HC Deb 24 January 1940 vol 356 cc613-25

3.50 p.m.

Mr. Mander

I beg to move, in page 4, line 5, at the end, to insert: The persons entitled to benefit under this Sub-section shall be those who were citizens of Czecho-Slovakia on or before 1st September, 1938. The object of the Amendment is to clarify certain matters to which I referred during the Second Reading Debate, and to call attention to the fact that in the Government's proposed scheme on page 4, in Clause 2, Czecho-Slovakia does not include the Sudetenland. It seems to me difficult to understand why this provision should be made. In the case of the refugees the help that is given applies to the whole of Czecho-Slovakia as the State was before Munich, whereas in this case it is apparently proposed to exclude any claims arising from citizens who formerly lived in Sudetenland, whether they be Czechs, democratic Germans, or whatever they may be. I hope that I have not misunderstood the position. Certainly the particular section in the Bill requires some explanation, and my object in putting down the Amendment is to enable the right hon. and gallant Gentleman the Financial Secretary to the Treasury to make the position clear, and also to make it clear whether all Czech citizens in Czecho-Slovakia, as it was before Munich, shall be entitled to come within the benefit of this scheme.

3.53 P.m.

The Financial Secretary to the Treasury (Captain Crookshank)

The hon. Member is under a misapprehension, and it is not surprising in view of the complications of the Bill. The words in the Clause refer not to the persons who are going to receive money out of this fund, but to the locus where the obligations arise. The Bill reads: The moneys paid into the said fund shall be applied, subject to and in accordance with the provisions of an order made by the Treasury under this Section, in or towards satisfying obligations to which the order is expressed to apply, being obligations incurred before the fifteenth day of March, nineteen hundred and thirty-nine, by the Government of the Czecho-Slovak Republic or persons who on that date were resident or carrying on business in the territories of that Republic or incorporated under the law thereof. That means the obligations of Czecho-Slovakia as it then was, and it has nothing to do with the residence of the people when they draw benefit, if they happen to be possessors of coupons as they may be, as defined in the scheme. In other words it has been the intention here to protect inter alia the interests of British holders. This Amendment of course would nullify that, and, as the hon. Gentleman the Member for East Aberdeen (Mr. Boothby), who supports this Amendment will see, it does the exact opposite to that which he asked should be done. Furthermore, under the definition of the draft scheme of residence it would cut out any refugees from the former Czecho-Slovakia who were in this country. The words "British holders" have been given a rather unusual ad hoc meaning, in order to make it possible that such refugees can get payment. Therefore, it would be not only inadvisable to pass this Amendment, but it would completely nullify the whole object of which I think the House and everybody was agreed should be done.

3.55 p.m.

Mr. Boothby

In view of what my right hon. and gallant Friend has said, perhaps I might say that I understood that the Amendment, to which I agreed to have my name put down, was to take the Austrian loan out of the ambit of the Bill. I confess I did not see the actual terms of it when I allowed my name to be attached to it, but I quite agree as my right hon. and gallant Friend has said that it would nullify the precise object I have in mind; and I welcome, therefore, the assurance he has given. The only point I would make, and it is not a large one, but may be worth while considering between now and the final stage of the Bill, is whether the Austrian loan should be included within this Bill at all. The late Government of Czecho-Slovakia is not the only Government who guaranteed this loan. There are other Governments who may also default, and it seems to me to be rather unnecessary to drag in the Austrian loan to a Bill which deals otherwise purely with Czech assets and claims. One day there will have to be a complete solution of the Austrian loan and other kindred problems, and meanwhile I do not know whether it would not be advisable to let the question of the Austrian loan stand over altogether. If my right hon. and gallant Friend is not prepared to take the Austrian loan out of the Bill altogether, I prefer the Bill as it stands at present.

Captain Crookshank

My comment on that is timeo Danaos—in this case the Independent Liberals when they bring you gifts.

Amendment, by leave, withdrawn.

3.58 p.m.

