HL Deb 21 February 1939 vol 111 cc848-56

Order of the Day for the Second Reading read.


My Lords, in asking the House to give a Second Reading to this Bill, which will I am sure command your Lordships' sympathy, I hope that I shall not have to detain you long. There is no need for me to describe the events of last autumn which gave rise to this Bill; it is sufficient to say that the decisions taken at Munich necessarily resulted in a temporary dislocation of the normal economic life of Czecho-Slovakia and in the influx into the new and smaller State of large numbers of refugees from the ceded territories. Accordingly, when last October the Czecho-Slovak Government addressed to His Majesty's Government an appeal for financial assistance, this appeal received prompt and sympathetic consideration. At the request of His Majesty's Government a credit of £10,000,000 was provided by the Bank of England on the understanding that when Parliament reassembled legislation would be introduced to reimburse the Bank from the Exchequer. At the same time His Majesty's Government drew the attention of the Czecho-Slovak Government to the refugee problem, in particular to the position of those German-speaking refugees who did not wish to return to the ceded territories, and stated that, should it be possible to arrange for the emigration of these people, they would expect that the cost of such emigration would be met out of the advance. His Majesty's Government also communicated with the French Government who at once expressed their readiness to share in the provision of financial assistance to Czecho-Slovakia.

Subsequently, further negotiations took place between the three Governments as to the ultimate amount of financial assistance to be provided and the purposes to which it should be devoted. These negotiations ended successfully on January 27, when letters were exchanged and several Agreements were signed, the details of which have been given in the White Paper presented to Parliament. Two of the Agreements are also printed as Schedules to this Bill. Briefly, the Agreements are as fellows:—His Majesty's Government and the French Government will, subject to Parliamentary approval, jointly and severally guarantee a loan of £8,000,000 to be issued by the Czecho-Slovak Government in London. Any payments that may be made in the execution of this guarantee will be shared equally between His Majesty's Government and the French Government. Out of the proceeds of the guaranteed loan a sum of £6,000,000 will be used to fund part of the £10,000,000 already advanced to Czecho-Slovakia and the £4,000,000, representing the balance of that advance, will be granted as a free gift. This sum of £4,000,000 will be paid into a Special Account, and will be used to provide foreign exchange for refugees emigrating from Czecho-Slovakia in accordance with an agreed scale, which is also set out in the White Paper.

On the other hand, the French Government will, subject to Parliamentary approval, take over from the Czecho-Slovak Government responsibility for the interest on and repayment of the 5 per cent. Czecho-Slovak Loan of 1937–42 to the nominal value of approximately 700,000,000 francs, which was issued in France. The amount which the Czecho-Slovak Government would have had to provide for the interest on this loan will be paid to a Special Account, and will be also used to provide foreign exchange for refugees emigrating from Czecho-Slovakia. The amount corresponding to the capital of the loan will in 1942 be used for the same purpose, so far as required. The total financial assistance given by His Majesty's Government and the French Government to the Czecho-Slovak Government will thus amount to approximately £16,000,000. Of this, approximately £8,000,000—namely, £4,000,000 from the United Kingdom and 700,000,000 French francs, responsibility for which will be taken over by the French Government—is granted as a free gift and will be used for providing foreign exchange for refugees who emigrate. The remaining £8,000,000—namely, the proceeds of the guaranteed loan—will be used for the relief and settlement of refugees in Czecho-Slovakia, and, so far as not required for that purpose, for the general purposes of economic reconstruction.

I should like to add a few words of explanation of these Agreements, particularly as to their relation to the refugee problem. The Agreements fall naturally into two parts—on the one hand, the provision of £8,000,000 for the internal reconstruction of Czecho-Slovakia and, on the other hand, the provision of £4,000,000, plus the approximate equivalent in French francs of another £4,000,000, for the emigration of refugees. As regards this latter fund, our own arrangements—and I understand that similar arrangements will be made by the French Government—are that the gift of £4,000,000 which will thus be available will be put into a Special Account at the Bank of England, and the sums required for emigration will be transferred from time to time to the Czecho-Slovak Refugee Institute, but only at the joint request of that Institute and of the British Liaison Officer (Mr. Stopford) in Prague, so that these funds will be kept under our control. Detailed arrangements have been made to ensure that emigrants will be provided from this fund with their expenses of transport, together with such sums of money as may be necessary to enable them to gain admission to the country of immigration. This scale of payments, which comes into force at once, applies to refugees who have already emigrated as well as to those who may emigrate in future. Furthermore, the National Bank of Czecho-Slovakia has given an undertaking that it will make every effort to transfer payments on account of interest on capital owned by emigrants which remains in Czecho-Slovakia.

