regards the standard of housing.
There is another question that the right hon. Gentleman admitted that he was not dealing with and that is the question of the rents of the houses. You have today two different systems operating as regards the rents of working class houses. You have the Rent Restrictions Acts so far as they go, and, so far as this enormous number of houses built by local authorities is concerned, you have a principle which settles their rents. I do not know, but I should not be surprised if the right hon. Gentleman had driven the building societies to make this concession with regard to the size and standard of housing provided they were able to extract their pound of flesh in the matter of rent.

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Then the Minister spoke about his new committee. This seemed to me a most extraordinary occasion on which to announce the appointment of a new committee. There is nothing in this Resolution about a new committee. It is rather a long time after 15 months of office to think about a new committee. It is true that he apologised about it. I can remember a predecessor of the hon. Gentleman who is to follow me who in my time of office was constantly taunting the Labour Government with the number of committees that they appointed. I am not surprised that the Minister had to make a certain apology for him. If the right hon. Gentleman meant to bring in this Bill—it was not in the King's Speech-it was his business to have thought about all these things beforehand, but he comes, nearly two months after the Bill has been introduced as the result of pressure from outside, to say, "I am going to appoint a committee," with a National Government and an overwhelming majority. We only appointed 79. I do not know how many the present Government have appointed. They are so powerful that they need not have done it. When the Minister of Health, who ought to be concerned about this question of housing and slums, comes to the House weeks after he has introduced his Bill and says "I am now going to have a committee," that is not government. That is the negation of government.
He adumbrates the kind of things they might discuss. Compulsory purchase of houses ! In 1926, when the Rural Housing Bill was introduced, I believe I moved its rejection, and I drew the attention of the House to a committee of which the right hon. Gentleman's predecessor and mine, the present Chancellor of the Exchequer, was the chairman on unhealthy areas where he himself had suggested the compulsory purchase of houses. I said then to the then Minister: "Why should we not deal with it in that way?" I do not remember whether the present Minister was then a Member of the House and whether he supported the Bill, but I know that all his colleagues who were in the House on that August Bank holiday went into the Lobby in support of the Bill and against this idea that we should have compulsory purchase.
Then the right hon. Gentleman goes on to a further suggestion of compulsory
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purchase by local authorities. It looks as if he had almost settled what the report of the Committee is going to be. He went further. He talked about the reconditioning of slums. We had on the Second Reading a very moving speech from the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain). It moved the House, as anyone with his name speaking on such a subject would move the House. At the end of it it amounted to this, that if you take these acres of houses in Birmingham which have been condemned for 40 and 50 years, the right thing is a coat of whitewash and 2d. on the rent. That will not do. If the National Government are reverting to this policy of reconditioning of houses which everyone knows cannot be reconditioned, they are not doing anything to solve the slum problem. Indeed, they are intensifying it. I meant, if I had time, to quote from the hon. Gentleman's book on this question. There is no Member in the House who does not know that, broadly speaking—I except the principle of the improvement area, because that is in the Act of 1930, and I stand by that—the slum problem as we know it now is not capable of any other solution than complete demolition. Now we are told as a sop that we are to have a committee to consider this, a committee to go into questions which the public conscience has satisfied itself about.
This is farcically called a financial Resolution. It withdraws money from local authorities which might still be carrying on and which would under public pressure carry on their great work. We are exchanging that for a gamble. The right hon. Gentleman may win a permanent victory, but it is a gamble as to whether private enterprise can make profit enough out of this business to carry it on. Take those areas which hon. Members opposite represent more than we do. Rural housing is a real problem. The right hon. Gentleman is withdrawing from these authorities, with very restricted financial powers, what little assistance has been given them in the past. It was the Labour Government in 1924 that first differentiated between urban and rural authorities. I remember the requests that we had from our opponents to extend the definition of rural parish more and more. We drew a very generous line. There is no agricul-

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tural parish to-day that is outside that scheme. We were not opposed on that principle; indeed, we were urged to go further, even with substantial subsidies-It is no use looking at the number of houses built in the areas of rural district councils because so many of them are semi-industrialised. Even with that assistance, if we look to the agricultural parishes, where you are dealing with a rural population, up to the end of last year since 1924 only just over 26,000 houses had been built. These are not houses for the week-ender. They are not bungalows for the man who wants to go down from Saturday to Monday. They are not houses for retired policemen. They are houses for people who are engaged in our most fundamental industry or who are associated with it—26,000.
My predecessor introduced his Bill for the reconditioning of rural houses. I did more for that Bill than my predecessor, or than has my successor, judged by the figures. I opposed it on its Second Reading, but I extended it when I was in office for reasons which I then explained. I do not believe that it can solve the housing problem, but I am prepared to do anything I can in the rural areas to assist them. In all those years—75 per cent, of it was done while I was in office —we have not reconditioned more than 10,000 rural cottages. I march on to 1931 when we hoped for a scheme of 40,000 rural cottages—not 2,000. The problem is still urgent and, with these poverty-stricken local authorities, we are faced to-day with a great problem. I received a letter only to-day from someone who is very much concerned with the housing problem, and it shows how this problem is related to the general policy of the Government. I put the case for rural housing upon broad, social grounds. It might be put on economic grounds. I am told that now that market gardeners and fruit growers are urged to increase the production of their various fruits and vegetables, such of them as are subject to a tariff, they cannot do so. Why? The housing accommodation is not available for them. Are the building societies going to rush to the countryside and provide cottages at 3s. 6d. per week for these people? Of course they are not. The Government, with their great Conservative backing and a party behind them which has always regarded agriculture as the
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apple of its eye, are letting down the countryside in the matter of housing.
I come to the question of the towns. I could give particulars—I wish hon. Members would read them if I were to circulate them—of attested housing conditions in the towns of this country. You cannot go to a big town to-day—Birmingham, Sheffield, Leeds or Manchester—and say, if you are honest, "We will leave this matter to the Almighty and the building societies." The right hon. Gentleman the Member for West Birmingham spoke of conditions there. Those conditions are not to be described as slum conditions. Though things which I have said may have lent colour to that view, I object to the view that the slum question is not part of the general housing question. It is part of it. It has its special difficulties, I admit, but if the Government think that they can deal with the problem by concentrating upon the slums at the rate of 12,000 a year, and what may come next year after the Private Notice Question, it will not help, because if there is a question which cannot be treated as an isolated question, the housing problem is one. On the maximum programme to be elaborated next year as a result of a Private Notice Question, I reckon, from calculations which I have made, that if you take the houses in the city of Leeds— my native city—which are 80 years old and more, standing 70 or 80 to the acre, at this rate of progress, Leeds will have those houses with them 200 years from now. In the city of Manchester, taking houses condemned, many of them 30 and 40 years ago, at this rate of progress, even if we get a little higher next year, it will be 200 years.
The right hon. Gentleman justifies his Bill and his (Financial Resolution by calling this the crusade against slums. There is nothing in the Resolution, and nothing in the Bill, which touches in any kind of way the law as I put it on the Statute Book in 1930. He has done nothing for this question. There is nothing. What is added is the discouragement of the local authorities who have built up in the last 13 or 14 years a machinery of their own, and have trained a skilled staff who are engaged in negotiations, and always have been since the War, with building contractors. They are the people who know their business. That is a social machine which it will be a crime to destroy. If the local authorities are to

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be left with all their powers and duties, as we are told, but with no financial assistance, except slum clearance on a scale of 12,000 a year, if not more next year, no town can afford to keep that machine. We are selling a priceless social asset and gambling in the hope that private enterprise will deal with this crisis.
I believe that the Bill is bad. It is anti-social. I believe that at this time, while hon. Gentlemen opposite are entitled to do all that they can to rehabilitate private enterprise—I do not complain about that, because it is their philosophy, it is their point of view and they have a right to do it—they are now attacking a public service of the most fundamental importance and throwing it back into the hands of people who for a century failed to deal with it. They are not acting as a National Government ought to do. That is the worst thing I can say about the Bill. I had hoped, because I am not an old politician, that the Government, with all their zeal for economy, would at least have implemented the Housing Acts of 1924 and 1930. The five years' programme under the 1930 Act is destroyed. It is more than unfortunate; it is disastrous, for this reason. It does not matter what increase you may get in exports next month and what temporary lightening of the clouds there may be in the next six months, this country and the world are going through a dreadfully hard time. The one thing which our people have got is their native quality. I am not interested in the reserves of public companies at the moment, or the lives of our captains of industry. I am concerned with what pulls a nation through its difficulties, and that is the common man or woman. The hon. and gallant Member for St. Albans (Sir F. Fremantle) has written a book about it. I have perpetrated books myself, but not a book on housing. The hon. and gallant Member knows, and hon. Members on the other side of the House know as well as we, that to-day our people are rotting in the material environment to which they are condemned. A National Government, did it merit the title, would have thought about the quality of those people on whom they relied during the war and on whom they will have to rely again in the next 10 years. If they had
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thought of that, they would not have destroyed a fabric which has been built up and which was seriously tackling the housing question.
I am more sorry than I can say about this Bill. The Minister of Health can sit back with folded arms and know that he will get his Financial Resolution tonight, and that he will get his Bill, but there will rest on him an ignominious name. There will rest on him and this Government the responsibility for reversing national policy on one of the most fundamental of our social problems. Hon. Members may cast their votes in favour of the Resolution, but the time will come when the public will realise the mistake that is being made. When the Bill is on the Statute Book hon. Members will realise the mistake the Government are making. I cannot blame them if they do not fight, but the course that we are taking is a course taken, as time will prove, in the highest public interests.
8.40 p.m.
The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): The right hon. Member for Wakefield (Mr. Greenwood) has taken an unnecessarily gloomy view of the situation. I was hoping that after the Recess he would come back in a more cheerful frame of mind, but I do not think he has yet understood the Government's policy. Last December I was convinced that the Government policy was right and now, as the result of a short tour in the North of England, in some of our large industrial centres, I am full of a burning conviction that our policy is right. The right hon. Gentleman referred to Leeds, which he said is his native city. One can but regret that his influence has not been used more towards rectifying some of the housing conditions to be seen there. The choice of Leeds as an example of how our policy is going to fail is most unfortunate. I had an opportunity only a fortnight ago of conferring with those interested in housing in Leeds, people in an official position in the city council, and I stake my reputation on this statement—that within two or three years Leeds will have made a greater contribution to the housing problem there than in any 50 previous years. I should be out of order in dealing further with that argument, because slum clearance is chosen for a whole evening's Debate later, and I shall

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be pleased to join issue with anyone on that occasion. The choice of Leeds is most unfortunate, because if there is one city which is benefiting by the Government policy it is the City of Leeds, and two years will show it.
The right hon. Gentleman also referred in scathing terms to what he called the push and go of private enterprise. Why? Private enterprise built 130,000 houses last year without subsidy and against subsidised building by local authorities. Why should we imagine that having done that last year private enterprise should be slower in coming forward this year to meet the demand in the far wider field of the "C" class house? Those 130,000 houses were of a rateable value of not more than £35 in London and £26 elsewhere, so that private enterprise last year was certainly getting down to the problem. Why then should it not get down to it this year? The right hon. Gentleman says that medical officers have assured him that the position is worse now than at the end of the War. If that be true, there is need for a change of policy such as the Government are introducing. I cannot, however, develop that argument. Conditions are growing worse because of the policy that has been hitherto followed, and with a change of that policy the whole of the housing outlook will improve.
The right hon. Gentleman also referred to our committee, and wondered why my right hon. Friend had not set it up before. The right hon. Gentleman was a member of a Government who appointed at least 75 Royal Commissions and committees. [HON. MEMBERS: "Seventy-nine."] Under those circumstances, it is a little ungracious to deny, my right hon. Friend the Minister his one ewe lamb. With regard to the question of reconditioning I agree with the right hon. Member for Wakefield. If reconditioning means that you take a pot of paint and put on a bit of whitewash, then reconditioning is not what the Government mean. The Noble Lord the right hon. Member for Hastings (Lord E. Percy) showed quite plainly that there is a vast number of houses in areas already surveyed which should come down straight away—which should be demolished, blown sky-high. The Noble Lord had also in mind property which may depreciate in the course of years and become slum property. The committee that we have in mind will be
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of great assistance in enabling an extension of reconditioning to go on. But my right hon. Friend is so anxious that slum clearance, on which the Government have set their heart, should not be retarded by the suggestions of legislation with regard to reconditioning that he asks me again to say that the promise of the committee and the possibility of future legislation must not be taken as an excuse by any local authority for deferring the problem of tackling the clearance of its slum areas. In certain cities in the north of England, which I inspected with some care, I saw areas including 15,000 houses, and 99 per cent, of those houses, at a rough guess, ought to come down at once.
The hon. Member for East Woolwich (Mr. Hicks) was a little suspicious whether the building societies would really carry out their part of the arrangement. The hon. Member for Houghton-le-Spring (Colonel Chapman) was also a little apprehensive. The building societies came to my right hon. Friend and offered to help. Why are we to assume that they will not do what they say they will? They made suggestions which were not only an advantage to them but also to us, and the Chairman of the Association of Building Societies gave us the most explicit pledge that they would use their influence to see that the houses which were provided were of the kind that my right hon. Friend had in mind. Why should we at this early stage, when the building societies have gone such a long way to meet our point of view, start by an accusation of bad faith? I rejoice that my right hon. Friend has been able to enlist the sympathies and active co-operation of the building societies on mutually advantageous terms.
Colonel CHAPMAN: Will the Parliamentary Secretary say why building societies in the North of England, which are now advancing money at 5 per cent. should advance under this scheme money at 4 per cent., whereas big building societies, like the Halifax and the London, are able to get 4½ per cent.
Mr. SHAKESPEARE: My right hon. Friend made a treaty with the building societies with which they were satisfied. They gave us an assurance, as far as they spoke for all their representatives,

