HC Deb 14 March 1934 vol 287 cc486-556

10.5 p.m.


I beg to move, in page 1, line 6, to leave out "from time to time," and to insert: within a period of two years after the passing of this Act. This Clause gives the Treasury power to make advances to certain private companies and the object of the Amendment is to limit the period within which those advances can be made. Under the Bill as it stands the payments can extend over an unlimited period. When the Chancellor of the Exchequer made his first statement in regard to these payments the impression was that the money would be needed almost immediately. The Amendment suggests two years as the limit of time within which this money should be granted. We believe that to be as long a period as the Committee should accept. There are many different opinions in the Committee in regard to this Bill. There is an opinion that it would not be fair if any portion of this money could be granted during an unlimited period if its purpose is merely to put the company in a position to build the fastest vessel on the Atlantic. There is also an opinion that it would not be wise to give the Treasury this power for an unlimited period to grant money for the purpose of bolstering up a private company.

There is also an opinion in this House that the Treasury ought not to have unlimited time in which to grant money to this company merely for the purpose of building a luxury vessel intended to carry rich people across the Atlantic. There is general agreement on one point only and it is that ship No. 534 should be completed so as to give employment to thousands of working men who are not now employed. We believe that that was the reason which really attracted the House of Commons to this proposal. We say that for that purpose the grant of the money ought to be within a time limit and that unless the company takes steps to obtain the money within two years and unless they deserve the money within two years then the money ought not to he paid.

10.10 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

The purpose which the hon. Member had in mind in moving this Amendment was disclosed by him in the last sentence of his speech in which he expressel the opinion that if any money had not been paid in accordance with the provisions of the Bill by the end of two years, the power to advance the money ought to lapse. I would point out to him, however, that that purpose would not be effected by the Amendment. It is, no doubt, the case that, in all human probability, all the money required for the completion of ship No. 534 will have been advanced before the termination of two years. The only money which would then be left over unadvanced would be perhaps some part of the working capital and the amount required for the second ship or ships. But if at the end of two years, supposing the Amendment were carried, the whole of the money has not been advanced the Government might find themselves in this position, that in view of the coming lapse of their powers they were bound, as they would have the power to do, to advance the whole of the remainder before the two years had elapsed. Thus the only result of the Amendment might be that the Government would be forced to make the full advance long before they were required to do so or indeed before they had made up their minds that it should be made. In those circumstances I hope the hon. Member will not think it necessary to press the Amendment.


After the statement of the Chancellor of the Exchequer, I beg to ask leave to withdraw the Amendment.


I desire to speak on the Amendment.


The hon. Member for Spennymoor (Mr. Batey) has asked leave to withdraw the Amendment and I would point out that if any hon. Member speaks now upon it, it cannot be withdrawn.

10.12 p.m.


May I point out that the Chancellor of the Exchequer in declining to accept the Amendment said it might mean the Government granting this money earlier than they otherwise would. On the other hand, as the Bill now stands, without an Amendment of this kind, this money can be paid without any time-limit at all. The purpose behind the Amendment is to have a reasonable time-limit for the completion of the one ship. If all the thousands of people who have been promised work on this ship are to get it, the ship should be completed inside two years and since we are told that the purpose is to provide work it is not unreasonable to expect that the provision of that work will have been accomplished inside two years and that the Government's financial commitments should be limited to that period. When the Chancellor of the Exchequer says that it might mean granting the money before the time, that would only occur if the vessel had not been completed in the two years and it seems to me that there must be something wrong if the vessel cannot be completed within that period. I think a limit of two years gives ample time, and if the primary object is the provision of work such a limit is only reasonable. The insertion of the Amendment would mean that if the ship were not completed by that time the Government's commitments would cease and I think that would be a powerful lever.


Is the hon. Member correct in thinking that this applies only to the one ship? Does it not apply to two ships?


If the hon. Member had listened to the Mover of the Amendment, he would have heard him say that this Bill had gone through so far because it was for the provision of work on this vessel. Clearly the purpose of the Amendment is to limit it to one ship.


If the Amendment were carried, the result could only be obtained through some other Amendment being moved subsequently. I think this refers to the sum of £9,500,000 and is not, therefore, confined to one ship.


I am thankful for these lectures on Parliamentary procedure, but Governments often move Amendments with the idea of subsequent Amendments being also moved, and the rights of the Opposition must not be taken away from them in this respect. Having regard to the later Amendment on the Paper and to the fact that this Amendment cannot be separated from the consequential Amendment, I think this is a very reasonable and necessary Amendment. I think also that no Government should have an unlimited time in such a matter as this, because the Bill as it stands can continue for all time, provided the sum of £9,500,000 has not been used.

Question put, "That the words pro-nosed to be left out, stand part of the Clause."

The Committee proceeded to a Division.

The CHAIRMAN stated that he thought that the Ayes had it and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and he accordingly called upon the Members who supported and who challenged his decision successively to rise in their places, and he declared that the Ayes had it, two Members only who challenged his decision having stood up.

10.19 p.m.


I beg to move, in page 1, line 15, to leave out "nine," and to insert "four."

I understand that it has been arranged that we shall take the following Amendment standing in my name—in line 18, to leave out "or more large vessels," and insert "large vessel"—in conjunction with this one.


Yes. I think these two Amendments really form one, and that the hon. Member will be satisfied with a decision on the first Amendment.


For the sake of guidance, do I understand that the first Amendment, to limit the amount Co £4,500,000, is to be taken with the second Amendment, to leave out "or more large vessels" and insert "large vessel"? Am I right in thinking that they will be taken together?


I put it in this way, that I looked upon these Amendments as one because the lesser amount referred to in the first Amendment is regarded as the necessary money for only one vessel. Consequently, if that Amendment were carried, the second would be consequential, but if the hon. Member takes a different view, I am quite satisfied, if these Amendments are discussed together, to put the Question on the second Amendment, but to have no further discussion on it.


So long as I can safeguard my right to vote on the two Amendments, I am satisfied.


These two Amendments are really one because, if the first Amendment be carried, it will mean that there will be no money left to build the sister ship at all. The reduction of the sum from £9,000,000 to £4,000,000 would automatically mean that only one vessel would be built. The reason we are moving this Amendment is very simple. When this issue first came before the House, all we heard about was ship No. 534, but in subsequent negotiations that have been proceeding between the Government and the shipping companies, a sister ship has loomed on the horizon. We are beginning to wonder whether the Government are in fact determined to help the company with the sister ship at all, and, indeed, we are beginning to wonder too whether if No. 534 is proceeded with, there is any advantage in promising money for the second ship. All the arguments that have been employed against building No. 534, can be muliplied ten fold in the case of building a sister ship.

I have looked over the documents that have been issued in connection with this matter, and I find that they are very nebulous about the second ship. If the right hon. Gentleman will turn to page 4 of the agreement, he will find that I am justified in saying that there is very little in the agreement to show that the second ship is warranted by the proceedings that have already taken place between the Government and the company. The argument has been employed justifiably from this side of the House that the Government are taking a grave risk in lending this money, but if it be admitted that we are right in lending it to build the ship that has already been begun, we are entitled to say that we should not guarantee sums of money in respect of a ship that has never been begun. The arguments may be very strong in favour of completing No. 534, but if it is agreed that the Government should not go beyond that and lend money for a second ship, the case is made out for my Amendment. Unless we get an adequate reply from the right hon. Gentleman we shall be compelled to make a protest in the Lobby against what is done in this Clause. There is no time limit neither with regard to the second ship, and as far as I have been able to read these documents, the Government in their promises are going beyond anything that the companies have asked them to do. If the finances of the country are in as bad a way as we are told they are, we should not throw our money away on this second ship.

10.25 p.m.


I find myself in somewhat of a difficulty with regard to this Amendment. Like a great many other hon. Members I was returned to this House to endeavour to save the money of the taxpayers, and I have always done my best to help my right hon. Friend the Chancellor of the Exchequer to keep down expenditure. Again and again I have refrained from asking him to spend money on objects which I approve. Here is expenditure which I do not like in the least, because I think it is a great waste, and when I find the Socialist Opposition moving an Amendment to reduce the amount of that expenditure, really, what am I to do? I cannot very well go back upon the electors who sent me here to save money. I find myself faced by a lot of people who say "Let us have all the money we can—give it out three for two, or whatever the phrase is," and others who say "Cut down taxation." If we spend money it is obvious there will not be so much to balance the Budget and help to right the financial position of the country. Quite honestly, many of us are placed in a very difficult position in face of this Amendment, because we do not want to vote against the Government if we can possibly avoid it.

But, after all, the Government may take the line of saying that this expenditure will be in the interests of encouraging national trade, and that ultimately the Exchequer will gain more than it loses, and if that is the position then it becomes a wholly different proposition. But I would repeat to the Chancellor of the Exchequer that I and others find ourselves in a difficult position when a proposal of this kind is brought up, and we are faced with the direct question, Are you going to help the Chancellor to balance his Budget or to increase the expenditure of this country? I can see that in many ways the Chancellor is in a difficult position, and I should be the very first person to endeavour to help him out of all his difficulties, but I hope the House will appreciate the difficult position in which I stand when I am faced with a direct Amendment which would help to save money.

10.28 p.m.


I do not intervene from any desire to oppose the Government in their desire to support the Cunard Line in the policy they are developing for the Atlantic trade, but to point out that it was obvious from the start that there must be two ships to carry on the service which they are at present running with three ships. That is the policy which the Cunard Line have developed from the beginning, and it is clear that there is not the slightest good in their building one ship unless there is the possibility of having two. That is why the Government are asking in this Measure for the sum of £9,000,000, an amount which the Amendment seeks to reduce. My purpose in intervening is to ask the Chancellor of the Exchequer or the Financial Secretary to the Treasury—to whom I put the question in a previous Debate—whether the House will have an opportunity, at a later stage, of knowing whether the Cunard Line are to proceed with the second vessel.

A very large sum is being spent on one vessel—and it is probably right that that expenditure should be incurred: I am all in favour of large vessels for the Atlantic trade—but I must remind the Committee that we are continually told that there is not a very large sum of money available to be spent upon various industries in the country. At a time when the shipping trade is placing before the Government proposals that another section of the trade should have consideration, I find that a total sum of £9,000,000 is being asked for in respect of two vessels. The chances are that when the Cunard Line wish to proceed with the second vessel, the section of the shipping trade to which I have referred will be in such a position that, unless the Government support it in the meanwhile, it will have to ask the Government for some measure of assistance. The Government might then say, "We have spent £9,000,000 already on the shipping trade, and we cannot afford to spend any more."

I repeat the question which I put in a previous Debate as to whether the House is to be informed in any way before the second ship is proceeded with, so that we may have an opportunity of stating, on behalf of the shipping industry as a whole, whether the industry consider that they might as well have a share of what is going. I pointed out in a previous Debate that, roughly speaking, 100 tramp vessels could be built for the cost of one Cunarder. The tramp shipping trade undoubtedly requires revival with new tools, but it is possible that although the Government might think that that would be a very good thing to do, they might object that they had already spent £9,000,000. Is there to be an opportunity of discussing whether the Cunard Line should proceed with another vessel at a later stage, or is this, so far as the House of Commons is concerned, the finish, and there will not be an oportunity of discussing the matter again? That was my object in rising, and possibly we might get an answer to my questions.

10.32 p.m.


Like an hon. Friend who has spoken I was returned to this House for the purpose of helping the Government to keep down expenses, but I was also returned to help the Government to extend employment. I understand that one of the main arguments for putting through this Bill is to give employment for a long period to a large number of men. That fact, and the other fact that this ship cannot run alone but must have a sister either of equal size or smaller, requires that we should support the Government and should reject the Amendment. I shall not discuss the point as to whether the Government could use this £4,000,000 in a better manner, as an hon. Friend has suggested, in a way which would go direct towards employment, or in ways in Which it is not meant to go. It is important to remember that if we support the Chancellor in regard to one ship, largely for the sake of its employment value and for the regaining of our prestige and our trade upon a certain route, we have to support him in having money—or at least having the power to give money—for a second ship. I only wish to ask the Chancellor, as I tried to ask him before, exactly how the £4,000,000 will be dealt with after the first ship is built, and when he comes to consider with his colleagues whether the extra £4,000,000 should be advanced or not. We should reject the Amendment and support the Chancellor.

10.34 p.m.


I must make my position quite clear. I support this Amendment. I know there are many hon. Members who hold that view, even if they do not vote in the same Lobby as the official Opposition. The junior Member for Southampton (Sir C. Barrie) has played right into my hands, and into the hands of those who have been speaking against this Measure. He said the other day: The Government may be, and I think they are, wise in insisting so far that the second snip is not to be proceeded with."—[OFFICIAL REPORT, 7th March, 1934; col. 1853, Vol. 286.] He says that to-day with a different implication. The other day they were wise in not insisting on proceeding with the second ship for large reasons of policy; but to-day, because in the meantime the tramp shipping people and so on—I do not mean that in a personal sense, but different sections of the industry—may want some of this money before the Cunard Company build the second ship, my hon. Friend is not so sure, and he wants to be certain that the House will have an opportunity of reviewing the arrangement. I can tell him the answer to his question: the House will not have such an opportunity. If the figure of £9,500,000 remains here, it will give that amount of borrowing power to the Government, and that will be the end of it.

Hon. Members may ask as many questions as they like at Question Time, and the Government may say they are not going on with it, but they will have the power to do so. Moreover, this Government will not always be in office. Another Government may delay action, but still the statutory power will be there, particularly under the very extraordinary borrowing Clause which the Government have drafted. If my hon. Friend wants a subsidy for tramp shipping—and that, of course, is one of the unfortunate results of this Bill; all the shipping people come forward for more subsidies—he will have to get it separately and unconnected with this Amendment. If the Amendment is not carried, and the words stand in the Bill, the Government will have the power, and that is what is so regrettable. I agree with my hon. Friend, not because I think the interval ought to be spent in shovelling out £4,000,000 or so to tramp shipping, but because I think the interval ought to be preserved, and this House ought to have the right, if there is to be a second or more ships, to discuss the matter at the proper time, when they see the experience of the first large ship.

This is not a party matter at all; it is a purely common-sense financial Amendment, and I hope the Chancellor of the Exchequer will see his way to accept it. There is, indeed, great force in what my hon. Friend the Member for Torquay (Mr. C. Williams) has said. It is putting all the supporters of the Government in a very awkward position to ask them to find a vast sum of money like this, because, even though it is nominally a loan, we know that it will not be repaid. [HON. MEMBERS: "Why?"] Because it is such an uneconomic proposition. Certainly, if repayment was so easy on a commercial basis, the Cunard Company would have no difficulty in raising the money in the City of London. That is the answer to that question. My hon. Friend the Member for Torquay is quite right in saying that it has put us in an awkward position, because the great body of supporters of the Government were sent here to get the finances of the country straight. It may be, as my hon. Friend the Member for Stockton (Mr. Macmillan) has said several times, that the Government are changing their policy and embarking on a policy of works; but, if that be so, why should they select this one particular item as the starting point? Would not a great housing loan, for example, be much more sensible?

