§ Considered in Committee, under Standing Order No. 69.
§ [Captain BOURNE in the Chair.]
Motion made, and Question proposed,
That it is expedient to provide—
§ 9.6 p.m.
§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)
This Resolution is, of course, an indispensable preliminary to the Bill which will have to 609 be introduced to the House later. There accompanies the Financial Resolution a Memorandum upon it, and a little while ago there was circulated a White Paper, Command Paper 4502, which gave the terms of agreement between the Cunard Steamship Company, the Oceanic Steam Navigation Company and the Treasury. Hon. Members who have read those two documents will already be in possession of the main features of the proposal which I now commend to the Committee. Before I say anything about the terms of this agreement I ought to offer a few observations upon the circumstances which have caused us to put it forward. When the suspension of the building of the great Atlantic liner, commonly known as No. 534, was announced, the news was received not only with consternation in the particular district in which the vessel was being built but with a very widespread feeling of regret and disappointment throughout the country. It was not only that thereby a large number of workpeople were thrown out of employment in a district which is almost entirely dependent upon shipbuilding, but I think the national pride was also touched at the idea that the hopes which had been entertained that British shipping might once again occupy that position of preeminence in the North Atlantic which it used to hold in former days, had for the time being to be laid aside.
There was a considerable body of opinion, judging from demonstrations which took place in this House, not at all confined to the banks of the Clyde, which would have welcomed some announcement on the part of the Government that they saw their way to introduce such measures as would enable the building of the ship to be completed. Actually, the Government were not blind to the exceptional nature of this case. There was in our recollection the previous occasion when the Treasury had advanced money in connection with the building of the then two largest ships on the Atlantic, the "Lusitania" and the "Mauretania," and certainly we realised that the conditions in this particular instance were something which were not paralleled by any other situation in the shipping trade. At the same time we could not but be aware that, viewed as a contribution to the problem of unemployment, the resumption of work on No. 534, although it would 610 have made all the difference to the particular district in which the ship is being constructed, nevertheless would have meant but a trifle compared to the figures of unemployment in the country generally.
Moreover, the circumstances in the North Atlantic shipping trade at that time were such as to snake it extremely doubtful whether, even if the ship were completed and put into service, it would be anything but a liability instead of an assets to the company which owned it; because the salient fact about British shipping in the North Atlantic was that two British companies, both of high reputation, both with great records in the past, were at that time in fierce competition with each other for a trade which had, owing to the world depression, and particularly the depression in the United States of America, shrunk to only a fraction of its former size. Indeed, I may say that the position of those two companies was such that not only was serious damage being incurred by both of them in consequence of this competition, but, as well as the shareholders, there were creditors, among whom must be reckoned the British Treasury itself, as also the Government of Northern Ireland, who had guaranteed considerable sums of money advanced on the security of some of the White Star ships and who, whilst they had not had to complain of default on the charges, nevertheless could not but view the future with anxiety if this cutthroat competition was to continue.
It appeared to the Government that here was an opportunity to try to bring off something very much bigger than the completion of a single ship, however magnificent, however large and however much that might add to British prestige. Here, we thought, might be an opportunity for the Government to step in and, by using their good offices, backed with the persuasion which naturally arises in those who have the power of the purse, to bridge over this difficulty which had arisen between these two great companies, and to bring about a fusion of the two interests for the benefit of both companies and of British shipping in general. There had, indeed, been previous efforts to bring about this amalgamation, but they had all failed, and at the time it did not seem that, in the absence of any such stimulus as might be 611 provided by the Government, there was any prospect of success being attained.
It was after consideration of these features of the situation that I announced on behalf of the Government that some satisfactory agreement between the Cunard and the White Star Companies was, in our view, an essential preliminary to the granting of any assistance by the Government in the way of finance for the completion of No. 534. Following upon that announcement conversations between the two companies were resumed, and they were extended over a long period of time, because the interests involved, although perfectly legitimate, were highly conflicting. There were a great number of secured creditors whose rights had to be considered, and I doubt very much whether without the help of third parties it would have been possible to reconcile them. In this difficulty we appealed, as Governments have appealed before, and never without success, to a man who is possessed of great public spirit, Lord Weir, to give us his assistance. Lord Weir freely and voluntarily undertook an investigation into the circumstances of the two concerns, and made a number of suggestions which proved of the utmost value in the subsequent negotiations. Thanks, firstly to him, secondly, I think I must say, to the remarkable ingenuity of the Treasury staff, thirdly to the undoubted desire on the part of both these great concerns to put an end to what was a ruinous state of affairs, and thanks lastly to the willingness of the Government, providing its condition could be fulfilled, to take its share in whatever risks there might be in the enterprise, we have now produced the happy result embodied in this agreement, and which gives rise to the Resolution we are now submitting.
I think that if we can secure the assent of Parliament to our proposals, we can count upon it that the two companies will also be able to obtain the consent of their secured creditors. In that case, not only shall we see resumption once again of work on this great ship in the shipyard of Messrs. John Brown & Company, but we can look forward to the establishment in the North Atlantic of one single powerful unit, amply provided with working resources, able in all probability to effect considerable economies, and 612 thoroughly well equipped to restore and to maintain that leading position in the North Atlantic trade which we like to think should be associated with the British Flag.
With these preliminary observations perhaps I may just mention the salient features of this agreement which has been arrived at after so many months and so many efforts on the part of those concerned. The Bill which will be introduced later will empower the Treasury to make advances to the Cunard Company, and the merger company which will be formed out of the two shipping concerns, the Cunard and the White Star, sums not exceeding a total of £9,500,000. That may be divided into three portions. £3,000,000 of it will be required to complete No. 534. £1,500,000 is set aside for the provision of working capital, and I may say that the Committee must not assume that the whole of that £1,500,000 will necessarily be required for this purpose. I think it very likely that a considerably smaller sum may be found to be sufficient, but it is in our view essential that a concern of this kind should not in any way be hampered by a lack of working resources which might, in fact, somewhat reduce the value of the security given to us if it were found to be insufficient. The remaining £5,000,000 is the sum which may be required if, later on, it were decided to build a sister or some analogous ship. I want to emphasise what I think is made plain in the White Paper, that the Treasury is in no way committed to the advance of this £5,000,000, or indeed to the construction of a second ship at all.
I cannot help noticing that some hon. Members in this House have already been disputing as to where this second ship should be built. That is dividing the skin of the bear before the animal has been killed. We should desire, in the first place, to wait until the merger company has been formed and has had some experience of the actual operation of No. 534 before they would be in a position to offer an opinion as to whether a second ship would be required. In the second place, it might even prove to be the case that if the merger company did consider that they required a second ship, their circumstances might be such as to enable them to finance it themselves without further 613 assistance from the Treasury. In any case, the Committee will see that the second ship cannot be decided upon without the assent of the Treasury, and, therefore, while power is provided in the Bill with regard to the sum should such a ship be decided upon, there is at present in no way any commitment thereupon.
