Sitting of 19 July 1929

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.
MEMBER SWORN.
Rhys John Davies, esquire, for County of Lancaster (Westhoughton Division).

PRIVATE BUSINESS.
Ross and Cromarty (Dornie Bridge, etc.) Order Confirmation Bill,
Read the Third time, and passed.
Ministry of Health Provisional Orders (No. 11) Bill,
Ministry of Health Provisional Orders (No. 12) Bill,
As amended, considered; to be read the Third time upon Monday next.
Inverness Water and Gas Order Confirmation Bill [Lords],
Leith Harbour and Docks Order Confirmation Bill [Lords],
London, Midland, and Scottish Railway Order Confirmation Bill [Lords],
Considered; to be read the Third time upon Monday next.

PRIVATE BUSINESS.
  GREENOCK BURGH ORDER CONFIRMATION BILL,
  "to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to Greenock Burgh," presented by Mr. Secretary Adamson; and ordered (under Section 7 of the Act) to be considered upon Monday next.

SELECTION (PRIVATE LEGISLATION PROCEDURE (SCOTLAND) ACT, 1899) (PANEL).
Mr. FREDERICK HALL reported from the Committee of Selection; That, in pursuance of the provisions of the Private Legislation Procedure (Scotland) Act, 1899, they had discharged the following Member from the Parliamentary Panel of Members of this House selected to act as Commissioners: Lieut.-General Sir Aylmer Hunter-Weston; and had appointed in substitution: Mr. Buchan.
Report to lie upon the Table.

BUSINESS OF THE HOUSE (COLONIAL DEVELOPMENT BILL).
Motion made, and Question proposed,
"That the Third Reading of the Colonial Development Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House relating to the interval between the Report and Third Reading stages of such a Bill."—[The Prime Minister.]
Colonel WEDGWOOD: Before this Motion is put, I should like to raise a point of Order. The Colonial Development Bill was passed in Committee last night. It has not been possible to reprint it as amended, there has been no opportunity of putting any Amendment down, and the Government, while the Bill was going through Committee yesterday, definitely promised that certain Amendments should be discussed on the Report stage. We have not seen these Amendments on the Paper. Yesterday, we had the Bill discussed in Committee, the day after its Second Reading, so that it was very difficult to get Amendments on the Paper then, which was not so much an inconvenience to the House as to the Minister concerned. It was not his Department, and consequently he could not be coached by his Department on the various manuscript Amendments. This is worse. Here it is impossible for any Amendment to be put on the Paper, and I understand it is the usual practice of the House not to take on the Report stage any Amendments that are not on the Paper, so that the Report stage becomes futile so far as amending the Bill is concerned. I submit that we ought not to take the Colonial Development Bill on its Report stage before it has been printed and before the Government Amendments have appeared on the Paper, and that private Members ought not to be deprived of their legitimate right of putting down Amendments to the Bill so that they may be discussed.
Mr. STANLEY BALDWIN: The right hon. Gentleman has raised a point of considerable substance, and I am rather surprised that the Prime Minister did not give his reasons for putting down the Motion, which is of an exceptional nature. I want to make our position clear. Ordinarily, we should have opposed this Motion, and we hope it will not be taken as a precedent if we do not oppose it today. The reason for our action is this. We have been regarding all this legisla-

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tion directly affecting unemployment as emergency legislation, and we have given every assistance to getting the business through. There is another reason which would have no weight if we had not the substantial reason I have already given. I understand that, if the Bill cannot leave this place to-day, it will delay proceedings in another place, and it would mean that all Members, and all the staff of the House, and the personnel, would be kept in London over the week-end for nothing else than just to complete this Bill on the Monday or Tuesday, it might be, of the week after next. For these reasons, we do not propose to offer any opposition to this Motion to-day, but we hope the Prime Minister will say it is an entirely exceptional circumstance and that he has no intention at all of making it a precedent, because the arguments put by the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) are perfectly substantial, perfectly sound, and perfectly good.
Mr. SPEAKER: Discussion at this stage is irregular as I understood from the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) that he was raising a point of Order, There is really no point of Order about it. If the right hon. Gentleman wishes, he can discuss the Motion when I have put the Question.
Colonel WEDGWOOD: I have no objection to the Motion. What I object to is taking the Report stage. The Motion is that the Report stage be followed by the Third reading. That does not matter a bit. The real difficulty is that no Amendment can now be taken on the Report stage, I understand.
The PRIME MINISTER (Mr. J. Ramsay MacDonald): I am very much obliged to the right hon. Gentleman for what he has said. I have said nothing in moving the Motion, because I understood it would be better if the explanation came afterwards. When this Resolution was handed to me, I naturally took objection to it myself on the very ground raised by my right hon. and gallant Friend, but the circumstances mentioned by the Leader of the Opposition arose before me, and, in addition to that, I was assured that it had been the subject of discussion by the representa-
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tives of various Departments and that they had agreed that the considerations mentioned by the Leader of the Opposition were so very grave that the Motion was justified. I want to assure the House that it will certainly not be taken as a precedent. It is only under the circumstances that I ask the House to pass it.
Colonel WEDGWOOD: May I ask the Prime Minister whether the Government Amendments that were promised yesterday will be moved to-day?
The PRIME MINISTER: Yes, they will be moved to-day. I understand that various pledges were given yesterday, and the Amendments were agreed to. They will all appear on the Report stage.
Colonel WEDGWOOD: May I ask you, Sir, to give a Ruling on the point whether it is in order to allow the Report stage of a Bill before the Bill is printed and available to Members of the House.
Mr. SPEAKER: It would be quite in order if a Motion of this kind were put on the Paper.
Colonel WEDGWOOD: I do not think this Motion has anything to do with the Report stage; it deals with I he interval between the Report and Third reading. I want to know whether it is in order for the Report stage normally to be taken before the Bill is printed.
Mr. SPEAKER: Yes, that would be in order.
Sir HERBERT SAMUEL: We en these benches have agreed to the course that is being taken, but we do so under duress, and I think a stronger protest than has yet been made should be voiced in order to prevent a recurrence of these circumstances. A Bill which is a very important one, with consequences extending over a long series of years, and by no means limited to immediate emergency legislation, was presented, the Second Reading was parsed by the House, and the Committee was taken on the day immediately following with no sufficient opportunity for the consideration of Amendments. Many Amendments had to be moved in manuscript without having appeared on the Paper. The Report stage is taken on the day immediately succeeding again, without any

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opportunity of seeing the Bill in print in its amended form as it passed through Committee, and the Third Reading is to be taken on the same day as the Report stage. I am surprised to learn that this is essential in view of arrangements in the other House, for the other House has the whole of next week for dealing with these Measures. This is a Measure which arouses no controversy in any quarter. It may indeed be certified as a Money Bill, in which case the other House would have no reason to discuss it at all. Although we agree to the proposal, I think it should be made known that it is most distasteful to the whole House and ought not to be repeated on any future occasion. Frequently, at the end of the Session protest is made in another place against legislation being unduly hurried there to meet the convenience of the House of Commons. I think, if in future such protests are made in another place, this instance may be quoted in the other direction, and it may be accounted unto us for righteousness.
Lord EUSTACE PERCY: I should like to clear up one point. The Government withdrew a manuscript Amendment in order that it might come on the Paper and be considered, and various other hon. Members did not press Amendments in order that they might be able to consider the Amendment the Government intended to put down. Are we to understand that that Amendment is going to be moved on the Report stage although it has not yet appeared on the Paper, and, if so, can some arrangements be made so that we may be able to see the Amendment, and consider it before the Report stage comes on?
The LORD PRIVY SEAL (Mr. J. H. Thomas): I do not know the exact details. The Prime Minister explained that he looked upon this Measure as emergency legislation, and that is, I think, the spirit in which everybody has accepted it. I understand that arrangements are being made for copies of the Amendment to be made, so that they may be distributed and in the hands of hon. Members interested before the Report stage is completed. It is the best that we can do under the circumstances.
Mr. MANDER: I should like to refer to the very difficult position in which some of us are placed. I had an Amendment on the Paper yesterday with refer-
786
ence to forced labour, and I withdrew it on the understanding that the hon. Gentleman in charge of the Bill would endeavour to frame an Amendment which would meet the views of all parties. Whether he will be successful in doing that I do not know, particularly in view of the fact that he was most anxious to have an Amendment which would meet the views of all parties in the House, which seem to me to be widely divergent in some respects. If the Amendment is not satisfactory to every hon. Member interested, what is our position? Can we still bring up our own Amendments at a later stage or not? I only raise this question, because I think we are placed in rather a difficult position.
Mr. THOMAS: The Amendment to which the hon. Member referred is covered by my previous statement and will be circulated. I cannot say at this stage whether it will meet with the acceptance of everybody. I hope that it will. The best that I can do at this stage is to say, "Wait and see—and hope".
Question put, and agreed to.
Resolved,
"That the Third Reading of the Colonial Development Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House relating to the interval between the Report and Third Reading stages of such a Bill."

ORDERS OF THE DAY.

  DEVELOPMENT (LOAN GUARANTEES AND GRANTS) BILL.
  Order for Second Reading read.
  The LORD PRIVY SEAL (Mr. J. H. Thomas)I beg to move, "That the Bill be now read a Second time."
  I am asking for a Second reading of this Bill with a view to obtaining the necessary powers to give effect to the policy which I outlined to the House for dealing with unemployment. I cannot at this stage indicate to the House any new proposals other than those with which I have already dealt, my reason being that negotiations and interviews are taking place daily, and I must judge after those interviews as to the relative merits of the proposals. There is nothing in this Bill which was not contained in the general outline of my proposals which were debated for two days.
  I may take this opportunity of drawing the attention of the House to the remarkable change that has suddenly taken place with regard to these proposals. When I first outlined them. I told the House quite frankly that it would be absurd on my part to assume at that stage that there was any finality, that 101 factors had to be taken into consideration, and that, as far as Parliamentary power was concerned, I was only asking for it on the ground that I should be enabled to negotiate on the lines that I then indicated.
  The right hon. Gentleman the ex-Chancellor of the Exchequer was leading for the Opposition. I hope that he will be present this morning, seeing that he is taking a keen interest in the unemployment problem, and that I propose to say something about him. He immediately followed me and said that he had listened to the proposals and that he had considered them. Incidentally, before the second occasion two days ago, there was a week's interval for him to consider them. His summing up of them was that they were meagre but safe. They were merely continuing the Conservative policy of doing nothing. They were not at all dangerous. In fact, he would call them
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  very humdrum. But he went on to say, with all the deliberation characteristic of him, that he knew they were going to fail; they were bound to fail, and, as far as unemployment was concerned, no result would follow. That was the ex-Chancellor of the Exchequer's attitude on the first day, and, let the House observe, it was his attitude on the second day after the reading the Money Resolution.
  The House will remember the incident of a few nights ago. After the ex-Chancellor of the Exchequer had read the Money Resolution and he knew that there was a Bill to follow it, that there would be an opportunity to discuss the Bill on all its stages, and knew perfectly well that both Oppositions, if they so desired, could insert any Amendment—with all that knowledge he summed up in the afternoon by saying: "Of course we, the Opposition, will do nothing to hamper the right hon. Gentleman in dealing with the matter." But suddenly, after having delivered himself in that tone, he gave us evidence of his anxiety for the unemployed, of his anxiety to help, of his desire to assist the Government! He walked into the House and discovered that the Financial Secretary to the Treasury was not present, and these humdrum proposals which were perfectly safe, which meant nothing, with no danger, suddenly become so important that in the absence of the Financial Secretary to the Treasury he proceeded at once to move to report Progress. I can only conclude what he had in his mind, not, of course, after consultation with the right hon. Gentleman the Leader of the Liberal party. I am sure they did not see each other, and I am quite sure that there was no communication. At all events, in order to show that the gangway was much narrower than the floor, purely spontaneously, he said "Now, here a serious unconstitutional position arises."
  The right hon. Gentleman the Leader of the Liberal party, when I outlined my proposals, went one step further. He said: "They are not bold enough, I am bitterly disappointed. This is going to fool the unemployed. Why has not the the right hon. Gentleman the courage to give us some really bold Measure? Why bother about precedents? Scrap them! That is the way to deal with the unemployed." After saying that, he dis-

  795
  covered that the ex-Chancellor of the Exchequer wanted the opportunity to show clever Parliamentary tactics, and he suddenly discovered that this was not a little scheme, but a big scheme; that it was a dangerous scheme, that the whole financial interest of this country, and, above all, sound Parliamentary financial control was involved. In order that there may be no misunderstanding, I will quote his exact words. These are the words of the Leader of the Liberal party, a few hours after he had declared that our proposals were meagre, poor, and not worth bothering about:
  "Never in the whole history of Parliament has anything of this kind ever been submitted to the House of Commons. In every case there has been a maximum limit imposed. … I should like him to quote a single precedent where a Government has committed the House of Commons to an expenditure with no limit proposed, because that is what it is."—[OFFICIAL REPORT, 16th July, 1929; col. 306, Vol. 230.]
  Mr. LLOYD GEORGE: Hear, hear!
  Mr. THOMAS: The right hon. Gentleman says, "Hear, hear!" this morning. I do not know whether he forgot his own record, or whether he assumed that in the interval of a few hours I should not be able to look it up. I have done that.
  Mr. LLOYD GEORGE: So have I.
  Mr. THOMAS: So have I. Therefore, we shall have an opportunity of seeing how much truth there is in it.
  Mr. LLOYD GEORGE: Hear, hear!
  Mr. THOMAS: Hear, hear! We shall have an opportunity of seeing whether all this talk of good will is humbug, or whether the right hon. Gentleman when he made that statement seriously meant what he said. Incidentally, I would remind him, although I am sure he must have read them, that every subsequent speech delivered from his Benches very clearly indicated that, whatever may have been the views of the right hon. Gentleman and the ex-Chancellor of the Exchequer about the gangway, and however much the incident may have made the gangway narrower, they took the earliest possible steps of widening the gangway. I would suggest to the right hon. Gentleman that if he will read those speeches he will get some indication of the fact that those hon. Members believe
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  that dealing with the un employment problem is more important than mere Parliamentary tactics.
  I would ask the House to observe what I pointed out in my first speech, that in dealing with unemployment, no Minister would have the right to come to this House and say: "I intend to give effect to certain ideas. Those ideas will affect railways, harbours, docks, gas, electricity, and without any negotiations, without trying to ascertain the views of those industries, I will merely propound a policy of my own." I refused to do that, I said: "No. While I believe, and while I am sure, that there is useful work to be done, that there is great need of work and there is work than will assist the unemployed and help the country I am not going to be such a fool as not to ask for the co-operation and clear views of those who are interested." In fairness to the House, I am entitled to remind hon. Members that although in the few weeks I have had to conduct these negotiations, by day and by night, at the same time I have had to come to the House in order to deal with the legislative side. Notwithstanding that, after the incident of the other night, I have to ask myself: "Am I taking an unusual course? Am I taking a dangerous course? Am I asking Parliament to give me power that they have no right to give me?"
  I will deal with precedents in a moment but, in passing, I take this view, that if for the purpose of tactics precedents are to be quoted, they may be good Parliamentary tactics, but if the precedents are bad and dangerous precedents, there is no justification for following them. I could have quoted the dangerous precedents of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the ex-Chancellor of the Exchequer in support of my action, but I did not attempt to justify my action on any of those grounds. Whilst I am entrusted with this position, I am not going to ask Parliament to give me any power which means the loss of effective and absolute Parliamentary control. It is rather surprising that I should be accused of seeking to do that, because I have always fought everybody on my own side or on any other side on that question. My record is well known. I have never hesitated to say: "No, Parliament is

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  the guardian of the public purse, and Parliament must have absolute control."
  Having examined the situation in that light, the House is entitled to say to me: "What were the circumstances that warranted you in taking this course?" I will tell the House. Let hon. Members observe that we were dealing with the Money Resolution. Let me repeat that to the right hon. Member for Carnarvon Boroughs. The right hon. Gentleman, judging from speeches outside this House, knows that he and his party hold the control of Parliament. There is no danger! They are the bosses! They will determine things! "Do not be alarmed," he says. "We are the watchdogs." Therefore, any Amendment, any kind of protection could be introduced into this Bill. In view of that, why did I ask Parliament to accept from me the intimation that I did not intend to include a figure? Before the debate ended, a figure of £1,000,000,000 was mentioned. If the debate had gone on much longer it might have been a million millions.
  Mr. OLIVER STANLEY: It was a mistake of one nought.
  Mr. THOMAS: Then the bad arithmetic is not only on one side. Suppose I had put in a figure, no matter what it was, what would have been the first question put to me? The right hon. Gentleman would have put what he calls "a few interrogatories;" and the first question which would have been in this form—I am not quibbling about it at all; it would have been the duty of the Opposition to have put the question and they would not have neglected their duty. If the figure had been £5,000,000, £10,000,000, or £20,000,000, the question would have been: Upon what is the figure based? What has the right hon. Gentleman in his mind? What kind of schemes are in contemplation?
  Mr. LLOYD GEORGE: Hear, hear!
  Mr. THOMAS: The right hon. Gentleman knows, and the House knows, that I could not have given an answer. I will tell the House why. Hon. Members must realise the difficulties of the kind of negotiations I have to conduct. No-one knows better than the right hon. Gentleman that there is no difficulty in anyone meeting the Government; if there is any chance of getting better terms
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  from the Treasury they will get them. The second safeguard is this, that I have no idea at this moment what kind of proposals will be brought forward. The right hon. Gentleman quoted tubes and was quite right in saying that £12,500,000 was raised for one tube by the underground railways. They did it under trade facilities. They were in a position to do this by borrowing under the guarantee of trade facilities; it suited them and they could get the money.
  Mr. LLOYD GEORGE: On Government credit; not a loan.
  Mr. THOMAS: Yes, but the right hon. Gentleman knows perfectly well that a number of these undertakings could not borrow even on Government credit. It is no use hon. Members opposite shaking their heads. They know perfectly well that there is no comparison between certain railway companies and other railway companies; that is common knowledge, and it is perfectly true of other bodies which are all included in the Bill. I do not object to a limit being put in; I have not the least objection. The only objection I could raise would be that if it was so absurd a limit, such a ridiculous figure, the House could not then blame me if in November I was unable to say that I have conducted any negotiations. Is not that a fair Parliamentary and constitutional position to take up. Then I ask, why all this row about this tremendous and dangerous power being taken on the Money Resolution? Again I repeat that on the Committee stage of this Bill if the House feel that a limit ought to be imposed I certainly shall not object, but hon. Members must clearly understand that they must not afterwards say you ought to have done this; you ought to have done that; if I am told in advance that a limit is to be imposed.
  Let me take the wider aspect. The House meets again within three months from the time it adjourns. An Estimate must be presented immediately the House meets again and Parliament, therefore, can not only ask for a record and a clear statement of all the commitments that have been made but will be able to express a clear and definite opinion as to the wisdom or otherwise of continuing them. I say again that the reason, and the only reason, I did not put in a limit