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that they were satisfied, and that being so I do not see why anyone else should be discontented.
Sir P. HARRIS: But why should there be these variations in rates?
Mr. SHAKESPEARE: Obviously, conditions in the provinces and in London are different. The hon. Member knows that the problem in London is different from the problem in the provinces, and this applies also to the existing mortgage rates of building societies. The hon. Member for East Woolwich asked who is going to own the houses. My right hon. Friend answered that question on the Second Reading; investors, great and small, public utility companies—everywhere there is a great unsatisfied demand for investment in cottage property ever since conversion has meant a yield of 3½ per cent. The hon. Member also referred to the building of houses by the Newcastle Corporation and mentioned a sum of £386. I have refreshed my memory by looking at the figures, and I find that the last scheme submitted for approval from Newcastle in respect of a three-bedroomed house was at a contract price of £296. If you take the average cost of land at about £60 you get the cost of an A3 house at about £356. Why it should be £386 at Newcastle I do not know. I suggest that the price is £356.
Mr. HICKS: I never mentioned the name of the municipal authority. The hon. Gentleman has brought it out for the first time. I stated that one of the deputation to the Minister stated that they had given instructions to their officers to try and prepare plans for a 702 feet superficial area, the density to increase from 12 to 20 per acre; and I said that it was a very objectionable kind of instruction. I did not mention anything about price, and I assumed that the matter has not yet been before the council to see whether they accept it or not.
Mr. SHAKESPEARE: The last approval given by my right hon. Friend —there is nothing secret whatever about this—in October, was for houses at a cost of £296. I suggest that this is getting down to the problem. In my tour of the North of England I found that many cities were getting down to a £280
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house plus £60 for the land for a A3 house, making £340 in all. You are getting down to a rent which your C tenants can afford. The hon. Gentleman again raised some fears about the deterioration of housing standards. There is no one more keen on maintaining our housing standards than the hon. Member for South-West Bethnal Green (Sir P. Harris). He is the watchdog on this matter, and if he is satisfied then I am satisfied. The hon. Member for the Scotland Division (Mr. Logan) was rather concerned because as he said the Government were handing over their responsibility for housing to the building societies. We are not. The responsibility remains where it always has remained, with the local authorities, subject to the help and advice of the Minister of Health. There is no change of policy.
Mr. LOGAN: Will the body which is not responsible for housing be the responsible body for fixing rentals?
Mr. SHAKESPEARE: I will deal with that point in a moment. The hon. Member for North Finsbury (Sir G. Gillett) made a very practical and useful speech, but I must point out that the committee envisaged by my right hon. Friend is not to survey the whole field of housing but to advise the Minister what extensions of policies are necessary. A survey of local conditions is already the duty of the local authority under the various housing Acts, particularly the 1930 Act. The hon. Member for St. Albans (Sir F. Fremantle) spoke with great authority, as he always does, on the work of public utility societies, and no Minister of Health could make a speech at this Box without recognising the great and increasing work they are doing. The hon. and gallant Member suggested that there might be a guarantee for these societies. A guarantee is necessary for a lender but not for a borrower, and public utility societies are in the position of borrowers of money. There is already nothing to prevent any public utility society from getting cheap money at 4 per cent, guaranteed by building societies.
The hon. Member also developed a point with which I was very much struck during my tour of the slums in the north of England, that is the very high compara-

125
tive rent paid by such a large proportion of slum dwellers. I was amazed to find that 50 per cent, were paying from 9s. up to £1 per week, and 30 per cent, from 15s. upwards. When building societies are providing houses at a rental of 11s. and 12s. and 13s. per week, to say that they are not helping to provide accommodation for a big class of slum tenant is to say what is not true. Anyone who makes that remark does not understand the housing problem, and still less the slum problem. I have not much faith in people who try to crab everything that is being done. I say that the provision by the building societies of this money at 4 per cent., and the guarantee in which we join, will mean that even as regards slum dwellers a large number of new houses will be provided.
Mr. LOGAN: Does the Parliamentary Secretary suggest honestly that no one in the House has any knowledge of slum clearance?
HON. MEMBERS: He did not say that.
Mr. LOGAN: He made the statement that anyone who said that the provision of houses at 12s. or 13s. a week was not solving the problem of slum clearance knew nothing about housing.
Mr. SHAKESPEARE: The bon. Gentleman misunderstood me. The hon. Member for Ebbw Vale (Mr. A. Bevan) criticised our proposal because he suggested that it was a destruction of municipal housing efforts. As my right hon. Friend the Minister has pointed out repeatedly, it is a concentration of municipal housing efforts. The hon. Member also doubted whether the Government proposals would lead to the provision of houses at a rent within the means of the C class tenant. If the Opposition will not believe me, whom will they believe? If I put into the witness box a witness hostile to the Government will they believe him?
HON. MEMBERS: Who is he?
Mr. SHAKESPEARE: Mr. J. M. Keynes, who cannot be accused of being a friendly critic of the Government on the question of housing. This is what Mr. Keynes says in the "New Statesman" of 4th February:
"Building costs have fallen 20 to 30 per cent, in the last five years. … At the same time the rate of interest has also
126
fallen by a third. The total result is that, if full advantage is taken of the gilt-edged rate of interest, houses can now be built to let at about two-thirds of the rental which it would have been necessary to charge previously. Thus, according to expert calculations, houses can be built to-day, provided the finance is available at present gilt-edged rates for the period during which the cost is being amortised, to let at 8s. to 9s. a week (including repairs and amortisation, but excluding rates), at which figure there is an insatiable demand."
If we are not to be believed, I say to hon. Members opposite for heaven's sake believe someone, and after all believe Mr. Keynes, who criticises us at every point but says that there is an insatiable demand for these houses, and that they can now be built for 8s. to 9s. per week if the present gilt-edged rates are available. That means 3½ per cent. The difference of ½ per cent.—that is between 3£ per cent, and our 4 per cent.—means an additional 6d. a week, so that at 8s. 6d. to 9s. 6d. per week rent houses could be provided at 4 per cent. The hon. Member for Ebbw Vale went on to taunt the Government that whenever a Socialist principle was involved it was always sent to a Committee to be re-examined. If that is true I suppose that Socialism wants reconditioning.
Sir S. CRIPPS: The Government want reconditioning.
Mr. SHAKESPEARE: I think I have dealt with most of the points raised.
Sir S. CRIPPS: How about rural housing?
Mr. SHAKESPEARE: The question of rural housing is really out of order, as it does not come within the scope of this guarantee. The policy of rural housing was discussed on the Second Beading of the Bill, and it does not come within the terms of the Resolution.
Sir S. CRIPPS: Does the hon. Gentleman tell us that no rural housing can be carried out under this guarantee? Does he say that the building societies will not lend any money at all for rural housing?
Mr. SHAKESPEARE: Of course they can if they like. But the main policy for rural areas, by which the Government stands, is the policy of reconditioning, which does not send up the rents. We shall have an opportunity of discussing that on the further stages of the Bill. There is an instruction on the Paper dealing with the point.
Mr. ALBERY: Have the Government had any intimation from the building societies of their intention to reduce the present very high rate of interest which they are charging to many of those who previously borrowed?
Mr. SHAKESPEARE: That, of course, is a matter for the discretion of the building societies. My hon. Friend raised that point and I should have answered before. The answer is that the old rates under contract between the building societies and their clients will in no way be affected by any provision that the Government are making in this Bill. My personal view is that the fact that the building societies under the Bill, under the guarantee, will be able to dispose of and find an outlet for surplus funds, will in no way weaken the position of their old clients.
Mr. ALBERY: The Parliamentary Secretary does not understand the point. The fact that the Government are creating an outlet for these surplus funds of the building societies does enable them to maintain a rate of interest to those who have already borrowed under contract. If there were no further outlet the present procedure, which is to pay back gradually at those rates, would compel them to lower the rate of interest.
Mr. SHAKESPEARE: The assumption is that they have entered into this
arrangement because it is advantageous to them. Therefore their financial position is strengthened, and, if it comes to a reduction of rates on previous mortgages, I cannot see how previous clients would be affected, except advantageously.
Colonel CHAPMAN: Why are owner-occupiers being left out of the Bill?
Mr. SHAKESPEARE: That obviously is the ordinary business of the building societies, but the Government are anxious to provide houses to be let to working-class families—"C" class houses. The other is the ordinary owner-occupier business. I think I have answered all the points that have been raised. I can only add that for the policy of the Government we have no need to apologise. It is obvious from this Debate that it has the overwhelming support of the House. It has been rounded off by the promise of a committee to inquire into several features which may contribute usefully to our general policy. I maintain that if this is all we have to fear in the House in the way of criticism, the Bill should go through its further stages speedily. I hope that the Committee will now give us the Resolution.
Question put.
The Committee divided: Ayes, 236; Noes, 38.

Division No. 33.]

AYES.

[9.5 p.m.

Acland-Troyte, Lieut.-Colonel

Campbell, Edward Taswell (Bromley)

Eales, John Frederick

Adams, Samuel Vyvyan T. (Leeds, W.)

Caporn, Arthur Cecil

Eastwood, John Francis

Agnew, Lieut.-Com. P. G.

Carver, Major William H.

Elliston, Captain George Sampson

Albery, Irving James

Cassels, James Dale

Elmley, Viscount

Allen, Sir J. Sandeman (Liverp'l, W.)

Castle Stewart, Earl

Emmott, Charles E. G. C.

Apsley, Lord

Cazalet, Thelma (Islington, E.)

Erskine, Lord (Weston-super-Mare)

Aske, Sir Robert William

Cazatet, Capt. V. A. (Chippenham)

Evans, Capt. Arthur (Cardiff, S.)

Atholl, Duchess of

Chamberlain, Rt. Hon. N. (Edgbaston)

Foot, Dingle (Dundee)

Atkinson, Cyril

Chapman, Col. R.(Houghton-le-Spring)

Fremantle, Sir Francis

Baldwin, Rt. Hon. Stanley

Clarke, Frank

Fuller, Captain A. G.

Balfour, George (Hampstead)

Clarry, Reginald George

Ganzoni, Sir John

Balfour, Capt. Harold (I. of Thanet)

Clayton, Dr. George C.

Gillett, Sir George Masterman

Balniel, Lord

Cochrane, Commander Hon. A. D.

Gledhill, Gilbert

Banks, Sir Reginald Mitchell

Colfox, Major William Philip

Glossop, C. W. H.

Barclay-Harvey, C. M.

Collins, Rt. Hon. Sir Godfrey

Goff, Sir Park

Beaumont, M. W. (Bucks., Aylesbury)

Colman, N. C. D.

Goldie, Noel B.

Beaumont, Hn. R. E. B. (Portsm'th, C.)

Conant, R. J. E.

Goodman, Colonel Albert W.

Bernays, Robert

Cook, Thomas A.

Grattan-Doyle, Sir Nicholas

Birchall, Major Sir John Dearman

Cooke, Douglas

Griffith, F. Kingsley (Middlesbro'.W.)

Blindell, James

Cooper, A. Duff

Grimston, R. V.

Boulton, W. W.

Cowan, D. M.

Gunston, Captain D. W.