Under the agreement, the Cunard Company and the Oceanic Company, which owns the White Star Line, will both sell their North Atlantic fleets and other North Atlantic assets free of all encumbrances to a new company to be called the Cunard White Star Line, or some other name that may be agreed, including, of course, No. 534 and the benefit of the contract with John Brown and Company, in consideration of shares in the merger company. These shares will be divided between the two concerns in the proportion of 62 per cent. to the Cunard Company and 38 per cent. to the White Star Company. As to the Government loan of £3,000,000 for the completion of No. 534, the first £1,000,000 will be advanced to the Cunard Company itself. The other £2,000,000 is to be advanced to the merger company. The first £1,000,000 will be transferred by the Cunard Company to the merger company, and will form part of the consideration for the 62 per cent. of the shares which the Cunard Company will receive. I have already spoken about the £1,500,000 for working capital, and also about the £5,000,000 for the second ship.
The security for these various advances will be found set out in the different parts of the Second Schedule to the agreement. Shortly, the first £1,000,000 to the Cunard Company is secured by a second charge upon the Cunard assets, ranking immediately behind the charges given to secure the existing first mortgage debenture stock of the Cunard Company, approximately £4,000,000 in amount. The second £1,000,000, and one-half of the advance for the working capital, that is to say, £750,000, will be a first charge upon No. 534, and the security will be the first debenture stock of the merger company. The third £1,000,000 for the completion of No. 534 will be secured by income debenture stock of the merger company. That income debenture stock will be in two classes. Class A will be the security for this £1,000,000, whereas 614 Class B will be the security for the remainder of the working capital, namely, the other £750,000.
All these loans will be repayable by 31st December, 1975, but there will be an option to redeem any part of the loans before then by giving one month's notice, in sums of £10,000 or multiples thereof. That will be an option to the borrowers. The debenture stocks will carry interest at one-half per cent. below bank rate until 1st January, 1940, and thereafter the rate will be the rate which is appropriate to loans guaranteed by the Treasury. The interest on the income debenture stock will be, on Class A 3 per cent. till 31st December, 1939, and thereafter 5 per cent., and on Class B it will be 5 per cent. throughout. The service of the income debenture stock will be out of the profits of the merger company. The profits will be assessed after allowing for interest on first debenture stock, depreciation and the necessary allocation for reserves, and profit will then be distributable in this way first of all to pay interest upon Class A, and then interest on Class B. After that, 3 per cent. to the shareholders, and any surplus which may still remain will be divided between the shareholders and the Treasury in proportion to the nominal amount of the shares and Class A income debenture stock.
§ Mr. CHAMBERLAIN
No, Sir. The first £1,000,000 of the Cunard ranks second to the existing debenture stock of the Cunard, but in the case of the second £1,000,000, that is a first charge upon No. 534. The remainder is a second charge upon No. 534.
§ Mr. CHAMBERLAIN
No, Sir. That remains a charge upon the Cunard Company. As the security of No. 534 diminishes, it is replaced by other assets.
§ Mr. DAVID EVANS
I am not quite clear on this point. Do I understand 615 that there is no specific charge upon the other ships transferred to the merger company, or is it only upon No. 534? Does the right hon. Gentleman say that the ships transferred are free from any encumbrances? Why is it that no specific charge is included upon the remaining ships of the merger company?
§ Mr. CHAMBERLAIN
It is a charge upon the Cunard assets. The hon. Member must understand that the Cunard assets include, of course, other assets besides the ships that are transferred to the merger company. Those assets are the security for the existing debenture stock. Is that now clear to the hon. Gentleman?
§ Mr. CHAMBERLAIN
Of course, it is a specific charge upon No. 534, but the real security for al those advances is the profits made by the merger company, and as long as the concern is profitable, the security for the advance may be considered to be satisfactory and reasonably adequate.
I have not quite finished with what I had to say about the distribution of the profits of the merger company. Every three years there is to be an examination of the total amount received by the Treasury since the first advance secured on the income debenture stock, and if the total received by the Treasury should be found to be in excess of the interest which is due upon the two Classes A and B, that excess is to be applied to the redemption first of the income debenture stock of Class A, and secondly to the income debenture stock of Class B. Finally, in case of liquidation before the stock has been redeemed, Class B will rank before the shareholders for priority, but Class A will be ranked pari passu with it.
I can quite imagine, with this rather complicated agreement that hon. Members might think that this or that provision could advantageously have been added in one way or another. I only ask them to consider the extraordinary com- 616 plexity with which we were met, the fact that actual and specific charges were held by the secured creditors on each concern on particular ships, and that we had to ask them to release various charges in order that the ships might be handed over to the merger company free from encumbrances. In order to do that, it was necessary to make some concessions that perhaps otherwise we should not have thought of doing. The whole transaction is one of an unusual character, but the circumstances and, I venture to say, the results, which are to be achieved by the transaction are the justification for the unusual character of the terms of the agreement. After long experience of the negotiations and the various differing efforts that have been made to try to find a solution which would be acceptable to all those concerned, I think the final result is one which is extremely creditable to the two companies and to the creditors themselves, and one which I believe, in the long run, will prove highly satisfactory to the nation.
§ 9.36 p.m.
§ Mr. KIRKWOOD
I am delighted to have listened to the Chancellor of the Exchequer, and I think I might say, on behalf of the shipbuilders of this country, that I have to thank him. I have struggled personally for two years for this purpose, and I know perfectly well that the Chancellor has done all that was possible to accomplish what we have heard him recite to us here to-night. I would ask the House to bear in mind the fact that this means putting into work, practically right away, from 9,000 to 10,000 men all over the country. I do not want to elaborate, as I have done time and again in the House, what this really means to the shipbuilding and engineering industries of Britain. It means, in my opinion, giving them a great fillip, of which they are badly in need at the moment. There is no denying the fact that we have inherited the past deeds of those who took from Germany, not only her Navy, but her entire mercantile fleet, and saddled us in this country with all her "dud" ships. That has always been lost sight of by the individuals who drew attention to the fact that every estuary around our coasts was packed with ships. They always forgot that many of those ships were the result of 617 back negotiations which gave us all the "dud" ships that Germany had, after we had been building great fleets to meet the requirements of the War.
We built great munition factories during the War, but we destroyed those munition factories, at Gretna and elsewhere. We unroofed them, because the payment of taxes was required on them. But we did not destroy the great shipping fleets that we built in order to do our work during the War; they were left on our hands. What happened in the case of Germany? The Germans had to build a new fleet, and the result was that they built ships with which we had nothing to compare, because their ships are modern ships. Now we have the opportunity to regain the Blue Riband of the Atlantic, which Germany took from us, and this is a better method of proceeding. Instead of going to war with individuals or with countries, we are in open competition as to which is the best to supply the world with a particular article. Up to now it has been recognised the world over that we were the finest shipbuilders in the world. Now we are going to get an opportunity of demonstrating to the world that we are still the finest shipbuilders in the world.
I want to say something else. The powerful shipping interest in this country—and it is about the most powerful combine of any description in this country—was not able to meet the situation by itself; private enterprise again miserably failed. The conditions have demonstrated that, just as during the War, under the conditions that prevailed in this country regarding the housing of the people, private enterprise could not supply the want, here also private enterprise could not supply the want, and had to come to the Government for assistance. The Government, in my opinion, have rendered not only to this company but to the country yeoman service in placing at their disposal £9,500,000 in order that they may meet the circumstances with which they are faced.