Mr. Mander

I beg to move, in page 4, line 5, at the end, to insert: No moneys shall be paid out of the said fund in any circumstances to persons or corporations involving payments direct or indirect to German nationals. There are some people, I know, who take the view that it is not reasonable to take over the guarantee of the Czecho-Slovakian Government with relation to the Austrian loan, except in so far as British subjects are concerned, having regard to the fact that the guarantee is not likely to be carried out by other countries. On the whole I do not share this view. I take the view that in the circumstances we should do all we can to raise the status of the Czech State and their property by taking up their guarantee and in this way I make no complaint. I want to make quite sure, however, that there is no possibility in this connection of any payments finding their way to German subjects. The position under (1, a) and (1, c) on page 2 and 3, are quite different from (1 b). In the case of (1, a) it has to be shown to the satisfaction of the Treasury to have been on the 8th May, 1939, in the beneficial ownership of an individual then resident or a corporation then ordinarily carrying on business in the United Kingdom, and in the case of (1, c) it has to be shown to the satisfaction of the Treasury to be beneficially owned by a British holder and to have been so owned by him at all times since the 14th March, 1939, or to have been inherited by him since that date. In (1, b), before payments are made, there is no provision of that kind whatsoever. I should have thought that there was some danger of payments being made regardless of where persons might be living and in what country. Unintentionally, of course, payments might inure to the benefit of German subjects, because one does not know what sort of transaction may have taken place since the loan was issued, and what kind of arrangements have been made as to the ownership of these shares. It may well be that transactions might have taken place with the result that Germany will benefit. I move this Amendment in order to have a clear statement from the Government on the point, and to make it quite certain that nothing in this guarantee can possibly benefit the German Government, or a German subject.

4.0 p.m.

Lieut.-Colonel Sir A. Lambert Ward

Is it not a fact that already, when anybody has any financial transactions in shares and so on, he has to sign a form to the effect that none of the proceeds which he receives shall be in any circumstances whatever transmitted to any enemy country?

4.1 p.m.

Captain Crookshank

Yes, I think the answer is that that would be tantamount to trading with the enemy. If the Amendment were accepted, it would have a contrary result to one of the main arguments which the hon. Member put before the House yesterday, and would prevent any payments being made to Reich German refugees who had fled to Czecho-Slovakia and since then had come to this country, for the reason that they are technically German nationals. That, I feel sure, is not what the hon. Member or anybody else wants to do. The whole idea is, if we can, to assist some of the refugees if they have assets here in order to enable them to live, and for that reason, if for no other, this Amendment would be quite out of place.

The important criterion is whether or riot payments will go to the enemy. If payments were directly made to enemy subjects, those sums would fall within the trading with the enemy legislation. Take, for example, an enemy subject who might have bought a Czech bond after 8th May and before the outbreak of war. If in that case he had been able to register his claim, payment would be made, not to the enemy subject, but, under the operations of the trading with the enemy legislation, to the Custodian of Enemy Property. The only other conceivable case which I think the hon. Gentleman has in mind is in conjunction with the Austrian Conversion Loan. I suppose it is theoretically conceivable that you might have an enemy subject who held some bonds of one of the neutral issues of this loan. In such a case we cannot stop him from being paid, if the Czech guarantee is paid out of the fund to the trustees. However, we have reason to know that there is no danger of any but a minimal quantity of exchange reaching the Germans from this source. The reason for this, which is not, I think, altogether appreciated, is that, after the Anschluss, the German Government took steps to acquire all the holdings in the loan of Austrians and Germans, and those bonds were cancelled in April last year, so that the possible residue is very minute, and we have no reason to suppose there is substantially any at all. I do not think the hon. Gentleman need be anxious on that point. So far as this Amendment is concerned, I think he will realise that it would be really a wrong thing, bearing in mind what we all want to do, to insert it in the Bill.

Amendment, by leave, withdrawn.

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

4.4 p.m.

Mr. Pethick-Lawrence

I have no wish to delay the passage of the Bill, but I want to put a point to the Chancellor of the Exchequer. I do not know whether he has yet had time to read through the Debate that we had yesterday in the House on the Second Reading, but if he has had that opportunity, he will have noticed that I made a certain suggestion and that the Financial Secretary to the Treasury undertook on behalf of the Government to have it considered. The point was this, that the form in which the claims are to be made under the proposed White Paper narrows down what was the original intention of the Government, and the answer that the Financial Secretary gave was that, owing to the war, certain claims which would otherwise have been ascertainable had ceased to be ascertainable. I recognise the force of that answer up to a point, but I am assured that there are claims which are fully documented, of which acknowledgment has been made from the other side, but which at the present time fall without the provisions of the White Paper. Of course, if I were suggesting that all claims prima facie good were to be met by the Treasury, the right hon. and gallant Gentleman would have a very clear answer and would say that they could not possibly accept prima facie evidence, but in any case the Treasury would have the power to say whether the proof was or was not adequate, and all that I was asking was that certain types of claims should not be ruled out in view of the fact that they belong to certain categories.

