HC Deb 15 May 1933 vol 278 cc156-67

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."



I desire to say a few words on behalf of my hon. Friends concerning this Bill. I do not propose to detain the House unduly. Hon. Members will know that on two occasions at least we on this side of the House have been associated with hon. Members in other parts of the House in indicating our dissent from the general principle upon which the Bill is founded, and I need only say that we occupy precisely the same position concerning that principle that we have taken up Since the initial stages. We have on previous occasions indicated that the creation of an account of this sort was a somewhat hazardous experiment, but in the present condition of the world financially it would appear to us to be more hazardous to-day than it was even 12 months ago. It is just possible that we are approaching in the next weeks and months a time when that hazardous position may be even worse than it is now. Let me illustrate it. Recently America has gone off the Gold Standard. For all we know Germany may follow suit in a short time, and it may be that one of those days the fund which we are discussing may be in a somewhat precarious position. However, the Treasury have decided that in their wisdom they will proceed with this proposal, and I need only emphasise once more that we stand precisely where we have done in regard to the principle in the Bill.

I want once again to raise with the Chancellor of the Exchequer, not a party question, but the question which I have discussed with him across the Floor in previous Debates on this subject. It is a House of Commons question. It is a question as to the control of this fund. [HON. MEMBERS: "Hear, hear!"] I gather from the cheers that come from other parts of the House that our sentiments are shared by Members in all parties.


I am afraid that we shall not be able to discuss that question on the Third Reading of the Bill as it is entirely outside the Bill.


I submit to you, Sir, that a good reason for not giving approval to the Third Reading is that the conditions under which the Account is being set up do not meet with our approval.


That might be a good reason to give on a reasoned Amendment against the Third Reading, but it would not be in order to discuss that point on the Third Reading itself.


May I submit that it would be in order to ask the Government to give us an explanation as to the measure of control which will be exercised?


As I read this Bill, it is one merely to increase the amount of the Account.


Of course, I must accept your Ruling, Mr. Speaker, but may I submit that it is a sound House of Commons view to take that we have no assurance that the increased amount will be adequately controlled on behalf of the House, and that we ought not to part with the Bill until we have that assurance?


The question then arises as to how it is to be controlled. There is no question of control in this Bill, so that point must be outside the Bill and therefore out of order.


Would it be in order to ask the Chancellor of the Exchequer whether he would be prepared to take certain administrative measures to secure that a report shall be presented to Parliament on certain matters? If he were to decline, it might be a reason for voting against the Third Reading. Would it not be in order at all events to ask whether such administrative measures will be taken?


Yes, that would be in order.


Then may I put that question to the Chancellor? The Account was set up last year without any definite provision whereby it should be duly reported upon or accounted for to the appropriate Committee of this House. To-night we are increasing the Account by £200,000,000, and the question I put to the Chancellor is whether there is in his mind at the moment any intention to provide the House of Commons or any Committee of the House with an opportunity for examining the control of the fund? It is well known to the House that there are occasions when such funds have to be treated with great confidence, and I can imagine the Chancellor would feel that he must examine very carefully what arrangements he would make or what machinery he would set up. All I invite him to keep in mind is that it is not a new situation, and that therefore our inquiry as to whether he will provide adequate machinery is not an inquiry in an entirely new situation.


The hon. Member is going beyond what I ruled. What I intended was that it would be in order to ask the Chancellor whether he is going to devise any administrative proposals on which this point could be discussed.


Then I will content myself with putting that question to the Chancellor, and I hope he will be able to give us a favourable reply.

11.10 p.m.


I rise to show that the hon. Member is not alone in his request. I am afraid that I shall not be anything like so skilful in the difficult waters in which we find ourselves owing to the Rules of Procedure. I would remind the House that when we tried to raise this matter on the Committee stage it was also ruled out of order. The Very serious fact emerges that the Government are asking the House by this Measure to increase by £200,000,000 the fund which they started last year, and that through circumstances which have arisen during the passage of this Measure through the House, it has been impossible to discuss any form of public control for that sum. You have ruled that it is in order to ask the Chancellor of the Exchequer whether he proposes to provide any administrative means by which some such information could be given to Parliament. I speak, I am certain, for a great many Conservative hon. Members, and, so far as I know, for the Liberal party. I do not often speak for the Liberal party, but on this occasion I know that they are with me in asking the question in the most formal manner possible. I would like to try to rouse the feelings of this House, not against the Government but on a purely House of Commons matter, which I mentioned last year and make bold to repeat again this year, and on the merits of the Bill.

