Lords Sitting of 8 November 1921

Preamble
The House met at a quarter past four of the clock, Tire LORD CHANCELLOR oil the 'Woolsack.
The Lord RAGLAN—Sat first in Parliament after the death of his father.

UNEMBLOYED WORKERS DEPENDANTS (TEMPORARY PROVISIONS) BILL.
Message from the Commons: That they have agreed to the Amendments made by the Lords to the Unemployed Workers' Dependants (Temporary Provisions) Bill without amendment.

NATIONAL HEALTH INSURANCE (PROLONGATION OF INSURANCE) BILL
Order of the Day for the Second Reading read
THE PARLIAMEN'I'ARY SECRETARY OF THE MINISTRY OF HEALTH (THE EARL OF ONSLOW): My Lords, this is a short measure agreed to by the Approved Societies. The object is to bring back into insurance temporarily those bona fide members of societies who have dropped out of employment during 1920 and 1921. Those persons will have enjoyed what is called the "free year to which they are entitled to benefits while paving no contributions, but now, in a large number of cases, that "free year" has come to an end and they have dropped out altogether. There is a clause in the Bill which provides that only bona fide persons should enjoy these privileges who have paid the minimum contributions during 1918–19. The rates of benefit which will be received under this Bill will be fixed by Regulations It is proposed to give these people maternity benefit to June, 1923, and full additional benefits and sickness benefit of 8s 6 d per woman and 7s 6 d per woman. The cost falls upon the Approved Societies and no additional cost to the Exchequer is involved, except the normal statutory contribution of two-ninths.
VISCOUNT HALDANE: Can the noble Earl tell us, in supplement of what he has said, what is the net additional liability of the State?
THE EARL or ONSLOW: The State always contributes two-ninths of the cost,
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and as a matter of fact there is no actual increase in the proportion which the State will he called upon to make.
Moved. That the Bill he now read 2a— (The Earl of Onslow)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

LOCAL AUTHORITIES (FINANCIAL PROVISIONS) BILL
Order of the Dow for the Second Reading read
THE EARL OF ONSLOW: My Lords, this Bill is one of the series of Bills which have been introduced by the Government to deal with the situation produced by the unexampled condition of unemployment. The main objects of the Bill are dealt with in the first clause, and are destined to facilitate relief. This falls into two categories— indoor relief and outdoor relief. With regard t o outdoor relief, the machinery already exists in the Metropolitan Common Poor Fund, established in 1867. This Bill enables the payment for the maintenance of a person enjoying indoor relief to be increased from 5d. to 1s. 3d. per day.
But the main provision is in Clause 2. I think it is common ground everywhere that the abnormal state of things in London requires immediate attention. It is impossible to allow things to remain as they are and to leave upon the shoulders of the poorer boroughs the whole financial responsibility of their own outdoor relief. Three possible solutions have suggested themselves. The first, I think it is obvious, could not be considered at the present time. It is the general reform of the Poor Law of the country. Apart from the fact that any such Comprehensive measure would be highly controversial, it would be impossible to realise such a measure in the short time at present at the disposal of Parliament, and even if such a scheme were contemplated in the immediate future it would be necessary, as regards the Metropolitan area, to wait until the Royal Commission presided over by the noble Viscount, Lord Ullswater, has reported. An immediate measure is, I think, clearly necessary to afford relief for the crying necessity that exists.
Two schemes, and two only, have been put forward for this purpose. The first scheme was the increase of the present equalisation rate of 6d in the £ The second is the scheme proposed in this Bill. With a view to considering this question a

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conference was held at the Ministry of Health at which the representatives of all the Metropolitan Boroughs were present. This question of the equalisation of rates was considered. The paying boroughs were unanimously opposed to such a scheme; the receiving boroughs were equally hostile, for the very good reason that even if the rate were raised from 6d to 2s in the £ a sufficient sum would not be produced to set free enough money to meet the heavy expenses of outdoor relief in those poorer boroughs. Thus, in Woolwich and Poplar, which are the two most necessitous boroughs, only £19,941 and £ 30,879 respectively would be produced. So, by common consent, this suggest ion was dropped.
At this conference the town clerk of Westminster, who is one of the most distinguished and experienced of our local officials in London, suggested the extension of the Metropolitan Common Poor Fund to outdoor relief The matter was carefully considered by all the boroughs and eventually a common agreement was reached by them. Under the scheme, which is Cal-bodied in this Bill, Poplar and Woolwich will receive £130,900 and £131,300 respectively. These sums are equal to a reduction of 2s 4d and 2s 9d in the £ respectively in the rates for the half-year, and they will afford material assistance to those boroughs in meeting their liabilities, which, of course, the equalisation of rates scheme would not do The effect which it would have on the rates throughout London is set out in the White Paper which lies on the Table, and therefore I need not go into that The objection which has been raised to this scheme of using the Common Poor Fund is that this Fund would be making payments which they do not control. But 1 would point out that under the Bill the local authorities will not be able to make any payments except such as are sanctioned by the Ministry of Health.
I think the most important matter which I should like to explain to your Lordships at the present moment is how the Common Poor Fund will be safeguarded against relief being administered in an extravagant manner In the first place applicants for relief will have to make a statement in writing in regard to the particulars of their resources, and I have the authority of my right honourable friend for saying that he will use his authority to the utmost limits, even to the extent of handing the matter over to the Public Prosecutor in the event
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of any fraudulent proceedings being detected. Secondly, a certificate will be required front the clerk to the Guardians for all expenditure charged on the Fund, and this certificate will have to be produced to the district auditor. The district auditor will hold audits of the various applications and payments, and further security for compliance with the Regulations will be obtained by making the general inspectors of the Ministry of Health keep in close touch with the administration of this outdoor relief. The general inspectors will obtain particulars from the clerks and other local officials, and will draw the attention of the district auditor to any case in which they have reason to believe the Regulations have not been properly complied with. I should say that the clerks to the Guardians may be dismissed by the Ministry without reference to the Guardians and they may not be dismissed by the Guardians without reference to the Ministry. That power gives the Ministry control over those officials.
I pass to Clause 2 which provides for the ease of a Metropolitan Borough neglecting to raise a rate to meet a precept, such as was recently the case in Poplar. If such a case occurs the authority issuing the precept shall, with the consent of the Ministry of Health, be empowered to apply to the Court for the appointment of a Receiver. Clause 3, which deals with borrowing on short term loans by local authorities, legalises a practice which, I think, has been followed by several authorities— namely, the making of overdrafts on the banks. Strictly speaking, that is not legal and this clause legalises it. If they did not overdraw at the Bank they would have to raise a higher rate in order to obtain working expenses. Many of these rates are not payable until December and therefore they would have no money to carry on throughout the year. Your Lordships will see that they have to make their books balance at the end of the year, and so it is only in order to facilitate their working expenses that this clause is introduced One other point. to which I should like to draw attention is the proviso on page 4, which gives power to deal with the temporary state of affairs which occurs at present, when very heavy expenses have been put on the local authorities. Power has been taken in case of necessity to spread repayment over a. term of years, instead of making it compulsory at the end of every year.

