Sitting of 7 May 1936

Preamble
The House met at a Quarter before Three of the Clock, Mr SPEAKER in the Chair.

DEATH OF HIS MAJESTY THE KING OF EGYPT.
The VICE-CHAMBERLAIN of the HOUSEHOLD (Major George Davies)reported His Majesty's Answer to the Address, as followeth:—
I thank you for your loyal and dutiful Address. I join most sincerely in your expression of deep regret at the melancholy tidings of the death of my illustrious friend His Majesty the King of Egypt, and I shall without fail communicate to King Farouk your message of profound sympathy with His Majesty, Her Majesty Queen Nazli and the Royal Family and with the Government and People of Egypt in the loss which they have sustained.

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:
Winchester Corporation Bill [Lords].
Bill to be read a Second time.
Great Western Railway (Ealing and Shepherd's Bush Railway Extension) Bill (by Order),
Read the Third time, and passed.
Epsom and Walton Downs Regulation Bill [Lords] (by Order),
Second Reading deferred till Monday next.
London County Council (Money) Bill (by Order),
Second Reading deferred till Thursday next.

ORAL ANSWERS TO QUESTIONS.
  UNEMPLOYMENT.

    BOOKS (STAMPING).
    Mr. DAYasked the Minister of Labour the number of cases that were brought to his notice during the 12 months ended to the last convenient date of employers who failed to stamp the unemployment cards of their employés; and in how many cases were criminal proceedings taken, in addition to civil actions, for the recovery of the arrears?
    The MINISTER of LABOUR (Mr. Ernest Brown): No record is kept of the particulars asked for in the first part of the question. During the year 1935 criminal proceedings were taken in 1,599 cases and civil proceedings were taken in 175 cases of failure duly to stamp unemployment books.
    Mr. DAY: Will the Minister say how many successful prosecutions were undertaken?
    Mr. BROWN: Only 29 were unsuccessful.
    Mr. DAY: Can the right hon. Gentleman say whether stamps were affixed to the cards in all these cases?
    Mr. BROWN: I should require notice of that question.
    Mr. DAY: Have any of the insured persons lost benefit?
    Mr. GEORGE GRIFFITHS: Is the right hon. Gentleman aware that certain cases have occurred where men who have missed having their cards stamped, have been thrown out of insurance benefit, with the exception of Pensions? I can give him particulars of such cases.
    Mr. BROWN: I shall be very glad to receive and to look into them.

    EXCHANGES (RECRUITING POSTERS).
    Major LEIGHTONasked the Minister of Labour how many Employment Exchanges are now exhibiting coloured recruiting posters?
    Mr. E. BROWN: Departmental instructions provide for the poster referred to in my answer to my hon. and gallant Friend's question on 30th April, which has a coloured border and coloured lettering, to be exhibited in each of the 1,184 local offices of the Ministry. In view of my hon. Friend's suggestion that the poster was not exhibited at all Exchanges, I have taken steps to secure that the instruction is observed in all cases.
    Mr. PALING: Is the right hon. Gentleman aware that a number of the young men offering themselves as recruits are refused because they do not reach the physical standard necessary, and that if instead of using these posters he would withdraw the means test, it might provide the number of recruits, and there would be no necessity to advertise?
    Major-General Sir ALFRED KNOX: Will the right hon. Gentleman issue instructions to all Employment Exchanges to exhibit these posters?
    Mr. BROWN: I am doing that.
    Mr. COCKS: Does the right hon. Gentleman expect to get recruits for a Government that will not fight?

    HOURS OR WORK.
    Mr. LEACHasked the Minister of Labour whether he has considered the representations made to him by Sir Benjamin Dawson, of Bradford, on the subject of a reduced working week as a means of solving unemployment; and whether he is prepared to make any statement on the matter?
    Mr. E. BROWN: Sir Benjamin Dawson was good enough to discuss this matter with my predecessor. He recognised that it was a necessary condition that there should be an international agreement in regard to the reduction of hours and the maintenance of wages, and in this connection I would suggest that the hon. Member should take into consideration the replies of the various countries to the International Labour Organisation relative to the discussion on the reduction of hours in the textile industries at the coming International Labour Conference. I should like to add that I regret that discussions on the subject of wages and working conditions in the wool textile industry appear to have broken down, and to express the hope
    1850
    that it will be found possible to take steps to secure agreed conditions as to hours and wages in that industry.
    Mr. LEACH: Is the right hon. Gentleman aware that this eminent Conservative is now so disappointed and disillusioned that anything may happen to his political allegiances?
    Mr. BROWN: I am not aware of that.
    Mr. LYONS: Can my right hon. Friend assure the House that his consultations with the representatives of industry are still taking place with reference to the reduction of the working week?
    Mr. BROWN: Certainly.

    DOMESTIC SERVICE (SEASIDE RESORTS).
    Mr. MANDERasked the Minister of Labour what arrangements are in existence at seaside resorts to supervise the employment of girls sent there for domestic service at boarding houses; and whether there are local welfare committees to see that the conditions and hours are reasonable?
    Mr. E. BROWN: Women and girls who take up at holiday resorts domestic employment found for them by the Ministry are given full particulars in writing of the wages and other conditions, and are advised to apply to the Exchange in the district if in need of assistance. Arrangements are made, with the advice of the women's sub-committee of the local employment committees and of juvenile advisory committees for cooperation with voluntary bodies, such as the Girls' Friendly Society, the Young Women's Christian Association, and the Travellers' Aid Society, in the organisation of welfare arrangements.
    Mr. MANDER: Can the right hon. Gentleman say whether these committees are functioning successfully in North Wales?
    Mr. BROWN: I think so, but if the hon. Member has any particular case in mind and would like me to make inquiries, I will certainly do so.
    Viscountess ASTOR: Is not the real problem that of the Welsh girls in domestic service away from Wales, and not the question of domestic service in Wales?
    Mr. JAMES GRIFFITHS: Is not the problem due to the fact that the girls are compelled to leave Wales?

    BEAMISH, TANFIELD AND LEA COLLIERIES (VACANCIES).
    Mr. DAVID ADAMSasked the Minister of Labour why unemployed men who previously worked at Beamish, Tanfield, Lea, and other collieries in that district are not offered the vacancies at these collieries, but instead men dismissed from the South Moor group of collieries have been supplied by the Employment Exchange with cards to enable them to obtain employment at the first-mentioned collieries?
    Mr. E. BROWN: I am making inquiries and will communicate with the hon. Member as soon as possible.

    SIGNING-ON (EXCHANGES).
    Captain Sir WILLIAM BRASSasked the Minister of Labour whether he has any statement to make concerning the report of the Departmental inquiry into the question of signing-on at Employment Exchanges, which was submitted to him some months ago; and whether any action is contemplated which will remove some of the anomalies which at present exist in Lancashire?
    Mr. E. BROWN: The general examination of this matter has not yet been completed. I have however given further consideration to the arrangements at the Great Harwood Employment Exchange, about which my hon. and gallant Friend has made representations to me previously, and I propose for the time being to reduce the number of weekly signatures ordinarily required at that exchange to two a week.
    Mr. DAY: Will the right hon. Gentleman say whether inquiries will be made in the spring?
    Mr. SILVERMAN: When will the right hon. Gentleman be able to tell us what he has discovered with regard to the anomaly to which the deputation drew his attention many weeks ago whereby the workers in this industry can earn far less while working than they would get if unemployed?
    Mr. BROWNThat is another issue.

    ASSISTANCE (BLIND PERSONS).
    Mr. E. J. WILLIAMSasked the Minister of Labour whether he proposes to take action to remove the anomalies that exist as regards the blinded soldier and the civilian blind in the determination of allowances under the Unemployment Assistance Act, 1934?
    Mr. E. BROWN: I cannot anticipate the proposals that will be made in the new draft Regulations.

    JUVENILES.
    Mr. SHORTasked the Minister of Labour the number of juvenile unemployed in Doncaster, Bentley, and Adwick-le-Street at the last available date?
    Mr. E. BROWN: The number of juveniles aged under 18 years registered as unemployed at the Doncaster Employment Exchange on 23rd March, 1936, was 840. Separate figures are not available for Bentley and Adwick, which are within the area of the Doncaster Employment Exchange.

  COST-OF-LIVING INDEX.
  Mr. SUTCLIFFEasked the Minister of Labour whether in connection with the revision of the cost-of-living index, he will state the number of trades, professions, or businesses in which wages at the present time fluctuate in accordance with such index; and whether in all those cases he proposes to secure evidence from those thus concerned?
  Mr. E. BROWN: The available information does not enable me to specify the actual number of trades, professions, or businesses in which wages fluctuate in accordance with the cost-of-living index, but some particulars as to the arrangements of this character which are known to be in operation, and the numbers of workpeople covered, were given on 19th March in a reply to the hon. Member for East Birkenhead (Mr. White) a copy of which I am sending to my hon. Friend. In view of the full information which is already in my possession on this subject, I do not think it will be necessary to adopt the suggestion contained in the second part of the question. As I stated, however, in the reply which I gave on 7th April to the hon. Member for East Aberbeen (Mr. Boothby) I propose to

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  appoint a committee to advise as to the methods to be adopted in the collection of the information as to working-class family expenditure which will be used in revising the basis of the index number, and this committee will include representatives of employers and trade unions.

  LICENSING DISTRICTS (CLOSING HOURS).
  Sir WILLIAM WAYLANDasked the. Secretary of State for the Home Department the number of licensing districts in England and Wales, outside the Metropolitan area, which now have 10.30 p.m. closing on week days all the year round; and a list of those which have 10.30 p.m. closing on week-days for part of the year?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): There are 95 licensing districts in England and Wales (outside the Metropolis) which now have 10.30 p.m. as the latest permitted hour on week-days throughout the year. I am sending the hon. Member a list of the districts which have 10.30 p.m. as the latest hour for part of the year. They number 307.

  COAL INDUSTRY,

    SILICOSIS.
    Mr. J. GRIFFITHSasked the Home Secretary whether he is aware that out of 691 applications made by miners from South Wales to the Silicosis Medical Board for certificates of disablement or suspension during 1934 and 1935, no fewer than 311 of these applications were refused such certificates, notwithstanding that each of these workmen had been certified by their panel doctors and by the regional medical officer of the Ministry of Health to be suffering from silicosis or anthracosis; and what steps he proposes to take to so amend the provisions of the various Industries (Silicosis) Orders, 1931 to 1934, as to make it possible for these workmen to claim compensation for the disablement which arises from and is caused by the inhalation of coal and stone dust in the course of their employment?
    Mr. LLOYD: I am aware that there have lately been a considerable number
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    of cases of miners suffering from lung troubles which the expert medical board could not find to be silicosis. It is impossible, in the present state of knowledge, to tell whether or how far they may have been due to employment, but the matter is being investigated by the Industrial Pulmonary Diseases Committee of the Medical Research Council. Consideration of further action must await results of such research. I should add that under the arrangements made with the Ministry of Health, the regional medical officer does not diagnose and certify silicosis but merely conducts a preliminary examination to ascertain whether there is reasonble cause to suspect the presence of the disease.
    Mr. GRIFFITHS: Seeing that the Ministry of Health doctor is satisfied that these men's illnesses are affected by their employment, will the Minister see that the scheme is so widened as to bring these men within the compensation law, in view of the fact that they have been certified by the Ministry of Health doctor?
    Mr. LLOYD: I do not know whether the hon. Member appreciates the fact that the regional medical officers' function is to certify only that there is cause to suspect silicosis. The Home Secretary's powers are limited under the Act to making schemes for silicosis.
    Mr. GRIFFITHS: I appreciate that, but does the hon. Member appreciate the fact that 311 suspected cases turned down in three years is alarming and calls for a widening of the scheme?
    Mr. LLOYD: That is why the medical aspect of this matter, which must be settled before we proceed further, must be investigated.
    Mr. PALING: The Medical Board have been inquiring into this matter for a long time. Can the Minister say how soon they are likely to report?
    Mr. LLOYD; I cannot say how long they have been inquiring, but it is a very difficult research, and will take some time.
    Mr. ROWSON: Can the Minister say how many of the cases turned down have been diagnosed as tuberculosis cases and afterwards proved to be silicosis cases?
    Mr. LLOYD: Not without notice.
    Mr. LEACH: In view of the Minister's own statement as to the restricted powers of the Home Office, will he not ask his Departmental chief to promote legislation to remedy it?
    Mr. LLOYD: Before that question can really arise, the medical aspect of this matter must be settled beyond reasonable doubts.
    Mr. LYONS: What my hon. Friend wishes to know is whether the Home Secretary will consider the introduction of fresh legislation to amend the scope of the Workmen's Compensation Act.
    Mr. J. GRIFFITHSasked the Home Secretary whether he is aware that Mr. George H. Dando, of 24, Coombend, Radstock, Bath, has been refused by the Silicosis Medical Board a certificate of disablement, although he has been employed for 40 years by the Somerset Collieries, Limited, Radstock, and for 20 years was engaged in drilling in hard rock; that the board's refusal is based on the fact that the applicant ceased to be employed in the process specified in the order on 16th October, 1931, and that the board has refused to consider the antedating of a certificate so as to bring the workman within the order in spite of medical evidence that he has suffered from silicosis since February, 1932; and will he have this case re-examined?
    Mr. LLOYD: My information is that the Medical Board have not refused a certificate of disablement, nor have they refused to consider the antedating of the certificate. The position is that the Somerset Miners' Association applied to the board last January on the workman's behalf for a certificate of disablement and asked that the certificate should be dated back to October, 1934, so as to bring the case within the Compensation Scheme. The board, however, after considering the medical evidence submitted by the association, and taking into account the fact that the workman had been employed since March, 1933, in work above ground, and still was so employed, informed the association that they would not feel justified in antedating the certificate as requested. In view of this, the association withdrew their application.
    Mr. GRIFFITHS: May I ask what reasons justify the Board in refusing to antedate this certificate when there was ample evidence to prove that the man had been disabled by silicosis since 1932?
    Mr. LLOYD: If he had been disabled by silicosis since 1932 it would have been wiser for the trade union to have brought his case forward earlier.
    Mr. GRIFFITHS: Is the Minister aware of the fact that the man was brought from underground to work on the surface because the employer offered him work which he thought would improve his condition, and that now the man has been penalised for stopping at work?

    ACCIDENTS (BOYS, YORKSHIRE).
    Mr. G. GRIFFITHSasked the Secretary for Mines the number of boys between the ages of 14 and 16, and between the ages of 16 and 18, killed in the mines in Yorkshire for the year 1935?
    The SECRETARY for MINES (Captain Crookshank): During 1935, six boys under 16 years of age and nine boys over 16 but under 18 years of age were killed by accidents at mines under the Coal Mines Act in Yorkshire.
    Viscountess ASTOR: Would the Government consider passing a law to keep children under 16 out of the mines? Would the Prime Minister not consider that proposal?

  PARISH COUNCILS.
  Mr. SAVERYasked the Home Secretary what has been the result of his direction to local authorities concerning the method of election to parish councils; and whether he proposes to take any further action in the matter?
  Mr. LLOYD: I presume that my hon. Friend has in mind the question whether the election is to be at a parish meeting or by means, of nomination and poll. That, however, is a matter which, under Section 51 of the Local Government Act, 1933, is dealt with by the county council on the application of the parish council concerned, and my right hon. Friend has no authority to give any directions, either generally or in a particular case.
  Mr. TURTON: Has not a draft scheme been submitted by the Rural District Councils' Association for a number of years, and have the Home Office not yet come to a conclusion upon that draft scheme?
  Mr. LLOYD: My right hon. Friend has not any powers under the Section I have mentioned, but I will look into the matter.
  Brigadier-General CLIFTON BROWN: Is the Minister aware that many councils are dissatisfied, and cannot he look into the matter with a view to dealing with it?
  Mr. LLOYD: The matter is governed by Statute.

  PROSECUTION, MARYLEBONE POLICE COURT (BAIL).
  Mr. VIANTasked the Home Secretary whether he will cause inquiries to be made as to the case of Mrs. Elizabeth Vernon, of Gladstone Park Gardens, Willesden, who at Marylebone police court on 22nd April was charged with theft, it being her first offence; and whether it was at the instigation of the police that bail was refused?
  Mr. LLOYD: My right hon. Friend has obtained particulars of the case to which the hon. Member refers. The answer to the second part of the question is in the negative.
  Mr. VIANT: Is it a regular practice for magistrates to refuse bail on unjustifiable grounds?
  Mr. LLOYD: The grant of bail is entirely a matter for the court and my right hon. Friend has no authority to express an opinion on the way that the court's discretion is exercised.
  Sir PATRICK HANNON: May I ask, Mr. Speaker, whether a question of this kind, affecting a single individual, should be brought forward to take up Parliamentary time?
  Mr. H. G. WILLIAMS: Do the Home Office take the view that magistrates ought to grant bail unless there is the strongest ground against it?
  Mr. VIANT: Can I have a reply to my question? This is very important.
  Mr. SPEAKER: The hon. Member has had his reply.

  RATS (EXPERIMENTS).
  Mr. LEACHasked the Home Secretary whether his attention has been drawn to the recent experiments on rats in which the animals were fed on food commonly used by the poor, the result being the development of rickets and other diseases; and will he consider a prosecution for cruelty to animals?
  Mr. LLOYD: I presume the hon. Member is referring to the report of a series of lectures contained in the issue of the British Medical Journal for 29th February last. The experimental research on nutrition referred to therein does not appear to have been performed in this country.
  Mr. LEACH: Am I to understand that these experiments were not conducted under the jurisdiction of the hon. Member's Department?
  Mr. LLOYD: Yes, that is what I said. The only record that we have of any experiments by this doctor are as to the effect of fat excess upon the development of tadpoles, in 1921.

  LOTTERIES AND SWEEPSTAKES.
  Mr. DAYasked the Home Secretary whether his attention has been drawn to the several sweepstakes that are being run by various clubs and associations in London on the Derby; and will he give particulars of any instructions that the Metropolitan police have received with regard to same?
  Mr. LLOYD: Section 24 of the Betting and Lotteries Act, 1934, provides that private lotteries, which are defined in that Section, shall be deemed not to be unlawful lotteries but that certain prescribed conditions shall be observed in connection with the promotion and conduct of such lotteries. No special instructions have been issued to the police, but appropriate action would be taken should infringements of the law come to notice.
  Mr. DAY: Are we to understand that the same freedom of action will be given to workmen's clubs and associations as to West End clubs and the Stock Exchange?

  MATERNAL MORTALITY (WEST RIDING).
  Mr. G. GRIFFITHSasked the Minister of Health the number of deaths from childbirth, and also the number arising therefrom, for the year ended 31st December, 1935, for the West Riding of Yorkshire, and the percentage per 1,000?
  The MINISTER of HEALTH (Sir K. Wood): As the answer involves a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

  Mortality from Childbirth—West Riding—1935.

  —

  West Riding Administrative County.

  County Boroughs of West Riding

  West Riding with Associated County Boroughs.

  No. of Deaths.

  Rate per 1,000 total Births.

  No. of Deaths.

  Rate per 1,000 total Births.

  No. of Deaths.

  Rate per 1,000 total Births.

  Deaths classified to Puerperal Sepsis.

  43

  1·78

  45

  1·62

  88

  1·69

  Death classified to Other Puerperal Causes.

  62

  2·56

  59

  2·12

  121

  2·32

  Total Puerperal mortality

  105

  4·34

  104

  3·74

  209

  4·01

  Mr. SPEAKER: I think the hon. Member will agree that this is inconvenient to the House.
  Mr. ATTLEE: Is it not the case that the hon. Member asked for one set of figures and did not ask for them to be dissected, involving a long answer when a short one would have been sufficient?
  Mr. LYONS: Is it not a fact that more unfortunate figures apply to parts of the South of England where there is no unemployment than to the North?
  Viscountess ASTOR: Is it not the case that until we get a proper system of birth control we shall never cut down the maternal mortality in the country?

  RAILWAYS (RATING ASSESSMENT).
  Mr. OLIVERasked the Minister of Health whether, in view of the judgment given by the Railway and Canal Commission with respect to the assessment of the Southern Railway for rating purposes and the consequential financial burden cast upon the local authorities, he will take an early opportunity to meet representa-
  Mr. GRIFFITHS: On a point of Order. I think you ruled, Mr. Speaker, some time ago, that if an hon. Member desired to have the answer giver on the Floor of the House, it should be given. I do not think that it would be very long, and I do desire that the answer should be given now.
  Mr. SPEAKER: The right hon. Gentleman has said that the answer contains a number of figures.
  Sir K. WOOD: I will gladly give the answer if desired. It is as follows:
  tives of the authorities affected to consider the desirability of granting financial assistance in relief of the heay charge upon the rates?
  Sir K. WOOD: I shall be ready, as always, to consider any representations which local authorities or their associations may desire to make to me.
  Mr. OLIVER: Do I understand, in view of the enormous amount transferred to the rates as a result of this decision, that the right hon. Gentleman will meet local authorities at an early date?
  Sir K. WOOD: I think I had better await an application from them.

  VETERINARY OFFICERS.
  Mr. SAVERYasked the Minister of Health how many whole-time veterinary surgeons have been appointed by county and county borough councils during the last 12 months; and whether he is willing to recommend that such councils should, as far as possible, utilise the services of veterinary surgeons who are practising in their districts?
  Sir K. WOOD: I regret that I am unable to give the information asked for in the first part of the question. As regards the second part, my hon. Friend is no doubt aware that the Cattle Diseases Committee of the Economic Advisory Council recommended that local authorities should appoint whole-time veterinary officers wherever this is practicable, and I do not think therefore I should be justified in taking the course suggested.

  NATIONAL FINANCE.

    HOUSE PROPERTY (MAINTENANCE CLAIMS).
    Mr. SUTCLIFFEasked the Chancellor of the Exchequer whether the owners of dwelling-houses who are required by local authorities to incur capital expenditure to improve their property are permitted by his Department to include such expenditure on their Income Tax, Schedule A, Maintenance Claims, as an item in respect of which they can obtain relief?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I assume that the expenditure to which my hon. Friend refers is such as would not be allowable under the provisions of Rule 8 of No. V of Schedule A, Income Tax Act, 1918; in which case the answer to his question is in the negative.
    Mr. SUTCLIFFE: Does not my right hon. Friend think the time has come to place them on the same footing as regards Income Tax?
    Mr. CHAMBERLAIN: What my hon. Friend is asking is that capital expenditure should be treated as expenditure out of income.

    ARMAMENTS (TAXATION).
    Mr. MANDERasked the Chancellor of the Exchequer whether he will consider the advisability of appointing a committee to see how far it may be practicable to impose a special tax on the profits arising out of the Government's re-armament programme?
    Mr. CHAMBERLAIN: No, Sir. I do not consider that the appointment of such a committee is called for.
    Mr. MANDER: If such a tax is practicable, does not the right hon. Gentleman think it is desirable?
    Mr. CHAMBERLAIN: I hope it will not be found to be necessary.
    Sir W. BRASS: Would it not mean an examination of all sub-contracts as well as main contracts?

    EMPIRE AND FOREIGN LOANS.
    Mr. CRAVEN-ELLISasked the Chancellor of the Exchequer the total amount of foreign and Empire borrowing in Great Britain, respectively, over the last 50 years from all sources; what is the amount of foreign and Empire loans which have had to be written off as a bad debt; and what is the amount which at present is in arrears of interest?
    Mr. CHAMBERLAIN; I fear that no statistics are available which would enable me to answer my hon. Friend's question. I would, however, refer him to the answer given to my hon. Friend the Member for the Wood Green Division of Middlesex (Mr. Baxter) on 5th March last.

    FOREIGN ISSUES (ADVISORY COMMITTEE).
    Mr. CRAVEN-ELLISasked the Chancellor of the Exchequer when he anticipates the report of the committee appointed to advise him regarding the restrictions on foreign borrowing in Britain; and will he give the House an opportunity of considering the report before any change in Treasury policy is made?
    Mr. CHAMBERLAIN: As stated in the reply given to my right hon. Friend the Member for Ripon (Major Hills) on 7th April, I have not at present in mind any radical alteration of the restrictions on foreign issues. I presume my hon. Friend understands that the Advisory Committee is a standing committee. It was appointed to advise me upon particular applications and, as occasion arises, upon the scope of the restrictions. I have not as yet received any report from the committee on the latter point, and I cannot of course forecast when any such report is likely to be received.
    Mr. PETHICK-LAWRENCE: When this committee was originally appointed were not two of the gentlemen appointed directors of Vickers, and does the right hon. Gentleman think it desirable that directors of an armament firm should be appointed to such a committee?
    Mr. CHAMBERLAIN: I do not think that their connection with Vickers has any bearing on their aptitude to serve on a committee of this kind.

    ITALY (LOAN).
    Commander LOCKER-LAMPSONasked the Chancellor of the Exchequer whether he will give an assurance that the negotiations opened in 1935 for a loan to Italy will in no circumstances be reconsidered by His Majesty's Government?
    Mr. CHAMBERLAIN: I am not aware that any negotiations were opened in 1935 for a loan to Italy, nor do I know of any such negotiations having been suggested since.

  THAMES (DRAINAGE SCHEME).
  Mr. DAYasked the Minister of Agriculture what progress has been made with the drainage scheme for the Thames catchment area; and whether he is satisfied that full provision has been made against the periodical flooding in the Thames area?
  The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Mr. Ramsbotham): Comprehensive schemes of improvement on the River Wey and on the Thames between Shepperton and Teddington have recently been completed, the value of which was clearly demonstrated last winter. These schemes were initiated and carried out by the Surrey County Council in the case of the River Wey and by the Surrey and Middlesex County Councils in the case of the Thames, with a financial contribution from the Conservators of the River Thames. The Conservators, who are now the drainage board for the Thames catchment area above Teddington, have also practically completed a scheme of dredging work on the main river above Oxford, and are now, I understand, considering what further works they can undertake to secure the alleviation of the floods and generally to improve the drainage system of the catchment area.
  Mr. DAY: Has anything been done in the Thames area to prevent a recurrence of flooding as far as possible?
  Mr. EDE: Is the hon. Member equally satisfied with the Thames below Teddington?

  BOATING ACCIDENT (SUTTON-ON- DERANENT).
  Mr. MUFFasked the Minister of Agriculture whether he is aware that on 26th April a boating accident took place at Sutton-on-Derwent, in Yorkshire, whereby two young men lost their lives by being swept over a dangerous weir; that no warning notices were displayed or a rope barrier erected; and will he take immediate steps to ensure that people boating at this place shall be warned of the danger?
  Mr. RAMSBOTHAM: I have seen in the Press an account of the boating accident to which the hon. Member refers. From the report of the inquest it is evident that the victims were warned by the boat owner to keep to the bank and so away from the weir. My right hon. Friend has no power to take the steps suggested, but he is in communication with the Yorkshire Ouse Catchment Board who, I have no doubt, will do anything in their power to prevent a recurrence of this type of accident.
  Mr. LEACH: Does the hon. Member not know that the Ouse Catchment Board wants more money, and cannot get it?

  PIGS MARKETING BOARD.
  Mr. PRICEasked the Minister of Agriculture whether he is aware that, at the recent election to the Pigs Marketing Board, candidates not representative of the producers interest were elected; that the method of election to the board is unsatisfactory from the producers point of view; and whether he will consider an amendment to the scheme to give satisfaction in this respect?
  Mr. RAMSBOTHAM: The members of the Pigs Marketing Board are elected by the registered producers. The initiative as regards an amendment of the scheme rests with the board. My right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture would, of course, be ready to consider any amendment duly submitted to them in accordance with the Agricultural Marketing Acts.
  Mr. PRICE: In view of the fact that the board, as at present constituted, is not likely to look very favourably on any

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  amendment of the scheme, will the hon. Member consider the views of the producers in amending the scheme?
  Mr. RAMSBOTHAM: Any representations that are made will be considered, but the initiative, of course, rests with the board, and not with the Minister.

  TRADE AND COMMERCE.

    DENMARK.
    Mr. LYONSasked the President of the Board of Trade whether any arrangement upon the issue of import licences in the interests of British industry has yet been made with Denmark; and whether it is proposed to safeguard the position in any new trade treaty?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): As regards the first part of the question, I would refer my hon. and learned Friend to the reply given on 8th April to the hon. Member for Lincoln (Mr. Liddall). The answer to the second part is in the affirmative.
    Mr. LYONS: In view of the apprehension which has been caused to British industry by the refusal to issue licences in the past, may I ask the right hon. Gentleman whether he will be able to assure industry in general that the difficulties in future will be overcome by some condition being imposed on Denmark that these licences shall be reasonably issued?
    Mr. RUNCIMAN: I would point out that in my reply I said that as a result of recent discussions it is proposed to safeguard the position in any new trade treaty.

    ITALY.
    Mr. H. G. WILLIAMSasked the President of the Board of Trade whether he is prepared to issue licences for the import from Italy of goods the property of British subjects in all cases where the contract to purchase the goods had been entered into before the imposition of sanctions?
    Mr. RUNCIMAN: Under Article 1 of the Treaty of Peace (Covenant of the League of Nations) No. 2 Order, 1935, the Board of Trade are empowered to issue licences for the import of any goods consigned from, or grown, produced or manufactured in Italian territory, if satis-
    1866
    fied that the price of the goods was wholly paid on or before 19th October, 1935. This provision is in accordance with the decision of the Co-ordination Committee taken at Geneva on 2nd November, 1935.
    Mr. WILLIAMS: Have the coordinating committee any proposals for compensating Britons who have suffered great losses as a result of the imposition of sanctions?
    Mr. RUNCIMAN: None that I know of.
    Mr. H. G. WILLIAMSasked the President of the Board of Trade how many applications he has received for compensation in respect of losses incurred by British traders as a sequel to the imposition of sanctions against Italy?
    Mr. RUNCIMAN: I can only say that I have received a number of inquiries as to the possibility of compensation for alleged losses in such cases.
    Mr. WILLIAMS: Is the right hon. Gentleman aware that some people have been completely ruined; and may I ask whether it is proposed to give these British subjects any help?
    Mr. RUNCIMAN: I am prepared to listen to any representations made on behalf of British firms.
    Mr. G. GRIFFITHS: Is it not a fact that some of the men thrown out of work have come on to unemployment insurance and have had to submit to the means test?

    BOOTS AND SHOES (PRICES).
    Mr. R. C. MORRISONasked the President of the Board of Trade what proportion of the recent advance in retail prices of shoes is due to the Additional Import Duties Order on box, willow calf, and certain other dressed leather?
    Mr. RUNCIMAN: I am informed that the advance in boot and shoe prices is not uniform or general. The classes of leather to which the recent Order applies account for only a small part of the consumption of leather by boot and shoe manufacturers and substantial supplies of home-produced leather of these classes are available. The amount of the increase in duty on foreign leather would be equivalent to about 3d. on a pair of shoes of average grade in which such leather is used.
    Mr. LEACH: Will the right hon. Gentleman assure us, in view of his honourable past, that he will discourage the Advisory Board from constantly imposing new duties and putting up prices to the consumers of this country?
    Mr. LYONS: Is it not a fact that this addition was made by the Tariff Advisory Committee after having listened to the representations from the trade concerned?
    Mr. A. V. ALEXANDER: Is the right hon. Gentleman aware that since the Order was issued, pricer of boots and shoes have advanced all round from 6d. to 1s. per pair?
    Mr. RUNCIMAN: I have already pointed out in the answer that the increase in the duty on leather is equivalent to about 3d. on the price of a pair of shoes.

    GAS (MANUFACTURE AND DISTRIBUTION, SCOTLAND).
    Sir ARNOLD GRIDLEYasked the President of the Board of Trade whether he is aware that at the iron and steel works of Messrs. William Dixon and Company, Limited, of Glasgow, a large volume of gas of high calorific value is being burnt to waste day and night; that such waste gas has been offered to the Glasgow Corporation for their gas department at a reasonable price and has been refused by them; will he state the grounds for their refusal; and whether he will be prepared to take any action in the matter?
    Mr. RUNCIMAN: This is one of the questions that are being investigated by a committee which I appointed last year to consider the possibility of co-ordinating the manufacture and distribution of gas in the West of Scotland.
    Mr. SHINWELL: Can the right hon. Gentleman say when this committee is likely to report, and whether he has taken into consideration the provision of a gas grid in the county of Durham?
    Mr. RUNCIMAN: No, Sir. The question which is on the Paper has no bearing on that. The committee has already completed the taking of evidence, and will shortly proceed with the drafting of its report.
    Mr. SHINWELL: Would it not be possible to submit to this committee the
    1868
    desirability of considering gas grids in other parts of the country?
    Mr. RUNCIMAN: Not to this committee; it would have to be to another committee.
    Mr. MAXTON: Will the right hon. Gentleman answer that part of the question which asks whether he can state the grounds for the refusal?
    Mr. RUNCIMAN: I cannot state any grounds which will appear in the report, because I have not received the report. I doubt very much whether it is completed.
    Mr. MAXTON: Surely the Glasgow Corporation could tell him the simple fact that the reason why they declined this supply is that they have an adequate supply of their own?

