REVENUE DEPARTMENTS. (Hansard, 7 March 1934)

§ Mr. CHURCHILL
During the course of the Debate yesterday I ventured to hazard a suggestion that the Secretary of State for India had been influenced in fixing the scale of this grant by the need of procuring additional funds in order to carry out his policy of giving Federal Home Rule to India, and finding the money for this democratic experiment in India. I was not at that moment in 1979 possession of the quotation of his evidence before the Joint Committee which would support that assertion. I therefore did not make the case with the fullness that I should have been justified in doing. I have since looked up the quotation, with the aid of the admirable index of the evidence before the Joint Committee, and I find that the impression that I had is fully borne out. There is not the slightest doubt that the Secretary of State had in mind the use of this contribution, this additional grant-in-aid of £1,500,000 which we are now to Vote for the purpose of carrying forward this Federal Home Rule Scheme in India. A discussion arose in the Joint Committee about the present financial position of India, what money was available, and very severe and careful examination of the position was undertaken by the hon. Gentleman who is now the Deputy-Leader of the Opposition. Among other questions he asked this: Have you considered at all the possibility of any part of the burden of defence being taken over as an Imperial burden. The hon. Member asked whether the right hon. Gentleman had in view any relief from this quarter, or words to that effect. The Secretary of State said: It is a question, of course, that has constantly been discussed between India and Great Britain for many years and is one of the questions that will emerge out of the Capitation Tribunal decision. I would prefer, if Major Attlee will allow me to do so, to wait until the autumn when I should hope to be able to make a fuller statement of the results of the Capitation Tribunal than I can to-day. Then a further question was raised as to whether other parts of the Empire paid less, to which the Secretary of State replied: Major Attlee is raising a very big and a very controversial issue, upon which there has been a discussion for generations. What I can tell him, however, is that this was one of the issues referred to the Capitation Tribunal, composed, as he will remember, of impartial British and Indian judges, and I should hope to be able to make an announcement on the subject when we resume our discussions in the autumn. That the right hon. Gentleman's hope was not fruitless and that he was justified in his hope was shown by what occurred. The tribunal fixed no figure and gave no award. It merely indicated that there should be a contribution of some kind. That was enough for the 1980 Secretary of State. That was what he had been counting upon. He was then able to go to the Chancellor of the Exchequer and demand from him, as colleague to colleague and as one man in a confederation with another, the means of supplying the finances necessary to bring his home rule scheme into operation. I expect there was a very hard tussle between the Secretary of State and the Chancellor of the Exchequer and that the Chancellor consoled himself by thinking that he had got out of it as cheaply as he could when he gave £1,500,000. The award of the tribunal could perfectly well have been satisfied by £130,000 or simply remitting the other half of the sea transport as was done 20 years ago, but the Secretary of State required this money as a make-weight, and as grist to his mill for bringing his home rule scheme into operation. He demanded and procured from the Chancellor of the Exchequer this £1,500,000, but he would have been very glad to have got more, because even that does not give him as much as he requires. That is my view and I say it is directly connected.
I see it stated in a newspaper which belongs to the Government Press—for they still have some Press left—that it was an unworthy suggestion to say that this demand for £1,500,000 had anything whatever to do with the Indian constitutional reform. I have exposed to the House to-night on the Report stage of this Resolution the direct link and the absolute proof, which no one can dispute. You may try to explain it away and wrap it up in a cloud of words, but there is not the slightest doubt that the hope of the Secretary of State was to obtain a substantial refreshment from this source for his scheme, and he has undoubtedly obtained it. I have indicated how I think the figure was fixed, by this hugger-mugger discussion between the India Office and the Treasury, with the War Office intervening.
But we had an alternative suggestion put before us last night by the Secretary of State as to how he worked out the scheme. He took all the expeditions in which India had assisted the Empire for the last 60 years. He took them all in and said there was so much due on that account. He also looked at the admirable training facilities afforded to our 1981 troops by the large expanses of the Indian plains, and said that there was so much due on that account. How much for each one he did not mention, but, adding them together—the expeditions from the sixties to the present day and these training facilities—he suddenly informed us that the answer was £1,500,000. Of course, anyone who knows anything about the working of the Governmental system knows it was nothing to do with these expeditions and training facilities, but what the Chancellor of the Exchequer thought was the least he could get off with. He did get off, in my opinion, with a very severe mauling such as no other occupant of that office would have tolerated in the last 30 years in regard to this issue. This £1,500,000 which is provided was aimed at and struggled for and fought for as part of the necessary provision for the home rule scheme of the right hon. Gentleman. He is getting it now as a burden for ever fixed upon the people of this country, and, although I do not expect for one moment that the House of Commons, which is the guardian of the public purse, is going to worry about such a bagatelle as £1,500,000 when the Government Whips are on the other side, yet I venture to say that in bringing this matter to the attention of Parliament and to the attention of the country, we have exposed one of the most disagreeable phases of the under-workings which are bringing forward this Indian policy to a conclusion which will be permanently disastrous to our interests.