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Clause 4 is introduced to facilitate the construction of new work, and thereby to relieve unemployment. It gives local authorities power to do what any business concern would do— namely, to defer payment of sinking funds until the concern begins to pay. Clause 5 was introduced in another place to meet the case of the East Coast towns which had been very badly hit during the war Their trade had gone, and they had been bombarded, summer visitors had left them, and they were really in a very bad state indeed. This clause gives them power, through the Minister, to recast their financial arrangements to suit the special disabilities under which they suffer. Clause 6 does two things to facilitate relief work: it puts money borrowed for such purposes as 1 have mentioned outside the limits of borrowing powers of local authorities, and it temporarily does away with the necessity of holding local inquiries before loans are sanctioned. Those are the main provisions of the Bill, and I hope your Lordships will consent to give it a Second Reading It has practically been agreed to by all the local authorities in London I beg to move
Moved, 'That the Bill be now read 2a—(The Earl of Onslow)
THE MARQUESS OF CREWE: My Lords, unfortunately I was not able to be in the House when the noble Earl began his speech, and I merely desire to ask one or two questions of him as to what has actuated the Ministry of Health in the precise form which this Bill for the relief of the poorer boroughs in London and the poorer Unions has taken. It was, as I understand, the fixed policy of the Local Government Board that the Metropolitan Common Poor Fund should in no circumstances become responsible for outdoor relief. There was an Inquiry conducted by a Royal Commission on the Poor Law and Relief of Distress in which important evidence was given by Sir Hugh Owen, who at that time was the permanent Secretary of the Department now represented by the Ministry of Health. In the course of that Inquiry, Sir Hugh Owen was asked whether there had been any proposal to put outdoor relief on the Metropolitan Common Poor Fund, and he explained in great detail— I will not trouble your Lordships with the whole of it— why such a course was, in the opinion of the Local Government Board, an impossible one to take. He prepared a table which
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was afterwards circulated as a White Paper, explaining what the effect would be upon the different unions in London, and the general trend of his evidence was that to place the whole of a charge of this kind upon the Metropolitan Common Poor Fund would mean that there would be no incentive whatever to economy on the part of the poorer districts in the expenditure of the money by the granting of outdoor relief.
At that time the figures were these. If the charge were equalised, Poplar, which had to raise £ 34,000 a year for outdoor relief, would have to raise only £5,200, or, to put it in another way, out of every £500 spent by Poplar in outdoor relief £490 would be found by the Metropolis at large. The point 1 wish to impress upon the noble Earl is that it is not only a question of hitting the wealthy unions, such as Westminster and Kensington, but the tendency of putting the whole of the charge upon the Metropolitan Common Poor Fund would also be to hit sonic of the poorer districts, if they are in fact carefully administered at this time. Sir Hugh Owen mentioned St. George's-in-the-East and Whitechapel, both of which, having been very strictly administered unions, would have to pay a considerable amount— up to £12,700 in the case of Whitechapel— as part of the contribution of £29,000 to Poplar. I have been lately reminded of what would happen at Fulham, which is not a specially wealthy district. The proposals in the Bill would mean, I suppose, a cost to Fulham of £10,000 or £12,000 a year on the rates as an extra contribution.
The question, therefore, I really wish to ask the noble Earl is what it is that has actuated the Ministry of Health in placing the whole charge, rather than one-half or some other fraction of it, upon the Metropolitan Common Poor Fund? What is the purpose of not leaving a certain proportion to be treated under the system of the equalisation of rates? It is not, I take it, either out of consideration for, or in order to inflict damage upon, the wealthier parts of London. They have recognised, fully recognised, that in a crisis of this kind they are bound to make a substantial contribution, but they desire, of course, that the money should be equitably spent; that there should not be anything like an indiscriminate system of poor relief in those unions where discrimination has not been very carefully exercised in the past;