These arrangements, then, are intended to make provision for those refugees who wish to emigrate from Czecho-Slovakia. But the £8,000,000 which is to be devoted to the economic reconstruction of Czecho-Slovakia will, similarly, be spent upon refugees—upon the maintenance and settlement of those refugees who remain in that country. For in the expenditure of this sum the maintenance of refugees and the economic reconstruction of Czecho-Slovakia will be closely linked together. It is clearly impossible to spend the whole £8,000,000 immediately on the refugees who remain in Czecho-Slovakia, and so it has been agreed that, while priority will be given to such expenditure as will be of special assistance to refugees, part of this fund will be applied to certain urgent requirements of national reconstruction, provided that the whole of such amounts are replaced as and when required for refugee purposes.

Since expenditure on maintenance alone could not hope to solve the problem, we have agreed that one of the primary methods of relief should be the provision of productive employment through public works—primarily the construction of essential new communications. I should add that the Czecho-Slovak Government have given us an assurance that no part of these funds will be used in building roads with a military object. They have also undertaken to provide us with quarterly statements of the detailed expenditure of these funds. Finally, it is important to bear in mind that the Czecho-Slovak Government have given a definite undertaking which covers all refugees, whether they emigrate or remain in Czecho-Slovakia, that there will be no discrimination against any person on account of his religious belief, political opinions or racial origin, and that they have assured us that no refugee will be forced to leave Czecho-Slovakia if he is thereby running the risk of danger to health, liberty or life.

The Bill which is now before your Lordships is intended to implement these Agreements. The first clause empowers the Treasury to repay to the Bank of England the sums which, at the request of His Majesty's Government, have been advanced to the National Bank of Czecho-Slovakia, together with interest at 1 per cent. As soon as the amount of this advance has been repaid the Czecho-Slovak Government will regard it as having been advanced to them by His Majesty's Government. The second clause is intended to give effect to the various Agreements which I have tried briefly to describe. It provides for the release of the Czecho-Slovak Government from all liability in respect of the £4,000,000 which is to be regarded as a free gift and is to be spent on the emigration of refugees; and it empowers the Treasury to guarantee the principal and interest of a loan of £8,000,000 to be raised by the Czecho-Slovak Government in accordance with the terms of the Agreement in the Second Schedule. The various subsections of this clause provide for the raising of the loan, for the issue out of the Consolidated Fund of any sums required to be paid under the guarantee, and for the submission to Parliament by the Treasury of a statement of any guarantee given under the Act and of any sums paid out under the Guarantee. That shortly is a description of this Bill. I will not detain the House any longer at this stage, but I will of course try to the best of my ability to answer any questions which may be put to me during the debate. I beg to move that the Bill be read a second time.

Moved, That the Bill be now read 2a.—(The Earl of Plymouth.)


My Lords, we shall not, of course, oppose this Bill, nor shall we attempt to-day any discussion of the details which it presents to your Lordships' House. I will not personally attempt to recall at any length the circumstances which have made this Bill a necessity, but I should not like it to pass through the House without having once more the opportunity of reminding your Lordships that Czecho-Slovakia, at a quite recent date, was not only a sovereign State but also a solvent State. It was a State in which the minorities were at least as well treated as minorities anywhere else, and where they were a great deal better treated than in places that could be named. But whatever the situation was in Czecho-Slovakia then, we know that the change has been disastrous to the Czecho-Slovakian people, and, possibly, exceedingly dangerous to European civilisation as a whole.

We, speaking for this country, were parties at least to the course which was followed, and we owe our present position to the self-sacrifice of a small, an unoffending and a helpless people. Therefore, looking at the situation at this time, it seems at least reasonable that we should make this small sacrifice of a gift of £4,000,000 to try to help to heal the wounds that have been caused. I can only hope that this money, when it is spent, will serve the purposes for which it is intended, and that the Czecho-Slovakian people will be the beneficiaries by the passing of this Bill. So far as I personally am concerned, I feel that those who took away the independence of this small people would not refrain from raiding the till if they could get any special advantage out of it. That is all I think it is necessary to say on this Bill. We regret the necessity for it, we regret the events which have caused this Bill to be produced, but those circumstances have passed, and we now have to deal with a situation such as is known to us all. The least we can do is to try to give any help we can to the unfortunate people concerned.


My Lords, I ask your Lordships' indulgence on this the first occasion that I have had the honour to address your Lordships' House. I welcome this Czecho-Slovakia (Financial Assistance) Bill, which is of a humanitarian character. It will help the refugees of that country who have suffered so much through recent events. At the outset of the few remarks I propose to make this afternoon, I must say that I am not in entire agreement with the way in which the money was obtained. The Government borrowed the money, and we are now being asked to repay that money. It is not the first time that the Government have pledged public funds, if it can be called pledging public funds, without the consent of Parliament. Not so long ago the Government bought foodstuffs as reserve in time of emergency, and the first intimation that Parliament had that this was taking place was when the Government asked for sanction to the payments that were made for these reserves of food. Now with the introduction of this Bill Parliament is again being asked to provide money after the events have taken place.