I would ask the Chancellor, when he is replying—because one or two questions are going to be put to him—to reply to me on this matter. I asked the President of the Board of Trade in the Labour Government the same question when the Labour Government came to the assistance of the Cunard Company first of all 618 in regard to insurance, when No. 534 was laid down. Again the insurance was too great for private enterprise to take on—this wonderful thing that has done all the wonderful things, and can do everything without the assistance of the community. We are living in a day and generation when that is given the lie entirely. You cannot carry on; the conditions are of such a character that you require to come to get assistance from the people of the country, and the representatives of the people are the Government of to-day. This is the thin end of the wedge for the inevitability of Socialism, and that is where my question comes in.
I want to ask the Chancellor if the interests of the workers are going to be safeguarded here? He knows perfectly well that there is no man in Britain more anxious that this work should be started than I am; he knows how I have worried himself; but I want to know if trade union conditions and the Fair Wages Clause are going to be recognised. Are the workers going to be protected just in the same way as they would be protected in any contract that was being given by the Government, say for a battleship or a cruiser? Are the interests of the workers going to be safeguarded by the Fair Wages Clause just as if it were a Government contract? That is the question that I would like to put to the Chancellor, and I hope he will reply to it. In closing, I want to say that, as far as I am able to judge, there is nothing that the right hon. Gentleman has done since he became Chancellor of the Exchequer in this Government that will bring more joy, not only to the shipbuilding and engineering workers of Britain, but to the whole working-class, and to all Britons, and to Britain, if not in fact to the British Government, than the fact that we are going to go ahead with the building of this ship so that we shall retrieve our position in the shipbuilding and engineering of the whole world.
§ 9.46 p.m.
§ Mr. D. EVANS
Speaking for myself and for some of my hon. Friends, I think, in order to decide what our attitude should be towards this Resolution, and what is underlying it, we must remind ourselves that this money, as we have been told, and as is clear from the Resolution, is to provide the means 619 whereby two companies can build one or more ships which otherwise they would clearly not be able to do, and to provide in addition to that the necessary amount of working capital, up to £1,500,000, in order to carry on business efficiently and effectively. Secondly, we were reminded by the right hon. Gentleman that the more important object of the two, with out which the two ships could not and ought not to be built, is the co-ordination of the operations of these two companies in the North Atlantic. I should like to congratulate the Government upon the result of their efforts and the success that they have achieved in bringing those two great companies together, because, without bring them together, it would be impracticable and uneconomic, and it would be an unwise policy, if the companies were to try to build two great ships each, because that would have been the result had there been no co-operation between them. Each of them would of necessity have had to have two ships of equal size to the two ships that are now being built, and there would continue this cut-throat competition between two British companies of which the Chancellor spoke.
The hon. Member for Dumbarton Burghs (Mr. Kirkwood) welcomed this very largely because it is going to create employment for 8,000 or 9,000 men. The Chancellor, on the other hand, said, or it might be implied from what he said, that that was not the main consideration, because, as far as employment was concerned, it would not have a very great effect on the enormous mass of unemployment in the country. Indeed, I could not on that ground alone feel justified in supporting this agreement, as I intend to do. I could not support any proposal by which we should expend money, or advance it to a private company, to make private profit for the purpose of creating employment. On the other hand, many Members would support the expenditure of a considerable sum of public money by way of advance to municipal authorities and general utility companies for national development. It is not necessary to argue that point, because there is one predominant reason why one is compelled, from whatever bench he speaks, to support this Motion. We have heard the word "prestige," and I believe it is necessary, in order to main- 620 tain British prestige in the North Atlantic, to build these two ships. By prestige I do not mean a mere wasteful competition between British shipping companies, and those of other nations. I do not mean a mere spectacular display of speed or luxury or comfort between British and other ships. I do not mean either a prestige which is derived from reputation or past service, but I believe in prestige which is proved by actual performance to-day. I do not see how we could maintain this reputation, this efficiency, this standard to-day unless we build these two ships.
The question, therefore, arises whether, having been out-distanced both in regard to speed, comfort, and efficiency, these two ships could have been built by these two companies, or by either of them, or by the merger company, without assistance from some other source than the usual channels of finance. It is obvious, as the Chancellor has pointed out, that without attributing any fault to anyone concerned in charge of these great companies, but owing to the present abnormal circumstances, a careful examination of their balance-sheet, their assets and liabilities, and creditors will convince any one that it would have been impossible for any British company to build these two great ships without assistance in this unusual way. The House will hope that, with this assistance which is about to be given and the combined experience of these two companies, and the experience of our best shipbuilders and designers, we shall succeed in producing two ships which are at least on a level with existing German and other boats belonging to other companies in the North Atlantic. I have crossed the Atlantic over 30 times in 30 years and only once in a foreign boat. That was on the last occasion when I did it for the purpose of seeing what they were like. It is useless to disguise the fact that in the newer ships of other countries there has been a very great advance indeed on anything that we have. Therefore it is our bounden duty to regain our superiority.
I want to deal with the financing of the proposal and to ask the Chancellor of the Exchequer one or two questions. I put it to him in interrupting, very unwillingly, that I think it is clear that these mortgaged charges, these debentures, are 621 not specifically charged, or even that there is what lawyers call a floating charge on the other assets of the merger company. I would ask the right hon. Gentleman why the amount advanced is not charged on the whole of the property of the merger company either specifically or as a floating charge? There are one or two points on which I congratulate the Government. One is that the capital of the company is to be fixed at a level which is certainly not too high. It is to be fixed according to the agreement at the real, the depreciated value of the assets concerned, and not on the book value. The House will be pleased to know that that principle, a very important point in the financial construction of this new company, has been provided for.
Another important point upon which I thoroughly agree with the Government is that these advances are only to be made as required from time to time, that the £1,500,000 advance is to be made as working capital, that it is to be made as required. I assume that the Treasury will inquire when application for further assistance is made, as to the purposes for which the money is required, and that the Treasury will not allow the money to be frittered away on anything but the actual operations of the company. I would congratulate the Government upon the agreement. It seems to me to bear upon it the stamp of very careful, thorough and prolonged investigation. The Chancellor of the Exchequer told us that Lord Weir had a considerable part in these negotiations. They bear evidence of very careful investigation. I and most of my hon. Friends on the Liberal benches wish this new venture success in every respect.
§ 9.58 p.m.
When a Welsh Member supports a Clydeside Member in making a raid on the Treasury, it is time for the normal English Member to be very careful about what is going on. I regret to have to intervene in order to make some criticisms of the whole policy underlying these proposals. I regret very much to do it, but unfortunately when the Opposition fails to oppose it is just as well that someone should put the contrary view, which is certainly felt far more strongly than will appear as a result of the way in which the question is put. 622 There is one small point in the Money Resolution itself about which I would like an explanation. Paragraph (c) enables the Treasury to borrow under Section 1 of the War Loan Act of 1919. The Chancellor of the Exchequer did not tell us why that provision was incorporated, nor does the printed memorandum explain why. As a matter of fact, the War Loan Act enables the Treasury to raise money in such manner as it thinks fit, and the powers are in addition to and not in derogation of any powers of the Treasury to borrow for the time being. That, I think, means that the Treasury can borrow from time to time as and how it likes, if it takes power in a Money Resolution, without any reference to Parliament at all.