Bower, Lieut.-Com. Robert Tatton

Craddock, Sir Reginald Henry

Guy, J. C. Morrison

Braithwaite, Maj. A. N. (Yorks, E. R.)

Croom-Johnson, R. P.

Hacking, Rt. Hon. Douglas H.

Brocklebank, C. E. R.

Curry, A. C.

Hales, Harold K.

Brown, Col. D. C. (N'th'l'd., Hexham)

Davies, Maj. Geo. F. (Somerset, Yeovil)

Hanley, Dennis A.

Brown, Ernest (Leith)

Denville, Alfred

Harbord, Arthur

Brown, Brig.-Gen. H.C.(Berks., Newb'y)

Dickie, John P.

Harris, Sir Percy

Burghley, Lord

Dixon, Rt. Hon. Herbert

Hartland, George A.

Burgin, Dr. Edward Leslie

Drewe, Cedric

Haslam, Sir John (Bolton)

Burnett, John George

Duckworth, George A. V.

Headlam, Lieut.-Col. Cuthbert M.

Cadogan, Hon. Edward

Duncan, James A. L. (Kensington, N.)

Heilgers, Captain F. F. A.

Henderson, Sir Vivian L. (Chelmsf'd)

Mayhew, Lieut.-Colonel John

Salmon, Sir Isidore

Hepworth, Joseph

Merriman, Sir F. Boyd

Salt, Edward W.

Hills, Major Rt. Hon. John Waller

Mills, Major J. D. (New Forest)

Samuel, Sir Arthur Michael (F'nham)

Holdsworth, Herbert

Milne, Charles

Sandeman, Sir A. N. Stewart

Hopkinson, Austin

Mitcheson, G. G.

Scone, Lord

Hore-Belisha, Leslie

Monsell, Rt. Hon. Sir B. Eyres

Shakespeare, Geoffrey H.

Hornby, Frank

Morris, Owen Temple (Cardiff, E.)

Shaw, Helen B. (Lanark, Bothwell)

Horsbrugh, Florence

Moss, Captain H. J.

Shaw, Captain William T. (Forfar)

Howard, Tom Forrest

Muirhead, Major A. J.

Shepperson, Sir Ernest W.

Howitt, Dr. Alfred B.

Munro, Patrick

Shute, John Joseph

Hudson, Robert Spear (Southport)

Nail, Sir Joseph

Simon, Rt. Hon. Sir John

Hume, Sir George Hopwood

Nall-Cain, Hon. Ronald

Skelton, Archibald Noel

Hunter, Dr, Joseph (Dumfries)

Nation, Brigadier-General J. J. H.

Smiles, Lieut.-Col. Sir Walter D.

Hunter, Capt, M. J. (Brigg)

North, Captain Edward T.

Smith, Louis W. (Sheffield, Hallam)

Janner, Barnett

Nunn, William

Somerville, Annesley A. (Windsor)

Joel, Dudley J. Barnato

O'Donovan, Dr. William James

Soper, Richard

Jones, Sir G. W. H. (Stoke New'gton)

Oman, Sir Charles William C.

Southby, Commander Archibald R. J.

Jones, Henry Haydn (Merioneth)

Palmer, Francis Noel

Spencer, Captain Richard A.

Jones, Lewis (Swansea, West)

Pearson, William G.

Stanley, Lord (Lancaster, Fylde)

Kirkpatrick, William M.

Peat, Charles U.

Stanley Hon. O. F. G. (Westmorland)

Knight, Holford

Percy, Lord Eustace

Storey, Samuel

Lamb, Sir Joseph Quinton

Perkins, Walter R. D.

Stourton, Hon. John J.

Leckie, J. A.

Peters, Dr. Sidney John

Strauss, Edward A.

Leech, Dr. J. W.

Petherick, M.

Strickland, Captain W. F.

Leighton, Major B. E. P.

Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)

Sueter, Rear-Admiral Murray F.

Liddall, Walter S.

Pickford, Hon. Mary Ada

Thomas, James P. L. (Herelord)

Lindsay, Noel Ker

Pike, Cecil F.

Thompson, Luke

Llewellin, Major John J.

Potter, John

Thomson, Sir Frederick Charles

Lloyd, Geoffrey

Powell, Lieut.-Col. Evelyn G. H.

Thorp, Linton Theodore

Lockwood, John C. (Hackney, C.)

Procter, Major Henry Adam

Touche, Gordon Cosmo

Lovat-Fraser, James Alexander

Raikes, Henry V. A. M.

Vaughan-Morgan, Sir Kenyon

Lyons, Abraham Montagu

Ramsay, T. B. W. (Western Isles)

Wallace, John (Dunfermline)

Mabane, William

Rankin, Robert

Ward, Lt.-Col. Sir A. L. (Hull)

MacAndrew, Lieut.-Col. C. G. (Partick)

Ratcliffe, Arthur

Ward, Irene Mary Bewick (Wallsend)

MacAndrew, Capt. J. O. (Ayr)

Rea, Walter Russell

Ward, Sarah Adelaide (Cannock)

McCorquodale, M. S.

Reed, Arthur C. (Exeter)

Warrender, Sir Victor A. G.

MacDonald, Malcolm (Bassetlaw)

Reid, Capt. A. Cunningham.

Wedderburn, Henry James Scrymgeour.

McKeag, William

Reid, James S. C. (Stirling)

Weymouth, Viscount

McKie, John Hamilton"

Reid, William Allan (Derby)

Williams, Charles (Devon, Torquay)

Maclay, Hon. Joseph Paton

Rhys, Hon. Charles Arthur U.

Williams, Herbert G. (Croydon, S.)

McLean, Major Sir Alan

Robinson, John Roland

Wills, Wilfrid D.

McLean, Dr. W. H. (Tradeston)

Ross Taylor, Walter (Woodbridge)

Wilson, G. H. A. (Cambridge U.)

Makins, Brigadier-General Ernest

Runge, Norah Cecil

Womersley, Waiter James

Mallalieu, Edward Lancelot

Russell, Albert (Kirkcaldy)

Worthington, Dr. John V.

Mander, Geoffrey le M.

Russell, Alexander West (Tynemouth)

Young, Rt. Hon. Sir Hilton (SVoaks)

Manningham-Buller, Lt.-Col. Sir M.

Russell, Hamer Field (Sheffield, B'tside)

Margesson, Capt. Rt. Hon. H. D. R.

Russell, Richard John (Eddisbury)

TELLERS FOR THE AYES —

Martin, Thomas B.

Rutherford, John (Edmonton)

Captain Austin Hudson and Dr. Morris-Jones.

Mason, David M. (Edinburgh, E.)

Rutherford, Sir John Hugo (Liverp'l)

NOES.

Adams, D. M. (Poplar, South)

Greenwood, Rt. Hon. Arthur

Maclean, Neil (Glasgow, Govan)

Attlee, Clement Richard

Grenfell, David Rees (Glamorgan)

Maxton, James

Banfield, John William

Grundy, Thomas W.

Parkinson, John Allen

Batey, Joseph

Hicks, Ernest George

Price, Gabriel

Bevan, Aneurin (Ebbw Vale)

John, William

Rathbone, Eleanor

Brown, C. W. E. (Notts., Mansfield)

Jones, J. J. (West Ham, Silvertown)

Salter, Dr. Alfred

Cape, Thomas

Jones, Morgan (Caerphilly)

Thorne, William James

Cocks, Frederick Seymour

Kirkwood, David

Tinker, John Joseph

Cove, William G.

Lawson, John James

Watts-Morgan, Lieut.-Col. David

Cripps, Sir Stafford

Logan, David Gilbert

Wedgwood, Rt. Hon. Josiah

Daggar, George

Lunn, William

Davies, David L. (Pontypridd)

Macdonald, Gordon (Ince)

TELLERS FOR THE NOES.—

Davies, Rhys John (Westhoughton)

McEntee, Valentine L.

Mr. Croves and Mr. D. Graham.

Edwards, Charles

McGovern, John

Bill read a Second time.

Resolution to be reported To-morrow.

ORDERS OF THE DAY.

  AUSTRIAN LOAN GUARANTEE BILL.
  Order for Second Reading read.
  9.15 p.m.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I beg to
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  move, "That the Bill be now read a Second time."
  In December last the House of Commons, sitting in Committee, approved the Financial Resolution upon which the Austrian Loan Guarantee Bill, whose Second Reading I now beg to move, is based. In pursuance of the authority thereby given to us, His Majesty's Government ratified the Agreement or Protocol made at Geneva on the 15th July, 1932. Article 10 of that Protocol or Agreement says that

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  "it shall enter into force as regards the Governments which ratify it as soon as the ratifications of Austria, the United Kingdom, France and Italy have been deposited,"
  and
  "the ratifications of the above-mentioned States must be deposited not later than the 31st December, 1932."
  That article has been complied with, and all the ratifications were deposited by the due date. Consequently, the amounts of the several guarantees are: Great Britain, 100,000,000 schillings, or about £4,000,000; France, 100,000,0000 schillings; and Italy, 30,000,000 schillings; making 230,000,000 Austrian schillings in all. It is hoped that other nations will make some contribution.
  When the House was sitting in Committee it took cognisance of the fact that the Protocol, which is 'appended to this Bill, falls naturally into two parts. On the one hand, a loan was to be guaranteed to Austria; on the other hand, Austria, the recipient of that loan, undertook to discharge punctually her foreign obligations, to abolish progressively exchange controls, to settle the affairs of the Creditanstalt, to balance her Budget, and to reorganise her internal economy, and particularly her railways. These reforms were to be carried out under the supervision of a representative of the League of Nations and an adviser attached to the Austrian National Bank. I am glad to be able to inform the House that all these obligations, none of them humiliating, but all of them natural where a party is soliciting assistance from another, are being satisfactorily carried into effect.
  What is the test which we applied before consenting to sign this Agreement? We asked ourselves this question: Would the financial assistance which we were offering to make forthcoming put Austria in a position to rehabilitate herself? We answered that question in the affirmative. Perhaps the best proof of the improvement in the commercial situation of Austria is to be found by looking at the figures of her balance of payments. These were considerably upon the wrong side up till June, 1932. From January to March, 1932, her adverse balance of payments was 55.8 million schillings; from April till June, 1932, it was 41.9 million
  132
  schillings; but between July and September she had a favourable balance of 4.1 million schillings; and that improvement, I am glad to say, is enduring.
  Under the guaranteed loan of 1923–43 we were participants to the extent of 24.5 per cent, in a total loan of £24,000,000, and it was but natural that we should safeguard ourselves that the annual payments due under that loan would be made before we incurred any further obligation. We obtained in the most specific terms a promise by Austria that the annual payments would be faithfully discharged. Because we obtained this promise, it is said that we are only making this loan in order that interest under a former loan should be liquidated. I do not think that that criticism can be considered valid, for His Majesty's Government would plainly be failing in its duty if it invited Parliament to ratify one loan without ensuring that the previous loan was to be met; and it is that which we have done.
  The interest on that loan has been, and, I trust, will be faithfully paid. [An HON. MEMBER: "Trust."] Well, we have the word of Austria that it shall be so, and there has been no failure by the bondholders so far to receive their interest upon the due date. It is at any rate an advantage that as a result of guaranteeing this loan in the circumstances which I have described we are to continue receiving in this country £800,000 per annum in respect of the previous loan, for if Austria had been allowed to fail, plainly these payments would not have been continued for ever.
  It is also an advantage that the whole of the 100,000,000 schillings which we are to guarantee will remain in this country. The House will recall that after the failure of the Creditanstalt the Bank of England advanced, not 100,000,000 schillings, which is the sum specified in this Bill, but 150,000,000 schillings to the Austrian Government to save it from collapse. It is a proof at any rate of the good intentions of Austria that they have reduced that 150,000,000 schillings loan by 50,000,000 schillings.
  Mr. BRACKEN: Can the hon. Gentleman tell us whether that advance made by the Bank of England had the concurrence of His Majesty's Treasury, and