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and they are quite unable to understand, as I am told, why it is that the other system—that is to say, dividing the charge between the two different methods of raising money either through the rates directly or from the Common Poor Fund— has not been adopted by His Majesty's Government. That is really the only question I desire to ask the noble Earl. It is possible, of course, that other speakers may take part in the debate, and if the noble Earl replies I dare say he will be good enough to explain these matters.
LORD PARMOOR: My Lords, I should like to say a word or two upon this Bill because I called your Lordships' attention, at an earlier stage this year, to the enormous burden which not only lay upon the rates then but was constantly being placed upon them. I pointed out at that time that the income derived from the rates had risen to £ 200,000,000 a year, although only charged upon certain classes of property. At that time the representative of His Majesty's Government—I think it was the noble Viscount, Lord Peel—intimated that the whole question would be considered by the Government in order that these enormous charges might be disposed of on some more equitable basis. Of course, when we come to the question of "equitable basis" we open the whole discussion as between local and what are called Imperial charges; but that is a matter which must inevitably be undertaken.
Meanwhile, we are always having the excuse, if I may so put it (though I am not, of course, charging the noble Earl with it)—"Do not object to a further interference with the rating question"—which, in fact, is putting a further charge upon people who are now monstrously overcharged— "because we cannot deal with the general question." I suggest that that is a very bad argument indeed, and the further we go into this piecemeal legislation the more difficult it is to put the whole matter on a satisfactory basis.
May I call your Lordships' attention, for instance, to what I understand are the proposals in this particular Bill on the two material points? The first proposal, in reference to indoor relief, is to raise the limit from 5d. in the half-year to ls. 3d.; in other words, 1s. 8d. in the year. That is so, is it not? It is 2s 6d as against 10 d., that is a difference of 1s. 8d. Just think what that does straight off,
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without considering any other matter in the Bill at all. It practically does away with the advantages which have been given to Poplar, to take Poplar as an instance, under the other head. I do not know if the noble Earl can tell me— there are no figures as regards the point upon the White Paper—what is the actual increase which may be thrown upon any of these various boroughs as a result of increasing the power of rating for indoor relief purposes from 10 d. to 2s. 6d. That seems to have been disregarded in supplying the figures, and the information certainly ought to have been supplied.
To any one who has not had a great experience of the rating question it is difficult to understand what the effect of this Bill will be. The noble Earl will correct me if I am under a misapprehension —I only saw the White Paper when I came into the House—but it appears to me to contain no reference whatever to any additional charges which might arise under subsection (1) of Section 1 of the Act. If I am wrong in that, the noble Earl will put me right. As regards the second question, the necessity of some relief to these poor boroughs may be conceded, but let us see what the nature of the, relief is. My mind goes back to a period now long ago, when a Royal Commission was considering this question. That Commission was presided over by the late Lord Balfour of Burleigh. There was considerable discussion before that Commission as to whether, amongst other matters, a proportion of the Poor Law expenses should not properly be charged on the Imperial or central fund.
If the noble Earl looks into the Report he will find that there was considerable discussion, but the discussion turned upon this point. Those who took one view said: "We do not want to disturb the principle which makes those who spend the money responsible for providing it." That, of course, is the real principle at the bottom of all local government in this country, and is the only theory on which you can, in any way, support the rating principles which have been adopted in this country. What you are doing here is absolutely contrary to a principle of that kind. You are placing an expenditure on people who are not responsible for the conditions under which that expenditure is made. You are putting on one district expenditure for outdoor relief given under the control of guardians

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for a different district. Therefore, what I want to point out, first of all, is that directly we come to this piece-meal legislation we find it founded on antagonism to every real rating principle, and not only that, but also to the very principle laid down by the Royal Commission to which I have referred, which thought that certain charges should still be left to the rates, apart from any further assistance from the central fund. That being so, I deeply regret, that these matters should be dealt with in this piece-meal way.
I want to ask the noble Earl a further question on the figures. Take, for instance, Whitechapel, which will be penalised by its rate being raised on this calculation by 4s 6d in the £ for the year. Can the noble Earl tell me what the total rate in White-chapel will be after this 4s 6d is added to the existing rate? You cannot, of course, estimate the expenditure of an additional burden unless you know what the rates are at the present time. Under this table ratepayers from one district, whose rates put together were only 8s, would possibly be receiving benefit; whereas another district, whose rates altogether might be as high as 10 s, would be penalised, because you are dealing with one item only of the local expenditure. I cannot, therefore, accept the first table as really giving any true information as to what the effect of this rating Bill will be. I should like to know whether, in a district like White-chapel, which is not other than a poor district, the effect of adding the 4s 6d to the rate will not be to raise the total rate there above that in some of those other districts to which assistance will be given. I think the noble Earl understands my point.
With reference to this matter we also have to consider what is the true position of the ratepayers. This is one of those Bills which, because it is wrong in principle, can only be carried out in a very costly and inconvenient way. The noble Earl says that "starting front the wrong principle, it must have some special safeguards. It must have provisions for particular audits, and persons from central bodies must have the power of seeing what is being done." That sounds very well on paper, but it is the source riot only of an immense amount of expenditure in modern times, by increasing seine of our official bodies to an undue size, but also of friction if you want to have true local administration.
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I regard our local administration as one of the finest developments in the world's history as regards a system of local government, but if, in order to use it wrongly, you have to introduce an enormous amount of what I call rather obstructive intervention from outside, your central authorities may counteract the main principle on which the whole superstructure is based. No doubt safeguards of this kind may be necessary—that is a Departmental matter — but I regard the fact that they have to be put into the Bill as, in itself, proof that the Bill is not founded on the right basis. It is, indeed, admittedly founded on the wrong basis, because you make one district responsible for what another district has done. That causes an upsetting of the primary principles of local administration.
As to the other matters in the Bill, after all they are rather like merely warding off the evil day. The noble Earl will recollect the Irishman who, every time he renewed his bill, thought that he had paid his debt. That is exactly what is being done here in what is called the extension of the loan principle. Instead of paying your way as you go on, you leave it to some future period, and at that future period there will probably be heavier liabilities on local authorities than there are at the present moment. I regard with great suspicion a proposal which says that instead of paying your way for the year you should be allowed to extend your expenditure into future years, which will have their own burdens to bear, and very likely heavier burdens than those which are imposed at the present time. It is very- important that we should consider these casual Bills in their true light, and that we should express the opinion that we hold that, although it may be inconvenient and troublesome to deal with the matter as a whole, still such legislation has long been overdue, and the longer you delay it, the more you will get conditions such as are exemplified in the present Bill.
THE EARL OF ONSLOW: My Lords, I think I can deal with the main questions put to me by the noble Marquess and the noble and learned Lord who has just sat down. As to the reasons why this particular course was followed rather than adopting the equalisation of rates, I endeavoured to explain them when I first addressed your Lordships, and the objections which I mentioned are these The richer boroughs objected most strongly to