With regard to the main question, we have had the Chancellor of the Exchequer explaining to us that when the 534 was abandoned there was consternation on the Clyde and regret throughout the country. He expressed regret at the previous failures to come to any agreement on this matter, but in all that he said there w as nothing at all in justification of the policy. He explained lucidly the difficulties and the terms of the arrangements, and incidentally said that one of the securities was to be the profits of the merger company. That means that the State is now going directly into the shipping business, because the repayment to the taxpayer of the moneys borrowed is to depend upon certain profits of this company. I do not stand for that at all. It may be one of the things that we have to deplore as a result of having a National Administration. If so, we must put the best face on it that we can.
The hon. Member for Dumbarton Burghs (Mr. Kirkwood) said that this would employ 9,000 or 10,000 men, and that the British engineer is the finest shipbuilder in the world. We are all agreed about that. The hon. Member for Cardigan (Mr. D. Evans) said that the compelling reason with the Liberal party was that we would lead the world in prestige. I am glad to hear that that is one of the cardinal things for which Liberal policy stands. It sounds as if the right hon. Member for Darwen (Sir H. Samuel) has made up his mind on one of his points. But prestige will be proved by the actual performances of these ships. Is the hon. Member so sure that the per- 623 formance of these ships is going to be so wonderful? He talked about the Blue Riband of the Atlantic and all that kind of thing. The prestige of this country—our engineers will not be thought any less well of by the world at large or by their own compatriots if this ship is not built. Prestige—may I remind the Committee of what happened about airships? Were we not leading the world in design? Was there not a terrible catastrophe with R.101, and did we not entirely scrap her? We have not built an airship since. But our prestige in aeronautical matters is certainly just as high as ever it was; in fact, considerably higher. No, I do not think prestige is enough to put forward as the case for building this ship.
I wish to put this to the Chancellor of the Exchequer: Have the Government reversed their policy about public works? Is this the beginning of a change? If so, I can see the Liberal party talking about prestige. If it is another word for a public works policy, let us know it, and incidentally let us go in for public work schemes the utility of which can be demonstrably proved. Let us go back to some of the things which Sir Oswald Mosley or the right hon. Gentleman who is now the Dominions Secretary used to talk about in this House and which were afterwards stopped because the money was not there, not because they were bad schemes—building town halls, building swimming baths, and all the rest of that vast catalogue of public works. If you think it is the right thing to do, it is because you know that works of that sort are going to be useful. There is no gamble about a town hall or a county council building, but there is a considerable gamble about building a vessel of this size, of which we, at any rate have no practical experience. I expect that the hon. Member for Cardigan (Mr. D. Evans), who has crossed the Atlantic so often will probably bear me out in saying that when one ever talks to the captains of the admirable vessels in which one goes across the Atlantic, most of them will say that the really economic vessel of that category is the ship of 30,000 tons. No one in my hearing at any rate has said anything about a vessel of 70,000 tons. I do not think that I shall be far wrong if I say that the ships which are even 624 to-day doing best are the ships about that size on the Translantic route.
We remember the race to build better, more formidable and more luxurious vessels, as the hon. Gentleman put it, transporting across the Atlantic, Tudor villages disguised as smoking rooms, ships containing shops, swimming baths, squash rackets courts and everything of that kind, on the assumption that you were going to get a very rich clientele. We always studied the American multi-millionaires. I do not know whether there are any left. Certainly the last return in the Press indicated that for every 100 millionaires in the United States a year ago, there are now only two. It is no good building 70,000 ton ships to cater for the more luxurious class of passenger, because he has ceased to exist. If, on the other hand, you are going to rely upon the cabin-class passenger, you will have to transport most of the United States to Europe, and most of Europe to the United States in order to make it a payable proposition. The migrants are not there. People do not migrate to the United States or to Canada. They are not welcomed any more. Who is going to travel in this ship? I do not know. Not even the whole Liberal party for the sake of prestige.
I would impress upon the Committee, what I think is true, that the whole idea underlying the construction of this ship—I am not sure whether the exact date when it was first mooted was two, three or four years ago—date back to the meglomania period. This is the last remnant—I do not mean the financial agreement; I am not sufficiently expert to know whether that would apply. I take it from the Chancellor of the Exchequer that it does not. It is all akin with the grand ideas of three or four years ago when the world was still young and rich, and it did not matter how big everything was, with all these mammoth buildings of flats, Devonshire House, Shell Mex House and all the rest which have been untenanted since, except, of course, by the leader of one wing of the Liberal party, who, for the sake of his own personal prestige, has his offices there. It is all akin with what, unfortunately, economic circumstances have brought to an end in every other direction except apparently in the breast of the hon. Member for Dumbarton 625 Burghs, who, naturally, wishing to do the best he could for his constituency, has gone on irrespective of what Government has been in office, and has succeeded by his bullying in getting them to agree. All the credit got out of this will be obtained by him, and not by the Government. The Clyde is a very important industrial part of our country. It is not the least vocal part of this House whether on the Government Bench or opposite, or up there or in front of me. Practically we do not have a Debate when we do not hear the voice of the Clyde. There are other parts. There is even a part called England.
If you have £9,500,000 which you want to lend for development, well I would remind the House that earlier in the day we have been debating the water supplies of the whole country, including Scotland, for only £1,000,000 as far as the Treasury are concerned. They are not comparable. We heard last week that the restoration, for example, of the cuts of the unemployed is about half the cost of this proposal. You can turn in almost every direction. Of course I know that every Member rides his own hobby—we should not be here if we did not. But for all that, if the Chancellor of the Exchequer suddenly came down and said, "Well, boys, here is £9,500,000 to play with. What shall we do with it?" There is not a boy in the class except the hon. Member for Dumbarton Burghs who would hold out his hand and say "Build this vast vessel." We could get a good deal of common agreement about development on far more useful public works if it were once decided to go ahead with that policy. I do not know if it has been decided. I do not know that I want it to be decided that we should go into public works. I do not think that we are yet sufficiently out of the wood financially to do it. But I know the argument from the other side, and probably it is a very narrow dividing line now, whatever was the case two years ago. I am satisfied, in my own mind, that there was very little excuse for spending.
I know that this is, technically, an advance, but who is going to foretell profits at the rate of 5 per cent. in 1939 as referred to in the agreement? I do not suppose anybody really thinks that we shall get any of this back again once the advance is made by the Treasury. 626 That will be the end of this little adventure. If we are to be able to afford anything like that sum, I put it to the Committee that this is not the way to do it. The proposal has been, I admit, enthusiastically received in all quarters of the House. If any hon. Members were to vote against it, I would willingly join them, because I think it so absolutely wrong that we should do this sort of thing. I myself certainly would not divide the House, but it seems to me to be a monstrous thing to come down and ask for this vast sum of money from the taxpayer, as someone has put it, for the promotion of better and bigger bankruptcies.
§ 10.13 p.m.
§ Mr. ATTLEE
I find myself in agreement with the hon. and gallant Member for Gainsborough (Captain Crookshank), but I should like to have heard him on beet sugar.