I see a very great difference. Last year, the Government asked for this sum of money for what was admittedly an experiment. They could not possibly see what was to be the result of stabilising the exchange, or of ironing them out for a short period. I have no doubt that the Government were surprised to find that they had made a profit out of the transaction. I submit to the House that, in a matter like this, size is of the very essence of the matter, and what might have been allowed to go through the House last year, in sailing uncharted seas, which no official of the Treasury had ever navigated—in fact, the hon. Member for Putney (Mr. S. Samuel) is the only Member who knows anything about this matter at all, and he gives it as his considered opinion that we are doing wrong in accepting this Measure, whereas the hon. Members for the City of London never speak on it—what might have been good in the circumstances of last year is not necessarily the case to-day. When the Chancellor of the Exchequer asks us to increase the fund by £200,000,000 it means that the grand total will be nearer £400,000,000 than £350,000,000. The original fund was £150,000,000, and the amount now asked for is £200,000,000. That makes £350,000,000. The assets of the Dollar Exchange Fund were put in last year, unless they were absorbed in the £150,000,000. I understand now that they were, although I understood that they were extra. That was the position last year. We are going to put something like £400,000,000 into the hands of the Government of the day—for I do not imagine that this fund is going to be wound up, and the Government of the day, whatever its political complexion, is going to deal with this sum without any reference to us. That is why it is desirable that the Chancellor of the Exchequer should make such a statement as he can make in order to reassure us.

A big thing—if I may put it in this way—is not necessarily a small thing bigger. [Laughter.] May I explain what I mean? The by-laws, for example which are applied to a cottage, are not those which the London County Council impose in regard to sky scrapers. The rules which a dog fancier has for his pekinese are not those for his bloodhound and those which might be very well for £150,000,000 last year, when you did not know what was likely to happen, are not necessarily those which this House will desire to use dealing with a fund for twice that amount. I do not want to stress the point, in view of the ruling which you and the Chairman of Committees gave the other day. The whole history of the House has been the age long struggle of this House against the Crown and, what is now the equivalent, of the executive of the day. The Crown in olden days, and the executive nowadays, naturally, from their point of view, have tried to get all the power and all the control they could, and it is our business as Members of Parliament to see, as Lord Hewart has pointed out in his book "The New Despotism," that such limits as are reasonably possible are set to those powers. I am not asking for anything unreasonable, but only for such control as can reasonably be given to this House at some stage in these proceedings.

The Chancellor of the Exchequer has only to answer the question of the hon. Member for Caerphilly (Mr. Morgan Jones) in the affirmative—to say that he will take some administrative action, or introduce something into the Finance Bill to deal with the matter—and we shall be satisfied; but, unless he can give us some firm assurance on that point within the Rules of Order which you, Mr. Speaker, have laid down, it will be for the House seriously to consider whether it is prepared to give to any Executive complete control over these vast sums of money. Their apparent object is perfectly clear. It is to try to "iron out," as they say, the exchanges for day-to-day transactions. It may be that they could devise a better way of obtaining the same result. It is only supposed to be an advantage for the trading community, and there may be ways and means of doing it at a far less cost than £400,000,000, which we risk losing entirely if the fund is not adequately manipulated. I do not use that word in a bad sense, but it is the word which is obviously suitable for a matter of this kind.

This, possibly, is one of the most serious questions that the House will have to consider from that aspect. If the right hon. Gentleman asks, "What do you suggest?" my answer is that it is not our scheme, that we did not propose the Exchange Fund, but that the Government and their advisers have proposed this method of dealing with the problem, and it is for them to see whether they cannot, at the express wish of the House of Commons, bring it more into conformity with our desires. It is a simple problem, but, unless the Chancellor of the Exchequer and the Government can give us some firm assurance with regard to the Finance Bill or some other means which they can devise for dealing with the situation, I should reluctantly be forced to ask my hon. Friends who really care about the control and prestige of this House once again to join issue with the Executive of the day and go into the Lobby against the Third Reading of the Bill.

