HC Deb 26 March 1935 vol 299 cc1820-77

Order for Second Beading read.

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

7.30 p.m.


Before I move the Amendment that stands in my name, I would like to raise a point of Order. The first Instruction to be moved on this Bill relates to the same subject-matter as one of the Instructions to be moved on another Bill. I am given to understand that so far as that other Bill is concerned, as a result of discussions that have taken place, there is not likely to be any debate upon that subject. I take it, therefore, that it would not be desirable in any way on the Amendment which I hope to move to discuss any of the aspects of the other Bill that are similar to the aspects of this Bill?


If the Amendment to the other Bill is not to be moved, there is no object in discussing that subject-matter now.


I understand that it is to be moved and to be accepted without discussion.


There are so many Instructions down on the Paper, to be moved after the Second Heading of this Bill, that probably it will be convenient to the House if all the subject-matter which is raised by these Instructions were dealt with on the Second Reading. If the House gives the Bill a Second Beading, the Instructions could be put separately and voted upon without discussion. If that meets with the approval of the House, I am quite willing.


Do I understand you to suggest that instead of taking any discussion on the Instructions we have a full Second Reading Debate and merely vote upon the Instructions after the Second Reading has been agreed to?


I conclude that all the questions which the Instructions raise can be raised in a Second Reading Debate. I am entirely in the hands of the House in the matter.


You ask the House to have a Second Reading Debate now.


The Second Reading Debate is now taking place. It is not a question of what I prefer, but what the House prefers.


I beg to move, to leave out "now," and at the end of the Question to add, "upon this day six months."

It may seem a little curious that the Motion for rejection of a Bill connected with the largest city in Scotland—I must not say the first city, because that may give rise to certain troubles—should be moved by a Member from an English constituency, and that most of the names attached to the Amendment should also be those of English Members. But, after all, this is the Parliament of the United Kingdom, and I never take the slightest objection to the fact that Scottish Members participate in Debates on matters which at first sight are purely English; and I see no reason why Scottish Members should not vote, as they did vote, on the question whether Waterloo Bridge should be destroyed or not. I have never quite understood the inferiority complex of Scottish Members who think that when a Scottish Measure is before the House they must all speak, but that no one else must do so. As long as this is the Parliament of the United Kingdom, and the issue is one of general politics, and not particularly concerned with the Corporation of Glasgow, and as those who have their names associated with some of the instructions have their names associated with similar instructions in connection with the English Bill, it will be seen that we were not thinking in particular of Glasgow when we tabled our Amendment.

It happens, in the case of Glasgow, that the greater part of the Bill deals with the subject-matter of the first instruction, the proposal to set up in Glasgow a municipal savings bank. I understand that the technical process involved is to take over an existing private undertaking which has only recently been registered and has not yet started business. I do not quite understand how the thing has come about in that way, and I am not concerned. I am only concerned with the question whether it is desirable to set up a municipal savings bank in another British municipality. There are other matters in the Bill which give rise to controversy. There is the Clause which proposes to enable the corporation to manufacture omnibus bodies, and there are two matters which are of rather narrower Scottish interest, one the question whether there should be a change in the rules under which Lord Provosts are elected. That Clause seems rather like proposing, in the middle of a game of football, that the referee should be changed. But I do not know whether that is a correct interpretation of the Clause.

There is also a proposal that certain people who are at present represented on the corporation should lose their representations, and then a proposal to deal with land in Glasgow, of which the ownership for the moment is not known, in a way different from the way in which all other land in Scotland is dealt with. That is a proposal to alter the general law in respect of a particular area, and there are a number of us who take the view that when we are dealing with matters of general legislation the proper way to deal with it is in a general public Bill affecting all the citizens alike, and not to deal with the citizens of a particular area. There are also proposals with respect to by-laws affecting street trading which I do not think call for any particular objection. Apart from that Clause, if all the instructions are carried, all that will be left of the Bill will be the title of it and the proposal that the corporation should pay the expenses. As that will happen in any event, and there is no particular merit in retaining the title of a Bill which contains nothing else, and if everyone who agrees with one of the instructions agrees with the rest, the obvious and economical thing to do is to reject the whole Bill and thus reduce the expenditure of the corporation to a minimum.

With regard to municipal banking, I know there is one corporation which has a municipal bank, and I understand it has not done too badly. That corporation started the bank at a time when money was very dear and when in some respects thrift facilities were not in quite such good condition, generally speaking as they are to-day. That particular municipality, the only one, I understand, where a municipal bank is in active operation, though one or two other corporations have powers to introduce such banks, has achieved a certain amount of success; but the general view amongst the public is that there is no need whatever for municipal banking facilities. We have in this country two forms of thrift organisations of the savings bank character. One is the general national organisation, the Post Office Savings Bank, which performs its functions with a fair measure of efficiency and in recent years has been rather comfortably situated, because it has never varied the rate of interest which it has paid to its depositors, and during the period of dear money it was enabled to make investments on such terms that it has in fact been able to produce a surplus; and that surplus has been lifted annually by the Chancellor of the Exchequer and appears amongst the miscellaneous receipts in aid of the Budget.

On the other hand the Post Office Savings Bank never makes any provision against depreciation, because the ultimate security is the Consolidated Fund of the United Kingdom, which means you and me and everyone else that we can tax if we are so inclined. Therefore, ordinary banking practice does not apply to the Savings Bank and the question of depreciation has not arisen. But the Post Office Savings Bank does provide convenient facilities of a certain kind—very convenient because of the enormous number of offices in the country to which people can go and obtain small sums on application without preliminary notice. But in addition to that Bank there are the trustee savings banks. If my recollection is right the trustee savings banks preceded the national system and have a wider field of activity than the Post Office. They are in a position to deal with larger sums, to advise their customers in a variety of ways quite outside the scope of the ordinary officials in a Post Office Bank, which deals with small transactions. Trustee savings banks are making great progress in this country and their number is constantly being added to. They are exceedingly well managed. Their directorial management is unpaid. I do not mean that the staff are unpaid. They are most admirable institutions for public thrift. They have a peculiar posi- tion under the law. They are definitely recognised institutions.

Having regard to the fact that in the City of Glasgow and in most other cities of this country there are the two thrift organisations, the Post Office Savings Bank and the Trustee Savings Bank, there is no need to be met in Glasgow. The two thrift organisations are at the disposal of the citizens of Glasgow. I am now considering organisations of the banking kind, not provident societies, building societies or friendly societies. Therefore at first sight I do not know why the Corporation want these powers. Let us assume that for some reason they want to use the people's money. I suppose they are going to pay interest on it.


Hear, hear!


I thought the party opposite did not believe in rent, interest and profit. My hon. Friend, who is now approaching the fatherhood of this House, belonged to the great Social Democratic Federation, which denounced rent, interest and profit long before any of these mushroom organisations started. Yet he now wants to found a new institution, based on the principle of rent or interest. I am frankly a little horrified that he should come here to support this capitalist principle of interest.


Do not forget that we have gone through a transitional stage.


The interesting thing is that all the Socialists I know go through the transitional stage, and they hope it will last all their lives. This proposed municipal savings bank, I assume, is to pay interest. You cannot pay interest unless you get interest from someone else. Therefore this institution has first of all to get funds from the citizens of Glasgow, and the citizens will not deposit the funds unless attracted by the rate of interest. Not even Socialist citizens will do that. They want it to be, for preference, a higher rate than that of any of the other thrift institutions. Therefore the municipality, when they have this money, have to lend it to someone else in order to raise the wherewithal. Money is what is called cheap at the moment. It is not easy to raise a high rate of interest with complete security. That is one of the difficulties. I understand that the Glasgow Corporation will probably want to lend the money to themselves, to another part of the Corporation, and I imagine that the other part of the Corporation will pay a sufficiently high interest that, after they have paid the management expenses, they will be able to pay a rate of interest higher than that which would be paid by the Post Office or a trustee savings bank.

That really means that the Glasgow Corporation is going to pay an abnormally high rate of interest on the money lent to it by its own savings bank. If not, it cannot make a business success of it, because obviously a new institution which has to buy its experience and is bound to have excessive overhead charges in relation to its transactions in the earlier stages, is bound to be more expensive to run than an existing institution. Therefore, inevitably, leaving on one side the question of whether this is Socialism or not, it cannot be very successful. But if the idea is that they want to get the people's money in order that it may be lent to the alleged people's representatives; in other words, if it is a device whereby the Glasgow Corporation can borrow money without the normal sanction, then we are entering into an entirely different field of argument. Is the purpose to enable the Glasgow Corporation to borrow large sums of money without going through the normal formalities of a municipal loan? I think that is perhaps the purpose behind it.

To-day, if a municipality wants to borrow money, normally it has to promote a Bill in this House. The Bill gets a Second Reading and goes upstairs, and four of our colleagues put pertinent or it may be impertinent questions to witnesses who come up from the country, a great many big-wigged gentlemen help forward the transaction, and before the sanction is given there has to be a great deal of investigation. But if you set up a municipal savings bank, and if, the Treasury regulations being rather stiff, you live in hopes of a more friendly Treasury coming along which will relax those regulations, so that ultimately you may get a rather easier system, whereby, under the guise of bank deposits, you can borrow money for all kinds of municipal trading enterprise, then, frankly, at that stage I become a little alarmed.

The Glasgow Corporation also wants to build the bodies of motor buses. I regret—I hope the right hon. and learned Member for Hillhead (Sir R. Horne) will not mind my saying this—that the railway companies of this country build locomotives. It may have certain advantages, but everyone knows that the British locomotive-building industry has been gravely hampered in fighting for world trade because it has never had the support of its own home market. One cannot blame the present railway directors. It was a system that they found and that they could not do away with, whatever their views may have been, but think of the difficulties that every independent locomotive manufacturer has in seeking orders all over the world, as they have done with great success, when they have not behind them any effective home market. You are proposing to do the same thing here with regard to one aspect of commercial road vehicle building.

I know the Corporation is not proposing to enter into the very risky job of building chassis, but it is proposing the not quite so difficult job of putting bodies on to other people's chassis. Everyone knows that mechanical motor vehicle construction, whether chassis manufacture or body building, depends for its efficiency upon an adequate scale of manufacture, and I suggest that the requirements of the Glasgow Corporation by themselves cannot be adequate to maintain a first-class, efficient bodybuilding department. From the purely engineering aspect of it, leaving all questions of municipal Socialism aside, it is a most reactionary proposal. I am not one of those who believe that all businesses should be amalgamated until they become one gigantic business, but there is a certain economic size of the unit of manufacture, and if you are below that size, it is obvious that you cannot manufacture economically. Therefore, it is bad economics, whether a private bus company of the same magnitude as the Glasgow undertaking is doing it or whether the Glasgow Corporation itself is doing it, because in neither case would the unit be sufficiently large. The bulk of the great bus-owning companies in this country do not attempt their own manufacture. They stick to their own business, which is bus operation, and they go to other people for bus construction, realising that the country can carry a certain number of units, but obviously a municipality would not be in a position to enter into general competition. I know it is not proposed to do so here, but it would only have one customer, namely, itself, and it would diminish the scale of activities of the other body builders. Quite clearly, therefore, it would diminish the magnitude of the home market behind the other body builders and hamper them all in seeking for world trade. Therefore, from that point of view alone, it is a most unwise and reactionary step to propose.

As I do not like municipal trading and want it restricted within the narrowest limits. [HON. MEMBERS: "Ah!"] Certainly. I do not think an unpaid body of directors, far too numerous—I have been a town councillor myself—is nearly as efficient at running a commercial enterprise as ordinary paid directors. Leaving out of account all the dangers of a municipal employé vote at election times, I say that as an administrative body a town council, excellent as it is for its normal functions, is not a very useful institution when it comes to running a business. The dice are loaded against it from the word "Go." Anyone who has served on a trading committee of a municipality knows that its efficiency right from the beginning is far lower than that of an ordinary commercial undertaking.


The White Star line.


If a commercial enterprise fails, you can eliminate the incompetent directors, but when you nationalise a thing the real directorate remains, however incompetent it may be. It goes on, the incompetence is permanent, and you have not failure to enable you to eliminate incompetence. That is the real difference, and therefore I am opposed to this proposal. I see nothing in municipal trading to attract me, and I oppose it on every conceivable occasion.