§ Mr. ATTLEE
The hon. and gallant Member was very frank. He said that everybody came here and rode his own hobby. I think that Members from agricultural constituencies have ridden their hobby pretty well lately. They seem to have had grants almost every day, and I do not think that the hon. and gallant Member has invariably protested on those grounds. I should have thought that he would have been joining the right hon. Gentleman the Member for Darwen (Sir H. Samuel) in his criticism of the Government for bolstering tip the protection of sugar produced in this country in view of the unwanted sugar in the world. It seems to me to be rather on the same lines as the building of these vessels. I think I am right in saying that if you had a sane Government which wanted to see that the workers of this country were engaged in the best possible way, no one would suggest that they should put money into this. I gather that these vessels can only be successful if there is an adequate supply of millionaires in the world. I understand that there is not, and I hope that there will never be.
On the other hand, there is an indication here of a very great change of policy on the part of the Government. We all remember what another exponent of Liberal policy, the President of the 627 Board of Trade, said at the World Economic Conference. He did not believe in Government subsidies for public works. To-day, we have the first sign that the Chancellor of the Exchequer is slipping away from the tenets of his right hon. Friend. During the last two years we have been ladling out a great deal of money, and that money has been put into equally bad investments, and it has always been with the special view of getting moneylenders out of their difficulties. The right hon. Gentleman came down here a fortnight ago for the purpose of relieving the Bank of England of an extraordinarily bad speculation which they had made in Austria. I do not know whether anybody thinks at the present time that that was a particularly good investment. The right hon. Gentleman came down later to relieve certain gentlemen—some of whom were alleged to live in this country, but some of whom we know were Americans—of the losses they made in a bad speculation in American dollars. That is going to cost us £7,000,000 as against the £9,500,000 in the Vote now before the House.
The whole tendency of the Government has been to rush in and shovel out money to moneylenders. There was the same thing in regard to Newfoundland. That is something like the milk scheme, under which most of the money seems to be going to the trade and very little in milk to schools. In regard to Newfoundland, almost all the money goes to the people who made an extremely bad speculation there, and only a little bit goes to the fishermen. Now, we get something of a change, because we have a reversion to the policy of public works. We found another Member of the Government moving a little way in that direction in a matter that we have discussed to-day, namely, water supply. Therefore, we are beginning to get away from the policy of not subsidising public works. Of course, we are doing it in the worst possible way. We are handing money over to private industry. Perhaps it would have been an advantage that the dole should not be given to people who, as the Chancellor of the Exchequer tells us, have been engaged in the practice of cutting each other's throats for a number of years. This proposal is in line with the general idea of the Govern- 628 ment, that is, that while they recognise the need for organisation, they consolidate private interests into monopolies, and then spoon-feed them with public money. Here we are doing that in regard to the North Atlantic trade, although they cannot get a monopoly because they are in competition with other countries. The idea is, however, that we should consolidate these companies and then they will be able to fight against other countries. That is in line with the general policy of the Government, who talk peace and then engage in economic warfare.
The Chancellor of the Exchequer is putting up this large sum of money. I have great sympathy with the hon. Member for Dumbarton Burghs (Mr. Kirkwood), because the needs of that area are great. It has been extremely hard hit. But I do not think the best way of meeting the position is by building these Cunarders. I hope this is going to encourage Members in all parts of the House, if they have unemployed in their constituencies, to urge upon the Chancellor of the Exchequer that now is the time to embark on a policy of public works. The Chancellor of the Exchequer would have no answer at all to them. Once he has conceded this position he cannot resist the demand of rural hon. Members for better drainage, for water supplies, for bridges, for houses; he will have to bring the Minister of Health up to scratch, for how can he be so slow in building houses for workmen when he is going to build a Cunarder for millionaires.
The Chancellor of the Exchequer has sold one of the main passes which have been defended by the National Government—the good old economy pass. He is really introducing a new policy. He is obviously getting away from the restriction idea of a deflation policy, and I hope that we shall soon see him on the highway of inflation and that the Government will come down with a programme of national works which will simply take the wind out of the sails of the right hon. Member for Darwen. While I consider that the Government are following their ordinary tradition in doing a thing in the worst possible way, in selecting as the object of their bounty possibly the least undesirable form of public works and expenditure, just as they seem to dole out money all round to all kinds 629 of rentiers, I welcome the change of policy. We shall not oppose it because we feel that once this has gone through the Chancellor of the Exchequer will be unable to resist demands from above and below the Gangway on all sides of the House for a full programme of public works.
§ 10.22 p.m.
§ Mr. BUCHANAN
I trust that the Committee will forgive me for intervening in this Debate. I have never intervened in a Debate with so much seriousness. I represent a Clyde division. I do not blame the hon. Member for Dumbarton Burghs (Mr. Kirkwood) for this policy, but if I am not able to accept his views I hope that I shall not be dubbed as being neglectful of working-class interests. I intervene with great hesitation because my own division is affected. I cannot accept the views put forward by the hon. Member for Dumbarton, and may I say to the hon. Member for Limehouse (Mr. Attlee) that if the hon. Member for Dumbarton had not been in the Labour party the Labour party would have opposed this proposal. Let us be frank. The whole speech and argument of the hon. Member for Limehouse was against it, and it is not a true analogy to draw a comparison between this and public works. I want to give a number of reasons why I oppose this proposal. You are proposing to make a grant of £9,500,000 of public money. If a profit of 5 per cent. was likely to accrue this company would have had no need to come to the House of Commons.
I am not a business man, but I have always known that if you have a business proposal to put forward, the money will come in freely. We are asked to grant this £9,500,000 and it is said that we are not to build a second ship, but what will happen? After we pass this Bill, there will be a most unedifying and almost contemptible display in this House. One of the things that has hurt me most in connection with this agitation has been to read in our Glasgow newspapers for the last two years how this ship is to be built every week or so and to find hope being held out to people of what will happen as soon as the House of Commons passes this Bill. You will have every Tyneside Member, every Clyde Member, every Birkenhead and Barrow Member putting all the pressure they can on the Govern- 630 ment in favour of building other ships. It will only be natural, and the Government faced with this agitation will be compelled to build the ship. It is not the sum involved that annoys me. I was born of very poor Scottish people, but one thing I was taught was that it was not the sum that you spent that mattered—it might be more defensible to spend £1,000,000 than to spend £1—but it was the use to which you put the money. What is the use to which this money is to be put? To build a great luxury ship. The Labour party help to vote money to be used to build a floating mansion house. Would Members of this House use public money to build a millionaire's mansion here in Britain? No. Yet this is a vessel on which no man can enter who does not belong to the class of the extremely wealthy, unless he is a member of the crew. No other will travel on it.
If I may use the analogy of housing, in subsidising housing schemes the use of State money has been limited almost exclusively to houses for the lower middle class and the working class of the nation. Bear in mind what we are asked to do here. I do not deny that it will give employment and that is where, as I have said, opposition to it might almost cost one his political future. We are told it will employ 10,000 men for a year. But your spending does not end this month. A capable House of Commons must look ahead. In Glasgow we have solved problems because men in the Labour party, the Liberal party and the Tory party many years ago were capable of looking ahead. To-day I ask hon. Members to look ahead. We are asked to spend this great sum in order to compel a merger of these companies. What does that mean to the working people? You have had mergers in the coal trade which have meant to great masses of the population desolation and unemployment and while the building of this ship may secure work for 10,000 men now, it can only be at the expense of putting other ships out of commission later, and in the long run the very problem which you are out to cure becomes more severe than it was before.
