HL Deb 25 March 1929 vol 73 cc824-31

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Cushendun).

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF DONOUGHMORE in the Chair.]

Clause 1:

Confirmation of scheduled agreement.

1.—(1) The supplemental agreement set forth in the Schedule to this Act is hereby confirmed and shall have effect as if enacted in this Act.

(2) Any sums certified by the Joint Exchequer Board to be payable after the thirty-first day of March, nineteen hundred and thirty, under the principal agreement as continued by the supplemental agreement, from the Exchequer of the United Kingdom to the Exchequer of Northern Ireland shall be charged on and paid out of the Consolidated Fund of the United Kingdom or the growing produce thereof.

LORD ARNOLD moved, at the end of Clause 1, to insert:— Provided that no sum shall be so charged and paid if there is a surplus in the Unemployment Fund of Northern Ireland and any deficiencies in that Fund have been made good. The noble Lord said: In moving this Amendment I wish again to make it clear that, so far as the Labour Party are concerned, we are not objecting to helping the Unemployment Fund of Northern Ireland when help is really needed. What we have said is that we think the help should be by way of loan, and not by way of gift, and there has been no misconception, as the noble Lord seemed to think, on our part. What I want to raise here is a point which seems to me of some importance, and that is, why should any payment be made from our Exchequer to the Government of Northern Ireland if their Fund is in surplus and all deficiencies have been made good?

As I understand it, under the Agreement signed in 1926 we should, even in those circumstances, under certain conditions, be liable to make a payment to the Government of Northern Ireland. For instance, supposing for the sake of argument that the unemployment figure in Great Britain had fallen to 3 per cent. and in Northern Ireland to 6 per cent., both those figures being below the 8 per cent. which is generally assumed to be the balancing figure of the Fund—certainly of our Fund—and supposing that all deficiencies had been wiped out, and that under these conditions both Funds were in the happy position of having a surplus, but the Northern Ireland Fund was not in quite so favourable a position as ours—it would not be on the assumption I have made—why in those circumstances should we have to pay, as I think we have to under the words of this Agreement, if you go back to the Act and Agreement of 1926? Why should we have to pay any money at all to the Government of Northern Ireland if their Fund is in surplus and in the conditions which I have adumbrated?

The noble Lord may say—and he has said it before in another connection—"Oh well! the agreement is reciprocal, and even although it may seem a somewhat strange proceeding, if it ever came into operation it would be the same for both countries, and so would even out the matter." As I ventured to point out last week, the Agreement is not really reciprocal. I say the White Paper is deceptive. On the last occasion the noble Lord said that I used strong language. I did, and I shall do so again. I say that not one man in a hundred reading the White Paper would understand what it means without having more information. It means this, that unless we alter the way in which we finance our Fund we can never get anything from Northern Ireland. We do not work our Fund on the basis of making a gift when in deficiency. We make a loan, and then we hope that when conditions improve the matter may right itself by the automatic operation of the Fund. If, however, you read this White Paper, you will find, I think, that nothing will happen unless when our Fund is in debit we give a grant out of the Exchequer, as we are doing to Northern Ireland. It seems to me that we cannot hope to get anything from Northern Ireland if we were in surplus. Moreover, it is extremely improbable that circumstances will ever arise when our figure of unemployment will be below the figure of unemployment in Northern Ireland. It is almost inconceivable. However, it is theoretically possible, and therefore to that extent it may be argued that the Agreement is reciprocal. But if when in deficiency we lend money to the Unemployment Fund and recoup ourselves when in surplus in the way which I have explained, would not that take us out of the operation of this Agreement? And would not the position, therefore, be this, that while we are liable, or might be liable, under certain conditions such as I have adumbrated, to make a payment to the Government of Northern Ireland, they would not be liable under the same conditions to make a payment to us unless we altered the basis of our Fund?

But why, in any case, should there be a payment at all if the Northern Ireland Fund became so prosperous that all deficiencies were wiped off and there was a clear surplus? Under this Agreement, as I read it, we are liable to make some payment. The noble Lord may say: "Well, if you are going to alter this, you must go back and change the original Agreement. "Well, why not? This is the time to do it. You are supplementing the original Agreement with another Agreement under this. Bill, and therefore this is just the opportunity to make the change. And clearly it would, as I hold, make the matter very much more business-like and very much more defensible. We have the opportunity now of rectifying this matter, and I think it is an opportunity which should appeal to your Lordships, because the Agreement as it stands seems to me to be a very extraordinary one. I do not think it was properly thought out to this extent, and, if it was, it was said "Oh, the circumstances will never arise." I do not think that is a satisfactory thing for Parliament, and I think that this strange provision should now be put right. That would be done by accepting this Amendment, which I beg to move.

Amendment moved— Clause 1, page 2, line 19, at end insert the said proviso.—(Lord Arnold.)

THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD CUSHENDUN)

No doubt the noble Lord is quite aware of the fact that if this Amendment were accepted or carried it would have the effect of destroying the Bill. I gathered from the last few words that he uttered that he would not object to that—he wants to amend the original Act of 1926. But, at all events, let us understand that that would be the effect, because this Bill merely implements an Agreement between the Government of Northern Ireland and His Majesty's Treasury, which is scheduled to the Bill. Consequently, if you were to make an alteration in the Agreement itself, which this Amendment would do, obviously the Bill would have to be dropped, at all events until negotiations had proceeded between the two Governments and they had agreed to the alteration which the noble Lord proposes.