There are other provisions in the Bill which affect Scottish interests in a peculiar and narrow way, but on broad grounds it seems to me undesirable that Glasgow should elect its lord provost in a different way from that in which the other three great cities of Scotland elect their lord provosts, or the smaller towns their provosts. They have a certain system in Scotland, and it seems to me wrong that it should be altered in one particular town. Whether the purpose is to terminate the tenure of office of the present Lord Provost before it would naturally run out, I do not know.


But you ought to, know. You should not get up and say that. The present Lord Provost has been in office for two and a half years. His term finishes next year, and this Bill does not operate until he has finished his normal time.


I am very glad to hear that.


You should not make such suggestions.


What I said was that it seems strange that one great corporation should want to alter the rules of the game.


This proposal was put before the Corporation of Glasgow years ago by a well-known Conservative in the city, who thought it would be more businesslike to have a change each year. It is a thing that was proposed in its origin by Conservatives and not always by the political party that now happens to be the predominant party in Glasgow.


I was not concerned with the author of the proposal. In England we elect once a year, but in Scotland these people run for three years. If the Scots want to modernise themselves and to put themselves on an English basis, let them do it in a general Bill. I do not think it is satisfactory that the general principles of municipal government should vary from one Scottish town to another. There are proposals also to alter the character of the corporation, but on them I have no comment to make. I know nothing about that system, though I have received a number of telegrams from people who strongly hope the change may not take place. The two things of general politics that I am concerned with are the proposal for a municipal savings bank, which I think would be a great mistake, and the proposal to build motor bus bodies, which also I think would be a great mistake.

7.55 p.m.


I beg to second the Amendment.

Under a rather thin camouflage this is really what might be called a form of Socialism. If you analyse the Bill, some of the provisions might be termed peculiar to Scotland, but there are other provisions which unquestionably are not exclusive to Scotland, but are matters of very great public importance. One of the reasons why some of us object to the Bill is that it seeks to put into a public Act questions of policy which ought to be seriously discussed and only included in public Acts after such discussion and consideration. As I understand it, and in order to make our opposition to the Bill plain, this Bill falls under six headings. There is, first of all, the creation of a municipal bank; then there is the shortening of office of the Lord Provost; then there is the proposal that the Dean of Guild and Deacon Convenor should cease to be members of the Corporation; then there is power to manufacture bus bodies; then power to take possession of and sell abandoned properties: and finally by-laws as to street trading. I do not propose to deal with all those matters, but I would like to deal with three of them.

I do not think, after hearing what has been said by the hon. Member for South Croydon (Mr. H. Williams) in moving the rejection of the Bill, that there is much left to be said so far as a municipal bank is concerned, but, as I understand it, the onus of proof of the necessity for this Bill is upon those who seek these powers, and it would be very interesting to know on what ground they base the apparent necessity for taking over the existing bank and having a municipal bank. Hon. Members may not know that the Glasgow savings bank has been in existence for some years, is a perfectly flourishing concern, properly carried on, that there are deposits of no less than £31,000,000, and that it has in addition 20 branches. In these circumstances it would be very interesting to find out on what basis the argument is advanced that it is necessary to take over this bank and make it into a municipal bank.


On a point of Order. It is evident that the hon. Member for Central Hackney (Mr. Lockwood) has not read the Bill. We are not proposing to take over the existing savings bank with 20 branches. If the hon. Member had studied the Bill itself, it might have induced him to withdraw his name from among those who object to it.


The hon. Member does me a great injustice if he thinks I have not read the Bill. I have read it several times.


Then I will amend my suggestion and say that he has not understood it.


By the time I have finished my speech, the hon. Member may realise that I know more about the Bill than he thinks I do. At any rate, my point is that it would be very interesting to know what is suggested as the need for taking over a bank and having a municipal bank, except that it is obvious that it is this Socialist idea that all you have to do is to get hold of some public undertaking and run it under a Socialist regime, and then the thing immediately starts paying and it is entirely for the good of everyone concerned—a fallacy which has long since been exploded. I would like to ask the promoters of the Bill if they consider they are likely to obtain money from this municipal bank at a cheaper rate than it can be got now. Money is very cheap, and they will obtain it just as cheaply from the joint stock banks as from any municipal banking concern. The question as to whether or not there might be a heavy loss on the municipal bank has probably entered the minds of the promoters, but I do not suppose it bears very heavily upon them. It is interesting to note that the rates in Glasgow at present are 13s. 10d. in the pound. I suggest that the chances are that if this bank became a municipal bank the rates would be considerably higher.


May I ask whether the hon. Gentleman has studied the record of the municipal bank in Birmingham?


What about the rates in Hackney?


I can only say this about the rates in Hackney, that since we have had a Socialist administration they have gone up considerably—about 1s. 10d. in the pound—and I am certain they will go up more. I do not understand why Members of the Socialist party should seek to apologise for it. I understood it was part of their policy that rates should go up. I come to a very important point, the Dean of Guild and the Deacon Convener, who are to cease to be members of the Corporation. It may be interesting for the people who do not know exactly what the Dean of Guild or the Deacon Convener is for me shortly to explain. Perhaps after I have explained it one hon. Member will know that I have read the Bill and studied it. The Dean of Guild is the head of Merchants House, which is a body consisting of the principal members of numerous branches of commerce, trade and manufacture—1,100 of them—incorporated in 1605. Ever since then the Dean of Guild has been an ex-officio member of the Corporation. His position has been considered in various Acts. It has been considered in four recent Acts, and it has been thought right by various Governments that the position should not be altered. The onus for altering it is upon those who seek to make the change.


What about the Deacon Convener?


I was not going to speak about the Deacon Convener at the moment. The other point is the power sought to manufacture bus bodies. It is no part of the duty of a corporation to manufacture bus bodies. So far as Socialist Governments are concerned, they would like to have that power, and a good many others, but I suggest that, as such, it is no part of the duty of a corporation to manufacture bus bodies.


Is the hon. Gentleman aware of the fact that at the moment the Glasgow Corporation manufacture their own trams?


I do not think that in the slightest destroys what I am saying, because the mere fact that they make them does not mean that they make them successfully or that the principle is right. I suggest that the possibilities are that the whole thing will result in a very heavy loss. I do not know why hon. Members opposite bother about that. They do not care whether it is a loss or not. It makes no difference. What they seek to do is merely to say, "The thing doesn't pay. That is all right, put up the rates"—and the rates will go up. I would also like to ask those who seek these powers whether or, not they have any difficulty at present in obtaining what they want. If there were any difficulty in obtaining bus bodies, one could very well understand that it might be necessary to manufacture them. I suggest that there is no difficulty whatever. Several attempts have been made already to obtain these powers and this is the last, and I trust the most hopeless, of the efforts of the Glasgow Corporation to make their own bus bodies. In ordinary cases, when municipal concerns run their own tramways or buses, they have no power to manufacture them. Glasgow endeavoured to obtain these powers. In 1922 when the powers were given the words were left in, that is to say, power was given to them to manufacture buses, but there was so much opposition to it that eventually the words were taken out. In 1924 a Provisional Order was obtained by the corporation, but again it had to be abandoned owing to opposition. In 1927 a Provisional Order was made and an inquiry took place. The result, again owing to opposition, was that the Order was withdrawn. Finally, as late as 1929 powers were again sought in a private Bill, but the Clause which would give them the powers they wanted was rejected by a Select Committee of the House of Lords. I suggest, therefore, that this is their last chance of getting these powers, which so far have been examined and rejected. Under the cloak of being a private Bill, this is merely Socialism, which the hon. Members opposite seek, and which I hope they will never get. I hope that when the object of the Bill is discovered it will be rejected by a tremendous majority.

8.10 p.m.


The House has listened to two speeches from two opponents of the Bill. I take no exception to the position from the point of view that they have expressed, but I take exception to the direction from which it has come, in view of the fact that the statements made by the last speaker undoubtedly show that he knew very little about Glasgow and even less about the Bill. While he may be able to learn from someone who has lobbied him what the purpose of the Dean of Guild may or may not be, he certainly has not gone further into the matter to find out exactly the intentions of the Glasgow Corporation. We can all appreciate the Member for South Croydon (Mr. H. Williams) speaking against the Bill, more particularly as it is being defended on this side of the House. We know exactly the line of attack he is going to launch on the Bill. He is undoubtedly the high priest of individualism in this House, and we, therefore, do not object or take any exception to the statements which he makes in regard to this Bill. I may point out to the House, and, particularly to Scottish Members, that it seems rather peculiar that until last night practically all the names that were down with objections to the Bill were those of Members representing English constituencies, and only one name attached to one of these Amendments or Instructions was that of a Member representing a Scottish constituency. He represents a constituency in the north of Scotland, very far removed from Glasgow. I am not concerned very much about it except that the Scottish Members are often told that they try to run this House. Evidently the English Members are going to take a leaf out of our book and are going to try to run Scotland. They will find that they have bitten more than they can swallow if they try to run Scotland.


We have a Scottish Prime Minister.


You are welcome to him.


You carry the burden, and we do not object. The hon. Member for Central Hackney (Mr. Lockwood) and also the hon. Member for South Croydon object to the Glasgow Corporation building omnibus bodies, and the last speaker, when an interjection was made that they already made their own trams, tried to make the House shiver with the idea that the trams did not pay and that they really cost more to produce in the works at Glasgow than if they were produced by private manufacture. I want to assure the hon. Member that the Glasgow Corporation, I am informed, save money on the building of their trams. For a period of between 30 and 40 years they have built their own trams, and, if the hon. Member ever comes to Glasgow, I am certain that the transport officials will be delighted to show him over their works, and he will see there a works department for building every part of tram-cars, electrical fittings as well, that will astonish him and make him think that he has stepped into some great manufacturing concern. It is carried on, not at a loss, as he has endeavoured to make out, not at a profit, but making a substantial saving to the corporation and citizens of Glasgow by the saving effected in the price that would otherwise have to be paid to a private manufacturer. That is my reply to the hon. Member on the question of the building of the trams.


May I ask the hon. Member who does the cost accountancy and whether all the overhead expenses are included?


The chartered accountants of Glasgow have access to the books of the Corporation and would very soon make an outcry in the local Press and send hitters to their Tory representatives in Parliament, even to the hon. Member for South Croydon, if they thought there was anything amiss in the book-keeping of the transport department of the Corporation. To suggest, as the hon. Member appears to do, that there is some faking of the books—


No. Everyone knows that a similar suggestion has been made in respect of the cost of the construction of ships in the Royal Dockyards. From the very circumstances of the ease it is obvious that a substantial proportion of the overhead expenses are never charged fully on the trading departments. We have only to consider the great mass of centralised town-hall expenditure, which is never properly spread over the municipal undertakings, in order to realise the significance of my comment.


In order to show the hon. Member how much the transport department does for the city of Glasgow and how much it does to keep down expenses in other directions, I need only mention that they maintain the streets for 18 inches on each side of the tramlines. In addition, a year or two ago a new bridge was built over the river Clyde in order to divert traffic from the other bridges and relieve congestion. The cost of that bridge was borne almost entirely by funds built up by the tramways department. They have saved the ratepayers of Glasgow considerable sums as a result of the amounts which they have been able to spend on the maintenance of roadways, the building of bridges and other matters of material benefit to the citizens. The hon. Member for Central Hackney attempted to show that the rates in Glasgow were being increased. It may come as a shock to him to learn that in spite of the fact that we have a Labour majority in the Corporation the rates were not increased last year and that there will probably be no increase this year.


They are high.


Yes, but let me remind him that the last increase was imposed by his own class—by the Tories. The high rate to-day is due in the main to unemployment. Glasgow like other industrial areas has been hard-hit and a large number of its citizens having run through their unemployment benefit are now on the rates drawing poor law relief. The rates in this respect have in recent years increased from £350,000 to almost £1,360,000, an increase of between £900,000 and £1,000,000, due to the unemployment that exists in the country. But surely the hon. Member is not going to accuse a Labour majority, which has only been there as a majority for less than a year, of being responsible for that additional £900,000? Yet he endeavoured to arouse the prejudice of Members of this House by his statement on the rates of the city.