That is why those of us who are the real supporters of the Government—and I do not look in any particular direction—are anxious on their behalf to limit their responsibilities as far as we can. Some of us would prefer that there should be no grant for shipping, or that, if there is to be a grant, it should be as small as possible, and I hope that during the discussion on this Amendment we may have a reply from the Parliamentary Secretary to the Board of Trade. I am very happy to see that at last one of the Board of Trade Ministers is present at these Debates. The curious will have observed that, in the Division the other day, none of the Board of Trade Ministers voted for the Bill, that none of the Cabinet Ministers from Glasgow voted for the Bill, and that the hon. Member for Dumbarton Burghs (Mr. Kirkwood), who, with the right hon. Gentleman the Member for Hillhead (Sir R. Home), is supposed to be one of the fathers of the Bill, refrained from voting for it.


On a point of Order. What I did was to refrain from voting against the Amendment of my party. There was no vote on the Bill. The whole House was agreed on allowing the Bill to go through.


On that point of Order—


It is not a point of Order.


That shows that some Members are in a very anomalous position with regard to the Bill. Those who are the real supporters of the Government and want to keep them on the path of economy and good finance suggest that it would be enough to take the amount mentioned in the Amendment rather than the amount mentioned in the Bill. We hope even now to soften the heart of the Chancellor and making him realise that it would be better, perhaps, to make the experiment on the first ship, which is now on the stocks, and let the decision with regard to future sums that may have to be raised for the purpose be come to after we have a good deal more knowledge than we possess now.

10.41 p.m.


I want to oppose the loan altogether, but, not being able to do that, I suggest that it is unwise to spend £9,000,000 on a project which no financial house will touch and on which no bank would lend 10s., because it is considered by all of them to be a project which in all probability will fail. It appears an extraordinary thing to me that a Government which is still telling the public that it cannot find money for far more important things than this should be willing to lend £9,000,000 which everyone believes will never be paid.


This is not an Amendment to stop the spending of any money. It is to reduce the sum to £4,000,000.


I think we have a right to ask the Chancellor whether there is a probability of the money being paid. Experience teaches us that it will not, because there is already a very large sum of money owing by the same company. If there is reason for the belief that the public money that we are asked to lend is not likely to be paid and if there is evidence, as there appears to me to be, in proof of that statement, I think I am perfectly in order in making the statement.


The hon. Member would be quite in order in arguing that on the Clause. In fact, it has been argued on the Second Reading. But he cannot argue it on this Amendment.


I bow to your Ruling, Sir, but it is rather a pity that it was not given a little earlier in the evening, because others have referred to it, and that is why I was led into the error of believing that I also could do so. There were some arguments put up for the completion of the boat which has been already started, though I was never convinced that there were arguments put up why public money should be used for building it. The security is altogether inadequate, and the proof of that is in the fact that private enterprise will not lend any money to the project at all. Therefore, I hope the Committee will say to the Chancellor that if he has, as he appears to have now, a considerable amount of money to spend, the £9,000,000 could be spent in a better way. I suggest that a great many houses could be built with that £9,000,000.


The hon. Member must confine this remarks to the Amendment.


I would point out that the argument has been made before in this Debate. I hope that the Committee will definitely tell the Chancellor of the Exchequer that we are not prepared to spend the additional £5,000,000. If any reasonable argument at all can be made for the spending of the money, it can only be argued in respect of the ship which has already been started. I should be glad to hear from the Chancellor of the Exchequer when it is proposed to start the second ship, and under what conditions. Where is it proposed to be built? The argument has been used that the principal reason for starting a second ship after building the first is in order to provide work. I do not agree. I do not believe that the provision of work is the principal reason. The principal reason in this, as in many other things, including subsidies, is to assist private enterprise which assisted the Government so well that they were enabled to obtain the majority which they have today. It is a question of the old saying "One good turn deserves another." The Government have had their good turn, and now they are paying what they owe to private enterprise for the assistance it gave in helping to form the National Government.

If I were in the position of the Chancellor of the Exchequer to-night I should say, as probably he will say, "Save me from my friends." I think that when the reports are published to-morrow they will show the public that there are some of those who sit on the Government Benches who are beginning to see that the giving away of public money has reached the limit and that Parliament ought to say to the Government—and I hope it will be the case to-night—that the loaning of public money for bolstering up a failing industry—the shipping industry to-day is a failing industry, otherwise there would be no reason to come here and ask for money—should be stopped, and that private enterprise ought to find the money.

10.49 p.m.


I find myself in a dilemma, like my hon. Friend the Member for Torquay (Mr. C. Williams), but for a slightly different reason. I have for some time past, in fact almost always, been in favour of a policy of expansion. I am all for a progressive policy towards industry on the part of the Government with a view to putting more people into employment, and in connection with this Bill I welcome the apparent conversion of the Chancellor of the Exchequer to that view. But what puzzles me is the first choice which he has made of the Transatlantic shipping industry of two enormous ships of 75,000 tons. We have not been told what speed they are going to do, nor the reasons why the Government think that they will prove an attractive financial proposition. We have never from the start up to the present moment been given the reasons why the Government have chosen to subsidise two giant liners for the Transatlantic passage, and why they think that these two liners are the best opening move in their policy of expansion at the present moment. On the whole, I feel with those who would like, at any rate in the beginning, to limit this expenditure to the first ship until we have had an opportunity of judging from a practical point of view what sort of commercial proposition it will be, that the right hon. Gentleman is asking the House to take a tremendous leap in the dark. We do not know whether these ships will prove a commercial proposition. Would it not be advisable for the right hon. Gentleman to let us see how this first ship does before asking us to commit ourselves to this very large sum?

I have been somewhat alarmed by the speech which has been delivered on this question by my hon. Friend the junior Member for Southampton (Sir C. Barrie). He keeps coming forward and saying, "We have one ship now; it is all right to have two ships; why not?" But the next thing we shall want is, perhaps, a hundred ships. The right hon. Gentleman must seriously consider subsidising the entire fishing industry of this country. The hon. Member for Southampton is asking for nothing less than the subsidisation of the whole shipping industry, to which I should certainly add the subsidisation of the whole fishing industry, and the right hon. Gentleman will be assailed with demands from all quarters for the subsidisation of every industry. Before, therefore, we grant this very large sum of money, £9,000,000, for the construction of two ships, we have a right to ask the right hon. Gentleman to tell us what is the underlying principle which is guiding the Government in this issue, and why they have chosen to subsidise these two particular large ships in preference to any other class of expenditure.


I must tell the hon. Member that I could not allow the Chancellor of the Exchequer to answer that question on this Amendment.


We are arguing on this Amendment whether there should be one or two ships, and I will confine my remarks to that question. There is something to be said for this House exercising its undoubted right of control over public expenditure and limiting this expenditure until it has had some opportunity of judging whether this first ship will be a successful commercial proposition or not. That is not an unreasonable request to make, and I hope that we may at any rate have some reasonable reply from the Government on that point.

10.53 p.m.

Captain GUEST

Two minutes is quite sufficient for the two or three remarks that I have to make. They are merely based upon the fact that during the last 26 years I have—I think I am probably right in saying—crossed the Atlantic Ocean more often than anybody else in this House. This may be a risky thing to say, but I expect that I can prove it true. My object in saying that is that I have crossed by every line and almost by every ship in the last 26 years, and I am also in a position to say, as well as anybody else in the House, that most of the ships are half empty. Only within the last two or three years I have crossed by the two latest blue-ribbon ships known as the "Bremen" and the "Europa," built by the German Government, or by some company subsidised by the German Government. Are we to undertake this terrible gamble? It may be true to say that the first ship was started three or four years ago in peculiar circumstances, and that the Government are reasonably advised in seeing it through. It is a pity to scrap a half-finished article. But to launch upon the second ship until the first is proved to be a success seems a terrible waste of public money. I urge the Chancellor not to consider the programme of this second ship until he has some proof that the first one is not only going to be needed, but is going to be thoroughly used and full.

10.55 p.m.


I beg to move, That the Chairman do report Progress, and ask leave to sit again. I do so in order to ask the Chancellor of the Exchequer whether he can give any information in regard to a cable which has been circulated from New York by the Exchange Telegraph Company, to the effect that representatives of the White Star Line are seeking an injunction in the courts in order to prevent any further progress with the merger?

10.56 p.m.


The information which the hon. Member has given to the Committee comes to me for the first time. I have no information which would confirm the statement he has made. In any case, I submit that the information should not prevent the Committee from carrying out the remaining stages of this discussion. If it were a fact that an injunction were sought and subsequently an injunction were granted, that might render useless the work which Parliament would do in carrying this Bill; but I do seriously suggest that to postpone the possibility of restarting work upon No. 534 indefinitely in order that we might wait and see what may happen to an action which may never come on, as far as I know—I do not wish to be taken as accepting the correctness of the statement that has been made, in the absence of other information—would be an inexcusable thing to do.

10.57 p.m.


Perhaps the Chancellor of the Exchequer will allow me to quote the actual words used by Mr. Franklin, the President of the International Mercantile Marine Company. He says that: The merger would be a gross violation of the rights of the Oceanic Company's stockholders, and he has instructed his attorney to seek an injunction. He says: It is nothing more or less than the creation of a British national line, backed by the British Treasury to the extent of about 50,000,000 dollars (£9,000,000). Therefore, he is withholding his consent. He considers that while the arrangement would be beneficial to the Cunard Company it would be unfair to the Oceanic Line. I do not express any opinion as to the facts of the case, but it seems to me that in these entirely new circumstances it would hardly be dignified or wise for the Committee to continue discussing a Bill which may never have to pass.

10.58 p.m.


I take it that even if the Committee proceed with the present stage of the Bill we can expect from the Government, if there is to be a Report stage, an announcement as to their future action if in point of fact the statement which has been made to the Committee turns out to be well founded. I suggest that no harm would be done if we proceed with the Committee stage, on the understanding that when we come to the Report stage we may expect from the Government some fuller statement of the course which they propose to adopt.

10.59 p.m.


Is there to be a Report stage? The Chancellor of the Exchequer knows whether there is to be a Report stage or not. The Government so far have shown no signs of accepting any Amendment, and if no Amendments are accepted there will be no Report stage. Everybody knows that the Third Reading will be put down for to-morrow. I am surprised if the hon. Member in charge of the Opposition does not know that there is to be no Report stage.

11.0 p.m.


Is it not the case that when the Bill was presented the argument of the Chancellor of the Exchequer was that an agreement had been reached by the various parties responsible for the merger company, and that were it not for the fact that such an agreement had been reached the Government would not have presented the Bill to the House?


It is true that a conditional agreement had been reached when the Bill was presented, and as far as I was aware all the consents necessary had been obtained or were in process of being obtained. The Committee will see that I am at a disadvantage in knowing nothing about the circumstances brought to my notice, but I shall be glad to accept the suggestion of the hon. Member for Caerphilly (Mr. Morgan Jones) and give the Committee this assurance, that if the Government are not in a position to make a statement to-morrow before the Third Reading, we will postpone the Third Reading until such time as we are in a position to make a statement. I hope on that understanding that we may proceed with the Committee stage now.


I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Question again proposed: "That the word 'nine' stand part of the Clause."

11.2 p.m.


The hon. and gallant Member for Gainsborough (Captain Crookshank) who is an acute critic of the Government wants to cut down this sum to £4,500,000. I would remind him that this is a business proposal. I would also remind hon. Members that it is only permissive. It says: The Treasury may from time to time…advance. We must assume that the Treasury are not bereft of all reason. They are not fools, and they will consider how the first vessel is progressing before they go forward with the second.


The point is that the Treasury are not the guardians of the public purse in the same way as the hon. Member of this House. They are not responsible to the taxpayers. We are.


The Treasury are the guardians of the public purse, and they have taken precautions in the Bill, if hon. Members will only read the passage. It says: The Treasury may from time to time on such terms as they think fit advance out of the Consolidated Fund. I think we should consider this as a business proposal. If we are prepared to go forward with it, I think it is a fair venture, we ought not to worry about the figure. I do not think the Amendment should commend itself to the good sense of hon. Members.

11.5 p.m.


In replying to the speeches made in support of the Amendment I want to confine myself as closely as possible to the actual subject we are discussing. We are not discussing the whole policy of the Bill. We are discussing merely whether we should confine the powers of the Treasury to the advancement of a sum sufficient to build the first ship or whether we should allow the full amount named in the Bill to be granted within the discretionary power of the Treasury. Let me make perfectly clear what the effect of accepting the Amendment would be. It would be to destroy the whole scheme absolutely and to tear up completely the whole agreement we have made with the other parties. Why? The reason is obvious. The scheme must be taken as a whole. There are obligations on all sides. This is not merely the expenditure of money by the Treasury, as has been represented. It is the advance of money by the Treasury, but it is also the engagement on the part of this great enterprise of a very large sum of money in this first ship and in, possibly, two ships that may be built. It is the settled conviction of the Cunard Company, whose business it is to run ships across the Atlantic, and who have to be responsible to their shareholders for the way they conduct their business—it is their conviction after their long experience of the trade—


And their great success.


—that in order to secure the passenger trade on the North Atlantic you must build ships which are faster than any of their competitors. The point to which the passenger looks is the speed of the ship. I am not proposing to give this as my own view, but as the view of the Cunard Company. The point which attracts the passenger is the speed of the ship, and, subject to being able to pay the price, he will travel by the ship which gets him across the Atlantic in the shortest possible time. I have already explained that it is an entire misapprehension of the character of a ship of this kind to suppose that it is fitted for nothing but millionaires. A ship of this kind in these days is fitted with a very large number of cabins of moderate size, with a moderate amount of luxury in their fitting, which are intended to take people who can afford a certain price but, are not able to pay the great price charged for the suites of rooms intended for millionaires. Whatever company has upon the North Atlantic the fastest ships, that company will attract the cream of the passenger traffic.

In their view it is necessary to have a double service, so that you can have one vessel going each way, because the passenger who goes out wants to be certain that he can come back by a similar ship. Therefore in the minds of the Cunard Company there is no possible doubt that it will require a second ship, a sister ship to the first. I am not saying that that is the view of every shipowner, or that it is the view of every shipowner in the North Atlantic. It is the Cunard's view. The Cunard Company are putting a very large amount of money into the ship. They would not be prepared to go on with the ship and to embark their shareholders' money in her, if they felt it possible in the near future that they might find themselves crippled in the possibility of providing that double service which in their opinion is necessary, because they could not raise the money for a second ship. Therefore, they say, if they are to put the first ship on the service, they must know beforehand that they will not be prevented from putting the second ship on the service, for want of the necessary finance.


Why cannot they raise the money?


