CLAUSE 1.—(Power of Treasury to guarantee securities.) (Hansard, 16 December 1935)

§ Mr. STEPHEN
On a point of Order. I have submitted a manuscript Amendment on which, Captain Bourne, I wish to ask your Ruling. My Amendment proposes to insert in page 2, line 26, after the words: If the said agreement is amended by any further agreement the following words: there shall be included within such amended agreement a provision to ensure that any worker whose services become redundant as a result of schemes of work comprised in the First Schedule shall receive adequate compensation, with the right of appeal to a tribunal composed of representatives in equal number of the railway workers and of the companies to determine the amount of compensation in each case. It is contemplated that a new agreement or an amended agreement may be entered into after this scheme has been set in operation and I submit that it is in order to propose that a statutory obligation 1463 should be placed upon the Treasury in such cases to provide for compensation for workers who may become redundant owing to these works. It would be in order I suggest to propose that the Treasury should be under the statutory obligation to insist on a clause to that effect being inserted in the new or amended agreement. I think when the Government are asking us to accept or reject these agreements there is room for laying down the principle of compensation for workers who lose their employment and as far as I can see it is only by such an Amendment that that principle can be introduced. It will be found that there is already in the agreement a certain amount of protection for workers in relation to the fair wages clause and so forth and I suggest that in any future agreements there should also be a provision to deal with compensation.

The DEPUTY-CHAIRMAN
I do not feel called upon to express an opinion as to what I might hold if the outline which the hon. Member has sketched to the Committee did in fact represent the effect of his Amendment. His Amendment as worded, however, would, if carried, affect any worker who became redundant in consequence of the execution of any of the works mentioned in the Schedule. It would not relate merely to the new agreement or to the workers covered by that agreement. It is, therefore, tantamount to an alteration of the Schedule, and as the Schedule is an agreement between parties outside this House, it is not competent for this House to amend it.

§ Mr. LATHAN
I beg to move, in page 2, line 28, at the end, to add: and no guarantee shall be given under this Act after the date of such further agreement or certificate until such further agreement or certificate has been approved by resolution passed by both Houses of Parliament. I have not the desire or the intention this evening to raise directly or indirectly any of the points to which attention was drawn from these benches when the Bill was previously under consideration. Subject to the qualifications which were then indicated and to which the Financial Secretary to the Treasury gave a measure of attention, we shall offer no further 1464 objection to the Bill as such; some of us will find no special difficulty in approving the general purpose of the Bill, and we shall be enabled, I think, at any rate after having heard what has been said by the Minister in charge, to vote for it. This Amendment comes into a different category from the comments which so far have been made on the proposals in the Bill, and it will, I hope, evoke no opposition from the Chancellor of the Exchequer. Sub-section (5) of Clause 1 refers to the agreement which is contained in the Schedule, and apparently it is contemplated that that agreement could be either continued or extended, for it says there: If the said agreement is amended by any further agreement or by a certificate of the Minister of Transport. But no provision is made for the approval of Parliament to such an extension, and that seems to me and those who are associated with me to raise a very important question. For that reason the Amendment has been put down, and I sincerely hope that no objection will be raised to it. If it is accepted by the Chancellor, it will allay a good deal of apprehension which has arisen in regard to the intentions of those responsible for this legislation, and I hope we may hear that no objection is raised to it, and that it will be unnecessary for us to press it further upon the consideration of the Committee.

§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)
I should like, in the first place, to call the attention of the hon. Member to the fact that his Amendment covers a very limited field. It will be observed that it refers only to the exercise of a guarantee by the Treasury after any variation in the agreement which is now before the House. If, therefore, as I think is very probable, the finance company raises the whole of the £26,500,000 in one lump, his Amendment would not come into operation, because there would be no further guarantee to be given even though there were a variation afterwards in the agreement.

§ Mr. LATHAN
Does the Sub-section I have quoted contemplate an extension of the agreement beyond the provisions which are contained in the arrangements for the £26,500,000?