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  was because I felt that if the House asked me upon what the figure was based I could not give a straightforward and fair answer. I do not know. On reflection, I think that any Minister in my position would have taken precisely the same view. For the right hon. Gentleman to assume that there is a danger to complete financial control in asking for some unusual power is pure imagination on his part. The right hon. Gentleman said that Parliament had never been asked to do such a thing before. He must have forgotten his own Housing Subsidy Act of 1919 where he actually gave power to local authorities to enter into commitments of which Parliament knew nothing. I assume he relied upon the same factor as I do in this case, that at some time Parliament would be able to review the situation.
  The late Chancellor of the Exchequor did precisely the same thing in the British Sugar (Subsidy) Act. He actually took power to allow manufacturers to build factories, do just what they liked, without any control whatever. They were both bad precedents and I only quote them to answer the challenge that there was never such a procedure as this. I am not going to repeat them because they are bad precedents. I propose to avoid them; but I am entitled at the same time to ask the House to face this situation, that between now and the time we meet again negotiations will be entered into, proposals will be made, some under one part of the Bill and some under the other, some suited to one part of the Bill and some more suited to the other; but all these commitments will be entered into and judging by my experience now I am not apprehensive about the danger of spending too much money. The danger I see is that tremendous machinery has to be set up in order to get something done. I say in all seriousness that that bothers me much more than the commitments. Let me fairly ask the House to see the danger. The right Hon. Gentleman was responsible for the Lord St. Davids Committee. The present Opposition, when they were the Government, supplemented and developed the Lord St. Davids Committee. £109,000,000 was spent by that body without any statutory authority whatever. Yet I, who am now accused of disregarding Parliament, come along in
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  my first Measure to regularise the situation in this Bill; I proceed to safeguard the situation.
  The former Secretary of State for War, in a speech the other night, got hold of the White Paper and flashed it and said: "Does the Treasury intend to do anything like this?" Then he added: "This is unconstitutional treatment." Let us see. The Lord St. Davids Committee has operated all these years and has been doing wonderful and public-spirited work, but has been handicapped in many ways. I gave an indication the other night be far as the percentage and acceleration was concerned, but a great part of their expenditure, if we examine it, has been directed to drainage, claying fields and work of that kind, all good in itself; but I say that if we are to try to get some real return for the expenditure that we undertake we will have to look beyond that. We will have to say, as I ask for power in this Bill to say: "How can we spend money that will ultimately tend to make us as a country more efficient? How can we spend money that will enable better transport facilities and cheaper power to be obtained?" No one pretends that that would be waste expenditure; no one would pretend that it is not better to spend money on useful work that will ultimately benefit the community as a whole.
  In my proposals, in my method of dealing with them, I make that perfectly clear, and that is why I ask for this power. The House is entitled to ask "What safeguards have you got?" I reply that the safeguards are embodied in the Bill. The first condition is acceleration. Someone may come along—I am not particularising or reflecting on anyone, but I am taking a broad view—and may say "We are prepared to deal with this harbour." It is very strange, with all the expenditure of public money up to now, how many undertakings there are to-day that are not only inefficient and badly equipped, but because of their handicap are deprived of a real chance of competition in the world markets. I shall have something to say, when the House meets again, of the competition of foreign markets and of how a fair chance can be given to industries in this country with better equipment and organisation and quicker methods of

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  transport. I have very much to say on that subject from the information that I am now obtaining.
  Notwithstanding all that, I still ask for this safeguard, that no matter how urgent and necessary that may be I have no right to grant public money to any public utility company to do something that they ought to do in their own business development. I have no right to ask the House to do it, and I am not going to allow it to be done. I am going to see that in the control of this I do not allow anyone to exploit the Government and get public money for things that they ought to do themselves. That is why I put first the condition of acceleration. A good business undertaking has clearly defined methods of capital expenditure, some for one year, some for two years, some for three years, with the hope of a fair return in a given period. Those are things that anyone connected with business knows perfectly well.
  Therefore, I first make the condition that any applicants have to prove to the satisfaction of the Committee that they are undertaking this work at an earlier period than they would otherwise undertake it, and that they are undertaking it only because of the immediate opportunity of providing employment. Secondly, it has to be work that definitely finds employment. Thirdly, conditions as to grants in individual cases may be laid down by the Treasury. I am rather surprised that the attitude could have been adopted the other night by the right hon. Member for Carnarvon Boroughs and the ex-Chancellor of the Exchequer after they had heard my clear statement at the opening. I was dealing with the St. Davids Committee, and I was being pressed as to why I was interfering with the discretion of that Committee, and why I insisted upon laying down terms that should guide the Committee. If hon. Members will look at the OFFICIAL REPORT they will see my reply. I said that it would be unfair to allow any committee to operate without clear guidance and certain fixed principles, not because I wanted to reflect upon the committee, but because it would be unfair to the committee itself, and because the committee would be accused of all manner of partiality and bias. I said that at the outset in dealing with the St. Davids Committee.
  Mr. LLOYD GEORGE: I did not make that criticism.
  Mr. THOMAS: I do not say the right hon. Gentleman did. I said that, having laid down all those conditions at the outset, I could not understand anyone assuming that there would not be conditions laid down. That was my point. Having therefore at the outset laid down the conditions in the Statute, so far as one committee is concerned, I ask the House, not only to believe me, but not to say or to assume for a moment, that I did not have the same kind of principle to apply to the other committee. Again I ask the House to observe the safeguards. The first is acceleration; the second is employment in the United Kingdom; and the third is a Treasury Minute for Treasury control. The Treasury must be the final authority, but whatever Parliament may do, whether it meets in two months or three months, a vote will be taken right away. Parliament will have an opportunity of reviewing the whole situation.
  The second point which I want to emphasise is that that must be done and will be done, as far as we are concerned, more than it has ever been done in the past. We do not want mere blind power. We do not want merely to incur expenditure which cannot be justified, but I again commend the original point which I made. Surely, if you ask me to name a figure at this stage, it is obvious that I cannot name a figure which I could justify by any experience, and I cannot name a figure which I could justify by any negotiations. But, I say that any figure which Parliament desires we shall accept, and we will certainly not exceed it whatever it is. The Debate threw a very interesting light on the House of Commons when it gets its subject. "The Treasury" has been bandied about, and I am sorry that the ex-Chancellor of the Exchequer is not here, because I told him that I intended to deal with this point. I want to say to the ex-Chancellor of the Exchequer first that I think the time has arrived when we ought to stop dragging in the Treasury without keeping in mind that the Treasury, for the moment, is the Chancellor of the Exchequer. No Chancellor of the Exchequer is worthy of his place who wants to hide himself behind any official, and the present Chancellor of the Exchequer certainly will not do so. Therefore that is unfair to all concerned

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  and, incidentally, it arises from that unprecedented action of publishing a White Paper, prepared by officials, the ex-Chancellor of the Exchequer not having the courage to take the responsibility himself.
  I want to say, now that we are dealing with finance, that so far as we are concerned we are not going to hide ourselves behind civil servants. The responsibility, whatever it is, will be taken by the Minister and that is his job. But it only shows how this disease can spread. The right hon. Gentleman the ex-Chancellor of the Exchequer would be entitled to talk about the Treasury and the right hon. Gentleman the Liberal leader would be entitled to talk about the Treasury because they are ex-Chancellors of the Exchequer and would be entitled to have their views accepted. But it only shows when the House runs wild to what an extent this will go. There are in this House what are known as Parliamentary private secretaries. I always understood that their job was either to open the door, or to be a good Press agent, or if the Minister was dry to see that the necessary stimulant was provided. Looking back to the ex-Chancellor of the Exchequer and remembering his Parliamentary private secretary who sits there, I have the very strongest ground for believing and saying that I know no Parliamentary private secretary who discharged those functions more efficiently. I am sure that when the ex-Chancellor of the Exchequer wants to pay a tribute to his success, all the little incidents I have mentioned, so magnificently performed, will be remembered by him. But the other night this Parliamentary private secretary did not assume the role of an ordinary Member. "Finance"—"Treasury"—all these great questions were involved and therefore we must go to the Treasury, and he gets up and says "I have had some experience of the Treasury."
  Mr. BOOTHBY: No.
  Mr. THOMAS: Well, "I have been at the Treasury"—as I have just said as a door-keeper or something. [HON. MEMBERS: "Order!"]
  An HON. MEMBER: That is mean.
  Mr. O. STANLEY: Does the right hon. Gentleman mean to say that all the right hon. Ladies and Gentlemen on that Front Bench have appointed some twenty or thirty other hon. Members merely to keep the doors of their respective Ministries.
  Mr. THOMAS: I accept that, but I do say that, if all those hon. Members because they happened to be Parliamentary private secretaries, got up in the House of Commons, where it could not be tested, and let it be believed that they were part of the Treasury, or were speaking as such, that would be unwise on their part. I want to submit on the Second Reading of this Bill that I am asking Parliament, first, not to sanction a particular scheme. I am asking Parliament to agree to the Second Reading of this Bill because it is giving me power to deal with the first stages of my method of dealing with unemployment. I am asking power to enable me to do so, supported by all the interests in the country, none excepted. Here let me pay a public tribute to the public-spirited business men who are freely giving their services to help the Government and to be the advisers, in a business sense, on this matter. I am sure that when I am in a position to announce the names, those names will, of themselves, be a guarantee that all aspects of the question will be fairly considered. In addition to that, as I have already indicated, there is full, absolute Parliamentary control. I am at the moment applying myself to those public utility companies under statutory powers. I have done it deliberately, because I believe it is in that direction that we can best equip out country.
  The right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) asked the other night why I did not apply the general principle of trade facilities to all businesses. I will answer the House quite frankly by saying that representations have been made in that direction, but I refused to do so and shall continue to refuse to do so, because there is at this moment a tremendous amount of good rationalisation taking place. I am only sorry it has not taken place before. There are all manner of reorganisations towards efficiency in many industries in this country long overdue, and for us to hold out at this stage any hope of artificial help would

  805
  be to stop that very reorganisation that is so essential, and would merely mean bolstering up inefficiency. That, we are not going to do. That is the reason why I have not included them and have limited the Bill in the way I have indicated. Finally, I would say that those undertakings will not be able to complain because in the end they must benefit by a more efficient and cheaper transport system.
  I ask for this power with confidence, and I ask for the early opportunity of getting on with this difficult job. Immediately I get this power, I shall be meeting all the interests concerned. I repeat that I will not object to any maximum figure that is put in, but if the House feels that between now and November it can trust the Government with this power, with these limitations, with these safeguards, with the additional guarantee that an immediate opportunity will be given to Parliament to take the Vote, so that the whole matter can be reviewed; if Parliament feels that it can trust the Government for this period of three months, we will accept its confidence and not abuse it. On the other hand, if any section of the House feels that this power ought to be limited by a sum of money, that sum will not be exceeded; but I submit that the absence of a sum is the better course, for the reasons I have given, that there is a sound Parliamentary safeguard and, above all, because of the urgency of getting something done this winter, because every week and every month that goes by now hampers and delays my work. For all those reasons I, with confidence, ask for a Second Reading of this Bill.
  Sir PHILIP CUNLIFFE-LISTER: The right hon. Gentleman the Lord Privy Seal has traversed a great deal of ground in the course of an interesting speech, but he will not be surprised if, in all quarters of the House, hon. Members may desire to answer him on matters, some of them general, some of them personal, which did not seem to me to be very strictly germane to the Bill, and certainly not germane to what I regard as the one contentious issue, that he has raised, as to the form of this Bill. Whether that is the best way to facilitate the agreed progress of a Measure of this kind, I must leave
  806
  to the House. I am not going to follow him in his disquisition on the duties of Parliamentary private secretaries. I am quite confident, as I am sure the whole House is, that the right hon. Gentleman himself has no doubt taken care to select as a Parliamentary private secretary one who is fully qualified to minister both to his social and his physical needs, but whether he and his colleagues are going to be equally successful in keeping in order all their back benchers, I am not quite sure. [HON. MEMBERS: "Order."] I am but following the right hon. Gentleman, and, if he chooses to debate these matters and to attack hon. Friends of mine, or to indulge in pleasantries at their expense, I certainly desire to reply. People who live in glass houses, with many windows at the back, should not themselves throw stones. Nor am I going to follow the right hon. Gentleman into the large number of other matters that he raised. I only propose to deal with one point, which I think is the one relevant point on this Bill, and which is not a question of musty old shibboleths at all, but is a very vital question of what is the regular Parliamentary procedure. I want to deal with the question as to whether a limit of money should be put into Clause 2. The right hon. Gentleman has come down to the House to-day, and at the close of his speech has said that if a limit is proposed, he personally will not oppose it, but the whole way through a day's debate last week the right hon. Gentleman most hotly opposed the imposition of any limit. He said it was impossible and that it would be fantastic.
  Mr. THOMAS Mr. THOMAS indicated dissent.
  Sir P. CUNLIFFE-LISTER: I do not think I am misrepresenting the right hon. Gentleman. He certainly gave no indication until five minutes to twelve to-day that he was prepared to consider the imposition of a figure. The issue is a very simple one. In Clause 1 of this Bill, which merely provides for the re-imposition of trade facilities, and that in a much more limited form than my right hon. Friend and I proposed, which is a guarantee, and a very strictly conditioned guarantee, to a limited class of undertakings, in that case, a figure limit of £25,000,000 is inserted. In Clause 2, which is a provision of a very different kind, and enables the Treasury to give a

  807
  subsidy—and a very large subsidy it may be, because the amount of the subsidy may be as much as 15 years' interest as a free gift—no figure limit is put in at all. I must deal first with one argument of the right hon. Gentleman. He said that, apart from precedent, it would be foolish to put in a figure because he could not say what would be required, as he must negotiate. But why then did he put a figure into Clause 1, which requires negotiations just as much as does Clause 2? Clause 1 is an invitation to a certain class of undertakers to come and ask for a Government guarantee. The right hon. Gentleman has not the least idea at present how many undertakers are coming under Clause 1.
  Mr. LLOYD GEORGE: He said so.
  Sir P. CUNLIFFE-LISTER: Yes. Then why has he put in a limit under Clause 1, which is much less generous with the money of the taxpayer? When you take the Colonial Development Bill, which we had yesterday, the right hon. Gentleman does not know what Colonial schemes are coming forward, but he is very careful, or the Chancellor of the Exchequer is very careful, in that Bill to put in a very strict limit. There is a limit to a guarantee under that Bill. There is a definite figure of £1,000,000 a year, which is to be applied under that Bill for a period of 10 years. I have no doubt precedents may be found, and the right hon. Gentleman is quite entitled, if he wishes to twit my right hon. Friend with having done something a little analogous to this. Well, we did rather loose things just after the War, and I thought we were all getting away from the War-time spirit. Anyhow, I do not think that they are exactly analagous, but, even supposing they are, I think they are bad precedents, and precedents that we ought not to follow. As I understand the recognised practice, the principle is that if you are dealing with a continuing service, the policy of which Parliament has authorised, you do not require a Bill, but you can proceed by way of a Vote. If, however, you are initiating an entirely new service, as we did under the Trade Facilities Act, it is not sufficient to proceed by Way of a Vote, but you must get Parliamentary authority for a Bill for the
  808
  course you propose to follow, and, of course, after that a Vote.
  I do not think that that will be disputed in any quarter of the House, and it will not be disputed by the right hon. Gentleman, because by producing this Bill and putting in Clauses 1 and 2, he assents to the proposition that the proper way of getting Parliamentary authority is by a Bill and not by a Vote. If that be true, it is not fair to ask Parliament in the Bill for a blank cheque. If Clause 2 is left as it stands, Parliament is in no better position than if the right hon. Gentleman had in a Parliamentary answer to a question said, "I propose conducting negotiations as to a number of undertakings and, later on, after those negotiations are completed, in many cases after we have been committed to the expenditure of money, a Vote will be produced." Let the House observe that we are not only dealing with what the right hon. Gentleman is going to do this time. This Measure is to go on for three years. He told us that we were to have Supplementary Estimates in the autumn. He may not always be there. This is to go on for three years. The right hon. Gentleman the First Commissioner of Works might be the generous and general authority in this matter. [HON. MEMBERS: "Hear, hear."] I know that it would suit some hon. Gentle men much better if the First Com missioner of Works rather than a stricter Minister had the administration of this. [HON. MEMBERS: "Why?"] I do not think we need be so mealy-mouthed about this. Really, the right hon. Gentleman has made a general attack, but he will be the last to object if I respond to the question. The reason why they would rather have the First Commissioner of Works to deal with this matter is that they would much rather have it administered in the Poplar spirit than in the far more stricter spirit of the Lord Privy Seal. (An HON. MEMBER: "The Chester-le-Street spirit."] I sincerely hope that sound administration will be invariably followed both under Clause 1 and Clause 2, and these kind of interruptions make it all the more important for us to see that when we pass this Bill, we pass it in a form which lets us know what are the conditions under which it is going to be administered during the three years.

