THE COLONIAL DEVELOPMENT CORPORATION

HL Deb 11 April 1951 vol 171 cc229-37

2.45 p.m.

LORD TREFGARNE

My Lords, I ask leave of the House to make a personal statement. The occasion arises out of certain untrue assertions which have been made and widely reported in the Press, including the Colonial Press, reflecting upon my conduct of certain affairs during the time when I was Chairman of the Colonial Development Corporation. The statements to which I desire to invite your Lordships' attention relate to the first undertaking launched by the Corporation early in 1948 in Gambia. Some of your Lordships no doubt remember that the undertaking was one for the clearance of 10.000 acres of bush in that Colony, in order to produce feeding stuffs for poultry. The total amount of expenditure involved was £850.000. The Corporation has recently decided to write off about half the capital involved and, I understand, to curtail the scheme.

The statements to which I desire to invite your Lordships' attention, and which have brought me here to-day, are that in pursuance of this scheme I, as Chairman of the Corporation, acted in an arbitrary and high-handed manner; overrode technical advice from within the Corporation; improperly made appointments without the approval of the Board; that I authorised unduly favourable announcements regarding the progress of the undertaking; and, lastly, that I withheld from the Board adverse reports about the scheme which might, if communicated to the Board, have brought into play remedial measures for its troubles. My Lords, political motives or no political motives, these are serious charges. Were they true, they would indicate a standard of conduct below that which would be expected from the Chairman of such a body, and certainly below that which your Lordships would expect from a member of this House occupying such a position. As I was abroad when those statements were made, I am taking the first opportunity after my return to deny them here.

Before doing so, I wish to make a few general observations about the undertaking. First, let me make it clear that I acknowledge the chief responsibility for its establishment. It was the first of a number of projects I proposed to the Board in the ordinary course of my duty as Chairman. This project made the greater call upon my own attention because, being the first operative undertaking of the Corporation, it naturally became the focal point for the discussion of questions of procedure with the Treasury and Government Departments. The fact that I myself had to take direct charge of these extrinsic aspects of the scheme has led to the fantastic suggestion that I had undertaken its commercial management at headquarters. The project was in fact shaped by a mission consisting of an American, Mr. Phillips, and an accountant in the employ of the Corporation, who together spent several weeks in the Colony. His Excellency the Governor, the Chief Agricultural Officer in the Colony and others were consulted, and the Gambia Government gave their strong support to the scheme. It was unanimously approved by the Board of the Corporation, including at every stage the late Sir Frank Stockdale, the senior full-time executive of the Corporation—I think universally acknowledged to be one of the world's greatest authorities on tropical agriculture. The project was launched with a capital of £500,000 in the spring of 1948.

It will not surprise those of your Lordships who are acquainted with such matters to hear that the undertaking, though not one of the largest of the Corporation's undertakings, was one of the most formidable; and it encountered, during the two and a half years of its life, a succession of four setbacks. The first three, namely, a shortage of timber production, infertility of hatching eggs, and a serious outbreak of fowl typhoid last July and August, were successfully overcome. The final reverse was the partial failure of the harvest last November and December; and I believe that this was the proximate cause of the Board's decision to curtail the Scheme.

I now make the considered statement that not one of the setbacks which occurred in my time was regarded by the Manager, by the headquarters officials concerned, by me, or by the Board, as destructive of the basis of the scheme. All was reported in writing by the officials direct to the Board. All the officials, including the Project Manager, the present Deputy Chairman and myself, and the Controller of Operations—the senior official of the Corporation—visited the undertaking during its course. My Lords, in looking back on these proceedings I own frankly that the judgment of the Board and the officials might have been affected by my own confidence, even optimism, about this undertaking. For that fault I have no defence. All the material information, however, was fully reported to the Board. Because Corporation documents alone can establish that fact conclusively, I am obliged to quote from them to the House.

One of the means by which the Board was informed was a quarterly report on every undertaking which gave a record of progress or setback. These reports were prepared by the Controller of Operations in consultation with the senior technical manager—the divisional manager— concerned. I do not propose to trouble your Lordships with the difficulties which arose during 1949, except, perhaps, to quote briefly from the last report of that year. The progress during that quarter was reported thus by the Controller in the quarterly report of December 1, 1949: The construction stage is now drawing to an end. This undertaking has been given a good start and there exists a sound basis for successful future operations. It is when we come to the crucial documents and reports of March to October last year that I must earnestly beg for a measure of patience as I read to your Lordships. For brevity I will, without comment, read short material extracts from the relevant reports. In the report of March 2, 1950, it is stated: In the period under review "— that is, the quarterly period: a total of 118,175 eggs were laid, averaging 18 per bird per month …. The bulk of eggs were incubated, the remainder consumed locally …. Initial hatches gave fairly satisfactory results of approximately 50 per cent. of total eggs set but there was a progressive reduction in November and December …. Results began to improve from mid-January onwards and hatches of over 60 per cent. are once more being obtained. In the summary the following statement was made: The shortfall in the target production of eggs for sale in 1950 may be of the order of 40 per cent.… Secondly, insufficient feeding stuffs have been produced to maintain the flock till next harvest. The report of June 1, 1950, said: Except for the setback to hatching in November/December last, the poultry side of the undertaking continues to thrive. What is not so satisfactory is farming operations. Profitability depends on our growing enough food at a low price, and failure to reach the target of 10,000 acres mechanically sown by June, 1950, is a disappointment. On June 15, 1950, there was a special report requesting board authority for a loan mainly for the purchase of feeding stuffs. It said: Provided the 1950 harvest reaches the manager's expectations, the revenue from January, 1951, will be more than sufficient to meet further expenditure. A permanent increase in the capital of the undertaking is not recommended. It is considered that the loan could be repaid by the end of 1952 partly from profits and partly by the sale of equipment not required when full development has been reached. In July, 1950—that is last year—the divisional manager at my request paid a special visit to the undertaking. In the discussions which followed his return it was reported to me that adverse weather conditions had caused heavy mortality in the flock. It was provisionally decided that the management should be strengthened and that thereupon consideration should be given to some alterations in the physical layout of the flocks. It was thought that new management would make the changes more effective.

