HC Deb 12 June 1952 vol 502 cc622-32

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

3.12 a.m.

Mr. Leslie Hale (Oldham, West)

I am in a very curious difficulty about Clause 1, which I do not understand. We are, unfortunately, in the position that, although this Bill comes to us from the House of Lords, we have had very little information about it. The total discussion in another place on Second Reading, in Committee, and on Report and Third Reading occupied precisely 15 minutes, and the Second Reading in this House occupied 17 minutes.

I think we have reached the stage when we ought to try to find out what this Bill is about. Some of the questions which I deemed important have not been answered at all. Clause 1 is the really effective part of the Bill, in fact, nearly the whole of the Bill. We are in this position. It is said that, when the Act of 1949 was passed, these bearer bonds were left out because no one had found any way in which we could establish who were the owners of these bearer bonds before the war at the effective date.

Now, it has been said, after consideration by the Morison Committee, in connection with these bearer bonds referred to in Clause 1, that it is possible for any British subject who was the owner on the effective date—I think it was November, 1951—to make a claim as a creditor. There is nothing in the Bill to show how the claim arises, or on what basis it is to be presented. I think we ought to be told. Most of these securities were virtually worthless throughout the war, though they have changed hands several times.

Clause 1 (a)states: (a) in respect of any bond of the City of Saarbruecken 6 per cent. Sterling Loan of 1928, being a bond enfaced in accordance with the Supplementary Agreement for the execution of Article 2 of the Anglo-German Transfer Agreement on the first day of July, nineteen hundred and thirty-eight; I take it that the reason why the Saarbruecken Loan is in a separate category is because there was a procedure for enfacement carried out. If, six months ago, I bought £100 of City of Saarbruecken 6 per cent. Sterling Loan at a price of £20, am I to be credited with £100 or £20? I think it is material. Is anyone who has speculated upon the possible rise of Germany in these last few months to be entitled to claim as a creditor? Do they claim for the nominal value, or only for the price they paid, which was very much lower?

Mr. Harold Davies (Leek)

May I interrupt my hon. Friend? If my memory serves me right, when the Bill came up in another place, it was said that there was a limited number of German corporation stocks held here by British subjects, and it was specifically stated that they would rank for claims, and that a limited sum of money had been received and was deposited in this country, so that there is in existence in this country a limited sum of money, and it would be possible for the Government to answer the question which my hon. Friend has asked, if they will reveal what that limited sum of money is at the present time.

3.15 a.m.

Mr. Hale

We have had great difficulty in getting very much information on these matters, which were always matters, I may say, of considerable complexity. Many small people preferred to forgo their claims rather than go through a long and complicated procedure to establish their claims. It does seem to be a curious habit that both Front Benches should be giving financial claims greater prominence than moral claims; but I understand that there is a feeling of responsibility on the part of the Government that they should give some sort of relief to the owners of these particular bonds. There is a moral obligation on the Government in this matter, because it must be remembered that they were funds invested in London to assist Germany's re-armament programme against Russia and the Government of the day gave the City of London great encouragement to lend money to enable Germany to build her great submarine fleet.

Viscount Hinchingbrooke (Dorset, South)

That is shocking.

Mr. Hale

That is very shocking indeed, I agree, and it is very shocking, too, that the wheel has come full circle with a Tory Government talking about giving financial assistance to Germany as a bulwark again against Russia.

Mr. Derek Walker-Smith (Hertford)

On a point of order. Is all this in order on the Committee stage of a Bill? Are these not matters which could properly have been disposed of in the debate on Second Reading?

The Deputy-Chairman (Mr. Hopkin Morris)

I was about to intervene.

Mr. Geoffrey Bing (Hornchurch)

Surely, as this is a one Clause Bill, all matters arising on the Bill can be raised on the first Clause? The second Clause is merely the Title of the Bill, and therefore anything in order on Second Reading would be in order in discussing this Clause.

The Deputy-Chairman

The Question is that the Clause stand part of the Bill and we can only discuss what is in the Clause itself.