I mentioned in particular co-operative societies in Czecho-Slovakia. I am aware that there was a strong bank and that some of those would be covered by the terms of the White Paper, but there are others which are not, and I want to bring to the mind of the Chancellor of the Exchequer this point, that I hope that between now and the drafting of the White Paper into the actual Order, the Chancellor will consider that point once more, and if it is possible to meet what is my desire and what I am sure would be the desire of other Members of the House, I hope he can promise to give it his sympathetic consideration.

4.7 P.m.

The Chancellor of the Exchequer (Sir John Simon)

I did note the observations made by the right hon. Gentleman and also the answer given by my right hon. and gallant Friend, and I think that answer given yesterday must stand for to-day. The point that has been mentioned shall be looked into, and if it is possible to reframe the proposals in the White Paper to cover this point, if it could properly be amended in that way, it shall be done. I have noted the case as one of those which shall be looked at before the White Paper is issued.

4.8 p.m.

Mr. Benson

Yesterday there was a considerable demand for more information than the White Paper gives, particularly with regard to the probable amount that must be allocated under the various headings. I should like to know whether the Financial Secretary to the Treasury could give us any information on this subject. He suggested that he could not give it because all the claims were not in, and that therefore no figures could be accurate, but I cannot conceive of the Treasury drawing up a paper like this and merely dumping down a number of items without any idea at all of what those items meant in terms of pounds, shillings and pence. They must have made an estimate, and they must have some idea in their minds as to how much is likely to be allocated. The White Paper is merely a schedule of items, which conveys little or nothing to us. When we realise that this money was originally allocated for the purpose of assisting Czecho-Slovakia and the Czechs, and when we find that a very large proportion of it is likely to go to the holders of Czecho-Slovakian loans who are not Czechs, I think we are entitled to know exactly how much the Czechs are going to get out of this money and how much non-Czechs are likely to get.

Take the Austrian loan shares. I understand that Czecho-Slovakia has a 24 per cent. guarantee. What does the obligation in paragraph (1, b) amount to? There is only £3,500,000 to £4,000,000 available, and if it is all going on these forms of allocation, which are not in any way to the benefit of the distressed Czechs, I think we ought to know. We have no information at all, and we are really being asked to pass a financial Bill entirely in the dark as to what the final fund with which we are dealing is likely to be. It is no answer to say that we cannot get a correct and complete answer to our question. The Treasury must have made some estimate, and I think the Committee is entitled to have that estimate before it passes this Clause.

4.11 p.m.

Mr. Boothby

In reply to the hon. Member for Chesterfield (Mr. Benson), I would suggest that until this scheme is finally drafted as a Treasury Order, it is difficult for the Treasury to make any accurate estimate of the amount of the cash claims that there may be, because they do not yet know what cash claims will be admitted and what cash claims will not be admitted. If you give merely a round estimate of the number of cash claims which have been submitted to the Bank of England, it might be very misleading, because a considerable number of those claims will, I think, be excluded.

When the hon. Gentleman says that this money was intended for distressed Czech refugees, he is not quite accurate. The £4,000,000 grant was intended for distressed Czech refugees; but the other grant, the remaining £6,000,000, the balance of which we are considering under paragraph 2 of this scheme, was a loan to the Government of Czecho-Slovakia for reconstruction purposes. As I understand the scheme, the Chancellor of the Exchequer does propose to complete the full grant to the Czech refugees; and, therefore, it is not fair to say that we are doing the refugees out of anything. We are not. They will get the full £4,000,000 given to them by the British Government. As far as the claims are concerned, claims are to be admitted on behalf of Czech residents in this country; but the British claims are just as valid as these claims; and I cannot see why money should be given to Czechs merely because they are Czechs, and withheld from British holders of claims because they are British. There is no logic in that.