I would point out that Glasgow received powers from this House previously for the building of bus bodies, and that it was the other House which threw out those powers. The House of Commons has already given such powers not only to Glasgow but to other cities. The hon. Member for South Croydon and his colleagues omitted to inform the House that other corporations in Britain had received those powers. Further, let me put this point to the hon. Members opposite. I am informed that if anything happens to one of the existing bus bodies the Corporation of Glasgow can build a new body for that bus and that special powers are not required for that purpose because that work comes within the category of repairs. It is possible for them, without any powers of this kind, to build an entirely new body and place it upon the old chassis. Hon. Members opposite are trying to get away with the illogical proposition that while the corporation is now able to manufacture a new bus body and place it on an old chassis, it should not be allowed to build a new bus body and place it on a new chassis bought from a private manufacturer. That shows how ridiculous and absurd is the attitude of the two hon. Gentlemen opposite and those who are supporting them in these Amendments and Instructions.

With regard to the statement that we are seeking to do away with the representation of certain interests on the corporation. I must inform the House that at present in Glasgow two individuals sit as town councillors who do not require to be elected. Every other member of the corporation, including the Lord Provost himself, has to go before the electors and secure election, but these two individuals are not under that necessity. I say no word against those individuals and I say nothing against the two bodies through which they are co-opted on the council. Many estimable gentlemen have occupied those positions in the past. One of them sits in this House as Member for Cathcart (Mr. Train). He acted in the capacity of deacon convenor in the Glasgow Corporation for two years, and not a word do any of us say against him. What we strongly object to, however, is the fact that every time these gentlemen are present at the corporation's meetings two votes are given against Labour by persons who have not had to stand before the electors and secure their return by the votes of the electors.


Is it not the case that neither of these two representatives has ever been connected with any party in the Corporation?


I would turn the hon. Member's question round the other way and ask whether these gentlemen have ever been known, to vote for a Labour proposal in the Corporation?



Lieut.-Colonel MOORE

That shows that they have some common sense.


The silence of the ex-deacon convener will, I think, indicate to the House the way in which they have always voted.


I do not know how they have voted on every occasion but I know they are not connected with any party.


But they do not betray their class.


At least the hon. Member for Cathcart knows how he himself voted and he has not given us his testimony on that matter. However, the city of Glasgow asks that these two representatives should no longer have the right to sit as town councillors without election. There is no reason why bodies composed of merchants of the city, formed and subscribed to for the purpose of looking after members and their relatives who fall on evil days, of helping them when they are sick and of educating their children, should be entitled to representation on the Corporation. We welcome and appreciate all the good that they do. No one would detract from their good work or utter a harsh word against the composition of those bodies having regard to the functions which they perform, but that is no justification for asking the City of Glasgow to provide representation upon its council for them. That is one of the reasons why, because of the non-representative character of these two gentlemen who sit upon the town council as town councillors, we put in this Bill the request that this particular position should be no longer filled by these individuals. I come now to the question of the Lord Provost. It is amusing to hear two Members who represent English constituencies asking the House to reject the proposal to introduce into the city of Glasgow a custom, rule or law that exists in every town in England. Lord mayors and mayors are elected in England for one year, and yet hon. Members want to deny Glasgow the right of electing the Lord Provost for one year.

Lieut.-Colonel MOORE

I thought that Scotland gave England the lead and did not accept the lead from England.


I do not think the hon. and gallant Member would refuse to take anything that was good, no matter from what source it came. I am prepared to take anything good, even if it comes from the Devil. If in the greater part of the kingdom the lord mayors and mayors are elected for only one year and given the right to reappointment, I do not see why it should be denied to Glasgow and why it should be necessary to ask the Secretary of State for Scotland to bring in a Bill for the whole of Scotland to enforce by legal enactment something which some of the burghs in Scotland might not wish to have. If Glasgow wishes it, I do not see why England should object to allow Glasgow the right to appoint the civic head for a year instead of appointing him for a period of three years. If at the end of one year he has justified his election and made himself happy with those who sit under him, and if they care for him and appreciate his conduct in the chair, it will be possible to re-elect him for three years. The appointment of the Lord Mayor for only one year would prevent that which presently happens, particularly in Glasgow. Having sat for three years, the Lord Provost cannot sit again in the town council, and by a gentleman's agreement he must retire and go entirely out of public life, unless he happens to be elected for Parliament or some other institution. This proposal would preserve for the city of Glasgow some individuals who have done valuable service to the community and would enable them to remain in the council to give the benefit of their wisdom and experience.

The question of the bank seems to be a sore point to hon. Members opposite. The hon. Member for Central Hackney (Mr. Lockwood) seemed to think I was hard upon him for suggesting that he had not read the Bill. I cannot do other than suggest it when he tries to make the House believe that we are endeavouring to take over a long-established trustee savings bank in the city. This bank is a flourishing concern and has been running for many years; it has branches in certain areas outside Glasgow and performs a good piece of work. The hon. Member said we would have to compete with the Post Office savings bank and the Glasgow savings bank and that we would not succeed. Both hon. Members who proposed the rejection of the Bill seem to lose sight of the fact that there are already two separate savings banks which are competing with each other— the Glasgow trustee savings bank and the Post Office savings bank. We have a Post Office savings bank in Glasgow and the trustee savings bank, and both are offering almost identical terms to those who lodge their money with them, and yet these two banks are flourishing. Why should not the corporation bank flourish? Is there any reason why it should not?


Does the hon. Member realise that the type of person who puts money into the Post Office is different from the type of person who puts money into a trustee savings bank?


The hon. Member is again showing that he does not understand what class of people go to these two banks in Glasgow. If he did, he would not make such rash statements. With regard to the bank which is mentioned in the Bill, if you had made inquiries from the individuals who are working with you, they would be able to tell you that the bank mentioned in the Clause is a banking company set up within the corporation itself, and the proposal is to take it over and run it in the same manner as the bank at Kirkintilloch is run. It is practically a municipal savings bank there, and the proposal in the Bill is to take over the functions and the deeds of the company as it was instituted within the corporation itself. No one can be a director of it unless he is a member of the council and when he ceases to be a member of the council he automatically ceases to be a director of the bank. That is the bank which it is proposed to take over, and not the long-established Glasgow Savings Bank of which many people in Glasgow are proud and to which they go to lodge whatever money they can lodge in its security.

Glasgow is asking the House to allow the Bill to get its Second Reading so that it can go before a Select Committee to be examined. Objections can be lodged there. The hon. Member for South Croydon suggested that he was going to save money for Glasgow by having the Bill defeated. It is for the House itself to settle either to defeat the Bill or to give Glasgow Town Council the right to have its proposals heard and examined in the manner established by Private Bill procedure. I do not say this as a threat, but if we are to have English Members, because they do not see eye to eye with the proposals in this Bill, preventing the Bill going through the usual procedure, other methods will have to be adopted. I have no objections to raise against their methods at the moment. They are exercising their rights as Members of the House to object to any Bill which comes from any part of the country. Let me assure hon. Gentlemen, however, that it can cut both ways. We can object to every English Private Bill which comes to this House, irrespective of how good or bad it may be, until we clutter up the Order Paper with Private Bills. Let hon. Members beware how far they carry their desire to oppose Private Bills because of principles to which they object personally, disregarding the wishes of many thousands of citizens in towns up and down the country. Why should their desires be thwarted because the hon. Member for South Croydon and the hon. Member for Central Hackney come to the House to give rein to their individual ideas and prejudices?

8.36 p.m.


The hon. Member for Govan (Mr. Maclean), if I heard him aright, referred to a banking company of which the directors must be town councillors, and directly they cease to be councillors they cease to be directors of the bank. In that observation the hon. Member has condemned municipal banking right away. Why should a man be a director of a municipal bank merely because he is a member of the town council—the only qualification to become a director is that he is a member of the town council? The hon. Member also said that we were not following the ordinary procedure in connection with private business in objecting to a Second Beading being given to this Bill. In my opinion this is not an ordinary municipal private Bill. It is one which raises a great and vital principle. I see many Members from Glasgow present, and I hope to prove to them that not only is municipal banking wrong in principle but, I say respectfully, that if they carry the proposal to institute a municipal bank in Glasgow they will be doing a very bad bit of business not only for themselves but for the municipality of Glasgow and for the depositors.


What about Birmingham?


I will deal with Birmingham in a minute. I venture as an English Member to support the rejection of this Bill on a matter of grave principle, and I want to speak against the institution of a municipal bank in Glasgow in particular and against municipal banks in general. I am not talking politically to-night; I am talking from the hard business point of view. A very great deal depends on whether a municipal bank starts operations in a period of cheap money or of dear money. Suppose it starts in a period of dear money, as was the case with the Birmingham Bank, a period when, we will say, the price for long-term borrowing is 5 per cent. If the municipality gives three per cent. to its depositors and adds one per cent. for expenses that means that it can lend money to the corporation at 4 per cent. at a time when the current rate of interest is 5 per cent. But in a time like this, when money is cheap, how can a municipal bank hope to compete even with the Post Office? If a municipal bank were started in Glasgow to-day, to be able to attract any money from depositors it would have to pay them 3 per cent. If we add 1 per cent. for expenses that makes 4 per cent., and it will only be able to lend the money which it has got from its depositors to the Glasgow Corporation at about 4 per cent. I have here a list of securities which were offering on the London Stock Exchange yesterday. It covers all the principal cities of Great Britain—Aberdeen, Birmingham, Blackburn, Blackpool, Huddersfield, Hull, Lanark, Leeds, Liverpool, Manchester, Middlesbrough, Nottingham, Salford, Sheffield, Stockton-on-Tees, Stoke-on-Trent and Swansea. That list covers practically the whole country, north, south, east and west. The loans run to 1953, to 1985, to 1930—to varying dates; and when I look at the yield with redemption, in only two cases is the yield over 3 per cent. In all other cases it ranges from £2 14s. 9d. to £2 19s. 9d. per cent. Therefore, the borrowing basis of municipalities to-day is 3 per cent., or under; and yet the proposal before us to-night is that the municipality of Glasgow shall set up a bank which, if it is to get any money at all, must offer its depositors 3 per cent., will have to add 1 per cent. to cover working expenses, and can only lend its money to the municipality at 4 per cent.




That is the only way they can make the bank pay, and what is the good of setting up a bank if it does not pay its way? A simple calculation works out in this way. Supposing the bank in Glasgow received from its depositors the sum of £5,000,000. If the bank is to be a business bank it would have to charge 4 per cent. for that money if it were loaned to the Glasgow Corporation; but the Corporation could borrow elsewhere at under 3 per cent., and therefore, if the money were borrowed from the municipal bank, that would mean an annual loss of £50,000 a year to the ratepayers of Glasgow.

I want to say a word, also, as regards the depositors, because the principal people to suffer if a bank goes wrong are the depositors. What are the assets of a municipality? They are tramways, waterworks, public buildings, sewers, electricity, gasworks, and the like. [An HON. MEMBER: "And the rates!"] Assets such as those are difficult of realisation, and a position might arise which would constitute a grave risk from the point of view of the depositors. If there were a party in power in any municipality, whether Glasgow or not, which was revolutionary and undertook unsound finance, the depositors in the municipal banks would get alarmed and clamour for their deposits, and owing to the unrealisable nature of those assets from what source could the municipal bank meet such an emergency?