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  whether the Treasury entered into an agreement to be responsible for that advance?
  Mr. HORE-BELISHA: I was going to answer the question which my hon. Friend, anticipating my argument, has quite fairly put to me. The Bank of England made the loan to Austria in June, 1931, on its own initiative, hut His Majesty's Government at that date, though not the present Government, was informed of and expressed its concurrence in what the Bank of England was doing. The Bank of England made it a term of this advance that it should be repaid in full out of the proceeds of the first national loan that was floated by Austria, which was then considered a proximate possibility. So proximate was it considered that the Bank of England only advanced the money on weekly terms, Austria to pay interest on the loan at the Austrian bank rate which, in round figures, has varied between 6 per cent, and 10 per cent. The loan mentioned in this Bill will now be raised on the full credit of the British Government at somewhere, presumably, between 3½ and 4 per cent. That will be an advantage to Austria as well as an advantage to this country, which does not lose a single penny. [An HON. MEMBER: "Very clever."] The hon. Gentleman says that is very clever. I am glad he entertains so high an opinion of the Government, but we are not doing it to be clever. The Bank of England advanced this money out of humanitarian motives. That is proved by the facts. If no national loan were to be raised, of course the Bank of England could not be repaid out of the proceeds of the national loan. We undertake to guarantee a certain proportion of this loan, the whole of which is to remain in this country, and therefore we are spared from making an exception to our general policy of putting an embargo on foreign loans. There will be no strain on the exchanges whatsoever.
  The House of Commons will want to know under what conditions this loan will be floated. It will not be floated except simultaneously with the French portion of the loan. I trust the House of Commons will consider that a sufficient safeguard. I have told the House quite plainly what are the facts regarding this loan. The House of Commons, sitting in Committee, authorised us to ratify the
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  agreement. We have accordingly ratified it and I hope the House, by passing the Second Reading of this Bill, will enable us to complete the transaction.
  9.27 p.m.
  Mr. RHYS DAVIES: I feel sure I shall not be exaggerating when I say that the House has just listened to one of the most sordid stories of international finance it has ever heard. I do not claim to understand high finance—[Laughter.] —but I believe I understand as much about it as most of those who laugh at me. It amounts in fact to this, that the British Government is making it possible for the Austrian Government to repay money it owes to the Bank of England. That is pretty obvious. That is to say, the Bank of England in one year lends money to Austria; then Austria comes back to this country to ask our Government to collect taxes from our people to lend money to Austria to enable it to repay its debts to the Bank of England. I say, therefore, that that is a sordid international financial transaction.
  Since we last dealt with this loan, something very important has emerged in Austria itself. I will devote the few minutes at my disposal to that point. I am very pleased to see the Foreign Secretary in his place. I want, however, first of all to challenge the statement of the hon. Gentleman who introduced the Bill that the Austrian Government has organised its internal economy to the satisfaction of the Powers lending the money. Let me tell him that the Austrian Government has organised its internal economy to such an extent that I am told on good authority that it has actually reduced old age pensions in order to satisfy money lenders and bondholders. I do not think that we, at any rate, in the House of Commons ought to help in any way any country in the world so to organise its national economy as to reduce the pensions of its old people.
  The real point I want to raise is this: we criticised this loan when it came before the House of Commons before Christmas. We did not vote against it, and we shall not vote against the Bill to-night. We are however very much more critical of this proposal to-day than we were then, because not only has the lending of this money to Austria meant lowering the standard of life of her working folk, but the Austrian Government

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  has recently allowed transactions which have violated the Treaty of St. Germain. I believe I am right in saying that Clause 134 of that Treaty lays it down very definitely that the importation into Austria of arms, munitions and war materials of all kinds, and the export of arms from Austria also is strictly forbidden.
  Mr. HORE-BELISHA: The right hon. Gentleman will forgive me for interrupting, but it is my duty to remove at once the misapprehension which he is in that we are taking any action which would reduce Austrian old age pensions. We have imposed no such condition, and would not contemplate imposing such a condition. Quite on the contrary. Any action contemplated by us would enable Austria to discharge her liabilities, and not prevent her from doing so.
  Mr. DAVIES: This is a matter of opinion. There is a difference of opinion in Austria itself and in the Austrian Parliament on this issue. The conditions of this loan were accepted in the Austrian Parliament not very long ago by a one vote majority only. The national economy referred to by the hon. Gentleman has meant a reduction of wages and old age pensions. We are told on good authority that 60,000 rifles and some machine guns were recently exported from Austria into Hungary. We should like to know before passing this Bill—and I think we are entitled to know, because we are going to guarantee about £4,500,000—whether this Government, the French Government or the Italian Government, any of the parties to this loan, has made any inquiries at all into the violation of the Treaty of St. Germain in connection with the recent export of armaments? The strange thing is that Hungary is supposed to be disarmed under one of the Treaties made at the end of the War setting up the Danubian States. It is true that Austria has always claimed, and rightly claimed, the friendship of the great States of Europe, and we on these benches, like all other parties in this House—I hope I am right in interpreting the views of other parties—feel that Austria is so circumscribed at the moment that she cannot possibly continue to live as a State of only 6,000,000 people with one-third of them living in one city.
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  We all feel that Austria should be helped, but I think we are entitled to ask why this great arsenal should be found in Austria—60,000 rifles and some machine guns too. I do not know very much about military terms, but they tell me that this number of rifles is sufficient to supply one and a-half divisions of an army! If that is so, we would like to know whether the Foreign Secretary has made any inquiry at all into this incident which has been recently disclosed. We press that point because those who have visited the Danubian States know full well that the situation there is really very dangerous at the moment. Hungary is supposed to be disarmed, and we are entitled to know from the Government, before we pass this Bill, how it comes about that the Hungarian Government, as we have been told, have been able to secure a large number of machine guns and 60,000 rifles from Austria. If the Treaty that established the present Hungary makes it impossible for them to import arms, then there must have been a violation of obligations there, too. We would like to know where these armaments come from. I am told that they cannot have been manufactured in Austria. They must, therefore, have been bought from some surrounding country, either Czechoslovakia, or probably Italy, or probably France—and France is going to be a party—
  Mr. MAXTON: Or perhaps England.
  Mr. DAVIES: This point is very important when we are dealing with this loan. I have no hesitation in saying from the little I know of these countries that the Treaties that were made at the end of the War must be revised. They limited Austria to a small portion of Europe, threw sections of mankind into a state like Jugoslavia and altered the frontier of Hungary so that thousands of Hungarians were placed under foreign control. The League of Nations, as I have said, will have to take cognisance of those Treaties and alter their provisions very soon. Otherwise, I am afraid, there will be serious trouble in the centre of Europe once again. I am speaking the mind of my hon. Friends when I say that we are unwilling to think that these nations shall be allowed to alter the Treaties that were made at the end of the War at the mouth of the

  137
  cannon. They ought to be able to secure a revision of those Treaties by argument arid reason at Geneva instead of by rifles at Vienna. We should like to know, therefore, whether the Government made inquiries into this important point that has emerged in regard to Austria. While we are a little more critical of this loan than on the previous occasion, we shall not oppose the Bill in the Division Lobby.
  9.37 p.m.
  Mr. LAMBERT: May I be forgiven if I do not follow my hon. Friend the Member for Westhoughton (Mr. R. Davies) into the international part of this situation. My sole object in rising is to show some concern for the British taxpayer. My hon. Friend the Financial Secretary, whose Parliamentary ability we all greatly admire, told us that this loan would put Austria on her legs. It is strange if that be so, because there have been several other loans advanced, by the British among others, to Austria, There was a loan, of which the hon. Gentleman talked, in 1923. That was the loan of something like £14,000,000 of which £10,000,000 is still outstanding. Then there was the Reconstruction Loan. I was amazed when I read through the accounts of the United Kingdom to find what a number of loans we have guaranteed. There was that Reconstruction Loan, in addition to this other loan, of £8,825,000, which is due to the British Government. Now we are told that if we advance another £4,300,000 Austria will be put on her legs. I have not any personal acquaintance with Austria, but I have here an account from the "Times" correspondent, which was published on the 4th January. It is "From our Vienna Correspondent." This correspondent, no doubt a very reputable gentleman, says:
  "In its latest report the Austrian Marketing Board answers the self-posed question whether the prospect is favourable for an early improvement in the Austrian situation with a frank 'no'."
  Then he goes on to show the situation that exists in Vienna to-day:
  "If outward signs of the growing impoverishment of Vienna were less easy to perceive previously, they came in large numbers during 1932. The flow of traffic on railways and roads has thinned clown almost to vanishing point … Tramcars on many Viennese routes run at long intervals, while an omnibus had become a relatively rare sight. The streets are once more
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  alive with mendicant musicians and singers who sometimes invade tramcars to pour forth their tale of starvation."
  Then comes a most terrible paragraph:
  "The number of suicides has increased by 88 per cent, compared with 1930; and the saddest feature is that the suicides seldom go alone. Husbands take their wives with them and as many of their children as happen to be under their wing at the critical moment."
  Now my hon. Friend comes down to the House and tells us that, having advanced these sums of money, and with this state of affairs in Vienna to-day, this £4,300,000 is going to put Austria on its legs. If we thought that anything of the kind would happen, we would not object to the loan. I object to it because in my judgment it is simply pouring £4,000,000 of good British money down the Austrian drain. The loan is to be under the control of the League of Nations. While I have the utmost admiration for the-League of Nations as an assembly for settling international disputes, I have none whatever for its financial sagacity. The League of Nations loans have amounted to £79,000,000, of which £36,000,000 to-day are in total or partial default. The League is not a financial authority to which I would entrust the British taxpayers' money.
  Mr. A. BEVAN: What about the American loan to Britain?
  Mr. LAMBERT: Let us stick to one thing at a time. The Austrians said quite plainly on the 23rd June—and this again is stated in the "Times" Commercial Supplement this morning—that, if a further loan were not provided, they could not pay the interest on the previous loan. This new loan was therefore sanctioned by the League of-Nations on the 15th July. This is not entirely a loan for, according to French accounts, it is more for the relief of the Bank of England than for Austrian distress. In the French Chamber the other day, they had a debate on this matter, and M. Cheron, the Finance Minister, said that the proposed loan was more important from the point of view of foreign policy than of pure finance. Are we really to advance British money to further French foreign policy? I cannot agree with that idea, and I would like a further explanation. I have often, in this House, seen public money spent in buying off political discontents at home, but I have never

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  known British public money spent to buy off public discontents abroad, yet apparently, according to the French idea, that is what this loan is intended to do. An hon. Member opposite said something about the American debt just now. The House of Commons devoted £19,000,000 of gold, or £29,000,000 of sterling, in order to educate the American Congress, though I think the object will fail, will prove to have been a costly futility; but that is not the point at the moment. The point is that we are advancing this loan to Austria for the purpose of furthering French foreign policy. The next thing, I suppose, will be a loan floated by the League of Nations in order to get Germany to acquiesce in the Polish Corridor, or something of that kind.
  We are told by my hon. Friend that this will be repaid to the Bank of England. He said just now the Bank of England had on its own initiative, without any prompting from the Government, the Government simply concurring, advanced a large sum of money to Austria. If the Bank of England makes a blunder, the stockholders of the Bank of England should pay, and not the taxpayers of Great Britain. I do not agree that my constituents, many of them struggling men, should be called upon to pay Income Tax in order to buttress the dividends of the stockholders of the Bank of England. I want to be quite frank about this matter, and I warn the Government. I warn them as a friend, for I am a friend of the Government. I do not propose to cross the floor of the House. How long we are to have the great privilege of the presence on this side of my hon. Friends behind me I do not know, but so far as I am concerned I propose to stay on this side. I remember with what splendid sacrifice our taxpayers rolled up to pay their taxes. What will be the result when these people know that we are advancing £4,300,000 to Austria, a sum which I very much doubt if we shall ever recover. I want to save the Government from themselves, and therefore I tell them that this financial prodigality cannot go on. What will be the Chancellor of the Exchequer's Budget in April'! We know full well that it is going to be a very difficult one, and what we are doing now will not make things easier for him. It may be too late to stop this loan, but I beseech the Gov-
  140
  ernment to have done with this financial prodigality in future.
  9.49 p.m.
  Mr. A. BEVAN: The proposal before us throws a great deal of light upon the whole subject of international indebtedness. Many economists have held that one of the principal reasons for the existing crisis is the fact that the post-war system of indebtedness is fundamentally different from the pre-war. In pre-war days there was not nearly so much government-guaranteed international indebtedness. When firms who had borrowed money failed to make repayment, liquidation or bankruptcy took place, the dead wood was cut out of international commerce and trade and the financial system was more recuperative. Many people have held that one of the reasons why the depression sags and sags from country to country is that post-war indebtedness is almost entirely intergovernmental indebtedness on Government securities, and because of that the debtor is kept artificially alive. The dead wood is not cut out of the financial system, and confidence is not restored. Although this Austrian situation is surrounded by political complications, we do not permit the financial aspects of it to emerge with anything like clarity. Nevertheless, it is perfectly true to say that any attempt to maintain the solvency of Austria or any of these States by a continuation of loans is doomed to financial disaster unless there is a regrouping of those countries to enable them to become exporting countries and repay their debts.
  One of the weaknesses of the League of Nations is that the League is merely a conspiracy to maintain the frontiers which were set up by the Peace Treaty, and any attempt to keep these nations financially alive when they are economically dead is bound to result in disaster. The Austrian nation attempted to solve its problem by arranging a Customs Union with Germany, with whom it had many historical and commercial alliances, but that did not suit French policy, and the French lent money to the Austrians to keep them bankrupt. It was Austrian policy that the country could only become economically wholesome again by being able to ally itself with an economic unit which was sufficiently complementary, but that did not suit France,