While I have some sympathy with the observations of the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence), I would say that if we had been able to come to a comprehensive agreement with the Government of Czecho-Slovakia, or even with the German Government before the war broke out, to settle all outstanding claims, it might have been possible to include commercial claims. As things are, I do not think it is possible, because they cannot be ascertained with any degree of certainty; and, moreover, we have not in dais country corresponding assets blocked against commercial claims. I therefore do not think we can or ought to satisfy any claims other than cash claims.

My final word is this. We do not yet know whether the cash payments will be made in full. I submitted arguments yesterday, and I found support on all sides of the House for the plea, that in view of the very large amount of Czech assets blocked in this country, cash claims should in any event be met in full at the present time. And I should like the Chancellor of the Exchequer, not now, but before we finish with the Bill and the Scheme, to give us some assurance that in the event of it not being found possible to meet these cash claims in full at once, then, until they are met in full, the remaining Czech assets, amounting to, I believe, no less than £10,000,000, should be kept blocked in this country, and should not be released until the cash claims of British holders have been met.

4.15 p.m.

Mr. Benson

The question of what happens to blocked Czech assets does not arise under this Bill. We are dealing with the loan to the Czech Government for the purpose of reconstruction and for helping Czech refugees. It is not a loan for paying British bondholders for any losses they may have incurred on the Czech loan. That is a risk which the holders must take. The whole of the loan was to help Czecho-Slovakia and it is a complete misuse of it to direct it now for the purpose of paying interest to bondholders who invested at a high rate of interest. We guaranteed it as a loan because we felt that Czecho-Slovakia had had a rough deal in September. It was a sop to our consciences. It was not a sop to the bondholders, and I do not think the House is entitled to give the Treasury carte blanche to deflect money granted for one purpose to a purpose which is entirely alien. There is a difference between paying cash to a refugee Czech and handing out this sum of money to British bondholders who may have an identical claim, but who are not Czechs and for whom the money was not intended.

4.17 p.m.

Miss Rathbone

I do not want to dispute the point of view of the hon. Member for East Aberdeen (Mr. Boothby), but I agree to some extent with the view put forward by the hon. Member for Chesterfield (Mr. Benson). The hon. Member for East Aberdeen was rather mistaken when he said that it was only the £4,000,000 gift that was intended for the refugees. The £6,000,000 loan was, as he truly said, given to the Czecho-Slovak Government for reconstruction, but the Government made a proviso that if it had to be used in the first instance for things like roads and railways, which would have kept a good many refugees in Czecho-Slovakia, ultimately it was for the settlement of refugees in Czecho-Slovakia.

Mr. Boothby

The Czecho-Slovak Government, to which that loan was made, has unfortunately ceased to exist, and that makes a great difference when you are dealing with cash claims.

Miss Rathbone

I was going on to say that. This money cannot now be used in that way because the Czecho-Slovak Government has ceased to exist. Moreover, the money was intended to benefit the refugees by settling them in Bohemia and Moravia, but these are no longer safe places for the people it was intended to benefit, so that the money cannot be used in that way. It is a rather different thing to transfer the use of the money now to satisfy the claims of British bond It may be impossible to carry out the original intentions of the Government to benefit refugees from and into Czecho-Slovakia, but I must point out that on the whole the sort of persons we are accustomed to think of as refugees are those who are now out of Czecho-Slovakia and those who ought to have come out if they could, and who have had a very raw deal from the British Government. We originally intended to spend the £4,000,000 right out. We also gave a loan on rather doubtful security to benefit the refugees. Now we are, to a certain extent, taking advantage of the misfortunes of Czecho-Slovakia last March, which made it impossible to use the loan in the way in which it was intended, to repay the British Treasury and to use it largely for the benefit of British bondholders.

I feel rather unhappy about the transaction because we have to remember that the Munich Pact was the origin of the whole business and we have to realise that what was done, rightly or wrongly, at Munich, put these people in a terrible situation. As a matter of fact, we have been able to do very little and have been able to rescue only a few of them. There are now in the Protectorate and the Sudetenland a few hundreds of unfortunate men and women who are the husbands or wives of refugees whom we brought to this country telling them that the other partner would follow very shortly. Because of the interminable delays, sometimes of the Home Office and sometimes of the refugee organisation, they were not brought out, and now they are told that none of them can be brought out because we cannot take any further refugees into this country as we cannot increase our burdens. Those in this country are, therefore, put in the appalling position of knowing that their husbands or wives in the Protectorate may at any moment be sent to a concentration camp.