§ Mr. CHAMBERLAIN
No, Sir, but I was coming to that. I wanted, first of all, to call the hon. Member's attention to the fact which I have just pointed out, that in all probability his Amendment would be inoperative, because the whole of the guarantee would be given before any possible amendment or variation of the agreement could take place; but I wanted, if I could, to remove any apprehension that was in his mind by going on to point out to him what the nature of any variation in this agreement is likely to be. I would say at once that I think perhaps his Amendment is justified, because it will draw from me this declaration, that it is, in the first place, impossible so to vary the agreement as to necessitate the expenditure of more money than the £26,500,000. Any variation must be within that £26,500,000. The hon. Member will see there are two possible ways of varying the agreement. The first is by agreement between the parties, that is, between the Treasury and the railway companies, and the second is by a certificate of the Minister of Transport to any particular railway which may desire an amendment, not in the Clauses of the Bill, but in the scheduled works.
The hon. Member will easily see that it might be necessary to make some minor amendment in the schedule of works which the Minister of Transport might consider was justified and would be an advantage—and he has to be satisfied that this is so before giving his certificate. With regard to the other possible variation, which would be obtained by agreement between the parties, that does not require any statutory authority. The parties who have made one agreement can then agree among themselves that they will alter that agreement. But I want to give the hon. Member an assurance that no major alteration is contemplated or would take place by a variation of the agreement of that kind. All that is intended here is to cover the possibility that the railway companies might submit that some minor variation was desirable, and if the Treasury were of opinion that they were justified, the Treasury would then have power to agree to that alteration.
Last of all, I would like to point out to him that if he concedes, as I think he would concede, that a provision of that kind was reasonable—when you are start- 1466 ing out on a great schedule of works of this magnitude, you cannot foresee everything, and it is therefore desirable to have some little measure of elasticity—he will see that if his Amendment were carried, it would really make it impossible to have any variation, because the railway company in question would at once say—that is, assuming that only a part of the money had been guaranteed—"We cannot agree to any alteration, because that would involve going back to the House of Commons to get approval for a further guarantee, and if the House of Commons withheld that approval, we should lose the guarantee on the remainder of the money and we should find ourselves half way through the scheme and unable to complete it." The only result would be that they would say, "However desirable this alteration may be, however much we may count on the sympathy and agreement of the Treasury, we must not make it, because we cannot afford to run the risk of losing the guarantee on the remainder of the money." In those circumstances I hope the hon. Member will not press this Amendment.

§ Mr. MORGAN JONES
The right hon. Gentleman suggests that the only change adumbrated is a minor variation, but in point of fact the words admit of a much wider interpretation than that. In the Schedule, on page 4, he will find these words: Provided that if any one of the Railway Companies shall hereafter satisfy the Minister of Transport that it is desirable that any of the works comprised in the First Schedule hereto which it is intended it shall carry out should be varied or that additional work should be added thereto.… That seems to include not merely minor variations, but any additional work that the companies might think desirable.

§ Mr. CHAMBERLAIN
That is covered again by the total amount. We cannot exceed the £26,500,000, and therefore no substantial addition could be made, because that would immediately mean more money. But it is possible that they might wish to substitute some additional work in one direction and take out of the schedule work in another direction.

§ Mr. WALKDEN
What would be the position if, at the end of the agreed period, the railway companies wanted a further five years?

§ Mr. CHAMBERLAIN
It is provided, I think, that the time may be extended, with the permission of the Minister of Transport. I cannot at the moment remember where it is, but I think there is a provision to that effect.

§ Mr. WALKDEN
I think it is very desirable that that should come before the House.

§ Mr. BELLENGER
Do I understand the right hon. Gentleman to say that this £26,500,000 is being raised by the finance company in one sum?

§ Mr. CHAMBERLAIN
No, I did not say that. I could not, because the company is not yet formed, and, of course, it will have it in its own discretion, but I said I thought it was likely that it would be raised in one sum, in which case the Amendment would not come into operation.