It is quite possible that they may be able to raise the money. That is the reason for giving complete discretion to the Treasury whether to make the advance or not. We are not committed to the advance of the £5,000,000 for the second ship, but we say that if the merger company decide that the second ship is necessary for the proper and economic carrying on of the service, the Treasury must have power to grant them the balance for that second ship. That is really a business proposition. I put it to the Committee that if they grant the power to the Treasury to advance money for the first ship, in their own interest they must give the power to grant money for the second ship otherwise they may make it impossible for the first ship to pay. That is the answer to my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) and others who say that we ought not to take out of the hands of Parliament the power to control the advance of this sum for the second ship. My hon. and gallant Friend said that this Government might not be here when the second ship was being built. It would be possible to go further and say that the present House of Commons may not be here when the second ship is being built. Another Government and another House of Commons may be in possession by the time the second ship is built. Those who are committing themselves to the considerable liabilities involved in proceeding with the first ship should have some assurance that they will not be deprived of the opportunity of completing the service because some new House of Commons which has not heard the arguments, which is not familiar with the circumstances in which the first grant has been made, may—perhaps on some entirely different ground—cripple their resources and make useless the large sum already advanced.

11.13 p.m.


The last point made by the Chancellor of the Exchequer is one of the most remarkable arguments I have ever heard. He says that this House of Commons is to bind every other House of Commons in the future because the future House of Commons will not have heard the arguments. In other words those who elect the next House of Commons and those who comprise the next House of Commons are not to have any say in this matter, because they have not heard the arguments. If that is to be accepted, the present House of Commons should not have a say either, because most of them have never heard the arguments. The great mass come in and vote from day to day without hearing a single argument. But is it to be said that another Government which may replace the present Government is to have no say in an expenditure of £5,000,000 of public money? That is the negation of Parliamentary democracy and Parliamentary control. The right hon. Gentleman also says that this company is putting a large sum into this undertaking. How much are they putting in? We have never been told. When the Government bought a certain literary work, there was an arrangement for paying pound for pound. Are the Cunard Company paying pound for pound? Are they putting in £9,500,000? Are they risking an equal amount?

There is a third question. I should say that from every angle tramp shipping needs this money more than anything else, because great numbers of sailors on tramp ships are to-day living under conditions that need improvement and considerable readjustment. For that reason alone there might be a defence for spending large sums of money in renovating your tramp shipping so as to give these men comfortable, decent conditions.

The DEPUTY-CHAIRMAN (Captain Bourne)

I think the hon. Member is travelling rather beyond the Amendment.


I admit that. The right hon. Gentleman said that this was not a millionaire ship, that large numbers of people in not very luxurious cabins would have the right to travel on it. What will the fares be? It is the fare that determines who shall travel.


Does the hon. Member not know that the fares are governed by a conference?


Yes, but the fare is governed in addition by the type of ship that you travel in, and the right hon. Gentleman knows as well as I do that that type of ship may alter in conference because it is a super-ship. If it is to repay the money at all, it must charge more. If it is to get a reasonable chance of bringing back the money invested, it must increase its charges. What are the estimated fares? Is it to be for the average man of moderate means, by which I mean the man with, say, £1,000 a year, or with £500 a year, or, if you like, less? Perhaps I had better leave out the man with less than £500 as not being likely to cruise, but could a person of moderate means travel even in the big ships to-day? He has not the means at his disposal. I must confess that we have not had any answer on this case at all. I was surprised at the hon. Member for East Edinburgh (Mr. D. Mason), who last week was holding up his hands and watching that the boys of Scotland did not get eating ice-cream on Sunday, watching that nobody should buy black strip balls on Sunday, saying just now, "What are you worrying about? It is only £5,000,000!" He crossed the Floor of the House, he went from those benches to these, because the Government's financial policy was wrong, and he says now, "Give them this £4,500,000. Let them play with it. Why worry?" That is the apostle of "peace, retrenchment, and reform." In these days I would have expected from him an Amendment that this money should not be granted if the boat was to sail on a Sunday.

But, seriously, the Opposition say, "We have a right to have a certain control over the spending of such a vast sum of money." That is a reasonable and a proper attitude for the Opposition to take. They say, "We are not saying that the second ship is to be built or not to be built." All that the Opposition are saying is that they are not committed one way or the other. They are only saying that the House of Commons should be asked, in the light of the circumstances, to be allowed to express an opinion on it. Along come the hon. Member for East Edinburgh and the Chancellor of the Exchequer who say, "This is a bargain; what does it matter what the House of Commons says? The Cunard Company says it, and we must do what the company tells us."


Will the hon. Member read the Bill?


I have made myself acquainted with it.


The hon. Member is wasting time.


I do not waste a whole Friday, like the hon. Member, on black strip balls and ice-cream. I know that he would sooner waste millions of money than waste 10 minutes now. A million is nothing to him, but a half-hour now is valuable. The Opposition are quite reasonable in asking that the House of Commons should be given a second opportunity. During our discussions on other matters in recent times, the hon. and gallant Member for Gainsborough (Captain Crookshank) and the hon. and learned Member for East Bristol (Sir S. Cripps) have deserved a certain amount of credit, for they have been insisting more and more on Parliamentary control in financial matters. In this matter the House is allowing the control of large sums of public money to pass out of its hands, and the Opposition are performing their public right in saying that before this money is spent, the House of Commons should have an opportunity of reviewing the circumstances.

11.23 p.m.


I agree with the hon. Member for Gorbals (Mr. Buchanan). I cannot understand the Chancellor's arguments against the Amendment. He tells us we ought to bind another House of Commons to support this Measure. I should have thought that he above all people would have realised that it is impossible for this House to bind another House; but perhaps the Chancellor had another meaning. Perhaps he thought that the next Government would not shovel out public money with the same lavishness. Perhaps that is the explanation of his appeal to the House to rush this matter through, so that the next House of Commons should not have an opportunity of reversing the policy. There was another interesting observation made by the Chancellor of the Ex-chequer. He is at the moment busy talking to his neighbour, and perhaps he will listen to what I am saying. I must congratulate him on being associated with the chairman of the Sound Currency Association, the hon. Member for East Edinburgh (Mr. D. Mason). They both agree that this is a sound business proposition. If that be so, why was it not taken into the City of London, which is anxious to provide money for any sound industrial venture. I cannot think that this is a sound business proposition, because it is brought to the Treasury. I do not think it is sound for another reason. The President of the Board of Trade has neither voted for the Bill nor given any support to it. He knows the shipping industry, and the Chancellor of the Exchequer does not. When the right hon. Gentleman treats us to the argument that we must bind the next House of Commons and that this is a sound business proposition, I wonder where he has learned his economics. Perhaps he has learned them from the Archbishop of York, with whom he has been engaging in economic fisticuffs lately. I do not see that there is much to be said for this Bill. It is wicked at the present time to spend a great sum of money on subsidising shipbuilding.


That might be an admirable argument against the Third Beading, but it does not arise here,


I bow to your Ruling, Captain Bourne, but I submit that the argument has been advanced by the Chancellor of the Exchequer, as a reason for building these two ships, that we must have the blue riband of the Atlantic, and that British shipping prestige must be kept up to the old standard. I think it is a great mistake to put forward proposals to spend £9,000,000 as a subsidy to shipping at a time when we are explaining to the Americans that we are too poor to pay our American debts. That argument appears to be disingenuous.

Then the Chancellor tells us that he attaches great importance to the information from the Cunard Line that the fastest ships get the greatest number of passengers. I have seen the "Bremen" and the "Europa," the fastest ships on the Atlantic, and they are almost empty. If the fastest ships carry the largest amount of traffic why should the "Bremen" and the "Europa" be almost empty? There has been a curious suppression of information on this matter. We have not been told what new sum the Cunard Company are putting into this ship or ships. The Chancellor has told us that an enormous sum of money is being put into the project and that the shareholders of the company are agreed that this is a good business proposition. But what is the amount? We know the Government are putting in £9,000,000; what sum are the Cunard Company finding? The Chancellor remains silent, and I think he is silent for a reason.

I hope that the House, quite independent of party considerations, will take a firm line on this matter. We have had many speeches from Ministers, like the Parliamentary Secretary of the Board of Trade, condemning shipping subsidies, saying they are wicked and contrary to every public interest. The House should take a firm line. If, for the sake of argument we are committed to the building of one ship it is our duty to cry halt and try to find out whether the first ship pays. How do we know that these ocean "Ritz's" will not remain empty? Members have been going round the country saying that the Treasury is empty and that we cannot spend money on slum clearance. If they are right we ought to hold our hand on this question of spending £4,500,000 on a second ship before we know the results from the first. That is a perfectly reasonable suggestion.

Why not treat this as an experiment? The Chancellor may be right in his belief that this is a good business proposition, and in that case the money for the second ship could be found in the City. I hope the House will take notice of the arguments so frequently heard from the Chancellor that we must have economy and we cannot throw public money about, and contrast them with his present attitude, when he airily dismisses every argument put forward by the hon. and gallant Member for Gainsborough (Captain Crookshank) and says this expenditure must be regarded as a business proposition. If this is a business proposition then the Chancellor has been very unforthcoming in his attitude to many other business propositions. I repeat that on this question the House ought not to vote on party grounds. It is a very dangerous development that one House of Commons should be asked to bind a succeeding House of Commons to the expenditure and so large a sum of money.

Let us build this particular ship by way of experiment, and then, if the experiment be successful, the Government can come to the House and ask for a further £4,500,000 or £5,000,000, although I do not see why, if it proves a success, the Cunard Company should not be able to raise the money itself. I hope the House will get rid of all notions of party, and insist on its control of the public purse, because if that goes there is very little left for the House of Commons to do.

11.30 p.m.


I do not think we have heard one supporter of the Government—


You have had the Chancellor of the Exchequer.


Most Members of the Committee fully appreciate the arguments that were advanced by the hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank). When this matter was first brought before the House of Commons we never heard a word about anything except the ship that was actually on the stocks at the time. There was no reference whatever to a second ship. I can find no reference at all, in the Debates that took place, to it being essential that a second ship should be built. When claims were made by my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), it was for the specific purpose of completing the ship that was lying on the stocks in his constituency. Hon. Members of this Committee have been deceived in this connection. The Government have realised at last after consultation with the directors of the Cunard Line that it is impossible to make one ship a competing proposition. After realising the necessity of building two ships, the Government have inserted in this Clause the sum of £9,500,000, contrary to the views that were held by every hon. Member, when the matter was originally advocated. The argument that has been advanced by the hon. Members for Gorbals (Mr. Buchanan) and North Paddington (Mr. Bracken) are valid. The Chancellor ought to be the last person in the world, as an old Parliamentarian, to advance the argument that we heard from him. Why should this House of Commons bind its successor? It cannot do so, and the Chancellor was taking a mean advantage of the Committee by advancing an argument of that kind. He put it forward in the hope that it might convince some of his supporters as to the legitimacy of the claims that have been advanced in connection with the Bill. I hope the Chancellor will appreciate that he cannot really resist this Amendment. The fact that not one supporter of the Government has made any case against the Amendment indicates that he should be prepared to accept it out of reasonableness to the Opposition. I support the Amendment, and I hope that we shall have continued support from Members on the Government Benches who preach economy all the time. We are not averse as an Opposition to the expenditure of money upon public works or upon any enterprise, provided that there is Government control. Associations in the mining industry would welcome the expenditure of money upon hydrogenation—


I hardly think that that arises on this Amendment.


I was putting that as an illustration. We heard the argument from the junior Member for Southampton (Sir C. Barrie) that implied that he might come along at some time to ask for assistance for tramp shipping. I might also give notice that we, as miners, will ask for support for the mining industry. I will not develop that point, and I bow to your Ruling. I hope we shall have the support, not only of those who have spoken in favour of the Amendment, but of those who realise the logic of the case, and the fact that the Chancellor of the Exchequer has not met that case.

11.35 p.m.


It has been said more than once in the Debate on this Amendment that the Chancellor of the Exchequer has had no support for the Bill. Many of the Members on this side have not spoken, but I think the large Majority of them are supporting the Bill. We have heard wild statements about the two leading boats crossing the Atlantic; but I myself a short time ago, before business had improved as it has done recently, crossed in the "Europa," and the vessel was very nearly half full. It is quite wrong to say that these two ships, the "Bremen" and the "Europa," are running nearly empty; 18 months ago, when the world depression was on, they were nearly half full. These two German boats are taking the cream of the traffic. When the Cunard Company were so optimistic as to put in hand a vessel which would compete with these two German boats, it was a piece of British enterprise that we in the House of Commons should not only admire, but support. I think that when a Government enters into a business transaction with a company which has had the courage to do that, it is not for the House" of Commons to pull the contract to pieces. We have heard from the Chancellor of the Exchequer that, if the money for the two boats is not provided, it will destroy the Bill.

It is surprising to hear from my side of the Committee speeches from Members who for some time have been emphasising the necessity for the Government co-operating with industry to try to maintain employment, and then, when a Bill of this kind comes before the House, to see attempts to destroy it—because, unless a contract which has been entered into can be carried out, it is impossible to proceed. To vote for this Amendment and upset the whole contract, making it impossible to proceed with these two boats in order to obtain again our premier position as the leading shipping nation of the world and regain the Blue Riband of the Atlantic, would show the country that the House of Commons was not sincere in endeavouring to provide the best employment for our people and the best name for our country.

11.38 p.m.


I must say that the facts of this case have not been put before the Committee. I am going to support the Chancellor of the Exchequer, because in my view one boat alone is of no use. Personally, I am dead against the scheme; I think it is going to be very costly; but I am positive that one boat will not be able to provide the service by itself—there must be two, or possibly three. The Chancellor of the Exchequer mentioned, earlier, the possibility of two smaller boats. The science of shipbuilding is making such rapid advances that there is no reason why a smaller boat should not be able to produce the necessary speed. We have heard no facts about passengers, except broad facts about "the cream of the passenger traffic." The passenger traffic is skim milk—there is no cream on it. There is no doubt that the "Europa" and the "Bremen" are getting more passengers than any other vessels afloat at the moment. The French liner "Normandie," which is about to come into the service, has a speed estimated at 33 knots. I trust that this vessel will be able to attain that speed. Unless you can get team work on this service, you are going to have an absolute failure. The question of mails comes in. If you do not put your mails across in a fast boat, you will lose all your mail contracts, and that is a very vital question. I am convinced that the right answer is two small boats. We are committed to building the first one and we do not want to lose the money that has already been spent, but if we could possibly get two smaller boats instead of a second large one, we should be much more on the right track. The Chancellor of the Exchequer did not preclude that in a previous speech. The question of insurance has not been specifically raised.


I do not think that arises on this Amendment.


I submit that it arises in this way, that it is going to put up the expense considerably, because the insurance market cannot insure one of these large vessels without assistance.


There is a special provision in the Bill dealing with that question.


I admit that there is a special provision but, nevertheless, the extra expenses are there. I trust that the Committee will realise that, unless you get a proper team of boats running the service, the money spent on one boat is absolutely valueless.


The Chancellor of the Exchequer stated that the Cunard company have put a large amount of money into this, but he did not state any figure. As we know what the obligations of the Treasury are but do not know the obligations of the company, is it asking too much that he should tell us what the amount is?

11.43 a.m.