11.17 p.m.


Before the Chancellor of the Exchequer replies, as the hon. and gallant Member for Gainsborough (Captain Crookshank) has made references to Rulings given by the Chairman of Committees and myself in reference to this matter, and lest there should be any misunderstanding that the Rules and forms of the House are inadequate to allow hon. Members to deal with this question in the way that they think they ought, I must point out to the House and to the hon. and gallant Member for Gainsborough that the hon. and gallant Member missed his opportunity—that the time at which that should have been done was on the Resolution on which the Bill is founded. That was the time at which to move Amendments to deal with the question which the hon. and gallant Member wants to raise.


I hope I may be pardoned if I say that I was not questioning the justice of your Ruling, Sir, or that of the Chairman of Committees.


I did not think that the hon. and gallant Member was, but I thought that it might be thought that the Rules of the House were inadequate to allow him to raise this question. That is not so.

11.19 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I am glad that, through the kindness of the right hon. Gentleman the Member for Darwen (Sir H. Samuel) the hon. Member for Caerphilly (Mr. Morgan Jones) was able to put a question to me which allows me to make some reply on the point which has been raised. If you, Mr. Speaker, had not intervened, I was also going to say to my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) that there was an opportunity at an earlier stage to have moved an Amendment in the sense which he desires; but I do not wish to stress that point, because I take the view that this is not the occasion, and this is not the Measure, which calls for the discussion of the particular point which my hon. and gallant Friend has been putting before the House. This is a Measure simply to increase the resources of the Exchange Equalisation Fund. My hon. and gallant Friend hardly did himself justice when he sought to suggest that we could very well do without House of Commons control when the sum in question was only £150,000,000, but when it came to £350,000,000 some control ought to be introduced, because, after all, £150,000,000 is a very substantial sum, and it seems to me that if House of Commons control is needed at all, it is needed just as much for the administration of £150,000,000 as for £350,000,000.


My right hon. Friend will not have forgotten all the speeches that we made last year asking for control on that? It was only because there was some form of control in the Finance Bill that we let it go through.


I am not complaining; I am merely stating my view, that if any control is required, it is required just as much for £150,000,000 as for £350,000,000. My conclusion is that, if control is to be introduced at all, it should be introduced on the establishment of the fund and, as it was not introduced last year, the proper place for them to move Amendments which would have the effect of introducing control is on the Finance Bill. I suppose it would take the form of a new Clause amending the provision in last year's Finance Bill. I am not taking an unsympathetic attitude at all to the desire on the part of the House to keep some control over this very large sum. My difficulty is that I have been unable to find a practicable method of giving control to the House of Commons over the management of this fund which would not publish, not only to the House of Commons, but throughout the world exactly the way in which the fund has been operated. As one of the principal functions of the Exchange Equalisation Account is to prevent the operations of speculators, the way to prevent the operations of the fund is to let the speculators know exactly how we are working it. But I will go further than I did, in saying that Amendments on this subject should be moved in the form of a new Clause on the Finance Bill. I am quite ready to discuss with my hon. and gallant Friend or with any of his friends who are interested in the subject the form of any Clause which they would like to suggest, or how any Clause could be framed which would achieve the object they desire without bringing on us the consequences which I should deplore and which would render the Fund absolutely useless. If between us, with perfect good will on my part, we can devise any kind of control which could not have disastrous consequences of that kind, I am ready to accept the Clause, but I do not want to mislead the House or to lead the House to suppose that I see my way to any such Clause at present. I cannot see any way of doing it, but I am ready to discuss it, in the way perhaps which would be most practical for the purpose, in a room together, and I will do it, not with the object of finding difficulties but, if possible, of discovering a way to satisfy my hon. and gallant Friend.

11.22 p.m.