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such a course, but the poorer boroughs showed that, even if you were to make a rate of 2s in the £ (which was a great deal more than has been contemplated in practice) it would nothing like meet the ease. They would not have been able to raise the necessary money to assist them out of their difficulties. Poplar, for instance, would receive only about £30,000, while in this Bill it receives £120,000.
THE MARQUESS OF CREWE: Might I remind the noble Earl that the question I put to him was why the Department had not adopted both methods so as to give some inducement to the poorer boroughs who will receive the bulk of the money not to expend it extravagantly. There would be a certain degree of check upon them if they became liable to some increase of their own rates, although the Metropolitan Fund had contributed a considerable part of the money.
THE EARL OF ONSLOW: The noble Marquess really asks why both schemes were not adopted, or a part of both schemes. The answer to that is that the objections were so strong to the equalisation of rates scheme that it was thought better to adopt the second scheme— namely, the consolidation of outdoor relief. The equalisation rate is levied not on rateable value but upon a population basis; the other is levied on rateable value, and it is this rate which produces the sum necessary to deal with the state of affairs that has arisen.
The objection of Lord Parmoor is that this is piece-meal legislation. It is, of course, emergency legislation; it is part and parcel of the Government's scheme for dealing with the present state of unemployment. To introduce a comprehensive measure of Poor Law reform at the present moment would have taken so long that it is out of the question to suppose it could have had any bearing on the immediate necessity. The present solution of the problem is one which has found favour with all the boroughs concerned, both the poor and the richer boroughs. The proposal came from the town clerk of the borough of Westminster, one of the richest in London. It was adopted after careful consideration by both sides and has been accepted by the Government. The safeguards to which Lord Parmoor referred are not, I think, of such an expensive nature as he seemed to suppose. The general
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inspectors, district auditors and clerks to the Guardians, are the officials who will deal with the matter, and 1 doubt whether it will be as expensive as the noble Lord suggested.
With regard to the question of figures I should like to draw Lord Parmoor's attention to paragraph 6 of the White Paper which, if I understood him correctly, gives the answer, or part of the answer, to his question. It says—
"It appears from particulars furnished by the clerks to the several Boards of Guardians in London (i) that the additional 10 d per day per poor person in respect of whom the 5d grant is now payable would have amounted to £ 202,000 in the past half year."
I think the noble and learned Lord also asked me for particulars of each borough.
LORD PARMOOR: What I really wanted to know was whether they had been taken into consideration in the estimate of the increases given lower down in the same White Paper.
THE EARL OF ONSLOW: I should like to make inquiries on that point. I cannot answer offhand but I will let my noble friend know at the next stage. He also spoke of handing over your debts to posterity. I should like to point out that the proposal of the Bill is that a borough might borrow money on overdraft for current expenses; that is to avoid having to raise a higher rate than is absolutely necessary. But the borough will have to balance its books at the end of the year. There are very heavy charges on local authorities at present, and in order to spread this charge out power is given in the Bill to enable money borrowed before April 1, 1923, to be spread over ten years. That period is a very outside estimate and it is hoped that the time over which this money will be spread will be much shorter than that.
LORD PARMOOR: I also asked the noble Lord whether he could give us the effect on total rates of the changes effected by the Bill?
THE EARL OF ONSLOW: I have not the figures with me, but I will make a note of the point and give the noble Lord the information at a later stage.
LORD BUCKMASTER: My Lords, the noble Earl has informed us that this is an

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emergency Bill. I do not know whether he used that phrase for the purpose of recommending it to our affections, but I should have thought that a more unpromising introduction could hardly be discovered to a Bill than to say it was an emergency measure. Nearly every emergency Bill has been introduced in haste and many of them repented of at leisure. I do not rise for the purpose of commenting upon that peculiarity of the Bill, however, but for another and different reason. The real defect in the Bill is that the central authority which will administer the Poor Law Fund is really inadequate to the task You have not got a. representative body at all; neither have you got effective control over the monies that will be raised in one parish for the purpose of redeeming the distress in another.
It seems impossible to find out, even from the White Paper, the extent of this relief, and it would have been better if the House had been informed what a penny rate would have produced in the City of London, in Westminster, Hampstead, and the other boroughs mentioned, as it would have enabled us to know the actual contribution from each of these boroughs to the central fund. I think the actual contribution made, by the City of London will be very large, for a penny rate there is highly productive. Until this information is given one cannot tell the extent to which these boroughs are being called upon to make a sacrifice for purposes for which everybody recognises a. sacrifice has to be made.
I should also like to have seen a statement as to what the existing rates are in order to see how far there was equalisation when this further proposal had been introduced. But the real comment I wish to make is that the authority which is provided for the allocation of monies under the Bill is inadequate, and I hope that some noble Lord will see his way to introduce an Amendment in Committee which will afford a more perfect protection for the administration of the fund.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

