§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Boothby (Aberdeen, East)
This is the operative Clause of the Bill, which is in effect a Bill for the relief of one harbour—Eyemouth Harbour. The question I want to ask is—why only Eyemouth Harbour? There appears to be neither rhyme nor reason in the policy of the Government as far as public works loans are concerned. Some debts are written off, and some are not. I asked on the Second Reading what was the reason governing the writing off of debts of harbours, and I was informed that they were written off only when there was no reasonable prospect of their being repaid. That leads to a very haphazard state of affairs.
§ Mr. Boothby
I was under the impression that this, and the next Clause, specifically remitted the debt of Eyemouth 1844 Harbour to the Public Works Loans Board. If it is out of Order, I will defer my remarks to the Third Reading.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.
§ Clauses 3 to 5 ordered to stand part of the Bill.
§ Schedule agreed to.
§ Bill reported, without Amendment.
§ Motion made, and Question proposed, "That the Bill be now read the Third time."
§ Mr. Pethick-Lawrence (Edinburgh, East)
There is only one word I wish to say with regard to the power of local authorities to repay their debts. Because of the possibility of their failure to meet their liabilities, many local authorities have desired to pay off their debts before the date of redemption comes along. I hope the difficulties which arose out of the special circumstances of the war of 1914–18 will be kept in mind and that because of the price of money the situation after this war will be quite different from what it was before. That is an argument for taking care that after the war the price of money does not rise.
§ Mr. Boothby
I was saying on the Committee stage that the reason given by my right hon. Friend the Financial Secretary on Second Reading for writing off this debt of Eyemouth Harbour was that there was no reasonable expectation of their being able to repay their loan. If that is the only reason why the loan should be written off, it will certainly discourage other bodies, and particularly local authorities, from giving guarantees, or underwriting grants or loans, or taking any financial responsibility for loans made to harbour authorities in the future. It is surely a very haphazard principle to apply to what is, after all, a very important part of our public life. I have no objection to the Eyemouth Harbour debt being written off. What I am complaining about is that the sole reason for doing it should be that they are financially "bust" beyond hope of recovery. I submit that the reason which ought to be given for writing off this debt is, for example, the special importance of the harbour to the fishing industry. It seems to me that the Government, or the Public Works Loans Board, have no regard to the future requirements or responsibilities 1845 of harbours or for the interests of the fishing industry as a whole. I think there should be a moratorium on all harbour debts during the war, and therefore that this Bill should have been extended to cover many other harbours—
§ Mr. Boothby
In that case I will hastily move to my final point. I would like my right hon. Friend to give an assurance, arising out of this Bill, and the inadequate explanation he gave on Second Reading, that the Government will reconsider the whole policy of public works loans in the near future; because this matter, which involves the whole question of national development, cannot be left as it is for very much longer.
§ The Financial Secretary to the Treasury (Mr. Assheton)
I shall, naturally, take note of all my hon. Friend has said, but I would get outside the rules of Order if I attempted to go into it in much detail. Under the original Act under which we operate, the only circumstances which we are allowed to look at in deciding whether to write off a loan or not is whether the 1846 debtor is likely to be able to repay it. My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) raised an important point about the rate of interest. As he understands, the fundamental reason why you cannot reduce the rate on existing loans is that the fund has borrowed on long-term substantially at the rate of interest at which the money has been lent. I appreciate the point he made about the benefits to be derived from cheap money. The statements which have been made with regard to cheap money by my right hon. Friend the Chancellor of the Exchequer in the past still hold good.
§ Question put, and agreed to.
§ Bill accordingly read the Third time, and passed.