I want to ask the Chancellor of the Exchequer if he cannot give us some information. He has spoken about speculations in exchange, on which I think he is rather misinformed. I said before that there was very little speculation going on. He says the operations of the Fund would be well known if he gave more information to the House. I should like to inform the Chancellor of the Exchequer that what the Government are doing is as well known in the City of London as it is at the Treasury. Take the Exchanges. The American Exchange closed on Saturday night at 3.99. It opened this morning at 3.96. At a quarter-past 11 it was 3.94 and at a quarter-past one 3.95. Francs opened this morning at 85⅞ At a quarter-past 11 they were 86⅛ and the same at a quarter-past one. So that they did not vary very much. There was very little gold offering in the morning, and the price was fixed at 123s. 3d. There was only a very small amount in the market. Francs went down slightly, and the Government entered the market and bought them, and the French Government, to counter it, went into the market and bought gold here. There was very little business done in the market on the whole, but the British Government had bought more francs than the French could counter with gold. This is as well known in the City of London as it is in the Treasury. The position now is that we do not know anything at all of the objects of the Government.

I want to ask the Chancellor of the Exchequer a question. There was a rumour this afternoon of an agreement between the Government of the United States, France and London to work together. The hon. and gallant Member for Gainsborough (Captain Crookshank) spoke about profit on the first part of these transactions. We have never seen that profit in the City of London. The hon. and gallant Member said that we might lose the lot. That is impossible, because we always have certain assets, and there can only be a depreciation under which the taxpayer can lose. We wish to know whether there is any agreement to provide for any losses which may accrue in any speculation going on between the three Governments. If it is true that they are working together, will any loss to the Account, when it is closed, if ever it is closed, be shared by the United States, France and England, or

shall we, who are piling up and buying gold and currency, have to bear the entire amount of what is lost?


There is no such agreement between the three countries. Therefore, the second part of my hon. Friend's question does not arise.


Then I take it we shall have to bear the loss.

Question put, "That the Bill be now read the Third time."

The House divided: Ayes, 237; Noes,. 37.