I heard a Debate one day in this House on coastal shipping, and I heard a very capable speech by the hon. Member for Southampton (Sir C. Barrie). Even if it is agreed that we have £9,500,000 to spend on shipping, would it not be of greater service to this nation, instead of 631 building millionaire and mammoth liners, to recondition our own coastal fleet and make it decent for the workmen engaged there from day to day? There are other reasons. The Chancellor never told us in his speech of the commitments that we are already under to these companies to some extent. We must not forget that we have been involved, through the Trade Facilities Act, in loans here already, and I would like to know from the right hon. Gentleman, first of all, what sums have been loaned to shipping companies for ships to be built, when those sums were loaned, and what proportion of them has been repaid. We have no right to enter into this arrangement without knowing our full commitments. It cannot be denied that the nation is quite capable of raising £9,500,000 now, that cannot be paid back for a good number of years. That £9,500,000 would give back to every unemployed man and woman in this country every cut for two years. In other words, use your £9,500,000 to make 3,000,000 people, and not a few, happier. I should be lacking in public duty, in what I believe is my knowledge, and in faith if I allowed this sum, even although it brings to constituents and to my own trade, of whose union I am chairman, temporary benefit, if I did not say that this money, instead of going here, should go into the pockets, not of shareholders, who may be needy, who may be in dire distress, but to the unemployed generally.
There is one point that has not yet been touched upon. This is to recapture the prestige of the Atlantic, to smash another nation. Socialism is not built up at the expense of smashing another nation. This ship is to be built to smash Germany, but who can say in this House that next year the Germans will not start to build another and a faster ship still, so that if we want to get this £9,500,000 back, we shall have to pour more in, in order to keep the competition going? If the Germans build a faster ship, we must build another still faster, or else the money that we have invested is gone. We are passing from company cut-throat competition to national competition of an even fiercer and more cutthroat kind. I see 3,000,000 decent men, just as good as they can be, living below the poverty line, and I say that that £9,500,000, instead of going into limited hands to be used for private property and 632 private enrichment, should go to the 3,000,000 people for the public good and the common weal.
§ 10.35 p.m.
§ Mr. O'CONNOR
I rise to make a comparatively limited point. I am in sympathy with what has been said from more than one part of the Committee. I cannot help thinking that if there be money to be advanced by way of loan for public works, we might have chosen something which would have ensured that the money would have secured something better than a luxury liner going across the Atlantic. I cannot help feeling that the return on the limited available resources of the country would have been better if this money had been advanced, for instance, to the Minister of Health in order to encourage him in slum clearance. Feeling that as I do, I nevertheless feel that the Treasury has committed itself, and we have to support the Treasury in the policy that is put before us. I am anxious to try and limit Treasury commitments as much as I can, and when my hon. Friend replies I want to know why we should commit ourselves to a further advance of £5,000,000. It will be seen from the White Paper that the total advance is £9,500,000, the maximum sum which is to be authorised by the Resolution. Of that sum, £3,000,000 is to be found at present for completing No. 534; £1,500,000 is to be provided as working capital for the merger company; and we are also asked by this Resolution to authorise powers to obtain a further advance of £5,000,000 for which we are going to get nothing at all. We are not even going to get an undertaking by the merger that they will build a ship. My right bon. Friend the Chancellor of the Exchequer, in moving the Resolution, said that we must wait until the company is formed and experiments with No. 534 have been undertaken before it will be found whether a second ship can be embarked on at all. If that be so, why is it necessary now to ask for authority to find at some future date—we do not know when, or in what circumstances—£5,000,000 for the building of another ship if No. 534 is successful. The answer to that, I imagine, is to be found in paragraph 17 (b) of the White Paper which sets out the agreement between the Treasury and the two shipping companies. It is a very remarkable paragraph, and I 633 would like to remind the Committee of what it says:The Treasury will cause legislation to be laid before Parliament as soon as possible with a view to conferring on the Treasury any requisite powers to give effect to the arrangements for finance mentioned in Part II of this Agreement.This is the important point:Such legislation shall include a power to the Treasury in their discretion to advance to the merger company the cost (not exceeding £5,000,000) of an additional new ship or additional new ships on terms analogous to … the above-mentioned advances.Observe what the Committee is being asked to do. It is asked to pass a Resolution which will authorise an advance of £4,500,000 for immediate work and will authorise the Treasury, in their discretion, to advance a further sum of £5,000,000 without any further reference to Parliament, if, in the view of the Treasury, this experiment has been a success. That seems to involve a very important principle. It means that this House gives to the Treasury power to advance £9,500,000. We will say that £4,500,000 will be spent in the next 12 months, and will go to the relief of unemployment; but a new election may occur, and with a new Parliament in being, a new party in office, the Treasury will still have authority to expend £5,000,000 without reference to Parliament at all—perhaps some years hence, when it has been seen whether No. 534 is a success. It seems to me that is a definite departure; I do not know whether it is an innovation, but it appears to me to be an extremely dangerous power to give to the Treasury, really behind the back of Parliament. It may be said that the agreement between the Treasury and the companies would impose upon the Government of the day the obligation of coming to Parliament to get authority to advance the further sum required to implement completely the agreement, but that is not quite the point.
I suggest to the Chancellor of the Exchequer, with great respect, that when the terms of the Bill which this Resolution introduces are framed—the Resolution, of course, speaks of no explicit sum of money—authority should only be asked to advance £4,500,000, which is all that is needed for the work in hand, and that the Government 634 should come back to Parliament, if and when the construction of No. 534 proves to have been a success and if and when it seems that the money is well secured, and ask in the ordinary way for an advance of a further sum in order to go on with the remaining vessels. I urge that strongly upon the Chancellor of the Exchequer, and I do so partly because, in my submission, the Committee is not by any means satisfied that this is the best possible way of spending so very large a sum of money, and also because there seems no reason for asking us, in this Session, in this stringent time, to vote £5,000,000 which cannot in any case be spent for a considerable time.
§ 10.43 p.m.
§ Sir JOSEPH NALL
This is one of those extraordinary occasions when, after months of clamour to get something done, the Chancellor of the Exchequer or the Government reluctantly and very cautiously respond, and are then assailed in this House with almost a chorus of disapproval because at last action has been taken. Looking back over the last year or more, during which the postponement of the building of these ships has been so widely lamented, and thinking of the almost universal chorus of disapproval which greeted every postponement of the matter, it is really astounding that to-night hardly a voice should be raised in support of the Government. I venture to say, with great respect to some of my hon. Friends, that the arguments which have been used to-night against this proposal are as inappropriate to the occasion, as unfair to the general principle of the parties who support the Government, and as parochial in their outlook, as they well could be. What comparison is there between a matter of this sort and public works here at home? Does anyone suppose that, if this had been a mere matter of providing employment, if it had been simply a question of setting some particular industry to work, we should have proceeded in this way?
This question of the North Atlantic passenger business has reactions throughout this country, as anyone who has any knowledge of the business must know. To the American tourist or visitor coming to Europe, the nationality of the particular ship or the line which owns the ship is very often of little importance. The particular ship, on its merits as a ship, is what affects them. What is of 635 importance to us in this country is that if those visitors or tourists are attracted by a ship which belongs to another European country, they land in that country, and may only afterwards come here, if they come at all. It is in the national interest that we should attract to these shores an ever-increasing volume of the shipping traffic from the United States, and it is by maintaining and improving our Transatlantic shipping that we can best achieve that result.