If the House will allow me I would read six points that were made by a professional body which reported to the Institute of Municipal Treasurers. The report was presented by the town clerk of Birmingham, to which city reference has already been made. The points are summarised, and I agree with them. I ask the House to note very carefully the recommendations of that body, which were as follow:

  1. "(a) The establishment of a municipal savings bank should not be regarded as having for its primary object the raising of money for municipal capital expenditure, but rather the provision of facilities for the exercise of thrift under the best and most remunerative conditions, with the same facilities to the local authority for making such use of a part of the accumulated funds as those suggested herein for trustee savings banks;
  2. 1843
  3. (b) The municipal savings bank should be regarded as entitled to obtain within the range of trustee securities the best possible return on its investments;
  4. (c) That upon any funds lent to the corporation the bank, as the lender, should receive not less than the rate of interest being paid by the corporation to private lenders;
  5. (d) That there should be no indirect subsidy given to the bank in the form of free accommodation or service and that all beneficial users of buildings, staff, etc., be costed for inclusion in the working expenses of the bank;
  6. (e) That while the rate of interest allowed to the depositor need not be restricted to the same rate of interest as that payable on the Post Office or other savings banks, it should nevertheless be such as will leave a sufficient margin when deducted from the rate of interest earned by the deposited funds of the bank, to pay the working expenses when the bank has become properly established;
  7. (f) That notwithstanding the fact that the savings bank will have behind it the guarantee of the municipality, it will be necessary in investing the funds of the bank to follow the usual practice of other banks and exercise such care and caution in arranging investments as will ensure the bank carrying liquid assets sufficient to meet any emergency such as au unexpected run on the bank."
One of the most important things in taking people's money, especially the money of the small investors, is the psychology of the small investor, who is most sensitive to anything which may appear to affect the security of his capital. The policy which has been found to be successful in conducting trustee savings banks should be followed by the municipal banks, and no risks should be taken, because, if anything went wrong with the municipal savings bank, all the agencies which had been set up catering for thrifty people would be injured. Finally, the report says: A municipal savings bank should, after a short period for getting into working order, be self-supporting. Any profit should be devoted in the first place to strengthening the financial position of the bank, and when that position is deemed to be sufficiently secure, it should be devoted either to the development of the business or to the improvement of the interest allowed to investors. It should not be devoted to relief of rates. That is the opinion of a very experienced and responsible committee.

When the Socialist Government were in office, powers were taken to establish municipal savings banks in other cities and were obtained by Cardiff and Birkenhead. The Treasury then laid down certain regulations for the establishment of banks in those cities. One of the regulations is that interest to the depositors should be 2½ per cent. per annum on ordinary deposits and 3½ per cent. on fixed deposits. Since the Treasury laid down those regulations, an enormous change has taken place in the money situation of this country. The brilliant conversion of the £2,000,000,000 5 per cent. War Loan has been made. I do not presume to know what the Treasury would do, but I cannot believe that, in the altered conditions, they would still lay down those regulations.

It is interesting to note that the regulations laid down by the Treasury then are of such a nature that it was not thought desirable to proceed, and the powers were reversed. In 1932 the Glasgow Corporation—[Interruption.] I will come back to the question of Birmingham. The whole point about Birmingham is that the Birmingham Savings Bank was started at a time of dear money. There were no other thrift banks in the city at the time. I do not know whether I ought to say this, but I mean it: Birmingham is different from most other cities. When you have the Chamberlain family behind a municipal bank it makes all the difference. In 1932 the Glasgow Corporation instructed the town clerk and the city chamberlain to inquire into the question of municipal banks, and those officials visited Birmingham. I have read the account of the discussions which the Glasgow representatives had with the Birmingham representatives. The Glasgow Council turned down any idea of establishing a municipal bank. I would like to know what has made them change their minds.


Because the people have changed the composition of the council.


I am coming to the, question of giving money by means other than by Parliamentary sanction. If the proposed municipal bank in Glasgow offered a higher rate than 2½ per cent., the cost of the money collected, plus the expenses of management and the higher rate at which it would borrow in the open market, either by way of mortgage loan or by the issue of stock, would mean that the ratepayers would have to bear the extra cost.

Another question will arise if this bank is formed and collects money. If the Bill goes through and the municipal bank is opened in Glasgow, and £5,000,000, we will say, is received as deposit, some of the money at least—I am not sure of the exact percentage—has to be invested in trustee or Government securities. As I have already said, we are passing through a period of cheap money and very high prices for Government securities. In the institution of a bank of this kind, the directors or trustees would be compelled to take a long-term view. The money would be there for a very long time. They would be compelled to buy trustee or Government securities at the highest prices that have obtained for many years. The probability is that when trade revives and things get better, the tendency will be for gilt-edged securities to depreciate in price. At the very commencement of their transactions, therefore, the municipality would be faced with the probability of the depreciation of the securities in which they had invested at the time of very cheap money. It is very important indeed that a municipal bank, even more than any other bank, should retain the fullest confidence of its depositors. A bank must keep a liquid cash reserve and a due proportion of reliable British Government securities. If the municipality of Glasgow agreed to pay a rate of interest that would attract deposits from the public, it would certainly be at the expense of the ratepayers.

I come now to one of the most important points of all. A municipal bank is in the ordinary way subject to Government control. My hon. Friend the Member for South Croydon (Mr. H. Williams) touched upon this point, but I want to add a further word in regard to it. It would be a bad thing if a municipality, through a municipal bank, were able to lessen Parliamentary authority over municipal finance, but Clause 3 of the Bill says definitely that: Subject to any regulations prescribed under this Section, the Corporation may use the money deposited at the bank for any purpose for which they may incur expenditure. Local authorities—county councils, borough councils and city councils—all over the country, in the 12 years during which I have had the honour to be in this House, have had increasing powers and increasing responsibilities put upon them. They have been given work to do in connection with education, the Poor Law, roads, and so forth, all over the country in increasing quantity, and the one control that the House of Commons has over the municipalities is by retaining the power to order their financial requirements. I am not certain of the exact procedure, but I think that, when a municipality or local authority wants to raise money, it has to come to the Ministry of Health and get its consent. This method which it is now proposed to adopt is, however—I say it in no unkind sense—a backdoor method of raising money for municipalities and avoiding Parliamentary sanction, and for that reason, if for no other, I strongly oppose the Second Reading of this Bill.

It is not the business of a municipality to go into banking. Some hon. Members may think that receiving people's money and putting it in a safe deposit somewhere is a very simple thing to do, but I can assure them that it is not. Once you take control of people's money, you accept a very heavy responsibility. During and since the War the banking system of this country has won the admiration of the world. In America, one has seen banks close down, but during all the crises of the War, the General Strike, and even the advent of a Labour Government, there has never been one question as to the solidity, efficiency and honourable conduct of our banks. Why? Because they are entirely free from political influences. The great objection that I have to the setting up of a municipal bank is that it cannot avoid coming under the political influence of the party in power, no matter which party it may be.

Reference has been made to the trustee savings bank, and I want to point out the position in Glasgow. I have here the Trustee Savings Banks Year Book, from which I see that there are 199 trustee savings banks in this country, of which the biggest is in Glasgow, with deposits of about £34,000,000. It has 30 branch offices in Glasgow. The point about the trustee savings bank is that, while it may lend the money which belongs to its depositors in all sorts of ways, that money is lent with no political bias at all. The trustee savings banks are administered by men who are not paid for their services, and I expect few Members of the House know that the trustee savings banks' accounts are inspected year by year by the Trustee Savings Banks Committee, which is a statutory committee and which submits an annual report to Parliament. If a municipal savings bank were to fail, it would be a serious blow to municipal credit and stability, and the risk is one which we should not take. The failure of a municipal bank is a real, and not an imaginary, danger. The Macmillan and other reports have all urged that banking should be kept free from political influence. The fact is that we simply cannot afford to risk the setting up of municipal banks throughout the country.

As my last point, I want to ask the promoters of the Bill, which includes the setting up of a municipal bank, whether it is fair for them to compete with existing banks, which are compelled to keep adequate cash reserves and capital resources, and have expenses because of that fact? If this Bill goes through, will the municipal bank have to publish an annual audited account, and will there be an annual meeting at which any depositor or shareholder can question and criticise the directors? Even if there were, I doubt whether the smaller depositors in Glasgow, though I do not want to say anything at all derogatory to them, would have the necessary education and financial ability to get up and ask intelligent questions at the meeting. I beg the House to realise that this Bill is a matter of principle, and not a matter affecting Glasgow alone. If municipal banks were established throughout the land—and this is a beginning—it would, in my humble opinion, create a national menace to the credit structure of this country. For all these reasons, I ask the House to reject the Second Reading of the Bill.

9.3 p.m.


As a Member for the City of Glasgow, I rise to lend my support to the Bill, and I propose to try to answer the case stated against the Bill, which is much more formidable because of its numbers and weight than is usually the case with a Corporation measure. Generally speaking, when we discuss these measures, the opposition is not so formidable in numbers as we have seen it to be to-day. I propose to try to meet in a reasoned way the opposition which we are now facing. Before I proceed, I would say, with all due humility to the Corporation, and particularly because I do not belong to the same complexion as the majority of the Council, that when they come here they have a right to ask for fairness in debate and fairness in criticism, but they must also extend the same fairness to others, even to those who are in a minority of one or two. I wish to say that the Corporation, and particularly some of those who are sponsoring the Bill, were most unfair at, the week-end. They published a paragraph somewhat to this effect, that the Corporation would probably be backed by the two Labour Members for the City, and the Independent Labour Party group were not even mentioned as probably backing them, although all our names are down as official backers of the Bill. We are entitled to be treated fairly. There was no problematic business about it, and we intended to back it. At Scottish party conferences up to now, it has been stated that our names were down in support of the Bill.

I wish to say a few words in support of the Bill in general and to examine its general principles. What are the provisions for which we are asking? They are a municipal savings bank, to build our own bus bodies, to take certain control over disused properties, to abolish the office of Dean of Guild and Deacon Convener, and to take certain powers about street trading. A great deal of the Opposition has been cencentrated upon the question of a municipal bank. Even if I were a Conservative and that was all I had against the Bill, I should vote for the Second Reading and take the ordinary constitutional way of moving an Instruction that that part of the Bill should be left out. It is not a sufficient reason, because hon. Members disagree with the municipal bank, for the rejection of the whole of the Bill. It is for the opposition to the Bill, if that is all that they have against it, to support the Second Reading and to move an Instruction to leave out that part of it dealing with the municipal bank. That is the constitutional way in which to proceed when dealing with a great town council like that of Glasgow.

I will deal with the objections raised to the municipal bank. I admit—and there is no wisdom or sense in denying it—that the present is a much more difficult time for the town council to embark upon a municipal bank than was the case when Birmingham did so. None of us would deny that money has become much cheaper since that time. I will submit two or three reasons why the corporation have undertaken the idea of the establishment of a municipal bank, which is not a new idea in the city of Glasgow. The demand has existed over a period of years. Let us in fairness examine the case. There is a trustee savings bank in the city which has made millions of pounds of profit. During that time Glasgow has been a heavily rated city under Tory rule as well as under Labour rule, because high rates are not the result of the present administration but of administrations that have gone before.

It has been found—a perfectly natural thing—that millions of pounds of profit have been made out of the money of the people of Glasgow. Glasgow is a thrifty city, whether you like it or not. The ability to save is not confined to Conservatives, but extends over the general population. Millions of pounds of profit were made out of the people of Glasgow at a time when rates were heavy and interest poor. These profits, made at a comparatively low rate of interest, were used for purposes which had no direct connection with the city. Consequently, the town council said: "Here is Glasgow with resources to supply all the money. Its citizens can subscribe it, and why should money be so subscribed for purposes outwith the city when the city is gasping for certain sums of money which can be profitably used and so decrease the ordinary rating of the city." That was the position, and so the demand for a municipal bank came along.

Hon. Members opposite ought to know a little of the history of Glasgow's borrowing powers, and I propose to enlighten them. The borrowing powers of Glasgow are not in all respects the same as those of other cities. Glasgow has already the limited powers of a bank. Let me explain. To-day the Glasgow Corporation can borrow money on short loans. My mother was of the Scottish thrifty type, and God knows how she could save, but she did save, and I remember that her first money went into the Glasgow Corporation on three months' call. It is true that it differs from the bank, but already the corporation have, on short call, practically the facilities which can be given by a bank. A short term loan system has been in operation in Glasgow for a period of years. They found that for the purposes of the city they could borrow money in that way even from working people, and so have a cheap supply of money available as against a high borrowing system.

It is said that the present time is not appropriate to venture into the business of bankers. I admit this fact. I will never take part if I can avoid it in an English-Scottish quarrel as to whether we are superior or inferior to England. I think that man for man we are very much alike, but we in Glasgow have certain traditions which are not common to other towns. One of the traditions is that there is a civic spirit. Nobody who knows that city would deny it. The municipal elections are fought with a great deal of interest, almost as much as that which is in evidence during Parliamentary elections. We have the people taking an interest in affairs in a way that few citizens can.