    CANADA (TARIFFS).
    Mr. LYONSasked the Secretary of State for Dominion Affairs upon how many occasions during the year ended with March, 1936, the Canadian Tariff Board bas heard applications on behalf of the industry of this country for reduction of tariffs in pursuance of the Ottawa Agreements; to what tariff items these have related; and what results have been announced, respectively?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): I understand that the Canadian Tariff Board has considered nine tariff items on behalf of United Kingdom industries during the year ending March, 1936. The changes recommended by the Tariff Board in respect of these items have all been incorporated in the recent Canadian Budget. As the particulars of the items involve a tabular statement, I will, with my hon. and learned Friend's permission, circulate these in the OFFICIAL REPORT.
    Mr. LYONS: May I ask the right hon. Gentleman whether, in his view, the machinery by which British industry can make application at Ottawa is working satisfactorily, and whether industry has taken reasonable advantage of that machinery?
    Mr. MacDONALD; That is another question. Perhaps my hon. and learned Friend would be good enough to put it on the Paper.
    Following is the statement:

    Recommendations of the Canadian Tariff Board, March, 1935—March, 1936.

    Item No.

    Item.

    B.P.*Tariff rates at the time of hearing.

    Recommendations of the Tariff Board included in the Canadian Budget introduced on 1st May, 1936.

    522

    Rovings, yarns and warps wholly of cotton not more advanced than singles, n.o.p.

    12½ per cent, ad valorem plus 2 cts. per lb.

    Item 522. The B.P. rate of duty to be 12½ per cent. ad valorem only.

    522a

    Rovings, yarns and warps wholly of cotton not more advanced than singles, when imported by manufacturers of knitted goods, to be used in their own factories in the manufacture of knitted goods.

    12½ per cent. ad va orem.

    Item 522a. No change.

    522b

    Yarns, wholly of cotton coarser than number forty but exceeding number twenty, not more advanced than singles, when imported by manufacturers for use exclusively in their own factories in the manufacture of cotton sewing thread and crochet, knitting, darning and embroidery cottons.

    7½ per cent. ad valorem.

    Item 522b. No change.

    522c

    Rovings, yarns and warps wholly of cotton, including threads, cords and twines generally used for sewing, stitching, packaging and other purposes; n.o.p. cotton yarns, wholly or partially covered with metallic strips, generally known as tinsel thread.

    15 per cent, ad valorem plus 2 cts. per lb.

    Item 522c, The B.P. rate of duty to be 15 per cent, ad valorem only.

    523

    Woven fabrics, wholly of cotton, not bleached, mercerized, not coloured, n.o.p. and cotton seamless bags.

    17½ per cent, ad valorem plus 2 cts. per lb.

    Item 523. The B.P. rate of duty to be 15 per cent, ad valorem only.

    523a

    Woven fabrics, wholly of cotton, bleached or mercerized, not coloured, n.o.p.

    20 per cent, ad valorem plus 2 cts. per lb.

    Item 523a. The B.P. rate of duty to be *20 per cent, ad valorem only.

    523b

    Woven fabrics, wholly of cotton, printed, dyed or coloured, n.o.p.

    22½ per cent, ad valorem plus 2 cts. per lb.

    Item 523b. The B.P. rate of duty to be *22½ per cent, ad valorem only.

    423e

    Woven fabrics, wholly of cotton with cut pile, n.o.p.

    15 per cent, ad valorem.

    Item 523e. No change.

    561

    Woven fabrics, wholly or in part, of artificial silk or similar synthetic fibres produced by chemical processes, not to contain wool, not including fabrics in chief part by weight of silk, n.o.p.

    27½ per cent, ad valorem plus 30 cts. per lb.

    Item 561. The B.P. rate of duty to be *30 per cent, ad valorem only.

    * When the duty exceeds 15 per cent, ad valorem or in the case of a specific duty or a specific and ad valorem duty combined, in which the computed rate exceeds 15 per cent, ad valorem, the British Preferential rate is subject to a discount of 10 per cent, of the duty.

    ARGENTINA (TRADE AGREEMENT).
    Mr. TURTONasked the President of the Board of Trade whether the present Anglo-Argentine Trade Agreement will terminate on 6th November, 1936; and, if not, what provision will be made to secure the imposition of an adequate levy on imports of meat from the Argentine on that date?
    Mr. RUNCIMAN: Under the Trade Agreement concluded in 1933 between the Governments of the United Kingdom and of Argentina, six months' notice of termination of the agreement may be given by either party at any date after 6th May, 1936. Discussions are now proceeding between representatives of the two Governments for revision of this

    1871
    agreement. Accordingly, the two Governments have agreed to exchange notes, the effect of which is to enable the agreement to be terminated on 7th November next, even though the notice of termination may be withheld till 7th July.
    Mr. TURTON: Is my right hon. Friend aware that the denouncement of that agreement will give great pleasure and delight to the livestock industry in this country?
    Mr. G. HALL: Will the right hon. Gentleman bear in mind the importance of the coal export trade to the Argentine?
    Mr. LEACH: Is the right hon. Gentleman aware that his answer will not give pleasure to the consumers of beef in this country?

    PUBLICITY (BRITISH PRODUCTS).
    Mr. SANDYSasked the Secretary of State for Dominion Affairs whether, in view of the difficulties of re-establishing the Empire Marketing Board in its previous form, he will approach the Dominion Governments with a view to entering into bilateral or multilateral agreements to extend publicity on behalf of British and Empire products?
    Mr. DONNERasked the Secretary of State for Dominion Affairs whether His Majesty's Government recognise that the need for Empire publicity has not ceased as a result of the introduction of tariff preferences; and, if so, what steps he is taking to re-establish those activities relating to publicity and market promotion which have been discontinued since the abolition of the Empire Marketing Board?
    Mr. MacDONALD: I do not think that, in present circumstances, any useful purpose would be served by an approach to the Dominion Governments with a view to re-opening the question of publicity, which was settled with them as recently as 1933. As my Noble Friend informed my hon. Friend the Member for Norwood (Mr. Sandys) on 23rd March, several of the Governments concerned are themselves active in regard to publicity and market promotion on their own behalf.
    Mr. DONNER: Could not my right hon. Friend recognise that if this publicity ceases altogether the volume of inter-Imperial trade is likely to be adversely affected?
    Mr. LUNN: Has there been any intimation from any Dominion Government that they intend to change their policy and contribute towards publicity in this country for Dominion products?
    Mr. MacDONALD: I have had no such intimation and, in regard to the other question which was asked, as I pointed out in the original reply, the publicity did not stop altogether, but is being carried on by various Governments concerned.

  BROADCASTING.
  Captain BULLOCKasked the Prime Minister whether he is now able to state if any reply was received from the British Broadcasting Corporation to the representations made in favour of the subsequent broadcasting of public pronouncements of the first magnitude in the House of Commons on which there is general agreement, such as the speech of the Secretary of State for Foreign Affairs on 26th March?
  The PRIME MINISTER (Mr. Baldwin): In reply to my hon. and gallant Friend's previous question on this subject on 6th April, I did not undertake to make representations in favour of this proposal, because, as I then stated, a number of considerations, technical and otherwise, arise in each case; but, as I promised, my hon. and gallant Friend's question and my reply were brought to the notice of the corporation. They have intimated that they have taken due note of them, and endorse my statement as to the varying factors which they have to take into consideration in each case.
  Mr. COCKS: Is a speech by a British Foreign Secretary of the least importance whatsoever at the present time?
  The PRIME MINISTER: I think that depends entirely on who the Foreign Secretary is.
  Captain BULLOCKasked the Prime Minister whether he will bring to the notice of the British Broadcasting Corporation the appropriateness of adding to or substituting for the weekly talk on events in America similar talks from the capitals of the chief Dominions?
  The PRIME MINISTER: This is a matter which lies within the discretion

  1873
  of the British Broadcasting Corporation. I understand, however, that the corporation hope to inaugurate such a series of talks in the autumn.
  Mr. DAY: Will that take place in Broadcasting House or from the Dominions?
  The PRIME MINISTER: Perhaps the hon. Member would kindly put that question down.

  MANDATED TERRITORIES.
  Mr. SANDYSasked the Prime Minister whether he has considered the declaration issued in Dar-es-Salaam on 4th May by a representative body of professional and business men and members of the Legislative Council, a copy of which has been communicated to him, to the effect that the uncertainty as to the attitude of His Majesty's Government in regard to the future of Tanganyika is causing alarm among the European, Indian, and native inhabitants and is retarding the economic development of the territory; and, if so, whether he can make any declaration which would allay these anxieties?
  The PRIME MINISTER: I have received from my hon. Friend a copy of the communication referred to in the question. I would, however, refer him to the reply which I gave to my hon. Friend the Member for South Croydon (Mr. H. G. Williams) on 27th April, in which it was stated categorically that His Majesty's Government had not considered and are not considering the transfer of any mandated territories to any other Power.
  Mr. SANDYS: In view of the fact that most of the Dominion Governments have found it possible to make unequivocal declarations as to the future of the mandated territories under their control, can the Prime Minister tell us frankly what are the reasons which prevent him from giving an equally definite statement of policy in regard to the mandated territories held by the United Kingdom?
  The PRIME MINISTER: I have said more than once that I have nothing to add to the very categorical and definite statement which I made.
  Mr. H. G. WILLIAMS: Having regard to the indications of uncertainty in statements made in Africa during the last few
  1874
  days, will the Cabinet consider and, come to a decision on future policy so that all uncertainty may be removed?
  The PRIME MINISTER: I have had no information of uncertainty from any quarter at all.
  Mr. PALING: Does the Prime Minister not think that the lack of this statement is retarding the economic development of these territories?
  The PRIME MINISTER: No, there is no truth in that at all.
  Mr. KEELINGasked the Secretary of State for Dominion Affairs whether he will enter into consultation with His Majesty's Governments in the Dominions with a view to a uniform declaration of policy regarding the future of the mandated territories?
  Mr. M. MacDONALD: I would refer my hon. Friend to the reply given by the Prime Minister to the hon. Member for South Croydon (Mr. H. G. Williams) on 27th April, in the course of which the Prime Minister stated that His Majesty's Government have no intention whatever of raising the question themselves. The question raised by my hon. Friend does not, therefore, arise.
  Mr. MANDER: Is it not perfectly clear now that there is a divergence in Empire policy on this matter, and is it not desirable to consult with the Dominions and try to agree upon a United Empire policy?

  NYASALAND (NATIVE MIGRATION).
  Mr. H. G. WILLIAMSasked the Secretary of State for the Colonies whether he is in a position to make any statement on the migration of natives from Nyasaland to undertake work in the mines in Southern Rhodesia and in the Union of South Africa; and whether the system under which this migration takes place is regulated in accordance with the customary British practice of trusteeship of native races?
  The SECRETARY of STATE for the COLONIES (Mr. J. H. Thomas): The migration of native labour from Nyasaland is not at present subject to any effective control. The matter has recently formed the subject of investigation by a local committee, whose report is

  1875
  being considered by the Governor in consultation with neighbouring Governments. He will furnish me with his recommendations as soon as he is in a position to do so. In the meantime, I am not able to make any statement in the matter.
  Mr. WILLIAMS: Would my right hon. Friend be good enough to let me know when I may put down further questions?
  Mr. THOMAS: Immediately I get the report I will let the hon. Member know.

  TANGANYIKA.
  Colonel PONSONBYasked the Secretary of State for the Colonies the amount now outstanding of the sums advanced from Imperial funds to Tanganyika territory since the acceptance by Great Britain of the Mandate; the amount of grants-in-aid non-recoverable; and the total of the grants made to the territory from the Colonial Development Fund?
  Mr. J. H. THOMAS: The total amount now outstanding is £3,249,413, of which sum £408,109 was given in the form of free grants. In addition, assistance to the amount of £435,550 has been approved from the Colonial Development Fund, £367,400 being in the form of free grants.
  Mr. BELLENGER: To whom have these sums been advanced?
  Mr. THOMAS: These sums were advanced under the mandate for the development of these particular territories, and the figures I have given indicate how faithfully we have discharged our duty to the territories.
  HON. MEMBERS: To whom were they advanced?
  Mr. THOMAS: To the local government.

  PALESTINE (PUBLIC WORKS).
  Mr. MESSERasked the Secretary of State for the Colonies what proportion of Jewish, Arab, and other labour is employed by the Palestine government on public works, in particular in the ports of Haifa and Jaffa?
  Mr. J. H. THOMAS: I will ask the High Commissioner for Palestine for the information desired by the hon. Member.

  KENYA (LAND OWNERSHIP).
  Mr. de ROTHSCHILDasked the Secretary of State for the Colonies whether, in order to dispel misunderstanding, he will give an assurance that no Order in Council dealing with the ownership of land in the Kenya Highlands shall be approved until this House has had an opportunity of discussing the matter?
  Mr. J. H. THOMAS: Yes, Sir; the debate on the occasion of the Colonial Office Vote will no doubt be a convenient opportunity.

  ITALY AND ABYSSINIA.
  Miss RATHBONEasked the Secretary of State for the Colonies whether all possible facilities have been afforded to the British and Ethiopian Red Cross to use British territory adjoining Abyssinia, so far as they desire, as a basis for their operations?
  Mr. J. H. THOMAS: The Governments of Kenya and of British Somaliland have given the Red Cross units working in Abyssinia all possible assistance.
  Miss RATHBONEasked the Secretary of State for the Colonies whether any considerable number of refugees from Abyssinia have passed into British territory; and whether any arrangements have been made for assistance to them?
  Mr. THOMAS; No Abyssinian refugees have crossed into Somaliland and very few into Kenya.
  Miss RATHBONE: In view of recent developments is it not likely that a refugee problem will arise; and can the right hon. Gentleman say whether any discussions are in progress as to how such a problem may be met?
  Mr. THOMAS: If the problem arises, and I hope it will not, we shall give the same generous and benevolent consideration to it as we have done in similar cases in the past.
  Mr. W. ROBERTSasked the Secretary of State for Foreign Affairs whether he will recommend to the Secretary-General of the League of Nations that an invitation be extended to the Emperor of Abyssinia to be present at the Council meeting called for 11th May?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Viscount Cranborne): The choice of the Abyssinian representative is not a matter for His Majesty's Government.
  Mr. ROBERTS: If the Emperor of Abyssinia were invited, would the British Government approve?
  Viscount CRANBORNE: I have already said that this question is not a matter for His Majesty's Government.
  Mr. GARRO-JONES: May I ask the Prime Minister whether, if it should happen that the Emperor applied for the return of all the subscriptions paid by Abyssinia to the League of Nations, be would authorise the British delegates to support it?

  ST. KITTS (CONSTITUTION).
  Mr. JOHNasked the Secretary of State for the Colonies what steps were taken to inform the people of St. Kitts of the terms of the new constitution; whether the assent of the various communities was obtained; and whether the new constitution is now in force?
  Mr. J. H. THOMAS: As stated in my reply to a question by the hon. Member for Rothwell (Mr. Lunn) on 11th December last, the proposals for constitutional changes in St. Kitts Nevis were fully debated in the local legislature. The views of unofficial members of the legislative council as representing the several sections of the population were thus obtained. The draft of the necessary local legislation to give effect to these constitutional changes is now under examination.

  TRANSPORT.

    RAILWAY STATION, LEICESTER.
    Mr. LYONSasked the Minister of Transport when, approximately, work will commence on the reconstruction of the London and North Eastern Railway station at Leicester?
    The MINISTER of TRANSPORT (Mr. Hore-Belisha): The reconstruction of Leicester station is not included in the works scheduled in the Railways (Agreement) Act.
    Mr. LYONS: Is it not a fact that a condition of the guarantee given last year
    1878
    to the railway companies was that certain improvements should be made; and is it not the case that this station, which is no longer in keeping with the city of Leicester, should be improved in pursuance of that undertaking?
    Mr. HORE-BELISHA: My hon. and learned Friend is under a misapprehension. There was a schedule of agreed works, but this is not one of them.
    Mr. LYONS: While I accept the fact as the Minister has stated it, may I ask him to bring to the notice of the railway company concerned the necessity of providing a better station, in order to replace the present station, which is no longer in keeping with the needs of the city and is in many ways obsolete?
    Mr. HORE-BELISHA: I shall convey my hon. and learned Friend's suggestion to the proper quarter.

    DISTRICT RAILWAY.
    Mr. GROVESasked the Minister of Transport whether he is aware of the danger to the travelling public resultant from the fact that many of the trains operating on the Inner Circle of the District Railway are still without pneumatically controlled doors and that, therefore, on many journeys the doors are not closed and passengers are exposed to danger and the discomfort of cold and draught; and whether he will make representations to the London Passenger Transport Board to provide additional platform staff to ensure the closing of the train doors?
    Mr. HORE BELISHA: I am in correspondence with the board on the subject and will communicate the result to the hon. Member.

    MOTOR VEHICLES (SAFETY DEVICES).
    Sir W. BRASSasked the Minister of Transport whether he has come to any decision with regard to the compulsory fitting of microphone horns at the rear of lorries and long-distance motor omnibuses, as is the universal practice in France, in order that the drivers of these vehicles may hear the warnings of private car drivers wishing to overtake them, and in that way make the act of passing safer than it is at the present time?
    Mr. HORE-BELISHA: My officers keep in touch with the French authorities, but

    1879
    on the information at present before me I am not prepared to put operators of goods vehicles and omnibuses in this country to the suggested additional expense. It should be borne in mind that the object of the driving mirror (which is required by regulation to be fitted on all motor vehicles except motor cycles) is to give visual instead of audible indication of vehicles approaching from behind.
    Sir W. BRASS: Is the Minister aware that drivers of motor lorries do not keep their eyes on the driving mirror, but on the road in front of them?
    Mr. HORE-BELISHA: If I have any evidence that the present arrangements are not satisfactory, I shall be happy to reconsider the matter.
    Sir W. BRASSasked the Minister of Transport whether his attention has been called to a recent fatal accident when a motor car ran into the rear of a stationary lorry at night; and whether, in view of this danger, he will consider adopting the French lighting practice whereby the width of these heavy vehicles is plainly visible at night by the fitting of small lights encased in red glass containers projecting from each side of the lorry at a considerable height from the ground showing a red light both forwards and backwards?
    Mr. HORE-BELISHA: The French regulations do not require vehicles parked on the highway to carry lights as described in the question, provided they carry on the offside a single lamp showing white to the front and red to the rear. My hon. and gallant Friend will be aware that I referred the whole question of the lighting regulations to the Transport Advisory Council in order that they might make suggestions on the most modern lines for their revision and the new regulations will be available to-morrow.
    Sir W. BRASS: Is the Minister aware that, if he makes inquiries in France at the present time he will find that what he has just stated is entirely wrong?
    Mr. HORE-BELISHA: I am sorry to differ from my hon. and gallant Friend. I can only say that this is the information which I have received to-day.
    Sir W. BRASS: Is the Minister aware that only last Easter I was in France and saw vehicles fitted with these lights?

    ROADMEN (HOLSWORTHY, DEVON).
    Mr. LEACHasked the Minister of Transport whether his attention has been drawn to the action of the rural district council of Holsworthy, Devon, in refusing the proposal of the county council to grant roadmen a week's holiday per annum with pay; and whether he will take steps to induce this and all other rural district councils to fall in with the general practice?
    Mr. HORE-BELISHA: The answer to the first part of the question is in the negative, to the second part that rural district councils are no longer highway authorities, and to the third part that questions of the wages and conditions of employment of their own employés are matters for the determination of the appropriate authorities.
    Mr. LEACH: Car the Minister say whether the county council itself can override any such condition made by the rural district council?
    Mr. HORE-BELISHA: I imagine that would be so. The rural councils are no longer highway authorities, and therefore presumably the county council would be the proper authority.
    Mr. THORNE: Is it not the case that the local people have the matter entirely in their own hands at election times, if they have as much commonsense as the people of Peckham?

  BURMA AND CHINA (BORDER).
  Mr. MANDERasked the Secretary of State for Foreign Affairs the present position with regard to the steps that are being taken for defining the border between Burma and China, the names of the members of the commission undertaking the work, how it has been appointed, and the stage which has been reached?
  Viscount CRANBORNE: As regards the first part of the question, a joint Boundary Commission a to deal with this question was set up last year as a result of an exchange of notes between His Majesty's Government and the Government of India on the one hand, and the Chinese Government on the other. The text of these notes was published in a White Paper (Cmd. 4884, 1935). As regards the second and third parts, I am

  1881
  sending the hon. Member a copy of the reply given by my hon. Friend the Parliamentary Under-Secretary for India on 18th December in answer to a question put by the hon. Member for West Fife (Mr. Gallacher), in which the position is fully set forth. As regards the last part, the Commission has been engaged during the recent open season—which lasts from December to the end of April—in examining the section of the frontier in dispute. It will return next open season to complete its work.

  CHINA (AGRICULTURAL ADVISER).
  Mr. VIANTasked the Secretary of State for Foreign Affairs whether he can give any information regarding the appointment of Mr. Campbell to advise the Chinese Government on the development of agricultural co-operative societies; and whether his appointment was made on the suggestion of His Majesty's Government or of the League of Nations?
  Viscount CRANBORNE: According to my right hon. Friend's information Mr. Campbell was appointed by the Secretary-General of the League of Nations. His name was not suggested by His Majesty's Government.

  ROYAL NAVY (OIL TANKERS).
  Mr. ADAMSONasked the Parliamentary Secretary to the Admiralty the number of charters entered into by the Admiralty in respect of Admiralty-owned oil tankers to outside interests and the number of charters made by the Admiralty of privately-owned vessels over a period of the last three years for which statistics are available; the amount of commission paid by the Admiralty in respect of these charters; and the amount of commission received by the Admiralty?
  The CIVIL LORD of the ADMIRALTY (Mr. Kenneth Lindsay): During the last three years ending 31st March, 1936, 104 charters to outside interests have been entered into in respect of Admiralty-owned tankers. The commission incurred in connection therewith amounted to £14,642. In this period, no charters of privately-owned tankers were made by the Admiralty until the recent political situation arose, when a few commercial
  1882
  tankers were chartered to meet Fleet requirements. Commission is payable to the brokers by the owners of the vessels, and the last part of the question does not, therefore, arise.

  SUEZ CANAL COMPANY.
  Mr. THORNEasked the Secretary of State for Foreign Affairs whether he can give the House any information in regard to the agreement recently signed by the Suez Canal Company and the Egytian Government; the amount that the Egyptian Government will receive per annum; and the number of seats that have been allotted her on the governing board?
  Viscount CRANBORNE: The main points of the agreement are as follow: The Egyptian Government are to publish a decree enabling the maximum dues chargeable by the company to be fixed at the equivalent in Egyptian piastres of 10 gold francs. The company in turn will pay to the Egyptian Government an annual sum of 200,000 Egyptian pounds. Two seats on the board of the company will henceforth be reserved for Egyptians. The company will progressively admit Egyptians to its clerical staff in Egypt, the proportion to reach 25 per cent. in 1958. Finally, a number of minor points between the company and the Egyptian Government are to be adjusted. I should add that His Majesty's Government have received assurances from the company that the conclusion of this agreement will not affect its declared policy of reducing the dues as circumstances permit, and that an early reduction is in fact contemplated.
  Mr. THURTLE: Will the Noble Lord say whether this will affect the number of British directorships on the board?
  Viscount CRANBORNE: No.

  CORPORAL PUNISHMENT.
  Mr. SORENSENasked the Home Secretary the total number, respectively, of juvenile delinquents birched and convicts flogged during the past 12 months?
  Mr. LLOYD: During 1935 courts of summary jurisdiction in England and Wales ordered the whipping of juveniles in 211 cases. If in the latter part of

  1883
  the question the hon. Member is referring to the infliction of corporal punishment for disciplinary offences in prisons, the answer as respects 1935 is "none."
  Mr. SORENSEN: Cannot the Home Secretary take steps to minimise, and ultimately to prevent, cases of birching against children.
  Lieut.-Colonel MOORE: Will the hon. Gentleman confirm the impression that this method of punishment is singularly effective in regard to offences against children and animals?

  PUBLIC ASSISTANCE.
  Mr. SORENSENasked the Minister of Health the comparative scales of public assistance rates for single men and women and married men and their families at Great Yarmouth, Bournemouth, and Dover, respectively?
  Commander SOUTHBY (Lord of the Treasury): I have been asked to reply. Public assistance authorities are not obliged to prescribe guiding scales of out-relief, and such scales, where adopted, do not need to be submitted for my approval. My right hon. Friend is making inquiries about the present practice as to these scales in the localities mentioned and he will communicate further with the hon. Member as soon as possible.

  RATING SYSTEM.
  Mr. HOLLINSasked the Minister of Health whether he is aware that a conference has been held in Stoke-on-Trent, when representatives from 60 local authorities were present, to consider the present rating system, and passed a resolution expressing the opinion that the existing system in inequitable and should be carefully considered in all its aspects, including the question of land values, and amended to meet present-day conditions; and whether he will be prepared to receive a deputation from the local authorities on the subject of the resolution?
  Commander SOUTHBY: I have been asked to reply. My right hon. Friend is aware of this resolution. He will, of course, be prepared to consider any representations in support of the resolution
  1884
  which the local authorities may wish to make, but he does not think that at present any useful purpose would be served by a deputation.

BUSINESS OF THE HOUSE.
Mr. ATTLEE: May I ask the Prime Minister three questions: first, what will be the business for next week; second, when will the Finance Bill be available; and, third, what Orders it is proposed to take to-day if the Motion for the suspension of the Eleven o'clock Rule is carried?
The PRIME MINISTER: The Finance Bill will, I hope, be available early next week. The Orders which we hope to take to-night are the first four Orders on the Paper. We also want to get the Midwives (Money) Report, but that is exempted business.
The business for next week will be as follows:
Monday.—Committee stage of the two Bills, the Second Readings of which we hope to get to-day, namely, the Special Areas Reconstruction (Agreement) Bill, and the Civil List Bill; Report stage of the Navy Supplementary Estimate, to which we devoted a whole day this week; and the Second Reading of the Hours of Employment (Conventions) Bill from another place.
Tuesday.—Report and Third Reading of the Employment of Women and Young Persons Bill. We hope to make further progress with the Special Areas Reconstruction (Agreement) Bill and the Civil List Bill.
Wednesday.—Second Reading of the Tithe Bill, and Committee stage of the necessary Money Resolution.
Thursday.—Supply; Committee (6th allotted day), Class 6, Votes 2 and 3. The subjects to be discussed will be the Mercantile Marine services and assistance to British Shipping.
Friday.—Private Members' Bills.
On any day, if three is time, other business will be taken, including Motions to approve three Additional Import Duties Orders, Numbers 8, 9 and 10.
Mr. ATTLEE: May I ask the Prime Minister, with regard to Monday's business, to bear in mind that the Report stage of the Navy Supplementary

1885
Estimate may require some time, as there were a number of questions put this week to which we received no reply.
Mr. MAXTON: Is Thursday's business the Board of Trade Vote?
The PRIME MINISTER: I am sorry I have not a note of the Department, but I assume that it is. It is Class 6, Votes 2 and 3, and, as the subject is the Mercantile Marine and assistance to British shipping, I assume that it is the Board of Trade Vote.
MAXTON: May we not discuss the Minister's salary?
The PRIME MINISTER: These are the subjects for which we have been asked.
Mr. MAXTON: The point I am trying to get at is whether the Minister's salary will be open for discussion on that particular Supply Day?
The PRIME MINISTER: I do not think so; I am afraid that I shall want notice of that question.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 258; Noes, 109.

Division No. 168.]

AYES.

[3.50 p.m.

Acland, R. T. D. (Barnstaple)

Courthope, Col. Sir G. L.

Hanbury, Sir C.

Adams, S. V. T. (Leeds, W.)

Craven-Ellis, W.

Hannah, I. C.

Agnew, Lieut.-Comdr. P. G.

Crooke, J. S.

Hannon, Sir P. J. H.

Albery, I. J.

Crookshank, Capt. H. F. C.

Harris, Sir P. A.

Allen, Lt.-Col. Sir W. J. (Armagh)

Cross, R. H.

Harlington, Marquess of

Anderson, Sir A. Garrett (C. of Ldn.)

Crossley, A. C.

Haslam, Sir J. (Bolton)

Anstruther-Gray, W. J.

Crowder, J. F. E.

Hellgers, Captain F. F. A.

Aske, Sir R. W.

Cruddas, Col. B.

Heneage, Lieut.-Colonel A. P.

Assheton, R.

Davies, Major G. F. (Yeovil)

Hepburn, P. G. T. Buchan

Astor, Visc'tess (Plymouth, Sutton)

Davison, Sir W. H.

Herbert, Major J. A. (Monmouth)

Astor, Hon. W. W. (Fulham, E.)

De Chair, S. S.

Hills, Major Rt. Hon. J. W. (Ripon)

Baldwin, Rt. Hon. Stanley

De la Bère, R.

Hope, Captain Hon. A. O. J.

Baldwin-Webb, Col. J.

Donner, P. W.

Hore-Belisha, Rt. Hon. L.

Balfour, Capt. H. H. (Isle of Thanet)

Dorman-Smith, Major R. H.

Hudson, R. S. (Southport)

Balniel, Lord

Dower, Capt. A. V. G.

Hume, Sir G. H.

Baxter, A. Beverley

Drewe, C.

Hunter. T.

Beaumont, M. W. (Aylesbury)

Duckworth, G. A. V. (Salop)

Hurd, Sir P. A.

Beaumont, Hon. R. E. B. (Portsm'h)

Dugdale, Major T. L.

Inskip, Rt. Hon. Sir T. W. H.

Bennett, Capt. Sir E. N.

Duggan, H. J.

Jackson, Sir H.

Bernays, R. H.

Duncan, J. A. L.

Joel, D. J. B.

Birchall, Sir J. D.

Dunglass, Lord

Jones, L. (Swansea, W.)

Bird, Sir R. B.

Dunne, P. R. R.

Keeling, E. H.

Blair, Sir R.

Eckersley, P. T.

Kerr, H. W. (Oldham)

Bossom, A. C.

Eden, Rt. Hon. A.

Kerr, J. G. (Scottish Universities)

Bowater, Col. Sir T. Vanslttart

Edge, Sir W.

Kimball, L.

Bower, Comdr. R. T.

Elliot, Rt. Hon. W. E.

Kirkpatrick, W. M.

Bowyer, Capt. Sir G. E. W.

Ellis, Sir G.

Knox, Major-General Sir A. W. F.

Brass, Sir W.

Elmley, Viscount

Lamb, Sir J. Q.

Briscoe, Capt. R. G.

Emmott, C. E. G. C.

Lambert, Rt. Hon. G.

Brocklebank, C. E. R.

Emrys Evans, P. V.

Latham, Sir P.

Brown, Rt. Hon. E. (Leith)

Entwistle, C. F.

Leckie, J. A.

Brown, Brig.-Gen. H. C. (Newbury)

Evans, Capt. A. (Cardiff, S.)

Leech, Dr. J. W.

Browne, A. C. (Belfast, W.)

Evans, D. O. (Cardigan)

Leighton, Major B. E. P.

Bull, B. B.

Everard, W. L.

Lennox-Boyd, A. T. L.

Bullock, Capt. M.

Flides, Sir H.

Lindsay, K. M.

Burgin, Dr. E. L.

Findlay, Sir E.

Llewellin, Lieut.-Col. J. J.

Burton, Col. H. W.

Fox, Sir G. W. G.

Lloyd, G. W.

Campbell, Sir E. T.

Fraser, Capt. Sir I.

Loftus, P. C.

Cartland, J. R. H.

Ganzonl, Sir J.

Lovat-Fraser, J. A.

Carver, Major W. H.

George, Megan Lloyd (Anglesey)

Lyons, A. M.

Cary, R. A.

Gilmour, Lt.-Col. Rt. Hon. Sir J.

Mabane, W. (Huddersfield)

Cautley, Sir H. S.

Gledhill, G.

MacAndrew, Colonel Sir C. G.

Cayzer, Sir C. W. (City of Chester)

Gluckstein, L. H.

MacDonald, Rt. Hn. J. R. (Scot. U.)

Cazalet, Thelma (Islington, E.)

Glyn, Major Sir R. G. C.

MacDonald, Rt. Hon. M. (Ross)

Chamberlain, Rt. Hn. N. (Edgb't'n)

Goldle, N. B.

McEwen, Capt. J. H. F.

Channon, H.

Goodman, Col. A. W.

McKie, J. H.

Chapman, A. (Rutherglen)

Gower, Sir R. V.

Maclay, Hon. J. P.

Chapman, Sir S. (Edinburgh, S.)

Graham, Captain A. C. (Wirral)

Macmillan, H. (Stockton-on-Tees)

Chorlton, A. E. L.

Grattan-Doyle, Sir N.

Macnamara, Capt. J. R. J.

Clarke, F. E.

Gretton, Col. Rt. Hon. J.

Magnay, T.

Clarry, Sir Reginald

Gridley, Sir A. B.

Maitland, A.

Collins, Rt. Hon. Sir G. P.

Griffith, F. Kingsley (M'ddl'sbro, W.)

Makins, Brig.-Gen. E.

Colville, Lt.-Col. D. J.

Grigg, Sir E. W. M.

Mander, G. le M.

Cook, T. R. A. M. (Norfolk, N.)

Grimston, R. V.