§ Mr. D. EVANS
The work indicated in the schedule, we are told, is work which the railway company would not normally do; it is abnormal work. On page 3, in the schedule, there is a reference to works which the railway companies "are unable to undertake," but in the discussions which we have had it has been pointed lout that the work in the schedule is work which the railway companies would not normally do. What security is there, apart from such a proposal as is contained in the Amendment, that any change in the work suggested may not lead to some such works as would normally be done apart from the protection of this House? I suggest that this Amendment is necessary in order to secure that, whatever variation there may be, the work eventually carried out is work which the companies would not be obligated to do in any circumstances.

§ Mr. CHAMBERLAIN
Perhaps the hon. Member does not quite appreciate what is involved here. An agreement which requires the assent of the Treasury would, of course, be subject to the same conditions which were imposed by the Treasury in negotiating the original agreement, and considering that we spent many weeks in going through every item and in making certain that it was work which could be assisted under such conditions by us, and was not work which 1468 the railways would in the ordinary course be doing, he may be certain we should not relax that condition in permitting any variation.

§ Mr. LATHAN
The position, as I see it, is this, that the approval of the House is being sought in regard to a definite schedule of works which are to be covered by the amount of money mentioned, namely, £26,500,000. We have no desire unnecessarily to interfere in so far as there may be found to be a need for making variations of a detailed character in regard to the work that is to be carried out, but the terms of the Bill seem to suggest a contemplated extension. If the Chancellor of the Exchequer will assure us that, apart from the details to which he has alluded, which conceivably may be necessary, no extension of the arrangement is contemplated, I think it will be satisfactory to us.

§ Mr. CHAMBERLAIN
I am sorry I cannot give an assurance in such specific terms as that. What I have said is that no major alterations are contemplated, and that, I think, is as much as the hon. Member should ask me to undertake. When he asks if I will give an undertaking that there shall be no extension, I answer "No," because the extension is one of the things which might be in the nature of a minor alteration. As I pointed out in reply to the hon. Member for Caerphilly (Mr. Morgan Jones), there might be extensions in one direction accompanied or set off by contractions in another direction, but they would be only minor alterations arising out of considerations that cannot be foreseen at the commencement of such a big undertaking as this. On the top of page 4 is a provision about the time during which the works are to be completed. They are to be completed not later than the 1st day of January, 1941, or within such farther period as the Minister of Transport may allow. That is only to allow for possible accidents.

§ Mr. WALKDEN
My concern was about the period of the credit to be allowed.

§ Mr. CHAMBERLAIN
There cannot be any alteration in that.

§ Mr. RHYS DAVIES
May I pursue a point which I raised the other evening with the Financial Secretary to the Treasury? Sub-section (5) of Clause 1 begins: If the said agreement is amended by any further agreement. May I ask the right hon. Gentleman if he will direct his attention to the point I raised the other evening, namely, that in the Schedule to the Bill there is the provision—

The DEPUTY-CHAIRMAN
I think we had better dispose of the Amendment before the Committee first. The hon. Member can raise his point on the question that the Clause stand part.

§ Mr. LATHAN
In consideration of the undertaking given by the Chancellor, I beg to ask leave to withdraw the Amendment.

§ Mr. RHYS DAVIES
Those of us who represent areas which are very distressed are anxious to know whether all the work which will be given in consequence of this big sum being guaranteed is to be confined to the special areas. When I raised this point the other evening, the Financial Secretary was good enough to say: With regard to the provision in the contract that the work is to be given, other things being equal, in the special areas, those words, of course, do not mean that areas outside the special areas will not have any of this work."—[OFFICIAL REPORT, 11th December, 1935; col. 1063, Vol. 307.] If we pass this Schedule to-night, does it mean in effect that the promise made by the hon. and learned Gentleman will be of no avail? The words are specific on page 10 of the Schedule that all this work, other considerations being equal, shall be confined to the special areas. I have pointed out on several occasions that there are parts of this country—and I speak for one considerable area—where the distress in parts is much snore severe than the distress which prevails in what are legally termed special areas. The contention that I have always tried to make is that when such guarantees as these are given, it is not fair to confine the spending of the money for the pur- 1470 poses of securing employment to what are legally defined as special areas when, in fact, other areas have been depressed since that definition was agreed upon, and are now in a much worse position than some of the special areas which are to be benefited by the words in the Schedule.