  809
  If the House passes Clause 2 without putting in any sort of financial limit, it is actually doing something worse than if it did not pass a Bill at all and waited for a Vote, because if the right hon. Gentleman gets a blank cheque under this Clause, he can come down afterwards with any Estimate for any amount after the money has been spent, and certainly after he has been committed, and morally bound, to any amount of expenditure, and be able to say, "The House of Commons deliberately passed the Bill in which they gave me this general power in which no financial limit was placed." It really does become more important when one considers what the right hon. Gentleman said in his speech before. He does not know whether this is going to a large or a small amount. I do not know whether the figure of £75,000,000 is right or wrong. Personally, I do not pay any very great attention to that figure of the right hon. Gentleman the Chancellor of the Duchy. I think the simple explanation of it is not that he was using his imagination, but that he made a mistake of a nought. There was a much abler Statesman, if I might be allowed to say so, who found himself obstructed by "these damned dots," as he called them. [HON. MEMBERS: "Oh!"] It is a perfectly Parliamentary quotation. If that more eminent Statesman found himself so encumbered, I am not at all surprised that the Chancellor of the Duchy should trip over a cypher. Anyhow, there is no limit set out, and the right hon. Gentleman himself has said: "What is the use of talking about this £25,000,000?" The real thing lies in Clause 2. If he wishes to follow the correct Parliamentary procedure and facilitate this matter, he should impose a limit. It is not for us to produce the figure. In any other case the Government would have produced the figure, and if they had followed the regular course they would have put a figure in Clause 2, just as they have put one in Clause 1. It is the responsibility of the Government to put in a figure which they propose. Therefore, I sincerely hope that that course will be followed.
  I have only two other questions which I wish to put to the right hon. Gentleman who has, I think in part answered them. The actual wording of both
  810
  Clause 1 and Clause 2 is rather loose about the conditions. Clause 2, Subsection (2) says:
  "The Treasury, in considering whether a grant shall be made under this section, shall have regard to the extent to which the capital expenditure in question is calculated to promote employment in the United Kingdom and to the probability or not of the expenditure in question not being incurred in the near future."
  That is rather a loose phrase, but I understand from the right hon. Gentleman—and no doubt he will make this plainer when the Bill is in Committee—that anticipation is an essential condition. But, of course, this Clause as drawn does not bind him, and I think if anticipation is an essential condition, the Government ought to consider whether rather more definite words are not required there, and that it should appear plainly on the face of the Bill. I have been in this kind of negotiation, and I know the difficulty. Unless you set out very clearly the limiting conditions by which you are going to be bound, you will, of course, find people anxious to take advantage of them when they ought not. These are very generous terms for interest, and up to 15 years is a generous period.
  Mr. THOMAS: I am sure the right hon. Gentleman could not have read Clause 2.
  Sir P. CUNLIFFE-LISTER: I was reading Clause 2.
  Mr. THOMAS: If the right hon. Gentleman will look, he will see:
  "and to the probability or not of the expenditure in question not being incurred in the near future."
  I am sure that the right hon. Gentleman does not want to be unfair. Although a maximum limit of 15 years is put in, I want to say, quite frankly, that I hope there will not be, and I do not anticipate that there will be, many schemes of that kind. If we are to look 15 years ahead for something being done, it will be something which it is difficult to conceive at this moment, but, as far as it is possible to make any check, we are doing it. In addition you must keep in mind that instructions are to be given to the Lord St. Davids Committee, and I have in my mind the possibility of having a sort of liaison, that is, members of that committee sitting on the com-

  811
  mittee to be set up under this Bill. Something of that sort would be a good thing to ensure continuity of policy.
  Sir P. CUNLIFFE-LISTER: I am very much obliged to the right hon. Gentleman. I think we mean the same thing, and want the same limitations, and I will say no more about that. It is really a question for the Committee stage to see whether that phrase is right. I would also like to ask the right hon. Gentleman when he will be able to announce the composition of the committee which it is proposed to set up?
  Mr. THOMAS: Before the House rises.
  Sir P. CUNLIFFE-LISTER: I gather that it was implicit in what he said, following all our precedents, that he would not sanction a scheme which the committee had not recommended. I am aware that the Bill lays down "after consultation with the committee." I think that that is the right form, but it must be a ministerial responsibility.
  Mr. THOMAS: Hear, hear!
  Sir P. CUNLIFFE-LISTER: I have no doubt that that is the right form, and that the right hon. Gentleman cannot say to the committee, "I am going to take everything you recommend to me without any consideration of my own." He and the Chancellor of the Exchequer must be the responsible people.
  Mr. THOMAS: That is intended.
  Sir P. CUNLIFFE-LISTER: I think I am right in saying that a very definite Parliamentary undertaking was given in connection with the Overseas Trade (Credits and Insurance) Act—I am not sure about the Trade Facilities Act—that the Government would not present to the House proposals which the committee had not recommended.
  Mr. THOMAS: It was in the Export Credits Act.
  Sir P. CUNLIFFE-LISTER: Yes, I am not sure about the Trade Facilities Act, and it does not occur in this Bill, which follows the Trade Facilities Act. I am not committing myself, but I think there was a Parliamentary undertaking—I am sure there was an understanding
  812
  —that the Government would not propose schemes which the committee had turned down. That is very important. I will give the right hon. Gentleman another reason why I emphasise this. You are asked from time to time to produce reports of the committee on this and that scheme. That is absolutely impossible, for the committee must get a great deal of confidential information about people's business and finance, which they must have if they are to do their work properly. They will not get that information unless it is to be treated as absolutely confidential, and unless they are able in their reports to speak with the same frankness with which people speak to them. Therefore, there can be no question about publishing reports. That carries with it the other obligation, that the Government, putting their trust in this committee, should not sanction proposals which the committee think are financially unsound. I am sure from what the right hon. Gentleman said that that is the intention, and that he would not sanction or approve or put into future Estimates any schemes which the committee did not think were financially sound.
  Mr. THOMAS: It is important to be clear on that point. You cannot say absolutely that Parliament and the Minister responsible must have the last word, and then take the other view. Surely, the common-sense is that the Minister, whoever he be, would have to have very strong and substantial reasons, reasons which would ultimately have to satisfy the House, for him to take an action of which the committee had not approved. I cannot conceive any circumstances that would warrant him doing it, but, on the other hand, merely to say that the committee, and not the Minister, should be the final authority, would be a mistake.
  Sir P. CUNLIFFE-LISTER: I am not asking that. What I do ask is this. It would have to be a very unusual case where the Minister decided to recommend something and give public money where the committee had not approved. If there should be a case where the Minister was recommending the expenditure of public money against the advice of the committee, or if the committee had not assented, he ought to tell the House that he is doing it on his responsibility.
  Mr. THOMAS: Oh, yes, that is quite fair.
  Sir P. CUNLIFFE-LISTER: There is one other thing. The right hon. Gentleman said at the end of his speech that he had not included any provision for giving private undertakings money who have not put their house in order, or to buy plant, and so on. I congratulate him on his courage. I know what specious schemes are put forward. They came before me, and a hundred and one people thought that they could get cheap and easy money out of the Government. I am glad that the right hon. Gentleman is setting his face absolutely against that, but I hope that he will not shut his eyes to this possibility. If it should be found that industries have set their houses in order, that you have rationalisation, to use a loose word, and that they want money not at an easy rate but because actually there is a shortage of credit, and a difficulty in these undertakings getting the necessary capital for further development after they have set their houses in order completely, I should not like to rule out the consideration of the use of public credit in such cases. That is entirely different from inviting anybody to come in, and say, "I want to buy new machinery; therefore, give me a loan." It is a case of helping with finance only if the finance cannot be obtainable when the industry has set its house in order, and when the further expansion of the industry is going to be a wealth producing asset, which is the most legitimate use of credit. I enter the caveat, because I do not want it thought that in that event the use of State credit is entirely ruled out. For the reasons which I have given, which are justified by what is being done in other parts of the Bill, and what was done in the Bill yesterday, and by all the right hon. Gentlemen's own arguments, I do think that the Government ought to state a figure, and state frankly what their intentions are, and the House of Commons ought plainly to say what their intentions are before they part with this Bill.
  Mr. LLOYD GEORGE: The Lord Privy Seal has said a good deal that was quite irrelevant, and I hoped on a hot summer afternoon like this that there was a bare chance of having a quiet and
  814
  even a drowsy examination of the details of a practical business proposition, and that we might, at any rate, try for this second time to avoid the scenes of heat and conflict which characterised our first Debate on the subject. This is, after all, a business proposition, and I hope that we shall be able to examine it in that spirit. I am not going to enter into all the suspicions which the Lord Privy Seal referred to, rather, as it seemed to me, to avoid the necessity for giving us a little more humdrum detail, which would have been more useful. I would only say this. I do not know whether, from his tone, he meant to suggest that the ex-Chancellor of the Exchequer and I have had some sort of discussion with regard to the rôles we played the other day. As a matter of fact I had not a single word of conversation with the ex-Chancellor of the Exchequer upon the topic; and not only that, but the line he took was a totally different line from that which I took. I had nothing whatever to do with the Motion to report Progress; the only part I took in connection with that was to try to soothe ruffled feelings, so that we might get on with the business.—[Laughter.]—Well, that is so, though I have great sympathy with the criticism that there ought not to be a discussion upon a subject which affects the Treasury so vitally unless a representative of the Treasury is present. That is the view which has always been taken during the time I have been in Parliament.
  But I want to get away from that point to the business with which this Bill is concerned. The right hon. Gentleman has put it quite distinctly; it is a very simple proposition. There are two operations contemplated by the Lord Privy Seal—I might say three, but two of them we can well treat as one proposition. The first proposal is that you should give a loan of money on public credit to public utility concerns for enterprises which would promote employment. [Interruption.] Well, a guarantee; the proposal is that you should use public credit in order to enable them to raise a loan. I am not going to make any point about this. I am trying to state it as non-controversially as I can. We are to use public credit for the purpose of enabling them to get a loan at

  815
  as low a rate of interest as possible in the market, so that they can promote enterprises which would utilise the work of the workless, in cases where they could not get money in the market either at all or at any reasonable rate of interest unless the public intervened. That is practically a continuation of the Trade Facilities Act, with which we are thoroughly familiar, and under which, I think, more than £70,000,000 has already been raised. The Act was dropped by the late Chancellor of the Exchequer and the right hon. Gentleman is now: resuming it, and I am very glad of it. I regretted very much that it was dropped. It rendered very useful service in providing admirable employment, and up to the present the Treasury has not been menaced with any financial loss, except of a very trivial character.
  Under that heading the right hon. Gentleman imposes two limitations. The first is a limitation of figures. He is not authorised, if the operations are under that part of his Bill, to go beyond £25,000,000. The second limitation is that the Treasury must be satisfied as to the security. Those are two very considerable and imperative limitations. Now we come to the second group of transactions and there we have what is practically a free grant of public money. However you may interpret it, it is a gift of public money to dividend producing concerns, whether railways, gas, electricity or water companies owned by shareholders—private ventures. The question which really matters to any of my hon. Friends and myself is, Why should you impose a limitation on a loan where you must have good security, and have no limitation upon a free grant to dividend producing concerns? I am trying to put this calmly, because I do not want to excite the right hon. Gentleman, as that does not conduce to elucidation; every time he explains it the thing becomes more obscure when he is doing it under the impulse of excitement. I really would like to know, however, why he is drawing that distinction. In connection with Colonial development there are proposals for considerable development schemes in the Colonies. Nobody has objected, and he has had his Bill with the almost unanimous assent of everybody in the House. What criticism there was came, I think, from his own side of
  816
  the House and was upon matters which have no reference to the actual expenditure. But there is a limit there. When, however, it is a case of a free grant to a dividend producing concern there is to be no limit.
  The right hon. Gentleman interrupted me to say "You did it." I do not know that that is a justification. I myself would not regard it as a justification, for if you do not learn something there is no use in continuing at your job; it is about time to apply for the Chiltern Hundreds—when it is vacant.
  The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): It is vacant. [Interruption.]
  Mr. LLOYD GEORGE: Thank you; and I hope at the same salary When the right hon. Gentleman said to me that the Lord St. Davids grant was made under exactly the same conditions, I doubted it, but one cannot always remember what he has done in the course of years, and Parliamentary experience teaches one caution, so I did not get up at once to contradict him, but I was very doubtful. I have gone into the matter very carefully since, and I find that the first time the Lord St. Davids Committee was set up, in December, 1920, the Minister of Labour, in announcing it in the House of Commons, gave the actual figure of £3,000,000. The following year I put forward certain schemes with regard to unemployment, including some of the very schemes which the right hon. Gentleman is now producing as if somebody had thought of them for the first time. There was the Trade Facilities Act—I announced it from that table. I announced to the House of Commons that the Government proposed to spend another £10,000,000—to place another £10,000,000 at the disposal of the Lord St. Davids Committee. In 1922 we increased the amount again, and I think ultimately we increased it up to about £13,000,000, and then my successors added, I think, about £20,000,000. They announced to the House of Commons beforehand what the limitations were.
  Let me say at this stage that if the limitation is imposed by a statement from the Chancellor of the Exchequer, then, so far as I am concerned, that will satisfy me; we should have had a Ministerial statement that until the House meets it

  817
  is not contemplated to go beyond a certain figure. I think probably that would be better than inserting a figure in the Bill. If the Chancellor of the Exchequer can see his way to make a statement of that kind we should like to hear it, because that was the way it proceeded. The Committee proceeded by three methods, the first being a Ministerial statement; the second was by a minute of instruction to the Lord St. Davids Committee; and the third was by a Vote of this House. In each case, however, the House of Commons was informed beforehand what the actual figure would be, and it was never exceeded without coming to the House of Commons, and then the House of Commons was taken into our confidence in advance.
  There were other limitations which were very important. I would like to draw the attention of the Chancellor of the Exchequer to this point, because I am dealing with very important limitations. What the late Government introduced were not so much limitations of figures as other limitations which restricted the amount far more seriously. There has never been a case where you have had powers of the kind now proposed given to a Government without a restriction of the figures being announced to the House, or restriction or limitations which kept the figure down below a certain amount. A limit was fixed in regard to the percentage of grants. I am not sure whether, first of all, it was 25 per cent., but it was afterwards made 50 per cent. whenever it was a revenue producing concern. I am not at all sure that this percentage was not confined to local authorities, but at any rate there was a limitation of 50 per cent on the amount of the expenditure. Of course, that is a considerable check. If you go to an enterprise and say "We would like you to make a railway round London or construct a tube," they would probably say "Very well, if you give us the money, we will do it." Of course, they would do it, and that is what the right hon. Gentleman calls an inducement. Anybody would do that. [An HON. MEMBER: You ought to know."] I do not know what the hon. Member means by that interruption. If he does not know, then he ought not to have said it. You give a free grant and grant a certain percentage. At any rate, that is a
  818
  guarantee that those people are coming into the concern and taking their share of the liability, and that is a restriction.
  May I mention another restriction which is placed on the Lord St. Davids Committee's grants even to local authorities. It was to the effect that in the case of a revenue producing concern the profits were to be limited. There is no condition of that kind under these proposals. If you are going to construct a branch railway, or a tube railway, or even a roundabout railway, like the one which the Lord Privy Seal described so graphically at the beginning of the Session and which I thought was a very good idea, there are two considerations. The branch line of the railway may not pay, but it feeds the main line and at any rate contributes to the revenue of the concern.
  I should like to put another question. I am asking these questions because I think the House of Commons ought to know before it parts with this Measure the enormous powers which are being conferred, and for which the right hon. Gentleman has not quoted a precedent. First, will the Chancellor of the Exchequer undertake between now and the time when Parliament meets again in the autumn that there will be no commitments beyond a certain figure? Secondly, will the Lord Privy Seal see that, at any rate, a percentage of the expenditure must be incurred by the dividend-producing concerns which are to get a part of the grant, and, thirdly, will there be any restrictions with regard to the profits which may inure from the grants, because there is not a single syllable in this Bill to say that the taxpayers are going to get one penny of the profits if the undertakings turn out to be successful. I think hon. Members opposite will see the reasonableness of going further into those matters. It is not a question of giving money to the local authorities where the benefit would inure to the ratepayers. The Lord St. Davids proposals were all dealings with local authorities, and even then we imposed a restriction with regard to profits, and this was done in the interest of the taxpayers.
  Mr. THOMAS: As a matter of fact, the only additional people included in this Bill are those connected with the railways. The Lord St. Davids Committee are now enabled to deal with companies

  819
  on precisely the same basis, and do not let us assume that it is only municipalities.
  Mr. LLOYD GEORGE: I can give the actual words from the Report if necessary.
  Mr. THOMAS: I mean what they are doing now.
  Mr. LLOYD GEORGE: As far as I was concerned, the Lord St. Davids Committee's grants were given exclusively to local authorities. I am not condemning it, and I am not condemning the fact that the Lord Privy Seal is assisting public utility companies, provided that all this public money is not going merely to increase dividends with no security that if the enterprise pays the public will get some advantage and return on their money. Now I come to the point whether it should be left to the Opposition to suggest the figure. I never heard that question put before for obvious reasons. We do not know what the right hon. Gentleman has in his mind. I do not know what he had in his mind when he drew a distinction between loans to railway companies and grants to them. When the tube was constructed, it was done by us under the guarantee of over £12,000,000, and the Treasury were never called upon to implement that guarantee because it paid. I do not know why the right hon. Gentleman contemplates departing from that precedent, and it is not fair for him to say that we are trying to restrict his enterprise, because that is not so. We have not objected to what he has proposed for the Dominions. We are not objecting to the proposal for £25,000,000 to enable public credit to be used for colonial development. We are only asking for information as to how much the right hon. Gentleman is going to commit the country.
  He said that with housing there was no limit, but really there is always a limit, because you can only build so many houses in a year, and there was also a certain limit in the shape of the penny rate, which I agree was not a very formidable one. You could not in three months commit yourself to any great, heavy expenditure, and Parliament, on coming together, if too many houses were being built, could easily say that you were incurring too heavy commitments. But
  820
  the right hon. Gentleman, between now and November, might commit himself to one of these £75,000,000 schemes; he could do that. Let me follow it. If he says that all he will do is to enter into a provisional arrangement which is subject to the approval of Parliament, that is a limitation; but, if he does that, I can quite see that he cannot begin work—and he wants to begin work—before November. Therefore, what the right hon. Gentleman wants is power that will enable him to commit the Treasury to such an extent that it will be too late for Parliament to cancel it. If you have entered into a contract with a railway company to begin a tube or a new railway, or to provide wagons, and if orders have been given and we have already committed ourselves to find £5,000,000, £10,000,000 or £15,000,000 for the purpose, it would be very difficult for Parliament to go back on that, because you must honour the pledge that has been given by Ministers of the Crown. Therefore, what the right hon. Gentleman wants is the power to commit.
  He knows pretty well what he has in his mind. It is no use his saying, "I cannot tell at the present moment, because I want to negotiate." This is equally true of the £25,000,000. Surely, you must negotiate before you lend. If a proposal comes from any of these great concerns to borrow £5,000,000 or £10,000,000, you must negotiate with them all sorts of conditions—you must have some negotiation. As to the second part you cannot tell now, and you cannot tell now what the £25,000,000 is going to be spent upon. I am not complaining of that; I am not making any criticism on that ground. The right hon. Gentleman is feeling his way; he is looking round; he is prospecting, as it is called, for schemes; but he has in his mind now generally the sort of thing that he means to press forward, and he ought to be able to tell us how much money will enable him to have the necessary negotiating authority between now and November. That is only three months. I would ask the Chancellor of the Exchequer, in the course of this discussion, to give us his idea of the figure; or, if he feels that he could not possibly do so this afternoon, then I would ask that, before we get through with this Bill on Monday, he should inform us what is his idea as to the extent of the commitment—not the