Margesson, Capt. Rt. Hon. H. D. R.

Cooke, J. D. (Hammersmith, S.)

Guinness, T. L. E. B.

Markham, S. F.

Cooper, Rt. Hn, A. Duff (W'st'r S.G'gs)

Gunston, Capt. D. W.

Mason, Lt.-Col. Hon. G. K. M.

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

Guy, J. C. M.

Maxwell, S. A.

Mayhew, Lt.-Col. J.

Rothschild, J. A. de

Sutcliffe, H.

Mills, Sir F. (Layton, E.)

Rowlands, G.

Tasker, Sir R. I.

Mills, Major J. D. (New Forest)

Ruggles-Brise, Colonel Sir E. A.

Taylor, C. S. (Eastbourne)

Moore, Lieut.-Col. T. C. R.

Runclman, Rt. Hon. W.

Thomas, J. P. L. (Hereford)

Morris-Jones, Dr. J. H.

Russell, A. West (Tynemouth)

Thomson, Sir J. D. W.

Morrison, G. A. (Scottish Univ's.)

Russell, S. H. M. (Darwen)

Titchfield, Marquess of

Morrison, W S. (Cirencester)

Salmon, Sir I.

Touche, G. C.

Muirhead, Lt.-Col. A. J.

Samuel, Sir A. M. (Farnham)

Train, Sir J.

Munro, P.

Samuel, M. R. A. (Putney)

Tree, A. F. L. F.

Nall, Sir J.

Sandeman, Sir N. S.

Tryon, Major Rt. Hon. G. C.

Neven-Spence, Maj. B. H. H.

Sanderson, Sir F. B.

Tufnell, Lieut.-Com. R. L.

Nicolson, Hon. H. G

Sandys, E. D.

Turton, R. H.

Orr-Ewing, I. L.

Savery, Servington

Wakefield, W. W

Palmer, G. E. H.

Scott, Lord William

Walker-Smith, Sir J.

Patrick, C. M.

Seely, Sir H. M.

Wallace, Captain Euan

Perkins, W. R. D.

Shaw, Major P. S. (Wavertree)

Ward, Irene (Wallsend)

Peters, Dr. S. J.

Shute, Colonel Sir J. J.

Waterhouse, Captain C.

Pickthorn, K. W. M.

Sinclair, Rt. Hon. Sir A. (C'thn's)

Wayland, Sir W. A.

Pilkington, R.

Smith, Bracewell (Dulwich)

Wells, S. R.

Plugge, L. F.

Smith, Sir R. W. (Aberdeen)

White, H. Graham

Ponsonby, Col. C. E.

Smithers, Sir W.

Wickham, Lt -Col. E. T. R.

Perritt, R. W.

Somerville, A. A. (Windsor)

Williams, C. (Torquay)

Procter, Major H. A.

Southby, Comdr. A. R. J.

Williams, H. G. (Croydon. S.)

Ramsden, Sir E.

Spender-Clay, Lt.-Cl. Rt. Hn. H. H.

Windsor-Clive. Lieut.-Colonel G.

Rathbone, Eleanor (English Univ's.)

Stanley, Rt. Hon. Oliver (W'm'l'd)

Wise, A. R.

Rawson, Sir Cooper

Stourton, Hon. J. J.

Womersley, Sir W. J.

Reid, W. Allan (Derby)

Strauss, E. A. (Southwark, N.)

Young, A. S. L. (Partick)

Roberts, W. (Cumberland, N.)

Stuart, Lord C. Crichton- (N'thw'h)

Robinson, J. F. (Blackpool)

Stuart, Hon. J. (Moray and Nairn)

TELLERS FOR THE AYES.—

Ropner, Colonel L.

Sueter, Rear-Admiral Sir M. F.

Sir George Penny and Lieut.-Colonel

Sir A. Lambert Ward.

NOES.

Adams, D. (Consett)

Hall, J. H. (Whitechapel)

Potts, J.

Adams, D. M. (Poplar, S.)

Henderson, A. (Kingswinford)

Price, M. P.

Adamson, W. M.

Henderson, T. (Tradeston)

Richards, R. (Wrexham)

Alexander, Rt. Hon. A. V. (H'lsbr.)

Hills, A. (Pontefract)

Ritson, J.

Ammon, C. G.

Holland, A.

Roberts, Rt. Hon. F. O. (W. Brom.)

Attlee, Rt. Hon. C. R.

Hollins, A.

Robinson, W. A. (St. Helens)

Banfield, J. W.

Jagger, J.

Rowson, G.

Barnes, A. J.

Jenkins, A. (Pontypool)

Sexton, T. M.

Barr, J.

Jenkins, Sir W. (Neath)

Shinwell, E.

Batey, J.

John, W.

Short, A.

Bellenger, F.

Jones, A. C. (Shipley)

Silkin, L.

Benson, G.

Jones, Morgan (Caerphilly)

Silverman, S. S.

Brown, Rt. Hon. J. (S. Ayrshire)

Kelly, W. T.

Smith, Ben (Rotherhithe)

Burke, W. A.

Kennedy, Rt. Hon. T.

Smith, Rt. Hon. H. B. Lees- (K'ly)

Cape, T.

Kirby, B. V.

Sorensen, R. W.

Chater, D.

Lathan, G.

Stephen, C.

Clynes, Rt. Hon. J. R.

Lawson, J. J.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Cocks, F. S

Leach, W.

Strauss, G. R. (Lambeth, N.)

Daggar, G.

Lee, F.

Taylor, R. J. (Morpeth)

Davies, R. J. (Westhoughton)

Leonard, W.

Thorne, W.

Davies, S. O. (Merthyr)

Logan, D. G.

Thurtle, E.

Day, H.

Lunn, W.

Tinker, J. J.

Ede, J. C.

Macdonald, G. (Ince)

Viant, S. P.

Edwards, A. (Middlesbrough E.)

McGhee, H. G.

Walker, J.

Edwards, Sir C. (Bedwellty)

McGovern, J.

Watkins, F. C.

Fletcher, Lt.-Comdr. R. T. H.

MacLaren, A.

Watson, W. McL.

Frankel, D.

MacNeill, Weir, L.

Welsh, J. C.

Gallacher, W.

Marklew, E.

Westwood, J.

Gardner, B. W.

Maxton, J.

Whiteley, W.

Garro-Jones, G. M.

Messer, F.

Wilkinson, Ellen

George, Major G. Lloyd (Pembroke)

Montague, F.

Williams, D. (Swansea, E.)

Graham, D. M. (Hamilton)

Morrison, R C. (Tottenham, N.)

Williams. E. J. (Ogmore)

Green, W. H. (Deptford)

Muff, G.

Wilson, C. H. (Attercliffe)

Griffiths, G. A. (Hemsworth)

Oliver, G. H.

Woods, G. S. (Finsbury)

Griffiths, J. (Llanelly)

Paling, W.

Young, Sir R. (Newton)

Groves, T. E.

Parkinson, J. A.

Hall, G. H. (Aberdare)

Pethick-Lawrence, F. W.

TELLERS FOR THE NOES.—

Mr. Charleton and Mr. Mathers.

Bill read a Second time.

NEW MEMBER SWORN.
Lewis Silkin, esquire, for the Borough of Camberwell (Peckham Division).
BILLS REPORTED.

  EDUCATION BILL.
  Reported, with Amendments, from Standing Committee A.
  Report to lie upon the Table, and to be printed.
  Minutes of Proceedings to be printed.
  Bill, as amended (in the Standing Committee), to be considered upon Tuesday next, and to be printed. [Bill 102.]

  MINISTRY OF HEALTH PROVISIONAL ORDER (STOCKTON-ON-TEES) BILL.
  Reported, without Amendment.
  Bill to be read the Third time Tomorrow.

  STALYBRIDGE, HYDE, MOSSLNY AND DUKIN FIRLD TRANSPORT AND ELECTRICITY BOARD BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

  COLNE VALLEY AND NORTH WOOD ELECTRICITY BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

  NOTTINGHAMSHIRE AND DERBYSHIRE TRACTION BILL [Lords].
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

MESSAGE FROM THE LORDS.
That they have agreed to—
Ministry of Health Provisional Order (Bridport Joint Hospital District) Bill, with Amendments.
That they have passed a Bill, intituled, "An Act to authorise the Wrexham and East Denbighshire Water Company to construct new waterworks; to alter the limits of supply of the Company; to enlarge their powers in relation to the raising of money; and for other purposes." [Wrexham and East Denbighshire Water Bill [Lords.]
Public Health Bill [Lords],—That they propose that the Joint Committee on the Public Health Bill [Lords] do meet in the Chairman of Committees' Committee Room, House of Lords, on Thursday the 21st instant, at Eleven o'clock.

MESSAGE FROM THE LORDS.
  MINISTRY OF HEALTH PROVISIONAL ORDER (BRIDPORT JOINT HOSPITAL DISTRICT) BILL.
  Lords Amendments to be considered To-morrow.
  WREXHAM AND EAST DENBIGHSHIRE WATER BILL [Lords].
  Read the First time; and referred to the Examiners of Petitions for Private Bills.

PUBLIC HEALTH BILL [Lords].
So much of the Lords Message as relates to the Public Health Bill [Lords] considered.
Ordered,
"That the Committee appointed by this House do meet the Lords Committee as proposed by their Lordships."—[Sir G. Penny.]
Message to the Lords to acquaint them therewith.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE C.
  Sir Henry Cautley reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C (added in respect of the Midwives Bill): Viscountess Astor, Dr. Howitt, and Sir Joseph Lamb; and had appointed in substitution: Miss Cazalet, Mr. Duncan, and Mr. Lyons.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  SPECIAL AREAS RECONSTRUCTION (AGREEMENT) BILL.
  Order for Second Reading read.
  4 p.m.
  The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I beg to move, "That the Bill be now read a Second time."
  This Bill has already been discussed in general terms and at considerable length on the Money Resolution. The first thing I would say is that I hope the House will recollect that the Bill is not put forward as a complete solution of the difficulties of the Special Areas. Therefore it is no use to criticise the Bill on that score, because it does not pretend to be more than an attempt to solve a particular problem to which the attention of the Government has been repeatedly drawn, and in particular by the Commissioner for the Special Areas. This is an experiment which we thought it well worth while trying and which, if it proves successful, may be enlarged hereafter. Let me say in that connection that although some criticism has been directed to the fact that the capital of the company is to be only £1,000,000, the House will of course realise that that £1,000,000 can be lent over and over again. Furthermore, I would add that there is a provision in the memorandum of association that if it is considered desirable the capital of the company can be hereafter increased with the written consent of the Treasury.
  The proposition is that this £1,000,000 should be in the form of redeemable cumulative shares bearing interest at 3½ per cent. and of the nominal value of £1 each, to the extent of £900,000. The remaining £100,000 will be represented by £1 ordinary shares on which the dividend is limited to 3 per cent. per annum. As I have said on a previous occasion, it is the intention that the company is to be limited to a life of ten years. In the memorandum of association it will be provided that the company shall be wound up not later than ten years from the date of its incorporation. This is
  1904
  really only a precautionary measure in order to limit the possible liability of the shareholders. It does not, of course, mean necessarily that if this experiment were a success it must come to an end in ten years, because it will be quite possible, in that event, by agreement of all parties, to obtain an extension of the period during which the company may function.
  With regard to the constitution of the company I would say that it will have a central board of directors, who will not be paid fees, but power is taken to pay some remuneration to the Chairman, the Managing Director or the technical directors, and as I mentioned on a previous occasion it is intended to have local boards and local offices in each of the Special Areas. I have also mentioned that it was not intended as a general rule that the loans which are to be made by the company should exceed the sum of £10,000 in the case of any one concern. I know that some hon. Members rather deprecated that minimum and thought that it might exclude eases in which it would be desirable to lend a larger sum. On that I repeat that the provisions will contemplate the possibility that such a thing may happen in exceptional cases; but the whole purpose of the formation of the company, in accordance with the representations which have been made to the Government, is to give finance to small industries and not to large industries, and it is for that reason that we have put in this limit.
  I think the House will see that that is quite reasonable, because there is no case made out for any necessity for special provisions of this kind in the case of really large concerns. They can find their finance through the ordinary sources. This is an experiment which is directed to meet a want which is at present said to exist, namely, that of small people who cannot get financial assistance through the ordinary sources, but who nevertheless believe that they could put forward a reasonable proposition for the financial aid which they require. I might mention, in further comment on one observation which I made on a previous occasion, namely, that the losses of the State through the guarantee which it gives could not exceed £1,000,000—that that, of course, remains true as long as the capital of the company is limited to £1,000,000, but if the capital

  1905
  were to be increased then of course that would also increase the possible losses on the part of the State.
  Let me turn to the Bill Hon. Members will see that it consists practically of one operative Clause and a Schedule. The operative Clause is Clause 1, and that gives the Treasury power to enter into an agreement with the company, which agreement has to contain the matters set out in the Schedule. It is followed by some other provisions. If the agreement had already been entered into it would no doubt have appeared in the Schedule but as the company has not yet been formed all that it has been possible to do is to set out in the Schedule the subjects which are to form the substance of the agreement. In Sub-section (2) of Clause 1 it is provided that if the capital of the company is increased with the written consent of the Treasury, then paragraphs 5 and 6 of the Schedule may be modified, and the purpose of it is that if the capital were increased it might be necessary to make some modifications in the arrangements for the liquidation of the company, which form the subject of paragraphs 5 and 6. Sub-section (3) provides that the Treasury is to lay before Parliament a copy of the agreement when it is made, and of any further agreement, if any, which may modify the original agreement. Paragraph 4 is a machinery provision.
  Clause 2 is merely a Clause to exempt the company from the provisions of the Moneylenders Act. Then I come to the Schedule which really contains the greater part of the information in the Bill and sets out the scheme. The first paragraph provides for the payment by the Treasury of the preliminary expenses of the company and subsequently of the costs and expenses which may be incurred when it is wound up. The second paragraph deals with the payment by the Treasury of the expenses of administration. In this case the payment is to be an annual one, but there is a limit of £20,000 in any one year of the Treasury contribution towards the expenses. The third paragraph deals with the Treasury contribution to the losses reserve of the company, and that is limited to the sum of £100,000. The fourth paragraph is perhaps a little complicated, but it is necessary because the scheme is a little complicated in this respect. I can perhaps explain what I mean in this way: The
  1906
  first year's loans are to be taken by themselves. Suppose therefore that in the first year the whole of the capital were lent and it were then to return without loss, when you came to the next time the capital was lent, if there was a loss the 25 per cent. guarantee would not be calculated upon the addition of two years' loans, that is on the £2,000,000, but only on the second year loans, the first year having been treated as entirely an independent transaction. Therefore if the whole of the capital were lost on the second lending the Treasury contribution would be limited to £250,000, in addition, of course, to the £100,000 provided for in paragraph 3.
  As I have said, paragraphs 5 and 6 deal with the provision in case of winding up. They show how any surplus which may remain after the payment of the company's liabilities is to be distributed in that event. The order of priority for the distribution of this surplus would be as follows: One, the amount paid up on the initial share capital of the company would be returned to the shareholders; two, the sum of £100,000 which the Treasury will have contributed as a reserve against losses will be repaid to the Treasury; three, the preference shareholders will receive any arrears of dividends on their shares; four, the ordinary shareholders will receive whatever is necessary to give them from the origin of the company a rate of interest amounting to 3 per cent. at simple interest for each year; five, the Treasury are to be repaid any sums which they have paid to the company under paragraph 1, that is to say, initial expenses and winding up expenses.
  If the company's capital should at any time be increased it might be necessary to give the shareholders for the increased capital the same rights of priority as those of the original shareholders. Otherwise it might be extremely difficult to raise money. That is what is meant when in Clause 1, Sub-section (2), it is provided that paragraphs 5 and 6 of the Schedule may be modified in case of any increase in the capital. The purpose of the modification would be to give the new shareholders the same rights of priority as the old ones. Paragraph 7 provides for the certification by the Treasury, a mere matter of financial machinery. Paragraph 8 is a provision to protect

  1907
  the Treasury against any alteration made by the company in the articles of association, if such an alteration would affect the matters set out in the Schedule. For example, if the directors resolved to increase their capital without the consent of the Treasury which is called for in the Bill, the Treasury will be exempted from any liability.
  I have dealt, shortly but I hope clearly, with the matters contained in the Bill. In view of the fact that we had so long a discussion upon the subject matter of the Bill, I do not propose to say any more at the present time. If particular questions are raised in the course of the Debate my hon. and learned Friend the Financial Secretary to the Treasury will have great pleasure in answering them later.
  Mr. MABANE: Who will float the company, and will the Government appoint any directors?
  Mr. CHAMBERLAIN: The directors will be appointed in consultation with the Treasury. In the formation of the company everything will be done in consultation with the Treasury.
  Mr. R. J. TAYLOR: Will the Bill apply to any area which may subsequently be classified as Special?
  Mr. CHAMBERLAIN: No, Sir. This Bill can only apply to the Special Areas as are now defined. I made it clear on the previous occasion that we have all along considered that any experiment which we are trying in the Special Areas and which has proved successful on that limited scale, may subsequently be applied to other areas where it is shown that they could be usefully applied.
  Mr. BENSON: May I ask about the rate of repayment? Has any agreement been entered into with regard to the loan capital? Will there be a minimum rate of repayment of the capital?
  Mr. CHAMBERLAIN: I am asking my hon. and learned Friend to deal with that in his reply.
  4.18 p.m.
  Mr. DUNCAN GRAHAM: The Chancellor stated that the Bill is experimental and that it is a complicated Bill. I consider the Bill very complicated on its financial side. I am glad to have the
  1908
  opportunity of calling the Chancellor's attention to the situation of the distressed areas in Scotland which were not dealt with on the occasion to which he referred, when the Special Areas were first considered. I do not pretend to be a financial expert, and nobody who knows me would expect me to be, but I am satisfied that there is justification for the statement which I am making that the Bill, notwithstanding the more or less diffident promises made by the Chancellor of the Exchequer, will be quite insufficient to meet the needs of the Special Areas.
  What are the Special Areas? The Bill does not make any reference to the position in Scotland, and I would like to draw the Chancellor's attention to it. The Special Areas represent, roughly, 42 per cent. of the total population of this country. I believe that statement to be substantially correct. The Special Areas are the whole of the North-East Coast of England and the West and North Ridings of Yorkshire. The money is not sufficient because the areas are much larger than the Chancellor evidently has in mind. The distress, which is the reason for the introduction of the Bill, is as keen and as severe in York and Lancaster as in Durham and Northumberland. I hope to be able to give evidence of the truth of that statement.
  I am not a financial expert or one of those people who are supposed to be capable of putting forward constructive ideas, but I am going to read the opinions of gentlemen who belong to the same school of thought as the majority in this House, and who are recognised as men of constructive capacity and ability. There is distress in South Wales and in North and Central Wales. In addition, there is the whole of the Clyde Valley, and the four counties of Lanark, Renfrew, Dumbarton and Ayr. The situation is so serious in those four counties that the whole of this money could be spent, with very little real advantage to those who are supposed to benefit from it. That is the position of the Scottish areas, and it is well known to the Chancellor, because last year his attention was specifically drawn to the serious situation which confronted the local authorities, and he was invited to allow those authorities to submit their case. He refused to agree.
  I have been asked to draw attention to that point, and I hope that the Chancellor will be prepared to meet the repre-

  1909
  sentatives of the local authorities, not only of Scotland but of England and Wales, and to discuss with them their difficulties in recent years. This is not only a question of months but of a series of years. While I do not agree with the politics of the Chancellor of the Exchequer or of the Government with which he is associated, I agree that he can put a fairly decent case and that he has considerable courage. I should feel very sorry if he were unwilling to meet the representatives of the local authorities. They are particularly anxious to put their case to him. I sincerely hope that he will be prepared to change the attitude he adopted last year and to meet these people. No harm would be done, and most of the gentleman are members of his own political party. They would be willing to accept any decision which might be the outcome of such a meeting. I particularly appeal to the Chancellor to concede the request which I am making on behalf of the local authorities. If he will allow them to have a discussion on the definition of the distressed areas he will satisfy members of all parties.
  Let us come to the position of Scotland I want to give the evidence of men who have constructive capacity and who are recognised by our political opponents as men of financial probity and ability. I am going to read from the Annual Survey of the Clydesdale Bank on the economic position in Scotland. Referring to the prosperity so much acclaimed by the present Government, they say:
  "It must be observed that although recovery is still proceeding it has not brought Scotland up to the level of business activity attained in Great Britain as a whole. Statistics of unemployment demonstrate this fact and place Scotland quite definitely among what might legitimately be called the 'depressed areas'."
  The writers of that statement do not speak of a part of Scotland but of the whole of Scotland, and they are correct. The unemployment index makes it plain that distress is not confined to Scotland or to the Clyde Valley. It extends as far north as Sutherland and Caithness, and south, below Glasgow. The unemployment index for Scotland was 21.3, for the north-eastern part of England 20.7, for the north-western part of England 19.7 and for Wales 31.2. The last figure is the average for the whole of Wales. Practi-
  1910
  cally one-third of the population is compulsorily idle and has been so for a number of years. That area is reasonably entitled to be called a distressed area. The survey goes on to say, referring to Scotland:
  "Comparing with the averages for three years earlier, the figures for those four areas have fallen by 6.4, 7.8, 6.1 and 5.3 points respectively. Thus the experience of all four in the recovery phase has been roughly similar; it corresponds, moreover, with the recovery record for Great Britain as a whole, though the remaining level of unemployment in the four areas is still disproportionately high."
  I do not want to be in any way personal, but I am satisfied of this, and I have been for a long time, that if the unemployment question had affected the Birmingham area in the same way as it affects the Glasgow, Liverpool, and Newcastle areas, there would have been a very different attitude of mind on the part of the Chancellor of the Exchequer. The men and women living in the areas to which I am now referring are just as capable, hardworking, sober, temperate, and good citizens as those in any part of the country, and we are entitled to ask that the Government should be a bit more generous in their treatment of these areas. The Clydesdale Bank go on to say, referring to the statements made by the Commissioner for Special Areas in Scotland:
  "His own statements show in what various ways it has been possible to encourage business enterprise, yet it seems evident, as in England, that he is unduly hampered by the severity of some of the restrictions placed on his activities under the terms of his appointment."
  Shall we have any assurance that the restrictions will be any less severe under this Bill than they have been hitherto? They go on:
  "There is at this stage a clear case for full and sympathetic re-examination of the powers of the Commissioners, looking to the removal of all unnecessary impediments to the more complete fulfilment of their task. Recognising that the areas concerned are truly 'special,' they need special methods of treatment, even at the cost, if need be, of some reasonable departure from old established notions of the precise dividing line between private enterprise and public activity."
  That is not a statement made by irresponsible persons, but one made by men who have to a very large extent to meet the claims of those elements in the dis-

  1911
  tressed areas who are not manual workers. It is sometimes forgotten that the small shopkeepers and the various other tradespeople are almost as badly affected by the depression in those areas as are the ordinary workers themselves.
  I understand that Sir Arthur Rose has resigned, and that means that we have no Special Commissioner for Scotland now at all. I should, therefore, like to ask the Secretary of State for Scotland whether any action is being taken by his Department to appoint a successor. I understand that Sir Arthur has been compelled to resign on account of ill-health, and I do not wonder at it. I believe he has had a pretty severe task imposed upon him, with very little encouragement and little hope of any real advantage being utimately secured to these areas. It is a most disheartening and dispiriting job, and I personally would be very unwilling, to say the least of it, to have anything to do with a work of that kind.
  While I am not a financial expert, I know something about the mining industry, and I should like to draw the attention of the House to the situation in Scotland. I am taking, again from the Clydesdale Bank report, the figures which they give. They show that in 1920 there were 147,323 persons employed in the Scottish mines, and that in 1935 that number was reduced to 82,849, a decrease of 64,474, equal to 43.7 per cent. That is to say, only 57 men are now engaged in the Scottish mines where 100 were engaged or could have been engaged in 1920. In Lanarkshire the position is worse, because there the number of persons now employed in the mines, as compared with 1920, has fallen by over 51 per cent. But the most remarkable feature in the figures given by the Clydesdale Bank is that they tell us the production of coal in Scotland in the two years which I have named. In 1920 the production of coal was 31,524,000 tons, and in 1935 it was 31,536,000 tons, an increase of 12,000 tons, during a period in which 64,000 men had gone out of the industry. There is no work for these men other than the work that may be given to them by local authorities, at least to a very large extent. Thousands of these men are travelling miners looking for work and not being able to find it.
  1912
  Thousands of them have been idle for the last 10 years, are no longer entitled to unemployment benefit, and are compelled to resort to the public assistance committees for the means of sustenance.
  Evidence as to that position is to be found in a book published last April by Allen and Unwin, entitled "The Home Market." That book tells us—and I have no reason to doubt the accuracy of the statements made in it—that the persons in receipt of poor relief per 10,000 of the population in Great Britain on 1st January, 1934, were 384, and in 1935 they were 450, an increase of 66. In England and Wales the numbers were 346 in January, 1934, and 364 in January, 1935, an increase of 18. In Scotland the numbers were 696 on 1st January, 1934, and 1,160 on the same date in 1935, which shows an increase of 464 persons entitled to receive public assistance per 10,000 of the population. I do not want to weary the House with a long speech. I know there are many hon. Members who want to speak, but I have rather shortly indicated the condition of affairs as far as Scotland is concerned and the problems affecting the local authorities in those areas.
  I will conclude by asking the Department over which the Chancellor of the Exchequer presides, the Department presided over by the Secretary of State for Scotland, and also the Cabinet to take a much more serious and more generous view of the situation in the distressed areas than has evidently been taken up to the present time. I can quite appreciate the anxiety of a large number of our friends and political enemies on the other side for a considerable expenditure for defence purposes, but when they are spending any amount of money for building ships and making it comparatively easy for men to get into the Army, either the Regulars or the Territorials, and the Navy, they are forgetting that the men are of comparative unimportance unless they have a good, sound training before they enter the Army or the Navy at all. They are forgetting that the man is more important sometimes than the machine. In the areas that we represent the vast majority of the men who rendered service during the Great War were men who came from these particular areas. They are deteriorating, and I look forward with fear to

  1913
  the possibility of anything in the nature of war occurring similar to that which we all lived to go through from 1914–1918, with the type of men that our country is now producing in those areas and from which the country drew a very large part of its support in those fateful years.
  My last words will be to appeal to the Chancellor of the Exchequer and to the Government to be much more generous in their treatment of these men and of their dependants, and to recognise that, while we cannot pretend to have the information that would enable us to deal with the points raised by the Chancellor in his opening speech, we have a knowledge of the conditions under which these people are living, and we appeal to him, and to the Government, and to their supporters to endeavour to ensure that a very large measure of fairer treatment should be meted out, not only to the men engaged in the various occupations in those areas, but to the large percentage of the population, who are almost as badly placed as they are, belonging to the distributive and other businesses. I believe I am correct in saying that we do not propose to vote against the Second Reading of the Bill. It is something, though not sufficient, and we hope that in time further provision may be made. We put the very best construction on the statement of the Chancellor of the Exchequer that this is only an experiment and that, if it is found necessary for more money to be provided, he will be prepared to consider it. I hope he will consider favourably the point of view which has been put from this side of the House.
  4.45 p.m.
  Mr. CARTLAND: I feel that I must apologise for choosing the present occasion to intervene for the first time in debate. I am afraid that many Members with a much more intimate knowledge of this subject than myself may well wonder why it is that I, who have the good fortune to come from one of the most properous areas in the United Kingdom, should not have kept silent on such an occasion as this. But this is not a local problem; it is a national problem; and anxiety about these particular areas is not confined to the areas themselves. As the Chancellor of the Exchequer knows, there is in Birmingham grave anxiety about the depressed areas, and I
  1914
  feel bound to say that there is a very general feeling that the Government are not facing up to this problem. There is, I believe, in our people a very acute social conscience, and the social conscience of the nation has been very deeply stirred by what is happening in the depressed areas. This Bill does very little to relieve the idea that the problem is being trifled with. If the Government had brought forward the Bill as an item in a general programme, whether a long-range programme or a short-range programme, it would perhaps have been better.
  Are we dealing with this problem in the right way? Is it really a problem of depressed areas? Is it not rather a problem of depressed industries? It seems to me that one can envisage a situation arising in a few years' time of industrial depression—depression in certain industries—which has nothing to do with areas, but which has to do with industries. We may be faced with identically the same problem of depression, and, unless on this occasion we attempt to deal with the problem on correct lines, we shall have no idea how to deal with it if it arises in the years to come. This Bill has been introduced, very rightly, because the Commissioner suggested that it should be introduced, but I feel bound to say that the opinion of the country is that the appointment of the Commissioner—and one pays full respect to all the good work that Mr. Stewart has done—has not relieved the Government of responsibility. There is a feeling that it would be far better if this problem of the depressed areas were being dealt with by the Minister of Labour. My right hon. Friend the Minister of Labour has a great reputation in the country, and one feels that this growing delegation of responsibility to bodies outside Parliament is neither popular nor very satisfactory.
  The Chancellor of the Exchequer has told us nothing this afternoon about the effects of the Bill. We have not been told whether there are industries waiting and anxious to start in these areas, or how many are waiting for the word "Go." As soon as this Bill is on the Statute Book, will the industrialists start industries in these areas? We have been told nothing about that, nor have we been told anything with regard to the employ-

  1915
  ment that is envisaged as a result of this Bill. I venture to ask the House to consider whether we are dealing with the problem in the right way. My right hon. Friend said some time ago, "We expect losses," and it is provided for in the Bill. But I would ask the House to consider the psychological effect on a man who has been out of work for a number of years—say a coal miner—and who gets occupation in one of these new industries, if six months later that industry, which was going to give him a chance of life after many years' unemployment, fails. What is the psychological effect, not only upon him, but upon his family and friends, and, in fact, upon the whole area? If a new industry comes in and then fails, that is bound to have an appallingly tragic and depressing effect on the whole circle of those who know that this new industry has failed, as the old ones have failed.
  Like many other Members, I have taken some trouble to try to find out why these light industries have not gone to the Special Areas. I have in my division a trading estate. Hon. Members opposite were inclined to laugh at the idea of trading estates, but I can assure them that these trading estates are extraordinarily successful. Knowing that this Bill was coming on, I took the opportunity to ask them to give me their opinion as to why it was that the light industries were going to the trading estates, particularly those at Slough and at King's Norton, and why they are not going to the depresed areas. They gave me their opinion, and I give it to the House for what it is worth, because I feel that we are bound to consider these questions in deciding whether we are dealing with the problem effectively.
  The first reason they gave was that of proximity to markets, the importance of which everyone admits. The second was that these light industries are both manufacturing and selling industries. They are a combination of the two, and at least 50 per cent. of their effort is spent in selling. There is a big saving both in effort and in finance if they are placed near to their biggest markets. The third reason was that many of them are run by small employers. They are owned and organised by the small man, and he, apparently, prefers to live either in the Midlands or in the South. I do
  1916
  not say that that is light; I am only saying what is the opinion of the trading estate. The fourth reason was that nowadays it is generally considered to be both cheaper and more convenient to bring your raw materials to your manufacturing establishment, rather than, as previously, to take your manufacturing establishment to your raw materials; and I am told, though I was not able to secure any figures, that there is a definite advantage in freight rates. These are circumstances which we have to take into account in considering this Bill.
  A feeling has often been expressed that the concentration of new industries near to their markets, and the resulting concentration of population near to big towns, ought not to be encouraged, but it is a perfectly legitimate and normal trend for industry to go as near as possible to the big centres of population. In 1921, when the balance was more towards export than towards domestic trade, one-half of the population of Great Britain lived within 15 miles of the ports, which, after all, were the gateways to their markets. Since the balance has gone over, and now the domestic market is on the up-grade and the export market is on the down-grade, it is natural and obvious that population and industries should be concentrated near these centres. The only thing which interests the House is the action of the Government in relation to this trend, and I venture to put to the House the suggestion that the duty of the Government, and the only way in which a government can assist industry, is to accelerate the natural trend of industry, rather than to take some artificial means of stimulating what I might call unnatural development.
  I do not think that we have considered, and I am not certain whether my right hon. Friend has considered, the effect that this Bill is going to have upon the national development of industry, but it is only by surveying industries as a whole that we can hope to find any solution of this problem. It is no new problem. The Balfour Committee on Industry and Trade, which many of us would have liked to see continued as a permanent body, dealt very fully with this problem of depressed industries, and I am bound to say, without, I hope, getting into any controversy with hon. Members opposite, that when they take, as they are rather

