§ Amendment proposed [27th March]: In page 70, line 30, to leave out Subsection (2).—[Duchess of Atholl.]
§ Question again proposed, "That the words proposed to be left out, to the words 'incorporated,' in line 38, stand part of the Clause."
§ 3.50 p.m.
§ Sir JOHN WARDLAW-MILNEWhen the Committee reported Progress last night we were engaged in discussing an Amendment moved by the Noble Lady the Member for Perth (Duchess of Atholl) to leave out Sub-section (2), and I was endeavouring to show that the Noble Lady's apprehensions with regard to the reason for the insertion of the Sub-section were not well founded. I was dealing with the past history of this matter and as some hon. Members may not have been present last night, it might be desirable for me to say that the Noble Lady who moved the Amendment and the Noble Lord the right hon. Member for Aldershot (Viscount Wolmer) who supported it, did so because they felt that it was discriminatory legislation against British concerns and British subjects in India. The Noble Lady began by saying that she believed the insertion of this Sub-section was due to action taken at the time of the boycott in 1930–31, and I endeavoured to assure her that it was a much older question than that. I pointed out to the Committee that the terms which the Government of India would require from a company or firm which was to receive a subsidy from Indian moneys had been under discussion for at any rate 20 years. I remember very distinctly the time when trade development boards were set up in certain Provinces in India before the War. At that time, the principle referred to in this Sub-section was laid down by the Government of India, and, therefore, there is nothing new in the principle that the Government of India should lay down conditions requiring that companies 2099 who are to receive public money in the form of subsidies or bounties should have a certain number of Indian shareholders and Indian directors, and give reasonable facilities to the trades and industries concerned for the training of apprentices.
It is an old story, and I can assure the Noble Lady that it has nothing to do with the boycott of 1930–31. It began, to my knowledge, at least 20 years before. If she will turn to the report of the Joint Select Committee she will find that one of the reasons given by the Joint Select Committee for recommending a continuance of this system is the findings of the external capital committee which was set up by the Government of India in 1925. That committee dealt with the question of the inflow of capital into India and the conditions under which it should be employed. I will not weary the Committee with the general terms of reference of that committee, but I should like to quote that part of their report which deals with this particular Sub-section. Let me say that this external capital committee consisted of members of both Chambers of the Legislature of that time, and seems to have had half and half of Europeans and Indians in its composition. In paragraph 27, which I should like to read, the committee said:
Where however, very definite concessions are granted to particular concerns, it is obvious that stipulations to safeguard Indian interests can be imposed without any practical difficulty, so long as the stipulations themselves are reasonable. We would therefore agree with the view of the Fiscal Commission and the Legislature"—It is evident that this matter was not only considered by this committee, but had been previously considered by the Legislature—that definite restrictions might he imposed in the case of concessions receiving bounties or similar definite pecuniary assistance.Later on, in paragraph 28, the committee said:In the case of bounties or similar definite pecuniary assistance, we consider that restrictions might be imposed of the nature described in Section 5 of the Steel Industry Protection Act of 1924, namely:2100 The point I want to make is that this is by no means a new thing; secondly, that it has nothing to do, as far as I know, with the boycott of 1930–31, and, in the third place, that the Sub-section is carrying out precisely the recommendations of the Joint Select Committee, which were based largely upon the report of the external capital committee; an extract from whose report I have just read. As far as I know, there has never been in India or in England from any commercial organisation any objection whatever during all these years to the terms which have been laid down. From my own knowledge, these conditions were accepted by English business firms in India and by chambers of commerce before the War as reasonable in those cases in which a bounty or subsidy was to be given from Indian revenue. It is a matter of opinion whether it is right or not for India to claim justification for making these conditions. That is a matter of opinion, but it is misleading the Committee to suggest that this matter has anything to do with the question of legislative changes at the Centre or in the Provinces, or to any question of constitutional reform. It goes much further back than the Act of 1919.
- (1) in all cases of facilities for the technical training of apprentices, and
- (2) in the case of incorporated companies—(i) that the companies should be registered under the Indian Companies Act of 1913 with rupee capital, and (ii) that a reasonable proportion of the directorate should be Indian."
There is one other point to which I must refer. The Noble Lord the right hon. Member for Aldershot made a great point about the indignity put upon British trades and suggested that it was impossible for anyone to believe that we should claim the right to make any such conditions in England. I can only speak for myself, but, if the British taxpayer's money is to be given in the form of a subsidy or bounty to any firm in this country, I think that most of us would endeavour to insist that there should be some security for British working people and that the control of the company should be British in fact.
§ Brigadier-General Sir HENRY CROFTCan my hon. Friend quote a single case where that has happened?
§ Sir J. WARDLAW-MILNEI was going on to say that I know of no case, because conditions here and in India are completely different from an industrial point of view. India is developing new industries in which new conditions exist, but this country is very highly industrialised and, so far as I know, that point has not arisen. I should think, however, 2101 it is perfectly possible that in connection with key industries we should certainly insist on conditions of that kind, and I do not think it is unreasonable. In any case, whether this exists or does not exist in this country, I say the conditions in India are utterly different, and, although I hope that subsidies will not be imposed to any great extent, I do not believe that any commercial body in India has ever thought it was unreasonable to look after the promotion of their own people and industries, and to give facilities for trading by their own people. I do not want to take the matter further, but I do wish to make it perfectly clear to the Committee that this matter has nothing to do with constitutional reform. It is a matter of opinion whether we are justified in putting in these conditions or not, but, at any rate, they have behind them long practice and precedent.