One of the features in municipal life in Glasgow to-day is that civil conscience has been created which will ensure patronage being given to any interest run by the city. To-day, if the Glasgow Corporation form a municipal bank, they will enter into it with one of the greatest assets a city can possess, namely, the civic spirit of the city and the spirit of its residents to give the city its chance to use city money for city purposes. No one can deny that the spirit is there. I rather disagree with some of the promoters of the idea of a civic bank in trying to enter into competition on rates of interest. I have never accepted the principle that they will have to pay so much more in order to attract money. A city bank in Glasgow, run by an efficient staff, would, through its civic spirit and without any increase in interest, attract sufficient sums to justify its existence. The city to-day could run it. To those who oppose the proposal, I would say that the Corporation of Glasgow, whether Labour or not, are not fools, and, if we gave them the power to-day to enter into a municipal bank, it would not mean that they would necessarily start it immediately. They might find the circumstances of to-day were against them and might delay the proposal, but if cheaper money came they would possess the power to establish a municipal bank. One thing that was said against us before the War, and it was a terrible charge, was that we bothered little about housing conditions. To-day in Glasgow one can see what a rapid change has come about among the common people in their desire for decent homes. One of the things that the city would respond to under a civic bank would be the provision of means for decent homes. I am sure that with practically no interest there would be a great response from a municipal bank for the provision of decent homes for our common people in the city of Glasgow.

May I say a word to the hon. Member for South Croydon (Mr. H. Williams) and others who say that the Corporation could not run a municipal bank successfully? I am a member of a co-operative bank. That bank is run by ordinary working people, drawn from the working people and managed by people similar to the members of the Glasgow City Council. They are people of great capacity and skill and to-day the cooperative bank is a success. If the Glasgow Corporation entered into the operation of a municipal bank they would have to face Government-appointed auditors and would have to run the gauntlet of a politically-minded population, who would take note of things and would be a constantly challenging factor in regard to every day administration.

Let me take the question of the proposed power to build bus bodies. This is a proposal that is backed not merely by Labour people but by broad-minded Conservatives. To-day the Glasgow Corporation build their own trams and with regard to buses they ask that they should not be in any inferior position compared with the private bus company. In the neighbourhood of Glasgow there are two companies. I think they are both in one combine, but I am not certain. They operate at a reasonable distance outside the city and are known as the Scottish Motor Transport Company and William Alexander. Both companies build their own bus bodies, one at Stirling and the other somewhere in the neighbourhood of the division of the hon. Member for Hamilton (Mr. Duncan Graham). Their buses run in and out of the city. They can afford to start a complete new bus body building company. They can, buy the machinery and equip it, but the Glasgow Corporation who own buses and trams are able to build their trams but not their buses. The corporation say that if they could employ their workers steadily without having to dismiss any of them, or without having to go on short time they would be able to keep their men employed without any breakages during the year. The consequence would be that the whole unit of manufacture would be employed constantly for the 52 weeks of the year.

We build our trams but the corporation have not built any buses yet because the law does not allow them to do so. They have built trams and they have bought trams which have been built outside. The two classes of trams are running on the same system and the trams built outside cannot compare with the trams built by the Glasgow Corporation. Look at the trams that are running in the London streets to-day which have been built by private enterprise, and compare them with the Glasgow trams, with their heating system, with their beautiful upholstery and every tram a credit to all concerned. Search your privately-built tramcars in any town in Great Britain and they would not compare with the Glasgow trams. That is a business test. I would not put forward anything that could not face up to the business test. Compare the corporation built tram with the private built tram and the Glasgow tram emerges a finer, more beautiful, better finished article than anything produced by private enterprise. The people who work for the Glasgow Corporation are paid under conditions with which few can compete. They have pensions. I sometimes wonder at the sincerity of hon. Members opposite. They talk about giving pensions to workers. Here is a corporation providing pensions and those same hon. Members when they are asked to support this particular power for which the Glasgow Corporation asks, say: "Do not give it to the Glasgow Corporation but give it to outside people." They do not carry out what they themselves have asked for year in and year out. The Glasgow Corporation in regard to its trams emerges with credit, and no one who knows the position could say otherwise.

What is the case with regard to the Provosts? The Glasgow Corporation have had three-year Provosts. In a large number of towns in this country a gratuity is given for expenses. That is not an uncommon procedure. A certain sum of money is allocated for entertainment, but not for personal use. That, however, is not the custom in Scotland. Men who have not private means have a right to be selected. The Labour party have a right to elect workmen as Provosts. If I were giving a word of advice to the Conservatives it would be to trust their own workpeople more than they do. Democracy might say that I should be a Provost. In that case and if I wanted to be a Provost I think I should carry a provostship as well as most men. Why should a man be debarred from becoming a Provost because of his poverty? A man of moderate means may look at a provostship for a year. A man of moderate means in my own city has been referred to as a likely Provost. I have a great regard for his capacity. If you ask a man of moderate means to be Provost for three years you are asking him to carry a financial burden that he cannot bear, but if you limit the term for a year he can manage.

The Corporation of Glasgow are not making grants of money. They ask at least that there should be a little more access to the post of Provost by the humble citizens. In any case that is how I see it. I hope I do not accuse colleagues of, dishonesty, but I wish people would not try to get over arguments by tricks. The Members of the Merchants House and Trades House, who elect the Dean of Guild and Deacon Convener, all belong to the Conservative, or, in the old days, the Liberals. What is this party democracy? That your elected representatives shall stand by election responsible to some public body. Here are two people elected by a charter of 400 years ago. Who on the Government benches would tolerate a proposal that there should be two members on the Glasgow Corporation from the Glasgow Trades Council? The Glasgow Corporation say in 1935 that when this Charter was given to these people a different set of circumstances existed. The vote was not then universal. To-day they represent nobody but a little group, yet they may be the deciding factors in the spending of large sums of money. The corpora- tion claim that these votes ought to go. I will not say anything about street trading and other aspects, except that the Corporation of Glasgow can manage a business. Much the same people who manage the great co-operative movement—which through all the depression has made great progress—now manage the corporation. I do not always agree with the actions of the corporation, but given the chance they can run a bank, and will, I believe, emerge from the test of time having done things well for the sake of my native city. In approving this Bill I believe the House will make Glasgow a better city than before.

9.30 p.m.


Although I disagree with the views of my hon. Friend who has just spoken, there are certain things with which I am, profoundly in sympathy. For example, I would admit that no one would make a better Provost of Glasgow than himself. When listening to his speeches I often think that he has the gift of charming a bird off a tree. It is difficult to get into profound or violent controversy with him, although fundamentally we hold different points of view. May I direct the attention of the House for the moment to the way in which this question arises, for there is a point of procedure to be considered. The procedure of Provisional Order was devised to prevent unnecessary expenditure being incurred by Scottish corporations having to come to London. Of course, Parliament keeps control over Parliamentary procedure in order to watch questions of public policy. The Provisional Order promoted by the Glasgow Corporation was examined by the two appropriate examiners, the Chairman of Committees in the House of Lords and the Chairman of Ways and Means in the House of Commons, and they found that these proposals were of a character which required discussion by the House of Commons, and that only a very limited number of the proposed Clauses were suitable for discussion by a Committee sitting in Scotland. I believe the Order had something like 23 Clauses, and, of these, 16 were held by these two chairmen to be of a character and of a magnitude which required first of all to be approved by Parliament.

We are therefore discussing in this Bill to-night a series of Clauses which the Chairman of Committees in the House of Lords and the Chairman of Ways and Means have decided raise questions of public policy, or of such novelty or importance that they ought to be dealt with by private Bill, and not by a Provisional Order. That places on us the obligation of considering the Clauses now before us from the large point of view of public policy, because they raise that kind of question. They are not such as, in the ordinary course, would be granted a Second Reading in the ordinary way. We are here on the decision of these very expert officials to discuss questions of policy. What are these questions of policy? They differ undoubtedly in magnitude. There is the question of a municipal bank to which considerable attention has been paid. There is a question about which very little has been said, which raises the whole public law of Scotland, and which would put Glasgow under a different public law from any other part of Scotland. There is a question whether you should alter the character of the Corporation, a question as to the tenure of property, a question of the right to build omnibus bodies and the right to issue by-laws to regulate street trading.

In my judgment, the first four of these matters can be decided at once by the House on principle; they require no investigation. They are matters on which an investigation will be of no help; no investigation by a committee would tell you anything. The last two matters are things upon which something might be said, but so far as the other matters are concerned we are in as good a position as we should be at the end of a Committee stage. I say this for this reason; that I do not think the House should forget the more or less understood practice in regard to private Bills. In the ordinary course, I have maintained that the House ought to grant a Second Reading to a Bill if there is a prima facie case for examination; when you have not had time to form a judgment the matter should go before Committee. An occasion on which I remember taking that view was, curiously enough, ten years ago almost to the exact day, on another Glasgow Corporation Bill concerning the boundaries of the Corporation. On that occasion, I separated myself from a large number of my hon. Friends. The hon. Member for Gorbals (Mr. Buchanan) by a speech opposed the Second Reading of that Bill, which, however, was commended by the hon. Member for Bridgeton (Mr. Maxton).


And the last time we differed.


The hon. Member for Bridgeton was careful to say that the hon. Member for Gorbals speech was the best speech made in the Debate although in the worst possible cause. Mr. James Adamson and Mr. Charles Brown voted against the Second Reading of the Bill, but the hon. Member for Bridgeton and I carried a majority of the House. I am saying this in order that we may safeguard the practice of the House. I maintain that if there is prima facie case made out in the Clauses of the Bill the House should give it a Second Reading. Here we are in a different situation. The questions are submitted to us as questions of importance and policy which require no immediate investigation by a committee. The hon. Member for Gorbals has referred to certain remarks which have been made in Glasgow. There are some of us who have been much more unfairly dealt with than the hon. Member in the interview to which he has referred. I am bound to raise this matter. A very important official of the Glasgow Corporation—if he had been an irresponsible member I should have taken no notice—the treasurer of the City Corporation said in this interview: The Glasgow and West of Scotland Unionist Members of Parliament were asked to back the Bill, but had declined. This meant that they were refusing to carry out the democratic decisions of the majority of the electors in their constituencies, which was something new in Parliamentary procedure. I protest against any such idea. I certainly refused to back the Bill. I am not going to back a Bill nearly every principle of which is entirely contrary to my own convictions, any more than I should back a Bill which proposed to destroy the cathedral of Glasgow and to build tenements. The suggestion is that the Member for a constituency is bound to back every Bill which affects the constituency. I protest against any such theory. It never has been the principle or the practice of this House; and I hope it will never be considered to be so. In this interview, the city treasurer went on to say: We regard the opposition by the English Members of Parliament as a manoeuvre framed by their Scottish colleagues to create the impression that they are quiescent in the matter. That is to say, that we are supposed to have hidden behind our English colleagues and suggested the opposition which is now represented by the hon. Member for South Croydon (Mr. H. Williams). I wish to say that there is not one word of truth in that suggestion, that there is no foundation for the statement, and that there never has been any foundation for it. I wish to say further that not a single Unionist Member of Parliament for Glasgow has had any conversation whatsoever with those who represent the opposition to this Bill at any time before the Motion for rejection was put down, and, as far as I am concerned—and I think the same is true of every other Unionist Member from Glasgow—I have never had any speech with any single individual in Parliament who is moving for the rejection of the Bill until yesterday. That was the first moment on which I have had any contact with any person who was moving in this matter, and then I never gave advice or guidance or sought any in that conversation. I wish to make on behalf of the Unionist Members from Scotland a strong protest against statements of this kind, which are entirely fabricated and without any foundation whatever. The treasurer of the city corporation goes on: When he was in the House of Commons last week he learned of the whole plot and was then told that the Unionist Members of Parliament"— And so on. I do not know what he was told, but I can assure the House that there was no plot. Further, the Unionist Members from Glasgow met to discuss this matter for the first time yesterday afternoon, and we spent a very anxious time in trying to discover whether there was any appreciable portion of the Bill for which we could vote in order that a Second Reading might be granted, with the excision of certain Clauses. I have come to the conclusion, and my colleagues agree, that there is so very little left, after our opposition on matters of principle has been expressed, that it is scarcely worth while the corporation taking a Second Reading of what remains.