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  and France lent money to Austria on conditions that the Custom Union project was abandoned. The Foreign Secretary-has been achieving some remarkable triumphs at Geneva, but this is the most extraordinary of them. We are to understand that we are to lend money not for the purpose, as euphemistically expressed by the Financial Secretary to the Treasury, of putting the country on its feet but of keeping it bankrupt, because a condition of bankruptcy is the object of French foreign policy. Our great nation, which has always prided itself upon its liberal and humanitarian foreign policy, is allowing itself to become a pawn in French financial diplomacy in order to maintain a system of anarchy in Central Europe which ultimately must lead to war. I submit that the time has arrived when this nation must disentangle itself from these commitments. If the Bank of England, in pursuing its own financial interests, enters upon an undertaking in Central Europe, this nation's international reputation must not be allied to the Bank's blunders.
  This loan is represented to us as a most serious proposition. The Financial Secretary to the Treasury was not, however, quite his usual self-confident self. Although he spoke with that charm and lucidity to which we have become accustomed, we discerned an atmosphere of diffidence that sat very ill upon him. He tried to persuade us that this loan, which we are confirming, would put Austria on its feet. I have already pointed out that its main purpose is to keep Austria bankrupt. If the loan was so well secured, why does not the Bank of England rest content with the security? Why do we need to find the money? If it is so well secured, why is it that we have to raise money to pay the banks and to relieve them of their obligation? I do not understand that, and perhaps the Financial Secretary or the Foreign Secretary, whoever is going to respond, will tell us. Indeed, the loan ought to be more secure now than when it was floated, because it was floated at 10 per cent., and it is now being floated at 3½ to 4 per cent., which surely is a safer loan than one at 10 per cent. One would think that if the security was safe when the Bank of England lent the money, it is even more safe to-day. I
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  shall be glad if the Financial Secretary will be good enough to take the House into his confidence and to tell us why we are asked to raise this money to reimburse the Bank of England. Is it as a wedding present to the Governor? What is the purpose of it?
  A much more serious aspect of the matter is raised. I have never been able to understand, being an innocent proletarian, the whole system of international banking. I have over and over again heard disquisitions from the Front Bench against the desirability- of raising loans for development and relief purposes. What has been the argument? It has been the ancient Treasury argument that if the Government entered into the loan market it would only do so in-competition with private enterprise, and that any money which was spent was merely in substitution, and not in augmentation, of the money which private-interests would have spent. Do we understand that to be the position to-day? Do we understand that the £4,300,000, which is being raised in this country when spent in Austria, is in substitution of £4,300,000 which would have been raised and spent in Great Britain? Where is the ancient Treasury argument now, unless it be now that it is an uneconomic proposition to build houses in Great Britain, but a perfectly sound proposition to finance flats in Vienna?
  This system of international lending seems to be a method of sending money far enough away so that it will not return so quickly as to embarrass us. If any suggestion is made here that the Government should use their credit to raise money for work schemes at home, it is turned down and condemned by all the financial pundits of the House as being mere Lloyd George electioneering or socialist extravagance; but it is perfectly sound finance for His Majesty's Government to ask us for £4,300,000 to reimburse the Bank of England which has lent money to keep a central European State in bankruptcy in order that it might be a pawn in French foreign policy. Where are we getting? We are in the middle of one of the worst winters of unemployment that this country has ever seen, and the House of Commons is considering a proposition of this kind, which has neither honour nor sound finance to back it up. I submit that if

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  this nation and the world are going ultimately to emerge from industrial depression, it can only be by cutting many losses in international loan markets. We have already told America that international good health can be served only by our falling down now on our debts to her. It might be a good thing to allow some of those who owe us money to fall down upon their debts to us. They might then be in a position to borrow in the international market upon a sounder basis and resume normal commercial relations with the rest of the world.
  As long as we go on like this, we shall he simply throwing good money after bad and maintaining frontiers and divisions which are profoundly and fundamentally uneconomic. The Foreign Secretary will probably be standing at the Treasury Box before very long telling us that he regrets that the intensification of the economic crisis in central Europe makes it impossible for those countries to pay us the money without the gravest impairment of international credit. We have heard that language so often before. If the House of Commons is going to vote this £4,300,000, let it do so with the full consciousness that what it is doing is to back up one of the Bank of England's blunders, and that we need never hope to get a cent of the money back again. I hope that this is to he the last of our loans to Austria. The House of Commons has not been treated fairly, by the inadequate explanation of the difficulties of the case and by the embarrassments of the situation that prevented the Financial Secretary from putting the matter before the House with his customary candour.
  10.2 p.m.
  Captain CUNNINGHAM-REID: This proposal for a guarantee has met with considerable criticism in this House and outside, because it forms part of that always dreary process of lying upon your bed after you have made it. The hon. Member for Ebbw Vale (Mr. A. Bevan) had something to say on the point that honour did not call for this particular loan. That being so might I be allowed to remind him, and perhaps other hon. Members, that the old Austro-Hungarian Empire consisted approximately of a population of something like 56,000,000
  144
  people, and that out of that population no less than 2,000,000 people resided in the capital, Vienna. I think that that was a reasonable working proportion. What is the position to-day? The new Austrian Republic has a population of 6,000,000 people as against 56,000,000, and the same capital still has a population of something like 2,000,000 people. This achievement was brought about by the Treaty of St. Germain-en-Laye, for which we, as much as anybody else, were responsible. When a city of 2,000,000 people is thrown together with perhaps half-a-dozen impoverished Alpine provinces, and they are told that they are an economic unit whatever they may have to say to the contrary, can we wonder at it that constant subsidisation is required on behalf of the Allies who were responsible for the original Treaty?
  Undoubtedly we are partly responsible for this misbegotten creature which has a head three times too large for its body, and I do not think that we have any right to whine when we are presented with a share of the payment due under the affiliation order. The time for any other considerations, if my memory serves me right, lapsed on 10th September, 1919, when that treaty was signed. Furthermore, it is unfortunate for us that we cannot even contemplate the possibility of allowing this national freak dying a natural death. Those of us who have studied the question realise only too well that Vienna today is still the central clearing house, and entrepôt, for most of Central Europe and also for the Balkans, and if by any chance we were to allow that city to dwindle into anarchy, I feel sure the House will agree with me that that would have a very serious effect upon the economic life of Central Europe, which in turn would rebound upon ourselves. Perhaps, therefore, the most sensible way in which the House could look upon this, as I think I am right in calling it, very necessary loan and, in passing, let me admit that it is improbable that we shall ever see one of these Austrian schillings again, nevertheless, let us look upon this loan as. an insurance premium against Communism in Central Europe.
  With regard to the July Protocol, upon which this Bill is based, there would appear to be several questions of importance upon which the House is entitled to

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  a little more information, I admit at once that on this occasion I consider that this country is being treated with unusual clemency. I should like to draw the attention of the House to the fact that in Paragraph 2 of Annex I the Austrian Government proposes to repay the Bank of England, from this loan, its debt of 100,000,000 Austrian schillings. It seems that we, in this loan, send them 100,000,000 schillings, and they at once return the amount to this country. There seems to me to be something a little naive about such a proposition. After all, the passing of these schillings, as it were, from the right-hand trouser pocket to the left, will not, as far as I can see, affect us very greatly, but, as this is not the first, and I expect will not be the last, loan to Austria that the House will have to guarantee, I think that the problem merits a little further attention.
  In Article 4 of the Protocol—and the same reference is to be found in Paragraph 1 of Annex II—Austria makes the startling promise to balance her budget by the end of last year. The Financial Secretary told us that they had indicated they would do this in the future, but, according to my reading of the Bill, they promised to do so by the end of last year. I have not, however, the facts but, if an opportunity arises, I should very much like to know whether this feat has been achieved. We also find that in Article 2 the security for this loan is stated to be the pledged assets of the Austrian State, subject to the priorities attached to three previous loans. I wonder whether my hon. Friend will tell the House later what is the estimated value of those assets, and how much of that value has been absorbed by the priorities. Surely the House is entitled to that information; otherwise it does not seem to me to be a wholly businesslike proposition.
  Again, in paragraph (v) of Article 2, such vital matters as the rates of interest and the issue price of the loan are not revealed. Is not this information to which the guarantor is entitled; and, if so, might we have it before the end of the Debate?
  Incidentally, Article 10 of the Protocol contains an arithmetical curiosity. I agree that my hon. Friend has already alluded to it, but he did not quite elucidate the point about which I desire
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  to ask. Although the total loan is for 300,000,000 schillings, only 238,000,000 schillings, according to my calculation, are noted as guaranteed by the various Powers. I should very much like to know whether the remaining 62,000,000 schillings are intended to be raised in Austria, and, if so, what success could be achieved in such an operation? If, as my hon. Friend suggested in his opening remarks, this amount is to be raised by other Powers, are there any signs that that is being done at the moment?
  In conclusion, I should like to draw the attention of the House to Annexe III. It contains one paragraph, paragraph 5, which I enjoyed immensely. It reads:
  "The representative of the League of Nations shall provide himself with the necessary staff. His expenses and those of his office shall be approved by the Council and defrayed by Austria."
  I feel that Austria is doubtless thinking that not only does she have to call the bailiffs in, but she also has to take them out to lunch. We also see in Annexe III that wide powers are given to the League of Nations representative and an Adviser to the Austrian National Bank, who is also to be appointed by the League. I think the House would like to know whether either of these is likely to be a British subject, and who they are likely to be. I submit that these are points on which the House is entitled to some information, and I trust that that information may be forthcoming. If it is satisfactory, to some extent it might possibly help the House to that state of "grinning and bearing it" to which we have become so accustomed while paying for these Peace Treaties, Peace Treaties that have not up to the present been satisfactory, and I, for one, feel that at the first opportunity they ought to be looked into very carefully.
  10.14 p.m.
  Sir ARTHUR MICHAEL SAMUEL: The hon. Member for Westhoughton (Mr. Rhys Davies) said that he was more critical now than he was before Christmas, and the same line was taken by the hon. Member for Ebbw Vale (Mr. A. Bevan) in his very interesting speech. Both hon. Members were hostile to the principle of the Bill. I was surprised at that. Both of them forget who is responsible for the necessity for this Bill. We are not responsible for the necessity