I have an impression that the information that the hon. Member asks for has already been given but I shall have much pleasure in repeating it. The Cunard Company has put £1,750,000 into the ship. It is borrowing from the Government another £1,000,000 for further work upon it and that £1,000,000 is, of course, an obligation of the Cunard Company. Therefore, although hon. Members say the Government is putting in £1,000,000, and do not regard that as part of the liabilities of the

Cunard Company, that is a false view to take of the transaction. The Cunard Company is borrowing £1,000,000, and is to that extent involving itself in that liability in respect of the ship, and in that sense the Cunard Company is putting that £1,000,000 into it.


Would it not be true to say that the Government are finding no money and that the whole lot is the liability of the Cunard Company or the merger company?

Mr. CHAMBERLAIN indicated assent.


Then the light hon. Gentleman's reply leaves us exactly where we were before it was made.

Question put, "That the word 'nine' stand part of the Clause."

The Committee divided: Ayes, 176; Noes, 37.

Division No. 162.] AYES. [11.44 p.m.
Acland-Troyte, Lieut.-Colonel Ford, Sir Patrick J Loftus, Pierce C.
Agnew, Lieut. Com. P. G. Fox, Sir Gifford Lumley, Captain Lawrence R.
Allen, Lt.-Col. J. Sandeman (B'k'nhd.) Fraser, Captain Ian MacAndrew, Lieut.-Col. C. G. (Partick)
Apsley, Lord Fremantle, Sir Francis McConnell, Sir Joseph
Aske, Sir Robert William Fuller, Captain A. G. McKie, John Hamilton
Bailey, Eric Alfred George Gillett, Sir George Masterman Magnay, Thomas
Baldwin, Rt. Hon. Stanley Glossop, C. W. H. Makins. Brigadier-General Ernest
Balfour, Capt. Harold (I. of Thanet) Gluckstein, Louis Halls Margesson, Capt. Rt. Hon. H. D. R.
Barclay-Harvey, C. M. Goff, Sir Park Martin, Thomas B.
Barrle, Sir Charles Coupar Goodman, Colonel Albert W. Mason, David M. (Edinburgh, E.)
Bateman, A. L. Gower, Sir Robert Mayhew, Lieut.-Colonel John
Belt, Sir Alfred L. Graves, Marjorie Mills, Major J. D. (New Forest)
Bernays, Robert Griffith. F. Kingsley (Middlesbro', W.) Milne, Charles
Blindell, James Grimston, R. V. Mitchell, Harold P. (Br'tf'd & Chlsw'k)
Bossom, A. C. Gunston, Captain D. W. Molson, A. Hugh Elsdale
Bower, Lieut.-Com. Robert Tatton Hacking, Rt. Hon. Douglas H. Moreing, Adrian C.
Bowyer, Capt. Sir George E. W. Hamilton, Sir R. W. (Orkney & Z'tl'nd) Morris-Jones, Dr. J. H. (Denbigh)
Braithwaite, Maj. A. N. (Yorks, E. R.) Hanley, Dennis A. Morrison, William Shephard
Braithwaite, J. G. (Hillsborough) Hannon, Patrick Joseph Henry Muirhead, Lieut.-Colonel A. J.
Broadbent, Colonel John Hartington, Marquess of Munro, Patrick
Brown, Col. D. C. (N'th'I'd, Hexham) Harvey, George (Lambeth, Kenningt'n) Nall, Sir Joseph
Burgin, Dr. Edward Leslie Headlam, Lieut.-Col. Cuthbert M. Nation, Brigadier-General J. J. H.
Campbell, Vice-Admiral G. (Burnley) Hellgers, Captain F. F. A. Normand, Rt. Hon. Wilfrid
Caporn, Arthur Cecil Heneage, Lieut.-Colonel Arthur P. Nunn, William
Cazalet, Thelma (Islington, E.) Hills, Major Rt. Hon. John Waller O'Donovan, Dr. William James
Chamberlain, Rt. Hon. N. (Edgbaston) Hope, Capt. Hon. A. O. J. (Aston) O'Neill, Rt. Hon. Sir Hugh
Christie, James Archibald Hore-Belisha, Leslie Ormsby-Gore, Rt. Hon. William G. A.
Clayton, Sir Christopher Horsbrugh, Florence Palmer, Francis Noel
Cochrane, Commander Hon. A. D. Howitt, Dr. Alfred B. Pearson, William G.
Colville, Lieut.-Colonel J. Hudson, Capt. A. U. M. (Hackney, N.) Penny, Sir George
Cook, Thomas A. Hudson, Robert Spear (Southport) Petherick, M.
Copeland, Ida Hunter, Dr. Joseph (Dumfries) Powell, Lieut.-Col. Evelyn G. H.
Crookshank, Col. C. de Windt (Bootle) Hunter, Capt. M. J. (Brigg) Radford, E. A.
Croom-Johnson, R. P. Jackson, Sir Henry (Wandsworth, C.) Ramsay T. B. W. (Western Isles)
Cruddas, Lieut.-Colonel Bernard James, Wing-Com. A. W. H. Rea, Walter Russell
Davidson, Rt. Hon. J. C. C. Janner, Barnett Reed, Arthur C. (Exeter)
Davies, Maj. Geo. F. (Somerset, Yeovll) Jesson, Major Thomas E. Reid, Capt. A. Cunningham-
Doran, Edward Jones, Lewis (Swansea, West) Remer, John R.
Duncan, James A. L. (Kensington, N.) Kerr, Lieut.-Col. Charles (Montrose) Renwick, Major Gustav A.
Eastwood, John Francis Lamb, Sir Joseph Quinton Rickards, George William
Ellis, Sir R. Geoffrey Law. Sir Alfred Roberts, Aied (Wrexham)
Elmley, Viscount Leckie, J. A. Robinson, John Roland
Emrys-Evans. P. V. Leech, Dr. J. W. Ropner, Colonel L.
Erskine-Bolst. Capt. C. C. (Blackpool) Leighton, Major B. E. P. Ross Taylor, Walter (Woodbridge)
Essenhigh, Reginald Clare Levy, Thomas Runge, Norah Cecil
Evans, David Owen (Cardigan) Liddall, Walter S. Russell, Albert (Kirkcaldy)
Everard, W. Lindsay Lindsay, Noel Ker Russell, Hamer Field (Sheffield, B'tslde)
Fielden, Edward Brocklehurst Llewellin, Major John J. Rutherford, John (Edmonton)
Foot, Dingle (Dundee) Lloyd, Geoffrey Salmon, Sir Isidore
Sandeman, Sir A. N. Stewart Stevenson, James Ward, Sarah Adelaide (Cannock)
Savery, Samuel Servington Stourton, Hon. John J. White, Henry Graham
shaw, Helen B. (Lanark, Bothwell) Strickland, Captain W. F. Whyte, Jardine Ball
Smiles, Lieut.-Col. Sir Walter D. Sugden, Sir Wilfrid Hart Williams, Herbert G. (Croydon, S.)
Smith, Bracewell (Dulwich) Summersby, Charles H. Wills, Wilfrid D.
Smith, Louie W. (Sheffield, Hallam) Thomas, James P. L. (Hereford) Wise, Alfred R.
Somervell, Sir Donald Thomson, Sir Frederick Charles Womersley, Walter James
Soper, Richard Titchfield, Major the Marquess of
Sotheron-Estcourt, Captain T. E. Todd, Lt.-Col. A. J. K. (B'wick-on-T.) TELLERS FOR THE AYES—
Southby, Commander Archibald R. J. Tufnell, Lieut.-Commander R. L. Sir Victor Warrender and Lieut.-
Spens, William Patrick Ward, Irene Mary Bewick (Wallsend) Colonel Sir Lambert Ward.
Adams, D. M. (Poplar, South) Greene, William P. C. Mander, Geoffrey le M.
Bracken, Brendan Greenwood, Rt. Hon. Arthur Maxton, James
Buchanan, George Grundy, Thomas W. Milner, Major James
Cape. Thomas Guest, Capt. Rt. Hon. F. E. Paling, Wilfred
Cocks, Frederick Seymour Hall, George H. (Merthyr Tydvll) Parkinson, John Allen
Cripps, Sir Stafford Hicks, Ernest George Smith, Tom (Normanton)
Crookshank, Capt. H. C. (Galnsb'ro) John, William Tinker, John Joseph
Daggar, George Jones, J. J. (West Ham, Silvertown) Williams, Edward John (Ogmore)
Davies, David L. (Pontypridd) Jones, Morgan (Caerphilly) Wilmot, John
Davies, Rhys John (Westhoughton) Lawson, John James
Dobbie, William Leonard, William TELLERS FOR THE NOES.—
Edwards, Charles Lunn, William Mr. Gordon Macdonald and Mr. Groves.
George, Major G. Lloyd (Pembroke) McEntee, Valentine L.
Graham, D. M. (Lanark, Hamilton) McGovern, John

Before I call on the right hon. and gallant Member for Ripon (Major Hills) to move his Amendment, I ought to warn him that I have been in some doubt about it, but I think he is in order. I may, however, find that my doubts are justified.

11.53 p.m.


I beg to move, in page 2, line 1, to leave out Sub-section (2).

I wish to assure the Chancellor of the Exchequer that, unlike some of my colleagues on this side, I support the Bill. It is my contention—and I hope that I shall succeed in convincing the Chancellor of the Exchequer—that the War Loan Act, 1919, gives the Treasury power to exercise the prerogative of this House. It may have been right to do that in 1919. At that time a large amount of debt was maturing, and that debt had to be paid off. Now, however, that things have reached a more normal and regular stage, the House ought to recall those powers and ought not to delegate to the Treasury that power to create debt. Perhaps the Committee will allow me, quite shortly, to explain the position. This is the important point. Before 1919, the practice was that the House of Commons alone was authorised to create debt. A Resolution in Committee of Ways and Means was introduced, and then a Section authorising borrowing for Appropriations was incorporated in the Consolidated Fund Act. Therefore the House kept control over borrowing. In the Act of 1919 the Treasury were given power to borrow money for certain purposes without coming to the House. Those purposes were to meet payments for maturing securities under the War Loan Acts, 1914–18, Treasury Bills and Ways and Means advances. Those powers still exist. Therefore the House of Commons parted with a very large and very important part of its powers. Instead of the House being called upon to authorise each individual case it gave general power to the Treasury for certain purposes. The words of Subsection (1) are: Any money"— for the purposes I have recited, that is, for meeting maturing debt in the financial year or the floating debt— may be raised in such manner as the Treasury may think fit, and for that purpose they may create and issue any securities by means of which any public loan has been raised or may be raised or such other securities bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as they think fit. That Act passed through the House of Commons with practically no discussion in 1919. I do not think the House realised what they were giving up. The Resolution was passed and the Second Reading of the Bill was passed with no discussion. There was no discussion in Committee or on Report, and on the Third Reading only a very short discussion took place on any of the questions I am now raising. I do not think the House knew what they were giving away; but whether they knew or not, I think the time has come when this House should resume its powers. The present application of those powers goes a good deal further than the intention of the Act of 1919. That Act gave the Treasury power, without coming to the House, to raise money for certain purposes, chiefly to pay, off maturing debt and to borrow for ways and means advances and Treasury bills, but in this case and in other eases the Treasury are to be given power to create a new debt without going through the procedure which was formerly necessary. For 12 years, from 1919 to 1931, the power given to the Treasury lay dormant; that is, the power of creating new debt under this Subsection was never exercised between 1919 and 1931, but between 1931 and 1933 it has been used five times without any application to the House. Parliamentary control is not preserved. If Subsection (1) of Section 1 of the War Loans Act, 1919, is to be used it does away with the procedure of this House in regard to the sanctioning of borrowing.

It is a big sum which we are asked to sanction to-night. It is a sum of £9,500,000, which would pay twice over the cuts in unemployment benefit and would increase by half the size of our Air Force. The powers which Parliament has exercised in the past should be exercised now before we pass this money. Parliament should not part with its control. I agree that the Act of 1919 is useful to a certain extent. It may be a good thing that the Treasury should have power uncontrolled by this House to meet a debt falling due, but by that we do not increase the amount of debt. To create a new debt is entirely wrong. It is generally considered that these powers ought to be withdrawn from the Treasury. The Treasury have always taken the opposite view, but I hope the Chancellor of the Exchequer will agree with me that as Parliament is the custodian of the public purse it ought to possess these powers and not delegate them to any Department.

12.2 a.m.


I do not think that my right hon. and gallant Friend appreciates entirely the position which would arise if the Amendment were accepted. If we withhold from the Treasury the power to borrow in order to make this advance, the amount would have to be found out of the taxes. My right hon. and gallant Friend is not concerned with the literal interpretation of the Amendment, because he has told us that he is raising the matter as a protest. He complains that in some way we are infringing the ancient powers of this House, and he told us that before 1919 the House of Commons alone could authorise the borrowing of money. I can well understand his solicitude for the traditions of this House, but I think he is under a misapprehension.

This Sub-section does two things. It gives power to borrow, and it provides us with the machinery whereby that borrowing may be conducted. The House of Commons by passing the Financial Resolution, upon which the Bill is based, and this Clause is authorising the Treasury to borrow money. There is no question about that. There is no borrowing behind the back of the House of Commons. All that remains to be decided is the machinery under which this borrowing shall be conducted. In the comparatively stable conditions which prevailed before the War and having regard to the small amounts which were then borrowed, it was possible to lay down with precision in an Act of Parliament all the conditions under which the money should be borrowed, including the rate of interest. Conditions are different to-day. If the right hon. and gallant Member will look at any of the pre-War Acts, he will see how particular they are in regard to the conditions. Not only is the sum of money to be borrowed specified, but the rate of interest is laid down in advance, and the dates on which the interest shall be paid.


All those conditions are laid down by the Treasury, but not by this House.


If my right hon. and gallant Friend looks at any pre-War Act he will see that all those conditions were laid down in detail in the Act. That is what we are asking for to-day. It was possible in the pre-War days, when comparatively small sums were being borrowed, to lay down all the conditions with great particularity. Every single detail was specified. But conditions have changed, and unless we are to put into every Act of Parliament all the conditions which must prevail in regard to borrowing, including the exemption of Members of this House, who otherwise would not be entitled to hold War Loan and vote in this House—unless we put in conditions of that kind seriatim we must proceed by reference. Accordingly we proceed here by reference to the War Loan Act of 1919, which gives us these general powers.


I am sorry to interrupt. I left out one statement regarding the whole process. The money could be issued as soon as there was a Resolution through the House of Commons, and as a matter of fact all the preparations for the loan were made beforehand.


Really my right hon. Friend has not yet made it clear. You are to specify all those details in an Act or you are not. We do not specify in this Bill all the details regarding the borrowing of this money. In view of the market conditions of to-day we must be left with discretion as to the rates of interest and the dates on which interest shall be paid. As regards the authorisation of the House of Commons, that is an authorisation for which we asked when we introduced the Financial Resolution. I trust I have made the point clear to my right hon. Friend.

12.8 a.m.