  1917
  inclined to do, this problem as their particular business, I think that we on this side of the House are entitled to ask them why they never did anything to face up to the problem in 1929–31. The problem existed then. I say it without offence, but they did very little towards the problem, although it had been going on for some time, and it would have been far easier to find a solution for it in 1929 than it is in 1936.
  In trying to find a solution of the problem of the distressed areas, we have to look at the problem from two angles—first, from the point of view of the relation of the State to industry, and, secondly, from the point of view of the relation of the industry to the people who work in it. As regards the relation of the State to industry, I would take the point with which the hon. Member for Hamilton (Mr. D. Graham) concluded his remarks, namely, the question of national defence. My right hon. Friend the Member for Epping (Mr. Churchill), in the Defence Debate, made a, great point about skilled labour and national industry in connection with the whole question of defence, and I would ask the Government whether they can afford to let the docks fall into disrepair, to let the shipbuilding industry break down, to let the miners drop out of work. Can they afford to allow any body of skilled labour which they may find it necessary to draw upon in the future to run to seed? Some of the most tragic passages in the Commissioner's report are those in which he deals with the decay of craftsmanship, and I think it is deplorable from the moral point of view as well as from every other point of view to allow craftsmanship in any volume of the population to run to seed.
  In considering the industry and those who are dependent upon it for their livelihood, we are bound to accept the fact that, in what I would call the essential, the great trades of the country, labour has a definite vested interest, just as much as capital has. It is essential that we should realise that in these essential trades capital and labour have equal interests. Capital has some form of protection through its mobility, and we can only balance that by giving some sort of protection to labour. If one accepts the points which I have submitted to the House—and, unless one accepts them, one
  1918
  can find no solution for the problem of the depressed areas—one is forced to the conclusion that in the essential industries there must be some form of public control. With that there are very likely, and, indeed, bound, to be subsidies, increased wages, better conditions and so on. It seems to me that in this Bill we are subsidising, and subsidising with very little control.
  I would like to ask my hon. Friend who is going to wind up the Debate where is the market for the goods which these light industries will produce? Are the Government looking solely to the depressed areas for that market? If they are, I am afraid they will be disappointed. If they are not, and if the goods are going to be sold in the ordinary industrial market, we shall have Government-subsidised goods competing with the goods produced and turned out in the ordinary Way extremely economically by existing light industries. From that point of view the principle of the Bill is quite untenable. I am not against subsidies, but, if we are to have subsidies, we must have them with control; and it is far better, if there are to be subsidies, that they should be paid direct to the essential industries, where they would be far more useful than if they were paid to light trades.
  I must apologise for having detained the House so long, but I would beg leave to submit one or two more points. I think labour has to play its part. We have every right to ask the trade unions to look into the whole question of apprenticeship. Take the question of boys and girls in the distributive trades. I am appalled at the enormous number of boys and girls who are going into those trades. A quarter of the boys and nearly a quarter of the girls in work are in them. It is not very healthy, because many of them are blind-alley occupations. If we are to solve the problem, we have every right to look to the trade unions to give us their support in thinking it out. We are all in favour of some sort of transference. but I would far rather that it were family transference. Individual transference is of very little use.
  I see the hon. Member for Ebbw Vale (Mr. Bevan) in his place. Last week I came across two young men who came from his constituency and I discussed this

  1919
  problem with them. Their whole point was that, unless they were able to bring their families to Birmingham, which they would like to do, they must give up their jobs in Birmingham and go back to Ebbw Vale. I can see no way out of that unless we adopt the system of family transference. We may be faced with a demand for skilled labour from certain trades which we are quite unable to satisfy because we have taken no trouble to train boys and girls. On all estimates, there is going to be an acute shortage of skilled labour in 20 years' time and there will be some shortage in 15 years' time. We ought to begin now to start trying to estimate what our industrial requirements will be, and also try to work out how we are to cope with the shortage of skilled labour. I am certainly not against the Bill. By all means let us have it. There is an uneasy suspicion that there must be some gap in the financial machinery of the country to account for the introduction of the Bill at all. I should like to see it extended so that any small industry requiring money could come and demand it. It applies only to the Special Areas. Such as it is, we are bound to accept it, but let us not delude ourselves that it will assist the problem in any way. Above all, let us not delude with false hopes those men and women in the depressed industries who for too long have held out, their craftsmanship disappearing, their faith vanishing, against growing misery and neglect.
  5.3 p.m.
  Mr. KINGSLEY GRIFFITH: I should like to congratulate the hon. Member most heartily on a speech which was not only attractive and informing but extremely courageous. He has faced not only the actual problems of the Bill but the problems underlying it with a comprehensiveness which has commanded the admiration of all who have heard it. I do not intend to go as widely as he has done or as the hon. Member did who opened the Debate. I shall confine myself to the actual provisions of the Bill. But I am very glad that we have had this background given to the Debate and I hope the Financial Secretary may be able to reply to some of the questions that the hon. Member has put to him. In a way what is wrong with the Bill is its Title. It is very misleading. When you read it you expect to find all sorts of things
  1920
  inside it which obviously are not there. The Title suggests that this is the Government's programme for reconstructing the Special Areas. We have had it from the Chancellor of the Exchequer already that that is exactly what it is not. It addresses itself in fact to a very modest proposition in a very modest way.
  As an experiment I am glad to welcome it, though I feel I am displaying a considerable amount of magnanimity in welcoming it, seeing that it does not affect the area that I represent. The line of criticism which would suggest itself at first is that the amount of money is insufficient, and it sounds an extraordinarily small sum when taken into consideration together with the title. Of course the actual result of the matter may be exactly the other way. It may turn out that what is wrong with the Bill is that, the money having been provided, there will not be enough applications for it. We are entirely in the dark as to what kind of demand there is likely to be, because it is important to see that the reconstruction, so far as there is to be reconstruction, is not being done by the Government. The Government are not taking the Special Areas in hand and reconstructing them. Even this company that is to be set up is not going to do the reconstruction. The company, as I understand it, sits there ready to receive applications from people who think that with a little financial help they may make a success of a light industry in a distressed area. The extent of the success of the Bill depends in no small degree on the number of people who are optimistic enough to think that, if they get assistance, they will be able to carry on.
  There, of course, the question of consuming power 18 of the first importance. If the main industries in the areas are going to remain depressed, with a lot of their people out of work, and those people still on the family means test, which is keeping them down to the barest subsistence level, the chance of these light industries finding a market in the areas is bound to be very small., Therefore, let us by all means welcome the Bill but let us realise its necessary limitations. I believe it may be of use and, if some good is going to come out of it, I should like to have such advantages as there are for the area that I repre-

  1921
  sent. I am sorry to bring this grievance up time and again, but it is necessary to emphasise on every possible occasion that, whenever we are dealing with what used to be called the distressed areas, we are brought up against the Schedule of the Act of 1934, and it is an unscientific and false basis for dealing with the problem. I am sure that it was never intended by the hon. Gentleman who is now Secretary of the Overseas Trade Department that the districts which he happens to have visited should become the permanent bases of legislation. It is not reasonable.
  To some extent the Chancellor has met this point, which I endeavoured to make on the Financial Resolution, by saying, "This is not our last word. If we find that the provision of these facilities is a success in the Special Areas we shall think about extending them further." If the right hon. Gentleman really thinks there is a prospect of that, why not make some provision for it in the Bill itself? It surely would be easy enough to provide some machinery whereby the Schedule could be added to, or whereby other areas besides those mentioned in the Schedule could be brought in for the purposes of this Bill. By not doing that the Chancellor gives himself and the House the trouble of having to begin all over again, to go through the stages of a Financial Resolution, Second Reading and Committee, and the stages in another place, when he need not make two bites at a cherry at all. He could have done it all at one and the same time.
  I should like to ask the Financial Secretary whether he can help me on this point. In the Act of 1934 there was a provision that assistance could be given in promoting work outside the Special Areas if it could be shown to be for the benefit of those inside the Special Areas. How far it has been used I cannot say, but in this Bill at present there is not even that amount of elasticity. As far as I can gather, the persons must have their premises actually inside the ringed fence set up by the Schedule and, even though if they are outside they might be drawing their workpeople from inside, as far as I can see they would not be able to apply for financial facilities. Would it not be possible within the Title and Preamble of the Bill to put in an Amendment which would give that amount cf elasticity? I should not be satisfied with
  1922
  that, but I should like to have it. Doubtless the financial provisions, which are necessarily somewhat complicated, will be subjected to keen scrutiny in Committee so that we may see that there is adequate security for getting the best value out of the money that is provided. I welcome the Bill on the basis of the Chancellor's statement that he did not regard this as the Government's programme, but rather in the nature of a modest answer to a particular suggestion made by the Commissioner. On that basis it is welcome but, regarded as a solution of the problem, it would be fantastically inadequate.
  5.12 p.m.
  Sir ROBERT HORNE: I should like to add my encomium to that which has been so gracefully pronounced on the speech of the hon. Member below me. He displayed a facility which at the end of a long Parliamentary career I have not yet for myself achieved. The House will listen to him on many subsequent occasions with the same pleasure and admiration that we have felt to-day. Like the hon. Member who has just spoken, I shall not venture to tread over so wide a field as the hon. Member did in his maiden speech. This is indeed a very small Measure, and I gather from the Chancellor of the Exchequer that it does not pretend to be anything else. But everyone, especially those who come from the distressed areas, is glad to welcome any kind of mitigation of the evils from which we are suffering, and I do not think any of us will criticise the Bill on the ground that it does not solve the whole problem. Any Measure which solves any part of the problem is something that we will receive with open arms.
  The difficulty which this Bill is meant to solve, as I see it, is the question of finance. There is in our financial system at present a gap which requires to be filled in the way of providing capital for extending businesses of small capacity and size, or for the starting of new industries. The usual experience of small industrial people is that, while there is capital available for very large ventures, which the issuing houses will welcome, there are very few facilities for the small man who wishes either to start a business or to extend it. Banking facilities, as the House will well understand, cannot extend over perhaps the loan of a year,

  1923
  and the whole banking system of our country involves the principle that you must always be sure of getting your money back, and getting it back quickly, if you are to be able to satisfy your depositors at any moment they choose to abstract from your bank the money which they require. Therefore, sound banks will never grant loans for which they do not see the prospect of being rapidly repaid. The man who wants, say, £10,000, which he cannot possibly pay back within a period of five or ten years, cannot get banking facilities, and, on the other hand, he cannot get the benefit of the aid which he might obtain if he were going to make a very large issue of capital from the great issuing houses.
  Miss WILKINSON: As the right hon. Gentleman knows more about this sort of thing than anyone in the House, will he enlighten the House by stating why banking and insurance houses have practically ignored the small men who are included in this Bill?
  Sir R. HORNE: Oh, no, I think that any kind of suggestion that banking has been reluctant to lend money upon any kind of reasonable security is entirely fallacious. The experience of anybody connected with any form of banking is that no such instances exist. The banks have run far more risks than they would ordinarily have run during these times of difficulty. It has been the experience of all of us. I have been endeavouring to explain why it is that for a man who wishes a small amount of capital for an extended period, the facilities at the present time do not exist, or that they exist in a very small measure. There are certain houses which have taken up a very restricted amount of business of that kind. What the Government are doing, and I hope to the advantage of small industrialists, is to provide means by which capital will be advanced to such people. In order that the Special Areas shall receive the primary advantage, benefit is being conferred upon people who undertake to start businesses within the Special Areas, thus giving them an important inducement. In that way business will fructify and the special Areas will benefit, and from that point of view I heartily welcome the Bill.
  1924
  The attractions of the Special Areas are not very great, if you wish to start business at the present time. My hon. Friend sitting below me read out a list of the disadvantages which apparently some of his Friends have indicated to him, but he omitted entirely to put what is, after all, the most important disadvantage which deters people from going into Special areas. It is that they are the places with the highest rates in the country. Whatever advantage business may get from the rebates in rates, everything else is made more expensive because of the terrible rates the general community have to bear. People most therefore be induced by some other compensating advantage. No one pretends that the proposal in this Bill is more than an experiment, but it is an experiment upon which, if successful, we shall all congratulate ourselves, and, as the Chancellor of the Exchequer says, he is willing to find more money for the purpose if success attends his efforts.
  Mr. LOGAN: It is not only a question of money to start new industries, but the financial embarrassment in industries already existing, and can the right hon. Gentleman amplify that position?
  Sir R. HORNE: I am not responsible for the Bill. I am taking the Bill as I find it and accepting it, and talking of its financial prospects. Therefore it is not in my province to make any reply on that particular matter. The question was raised with regard to markets. It is a mistake to suppose that there are not good markets within the Special Areas. There are still good markets among those great communities. Industry is being carried on. They are not absolutely derelict. There are great coal communities and great iron and steel enterprises, one of which, I am glad to think, is being re-started at the present time in the constituency of the hon. Gentleman the Member for Ebbw Vale (Mr. Bevan). These are great markets, and one of the things which are so distressing at the present time is that these great companies in the Special Areas are compelled to go outside for many parts of their equipment which they ought to be able to purchase within their own community. For example, on the Clydeside there are several instances. There is the

  1925
  absence of many industries which otherwise would be able to supply small portions of the equipment of ships which sail the sea. One of the things which I should like to see established, and what I am glad to think may be established because of the inducement of this Bill, is minor industries of that character, which would feed the great industries within the Special Areas. From every point of view, therefore, I welcome the Bill.
  I think that the hon. Gentleman who led the Opposition in this matter to-day, in talking about the question of the increase of our defences failed to realise the extent to which the Special Areas will be benefited by the work given by the Government for the improvement of our defences. I am delighted to think, upon the question of crafts, which my hon. Friend below me raised, that a great many people will be brought into the crafts of this country where at the present time we have almost a complete absence of men who can use their hands. I hope and expect that we shall have a great many more of these people than we have had in the recent past.
  In alluding to the criticism made by the hon. Gentleman the Member for West Middlesbrough (Mr. Griffith), I think that it is a pity that this benefit is to be confined to areas as described in the terms of this Bill. It is impossible to draw a line round an area and say that that is a Special Area to which distress is confined. In fact, distress spreads itself over all the margins of its own area, and into the areas surrounding it. I could give repeated examples of work being given in what is described as a distressed area and being refused in another area far more distressed than the one alongside it, simply because it does not come within the Government definition in the Schedule.
  There is no more distressed community in this Kingdom than Glasgow. It does not form one of the Special Areas in the Schedule of the previous Act, but it is far more distressed than many of the areas round about it which are so described. In consequence certain Government orders were being given entirely outside Glasgow on the ground that Glasgow was not a Special Area, and yet an order to Glasgow would have done far more for employment in Scotland than
  1926
  the firms obtaining those orders in areas outside. That is a practical illustration of the disadvantages which occur under this far too rigid definition. I beg of the Chancellor of the Exchequer to take account of what has been said by the hon. Gentleman the Member for West Middlesbrough and see whether it is not possible, still within the limits of this Bill, to make some definition of the areas to which the benefits have to be applied which will really spread the benefits to the greatest possible advantage. It might be possible, for example, to set up one of these small businesses or to induce somebody to come forward and ask for the necessary capital to set up one of these small businesses to the benefit of the places in great distress, whereas it might not be possible to do it in a Special Area. There are all sorts of considerations of that kind which determine whether businesses should be set up and whether it is worth while to do it. I will not unduly press my right hon. Friend upon this matter, but I would ask the House to believe me that this Bill would have given greater confidence if the definition of the Special Areas had not been made too rigid. With those comments I welcome the Bill and I hope it will have a great success.
  5.26 p.m.
  Mr. DAVID ADAMS: Coming from a particularly distressed area, I am glad to express my gratitude for and approval of this Measure, and to know that the Opposition will give it their support, or at least will not vote against it. One cannot but agree that it is a Measure of such relatively diminutive proportions that it will not go very far upon the road to help to save the mining areas. One would hope that even now the Chancellor of the Exchequer may consider the desirability of entering into a bolder scheme, giving us, if necessary, another Bill to deal particularly with those areas which require not light industries, but something of a more formidable character. If we could have schemes, say, for coal distillation or the manufacture of cement in County Durham, the former requiring £750,000 and the latter £200,000, they would undoubtedly have an immediate and an appreciable beneficial effect.
  It is interesting to note that the Special Commissioner has not the paro-

  1927
  chial views which are expressed in the Measure now before us. I happen to be a member of the Tyne Improvement Commission. We have had under consideration for some years past the development of part of the River Tyne but it was not possible, owing to the lack of the necessary finance, until the Commissioner turned his attention to it. It is true that that is a non-profit making industrial concern, that its interest is the trade and the facilities of the Port of Newcastle-on-Tyne. It is a large and a bold scheme. The sum of £1,350,000 was the sum involved. But the Commissioner comes along, and uses the powers conferred upon him and offers the Tyne Improvement Commission the sum of £400,000. That is a reasonable amount and they now propose to purchase Tyne dock from the North Eastern Railway Company, to build a new quay, 1,400 feet long, for deep-water vessels of the largest type. The depth of the water at low tide is to be 35 feet and the river channel is to be deepened also to 35 feet, so that there will be no river in the British Isles that offers such facilities as the River Tyne so far as deep-water vessels are concerned.
  I mention these matters because if the Commissioner were allowed to deal with the situation, particularly in the North Eastern area, as he sees it, large sums of money could be beneficially expended on these lines. I fail to see why the Chancellor of the Exchequer should adopt a narrow outlook and restrict his operations merely to new companies in which the maximum capital to be expended is only £10,000. Many light industries will, we hope, grow up into big industries. The term "light industry" was never intended, in my judgment, and in the judgment of the Commissioner—I have had many interviews with him—to mean an industry restricted in size. You can have a light industry producing many things of a light character, although the capital involved may be very large. Certain aspects of Vickers' business are those of a light industry, but many million pounds of capital are involved in it.
  I am wondering whether the Chancellor could entertain the idea, perhaps a revolutionary one, that local authorities should be released from their legal
  1928
  bonds and facilities given them to enter into trade either as local authorities or as intermunicipal authorities. If they had facilities for engaging in trade, there is little doubt that they would turn their eyes towards many industrial concerns thereby relieve the pressure of unemployment in their midst. I am sorry to say that the Act of 1935 certainly restricted municipal enterprise so far as direct house building was concerned. The Commissioner has expended the resources placed at his disposal in a bold way. He has granted £1,500,000, a very large sum, for non-trading purposes. Why should not the same facilities be given to him for trading facilities? If we are to deal with the problem on large lines we shall require further legislation. I hope the Chancellor of the Exchequer will entertain it, on the lines of the Trade Facilities Act, which was beneficial in aiding shipping and other industries. That is the line the Chancellor should pursue. In the meantime, we are grateful for this small Measure on account.
  5.35 p.m.
  Sir HENRY FILDES: I should like to put before the House and the Chancellor of the Exchequer an aspect of this case which has already been mentioned by a former Chancellor of the Exchequer, the right hon. Member for Hillhead (Sir R. Home). It is most desirable that the Chancellor of the Exchequer should take his courage in both hands and go a little further in regard to the administration of the money that he is providing. In the Scottish constituency that I represent there is a village where the only persons employed are the policeman, the postman, the parson and the schoolmaster, but they are not resident in a distressed area.
  Mr. GEORGE GRIFFITHS: And the undertaker.
  Sir H. FILDES: The undertaker is very busily employed. I would appeal to the Chancellor of the Exchequer to give us a chance of stating our case for the areas that are placed outside the schedule of the distressed areas by artificial lines. The particular instance in which I am interested is a lead mine. Lead has been produced there for 250 years. Under the Ottawa Agreement, however, the price of lead came down to something like £7 or £8 a ton, and as lead could not be

  1929
  produced there at a profit this mine, employing 200 people, closed down. If we could get a little assistance under this scheme there are persons who would supplement the amount that might be provided and work could be found for these unemployed people. But in connection with every effort I have made up to now I have been met with the answer: "You are not a distressed area." I would therefore, appeal to the Chancellor of the Exchequer to widen the scope of this scheme. A definite mistake has been made in defining the distressed areas, but the Chancellor of the Exchequer has an opportunity now of giving some elasticity to the scheme, which would enable the mistakes that have been made to be remedied.
  Mr. LAWSON: We hear about mistakes having been made in defining the Special Areas, but I should like the supporters of the Government to explain to me how it is that those of us who are inside the boundaries of the Special Areas who have protested against the limitations of this Bill have received no consideration from the supporters of the Government.
  Sir H. FILDESMy hon. Friend and others associated with him have been very vocal and vociferous, while the law-abiding citizens for whom I appeal have suffered in silence. It may be a belated appeal that I am making to the Chancellor of the Exchequer, but I would ask him to give us some help. I should also like to say to my hon. Friends who represent the distressed areas that they might stand aside for once and allow unfortunate people in other areas to get a share of the benefits that they have been receiving for several years. I am raising a serious point which affects many parts of the Kingdom and all classes of citizens. I would beg the Chancellor of the Exchequer not to be bound by artificial limitations in dealing with this scheme. If there is any loss, it will be made good by the whole of the ratepayers and taxpayers of the Kingdom. It is only fair that if a case can be made out that there is injustice in excluding certain areas from the ambit of the Bill, the Chancellor of the Exchequer should either retain powers for himself, or delegate powers, which would enable other districts to obtain justice, because the
  1930
  conditions of things is indeed very distressing.
  5.40 p. m.
  Mr. BENSON: The hon. Member for Middlesbrough, West (Mr. K. Griffith) suggested that we might find ourselves possessed of this sum of £1,000,000 and then find that we should be unable to use it by reason of the lack of demand. It seems to me that the hon. Member is counting his chickens before they are hatched. We have not got the £1,000,000 yet, and so far as I can see, unless the Chancellor of the Exchequer has definite pledges from private individuals that they are prepared to raise the money, there is not very much likelihood that by going on to the Stock Exchange or by using the usual channels we shall raise the £1,000,000. The financial proposals in this Bill are very extraordinary. There is a Government guarantee on the first £1,000,000 of 35 per cent. Then a sum of £100,000 has to be paid to reserve, and there is a 25 per cent. guarantee against loss. If further capital is raised the 35 per cent. will gradually diminish. On the capital raised the interest is to be 3½ per cent. for the preference shares and 3 per cent. for the ordinary shares. One can buy Government stock to show more than 3 per cent., with a full 100 per cent. Government responsibility behind it. What ordinary investor is likely to choose a 3 per cent. investment with a 35 per cent. Government guarantee as compared with an investment in Government funds showing more than 3 per cent., which has a sinking fund to guarantee it. The chances of raising this sum of £1,000,000 in the ordinary market are, I think, very small.
  Another very extraordinary proposition in the Bill is that the ordinary shares, which have definite limitations of interest, are to bear a lower rate of interest than the preference shares. The preference shares, which for repayment will rank in front of the ordinary shares, are to bear 3½ per cent., while the ordinary shares, which rank after them, are to bear only 3 per cent. Had it been the other way round there might be some rhyme or reason in the proposal. This is one of the most extraordinary financial proposals that I have ever come across. I hope that in putting the Bill before the House, with its very limited possibilities of raising the money, the Chancellor of

  1931
  the Exchequer has looked into the question definitely and has some guarantee that the money will be raised, because there is nothing in the Bill to say that the Government is to raise the money. Apart from the £100,000 payable to the reserve fund, the only liability of the Government is in regard to the money, once it has been raised.
  In his opening speech the Chancellor of the Exchequer referred to the repayment of the money by the borrowers and used the phrase "in the first year." I do not suppose he intended to suggest that the money should be lent only for one year, but I should like to know whether provision is to be made for repayment by the borrowing firms within a certain period. If there is to be a definite amortisation I hope it will be spread over as long a period as possible, because it will be a very heavy burden on a small firm which raises £5,000 or £10,000 of capital from this company if it has to pay not only a substantial amount in interest but also to allow a heavy rate for amortisation of its loan. I hope the Financial Secretary will deal with these two points—first, how far they can be sure of raising this money on the extra keen cut terms; and, secondly, whether they propose to burden borrowers with any specific regulations as to the amortisation of the loan.
  5.47 p.m.
  Mr. MAGNAY: I am glad of an opportunity of saying a word in favour of the Bill. I have been unable to catch Mr. Speaker's eye on previous occasions, and it might be thought that hon. Members from distressed areas were a little ungrateful if not ungracious to the Government and, therefore, I should like to express my thanks for what they are doing in this matter, and also, I am sure, the thanks of my constituents and the northeastern group of Members of Parliament. Having regard to what the hon. Member for Dumfries (Sir H. Fildes) and the right hon. Member for Hillhead (Sir R. Horne) have said, I will only quote the words of a man who did a great deal for the betterment of England; that assistance should go not to the people who need it but to those who need it most. As a humble follower of that man, John Wesley, I think that is a sound principle even in politics. You should go not to
  1932
  all the distressed areas but to those Special Areas which need special assistance. Wesley was an Arminian in theology. To-day I am a Calvinist in politics. It has been decreed by the powers that be that my constituency shall be considered to be a Special Area, and, therefore, as one of the elect I am quite easy about the matter. I hope that other areas will not think any the less of us because this dish has been put before us, and that as we have got our spoon into it we are to get a helping out of it first.
  A new trading estate will not be in full working order in a few months' time or in a few years' time. Obviously, it is a long-term policy. A trading estate must be on a somewhat large scale, indeed 1,000 acres ought not to frighten anyone. But the real object of this trading estate and the finance corporation which is to make it workable, is to change the balance of industry, particularly for young persons. On the North-East Coast we pride ourselves that we can make anything from a needle to an anchor, but my concern is that in a few years' time, unless we are very careful, we shall lose all our craftsmen and become a race of labourers. I suggest that this trading estate and corporation will keep our skilled men on the North-East Coast. I was much amused the other day by some advertisements I saw in the "Newcastle Evening Chronicle," from Birmingham, Saltney, and Coventry, and, of all places in the world, from the Isle of Wight, asking for skilled men to go to these districts to fulfil Government contracts which they had been fortunate enough to get. We want to keep our skilled men on the-North-East Coast.
  This matter has received the closest consideration by the North-East Development Board, and they have given figures showing that the Chancellor of the Exchequer in his Budget speech proposed to do the very thing for which we in that district are asking. Who composes the North-Eastern Development Board? There is the Lord Mayor of Newcastle, a very good friend of mine, although a Member of the party opposite and if I may say so a more intelligent Member than usual of the Labour party. Then there is William Straker, a name to conjure with in Labour circles; Sir Luke Thompson, members of trade unions, Mr. Westwood, Mr.

  1933
  Gilbert, Professors of Universities, and representatives of the North-East Steelmakers Association and Coal Trades Association. A few months ago they said that to advertise for trades to come up north was not enough. If I may use an expression of my own, adversity is no good as an advertisement. They made this recommendation:
  "We feel it is vital that Industrial Estates should be created in various parts of the area on the lines of the Slough Trading Estate, Welwyn, Trafford Park, Park Royal, etc. The Commissioner for Special Areas has already undertaken the clearance of derelict sites, but he has no power to erect buildings, build roads, etc. Modern factory buildings are required, supplied with facilities such as roads, sidings, power, river frontage, in convenient localities with good housing nearby ready to be leased to an intending manufacturer. The finance for this undertaking would have to be provided either by Government funds or by Government guarantee, and there is no reason why such an undertaking should not in time become self-supporting. The administration could be in the hands of a body appointed by the Government or of the Commissioner for Special Areas, or of some form of development board or nonprofit-earning organisation."
  Before the North Eastern Development Board made this recommendation the Secretary for the Overseas Trade Department in his report said:
  "Within the limitations imposed by its financial resources the Development Board has proved of real value, and I believe that some such organisation upon a much larger scale would be worthy of Government support."
  Mr. Malcolm Stewart, the Commissioner for the Special Areas, in his report said:
  "The capital which they are able to raise on Tyneside was not sufficient to enable them to operate on a sufficiently large scale to give the experiment a fair chance. It seems doubtful whether any organisation run on a purely commercial basis can meet the needs of the areas. Exactly what those needs are no one can at present say. I am therefore proposing to take further steps in order to ascertain the extent of the demand for financial assistance. If, as a result, it is found that there is a real opening for new enterprise in the areas if the necessary capital were provided (especially for smaller undertakings and those which are not large enough to float a public issue) I may find it necessary to advise that a special fund should be created for the purpose."
  1934
  That is precisely what the Bill proposes to do. In no other way can we attract new industries. We want to mix our industries better. Whenever I go to Birmingham, Coventry, Leicester or Nottingham, I am amazed at the variety of industries. We in the north have deliberately put all our eggs into one basket, mining, engineering and coal, basic industries, by which we have lived as a nation, and we have rather looked down upon such places as Birmingham, which has gathered together all these smaller industries, this smaller fry. But they were well advised, and we should also try to attract new industries. How are we going to do that unless we establish such finance corporations as are suggested in order to make it possible for new industries to be set up and to grow? There must be generous Treasury assistance and continued backing. I take comfort from the thought that in the Bill there are multiples of 10, which I understand means quantity, i.e., £10,000 for each company for 10 years up to £1,000,000. In fact, I take it to mean that these financial figures are merely nominal and that if the thing is a success we can expect more backing from the Government.
  This Bill proposes to do the very things which are the recommendations of the North-Eastern Development Board, and it seems to me it will enable us to have these new industries and better mixed industries. To be frank, I never expected the Chancellor of the Exchequer would do this. This heterodox finance, coming from him, amazed me not a little, but it just shows what a realist he is. As the right hon. Gentleman knows—and it may interest him if I tell him again—in some other things, such as equalisation of the poor rate, he and I do not agree, but at any rate one always knows where he is, for he does not wobble. He is a realist. As I come from a Special Area and as this Bill will, I think, specially benefit my constituency, it would be ungrateful and ungracious of me if I did not express my thanks for it. I thank the House for listening to me so patiently and kindly.
  6.2 p.m.
  Mr. WALKER: I am very much astonished at the enthusiasm displayed

  1935
  by the hon. Member for Gateshead (Mr. Magnay) at what is to be done for the depressed and Special Areas in the Bill which has been presented to the House to-day. The Chancellor of the Exchequer himself was very careful to explain to the House that it was only a small experiment.
  Mr. MAGNAY: I have the Chancellor of the Exchequer's speech here and I would point out that he did not say it was a small experiment. He said:
  "I think this is eminently a case where it is desirable to experiment."—[OFFICIAL REPORT, 21st April, 1936; col. 51, Vol. 311.]
  Mr. G. GRIFFITHS: This is not a dialogue.
  Mr. WALKER: I accept the correction that the Chancellor of the Exchequer did not use the word "small," but I shall apply the word "small" to it because it is an experiment applied to a problem which is extremely large. When a solution of this kind is brought forward for a problem affecting many parts of the country and many industries of the country, and when the problem is that of 2,000,000 unemployed and over 4,000,000 not receiving enough nourishment, even in the district from which my hon. Friend comes, the provision of £1,000,000 for the purpose of trying to find employment or attract industries to the distressed areas is a very, very small contribution indeed to the great problem which confronts the country. If the Bill had spoken of £100,000,000 it would not have been sufficient.
  What are we faced with to-day? Britain can be roughly divided so far as this problem is concerned by a line drawn from Newport on the Bristol Channel to the Wash. South of that line unemployment is something in the region of 4.8 per cent.; at about the lower Midlands it amounts to approximately 7 to 8 per cent. On the North-East Coast, from where my enthusiastic hon. Friend comes, it goes up to 18 or 19 per cent., and the same applies in the North-West area. In Scotland it is over 23 per cent., and down in South Wales it reaches the same figure as in Scotland. The point which the House, and the Government in particular, ought to notice is that the bulk
  1936
  of the unemployment is contained in these areas and that it applies to certain industries—coal mining, iron and steel, shipbuilding, engineering and cotton. If the problem could be solved in those five industries, we would have solved the problem of unemployment for the whole of the country. That problem will not be solved by our trying to attract industries into those areas by the offering of cheap money. This Bill has about as much chance of attracting industries into those areas as a penny magnet has of attracting a 20-tons steel plate. Hon. Members ought frankly to realise that. But this Bill is on a par with all that the Government have clone to try to deal with the unemployment problem or the depressed or Special Areas.
  I make bold to say that if you were to offer to the local authorities which control all these depressed and Special Areas the repeal of Section 45 of the 1934 Act and the abolition of the means test, they would tell you that that would do more for the Special Areas than anything contained in this Bill. They know what they are faced with. To-day we were told by the right hon. Gentleman the Member for Hillhead (Sir R. Horne) that he was glad to see that certain industries were making a recovery. One of the industries he mentioned—an industry which has been mentioned here very often—was the iron and steel industry. Last year that industry produced a record output. It beat the record of 1929 and was over 2,000,000 tons better than the output in the year 1913. Yet there still remains the fact that there is over 17 per cent. of unemployment in the iron and steel industry to-day, and that industry ranges from South Wales right up to Lanarkshire in Scotland. If in an industry which it is boasted has recovered and which is making profits to-day that it has never made during the past 10 or 12 years, there are still so many unemployed men, surely the problem is going to be very much bigger than is contemplated in the pigmy Bill which is brought forward here to try to solve the problem of the depressed and Special Areas.
  The hon. Member for King's Norton (Mr. Cartland), who made such an interesting and courageous speech from the benches opposite, said that the reason