I was at the time entirely in agreement with the policy of creating hidden food reserves, and of doing it with secrecy, and I was also entirely in agreement with the help given to refugees in Czecho-Slovakia. It may have been that no alternative method of supplying the funds for these two needs was advisable on each of these occasions. From the point of view of food reserves secrecy was, of course, necessary, and there was also the further consideration of speed. To my mind it is necessary that those in immediate control of this country should have almost dictatorial powers of allocating public funds for urgent purposes, but I do not think that I am alone in hoping that His Majesty's Government will not make a habit of employing these quite legal but somewhat unusual methods of pledging public funds unless the circumstances themselves are really unusual.

As I have said before, I support this Bill because if the Bill does pass through Parliament the Czecho-Slovak nation will have some tangible recognition of the indebtedness that is felt in many parts of this country for the great sacrifice to world peace which that country has made. I have heard some people criticise the Bill by saying that, although we have taken at any rate precautions to see that the money involved is not allocated in Czecho-Slovakia to purposes for which it is not intended, the fact does remain that this gift and loan of ours will enable Czecho-Slovakia to earmark a like sum, which they would have had to spend on refugees, for purposes that may be antagonistic to ourselves. In other words, those critics say that the same result might have been obtained if we had sent money to Czecho-Slovakia with no conditions at all and they could use it for any purposes, military or otherwise. Apart from the fact that I do not think Czecho-Slovakia would have been able to allocate a sum of £10,000,000 for refugees and reconstruction if this money had not been forthcoming from us, I do not consider any sum of money which has been released in Czecho-Slovakia by our sending this money there will be put to such uses as would cause alarm and consternation concerning the peace of Europe.

I am of the opinion that Czecho-Slovakia wishes to improve her finances and hasten her economic recovery. At Munich that country gave up in the cause of peace one third of her industry and one third of her purchasing power. In spite of this we are faced with the remarkable fact that in the last quarter of 1938 Czecho-Slovakia showed an export trade surplus of £1,750,000. The economic and political unheaval of Czecho-Slovakia was indeed considerable, and the fact that that country has been able to reorganise to such an extent in such a short time as to bring about this surplus export trade balance which I have mentioned, leads me to believe that Czecho-Slovakia wishes to use any money she has at her disposal for reorganising herself for economic peace as opposed to reorganising herself for the bankruptcy of war. In 1937 this country took from Czecho-Slovakia £7,000,000 worth of goods, and Czecho-Slovakia, in her turn, took a like value of goods from ourselves and the Empire. Surely we must do everything in our power to encourage Czecho-Slovakia to maintain her exchange of trade with this country and our Empire. This country is building armaments and becoming strong. It will not be long before we will be able once again to employ such influence in Europe as to enable Czecho-Slovakia to regain her complete economic and political independence. Any loan or gift of money that this country can offer to Czecho-Slovakia will help towards that desirable end. Therefore I do most heartily support the Bill which is now before your Lordships' House.


My Lords, I do not wish to detain your Lordships more than a few moments. Perhaps the noble Viscount who has just sat down will allow me to congratulate him very heartily on the first occasion of his addressing the House, and to express, as is the custom, our hope that we shall often hear him in debate. I only wish to say a word about this Bill. Of course I support it. I think it is the best we can do. Czecho-Slovakia has suffered injuries under the policy pursued for which no amount of money can possibly compensate. She has lost in effect her independence; she has lost the great tradition of democracy which she has professed for many years and indeed one might almost say for many centuries; she has suffered in many other ways politically and socially, and for those injuries nothing that we can do by way of money can be any compensation. Still this is the best that can be done in the circumstances.

The temptation to point the moral is almost irresistible. This is the result of a policy against which some of us protested at the time. It is a melancholy kind of epitaph—I hope it is an epitaph—on the policy that was then popular with His Majesty's Government. If any one impartially considers the result of that policy, culminating in this vast expenditure on armaments—which is no doubt necessary but is unquestionably a terrible evil—I think they will agree that the sooner the policy is definitely and finally abandoned the better it will be for this country and the better it will be for the world.


My Lords, I do not think it is necessary to say much in bringing this debate to a conclusion. I would like first of all to join the noble Viscount opposite in congratulations to the noble Viscount, Lord Bridport, on his speech in addressing your Lordships for the first time, and like the noble Viscount I hope that he will continue to take an interest in our proceedings and to take part in our discussions as often as he can. In regard to the subject matter of his speech, which I felt was too brief, I would only say in reference to his observations about the pledging of public money before the assent of Parliament has been obtained, that that is a point which is naturally always present in the mind of the Government, but that there were special circumstances in this particular case and that is the justification for the action taken. Apart from that, there is no opposition to this Bill, and I do not feel that it would be much of an advantage to enter into the points raised by the noble Lord who leads the Opposition and the noble Viscount opposite. All that I feel I must say is that I cannot accept as completely accurate the description which they gave of the events which have led up to the present situation. I should like to reassert that I for one, far from being in any way ashamed of the part His Majesty's Government took in those affairs, feel that they took a part of which we may well be proud and saved the world from what might have been a great calamity.

On Question, Bill read 2a, and committed to a Committee of the Whole House.