When the Financial Secretary says that all these particulars and details of a loan were given, does he say that the actual price at which the loan was to be offered to the public was given? That would be the governing factor.


I certainly say that, if my hon. Friend will look at the pre-War Acts he will find that all these particulars are stated, the title of the stock, the interest and the date of repayment, but I cannot say whether the price of issue was set out.


I do not think it was. That makes the whole difference. That is the governing factor.


But surely my hon. Friend with his long experience of the Stock Exchange would not suggest that we should announce in advance the price of issue. The Treasury must have discretion as to that and must be guided by the condition of the market.


One obviously could not state the price. It was not done then and one could not do it now. If one does not state it the other particulars do no harm. I cannot understand, even after the explanation that has been given, what the real difficulty is in borrowing money for the State under conditions similar to those under which it was borrowed before the War. The Act of 1919 was, I believe, an enlargement of the original War Loans Act of 1914, which dealt with the power to raise money for the purposes of the War. Obviously we had ample facilities for raising money before the War and the point which my hon. Friends and I are trying to make here is this. We hope that at long last the War is over and we ask has the time not come to return to the conditions of borrowing which prevailed before the War and under which this House had a greater degree of control than it now possesses?

12.11 a.m.


We are using this War Loan Act as an easy way of borrowing money. It is a remarkable thing that we should now be making use of that Act, so long after the War and for a purpose for which it was not intended. It is particularly remarkable that that should be done at the request of a Government which was returned to stop borrowing and to pay its way. It is a pity that we should continue to insert in Bills of this kind provision for an easy method of borrowing. Surely, at the present time, it should be our desire to make it, at any rate, not too easy for any Government to borrow. I respectfully suggest that the Government are ill-advised in creating a precedent by inserting this Sub-section, if there is any possibility, as I gather from my hon. Friends there is, of dealing with the matter in any other way.


Perhaps I can reassure my hon. Friend the Member for Gravesend (Mr. Albery). I think I now see what his point is. He feels that there may be some sinister provision in the Act of 1919.


No, no.


It is purely machinery. There is nothing in the Act to—


I did not for a moment suppose that there was any sinister provision of any kind in it. I am only drawing attention to the change which has taken place in the method and suggesting that we should revert to the older and safer method.

12.13 a.m.


I hesitate to quarrel with the hon. Gentleman the Financial Secretary, who has more or less suggested that my right hon. and gallant Friend the Member for Ripon (Major Hills) did not know what he was talking about. As my right hon. and gallant Friend has written a book on Government finance which is a text-book on the subject, it may be that the boot is on the other leg. My right hon. and gallant Friend is an expert on the subject and he is trying to draw attention to the fact that we have departed from long-established practice. We have only departed from it, by adopting this provision of the War Loans Act, 1919, on five occasions since the War. All five occasions have been since 1931. In three out of the five cases the power was taken for purposes which were practically speaking, connected with the War Loans Acts. One was a payment in connection with the American Debt; the second a payment to the National Debt Commissioners with regard to Death Duties and the third was the payment of the cash bonus and expenses connected with the conversion of the War Loan. Those purposes were ancillary to the purposes of the original Act. The other two cases were the setting-up of the Exchange Equalisation Fund, about which there was some criticism from several quarters and the provision in the Finance Act of last year for the contractual Sinking Fund payments in the current year. I understand that that power has not been used.

It is remarkable that we should now, for an entirely different purpose which can have no connection with anything arising out of the War Loans or national finance at all, seek to use this method. This is borrowing for a specific purpose. The Financial Secretary says that it is impossible to lay down with the same particularity as before the War, the details of Government borrowing. He may say so, but he gives us no reason. I should be more happy if I could be told why. It has perhaps escaped his notice that under the pre-War practice, the passage of the Money Resolution gave the powers and the Bill which followed was, more or less, declaratory. The powers were taken but each time there was borrowing the House had to be consulted. The general powers were laid down in each Money Resolution for each specific purpose. Generally speaking, there was a comparatively short period involved. So that the House, on the maturing of the debt, even if the original purpose was not achieved, had an opportunity for re-consideration. I advise the hon. Gentleman to make a profound study of my right hon. and gallant Friend's book—I think he will find it laid down there—in order to get a reason why the Treasury cannot revert to pre-War practice in this matter. No doubt they have a very good reason but we ought to know it. I dare say the Treasury does not want to give reasons but it is the increasing power of Government Departments that the House of Commons is up against, and those of us who try to stress the importance of the House of Commons feel that very strong arguments should be advanced for adopting in this case a practice which had gone out of use before 1931 and reverting to an Act passed to deal with a War situation. We want to know why we should not go back to the original system which enabled the House of Commons to maintain its power over borrowing. I hope the hon. Gentleman will tell us the exact reason why it is impossible to particularise in the way suggested.

12.17 a.m.


I am glad to find myself in this case in agreement with hon. Members opposite. I think it would be an advantage to the Treasury to accept the Amendment. Under the Amendment they would be able to select whatever method they thought best for borrowing. In the Bill, as it is, they are confined to the powers given by the War Loans Act. According to the former practice when the Treasury wanted to borrow, they brought in a Bill, for whatever measures they thought advisable, having regard to the market conditions at that time, and the control of the House of Commons over borrowing was maintained.


As the question raised by my right hon. and gallant Friend the Member for Ripon (Major Hills) is of importance, may I ask the Chancellor of the Exchequer to have the matter looked into, at least with reference to future borrowing?

12.19 a.m.


My hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) appears to think that because a man has written a book upon a subject, and is himself an expert upon it, he must therefore be intelligible to everybody who has not done so. That has not been my experience in the past and I share with my hon. Friend a difficulty in apprehending exactly what is the anxiety in the mind of my right hon. and gallant Friend the Member for Ripon (Major Hills). I would like to explain to the Committee what I understand to be the purport of this Subsection and why it is in its present form. What is this Sub-section of the War Loans Act of 1919 and what is its effect? It is not the provision which now governs the Treasury's power to borrow. The power to borrow in this case is given by the Sub-section which we are discussing, Subsection (2) of this Clause in the present Bill. What the Sub-section of the War Loans Act to which we are referring says, in effect, is that the Treasury may raise the amount, which you are going to authorise them to borrow, in any way they think fit. My right hon. and gallant Friend asks why we should give the Treasury this power to raise the money in any way they think fit, and why the House of Commons should not maintain in its own hands the power to say how the money should be raised. I want to give an answer to that question. The answer is that the conditions in the money market change so rapidly, as we have seen in the last week or so, that a method which would be appropriate to-day might be entirely inappropriate in a fortnight's time. Therefore it is for the purpose of saving money in order that we may borrow in whatever may be the cheapest way in which we can borrow when the borrowing has to take place that we have made use of this old Act which gives that latitude that we want, and which, of course, we might have set out in full in this Subsection.

12.21 a.m.


I thank my right hon. Friend for his explanation, but it does not meet our point. Under the old procedure you had just the same elasticity, just the same speed, and just the same objection of the Treasury. Here you are giving to the Treasury a power that before was specially brought into force by this House. It may have been a cumbrous system and have taken time. I dare say it did, but a great deal of our procedure that seems cumbrous is necessary for the complete control of this House over finance. I do assure my right hon. Friend that it has long been recognised outside the Treasury that this power ought to be recalled, and I hope that he will after this Debate reconsider the whole question.

Amendment negatived.

12.22 a.m.


I beg to move, in page 2, line 15, at the end, to add: (4) Until the advances made under this Section have been repaid there shall be allocated to the Treasury one representative on the board of directors of the merger company. On the Second Reading of the Bill the Financial Secretary made reference to this matter and said that the Government were mortgagees and had no status to ask to be represented on the board of directors. I think there are cases where representatives of the debenture holders have been placed on the board of a company. I will give one or two instances in proof of that assertion. There is the outstanding case of the Cordoba Railway Company, of which Lord Farrer is chairman. This company has had a chequered career, and I agree it is not a complete analogy with the present case inasmuch as it is a railway company. The chairman of the company had two directors, and two further directors were added to the board to represent the 5 per cent. income bebenture stock.

There was some justification for those debenture holders asking for representation on the board, and I think the same argument applies to this case, because the Cunard Company are quite unable to raise the necessary funds just now. They have no revenue returns over the past few years which would justify them going into the money market and asking the public for £4,500,000, and as the State has to come in I think the request I am making is a reasonable one. Where there is public money there should be some measure of public control. In the case of the railway company I mentioned directors were placed on the board to represent the debenture holders. The Financial Secretary to the Treasury says that in this case we are mortgagees; but where a large sum of public money has been advanced we are entitled to have our point considered. The Government's action has met with a good deal of criticism from all parts of the House, and I feel that it would meet that criticism in large measure if a representative of the Treasury, of the taxpayers, were put on the board. In acceding to this request the right hon. Gentleman will be doing a service to the Government and helping to secure public approval for the action the Government have taken in this matter.

12.27 a.m.


Since it appears that this unfortunate flutter by the Government is going forward it is to be hoped that this Amendment will be carried. When deciding that they would invest some money in the shipping industry it was unfortunate that the Government should choose this particular sector of company finance on which to back their fancy. This merger company is to be made up from the Cunard Company and the Oceanic, the latter being, I believe, a subsidiary of the White Star Line. The White Star Line was a part of that remarkable structure the Royal Mail Steamship Company. I do not propose at this time of night to go into the history of that very unfortunate business, because it, is familiar to us and the closing stages of that drama are not very old, but when one considers that history one certainly does have a great deal of misgiving on realising that the board of this company is going to provide a part of the board which will be the custodians of £9,000,000 of public money. The board of the White Star, I would remind hon. Members, is very much the same board as that of the Oceanic Company, which is its subsidiary.

It was the board of one of these shipping companies which performed that remarkably successful shipping transaction designed to demonstrate to the Labour Government of Australia how to make shipping pay. It will be remembered that they purchased the Commonwealth Line fleet from the Commonwealth Government for the sum of £1,900,000; and, having done this with a great flourish, which brought a great deal of pleasure to the hearts of all good supporters of private enterprise, they failed to find the money to pay for it, and only quite recently the Commonwealth Government foreclosed on the boats for non-payment of debt, and the company, which paid £1,900,000 for the fleet—and they have put it in their last balance-sheet at £2,250,000—had to sell the entire fleet for £500,000. It is the gentlemen who were capable of that deal who are to take a part in forming the board of this merger company, and it is to be hoped that the Government feel more happy about them.


Is the hon. Gentleman quite correct in his statement that the gentlemen who were capable of that deal are to form part of the board of the new company, seeing that those gentlemen have all along ceased to be directors?


I am obliged to the hon. and learned Gentleman for giving me the opportunity of making a minor correction. It is the board of this company which will take a part in constituting the board of the new company. I believe the hon. and learned Gentleman is right in saying that all members of the present board are not the same as the board which carried out that transaction. I am glad to have the opportunity to make that correction, but the principle remains, and, if public money—and so much of it—is to be sunk in a company which has this history, then it is to be hoped that the Government will see the wisdom of securing adequate control over the money.

The hon. Member for East Edinburgh (Mr. D. Mason) mentioned the question of the rights of debenture holders to nominate a member on the board. That is quite common, but it has to be remembered that this enormous sum is not secured on the first debentures, or only a very small part of it is. A large part of it is secured on the second charge, ranking after a good chunk of first debentures which come in front of it. A still further part is secured without debentures at all. That is the income debenture bond, which is nothing more or less than a preference share. So that the Government is becoming a preference shareholder in this merger company, and I am sorry, therefore, that this Amendment does not signify more than one representative. I believe I am right in saying that, after the disclosures of Royal Mail finance, the Treasury insisted, in the reconstruction scheme that followed, on taking powers to nominate one or more members of the board. Even so, the arrangement for the benefit of the White Star Line shareholders in the issue of notes in default of preference share interest has not been complied with. It is to be hoped that the Government will see the wisdom of keeping adequate control of this board. Not only, in my view, is this whole transaction very questionable, but it is made the more so by reason of the circumstances of the company involved. I hope that the British Government in this little venture will have better luck with the board of the company than the unfortunate shareholders have had hitherto.

12.35 a.m.


I hope the House will extend some indulgence to me at this time of night, but I have been requested by certain important shipping interests in the city of Cardiff to join with my two hon. Friends in supporting the Amendment. I remember that on the Second Reading of this Measure the Financial Secretary to the Treasury told the House that the Government were not anxious in any way to appoint representatives of the Treasury to take an active interest in operating shipping companies in this country, and that their interests were limited to those of mortgagees. As has been pointed out, their interests in fact go beyond that. It is the fact that this money will be a second charge, and it is reasonable to suppose that the directors of the merger company, representing, as they do, the holders of the first charge, have a perfect right to consider their interests before they consider the interests of the taxpayer who might be called upon to provide this very large sum of money. After all, I cannot appreciate the objections of the Government to having a representative on the board. It has been pointed out that a very large sum of money is involved—£9,000,000—and there are certain shipping interests who feel that, if money is to be spent, it might perhaps be spent to better advantage in other interests of the shipping industry. I will not pursue that now, but I invite the hon. and gallant Gentleman to submit a better reason for not allowing a representative of the Treasury to have proper control over the taxpayers' money, in the same way as in the case of other industries in which Government money is involved.

12.37 a.m.

Lieut.-Colonel C. MacANDREW

In regard to the plea that a director appointed by the Treasury should be put on this board, we should bear in mind the result of the very line referred to by a previous speaker, in which Australian ships were concerned. In the 12 years from 1916 to 1928, they lost altogether £14,000,000 of the taxpayers' money. It would be very stupid of the House to try to nominate directors to run a business which could be much better run by the company themselves.

12.38 a.m.


As the House always likes precedent in this matter, may I be allowed shortly to recall what was done on the occasion of the MacBrayne Shipping Company, when the House handed a considerable sum of money over for the purpose of subsidising that line? There, as here, the taxpayer was interested in the dividends of the company. I have the agreement here, and, though the wording is somewhat different, the objects to be attained are exactly the same. It says this: The Minister"— that is, the Postmaster-General— shall reserve the right at any time to nominate a person to serve for such period as the Minister may determine on the board of directors. In answer to the hon. Gentleman who has just spoken, that is not with the object of running the shipping company. The one director who would be placed on the board would be there to keep the Government in close touch with what was happening on the board.


That was a Scottish company.


I do not see the relevance of that remark, because, if it was considered advisable in that case, how much more advisable is it in this? The object of doing that was really to keep the Government in close touch with the working of the board—not to direct the shipping company and try to run it, but to keep in touch with the financial side. That is a different thing from seeing the balance sheet at the close of the financial year. If there is a director on the board with the right to be in touch with what is going on, he can keep the Government fully informed. That is in the interests of the taxpayers, who are supplying the money in this case. It is most desirable, and I hope the Chancellor of the Exchequer will see his way to accept the Amendment.

12.40 a.m.