  1937
  why industry is going South from the North is that it is cheaper to take the raw materials to the factory than to take the factory to the raw materials. That all depends on the kind of factory. The tube industry has been removed from Scotland; the reason being that they wanted to take the industry right to the raw materials—right on top of the ore. The reason for shifting that industry was exactly the reverse of that which was suggested by the hon. Member for King's Norton in his very interesting and delightful speech. The same thing applies in the case of shipbuilding and heavy engineering in all its branches.
  What we require is not a Bill of this sort to deal with the depressed and Special Areas. We want a Bill which is very much bigger and which has very much more finance and Government planning behind it. We do not want merely the appointment of a committee which is to sit in London and decide as to whether it will lend money here or there for the purpose of starting an industry in some part of the country. As a matter of fact, the City of London has done far more in settling where the industries of this country shall go than any other section of the community. Small committees of men are sitting in London at any given moment and deciding whether a coal pit shall close down in one place and whether one shall be opened up in another place, or whether a steel works shall close down in Lanarkshire and one be opened in Nottinghamshire. It is they who decide—not the Government, not Parliament, not the people, not the workers in the industry, not even the employers in the industry. The City financiers have the whole of the industries of the country in the hollows of their hands. One great steel works in Bellshill in Lanarkshire has been closed down completely. It was one of the most efficient works in the country, and an American firm said it was just the sort of works for carrying on certain sections of the iron and steel industry. But the financial interests of the Bank of England, who were heavily inside that firm in connection with overdrafts, sold it out to another firm and the works was transferred. That area has become a distressed area because of the closing down of that works and another works.
  1938
  We want Government planning, and Government planning which will not have the idea that the profits of the financier and the investor are the chief consideration, but the lives and livelihood generally of the people who are in these areas and who for the past 15 years have been suffering from the depression. Some people think that the industrial crisis started in 1931 because the City of London got into a financial mess. In the iron and steel industry the depression started at the begining of 1921. Throughout all these years the areas in which the iron and steel industry is situated have been suffering from the depression —wages have been falling, employment has been scarce and the standard of life generally has been diminishing. We want something done to remove that, and that something can be done only if the Government will step in and say that, irrespective of the desires of the people who have manipulated industry in the past—the people who because it paid them to do so shifted industry from one part of the country to another—but in the interests of the people generally, this planning shall take place on a very much larger and wider scale than exists or is contemplated in this Bill. Only then will it be possible for anything to be done which will really touch the problem which confronts the people of this country.
  6.14 p.m.
  Sir GEOFFREY ELLIS: I will not detain the House for more than a few minutes, but I would like to ask for a little explanation from the Financial Secretary to the Treasury as to the details involved in the working of this suggested company. There are two things that have to be considered. The first is the principle behind it and the second is whether the machinery which is suggested will do what the Chancellor hopes it will. On the principle, I would only say that the real question is one of industry and not of area. Unless you tackle the problem from the point of view of industry primarily, and regard the area only as secondary, you will never solve the problem as it ought to be solved if we are to reach any finality. I would, however, rather direct myself to the smaller matter of machinery. It is obvious from the steps which the Treasury have taken that they do not expect the company to be successful. They propose to start it

  1939
  with a nominal capital of £1,000,000 and to put on one side 2 per cent. to pay managing expenses and also a certain amount for some kind of reserve.
  Let us work it out as a matter of practice. First, you cannot raise your money at less than 3 or 3½ per cent. Then it will cost you, on the basis of the Treasury allowance 2 per cent. on your £1,000,000 in order to carry out the ordinary business of the concern and pay running expenses. That is something like 5 per cent. Then you must make some provision in reserve for losses on the basis of the £1,000,000 and you could hardly put less than 1 per cent. per annum to reserve under that head considering that you are only going to run for 10 years. Thus you start with that burden on your back. You lend money in these distressed areas, to people who have found the greatest difficulty in providing any money at all for themselves, on a basis of something over 6 per cent. before you can hope for a single possibility of profit. Personally I think the machinery which has been chosen is not that which is best calculated to carry out what the Government apparently are willing to do. They are, obviously, willing to make a subsidy for certain purposes in these areas. If they have come to that conclusion, it would be better to devise some form of machinery for paying that subsidy which will cost as little as possible, rather than to establish, in a roundabout way, a large company which must cost much more than other methods would cost.
  For instance, would it not have been possible to take into account existing sources of credit in these areas? We could say to those responsible "We start on the basis that there are some loans which it is not proper for you to make." But looking at the matter from the point of view of security, many of those undertakings would be prepared to make the loans if they could get just a little more security than is already being offered. If the Government were prepared to deal with them and to make guarantees in certain events, I suggest to the right hon. Gentleman that they would have carried out his purpose just as well as this company will do it, and at far less cost. I believe it would have been easy to get local committees to pass on applica-
  1940
  tions for loans and make recommendations to the Government acting in conjunction with the existing sources of credit.
  Do not let us run away with the idea that this company is, in any sense, a bank. It is not. It is simply a mortgage loan company subject to all the difficulties and dangers that every mortgage loan company has to face, with this difference that it is dealing with current business, instead of securities like land and buildings. In addition, it will be working in districts where, in many cases, trade has little hope of recovery. When a loan is made it will be on the basis that the company is beginning with a bad debtor. You then pass to the point that you are lending money in an area where prima facie there is little hope of trade recovery. I suggest that the method chosen by the Government is a long and roundabout way of achieving a purpose which they could have achieved, for far less money and in a better manner by other means.
  6.20 p.m.
  Mr. ANSTRUTHER-GRAY: I have no doubt that the Financial Secretary will reply to the very interesting financial point raised by my hon. Friend who has just spoken, and I propose to deal with another aspect of the Bill. The Chancellor of the Exchequer has told us that the Bill is to be experimental and that is so, but one thing I regard as certain is that some amount of employment will be given as a result of the Bill in the distressed areas, and. as a representative of one of the distressed areas, I welcome it from a local point of view. I also welcome a letter which I have received from the county clerk of Lanarkshire and the town clerk of Glasgow on behalf of local authorities in the distressed areas in Scotland, assuring us of their wholehearted support for the Government's efforts in this direction. In fairness, I ought to add that the letter also refers to Section 45 of the Unemployment Act of 1934, but I do not think that is relevant to the present Debate.
  My support for the Bill, however, is not on local but on national grounds. As I understand it, the company which is to be formed will lend money to businesses and individuals and firms on three conditions, first, that the money will give em-

  1941
  ployment in the distressed areas where employment is most needed; second, that it will have a reasonable hope of success —the economic prospects of the scheme must be reasonable—and, thirdly, that before money is lent through this company, it must be proved that the individual or firm concerned has been unable to raise money through the ordinary financial channels. I am not at all dismayed by the prospect of this company taking risks which private capital would pot take. Nor do I think that it proves the shortcomings of private enterprise. Obviously with private enterprise the first consideration is bound to be security, and rightly so, because those institutions are trustees of the money of their shareholders, and, without security, they are naturally unwilling to lend, however promising a scheme may be. I think the Government's guarantee to meet 25 per cent. of losses will make up for that lack of security. Furthermore I think the 75 per cent. of private interest will ensure that this company will be reasonably administered and that the money will not be wasted on harum-scarum schemes.
  I think there are plenty of good schemes. Both the Commissioners for the Special Areas in their reports referred to individuals who had inventions or plans, possibly quite feasible, which could not be started because there was not the necessary security. I understand that the Commissioner in Scotland, Sir Arthur Rose, has been approached in certain definite cases. I mention this point in reply to my hon. Friend the Member for Kings Norton (Mr. Cartland), whose maiden speech the whole House appreciated so much. He asked where was the demand for credits? I have here a list of schemes put forward to the Special Areas Commissioner for Scotland, which includes the renewal and extension and equipment of small factories and light engineering trades; investigation of patents and finance for the manufacture of household utensils, aircraft devices, engineering and electrical gadgets, motor car small parts and gadgets, demonstration units of new patents and toys. There are also references to financial assistance for the co-operative canning of fruit by growers—which will, perhaps, appeal to hon. Members opposite—the cultivation and marketing of mushrooms, the manufacture of composts
  1942
  and fertilisers from sewage and refuse and the manufacture of peat products,
  There are also references to the incubation and preservation of eggs by new processes; the production of skins and hides for the leather trade and the erection of a building for shows and trade exhibitions. Though it may be that that would not come within the £10,000 limit which the Chancellor of the Exchequer has set. Beside these, numerous applications have been made for assistance for small men to start tomato-growing under glass and other horticultural developments. I ask the Financial Secretary in his reply to give us the assurance that agricultural development is intended to be included in these schemes. The cases I have mentioned are cases in which I think this company might very well help. Further, some of these cases have this advantage—that small industries could be started which would be suitable for some of the derelict villages. One does not like the word "derelict," but I am afraid that hon. Members opposite and hon. Members on this side know only too well that there are villages which are, virtually, derelict. If this company succeeds in getting live little industries at work in some of these villages, this Bill will not have been in vain.
  In suggesting that public money should be risked here where private money cannot be risked, I do so because I think that whether a loan is lost or not the public will derive some advantage from it. They will derive the advantage of the employment that a scheme gives before it fails. My hon. Friend the Member for King's Norton alluded to the psychological effect on the minds of those employed in a newly established industry which fails after a time. But surely those who are in close contact with unemployment know that the real degeneration arises from permanent unemployment and that employment of any sort is desirable, even though it be only temporary and not premanent. We should appreciate the fact that in granting this £1,000,000 to the company the State is, deliberately, hazarding money in a good cause—in order to give natural employment twhere it is most needed. I have always been opposed to barren relief works but to give natural employment where it is most needed is well worth the risk involved.

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  I am not so pessimistic. I do not see why this Bill should not be a financial success certainly from a national point of view. If it works out as we hope, it is going to provide capital for hundreds and it may be thousands of undertakings and I hope that the small undertakings will not be ruled out. I refer to undertakings in which the capital required is only in the nature, perhaps, of £100.
  It is in the last degree unreasonable to expect that all these undertakings are going to fail. I think that probably a good percentage of them will flourish. They may not counterbalance the failures but if the scheme is boldly worked by the company—as I hope it will be because unemployment in the distressed areas calls out for drastic action—the ultimate advantage to the State of having new thriving industries will be well worth any money lost. I do not want to anticipate that the company will lose, but even if it does lose the country may gain. It would be possible to lose the whole £1,000,000, and yet for the country to gain. That is a, point we should appreciate, because whereas the benefit of a successful scheme to the company would merely be the return of the loan with interest, the benefit to the country as a whole and to the distressed area in particular, may be a new industry. Equally, while a loss to the company will be a dead loss and the money will be gone, the loss to the country will always be greatly mitigated by the employment that will have been given.
  There has been a criticism that this Bill does not go far enough. I do not agree with that. As I see it, the £1,000,000, covering as it does only 25 per cent. of the total loans, may allow for a total of £4,000,000 being out in loans at once. This will be circulated and re-loaned as it is repaid. That is a considerable sum with which to start on this experiment, and there is nothing to prevent an expansion if the experiment justifies itself. Another point has been made by hon. Members, principally those who do not represent depressed areas. They complain that the scheme is limited to the Special Areas. I doubt whether I could support the Bill if it were not limited to the Special Areas, because, if it were not, the result would be merely
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  to encourage the drift, of industry to the south which those of as in Scotland have been trying so hard to combat.
  This Bill is not going to move labour from one district to mother, but it will bring work to places where the labour is. Although there may be, as I think there is, a case for transference of labour from places which are workless to places where there is work, there is a much stronger case for moving work to where it is most needed. That is what this Bill will do. I feel that the Bill should receive the general support of the House, not only of Members from depressed areas, but of everybody interested in the general employment problem. It is, as the Chancellor told us, an experiment well worth trying. At the worst, it will give some employment where employment is badly needed, and at the best it may give birth to new industries which, in course of time, may go far to rejuvenating the distressed areas.
  6.35 p.m.
  Mr. A. BEVAN: The whole House will have felicitated the hon. Member for North Lanarkshire (Mr. Anstruther-Gray) for his sanguine disposition. His, indeed, must be a very happy life if he can see any ground for optimism in the proposal which is now before the House. I should be much more contented if I could find in the proposal any grounds whatever for hoping that it will have the effect which the hon. Member described. For the life of me, I cannot see how a potential manufacturer is to be attracted to establish a factory in a distressed area by being told that if he loses money he will not be required to bear all the loss, but only 75 per cent. of it. I have, I think, had a great deal more than the Chancellor to do with trying to promote schemes, to encourage schemes and to define schemes for the distressed areas in the last 10 or 15 years, and I venture to tell him that, although there is a general hope in all parts of the House that some measure of success will attend his proposal, those of us who occupy these benches do not expect any success whatever. I do not altogether blame the Chancellor for the paucity of the proposal which he is making. It is entirely unfair to expect the Chancellor of the Exchequer

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  to turn aside from his many other preoccupations and to provide a scheme of any value dealing with this problem.
  I have held the view for some time, and I believe many other Members share it, that there ought to have been long ago a special Minister to deal with the Special Areas. The Chancellor brings his annual Budget before the House, and of course he thinks that something must be in it about the Special Areas, and the proposal which he is now making is really an afterthought. It is not intended to be a contribution to deal with the problem at all. It is merely intended to be a proposal in order to dissuade people from saying that the problem is being entirely neglected. When I first examined the proposal I was hoping that there was something in it, but having looked at it carefully and having thought about a number of concrete instances where it might be applied, I came to the conclusion that a potential manufacturer would not be able to get money on any more favourable terms than he would be able to obtain in the open market.
  Let us suppose there is a finance house which has spare money on its hands and a man goes to it and says, "I believe I have a proposal for a factory in South Wales to produce this or that commodity. I can assure you that if I fail the money that you advance to me to set up the factory will not be entirely lost. You will lose only 75 per cent." I would like the Financial Secretary to tell me who would lend money in such circumstances. It is true that there might be borderline cases where a little additional assistance might incline the balance over, but what is there in such a border-line case to persuade the manufacturer to establish his factory in a distressed area rather than outside? As I understand it, the actual loss has to be made before a manufacturer gets the assistance of the company. I understand that it is not an annual subsidy.
  The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): The company provides facilities by which money can be borrowed which cannot otherwise be provided. It will be in no case necessary for a manufacturer to make a loss before he can borrow.
  Mr. BEVAN: I suggest that 'the advantage of having to bear only 75 per
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  cent. of the loss will not accrue to the manufacturer until the end. You are saying to the manufacturer, "If you have a proposal, we will assist you to borrow money for it by telling whatever person will lend the money that if a loss is incurred 75 per cent. will be borne by you"—
  Mr. CHAMBERLAIN indicated dissent.
  Mr. BEVAN: That is how I understand the position at the moment. If that is not the position, perhaps the Financial Secretary will say what it is. Is it to be a subsidy advanced to a company annually I Will manufacturers annually get the advantage of the additional credit facilties which the company will be able to afford to them? What advantage is furnished to a potential manufacturer intending to set up a factory in the distressed areas which he will not be able to obtain in the open market, except the advantage that only 75 per cent. of any loss will have to be borne?
  Mr. CHAMBERLAIN: I almost despair of making the hon. Member understand the meaning of the proposal. It is a proposal to advance loans. The advantage that the potential manufacturer will get if he is situated in a Special Area is that he will be able to obtain a loan from this company, provided that he can satisfy them, on terms which he could not obtain if he were not in a Special Area.
  Mr. BEVAN: I am still at a loss to know what advantage the manufacturer is to have. In the last two days I have been discussing the proposal with several business men, and they all take the view that the proposal of the Chancellor cannot in these circumstances provide any manufacturer with an additional inducement beyond what he has at the moment, because, in point of fact, if he hiss a proposal to construct a factory, the advantages of putting that factory outside the distressed areas will still outweigh any advantages of putting it inside the distressed areas under this scheme. I admit that, as things are now, it is possible for the Chancellor to make an abstract case to show that there may be certain advantages to a manufacturer in establishing a factory under this proposal. If, however, the Chancellor had a concrete proposal and a specific manu-

  1947
  facturer in mind rather than a general category, I fail to see that he is offering any inducement that will result in the establishment of a factory.
  Why should the Chancellor start an experiment of this sort without first exhausting certain remedies that he is able to apply? Why should we enter the area of experiment when we have not yet exhausted the possibilities of absolute advantages? There has not yet been general agreement as to what it is specifically that the distressed areas are suffering from. If we could agree about that we should make some progress. They are suffering because they are not able to attract their proper share of the new industries established in the country, and not merely from the fact that the heavy industries are declining; and it is difficult to see how these heavy industries can be revived, how, for example, to increase the production of coal by 50,000,000 or 100,000,000 tons per annum. The fact that there is unemployment in the distressed areas and not elsewhere is because the distressed areas cannot attract new industries. They cannot do so because they have special disadvantages. The light industries tend to establish themselves where there is a local market for a large proportion of their products. That is why I could not understand the hon. Member for North Lanark when he said that the abolition of the means test was irrelevant to this problem.
  Mr. ANSTRUTHER-GRAY: I do not think I said that it was irrelevant to the problem, but irrelevant to this Bill.
  Mr. BEVAN: But this Bill is supposed to be a contribution towards the problem. One of the reasons why the light industries do not establish themselves in the distressed areas is that a light industry is a peculiar sort of industry, which fastens on an area where there is a local market for its products. That is one of the reasons, as is universally agreed by industrialists, why those industries are found round about London. I ask, therefore, not as a partisan point but as a business point, why we should drain away from the distressed areas sums of money which ought to be left among the people there to provide the market for the products of the industries it is hoped to establish there. We
  1948
  have asked that question over and over again but the Chancellor always rides off and does not attempt to face up to it. Why take those millions of pounds every year from South Wales, from Scotland and from the North-East Coast? Frankly it seems to me there is no reply to the question, except that the Government think a means test is justified on other grounds, and that it is merely an unfortunate incident that those who suffer most from it are those living in distressed areas. I should have thought that if the Government were seriously facing up to the problem they would leave the money in those areas. That is one line of approach to the problem. I do not suggest that it is the only one, because the problem is a highly-complicated one and will have to be tackled from many angles, and I am sure no hon. Member on this side of the House will say that he has the sword of Excalibur with which he can lop off the head of the problem. Hon. Members should ask themselves what contributions can be made to the problem. I believe it is reasonable to suggest that we should not continue to extract from these distressed areas sums of money which in equity and from the economic point of view should be left to be spent there.
  We have made this plea over and over again, but hon. Members opposite always regard arguments from this side as though they were put forward merely to wound the Government, and our view has never received proper consideration. Some part of the problem arises from the fact that the distressed areas are the exporting coal areas. Two-thirds to three-fourths of the coal produced in South Wales is sold in the export market. The burden of selling that product in a competitive market falls upon one area, and that a distressed area, and the revenue flowing into the coal industry in that area is far less per ton than the revenue flowing into the other areas supplying the home market. If the home consumer of coal is called upon to pay an artificial price, as he is—and after June or July it will be an artificial price fixed by statutory companies—is not the community entitled to say that that artificial price shall support the revenue flowing into all parts of the industry and not go more to one part than to another?

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  I will put another argument, because I feel keenly about this matter, and this argument has been ignored for years. In 1930 I put on the Order Paper an Amendment to establish an export levy in Great Britain. That Amendment was not moved and never received the proper consideration of the House, because the Labour Government, being in a minority, could not allow the Amendment to be moved if they were to secure the rest of the Measure. If an export levy had been fixed in 1930 a very substantial inroad would have been made into this problem. I admit that the Chancellor may have the right to feel impatient about this, but the only reason is because he is the Chancellor and not a special Minister called upon to deal with this problem. If he were the thing would be immediately relevant to the whole problem. Every ton of grain and every bit of raw material coming into Britain is cheaper because of the coal sent out. If our imports had to bear the cost of double freights the cost of grain and raw materials would be very much higher. Therefore, these coal-exporting areas are subsidising every consumer of cereals and of raw materials in Great Britain. The burden of cheapening these imports falls upon three or four coal-exporting districts, and it seems to me quite reasonable to suggest that those districts should have access to the revenue which flows into the coal industry as a whole. The result of that would be that South Wales, Durham, Northumberland and Cumberland would be on the same basis as Nottingham, and portions of Yorkshire. In other words the coal industry in the exporting districts would be lifted out of the category of a. distressed industry. I sincerely hope that in the proposals which are to be brought forward in a month or two by the coal industry provision will be made for such a plan. The Chancellor of the Exchequer has on several occasions challenged us to be constructive and, therefore, I make no apology for going into this subject in some detail. There are afforestation Commissions.
  Mr. SPEAKER: I must ask the hon. Member to keep to the proposals in the Bill.
  Mr. BEVAN: I bow to your Ruling, Sir, but some hon. Members have been permitted to go outside the provisions of
  1950
  the Bill, and I thought I was entitled to say that there are some provisions which the Bill ought to contain. I will not pursue that point very much further. I am merely anxious to say these one or two words before I sit down. After we have established these factories in distressed areas we shall then have to keep them going. Two years ago it was suggested that there was only one way tot assist the areas to get back the industrial: life they have lost, and that was by the-grant of preferential railway rates. I see, no reason why that should not be done.- If the rest of the country is enjoying such-vitality that it is able to sap the life out of the distressed areas, then out of its superabundant vitality it should make some contribution towards the restoration of vitality in those areas, and it is reasonable to suggest that the distressed industries in the distressed areas should have preferential railway rates. It is not a novel idea. It has been adopted in the case of coal going to the ports and for some forms of raw material. These factories will die, after they have been established, unless they are given advantages against industries elsewhere. Hon. Members may say, "But why should a man who establishes a factory near Cardiff have to pay less for the transit of the products of his factory than his competitor near London?" The answer is that you are trying to give preferential advantages to industries in a distressed area, and preferential rates are a much more effective way of giving an advantage than this roundabout way of lending money. It is a continual advantage; the costs are kept down all the time, and it provides him with just that advantage over his rival which he needs to establish his factory in a distressed area. There is a further point. These industries will require light and power. We have in Great Britain an electric grid deriving its revenues from the country as a whole. Why should not these industries in the distressed areas receive preferential rates from the grid and the power companies? If you really want to give advantages to the distressed areas why do you not give, these preferential rates?
  I apologise for going, to some extent, beyond the proposals before the House and if I have done so it is because there is nothing in the proposals. I should have been only too delighted to confine myself to the limits of the Bill except.

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  that those limits are so narrow that it is impossible to stand on them for five minutes. I have been attempting to provide the House with concrete suggestions. If you are really sincere in your desire to re-establish the distressed areas you can do it. Some hon. Members may say, "No, we are not going to have this interference with the laws of supply and demand; industries must fight for themselves, and if industries cannot establish themselves in the distressed areas, let them go elsewhere." I can understand that point of view. They say that it is unfair, unjust, and uneconomic for the country out of the resources of the Treasury, or by the use of the national credit, to give to one competitor an advantage over his rival. I can see that. But that is not the ground taken by the Government. The ground taken by the Government is that it is now necessary to offer inducements to industries to establish and maintain themselves in the distressed areas. If that is admitted, the inducements offered by the Government are not nearly as effective as the inducements which lie in their power. That is a case to which the Financial Secretary to the Treasury ought to make some reply.
  I am sorry that I cannot take a more optimistic view of the proposals before the House. There are one or two other suggestions which I should like to have made except that the Speaker's eye is on me. I hope that this is not the last proposal of the Government in this matter. Some of my hon. Friends and I are rapidly reaching the conclusion that we shall not get any attention paid to this problem unless we make nuisances of ourselves in the House. I am beginning to feel that as representatives of the distressed areas we have been much too docile, and that if we had given the Chancellor of the Exchequer as much trouble over the unemployed in the distressed areas as his own friends give him when he proposes to tax them a little more, we should probably have had more attention given to us long ago. We are not going to rest content with this. The local authorities in the distressed areas all feel that they are being played with. They feel that these are merely empty gestures, and although I know that it will be possible for the Financial Secretary to the Treasury to explain
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  these proposals in midi more attractive terms, it is not his speech which is going to attract industries, but the proposals themselves. In the next few months before the Recess, unless the Government come forward with something much more substantial than this, we shall make their life very miserable.
  7.6 p.m.
  Mr. HANNAH: It is inspiring to find British people in the old and best traditions of this House really trying in a constructive way to carry out one of the greatest tasks that has ever been in front of us. The great majority of the speeches which have been delivered might almost equally well have come from any corner of the House. If there has been any difference it has been in the rather more detailed knowledge of company promoting that so many have shown on the Labour benches and which is not perhaps shared to the same extent by those on the Government side of the House. We all feel that the National Government has carried out a great work if we compare the condition of our country now with what it was years ago when this Government first took office. From my own point of view, if I had to face my constituents at the present time I should go to them with far greater confidence than I did at the General Election. The National Government is strengthening throughout the length and breadth of the country. [Interruption.] I know what hon. Members are thinking. Let me tell them what I am thinking. In a local council election last month we won three seats from the Socialists. I feel that perhaps I have been wrong to enter on even this amount of party bias, because I feel there has been something splendid in this Debate. At the present time nobody would deny that our country is on the whole in the best position of the seven great Powers, from the point of view of its economic position generally. The small Powers, not caving the—
  Mr. SPEAKER: I am afraid that that debate took place yesterday.
  Mr. HANNAH: It is a magnificent thing that we have the opportunity of carrying out this great experiment, for it is nothing less. The hon. Member for Motherwell (Mr. Walker), said that it would have been a good deal better if instead of a small sum £100,000,000 could

  1953
  have been provided. I cannot for a moment agree with him on that. America has shown how dangerous it is to try out an experiment on a huge scale without precedents, without anything really to guide you. Somehow or other things will come out differently from what anybody expects. From this small beginning, gradually learning from experience, we can work up to something bigger. The Chancellor of the Exchequer has very properly said that this is a tentative and relatively small experiment. I hope that we shall get the opportunity, on perfectly sound lines, of carrying out this great programme for bringing prosperity once more to these districts which once were the backbone of British industry. It has sometimes been said that a special providence looks after drunken men and fools and the British Empire, and I think that at the present time we have a special providence in this. Rearmament, which we all realise is entirely necessary, will help to a very considerable extent the difficulties in the distressed areas. In carrying out the new armament proposals of the Government we shall do a great deal to cure those difficulties. I want to appeal to the entire House for real enthusiasm. Let us try to make this work the beginning of a great new development. Let us sink mere party differences, realise that this is mainly an economic problem and do the best we can to carry out these proposals to a triumphant conclusion.
  7.13 p.m.
  Mr. HAROLD MACMILLAN: I am afraid that after the rather lyrical speech of the hon. Gentleman who has just addressed the House the few observations which I shall make will have to be on a lower plane. Nor will I attempt to follow the hon. Member for Ebbw Vale (Mr. Bevan), except to say that in the latter part of his speech he was on safer ground and conforming more to the rules of order than in the earlier part, when he was explaining the financial Clauses, which he did not seem to understand or had not read. I hardly like to speak in this Debate without paying my tribute to an attractive maiden speech which was one of its features, and I should like to offer my congratulations to the hon. Member for King's Norton (Mr. Gartland) for his first contribution to our Debates. He addressed himself
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  with great breadth of vision and clarity of argument to this problem on a very wide field, and he showed all the enthusiasm of youth which we like to see in this House. I am bound to say that it made me feel rather sad and old, and it recalled the enthusiasm with which 12 years ago, when I first came to the House, my hon. Friends and myself used to address ourselves to this problem. I am afraid that we have made little headway. There was in the hon. Member's speech a note of courage and critical observations on the Government of the day. I am afraid that he must learn to conceal that method, at any rate as long as the present control of our administration remains in hands similar to those which have controlled it in the last 40 years.
  The Chancellor of the Exchequer made a very proper appeal to the House. He said the Bill was a contribution upon a limited field and for a very small purpose, and that it was in no case a contribution to the wide problem of the Special Areas. He justly complained that there was a tendency for hon. Members to call for this or that remedy and when anything was done to ridicule—I think he said "denigrate"—the proposals put forward by the Government on a very limited field. That is possibly a fair and reasonable complaint. I shall try, therefore, to avoid that danger to-day.
  One of the troubles in our consideration of this question is that there are very few occasions when we can consider the wide policy of the Government. We are able to have either a Supply day at the request of the Opposition, and that precludes us from any reference to legislation, or a Vote of Censure, which is conducted in an atmosphere not altogether the kind in which we want to address ourselves to a consideration of these problems and to discuss them upon wide fronts. I remember that on the last occasion we had, by arrangement, two or three days set aside for just such a discussion. It was a useful and valuable experiment in this House. While I certainly respond to the appeal of the Chancellor that we should do nothing to minimise the practical proposals contained in the Bill, I appeal to him to give us, before the Session goes very much further, an opportunity for one of those wide discus-

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  sions upon the whole question of unemployment and the reconstruction of the distressed areas which will not be limited by the Rules of Supply or the circumstances of a Vote of Censure Debate.
  In spite of this self-denying ordinance, in which I appear in the rather unusual role of a strong supporter of the Government on this Bill, there is one thing which I must add to what has already been said, although I will not underline it. The hon. Member for West Middlesbrough (Mr. K. Griffith), the right hon. Gentleman the Member for Hillhead (Sir R. Horne), and other hon. Members, have referred to the question of the Special Areas being, as it were, for ever laid down by the mere chance determination of the Schedule to the Act of 1934. Everybody who knows how that came into being will know that it is not a scientific delimitation, to be carried on for all time. In respect of certain other considerations, the Minister of Labour has recognised that there are areas which should be called depressed areas, in connection with the administration of the Ministry of Labour and the working of the Treasury Minute regarding the placing of contracts. That shows that the Government recognise that the particular areas chosen, in the Schedule to which I have just referred, are based upon considerations which were perfectly reasonable in the summer of 1934 but cannot be regarded as permanently satisfactory. Indeed, the very reason given by the hon. and gallant Gentleman who was Commissioner for the Durham area, that he did not visit Tees-side because he was asked to make his report before he had time to go, shows that you cannot make that a permanent basis for the delimitation of particular areas.
  Nevertheless, I welcome the introduction of the Bill dealing with this limited part of the field. It is definitely in response, first to a recommendation of the Commissioner and, secondly, to a view which has long been felt necessary to meet a gap in the general financial system. As far back as the Macmillan Committee's Report there is reference to a procedure not altogether different from that which is embodied in the Bill, but it is fair to welcome any action of the Government that is taken in response to the points put forward by the Commissioner and to those which have been discussed
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  and supported by large bodies of opinion. There are one or two points of detail to which I hope the Financial Secretary will be good enough to give me a reply. The hon. Member for Ecclesall (Sir G. Ellis) has raised pouts to which I am sure the hon. and learned Gentleman will also reply.
  What interests me is, why do we choose this form of capital structure for the Bill? I strongly support the purpose of the Bill, which is to give long or middle-term credit to undertakings that otherwise would not be able to obtain it, but why is the financial structure of the Bill in this form? That question is bound up with the second question which is, what is expected to be the normal rate of interest at which these undertakings will borrow? What will be its relation to the market rates of to-day? The Government have chosen a capital structure that is more expensive than if they had borrowed the whole of the capital required on their own credit or had borrowed it short or long. If the Government had borrowed short and had advanced this comparatively small sum from day to day, they would have paid one-half of 1 per cent. If they had borrowed for 10 years on their own credit they could have borrowed for 2½ per cent. They have chosen a capital structure which will make the ordinary shares carry an interest of 3 per cent., and in respect of the preference shares the interest will be 3½ per cent. If the company is to be carried on and not to lose, the rate of interest for these loans must relate to the capital at which the money has been raised, and if the capital has been raised, as I think, unnecessarily extravagantly, considering the present situation in the money market, it is pro tanto to the rate at which the money will be re-lent to the undertakings that apply for it.
  What is to be the normal term for which these loans are to be made? I ask that only because there was something in the Chancellor's speech which I did not altogether understand. He explained the operation of the agreement referred to in paragraph 4 of the Schedule, and he alluded to what he called "the £2,000,000," and, "in the first year." He used the words not "the first million pounds" but "the first year." Perhaps that was an error and he really referred to the first block of £1,000,000 of loan.