POOR LAW EMERGENCY PROVISIONS (SCOTLAND) BILL
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee—(Lord Stanmore)
LORD SALTOITN: My Lords, before the House goes into Committee on this Bill I should like to ask a question of the noble Lord in charge of it. I apologise to him, but I was unable to be in the House on the Second Reading of the Bill. Clause 2 of the measure deals with loans to parish councils in connection with the relief of able-bodied persons out of employment. Many parishes will find great difficulty in raising loans because the security of those loans will not be such as to justify the banks in giving advances. I understand that His Majesty's Government are not going to ask the banks to lend the money for a period of five years, but that the local authorities will be invited to arrange the loans themselves for five years, and that if they cannot arrange the loan, the Government will step in and raise a loan for them. The parish council will go to the banks for an overdraft, and the Board of Health will be prepared to give a certificate to the bank if the overdraft is in order. I want an assurance from my noble friend that that is an accurate statement; that the Government are prepared to do this, and that this will be the procedure. It is a very important point and a great many parish councils are anxious to have that assurance clearly affirmed, as it did not appear to me to be complete when the Bill left the Commons.
LORD STANMORE: My noble friend is perfectly right in the interpretation he puts on the Bill. Parish councils who have overdrawn their accounts with the banks are authorised by the Bill to raise loans, the proceeds of which will be used to pay off the overdrafts. There is no intention of asking the banks to lend for five years; the loans will be raised otherwise, with the help of the Board of Health.
On Question, Motion agreed to.
House in Committee accordingly: Bill reported without amendment.

TRADE FACILITIES BILL
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee—(Viscount Peel)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL of DONOUGHMORE in the Chair.]
Clause 1:
Power of Treasury to guarantee loans
1 —(1) If the Treasury, after consultation with an advisory committee nominated by the Treasury for the purposes of this section, are satisfied that the proceeds of any loan proposed to be raised, whether within or without the United Kingdom, by any government, any public authority, or any-corporation or other body of persons, are to be applied towards or in connection with the carrying out of any capital undertaking, or in, or in connection with, the purchase of articles other than munitions of war, manufactured or produced in the United Kingdom required for the purposes of any such undertaking, and that the application of the loan in the manner proposed is calculated to promote employment in the United Kingdom, the Treasury may, subject to the provisions of this section, guarantee in such manner and form and on such terms and conditions as they think proper the payment of the interest and principal of the loan or of either interest or principal:
Provided that the aggregate capital amount of the loans the principal or interest of which is guaranteed under this section shall not exceed the sum of twenty-five million pounds
LORD BUCKMASTER LORD BUCKMASTER moved, in the proviso to subsection (1), to substitute "five million pounds" for "twenty-five million pounds." The noble and learned Lord said: A public engagement of no slight importance prevented me from being present when this Bill was read a second time. I had, indeed, attempted to arrange the meeting on such a day as to secure myself liberty for attendance at this House, but owing to the zeal of the Government in pursuing this measure on Friday, my good intentions were frustrated. I do not mention this specially for the purpose of complaining of the Government's proceeding with their work on Friday without any notice, nor for the purpose of warning you that I propose now to make the speech with which I certainly should have committed trespass upon both your time and your patience had I been here when this Bill was under discussion. I do it only for the purpose of explaining why I have put down such an Amendment as that which stands in my name without having prefaced it by a discussion at an earlier stage of the Bill.
The Amendment that I propose is to limit the liabilities that the Government can incur under the guarantees in this Bill to £5,000,000, and I have no doubt I shall be told that the effect of this is to destroy
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the whole value of the guarantee. That may be so. I beg your Lordships, however, to see what it is that this guarantee is intended to support. It is intended to support schemes which, so far as I can see from Clause 1, have no recommendation whatever excepting a recommendation by an Advisory Committee, which says that the loan which is to be guaranteed is to be applied either in carrying out a capital undertaking or in connection with the purchase of articles other than munitions of war. The only thing that is left out, so far as I can see, is cannon and shells; for the rest, any article that the local authority desires to buy in connection with the capital undertaking, whatever that may be, may be purchased, and the only condition that is imposed upon them is that the article in question must be made in the United Kingdom.
It makes no difference whatever that it might be that the article which they need is an article which could be much better obtained elsewhere. If they attempted, in the interests of economy, to do anything like that—if, for example, in building a bridge they obtained girders cheaply from Belgium—in no circumstances whatever could they then obtain the security of this guarantee. They must buy the article here; and if they do so, then that is the only condition precedent, so far as I can see, that need be satisfied before the guarantee attaches.
It will be found that this guarantee, when once it has attached, has got to be satisfied "out of the Consolidated Fund of the United Kingdom or the growing produce thereof." Before this Bill passes, with its twenty-five millions charged under the Consolidated Fund, "or the growing produce thereof," I should really be glad to know what it means. As I understand the Consolidated Fund, it is the Fund that is raised by Taxes. What "the growing produce thereof" is, I really have not a notion. There cannot be much doubt that the growing produces of Taxes in the future will be a growth in the nature of a deficit. However, this money is to be charged on that. But if it is meant in this Bill that it has got to be paid out of the Revenue of the year, I do ask your Lordships to consider what an intolerable burden this Bill may place upon the taxpayers of this country, for it would in those circumstances certainly mean that an Income Tax up to an extra 6d., or it might be even more—
VISCOUNT PEEL: Up to 6d?
LORD BUCKMASTER: Why not?
VISCOUNT PEEL: The total amount is only £25,000,000.
LORD BUCKMASTER: Does not Id. in the £ produce between four and five millions? Four to five millions is a very liberal estimate, and six times that is twenty-four. I do not think I am very far wrong in saying that this is going to be found out of the Revenue of this country. Your Lordships will have the pleasure of paying another 6d in the £ Income Tax. From what source you arc going to pay it, I have not the least idea.
Everybody knows that at the present moment Income Tax in this country is pressing with such h grave and increasing burden upon people whose livelihood is derived from the possession of land that their difficulties in making both ends meet are far graver than the public at large recognises. It is not merely that they have been stripped to the skin; they have been stripped to the bone; and I believe that at this very moment considerable sums of Super-Tax remain unpaid, simply because the Inland Revenue authorities know perfectly well that, although these persons have been duly assessed and all the necessary demands made for payment, it is perfectly impossible that the demands can be met. If I am right in thinking that the Consolidated Fund or the growing produce thereof does, in fact, mean Revenue raised by direct taxation in this country, or any other form of taxation, because it comes to be direct taxation sooner or later, then I beg your Lordships not to allow this Bill to pass in its present form, but to reduce the liability which you will have to bear from £25,000,000 to £5,000,000.
Amendment moved—
Clause 1, page 2, line 3, leave out ("twenty- ") —(Lord Buckmaster)
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT PEEL): I must express my regret that the noble Lord was not present on Friday. He says it was due to the anxiety of the Government to press on with its business. I hope he acquits me of any desire to press it on unduly—
LORD BUCKMASTER: I thought I did say that. I rather appreciated the zeal of the noble Viscount.
VISCOUNT PEEL: 1 was not quite certain, and I wanted to elicit that compliment in rather more explicit language. I really did not know until very recently that this Amendment was on the Paper, or I would have been prepared to answer more fully the general question of the noble and learned Lord on the financial situation itself. I will, however, do my best to answer the specific point and complaint of the noble and learned Lord, first of all, as to the sum to be guaranteed being so large as £25,000,000, and secondly, as to the method by which it was to be done.
He complained, I think, that this guarantee had to be given in the case of loans whose produce was to be expended in purchasing either carriages or railways or bridges, whatever it might be, to he made in this country, and he seemed to complain that it was not to be used for purchasing similar articles made in Belgium or elsewhere. I think it a rather strong order to ask the Government of this country to guarantee loans in other countries, the produce of which was to be spent in purchasing articles in those other countries, and therefore I do not think the noble and learned Lord must complain that the produce of these loans is to be confined to purchasing articles produced in this country. In fact, it is not quite solely in this country, because some of the work of construction might be done in other countries, and money might be spent on the necessary labour of erecting those works in other countries.
He complained also that this was to be charged on the Consolidated Fund, and "the growing produce thereof." 1 was rather surprised that he made such a difficulty about that phrase, "the growing produce thereof," because it is, of course, a common phrase, to be found in all Bills. 1 do not think you ever hear of the Consolidated Fund without also hearing of the growing produce thereof The reason is very simple. The accounts are made up each quarter, and it is desired that they shall also include the amounts coming in from the Taxes during the ensuing quarter, and that is why in all cases you use the phrase "growing produce thereof.''
The noble and learned Lord did not, I think, give us a very great deal of argument as to the reason why we should confine these particular loans to £5,000,000, or why he thinks that £5,000,000 would be an adequate sum. I will deal, first of all,