§ 4.2 p.m.
§ Sir H. CROFTMy hon. Friend who has just given us such an interesting address on this subject has pointed out that the principle, as I gathered, had been accepted in commercial circles in India. That may be so or not, but here we are legislating, possibly, for all time on this question, and we have to consider the whole subject from the point of view of the spirit of partnership in the days to come. It must be clear to my hon. Friend that it is a very extraordinary position to take in permanent legislation, for the reason that it is almost ruling out the fact that British firms in India, and British directors, and so on, are all members of an Imperial system. For the first time, it seems, we are laying down here that there is to be a segregation of the subjects of His Majesty in different countries. The point I want the Committee to consider is this: Suppose we have in this country a subsidy on sugar. Is it reasonable to lay down that, no matter where the capital comes from, the majority of directors—
§ Sir J. WARDLAW-MILNEI am afraid my hon. and gallant Friend did not fully follow the question. It is not a question of companies at present engaged. They, clearly, do not have to comply with these conditions. All that the Sub-section refers to is companies not engaged "in that branch of trade or industry." That is rather a different thing.
§ Sir H. CROFTI quite understand the point. Even so, what difference does that make? If you have a subsidy on sugar, or whatever it may be, in this country, it really seems that we are going back from the whole idea of Imperial unity in declaring that there must not be a majority on a board in this country of Canadians or Australians, and we cannot have two Canadians, two Australians and three Englishmen. That seems to me to be an extraordinary principle to lay down. Even more, we have a right to say that this restrictive legislation should not be put upon the Statute Book. Although my hon. Friend has been among gentlemen who have had a feeling of depression for a long time in India, he must realise that here we are starting something which is completely different from anything which exists, so far as I know.
§ Sir H. CROFTI refer to the general depression of those engaged in trade in India, and gave up the fight. I feel most strongly that here you have a set of circumstances entirely different from those existing in any other part of the world. All those industries in India have been built up, I think, under the guidance of British industrial leaders, captains of industry who have gone out and given the benefit of their knowledge and skill, and helped those industries to go forward. Under the benign rule of Great Britain you have raised those industries to such a condition that India has become one of the greatest trading countries in the world. The whole structure of India has been built up by British skill, British energy and determination, and British credit. Now we come along and say "Oh, yes; but if ever in future there is a subsidy in India, you must not have more than 50 per cent. of the directors British." The hon. Gentleman seemed to think that in future we must not regard ourselves as having any equal share with Indians, though without our defence, without the British Navy, where would India be? An inferiority complex has got hold of the hon. Gentleman. I think that the whole principle of this part of the Clause is wrong.
2103 I will ask one other question for the Committee to consider. Why these restrictions on Englishmen? What about Moslems? Are you going to allow a majority of Moslems to sit on any board in India? Are Moslems any more indigenous to the soil than our own people? Take the dynasty of Akbar, who had not a drop of Indian blood in his veins. Then there were the Greeks, the Syrians, the Persians, the Afghans, and the Moguls? The whole trouble is that we are imagining there is such a thing as Indian people. It is all nonsense, and the hon. Gentleman knows that it is. I ask, why should we discriminate against our own countrymen in the future? We should realise that there is a real partnership of Britons wherever they choose to go in the Empire, and who should have as far as we can lay down in this Committee, equal opportunities? If there were a subsidy in this country, and a company was formed giving employment to British people, I think we should be entirely illogical to try to prevent a majority of Indian directors in such a company. We have never done it in the past, and I think it would be a great mistake in the future. The hon. Member, I think, spoke of key industries, having in mind some secret industry for war purposes, and so on. That might be necessary, but it has nothing to do with general commercial business. I hope the Government will consider accepting this Amendment.
§ 4.12 p.m.
§ Mr. ATTLEEIt is very interesting to hear an Imperialist like the hon. and gallant Gentleman get well off the mark. He is far more an Imperialist, and knows far more about trade than people who have been trading in India for many years.
§ Sir H. CROFTI have traded with India a great deal more than the hon. Gentleman.
§ Mr. ATTLEEI was only comparing the hon. and gallant Gentleman's slightly inferior knowledge with that of the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) and other gentlemen who have traded in India, and who have, apparently, for years accepted this condition. I was very much interested in the doctrine put forward by the hon. and gallant Gentleman, but, after all, if the 2104 people of India have been conquered by all sorts of nations, what about ourselves? So far as I know, most of the subsidies we give, at any rate with regard to sugar, go into the pockets of the Dutch. I was struck by the extraordinary way in which the hon. and gallant Gentleman regards all the people who went to India as wonderful philanthropists, going there and giving everything to India, with no idea of making any money out of it.
§ Sir H. CROFTWhere will the hon. Gentleman find anything in what I said which would bear that interpretation? If you are talking of your own country, no such gifts have been given by any other country.
§ Mr. ATTLEEIf the hon. and gallant Gentleman meant that, why did he boast that we have done all this for India? I do not think we have done it only for India, but that we have had a very good quid pro quo for it. As a matter of fact, we went to India to trade, and this country gained by it just as much as India did. It is an extraordinary thing that the hon. and gallant Gentleman takes that line. I should be very much surprised if when a suggestion was made here that the people of this country should give subsidies to all kinds of people outside, the hon. and gallant Gentleman would not be on his hind legs in protest.
§ 4.14 p.m.