  821
  final commitment, but the commitment between now and November before the House meets—the amount and something of the conditions. I think we are entitled to know whether this money is going to be just shovelled out to these companies without any condition at all—[Interruption]. Will any hon. Gentleman tell me what is offensive in what I have said?
  Dr. SPERO: It is the statement that the right hon. Gentleman is going to shovel out money to anybody who comes along.
  Mr. VAUGHAN: Is not that an insult to the Lord Privy Seal?
  1 p.m.
  Mr. LLOYD GEORGE: I observe that all these interruptions come from young Members who have no experience of the limits of Parliamentary discussion. If we are not to have freedom of Parliamentary discussion in this House, it is idle to have any Parliament at all; better at once get a Soviet. I say, again, that we must know the conditions under which this money is to be given—[Interruption.] If hon. Members object to the word "shovelling", I will say "handing". We are entitled to know whether money is to be handed over to these dividend-producing companies without any conditions of any sort or kind with regard to profits, with regard to dividends, with regard to the percentage which they themselves are to find. In addition to that, we ought to know what the limit is with regard to the figure, and I think we are entitled to know that before this Bill leaves the House.
  Mr. P. SNOWDEN: I do not know that it is desirable that the two front benches should monopolise this Debate, but I think it is only courteous that I should rise at once to reply to the criticisms which have been made by the late President of the Board of Trade and by the right hon. Gentleman who has just sat down. I think that a great deal of the justification, I will not say for the criticisms, but for the doubts that have been expressed, should have been relieved by the statement of my right hon. Friend in the course of his speech, namely, that we are quite prepared to consider, when the Bill comes into Committee, whether the House, on the recom-
  822
  mendation of the Government, should insert a figure in the second or alternative part of the Bill. I am not in the least concerned about precedents; I am not a worshipper of ancestors; I do not believe in being ruled by the dead hand; and, therefore, I shall not enter into controversy in regard to that matter.
  The right hon. Gentleman who has just spoken, and, indeed, the right hon. Gentleman opposite, did not see why we should draw a distinction between Clause 1—what has been described as the Trade Facilities procedure—and the second part of the Bill, which provides for the making of grants to public utility companies towards the payment of interest upon loans which they themselves may raise. It is, of course, a perfectly reasonable thing to say, "A limit of £25,000,000 has been inserted in regard to the first part; why should you not insert a limit in regard to the second part?" But neither of the two right hon. Gentlemen has appreciated the point. If there be a loss upon a guarantee in respect of a loan, that is paid for out of the Consolidated Fund, but in the case of the alternative, where there is a grant of interest upon loans which have been raised, that has to be paid by an annual Parliamentary Vote. I do not urge that as being a very substantial answer to the points that have been raised, but there is in it a certain amount of reason which justifies the difference that we are making. The right hon. Gentleman, said, "You have found no difficulty of putting a figure of £25,000,000 in the first part, but you put no figure in the second," and he went on to assume—not to say—that there was just as much ground for putting in a figure in the second case as in the first.
  A further answer to that is that in the second case it is a new procedure, a new proposal, and we have no past experience to guide us. In the first instance we have. We know what are the amounts which have been guaranteed tinder the Trade facilities procedure in the past and that is a very fair guide to the expectation of what may be undertaken under Clause 1 of this Bill. During the six years of the operation of the old scheme something like £17,000,000 were guaranteed to public utilities of the kind now in question, and we had that fact before us

  823
  when we inserted the figure of £25,000,000. The right hon. Gentleman put me three categorical questions, mainly dealing with limitations upon the use of the alternative plan. Before I answer them let me say that I do not anticipate that this alternative plan will be universally used or that it will supersede the procedure under Clause I because I can very well imagine that if Treasury control is going to be effective and if Treasury advice is going to be taken when a proposal is made for assistance for one of these public utility companies, the Treasury will say: "Why do you not proceed under the Trade Facilities part of the Act?" and they will have to make out a very strong case indeed for the sanction of the Treasury to be given for the far more expensive procedure under the alternative plan.
  The right hon. Gentleman, as I say, put to me three questions. In the first place, he asked why there was no limit put on the expenditure under the alternative scheme. The real difficulty is this, that my right hon. Friend is engaged in what I may call an initial survey, and I am sure he has not yet reached the stage which the right hon. Gentleman thought he might have reached when he has in his mind a fairly clear idea of what his commitments are likely to be, say for the next six months. I repeat what my right hon. Friend has said. I know there is no logical justification whatever for putting in a limit under the first part of the scheme and not putting in a figure in regard to the second part of the scheme. It is not logical. It is simply a question of not-being able at the moment to fix any definite figure. The right hon. Gentleman has not asked me to commit myself to a definite figure. I am sure he knows it would be quite impossible for me to do it to-day. I will give the matter consideration between now and Monday, but I doubt very much whether in such a short time as that I shall be able to submit to the House a firm figure. I will add that I agree with the right hon. Gentleman that it is not for the Opposition at this stage at any rate to suggest a figure. The figure must come from the Government and then it will be open for the Opposition to criticise. I will do the best that I can between now and Monday to see whether I can suggest a figure, but
  824
  at any rate I associate myself with the statement that was made by my right hon. Friend that if it is the wish of the House in Committee to insert a figure, such as £5,000,000, the Government will agree to that being done, but of course on this understanding. It is impossible at the moment to say whether under this alternative scheme any such figure as £5,000,000 would be a final figure. The House must really understand that any figure that we may suggest cannot be regarded as a final figure. We shall claim freedom to come to the House if we have schemes which we think are practical. We shall claim freedom to some to the House at any time and ask them to increase the figure. I am sure we shall be able to come to a satisfactory accommodation.
  Mr. LLOYD GEORGE: I put another question—I am not asking for an answer now—about the limitation of Percentage.
  Mr. SNOWDEN: The right hon. Gentleman asked whether it would be possible to do something to unit profits where assistance had been given under the alternative part of the scheme. He appeared to forget that these are all statutory companies and that the great majority of them are working now under a limitation of profits—water companies, gas companies, I am not sure about docks, but in the case of railway companies the right hon. Gent leman must remember that they are under strict supervision by the Ministry of Transport and railway rates are subject to fixation by a Tribunal. But that is not all. These schemes, let it be understood, are being inaugurated to meet what the right hon. Gentleman described as a national emergency. I am not very much concerned at the moment whether they are going to give an immediate profit or not provided they are going to do something to mitigate this appalling problem of unemployment. But do not let me be misunderstood in saying that I entirely associate myself with what right hon. Gentlemen have more than once said that every one of these schemes which receive Government approval will have to be a sound scheme and ultimately a remunerative scheme, but it will be no obstacle to the approval of these schemes that they do not promise in a year or two to become remunerative.

  825
  I am sure I shall shock many of my Friends behind me when I say this. I am going to speak on this matter as a Socialist. I look forward to the time when all these public utility services will be publicly owned under some form of public control. When the time comes for the State to assume this function, I want the State to take over thoroughly efficient undertakings, I want it to be, in the words of the right hon. Gentleman, a sound, business proposition and, therefore, in the meantime I am not very much concerned whether we are giving a little assistance to these undertakings which will make them more efficient when taken over. When that time comes, the subvention or subsidy which we have given may easily have added to that efficiency. I think I have now answered the three points the right hon. Gentleman put. The Bill proposes 15 years as the full period for payment of interest under Clause 2. Those are the maximum terms, and I do not imagine that there are many schemes in which it will be found necessary to offer the maximum in order to secure acceleration of work. As a typical case, I conceive something like this: One of these public utility-societies comes forward and says, "We have a plan, we have had it in mind for some time. It is not particularly urgent, we probably should not have undertaken it for four or five years, but if we can have assistance we are prepared to put the work in hand at once." In circumstances like those, when an undertaking will not come into profit for say two, three, or five years—it might take a couple of years to complete the construction of the work, and it might take another three years before it became a dividend paying proposition—all the circumstances will have to be taken into consideration in assessing the percentage of interest which will have to be paid by the State, and the number of years for which it will be paid. As I look at it, something like this will happen. We shall say: "This undertaking is likely to begin just to pay a dividend in five years; it may become a highly remunerative business in 10 years' time, and, therefore, we will undertake to give you the maximum rate of interest—that is, to pay the whole of the interest on the loan—for three years, and then to pay you one-third of the interest for another three years." Of course, it is quite
  826
  impossible to make a hard and fast rule on these schemes, because every case is to be considered according to the circumstances. But I can assure the right hon. Gentleman that as long as the Exchequer is under its present administration there will be no extravagance.
  May I just add that some criticism was made the other day regarding the absence of a Treasury representative when the Money Resolution was under discussion. I cannot call to mind in a fairly long Parliamentary experience a case where the Treasury has taken an active part in a Money Resolution except when it has been a matter which arose in the Treasury itself. It certainly has not been within my experience the practice of the Treasury to take control of a Money Resolution which dealt with the work of another Department. But if there was any inconvenience through the absence of a representative of the Treasury the other day, I offer to the House my sincere apology. I should also like to say that I am quite sure that I am speaking for all my colleagues when I say that I want to thank the Members of the Opposition for the way in which, generally speaking, they have received our proposals. I do not in the least resent, but I do most heartily welcome, the very helpful criticism.
  Mr. WARDLAW-MILNE: The right hon. Gentleman the Chancellor of the Exchequer has undoubtedly cleared up matters which have been under discussion this morning and has facilitated the progress of the Bill, and I think it will be realised by the Government now that it was quite impossible to expect that this Bill should have been carried only upon the statement which the right hon. Gentleman the Lord Privy Seal put forward in the early part of the discussion to-day. I think that he must realise that it was absolutely essential that the House should have a figure inserted, especially in the second part of the Bill. I want to make it clear that there is one statement in connection with Part I of the Bill which has been made this morning which is really not strictly accurate, and that mistake which wag made by the Government was also, to some extent, the mistake which was made by the Leader of the Liberal party. The first part of this Bill does not, in fact, resurrect the Trade Facilities Act at all. It puts forward a

  827
  totally new proposition. The Trade Facilities Act was an Act specially for the purpose of developing industries which required temporary assistance by means of guarantees. Part I of this Measure is definitely aimed at giving guarantees only to public utility companies. I want to make it perfectly clear to the House that this is not and never has been a suggestion to resurrect the Trade Facilities Act, but that this is, in fact, a very modified form of the previous Act specially for the purpose of helping public utility companies and with very limited scope.
  With regard to the second part of the Measure, I want to ask—I do not want to cover any of the ground which has been covered by the various speakers from the Front Benches—Could it be expected by any Government that any part of this House, their own supporters, or any others, could possibly agree to the passing of a Measure which gave the Government unlimited powers of distributing cash? That is really what it comes to. It is perfectly clear that a figure must be inserted in the second part of the Bill and I am more than grateful to the right hon. Gentleman, the Chancellor of the Exchequer, who has realised that that figure must come from the Government and cannot properly be put forward by the Opposition.
  Next week, however, the House rises for nearly three months, and I think that it is not unfair to put this proposition to the Members of the House: Are they satisfied that what has been done or has been indicated as likely to be done for unemployment—are they satisfied that the proposals which can be brought forward under this Measure and under the Bill we discussed yesterday are likely really to result in a material measure of permanently increased employment in this country? I venture to doubt it, and it is because I doubt it, and not in a spirit of carping criticism, for I want to help the right hon. Gentleman in every way that I can, that I ask for consideration of a wider view of the problem.
  I am not going to oppose any suggestion that will bring employment to anyone, but I suggest to the Lord Privy Seal quite seriously, that, although this may be the only means by which he can be expected to approach the problem at
  828
  this moment, it does not alter the fact that these suggestions which he has referred to are not going materially to assist the solution of the problem of unemployment at all. When the right hon. Gentleman stood at that table a week or two ago and brought forward his proposals for the first time, I think it is reasonable to say that he had a very sympathetic reception from the House. Most of us thought, as we listened to him, that his proposals, if they were not likely to give a great deal of employment, were certainly as much as could be expected at the very beginning of Parliament when he had been only a week or two in office. I do not want to follow certain hon. Members and say to use an old quotation "that what was new was not valuable and that what was valuable was not new." It does not matter whether the proposals were new or not. It does not matter as long as the schemes are helpful. But I think the House of Commons, which is going to part for several months, will have seriously to consider whether these proposals are going materially to help the unemployment problem in this country.
  Let me say why I am taking that line to-day. I am not attacking his Bill or speaking in any spirit of criticism, but I do want the wider aspects of she problem to be brought home to the Government. This Bill, and the other Measures, which the Lord Privy Seal has brought before the House, or the proposals which, as a result of them, he is likely to have under consideration in the next few months are mostly aimed at helping docks, railways, and similar public utility concerns. It appears to me that the House has for-forgotten altogether that we do not really cure unemployment by helping to build new docks and to increase railway facilities, unless there is traffic and trade for those docks and railways. To put it plainly, it seems to me that the House and the nation have entirely forgotten that we cannot get prosperity merely by giving greater travelling facilities and greater freight facilities. We have forgotten the manufacturer, the man who provides the money. We have forgotten that the concerns which we are attempting to help by a Bill of this kind can only be profitable and can only make a living if the industry of the country itself is prosperous.

  829
  There is not one word in any of these proposals which is going to help productive industry; but I do not criticise the proposals merely on that ground. I do not suggest that the Lord Privy Seal could have done better in the time at his disposal, but I do suggest that he must look very much further than anything that is in this Bill, and the other Bills, if he is going to assist employment in this country. I have here a list of 20 or more of the greatest firms in England, whose names are household names. For obvious reasons, I do not propose to go through the list. They are concerns all of which are well known in this country, and not one of them has paid a dividend on its ordinary capital for years. There are concerns employing hundreds of thousands of men. How on earth can you hope to get unemployment relieved and the prosperity of the country restored to long as we have conditions of that kind going on?
  Certain hon. Members opposite may be inclined to say that we should reconstruct and rationalise. On that point, I would very earnestly draw the attention of hon. Members to a letter which appeared in the "Times" newspaper, yesterday, from the President of the Federation of Cotton Spinners' Associations. To my mind, he puts an aspect of this question which it was high time should be put forward. There is far too much talk about rationalisation. No doubt, a great deal can be done by rationalisation. By combination you can improve not only the amount of your production, but you can reduce considerably your overhead charges; but the idea that purely by rationalisation you are going to cure the troubles of industry, is quite erroneous. There is a very great danger that this continued talk of rationalisation may obscure in the minds of the workers, and in the minds of the employers, also, the real facts which underlie the whole of our industrial troubles.
  I am precluded to-day from touching upon one, and possibly the most important aspect of this problem. It is perfectly clear that we cannot continue to live under so-called Free Trade conditions in a Protectionist world; but I cannot under the Rules of Order pursue that argument. Leaving that point aside—I mentioned it because it is one of the most cardinal points—my second point is that the
  830
  amount of unemployment and the difficulties of industry are closely and intimately connected with our financial policy. We are getting nearly £30,000,000 a year paid to us from the Continent, and that is being paid by us to America. Every year America is increasing the amount of her gold, which she bottles up in the United States, doing her no good, but doing her harm, and doing us a great deal more harm. Nobody has yet suggested, so far as I know, a better means for the settlement of international debts than by the medium of gold, but I do suggest to the House, quite seriously, that it is no use ignoring the fact that our industrial troubles are, to a large extent, bound up in our currency and financial problems, and until this country realises that fact it will not be facing the real problem that lies before us in the question of unemployment.
  In your dock schemes and your schemes for the building of roads you employ a certain number of men, largely unskilled labour. I agreed with the Lord Privy Seal when he said, at the beginning of this Parliament, that only about one-half of the numbers appearing in the unemployment figures are permanently out of work. If he looked closer into the figures he would find that the proportion was probably even less than that. We have to deduct a very large number of people who are unemployable, not through any fault of their own but because they have been out of work so long, or because they are physically unfit. The number of unskilled people that can be employed on the roads, docks, etc., in the sort of schemes that have been put forward, is comparatively small; but nothing that I can say will be said to obstruct those schemes, even if they employ only a few thousands of that number, because I am so anxious that employment shall be found. But these schemes do not touch for a moment even the edge of the problem of unemployment, which is a totally different matter altogether.
  To-day in this country we have a shortage of skilled labour. It may surprise hon. Members opposite to be told by someone who knows something about industry that we have already a shortage of skilled labour in this country. The curse of it is that not only is there a shortage but that it is an increasing

  831
  shortage, because men are not being trained. They cannot be trained, because the industries that would give them skilled training and ensure them an occupation, equivalent to giving them a profession which would ensure to them occupation in any part of the world, are not able to give them that training. The means of training have gone or are going to a very large extent, because we have conditions where a very large number of industries, such as I have mentioned, are earning no profits. At first sight, some of the new Members of the House may say that it is a very desirable thing that some of these industries should not earn a profit, but I think that they will soon take a wider view. What may happen in the days to come, if and when there is a Socialistic State of which the Chancellor of the Exchequer has spoken, I do not know. Suffice it to say that at the present time it is a very great hardship to the people of this country of all classes to have our greatest industries in this state of depression, and no amount of work of the kind covered by the present proposals will alleviate that hardship.
  It is no use talking about over-capitalisation, and suggesting that in this way a remedy can be found. That is not the cure. I know that in the days of the boom after the War there was a great deal of over-capitalisation, and that a good deal of that dead flesh has had to be cut away, and possibly a good thing, too; but when you have 20 of the largest firms of this country earning no profit for years, it is no use talking simply of over-capitalisation. It does not matter what the paper figures of capital are, if there is no profit earned on the bulk of it. What is it that is causing our heaviest industries constantly to lose money and to employ less labour? What is it that is causing those who run these concerns to get more and more into a pessimistic state, and to get into a hopeless attitude of mind? There are three causes. In the first place there is the issue which I have mentioned, the unfair international competition against tariffs and, protected home markets. Secondly, there is the financial conditions under which we are working in this country, and the third is the immense burden of taxation.
  832
  The third, unfortunately, we cannot deal with at once because it is a vicious circle which can only be put right as prosperity increases, but we can do something with the second, and I suggest that the time has come when the present Government could clearly announce their view upon the currency arid financial policy of this country. The Chancellor of the Exchequer is said to be as good a watch dog for the Treasury as this House is ever likely to get. The reception which his remarks a few moments ago received would assure him of his reputation in that respect. The maintenance of the gold standard has no stronger exponent than the right hon. Gentleman, but although you may maintain the gold standard for international obligations—because we know of no better way—is it absolutely necessary to maintain the same standard for all inter-imperial transactions within the Empire? Is it necessary between one nation of the British Empire and another and between individuals of the same nation, that we should have a standard based on gold, over which we have no control and be subject to fluctuations in the price of a metal which is largely in the hands of the United States of America. It is a control which is doing them harm and also undoubtedly hindering the revival of trade it; this country and Europe. The time has come when the right hon. Gentleman the: Chancellor of the Exchequer and his colleagues might seriously consider, when they are dealing with the problem of unemployment, what proposals they can bring forward as to the future financial policy of this country particularly in its non-international obligations.
  It will be said that we are beating the air in trying to arrange any other standard. Are we? Other nations have done it; why should not we? Even the United States of America do not work on the hard and fast rules for internal trade transactions which we think are necessary in this country. The whole basis of trade prosperity rests entirely upon credit. One has only to read the reports of the International Labour Office to see how closely unemployment is bound up with a rise or fall in prices of commodities and how closely it is bound up with the supply or limitation of credit. It has been claimed that there is a necessity for a complete inquiry into