Now I am coming to perhaps the most crucial report of September 7 last. That report is noteworthy because it embodied the results of the Divisional Manager's visit as well as later information. In this paper the Board were specifically informed of the mortality of 29,000 out of a total of 127,000 chicks hatched, of the total egg sales and of timber production. As in all former reports, up-to-date figures were given of acreages tree-felled, acreages stumped and under crop. It was also reported that 1,161 acres had had to be replanted because of pest attack and other causes. But I wish to emphasise that even after this report, though we were all conscious of the difficulties, no doubt arose in our minds of our intention and ability to carry this undertaking through to success. To bear this out I will read from the Controller's summary of the report of last September: The Divisional Manager was favouably impressed by the drive shown by the project manager in launching the scheme. … He reported favourably on the types of soil and in his opinion the land should produce satisfactory crops with efficient farm management. … This project has had the great benefit of energetic drive and direction. It is difficult to underrate the great physical achievement that Mr. Phillips has gained for the Corporation. In all except the full target for agriculture the major portion of the tough pioneering stage of development is over. But the experience of two years would indicate that we have yet some distance to go before our methods and technique can be deemed fully adequate for all tropical hazards. At the Board meeting on October 26, five days before I left the Corporation, it was the view of the Controller of Operations and the Divisional Manager, shared by me and reported to the Board, that the undertaking would now make better progress under new management and that with certain proposed modifications in the undertaking the original production aimed at could still, though perhaps with a little delay, be achieved. These proposals were recommended by the Divisional Manager in person to the Board, and accepted by them.

At this Board meeting, for the first and only time during my Chairmanship, two members of the Board recorded their dissent from the decisions taken. Since that date four members of the Board, including myself, have left the Corporation, and the views of the minority appear now to have been accepted. There remains one charge made in another place concerning the appointment of the American manager that I think can be conclusively dismissed by a recital of the facts. I myself visited the island of Eleuthera in January, 1948, and found Mr. Phillips successfully managing a large poultry farm of between 75,000 and 100,000 birds. He had resigned owing to some disagreement with his employer. On my return he cabled me saying he was free and could he come across for an interview.

In consultations with the late Sir Frank Stockdale, we discussed at length with Mr. Phillips the possibilities of such a scheme in Gambia. On March 18, 1948, the Board authorised me to settle terms of employment with Mr. Phillips and to send him to Gambia with an accountant to investigate the proposal. There was never any question of my making appointments in the Corporation, other than to my personal staff, without the authority of the Board and the wise procedure of interview by an appointments committee, always provided, of course, that there is enough experience on the committee for the judgment of men.

If all this wearisome evidence has successfully engaged your Lordships' attention, you may feel that the charges which have been made are unjustified. There is something else I feel bound to say, and I will say it, I hope, in words of the utmost moderation. It will be for me a matter of enduring regret that my successor, the noble Lord, Lord Reith, heard these charges in my absence abroad and allowed them to go unanswered. He had only to press the bell and say: "What is the truth about this? "

There is something else I feel I should like to say in order to place this matter in its proper setting. It is a matter of my personal opinion which, frankly, at this difficult moment I cannot expect to carry conviction to your Lordships. I am of opinion that the problem of growing 5,000 or 6,000 tons of feeding stuffs for poultry or pigs on the 10,000 acres is not so insuperable. The native African obtains, year in, year out, average yields of ground-nuts of 1,200 lb. to the acre in Gambia, and a smaller but adequate yield of 600 lb. to the acre of sorghum and coarse grains. Two harvests on the Corporation farm partially failed, but the second deficiency was the result of conditions which plagued all agriculture in the Colony and which made the quality of the ground-nut yield from Gambia the worst in living memory. Incidentally, the British taxpayer, whose name is invoked in relation to this scheme and who so often gets the worst end of the stick, has for years received a large subsidy by the purchase below world price of 60,000 tons of ground-nuts from Gambia, and the resale to that Colony of British goods at full value. I will not labour that point.