Mr. Hale

I am a little surprised that the noble Lord should intervene, because in bringing in the Bill in another place the noble Lord who introduced it said: The issue and placing of some of these loans by the German and Austrian Governments was actually done with the commendation of the British Government of the day."—[OFFICIAL REPORT, House of Lords,6th March, 1952, c. 560.] He gave that reason why the holders of these bonds should receive this particular and rather special treatment. We are passing an Act of Parliament solely to permit bearer-owners to participate in whatever payment is to be made to German creditors. It is not contended that the people who will now claim had anything to do with these bonds before the war. It is part of the case, as made in another place, that they have frequently changed hands. It is said that this is the only way we can deal with this, because we cannot find out who owned them before the war. It is common knowledge that they stood at a low figure, and were bought at a low price.

It is said that we have responsibility because we, as a people, persuaded these people to buy the bonds. We financed the great expansion of German arms industry in the years which followed. I want especially to know whether it is clear that no one will be able to claim as a creditor for more than he has invested. Unless the 1949 Act covered that point—and I do not think it did— it seems to me that an Amendment must become necessary.

Mr. Bing

It would be of help to the Committee if it were given some indication of what is likely to be the total of German debt payments; because whether we include in the settlement another class of people who may, or may not, be more or less deserving, may depend upon the total sum available. Perhaps the Financial Secretary has later information to give, but I understand that the offer at the moment is about one per cent. That is another grave disadvantage of going in for German re-armament. The Germans even now are in a position——

The Deputy-Chairman

That does not arise on this Clause.

Mr. Bing

With respect, it arises in the sense that it is a reason for postponing further consideration, or dealing with this matter, until we know what is going to happen, and how much money we are going to get for our German assets.

We ought to have some indication of the amount which is to be available. Are we going to get the whole of the amount? I hope the hon. Gentleman will give some indication of the sums we can expect. Is it 1 per cent., 2 per cent., or 3 per cent? What are to be the percentages of risk as against the sums covered in the 1949 Act? Is this an increase of 10, 15, 20 per cent. or is it an even higher increase? What proportion of the total outstanding German liabilities are the securities which are contained in the Schedule? What sort of amounts are outstanding as com- pared with the other amounts outstanding? These are the sort of facts the Government should give to the Committee to enable us to discuss this Clause with rather more information than we have at the moment.

The Deputy-Chairman

The Question is, "That the Clause stand part of the Bill."

Mr. Paget (Northampton): rose——

The Deputy-Chairman

Order——

Mr. Paget

With great respect I have not spoken to the Clause, and I was on my feet when the Question was put.

The Deputy-Chairman

When I got up to put the Question there was no hon. Gentleman on his feet in any part of the Committee. I did not, however, collect the voices, and I now call the hon. Gentleman.

Mr. Paget

Surely we are going to have a reply? The Government have not told us anything. We have asked a number of questions, and surely the Minister, whom we are glad to see in his new office, is not going to treat us with such discourtesy on a Bill of which he is in charge? Surely it is not unreasonable for an Opposition, whose duty it is to examine legislation, to ask what are the sums involved, and what is the outstanding debt which we are asked to bring in and rank for this payment. If there is going to be no reply, perhaps it would be convenient for me to move, "That the Chairman do report Progress, and ask leave to sit again."

Mr. Frederick Willey (Sunderland, North)

I join in this appeal to the Minister. After all, last night he gave an explanation to the House when none was asked for.

The Deputy-Chairman

I am not going to accept a Motion to report Progress.

Mr. Willey

I join in this appeal to the Minister. Last night he gave a long explanation to the House when none was called for by any hon. Member. This is an extraordinary procedure.

Mr. Walker-Smith

On a point of order. To what Motion is the hon. Gentleman speaking?

Mr. Willey

I was speaking on the Question that the Clause stand part of the Bill. I thought that was obvious.

It is certainly an extraordinary position if, when hon. Members on this side of the Committee ask for an explanation of the Clause, we get no explanation, and that when no explanation is asked of the Government on a matter which is patently self-obvious, we get one. I want to know how we are going to be treated and why we cannot have an explanation of this Clause which is the only Clause in this Bill.