Let me put forward my views on the matters which have been raised. I take the first and what is the largest question, namely, the proposal to set up a municipal bank. I am against setting up a municipal bank in principle and for this reason. Banking is a very different thing from spending, and the people who do the banking should not be the same people who spend the funds. The one idea in the mind of a banker is to safeguard the money put in his charge, and, if he is at the same time thinking of spending the money he has collected, on some object, no matter how fruitful he may think it to be, and no matter how meritorious, he is taking an entirely wrong attitude towards his first duty. His first and only duty is to look after his depositors. If his mind is deflected by any other consideration there is no question at all that he is not in a fit position to carry out his duty. That is the primary reason against a municipality which is spending money having the control of money in a bank.

I share with my hon. Friend the Member for Gorbals the greatest possible respect and admiration for the Glasgow Corporation, which compares favourably with that of any other city in the Kingdom. Its enterprise and the progress that has taken place under the general schemes which have been promoted in Glasgow, are something of which any city may well be proud; and in most instances I would trust the Corporation to do what was right for the benefit of the whole of the citizens. But I cannot share my hon. Friend's point of view that the Glasgow Corporation was going to wait for some suitable time at which to start a municipal bank. As he well knows, the Corporation did start a bank without asking for the authority of Parliament, and the citizens of Glasgow took a case to the Court of Session and had the Corporation interdicted from carrying on activities which were beyond their powers. It is idle to say that they are only taking these powers to exercise them at some future time when conditions are suitable, seeing that they started them at a time that was the most unsuitable ever known.

I do not know whether any bank, even the biggest and most powerful, is making big profits to-day. I would remind my hon. Friend of one fact. A bank cannot invest all its money. It has to be ready to pay out money to any depositor who asks for it, and, therefore, it must always keep a large amount of cash which is earning no interest at all. In addition to that, it has to keep large reserves against the possibility of the investments it makes dropping, and its having to sell them when they will not realise the money put into them. Any corporation in this country can to-day borrow more cheaply than it could by any chance raise it from the public payments into a municipal bank. But this is the time when the Glasgow Corporation proposes to start a municipal bank. It may have been observed that recently the municipal bank at Birmingham refused to take any new deposits because it could not pay the interest upon them without running itself into difficulties. Another bank in Scotland which shut up last week was liquidated because the corporation which had started it on a rather doubtful legality found that it could borrow money more cheaply than the bank could possibly afford to lend it.

To-day, of all times, there is no case at all for municipal banking, whatever it may be at another time. If Glasgow had come forward and said, "There is no means by which the small person can put his savings into a bank, because the big banks will not take small deposits," if there had been a case of that kind, we might have listened with some sympathy to it. But what is the case in Glasgow? It has the biggest and best savings bank that exists in this country to-day. Of all cities of which it could be suggested that there are not suitable means for conserving the savings of the people, the last city to be suggested is Glasgow. Let me give one or two figures. The bank has three departments. In those three departments they have 378,000 depositors and they added 39,000 last year. The transactions numbered nearly 2,000,000. The deposits of sums not exceeding £l represented 44 per cent. of the total number of the total deposits. The balance due to-day to depositors is over £30,000,000. Its assets as against those deposits are £31,000,000, including the value of the bank building. I wish to correct a statement made by the hon. Member for Gorbals. He spoke of millions of profit having been made.


The Glasgow Corporation at that time were paying 5 per cent. for money, but the bank was paying Glasgow citizens only 2½ per cent.


That is quite right, but the hon. Member forgets the management expenses and the cash that has to be put on one side to be paid out on demand. That cash earns no interest at all. I could enlighten my hon. Friend on the question of profit. Over 99 years, so carefully has the bank been managed and so little has it taken off its depositors, that the whole of the surplus, including buildings, is £1,500,000. Who can say that there is any great profit of millions which can be expected? What this bank has done has been to keep the deposits absolutely safe, and that is the only object that such a bank should have. The intention is to create thrift, and in order to do that you must give an absolute certainty to the man whom you induce to deposit his money. I entirely agree with what was decided long ago by a Treasury Committee when they found this: It seems prima facie preferable that the authority which controls a savings bank should not have the spending of the money at all. Its policy should represent no interest but that of the depositors, and should be directed solely to placing the bank's funds most profitably and wisely. With that statement, I leave this part of the Bill. There is a provision in this Bill dealing with property which has become unoccupied. I am not going to argue the merits of the question now. It may be right or wrong. So far as I am concerned, I do not think it is right. A debt due for rates has always been a personal charge on the debtor, but this alters, in the case of Glasgow, the whole law of Scotland. You propose to have a different law of bankruptcy in Glasgow from what you have in the other communities in Scotland, and I say that you cannot do that by a private Bill. Whether it is right or wrong, it must be done by a straightforward alteration of the public law. There are other matters. There is the question of the Dean of Guild and Deacon Convener. I would say to members of the corporation: What are they making all this pother about? Cannot they bear to see two people who are in general of a different political colour from their own? Are they going to sacrifice the reputation of the Corporation as a great business organisation for such good as they may get from a mere paltry prejudice? I would ask my hon. Friend opposite to revise his point of view.


I sat on the Corporation for five years, and I must confess that whatever advice these two men gave there were plenty of Members of the right hon. Gentleman's own party who did not follow it.


I think the hon. Member will find that a great deal of advice has been given privately. With regard to whether the Lord Provost should be in office for five years or three years, I do not think it is of very great importance, but if we are going to alter the position in Glasgow, let us alter it altogether in Scotland and not in the case of Glasgow only. With regard to the other two matters, I do not think I should be wrong if I took the view that the Glasgow Corporation should not think it worth while to go to the expense of an inquiry under the private Bill system to do what is proposed here. This particular Bill is entirely out of tune and out of tone with the point of view which the great majority of the Members of this House hold, and upon which we are bound, on our own conscience, holding the views that we do and being enjoined by my hon. Friend to express them and carry them through ruthlessly, to express ourselves to-night quite candidly about the matter and to save the Glasgow Corporation and its ratepayers the expense of trying to carry through a Bill which we think is entirely unfortunate. I would therefore venture to advise my friends that it is not worth while carrying this matter through, and, much as I would like in other circumstances to support the Glasgow Corporation, I have come to the conclusion that I cannot on this occasion do anything but oppose the Second Reading of the Bill.

10 p.m.


I desire to express my support of Clause 3 of this Bill. I wish to uphold the proposal to give Glasgow the power to create a municipal bank, and I do so largely because of one's experience in Birmingham. Part of the City of Birmingham lies in my constituency, and I know from conversations and inquiries what a boon the municipal bank in Birmingham is to the working classes and particularly to the small shopkeepers. Influenced largely by the success of the Birmingham bank, for the proof of the pudding is in the eating of it, I shall gladly see Glasgow provided with a similar institution. This is a business proposition. A very large number of the supporters of the municipal bank in Birmingham are Conservatives, and if a proposal was made to destroy the Birmingham municipal bank, there would be a loud outcry, and a substantial part of it would come from Conservatives, who would be the first to object to the destruction of the bank.

I have listened to the prophecies that have been made by various Members on this side as to what would happen if Glasgow had a municipal bank. Exactly the same prophecies were trotted out when the Birmingham bank was started. Those prophecies have proved untrue, and I am not going to allow myself to be influenced by precisely similar prophecies about the possibilities in Glasgow. I am going to pray in aid of my attitude certain words of a very great authority, one whose authority will not be questioned in this House. I wish to tell the House what is the opinion of the Chancellor of the Exchequer with regard to municipal banks. A book was brought out some few years ago, entitled "Britain's First Municipal Savings Bank," written by the manager of the Birmingham bank, Mr. J. P. Hilton, and in that book there is a foreword by the Chancellor of the Exchequer, who says: Reflecting on the contents of these pages, certain questions will naturally arise in the minds of readers. Is this supremely successful experiment to remain unique? Is Birmingham to have the sole monopoly of this fruitful idea, which, in the space of less than eight years, has enabled her citizens to accumulate nearly £8,000,000 of savings? Have we indeed reached the limit of what municipal enterprise should be allowed to attempt if we confine it to a single town? For my part, I would as soon endeavour to imprison a volcano. That is the opinion of the Chancellor of the Exchequer. I will give one other extract, from a speech by the same right hon. Gentleman, quoted in the House and appearing in the OFFICIAL REPORT: You may call it Socialism if you like. I have never been frightened by a name. I do not care whether it is Socialism or not, so long as it is a good thing. I think our experience proves that the municipal savings bank has advantages which other forms of savings banks have not."—[OFFICIAL REPORT, 22nd February, 1928; col. 1690, Vol. 213.] Influenced by those very weighty words from one whose authority we all respect, I wish to give my support to Clause 3 of the Bill.

10.5 p.m.


Before the hon. Member for Gorbals (Mr. Buchanan) leaves the House might I make a slight reference to the initial part of his speech to-night regarding the statement that he and his colleagues were not going to associate themselves with the Labour Members? In so far as the two Labour Members representing the City of Glasgow are concerned, there was no doubt as to what would be the attitude of himself and his colleagues, and I do not think that anyone I know in Glasgow anticipated that they would not adopt the attitude that was expressed by him to-night. I would like to refer to what the right hon. Member for Hillhead (Sir R. Horne) said with regard to the attitude that is adopted in this Bill to the Dean of Guild and the Deacon Convener. The suggestion contained in his speech is that these two are representative of great business organisations. I am prepared to accept the fact that in the early days they had a most valuable and intimate connection with business, but to-day, especially with regard to the Merchants' House, they are looked on more as a charitable organisation than anything else. That practically covers its functions. For that reason we see no reason for continuing a practice that was started, I am informed by the hon. Member for Hackney, Central (Mr. Lock-wood), in 1605. I know a number of people in the various trades in Glasgow, and they do not use the machinery of their Guilds for trade purposes. The persons who are ultimately selected as Deacon Conveners are not selected for their ability to express trade interests. There is absolutely no reason why the practice that has continued so long should still be allowed to continue.

With regard to the Provostship, a gentleman in Glasgow speaking to me on this matter expressed in a terse way what I think is at the back of many Conservative minds. His fear was that if a change were made from the three-year tenure of office we should not get men of dignity and substance to occupy that position. I agree with the hon. Member for Gorbals that there is dignity and substance, and dignity and substance, and I am not prepared to accept the suggestion that members of the Corporation who are not moneyed persons, and who do not live in high social circles, are not equal to keeping up the dignity of Glasgow. This method has not always secured dignity and substance in the Provosts that have gone before.

I want to express my surprise at the attitude that has been adopted in regard to the building of bus bodies. This is a matter that might be termed one of public policy—so termed by the right hon. Member for Hillhead—but it is a matter of extreme importance to Glasgow and, in a differing extent, to the rest of Scotland. Glasgow has had to keep abreast with changes in transport methods, and the Corporation—not because they dislike trams; they are very proud of them—have had to adopt buses as a means of transport. They have already spent no less than between £700,000 and £1,000,000, on buses and equipment, and there is a demand in the city that the fares that have to be charged in respect of the buses should in some way be reduced. Everything that can be provided in order to reduce the upkeep of the buses will help in reducing fares. No one can gainsay the fact that we have built trams satisfactorily, and from the point of view of economical production no one can cast a stone at us. While it may be stated that we are in unfair competition with private firms, that I cannot see. I think it was the hon. Member for South Croydon (Mr. H. Williams) who said that it was unfair to withhold this work from private firms, because if the private firms got the work they would be able to reduce their costs and compete in the export trade. That may or may not be so, but it must be remembered that when a municipality, in vehicle building, has displayed such efficiency as Glasgow, it has not got the country to appeal to. It can only build for its own restricted use. But Glasgow has shown that, notwithstanding the fact that the great field of the whole country is not open to it, it can build trams at the economical rates to which I have referred.

Glasgow has built up machinery in order to eater for its requirements in so far as rolling-stock is concerned. Glasgow has that right now. If you withhold that right in so far as it applies to buses, you may take from Glasgow a right that at present applies, because buses are making inroads, and are becoming very popular. It is possible, owing to their efficiency and suitability, that the buses may at some time supplant the tramcars altogether, and if that takes place you will eliminate—perhaps that is the intention—this productive unit of the Glasgow Corporation. There may be something in the intention of hon. Gentlemen who are opposing this Bill—a hope that in the near future they will be able to eliminate this productive unit. That aspect of the question has to be considered. I wonder why it is that the hon. Member for South Croydon has not been more perturbed with regard to the people who have set themselves to bus building. He made no reference to the railway companies.


I pointed out that the railway companies built their own locomotives. They might have done just the same with regard to coaches.