  833
  the Bank Charter Act and the management of the Bank of England. Hon. Members opposite have suggested that the Bank of England should be nationalised. Would that improve the position? The shareholders have no control whatever over the policy of the Bank of England. To all intents and purposes the Bank of England is already nationalised. The real trouble is that the credit and trade facilities of this country are based unnecessarily on gold, that we have to pay our debts in gold, for with an ever-rising Tariff in the United States they prevent our paying any other way, and that the price of the gold we must have can at any time be fixed and manipulated by the very creditors who demand it from us.
  I have wandered, perhaps of necessity, from the actual provisions of the Bill. Nobody will oppose the Bill with the safeguards which have now been promised to us in the Committee stage. The House is rising at the end of next week for about three months; I repeat, are the Government satisfied that these proposals are going in any way to seriously touch the grave problem of unemployment? The proposals of the right hon. Gentleman the Lord Privy Seal, such as they are, will excite support and sympathy from everyone, but when it comes to tackling the problem of unemployment I hope the right hon. Gentleman will not get so mixed up in little details of negotiations with dock companies and the like as to forget what is the real problem of unemployment.
  I have sat for some years as a Member of the Imperial Economic Committee and I have seen a good deal of what can be done for the improvement of trade within our own Empire and within our own borders, and I do not think you are going to touch the problem by measures such as those suggested by this Bill. Do not let us forget that it is not the provision of new branch railways or new docks for which money can generally be fairly easily raised by the Companies concerned, which will increase the prosperity of the country. I spent a number of years as a member of the Port Authority of a City which claims to be the second largest port of the Empire and we found no difficulty in raising money for increased facilities for trade, new docks, and new branch railways,
  834
  to bring the trade to the docks, provided we knew the trade was there and that the new facilities were required and would be remunerative. Do you know that the trade is here? Do you know of one proposal put forward by this Bill which will provide the trade, by which alone can these docks and railways prosper. It is not so much roads that we want as goods to go along the roads, it is not so much new docks and railways as eager traffic for these railways, and you will not get these goods and that traffic merely by employing a number of people to increase the facilities of your docks and railways. Of course, new and better roads, cheaper transport and improved facilities are all, in reason, vitally necessary, but before we part with this Bill, and before the House rises for the Summer recess, the Government should give us some idea as to whether they are going to tackle the real problem of unemployment which is bound up vitally, to my mind, with the fiscal, financial and the currency problems of the country.
  Mr. MESSER: As a new member making his maiden speech, I crave the indulgence which is usually accorded. I agree with a great deal that has been said by the hon. Member for Kidderminster (Mr. Wardlaw-Milne) and I am convinced that this Bill is not by any means likely to cure unemployment. We have been told already by the Opposition that we are not going to be allowed to cure unemployment. We have been told that as soon as this Government begins to put into operation the policy of Socialism, it is to be swept aside, and I want to submit to the House that within the bounds of the present system of society there is no cure for unemployment. There are, however, steps which can be taken to lessen the degree of evil of unemployment, and I notice that the Lord Privy Seal in his first speech took a survey of the things which were imported into this country which might be produced by the workers at home. I was hoping he would refer to the fact that we import somewhere in the neighbourhood of three-fifths of our food stuffs. What is required is to increase the purchasing power of the people. We must make up for the oversea markets which have been lost by a stimulated home market, and

  835
  the home market can best be stimulated by increasing the purchasing power of the people of this country.
  This can be done either by an improvement of their real wages—by a reduced cost of living—or by increasing the amount of their wages. The position that we occupy as the greatest exporting country in the world is in danger of being lost as a result of capital going out of the country and of the exploiting of subject races to put products into the market with which our people have to compete. We have an instance at the present time in the textile industry. There are differences of opinion as to how it will be possible, for the cotton goods of this country to compete in the markets of the world. Yet our people in Lancashire are expected to compete with coolie labour that is being exploited as a result of capital being taken out of the country. One thing to which we have to pay attention is the fundamental principle of the ownership of the means of production and the most important part of that question is the ownership of land. What is required is a cheapening of the means of production by a payment of less to those who own the land. Why it is possible for us to buy beef that is imported from a distance of 2,000 or 3,000 miles and to sell it in the shops of our big towns more cheaply than British beef? That imported beef is produced by people who are getting higher wages than those received by people occupying similar positions here. Until the Labour party has the power that will be given by a majority, it will be impossible for it to tackle the land question, or to produce food supplies profitably at home by restoring the purchasing power of the workers of this country, or to deal with the problem of unemployment.
  Colonel WEDGWOOD: It is not impossible.
  Mr. MESSER: But we have to secure a majority.
  Colonel WEDGWOOD: We shall do it next year in the Budget.
  Mr. MESSER: We have to get a majority to enable us to deal with the fundamental evil. I suggest that the criticisms of this measure, which is only
  836
  a beginning, must be taken in conjunction with the statement that when we do actually begin seriously to tackle the question of unemployment, so soon shall we be thrown out.
  Sir GEORGE HAMILTON: I must congratulate the hon. Member who has just spoken on his maiden speech. I am afraid that I cannot agree with him in the last part, as naturally we do not see eye to eye on these matters. My hon. Friend the Member for Kidderminster (Mr. Wardlaw-Milne), seemed to me to have rather a wrong impression of the object of the Bill. As I understand the intention of the Bill it is to improve employment by finding promptly, next winter, work for a number of our people. The Lord Privy Seal does not intend that in finding that employment we necessarily keep a special eye on the improvement of industry. As I understand it, the proposal is to find employment only so long as that employment is given in producing works that are useful and of general benefit to the country, and works which will not cost the Treasury too much. I got a considerable shock when the Chancellor of the Exchequer spoke. He said that under the second part of the Bill Treasury control would prevent very much being done—that the Treasury, when a proposal was put forward, might say: "Why should you not do this under the Trade Facilities proposals of Clause 1? Why should you come for a free gift under the second part of the Bill?" I gather that the view of the Chancellor of the Exchequer is that very few proposals indeed may be accepted by the Government under the second part of the Bill.
  Then we are thrown back on the first part of the Bill, where we find that the total amount which can be spent must not exceed £25,000,000. If the total capital expenditure under the Bill is to be £25,000,000, I cannot see that there will be very much more employment given in the coming winter. We all know that the Lord Privy Seal has much vaster schemes in his brain. The other day we heard about £75,000,000 to £100,000,000 being spent on the electrification of suburban services round about Liverpool Street Station, for the London and North Eastern Railway Company. That is a matter which interests me very much.

  837
  When I was first elected for Ilford about 18 months ago, there was tremendous feeling on the subject of the transport between Liverpool Street and Ilford. As soon as I became a Member of this House, I received all sorts of information as to how the service could be improved. I have not the least doubt that to electrify the suburban services would be of great benefit to the travelling public, and that the scheme would give considerable employment in this country.
  There are, however, two points which I submit to the Lord Privy Seal. Is it not a fact that the electrical industry in this country is one of the few industries which are really doing well and in which production is almost up to the limit of saturation? Therefore the proposal would mean giving employment in a trade where employment is not really wanted. Although I and my constituents would be delighted to see this electrification undertaken, yet if the cost is to be as vast as was outlined by the Chancellor of the Duchy, the money could be better spent in another direction. There was another proposal, that after electrifying this railway there should be an overhead railway from Liverpool Street to the suburbs. It is a fact that Liverpool Street Station cannot be extended sideways by even a few feet, and that if you must have more accommodation there it must be obtained up in the air or below ground. I understand that Sir Henry Thornton, the late general manager of the old Great Eastern Railway, who is now the head of the Canadian National Railways, was very much attracted to this scheme of an overhead railway and an overhead station on the top of Liverpool Street Station as it is now.
  I put this scheme forward to the railway company and received the greatest courtesy from the managing director, Sir Ralph Wedgwood. He and his experts invited me to the station to go into the, matter. Plans were submitted, engineers' reports were considered, the whole matter was thrashed out, and the conclusion which I reached after considerable consultation, was that to electrify that station—as far as some of the suburban services were concerned, including the Ilford service, which is undoubtedly the most crowded—would not really achieve any considerable benefit
  838
  for the travelling public using that station. There is a point at which you cannot get any more trains along the metals. Everything has a point of saturation; and if one takes the trouble to examine these services, again taking the example of the Liverpool Street-Ilford service as an illustration, it will be seen that in the rush hour there are 15 to 17 trains per hour, or leather more than one every four minutes. I believe it will be found that on the old Great Eastern system there is a higher efficiency of trains moving in and out than anywhere else in the world. The old Great Eastern was not as efficient as the system is now under the London and North Eastern railway, but such a high state of efficiency has been reached that I am doubtful whether electrification would materially improve the results.
  After looking into the matter I came to the conclusion—though I dare say I may be miles out—that you might possibly carry some 200 extra passengers per hour during the rush hours, or roughly 12 on each train if you electrified the trains. That would not be done by being able to turn the trains round quicker, and get them into and out of the station quicker, because the terrible bottle-neck at Stratford seems to be an insoluble difficulty from the engineering point of view, and would prevent the trains being moved any more quickly, But, with electrification, you would be able to get a few more people into the trains on the existing length of platforms. As I have explained you cannot extend the platforms owing to the congested situation of Liverpool Street in the middle of the city of London. Even if you took 400 passengers an hour in and out of the station during the rush hours, however, what benefit is that going to be, when several thousands more per hour wish to travel during those periods? If the right hon. Gentleman comes himself or sends a representative of the Ministry of Transport, to Liverpool Street Station he can see crowds of men and women—old men and women, and boys and girls—struggling and fighting to get into the trains for Ilford between half-past four and half-past six. It is a scandal. They travel 15 and 16 in a compartment and there is no control as to whether they travel first, second or third class. Nobody cares. They pile

  839
  in anyhow. They sit on each other's knees, and in this hot weather it is not only unhealthy but disgusting, and it is quite unbearable for tired people who have done a hard day's work to travel in those conditions.
  2.0 p.m.
  This preliminary study of the problem led me to the conclusion that as an overhead railway into Liverpool Street was regarded as too expensive and too difficult owing to bridges, cross-roads, etc., on the line, and as it was impossible to secure a sufficient improvement of efficiency by electrification, there was only one solution and that was to burrow under the ground. I suggested that it might be possible to run an electrified tube railway under the existing lines. I was told frankly that the London and North Eastern Railway preferred long-distance traffic; that their suburban traffic did not pay and that they would prefer if somebody else constructed tubes, rather than that should be pressed to do so. I dare say it would be a very different story if the right hon. Gentleman and the Government could supply the London and North Eastern Railway with the necessary funds to build such a railway. It seems to me from what the right hon. Gentleman said on the Financial Resolution that the London and North Eastern Railway are not in a position to borrow money under the first paragraph, but would have to come under the gift part of the Bill. We heard from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) that a tube railway was built at a cost of £12,500,000 and was so successful that it did not cost the Treasury a penny. That railway was built under a trade facilities guarantee, and the Treasury had not to find anything. All they had to do was to guarantee the necessary capital. As that scheme was such a success, I ask the right hon. Gentleman to consider whether the greatest amount of useful employment would not be given by extending the tubes of London in various directions. The terrible congestion in passenger traffic to which I have referred is largely due to vast new housing estates of the London County Council beyond the East End of London in the county of Essex. Would it not solve the travelling difficulties of that and other areas, equally badly placed, if the right hon. Gentleman ap-
  840
  proached the underground railways and, by arrangement with them, gave them something in the nature of a trade facilities guarantee on the understanding that they would start immediately to build some of these tubes? That would give employment in the iron and steel industry to which the hon. Member for Kidderminster has referred. Vast amounts of iron and steel are used in the construction of tube railways. Immediate employment would be given in the making of the tubes, and such a scheme would undoubtedly solve a problem which is of the greatest importance to the East End of London.
  If a tube were built there, and the surburban services were electrified, I believe the East End of London would get a service which would improve living conditions for many people, and establish efficient transport for the workers who come into and go out of London every day. I therefore beg of the right hon. Gentleman to study the problem from all points of view, and not merely to go into the electrification of a great station like Liverpool Street because such schemes may appear attractive and likely to give employment at once. I ask him to consider whether that employment would be of the kind which is really wanted, and whether that electrification would really contribute most to efficiency and to the benefit of the travelling public. I ask him to study also the possibility of giving a guarantee for the building of tubes. I was told the other day by one of the directors of the underground railways that he anticipated that all tubes urgently required could he built by a guaranteed loan of £25,000,000. I am not going to say that the right hon. Gentleman should give the whole of his guarantee to them, but we have heard the proof' which the right hon. Gentleman the Leader of the Liberal party has given that £12,500,000 was guaranteed for such a scheme and that it did not cost the Treasury a penny. Another £12,500,000 would go half-way towards solving the problem. I do not believe it would cost the Treasury a single penny, while it would ensure immediate employment of the type that is wanted just where it is wanted and would help very much in the solution of the London traffic problem.
  Mr. BOOTHBY: I did not intend to take any part in this Debase, but the

  841
  Lord Privy Seal made one or two observations about me, to which I think I am entitled to offer some reply. Before coming to what the right hon. Gentleman said about me, may I say that the House, and the Labour party particularly, ought to be very grateful to the Chancellor of the Exchequer, whose speech quite effectively took this Bill right out of the realm of party controversy, and made it practically an agreed Measure. With all due respect to the Lord Privy Seal, I do not think that the speech in which he commended the Bill to the House was well calculated to secure for it an easy passage. It was not until the Chancellor of the Exchequer made his speech that the House obviously made up its mind to give full facilities for the passage of the Measure, without raising any further difficulties. I think the undertakings given by the Chancellor of the Exchequer are quite satisfactory to every hon. Member of this House.
  Like the Lord Privy Seal, I am not one of those who believe in excessive or false modesty. I am against it; but on the occasion to which the right hon. Gentleman referred, I asked the Government to make a statement on the subject of credit and currency policy. I was perfectly entitled to make that request. Any hon. Member is entitled to request the Government to give a clear statement of its policy on an important matter of State policy. I have got the OFFICIAL REPORT in my hands now. The Lord Privy Seal misquoted what I said in the course of my speech. This is what I actually said, according to the OFFICIAL REPORT:
  "In my opinion, for what it is worth"—
  Then there was a slight interruption from the benches opposite, which I did not resent in the least, because perhaps my opinion is not worth a very great deal; but I went on to say:
  "and we all have a right to express our opinions, and I have spent some time in the Treasury."—[OFFCIAL REPORT, 16th July, 1929; col. 377, Vol. 230.]
  That was by way of justifying my making any observations on the subject of credit and currency policy. The statement was literally and in fact true. I agree that it was in a very humble capacity. I was Parliamentary private secretary, unpaid, to the late Chancellor of the Exchequer. I never said I was in the Government; I merely stated the truth, that I had
  842
  spent some time in the Treasury, and I do not think the right hon. Gentleman the Lord Privy Seal need have made such a fuss about it.
  Mr. THOMAS: If I wounded the hon. Gentleman in the least, I tender my humble apologies to him.
  Mr. BOOTHBY: I am not really wounded at all. I would remind the right hon. Gentleman of a Scriptural quotation which was told to me—I did not remember it, I admit, till I was reminded of it—and which applies to this case. The right hon. Gentleman accused me of being a doorkeeper and of fetching drinks for the late Chancellor of the Exchequer—that was quite unjustified—and I would remind him of this quotation, which I think is peculiarly apt:
  "I had rather be a doorkeeper in the house of my God, than to dwell in the tents of wickedness."
  Mr. WALLHEAD: The other day the Chancellor of the Duchy of Lancaster was called a ginger assistant to the Lord Privy Seal.
  Mr. BOOTHBY: I did go on, upon the occasion to which the right hon. Gentleman referred, to say one thing which I most firmly believe. I said I did not believe that so long as you had a fall in the general level of world prices continually going on, you would ever, by administrative means, do much to affect the volume of unemployment. I am not alone in that belief, and I would say to the right hon. Gentleman that so great an economist as Sir Josiah Stamp stated, only a few weeks ago, that in his judgment this question of world prices was by far the most fundamental economic problem with which we had to deal, and that until some solution of it was reached, we could not hope to see a great amelioration in the economic position. So far as this Bill is concerned, I think we were really justified in all the criticisms that we originally made about it. It divides itself, as practically everybody has pointed out, into two parts: There is, first, the trade facilities section, which is simply in effect the granting of trade facilities to the tune of £25,000,000. As the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) pointed out, that has already been done, and done on a far