§ Mr. RAIKESThe hon. Member for Limehouse (Mr. Attlee) seemed completely to misunderstand the argument put forward by the hon. and gallant Baronet the Member for Bournemouth (Sir H. Croft). Probably the only people indigenous to India are the depressed classes, but, so far as Great Britain is concerned, we who came in and gave a great deal of security, education, sanitation and so on to India, at any rate should have the same degree of partnership as those conquerors in the past. Is there any question of exploitation ip asking that, so far as we are concerned, we who have given greater benefits than past conquerors, at any rate should have an equal right to see that British trade is looked after? If the Sub-section passes into law, it means that we shall definitely lay down in an Act of Parliament for all time a discrimination with regard to 2105 the number of directors of British companies and so on, which shall be allowed, without any reciprocity.
Reference has been made to the beet-sugar subsidy. I would rather like to know how the Government can square their attitude towards that subsidy with the attitude which they are adopting at the moment towards this Amendment. In connection with this beet-sugar subsidy we make use very largely of Dutch capital and Irish labour, and the British taxpayer has the privilege of paying the subsidy in order to keep things going. If the Government are prepared to go as far as that with regard to sugar, it is curious that they should in an Act of Parliament encourage India to take very powerful steps against any reciprocal treatment of British trading companies in the future. It is on the broad basis of the partnership of British interests being safeguarded, on an equality with so-called Indian interests, and on the ground that we are all British subjects, that I have much pleasure in supporting the Amendment.
§ 4.17 p.m.
§ Sir S. HOAREI suggest to the Committee that we are really making much too big a controversy of a very limited proposal. It is quite unnecessary to go into all the historical facts which were entered on by my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). I was very much tempted to follow him, but I would have some little controversy with him about some of his historical facts, and I shall not fall into the temptation. I come back rather to the actual Clauses of the Bill. There is no question whatever of undermining the principle of the British partnership with India. The British partnership is safeguarded in the discriminatory Clauses. This particular Clause is a Clause of much more limited scope. It might be thought, in listening to the speeches that have been delivered, that this Clause was striking at the very foundation of the provisions that we are making against discrimination generally. That is not the state of affairs. All that this proposal does is to allow, at a definite date in future, certain definite conditions to be imposed upon the granting of subsidies financed by money from the pockets of Indian taxpayers. Every existing British company that complies with these condi- 2106 tions as to capital and directors and the facilities for trading, is qualified for these subsidies. Moreover, the disqualifications for future companies come into force only after a subsidy Act has actually been passed; that is to say, they do not come into force until first of all the Federal Government has been brought into operation, and, secondly, the Federal Government has passed a subsidy Act. When the Federal Government has passed a subsidy Act, presumably giving a subsidy to a particular kind of trade or company, then still all British existing companies will be eligible for that subsidy.
§ Mr. MOLSONEvery existing company engaged at present in that industry.
§ Sir S. HOARECertainly, that is exactly what I am saying. I do not see the point of the intervention. Of course it is every existing company engaged in that industry. The conditions about the board of directors and so on will only come into operation after that Act has been passed. This Clause has a very limited scope. I should have thought that if there was a complaint to be made it might be made by Indians that we were restricting the conditions too closely. We did, however, feel it just and wise to follow the lines of these proposals, taking into account that we are continuing what has actually been in operation for many years. There is a great deal to be said for continuing a plan that has existed without any grievance being raised, so far as I know, by British industry. I would have thought that with the safeguards I have described, this was a very modest proposal which raised none of the issues which have been suggested in certain speeches—a proposal just enough to the Indian taxpayer and to the British trader and British company. I hope we shall not be led astray into exaggerating the scope of the proposal, but that we shall accept it on the ground that I have put forward, as a proposal which is just in the interests both of Indians and Englishmen.
§ 4.22 p.m.
Duchess of ATHOLLThere are two questions I would ask. Can my right hon. Friend assure us that the conditions stated in the Bill already exist in some Act of the Indian Legislature, because we have just understood from my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that they 2107 were only recommendations made by a committee of the Indian Legislature in 1925. My second question is, can my right hon. Friend tell me of any corresponding provisions in any Act of this Parliament as proposed to be applied either to India or any other subjects in the Empire?
§ Sir S. HOAREI can answer those questions at once. When I was Secretary of State for Air I remember that I was responsible for the starting of the Imperial Airways Company. There were very much the same kind of conditions for the board of directors that we are here suggesting for subsidised companies in India. There may be other cases, but that case occurred to my mind because it came within my own knowledge.
§ Sir H. CROFTDoes that apply to the citizens of various countries of the Empire, for instance to New Zealanders?
§ Sir S. HOARECertainly. As far as I remember the intention was to have a definitely British Board. My Noble Friend asked another question. As far as I can remember—I will verify the point —these conditions are set out in' some of the Indian Acts.
§ Mr. MOLSONIn the Steel Protection Act of 1924.
§ Sir S. HOAREMy hon. Friend reminds me that it was in the Steel Protection Act. That was an Act under which subsidies were given.
Duchess of ATHOLLDoes my right hon. Friend think that the question of a subsidy to ordinary trade and industry, as indicated in the Bill, is quite a parallel to the grant of a subsidy to such a service as Imperial Airways?
§ Sir S. HOAREI do not see any difference in kind. I think my Noble Friend really exaggerates the dangers in this proposal. I cannot believe that any Government, particularly an Indian Government which has not at its disposal large surpluses of revenue, is likely to give subsidies on a big scale. Certainly that has been the experience of the last 10 to 15 years; although it has been possible to give subsidies they have been given very rarely and with rather a niggardly hand. I do not believe that the danger is as great as some of my hon. Friends think it to be.