§ The UNDER-SECRETARY of STATE for INDIA (Mr. Butler)
The right hon. Gentleman has again returned td the charge which he showed so little success in substantiating yesterday. I am only too glad to have the opportunity of drawing attention to the lamentable exhibition which he and his supporters made in this House on the previous occasion on the same subject. That they should have returned to the charge is their own choice, and I hope in a few words I shall be able to show the House and the country that this charge which the right hon. Gentleman has chosen is singularly ill-founded. The right hon. Gentleman had the courtesy to inform me that he was going to raise the subject, and he also had the courtesy to compare with me the results of his researches in the excellent index to 1982 these large volumes. I may say that my researches have come to exactly the same conclusion as those of the right hon. Gentleman, but the deductions which I draw from the quotations of the evidence of my right hon. Friend are totally different from the deductions drawn by the right hon. Gentleman. I would like to remind the House that my right hon. Friend took the unprecedented course of giving evidence for a very long period before the Joint Select Committee. He therefore subjected himself to questions from some of the acutest brains in this country, representing different points of view, and to questions put to him by the representatives of Indian opinion. He was asked by the Deputy-Leader of the Opposition, who is a member of the committee: Have you considered at all the possibility of any part of that burden being taken over as an Imperial burden? To my mind the answer which my right hon. Friend gave was absolutely straightforward and was the only answer he could possibly have given in the circumstances. My right hon. Friend said, and he repeated yesterday exactly what he said in evidence before the Committee, that this important question was one which had been constantly discussed between India and Great Britain for many years. That disposes of the theory that the right hon. Gentleman has put up with his usual astuteness, that this has been trumped up at the last minute in order to support our scheme of Indian constitutional reform.

§ Mr. CHURCHILL
No. I never said it had been trumped up at the last minute. I know this question has been pending for 30 or 40 years, and it has been brought into prominence from its seclusion within recent times.

§ Mr. BUTLER
My right hon. Friend the Secretary of State made it perfectly clear yesterday that this matter has been under discussion before the decision to set up an arbitral tribunal. I think it is quite unnecessary to rebut all the arguments which the House heard yesterday. The Secretary of State continued with his answer: I would prefer, if Major Attlee will allow me to do so, to wait until the autumn when I should hope to be able to make a fuller statement on the results of the Capitation Tribunal than I can to-day. 1983 I submit that was the only course that the Secretary of State could have taken. He informed his questioner that he preferred to wait until the Capitation Tribunal reported. I can see no possible objection to his having given an answer of that sort. The Noble Lord the Marquess of Reading asked whether this question had been within the terms of reference of this tribunal, and the Secretary of State answered "Yes." The Noble Lord went on "I do not want to ask any more if you tell me it was," and the Secretary of State replied "Yes, it was one of their terms of reference." Throughout the tenor of his remarks, if the right hon. Gentleman had pursued his researches into the document, he would have seen that the Secretary of State replied in exactly the same sense to Sir Hari Singh Gour. He said: As Sir Hari Singh Gour will remember, the Capitation Tribunal that was appointed with the approval of the parties concerned, made an inquiry last year. They have issued to the Government a Report, and the Government are now considering that Report. I think when the House hears the answers of the Secretary of State as they have been read out by the right hon. Member for Epping (Mr. Churchill) and myself, it will see that in answering the Secretary of State took the only course open to him, and that was to say that he was awaiting the report of the tribunal. Into the question of the merits of the tribunal and the merits of the award and so forth, I do not propose to enter now. We debated the matter fully last night, and the House was able to show by the overwhelming vote and the decision it took that it was perfectly satisfied with the explanation of my right hon. Friend. The right hon. Member for Epping takes every opportunity of coming here and misrepresenting the point of view of my right hon. Friend and myself. He chooses to take this opportunity to reproach the Secretary of State for having brought up this subject at this moment. I have explained that this is a subject which has been outstanding for many years, and I think it is one of the successful marks of the administration of my right hon. Friend that he should have brought this stormy and difficult subject which has stood between our two countries for such a long time to such a satisfactory conclusion.