Division No. 173.] AYES. [11.30 p.m.
Acland-Troyte, Lieut.-Colonel Dickie, John P. Loder, Captain J. de Vere
Adams, Samuel Vyvyan T. (Leeds, W.) Duckworth, George A. V. Lovat-Frater, James Alexander
Agnaw, Lieut.-Com. P. G. Dugdala, Captain Thomas Lionel Lumley, Captain Lawrence R.
Allan, Sir J. Sandeman (Liverp'l, W.) Duncan, James A. L. (Kensington, N.) Lymington, Viscount
Anstruther-Gray, W. J. Eastwood, John Francis Lyons, Abraham Montagu
Apslay, Lord Elmley, Viscount MacAndrew, Lieut.-Col. C. G.(Partick)'
Aske, Sir Robert William Emrys-Evans, P. V. MacAndrew, Capt. J. O. (Ayr)
Astor, Maj. Hn. John J. (Kent. Dover) Entwistle, Cyril Fullard MacDonald, Malcolm (Bassetlaw)
Baillie, Sir Adrian W. M. Erskine, Lord (Weston-super-Mare) Macdonald, Sir Murdoch (Inverness)
Baldwin, Rt. Hon. Stanley Everard, W. Lindsay McKie, John Hamilton
Balfour, Capt. Harold (I. of Thanet) Fielden, Edward Brocklehurst McLean, Major Sir Alan
Balniel, Lord Foot, Dingle (Dundee) McLean, Dr. W. H. (Tradeston)
Barclay-Harvey, C. M. Ford, Sir Patrick J. Mallalieu, Edward Lancelot
Barrie, Sir Charles Coupar Fox, Sir Gifford Mander, Geoffrey le M.
Bateman, A. L. Fremantle, Sir Francis Manningham-Bulier, Lt.-Col. Sir M.
Beauchamp, Sir Brograva Campbell Gillett, Sir George Masterman Margesson, Capt. Rt. Hon. H. D. R.
Beaumont, M. W. (Bucks., Aylesbury) Glossop, C. W. H. Marsden, Commander Arthur
Beaumont, Hon. R.E.B. (Portsm'th.C.) Gluckstein, Louis Halle Martin, Thomas B.
Belt, Sir Alfred L. Goff, Sir Park Mason, Col. Glyn K. (Croydon, N.)
Bonn, Sir Arthur Shirley Goodman, Colonel Albert W. Mayhew, Lieut.-Colonel John
Bevan, Stuart James (Holborn) Graham, Sir F. Fergus (C'mb'rl'd, N.) Merriman, Sir F. Boyd
Bird, Ernest Roy (Yorks., Skipton) Greene, William P. C. Mills, Major J. D. (New Forest)
Borodale, Viscount Grentell, E. C. (City of London) Mitchell, Harold P.(Br'tf'd & Chisw'k)
Boulton, W. W. Griffith, F. Kingsley(Middlesbro',W). Molson, A. Hugh Elsdale
Bowyer, Capt. Sir George E. W. Grimston, R. V. Monsell, Rt. Hon. Sir B. Eyres
Braithwaite, J. G. (Hillsborough) Guest, Capt. Rt. Hon. F. E. Morsing, Adrian C.
Brass, Captain Sir William Guinness, Thomas L. E. B. Morris, John Patrick (Safford, N.)
Briscoe, Capt. Richard George Gunston, Captain D. W. Morris-Jones, Dr. J. H. (Denbigh)
Broadbent, Colonel John Hacking, Rt. Hon. Douglas H. Morrison, William Shepherd
Brown, Col. D. c. (N'thl'd., Hexham) Hamilton, Sir George (Ilford) Muirhead, Major A. J.
Brown, Ernest (Leith) Hanbury, Cecil Munro, Patrick
Brown, Brig.-Gen. H.C.(Berks., Nawb'y) Hanley, Dennis A. Murray-Phillpson, Hylton Raiph
Buchan-Hapbun, P. G. T. Hannon, Patrick Joseph Henry Nail, Sir Joseph
Burghlay, Lord Harvey, George (Lambeth, Kenningt'n) Nation, Brigadier-General 1. i. H.
Burgin, Dr. Edward Lesile Harvey, Major S. E. (Devon, Totnes) Newton, Sir Douglas George C.
Burnett, John George Haslam, Sir John (Bolton) Nicholson, Godfrey (Morpeth)
Butt, Sir Alfred Heilgers, Captain F. F. A. Nunn, William
Campbell, Edward Taswall (Bromley) Heneage, Lieut.-Colonel Arthur P. O'Donovan, Dr. William James
Campbell, Vice-Admiral G. (Burnley) Herbert, Capt. S. (Abbey Division) Patrick, Colin M.
Caporn, Arthur Cecil Hore-Ballsha, Leslie Penny, Sir George
Castlereagh, Viscount Hornby, Frank Petherick, M.
Cayzer. Maj. Sir H. R. (Prtsmth., S.) Horobin, Ian M. Pickford, Hon. Mary Ada
Cazalet, Thelma (Islington, E.) Horsbrugh, Florence Pike, Cecil F.
Chamberlain, Rt. Hon. N.(Edgbaston) Howitt, Dr. Alfrad B. Procter, Major Henry Adam
Clayton, Dr. George C. Hudson, Capt. A. U. M.(Hackney, N.) Raikes, Henry V. A. M.