I am supporting the Government on this particular occasion. If you are going to set down what financial terms you will have, it is perfectly absurd to place Government officials on this company's board. Whoever is put there will have to be paid, and I would say that, in an ordinary British company at the present time, the connection between them and the Government is so easy that it is absolutely unnecessary to interfere in this way. As regards the efficiency of the people themselves, it was said in the Debate the other day that the men who are projecting this merger are the most astute business men, not only in this country, but in the world—that none are more astute and none are more capable. We know that that is their position, and we were told that by the hon. Member for Dumbarton Burghs (Mr. Kirkwood) on the 7th March. I think that that is all we need say about a rather absurd speech.

12.41 a.m.


I hope the Committee will consider very carefully what the effect of this Amendment would be. It is quite clear that one director could not influence appreciably the policy of a company if he had all the rest of the board against him. All that he could be expected to do would be to act as a sort of, I will not say spy, but a sort of channel of communication giving information to the Government as to what was going on inside the board. In the first place, let me say that I do not imagine that, if we had asked to put a director on the board, we should have been refused. If we have not asked, it is because we do not think the interests of the country would be served. Let us assume that we did put one on, and that he acts as a channel of information. Are the Treasury to set themselves up as a greater authority on how to conduct the company than the board? Surely, that is assuming for the Treasury a much greater amount of competence in a technical matter than they would assume. If the Committee can imagine that the establishment of this merger company served some interest quite apart from the commercial and financial interest and that, for example, its existence, prosperity, or policy was in any way bound up with strategic considerations or military considerations, then, indeed, you would have to require that some representative of the Government should be on the board in order that those considerations should be kept in view which would not, of themselves, appeal to those who were there for commercial or financial interests. You may see an example of a similar matter in the Anglo-Persian Oil Company. It would be assumed, if the Government did have a director on this company, that its policy was Government policy. Have we not already heard this afternoon words quoted by an hon. Member opposite—I do not accept them as correct—words from a Mr. Franklin, who, it was stated, was going to apply for an injunction against this merger? Did not that suggest that there was here some question of rivalry between the British and American nations? If we were to give any handle to a suggestion of that kind, and do anything to have the effect of causing the American people to think that we opposed a line because it was a line belonging to another nation, it would be very unfortunate. This is a line that is not going to be governed by Government policy, but by commercial considerations.

12.44 a.m.


I really think that the explanation of the Chancellor of the Exchequer for not accepting this Amendment is not very satisfactory. The right hon. Gentleman says that he does not wish to raise any competition or rivalry with another country. I thought the whole object of this was to get the Blue Riband of the Atlantic.


Competition between an American company or a German or French or any other national company is going on every day. What I object to is that the British Government should be brought in.


The British Government is coming in to the tune of £9,500,000. We are told that one of the purposes is to get the Blue Riband of the Atlantic. The fact that, although there is not a Government director, the suggestion has been made, seems to show that it does not depend on a Government director. That is really a bogey that should not have any effect as regards the decision on this point. The Chancellor of the Exchequer says that if there were military or strategic reasons we ought to have representation on the board. But there is a very vital financial interest here, and the amount of money that goes to the use of the merger company will depend on what happens to the merger company. We are not going to give them the whole of the £9,500,000 on the first day, but presumably as it is required, according to the circumstances of the company. The interests of the directors of the company may well be to get as much as they can, and the interests of the State may well be to get them to finance themselves as much as they can without drawing on it. In those circumstances, surely it is wise for the Government to see that, while this money is not fully advanced, it is desirable for the Government to have someone who is in intimate contact with the proceedings of the board of the company, in order that they may consult with the Government and assist in directing the company's policy as regards further advances from time to time. I presume that the Government will have some say as to whether the second ship is to be built, as judged from the success of the service. Surely it is vitally essential that, where the interests of the Government in advancing the money, and of the company in getting it, may clash, the Government should have its own independent adviser to be its own independent director on the board of the company.

I am sure that no one would imagine that one director out of the 10 would direct the policy of shipping. That would be perfectly well understood, as well as the fact that the Government, having this very large financial interest—which might be more or less as the time goes on—would be right in saying, "We want independent advice regarding the proceedings of this company, and we can only get it by having our representative on the board." It is a perfectly proper protection, in the case of so large a sum of money, that the Government should have this advice.

12.51 a.m.


I think it is necessary for hon. Members of this House to deal with the points raised by speakers responsible for giving a large sum of money to this company. The Chancellor of the Exchequer has overlooked a rather interesting precedent. Why do the Government appoint directors to Imperial Airways? The Government do so because to a large extent they subsidise Imperial Airways. I do not think that Government directors are greatly advantageous to companies which have them. But their presence will encourage those companies to do their best to pay off a Treasury loan if only to get rid of them. And I think that a Government director might be useful to the Treasury when there is a question of curbing megalomania, and there has been a good deal of megalomania in the building of ships. If the Government had a representative he might not be able to prevent his colleagues adopting extravagant policies, but they would take a great deal of notice of what he said. That may be one of the reasons for having directors of Imperial Airways and of the Anglo-Persian Oil Company. The Government, on one occasion, insisted upon a change in the chairmanship of the Anglo-Persian Oil Company, because they thought a better man was required for the post and one of the Government directors became chairman.

The right hon. and gallant Member for Ripon (Major Hills) was, I believe, a Government director of Imperial Airways. We give very much less to Imperial Airways than we are going to give to the Cunard Line. Why, then, should we not have a director? We are giving £9,000,000 to the company, and the Government might well be represented on its board. I would remind the hon. Member for Torquay (Mr. C. Williams) that it is not a question of spending a very large sum of money on directors' fees. The directors' fees would be small. The Government could appoint a retiring civil servant or if they agree to reconstruct the Administration one of its Members might serve as a director. When the public's money is invested in a company the Treasury ought to have a director to keep an eye on policies and developments. I do not see why the Chancellor of the Exchequer objects to this Amendment when the precedent of Imperial Airways exists.

1.2 a.m.


I beg to move, in page 2, line 15, at the end, to add: (4) There shall be attached to the making of any advance under this Section a condition that the Fair Wages Clause of the House of Commons shall apply to the work of construction and fitting out of the vessel or vessels.

Question put, "That those words be there added."

The Committee divided: Ayes, 37; Noes, 129.

Division No. 163.] AYES. [12.55 a.m.
Adams, D. M. (Poplar, South) Grundy, Thomas W. Mason, David M. (Edinburgh, E.)
Bracken, Brendan Hall, George H. (Merthyr Tydvll) Maxton, James.
Buchanan, George Hamilton, Sir R. W. (Orkney & Zetl'nd) Milner, Major James
Cape, Thomas Hicks, Ernest George Paling, Wilfred
Cocks, Frederick Seymour Janner, Barnett Rea, Walter Russell
Cripps, Sir Stafford Kirkwood, David Roberts, Aied (Wrexham)
Daggar, George Lawson, John James Smith, Tom (Normanton)
Davies, David L. (Pontypriad) Leonard, William Tinker, John Joseph
Dobble, William Logan, David Gilbert White, Henry Graham
Edwards, Charles Lunn, William Williams, Edward John (Ogmore)
Foot, Dingle (Dundee) McEntee, Valentine L. Wilmot, John
George, Major G. Lloyd (Pembroke) McGovern, John
Griffith, F. Kingsley (Middlesbro,' W). Maclean, Neil (Glasgow, Govan) TELLERS FOR THE AYES.—.
Mr. John and Mr. Duncan Graham.
Acland-Troyte, Lieut.-Colonel Hacking, Rt. Hon. Douglas H. Radford, E. A.
Agnew, Lieut.-Com. P. G. Hanley, Dennis A. Ramsay T. B. W. (Western Isles)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Hartington, Marquess of Reed, Arthur C. (Exeter)
Aske, Sir Robert William Headlam, Lieut.-Col. Cuthbert M. Reid, Capt. A. Cunningham
Bailey, Eric Alfred George Heligers, Captain F. F. A. Remer, John R.
Baldwin-Webb, Colonel J. Hope, Capt. Hon. A. O. J. (Aston) Renwick, Major Gustav A.
Barclay-Harvey, C. M. Hore-Belisha, Leslie Rickards, George William
Barrle, Sir Charles Coupar Horsbrugh, Florence Robinson, John Roland
Bateman, A. L. Howitt, Dr. Alfred B. Ropner, Colonel L.
Belt, Sir Alfred L. Hudson, Capt. A. U. M. (Hackney, N.) Ross Taylor, Walter (Woodbridgs)
Blindell, James Hudson, Robert Spear (Southport) Range, Norah Cecil
Bossom, A. C. Hunter, Capt. M. J. (Brigg) Russell, Albert (Kirkcaldy)
Bowyer, Capt. Sir George E. W. James, Wing-Com. A. W. H. Rutherford, John (Edmonton)
Braithwaite, Maj. A. N. (Yorks, E. R.) Jesson, Major Thomas E. Salmon, Sir Isidore
Braithwaite, J. G. (Hillsborough) Jones, Lewis (Swansea, West) Sandeman, Sir A. N. Stewart
Broadbent, Colonel John Kerr, Lieut.-Col. Charles (Montrose) Shaw, Helen B. (Lanark, Bothwell)
Brown, Col. D. C. (N'th'I'd., Hexham) Leckie, J. A. Smith, Bracewell (Dulwich)
Buchan-Hepburn, P. G. T. Leech, Dr. J. W. Smith, Louis W. (Sheffield, Hallam)
Burgin, Dr. Edward Leslie Liddall, Walter s. Soper, Richard
Campbell, Vice-Admiral G. (Burnley) Lindsay, Noel Ker Sotheron-Estcourt, Captain T. E.
Caporn, Arthur Cecil Llewellin, Major John J. Southby, Commander Archibald R. J.
Cazalet, Thelma (Islington, E.) Lloyd, Geoffrey Spens, William Patrick
Chamberlain, Rt. Hon. N. (Edgbaston) Loftus, Pierce C. Stevenson, James
Christie, James Archibald Lumley, Captain Lawrence R. Stourton, Hon. John J.
Clayton, Sir Christopher MacAndrew, Lieut. Col. C. G. (Partick) Strickland, Captain W. F.
Cook, Thomas A. MacAndrew, Capt. J. O. (Ayr) Sugden, Sir Wilfrid Hart
Copeland, Ida McConnell, Sir Joseph Thomas, James P. L. (Hereford)
Cruddas, Lieut-Colonel Bernard McKie, John Hamilton Thomson, Sir Frederick Charles
Davidson, Rt. Hon. J. C. C. Margesson, Capt. Rt. Hon. H. D. R. Titchfield, Major the Marquess of
Duncan, James A. L. (Kensington, N.) Mayhew, Lieut.-Colonel John Tufnell, Lieut.-Commander R. L.
Elmley, Viscount Mills, Major J. D. (New Forest) Ward, Lt.-Col. Sir A. L. (Hull)
Erskine-Bolst, Capt. C. C. (Blackpool) Mitchell, Harold P. (Br'tf'd & Chisw'k) Ward, Irene Mary Bewick (Wallsend)
Essenhigh, Reginald Clare Moreing, Adrian C. Ward, Sarah Adelaide (Cannock)
Everard, W. Lindsay Morris-Jones, Dr. J. H. (Denbigh) Warrender, Sir Victor A. G.
Fox, Sir Gifford Morrison, William Shepherd Whyte, Jardine Bell
Fraser, Captain Ian Muirhead, Lieut.-Colonel A. J. Williams, Charles (Devon, Torquay)
Fremantle, Sir Francis Munro, Patrick Williams, Herbert G. (Croydon, S.)
Glossop, C. W. H. Nail, Sir Joseph Wills, Wilfrid D.
Gluckstein, Louis Halle Nation, Brigadier-General J. J. H. Wise, Alfred R.
Goff, Sir Park Normand, Rt. Hon. Wilfrid Womersley, Walter James
Goodman, Colonel Albert W. Nunn, William
Graves, Marjorie O'Donovan, Dr. William James TELLERS FOR THE NOES.—
Greene, William P. C. Palmer, Francis Noel Sir George Penny and Major George Davies.
Grimston, R. V. Powell, Lieut.-Col. Evelyn G. H.
Gunston, Captain D. W.

I rise with the expectation that the Government will see their way clear to accept this Amendment, and, consequently, I am not proposing to make an elaborate speech in urging the importance of its acceptance. The short history of the facts is that, prior to the House of Commons passing a Resolution approving of fair wage conditions, a number of contractors were quite willing to take advantage of the position of having the Government as an employer without observing fair conditions. The House of Commons at that time recognised the importance of placing on record the fact that, when people were working for good employers, they should observe good conditions. I think that in all the work on the vessel and in the fitting out, as public money is being advanced for the purpose, the conditions of labour should be those generally observed between employers and trade organisations. I urge the importance of this, and trust that the Government will accept the Amendment.

1.5 a.m.


I can give the hon. Gentleman the assurance which he requires. I am informed that it may be stated without hesitation that the wages will conform to the principles of the fair wages clause. I hope that he will accept the assurance, and that, if there is no reason to doubt it, he will not press for the insertion of his Amendment in the Bill. The reason I ask him not to press it is because it forms no part of the actual agreement. The hon. Gentleman knows that the firm constructing this vessel is a firm engaged on contracts for the Admiralty, and is quite accustomed to the observation of this Clause, and that the trade union is a powerful one and will be able to protect the rights of the working people.

1.7 a.m.


I want to raise a number of points that have not so far been raised in this Debate. The Government are spending £9,500,000 on these operations. So far as I can gather, the Amendment covers not merely the building of the ships, but also the operation of the fair wages clause in the running of the ship.


I think the hon. Member is under a misapprehension. The Amendment deals merely with the construction and fitting of the ship.


It is all very well for the Financial Secretary to the Treasury to say that there is a powerful trade union, but this does not affect the shipyard only. A large proportion of this work is sub-contracted for, possibly all over the country, and it is impossible to say that the fair wages clause is carried out everywhere. I have no doubt that in the yard itself it is carried out for, apart from the strength of the union, you get public opinion to see that the conditions are carried out. But you might have the making of furniture sub-contracted, and contracts given to firms which do not observe the fair wages clause. These conditions are carried out when a ship is built for the Admiralty, and, as the Government are giving money for the building of this ship, the same conditions should apply to this ship as for ships for the Admiralty. While the unions may be powerful, the Committee must remember that there is a large proportion of boy labour employed. I do not say whether this is necessary or not, but these boys are not protected in the same way as other workers, and I should like to see that in their case they are safeguarded by these conditions. When work is sub-contracted for, there might be places where the unions are not strong and I do say that in relation to these matters we should get the fair wages clause in the Bill itself. At least we ought to have it as a provision in the Bill that the fair wages clause should be observed.