The Deputy-Chairman

I am afraid that the question of refugees does not come under this Clause.

Miss Rathbone

I will not enlarge on it, but I want to make the point because it seems to me a reason for using in every way possible as much of the money as we can use for the benefit of the Czechs rather than for the benefit of British bondholders. I admit that my remarks went rather beyond the Clause, but it is a point which bears on it and which ought to be kept in the mind of the Chancellor and everybody concerned with this Bill.

4.22 p.m.

Sir A. Lambert Ward

There is a point which I do not think has hitherto been considered. If and when the Republic of Czecho-Slovakia is reconstituted it will want a great deal of money to put things straight. If the interest or part of the interest is paid on these bonds and the debts of Czecho-Slovakia are paid, the credit of the country will be what is known in the money markets of the world as "good" and it will be able to borrow as much money as it wants. If, on the other hand, Czecho-Slovakia or its representatives default on this loan it will mean that when the time comes when money is wanted for the country it will not be able to get it. This payment of debts and in- terest is merely a sprat to catch a salmon.

4.23 p.m.

Mr. Charles Williams

Some hon. Members want this money to go to the bondholders and others want it to go to the Czech refugees, of whom there may or may not be many. No one, however, has suggested that, this being British money, some of it might go to the relief of British taxpayers. It might be as well for us to hold on to the money as much as we can.

The Deputy-Chairman

That point was decided when the House passed the Second Reading, and it would not be in order to discuss it now.

Mr. Williams

I will not discuss that further. We have been thinking a great deal of the bondholders and the Czechs, but I am not clear, unless we have another statement from the Exchequer, exactly where this sum of money is going.

4.24 p.m.

Captain Crookshank

This is rather a complicated matter and I explained it yesterday in the unfortunate absence of the hon. Gentleman. It would be unfair to the Committee now to go through it again, especially in view of the fact that the House gave a unanimous Second Reading to the principles of the Bill. I have little to add on this Clause because it has to do with the loan fund and not with the refugee money at all. The point which the hon. Lady the Member for the English Universities (Miss Rathbone) was making when you called her to order was made on her behalf by her colleague yesterday. I told him then, and I tell her now, that if they want details about that the best plan would be to ask questions of my right hon. Friend the Home Secretary, who will do his best to answer them. They are not within my competence nor within the ambit of this Bill. As regards the £6,000,000 loan fund, the hon. Lady is right, to this extent, that the original proposals were that the loan was for the general purpose of the reconstruction of Czecho-Slovakia, including the relief and settlement of refugees in that country as then constituted. That did not mean there was any specific proportion of the money to go for that purpose. It was to be a loan to the Czecho-Slovak Government, who would have to administer it and decide for themselves how much, if any, would go to that purpose. The argument of the hon. Member for Chesterfield (Mr. Benson) has been logically answered by my hon. Friend the Member for East Aberdeen (Mr. Boothby), who came to my assistance in that case more efficaciously than he did when the hon. Member for East Wolverhampton (Mr. Mander) moved the last Amendment.

When the hon. Gentleman presses me again to give some estimate of what these sums might come to, I am afraid that, in spite of long cogitations this morning, it is impossible to help him. One reason, as I said in my Second Reading speech, is that we have not come to the last day for registration, which is the 31st of this month. It is conceivable—although I do not know any more than the hon. Member does—that quite big claims might come in during the last days. In any case, any figure of the amount registered would be illusory until the claims have been checked up and investigated to see what the standing of the claims was. It will not be possible for some considerable time to give any estimate of the sort of amount that is involved in the claims and what amount will stand when the claims are eventually investigated. It should be borne in mind that the White Paper which we were discussing yesterday is not an Order which is in front of us now. We are merely taking powers in the Bill to make an Order. The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) raised a specific point, and, if we were to find on consideration that the sort of thing which he was talking about could be brought within the ambit of the Bill, any figure which I gave to-day might be falsified. I had better, therefore, rest on the remarks that I made yesterday, which are clear, intelligible and logical, that there is no basis on which I can give anything of any value. I would be the last person to wish to give any figure which would be of no value.

Question, "That the Clause stand part of the Bill," put, and agreed to.