§ 4.24 p.m.
Mr. CHARLES WILLIAMI do not wish in any way to contradict my right hon. Friend, but when he says that this is a small subject I would reply that no subject of trade as between this country and India can possibly be a small subject in these days. Because my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) or any other person says that this sort of thing has gone on for 20, 30 or 100 years, that is no reason for not changing it. We are changing many things in this Bill. I can quite understand that as a general principle you may lay it down that if you use Indian money for subsidies the Indians should draw it. But that is not the position in this country. Before we lay these conditions down in the Bill we should at any rate have assurances on one or two points. The most important point of all is the question of the air. We can quite easily imagine an Indian Government subsidising a company which cuts across the whole system of Imperial air development between here and Australia. I do not wish to develop the point, because I am most anxious to work in with the whole agreement.
§ Sir S. HOAREMy hon. Friend seems to have forgotten that Imperial Airways would be eligible for the subsidy.
Mr. WILLIAMSI have not forgotten that. But that is not the point. What is the position to-day may be completely and entirely changed by the Federal Government in the course of the next few years. I know the safeguards, but I would draw attention to this: You have a special provision at the end of this Clause as regards ships. It has been thought advisable to include that provision because the shipping industry is a very powerful one in this country. The air industry has not the same power as the shipping industry. If I may say so, however, we have in the Secretary of State for India a very great ex-Air Minister. Many of us think very highly of him, if I may say so—in that respect. But I make this appeal to him: I shall be satisfied if he will assure me that he will look into the whole question from the point of view of the air between now and the Report stage, and see whether it is not possible to put in some new Sub-section dealing with air. It is an important matter.
2109 Shipping would not have been put in without some special reason. Many of us feel that even if subsidies are included, with the safeguards, and the Government insists on them, they must have them; but I ask my right hon. Friend particularly to look into the air question. If many people outside had had the time to go into the details of the Bill, and if members of the Committee who have not followed the Debate had realised that there is any sort of danger, we would have been able to get something very much on the same lines as the shipping interests have been fortunate enough to get.
§ Sir J. WARDLAW-MILNEThe hon. Member seems to think that shipping people are in a special position but if he refers to Sub-section (3) he will see that it merely states that a company shall be deemed to be carrying on business in India if it owns ships which habitually trade to and from ports in India. They are in no different position from other companies.
Mr. WILLIAMSI understand that and the point is that people who are dealing with air transport to India should be in exactly the same position. If they were treated in the same way as shipping is being treated I think it would meet the point.
§ Sir S. HOAREMy hon. Friend the Member for Torquay (Mr. C. Williams) is not often absent from our proceedings, but I think it must have been one of his rare absences that we actually put air- craft into the same category as ships in this respect.
Mr. WILLIAMSI was present and indeed I congratulated the right hon. Gentleman on what he did, but I submit that the claim of the air has not yet been fully met in this respect.
§ Question put, "That the words proposed to be left out, to the word 'incorporated,' in line 38, stand part of the Clause."
§ The Committee divided: Ayes, 218; Noes, 32.
2111| Division No. 124.] | AYES. | [4.32 p.m. |
| Acland, Rt. Hon. Sir Francis Dyke | Despencer-Robertson, Major J. A. F. | Hunter, Dr. Joseph (Dumfries) |
| Agnew, Lieut.-Com. p. G. | Dobbie, William | Hutchison, W. D. (Essex, Romf'd) |
| Albery, Irving James | Doran, Edward | Inskip, Rt. Hon. Sir Thomas W. H. |
| Allen, Sir J. Sandeman (Liverp'l, W.) | Dugdale, Captain Thomas Lionel | Iveagh, Countess of |
| Allen, William (Stoke-on-Trent) | Duggan, Hubert John | James, Wing-Com. A. W. H. |
| Assheton, Ralph | Eales, John Frederick | Jenkins, Sir William |
| Attlee, Clement Richard | Ellis, Sir R. Geoffrey | John, William |