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  for the Bill. They are. And, although the Financial Secretary's excellent speech was very skilful, one could see that he was skating over thin ice—that he was supporting a Bill which he did not like, for which he was never responsible, and which had been forced upon him, and that he had been left to mop up a mess for which neither his nor our party were responsible. That being the case, hon. Members on the other side have the effrontery to get up and say that they do not like this Bill. We had a very long Debate on the Financial Resolution, and I put a question to the Chancellor of the Exchequer on 20th December. I asked:
  "Did the Bank of England make this advance at the request of the Government?"
  The advance was made in order to keep the Creditanstalt on its feet—a purely political action. My right hon. Friend answered:
  "I will not say that, as I was not a member of the Government at the time, but that it was made with the approval of the British Government I have no doubt."— [OFFICIAL REPORT, 20th December, 1932: col. 935, Vol. 273.]
  Sir S. CRIPPS: The Financial Secretary to-day has said that it was not made with the approval of the Government. It was made by the Bank of England, and subsequently the Government approved the course that the Bank took.
  Sir A. M. SAMUEL: I am not going to answer for the Treasury, but the Bank of England would not think of lending £4,300,000 to Austria unless it had known first whether the Government wished it or was against it. This was in 1931. We were not in office. That brilliant galaxy of talent now on the other side was—
  Mr. COCKS: Your Prime Minister was in office then.
  Sir S. CRIPPS: And your Lord Snowden.
  Sir A. M. SAMUEL: This is an example of the fantastic and grotesque actions of misgovernment that took place. It is for such reason that Lord Snowden left that party with disgust. If any blame accrues to anyone, let hon. Members opposite remember that they were partly, if not wholly, to blame, for it was their own Chancellor of the Exchequer who led them into giving approval, or led them not to disapprove when the Bank of England
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  made the application to the Treasury to know whether the money should be lent or not. I object very much and on the lines of the right hon. Gentleman the Member for South Molton (Mr. Lambert). It is no good talking self-righteously about the standard of living of Austria being kept up by us. I want to see the standard of living of the people of West Surrey, Norwich and Bristol kept up. In the last Debate I said I would rather see money lost in Surrey, Bristol or in Norwich than in Vienna. If it is to be lost, let it be lost at home. Let the hon. and learned Gentleman who rebuked me during the Debate on the Money Resolution go to Bristol and say he prefers the money to be lost in Vienna rather than it shall be lost in pulling down slums in some of the unlovely cities in England. It is false sentiment run riot. We are not responsible for this Bill although we have to carry it. The Chancellor of the Exchequer said, during the Debate on the Financial Resolution,
  "The Committee, no doubt, will ask itself what test should be applied to this problem in order to decide whether it is prepared to approve the Resolution which is now before us, and I suggest that the test which should be applied is whether if this loan is made with the guarantee of the several Governments, it does really offer a reasonable chance that Austria may once again recover her position, that she may be able to meet her foreign obligations.… These reforms are to be carried out with the assistance of a representative of the League, a Dr. Rost van Tonningen."—[OFFICIAL REPORT, 20th December. 1932; col. 9315. Vol. 273.]
  I have taken the trouble to find out what Dr. Rost van Tonningen said. He said the Austrian foreign debt in June, 1930, was £140,000,000, of which £120,000,000 was non-commercial. The Budget deficit for the first nine months of 1932 was nearly £1,000,000. And the service of the debt cost £10,000,000 annually plus £5,000,000 of arrears. I think the Financial Secretary was a little disingenuous about that. I have a cutting here from the "Times" of 18th January which says that, according to statistics published by the State Court of Accountancy, the figures for the Austrian Budget for the first nine months of 1932 showed that there would be a deficit of nearly £1,000,000. That is only a few weeks before we were debating it in December. If one were to be cynical as to the form in which the bonds of this loan should be printed, he would remem-

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  ber that it is a loan to take the place of another loan. The crest of the Austrian Empire before the War was a double-headed eagle, and underneath was the Austrian or Virgilian motto "Uno avulso non deficit alter," which now means, default on one loan, and then replace it by another. The verb in that motto is the word "deficit," so we are going into this guarantee with our eyes open. We are fully warned that there will be a fresh call upon the Treasury to implement the guarantee sooner or later.
  I maintain that we ought to ask the various other nations who are likely to join us in this guarantee for raising a loan, to control by a consortium and without any infringement of sovereign Austrian rights or any of the courtesies due to Austria, the Austrian Customs and Excise so that we should not ultimately find ourselves, owing to some gap in our precautions, without the interest on the loans about to be guaranteed. On top of the money already owed there is to be a further debt of not less than £12,000,000 in respect of the present loans. Taxes are not being collected in Styria and Western Tyrol. In fact, when the officials attempt to obtain the taxes for the Government they are met with armed resistance. How can we expect Austria to supply money to pay the interest upon this loan when she cannot get in her taxes. The fact of the matter is that a bankrupt Austria maintains her social services—and there is a great deal in what the hon. Member for Ebbw Vale said—on taxes she cannot collect and on loans from her friends in respect of which she defaults and then asks for more. He said that we ought to cut out the dead wood. I do not like to use the word "crash," but I think that it would have been better if we had allowed the inevitable collapse of Austria instead of postponing it. Austria ought to be allowed by a liquidation to put her house in order. The Socialist Government forgot a commercial proverb—that although you may put a bankrupt on his feet you cannot always keep him there. You might spend all you had on Austria, but it does not follow that you would save her. That is what we are trying to do with Austria. We ought never to have intervened and the Socialist Government ought never to have countenanced the lending of British money to bolster up the Creditanstalt.
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  They told the Bank of England to go ahead and that they would stand by it. The Bank of England found the money, but the Creditanstalt did crash. What happened? The British Empire still goes on. In future, if France and Italy wish to outbid us and compete in guaranteeing political loans either to Austria, Albania or Yugoslavia, let them do so. We are not going to find any more money for that purpose. We bolstered up Turkey for years to keep the equilibrium in the Balkans. The great Lord Salisbury said ultimately that we put our money on the wrong horse. We found her with money. She was our bitterest enemy during the War. There was the Gallipoli campaign, and Turkey made mischief for us all over the East, while we had made sacrifice after sacrifice to keep the Sultan on the Throne. Just before the outbreak of war we found a loan for Hungary. Hungary took arms against us. This lending of money to foreign countries for political purposes should be brought to an end. The Financial Secretary represents the Treasury. He has been warned. My right hon. Friend the Foreign Secretary, who has more than enough on his shoulders, will have to bear this further warning on his shoulders. The House of Commons will not confirm a policy of this kind in the future. It is a very good thing that we kept the Stamp Duty at a high figure on foreign bonds. When I was officially responsible for certain things here it was suggested that we should bring down the duty on foreign bonds. I thank God that we did not. We were told that if we did not reduce the Stamp Duty on foreign bonds the loans would go to America for issue, and that we should lose the profit. What profit? I am very happy to say that by keeping a high duty on the issue of foreign bonds we drove the issues to America, and now America has them on her shoulders and not our investors, and the loans are in default. The old blind principle of our lending money on any pretence whatever to foreign countries, even bankrupt foreign countries, is dead and done with, and should be buried. I must support this Bill, which was bequeathed to us by the late Government and Mr. Snowden. But we all trust it is the last time that the principle it embodies will be put into a Bill brought before the House of Commons. If another such Bill is

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  brought before the House, I hope that I shall be with the right hon. Member for South Molton and that two of us, at any rate, will not vote for it.
  10.28 p.m.
  Mr. MANDER: A lot has been said tonight by one of the chief props of the Government, who has been attacking two of the other chief props of the Government who are here to-night defending the Government's proposal in this matter. I have no doubt that they will survive the attack. The hon. Member for Farnham (Sir A. M. Samuel) read an account from the "Times" of the state of affairs in Vienna at the present time. From the information that I have received from friends there I think that that statement is very much exaggerated and that, serious as the situation may be, there is no danger of the immediate collapse to which the report would seem to point. The hon. Member made an attack, and one that is quite customary, upon the Financial Committee and the policy of the League of Nations. In so far as that is true it is nothing other than an attack upon the chief financial experts of the world, because the people who go to Geneva to give advice upon the Financial and Economic Committee are the leading financial experts of this country, of France, Germany and the other countries.
  Sir A. M. SAMUEL: Experts of what?
  Mr. MANDER: They make many mistakes in advising people inside their own countries, and in this country, and it is not surprising that when their collective wisdom is called together they may give similar advice to the League of Nations. Therefore, the attack is not upon the League but upon the particular persons who are there to advise it on financial issues. The correct remedy is to send wiser and abler advisers there.
  When the Debate took place on the previous occasion the idea was put forward that one of the conditions of the loan was that the Customs Union between Germany and Austria should not be allowed to take place. We were told in the reply to the Debate that the result of passing that resolution would be that there would be no change and that the situation would, at any rate, be no worse. I do not think that is quite the whole story. The position really is that France
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  insisted absolutely that this loan had to be issued under the terms of the Protocol of 1922. They insisted for political reasons and the Permanent Court of International Justice had before it this Protocol in connection with the ' well-known case of the Customs Union which the German Government brought about, and they decided by a majority that the Customs Union was illegal under the terms of that Protocol. Therefore, it follows that for the next 20 years any Customs Union between Germany and Austria will be illegal and an impossibility.
  We ought to have some defence from the Government as to why they came to agree to an extension of the issue of the loan under conditions of this kind. Were they obliged to do so? Surely they could have insisted that it should be free from these fetters, which are most unfair and unreasonable in the case of Austria, which is in a difficult position geographically and economically as a result of the War. It may be that a customs union between Germany and Austria is too limited and that there should be a wider area covering all that part of Europe, but it is unfortunate that we should agree to this new scheme, which continues for 20 years the fetters placed upon Austria by the Protocol of 1922. It is clear that the whole object is to repay the loan made by the Bank of England; we are simply meeting a debt incurred by the Labour Government. They regret it now, but it is an honourable obligation made with their con currence—
  Mr. A. BEVAN: Surely the Financial Secretary made it clear that the loan by the Bank of England did not in any way involve an obligation on the Government?
  Mr. MANDER: The Financial Secretary made it clear that the Labour Government on its own motion undertook the liability of concurring.
  Mr. BEVAN: To concur in a loan made by a private company is not to underwrite a loan.
  Mr. MANDER: We all know that the relations between the Government and the Bank of England ought and should be very close indeed, and that when a loan of this size is made to a foreign

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  country it is well known to the Foreign Office. In this case the Labour Government decided that they would concur and approve, and there is clearly a moral obligation on the Government of this country to carry it through. I hope this will be the last time, and that nothing of the kind will be necessary in the future. The whole point is this. There is no case, apart from this loan, for picking Austria out and making the loan to her, but we have done so. Whether we shall have to make another loan in the future depends on the World Economic Conference which is to be held some time this year. If the Government pursue a bold policy for a reduction of tariff barriers and all restrictions on trade throughout the world with courage and determination, as I hope they will, the situation in Austria arid other countries may improve and prosperity return. If they do not then it is clear that this loan will be perfectly useless; we shall be throwing good money after bad. I hope that this will prove another stimulus to the Government to make the greatest possible success they can of the World Economic Conference.
  10.34 p.m.
  Sir S. CRIPPS: There seems to be an idea that this loan made by the Bank of England was a loan made at the request or with the consent of the Labour Government. I naturally have no means of knowing the position, but I understand from the Financial Secretary, who no doubt has looked carefully into this matter before he made his statement, that there was no approval of any sort or kind, before it was made or at any time, and, indeed, that this loan was not in any way an isolated transaction but part of a much larger transaction between the creditors of the Creditanstalt—the Austrian Government, the National Bank of Austria and the Bank of England, whereby the Austrian Government guaranteed £14,250,000 sterling to the creditors of the Creditanstalt. It was in order to enable that guarantee to be carried through that the Bank of England, which no doubt was vitally interested in preserving the financial stability of the big London houses, put at the disposal of the Austrian Government the 150 million schillings, probably in the form of sterling. That was a matter which was done entirely for the sake of the City of London, and it was
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  not done as the gesture of a humanitarian bank in order to save Austria. It was because the Austrians already owed so much to the City of London that if the Creditanstalt had simply been allowed to default there would have been a very urgent crisis in the City of London itself.
  The criticisms which we have to offer upon this Bill are, first, that by this snowball of international indebtedness you will never cure the Central European position. It is quite clear that the object of this loan—it has been so stated—is to put at the disposal of the Austrian Government an amount of foreign exchange to enable them, first of all, to convert some of their short-term liabilities into long-term liabilities; and, secondly, to enable them to have a certain amount of foreign exchange for the purpose of providing the service of the previous loans; that is to say, this money is fresh capital out of which interest on the old loans may be paid. When, this £4,500,000 is exhausted no doubt Austria will come back again, or someone will suggest that Austria should come back again, and borrow some more money to pay the service on this loan and the previous loan, and the loan of J. P. Morgan and Company, which was made in 1930 to the Austrian Government. So we shall go on building up this superstructure of indebtedness upon a foundation which does not exist at all, because there is no economic unit in Austria which is capable of carrying this huge weight of debt.
  We believe that if this problem is to be tackled at all, as was said on a former occasion, it has to be tackled by reconsidering the whole Central European situation and doing something to build up economic units which are capable of becoming self-supporting. For that reason the restriction which has been put upon Austria as a condition of this loan, that for 20 years she will not enter into any Customs union with Germany, is, we think, a very serious restriction, and one which is extremely vicious in view of the European situation.
  There is one other aspect of the problem which calls for a great deal of criticism. This 100,000,000 schillings the equivalent of which is being provided by a loan in this country, is expressly to repay the Bank of England, and it is so laid down in the annexe to the Protocol.