  843
  larger scale; and its effect on the volume of employment has been proved by experience to have been confined to a small area, and limited to a comparatively small scope.
  Under the second part of the Bill—in spite of the statement in the White Paper, which appeared to some of us to indicate the exact contrary—as it stands at the moment, before the Chancellor of the Exchequer had given any of the undertakings he has promised now to do, interest could be paid up to an unlimited amount to private companies working for public purposes in this country. That was the Bill as it originally reached us. A first very modest part, dealing entirely with trade facilities upon a not very large scale; and then this second proposal, giving the Government powers to spend up to an unlimited amount, without asking the permission of this House. I think there were grounds for serious criticism until the Chancellor of the Exchequer made his statement to-day.
  The hon. Gentleman the Chancellor of the Duchy of Lancaster asked a rhetorical question of the House in winding up the debate on the Money Resolution. He asked:
  "whether this Bill is so alarming in the powers it confers upon the Government that it is a public menace, or is so small and pitiful a thing that it cannot put half a dozen men into employment."—[OFFICIAL REPORT, 16th July, 1929; col. 390, Vol. 230.]
  I submit that the Bill as drafted is both those things. It is a pitiful thing in so far as it is designed to cure unemployment, and at the same time it does confer on the Government powers which, unless they were checked, would be something of a menace to the constitutional life of this country. I think we all agree that the first part of the Bill cannot be expected to reduce to any very great degree the number of men actually on the live register, and the second part means at the moment nothing at all, because none of these schemes have been negotiated; but if it is seriously to affect the volume of unemployment it does involve the granting of subsidies on a fairly substantial scale to private undertakings in this country. I do not know that that is a very bad thing. I think it is rather a good thing, if it is very well scrutinised, and if this House maintains a firm control over the whole
  844
  process at every stage of the proceedings. But I must say that I think those of us on this side who have studied the election addresses manifestoes, programmes, and promises of the Labour party during the last two or three years are entitled to express our astonishment that the main constructive proposal that the Government should have thought fit to bring forward to deal with the problem of unemployment should be one to subsidise private enterprise; because that is really what it amounts to. I do not think this Bill will cure unemployment or even go any very long way towards curing it. The right hon. Gentleman the Chancellor of the Exchequer said that, so long as he was there, Clause 2 would play a very small part in the whole business and that, so far as he could see to it, he would shift every proposal into Clause 1, and only in exceptional conditions would he consider applications under Clause 2. That was received with general cheers, from this side of the House at any rate.
  There is, however, one thing upon which, before I sit down, I think the right hon. Gentleman the Lord Privy Seal ought to be warmly congratulated. As usual, he has handled the publicity of the whole business in a most masterly way. For a few days, and even weeks, he almost persuaded the great British public that he had really produced a brand-new and really formidable, constructive scheme, which would go a long way towards solving the problem of unemployment. Of course, that has been seen through now. I do not want to be offensive in any way, though the right hon. Gentleman said some harsh things about me; but I should like to say that there are some people in the country, and possibly in this House, who genuinely believe that the considerable public reputation which the right hon. Gentleman enjoys has been built up to some extent through his almost unrivalled and exceptional capacity for bluffing successfully the people with whom he conies in contact, all the way through. I do not associate myself necessarily with that criticism. But in this business which the right hon. Gentleman has now taken on, bluffing is no good at all. I am sure he will realise that, and will not expect to be able to "get away with it," as they say. You cannot get away with an

  845
  unseen hand here, and what we have asked the right hon. Gentleman to do is to show his hand—a perfectly legitimate request. I would only say that, as the hand has got to be seen, and as, in the course of time, every card must be lying face up on the table, he had better not try to prove, at any stage, that it holds a great scheme to solve the problem of unemployment. This Bill will undoubtedly do some good, and go a long way towards improving some of the capital equipment of the country. I do not believe for a moment that it will go within 100 miles of solving the unemployment problem, but if we see it in its proper light, and if the right hon. Gentleman puts it before the country in its proper light, then neither he nor we will be disappointed with the result.
  Mr. W. J. BROWN: The hon. Member for East Aberdeen (Mr. Boothby) found some difficulty in understanding the position of Members on these benches who, elected on a Socialist platform, offer, as he says, as their main contribution to the solution of the unemployment problem, an extensive subsidising of private enterprise. I think it would be a mistake to regard this Measure as the sole or even the main solution of the unemployment problem that this Government will produce. But even if our position is difficult to understand—a point to which I shall come back later—the hon. Gentleman's position seems to me to be positively astounding, for he, together which his chief the ex-Chancellor of the Exchequer, has identified himself publicly with a doctrine which, if it is true, renders this Bill a mere irrelevance to the solution of the unemployment problem. I refer to the Treasury doctrine as to the results produced when the State takes part of the pool of capital available for investment, utilises itself for the promotion of public work, and thereby reduces the amount of capital available for use by private enterprise. If the ex-Chancellor of the Exchequer and the hon. Member for East Aberdeen believe in that doctrine, then, clearly, there is only one course for them to take, and that is to vote against this Bill.
  Mr. BOOTHBY: I can, naturally, only speak for myself. I did not say I be-
  846
  lieved or disbelieved in it. I only said I was asking for light from the Government.
  Mr. BROWN: At this moment I am asking for light from the hon. Gentleman, and I find if the light that is in him be light, then clearly he and his colleagues ought to be voting against this Bill, but so far from that, it has been received with very general agreement, in principle at least, by hon. Gentlemen on that side of the House. My purpose in intervening in this Debate is to answer what is alleged to be the Treasury doctrine, and I propose to show that that doctrine is not a sound doctrine; secondly, that it is not a Treasury doctrine; and, thirdly, that it is not a doctrine at all. If I succeed in demonstrating those three things, I hope the exuberance of the ex-Chancellor of the Exchequer will be restrained if he takes part in future discussions on this Bill.
  What is the alleged Treasury doctrine? It is that there is a limited amount of capital available every year for investment in industry; that, normally, if the State does not intervene, private enterprise will utilise that capital in the productive processes of industry; thirdly, that any money the State pays for schemes of this kind must come from that pool of capital; and, fourthly, that to the extent the State takes money from that pool, there is a reduced residuum for use by private enterprise. Therefore, the conclusion of the syllogism is that the net result of the State taking any part of the money is to put people in work with one hand and put them out of work with the other. That is the doctrine described as the Treasury doctrine, which receives the beneficent support of the ex-Chancellor of the Exchequer, although he does not put his name on the paper in which the doctrine is elaborated. I want to show that the contention contained in that syllogism is imperfect and illogical. First, it is not true to say that the capital available each year is utilised by private enterprise in productive processes of industry. To a considerable extent the volume of capital available each year is utilised in enterprises which, from a Socialist point of view, are sometimes positively undesirable. Indeed, one of the problems in the modern capitalist

  847
  community is the way in which the flow of new investments at home passes over the great basic industries which are crying out for capital.
  Mr. DEPUTY-SPEAKER (Mr. Robert Young): I would ask the hon. Gentleman to bring his speech into relation with this Bill. I confess at the moment I am in grave doubt whether he is in order.
  Mr. BROWN: I should be sorry to be out of order, but in the discussion on this Bill, I submit, with great respect, the ex-Chancellor of the Exchequer has cast doubt upon the results which this Bill will produce in terms of finding employment because of what he described as the Treasury doctrine. With respect, I submit that if it is proper for the ex-Chancellor of the Exchequer to introduce that doctrine as a comment on this Bill, it is proper for me to answer that doctrine and to show that it is wrong.
  Mr. DEPUTY-SPEAKER: I was not present when the late Chancellor of the Exchequer referred to what has been mentioned by the hon. Member. I do not know what the ex-Chancellor of the Exchequer said, but perhaps he made a reference only to the document in question.
  Mr. O. STANLEY: On a point of Order. It is the contention of some that, although this Bill purports to deal with immediate employment, unless some additional arrangement is made for credit facilities, no alteration in fact in employment will take place. Therefore, is it not in order in discussing this Bill to discuss whether that doctrine is true, because its truth or fallacy will make a considerable difference in the attitude towards the previsions in the Bill?
  Mr. DEPUTY-SPEAKER: The discussion must be confined to the object of the Bill. We might have a discussion in this House on the Treasury doctrine quite apart from the contents of this Bill.
  Mr. BROWN: I hope I shall not get outside the point of Order, but, with great respect, I regard that Treasury doctrine as being the most relevant that has yet been mentioned in connection with this Bill, because, if that doctrine be true, this Bill must fail of its effect.
  848
  The ex-Chancellor of the Exchequer devoted a considerable amount of time to elaborating that doctrine, and to basing substantial arguments upon it. I am defending the Bill, and in doing so I want the liberty of answering that doctrine as far as that doctrine affects the purpose to which this Bill is directed.
  Mr. DEPUTY-SPEAKER: If the hon. Gentleman is directing his remarks to the Bill I am sorry. I have not been quite able to find their relation to the Bill.
  Mr. BROWN: I hope you will allow me to proceed. This is a Bill under which the Treasury takes power to utilise public money in grants or loans to various enterprises for the purpose of stimulating employment. That much, at least, will be common ground. Hon. Members on the benches opposite say that the Bill must fail in its effect, because any money that the State takes will be withdrawn from private enterprise, and that, therefore, we shall put people out of work with one hand while we are putting them in work with the other. If that doctrine be true, this Bill, if I may utilise a phrase quoted by the right hon. Gentleman opposite, is damned from its inception. I say that it is not true that, if the Stale did not intervene, capital available year by year would be utilised in the productive processes of industry. With every year that goes by, more and more of that available pool of capital goes into totally unnecessary and undesirable channels.
  May I illustrate it in this way. A sum of £20,000 or £100,000 spent in the provision of adequate harbour facilities at a port will produce much more employment in the towns concerned than a corresponding amount of money spent in picture palaces, racecourses, and dog-racing tracks. By withdrawing money from that pool of capital, which might otherwise be used in unproductive ways, and utilising it in productive ways the State can effect substantially the volume of employment which the use of that capital will give. I deny that there is a limited pool of capital available each year. That statement is only true upon two assumptions, both of which, I hope, this Government will prove false. Capital is that part of current wealth production which is set aside for the production of more wealth. The amount that

  849
  it is possible to set aside depends to a considerable degree upon the standard of expenditure of the investing class—the owning class. I hope that a Labour Government, in a series of successive budgets, will make a substantial difference in the standard of expenditure of that class, and thereby substantially affect the volume of capital available for reinvestment each year.
  Mr. ORMSBY-GORE: Reduce it or increase it?
  Mr. BROWN: Increase it. Another assumption underlying that argument, which again need not be true. It relates to a point which I mentioned in the House in an earlier discussion. Of the pool of capital available each year for investments, between one-half and one-third is exported from this country altogether. Between one-half and one-third of the new investments made from this country each year, according to Professor Keynes, are investments in overseas enterprises of one sort and another. The doctrine that there is a limited pool of capital available for investment is only true if the standard of personal expenditure of the investing class remains what it is, and if complete liberty is still preserved to export capital from this country year by year. Both of these assumptions, I hope, are going to be proved false by a Labour Government.
  Mr. ORMSBY-GORE: How are you going to prevent the export of capital?
  Mr. BROWN: We have done it before, and I see no reason why we should not do it again. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), who has a courage which I should like to see imitated in other parts of the House, did it when the War was on, and if, for the purposes of successfully financing the War, we could place an embargo upon the export of capital, I suggest that we are justified in placing an embargo upon it for the solution of the equally serious emergency of unemployment. Hon. Members will remind me, as purist free traders remind us, that the export of capital is necessary in order to bring in, in the shape of imports, goods which we cannot grow or manufacture ourselves. My reply is that if imports to this country were confined to goods which we cannot produce ourselves,
  850
  I should give that argument more sympathetic consideration than I do, but when—
  Sir DOUGLAS NEWTON: On a point of Order. Is it relevant to this Debate to enter into a discussion on the export of capital?
  Mr. DEPUTY-SPEAKER: The hon. Gentleman is entering on a controversial topic, and I would remind him that it is usual to confine one's remarks on Second Reading to the general principles of the Bill.
  Mr. BROWN: If I am not demonstrating that I am, above all things, dealing with the general principles of this Bill, I am exceedingly sorry. I am getting nearer to broad principles than most Members who have taken part.
  Mr. DEPUTY-SPEAKER: The hon. Member must not widen the discussion in such a way that the question of tariffs and Free Trade, with which this Bill does not deal, becomes general.
  Sir P. CUNLIFFE-LISTER: The hon. Gentleman is developing an argument which was, of course, debated on the Financial Resolution on which this Bill is based; and, if his argument be that, unless you pursue a certain financial policy which involves a restriction of the export of capital, this Bill must fail, and that we should either support or oppose this Bill accordingly as we are assured from the Treasury Bench—and it is relevant that we should receive an assurance—that in order to make the Bill succeed they will ensure a control of capital issues, I submit that that was not only discussed on the Ways and Means Resolution, but is a very relevant argument as to whether Members should support the Bill.
  Mr. DEPUTY-SPEAKER: As far as I am concerned, I shall take good care that there is no general discussion on tariffs and Free Trade on this particular Bill.
  Mr. BROWN: In view of what you have said, I will not pursue that aspect of the argument. I will show that the alleged Treasury doctrine only remains true while two conditions are satisfied. One is that there is no effective control of new investments within our territory, and no control over the export of capital

  851
  from the country, and I express the personal hope, as a Socialist, that a Labour Government will disprove both the assumptions upon which the alleged Treasury doctrine is based. To sum it up, within the framework of capitalism—and I must keep within that framework, because we are told that as soon as we get out of it, we shall be thrown out—within the framework of capitalism, by the use of public money on public works, coupled with other Measures which I hope the Labour Government will bring in at a later stage, it is possible, in spite of the alleged Treasury doctrine, to influence substantially the volume of employment in this country.
  My second point was that this was not a Treasury doctrine. It is a little significant that, although we have been shown the Treasury Minute on this subject in the White Paper, we have never been shown the Minute which the Chancellor of the Exchequer presumably wrote before the civil servants at the Treasury wrote the Minute which is so often quoted. Before I can judge of any advice, I want to see the form in which the request for advice was tendered. That, so far, has been withheld, and it would throw an interesting light on this Treasury doctrine if we could see it. For something like 20 years fighting the Treasury on Civil Service affairs has been my daily occupation.
  Sir P. CUNLIFFE-LISTER: It appears to be continued.
  Mr. BROWN: Although that is so, I like to see fair play towards my opponents, and I think there has been nothing quite so contemptible for a long time as the use which the ex-Chancellor of the Exchequer has made of the name of the Treasury in regard to this alleged Treasury doctrine. Clearly the ex-Chancellor himself ought to have assumed responsibility for that doctrine as he quoted it against proposals from these benches. I do not think the Treasury have had fair play from the ex-Chancellor in this connection. May I say a word to our own Front Bench? Most of the proposals which have been mentioned in connection with this Bill have been concerned with railways. That is not unnatural when it is remembered that the Lord Privy Seal is an ex-railwayman.
  852
  I would like to say that the mere expenditure of public money upon things which are not in themselves productive, such as harbours, roads and railways, will not serve its purpose unless we can stimulate the basic trades to provide more goods for the railways to carry. I hope that the bulk of the money we spend under this Bill will be spent upon stimulating productive enterprises. I have in mind particularly the mining industry, which is clamouring for the kind of help which could be afforded under this Bill. I am quite sure that is in the mind of our Front Bench, but I may be forgiven for emphasising it, because it does seem to be of considerable importance.
  Finally, I wish to say a word to the right hon. Gentlemen opposite. It may be that the Labour Government will fail in the task of dealing with unemployment. The attitude of the Opposition Front Bench is, "You cannot do much under Capitalism, and if you try Socialism we shall throw you out." Those are the limitations which right hon. Gentlemen opposite set up. With an eye on the next General Election, may I say that I am not at all sorry—
  Mr. SPEAKER: We must confine ourselves to this Bill, and not deal with the next General Election
  Mr. BROWN: May I keep within the point of Order by saying that I welcome the grounds on which right hon. Gentlemen have opposed this Bill, because I believe that the more clearly it is seen that we cannot do a tremendous deal by Bills like this within the framework of Capitalism, and the clearer hon. and right hon. Gentlemen make it that they will oppose the only alternative to Capitalism, which is Socialism, the better from the point of view of the prospects of this party when the time comes to go to the country?
  Mr. O. STANLEY: I feel a certain amount of diffidence in rising to address the House this afternoon because I run rather doubtful whether 4½ years' apprenticeship to what I gather is a cross between a commissionaire and a potboy fits one to address this assembly. I regret that the Lord Privy Seal should this morning have allowed to slip from him that man of the worldliness with which the pens of the publicists and the pencils

  853
  of the cartoonists have made us so familiar. It is a pity that he should, to use a technical expression with which I believe he will be familiar, have suffered from a hot box. We on this side, and I think particularly the hon. Member whom he so grossly attacked, are anxious to assist him in the very difficult and important task he has undertaken. We may not agree with all his methods, they may not be the methods we should employ, but they are the methods which are to be taken, and I want to see them successful, if possible. We offer him our heartiest co-operation, but, after all, co-operation cannot come from one side alone. He cannot expect us to surrender our Parliamentary rights of criticism and of questioning, if we are to go on in the spirit in which his own leader asked this House to proceed. He must remember that the sonnet the first line of which begins:
  "Others abide our question, thou art free,"
  was written about Shakespeare, and not in anticipation of the right hon. Gentleman.
  Now may I follow the example of the right hon. Gentleman and devote some small portion of my speech to the Bill under discussion? The first part has been compared, rather loosely, I think, to the Trade Facilities Act. As a matter of fact, Clause 1 does not reproduce the features of that Act, but it is drawn a great deal more tightly, and loses, I think, a great deal of its value. To start with, we restrict the organisations to whom this help can be given to public utility companies, though in 99 cases out of 100 they could go into the open market to-day and raise money at a respectable level of interest. They are, indeed, the very kind of company which does not require the Government guarantee, which can result in only a very small diminution of the rate of interest which they have to pay. I regard Clause 1 as a rather unimportant part of the Bill, and I was extremely sorry to hear the Chancellor of the Exchequer say that the Treasury would do their utmost to force public authorities and public utility companies to use the facilities under Clause 1 rather than those under Clause 2. It seems to me that Clause 1 will not meet the case at all.
  854
  Clause 2, which is a departure, is a very valuable one, and I should prefer to think that Clause 2 was to be used rather than Clause 1. I will not go into the question of the limitation, which has been so satisfactorily settled, except to say that what disturbed me was not the question of the amount that would be expended, because I agree that if we are to pursue this policy at all it must be carried out on broad lines. But I think that some provision should be made in the Bill which would force the Minister in charge to let the House know at stated intervals how the money had been spent. I do not know whether the First Commissioner of Works is to reply, but may I ask him one point with regard to Clause 2? I find in Clause 4 what I regard as a very valuable provision requiring that the committee considering these loans are to take into consideration the extent to which the proposed works are calculated to promote economic development in the United Kingdom. I presume from the interesting conversation which the Chancellor of the Duchy of Lancaster is carrying on that he is not going to reply and I hope I have not interrupted his conversation unnecessarily. I am rather surprised to find that a similar provision is not included in Clause 2. Am I to take it that whereas under Clause 4 the committee have to consider the economic value of the work to be done, under Clause 2 they have not to take that question into consideration? It seems to me rather a significant omission.
  Another omission which I rather regret to find is that no mention is made of facilities for ordinary industrial companies apart from the public utility companies. I am quite certain that within the next year or two, if right hon. Gentlemen opposite are then still sitting there, they will have to come to this House and ask for some powers of this kind, and they might just as well ask for them to-day. We are setting up committees to inquire into the cotton and iron and steel industries, and it is almost certain that those committees will recommend drastic reorganisation in those industries. Those reorganisations will mean expenditure on machinery and plant, and neither of those industries is in a position to raise money themselves on anything like possible terms in order to carry out that reorganisation. There-