But that is just what the railway companies are doing—building buses that might go to the bus building concerns. I want to deal with this from the point of view that the ratepayers may in some way be involved in loss. I have here an official statement from the city chamberlain of Glasgow giving in detail the position of this great undertaking. I find that from the depreciation and permanent way renewal fund there has been applied in reduction of debt no less than £4,700,000. The outstanding loan debt on 31st May, 1934, was £3,800,000, and the total amount at the credit of the depreciation and permanent way renewal fund on 31st May, 1934, was no less than £3,900,000. Towards local rates the transport undertaking has paid £3,200,000, and in property and income tax £1,300,000, while they have paid no less a sum than £1,226,000 to the Common Good Fund of the City. The people of Glasgow through the medium of their elected authority have proved themselves to be quite capable of safeguarding the economic interests of the city; and it is well to mention these facts in view of the statements which have been made concerning the need to safeguard the rates of the city.

With regard to the municipal bank question, I wonder why so much fear should be expressed by certain hon. Gentlemen as to the results which would follow in Glasgow if this permission were granted. According to the provisions in the Bill itself, the bank would be carried on in accordance with such regulations as the Treasury may prescribe. We have already been told by the hon. Member for Chislehurst (Sir W. Smithers) that one municipality which got permission to establish such a bank afterwards found that the Treasury conditions were so severe that they decided not to go ahead with the project. I think that is an indication of how effective the Treasury control is in these matters, and, if the Treasury regulations applicable to the municipal bank in Glasgow are to be similar to the regulations applied in the case referred to, there does not seem to be much fear of the interests of the ratepayers being overlooked.


The whole point is, that if you start a municipal bank in Glasgow during a period of cheap money, on a basis of £5,000,000 deposits it will cost the ratepayers £50,000 a year.


I do not wish to go into details, but, speaking from memory, I believe that at the present time outstanding loans are costing the city £3 17s. per cent. on an average. I am not a banker and I do not propose to go into the intricacies of banking with the hon. Member, but I understand that in so far as there is any of this cheap money about which we hear so much, it is all on short term loans. I am inclined to believe that the Corporation of Glasgow might not feel it desirable nor would it be judicious on their part, to try to run the city on short term loans. However that is a matter which could be much better gone into in Committee, and that is another reason why I resent the fact that hon. Members should oppose the Bill going to a Committee. The hon. Member for Gorbals has already dealt with the civic sense which displays itself in Glasgow, and the desire of many ordinary people to bank their money on loans with the Corporation. At one time before Labour influences had made themselves felt, it was not possible to give a sum on loan to the Corporation unless you had at least £50. It was only on the intervention of some Labour representatives that that sum was reduced to £5 and it still stands at £5, and I agree with the hon. Member that there are many people in Glasgow who would like to put money into an institution in which it would be guaranteed to some extent and in which they knew it would be used for the upkeep, welfare and progress of their native city.

Again speaking from memory, I would recall a discussion which I had on one occasion with a friend of mine who was greatly interested in National Savings Associations. I think that there is an arrangement whereby the income in certain localities from national savings certificates is, by agreement with the Government, lent back to the localities to the extent of 50 per cent. That is a recognition of what we want in Glasgow. It is a recognition by the Government that it is desirable to allow money that has been collected in a locality to go back for the benefit and use of that locality. I feel that this question of a municipal bank should receive greater and more detailed consideration than it can have in the House. I was surprised to hear the right hon. Member for Hill-head (Sir R. Horne) state that it was inadvisable to countenance an organisation of this kind in which the directors would also be councillors. That all depends on the point of view from which you look at the question. I do not think it would jeopardise the interest of depositors but would rather protect them. The right hon. Gentleman has his angle of looking at this question and I have mine, and I am inclined to prefer my own view.

The hon. Member for South Croydon (Mr. H. Williams) told us that he was not going to apologise for opposing this Bill, and I think that he was right because geographical divisions do not exist in this House. We are all here representing well-defined interests which have nothing to do with England or Scotland as such, but are based on well-defined interests which are in conflict. It is because the principles of this Bill are contrary to the dominant interests of commerce and trade, and not because of any geographical considerations, that opposition to the Bill has been adduced.

10.23 p.m.


I cannot agree with the concluding sentiment of the hon. Member for St. Rollox (Mr. Leonard). I do not hold that we in this House are representing different interests. We are all representing different parts of the country and we all represent the interests of the country as a whole. I agree with him that it is the right of every Member to take part in a debate which concerns any part of the country, and especially a part which is of great value and interest to the whole Empire. I shall not detain the House long, but I think it right that a Member of the Front Bench should take part in the Debate. It is not in any way doing a disservice to Glasgow or treating that great city with indignity that the whole House of Commons should concern itself in her affairs. It is just because Glasgow is a city of such importance—I believe the second largest in the Empire—that the House of Commons has it as its duty to decide a matter which will affect the fate of all the inhabitants of that city. I rather resented the implied threat of the hon. Member for Govan (Mr. N. Maclean) when he said that if English Members interfered with Scottish business he and his friends would do something terrible to prevent the passage of any English Bill. I do not know how he meant to accomplish it, but there was an unpleasantly menacing tone in the way in which he spoke. There was a complaint from the hon. Member for Gorbals (Mr. Buchanan) as to the method of dealing with the Bill by deciding its fate on Second Reading. I think that objection has been satisfactorily answered by the right hon. Member for Hillhead (Sir R. Horne). We are saving the money of the Corporation of Glasgow by deciding this issue, if we do decide it, on one vote this evening.

The position I take up with regard to the setting up of a municipal bank is that at the present time it is a bad suggestion and that it would be bad business, and not a single Member from the other side of the House has suggested anything to the contrary. Everybody knows that to set up a municipal bank when money is as cheap as it is to-day would be an extremely unwise step. The hon. Member for Gorbals, with his usual ingenuity, suggested that that was not really the issue. He said "Give us the power to set it up and we will do it in our own good time"; but, as has already been pointed out, the Corporation of Glasgow have already gone very far—until they found that they could go no further—towards setting up a bank, and I would ask the hon. Member whether he could give any guarantee that if the Bill passed to-day they would not proceed to set up a bank almost immediately. A proposition of this kind ought to be decided on its merits. It would be a dangerous principle to give municipalities wide powers on the understanding that they were not to exercise them at the present time, but might possibly do so in the future when the course of affairs had changed. There is no immediate prospect, so far as I am aware, of money becoming dearer, and therefore there is no immediate prospect of these powers being needed by a wise corporation of Glasgow or any other city.

Not only is this proposal bad business, but, if I may respectfully say so to hon. Members opposite, it is bad Socialism. The difference between the conditions when a municipal bank was set up in Birmingham and the conditions which exist in Glasgow to-day has been referred to again and again. Not only was money very much dearer then, but it is also a fact that there were then insufficient facilities for people, especially poorer people, to save their money. There was then a real demand for such a bank. Nobody can suggest that there is such a demand in Glasgow to-day. There are two institutions, the Post Office Savings Bank and the Trustee Savings Bank, both working admirably and both conferring great benefits on the community. There is no better example of a Trustee Savings Bank than the one in Glasgow. The hon. Member for Govan said "There are two already, why not have a third?" I always thought that if Socialism stands for anything sensible it does stand for getting rid of unnecessary competition. Here we have two institutions providing the community with what they want and the Socialists coming along and saying, "Start a third." The same observation surely applies to the buses.

The hon. Member for Central Hackney (Mr. Lockwood) made a slight error, which the hon. Member for Govan was quick to pounce upon. He understood that it was the intention of the Bill to hand over the Trustee Savings Bank to the Corporation, and naturally the hon. Member for Govan was delighted to discover him in such a mistake. But it seems to me a very natural mistake to make, and, upon my word, I think it would have been a far more sensible suggestion, far more in accordance with true Socialism, that the Government or the Corporation should take over a going concern and run it in the interests of the community rather than start an opposition concern to compete with it. Hon. Members opposite have often threatened us with the taking over of the Bank of England when they have the opportunity. I believe that is part of their policy. I differ from that policy, I think it would be an error, and I think it might produce many evils; but certainly it would be a very much more sensible proposition than starting an opposition bank. [Laughter.] Hon. Members laugh at that themselves, but that is exactly what they are asking the Corporation of Glasgow to do. They have told us that in the vicinity of Glasgow there are already two firms who supply trams and buses, and yet they say that that is a reason for starting a third business in opposition.


The Corporation of Glasgow already make them, and in that respect the proposal is not to start a new business but to undertake a certain expansion.


I am well aware of what is being done. I have listened with admiration to the way in which the trams and buses are being manufactured, how well they are upholstered and how pleasing to the eye as well as comfortable to the form. If they are so good, they are probably superior to the trams and buses turned out by other firms because they will be made to compete with the products of other firms, and the firm which makes them manages to stay in business. When I consult the figures I find that the Glasgow Corporation have only exercised the power to make tramcars to a very limited extent. From 1919 to 1924 they manufactured 149 bodies in their own workshops, but in 1927 only one sample body. Since then, they have manufactured no tramcars at all.


Is that not connected with the changes that have taken place in regard to alternative methods of travel?


The manufacturers of the tramcars now in use by the Glasgow Corporation have satisfied, and wonderfully satisfied, the people of Glasgow. They have provided all that the people need without attempting to compete with business firms outside. If they had attempted to do so they would have been unable to do so. [HON. MEMBERS: "Why?"] There has been no continuous demand for the manufacture of tramcars, because the people have all that they need, and when you have all that you need you do not want any more. That is exactly the fallacy of a municipality's entering into trades which already satisfactorily supply a demand. When that demand is satisfied, there is no need to make any more, and therefore the municipality's overhead expenses are wasted, the industry which the municipality has created to manufacture for their town is no longer wanted, and the people who have been employed fall out of employment. On the other hand, people who are competing in the ordinary market naturally take their products—tramcars or motor cars, for example—to whatever market may be open to them. When there is a sufficient supply from outside by two business firms who supply one market only, it is very bad business to set up a third competing agency.

The hon. Member for Gorbals told us of the civic spirit of Glasgow. We recognise and admire that civic spirit, but there is nothing more unfortunate than when the civic spirit of a great city is misled, because that may lead to disaster. Anybody who studies, not the ancient history but the recent history, of other countries, say of France and America, know the awful misfortunes which have befallen great cities owing to bad administration, which creeps more easily into municipal government than into the government of a great State. It is therefore dangerous to rely too much upon the civic spirit of a community to support, as they naturally do, their elected governors—temporarily elected governors—and to give powers which may not in the long run be used for the peoples' good. It has been proved this evening, and not been denied, that the powers which the city of Glasgow have asked for could not be used for the good of the people at the present time. Why, then, should we rely, either upon their not using these powers at the present time, or upon some future corporation, of which at the present time we can have no knowledge, not making use of them for the purposes of an unwise project? I think that my hon. Friend the Member for South Croydon (Mr. H. Williams) has fully made out the case for his Amendment, and that, if anyone were inclined to waver while listening to the extremely eloquent and ingenious speech of the hon. Member for Gorbals their faith must have been restored when my right hon. Friend the Member for Hillhead (Sir R. Horne) replied to it. I honestly think that anyone who has listened to the Debate and who has come to it with an open mind will see that no case for the Bill has been made out.

10.36 p.m.


I have listened to discussions on many Private Bills in this House, and have listened to many statements made upon them from the Front Government Bench, but I never knew a more appropriate, or, indeed, I may say, unfortunate statement than the one which has just been made by the Financial Secretary to the Treasury. A House of Commons of whom all except 15 have no local knowledge or interest, but wanted merely a dispassionate and objective statement on the Bill, has received instead an anti-Socialist tirade delivered with greater heat and passion than the hon. Gentleman has ever displayed on any other occasion. It is a complete misuse of the House of Commons, and a complete misunderstanding of the duty which the House is, assembled here tonight to perform. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) did me the honour of recalling the fact that, when a Conservative majority in the Glasgow Corporation—a majority that was objectionable to me—came here with a Bill, I supported it, along with him, although I had considerable objections to the majority that sat on the Glasgow Corporation and managed the affairs of Glasgow at that time.


The hon. Gentleman will remember that a large number of his colleagues voted against the Glasgow Corporation on that occasion.