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  The Bank of England is a particular creditor of Austria, and we do not see any reason why that particular creditor should be provided with the money at the expense of the English taxpayer, because there is very little doubt that no one will ever see this £4,500,000 again except the Bank of England. They, of course, are going to get it, and they will, therefore, benefit to that extent. I suppose the country will never get it back again until they nationalise the Bank of England and get it in that way. No doubt the country will do that, though whether this item will then be traceable in the accounts, it is impossible to say.
  We asked the Government on a former occasion to explain why, when we cannot pay America, as we say, when we cannot provide money internally for essential services such as slum clearance, housing and proper unemployment benefits, we are able to raise in this country a loan of £4,250,000 which is to be paid to the Bank of England. We are, in fact, apparently preferring the claim of the Bank of England to be reimbursed for a bad loan which they made two years ago, to the urgent needs of our own people. We on this side of the House do not see how any Government can justify it. Nor, may I say, to their credit, have the present Government ever tried to do so. We have never heard an argument from the benches opposite which sought in any way to answer that criticism. We challenged the point formerly, but the Financial Secretary with his usual adroit ness managed to skate over the ice with out falling into that particular hole. We hope, however, that the Government will take this opportunity of explaining through the House to the unemployed, who number some 180,000 more than they did last month—
  Mr. MICHAEL BEAUMONT: Does that please hon. Gentlemen opposite?
  Sir S. CRIPPS: It does not please me any more than it pleases the hon. Member.
  Mr. BEAUMONT: The hon. and learned Gentleman is, I think, the sixth Member of his party who has referred to it this evening.
  Sir S. CRIPPS: Certainly. We are vitally interested in the feelings of hon. Gentlemen opposite, and we believe it is
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  very good for those feelings that they should constantly remember the position of unemployment. As I say, perhaps we may on this occasion have explained how it is that in the circumstances which I have mentioned this money can be raised on the London market and put to this use of repaying the Bank of England, when apparently it is impossible for the Government to raise money for housing and other purposes which might lead immediately to employment. That, I think, is a question which the unemployed will want to have answered when they read to-morrow that the Government are providing £4,250,000 for Austria.
  10.44 p.m.
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon):
  This has been a useful Debate, but it is well to bear in mind, in view of the case which has been so forcibly put from the other side of the Table, that the statement has already been made that hon. Gentlemen opposite do not intend to vote against the Second Reading of the Bill. This matter has a history which must be kept in mind if one is to judge it fairly. The Government certainly have no reason to oppose the view which has been expressed in many quarters, that when our own country is living through such difficult times, when there are so many good objects which we should all wish to see supported to the fullest possible extent, nobody desires to see us travelling all over the world in a sort of Don Quixote fashion, bestowing money lightheartedly upon other areas and other peoples. We do not want to do that, and certainly that is no part of the outlook of the British Government in this matter.
  On the other hand, I must be allowed to say—and I aim sure that hon. Gentlemen opposite will support me in this— that it is the greatest possible mistake to suppose that the prosperity of this country and of our own people has no relation at all to the situation of people in other parts of the world, and if one can find a case in which there is really a specially strong need for help and a specially strong reason for believing that help may have good results, then I think we must find a balance between these two very natural and very proper needs.
  At Geneva, I found that the Finance Committee of the League of Nations was

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  engaged in drawing up an elaborate plan which, if it had been adopted in full, would have meant the guaranteeing of loans, not only to Austria, but to other countries in the centre of Europe, whose necessities I do not dispute. That was being done by the very distinguished men who are on the Finance Committee of the League. The British Government thought it right to examine those proposals very closely, very shrewdly, because, after all, we have to consider our own national position and not allow our actions to be completely decided even by the most experienced and the most disinterested international organisation. We put on our experts to study the plan, and we came to the conclusion that we could not ask the House of Commons and the country to accept this very elaborate scheme, which would have bestowed benefits upon several countries in Central and Eastern Europe. But the case of Austria, beyond all question at all, had some special features, and here are two very special features.
  There is no doubt whatever, I apprehend, that a financial disaster occurring at Vienna would have a greater effect upon the whole credit of Europe than a similar sort of collapse in many of the adjoining States. I think anyone who has followed the history of the matter will have recognised the significance of the fact that the Creditanstalt crisis was the prelude to the German crisis of 1931. What have we been trying to do at Lausanne? We have been endeavouring, no doubt, to serve what we believe to be the interests of our own country, but we have been trying to do it by having regard to the terrible stress and the fearful necessities of some of the populations on the Continent of Europe, and we have endeavoured to get co-operation for the purpose of lifting the burden, if we could, upon Europe as a whole.
  The first reason why the Austrian case was thought to be one which stood rather specially apart was that, I believe, in the judgment of all competent persons, a collapse in Austria, a collapse in Vienna, which, as the hon. and gallant Member for St. Marylebone (Captain Cunning-ham-Reid) rightly said, might mean political anarchy, was a thing which would certainly produce the most dreadful reactions, not only in Austria itself, and in its immediate surrounding
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  neighbours, but in Europe generally. Furthermore, the collapse of a financial house or of a particular bank is felt by poor people just as much as by rich and may produce very great hardships. That is one reason, and the second is the very practical one that if Austria made default on her 1923 loan, then, straight away, we were in for a loss of £800,000 a year, which is a good, solid, practical factor. In those circumstances the experts who examined this, the Chancellor of the Exchequer and the Treasury, came to the conclusion that, while we could not announce at Geneva that we would adopt this elaborate plan of the Finance Committee, which would have tried to assist quite a large number of countries, this was a case which stood much more by itself and one where we ought to see if we could give some help.
  But see what the conditions of help are. While this House is asked to give a Second Heading to a Bill authorising the making of this loan, the loan is not going to be made unless, indeed, it is with the co-operation of other countries, including France. We have no idea of doing it entirely by ourselves. We have got a similar assurance from one or two other important countries in Europe. If now it is possible for these countries to join together with us to make this loan, the special circumstances of the Austrian case would justify our joining in. If others are not able to do it, we cannot do it either. The hon. Member for Marylebone asked why it was that while the Schedule of the Bill speaks of an amount of 300,000,000 schillings, the actual amount mentioned is a smaller sum. The answer is that the smaller amounts adding up to 238,000,000 schillings are amounts promised firm assuming we are all able to come together. But, of course, the list is open. Already there have been hopes that some other countries will make contributions, and if it is possible 300,000,000 schillings is the total wanted to be provided.
  Those are the broad reasons why the Government thought that this case ought to be considered specially. There is one thing more. Not only will any competent student admit that an Austrian collapse would be exceedingly severe in its possible consequences to Europe and other countries, but, as a matter of fact, it is only right to recognise that the

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  Austrian Government, faced with great difficulties, have already made considerable efforts, and not unsuccessful efforts, to pull itself round. I am not going to be so rash as to make any promises at all. No one shall quote what I am saving to-night, if things go badly, as saying that I have assured the House of Commons that all is now going to be perfectly all right. I do not know, and we none of us know, but we had to consider what Austria had done. The right hon. Gentleman the Member for South Molton (Mr. Lambert), with whose general view of the necessity of being careful I entirely agree, quoted a passage from the "Times," but I do not think he observed that that was followed by a very careful statement, and there are a couple of extracts which I will venture to read. The first is that the statement to which he referred
  "does not take account of the fact that the Budget for 1933 has been balanced and that expenditure has been reduced by 269,000,000 schillings in the period 1931 to 1933."
  I naturally inquired about the Budget of 1933 which has already been the subject matter of assurance, and I have ascertained that in 1932 there was a very small adverse balance, less than £500,000. In 1933 the Budget, as presented, by means of very considerable economies and the additional burdens they have taken on themselves, is actually a balanced budget and to that extent Austria is entitled to say to some of her neighbours that she has been doing her very best to pull herself round. The second extract I should like to read is this:
  "The Austrian Treasury was able to meet all foreign claims of holders of the League of Nations Loan of 1923 and of the International Federal Loan of 1930 on 1st January, 1933. the transfer of payment being continued."
  I can only say I wish other foreign Governments would in all cases do the same. Austria is entitled to say she has in these days of exceptional difficulties, and with the advice and the help of the League of Nations advisers, been doing her utmost to pull herself round. We have not the slightest intention of undertaking this new experiment by ourselves, but we did think it right to say, when the League of Nations presented us with a much more elaborate programme, that we really could not do all this. The burden on our country and the claims on our people did
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  not make it possible to suggest that we could do all that, but here was a very vital case in which we would do it provided some of the other countries of Europe would do the same. I think that the House will see that that was a reasonable and sensible course, and it is a very narrow view of our own interests and our own duty to say that we should wash our hands entirely of other people and that they can collapse without serious reactions upon ourselves.
  The hon. Member for Westhoughton (Mr. R. Davies) raised a side point, but a perfectly reasonable point, in this connection. He called attention to the fact that, according to rumours and reports, there had been a strange event, namely, some importation, it is suggested, of arms into Austria. The hon. Gentleman asked the Government quite naturally what the Department for which I am responsible had done about it. As soon as we heard of this, I directed that inquiry should be made of all the capitals in Europe which could possibly have information to give. These inquiries were addressed in very careful terms by our representatives there. The worst of it is that in these cases you very seldom get a completely clear account of the matter about which inquiries are made. I think it is plain that the hon. Gentleman, possibly by a slip of the tongue, went too far when he spoke of the Austrian Government importing arms. That does not appear to have occurred at all. What appears to have occurred is that a number of arms, not new, but old arms, were sent to two factories in Austria, so it is said, for the purpose of being reconditioned, for, I suppose, more effective use. They consisted of a large quantity of rifles and 200 automatic rifles. They were not imported by the Austrian Government, but they were undoubtedly received by two factories which are in Austria.
  The next question was, "Where are they going to?" As the hon. Gentleman correctly informed the House, there were rumours in the papers that they were going to Hungary. When inquiries were made at Budapest, the answer was that the Hungarian Government had no knowledge of the matter at all. We have done all that is proper to test that, but that is the answer we get. As regards the Austrian authorities, they say that the arms were forwarded with the con-

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  sent of the competent Austrian authorities as coming to the country for the purpose of being reconditioned. The question still is, therefore, as far as they have not been distributed, where they are going to. On that, I will only say that I have acted with promptitude and made it plain that we desire to know more about it, and that we most particularly call attention to the fact that we would conceive it as a breach of the Peace Treaties if they were to be distributed as some people suggested.
  Mr. RHYS DAVIES: Has the right hon. Gentleman information where they came from?
  Sir J. SIMON: We made inquiries from the country from which it was suggested they came, and were assured by that country that, as a matter of fact, they are unable to give us much information. I have not given up inquiring into the matter, and am in contact with some of the other Governments in Europe about it. I would just observe this, that I think it is just as well that the fact should have been ascertained that two Austrian firms have been allowed by the Austrian authorities to import arms with a view to reconditioning them for export. I think it is very well in view of the terms of the Treaties that the fact should have been publicly stated, as it was quite accurately, by the hon. Member. We desire if we can to get at the bottom of the affair, not with the object of calling anybody hard names, but to stop what would be a Very serious thing—if it were the case that there was a secret supply of arms from any quarter. But, after all, the House will see that this question of arms has nothing to do with the Austrian financial situation. The arms are not being imported by the Austrian Government, none of this money goes to pay for them. Having given the House, as candidly as my information permits me to do, the facts about that situation, I ask the House to take the view that this is a case where, naturally, we all examined the claims made upon us with a great deal of concern and anxiety; and because of that, and of the history behind it, as my hon. Friend the Member for Farnham (Sir A. M. Samuel) said, I hope the House will give us this Measure.
  Mr. MABANE: I understood the right hon. Gentleman to say that the Austrian Government, by their Budget of 1932, had served the loan guaranteed in 1923, and yet on 20th December the Financial Secretary to the Treasury said:
  "The Austrian Government undertook to transfer the sum required for the service of this Joan in monthly instalments. The transfer of these instalments has been suspended since 1st July, 1932."—[OFFICIAL REPORT, 20th December, 1932; col. 969. Vol. 273.]
  I am at a loss to reconcile that statement with the statement made to-night.
  Sir J. SIMON: I think the hon. Gentleman will see that there is no inconsistency. The question whether in a given year a country balances its Budget is a question of balancing outgoings and receipts. Whether it is or is not punctually serving a loan is not quite the same thing. I believe it is true that when that statement was made there had been some delay, at any rate, in serving the loan, but it is the fact that there never has been actual default in serving the loan of 1922–23; and by means of this new advance, combined with the contributions from France and other countries, we believe we are really assisting Austria to meet that liability.
  Mr. MABANE: Do I understand that those monthly instalments have since been met?
  Sir J. SIMON indicated assent.
  Mr. ATTLEE: I understood from the speech of the Financial Secretary that none of this money was actually going to Austria. If that is so, what is the point of saying that Austria has balanced her Budget? If she has balanced it why should we take on this liability?
  Sir J. SIMON: The answer is that at present Austria has got a short-term loan at a high rate of interest. If this proposal goes through she is going to get the money at a low rate of interest. So far as the loan of the Bank of England is concerned—whatever may be challenged or is in dispute as to the impression given by a former Chancellor— it is certain that the Bank of England lent money on the terms that whenever Austria next got a loan that money should be repaid. Therefore, the only choice between us is either not to go into this business at all or else to accept the posi-