Mr. Harold Davies

I appeal to the Minister through you, Mr. Hopkin Morris, to answer two simple questions that were put from this side of the Committee about Clause 1. They were quite relevant and are worthy of some attention from the opposite side of the Committee. My hon. Friend asked, in the definition of the German enemy debt, how much was outstanding. Is it 1 per cent, or 10 per cent.? I noted roughly from memory, although I made a few notes while my hon. Friend was speaking, a statement made in the other place that specific amounts had been paid into this country.

At least this Committee is entitled to know on Clause 1 what is the amount of the German debt that has been paid into this country at the present moment. It will be very remiss of the Minister if he does not answer that question, and he will be treating the Committee with the utmost disrespect. A famous Prime Minister from that side of the House speaking at Lausanne in June, 1932—then known as Mr. Chamberlain—said that we were then owed by the Germans—Did the hon. Gentleman want to say something?

Mr. John Profumo (Stratford)

I was only asking what other name Mr. Chamberlain was ever known by.

Mr. Davies

In June, 1932, Mr. Chamberlain told the world at that conference that this little country was owed——

The Deputy-Chairman

Order. I do not know what that has to do with this Clause.

Mr. Davies

Mr. Hopkin Morris, if you would be kind enough to wait until I finish the sentence, you will probably see the relevancy of it. He told the world that we were owed £2,000 million by the Germans, and we were scaling that down to such an extent under the Lausanne Conference debt talks that we were only receiving two-thirds of it. And the German repayment of debt only covered one-half of what we were paying to the U.S.A. to meet our commitments.

The relevancy is this. What is the position of the German debts today? What percentage of the debts have we received today? And if there is any priority at all, why should it be given to the holders of bearer bonds? Consequently, due to the entire economic problem of war debts and reparations in this last generation, this Committee is entitled to get an answer on the amount of war debts that have been paid to this country under the new definition of German debts given to the Committee under Clause 1 of this Bill.

Mr. Bing

I am sure the Minister does not intend to be so intentionally discourteous to the Committee as he appears to be. He is probably a victim of the rather peculiar way in which business is conducted by the Lord Privy Seal. He did not announce to the House that this business was going to be taken and he probably did not tell the Minister either. But a certain time has now elapsed and it is to be hoped that the Minister will by now have this information which I suggest he should either give to the Committee, or else should consult with one of the Whips and suggest that we should adjourn this debate until such time as this information can be given.

I know that my hon. Friends are going to press for it, and it is information which the Committee ought to have before they proceed with this Measure. There is probably a sound argument for passing it. It seems to me merely to follow out the principles which we adopted in 1949, but in payment of those debts there are things we ought to look at.

When we passed the 1949 legislation we had greater hopes of getting more money out of the Germans than we have today. The external policy has affected our prospects there. What prospects have we of getting any money? Again, what is the percentage, as I said before, of these securities listed here compared with the total liability?

I do not know whether there is anything further which the Minister can say with regard to the Morison Committee. One appreciates the arguments which were put forward by that Committee in regard to this matter, but I must say I am always a little unhappy about the payment of these bearer bonds. I hope, therefore, we shall now hear from the hon. Gentleman, who has, perhaps, now had an opportunity of recovering from the embarrassing situation in which he was placed by the Lord Privy Seal, and is in a position to help the Committee with the facts.

The Secretary for Overseas Trade (Mr. H. R. Mackeson)

I cannot give the hon. and learned Gentleman an accurate and definite figure, but I think it is somewhere in the region of £15.7 million. As for hon. Members' criticism of my not getting up to speak on this, I would remind them that it is an extremely technical matter and that the real implication is that we are taking 10 series of bearer bonds and also the Saarbruecken Loan which was specially treated by the prewar German Government and treating them on a par with the Dawes and other Reich loans which this country underwrote.