I quite admit that the Financial Secretary to the Treasury speaks in good faith in this matter, but, when the Act is passed, it is not good faith that we shall be dealing with; it will be the Act, and the Labour Members are entitled to insist, and are only doing their proper duty in insisting, not on having verbal words, but that this principle of the trade union fair wages clause should be inserted in the Bill in the same way as it is inserted in the case of every other Government contract. It is inserted in the Post Office contracts. They could say there that they will not have the clause inserted, and that the trades unions are strong and public opinion is sufficient. That could equally be said in the case of every Government contractor. It was found in practice in the old days that this was needed in every Government contract. If the contractors are going to pay the trade union rates, there can be no objection to putting it into the Bill. They can lose nothing by it if they intend to observe the principle in the spirit and in the letter. This is a fair proposition. It is all very well to say that the trade unions are strong, but we ought to have a guarantee that it will be done. In order to see that it shall be done, and that we leave no loophole outside the Act of Parliament, I hope hon. Members in the House of Commons will accept nothing less satisfactory than that which is accepted in the ordinary Government contract.

1.13 a.m.


I was disappointed by the reply given by the Financial Secretary, for I thought the Government would have had no hesitation in accepting this Amendment. I want to emphasise the point made by the hon. Member for Gorbals (Mr. Buchanan), and to go beyond some of his statements. It may be possible that, in the yard where the principal part of the shipbuilding takes place, they will conform to the fair wages clause that is laid down by Parliament, and they may pay trade union rates of wages, but, as has been said, a good deal of the work may be put out to subcontractors, who may escape, or may try to escape, their obligation under the fair wages clause. I suggest to the Chancellor of the Exchequer that, if this does not apply to the firm which is responsible for the largest portion of this work, it may happen that one contractor may fulfil the obligation while another contractor may be allowed to escape it. That would be grossly unfair to the men employed by such a contractor, as well as to other contractors.

In the second place, it may be argued that the fair wages clause applies in all Admiralty work, and it is said that this firm do a good deal of Admiralty work and that therefore they know perfectly well what the Government requires. I would point out, however, that, while the Government are going to be responsible for finding the major portion of the money required to build this ship—or it may be two ships—the work is to be under the jurisdiction of a private firm. Consequently, although there might be a strong trade union in that yard, it might be said that this was not a Government contract, but a contract of a private firm. In that way I think we are entitled, in the special circumstances surrounding this Bill, to make it definite and put it in the Bill that this has got to be done.

As the hon. Member for Gorbals (Mr. Buchanan) has said, we do not mistrust the sincerity of the Financial Secretary, or doubt that he really means what he says, but what you have to look at is the Act of Parliament. We have had experience, as trade union leaders, in dealing with employers in regard to Acts of Parliament. When we quote to them what a certain Minister has said, we are told, "Oh, we go by the Act, and by the wording of the particular Clause." Consequently, while the Financial Secretary is genuine, as we honestly believe he is, in his statement, he cannot be responsible for an employer when that employer fails to meet this requirement and says there is no obligation placed on him by the Act of Parliament. I beg the Financial Secretary to accept this Amendment, and to put in the Bill the fair wages clause, which makes it safe for all men employed by any contractor.

1.16 a.m.


I rise to support the Amendment, and to press the Government to accept it. We were under the impression that there would be no discussion upon it, and that the Government would accept it. I understood that some promise had been given that they were willing to accept it, and I gathered from the hon. Member for Gorbals that he curtailed his remarks because of that, and that he thought that it was virtually agreed. After all, one of the things that we stand for when public money is being handed out is that at least the fair wages condition shall apply. The Financial Secretary said that to all intents and purposes that would be carried out. If that is so, why should it not be put in the Bill? I have heard no reason why it should not. It is not in the agreement, but surely, when the loan of the money was promised, it was understood that some kind of conditions would be required by the Members of the House, and that the whole matter would have to be submitted to us? It is a small thing that we are asking, but it is of vital importance. We should not have been doing our duty to the people working on the vessel if we had not insisted on having this in the agreement. I do expect, even at this late—or early—hour, that this will be granted by the Government. If not, I shall ask our people on the Front Bench to force it to a Division, to show that at least we intend to get it in the Bill.

1.19 a.m.


I will reply at once to the point raised by the hon. Member for Gorbals (Mr. Buchanan), which seems to be the point most agitating hon. Members. He took a perfectly good point, but the Government anticipated him by making the necessary inquiries. I cannot do more than read to the House the exact words of the statement which has been made to us by the Cunard Company: We have conferred with the builders, John Brown and Company, who advise us that, as practically all their sub-contractors are contractors for Admiralty work, it may be stated without hesitation that wages will conform to the principles of the fair wages clause in the case of sub-contractors working on the 534, just as they do for work under the main contract.


What is the date of that letter?


It is quite recent. I have not the date before me, but it is within the last day or so. As soon as the point was raised we made the inquiry. I have told the Committee quite frankly why the Amendment cannot be accepted. There is no provision in the agreement. We do not desire to delay the work on this ship one hour more than is necessary. If this agreement is interfered with in any particular, it will lead to delay because parties have to be consulted. I am sure that hon. Members would not desire to hold up the work on account of this point, which is small in view of the assurances that I have given to the House. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) has been pressing with natural enthusiasm that there should be no delay. He has accepted our assurances, and I hope the Committee will do the same.


Having had a reply from the Cunard Company, and the Government being relatively satisfied with that answer, could I get a guarantee from the Chancellor of the Exchequer that the Government will watch this matter and see that in the money which is spent the terms observed shall be those generally observed in regard to Government contracts?

1.22 a.m.


We have just heard again that an Amendment cannot be accepted because it is not in the agreement. I have heard that several times to-night as an excuse for not accepting most of the things put forward from this side of the House. When this agreement was made with the Cunard Company and the other people concerned, surely the Chancellor of the Exchequer knew that he would have to bring it to the House of Commons, where it would be subject to debate, and that the House of Commons would probably want to alter it in various particulars. Does the Chancellor of the Exchequer tell us that he has been to the Cunard Company and said to them, "Here is the agreement, word perfect. Trust me; I can get it through just because I can depend on a majority in the House of Commons to drive it through"? Surely there ought to be some elasticity so that it can be incorporated in the Bill. It is equivalent to telling us that the Chancellor of the Exchequer has all the power and that the House of Commons cannot alter anything that he has done. That is asking too much. In contracts given by local authorities, whatever the bona fides of the contractors may be, you always insist on the fair wages clause being part of the agreement, and, if that be so, why should not we do so now?

1.24 a.m.


The hon. Member who has just spoken says that I must have known long ago that this matter would have to be brought before the House of Commons. Of course, I knew. If there is any blame attaching to anyone for a fair wages clause not being inserted in this agreement I must bear that blame. But a fair wages clause is not ordinarily inserted in a commercial agreement. I frankly say that it never entered my head that the question of fair wages could possibly arise in the construction of a ship of this size and with builders of the reputation of John Brown and Company. To me it seems absolutely fantastic that the construction of a ship of this character should be carried on without fair wages being paid. That is my explanation, or my excuse if you like. As to an assurance that the Government will watch over this matter and interfere in any attempt to break the fair wages clause, I should like to give that assurance if I could, but there is no power for the Government to interfere in a contract already placed. There is, however, this indirect power, that this is an agreement which does not concern only one ship. It concerns also a prospective second ship which the Cunard Company believe it will be necessary for them to build.

I will give this assurance, at any rate, that the Government will look with the utmost disfavour on any breach of the conditions generally applicable to the fair wages clause, either in the construction of the present ship or in the construction of the second ship, and will not hesitate, in such an event being brought to their notice, to call the attention of those concerned to the breach, and intimate their disapproval of that course. Considering that the building of the second ship is subject to the veto of the Treasury, I think it might be fairly said that that assurance is practically of the same value. I can quite understand hon. Members hesitating about this being an agreement which cannot be broken. What I do say is that it risks a serious delay, that this agreement has still to obtain various consents, that someone might raise various questions. I do ask the Committee to think of those men who have been waiting months and months for an opportunity of getting work, and I ask them not for a technicality to run the risk of keeping those men waiting longer.

1.39 a.m.


I accept this continual reference to the fair wages clause to mean the fair general conditions that have to apply under the fair wages clause. With regard to the sub-contractor, I want especially to draw attention to difficulties I have experienced myself in shipyard negotiations affecting apprentices. The fact of the matter is that in most of the trades functioning outside the shipyards to-day there are apprentices' agreements which do give some kind of ratio between the men and the apprentices. In the shipyards there are no such agreements. The shipyards have always claimed the right to determine the numbers and wages of apprentices. I trust, if there are discussions in the future such as are visualised by the Chancellor of the Exchequer in the statement that he has made, that something will be done to make it clear to the shipyards that some regard should be paid to the apprentices and under-paid labour in relation to fully-paid labour.

1.31 a.m.


I would like to suggest for the consideration of the Committee a line of argument against the possibility of accepting this Amendment, however much sympathy the Committee and the Government may feel for it. I gather that hon. Members are not so uneasy about John Brown's as about the sub-contractors. Hon. Members must remember that on this Cunarder £1,750,000 has already been spent and, when it was laid down, the bulk of the sub-contracts were fixed. I know individual firms who have got sub-contracts for the 534. These sub-contracts have been lying dormant and, if these sub-contracts have been made by John Brown without a specific provision regarding the fair wages clause, and the Government now lay down that John Brown have got to place contracts with firms who have undertaken this condition, it may mean the cancellation of these contracts and the payment of damages. I think the Committee should view this thing as a general obligation on new contracts, whereas it is being pushed on sub-contracts already placed, but which have been lying dormant for the period of a year.


The suggestion is presumably that a certain number of people who have got contracts will not obey the fair wages conditions.


No. I do not suggest anything of the kind. The contracts were already made. It was not a case of placing contracts. The firms have already contracts.


If these firms are giving their workers reasonable conditions, they are suffering nothing whatever by being told now that the fair wages clause has to be observed. The only value would be in the suggestion of the hon. Member that there may be contractors of whom it possibly can be said that their labour conditions are not up to that standard.


The hon. Member's knowledge of commercial law must be singularly limited if he thinks that where a contract has been made it is competent for one of the parties to turn round and say you have to observe certain conditions not laid down in the contract.

1.34 a.m.


I am not going to place my knowledge of the law against that of the hon. Gentleman. If this is the same business arrangement as was entered into when the ship was laid down I do not understand business at all. There was no question at that time of Government interference. It was private enterprise on the part of the Cunard Company. What we are doing alters the whole situation. It gives us in this House some right to say that it throws an extraordinary light on the way the Government entered into these negotiations. The question of the fair wages clause never crossed their minds. In many of the shipbuilding trades now, after about 10 years of stagnation, even the union conditions provide a very miserable standard of life for the working people. The Committee should not refuse to put this in a Bill which has been recommended to the Committee to help the workers of the Clyde. That was the argument put behind the presentation of this Bill, and it secured a large measure of support because of that. Could not the Committee reasonably put in the Bill the bare minimum that trade unionism, in a bad period of time, has been able to maintain for the workers? It is easy for the Financial Secretary to the Treasury to say that the unions had power. Even inside the actual yard on the construction of the ship there were about 10 unions involved. Outside, there were about 100 different unions. Some of them are strong and some of them are very weak. I am thinking principally of the men in sanitary engineering involved in ships of this kind, in the provision of baths, wash-hand basins and sanitary appliances of that kind. I know that trade reasonably well in the North of Scotland. Trade unionism is powerless in it. The ordinary trade union regulations are set at defiance.

The right hon. Gentleman the Chancellor of the Exchequer has made an apology for neglecting to think of this matter when the negotiations were going on. Since that time communications have passed between the Treasury and the firm concerned. The Financial Secretary has read a letter which, one is entitled to assume, is genuine, honest and sincere. If I were given £9,500,000 I would be genuine and sincere to the people giving it to me. If we assume that it is sincere, it is a statement on the part of the people concerned that they fully intend to maintain the fair wages conditions. Since they made that statement in writing, and it has been read in the House of Commons, there can be no long drawn-out negotiations. If we here decide that we accept their statement on its merits, at its face value, as honest and genuine, we ought to be prepared to give it statutory-standing in our legislation. I urge the hon. Gentleman who moved the Amendment not to accept the assurance. The Chancellor of the Exchequer says, quite rightly, that it is not in the agreement. That is not an argument for not putting it in the Bill. The right hon. Gentleman says he will use pressure. Unless we have it in the Bill fee is powerless, except to threaten that when half-way through the bargain fee will break the bargain, which he said was a silly bargain unless completed 100 per cent. Therefore, I urge the hon. Gentleman who moved this Amendment to push it to a Division so that at least we on this side can register our opinion.

1.41 a.m.


I think the Committee will insist that this Amendment should be carried. The point raised by the hon. Member for Rusholme (Mr. Radford) was that these contracts must have been varied in point of time and that this small matter can also be easily adjusted. This is a small matter if the firms are accepting the conditions, but, if they are not, it becomes a very important matter. I appeal to the Chancellor of the Exchequer to appreciate the feeling of the Committee and to give us an assurance that after all that has been said as between the three parties he can put the matter right to-morrow.


I would like to remove a certain measure of misapprehension that has arisen from the speech of the hon. Member for Gorbals (Mr. Buchanan) in regard to what fee said about the running of the ship.


That is exactly the point that I ruled the hon. Member for Gorbals (Mr. Buchanan) must not follow.

1.50 a.m.

Vice-Admiral CAMPBELL

I beg to move, in page 2, line 15, at the end, to add: (4) No sums are to be paid under subsection (1) of this section unless a guarantee is given by the company that the vessel or vessels are to be manned solely by British crews. Although this Amendment is an important one, I shall only occupy a few minutes in explaining it. In the first place, I should like to say a word about

Question put, "That those words be there added."

The Committee divided: Ayes, 31; Noes, 120.