| Balniel, Lord | Elliston, Captain George Sampson | Jones, J. J. (West Ham, Silvertown) |
| Beaumont, Hon. R. E. B. (Portsm'th, C.) | Elmley, Viscount | Jones, Morgan (Caerphilly) |
| Bevan, Aneurin (Ebbw Vale) | Emrys-Evans, P. V. | Ker, J. Campbell |
| Blindell, James | Evans, Capt. Arthur (Cardiff, S.) | Kirkpatrick, William M. |
| Bossom, A. C. | Evans, R. T. (Carmarthen) | Lamb, Sir Joseph Quinton |
| Boulton, W. W. | Fielden, Edward Brocklehurst | Lansbury, Rt. Hon. George |
| Briscoe, Capt. Richard George | Foot, Dingle (Dundee) | Law, Richard K. (Hull, S. W.) |
| Brocklebank, C. E. R. | Foot, Isaac (Cornwall, Bodmin) | Lawson, John James |
| Brown, C. W. E. (Notts., Mansfield) | Galbraith, James Francis Wallace | Leech, Dr. J. W. |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Gardner, Benjamin Walter | Leighton, Major B. E. P. |
| Brown, Ernest (Leith) | Gillett, Sir George Masterman | Leonard, William |
| Buchanan. George | Gilmour, Lt.-Col. Rt. Hon. Sir John | Lewis, Oswald |
| Bullock, Captain Malcolm | Goff, Sir Park | Liddall, Walter S. |
| Burgin, Dr. Edward Leslie | Goldie, Noel B. | Lister, Rt. Hon. Sir Philip Cunliffe- |
| Butler, Richard Austen | Graham, D. M. (Lanark, Hamilton) | Little, Graham-, Sir Ernest |
| Cadogan, Hon. Edward | Greenwood, Rt. Hon. Arthur | Lloyd, Geoffrey |
| Campbell-Johnston, Malcolm | Grenfell, David Rees (Glamorgan) | Lockwood, John C. (Hackney, C.) |
| Caporn, Arthur Cecil | Griffith, F. Kingsley (Middlesbro', W.) | Lovat-Fraser, James Alexander |
| Cautley, Sir Henry S. | Griffiths, George A. (Yorks, W. Riding) | Lunn, William |
| Cayzer, Sir Charles (Chester, City) | Grigg, Sir Edward | Mabane, William |
| Cazalet, Capt. V. A. (Chippenham) | Grimston. R. V. | MacAndrew, Lieut.-Col. C. G. (Partick) |
| Chamberlain, Rt. Hon. N. (Edgbaston) | Groves, Thomas E. | MacAndrew, Capt. J. O. (Ayr) |
| Cleary, J. J. | Grundy, Thomas W. | Macdonald, Gordon (Ince) |
| Conant, R. J. E. | Hacking, Rt. Hon. Douglas H. | MacDonald, Rt. Hon. J. R. (Seaham) |
| Cook, Thomas A. | Hall, George H. (Merthyr Tydvil) | MacDonald, Malcolm (Bassetlaw) |
| Cooke, Douglas | Hanbury, Cecil | Macdonald, Capt. P. D. (I. of W.) |
| Copeland, Ida | Hannon, Patrick Joseph Henry | McEntee, Valentine L. |
| Cove, William G. | Harvey, Major Sir Samuel (Totnes) | McEwen, Captain J. H. F. |
| Cripps, Sir Stafford | Haslam, Henry (Horncastle) | McGovern, John |
| Crookshank, Col. C. de Windt (Bootle) | Hellgers, Captain F. F. A. | McKie, John Hamilton |
| Crookshank, Capt. H. C. (Gainsb'ro) | Henderson. Sir Vivian L. (Chelmsford) | McLean, Dr. W. H. (Tradeston) |
| Crossley, A. C. | Herbert, Capt. S. (Abbey Division) | Makins, Brigadier-General Ernest |
| Daggar, George | Hills, Major Rt. Hon. John Waller | Manningham-Buller, Lt.-Col. Sir M. |
| Davidson. Rt. Hon. J. C. C. | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Margesson, Capt. Rt. Hon. H. D. R. |
| Davies, David L. (Pontypridd) | Hope, Capt. Hon. A. O. J. (Aston) | Martin, Thomas B. |
| Davies, Maj. Geo. F. (Somerset, Yeovil) | Hornby, Frank | Mason, David M. (Edinburgh, E.) |
| Davies, Rhys John (Westhoughton) | Howitt, Dr. Alfred B. | Mason, Col. Glyn K. (Croydon, N.) |
| Maxton, James | Rea, Walter Russell | Strickland, Captain W. F. |
| Mills, Sir Frederick (Leyton, E.) | Reid, James S. C. (Stirling) | Stuart, Hon. J. (Moray and Nairn) |
| Mills, Major J. D. (New Forest) | Reid, William Allan (Derby) | Sueter, Rear-Admiral Sir Murray F. |
| Milne, Charles | Rickards, George William | Summersby, Charles H. |
| Mitchell, Sir W. Lane (Streatham) | Robinson, John Roland | Sutcliffe, Harold |
| Molson, A. Hugh Elsdale | Ropner, Colonel L. | Thomas, Rt. Hon. J. H. (Derby) |
| Monsell, Rt. Hon. Sir B. Eyres | Ross Taylor, Walter (Woodbridge) | Thompson, Sir Luke |
| Moore, Lt.-Col. Thomas C. R. (Ayr) | Salmon, Sir Isldore | Thomson, Sir Frederick Charles |
| Morrison, G. A. (Scottish Univer'ties) | Salter, Dr. Alfred | Thorne, William James |
| Moss, Captain H. J. | Samuel, Rt. Hon. Sir H. (Darwen) | Tinker, John Joseph |
| Munro, Patrick | Samuel, M. R. A. (W'ds'wth, Putney). | Titchfield, Major the Marquess of |
| Nation, Brigadier-General J. J. H. | Savery, Samuel Servington | Tree, Ronald |
| Nicholson, Godfrey (Morpeth) | Shakespeare, Geoffrey H. | Tufnell, Lieut.-Commander R. L. |
| O'Neill, Rt. Hon. Sir Hugh | Shaw, Helen B. (Lanark, Bothwell) | Ward, Lt.-Col. Sir A. L. (Hull) |
| Ormsby-Gore, Rt. Hon. William G. A. | Simon, Rt. Hon. Sir John | Ward, Irene Mary Bewick (Wallsend) |