If the Board have now decided not to persevere with this undertaking, I have one final plea to make. It is that the Gambia decision should not be allowed to destroy your Lordships' confidence in the great bulk of the Corporation's work. This undertaking, inspired by the dire need of the Colony, was one of the most hazardous of the Corporation's fifty undertakings. Of the remainder of public money involved, about £10,000,000 is in absolutely secure investment, such as an electricity undertaking, a building society, a large long-term forestry undertaking and other enterprises where the commercial risk is negligible. Most of the agricultural and other undertakings are planned in progressive stages which can, if necessary, be modified without loss to meet a changing ratio between costs and commodity prices. The proportion of the capital of £30,000,000 which is committed to unduly speculative operations apart from Gambia is less than 2 per cent, and is spread over four or five smaller undertakings.

It is my respectful advice and request to noble Lords to judge the Corporation's work by a study of its undertakings rather than by the sweeping criticisms which are heard to-day. Such an analysis would yield facts and figures which, in my judgment, would go far to renew your Lordships' confidence in a policy supported at its initiation by all Parties and which, unless the flag is hauled down or smeared with untrue criticism, will do much for the Empire. I am afraid I have made a heavy call on the patience of the House. I thank your Lordships for your tolerant attention.

3.7 p.m.

THE MARQUESS OF SALISBURY

My Lords, I would not seek to comment at this stage upon the statement which has been made by the noble Lord. It clearly deserves our careful study. In so far as it relates not to his personal honour but to the judgment of the Corporation, it might properly form the subject of a later debate in this House. I would ask the Leader of the House whether he would give us an assurance that, in accordance with the usual practice, the documents from which the noble Lord, Lord Trefgarne, has quoted, will be laid on the Table of the House.

THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT ADDISON)

My Lords. I have asked my noble friend about these reports. I understand that they were quarterly reports of the Board. The noble Lord assures me that he will provide us with all the documents in his possession. I shall be glad to lay them either on the Table of the House or anywhere else that is convenient to your Lordships.

Viscount SWINTON

My Lords, certain quotations were made by the noble Lord, Lord Trefgarne, in the course of his speech. He also referred to meetings of the Board and to discussions which took place there, and to certain reservations made by members of the Board which I believe he said they asked to have recorded. I am not sure whether the noble Lord read from these records, but since the noble Lord stated at considerable length the substance of the procedure at these Board meetings, I am sure the Leader of the House will agree that it would be appropriate, when the reports to which reference has been made are tabled, that the House should see also the minutes of the Board meetings.

VISCOUNT ADDISON

I will inquire into that point. I am afraid that I am not very well acquainted with the procedure in these matters, but I have impressed upon the noble Lord, Lord Trefgarne, and will do so again, the necessity for providing the House with every possible record that he can produce.

LORD TREFGARNE

May I say that I am not familiar with the proceedings of this House, and therefore I assumed that the documents in question would be made the subject of an Order by this House?

VISCOUNT SWINTON

With great respect, I should have thought not. The ordinary rule applying to Ministers is that if anybody quotes from a document, that document is laid. It does not require an Order of the House. That is done automatically.

LORD STRABOLGI

That is in the case of a Minister. My noble friend is not a Minister.

VISCOUNT SWINTON

I am well aware that the noble Lord, Lord Trefgarne, is not a Minister of the Crown. The Leader of the House has said that, in view of the rather exceptional character of the statement which has been made to us to-day, he considers that it would be entirely proper that all the relevant documents should be put at our disposal. I am perfectly content to accept that course. I share the view of the Leader of the House. I suggest that no formal Order is required, but that the reports will be laid as a matter of course.

THE EARL OF PERTH

My Lords, may I intervene for one moment? It seems to me that it may be a little difficult for some of these documents to be brought forward. I think in this case we must trust entirely to the Leader of the House.

LORD MILVERTON

My Lords, it is only by accident that I happen to be here this afternoon to hear the statement which the noble Lord has made. I am not unmindful of the agreement as to speaking by members of these Boards on subjects concerning the Boards. I do not wish to run counter to that agreement, but may I just say one thing which in fairness I think I ought to say, because otherwise silence might be taken as implying consent? It is no business of mine to defend the present Chairman of the Corporation, but the assumption which lies behind the complaint which has been made by the noble Lord against him is that everything that the noble Lord said is a correct representation of the facts. I can speak only as a part-time member of the Board concerned, and all I say at this stage is that I cannot endorse the accuracy of some of the statements which the noble Lord has made—I say that with the greatest regret. I feel that it is not reasonable to expect the present Chairman to go round making public statements in contradiction of Press reports, which perhaps would not be endorsed by the Board concerned.

LORD TREFGARNE

Everybody knows that the noble Lord feels strongly about all this, but I feel entitled to protest against his saying that he dissents from some of my statements, without indicating to the House which they are.

LORD MILVERTON

If I may say so, I thought that the whole discussion was rather an improper one to take place in this manner, and I curtailed my comments as much as I could. I do not pro-pose to be tempted into making any further statement.