Cobb, Sir Cyril Hume, Sir George Hopwood Ramsay, Capt. A. H. M. (Midlothian)
Cochrane, Commander Hon. A. D. Jesson, Major Thomas E. Ramsay, T. B. W. (Western Isles)
Colman, N. C. D. Joel, Dudley J. Barnato Ramsden, Sir Eugene
Conant, R. J. E. Jonas, Lewis (Swansea, West) Rankin, Robert
Cooke, Douglas Ker, J. Campbell Rathbone, Eleanor
Craddock, Sir Reginald Henry Kerr, Lieut.-Col. Charles (Montrose) Ray, Sir William
Crookshank, Col. C. de Windt (Bootle) Lamb, Sir Joseph Quinton Rea, Walter Russell
Crookshank, Capt. H. C. (Gainsb'ro) Law, Richard K. (Hull, S.W.) Reed, Arthur C. (Exeter)
Cross, R. H. Leckie, J. A. Reid, William Allan (Derby)
Crossley, A. C. Leech, Dr. J. W. Remer, John R.
Cruddas, Lieut-Colonel Bernard Leighton, Major B. E. P. Renwick, Major Gustav A.
Culverwell, Cyril Tom Lennox-Boyd, A. T. Roberts, Sir Samuel (Ecclasall)
Davidaon, Rt. Hon. J. C. C. Llewellin, Major John J. Robinson, John Roland
Davies, Maj.Geo. F. (Somerset,Yeovil) Lloyd, Geoffrey Ropner, Colonel L.
Detpencer-Robertson, Major J. A. F. Lockwood, John C. (Hackney, C.) Rosbotham, Sir Samuel
Ross, Ronald D. Smith, R. W. (Ab'rd'n & Kinc'dine.C.) Touche, Gordon Cosmo
Ross Taylor, Walter (Woodbridge) Smith-Carington, Neville W. Train, John
Ruggles-Brise, Colonel E. A. Somerville, Annesley A. (Windsor) Turton, Robert Hugh
Runge, Norah Cecil Soper, Richard Wallace, Captain D. E. (Hornsey)
Russell, Alexander West (Tynemouth) Sotheron-Estcourt, Captain T. E. Ward, Irene Mary Bewick (Wallsend)
Rutherford, John (Edmonton) Southby, Commander Archibald R. J. Ward, Sarah Adelaide (Cannock)
Rutherford, Sir John Hugo (Liverp'l) Spears, Brigadier-General Edward L. Warrender, Sir Victor A. G.
Salmon, Sir Isidore Spens, William Patrick Waterhouse, Captain Charles
Samuel, Sir Arthur Michael (F'nham) Stanley, Lord (Lancaster, Fylde) Wedderburn, Henry James Scrymgeour
Samuel, Rt. Hon. Sir H. (Darwen) Stanley, Hon. O. F, G. (Westmorland) Whiteside, Borras Noel H.
Sandeman, Sir A. N. Stewart Stewart, J. H. (File, E.) Whyte, Jardine Bell
Sassoon, Rt. Hon. Sir Philip A. G. D. Storey, Samuel Wilson, Clyde T. (West Toxteth)
Savery, Samuel Servington Strauss, Edward A. Wilson, G. H. A. (Cambridge U.)
Scone, Lord Stuart, Lord C. Crichton- Winterton, Rt. Hon. Earl
Shakespeare, Geoffrey H. Sueter, Rear-Admiral Murray F. Wise, Alfred R.
Shaw, Helen B. (Lanark, Bothwell) Tate, Mavis Constance Young, Rt. Hon. Sir Hilton (S'v'noaks)
Shepperson, Sir Ernest W. Thomas, James P. L. (Hereford)
Slater, John Thompson. Luke TELLERS FOR THE AYES.-
Smith, Bracewell (Dulwich) Thomson, Sir Frederick Charles Lieut.-Colonel Sir A. Lambert Ward
Smith, Sir Jonah W. (Barrow-in-F.) Titchfield, Major the Marquess of and Mr. Blindell.
Attlee, Clement Richard Hicks, Ernest George McGovern, John
Banfield, John William Hirst, George Henry Maclean, Nell (Glasgow, Govan)
Brown, C. W. E. (Notts., Mansfield) John, William Mason, David M. (Edinburgh, E.)
Buchanan, George Jones, Henry Haydn (Merioneth) Maxton, James
Cape, Thomas Jones, Morgan (Caerphilly) Milner. Major James
Cripps, Sir Stafford Kirkwood, David Nathan, Major H. L.
Davies, David L. (Pontypridd) Lansbury, Rt. Hon. George Price, Gabriel
Edwards, Charles Lawson, John James Roberts, Aled (Wrexham)
Evans, David Owen (Cardigan) Leonard, William Smith, Tom (Normanton)
George, Major G. Lloyd (Pembroke) Logan, David Gilbert Tinker, John Joseph
Greenwood, Rt. Hon. Arthur Lunn, William Williams, Thomas (York, Don Valley)
Grundy, Thomas W. Macdonald, Gordon (Ince)
Hall, George H. (Merthyr Tydvil) McEntee, Valentine L. TELLERS FOR THE NOES.—
Mr. Groves and Mr. D. Graham.

Bill accordingly read the Third time, and passed.