| Paling, Wilfred | Smith, Sir Robert (Ab'd'n & K'dlne, C.) | Wardlaw-Milne, Sir John S. |
| Palmer, Francis Noel | Smith, Tom (Normanton) | Warrender, Sir Victor A. G. |
| Parkinson, John Allen | Somervell, Sir Donald | Waterhouse, Captain Charles |
| Patrick, Colin M. | Sotheron-Estcourt, Captain T. E. | Watt, Major George Steven H. |
| Peake, Osbert | Spears, Brigadier-General Edward L. | Wedderburn, Henry James Scrymgeour. |
| Peat, Charles U. | Spencer, Captain Richard A. | Williams, Edward John (Ogmore) |
| Penny, Sir George | Spender-Clay, Rt. Hon. Herbert H. | Wilson, Lt.-Col. Sir Arnold (Hertf'd) |
| Percy, Lord Eustace | Spens. William Patrick | Winterton, Rt. Hon. Earl |
| Petherick, M. | Stanley, Rt. Hon. Oliver (W'morland) | Womersley, Sir Walter |
| Pickthorn, K. W. M. | Stevenson, James | Worthington, Dr. John V. |
| Potter, John | Stewart, J. Henderson (Fife, E.) | Young, Ernest J, (Middlesbrough, E.) |
| Powell, Lieut.-Col. Evelyn G. H. | Stones, James | |
| Ramsay, Capt. A. H. M. (Midlothian) | Storey, Samuel | TELLERS FOR THE AYES.— |
| Ramsden, Sir Eugene | Strauss, Edward A. | Captain Sir George Bowyer and |
| Rankin, Robert | Strauss, G. R. (Lambeth, North) | Dr. Morris-Jones. |
| NOES. | ||
| Acland-Troyte, Lieut.-Colonel | Croft, Brigadier-General Sir H. | Nunn, William |
| Applin, Lieut.-Col. Reginald V. K. | Davison, Sir William Henry | Pike, Cecil F. |
| Astbury, Lieut.-Com. Frederick Wolle | Donner, P. W. | Somerville, Annesley A. (Windsor) |
| Atholl. Duchess of | Emmott, Charles E. G. C. | Taylor, Vice-Admiral A. A. (P'd'gt'n, S.) |
| Boyd-Carpenter, Sir Archibald | Erskine-Bolst, Capt. C. C. (Blackpool) | Touche, Gordon Cosmo |
| Broadbent, Colonel John | Everard. W. Lindsay | Wayland, Sir William A. |
| Brown, Brig.-Gen. H. C. (Berks., Newb'y) | Goodman, Colonel Albert W. | Wells, Sydney Richard |
| Cobb, Sir Cyril | Hartington, Marquess of | Williams, Charles (Devon, Torquay) |
| Colfox, Major William Philip | Keyes, Admiral Sir Roger | Williams, Herbert G. (Croydon, S.) |
| Courtauld, Major John Sewell | Knox, Sir Alfred | |
| Craddock, Sir Reginald Henry | Nicholson, Rt. Hn. W. G. (Petersf'ld) | TELLERS FOR THE NOES.— |
| Mr. Raikes and Mr. Lennox-Boyd. |
Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.
§ 4.40 p.m.
§ Mr. MOLSONI beg to move, in page 70, line 38, after "is," to insert:
or within such reasonable time as may be prescribed by the Act shall become.The Committee has now considered this question at some length and is familiar with the various points which have been raised. It will have been made plain, especially in the speeches of my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that it is perfectly reasonable that companies, not at present engaged in an industry which at some subsequent date an Indian Legislature may decide to subsidise, should only receive that subsidy if they satisfy certain conditions. But there is no intention that this should be a penal Measure. It is not intended that if a company at some given time does not satisfy those requirements, it should not be able at some subsequent time to satisfy those requirements and thereby qualify for subsidy. There is not only the question of the registration of a company but also the other conditions 2112 which may be laid down as, for example, in connection with facilities for trading with the Indian States. I think this is really a draft Amendment and expresses the intention of the Clause.
§ 4.41 p.m.
§ The UNDER-SECRETARY of STATE for INDIA (Mr. Butler)We are advised that this Amendment makes very little difference to the sense of the Clause. Obviously, if a company complied with the conditions at some subsequent time it would become eligible for the subsidy. Since we consider that the hon. Member's desires are largely covered by the Clause as it stands, we would prefer not to accept the Amendment and I hope he will not press it, on the assurance which I have given him.
§ Mr. MOLSONI certainly will not press the Amendment, but I hope the Under-Secretary will undertake to consider whether the Clause, as drafted, might not be interpreted to mean that any company which did not satisfy these 2113 conditions at the time when the subsidy-Act was passed would be held to be disqualified from doing so.
§ Amendment, by leave, withdrawn.
§ Amendments made: In page 70, line 42, leave out "Indian subjects of His Majesty," and insert, "British subjects domiciled in India."
§ In page 71, line 2, leave out "Indian subjects of His Majesty," and insert "British subjects domiciled in India."—[Sir S. Hoare.]
§ 4.44 p.m.