I well remember a little over a year ago coming back from New York in the "Mauretania." I do not think that I have ever felt so depressed at the position which this country seemed to be occupying as, upon a Sunday morning, in a fairly still sea with a mist, the "Mauretania" was running almost parallel with the "Ile de France," when away in the mist appeared the "Bremen," which in an hour had overtaken both ships. The old "Mauretania," still the fastest of the British ships on the North Atlantic route, was over 25 years old. Nothing had been done since the War to improve upon her. No effort had been possible to restore the position which we have rightly held down the years, and ought to hold to-day. How can we remedy that state of affairs, unless the State comes to the aid of the organisations which are entrusted with the business?
It may well be that in detail the Bill requires some revision. Some of the points which have been raised by the hon. and learned Member for Central Nottingham (Mr. O'Connor) may well merit attention. It would be absurd to advance a further sum unless there were proper security that a second ship could be built. Anyone with any knowledge of the trade knows that it would be absurd to build one ship unless another could be built. One ship is of no use; two are the minimum and a third may be necessary. I hope that in passing to the detailed Committee stage of this Measure we may pay tribute to the Government for rising to what is, indeed, a national occasion, in order to facilitate the restoration of our place upon the seas.
§ 10.49 p.m.
§ Mr. PALING
I should never have dared to think that I should find myself 636 in the same boat as the hon. and gallant Member for Gainsborough (Captain Crookshank), but I agree, to a very large extent, with what he has said on this Motion. Having heard the Chancellor's statement to-night and having got same smattering of what this business means, I must protest against what is being done. As a Socialist, I protest, first and foremost, against using public money for bolstering up private enterprise, and particularly a decaying private enterprise such as this. I have been in this House some years, and I have always found that when one begins to talk about a particular kind of sentiment the House nearly always objects. We have been talking this week on a sentimental issue whether the allowance for children should be 3s. or 2s., and there were a number of objections about making that a question of sentiment. But when it comes to spending £9,500,000 on a matter like this, then sentiment and prestige become the dominating issue. The Chancellor of the Exchequer admitted that this was a very unusual course for a Government to be taking, but he said it was justified by the result. The only result I was able to draw from his statement was that of recovery of the prestige of the Blue Riband of the Atlantic which we have lost.
Apart from my objection to spending public money on private concerns such as this, I have another objection. I have in mind what hon. Members have said in this House and what I have read about the position of shipping, how the trade in the North Atlantic has gone down, and that there is no longer any necessity for luxury ships. I have read about the number of millionaires in America decreasing, and like the hon. and gallant Member for Gainsborough I want to ask who is to travel in these ships when they are built? If my information is right nearly half the ships are out of commission, and some of those which are running on the North Atlantic route do so for a great part of the year almost empty. I think I am justified in saying that there is not a business man on the benches opposite who would put a penny of his own money into an enterprise of this description. From the purely business point of view he would not look for a minute at the security offered. There appears to be nothing left except the sentimental point 637 of view. If we must spend money, and if we have passed the necessity for economy, there are many better ways of spending money than in this particular direction. I feel that the hon. Member for Gainsborough will prove to be right, and that we are not loaning this money, but that we are making a present of it to the company and will never see anything of it back.
The only point I can find in support of spending this money is that of providing employment. But I think it could be spent in other ways much more profitably even from that point of view. This public money could be used for creating public assets which would be of great benefit to the community in addition to creating employment, and we would lose it as we probably shall do under this proposal. For these reasons, I hope that some further consideration will be given to this matter before it is allowed to pass the House in the form in which we find it to-night.
§ 10.54 p.m.
§ Mr. CHAMBERLAIN
I know some more of my hon. Friends would like to speak on this subject, but I would remind the Committee that there will be ample opportunities when the Bill is before the House for further discussion of the points that have been raised. I think enough has been said to indicate the points upon which the Committee would like further information at this stage. I am not now going to argue whether this amount of money could be better spent in some other way. We are really not here to consider alternatives, but to consider whether the particular proposal I have made to the Committee is one which deserves their commendation or not. I will take first the point raised by the hon. Member for Cardigan (Mr. D. Evans) in reference to the security. Let me point out to him that not only is there this specific charge on No. 534 in respect of the first £1,000,000 which is to be advanced to the merger company, and the £750,000 of working capital which is also to be advanced to them—No. 534 being, of course, worth somewhere about £4,500,000—but it is provided, as the hon. Member will see from the memorandum of agreement, that under the trust deed the sums set aside for the purpose of depreciation are also to be held as security, so that, as 638 the security on No. 534 diminishes, the security of the depreciation sums will increase, and, if those sums should thereafter be invested in the provision of new ships, the trustees will have to make this a further charge upon the new ships. Therefore, I think there is a very substantial security in these provisions.
My hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) raised a question about Section 1 of the War Loan Act. But we are, in paragraph (c) of this Resolution, asking for power for the Treasury to borrow the sums which under this proposal are to be advanced to the Cunard Company and the merger company, and Section 1 of the War Loan Act merely provides the machinery by which that borrowing will be undertaken. In effect it gives to the Treasury the power to raise this money in any way that they may feel to be desirable, and I think that probably, if the House passes the Bill, it will be in the first instance by an addition to the Floating Debt.
My hon. and gallant Friend went on to raise other difficulties, and those difficulties have been repeated to some extent in other quarters. It seems to me that they are largely based on a misapprehension of the sort of ship which No. 534 is going to be. This ship is described, for example, by the hon. Member for Gorbals (Mr. Buchanan) as a luxury ship; it seems to be thought that nobody who is not a millionaire would be able to travel in it. But anybody who has travelled recently on the Atlantic, as my hon. Friend the Member for Hulme (Sir G. Nall) has evidently done, will have observed that the ships which have the fastest rate of speed are those which carry the largest number of passengers, and those passengers are not necessarily millionaires. On the contrary, the modern big and fast ship is designed to carry a very large number of what one might call the intermediate class, who would jump at the opportunity of going by a route by which they could get to their destination quicker than by any other. The whole experience of the Atlantic trade is that it is the fastest ship which carries the largest part of the trade, and it is, therefore, for that reason that the Cunard Company—who, after all, have had a great many years' experience in this particular trade—felt that they must, if they 639 were to preserve their position, embark upon the building of a ship of that class.
My hon. and learned Friend the Member for Central Nottingham (Mr. O'Connor) points out that, in addition to the first ship, the Motion gives power to the Treasury to advance the money which may be required for a second ship. He suggests that that is asking a great deal and that it would be much more reasonable if we confined ourselves at present to the first ship and, if a second ship is wanted hereafter, come back to the House and ask for the necessary powers. I think further consideration of the circumstances will convince him that that would not be a fair thing to the companies. It is possible to provide a weekly service with two ships if they are of sufficient speed. You must provide a weekly service if you are to get the cream of the passenger traffic. I therefore think it extremely probable that the Cunard and Oceanic Companies will find that the provision of two ships is necessary in order to make the first ship pay. On the other hand, it is possible that they may come to a different conclusion and it is for that reason that we do not make a definite commitment here and that I have protected myself by the observations that I made in that respect. It is conceivable that they might say that, instead of building a second large ship, they might build two more ships of a smaller size. I do not know what may be their recommendations, but I see that it might turn out that, if they do not have certainty with regard to the second ship if required for the purpose of an efficient service, they would have embarked their money on the first ship and would have been unable to obtain the necessary conditions to build the second.