  855
  fore if the committees recommend reorganisation the Government will be bound to put forward some financial scheme which will make it possible for the companies to carry out the report of the Committee. The hon. Member for West Wolverhampton (Mr. W. J. Brown) said that the Treasury doctrine did not exist. I cannot understand why it is called particularly the Treasury doctrine. It is a doctrine which has nothing novel about it, and it has been held by a great number of people of repute in the economic world for a long time. It happens that the Treasury has in the past few years acted upon it, but that does not make it a Treasury doctrine. The hon. Member for West Wolverhampton sought to disprove that doctrine. The argument used was that these proposals, as far as development and the finding of immediate employment is concerned, will fail because they simply take money from one pocket and put it in another, giving employment in one direction and taking it away in another.
  The hon. Member for West Wolverhampton gave three reasons why this would happen. In the first place, he said that the Government were going to take some action and restrict credit in other directions. The hon. Member gave us no reason to show that a Bill of this kind would not increase credit or make more employment available. I think we are entitled to ask what steps the Government intend to take? The hon. Member for West Wolverhampton recommended three steps. His first step was to withdraw automatically money from unproductive investments. That is absolutely wrong, because the class of investment which is going to be provided under Clause 1 will not compete with investments such as those which were mentioned by the hon. Member, namely racecourses or greyhound tracks, because they will only compete with good sound investments. The hon. Member's next step was to increase the spending power of the people by increasing the taxation of the rich. A rich man saves a greater proportion of his income for investment than a poor man is able to do, and therefore the more equally you distribute the wealth the less is the proportion available for investment.
  856
  The third step mentioned by the hon. Member for West Wolverhampton was a restriction on the export of capital, and that appears to me to be the only practical suggestion which the hon. Member has made. The Government can make this Bill more operative by restricting capital invested abroad, or they can take the other alternative, which is to increase the volume of trade by the usual operation of the Bank of England in the money market. I am glad the hon. Member for West Wolverhampton has raised this point, and I hope the First Commissioner of Works will give a categorical answer as to whether he accepts the Treasury point of view that, unless some steps of this kind are taken, this scheme will not succeed. I should also like the right hon. Gentleman to say whether the Government intend to prohibit the export of capital and to increase the credit of this country through the operation of the Bank of England in the money market.
  Sir D. NEWTON: We have been listening to an illuminating and interesting discussion upon economics. Reference has been made to restrictions on the export of capital, and various suggestions have been made in regard to the expenditure of the money to be provided under this Bill. The House is familiar with the principle of providing employment by stimulating productive industry, and that is why the Bill has been welcomed on all sides. I regret, however, that more information has not been given to the House regarding the results of previous Measures which have been placed upon the Statute Book dealing with this question, and I hope reports will be available during the next few months as to the results obtained under the working of the Bill which we are now about to pass.
  May I also express the hope that, just because an industry is successful, it will not be debarred from receiving assistance. I feel that the greater the success of an industry the greater are the possibilities of that industry providing good wages and employment for the workers. I trust that some portion of the resources of this Bill will be used for the development of the amenities of the countryside. There are many important new spheres of development which have not yet been adequately dealt with, and I would like

  857
  to allude to one of them, namely, the electrification of the country districts. In the latest report of the Electricity Commissioners it is stated that there are rural areas in which some 3,000,000 people reside to cover which no electrical undertaking has yet been promoted. There are other areas containing more than 6,000,000 inhabitants where powers have been obtained for electrification, but where up to the present time no adequate development has been made, nor is any effective development anticipated in the near future. If those areas were in foreign countries like Sweden they would receive assistance from the Government and would be developed.
  There are many urban areas, too, in this country in which at the present moment no electrical supply is available, and even in certain urban areas where electricity is available, less than 25 per cent. of the people as yet enjoy its benefits. In similar Continental areas the proportion of people using electricity is not 25 per cent., but nearer 60 per cent. to 90 per cent. of the population. I believe I am right in saying there are 8,750,000 homes in this country, and that 8,000,000 of those homes are in the areas of supply of existing undertakers, municipal and otherwise. I believe it is a fact that only some 2,000,000 of those homes are supplied with electricity, and there are still 3,250,000 homes which might and perhaps ought to be provided with electric current. The problem is to bring an electric supply to those 3,250,000 homes in this country. If progress is to be made within a reasonable period of, say, five years, and those 3,250,000 homes are to receive the benefit of electrical development, steps will have to be taken to connect and wire them at the rate of 650,000 homes per annum. The ordinary rate of progress is in the neighbourhood of 250,000. The work clone annually, therefore, will have to be doubled, and more than doubled, which, it will be seen at once, raises a considerable financial question. I hope therefore that encouragement will be given to undertakers, municipal and others, who are prepared to face up to this problem.
  I would also urge the need of rapidly proceeding with the building of the grid. The House will remember the Debates which took place in 1926 on the question
  858
  of the provision of a national electrical grid, but only a very few miles—not more than eight or 10—have yet been built in this country. If we are to have this development within a reasonable period of time, steps must be taken to see that the grid is erected far more rapidly in the next few years than has been found possible since the passage of the Act. There is already a scheme in Lincolnshire with which I am more or less familiar, under which the grid is to be tapped at six points, but, until the grid is erected, it cannot be tapped, and this valuable development must wait. What is true there is true of other areas, and I suggest that the Lord Privy Seal will do well to devote some attention to that aspect of the matter. Difficulties also arise in connection with wayleaves and so on, and I hope the right hon. Gentleman will look into the whole question of administrative difficulties so that full advantage may be taken of the provisions of the Bill now before us. In order to face the problem adequately, something should also be forthcoming in the direction of assisted wiring schemes, so as to help to bring current within the reach of the poorer occupants of houses in the country. Up to now the rural community have not received the full assistance which they ought to receive in matters of this kind. Rural problems seem to be regarded as a sort of side-line in our national life, but that is not fair to the rural community, who should be given all the amenities which it is possible to give them; for it is important for the urban dweller to see that the rural worker, as far as possible, is happy and contented, and that he does not seek to leave his job to compete with the worker in the town.
  The FIRST COMMISSIONER of WORKS (Mr. Lansbury): The House, I am sure, will not expect either myself or any other Minister to take up very much time, for two reasons. In the first place, it is necessary to get other Orders, and, secondly, the one matter of major controversy between the other side and the Lord Privy Seal has been settled by agreement. There are, however, just one or two things that I should like to say. The first is that the Bill does provide, in Clause 1, what was asked for by the hon. Member for Westmorland (Mr. O. Stanley). In Sub-section (1) of Clause 1 the hon. Member will find these words:

  859
  "for the purpose of meeting capital expenditure to be incurred under a scheme for development, reconstruction or re-equipment in connection with a public utility undertaking in Great Britain."
  That, I think, covers his point that whatever money we advance or guarantee should be spent for the benefit of industry in this country. Obviously, with these words, it could not be spent otherwise, and I hope that that will satisfy the hon. Member. If it does not he will be able to raise the point when the Bill is in Committee.
  Mr. O. STANLEY: It is a Committee point.
  3.0 p.m.
  Mr. LANSBURY: The hon. Member also mentioned that we were going to appoint committees to deal with cotton, and coal, and iron and steel, and he rather suggested that we ought to have taken powers in the Bill so that, if those committees report that national assistance is required to enable those industries to be reconstructed, it should be forthcoming. I think, however, that on reflection he will agree that we had better wait, and not take it for granted that these three great industries cannot carry on without public assistance. In any case, with the sort of feeling that there is in the House at the present time, it will be quite easy to get such legislation through if it is proved to be necessary. I myself think that some action, taken either by those in control of these industries themselves or with the aid of the Government, is absolutely essential for the purpose of restoring conditions which will get rid of unemployment.
  That brings me to my other point. None of us who support the Bill, either on that side of the House or on this, thinks that its provisions, if carried to their most extreme limit, will solve the unemployment problem. The Bill is brought forward as quite a temporary Measure, in order to try to alleviate and palliate some of the conditions that are prevailing, but to do it along such lines as may lead to the prevention of at least some unemployment in the future. The hon. Member asked me, of all people, to say what should be the financial policy of the Government in regard to credit and on the questions raised by my hon. Friend the Member for West Wolver-
  860
  hampton (Mr. W. J. Brown). I am not so young as to be taken in by that sort of invitation. The financial policy of the Government will be stated by the Finance Minister of the Government, the Chancellor of the Exchequer. I hold my views, just as some hon. Gentlemen hold their views on Tariff Reform and some on Free Trade. I happen to hold certain views in connection with finance, which I have advocated, and which, probably, from another position than this, I should advocate again; but in that I am in exactly the same position as the late Prime Minister and others who believe in certain tariff doctrines, but who found that the country did not support them, and were unable to put their policy into operation. I am a little tired of hearing people on this side charged with inconsistency because we are attempting to carry on without putting Socialism into operation. The country has not accepted Socialism in the sense in which we understand it, any more than the country has accepted Tariff Reform in the sense in which you understand it. Consequently, many of you were quite illogical and inconsistent in the last Parliament, but life is like that. No one can charge me with ever having said anything to the contrary.
  Mr. O. STANLEY: The right hon. Gentleman is looking rather fixedly at me, I hope he does not think I was trying to charge him with having said anything to the contrary.
  Mr. LANSBURY: The hon. Member wanted my views on the matter.
  Mr. STANLEY: Only in the absence of the Chancellor of the Exchequer.
  Mr. LANSBURY: No, nothing of the kind—only because he happens to know that my views coincide with his. He also knows quite well that it is not the view of the Government. There is nothing to conceal about those matters. It is better for the honesty of public life that we should own up when we disagree. Hon. Members opposite disagree very thoroughly among themselves on the question of tariffs, and so on, and we, having the business in hand of dealing with unemployment, are Irving to deal with it to the best of our ability within the limits allowed to us. Speaking as one who has had a very great deal to do with the setting up of public work and schemes for the unemployed, I think

  861
  the right hon. Gentleman whom the Prime Minister has asked to undertake this work is going on quite sound and right lines. The right hon. Gentleman was good enough to say the Poplar spirit was what would be welcomed on our back benches. I should like to ask the House one personal favour. Poplar is about half-an-hour's journey from this House. We hear it dragged in almost as often as the general strike in order, as it were, to call in question the soundness of the proposals put forward when anyone connected with Poplar has anything to do with them, I would ask any hon. Member opposite to take the half-hour's journey to Poplar and go through that district, and I would ask the late Minister of Health to go with him. He himself has said that we build our houses more cheaply than any other Metropolitan borough. We carry out our electricity undertakings more cheaply than any other boroughs and make money out of it. It sounds extraordinary, because hon. Members have heard, read and thought so much to the contrary. The borough is administered better and more cheaply than any other in London. About that there is no question. I only say that because the right hon. Gentleman raised a cheap laugh when he said we wanted the Poplar spirit. So far as the Poplar spirit in connection with public works is concerned, you could not have a better spirit.
  Question put, and agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the Whole House for Monday next.—[Mr. Parkinson.]

  DEVELOPMENT (LOAN GUARANTEES AND GRANTS) BILL.
    HOUSING (REVISION OF CONTRIBUTIONS) BILL.
    Considered in Committee, and reported, without Amendment: to be read the Third time upon Monday next.

  COLONIAL DEVELOPMENT BILL.
  As amended, considered.
  The CHANCELLOR of the DUCHY of LANCASTER (Sir Oswald Mosley): I beg to move, in Clause 1, line 2, page 7, at the end, to insert the words "(f) surveys."
  The House will remember that this is a purely drafting Amendment cones-
  862
  quent upon the Committee stage. I accepted an Amendment from the hon. Member for Oxford (Captain Bourne), omitting from paragraph (l) the words "including surveys," in order not to intrude into that paragraph any extra matter. It is very necessary to insert these words in another part of the Bill, and I accordingly move to insert them in line 7.
  Amendment agreed to.
  Sir O. MOSLEY: I beg to move, in page 2, line 31, after the word "may" to insert the words "subject as hereinafter provided."
  It might be for the convenience of the House, Mr. Speaker, if you would allow me to pursue the same procedure that we employed in Committee and to discuss at the same time the larger Amendment which is to be moved. The terms of the larger Amendment have already been circulated to both Oppositions and to hon. Members concerned. It is to insert in page 2, line 37, at the end, the words:
  "Provided that the Secretary of State

  (a) shall satisfy himself that fair conditions of labour will be observed in the execution of all works the cost of which is to be defrayed in whole or in part out of an advance, and in particular

  (i) that the wages paid will be at not less than the standard rates; and

  (ii) that no forced labour and no children under the age of twelve years will be employed on the works; and

  (b) shall take into account the desirability of securing, so far as possible, that the colony or territory in respect of which an advance is made shall participate in any increase in values directly attributable to the advance."

  This Amendment is an attempt to embody in the Bill the views which were expressed in the Committee yesterday. I understood from yesterday's Debate that my hon. Friends behind me would be satisfied if specific provisions concerning standard rates, forced labour, and children under 12 were embodied in the Bill. I understood that hon. and right hon. Gentlemen opposite would have no objection in principle to the inclusion of these provisions, but that they had some slight doubts on the technical application of forced labour, upon which I will say a word before I sit down. It was the intention of the Government, of course, in the original provisions of the Bill to

  863
  cover all such questions. They were covered in page 2, lines 33 and 34, by the words:
  "on such terms and subject to such conditions as the Treasury may think fit."
  But I fully realise the desirability of embodying in the Statute a more specific definition than that which was contained in the original wording of the Bill. We are in this difficulty, that the International Convention, which, we hope, will ultimately determine all these questions, is not in a position to report, and has not yet submitted a report for the ratification of the various countries. When such a report is ratified, these provisions will be defined. At present, such an expression as "forced labour" is rather a loose term. It is not clear whether it applies to such a situation as is purely attributable to the communal supply of labour for a particular concern. That definition, together with other definitions, will be settled by the report of the International Convention, and, automatically, when that International Convention is ratified by this country the definitions of the Convention will naturally apply to this Measure.
  The right hon. Member for Stafford (Mr. Ormsby-Gore) raised the specific question of Nigeria. I am informed that, recently, conditions have materially changed in that country, and that at the moment there is actually a surplus of free labour available. We do not, therefore, anticipate any delay or difficulty in the execution of the work which the Bill promotes. The second proviso, contained in paragraph (b) covers, in general terms, the whole question of values which accrue as a result of the expenditure of public money. We must here leave the Colonial Office administration a very wide elasticity and discretion; but by the words which we propose to insert, we are definitely instructing the Secretary of State to busy himself in these matters. A further change which is proposed to be made, in order to meet the views of hon. and right hon. Members opposite, is the omission of the reference to the Treasury, and the reference of this matter specifically to the Secretary of State.
  The point embodied in the original Amendment of my hon. Friend, concerning participation in the profits, and some
  864
  measure of control of limited liability companies which may, under the Colonial Governments, undertake this work, is broadly covered by the general term "advance." That will direct the attention of the Secretary of State to the necessity of securing some participation by the State in any profits that may accrue. In one specific instance which has been mentioned in connection with this Bill, the Zambesi Bridge, I stated yesterday that the Government are seeking to secure full control of the company in question. We have gone far to meet the views that have been expressed, and I hope that we shall be able to proceed with an agreed Measure. I think the Hon. Member for Wolverhampton, East (Mr. Mander) has had his point entirely met. I hope that we shall now have that happy agreement which has characterised every stage of this Measure.
  Mr. ORMSBY-GORE: As the Chancellor of the Duchy has dealt with the two Amendments, I should like to say at once that we on this Bench are quite happy about the wording of the proposed proviso, which states in general terms what we desire, and that the matter—this is the most important—is placed under the sole responsibility of the Colonial Office. It was an extremely bad thing that the responsibility of Colonial administration should, as happened so often in these cases m the past, where Grants-in-aid, or anything of a like character, have been given to the Colonies, be taken out of the hands of the Colonial Office, and transferred to the Treasury, who do not really know anything about the administration of the Colonies, and the particular problems involved. I am extremely glad that the words "the Treasury," and the original phrasing of the Bill, have been amended, and that the Colonial Office is once again allowed to be master in its own house. I am all the more pleased because I understand from the Chancellor of the Duchy that the definition of "forced labour" will be, as I suggested yesterday, in accordance with whatever comes out of the recent prolonged conferences at Geneva. That is extremely satisfactory.
  Although I do not object I must enter a caveat against the danger of putting numbers in a Bill like this. This new proviso says "No children under the age of twelve years." I hope that in