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with his financial criticism, and then say a word as to the reasons why I think the sum should be £25,000,000. The criticisms that I have heard upon this Bill are in an entirely different direction from that of the noble and learned Lord. It is said that; with so much capital money required for the starting of these new businesses and their development, it is really only child's play to deal with so small a sum. I am prepared to defend the Bill against that criticism, but now T have to defend it against the criticism that, in the opinion of the noble and learned Lord, far too large a capital sum is to be guaranteed by the Government. He tried to alarm us by saying that there would have to be an Income Tax of 6d in the £ in order to pay this sum of £25,000,000, assuming that a penny produces between £4,000,000 and £5,000,000.
I think the noble and learned Lord has really misconceived this guarantee altogether. This sum of £25,000,000 is the largest total of loans which the Government is entitled under this Bill to guarantee. The noble and learned Lord apparently assumes that this money is to be lent within one year, and then to fall to be repaid within that year, so that the whole charge would fall upon the Consolidated Fund and the growing produce thereof within that year. Of course, that would be impossible, and could not happen, because these loans would be made for a certain period, ten or fifteen years, whatever might be the period, and there would probably be a sinking fund in most cases to replace them, and the whole liability could not therefore fall upon the State in the course of one year. Moreover, why should we assume that the whole liability will fall upon the State at all S The Government will act in these cases upon the advice of a Committee of very competent business men, and one could hardly call them competent business men if they are going to guarantee loans of £25,000,000, every penny of which will have to be repaid by the guaranteeing Government. The whole idea that that will happen is incredible.
I have one or two figures which might interest your Lordships, and the noble and learned Lord, as to the possible extent to which liability might fall upon the Consolidated Fund. I am assuming, of course, what is really ridiculous—namely, that the whole of the money is lost and none repaid. If we assume that £25,000,000 is borrowed
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at 6¼ percent and repaid by sinking fund in twenty years the maximum liability on the State would be £2,207,000 per annum. If the period were thirty years, of course it would be less, owing to the sinking fund being less for the longer period, and the liability would be about £1,855,000. If you take the interest at 6½ percent the figures would be: for twenty years, £2,251,000, and for thirty years, £1,901,000. Obviously, the charge would be spread over the Consolidated Fund by some such method as this, but those figures, as I have said, assume that the whole of that money is lost (which, as I have already pointed out, is an absurdity) and that not one single penny is paid back by those to whom the money has been loaned.
With regard to reducing the£25,000,000, I am afraid that that would be equivalent to destroying any value that the clause possesses, because a guarantee of £5,000,000 would be so small a matter that it would hardly be worth doing. Moreover, these loans might be raised either in England or in other countries or in the Colonies or Dominions. I understand that the Dominions and Colonies are to have the preference. If you were to limit the amount to £5,000,000 you might just as well say that you limited it to certain of the Dominions or Colonies, because the idea of putting in the suggestion that it should be raised in other countries would be really absurd were the sum so small as £5,000,000. I hope, therefore, that the noble and learned Lord will not press his Amendment. Perhaps he will be satisfied with the care the Government have taken in limiting the amount of the guarantee at so comparatively small a sum as £25,000,000, conscious as they are of the danger that there might be in risking larger sums in the present state of taxation and the present state of trade.
LORD BUCKMASTER: I understand a good deal of what the noble Viscount has said, but I think he has overlooked this, that this is not a Bill merely for guaranteeing long loans such as those to which he referred. This is a Bill to guarantee the loan of any corporation or body of persons, whoever they may be. It may be a joint stock company or a private firm, and they do not raise loans at 6¼ per Cent with fifteen years for repayment—their loans have to be paid very promptly; and there is