There is another preliminary objection which I think I ought to bring before your Lordships. If your Lordships will look at the place in the Bill where the noble Lord proposes to make this alteration you will see that the clause to which he wishes to add the proviso is not an enacting clause with regard to payments or the incidence of payment; it is simply a clause which provides that, whatever payments have to be made, when agreed upon by the Joint Exchequer Board, shall be made out of the Consolidated Fund. I do not say that it is not within the province of your Lordships to make such an Amendment, but it would at all events introduce a very great anomaly in drafting to insert this proviso in this place. I quite admit that the noble Lord is in a difficulty because he really wants to amend the Agreement. He cannot alter the Agreement itself, there is no place to do it, he can only propose to amend the body of the Bill. But that does not get over the fact that this clause merely states that any payment that has to be made must be made out of the Consolidated Fund—it is entirely confined to that—but the noble Lord s proposal is to vary the payment itself, to vary, in fact, the whole structure of the Agreement.

But my objections to the Amendment are by no means confined to technical objections. There are very grave objections, I think, to the Amendment on the merits. It is not in the least necessary to make this Amendment. The noble Lord has repeated to-day very much the same criticism that he made the other day, and which I endeavoured, apparently unsuccessfully, to show was an entire misconception of the meaning of the Bill. After all, the intention is to make the two Funds stand on the same footing. The noble Lord continues to speak of making payments to the Government of Northern Ireland as if this payment was something in the nature of a "dole," or a concession, or a grant. It is nothing of the sort. It is simply an arrangement by which the two Funds, which ought to be one and indivisible, make an arrangement by which they can be kept on terms of equality. The noble Lord knows that the Agreement already provides that no payment becomes due from this country in any year in which the Northern Ireland Fund is in a better position than the British Fund, that is to say, a year in which it has proportionately a larger surplus: in such circumstances no payment is made.

Then the Amendment appears to be intended to mean that if, after the whole debt of the Northern Ireland Fund has been paid off, and all deficiency has been removed—and let me remind your Lordships that that cannot take place for thirty years, and therefore there is no great urgency about the matter—if, then, there are in any year surpluses both on the British and on the Irish Funds, of which the Irish surplus is proportionately the smaller, then a payment has to be made under the Agreement. The noble Lord especially complains of a payment being made when the Irish Fund is not in deficit—that is to say, some period after thirty years. What would be the effect of that? I presume that the English Fund would also he in surplus. If it is a handsome surplus, if you have built up, by years of prosperous insurance, a considerable reserve, then obviously what takes place is that the contributions are lowered, or the benefits are increased to absorb the surplus money. When that takes place it has to take place equally on the Irish Fund and on the English Fund, and there is no way by which those two Funds could be kept on an equality except by this system of payments from one to the other, not dependent necessarily upon whether there is a surplus in the Irish Fund, but on the relative positions of the two Funds.

I do not, know whether I have succeeded in explaining that to your Lordships. It is, I admit, a rather complicated matter resting on a formula; but I can assure your Lordships that the matter has not been, as the noble Lord seems to suggest, hastily arrived at and not properly thought out. On the contrary, it has been most carefully thought out, and I submit to your Lordships that there is no way by which the end in view, to which the noble Lord does not object, of keeping the Irish Fund on an equality with the English Fund, can be reached except by the system of cross-payments which is embodied in this agreement and in this Bill.

The noble Lord, again, spoke of the procedure, which he thought involved an alteration of our financial system. I do not think that is so. If the English Fund was in a smaller surplus than the Irish Fund, then the English Exchequer would be entitled to make an equalisation payment to bring the two Funds on to an equality. When that had been done they could claim a proportion of the amount from the Government of Northern Ireland. I agree with the noble Lord that the circumstances are never likely to arise; in fact, I said so the other day. Nevertheless, for the reason I gave last week it was thought desirable, and the Government of Northern Ireland were particularly anxious for it, that it should be in form, at all events, a reciprocal arrangement, and that it has been made. For those reasons I cannot accept the Amendment of the noble Lord, and I hope after what I have said that he will not think it necessary to press it.

LORD ARNOLD

The noble Lord has dealt with the matter fully to-day and I thank him for doing that, because I raised the point before and then there was really no reply given. Let me say again that it is not our object to destroy the Bill. We only want to change the basis of it. We are quite in favour of helping the Northern Ireland Unemployment Fund. It is true, as the noble Lord has said, that one of the difficulties which are unavoidable, if the Amendment is put in, is that it comes at the place where it would have effect on payments out of the Consolidated Fund. I cannot help that. That is my misfortune. I cannot put down an Amendment to the original Agreement. I would assure the noble Lord that on the main question there is no misconception as to what has happened. We understand perfectly well the basis of this Bill, but we do not agree with it. If I may say so, I think there is some misunderstanding in his mind. I took the point again and again that for us to get payments from Northern Ireland we should have to alter the basis of the finance of our Fund. He says that that is not so. I have just been looking through what the Chancellor of the Exchequer himself said in 1926, and he admitted it. He said that we would have to derange the whole basis of our Fund. We would have to put it on the same footing for this purpose as the Government of Northern Ireland Fund.

I still do not think, despite what he said, that any real and satisfactory explanation of why a, payment should be made when the Northern Ireland Fund is in surplus has been given. I do not think there has been any really satisfactory explanation of that point. It may be true that the surplus would not last very long, that it would more or less equate itself to the alteration of benefits or payments and so on; but as a matter of business I do not think the noble Lord has made good the position that we should have to pay money when there is a surplus. When the noble Lord says that it could not arise for thirty years I do not think that matters. It does not make an Act of Parliament any better if in fifty years something is going to be wrong. We ought to make the Act right from the start, and I think that ought to be done now. I certainly shall not press the Amendment. As the noble Lord pointed out, it is an Amendment which it is very difficult to discuss in your Lordships' House because of its peculiar character; but, if I may say so, I think I have done right, in raising the point because we have now on record the position as explained by the noble Lord. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Remaining clause agreed to.

Schedule agreed to.

Bill reported without amendment.