§ Mr. CHAMBERLAIN
The literal answer to the hon. Member's question whether this means that the work is confined to the special areas is "No." It does not mean that, and it cannot possibly mean that. I think, however, that what the hon. Member was really asking for was something rather more than a literal answer to his question. It amounted to a request that the definition of "special areas" should be extended so as to include other areas which, the hon. Member alleges, are just as badly off as the special areas. As to that, I cannot give him any satisfaction. I cannot undertake on this Bill that the definition of "special areas" shall be extended. It is not a new point, as the hon. Member knows very well. It is often raised, but the practice up to the present has been that the special areas as defined have had this amount of preference, not only on occasions of this sort when we are dealing with special projects, but in all Government contracts. It has not been found that in consequence a very large amount of work has been given to the special areas. That, of course, arises from the fact that preference only takes effect "other things being equal," and other things are hardly ever equal. There is really very little that this Clause can do for the special areas, and, seeing how little there can be done for the special areas in the way of putting work there, we must adhere to this principle, and whenever we can find an opportunity of giving them a little preference, we must try to do so.

§ Sir FRANCIS ACLAND
May I ask your guidance, Captain Bourne, on a point of Order. The last two speeches seem to have dealt with a matter which is practically covered by a proposed new Clause in the name of my hon. Friend the Member for Anglesey (Miss Lloyd George), namely: The Minister of Labour shall select the areas from which additional labour for 1471 carrying out the works referred to in the First Schedule shall be drawn, and the determining consideration in selecting areas from which such additional labour shall be drawn shall be the percentage of unemployment in those areas. We have no guidance whether that proposed new Clause will be in order. If it is not, those who are interested in the matter would like to take their part in the Debate now, but if it is in order, they will wait until their Clause is called.

The DEPUTY-CHAIRMAN
I have given the proposed Clause careful consideration, and I have come to the conclusion that it is an attempt to do by a side wind what is against the practice of this House, namely, to amend an agreement which has been arrived at between parties outside the House. It seemed to me that if this proposed Clause had any effect, it must be substantially to alter that agreement.

Miss LLOYD GEORGE
I see that the Financial Secretary said in the House on Friday that if some variations were needed in the definition of what was meant by a special area for the purposes of this agreement, he had not the least doubt that the railway companies would agree to modify the agreement accordingly. Would it be in order to modify the agreement to that extent? It seems to me that it would mean a substantial alteration and would, in fact, mean something which the Chancellor has just told us would be impossible, namely, an alteration in the definition of the special areas. I do not see how else the agreement could be modified except to mean that.

The DEPUTY-CHAIRMAN
I am afraid that that is not a matter for me. The agreement can only be modified with the consent of all the parties to it including the Treasury. What view the various parties might take to suggestions like that, is not a matter for me.

§ The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison)
If the hon. Lady looks at what I said, she will see that I was making the same reply as that which has been given by my right hon. Friend. I was saying that the definition of a special area could not be altered in this Bill, but that if, as a result of subsequent legislation, the 1472 matter were reconsidered or some other definition were given, it might be possible by agreement between the parties to introduce that new definition instead of the one that exists.

§ Mr. MATHERS
The hon. Member has anticipated the point that I wanted to put. It was that this work is to extend over a considerable period and that during that time the special areas may be altered. I want to ask the Chancellor what are the opportunities open to Parliament to alter these special areas and to cause an extension to be made that will be beneficial to those areas that are now shut out from the opportunities provided by this Bill?