With regard to the objection of the hon. Member for Gorbals to all mergers on the ground that they throw people out of work and invite further competition from other countries, why are we to be the only country which is never to engage in competition and which is to suffer every country to smash us, throw our ships out of commission and make no effort on our side to hold our own and engage in competition with others on equal terms? That is not the sort of spirit in which commerce has been carried on in the past. If it was we should 640 never have achieved the position we have. In this case we have to bear in mind that the whole fleet of the Cunard Company is at present an ageing fleet, one might call it past middle age. If ships are thrown out of commission they will be ships which are already obsolete and sooner or later will have to be broken up. This is a rejuvenating process that we are carrying on. It is no reversal of the Government policy of public works. We have again and again announced that it is our desire that public works, where they are remunerative and economic, should be undertaken. It is our desire that the industries of the country should put themselves in a position to compete with the rest of the world. In this case, as I emphasised in my opening remarks, it is the building of the ship which has excited the Press and which has been the chief interest of the hon. Member for Dumbarton Burghs (Mr. Kirkwood). The real great achievement which is carried out by the agreement which this Motion approves is the joining together of these two concerns into one, which will be able to hold its own against the rest of the world. I hope the House will be able now to give us this Resolution. We shall be able to resume our discussions at a later stage when the Bill is introduced.
§ Mr. MAXTON
Can the right hon. Gentleman answer the question as to whether the companies which form this merger have had other commitments with the Treasury through the Trade Facilities Acts, and are they being met?
§ Mr. CHAMBERLAIN
I forgot the question had been put. Yes, it is true, under the Trade Facilities Acts. I thought I mentioned it in my opening speech.
§ Mr. CHAMBERLAIN
The amount is £1,000,000. It has already been advanced on the security of certain ships belonging to the Oceanic Company, but in my opinion the security for those previous advances, which have not yet been repaid to any extent and are still outstanding in their original form, will be improved and not lessened by this advance.
§ Sir J. NALL
Were not the "Mauretania" and "Lusitania" both built by subvention, and was not the money repaid in due course?
§ Mr. CHAMBERLAIN
Yes, that is perfectly right, and indeed the obligations that were undertaken at that time appeared then to be just as formidable as that which we are considering now. They were all paid off.
§ 11.7 p.m.
§ Mr. ALBERY
I am very sorry to keep the House at this late hour. I am also sorry not to acquiesce in the Chancellor's request to bring the Debate to a close, but I must admit as a back bencher who has sat as a supporter of the Government for the last few years that I found little consolation in his suggestion that I shall probably get an opportunity to speak on the Second Reading or some other Debate on the Bill. I have sat here through the Unemployment Bill Debate for many days, and have never been able to get in, and I have now come to the conclusion that if I want to say anything in this House I had better take the opportunity when I get it.
I admit readily that there are many considerations which enter into this proposal. As the hon. and gallant Member for Hulme Division (Sir J. Nall) said, we have our marine prestige to think of, that trade follows the flag, and that there are many valuable assets to be got if we get back our predominant position in the Atlantic trade. I willingly would see the Cunarder finished if it is going to achieve that object. I would also like to sec the employment given which might thereby be obtained. But what is a shock to me is not the fact that the Government are to help to finish the Cunarder, but the manner and the method which they have chosen in order to do it.
I believe that we stood for private enterprise in shipping. I believed that our shipowners and shipmasters were capable of meeting the world in shipping matters. It was certainly possible to do this in the past. If these big ships are to win us back predominance in the Atlantic trade, then it is worth doing as private enterprise. They may need some assistance. I certainly had imagined it possible that the Government might have guaranteed a loan of £2,000,000 or possibly £3,000,000 to assist them to forward the private enterprise which they themselves had started as an economic proposition without Government assistance. But what 642 do we see to-night? We see the Government asking us to vote a sum of something like £9,000,000, provided by debentures, and after the interest on the debentures has been paid the remaining profits are to be divided between the private enterprise shareholders of the company and the Government. That I for one had never expected.
Either this business is worth doing as private enterprise or it is not worth doing. In which case it does not seem to me that it is the business of the Government to step forward and shoulder practically the whole of the burden, as they are doing in this proposal. There is also the question of good security. It may not be a very big point, but it is certainly peculiar. I always understood that one of the first things that one did if one was going to lend money on mortgage on a house was to ask the borrower if he had an insurance on the house. If we take the question of the Cunarder, who is it that bears the insurance? The lender of the money. The Government lend the money and the Government insure the Cunarder. If the Cunarder goes to the bottom of the sea, and the Government are the insurers, they will lose the money. As to the question of a second ship, are we committed to the building of it or not? If we are, let there be no doubt about it. Let it be said right away that we have to provide £9,500,000. I understood from the Chancellor of the Exchequer just now that that matter remained indefinite. It is natural that it should remain indefinite, for after they have tried out the first ship they will probably have some idea whether it is going to be a paying proposition. If it is, the company itself could provide the finance of the second and should not need Government assistance. If, on the other hand, it is not going to be a paying proposition, there is no need for us to find the money for a second vessel. On all those grounds the proposal put forward is an extraordinary one, and not the kind of proposal for which this House should be expected to find the money. I hope when this matter comes to be considered on Second Reading there will be an alteration made in the present proposal.
§ 11.13 p.m.
§ Mr. MARTIN
I wish to ask a question. I was not quite sure whether the 643 Chancellor of the Exchequer replied to the hon. and learned Member for Central Nottingham (Mr. O'Connor) on the question of the further sum for the second ship being built. I did not understand how long it will be in the power of the Treasury to grant the money, and whether it will have to come before this House. Are we to have any opportunity of knowing whether it is to be one ship or two ships, which the Chancellor of the Exchequer suggested might be the case. In view of the fact that all the Northern Press have been saying that my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), having such powerful lungs, has been successful where the Tyneside Members have been unsuccessful, we on the Tyneside would like to know whether, if there be two other ships, they will go to the area which is equally as depressed by unemployment as the area of the hon. Member for Dumbarton Burghs?
§ 11.14 p.m.
I should like to associate myself with the words that have fallen from my hon. Friend the Member for Blaydon (Mr. Martin), and to congratulate the hon. Member for Dumbarton Burghs (Mr. Kirkwood) on the good fortune which has come to his constituency. We hope that before the Bill has passed its Second Reading, we shall receive the information for which the hon. Member for Blaydon asks. I want to put in a 644 plea for Tyneside, because we feel that something should be done there.
§ 11.15 p.m.
§ Mr. NALL-CAIN
I cannot allow Tyneside and Clydeside to have it altogether their own way. I am not going into the question of the wisdom or not of the Government departing from their original policy, but if it is going to be a question of conquering unemployment by public works, as one part of the Liberal party once tried to do, let us have several of these ships and have one of them built at Cammell Laird's, Birkenhead.
§ The CHAIRMAN (Sir Dennis Herbert)
It is time I reminded the Committee that there is a custom in this House with regard to advertisements.
§ Resolution to be reported upon Monday next.
§ The remaining Orders were read, and postponed.