I agree. I remember that a fair number of Labour Members voted on that occasion against the Second Reading, just as, I gather, the right hon. Gentleman himself is going to do tonight. I think that their view was as wrong as his is. When the largest city in Scotland, and the second city in the Empire, comes to this House, having taken all the trouble of preparing a Measure and having gone to all the expense of promoting it in this House, the House has to be furnished with something better in condemnation of it than has been produced before it takes the responsibility of rejecting the Measure. One point which has been made is that in this Measure for Glasgow there are some things that other Members would not want adopted in their particular area or town. Therefore they say, "Because we do not want it in our town, Glasgow is not to have it in their town, and we must not allow any municipality to have a single activity of any description unless we are prepared to pass a law making that particular activity general for the whole country." Could anyone ever propound a more silly idea of statecraft than that before we can experiment in any direction, anything upon which we want to experiment has to be adopted broadcast over the whole country? Why come here and talk, as hon. and right hon. Gentlemen always talk when it suits them, about the great institution of local government that we have in this country, and of the fine men who are doing that work, and that we in the central Government must not do anything that would interfere with their duties and with the carrying out of their functions? If that is more than mere lip-service to local government, and if local government is really respected by this House, then here is a municipality, Glasgow, asking to try out certain things which are not generally done throughout the country because of your class and political prejudices. There has been nothing else here to-night from that side of the House except political prejudices.

We have had a long story from one or two hon. Gentlemen, notably the hon. Member for South Croydon (Mr. H. Williams) and the hon. Member for Chislehurst (Sir W. Smithers). I am always glad to hear them giving of their knowledge on expert matters like the running of banks. All that they and the right hon. Gentleman the Member for Hillhead have told us is that it is a difficult thing to run a bank successfully. I knew that before they started talking. Everyone of them has paid tribute to the tremendous work which has been done by the Glasgow Savings Bank. I wonder if they know that the hon. Member for Gorbals (Mr. Buchanan), the hon. Member for Shettleston (Mr. McGovern) and myself are all directors of that bank, and that the control of that bank is vested in a certain number of people. We are not the only three directors. The 15 Members of the City of Glasgow are all trustees, governors, or whatever the term may be of the Trustee Savings Bank. Its governing body is drawn entirely from publicly-elected people. When the hon. Member for South Croydon and the hon. Member for Chislehurst tell mo that it is difficult to run a bank successfully, I say that I know better than they do, because we are running one, and running it successfully.

The one thing in this Bill to which objection is made is the municipal bank. There is one thing with which I agree in the propaganda speech of the Financial Secretary to the Treasury, and that is that this Bill is not Socialism. Socialism will not come to this country in that way. Glasgow is doing its bit for Socialism. There were 50,000 people demonstrating in the streets of Glasgow yesterday because of unemployment. That is the way in which Socialism is coming, and not merely by coming here with a Bill to ask for permission to run a municipal bank. That there were 50,000 people demonstrating in Glasgow yesterday is what you have to consider when fighting Socialism, and not a private Bill brought in in a perfectly legitimate way through perfectly legitimate channels. They come here asking for powers to do certain things that any municipality has a perfect right to ask for and that this House has no right to withhold from them. [HON. MEMBERS: "Oh!"] I repeat that this House has no right to withhold from them. This House has the right to examine any Bill coming from any corporation and to say: "Is there something in this Bill that is injurious to the general body politic?" If so, this House has the right to reject it, but when a corporation comes forward, after due and proper consideration, and asks for powers to carry out certain activities that they believe will be for the enhancement of the general civic life, it is the duty of this House to give them the necessary powers to enable them to proceed with that civic work.

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

The House divided: Ayes, 52; Noes, 190.

Division No. 121.] AYES. [10.47 p.m.
Acland, Rt. Hon. Sir Francis Dyke Groves, Thomas E. Maxton, James
Addison, Rt. Hon. Dr. Christopher Grundy, Thomas W. Milner, Major James
Allen, William (Stoke-on-Trent) Hall, George H. (Merthyr Tydvil) Palmer, Francis Noel
Aske, Sir Robert William Janner, Barnett Parkinson, John Allen
Attlee, Clement Richard Jenkins, Sir William Rathbone, Eleanor
Batey, Joseph John, William Rea, Walter Russell
Brown, C. W. E. (Notts., Mansfield) Jones, Henry Haydn (Merioneth) Salter, Dr. Alfred
Buchanan, George Kirkwood, David Smiles, Lieut.-Col. Sir Walter D.
Cleary, J. J. Lansbury, Rt. Hon. George Smith, Tom (Normanton)
Cripps, Sir Stafford Lawson, John James Thorne, William James
Daggar, George Leonard, William Tinker, John Joseph
Davies, Stephen Owen Logan, David Gilbert Williams, David (Swansea, East)
Denman, Hon. R. D. Lovat-Fraser, James Alexander Williams, Edward John (Ogmore)
Evans, David Owen (Cardigan) Lunn, William Williams, Thomas (York, Don Valley)
Gardner, Benjamin Walter McEntee, Valentine L. Wilmot, John
Gillett, Sir George Masterman McGovern, John Wood, Sir Murdoch McKenzie (Banff)
Grenfell, David Rees (Glamorgan) Maclay, Hon. Joseph Paton
Griffiths, George A. (Yorks, W. Riding) Maclean, Neil (Glasgow, Govan) TELLERS FOR THE AYES.—
Mr. D. Graham and Mr. Paling.
Acland-Troyte, Lieut.-Colonel Dixey, Arthur C. N. Leech, Dr. J. W.
Agnew, Lieut.-Com. P. G. Doran, Edward Leighton, Major S. E. P.
Albery, Irving James Duncan, James A. L. (Kensington, N.) Liddall, Walter S.
Alexander, Sir William Dunglass, Lord Lindsay, Noel Ker
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Eastwood, John Francls Lumley, Captain Lawrence R.
Anstruther-Gray, W. J. Elliot, Rt. Hon. Walter Mabane, William
Bailey, Eric Alfred George Ellis, Sir R. Geoffrey MacAndrew, Lieut.-Col. C. G. (Partick)
Baldwin-Webb, Colonel J. Emmott, Charles E. G. C. MacAndrew, Capt. J. O. (Ayr)
Balfour, George (Hampstead) Emrys Evans, P. V. Macdonald, Capt. P. D. (I. of W.)
Balfour, Capt. Harold (I. of Thanet) Essenhigh, Reginald Clare McKie, John Hamilton
Barclay-Harvey, C. M. Everard, W. Lindsay McLean, Major Sir Alan
Bateman, A. L. Fleming, Edward Lascelles McLean, Dr. W. H. (Tradeston)
Beaumont, M. W. (Bucks., Aylesbury) Fremantle, Sir Francis Magnay, Thomas
Beaumont, Hon. R. E. B.(Portsm'th, C.) Ganzoni, Sir John Martin, Thomas B.
Benn, Sir Arthur Shirley Gauit, Lieut.-Col. A. Hamilton Mayhew, Lieut.-Colonel John
Blaker, Sir Reginald Gilmour, Lt.-Col. Rt. Hon. Sir John Mills, Sir Frederick (Leyton, E.)
Blindell, James Gledhill, Gilbert Mills, Major J. D. (New Forest)
Boulton, W. W. Glossop, C. W. H. Molson, A. Hugh Elsdale
Bower, Commander Robert Tatton Gluckstein, Louis Halle Moore-Brabazon, Lieut.-Col. J. T. C.
Bracken, Brendan Goff, Sir Park Moreing, Adrian C.
Braithwaite, J. G. (Hillsborough) Goodman, Colonel Albert W. Morris, John Patrick (Salford, N.)
Briscoe, Capt. Richard George Grenfell, E. C. (City of London) Munro, Patrick
Broadbent, Colonel John Gretton, Colonel Rt. Hen. John Nation, Brigadier-General J. J. H.
Brocklebank, C. E. R. Hacking, Rt. Hon. Douglas H. Normand, Rt. Hon. Wilfrid
Brown, Col. D. C. (N'th'l'd., Hexham) Hall, Capt. W. D'Arcy (Brecon) Nunn, William
Brown, Ernest (Leith) Hanbury, Cecil O'Donovan, Dr. William James
Brown, Brig. -Gen. H. C. (Berks., Newb'y) Hannon, Patrick Joseph Henry Pearson, William G.
Burghley, Lord Harbord, Arthur Peat, Charles U.
Burgin, Dr. Edward Leslie Hartington, Marquess of Penny, Sir George
Burnett, John George Haslam, Sir John (Bolton) Perkins, Walter R. D.
Carver, Major William H. Headlam, Lieut.-Col. Cuthbert M. Petherick, M.
Castlereagh, Viscount Henderson, Sir Vivian L. (Chelmsford) Peto, Geoffrey K.(Wverh'pt'n, Bilston)
Christie, James Archibald Hepworth, Joseph Pike, Cecil F.
Clarry, Reginald George Hornby, Frank Powell, Lieut.-Col. Evelyn G. H.
Clydesdale, Marquess of Horne, Rt. Hon. Sir Robert S. Procter, Major Henry Adam
Cobb, Sir Cyril Horobin, Ian M. Radford, E. A.
Cochrane, Commander Hon. A. D. Horsbrugh, Florence Raikes, Henry V. A. M.
Colfox, Major William Philip Howitt, Dr. Alfred B. Ramsay, Capt. A. H. M. (Midlothian)
Collins, Rt. Hon. Sir Godfrey Hudson, Robert Spear (Southport) Ramsay, T. B. W. (Western Isles)
Conant, R. J. E. Hume, Sir George Hopwood Ramsbotham, Herwald
Cook, Thomas A. Hunter, Capt. M. J. (Brigg) Rankin, Robert
Cooper, A. Duff James, Wing-Corn. A. W. H. Reed, Arthur C. (Exeter)
Craven-Ellis, William Jamleson, Douglas Remer, John R.
Crooke, J. Smedley Joel, Dudley J. Barnato Rhys, Hon. Charles Arthur U
Crookshank, Capt. H. C. (Gainsb'ro) Jones, Lewis (Swansea, West) Rickards, George William
Croom-Johnson, R. P. Ker, J. Campbell Ross Taylor, Walter (Woodbridge)
Cross, R. H. Kerr, Lieut.-Cot. Charles (Montrose) Russell, Hamer Field (Sheffield, B'tside)
Crossley, A. C. Kerr, Hamilton W. Rutherford, Sir John Hugo (Llverp'l)
Davies, Mal. Geo. F. (Somerset, Yeovil) Keyes, Admiral Sir Roger Salmon, Sir Isldore
Davison, Sir William Henry Kimball, Lawrence Salt, Edward W.
Denville, Alfred Lamb, Sir Joseph Quinton Samuel, M. R. A. (W'ds'wth, Putney).
Dickie, John P. Law, Sir Alfred Sanderson, Sir Frank Barnard
Shaw, Helen B. (Lanark, Bothwell) Strickland, Captain W. F. Waterhouse, Captain Charles
Shaw, Captain William T. (Forfar) Stuart, Hon. J. (Moray and Nairn) Wedderburn, Henry James Scrymgeour
Shepperson, Sir Ernest W. Sugden, Sir Wilfrid Hart Wells, Sydney Richard
Smith, Bracewell (Dulwich) Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.) Williams, Charles (Devon, Torquay)
Smith, Louis W. (Sheffield, Hallam) Templeton, William P. Willoughby de Eresby, Lord
Smith, Sir Robert (Ab'd'n & K'dlne, C.) Thomson, Sir Frederick Charles Wilson, Clyde T. (West Toxteth)
Smithers, Sir Waldron Todd, A. L. S. (Kingswinford) Windsor-Clive, Lieut.-Colonel George
Somerville, Annesley A. (Windsor) Train, John Womersley, Sir Walter
Soper, Richard Tufnell, Lieut.-Commander R. L.
Spears, Brigadier-General Edward L. Wallace, Captain D. E. (Hornsey) TELLERS FOR THE NOES.—
Stevenson, James Wallace, Sir John (Dunfermline) Mr. John Lockwood and Mr.
Stones, James Ward, Lt.-Col. Sir A. L. (Hull) Herbert Williams
Stourton, Hon. John J. Warrender, Sir Victor A. G.

Question put, and agreed to.

Words added.

Second Reading put off for six months.