Miss LLOYD GEORGE
As my proposed new Clause will be out of order, may I make the few observations which I should have made in moving it? It seems to many of us in various quarters of the House that this scheme—

The DEPUTY - CHAIRMAN
This Debate should really, of course, have taken place on the Question, "That this be the Schedule to the Bill." I have allowed it on the Clause, but it must be clearly understood that the question must not be redebated on the Schedule.

Miss LLOYD GEORGE
The point I was about to make is that this agreement provides the largest work-providing scheme which the Government have brought before the House. It involves a fairly substantial sum of money, and the Financial Secretary has assured us that it will be the means of giving employment of 120,000 man-years. He assured us that he knew exactly what that meant. In spite of all that, there is only one passing reference to special areas. That is in the proviso which has been discussed already, namely, that, other things being equal—and the Chancellor has told us not to put too much reliance on that—materials and machinery shall be manufactured in the distressed areas. I was sorry to hear the Chancellor say that he did not think it would be possible to alter the definition of a special area in this agreement. I hoped very much that it would be possible to get away from this rigid definition, which leaves out of benefit areas where unemployment in many cases is higher than it is in those areas which are scheduled as special 1473 areas. I think that there is a general feeling in the House that not special areas only, but areas where the burden of unemployment is heaviest, will not get the benefit to which, I think, they are entitled under this agreement, seeing that Parliament is guaranteeing a large sum of money. No one expects the railway companies to invent schemes in the distressed areas. No one would be so unreasonable as to expect that of them. I should like, however, to quote a passage from the "Times," of 19th June, 1935, in which a special correspondent, in giving a survey of the needs of the railways, said: There is a scheme ready for the electrification of the line south of the Tyne, from Newcastle to South Shields. This area has suffered severely during the recent period of depression, but it is regarded as a very promising ground for electrification. The correspondent went on to say. In the Glasgow area, the Cathcart circle and the line on the north bank of the Clyde to Helensburgh might bring in an additional revenue if electified, and there are possibilities of useful electrification work at Manchester and Birmingham. Only the Manchester scheme of those schemes which would affect the distressed areas is mentioned in the Schedule. In the scheme of the Great Western Railway which serves South Wales, one of the most depressed areas in this country, there are only two instances which will give direct employment there.

The DEPUTY-CHAIRMAN
I think the hon. Lady is now going on to discuss a question which would be much better left until we come to the Schedule of the Bill. I did allow the question whether, other things being equal, the work should be given to what are technically known as "special areas," or whether there should be some widening of that definition, to be raised on this Clause, but I think the question of the works named in the Schedule should be raised when we come to the Schedule.

Miss LLOYD GEORGE
Is it competent for me to discuss now work that might be given indirectly as a result of schemes contained in the Schedule?

The DEPUTY-CHAIRMAN
I think that question would be better discussed on the Schedule. It seems to me that we are getting to points which are strictly relevant to the Schedule.

Miss LLOYD GEORGE
Naturally I shall defer to your Ruling and not pursue that point, but before resuming my seat I should like to say, if it be in order, that it seems extremely hard to one who, like myself, represents an area with a railway town where 41 per cent. of the insured population are out of employment, that many of these works schemes are to be found in areas where the percentage of unemployment is as low as 2 or 6 per cent.

The DEPUTY-CHAIRMAN
That is just one of those points which ought to be raised on the Schedule.