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  I ask that only because I take it that the normal term for which this loan would be made would certainly be for much more than a year. It would be a three-year, four-year, five-year or, perhaps, 10-year loan, and the purpose of the company would be, not to demand a high rate of interest so that the loan would be paid off, but rather to hope that, during the period in which the loan is made to start an undertaking, and by the end of four or five years, the promoters may be in a position to float a loan in the ordinary way, and to obtain their capital in the money market by the ordinary method. Otherwise the rate of amortisation would be made rather heavy for the character of the undertaking. I hope that the Financial Secretary will be able to reassure me on those points. They are obviously important if this company is to perform the functions that we hope for it.
  The Bill clearly is not a very great or important contribution to this huge problem, but it is a contribution that has been asked for by successive inquiries, and in all parts of this House. Whether it contains exactly the right details, or whether it can be spread, as I hope, to a much wider field, it is a contribution to what is, fundamentally, one of the great problems of the day, that is of marrying the enormous rate of annual savings to the need for new investments, other than of a purely security type. It contains the solution of one of the most fundamental monetary problems with which our future is bound up. I welcome the Bill, and I am glad that the Government have gone forward with it. I hope that, having gone forward with this one of the many proposals that have been put forward, they will go forward with others, and that they will interpret the very real good will with which the House has met their proposals, not as showing that the House is satisfied that this is in any way a solution of these problems, but as showing that the House is prepared to accept it. I hope that the Government will, in the same spirit, give us an opportunity of debating in full the problem as a whole, and that they will come forward with much more far-reaching proposals when they have been able to frame a policy satisfactory to themselves and to the House.
  7.27 p.m.
  Mr. ROWSON: I rise to protest against the narrow scope of the Bill. I do not represent a constituency that can be called a Special Area. There are constituencies in Lancashire which cannot be described as suffering to the same extent from the unemployment problem as others, but we are suffering an injustice, as a county, in not being classed as a Special Area, entitled to consideration in the Bill. I have listened to the arguments put forward by hon. Members on the other side and to those put forward on this side, and I agree that steps should be taken to bring new industries into any area where they are needed.
  We are in a peculiar position in Lancashire. While we may desire new industries to be brought in, we have just passed in this Parliament the Cotton Industry Act for the specific purpose of buying out certain cotton spindles and closing down the mills. The Government are introducing Measures to assist industry at the behest of certain capitalists in Lancashire, but they are taking steps to close down certain mills and are narrowing thereby the field of employment. I know that it will be urged in support of the Bill that somebody may start a new industry, thereby lessening the number of unemployed in a given area, but hon. Members ought to know some of the facts with which we have to deal. The hon. Member for North Lanarkshire (Mr. Anstruther-Gray) claimed that a new light industry should be provided out of this Bill for North Lanarkshire, because it would relieve the distress of those who are suffering from unemployment in the coal and iron industries. One of the problems which we have to face is that although Lanarkshire had in 1935 only about 55 men employed in the mining industry for every 100 men employed in that industry in 1920, they produced more coal in 1935 than they did in 1920. It seems to me that this Bill will not, with all the support which we can give it, provide any remedy for that state of affairs.
  I mentioned the narrow scope of the Bill, and I want to protest, as a Lancashire man, against it. I would like it to be extended to other areas than those that may be specified. I understand that the right hon. and learned Member for Hillhead protested along the same

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  lines. Let us take the district of Westhoughton, which is not my constituency, but the hon. Member for that constituency has pleaded on its behalf in this House on many occasions. I am living in it, and I know the actual conditions that prevail there. Since 1934 no fewer than 19 different collieries in that constituency have closed down, and I protest that any Measure that is put forward in this House to relieve distressed areas ought to include an area of that kind. In the town in which I live there are three cotton mills which have gone out since 1926. Two of them have been demolished, and one of them stands idle to-day because it went into liquidation in March of last year. We ask that some consideration shall be given to a case of that kind. We have a large percentage of unemployed in our area, but there seems to be no extension of the provisions of this Bill to it. With regard to the mill that went into liquidation last year, schemes have been proposed, and I suggest that an area like that might be taken into consideration in connection with this Bill, because if the company in charge of that mill could get facilities like these, I aim certain they would take every advantage of them, and there would be a possibility of restarting the mill.
  On the general question of unemployment, we have had various statements made, but to my mind the Measures that have been taken by the Government to deal with the distressed areas are simply niggling, and they are quite likely to have no serious effect on the problem. We welcome what the Government are trying to do, but in my view these steps are certain not to touch more than the fringe of the problem, and I want hon. Members opposite to bear in mind what was said by the previous speaker, that it is necessary to deal with this matter in a more comprehensive fashion. We who are in the industrial areas and have to deal with the people who are suffering from unemployment there think that the Government would do far more good if they would agree not merely to act on these niggling lines, but to help us in our efforts to get abolished at least the household means test.
  7.35 p.m.
  Mr. FYFE: It has been some consolation to those who support this Bill to have heard to-day the general view ex-
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  pressed that it will meet a need and that its main apparent disadvantage is that it does not include sufficient areas. That is a great advance, we, believe, upon the point of view expressed by the hon. Member for Seaham (Mr. Shinwell), that even the £1,000,000 mentioned in the Bill would not be used. When one considers the criticisms that have been made against the Bill, and especially those by the hon. Member for Ebbw Vale (Mr. A. Bevan), who has unfortunately loft his place in the House, apart from the original confusion regarding the bearing of 75 per cent. of the loss, the hon. Member seemed to have the view, which I hope is held by him only, that that was going to fall on the person who borrowed the money and not on the Government supporting this company which is going to lend it.
  But apart from that, his criticisms seem to have fallen into two divisions. In, the first place, Is this really going to provide an additionally attractive means of getting money at all? The hon. Member said, "How is it going to be more attractive than any other form of borrowing?" The real support that the Bill gives to these areas is that it will enable money to be got where, without the machinery of this Bill, it could not be got at all. It is not a question of getting it on more attractive terms; it is a question of getting it at all, which could not be done without this machinery. Hon. Members know very well that in all these areas to-day there are the shells, the buildings, that once housed industries which were active. What good are these shells if you have to go to a hank for an overdraft to start a new industry?
  This company will provide, not only the only means by which that money would be forthcoming when the risk is so great, but provides at the same time a machinery of assistance to those who are setting out on a new venture. As I understand the purpose of the company, it is that there will be at the disposal of those who wish to start a new industry financial guides who will give them the help when the money is lent which otherwise they would only receive at that time in the history of a business when its overdraft is so high that the bank has to place a director on the board. It is to anticipate that, that the machinery of this Bill is present to help an industry.
  The hon. Member went on to his second point, which was this: Why should

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  they go into the distressed areas at all? It is surely rather a trite and poor view of human nature, even of those who happen to be politically opposed, to suppose that to-day there are not those who are most eager, if they are given any vestige of an opportunity, to do something which will help these areas and especially to do something which will benefit the people in them. Local patriotism, local feeling—call it what you like—a realisation of what people are suffering in these areas will draw people there if they get the chance. As I have pointed out, in so many cases to-day it is not a question of getting your buildings, because they are there; you want the capital to put into the plant and to get something going.
  We had to find a scheme that would give people the chance of acquiring plants, and we shall have in due course to consider whether there is not a necessity, not merely to provide capital for those who are to purchase plant for an industry, but to have some central body which will purchase plant wholesale and may adopt some leasing system by which it can be given out to new industries, without their being required to exhaust so much of their capital in expenditure on plant. Some system of that kind may be a most helpful adjunct, but the first thing is to provide the chance of getting the plant, and that is what this Bill is doing.
  The hon. Member said it was an afterthought, dragged in at the tail-end of Budget activities to show some regard to the special areas of this country to-day. Hon. Member after hon. Member has pointed out, however, that this is in answer to a request made by the Commissioner for the Special Areas, and not only so, but the Commissioner pointed out that the industries which were required were the smaller industries, which are those for which this assistance is designed. It is idle to say that the smaller industries demand a market ready at their hands, when the Commissioner, after these exhaustive and full inquiries, has said that these are the very industries which these areas require. That being so, surely these are the industries to be helped, and surely that is the purpose of the Bill.
  We all agree that it would be better to see the Bill extended to areas which are not at present scheduled, but when
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  one finds that this Measure was greeted by hon. Members like the hon. Member to whom I have just referred, and who has just left the House, as one which was bound to fail and one which, according to him, was bound to have the result that its facilities would not be drawn upon, surely it is necessary to test that out where, according to the report itself, the conditions demand it most urgently at the preent time. We firmly believe that this is only a first step and that we shall find, through the success which this first application of it will have, that it will be extended, and we shall see the same facilities offered to those areas which, although not now scheduled, yet seriously need the assistance which such a plan would give.
  I have endeavoured to deal with criticisms which have tried to show either that there will not be a demand for these facilities, or that they would not help if they were demanded. I only ask, in conclusion, that hon. Members should consider these proposals from the point of view of the type of industry and business that they are designed to help. I could not help being slightly amused when I heard my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan), who, I am sorry, has also left the House, talking of the amortisation of the loans. Unfortunately, it is not by a local authority amortisation that you can deal with loans to businesses of this type. You hope to reduce your indebtedness to such an amount that the bank will let you carry on and will not press you, and I feel—and I say it in all humility and sincerity —that what we are seeking for here is that these five-year loans up to £10,000 will bring the businesses to this position, that at the end of the five years they will be able to say to the banks, "Well, we are a going concern. It is true that we still owe you £7,000, it may be, but there is the business, there is our good will, there is our plant, in addition to the shells that were there before. Is not that worth giving us our ovedraft for and letting us carry on until things improve still further?"
  Nobody suggests that any venture can at once start an amortisation fund of over £2,000 a year providing for the interest, but they can bring the business to that state that they will be able to go to the bank, or the insurance company, or

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  some other persons, and get the necessary help from them. That is what we are looking to. This is a practical Measure dealing with the practical problems which meet the small business man and the small industrialists as we know them in the industrial parts of this country. It is because it does something practically to meet what has been so badly needed during the last few years that we welcome it, not only for itself, but as the harbinger of better things to come.
  7.45 p.m.
  Mr. MAINWARING: I have listened with somewhat mixed feelings to this discussion, and have been wondering what is the picture of the areas referred to as Special Areas that exists in the mind of each hon. Member as he speaks. The hon. Member who has just spoken evidently had in mind an area where there are empty factories or workshops, with buildings intact, suitable for the commencement of the new business, subject only to the introduction of the machinery and raw material required. I represent the most distressed area in this country, and there is no such workshop or factory, idle or working, there. Such a thing does not exist. The black areas of South Wales, the valleys running down towards the ports of Newport, Cardiff and Swansea, present no idle workshops; they are not there, and never were there. This is what the Government have to realise. We are discussing the problem of depression, but this afternoon what has impressed my mind much more than the depression in certain parts of the country has been the depression in the Government, and the deepening depression of hon. Members who have spoken here to-day.
  I cannot understand where the hon. Member got the idea that there is a general impression that this proposal is going to meet the problem. Believe me, no one who sits on these benches is under that impression. There cannot be an individual here who for one moment would express the view that this proposal is in any way meeting the problem of the depressed areas. Examine the proposal itself. Special Commissioners were set up some time ago, and in their reports they have happened to refer to the fact that under their authority they are not entitled to assist any undertaking carried
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  on for profit: The Government have fastened upon this one question: Is it possible that, somewhere, there may be some individual who has failed to obtain credit, but who, if he had it, might start some little workshop that would employ some boy or girl in one of these depressed areas? And, to remove the possibility of that being the case, they create this corporation. There is no evidence at all that there are individuals anywhere in South Wales who have been seeking this credit and have failed to get it. Is there any such evidence from any other part of the country? I should have expected the Chancellor to say, "We are being continually besieged from all the areas regarded as Special Areas with requests for credit facilities, and in order to meet those requests, we are creating this new piece of credit machinery"; but all that they have had so far is a suggestion from the Commissioner.
  The suggestion of the Commissioner, however, is not going to make this work. However laudable may have been the appeal of one hon. Member this afternoon, that we should all combine in a vast united effort to make this a practical proposition and to make it work when it has left us, unless the Bill contains within itself the conditions that will make it practical, nothing will ever make it practicable when it has left this House; and there is nothing in the Bill at this moment that will ever provide work for a single individual in the Rhondda Valley. I represent those people, and possibly the Chancellor would excuse me if I expressed myself in stronger terms on this question. Those people are looking for something, and the House of Commons this afternoon is calmly going through a farce. It is a farce pure and simple. The Chancellor himself—let us give him the credit of having said so—in introducing the Bill this afternoon, said that it is a farce. He did not use the word "farce," but he was careful to explain that this is not intended to deal with the problem of the depressed areas, but is simply going to deal with one special little thing. In other words, we are going to make it impossible for the Commissioner next year to say that there are no credit facilities available for those who want them.
  But, as has been pointed out many times already, the credit facilities will be no cheaper, they will be on no easier

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  terms than before, because, whoever the individual may be, and wherever be is situated, who has some notion of commencing a new business, if he has no capital resources himself, or only limited capital resources, he will seek assistance to obtain what he wants. He will go to some bank or financial institution, place his proposal before them, and, if he satisfies them, there is no need for him to be without credit to-day. Indeed, if we were discussing the British banking system, instead of this special little problem, there would be heated defenders of the banking system from the opposite side of the House. I have heard them more than once, during my brief membership of the House, defend very heatedly the British banking system, and assert that there is no sound business proposition in the country for which credit facilities cannot be obtained. That has been said over and over again. Therefore, it comes to this, that it may be possible that, by carrying a slight additional risk beyond that which is ordinarily taken, we may find somebody, somewhere, opening a fried-fish shop or something of that kind.
  These small capital units of £10,000 are not going to find employment for the tens of thousands of people who are unemployed. How many of these little capital units would require to be dotted around within a short distance of, say, the Port of Cardiff? We have in the Rhondda Valley over 20,000 people unemployed. How many of these units of capital must be situated somewhere in that district before all those people will get employment? Moreover, the Commissioner who referred to credit facilities has already informed the Government that the Rhondda Valley cannot expect to have this scheme applied to it. The Government have been told that quite clearly, and it is the greatest condemnation against them. In that district there is an idle population at the present time of at least 50,000, and, as a, matter of fact, 80 per cent. of the total population of 140,000 are living on public funds. The Commissioner said that it will not be possible to attract new works into that area, and, therefore, the Government are going to leave that community, within the narrow confines of that valley bounded by its mountains, until by some natural process they die out. That is the prospect and that
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  is the proposal so far as the depressed areas are concerned.
  To meet that problem we have this Bill, and that is all. I repeat what my hon. Friend the Member for Ebbw Vale (Mr. Bevan) said—it will never do it. I am confident that, when the next Budget is introduced by the right hon. Gentleman, he will, after having referred to this experiment of creating one company with a nominal capital of £1,000,000 which has produced no results, bring forward a new proposal to create a new corporation with a, nominal capital of £10,000,000 in order to see whether that will attract anything. On the assumptions laid down in this Bill there is no promise of any kind that any relief will be given to our people. It is really farcical, and, indeed, worse than farcical, because a thing cannot be an unrelieved farce when there is so much tragedy behind it. It is the tragedy of that valley, and of similar areas that I know well in this country, that compels me to tell the Government here and now that they are not merely tinkering with a business proposition, but are tinkering with a ghastly tragedy affecting thousands of lives in this country, and all that they can do is to ask that this Bill should receive a Second Reading. The worst we can say about it is that its terms are such that it fails to get anybody to go into the Lobby to vote against it.
  7.58 p.m.
  Mr. LECKIE: I had not intended to intervene in this Debate, but, on listening to some of the arguments from the Opposition benches, certain facts occurred to me which I think are applicable to the Bill, and which I should like the opportunity of putting before the House. Many hon. Members on the Labour benches have talked as if this Bill was intended to bring about a complete revolution in the distressed or Special Areas, but that is not the object of the Bill at all. The Bill is not a panacea for all the troubles of the distressed areas, which we on this side know just as well as hon. Members opposite. It has a definite object. It is an experiment—a modest experiment. The Chancellor of the Exchequer did not put his claim very high when he referred to it in his Budget speech. But it is an experiment which has great potentialities, and, I for one, am disappointed that the Opposition should have treated

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  it so scurvily. I hardly expected anything else, however, because we all realise how depressed and how pessimistic Members on the other side are.
  It is only natural, perhaps, that they should be pessimistic about this Bill, but we are not pessimistic. I believe in its own way it is going to be a great experiment. One hon. Member declared, perhaps rightly, that it would not affect the unemployed in the iron and steel industry. Whether that is so or not, it has not been brought in with that express object. It has been brought in to encourage the starting of new industries in a comparatively small way in the various areas that are called "special." You cannot stimulate the heavy industries artificially. I have no doubt that the Socialists, if they got into power again, would endeavour to start national factories or mills for manufacturing steel or iron, but that would inevitably lead to disaster sooner or later. The general policy of the Government is gradually to make inroads into the unemployment in the iron and steel industry. If you compare it with what it was four years ago, you will see the improvement that has been brought about by the steady, sane policy of the Government.
  I have said this is an effort to start new industries and I believe it will do so, not immediately, perhaps, but gradually. The Government have been charged again and again with doing little for the depressed areas. Now, when they come forward with this little Measure, it is received in a very ungrateful manner. No Government can start new industries themselves successfully. I have been in business all my life and experience has shown that new industries can only be started by private enterprise. There is a saying that the Almighty helps those who help themselves, or at least show willingness to do so, and I wish I could see more of that willingness on the other side of the House than is displayed when this matter is under discussion. I have felt for some time that the people in the depressed areas are too apt to take up a defeatist attitude, to throw in their hands as it were. That will never lead a depressed area anywhere. In my constituency and the neighbourhood, when the crisis came in 1931 we found ourselves a very depressed area. There was tremendous unemployment. The heavy
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  iron and steel works, which we had had for a century, simply closed down and have now left the district never to return. But I am glad to say the manufacturers in the district did not take that unfortunate position lying down. With the grit which always stands out in South Staffordshire men, they looked out for new directions for their energies and, with the co-operation of their workpeople, many industries that were quite new to the district have been opened up, and other industries have been widened out considerably. Many of them have been started in a very small way.
  It is that kind of business that the Bill is going to encourage. I know a man who started a business in a small way a few years ago with a guaranteed overdraft of a small sum at the bank. He has gone on from strength to strength, and he is now the proprietor of a very flourishing business employing a considerable number of men and women. I know another man who started in a small way and he has also gone ahead steadily, and is now employing many hundreds of hands in manufacturing lines which were not manufactured in the district before. So that in these four years South Staffordshire has been taken out of the slough of despond in which it was in 1931 and, while it is not so prosperous as we should like it to be, there is no comparison between the present position and that of four years ago. What South Staffordshire has done other areas can do if they have the faith in themselves, and the pluck that is necessary to carry it out. This Bill will provide the wherewithal for doing it, and I welcome it very heartily as a step in the right direction. I would advise hon. Members opposite not to despise the day of small things. Small businesses become great businesses and we know, alas, that sometimes great businesses become small businesses through inattention. I hope that, in spite of the opposition that has been expressed, the Bill will do a great deal in a quiet way in helping the depressed areas. I look forward very hopefully to its operation. The Chancellor deserves every encouragement for bringing it in instead of the cold water, a plentiful supply of which is always ready from the Opposition benches. I am sure he will not be deterred by any of the criticisms that we have heard from putting it on the Statute Book at the earliest moment.
  8.10 p.m.
  Mr. POTTS: The last time that I raised the question of my constituency the Minister of Health made the definite statement that Barnsley would be considered. Relying on that statement I have not troubled the House again till now. I assume that the Minister had authority to make the statement in the absence of the Chancellor of the Exchequer. Barnsley is the centre of the mining industry of Yorkshire. Large numbers of people are suffering enormously, and the borough is in a very serious condition. If the Chancellor is going to do nothing, we Yorkshire Members must come together in joint consultation to force his hand. In January, 1930, there were in Barnsley 6,710 wholly unemployed; in March, 1935, there were 6,738, and the figure that I have received to-day is 6,780. There is also a very large number of suspended people who get three days work in a week and three days unemployment pay. There is one large colliery outside the town which is working three days a week and looks like continuing to do so, and other collieries in that part of the West Riding are doing very much the same. The Chancellor ought to do something for Yorkshire, and for Barnsley in particular. Now that I have brought the matter to his notice I would ask him to keep his mind centred on this area. Rates in Barnsley last year were 18s. 11d. in the £, and in the ensuing year 18s. 2d. In such a distressed area it is a serious matter for the people resident there, and even for the business people, who have drawn my attention to the position and asked me to urge upon the Cabinet or the appropriate Ministers that they should endeavour to do something for Barnsley. I leave the matter there, and will conclude by again asking the Chancellor of the Exchequer to give consideration to Barnsley, which I hope he will do to the best of his ability.
  8.16 p.m.
  Mr. WISE: The hon. Gentleman the Member for Barnsley (Mr. Potts) has put in a very eloquent plea for the special consideration of his own area, and by so doing has drawn attention to one of the greater objections to this Bill as it stands. The moment this sort of thing is done as a Government measure, there is not one of us representing the industrial areas who will not have the same difficulty of our people saying, "Why
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  should we not have a cut out of this?" That is a very serious objection to the Bill. But there are more serious objections even than extending what I may call the dockyard complaint to every industrial area. We have seen this so often in this House. Hon. Members, quite properly, whenever the Government build a cruiser rise to their feet and say, "Why the Clyde built two cruisers last year and the Tyne only one. What has the Tyne done wrong?" Surely we do not want to extend that principle. The fundamental objection to the Bill goes deeper than that, and it was well expressed in the speech of the hon. Member for East Rhondda (Mr. Mainwaring), to which I listened with very considerable agreement. His area is one of the worst in the country from the point of view of distress, and he said quite truly that there was no hope of relief for that area in this Measure because this picture, which he so truthfully said, of beautiful factory buildings merely waiting equipment and working capital in order to produce goods does not exist. Even in most of the areas, to assume that the factory buildings are fit for use now is to assume that there has been no change in factory construction in the last 70 or 80 years.
  Industries did not leave these areas for fun. There was no reason to drive them out except the cessation of the demand for the goods which they were producing. In the South Wales area and in Durham there is ample and very good labour to work the factories, fully desirous of obtaining employment, and yet employment has gone from them. We must go back to the fundamental cause of why that employment has gone, and even to the fundamental cause of why that enormous supply of labour ever went there. We must remember that the vast bulk of it has not been in those distressed areas for many generations. A very simple example is the County of Durham, where in the nineteenth century the population of the county increased 10 times, whereas the whole population of Great Britain only doubled. There was an enormous inflow of men seeking work because at that time there was work in Durham. There was a demand for the coal which Durham was able to produce, and many of the heavy industries went northwards in order to get near to the

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  source of their main raw material, which was coal.
  Exactly the same consideration applies to South Wales. When you see the assemblage of the unemployed in South Wales now you find among them Irishmen, Scotsmen and even in one place, I believe, in Merthyr, a very healthy and flourishing colony of 'Spaniards, who have been there for three generations. [An HON. MEMBER "Any Englishmen?"] Very few Englishmen, and a certain number, naturally, of Welshmen. All this vast number of people went into those areas, and the industry moved from them. There is only one solution. They also must move. You cannot restore to the areas from which this industry has gone any fresh little driblet sof workshops here and there, and if you could, under this Bill, so restore it, would it, in fact, be playing fair with the other industries of this country to subsidise competition, even though it were in distressed areas? The transference of the population is going on the whole time. I believe that I am correct in saying that in the last 10 years 250,000 people have left South Wales for areas where there is more work. The bulk of them have found profitable employment and have now settled down as citizens in those areas. In the prosperous areas of the Midlands, in many cases, there is a shortage of labour. Surely it would be better to absorb these populations there than to consider some form of patching up, and it would be better, instead of this very temporary palliative condition—I do not think that anybody really expects it to do very much good—if we could have a little longer vision and a more permanent policy in dealing with this problem. The problem has been permanent enough. It is not merely the result of the last depression. The depression in these distressed areas started many years before the financial crisis, the slump or the economic blizzard, or anything else.
  I would appeal particularly to the Chancellor of the Exchequer in this year of all years, when we hope to celebrate most fittingly, if we can, the centenary of the birth of his very great father. Would he have taken so short a view of the solution of this problem? He was the only Englishman, I think, in the last 100 years who has understood the purpose for which the British Empire was meant,
  1972
  where there is undeveloped wealth, where there is room and opportunity, and where these men could go, remembering always that in these distressed areas you have the finest material for new development that you can find. The record of Wales in migration a very good one. You have a Welsh settlement in the middle of South America still speaking Welsh, building up a new Wales in the countries to which those people have gone. Surely it is possible to do that. If you can do it in an alien country, do it under the shelter of our own flag. There has been to date only two things lacking to make this policy successful—a well-worked out scheme for complete community settlement and an assured market for any surplus goods which those communities may produce, and the adequate finance to ensure a fair chance for these communities and a guarantee to the countries to which they go, that these communities are never likely to become a charge upon public funds. Surely if we are going to guarantee losses, would it not be better to guarantee the losses of individual communal migrants than to guarantee losses in the way proposed in the Bill? There is a shortness of view in these matters that might easily be overcome.
  I do not believe that there is unwillingness in the overseas countries to assist these schemes. At least their statesmen say there is not. Statesmen in many parts of the Empire say that they are awaiting the provision of such schemes. The Chancellor of the Exchequer would probably find it not necessary to give a guarantee with the taxpayers' money. Surely in this form of development there lies the only solution which can be provided for this most appalling problem which all of us feel so deeply. Here are these men. If they are left in the distressed areas we know that they will not be re-employed. we know perfectly well that these small workshops here and there are not going to provide, as the hon. Member for East Rhondda truthfully said, employment for any large number of men. They are not even going to start the ball rolling so that other industries will come after them into the sort of partial prosperity that they may create. We know that transference must take place. The unemployed to

  1973
  whom I have spoken also know that transference must take place. They know that they have to leave and go somewhere else, but at the moment their vision is limited to this country. They realise that they have to go somewhere else in Great Britain.
  Mr. LOGAN: Does the hon. Member really put forward the suggestion that migration is the solution of the problem in this country to-day? If so, to what country will they go?
  Mr. KIRBY: Is the hon. Member not aware that during the past four or five years in particular a very large number of people who emigrated to the Colonies have come back to this country?
  Mr. DEPUTY-SPEAKER (Captain Bourne): I do not think that we can go into a general discussion of migration on this Bill. I have allowed the hon. Member to raise the subject as a. possible alternative suggestion, but we cannot pursue it in detail.
  Mr. WISE: I am afraid that that Ruling will preclude me from replying to hon. Members opposite, but I hope that I shall have an opportunity to reply in detail on some subsequent occasion. It seems to me that this Bill can only mean extending credit where that credit must of necessity be wasted. I cannot see how any industry likely to prosper is going to get very much help. I cannot see how these small sums are going to enable any reasonable factory to be set up to bring employment to a district. The lighter industries are not going to the distressed areas to put up their factories. Even with this partial subsidy I doubt whether they will be attracted to go there. They have the question of transport, the nearness of markets and many other things to consider, which will govern the situation. I hope that this will be the last effort of this kind to deal with this problem and that we shall have a much longer vision, not confined to paying the promotion expenses of a financial syndicate, and guaranteeing their losses in respect of too small a sum to do any real good.
  8.30 p.m.
  Mr. A. EDWARDS: It would be interesting to the House and the country if the Government, having decided to bring in
  1974
  this Bill, would apply their minds to seeing how it will work and how to make it work. I am vitally interested, and I have listened all day to find out if this is a really practical proposition. I come from a district which will perhaps be much affected. The last speaker from the other side said that my colleagues on this side take a very poor view of humanity. There are some very good reasons why hon. Members on this side look with suspicion upon some of the proposals that come from the Government. One of my colleagues from another iron and steel district had something to say about the iron and steel industry, and I should like to tell the House something that happened 14 or 15 years ago, during the Sankey Commission. The miners of this country were appealing for a rather higher standard of life, and one of the iron and steel magnates was called to give evidence. He said that if their demand was granted it would absolutely ruin the industry. In cross-examination he was asked for certain figures. He was asked how much royalty was paid on the production of a ton of iron, iron ore, and coal, and in the end the figure totalled up to 10s. 10d. royalty paid to people who never touch the commodity and had nothing to do with it. He was asked by one of the members of the Commission if he still felt that the miners could not be guaranteed a little more if something could be done with regard to royalties, but he said that that was not his business.
  The last speaker told us that the one solution for the problem is migration, and that was the solution offered to the Commission by that particular witness. A comparison was made with wages paid in this country and America, and he said that if we could get the production that they have in America we could pay just as high wages. One of my colleagues has already told the House that last year the iron and steel industry reached a record of production and profits. Another speaker reminded us of the progress in the last four years. They have broken all records in the industry in that period, but there has never been a voluntary increase in the wages during all those years. Moreover, during those years some 6,000 fewer men have been employed in our local iron and steel industry than in 1929. The workmen in this industry have as much right to live as anybody else.

  1975
  When hon. Members opposite consider these questions they have rather a different background from ours. They have a background of prosperity and privilege; hon. Members on this side have the background of poverty and degradation. You must, therefore, make due allowance for the expressions of opinion of hon. Members on this side of the House. When the Chancellor of the Exchequer was speaking the other day about strengthening our defensive forces I thought that he might have said a word about strengthening the men who will have to man them. I do not think that the Chancellor of the Exchequer seriously believes that this £1,000,000 is going to help very much. I doubt whether industries will be attracted to these areas by this proposal, but, as he has said, it is an experiment, and in that case I want to make an appeal to him. I know something about one particular industry which is not represented in the North-East Coast area, but which is one of the most prosperous industries in the country. It is working full time and, indeed, overtime. It is the kind of industry which I think should be placed and could be placed in distressed areas.
  If you introduce factories it is going to take away work from other districts. It is no good putting don a steel plant in Jarrow to employ 3,000 men, because it will put out of work 3,000 people in Middlesbrough. That is not good business. But the industry about which I am speaking could be started there. We have the men, the brains and the ability to build up a successful undertaking. But £10,000 will not do it. An amount of £100,000 would do a good job. It would be a safe investment. If a factory of this kind could be put down with a guarantee it would be sensible business. I do not want to mention the name of the business, but I am quite prepared to give hon. Members particulars privately. If the proposals in the Bill to help, small businesses are not successful, I hope the Chancellor of the Exchequer will tackle larger businesses of the kind I have mentioned, which might succeed in these areas. I do not like the idea that the Government have no alternative for these people except for them to go abroad; especially when the people abroad do not want them. That is not a serious
  1976
  contribution to the Debate. I hope the Chancellor of the Exchequer will bear in mind the possibilities there are if he would be a little more lavish in his guarantees, for in that way the scheme might be of benefit to the Special Areas.
  8.39 p.m.
  Mr. LAWSON: Whenever these melancholy Debates take place we can almost tell how many Members are going to attend and even the names of those hon. Members who will be present. But we had a stranger in the House to-day. Indeed, I was so startled when I saw him that I almost spied strangers. The speech of the hon. Member for King's Norton (Mr. Cartland) was a maiden speech and notable for the fact that in eloquent terms it expressed what we know is the deep dissatisfaction of hon. Members behind the Government with their handling of this serious problem. In fairly emphatic language the hon. Member told the Chancellor of the Exchequer that whatever value there was in the Bill it was merely playing with a, vast problem. The Chancellor of the Exchequer made it quite plain that this is merely an experiment. We who know the problem so well, its range, its tragedy and the great damage that it is doing to the physical and moral welfare of the country by its continuance, would be wrong both to ourselves and to the nation if we grew enthusiastic over a Bill of this nature. It is said to be an experiment. How many more experiments of this kind are we going to have? The hon. Member for Smethwick (Mr. Wise) spoke about transference. It has been going on for at least 10 years; at least 150,000 men have been moved from Durham in the last 10 years. But in spite of that the problem gets worse. In a recent report the authorities of Armstrong College said:
  "In 1931 a survey was undertaken by the Armstrong College of the industrial position of the North-East Coast area as things were at that time, and it was apparent from this survey that even in a good year of trading there was a surplus of some 64,000 males. This survey has been recently brought up to date by the staff of the Economic Department of Armstrong College in a publication entitled The Industrial Position of the North-East Coast of England,' and it is clear from this new survey that the area has not yet passed its depressed economic condition and that the 1931 estimate of the surplus male labour was too low."
  That means that it is higher to-day than it was in 1931. We have had transfers and

  1977
  we have had emigration, which was tried on a great scale. We have had derating as an experiment. The right hon. Gentleman had great hopes with regard to his derating scheme, but the people in those areas would not exactly say that derating has been a success as far as they are concerned.
  Mr. CHAMBERLAIN: They would not like to change it.
  Mr. LAWSON: I can tell the right hon. Gentleman that if he would put Durham, so far as the county area is concerned, in the position they were in prior to de-rating, they would be glad of it. All that happened as a result of derating was that the great industrial plants in each area —and Wales was in the same position—were relieved of three-quarters of their rates. That enabled them to produce more cheaply. They sold cheaper coal and thus passed on the benefit to the foreigner. I do not know what the right hon. Gentleman's view may be, but there is a school in this House and in the country which sometimes whispers, but sometimes says bluntly, that the areas such as Wales and Durham, and some of the other depressed areas, suffer because of extravagance in their administration. I would like to point out that there hat been an inquiry in Durham on the question of administrative costs, and we should be glad if there could be a person or body in this House responsible to the Government who could take note of the results of that inquest. Will the House believe that in education, both high and low, and in the Poor Law institutions—the workhouses as we used to call them—the costs in Durham are considerably lower than the average for England and Wales? The real trouble is the rateable value.
  Until quite recent years in these old areas, which were the first products of the industrial revolution, and in my own county, the great mass of the people was what might be called a shanty population, because the houses were so poor. I am sure that the critics of South Wales, Durham and Scotland, if they knew intimately the problems that had to be dealt with there, the grossness of sanitation until 20 years ago and the scandalous condition of housing, would appreciate the magnitude of those problems. I could describe conditions which existed nearly up to the War—and I am sure my fellow Members from the mining areas could do
  1978
  so—which would positively make the House sick. Such were the problems that had to be faced. The only rateable value worth while was that of the industrial plant.
  As an illustration let me refer to the county of Durham, where the inquest has been held—an inquest of which more will be heard. Throughout England and Wales the houses containing five rooms or more for rating purposes represent about 34 per cent. of the whole houses to be rated, but in Durham they represent 9 per cent. There has been no rateable value at all since the right hon. Gentleman took the industrial plant from us. However, he only completed what had been going on for a long period.
  This experiment has been going on for some years now. The right hon. Gentleman gave us the Commissioner for the Special Areas, and he cannot charge us with falling before him with enthusaism for that. He will well remember what we said at the time. We told him that he was only dodging the issue of the Special Areas. We told him that he had appointed the Commissioner only for the purpose of getting rid of the problem here as far as he could, and that has turned out to be the case. His Commissioner is doing nothing. The local authorities have to meet the Commissioner sometimes and they get a little here and a little there, but all that has really happened has been that the Commissioner has enabled the Government to dodge their own responsibility.
  I have heard hon. Members to-night complain that the Special Areas are very limited. Some of them were complaining that their constituencies were outside the Special Areas. I was complaining in the same way when the Measure dealing with the Special Areas was passed. The astonishing fact is that one has to think twice before one knows which areas are inside and which are outside. I heard speaking to-night an hon. Member on this side of the House who was under the impression that his division—which is next to mine—was in a Special Area, but I can assure him that it is not. I believe it is calculated that there are only between 300,000 and 400,000 in the Special Areas, and that does not touch the edge of the problem. The unemployed population in the industrial divisions affected is 1,300,000, and it is only playing with the