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  tion that if the loan is made by several nations together this borrowing by the Bank of England will be repaid. Those are not the terms we have inserted. It is one of the conditions on which the Bank of England loan was granted. When I say that Austria will have additional re sources, it is quite true that so far as this country is concerned, it is a case of a given sum cancelling out against another sum, but we must remember that the total loan to Austria does not come from this country alone.
  11.5 p.m.
  Mr. BRACKEN: I do not want at this late hour to trespass very much upon the time of the House. We have listened to an answer from the Foreign Secretary which he called "candid," but which was in fact more clever than candid, and to a speech from the Financial Secretary which skated over the most important points raised in the Debate. It is not at all clear whether, when the Bank of England made this advance to the Creditanstalt, they obtained the Treasury's participation. The Financial Secretary to the Treasury says that they did and did not. The Chancellor of the Exchequer says that be was not a member of the Government at the time, so that he could give the House no information. It is a very important point indeed. If the Chancellor of the Exchequer at that time, Lord Snowden, gave any guarantee to the Bank of England that the State would back the Bill that lies behind this advance to Austria, an attempt has been made behind the back of the House of Commons to lend money to a foreign government by utilising the Government's bankers and pledging this House's credit without any consultation with its Members.
  So far we have had no very clear explanation on this point. The Financial Secretary to the Treasury was embarrassed and unhappy when he was questioned on this subject. He never told us whether the Government was a party to the advance made by the Bank of England to the Creditanstalt. That is the most important question that could be raised in this Debate. The Government, at the present moment, are ratifying a decision taken secretly between Lord Snowden and the Governor of the
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  Bank of England, and by doing so we are losing the whole of the boasted control of the House of Commons over finance. It is remarkable that no speaker in the Debate has given any information as to whether the Government was a party to the loan which was made to the Creditanstalt. I will give the Financial Secretary an opportunity of telling the House whether the Government was or was not a party to that loan.
  Mr. HORE-BEUSHA: I would not like my hon. Friend to go away dissatisfied, nor should I like him to go away under the misapprehension that there is any distinction between what my right hon. Friend said and what I said myself. My right hon. Friend was asked by the right hon. Gentleman the Member for Farnham (Sir A. M. Samuel) if the Bank of England made this advance at the request of the Government, and the Chancellor of the Exchequer replied:
  "I will not say that, as I was not a member of the Government at the time, but that it was with the approval of the British Government I have no doubt."—[OFFICIAL REPORT, 20th December, 1932; col. 935, Vol. 273.]
  That is precisely what I myself said, indeed what I think I have said this evening, namely, that the Government of the day regarded it as desirable from every point of view to avert financial collapse in Austria and to approve the action that was taken by the Bank of England. I think that that is an amplification and an extension of what my right hon. Friend said, and I made that statement with the intention of giving to my hon. Friend who interrupted me and who put the question, the fullest explanation.
  Mr. BRACKEN: I am very much obliged to the Financial Secretary. I do not think that his explanation of the Chancellor of the Exchequer's explanation gives us a very clear indication of what really happened. The Chancellor of the Exchequer said, "I will not say that, as I was not a member of the Government at the time," but he could have applied underneath the Gallery to his own officials to get the information on that point. The trouble about this loan is that the Government have inherited an unhappy commitment from Lord Snowden. The Government are ashamed of that commitment, but they are determined to ram it through the House of Commons. The Government are deter-

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  mined, knowing that this loan was made behind the back of Parliament, to endeavour to fulfil the embarrassing commitment left to them by Lord Snowden. I think the House will lose all reputation if it passes a Bill of this kind. What is happening is that we are fulfilling a subservient function. We are to back a Government bill a year and a half after the obligation has been incurred without our knowledge. I think we ought to resist this proposal, and if we do so, I do not think that it will embarrass the Government very much, because the Government, as far as I know, are not on affectionate terms with Lord Snowden. The principle of Parliamentary control of finance is the most important issue in this Bill.
  Supposing that by some extraordinary chance one of the hon. Gentlemen on the Front Opposition Bench became Chancellor of the Exchequer, and was thinking of making a loan to Russia, he might say, "We cannot get this loan from Parliament, but we will instruct our bankers to make the loan, and will ask Parliament to ratify it later." Then every Member on the Treasury Bench would say that our control over the public purse had been destroyed, and Parliament's authority over finance had been undermined, and we should have a number of brilliant perorations against such a policy. The present position is not different. The Government are ratifying la loan which has been made in an illegal and disingenuous fashion by the former Chancellor of the Exchequer, Lord Snowden, and, if any Member of the House has any independence of the present administration, he will not vote for it.
  On the other hand, if the Government say that they never accepted any responsibility for the loan, would they explain why they bring in what is practically a Bank of England Belief Bill? They are bringing in a Bill to help a country which is competing with our own traders. Why not bring in a Bill to help joint-stock bankers in Lancashire, Yorkshire and elsewhere? If the Government are so anxious to relieve bankers, surely they will relieve those who are financing our home trade, and not those who are assisting our foreign competitors.
  I do not think that this Government approve of financing the Creditanstalt or
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  Austrian traders. I know that they realise that they have inherited a monstrous commitment fom their predecessors, and are anxious to make the best of it, and they send the Foreign Secretary to perorate, as he did in the most winning language, about helping Austria; but he forgot to tell us that the proceeds of this loan are not going to help Austria, but are going into the coffers of the Bank of England. The Foreign Secretary, further, made great play with the fact that Italy and France had participated in this loan, but he did not give the House any information as to the terms imposed by France and Italy. They made a condition that Austria could not enter into a very desirable Customs Union with Germany. We are being dragged into these squalid intrigues between Italian and French politicians over the corpse of Austria. I think that that is a mistake. If France and Italy will turn Austria into an almshouse, they had better be told to keep her, but I do not think that the British taxpayer should be called upon to do so.
  I seriously ask Members of the House, especially the younger Members, to make a great effort to preserve their independence to-night by turning down this proposal. The Government cannot resign if this Bill is rejected, but they would be taught a lesson to respect the old House of Commons tradition of our control over the public purse. It seems to me that the observations which have been made by the Foreign Secretary and the Financial Secretary are so futile that it is an insult to the intelligence of the House to ask it to accept their arguments. The Chancellor of the Exchequer, who was quoted by the Financial Secretary, told us that he practically knows nothing about this loan, because he was not in office at the time. He goes to the Treasury every day, but, apparently, they do not show him the papers relating to what happened before he came into office. Because, I suppose, we reached a new era when he descended upon the Treasury. The busy officials underneath the Gallery who can explain, everything were happily dumb in this occasion. The Government 'are trying to save Lord Snowden's face, though with the greatest reluctance; but even so I appeal once again to the younger Members of the House, and to all independently minded Members, not to

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  support this Bill. We are always being told by the Government that they cannot afford 'a penny to get rid of our suppurating slums, or for any sort of social service, but they are quite willing to march forth with £4,500,000 to help the Bank of England or Austria. At some time or other Members will be faced with a general election, and I should like to see their faces when they are told by their constituents: "You supported a Bankers' Relief Bill for £4,500,000, while refusing to find a penny to deal with the slum problem and other grave social evils in this country." That is what they will be told if they do not go into the Lobby and support us. We are really trying to do our best for the House of Commons traditions by 'attacking this particularly disingenuous and unconstitutional Bill.
  11.16 p.m.
  Mr. C. WILLIAMS: I think the House has the right to have one of the most important questions answered by the Foreign Secretary. The Government were asked the other day and again to-day by the right hon. Gentleman the Member for South Molton (Mr. Lambert) if there has been any agreement or arrangement of any sort or kind with any of the countries which are guaranteeing part of this loan and if they have laid down any sort of condition that there should not be a treaty between Germany and Austria, for the purpose of reducing tariffs. I can imagine no circumstance which would bring the Foreign Secretary into this Debate unless it was to give an answer to that important Foreign Office question. The Financial Secretary on 20th December made it fairly clear to some of us, as we thought at the time, that it had nothing whatever to do with a trade treaty between Germany and Austria and that there was no part of the Protocol which laid it down that for say, 20 years, Germans and Austrians were not to make any form of trade agreement. Yet, a few days afterwards we had a leading article in the "Times" which indicated that the French had apparently laid it down that for the duration of the loan, for 20 years, there should be no possibility of a trade agreement between Germany and Austria, which is in a hopeless financial position.
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  This point has been raised by more than one hon. Member, and we have had no answer. The speeches and ideas of the Socialist Opposition are directly contrary. They all seem to think that there has been an agreement of this kind. It is hopeless for the House of Commons to be passing a Bill of this nature; it is not right that we should pass it if there has been some private European treaty, one of those secret treaties, which are the worst of all, by which you prevent the Austrian people, whom you have placed in a hopeless position as an economic unit, from trading with the great nations around them on more favourable terms than now. You have no right, as I see it, to take part in treaties of that kind imposing burdens on countries in the centre of Europe who are at present hopelessly incapacitated by the burdens laid upon them by the Peace Treaties. I think the House is entitled to know perfectly clearly and once for all whether there has been any sort or kind of foreign agreement.
  Sir J. SIMON: I will answer the question, as the hon. Member says, once for all and perfectly clearly. There is no private or secret understanding or agreement of any sort or kind. I cannot agree with the hon. Member that the question the puts has not been answered. It was answered in the Debate on the Financial Resolution and was answered in anticipation by my hon. Friend beside me, and if the hon. Member will look at the Schedule and read between lines 15 and 20, he will there see the answer printed on the face of a House of Commons paper.
  Mr. WILLIAMS: I ask my right hon. Friend, What is the basis of the speeches which have been made from this side? Here is a leading article in the "Times" of the 3rd January which lays it down, with reference to the Treaty between Germany and France, that this renunciation was the price required for the French participation in the new scheme of financial assistance, without which the issue of a fresh loan would not have been possible. Will my right hon. Friend the Foreign Secretary, say that the leading article in the "Times" is entirely inaccurate, or is it accurate?
  Sir J. SIMON: I will make the point quite plain to my hon. Friend. I have not said anything at all before about the

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  explanation of the speeches of hon. Gentlemen opposite, or with regard to the contents of any article, but what I am saying, and what I have said quite clearly, is that I do not know of any secret or private arrangement or treaty, or any understanding of any kind. If anyone wants to know what the condition is, it is here printed in the document. If the hon. Gentleman will look at it, he will see:
  "That the above Governments, including the Austrian Government, declare that such assistance is given on the basis of Protocol No. 1 signed at Geneva on the 4th October, 1922, and of all the undertakings resulting therefrom."
  That is to say, that the provision of the earlier Protocol of the year 1922 applied without change to the present document. I will first give the example that one of the conditions is that Austria undertakes, in accordance with the Treaty of St. Germain, not to alienate its independence. What is not true is that there is any special condition put upon Austria in respect of this new loan; still less is it true that there is any treaty, arrangement, or understanding of which I have no knowledge whatever.
  Mr. WILLIAMS: I accept that statement, but the right hon. Gentleman has said this Treaty carries on the same position as that of the 1922 Treaty. This Treaty takes it on for the full 20 years, and that may very likely be the cause of the misleading opinion held by some people. There is a strong feeling that you have lengthened the time laid down
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  previously, and made it more difficult to have any sort of breakdown of the economic barriers in Central Europe. I think that it is a very bad condition to have in this Treaty. As my right hon. Friend said, there is nothing secret or anything of that kind, but it is a curious thing, as many people think, that you are doing in this Treaty something which will make it more difficult to effect a real economic solution of the policy of the great Central European Powers.
  Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Hore-Belisha.]

  EVIDENCE (FOREIGN, DOMINION AND COLONIAL DOCUMENTS) BILL [Lords].
  Read a Second time, and committed to a Standing Committee.
  The remaining Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn."—[Captain Margesson.]
  Adjourned accordingly at Twenty-five Minutes after Eleven o'Clock.