Division No. 164.] AYES. [1.44 a.m.
Adams, D. M. (Poplar, South) Hall, George H. (Merthyr Tydvil) Maxton, James
Buchanan, George Hicks, Ernest George Milner, Major James
Cape, Thomas Kirkwood, David Paling, Wilfred
Cocks, Frederick Seymour Lawson, John James Rea, Walter Russell
Cripps, Sir Stafford Leonard, William Smith, Tom (Normanton)
Daggar, George Logan, David Gilbert Tinker, John Joseph
Davies, David L. (Pontypridd) Lunn, William White, Henry Graham
Dobble, William McEntee, Valentine L. Williams, Edward John (Ogmore)
Edwards, Charles McGovern, John Wilmot, John
Foot, Dingle (Dundee) Maclean, Neil (Glasgow, Govan)
Grundy, Thomas w. Mason, David M. (Edinburgh, E.) TELLERS FOR THE AYES.—
Mr. John and Mr. Duncan Graham.
Acland-Troyte, Lieut.-Colonel Greene, William P. C. Petherick, M
Agnew, Lieut-Corn. P. G. Grimston, R. V. Powell, Lieut.-Col. Evelyn G. H.
Albery, Irving James Gunston, Captain D. W. Radford, E. A.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Hanley, Dennis A. Ramsay T. B. W. (Western Isles)
Bailey, Eric Alfred George Hartington, Marquess of Reed, Arthur C. (Exeter)
Barclay-Harvey, C. M. Headlam, Lieut.-Col. Cuthbert M. Reid, Capt. A. Cunningham.
Bateman, A. L. Heilgers, Captain F. F. A. Remer, John R.
Belt, Sir Alfred L. Hope, Capt. Hon. A. O. J. (Aston) Renwick, Major Gustav A.
Bossom, A. C. Hore-Bellsha, Leslie Rickards, George William
Bowyer, Capt. Sir George E. W. Horsbrugh, Florence Robinson, John Roland
Braithwaite, Maj. A. N. (Yorks, E. R.) Hudson, Capt. A. U. M. (Hackney, N.) Rots Taylor, Walter (Woodbridge)
Braithwaite, J. G. (Hillsborough) Hudson, Robert Spear (Southport) Runge, Norah Cecil
Broadbent, Colonel John Hunter, Capt. M. J. (Brigg) Russell, Albert (Kirkcaldy)
Brown, Col. D. C. (N'th'I'd., Hexham) James, Wing-Com. A. W. H. Rutherford, John (Edmonton)
Buchan-Hepburn, P. G. T. Jesson, Major Thomas E. Salmon, Sir Isidore
Burgin, Dr. Edward Leslie Kerr, Lieut.-Col. Charles (Montrose) Sandeman, Sir A. N. Stewart
Campbell, Vice-Admiral G. (Burnley) Leckie, J. A. Shaw, Helen B. (Lanark, Bothwell)
Caporn, Arthur Cecil Leech, Dr. J. W. Smith, Bracewell (Dulwich)
Cazalet, Thelma (Islington, E.) Liddall, Walter S. Soper, Richard
Chamberlain, Rt. Hon. N. (Edgbaston) Lindsay, Noel Ker Sotheron-Estcourt, Captain T. E.
Christie, James Archibald Llewellin, Major John J. Southby, Commander Archibald R. J.
Clayton, Sir Christopher Loftus, Pierce C. Spens, William Patrick
Cook, Thomas A. Lumley, Captain Lawrence R. Stevenson, James
Copeland, Ida MacAndrew. Capt. J. O. (Ayr) Stourton, Hon. John J.
Crookshank, Col. C. de Windt (Bootle) McConnell, Sir Joseph Strickland, Captain W. F.
Cruddas, Lieut.-Colonel Bernard McKie, John Hamilton Sugden, Sir Wilfrid Hart
Davidson, Rt. Hon. J. C. C. Margesson, Capt. Rt. Hon. H. D. R. Thomas, James P. L. (Hereford)
Davies, Ma). Geo. P. (Somerset, Yeovil) Martin, Thomas B. Thomson, Sir Frederick Charles
Duncan, James A, L. (Kensington, N.) Mayhew, Lieut.-Colonel John Titchfield, Major the Marquess of
Elmley, Viscount Mills, Major J. D. (New Forest) Tufnell, Lieut.-Commander R. L.
Erskine-Bolst, Capt. C. C. (Blackpool) Mitchell, Harold P. (Br'tf'd & Chlsw'k) Ward, Lt.-Col. Sir A. L. (Hull)
Essenhigh, Reginald Clare Molson, A. Hugh Elsdale Ward, Sarah Adelaide (Cannock)
Everard, w. Lindsay Moreing, Adrian C. Warrender, Sir Victor A. G.
Fox, Sir Gifford Morris-Jones, Dr. J. H. (Denbigh) Whyte, Jardine Bell
Fraser, Captain Ian Morrison, William Shephard Williams, Herbert G. (Croydon, S.)
Fremantle, Sir Francis Muirhead, Lieut.-Colonel A. J. Wills, Wilfrid D.
Glossop, C. W. H. Munro, Patrick Wise, Alfred R.
Gluckstein, Louis Halle Nation, Brigadier-General J. J. H. Womersley, Waiter James
Goff, Sir Park Nunn, William
Goodman, Colonel Albert W. O'Donovan, Dr. William James TELLERS FOR THE NOES.—
Graves, Marjorie Palmer, Francis Noel Sir George Penny and Mr. Blindell

the two companies to whom this Bill refers. I am second to none in my admiration for the efficiency and discipline of the officers and men on these ships, from the captain down to the cabin boy. Connected with that efficiency and discipline is their great courtesy and care and attention for the comfort of the passengers, a thing which is most important in these big vessels. I have little doubt that the Cunard line and the new merger company will continue to maintain those very high traditions of service of the two companies. I am confirmed in that opinion by the very fact that this line carries the Blue Ensign of the Royal Naval Reserve. We have, however, to consider the fact that this Bill strikes a new note and may form a precedent for similar innovations. We have to remember that the President of the Board of Trade has promised to do something more for shipping. With that idea in my mind, I have put down this Amendment, because we have to face the very unfortunate fact that at the present moment there are many British ships on the seas under the British flag without a single British officer or man on board them. In other cases British ships at sea fly the British flag with only one British officer on board, the remainder being foreigners. We also have some shipowners who in several instances have transferred their ships to neutral flags. I do not believe that the merger company would ever do that. But we must bear in mind that there is this unfortunate state of affairs in our British shipping at present, where we have an enormous amount of unemployment.

In this Bill and in other Bills to follow to help unemployment we must remember the employment of British sailors. I do not wish to press the Government unduly in this matter. We realise that any company which is catering for passenger traffic from one continent to another may, in exceptional cases, wants to have one or two special people on board who may not be of British nationality. I can understand that the President of the Board of Trade may like to reserve the right to give licences to certain individual persons of non-British nationality. That is the limit to which I would be prepared to go. I hope the Parliamentary Secretary to the Board of Trade, in considering this Amendment, will bear in mind what I have mentioned. I am raising this matter as a principle of vital importance.

1.55 a.m.


As I was the only person to raise this matter on the Second Reading, I hope the House will allow me two or three minutes. The idea behind the Amendment is one which I feel sure will commend itself to every Member. It is that, if you are to win back the Blue Riband of the Atlantic, at any rate you should do it with British sailors. I feel sure that the Government will not fall back on the excuse that it is not in the contract, because after all these ships will not run for a few weeks; and I hope we shall not be told that by pressing this Amendment we are holding up the building of this vessel, because that does not apply. Under this Bill we are deliberately supplying the capital for the running of this ship. It will he a long time before that becomes operative, and I want to see it laid down definitely and clearly in the Bill—not only for now but for the future—that if now some shipping subsidy is given, at any rate the vast proportion of the men shall be British seamen. It can be put in without breaking the contract or agreement, because you could hardly put anything else in the agreement. I feel equally sure that the Cunard Company will almost entirely run with British seamen. The principle of the Amendment should be laid down now for all time and on the Report stage the Government can insert a figure of 90 per cent. or 95 per cent. if they do not like the exact wording of the Amendment. I hope the Government will meet the Amendment in the spirit in which it is moved, which is the only spirit in which we can possibly tackle this shipping question. Those of us who have from time to time seen something of British seamen know that it is essential that it should be laid down in the clearest way possible and that this should be included in the Bill.

1.57 a.m.


The hon. and gallant Member for Burnley (Vice-Admiral Campbell) and those associated with him are really pushing an open door. Everyone wants as far as possible to employ British seamen in connection with this vessel. I have caused inquiries to be made and the Cunard Company entirely accepts this obligation and the principle which the Amendment implies, so far as masters, officers and engineers are concerned. As to the other members of the crew, the same principle applies entirely to the deck and engine department. In the stewards' and catering department the only exception will be a certain number of members of the staff whose duties bring them into association with foreign-speaking passengers and a few specialist ratings, such as chefs. I hope after the assurance I have given that the hon. and gallant Member will see his way not to press the Amendment. In the first place, the whole question of the employment of aliens on board ship is already governed by Statute—namely, the Aliens Restriction (Amendment) Act of 1919, Section 5, which was modified by another Act in 1925. That Act lays down clearly that aliens shall not be employed on British ships in any important capacity.

It would be much too hard and fast a rule to say that you should never have on a British ship anyone other than British subjects as members of the crew. The President of the Board of Trade has said that shipping is an extremely elastic trade. You cannot tie the shipowner's hands so tightly as to say that in no circumstances shall he be empowered to employ in some capacity connected with shipping a seaman who is not a British subject. It has been found to be quite unworkable to make a rigid insistence, as a matter of law, that only British subjects shall be employed. In a vessel of this kind, designed, built, and having as its object the winning of the greatest measure of popular approval, we must run it as a first-class travelling hotel, among other things. So, it stands to reason, that there will have to be, in certain specialised categories, people who will not be British subjects. But for the effective running of the ship, as a ship, they will be British subjects. Only in quite incidental, employments is there any likelihood of foreign or foreign-speaking people being employed. With that very clear statement of the law and of the desire of the company to accede to the spirit behind this Amendment, together with assurances given by the Cunard Company, I hope that the hon. and gallant Member will not press his Amendment as I should be obliged to ask the Committee to resist it if it is put as a matter of law. The House is trying to help shipping and it will not be helping shipping to make it a rigid test.


Will the hon. Member accept the Amendment if we omit the word "solely" and say 90 or 95 per cent.?


No. I could not accept any such arbitrary measure. You are not helping the cause you have in view. I agree with the hon. and gallant Member who moved the Amendment about the courtesy and conduct of these officers. Here is a pre-eminently British ship, built for a first-class line. It is of the essence of that ship that she should be British throughout. But you must not insist on impossibilities. You are not going to say that a West-End hotel must be staffed by British subjects only throughout.


Why not?


Because you would defeat the object of a first-class hotel. I have tried to meet the spirit of the Amendment, and I am most anxious that the principle should gain currency, but you cannot put it into law in this form.


Since we are supposed to be winning back the Blue Riband of Atlantic shipping for Britain, is it not to be expected, if she has foreign chefs on board, that you cannot obtain the blue riband for cooking?

2.5 a.m.

Lieut.-Commander AGNEW

I do want to press the hon. Member on this point. There are unemployed in this country estimated at about 3,000 officers and 40,000 mercantile seamen. This Bill deals with a particular area—the North Atlantic. In certain parts of the world you must of necessity employ Lascars, because white men cannot stand the heat. But that does not apply in this Bill, which deals only with the North Atlantic, where you have a temperate climate. When the First Commissioner of Works is letting out tenders for a contract he is not content with the assurances and desires expressed by contractors that they will, so far as they can, employ British workmen and British materials. He insists that they must be employed. Here it is doubly important to have it rigidly stipulated that the labour should be British, especially when this is not a case of trying to lay down a restriction or law that the whole of the crews of the Cunard Line should be British but only relates to this particular ship, running on a particular route and under conditions where it is being financed by public money. Therefore, although the Parliamentary Secretary has stated that the conditions of the Amendment are going virtually to be carried out, surely there can be no real objection to having the principle of the Amendment embodied in the Bill.

2.8 a.m.


I make no apology at two o'clock in the morning for speaking on this subject. I have been speaking on it for two years, and I do not want to speak for another two years. We have come to the culminating point where we have a right to make known our views. It is well known to the Board of Trade that this very important matter has been discussed and the answers have been most unsatisfactory. On Mersey-side ships that have been sailing under the British flag for many years and carrying nothing but British crews are now carrying Chinese crews. If the Riband of the Atlantic is to be manned by what is called British labour, that is, Lascars, Chinese—


Is the hon. Member aware that never in the history of the Cunard Company has any native labour been used?


I am aware of that fact. I want to pay my tribute to the prestige and reputation of the Cunard Line. But ships are sailing from Liverpool where, owing to the extreme urgency of competition, they have placed the national on the dockside and had recourse to black, coolie and Chinese labour. As I have said in this House before there are ships sailing with aliens under terms of contract which enable them to go back to their own land leaving wives behind them in Liverpool. I want to see British ships built and the Cunard getting along successfully. It would give work, and I want to see the streets relieved of men. I know men who have to stand about who have been six or seven times torpedoed in the War. It cannot be denied that that is happening in the Scotland division of Liverpool. I can give the names of a dozen men who have been torpedoed in the War that number of times. I have a right to say in this House that, when a British ship is being built, the work should be given to our own men. I dislike seeing the manhood of the nation standing about in the streets without employment.

I am told, when I ask questions, that blacks, coolies, Lascars and Chinamen are to be rated as British, and that our young men have to be left to stand in the streets. Had I had the opportunity earlier in the Debate I would have liked to remind the President of the Board of Trade that, regarding even some of his own ships that I could mention, I have my own views about the British flag protecting some of the crews going about in some of the boats. There are young men and women in Liverpool and they are anxious to see what can be done for the idle steamer and the idle sailors. I know that on a great liner 100 per cent. will not be applicable. There are the interpreters, and it is absolutely essential that you must have a service equal to the continental service. I believe the Cunard are loyal and anxious to see this case answered.

2.16 a.m.


The Chancellor of the Exchequer anticipated the last Amendment by giving a kind of guarantee with regard to the fair wages Clause. I want to ask if it is not possible to accept this Amendment and to get a letter from the company similar to that guarantee—that the labour as far as humanly possible shall be British.

2.17 a.m.


I had hoped that I had explained to the Committee that I had approached the Cunard Company the moment I heard of this Amendment. May I read the communication again. It can be stated that the Cunard Company entirely accept as an obligation"— not as an assurance— the principle which the Amendment implies, so far as it implies the master, officers and engineers, deck and engine departments. In the steward and catering departments, the only exceptions are in relation to the members of the staff whose duties bring them into association with foreign-speaking passengers, and specialist ratings such as chefs. I think that really meets the point. I am very sympathetic with what the hon. Member for the Scotland division (Mr. Logan) has said. He and I have had many passages of arms in regard to this question. It is a fact that whatever the colour of those to whom he has called my attention may be they are by nationality British subjects, so that none of us could get further than recognition of the birth certificates. I would like to call the attention of the hon. and gallant Member for Camborne (Lieut.-Commander Agnew) to the fact that if you push nationality you invite reprisals. Careful consideration of the advantages and disadvantages has been made by the President of the Board of Trade, who is a great authority on shipping both inside and outside this House, and he has come definitely to the conclusion that you do not reach the object which the Committee have in mind, of securing the greatest possible amount of employment for British mercantile officers and seamen, by insisting on nationality. Many of our nationals are in profitable employment in the service of other nations. If we make it too rigid with regard to no one going on British ships except Britishers, other countries may make a similar rule.

Vice-Admiral CAMPBELL

I beg to ask leave to withdraw the Amendment in view of the assurance about this particular ship.



Question, "That those words be there added," put, and negatived.

Clause ordered to stand part of the Bill.

Clause 2 (Exemption from Stamp Duty and Fees), ordered to stand part of the Bill.

CLAUSE 3.—(Provisions as to Cunard (Insurance) Agreement Act, 1930.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

2.23 a.m.


I want to say that although we are allowing these Clauses to pass we are not to be taken as being in agreement with them in every case. There are only a small number of us, and we do not wish to put the House to the inconvenience or trouble of voting, but we must not be taken as agreeing to the provisions contained in the Bill.

Question put, and agreed to.

Clause 4 (Short Title), ordered to stand part of the Bill.

Bill reported, without Amendment; to be read the Third time To-morrow.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Twenty-five Minutes after Two o'Clock.