  1979
  problem to limit it to 300,000 or 400,000. The right hon. Gentleman said, of course, that the front was being narrowed in order to experiment. Is he satisfied with the result of that experiment? His Commissioner has now been working for some three years. He has been in close touch with the authorities, and they have given him all facilities and co-operated with him. As a matter of fact, I sometimes think the local authorities have been too kind to the Commissioner, for the very simple reason that had they been less easily satisfied by him the Government would have had a little more trouble on their hands.
  I think it was the hon. Member for King's Norton who pointed out that a great mass of people were being physically undermined and in some cases were being undermined in moral by unemployment, and my hon. Friend who opened the Debate from this side also dealt with that aspect of the question. There are whole villages populated by people who used to be among the most independent and virile types to be found in this or any other country, and in what plight do we find them to-day? Up in the fells, in the remote parts of Durham, down in the valleys of Wales, you had, years ago, in the days when there was regular work, men and women who would have been insulted by the offer of a new suit of clothes. They would not take anything from anyone. In what condition are they now? I do not want to undervalue the work of those engaged in the social service movement. I appreciate the spirit of the people who adopt villages. But knowing what I know of these men and women as they once were, and in view of what I have seen lately, I am bound to say that I would respect my people far more if they refused to accept a single copper or a single suit or a single element of charity from the people who are giving charity.
  The Government have a great load of responsibility to bear in this respect to hundreds of thousands of these men and women. There are about 2,000,000 unemployed and well up to 400,000 of them have been unemployed for nearly a year. About 800,000 have been unemployed for more than three months. Surely, that is a national emergency. Hon. Members opposite who are concerned about the
  1980
  defence of the nation do not want experiments in that direction. They want to have things done at once and they have compelled the Government to do things at once.
  Mr. EDE: To build the battleships first and experiment afterwards.
  Mr. LAWSON: The Government did not put somebody from outside the House in charge of that matter. They did not even put a private Member in charge of it. They appointed one of the chief Members of the Government to look after the question of rearmament. Hon. Gentlemen sitting behind them saw to it, that no one outside the House was appointed to take charge of that matter. They wanted someone whom they could deal with and criticise here. My charge against the Government and the reason why I am not going to say "thanks" for this Bill, is not that the Government have not done all that they might have done. I agree that this is a many-sided problem, a problem so great that it will almost break the hearts of statesmen before they can dispose of it. My charge against the Government is that they have never attempted to face the problem. They have shoved the responsibility as far away as possible. They have never got down to it or even shown that they meant to get down to a proper examination of it either as to its range or its depth or possible methods of solution.
  Before there is any settlement, I am sure the particular feature of the problem to which attention has been called by the right hon. Gentleman the Member for Hillhead (Sir R. Home) will have to receive consideration. I do not wish to go outside the terms of the Bill in dealing with that matter. I am not so much concerned about the financial aspect of the Bill. If it does any good at all I shall be the first to thank the Government and to say that I was wrong. But I am sure that there is a much bigger element in the problem to which the Government will have to direct attention and that is the question of rates and rateable values. The Government are faced with a situation which is growing worse and worse. I do not want to exaggerate, but I do not want people to be misled. A general impression is being spread abroad outside that, somehow or other, things are improving in these

  1981
  areas. Neither the facts nor the figures show that there is any improvement. The right hon. Gentleman may be disappointed at our lack of gratitude, but all we can say to him is that we are getting nothing, that we have got nothing, and that we hope for nothing except a Government that, some day very soon, will deal adequately with this problem.
  9.1 p.m.
  Mr. W. S. MORRISON: I was sorry, and I am sure the House was also sorry, to hear the hon. Member for Chester-le-Street (Mr. Lawson) wind up his speech on such a depressing note. He said that he and his colleagues thanked us for nothing and hoped for nothing until some date, indefinitely postponed, when he instead of us might have the handling of this problem. We do not cherish such a hopeless outlook on the problem as the hon. Gentleman does. We believe that it is one of those problems, vast in its scale and multifarious in its complications, which has to be dealt with, not by knuckling down to it and adopting an attitude of despair because of its very magnitude, but by adopting practical measures, each, perhaps, limited in scope, but each capable of dealing with one aspect of the problem at a time. We hope by the cumulative effect of such practical measures, which must vary one from another as the features of the problem vary, to achieve that improvement in the Special Areas which is the desire on all sides in the House. The hon. Member was inclined to be critical of my right hon. Friend's description of this Measure as experimental. He asked us how much more experimenting we were going to do. For my part, I profoundly hope that we shall have a lot of experimenting, because it is a problem worthy of research and experiment.
  Miss WILKINSON: Experiment or vivisection of the depressed areas?
  Mr. MORRISON: I would remind the hon. Lady that experiment may be productive of much good, and that a great deal of our present advance is due to experiment. I know there are minds which dislike experiments and would prefer to deal with problems on a theoretical and deductive basis, which would like to seek a refuge from the hard realities with which we are confronted
  1982
  in an easy reliance upon some preconceived theory of human life. But when we are confronted with a problem of such gravity and difficulty as this problem of the Special Areas, which we have inherited, I believe that no theory should be used until all the resources of experiment have been tried to the utmost. Against that general background I ask the House to regard this Bill. I make no apology for it on the ground that it is an experiment. Rather I rejoice that we have in office a Government who are prepared to make experiments along unorthodox lines in the hope that they will make some contribution towards a solution of the problem that distresses us all. It is clear that without experiment there can be no illumination on this problem. The hon. Member for Ebbw Vale (Mr. Bevan) truly said that no one can claim that we are in possession of a magic sword such as Excalibur which with one blow could smite off the heads of this many-headed monster. That is the attitude we should adopt towards this problem.
  The Bill that is before the House is an attempt to deal with one particular aspect of it which, I suggest, is worthy of being dealt with experimentally because it is an aspect which has puzzled many people who have tried to deal with the problem of the Special Areas. It is a particular aspect which has been singled out for special mention in the report of the Commissioner for the Special Areas. It is to some extent a financial problem, and the Bill is an attempt to deal with that particular side of it. Therefore, I am not at all disappointed that the hon. Member received this Bill without any gratitude, because I should not expect a measure emanating from this side of the House to be received with rapturous enthusiasm by Members opposite; nor am I unduly distressed that this is a gift horse that has been looked at in the mouth, every dental peculiarity, real or imagined, having been described at considerable length. I make no complaint about that. It is natural that hon. Members who represent the Special Areas should make this Measure, limited though its real scope and purpose may be, an opportunity for describing to us the conditions of their areas and reminding the House of circumstances of a sad character of which no hon. Member is ever likely to require reminding.

  1983
  The hon. Member for Hamilton (Mr. D. Graham), who opened the discussion, made at the outset the criticism, with which I shall deal in greater detail later, that the Bill should apply to a greater area. He also suggested that the sum of money involved in it was too small. On that criticism has centred most of the discussion which followed. The general idea has been, "This is a bad Bill, but let us have more of it and apply it to a wider area." The hon. Member will excuse me if I cannot follow him into his description of the plight of Scotland, which I was very sorry to hear, because the Bill, although it is an attempt to deal with one particular aspect of the problem of the Special Areas, does not profess to be a Measure of such scope as can deal with all the problems in the Special Areas. It has never professed to be that. It is an attempt to remedy a particular matter that was brought to our attention by the Commissioner for the Special Areas. My right hon. Friend has previously referred to the passages in the Commissioner's Report, but I ask the House to bear with me if I make a further reference to what the Commissioner said about the obstacles which he found confronting him and about the remedy which he suggested. This is strictly relevant to the Bill. I refer to the second report of the Commissioner and to that passage on page 15 which is headed with the significant title, "Finance for new or expanding industries." That is the area in which this Bill is to be operated. The Commissioner says, in paragraph 51:
  "There is no need here to examine at length the reasons why difficulty is experienced in obtaining capital to finance new industries in the Special Areas. The all-important fact is that the difficulty exists and is the subject of constant representation from each area."
  Then he goes on to analyse the difficulties very much as they have been analysed to-day by the right hon. Gentleman the Member for Hillhead (Sir R. Horne). Then he goes on to say:
  "Shortly after my First Report was rendered I came to the conclusion that, if the Areas were to be given a good chance of partaking in the general economic recovery of the country and in the advantage of the present abundance of cheap money, it was essential that further facilities should be provided and that a fund should be created and used for the express purpose of stimulating the establishment
  1984
  of new industries and expansion of existing industries in the Areas. The Special Areas Fund cannot, of course, be used for this purpose, and I therefore submitted a recommendation on the 26th July that a special fund should be created.
  "I realised that this recommendation would not be easy of acceptance and would require careful consideration. I am of the opinion that Government Funds should not generally be used to finance private enterprise, and I hope that the necessary fund would be put up by financial interests in the City. However, if private financial interests are not prepared to find the necessary money without some Government guarantee, I should regard the giving of such guarantee as one of those unorthodox measures essential to the Special Areas if they are to be given opportunities for effective recovery. The use of the fund should be limited to the Special Areas and the period of the loans defined."
  Mr. BATEY: Does the Commissioner ever suggest such a small figure as £1,000,000?
  Mr. MORRISON: I am dealing with the alleged smallness of the figure later on. I would ask the hon. Member to note that what the Commissioner is asking the Government to do is to make up for this blank in the financial organisation of the country which is preventing the Special Areas, through lack of adequate finance, from participating in the general recovery. He asks us further, if we cannot get the money through the ordinary interests in the City, to take the unorthodox step of furnishing some Government guarantee in order that that object may be accomplished. That is what this Bill is doing. While hon. Members have used the discussion as a vehicle for enlarging on the general problems of the Special Areas—and no one, recognising the gravity of the problem, can take exception to that—the particular purpose which this Bill sets out to achieve should be the criterion for deciding whether it should be given a Second Reading. I claim that if the Bill is an attempt, which is likely to prove successful, to adopt the particular measure of relief which was commended to us by the Commissioner, it will enable the Special Areas to participate in the general recovery.
  We had a very delightful maiden speech from the hon. Member for King's Norton (Mr. Cartland) which we all enjoyed, and we hope it was the precursor of many other occasions on which he will address the House. In

  1985
  regard to many of the things he said, particularly those that were of a more general character, there was a strong disposition to agree with him in many parts of the House. In particular, when he described this as a national and not a local problem, I think there would be general agreement with him; and that is why, in this national House of Commons, we are introducing a Measure to deal with what is sometimes supposed to be only a local problem. The hon. Member commended his ideas to us with such freshness that I do not propose to traverse them at any great length and, indeed, I would only ask him to consider one aspect of the problem he brought up, in order that I may give the House a little information on the matter. The hon. Member thought we ought to encourage the present trend of industry to move to other parts of the country rather than attempt to keep industries in the Special Areas. I could not help thinking that he and his friends—because we had similar speeches from other hon. Members—are really giving very little hope to the Special Areas and the people in them. It is not as easy for men to transfer from a Special Area as is sometimes supposed. They have the bonds of home and kindred to consider, and it is not often a wise thing for a family to move unless there is some prospect that their security will be materially increased.
  The Government's scheme for assisting transference has proved markedly successful in selected cases. We have found that where one member of a family from a Special Area succeeds in getting employment elsewhere it is often possible, by Government assistance, to enable the rest of the family to follow—when the ground has been mapped out by the pioneer—with prospects that the whole lot will be settled there in the end. There has been a hopeful acceleration of that movement in recent years. Whereas in 1933 there were 605 family removalshouseholds—in 1934 there were 1,308, and in 1935 there were 3,595 successful removals. If we take the first two months of each of the last three years we find the position to be this: In the first two months of 1934 the number was 105; in the same two months of 1935 the number was 164; and this year the figure rose to 838.
  Mr. LOGAN: When you say "households" do you mean a man and wife and family?
  Mr. MORRISON: The figures relate to the number of households removed under this scheme. I mention these figures to let the hon. Member see that though we have brought in this Measure to deal with one aspect of the problem, we are by no means neglecting the other. We ask the House to take the line that we takes that every conceivable measure should be tried, that this is no problem that can be solved by any quick formula of any description. We regard this Bill as another example of a practical experiment, and we ask the House to agree to it for that reason. The hon. Member for West Middlesbrough (Mr. K. Griffith) dealt with one familiar aspect of the problem, and that is the complaint that the Bill is limited to the areas scheduled as Special Areas under the Act of 1934. He will realise that one reason for that is that the genesis of this Bill is to be found in the report of the Special Commissioners, which dealt with certain areas. The question whether or not the Special Areas should be extended and other areas brought into the category of Special Areas is not a question before us in this Bill, but if at any time Parliament considers that the Special Areas should include other stretches of the country not now included in that category the operations of the company formed under this Bill will automatically apply to the area thus extended.
  Mr. K. GRIFFITH: Does the hon. and learned Gentleman mean that before we can do anything we have to go back and, by new legislation, amend the Act of 1934? That was rather what I wanted to avoid?
  Mr. SHINWELL: When the hon. and learned Gentleman says "if at any time Parliament decides to extend the Special Areas," does he mean that the Government have in contemplation some amendment of that kind?
  Mr. MORRISON: No, Sir. I say nothing of that kind at the moment. All I am saying is that it will be in the memorandum of association of the company that the term "Special Areas" will include not only the Special Areas as in the Act of 1934 but those areas as

  1987
  described in any subsequent Act which amends the original Act.
  Mr. H. MACMILLAN: This is a very important point. I should like to know whether that would be consistent with the Preamble of the Bill as it is drawn, whether it would be possible for the articles of association to be so drawn without a fresh Financial Resolution and a fresh Bill. If the position is as the hon. Gentleman has stated it, I am glad to hear it.
  Mr. MORRISON: I can reassure the hon. Member on that point. The term "Special Area" is now to be understood by reference to its present statutory definition, and if at any time that definition is by statute varied or enlarged, it will apply to the company which is to be created, and that is perfectly consistent with the terms of this Bill.
  The hon. Member for Chesterfield (Mr. Benson) asked me two questions. The first was rather in the form of the expression of an apprehension that we should not get the money. It is true that the terms offered to shareholders in this company are not commercially attractive, but I can assure him that we shall get the money all right, that there are persons with sufficient public spirit not entirely concerned with the commercial aspects of the case who wish to assist in this effort to create a new measure of hope for the Special Areas, and I can assure him that we are assured of the necessary support. He asked me also what would be the period of the loan. There will be a period as in every loan transaction, but when he asks me to define what the term will be I am unable to answer him. The term for which a loan is granted will depend very much on the particular case. Propositions of varying attractiveness will present themselves to the company, and concerns of varying financial strength may apply for loans, and therefore the term of years for the loan will have to suit the necessities of each case.
  Mr. SHINWELL: Is it not necessary to have some information as to the repayment terms before we can ascertain how far the provision to which the right hon. Gentleman referred has any application?
  Mr. MORRISON: It is clear that if the whole of the capital were lent out for a very long time it would make a difference. There are all sorts of problems that may present themselves. There may be redemption over a period of years, which each year will bring back to the company a fresh supply of money. The matter will have to be decided according to the best commercial practice that the company can bring to bear.
  Mr. BENSON: The best commercial practice would insist on the most rapid repayment from those firms which were the least attractive borrowers. If one is to help these areas and firms over their difficulties a longer term of loan should be granted to the weaker firms who are the least attractive borrowers.
  Mr. MORRISON: What I mean by the best commercial practice is the best common-sense practice to achieve the object of this company. The main object of the company must always be borne in mind, but at the same time it must arrange its terms of lending to suit the necessities of each particular case. The hon. Member for Motherwell (Mr. Walker) complained of our trying to solve these problems by a committee in London. It is intended that this new company should have nut only a central board here but local boards in the Special Areas, and also that these local boards should co-operate to the fullest extent with the local authorities and other agencies at work in the Special Areas. It is to have a central home, but it is to be an organisation with a local habitation and name in each of the Special Areas, and to keep closely in touch with the conditions, which vary from point to point. The hon. Member for Ecclesall (Sir G. Ellis) addressed some observations to me, and so did the hon. Member for Stockton-on-Tees (Mr. H. Macmillan), suggesting that this was an unduly expensive financial structure. I think the alternative which the lion. Member proposed was that we should do better by entrusting the operations to the existing credit organisations. The hon. Member for Stockton-on-Tees was of opinion that we would do better if we were to raise the whole money with Government credit. I do not agree that this is an expensive structure. Both hon. Members have arrived at that concision by using as an interest charge the maximum prescribed

  1989
  rate. I ask them to reconsider this matter, and to put against that the contribution which the Treasury is making to the administrative expenses, reserve fund and so on. They will then see that in reality this is an exceedingly cheap capital structure, much cheaper than could be provided without Government assistance.
  Sir G. ELLIS: If it did not have the administrative expenses as under this Bill, and used the existing structure, he would save that amount of money.
  Mr. MORRISON: The existing credit organisations have failed to provide what is required.
  Sir G. ELLIS: They have failed to provide it because they have never had the opportunity now suggested. If the means now to be taken were offered them they would probably be only too willing to do so.
  Mr. MORRISON: I understand the suggestion is that the Treasury should give a guarantee to these organisations to lend out as they see fit.
  Sir G. ELLIS: I have never suggested anything of the sort. I said that there were these marginal cases which in present circumstances the ordinary credit organisations were not prepared to advance to the full extent, but that had they a little extra guarantee from the Government the whole proposition became entirely different.
  Mr. MORRISON: I think I have not misrepresented the hon. Member. He is suggesting that the Government should give its guarantee to enable them to take risks which they will not at present take.
  Sir G. ELLIS: The margin of risk.
  Mr. MORRISON: The hon. Member is asking the Treasury to assume a very large liability. We are to say, "It is true there are some risks you will not take. Have our credit behind you if you will take them."
  Sir G. ELLIS: Not to a greater extent than is provided under this Bill.
  Mr. MORRISON: Both from the point of view of the Treasury and from the effectiveness of this object it is far better to adopt the measures we have adopted, in which a special body with this object
  1990
  is set up and given the advantage which the Treasury proposes to give it.
  Mr. H. MACMILLAN: What is meant by the maximum rate of preference interest? Surely it is a fixed rate of interest.
  Mr. MORRISON: No, I understand that what is provided is a maximum. If in any year there are losses, there is no dividend paid or the dividend is less than this maximum, the dividends are cumulative and at the end of the period any assets may be used to repay the dividends which have not been paid.
  Mr. MACMILLAN: When the company is floated surely the rate of dividend will be stated, and the preference rate will be 3½ per cent. I do not understand what the hon. and learned Gentleman means by saying that it is a maximum rate, which would seem to indicate that in certain years or in certain circumstances it may be varied.
  Mr. MORRISON: The hon. Member is making a great difficulty over what is a very simple matter. What I said is perfectly true. The rate of preference dividend is fixed at 3½ per cent., but the hon. Member must know, if he has ever held preference shares, as I have no doubt he has, that you do not always get the full rate on your shares. You may get less. It is true, therefore, to say that this' is a maximum. The hon. Member also asked what is the normal term of the loan. As I have explained, that must be determined according to the circumstances of each case. He drew attention to a phrase which he said was used by my right hon. Friend, "the first year." That had reference to the total circulation of the £1,000,000, until it came back again.
  Mr. H. MACMILLAN: Not the first year?
  Mr. MORRISON: No, not the first year. It was in reference to the number of fresh times the capital sum of money had gone out. An hon. Member referred to our proposals as a farce, but I can assure him that the Government consider this to be a very serious effort to solve one particular problem. This is an experiment, limited to the Special Areas at the moment, and, if it proves a successful experiment, no doubt the Government and the House would like to see it ex-

  1991
  tended to other areas where it could prove successful. It has been said that the sum provided is too small.
  Mr. POTTS: May I take it that Barnsley will have no consideration in this matter?
  Mr. MORRISON: I do not know about Barnsley, but what I am saying is that the operation of the Bill is limited to the Special Areas as defined in the Act of 1934. Perhaps the hon. Member will look at that Act and see whether Barnsley is defined.
  Mr. POTTS rose—
  Mr. MORRISON: I think I have given way sufficiently.
  Mr. POTTS: I simply wanted to ask whether anything further could be done from any other source.
  Mr. MORRISON: That is another matter. It is said that the Bill is too small, but it is an experiment, to test what can be done on other lines. It is not too small a proposal, because it may be extended. The capital may be increased with the written consent of the Treasury and if the Bill proves successful no doubt it will be increased. The capital sum of £1,000,000 must never be considered as fixing the total capital that can be lent by the operations of this company. It is a revolving sum, which can be lent again and again. I would like the Housce to consider what the total effect of the Measure will be upon the industries which derive benefit from it. Any hon. Member who considers the problem of the Special Areas will know that if a successful industry is set up in one of them, the additional prosperity to the area will be not only the wages paid and the purchasing power created by that industry, because one spot of success in an area of desolation is apt to spread. This form of assistance, coming to a new industry in one area, may be just what is required to act as a catalyst to release the energies of other potential industries in the area.
  I ask the House to bear in mind the admirable sentiments that were expressed in the very forceful speech of the hon. Member for Walsall (Mr. Leckie), who urged us not to despise the small industry because it frequently became a large one.
  1992
  I hope I have said enough to indicate the scope of the Bill. It is, as I have said, an attempt to give effect to a recommendation which has been put before us not only by the Special Commissioner, but constantly has been urged upon His Majestys' Government by hon. Members in all parts of the House. The proposal has never been the subject of criticism until the Government has tried to carry it into effect. I ask the House to show something of the enthusiasm with which the proposal was demanded before it was in draft, and to give the Bill a Second Reading. I commend it to the House.
  Bill committed to a Committee of the Whole House for Monday next.—[Commander Southby.]

  CIVIL LIST BILL.
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a Second time."—[Mr. Chamberlain.]
  9.41 p.m.
  Mr. ATTLEE: I beg to move, to leave out from "That," to the end of the Question, and to add instead thereof:
  "whilst desirous of making adequate provision for the maintenance of the Royal Household and the dignity of the Crown, and whilst being willing to provide additional grants in lieu of the revenues of the Duchies of Lancaster and Cornwall, this House cannot accept a Measure which does not provide for the transfer of such revenues to the public Exchequer."
  This point was dealt with at suitable length by my hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) upon the Financial Resolution. I wish to re-state the reasons which caused my colleague and I to put down the Amendment in Committee to this effect, and to carry it to a Division.
  This matter has been debated before in this House many times. It was discussed at length in 1901 and in 1910. Our point of view is that the revenues from the Duchies of Lancaster and Cornwall should be treated on the same lines as the other hereditary revenues of the Crown. We ask that they should be surrounded in exchange for a fixed annual sum of money. We recognise what His

  1993
  Majesty has done with regard to handing over the Duchy of Cornwall revenues, and it is no part of our case that the Duchies have been administered badly. On the contrary, they have been administered well and generously. The administration of the Duchy Estate would compare well with the administration of any other estate in the country, and very, very favourably with the administration of Crown lands under Treasury control.
  I have had personal experience of the administration of these Duchies. I was Chancellor of the Duchy of Lancaster, and I know well the principle of their administration. We all know the work that has been done in regard to the Duchy of Cornwall. It has been suggested that if the Duchies were assimilated to Crown lands the administration must be conducted on the somewhat severe principles which apply to Crown lands but, of course, there is the alternative that the administration of Crown lands might be reformed. We recognise fully that they are well administered, and we also recognise the personal interest that has been taken in both these Duchies by the late King and by his present Majesty when he was Duke of Cornwall. We recognise fully that there is in the administration of the Duchy of Cornwall a valuable training ground in affairs for the Heir to the Throne.
  We quite recognise those points that can be put forward for the retention of the Duchies as they are at present, but we think that there is a matter of principle on the other side. The first point is that these great Duchies are historic survivals and that they cannot be considered in any way to be private estates. They have come down as being attached to the holders of certain positions, to the reigning King and to the Heir to the Throne. They have not passed by the ordinary laws applicable to other property. If they had, they would have departed from the Royal Family on the change of dynasty, and I imagine the Duchy of Cornwall would have gone with James Edward, the Old Pretender. As a matter of fact, these Duchies, whatever their origin—and the Duchy of Lancaster, I think, did really originate in the House of Lancaster, and I think it only retained its separate position from other Crown lands owing to the fact that the House of Lancaster had a
  1994
  very shaky title, and they thought they might keep both Crown and lands by keeping them separate. Whatever may have happened in the past, they have now descended with the Crown and have in fact become attached to the positions of King and Prince of Wales. Therefore, we think they should be assimilated to the position of the other Crown lands.
  The next point is this, that they have a fluctuating revenue. I think it is worth while to enlarge upon that point, because the general principle observed with regard to hereditary revenues is that they should be surrendered in return for fixed sums laid down by Parliament. Now you have here a fluctuating revenue. Look at the figures for the last 25 years, and you see that the returns from Crown lands have varied from £459,000 up to 11,267,000. The small branches of revenue have varied from £17,000 to £108,000. Those are the revenues which are surrendered in exchange for a definite fixed payment. On the other hand, in regard to the Duchies of Lancaster and Cornwall, the amounts there are returned at a fluctuating amount dependent on what comes from them. They have varied in the case of Lancaster in the last 25 years from £49,000 to £85,000 and in the case of Cornwall from £25,000 to £83,000. I consider that it is of the essence of the provision for the Civil List that the amount should be certain. No one can judge at the present moment what are likely to be the future revenues of these Duchies. They may increase or they may go down. I think there will probably be a tendency on the whole for them to increase, but I think it is undesirable that there should be either great decreases or great increases, because the whole point of the Civil List is that it is fixed by Parliament at a definite amount. So we would like to see these exchanged for a definite fixed sum.
  There is a further point, and one of no little importance, and that is that the Sovereign should be above ordinary political controversies, but as long as his revenue is derived from grants by Parliament, there can be no controversy with regard to the sources of the revenue, except what is common to all our fiscal arrangements. But you have in the Duchies of Lancaster and Cornwall revenues derived from all kinds of property, and some of that property may

  1995
  of its nature come to be a matter of controversy. You may have, for instance, a severe conflict in this country with regard to mining royalties, you may have attacks made on mining royalties, you may have considerations as between mining royalties and miners' wages. It is extremely undesirable that the personal income of the Sovereign should be in any way derived from kinds of property that are liable to come into controversy. You may have exactly the same thing with land, and that, we think, is an additional reason why these Duchies should be assimilated to the Crown lands.
  With regard to the Duchy of Cornwall, which is attached to the Heir to the Throne, no matter with regard to the personal interest of a Prince of Wales can arise for some time, but there is a possibility—and indeed it might happen if certain other steps are taken—of this property increasing so greatly in value that you will have an Heir to the Throne with a greater revenue than the Monarch. On the other hand, you may have it falling to a very low state. There again we think it is undesirable that these should be separate. Therefore, I move this Amendment, because we consider that the principle of the Civil List is that hereditary revenues should be surrendered in exchange for a definite sum of money decided by Parliament.
  9.53 p.m.
  Mr. LAMBERT: The right hon. Gentleman the Leader of the Opposition has presented his case in an eminently fair and reasonable manner, but when he talks of the unification of mining royalties and of land legislation, I have been through a good many of these so-called disturbances, but they have never touched either of the Duchies. I am interested more especially in the Duchy of Cornwall, because it has large interests in the West of England. As a matter of fact, part of the Duchy is in my constituency, and rather than follow the Opposition in this thin end of the wedge of land nationalisation, I would prefer the interests of the tenants in the Duchies themselves. The right hon. Gentleman has said, quite frankly and fairly, that the Duchies are extremely well managed. If they are well managed, why change the management? It seems to me that my right hon. Friend has
  1996
  chosen very bad ground for this thin end of land nationalization. If he wants to nationalize the land, let him take a badly administered estate, not a well administered one, and in this case it is a well administered estate.
  With regard to the Duchy of Cornwall, the Committee we had under examination the Receiver-General, who is an extremely able man, such a man as the Treasury cannot command, for they would not pay him salary enough. For something like 40 years I have been connected with public life in the west of England, and I have never received a single complaint about the management of the estates of the Duchy of Cornwall. That shows that they are well managed, because it is known to all Members of Parliament that when things go right they do not hear of them, but when things go wrong the Member of Parliament is the recipient of the complaints. The tenants are satisfied and happy, and they have generous treatment. During the time of the agricultural depression, the tenants of the Duchy of Cornwall were treated handsomely, and there is also in the management of the Duchy of Cornwall estates, as I can say from personal experience, a touch of progressive interest. There is the kindly touch, which you cannot get from the Treasury; the human element comes in. If any complaints are made to the managers of the estates, they are remedied at once. I happen to be the chairman of an agricultural college in Devonshire, and only recently the Duchy offered a scholarship for the son of one of their tenants at this agricultural college. I never knew the Treasury, or any Government Department, to offer any scholarship for anything.
  My right hon. Friend said, quite rightly, that it is an excellent training for any monarch to manage such estates as those of the Duchy of Cornwall, and that the Monarch has managed them well is proved by the fact that there has not been so little complaint. When, as Prince of Wales, he came down, all the tenants turned out to welcome him. I suppose that under this Amendment the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) will probably be the controller, for, if there should be a Socialist Government he will probably be the Chancellor of the Exchequer. If he

  1997
  came down to Devonshire or Cornwall, we would welcome him, but it would not be an enthusiastic welcome. The Treasury extracts the last drop of blood. The Leader of the Opposition says that we have had experience of Treasury management in the case of the Crown lands, the gross income of which went up from £644,000 in 1910 to £1,924,000 in 1935. But we all know that in Regent Street the rents were put up three or four times, to the ruin of many small shopkeepers. We have not had that in the Duchy of Cornwall, and, therefore, I do not want to make any change. My right hon. Friend says, "Yes, but change the administration of the Crown Lands." I would say, do that first, before you change the management of the Duchies. I know enough about the Treasury and about the Chancellor of the Exchequer and his officials. They have no bowels of compassion at all, and I certainly object to handing over the Duchy tenants to these soulless Shylocks.
  I would ask the Opposition not to press this matter to a Division, because, if the Amendment were carried, it would put a large number of tenants, including some of my constituents, in the West of England, under the harrow of the Treasury. I do not want that, and they do not want it. If I may utter one last sentence on the subject of land nationalisation, I beseech hon. Gentlemen opposite to realise that they are flying in the face of human nature. It is human nature for everyone to wish to possess something that he can call his own. Therefore, I sincerely hope that the Opposition will not press this Amendment.
  10.1 p.m.
  Mr. SIMPSON: As a new Member of the House, I rise with a considerable degree of diffidence to participate in this Debate, but I must confess that, after listening to the discussion on Tuesday night, my nervousness has been somewhat removed. A witty Member of the House once observed that the best way to make a speech was to make sure of the beginning, to make sure of the end, and to bring them close together. I can make sure of the beginning, to the extent that, as a Member of the Committee who had freedom to make any proposals or inquiries on that Committee, it is incumbent upon me to defend the attitude that we took in our delibera-
  1998
  tions. I hope the House will be a little patient as regards the hiatus between the beginning and the end, because, after all, the subject which we are discussing to-night is of some importance. It has considerable historical significance, and the right hon. Gentleman who has just spoken must, I think, have lost sight of the views of some of his political predecessors.
  There have been great parliamentarians and fervid Radicals in this House who have addressed themselves to the issues which are the subject-matter of the Report that we are considering to-night. The sovereignty of this House, and the foundations of democratic freedom in this country, were jealously regarded more than 100 years ago. Indeed, then and much later the cry of Republicanism was much louder in the land. Tradition and precedent have been invoked in support of the general proposals in regard to the Civil Lists, and, of course, with very good reason, but at the same time there are high parliamentary opinions and weighty words in line with the proposals which have been the special subject of the remarks of the Leader of the Opposition to-night, and I think we should be concerned with those great precedents and arguments quite as much as with other parts of the Civil List recommendations.
  There is indeed a very wide territory and an exciting field for historians in the story of the Duchies and the varying fortunes of the monarchs who have been associated with them in the past. In. this House 150 years ago the position of the Duchies was hotly debated, and no less an authority than Burke took precisely the position that the Labour party are adopting to-night. He was strongly of the opinion, for the reasons that have already been stated, not as a propagandist for land nationalisation but on the sound constitutional basis for which we are contending that this change should be made. Indeed, he went further in meeting some of the objections raised by the right hon. Gentleman when he said:
  "If the Crown has any favourite name or title, if the subject has any matter of legal accommodation within any of these jurisdictions, it is meant to preserve them."
  We have no objection at all to any associations of a sentimental or traditional character being still associated with the

  1999
  Duchies. Considerable play was made of the importance of a breach or break of this character, and in reply to an argument of that kind Burke retorted:
  "A fracture properly healed acquires strength superior to any other part of the bone. The Crown held no public property but as a trust for and under the people. The prerogatives of the Crown—the highest and most transcendent part of its power—were created, and ought of course to he exercised, for the benefit of the people who created and conferred them. It was particularly of the very essence of that House to inquire, to regulate and control, and whenever it waived, concealed or suspended that right when an occasion offered, then most clearly every object of their meeting and deliberating was at an end."
  I take it that that is what we are doing to-night, and to that extent the right hon. Gentleman who spoke last is departing from the traditions of the party with which he is associated. Unfortunately Burke's proposal was not adopted, but at the same time I think it can be said that there was no effective reply. It was a bold, convincing, reasoned argument for the change. At the same time there was a proposal, also advanced by Burke, to abolish the office of Master of the Buckhounds. That was also defeated, and that queer calling and perquisite has since disappeared along with many other decorative attachments. The release from a number of these decorations has strengthened, and not weakened the character and dignity of the Throne. There are other representative opinions in this connection. Lord Brougham, for instance, in 1850 laid it down as a principle that it was not in conformity with the genus of the constitution that the Sovereign of this country should have the means of acquiring wealth, but that it should be dependent upon Parliament. Again that is what we propose. Again, Sir William Harcourt observed in 1889:
  "I absolutely deny that the hereditary estates of the Duchy of Cornwall or of Lancaster are in any sense personal estates of the Sovereign. They are trust estates held for the benefit of the public."
  It seems to me that all that was cogent and true in that connection is more so to-day. All the constitutional objections that were advanced then have been emphasised since. The largely increased value and the imminence of controversial legislation are all likely to involve the Crown in controversy and in political
  2000
  issues which may be hotly contested in the House. All that is sentimental and traditional about the Duchies in a nominal way can still be retained. The proposition that we are advancing as against the chief recommendations in the List is practical commonsense. We recognise, of course, that the proposals of the Sovereign are in a measure a move towards the end that we expect to effect in our proposal, and we suggest that it is most desirable as a constitutional change, and not as an effort in land nationalisation propaganda or any other party or propagandist end associated with this party.
  Further, it is due to the House that one should say a word in regard to the other aspects of the recommendations. If there are any substantial criticism of the rest of the proposals in the Civil List I certainly think it ought to be advanced. If not it should be defended. It is one of the ancient rights and one of the evidences of the freedom of this country, the House and the Constitution that we have the opportunity, unfettered and free, to discuss the King's prerogative in many of its aspects: It may be the case that there is a Republican movement in this country, but it is difficult to ob serve precisely where it is. I suggest that in the main it disappeared some 50 years ago. Someone very aptly said:
  "When Republicanism ceases to be a heresy it ceases to be a faith."
  Indeed, Bright, who was reputed to be a Republican, recorded in his diary in 1867:
  "I am not a courtier, but I can respect an ancient monarchy and can admire and even reverence a monarch whom monarchy bas not spoiled."
  There are still Micawbers in our midst. Micawber may not have been an entirely praiseworthy person, always waiting for something to turn up, but there are on the other hand inverted Micawbers who are always waiting for something to turn down. There has been a definite change in the direction I have indicated, but I do not know that there is any particular reason why we should be unduly depressed about it. There are people who seem to thrive on melancholy and disaster, and I suspect that there may be people who come to this House as apostles of progress, who always seem depressed when any progress is made.