§ Mr. MOLSONI beg to move, in page 71, line 3, at the end, to insert:
Provided that a company incorporated, whether before or after the passing of the Act, by or under the laws of the United Kingdom, or by or under the laws of British India, which acquires either the undertaking of a company which at the date of the passing of the Act was engaged in British India in that branch of trade or industry which it is the purpose of the grant, bounty, or subsidy to encourage, or so much of such an undertaking as relates to the carrying on in British India of such branch of trade or industry, shall upon acquiring such undertaking, or such part of such an undertaking, be deemed for the purpose of this Sub-section to have been engaged in British India in such branch of trade or industry at the date of the passing of the Act.We have had a long discussion on this Clause and on the purpose which lies behind it, and there is no need, I think, to say very much by way of explanation of this Amendment except to point out exactly what is the addition which we seek to make to the Clause. It deals with the case of companies engaged in an industry which at some subsequent time an Indian Legislature may decide to subsidise. There are two broad categories of such companies. There are the companies which were engaged in the industry at the time when the Act was passed and there are those which engage in it after the Act has been passed. We are not proposing to make any change in the case of the second category but there might be a company which had been engaged in the industry and as such was entitled to receive the subsidy without satisfying any special conditions. That company might desire to sell that undertaking which was to be subsidised, and, as the Clause is now drafted, it would be held that the purchaser of the new undertaking had not been engaged in the undertaking at the time the Act was passed, and therefore it would be 2114 required to satisfy the conditions laid down in Sub-section (2).It has been suggested that these circumstances would only arise in the case of a moribund company, but I shall show that that is an entirely gratuitous assumption. Even supposing, however, that this was a moribund company, what are actually the conditions? They are, first, that this company was engaged in an industry which the Indian Legislature thought it was desirable to encourage; in the second place, obviously, it is an industry which, even if the concern is efficiently run, in the view of the Indian Legislature could not be run profitably without some direct subsidy; and, in the third place, let it be remembered that this is an undertaking which was started as a private concern and not for the purpose of benefiting from the subsidy. It is not at all inconceivable that such a company should wish to sell its assets, goodwill and the right to receive the subsidy which, rightly or wrongly, the Indian Legislature had thought necessary in order that that particular branch of industry should be kept alive.
It would not, however, necessarily be a case of a moribund company at all. After all, most companies that are bought from day to day are not moribund. There is a difficulty in such a case in finding a purchaser, and it might well be that a prosperous concern or that part of a concern which was entitled to receive a subsidy under the Indian Legislature, might be bought by some other concern for the purpose of obtaining control of the management. It might be suggested that that could be done by buying a majority of the shares, but that is not possible with Indian companies which have a contract with a firm of managing agents. On the other hand, it might be some particular branch of activity—shall we say, the manufacture of rails in India which might be one part of the activity of a steel company—and it might be that some other company which was the manufacturer of rolling-stock or other requisites for railways might desire to obtain control of that particular part of the steel company's undertaking. In that case, obviously, there would be no question of buying a majority of the shares of the whole of the steel undertaking. It would merely be for the purpose of more efficient management to buy that particular branch of the industry which received 2115 a subsidy. As the Bill is drafted, it would not be possible for that to be done without the purchaser of the undertaking coming under Sub-section (2) and being made to conform with the requirements of that Sub-section.
§ 4.50 p.m.
§ The ATTORNEY-GENERAL (Sir Thomas Inskip)This Clause provides, in the first instance, that existing British companies shall be eligible, in the same way as Indian companies, for a subsidy or a bounty. So far as new companies are concerned, the Clause provides that they shall be subject to certain conditions before receiving a subsidy. My hon. Friend wants to put in a proviso that where a new company comes along and purchases the business of an old company, it shall be treated as an old company—that is to say, free from all conditions. It seems to me that there is no justification for that proposal once you have accepted the proposal in the Clause that there shall be two categories of companies, old companies and new companies, because my hon. Friend is really trying to say that that which is in substance a new company shall be treated as an old company merely because it has purchased the undertaking of an old company. That is really continuing the business of an old company in a new form. By purchasing the whole undertaking, lock, stock, and barrel, as a going concern, there is nothing easier than to preserve the identity of the old company and to let it carry on its old business.
If, on the other hand, it really is in substance a new company and is only a sort of sham old company, because it has purchased the undertaking of an old company which proposed going out of business, I see no reason why it should get that advantage over those companies which are new and do not make any pretence of not being new. The thing is either a new company or it is not. If it is a new company, you ought not to give some advantage to a new company that can secure this facade of an old company. On those grounds the Government is not able to accept the Amendment. The Clause in the Bill goes a long way, I do not say to interfere with the freedom of the Indian Legislature in the future with regard to subsidies which it might desire to grant for the purposes of Indian 2116 trade, but it is going too far to suggest that we can give to new companies some advantage which they only acquire merely because they are fortunate enough to be able to buy the undertaking of what may quite possibly be a moribund concern.
§ Mr. MOLSONWill my right hon. and learned Friend deal with the point that I raised about it possibly being a branch of an undertaking and say why, if a reorganisation has enabled that subsidised branch of the undertaking to be taken over by a new concern, it should be necessary to purchase the majority of the shares in the whole of the concern? I pointed out that in the case of companies managed by managing agents in India, there are many cases of contracts running over a period of years that it would not be possible to break, even if a majority of the shares; were bought.
§ The ATTORNEY-GENERALThe Amendment of the hon. Member does not cover that case, but speaks of purchasing the undertaking of a company. That does not mean a branch of an undertaking. If the hon. Member wants to provide for a new company which has purchased, say, branch "B" of the activities of a whole undertaking, he will have to choose new words, but even if he did, I should not be prepared to accept the Amendment, because all that that would mean would be that a new company would be treated as an old company, merely because it had acquired the goodwill of some undertaking in a particular branch of its activities.
§ Mr. MOLSONMy right hon. and learned Friend really has not read my Amendment. If he will read it, he will see that it says:
or so much of such an undertaking as relates to the carrying on in British India of such branch of trade or industry.
§ 4.55 p.m.
Duchess of ATHOLLI am a little surprised to find this Amendment moved by the hon. Member for Doncaster (Mr. Molson), because it seems so contrary to the effect of his previous interventions on this Clause. I understand the purpose of his Amendment is to reduce as far as possible the number of companies which in the future will be penalised by the proposals under Sub-section (2) of the Clause, and it seems to me rather 2117 strange that he should desire to do that in view of his previous remarks on this subject. It seems to indicate that the hon. Member realises, after all, that Subsection (2) may be of a very penalising character in the future to many British firms—in fact, that it proposes to put a great bar on the future development of British trade in India.