§ Mr. HARDIE
The Chancellor of the Exchequer recently made a statement that the distressed areas could not expect much from the operations of this Measure when it becomes law. In my mind there has never been any doubt on that point, because there can be no incentive to a railway company to go into a derelict industrial area to spend money. Such an area is like the back court of a slum tenement which has been condemned by the sanitary authorities, and to seek to make the public believe that any of this money is going to be dispensed on behalf of distressed areas is to mislead the public, to put it mildly. The right hon. Member for Hillhead (Sir R. Horne) knows that no railway company, including the one of which he is chairman, is going into any derelict industrial area. He knows that the engineers upon whom he depends for any information which he gives to this House would not advise him to do so. As an engineer myself I should advise no one to do a stupid thing like that. If any benefit does come to one of the distressed areas it will be only incidental, and not a direct result of this Measure. The new money is not to go to help distressed areas, but to develop new areas where there are possibilities of increasing not only the income of the railway companies but increasing every kind of value, including, especially, land values.
The public are to be given an impression that this is a Measure to help the distressed areas, whereas it is to make possible the development of new areas for the class which has always fattened and battened on such Acts of Parliament. Of this £30,000,000 not one halfpenny will be spent directly in a distressed area. Every engineer knows that. The hon. Member for Anglesey (Miss Lloyd 1475 George) spoke about the electrification of railways in certain parts of Scotland. I belong to the district mentioned and know the conditions there. Under the control of the London Midland and Scottish Railway and the London and North-Eastern Railway there are two sections of underground railway in Scotland which have been holy horrors ever since they were built, but no mention is made of them. Glasgow, although not yet classed as a distressed area, is really from the numbers of its unemployed, more than a distressed area, but there has been no suggestion of doing anything with regard to those lines in the interests of the convenience and the health of the public.

The DEPUTY-CHAIRMAN
I think the point which the hon. Member is now raising would come better on the question, "That this be the Schedule to the Bill."

§ Mr. HARDIE
I will reserve my right to speak then, and will conclude by saying that the statements which have been made from the Treasury Bench trying to make it appear as if this were a scheme to help distressed areas are absolutely without warrant. We know, and the right hon. Member for Hillhead knows, that the whole matter has been mapped out. The railway companies know the areas where the work will be done and so does the Chancellor of the Exchequer, and yet they come to Parliament trying to make it appear that this money is going into the distressed areas, which, in fact, will get nothing but a little incidental work. The works of the railway companies in different centres have, for a long time, been on short time or half time, and the railway companies are going to make use of their own works, which are not scheduled as distressed areas. They have the skilled men there, and it is the proper thing to do—always to take your work where the greatest ability of hand and brain is to be found. I agree with that. But, knowing all that, the parties concerned still talk about doing something for distressed areas. I had hoped there would be more honesty on their part.

§ Sir ROBERT HORNE
The hon. Member for Springburn (Mr. Hardie) has 1476 again indulged in a series of admonitions to me on the way in which I ought to administer the Great Western Railway Company. Previously I have taken no notice of him, but I do so on the present occasion because many people who come from constituencies South of the Tweed might be very much misled by the hon. Member's attitude. As a colleague of mine in the representation of the city of Glasgow he is really only anxious that I should do my job as well as possible, and he is, therefore, eager to instruct me, in order that I may not fall down upon the great undertaking of which I am chairman. On the other hand, while he sometimes appears to address himself to his points with great rudeness that, after all, is only a method in Scotland of showing extreme affection. I should like to reciprocate these genial attentions in order that the hon. Gentleman may not fall into error. Many things in his speech—in fact the whole of his speech—are a complete fallacy.
So far from these operations of the Great Western Railway Company having no effect on the distressed areas let the Committee note what the Schedule contains. One item is the building of a new railway line. The whole of the rails will be ordered from South Wales, which is a distressed area. A huge number of old stations are to be reconstructed—but there is no extension of territory by which new land values will be created in these cases. All the constructional steel for these works will be ordered from depressed areas. So far from its being true that we are misleading the House of Commons, all that this Measure does is to give effect to an agreement made by the railway companies and the Treasury, which we intend faithfully to keep. The suggestion that we are here to mislead the House of Commons and impose a deception upon it is something entirely unworthy of anybody connected with the House, and why the hon. Gentleman should feel justified, in his complete ignorance, in making such suggestions I cannot think. No amount of genial attention such as he is paying to me can justify him in putting such a statement before the House of Commons.