  865
  those colonies where it is the existing practice to admit child labour under the age of 16 years that it will not be taken as an indication that they are to go back to the age of 12. There is always that danger in putting figures and words into a statute. Once you put in 12 years as the standard below which you do not want anyone to go there is the danger of stereotyping that figure as having been accepted by the Imperial Government as the proper age. However, there it is, and I do not wish to quarrel with it. In regard to the final paragraph—territories getting a proportion of the increased wealth that is brought to native and other communities by an extension of public utilities—there, again, I hope there will be no one specific adopted; either the taxation of land values or a special land tax, or even a tent or hut tax. I hope this will be taken only as a general instruction to Colonial administration that it is the view of the Imperial Parliament that where Imperial credit is given for new schemes of public utility it is legitimate that some form of tax or rent revision shall be introduced which will bring back a fair share of the increased revenue to the Colony concerned.
  In these matters we must remember that although the State may create new opportunities for work in these colonies, and especially in places like West Africa, it is only by the subsequent increased efforts and labour of the native communities themselves that an increased trade will ensue, and if you pile taxation up to the hilt, as the result of public expenditure, it would certainly have a deterrent effect in some of these communities. So far from speeding them up to growing more cotton it would have precisely the opposite effect. They would say: we do not want your developments; let the taxation stay where it is. You would not get that development which is the object of this Bill. Generally speaking, the phraseology proposed by the Government in this proviso, to deal with the points which were raised in the Debate yesterday, has been singularly well chosen and makes the Bill more acceptable.
  Mr. CHARLES BUXTON: The Chancellor of the Duchy has gone a long way towards meeting the desires of those hon.
  866
  Members who are anxious for some restrictions of this kind to be imposed on expenditure on development works, and I am not going to complain that some of the points which some of us desired have not been included in the Amendment. I very well recognise the difficult conditions under which we operate in this House, and the lengths beyond which it is impossible for us on this side to go. It is a very great satisfaction that in an Act of Parliament providing for works in the Colonies restrictions have been imposed, in the interests of the vast native population, far greater and far more specific and far more effective than have ever been imposed before in a British Act of Parliament. One has only to measure the difference that has been made by the accession to office of the present Government by comparing this Clause with the corresponding Section inserted in the Palestine and East Africa Loans Act of 1926. Some progress was made then in protecting the interests of these vast native populations, but it was very slight, and the protection now inserted goes very far beyond that. I claim that this is a measure of the greater effectiveness of the policy of the Labour party with regard to the protection of native populations, compared with the policy of any previous Government in this country. Speaking for myself, I certainly accept with very great satisfaction the considerable progress that has been made in dealing with the vast and critical problem of native labour.
  Mr. SMITHERS: I have not had an opportunity of seeing the terms of the Amendment. Reference was made just now to "standard wages." Does that mean the standard wages prevailing in the country where the work is done? Is that clear?
  Sir O MOSLEY: Yes, that is so.
  Mr. MANDER: As the Mover of the Amendment yesterday, on the subject of forced labour, I am entirely satisfied with the way in which my suggestion has been embodied in this Amendment. I think that a great step forward on that subject has been made.
  Mr. BROCKWAY: I would like to say how very gratefully we appreciate the way in which the Government have met us on this point, and we express our cordial thanks to them.
  Mr. ERNEST BROWN: The hon. Member for Elland (Mr. C. Buxton) was rather self-righteous and amusing. He should remember that there was a Commission dealing with the East Africa problem, of which the right hon. Gentleman, the Member for Stafford (Mr. Ormsby-Gore) was the Chairman. It consisted of three representatives, one from each party in this House. It was not a Member of the Labour party who signed the Minority Report of that Commission, but a Member from the Liberal benches. The hon. Member need not be quite so self-righteous in arrogating all the virtue to himself and his party.
  Sir HERBERT SAMUEL: I would draw attention again to the point put by the right hon. Gentleman the Member for Stafford (Mr. Ormsby-Gore), for it was a point of considerable importance. The Amendment, as moved, may not effect the purpose which the House has in view, in respect of the age of child labour. As it reads the Amendment would provide that the Secretary of State should satisfy himself that no forced labour and no children under the age of 12 years should be employed on the work. That would appear simply to preclude the Secretary of State from insisting upon any higher age. Although such higher age might be proper in the circumstances, it might be legally held that he could not impose such age, since Parliament had decided that the only condition was that children under the age of 12 should not be employed. Therefore, merely as a matter of drafting, I would suggest that instead of the words "no children under the age of 15 years," we should insert "no children under such age as may be appropriate in the circumstances but not in any case being less than 12 years." That would enable a higher age in appropriate circumstances to be applied but not a lower age.
  Amendment agreed to.
  Sir O. MOSLEY: I beg to move, in page 2, line 37, at the end, to insert the words—
  "Provided that the Secretary of State

  (a) shall satisfy himself that fair conditions of labour will be observed in the execution of all works the cost of which is to be defrayed in whole or in part out of an advance, and in particular

  868

  (i) that the wages paid will be at not less than the standard rates; and

  (ii) that no forced labour and no children under such age as may be appropriate in the circumstances but not in any case being less than 12 years, will be employed on the works; and

  (b) shall take into account the desirability of securing, so far as possible, that the colony or territory in respect of which an advance is made shall participate in any increase in values directly attributable to the advance."

  I am very glad in this Amendment to accept the words suggested by my right hon. Friend the Member for Darwen (Sir H. Samuel). I am assured that no such restriction as he suggests would in fact rest upon the Secretary of State for the Colonies, but it is always well to make these things quite clear and the words suggested by my right hon. Friend are certainly designed for that end.
  Mr. THURTLE: On a point of Order. Is not the Amendment which is now being put, different from the Amendment as moved?
  Mr. SPEAKER: No, I am taking the Amendment as moved.
  Mr. FRANK SMITH: I wish to raise the point as to cases where no standard rate of wages is observed. That is the case in many of these Colonies or Dependencies, and I wish to know if the Department will assure themselves in such cases that the wages paid are sufficient and proper.
  Sir O. MOSLEY: My hon. Friend raises a pertinent point. There are of course cases of that kind under the ordinary Colonial Office administration and those cases are dealt with. Where standard rates prevail it is the usual practice to pay higher than the standard rates because that is the only way to get the labour. Where there is no standard it is a matter of ordinary Colonial Office administration.
  Amendment agreed to.
  Lord EUSTACE PERCY: I beg to move, in page 2, line 42, to leave out Sub-section (4).
  This is of the nature of the Amendments with which we are familiar on the Estimates, where one thinks an Estimate is too low and, in order to call attention to it, one is obliged to move a reduction

  869
  of it. I regret that this Bill does not provide for a fund of £1,000,000 a year cumulative, but it was explained very candidly to us by the Financial Secretary to the Treasury yesterday that the intention of the Treasury is that there shall be paid into this fund just so much as, and no more than, is necessary to meet the liabilities of the fund during any financial year, that it is true that, if there is any surplus in the fund at the end of the year, that will continue in the fund and not be surrendered to the Treasury, but that the Treasury will do its best, quite frankly, to see that there is no appreciable surplus in the fund by not issuing to the fund more than the fund actually has to spend in any year. If that be so, why should you provide for a fund at all? Had we not better say that there is not a fund and that the Treasury may make advances on the recommendation of the Committee, and get rid of all this purely delusive paraphernalia of a non-existent fund? The Financial Secretary to the Treasury explained to us that the Treasury was not going to allow this Bill to cover any such profligate proceedings as had been indulged in under the Empire Marketing Board. If that be so, let us get rid of the paraphernalia of the fund altogether.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): When I first saw this Amendment, I confess I was rather surprised. First of all, obviously it could not stand alone, but would necessitate a large number of other Amendments; and, secondly, in so far as it has any effect, it would be in the opposite direction from that intended by the Noble Lord. I understand, of course, that it is not to be taken seriously as a proposal, but simply as a peg on which to hang an argument for doing the exact opposite to what the Amendment proposes.
  Lord E. PERCY: It is the only course open to us.
  Mr. PETHICK-LAWRENCE: I understand, as the Noble Lord has explained, that it is the usual method adopted in this House for calling attention to something when it is not possible to move an Amendment in the appropriate form. In answer to the Noble Lord, I would only say that I think there is a certain
  870
  advantage in retaining this idea of a Fund. It is true there is not a very great deal of difference, but there is something. I do not think I said quite as much as the Noble Lord alleges that I said about it. I did not say the Treasury would never allow any amount to go into the Fund except what it was actually intended to use. I said we would retain the right of the Treasury, as the Treasury always does, to short issue. That is not quite the same thing, because there might be occasions when there might foe some balance, probably a small amount, which would not be surrendered. But there is an advantage in retaining the Fund and so to have it in line with the Development Fund, and it does enable certain machinery to be carried out with advantage. On the wider issue, the Noble Lord takes one view, and the Government takes a different view. The Noble Lord would like to see £1,000,000 or some fixed sum going into the Fund every year, and piling up, even though it was not required in the particular year. The Government of the day do not think that desirable, and that on the whole it is better that the grants paid over by Parliament each year should be limited approximately to the amount which is actually required If there should come a year in which a larger sum was required, it would of course be possible to come to Parliament for further powers in order to exceed the £1,000,000 in that particular year. That is the view of the Government, and I am therefore afraid that we cannot accept the Amendment.
  Amendment negatived.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  Mr. ORMSBY-GORE: Before the House passes from this Bill, are we to be told anything more with regard to the committee? After all the whole administration of this Bill and its whole value will depend upon the work of this new committee, on its ability to attract money from the Treasury, to get schemes from Colonial Governments and make arrangements with Colonial Governments in regard to the schemes, and, generally, to advise the Colonial Office. All that we have been told is that this committee is to be a small committee of about five

  871
  members on which business interests are to predominate, that is to say, they are to have an unofficial majority, and we are not told in any way who they are to be, though the whole success of this Bill will depend upon the drive and energy of the members of the committee. The Noble Lord the Secretary of State and his Under-Secretary will not personally have time to go through and survey all the possible schemes, or even the schemes likely to be put up by Colonial Governments and private enterprises. The work will fall on the committee who will have to work, I will not say from day to day, but very frequently, and will have to thrash out the matters and, above all, convince the Treasury each successive year as to exactly what sum up to £1,000,000 will be required by the next 31st March, and which will have to be presented to this House in the form of Estimates. Therefore, we are to-day in effect arming a new and an unknown committee with very great powers. Before this Bill is passed, we should be told what progress has been made in regard to this committee, and just what Ministers have in mind in relation to its composition and methods of work.
  I should like to ask one question, which is very important to anyone who has had actual experience in the working of government, and it is whether the secretary of the committee, the official who has to run this committee, is to be an official of the Treasury or of the Colonial Office? Is the operative secretary of this committee of business men, dealing with the preparation of documents and schemes, to be a Colonial Office man or a Treasury man? A tremendous lot will depend upon the decision between those two alternatives.
  Colonel WEDGWOOD: There is one portion of the globe where there is no unemployment; that is in tropical Africa. There the problem is not how to find work, but how to get work done. The problem there which has been bothering both employers and statesmen for the last 20 years has been how to get labour, and how much labour can be spared from the native's own cultivation in order that they may work for somebody else. Committees have gone through Africa looking at this question. It has been shown in the careful inquiry which was
  872
  held in the Belgian Congo that 25 per cent. of the able-bodied males was all that could be spared from the reserves to work outside. It has been shown in the report of the Chief Native Commissioner that in Kenya, where so much of this money is to be spent, there are 407,000 men between the ages of 15 and 40, and 40 per cent. are normally working within the reserves. In other districts the proportion goes up to as high as 78 per cent. Then the problem of these poor blacks is not how to find work, but how to escape it under the present industrial system, and it is a tragedy to me that the first act of a Labour Government is to make these poor devils work harder.
  If it were a chance of people here getting work, how gladly we would vote the money, but most of this money is not going to be spent on the Tyne, Tees and Wear, although some of it may be; the vast bulk of it is intended to get labour for these railways and reclamations and and other works in East Africa, for the Zambesi Bridge, and so on. I have seen this work, and I will tell you what it means. Making a railway in Africa does not mean using machinery. There is no comparison between making a railway in this country and making a railway in Africa. It is like a mass of brown ants, all of them filling baskets with earth and carrying them on their heads or on their backs, and dumping it down—a continuous stream of coloured humanity labouring like the beasts of the field. That is what it means to provide work in East Africa. These people are recruited in all sorts of ways. Nominally, there is no forcing, but through the pressure of taxation, the pressure of the Government, and the pressure of the chiefs, they have to work two months of the year to earn the money for the tax. I have seen the labour; they are vast colonies of workers, not as here in this country going back to their homes at night, but taken away from their homes and families, without anybody in charge who can enter into their feelings, and hardly speaking their language, except to give orders, no hospitals, and not even a missionary to look after them. They suffer from horrible diseases, parasites bore into their feet, they die of dysentry like flies, they suffer from the cold far worse than we do, their

  873
  clothes get wet through in the rainy weather, and they have to sleep in their clothes. They are not naked, and the first thing that a native in Kenya does when he has any money, is to buy an umbrella with which to keep the rain off his clothes.
  These people have been working and working, carrying loads on their heads, ever since we got into East Africa. That is all that civilisation has done for the coolies. The population is dying out. They have not enough men to till the fields, and the women have to work in the fields because the men are taken away, with one child on the back, and the other dying in the womb. That is what you are doing for the natives in East Africa. Suppose they want to leave the job, they cannot do it once they are recruited. If they get unfairly treated there is no redress and no escape; for their period they have to continue to serve. If they do, there is an Act which will punish them as criminals for having left their job. Under that Act they will not be sent to prison—oh dear no—but to labour camps where they do the same work as before under rather severer discipline. This is labour in East Africa. When I was in East Africa I saw 90,000 of these wretched devils die carrying those loads for us. It is not so bad now. Those were only men. Now men and women have been driven into the labour market in Kenya.
  It is not as though those people could read or write. The man leaves his home and goes out to work in a strange country. He cannot write and the wife he has left behind cannot write. They know nothing of what is happening to each other. The wife does not know whether the man is alive or dead. No notification of his death goes to the wife. The first news she will get of his almost certain death, in the long run, is when her relatives gather round to separate her from her children, to sell the widow to one relation and her children to another. This is what you are accentuating. You are all supporters of this Bill. I am not. To me it is the creation of more slavery, more labour and more horrors in East Africa. There is no hope of stopping it now; but I would beg hon. Members, when they think of what
  874
  they have done for East Africa, to remember that they have added to the curse of Adam on the entire population.
  Sir O. MOSLEY: My right hon. and gallant Friend has just made one of those speeches which have never failed to move me, coming from him, during the time I have spent in this House, but I do not think it is really fair to say that this Measure adds to the burden or the horrors of the African natives. I think it can be shown, as I will try to show, that it makes the most notable advance in regard to their conditions ever made in this House. But before I come to that I would like to reply to the right hon. Gentleman opposite with regard to the committee. I am very sorry that I cannot yet announce the names of the committee, but I think I can give him some pleasure by telling him definitely that a Colonial Office official will be secretary.
  Mr. BROCKWAY: When the Government are considering the composition of this Committee will they nominate one Member who has special knowledge of and who will watch specially the interests of the native workers?
  Sir O. MOSLEY: I discussed that point yesterday, and I will certainly convey to my right hon. Friend the representations which have been made in that respect. I think that is the only point raised from the Benches opposite. My right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) has just said that nothing would be done on the Tyne or other areas here as the result of this Bill—or very little. I think I can tell him straightaway that as regards the Zambesi Bridge and the railways connected with it orders for something like £1,000,000 worth of steel will come to this country, and that, after all, is something. In regard to the general question of native labour, I would only say this. As he had admitted, things are better than when he was in that country.
  Colonel WEDGWOOD: In the war.
  Sir O. MOSLEY: There has been some gradual improvement. I understood him to admit that, and I would draw his attention to this, that embodied in this Bill are the most specific safeguards in regard to native labour

  875
  ever contained in any Statute. I do not pretend that in a Bill devoted entirely to different purposes you are going to wipe away every abuse, but within a statute which I think will be passed with the unanimous approval of the House of Commons, we are making the most notable advance in that respect that has ever yet been made. The right hon. Gentleman the Member for Newcastle-under-Lyme, has referred at length to the ravages of disease in Africa. May I point out that under this Bill we are providing £1,000,000 a year, part of which is available to be applied towards remedying those diseases. Of course, we cannot with one stroke of the pen abolish abuses which go down deep into the roots of history, but we are embodying certain great principles, and by giving a passage to this Measure, I feel sure that we shall produce results which will be benignant both to the workers in Great Britain and in Africa. I am myself most grateful to hon. Members for
  876
  the consideration which our proposals have received, and I appeal to the House to give this Measure a Third Reading.
  Question put, and agreed to.
  Bill read the Third time, and passed.

  GOVERNMENT OF INDIA (ADEN) BILL.
  Lords Amendment considered, and agreed to.
  The remaining Orders mere read, and postponed.
  Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.
  Adjourned accordingly at Two minutes before Four o'Clock until Monday next, 22nd July,

  MENTAL INSTITUTIONS (OFFICIALS, SUPERANNUATION).
  MENTAL INSTITUTIONS (OFFICIALS, SUPERANNUATION).
POOR LAW.
  RELIEF (WORK).
  RELIEF (WORK).
  INSTITUTIONS (CHILDREN).
  INSTITUTIONS (CHILDREN).
  HOUSING (SLUM CLEARANCE).
  HOUSING (SLUM CLEARANCE).
  POST OFFICE PREMISES, BROADWAY, WORCESTERSHIRE.
  POST OFFICE PREMISES, BROADWAY, WORCESTERSHIRE.
  TAXI-CABS, LONDON.
  TAXI-CABS, LONDON.
  EDUCATIONAL CHARITIES, SOUTH SHIELDS.
  EDUCATIONAL CHARITIES, SOUTH SHIELDS.
  MILITARY TATTOO, ALDERSHOT.
  MILITARY TATTOO, ALDERSHOT.
  ANIMALS, EXPORT (EAST INDIA DOCK QUARANTINE STATION).
  ANIMALS, EXPORT (EAST INDIA DOCK QUARANTINE STATION).
  ROYAL NAVY (MARRIAGE ALLOWANCE).
  ROYAL NAVY (MARRIAGE ALLOWANCE).
EAST AFRICA.
  RESIDENTIAL PLOTS, MOMBASA.
  RESIDENTIAL PLOTS, MOMBASA.
  ZAMBESI BRIDGE (COST).
  ZAMBESI BRIDGE (COST).
  INTERNATIONAL LABOUR CONVENTIONS.
  INTERNATIONAL LABOUR CONVENTIONS.
Preamble
The House met at a quarter past eleven of the clock, LORD MUIR MACKENZIE on the Woolsack.
IRISH FREE STATE (CONFIRMATION OF AGREEMENT) BILL.
Brought from the Commons; read 1a; and to be printed.
UNEMPLOYMENT INSURANCE BILL.
Brought from the Commons; read 1a; and to be printed.

BUSINESS OF THE HOUSE.
THE UNDER-SECRETARY OF STATE FOR WAR (EARL DE LA WARR): My Lords, I desire to give notice that if convenient to all Parties we shall move on Monday next that Standing Order No. XXXIX be considered in order to its being dispensed with for the purpose of passing the Land Drainage Bill through its remaining stages.
House adjourned at twenty-five minutes past eleven o'clock.