§ Mr. MOLSONIf I thought it was in any way in conflict—
The CHAIRMANI do not want to interrupt hon. Members too much, but really we are getting beyond the scope of the Amendment altogether.
§ Amendment negatived.
§ Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
§ 4.57 p.m.
§ Major COLFOXI wish to ask the Secretary of State whether it is the intention of the Government to differentiate as between British Indian subjects and subjects of Indian States in this matter of being directors of companies, because in paragraph (b) of Sub-section (2) it refers to:
such proportion not exceeding one-half of the members of its governing body as the Act may prescribe, are Indian subjects of His Majesty,or, as it now reads, "are British subjects domiciled in India." Does that exclude subjects of Indian States, and, if so, why?
§ Sir S. HOARESo far as our intention is concerned, it would not exclude subjects of Indian States.
§ 4.58 p.m.
§ Mr. MOLSONBefore we part with this Clause, I would like to say something about the claim of the European community in India for equality of treatment, which was accepted at the Round Table Conference by the Indians who were there and as a result of this agreement which was come to it has been incorporated in this Bill. I am sure my right hon. Friend will not misunderstand me when I say that I do not attribute the fact that this chapter is in the Bill to him, because I regard him as being merely one who is anxious to give legislative effect to the agreement that was came to at the Round Table Conference. We 2118 claim, in the first place, this equality of treatment with Indians in India on the ground that in the past European capital and enterprise have developed the resources of India to the great advantage of India, and it is almost universally agreed that it is of the utmost importance that that development should continue. Whether in the great jute industry of Bengal, the coal industry in Bihar, oil in Burma, or the development of railways, in each case it has been British capital and British enterprise which has been responsible for these great works, and the Indian delegates at the Round Table Conference recognised the equity of our claim. At the same time, the British Government have, even in the case of the Dominions, a long and honourable record of trying to obtain equality of treatment for Indians, and I was interested to see in the "Times" only two days ago that this principle of reciprocity which underlies this and the preceding Clauses has had an interesting application in London, where, I see, Mr. Udani, an Indian trader, has been appointed to an important trading committee, the committee of appeal of the Incorporated Oil Seed Association.
Unfortunately, there have been indications that some Indian politicians were seeking to use the powers that had been given under the Montagu-Chelmsford Constitution in order to discriminate against British trade in India. In particular, a Bill was introduced to reserve the Indian fiscal traffic in India, which would not only discriminate against British companies but, in effect, expropriate them without compensation. In 1921, as the Noble Lady the Member for Kinross (Duchess of Atholl) mentioned a few moments ago, special efforts were made to compel British firms to accept conditions which we regarded as unfair and inequitable. The origin of these Clauses is the claim that was made by the European community to the Simon Commission that under any new constitution there should be effective statutory safeguards against discrimination against our interests. The Simon Commission took the view that it would be extraordinarily difficult to draft in an Act of Parliament statutory safeguards which would be effective for defending our legitimate rights without at the same time unduly hampering the right of 2119 development of Indian commerce. As a result of that, the matter was examined afresh, and at the First Round Table Conference a proposal was put forward that the best way of effecting these safeguards, which the Indian delegates there agreed to, was by a commercial convention.
The CHAIRMANThe hon. Member, if I may say so, is very interesting, but he is getting far beyond this Clause. His is almost a Second Reading speech on the subject of Indian trade.
§ Mr. MOLSONWith regard to this question of a convention, that is one of the methods suggested in the Joint Select Committee's report for guaranteeing in the future the protection of British commerce in India, and I was going to ask you, Sir Dennis, in view of the fact that this convention would cover two different points, whether you would allow me to refer also to the protection of British trade with India. If you would allow me to do that, I would move my Amendment merely by saying "I beg to move."
The CHAIRMANI think that I must leave the hon. Member to move his Amendments in his own way, but he must remember that we are now in Committee stage dealing with Amendments, line by line and Clause by Clause in the Bill. There is really nothing in the Clause to justify a general speech on the history of the trade relations between this country and India.
§ Mr. MOLSONIn that case, I will only say that this Clause is one of a series which, taken together, will I hope guarantee in an interim period adequate protection of British commerce in India until such time as a commercial convention may be entered into in the future.
§ 5.6 p.m.
Duchess of ATHOLLI think it is rather important, in view of what the hon. Member for Doncaster (Mr. Molson) has just told us of the very strong demand made by the British mercantile community in India to the Statutory Commission that there should be no commercial discrimination, that before we part with this Clause we should realise that it does specifically allow in the future, 2120 if the Indian Legislature desires it, for commercial discrimination against British firms. That seems to me a very serious thing, and it is very important that the House should realise it. We were told by the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) that these sort of conditions had been imposed for a long time in India. The hon. Member for Doncaster followed that statement up by giving one case, the case of the iron and steel duties. I submit that it is a very different matter for the British Parliament in a constitution Act definitely to give sanction to discriminatory conditions that have been laid down some 10 years ago by the Indian Legislature. It is very definitely not meeting the demand of the mercantile community made to the Simon Commission. One must imagine that the fact that this Clause has been passed is bound to have a very depressing effect on the British mercantile community in India, whose views, expressed in private, are very apprehensive of the effects of this Bill, though many of them do not like to say in public what they say in private.