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nothing in this clause to protect you against this money being used for the purpose of securing the repayment of short loans. The one thing that is certain is that the guarantee is to be given to protect the security which, without the guarantee, would not be adequate to raise the money, or otherwise there is no need of giving the guarantee. In other words, the risk involved in this clause cannot be overlooked. Nor do I think that the calculations which the noble Viscount has placed before us can be relied upon as showing the way in which this money is to be raised and repaid
LORD VERNON: Could not the Government by some means make this a prior charge on these enterprises? And is there any provision in the Bill which says where the charge stands relative to other debts which the companies may have?
VISCOUNT PEEL: Two points have been raised. First of all, the noble and learned Lord (Lord Buckmaster), has, I think, taken rather too sharp an alternative. He said the guarantee would be applied in cases where, without 1-he guarantee, a. loan could not be raised at all. I think he is going rather too far. It might quite conceivably, indeed very probably, be applied in cases where the company or Government, or whatever it was, might be able to raise the loan, but raise it at such a price time it would not be worth while for it to go on with the enterprise any further; and the Government guarantee— we are, of course, very familiar with this sort of transaction— would enable the money to be raised at a better price and a lower rate of interest. It may very well be that that difference between the two prices would be sufficient to make a profit a possibility, and to enable the enterprise to go forward, because so many firms and businesses are hanging back now in the hope that things will be better. The object of the Government is to give a little push to trade, and to try and start operations of this kind with the assistance of the Government guarantee.
The noble Lord, Lord Vernon, asked, I think, whether the charge would be made a first charge on some of those enterprises whose securities were guaranteed. That, of course, is a matter which will be dealt with by this Committee of business men which will be set up, because they are going to advise the Treasury, and the
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Treasury will in most cases, I understand, act upon their advice. Therefore those questions of prior charge, and so on, will be among the questions which will be considered by this particular Committee.
LORD VERNON: Can the noble Viscount say whether the question of what is a prior charge rests with the Committee?
VISCOUNT PEEL: It rests with the Committee, subject, of course, to the overriding responsibility of the Treasury. But the noble Lord will understand that in cases of this kind, where there may be suggestions of political influence, it is much better that they, should generally accept the decision or advice of an impartial business Committee.
LORD SYDENHAM: not the whole point of this Bill that the Government is prepared to undertake risks which no banker would feel justified in running?
On Question, Amendment negatived
Clause 1 agreed to.
Remaining clauses agreed to.
Schedule agreed to.

GAMING BILL [H.L.]
Read 3a(according to Order), and passed, and sent to the Commons.

POTATOES FROM GERMANY
LORD BLEDISLOE LORD BLEDISLOE rose to ask His Majesty's Government to what extent potatoes grown in Germany are now being imported into this country through the medium of Holland, Denmark, Sweden, and other Continental countries, without payment of the 33 percent. or any other duty; at what price such. potatoes are being sold in Great Britain, and whether in their judgment there is any chance of home-grown potatoes being raised at any margin of profit in face of such competition.
The noble Lord said: My Lords, in asking this Question I desire to make it clear that I am seeking information, and not attempting by my Question in any way to convey it. I have no personal knowledge on this matter, but there is a rumour current in all our chief potato growing districts, notably in the Lothians of Scotland, in Lincolnshire, Lancashire, and elsewhere.