The late Government, I think, rightly, set up the Morison Committee and I think we are right in accepting its recommendations. It is a technical matter which really involves the point that bearer bonds are so easily transferable, and at the time when the Dawes and Young Loans were specifically dealt with we took the view that these bearer bonds should not be treated in the same way because there was a danger that foreign nationals might gain an advantage.

The Committee which reported to the late President of the Board of Trade took an opposite view. In this Bill we are simply following the recommendations of that Committee. I do not wish to be in the least discourteous to the Committee. As I have said, it is a very technical matter and the Bill is one which removes difficulties that would otherwise be insuperable. I hope that may be so, but, if it is not, it may be necessary to look at this matter again.

Mr. Hale

Will the Minister say whether these bearer bonds are going to be assessed at the cost to the purchaser or whether they will rank at their face value?

Mr. Mackeson

I could not say. I think it will be the Stock Exchange value on the day that the Order was issued.

Mr. Bing

I should just like to add, now that we have had an answer—and I hope that the hon. Gentleman does not think we are pressing him too hard—that we should like him to say how far this payment is linked with the funding of the pre-war German debts. From what I can follow from accounts in the Press, it would appear that the offers being made are very poor indeed; only some 1 per cent. of the total debt is being offered.

The Deputy-Chairman

The hon. and learned Gentleman is out of order.

Mr. Bing

It does seem, with great respect, to be of the utmost importance that we should know how much money is coming in. I hope we shall get some information from the Minister.

Mr. Mackeson

I do not think there is any connection between the two.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Motion made, and Question proposed, "That the Schedule be the Schedule to the Bill."

Mr. Hale

Could we have a short explanation before the Schedule is agreed to? It does seem that some of the items in it appear to be unusual. It may be that each and every one of these items has some German guarantee, but the Potash Syndicate of Germany 25-year Sinking Fund Gold Loan would not appear to be a Government guaranteed issue, and the Prussian Electric Company 6 per cent. 25-year Sterling Bonds seem to sound like what is normally a debenture investment in a public company rather than a Government loan. Perhaps we could have a short explanation.

Mr. Mackeson

It is rather confusing, but all these particular issues were dealt in in exactly the same way as the Reich, Young and Dawes loans. It is for that reason that the City of Saarbruecken Loan is included in the Bill, but that particular issue was specially treated. Hon. Members doubtless know that there was a special situation in Germany so far as local government was concerned.

Mr. Paget

I hope that, on Third Reading, the information for which we have asked will have been obtained so that it can be given to us then.

Bill reported, without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Mackeson.]

Mr. Bing

Would it not be more convenient, if the hon. Gentleman feels that he could deal with this matter at some other time, that we should defer the Third Reading? He admits that it is a most complex Bill, and if there are outstanding queries, perhaps it would be better that he should obtain advice than that we should have the Third Reading straight away. If he feels that he must proceed at all costs, then let him, but, in the atmosphere of good will which obtains, could he not leave the matter over and give us, say, 10 minutes on some other occasion when he would have the information for which we ask?

Mr. Paget

May I add a word to that plea?

Mr. Deputy-Speaker (Mr. Hopkin Morris)

The Question before the House is, "That the Bill be now read the Third time."

Mr. Paget

With regard to this, can the Minister tell us whether there is any immediate urgent reason why the Bill is needed at once? If it is, will he undertake to make a statement and give us the information for which we have asked and to which we are quite entitled? If not, can we now adjourn this matter for a day or two just to get the Minister's statement and the information.

Mr. Deputy-Speaker

The hon. and learned Member must direct his mind to the Question, "That the Bill be now read the Third time.

Mr. Mackeson

If the hon. and learned Member wishes to put down questions on this complicated subject, which is extremely narrow for debate on Third Reading, I shall be only too pleased to answer them. I feel I should be quite out of order if I attempted to answer them now, and I am sure you, Mr. Deputy-Speaker, would object if I did so.

Mr. Paget

Personally I should be quite satisfied if the Minister undertakes to answer these questions.

Bill accordingly read the Third time, and passed, without Amendment.