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that large quantities of potatoes, raised in Germany, are being imported, or are about to be imported, into this country through various neutral countries, such as Holland, Denmark, and Sweden, without any payment of the 33⅓ per cent which, I believe, German potatoes are supposed to pay on importation into the United Kingdom, or any other Duty.
Assuming that this importation is taking place it is somewhat remarkable, because the potato harvest has not been a particularly favourable one, and yet the price of British potatoes is very low—much too low to leave the growers in most parts of the country any margin of profit. It is quite clear that, if the Government are anxious that potato production should increase and prosper in this country, it is most undesirable that potatoes raised in Germany, with very cheap labour and in the existing condition of international exchange, should enter so severely into competition with our own potatoes as to render it impossible to produce them here at a profit.
I should like to remind your Lordships that there are two farm products, both of them very important, in respect of which we are entirely self-contained, one of them being potatoes and the other milk; and, in view of the "scrapping" of the Agriculture Act and of the corn production policy which it embodied, it has become of far greater importance than formerly that. we should remain self-contained in the matter of our potato production, upon which, in times of very serious national emergency, we shall undoubtedly have to depend. Having said that I should like to put to the Government the Questions of which I have given Notice, and in particular, whether, in the event of any attempt to import German potatoes surreptitiously through other countries, the Government are prepared to take steps to put a stop to it.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF ANCASTER): My Lords, the importation of potatoes from the Netherlands and other countries adjacent to Germany in the present year is quite normal, and gives no ground for suspicion that fictitious re-consignment of German potatoes from an intermediate country is being attempted. I think the noble Lord has rather confused
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two different questions. There is at the present moment a payment of 26 per cent. under the German Reparation (Recovery) Act, and I understand that the Customs officers have standing instructions to watch importations which might cause suspicion to arise that endeavours are being made to avoid, by fictitious re-consignment from an intermediate country, the payment of this 26 per cent.
Then the noble Lord refers to the 33⅓ per cent. That is charged in certain cases, as noble Lords will no doubt remember, under the Safeguarding of Industries Act. The first part of -that Act does not apply to potatoes, because potatoes are not in the Schedule; it refers to key industries. And Part II of the Act does not refer to potatoes because that Part of the Act prevents dumping, which particularly excludes articles of food and drink. From inquiries which have been made by the Ministry of Agriculture I understand that the trade in Continental potatoes is bad. In the few cases where trade is being done the quality of the potatoes is moderate. The Ministry is satisfied that the quantities which are being imported are not an important factor in determining the price of home-grown potatoes. I do not think I can follow the noble Lord further and go into a debate now on the merits of the taxation of foreign imports of foodstuffs.

REPORT OF IMPERIAL MEETINGS
LORD VERNON: My Lords, in the unavoidable absence of Lord Strachie I desire to put the Question which stands in his name on the Paper— namely, to ask His Majesty's Government whether they will publish the Report of the proceedings of the last Imperial Conference as a Parliamentary Paper as they did in the case of the Imperial Conference of 1917.
THE FIRST COMMISSIONER OF WORKS (THE EARL OF CRAWFORD): My Lords, in connection with the Imperial meetings which took place last June and. Judy, it is not proposed to publish anything beyond what has already been given to the Press—namely, "The Summary of the Transactions of the Prime Ministers and Representatives of the United Kingdom, the Dominions and India, June, July, and August, 1921," a Paper which was approved by the Empire representatives for publication,

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and issued to the Press on August 5 last. This Summary was also published by the Colonial Office in Command Paper 1474, together with various appendices giving the opening speeches of Ministers, Mr. Balfour's statement on the League of Nations, the Report of the Air Committee, and memoranda on such things as Oversea Settlement, Empire Patent, Nationality, and so on.
Although in many quarters the meetings last summer have been referred to as the Imperial Conference, it was not strictly speaking an "Imperial Conference" such as has been held previously, and was more in the nature of an Imperial Cabinet. The term "Imperial Cabinet" was, however, objected to in some quarters and was consequently avoided, the designation generally adopted being "Imperial Meetings." At the previous Conferences, which have been called "Imperial Conferences" (as opposed to the "Imperial War Cabinet" which was held during the war), there has been really nothing confidential about the questions under discussion, and in many cases it has been an advantage rather than otherwise to publish the records of the discussions. This was not the case with the recent Imperial meetings, when most of the discussions were of a very secret and confidential nature, dealing as they did with questions of foreign policy, defence, and the like, the publication of which would not be in the public interest.

HAYLING ISLAND GAS ORDER, 1921,
LORD SOMERLEYTON: My Lords, I beg to make the Motions which stand in my name with reference to certain Gas Orders, and by the leave of your Lordships I will move all four together. They are very simple and are in accordance with other Resolutions which have been moved on similar matters in the past
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Hayling Island Gas Company, Limited, which was presented on the 25th October, be approved. —(Lord Somerleyton)
On Question, Motion agreed to.

NEWBURY CORPORATION GAS ORDER, 1921
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Mayor, Aldermen and Burgesses of the Borough of Newbury, which was presented on the 25th October, be approved—(Lord Somerleyton)
On Question, Motion agreed to.

WISBECH GAS ORDER, 1921
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Wisbech Lighting Company, which was presented on the 1st November, be approved—(Lord Somerleyton)
On Question, Motion agreed to.

PLYMOUTH AND STONEHOUSE GAS ORDER, 1921
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Plymouth and Stonehouse Gas Light and Coke Company, which was presented on the 25th October, be approved—(Lord Somerleyton)
On Question, Motion agreed to.

BUSINESS OF THE HOUSE
THE EARL OF CRAWFORD: My Lords, I beg to give notice that to-morrow I shall move, or my noble friend the Marquess Curzon of Kedleston will move, the consideration with a view to its suspension of Standing Order No. XXXIX in respect of certain measures—namely, the two Bills standing first on the Order Paper to-day (the National Health Insurance (Prolongation of Insurance) Bill and the Local Authorities (Financial Provisions) Bill). I should also like to give notice that I shall move that Government Orders do have precedence in order to get the Amendments down to the Commons at the earliest possible moment.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
The Royal Assent was given to the following Bills:—

Forestry,

Unemployed Workers' Dependants (Temporary Provision),

Edinburgh Corporation Order Confirmation,

East Lothian County Buildings Order Confirmation,

Dorward's House of Refuge (Montrose) Order Confirmation,

Church of Scotland (General Trustees) Order Confirmation,

Oban Burgh Order Confirmation,

Greenock Corporation Order Confirmation

[From Minutes of November 4.]

DUNDEE CORPORATION ORDER CON FIRMATION BILL
Brought from the Commons; read 1a; to be printed; and (pursuant to the 'Private Legislation Procedure (Scotland) Act, 1899), deemed to have been read 2a (Lord Stanmore), and reported from the Committee.
House adjourned at a quarter past six o'clock.