  2001
  Indeed I think it was George Bernard Shaw who once observed that some people think they are good only when they are uncomfortable, and in the same way some people are definitely nervous about any improvement for somewhat the same reason.
  There have been certain references during the Debate to Monarchs of one kind or another, and there have been very strong words used at various times in this country about various sovereigns who have reigned in this country, and by way of contrast I would remind the House that the "Times" Obituary notice on George IV contained these observations:
  "The truth is—and it speaks volumes about the man—that there was never au individual less regretted by his fellow creatures than this deceased King. If George the Fourth ever had a friend—a devoted friend in any rank of life—we protest that the name of him or her has not yet reached us."
  There has been a considerable change since, and Professor Laski some time after the death of the late Bing observed:
  "Anyone who, compares this comment with the national sympathy in the illness of George the Fifth can hardly regard the change as other than a political miracle."
  If social change and important miracles occur, and they are riot too frequent, I have no reason to suppose that we should be unduly depressed about that. Again, Labouchere in this House opposed such a List as we are considering this evening, and, in regard to the principles of republicanism, he spoke in these terms:
  "Radicals are essentially practical. They do not approve of fuss and feathers of Court. They admit, however, that the scheme of a Monarch who reigns but does not rule has its advantages in an Empire such as our own."
  Then he observes further, and as complaint has been made in regard to the provision for hypothetical persons and happenings in the future, I think that there is a reasonable and decent argument for that. He went on to say:
  "Nothing has, conduced more to shake that decent respect for the living symbol of the State which goes by the name of Royalty than the ever recurring rattle of the Money Box."
  If people are not in favour bf our existing Constitution and if they favour the republican method, I think it -is much better that the arguments should be advanced on those lines than that the indignity and indelicacy of recurring de-
  2002
  bates and deliberations in this House should be avoided. A reference was made on Tuesday night to a well remembered, speech of Mr. Chamberlain—the predecessor of the Chancellor of the Exchequer, who sits opposite to-night—when he was Mayor of Birmingham. He said in 1874, as he was known as a republican in those days:
  "If a republican is one who would thrust aside the opinion and affront the sentiment of a huge majority of the nation merely to carry to a logical conclusion an abstract theory, then I am as far from being a republican as any man can be.
  I hold that Radicals and Liberals have quite enough to occupy their best energies without wasting their time in what seems to me a very remote speculation. At the same tune there may be an exaggerated loyalty as well as exaggerated republicanism."
  It seems to me that if we transpose the party titles that is our position in adopting the attitude we do generally to this List. As far as we are concerned in our opposition to the List that we are considering to-night, it represents a recognition and an appreciation of our constitutional system and does not imply by any means any form of servility but the preservation of a symbolic authority that has served us so well. I appreciate that there is a very real difficulty in some quarters quite naturally, of recognising the symbolic value associated with this authority, and for that reason, it invites many cheap, easy and irrelevant criticisms. I make bold to say that some things must remain firm if many things are to remain free. I need not develop that argument or give illustrations, but the sooner some democrats recognise that truth the safer it will be for democracy in this country and other countries. As far as we are concerned the grant that we are making to-night represents provision for what is our national form of constitutional authority, with its own special national manifestations. We have municipal authority that is typified by its own special form of manifestation. and is capable of much of the same kind of criticism that has been levelled against the general proposals in this Civil List. I think it was Shakespeare who said that:
  "Like the baseless fabric of a vision,
  The cloud-capp'd towers, the gorgeous palaces,… shall dissolve,
  And… leave not a rack behind."

  2003
  We are not concerned with the preservation of palaces as such. We are certainly not likely to be mesmerised with the glamour of the Court, or to seek to get within the walls that were referred to by one hon. Member the other night, much less to scrounge about the gates for admission. In supporting the major principle of these proposals it simply means financial recognition for the equipment not essentially individual but expressing in a permanent and authentic form the constitutional means by which we function, as free men, instead of changing to an insecure constitutional process, with all the dissipation of the political energy. We enjoy the framework of constitutional freedom which gives as ample place for the vigorous activities of the hon. Member for West Fife (Mr. Gallacher) as it does for Noble Lords on the other side who are not less provocative in their own particular way. Somebody has summoned up the position in these very pertinent words:
  "A republic differs from a constitutional monarchy only in form. A constitutional monarchy differs from a republic in substance."
  A namesake of one hon. Member who spoke from these benches, in a very admirable criticism made of the times of Queen Victoria, used these words:
  "The dominant issue in politics is the issue between Capitalism and Socialism. The difference between a monarchical capitalist democracy and a republican capitalist democracy is normally immaterial."
  I understand that the late Mr. John Wheatley, who represented a constituency now represented by one of our hon. Friends below the Gangway, made some such observation to the late King in conversation with him on that particular issue.
  In conclusion, I suggest that our general support of the provisions of the Civil List, subject to the Amendment that has been moved to-night, is not incompatible with the movement that is advocated from these benches, and we have a. right to resent some of the suggestions that we are indifferent to or are letting down any of the humble folk we represent. Republicanism is not synonymous either with freedom, peace or Socialism. With regard to toadyism, you can have it in any country, in any strata of society, and
  2004
  you can have it in any political party. If words, like patriotism and loyalty, carry false and unworthy values, then so much the worse for the people who use them. On the other hand, there is no reason why they should not be invested with real and deep human values, and we should engage in a ceaseless struggle towards the attainment of a, life and society which will make them carry these values in the interests of the whole people of this country. I conceive it to be the purpose of our political contests to develop and extend that work, and I consider the general part of the Bill which we are passing is not prejudicial to that end.
  10.26 p.m.
  Mr. G. STRAUSS: I should not intervene but for a remark of the right hon. Member for South Molten (Mr. G. Lambert). In my constituency I have a considerable proportion of property which belongs to the Duchy of Cornwall. I have no complaint as to the management of that area, it is a, working-class area, and, frankly, on the whole it has been well administered. But I want to put this point. The fact that nominally the Prince of Wales has been in control of that property has brought the Prince of Wales more than once into local political controversy, and that I suggest is undesirable. On many occasions tenants of the Duchy of Cornwall have come to me when they have considered that something has been wrong in their house or with their tenancy, or about some grievance which has not been rectified. It may be that they cannot get some repairs done, or that they have been given notice to quit unjustifiably and feel that they have a serious grievance against the Royal Family, or the Prince of Wales. It maybe quite unjustified, and really one of the most unfair things about it is that the Prince of Wales who has been attacked is debarred from answering. The position is unsatisfactory.
  But there is more than that. There have been in my constituency plots of land which many people consider should have been built upon, that working-class houses should have been built. I am talking of some years ago. These plots were vacant for a long time and there was a raging local controversy as to why the Prince of Wales would not build houses on this land. His name was bandied

  2005
  about at political meetings, at which considerable heat was engendered, as to whether the Prince of Wales was carrying out his duties properly. I know, and others realise, that probably the influence of the Prince of Wales in this matter was exactly nil, but, nevertheless, he became the subject of a very strong political controversy, and I maintain that in any part of the country where there is land belonging to the Duchy of Cornwall or the Duchy of Lancaster at any moment the administration of this land might become the subject of controversy and inevitably the Royal Family will be dragged into it. It is most unfair because the Royal Family cannot answer, and I think hon. Members will agree that it is undesirable to drag in the Royal Family into a public controversy, and particularly a political controversy. It is wrong that the subject should have a grievance, true or imaginary, against the Royal Family, which the latter cannot answer. I hope the House will support the Amendment.
  10.30 p.m.
  Mr. BUCHANAN: I will keep the House only a. few minutes, because we on these benches occupied a considerable amount of time the other evening on this matter. The first observation I would like to make it that there seems to me to be almost a mystery about the Rules of the House these days. In Committee we were definitely ruled from discussing this matter, because we were told it was not right to do so, but to night we are discussing it with complete freedom and abandon. We intend to support this Amendment to-night. As every hon. Member knows, those who are opposed to a Bill usually join in supporting any Amendment which has as its object the rejection of the Bill. Consequently, we intend to support this Amendment because it rejects the Bill, to which we are opposed.
  I would like now to say a few words regarding the question whether the King ought to own this particular land or not. When I first came to Parliament, I lived for some years in the district represented by the hon. Member for North Lambeth (Mr. G. Strauss). Some people there said that the Prince of Wales was a very good landlord, but there was a great deal of conflict about it. It all depended upon where you lived, what kind of rent you paid and how you got out of it when you
  2006
  did not pay the rent. That was the test as to whether he was a good landlord. May I say that I did not think some of the property altogether good; indeed, I thought some of it was shocking, particularly from the point of view of lavatories, bathing facilities and the provision of a decent water supply. I thought the position was indefensible. I considered that it was wrong for anybody to live in some of the places.
  In my opinion we cannot stop the King from being a human being, and I am afraid that as long as he is a human being with such an income he is bound to become the subject of controversy. I do not believe he can use that income, and he must have a surplus. If he has a surplus he must do something with it; that is to say, he must invest it. As soon as he does that he enters into the capitalist framework of society, and it is impossible to keep him outside, no matter how much you would like to do so. I would like to say to the hon. Member who criticised the Treasury that the Treasury is a very mixed thing. The Treasury, through the Commissioners for Crown Lands, owns property, and I must confess that the great difficulty is to get into the houses, because the Treasury is looked upon as a first-class landlord. Taking the Treasury as an employer of labour, my experience —and I do not think there is an hon. Member on this side of the House who would say I am incorrect in stating this—is that the ambition of every working man is to be employed by the Treasury or the State. [An HON. MEMBER: "No!"] To a great extent it is. It may be that the people in my division are different, but I know that there they would tumble over one another to become employés of the State. I would say that in the main the State is better than the average employer throughout the country.
  On the general issue our attitude remains unchanged. The point under discussion to-night is whether the King should be allowed to have an income which might go up or which might go down, or whether he should be given a fixed income. Hon. Members of the Labour party have moved that the King should get £80,000 per annum instead of having the income from the Crown lands or from his own lands. In addition, they moved that in the cases of other persons there should be incomes of £30,000 a year and

  2007
  £10,000 a year. I speak from memory, but I think those figures are correct. The issue is: Are you going to hand over a, fixed income, in which case the person who receives it becomes part of an exploiting system, or is he to become part of that system by being made a landlord? It does not seem to be an issue of great material importance.
  The hon. Member for Ashton-under-Lyne (Mr. Simpson) talked about republicans. The greatest man whom the Labour party ever produced, the man who bad more to do, possibly, than anybody else, with building up the Labour party, made part of his reputation in the republican movement. One of the first things which made Keir Hardie an outstanding figure in this House was his attack on a Civil List, and I think his contribution to politics was no less beneficial to the working-class movement than that of any Labour leader of to-day. Most Labour Members have a great respect for Russia. Russia is a republic. Russia has thrown over monarchy and nobody in Russia would dream of asking to go back to a monarchy, even of the so-called democratic kind which we have. Provided people are intelligent they can run their system without kings or rulers. They can do it by their own capacity through their own elective institutions.
  We oppose this for two reasons. First, we think that the monarchy is not necessary in a civilised community. We do not think it is required in the organisation of our system. Secondly, we take the view of the early Labour movement and the view of the Labour movement to-day on almost every other subject but this, namely, that it is wrong that wealth in large quantities should be handed out to one man while there is the social disease of terrible poverty in our land. We say that it is indefensible and morally wrong to hand sums 'like £80,000 or £100,000 to one man, with only one man's human needs, while, on the other hand, you have living on a starvation level and housed under shocking conditions another man who has the same human desires as any king, a man who likes his children, who has, it may be, fought for the community. I remember when it was proposed that Sir Ernest Gower should receive £7,090 per annum, even the Tories, including the right hon. Gentleman the Member for Watford (Sir
  2008
  D. Herbert) hotly disputed the proposal as being excessive, particularly in view of the fact that the nation could not afford to pay other decent people adequate incomes. I say we are doing wrong to-night in handing out vast sums to people who, in my view, are neither better nor worse than the average, who are just ordinary decent folk. To hand out to them lavish sums of this kind is bound to have a bad effect on the recipients as well as on the givers.
  A person who is given an income of this kind is given a power over his fellow human beings that is neither good for him nor good for the rest of his fellow men. This proposal is one that I cannot defend. The Government are possibly doing one of the few popular things to-night that they will ever do. They have done nothing but unpopular things since they came into office, and when they have tried to do the popular thing they have done it in the most stupid and unpopular way. To-night they may be doing a popular thing. I do not deny that they are putting forward what represents the view of the mass of the people of this country. But I was not sent here to represent simply the great mass. I was sent here to represent a division because I do not accept the views of the great mass. As long as I am here I shall claim that the giving out of this sum of money is shockingly wrong, particularly when, in the next few weeks, the Government will discuss how little they can give to the unemployed, not how much. They will discuss counting in pennies and halfpennies the incomes of the poor. We will support the reasoned Amendment in the same way as we shall support every other political move against the Civil List because we believe that, if the Amendment were carried, it would be one vote against what we regard as a shocking wrong.
  10.43 p.m.
  Mr. CHAMBERLAIN: If this Amendment had to be moved, I freely recognise that it could hardly have been moved in terms less likely to give offence than those which were used by the Leader of the Opposition. He made an acknowledgment of the generous spirit in which His Majesty has approached the subject of the new Civil List. He did not suggest that there was any fault to be found in the administration of the Duchies, but, on the contrary, he paid a well-deserved

  2009
  tribute to the general satisfaction which had been found to exist in connection with that administration. He admitted that His Majesty, as well as his late father, had taken a personal interest in the Duchies which had been of general benefit to them; and he further and finally agreed that on the evidence the Committee had before it the association of the Prince of Wales with the administration of the Duchy of Cornwall was a form of training which was especially valuable for one who would hereafter fill the exalted position of King in this country.
  I regret that, in spite of all that, the right hon. Gentleman felt it necessary as a matter of principle to ask the House to divide on this Amendment, because I cannot help feeling that, if the House were to pass the Amendment, it would be viewed by the great majority of people in the country as an extremely regrettable incident. I do not believe for a moment that the Amendment represents any body of opinion in the country generally. The hon. Member for Ashton-under-Lyne (Mr. Simpson), in his interesting and well-informed speech, quoted words which my father used on an occasion many years ago in reference to republicanism, when he said that he was not prepared to affront the general sentiment of the people for the sake of a pure theory. These words are exactly applicable to the Amendment. To justify this Amendment something more than abstract principles is required. We must be told either that there is some grave defect in the system as it exists, or that there is some great advantage to be derived from the change.
  I submit that the right hon. Gentleman did not advance anything which would justify either of those arguments. What did he allege in order to support his Amendment and the principle for which he was contending? In the first place, that the existence of these Duchies in their present form is a historic survival. I agree, and this country is full of historic survivals. It is in that respect the envy of many newer countries which would like to be able to enjoy the continuity of policy and stability which is in part derived from those historic survivals. I will not enter into any argument with the right hon. Gentleman on his contention that these Duchies are
  2010
  entirely different from private properties. I will, however, say that they are also entirely different from the Crown lands, and that if they are not exactly the same as private property in the ordinary sense their description approaches more closely that of private property than of Crown lands.
  Then my right hon. Friend the Member for South Molton (Mr. Lambert) said that the change was wanted neither by the tenants of the Duchy nor by anybody else. I can assure him that he can include in that category the Treasury, who also do not want to have the administration of these estates, in order that they may be termed by my right hon. Friend "soulless Shylocks." Another argument advanced by the right hon. Gentleman was that it was undesirable that His Majesty or the Prince of Wales, as the case may be, should be in receipt of a revenue which fluctuates. He went on to say that in his view the fluctuation was more likely to be upwards than downwards. That, perhaps, might give rise to a feeling if this Amendment were carried that the real motive at the bottom of it was to secure an unearned increment. But I give the right hon. Gentleman the credit for the view that he was not seeking to make a profit out of this transaction, but that his argument was the genuine one that it was undesirable that the Sovereign should be in receipt of a revenue which fluctuates. I confess that I do not share that view. The fluctuations in the revenue of these properties, if they occur, are likely to occur in connection with some general movement throughout the country, and to my mind it is rather an advantage than a disadvantage that the Sovereign should feel himself, in his own person, some of the effects which are present to the minds of so many of his subjects. [HON. MEMBERS: "Oh!"] Some hon. Members may sneer at that sentiment, but to me it is a perfectly genuine conviction. It is not good to try to isolate the Sovereign completely from the feelings, fluctuations and fortunes of his subjects, but it is well that he should be brought as closely as possible into contact with them.
  We were told also that there was a possibility that the Sovereign might be brought into political controversy, because a part of his revenues was derived from property which might become the sub-

  2011
  ject of controversy of that character. Have mining royalties and the taxation of land never been the subject of controversy during the late King's reign, during the last 25 years I Surely we are all aware that these controversies have raged as bitterly in the past as they are likely to rage in the future, yet I cannot recollect that the Sovereign has been brought into these controversies, which have been carried on entirely apart from his person and from any advantage which might accrue to his position. I would put it to the House that no case has been made which would justify them in trying to make a change for which there really is no practicable object, but which is founded entirely on a theoretical principle which has no value or substance in fact; and seeing that we are not now in the reign of George IV, to which allusion has been made, but in the reign of King Edward VIII, whose relations with his subjects are entirely different from those of his predecessor to whom the hon. Gentleman referred, I feel that it would be in accord with the sentiment of the people of this country that we should reject the Amendment and pass the Bill as it stands.
  10.53 p.m.
  Mr. E. J. WILLIAMS: I rise to support the Amendment. During the last few weeks I have been endeavouring to elicit from the Duchy of Lancaster a certain transaction which has taken place in my constituency. I have been able to ascertain that 205 acres of land have been sold to the Dunraven Estates Limited, of which the Chairman is Sir Rhys Williams, one of the large landowners of Glamorgan-shire, and I am unable to ascertain the price for which that land was sold. I am informed on fairly good authority that it was sold for a few hundred pounds, and in its sale the company obtained not only the 205 acres of land but the foreshore rights of that portion of the Bristol Channel coast. The commoners have been complaining for some years about this transaction, and most of the people who reside in my part of the area look on it as a grave scandal and believe that it should never have taken place. The commoners were not offered the land. The public authority have had no opportunity, because of impediments put in their way by this company, to perform their public
  2012
  duties. This is the only opportunity I have of stressing this matter and I rise to do so. I had hoped to have done it before the Chancellor of the Exchequer made his remarks, because much has been said about good government, particularly about the Duchy of Cornwall.
  I submit that this is a concrete instance of bad management, and not only of bad management. If a Labour Government had been in office and had had authority over those bodies, and if they had sold land to a co-operative society, to a trade union or to some such body with which they would have been politically allied, that would have been called nepotism, and perhaps something worse. In this case land has been sold to people who are known to be of the same political colour as the Government under which the land was sold. It has been administered by people who are receiving, according to evidence which I have received from the Duchy of Lancaster during the last few days, 500 a year in car park fees, but they have not even provided seats for the public, apart from other amenities. A beautiful coast is being run by these people, and yet nothing is done about it for the public. It would seem, now that the sale has taken place, that it is irrevocable and that nothing can be done. The public have been deprived for all time of the right that they should exercise. It has been assumed that the Duchy of Lancaster was administering Crown lands as a public trust, but in this case they have deprived the public of their rights as well as the commoners of their commons rights. I submit to the Chancellor of the Exchequer that this is concrete evidence that there has been bad management, and that it would be better that the House should agree to this Amendment.
  Captain RAMSAY: Is the hon. Member insinuating in this accusation that the Crown or the Royal Family are to blame? If he is blaming the Government, does he think that the situation would have been better if the land had belonged to the Government?
  Mr. WILLIAMS: I submit that in this case something very irregular was done, and that it could not have been done if this Amendment had been carried.
  HON. MEMBERS: Why?
  Captain RAMSAY: Would the hon. Gentleman explain why?
  Mr. WILLIAMS: We should have been able to obtain a statement in this House, and I should have been able to obtain facts. Apparently the facts are not to be revealed. I cannot obtain even the price, because the information is considered not
  to be in the public interest, although it is known to be a public scandal.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 202; Noes, 95.

  Division No. 169.]

  AYES.

  [10.58 p.m.

  Adams, S. V. T. (Leeds, W.)

  Gridley, Sir A. B.

  Palmer, G. E. H.

  Albery, I. J.

  Griffith, F. Kingsley (M'ddl'sbro, W.)

  Peaks, O.

  Anderson, Sir A. Garrett (C. of Ldn.)

  Grimston, R. V.

  Peat, C. U.

  Anstruther-G ray, W.J.

  Guest, Maj. Hon. O.(C'mb'rw'll, N. W.)

  Penny, Sir G.

  Apsley, Lord

  Guinness, T. L. E. B.

  Perkins. W. R. D.

  Aske, Sir R. W.

  Guy, J. C. M.

  Petherick, M.

  Assheton, R.

  Hacking, Rt. Hon. D. H.

  Pickthorn, K. W. M.

  Astor, Hon. W. W. (Fulham, E.)

  Hanbury, Sir C.

  Ponsonby, Col. C. E.

  Baldwin, Rt. Hon. Stanley

  Hannah, I C.

  Procter, Major H. A.

  Baldwin-Webb, Col. J.

  Hannon, Sir P. J. H.

  Raikes, H. V. A. M.

  Balfour, Capt. H. H. (Isle of Thanet)

  Harris, Sir P. A.

  Ramsay, Captain A. H. M.

  Barclay-Harvey, C. M.

  Hartington, Marquess of

  Ramsbotham, H.

  Beaumont, M.W. (Aylesbury)

  Haslam, Sir J. (Bolton)

  Ramsden, Sir E.

  Beaumont, Hon. R. E. B. (Portsm'h)

  Hellgers, Captain F. F. A.

  Rankin, R.

  Bernays, R. H.

  Heneage, Lieut.-Colonel A. P.

  Rathbone, J. R. (Bodmin)

  Birchall, Sir.J D.

  Hepburn, P. G. T. Buchan-

  Reed, A. C. (Exeter)

  Blindell, Sir J.

  Herbert, A. P. (Oxford U.)

  Reid, W. Allan (Derby)

  Bossom, A. C.

  Herbert, Major J. A. (Monmouth)

  Remer, J. R.

  Bowater, Col. Sir T. Vanslttart

  Herbert, Captain S. (Abbey)

  Ross, Major Sir R. D. (L'nderry)

  Bower, Comdr. R. T.

  Hills, Major Rt. Hon. J. W. (Ripon)

  Rothschild, J. A. de

  Bowyer, Capt. Sir G. E. W.

  Holmes, J. S.

  Rowlands, G.

  Brocklebank, C. E. R.

  Hope, Captain Hon. A. O. J.

  Russell, A. West (Tynemouth)

  Brown, Rt. Hon. E. (Leith)

  Hopkinson, A.

  Russell, S. H. M. (Darwen)

  Browne, A. C. (Belfast, W.)

  Hudson, Capt. A. U. M. (Hack., N.)

  Samuel, M. R. A. (Putney)

  Bull, B. B.

  Hume, Sir G. H.

  Sandys, E. D.

  Bullock, Capt. M.

  Inskip, Rt. Hon. Sir T. W. H.

  Savery, Servington

  Campbell, Sir E. T.

  James, Wing-Commander A. W.

  Scott, Lord William

  Cartland,.J. R. H.

  Joel, D. J. B.

  Selley, H. R.

  Cary, R. A.

  Keeling, E. H.

  Shakespeare, G. H.

  Chamberlain, Rt. Hn. N. (Edgb't'n)

  Kerr, J. G. (Scottish Universities)

  Shaw, Major P. S. (Wavertree)

  Channon, H.

  Lamb, Sir J. Q.

  Shepperson, Sir E. W.

  Chapman, A. (Rutherglen)

  Lambert, Rt. Hon. G.

  Simon, Rt. Hon. Sir J. A.

  Colman, N. C. D.

  Latham, Sir P.

  Smith, Sir R. W. (Aberdeen)

  Colville, Lt.-Col. D. J.

  Leckie. J. A.

  Somervell, Sir D. B. (Crewe)

  Cook, T. R. A. M. (Norfolk, N.)

  Leech, Dr. J. W.

  Somerville, A. A. (Windsor)

  Cooper, Rt. Hn. T. M. (E'nburgh, W.)

  Leighton, Major B. E. P.

  Southby, Comdr. A. R. J.

  Courtauld, Major J. S.

  Lindsay, K. M.

  Spears, Brig.-Gen. E. L.

  Craven-Ellis, W.

  Little, Sir E. Graham-

  Spens, W. P.

  Crooke, J. S.

  Llewellin, Lieut.-Col. J. J.

  Stanley, Rt. Hon. Oliver (W'm'l'd)

  Crookshank, Capt. H. F. C.

  Lloyd, G. W.

  Stourton, Hon. J.

  Croom-Johnson, R. P.

  Loftus, P. C.

  Strauss, H. G. (Norwich)

  Cross, R. H.

  Lumley, Capt. L. R.

  Stuart,. Hon. J. (Moray and Nairn)

  Crossley, A. C.

  Mebane, W. (Huddersfield)

  Sueter, Rear-Admiral Sir M. F.

  Cruddas, Col. B.

  McCorquodale, M. S.

  Sutcliffe, H.

  Donner, P. W.

  MacDonald, Rt. Hon. M. (Ross)

  Thomas, J. P. L. (Hereford)

  Dorman-Smith, Major R. H.

  Macdonald, Capt. P. (Isle of Wight)

  Titchfleid, Marquess of

  Duckworth, G. A. V. (Salop)

  McKie, J. H.

  Touche, G. C.

  Dugdale, Major T. L.

  Macnamara, Capt. J. R. J.

  Tree, A. R. L. F.

  Duggan, H. J.

  Magnay, T.

  Tryon, Major Rt. Hon. G. C.

  Dunglass, Lord

  Makins, Brig.-Gen. E.

  Tufnell, Lieut.-Com. R. L.

  Eales, J. F.

  Mander, G. le M.

  Turton, R. H.

  Eckersley, P. T.

  Manningham-Buller, Sir M.

  Walker-Smith, Sir J.

  Edmondson, Major Sir J.

  Margesson, Capt. Rt. Hon. H. D. R.

  Ward, Irene (Wallsend)

  Elliot, Rt. Hon. W. E.

  Markham, S. F.

  Waterhouse, Captain C.

  Elliston, G. S.

  Mayhew, Lt.-Col. J.

  Wedderburn, H. J. S,

  Emmott, C. E. G. C.

  Mellor, Sir J. S. P. (Tamworth)

  Wells, S. R.

  Emrys-Evans, P. V.

  Mills, Sir F. (Leyton, E.)

  White, H. Graham

  Evans, D. O. (Cardigan)

  Mills, Major J. D. (New Forest)

  Wickham, Lt.-Col. E. T. R.

  Fildes, Sir H.

  Mitcheson, Sir G. G.

  Williams, C. (Torquay)

  Findlay, Sir E.

  Morris-Jones, Dr. J. H.

  Williams, H. G. (Croydon, S.)

  Fleming, E. L.

  Morrison, W. S. (Cirencester)

  Windsor-Clive, Lieut.-Colonel G.

  Foot, D. M.

  Muirhead, Lt.-Col. A. J.

  Winterton, Rt. Hon. Earl

  Fraser, Capt. Sir I.

  Munro, P.

  Wise, A. R.

  Fyfe, D. P.M.

  Nall, Sir J.

  Womersley, Sir W. J.

  George, Megan Lloyd (Anglesey)

  Neven-Spence, Maj. B. H. H.

  Young, A. S. L. (Partick)

  Gledhill, G.

  Nicolson, Hon. H, G.

  Glucketein, L. H.

  O'Neill, Major Rt. Hon. Sir Hugh

  TELLERS FOR THE AYES.—

  Greene, W. P. C. (Worcester)

  Ormsby-Gore, Rt. Hon. W. G.

  Lieut.-Colonel Sir A. Lambert

  Gretton, Cal. Rt. Hon. J.

  Orr-Ewing, I. L.

  Ward and Major George Davies.

  NOES.

  Adams, D. (Consett)

  Griffths, J. (Llanelly)

  Potts, J.

  Adams, D. M. (Poplar, S.)

  Hall, A. H. (Aberdare)

  Pritt, D, N.

  Adamson, W. M.

  Henderson, A. (Kingswinford)

  Richards, R. (Wrexham)

  Alexander, Rt. Hon. A. V. (H'lsbr.)

  Henderson, J. (Ardwick)

  Ritson, J.

  Ammon, C. G.

  Henderson, T. (Tradeston)

  Robinson, W. A. (St. Helens)

  Anderson, F. (Whitehaven)

  Holland, A.

  Rowson, G.

  Attlee, Rt. Hon. C. R.

  Hollins, A

  Sexton, T. M.

  Bandsfield, J. W.

  Hopkin, D.

  Short, A.

  Barr, J.

  Jagger, J.

  Silkin, L.

  Batey, J.

  Jenkins, A. (Pontypool)

  Simpson, F. B.

  Belienger, F.

  Jenkins, Sir W. (Neath)

  Smith, Ben (Rotherhithe)

  Benson, G.

  Jones, A. C. (Shipley)

  Sorensen, R. W.

  Bevan, A.

  Jones, Morgan (Caerphilly)

  Stewart, W. J. (H'ght'n-le-Sp'ng)

  Brown, Rt. Hon. J. (S. Ayrshire)

  Kelly, W. T.

  Strauss, G. R. (Lambeth, N.)

  Buchanan, G.

  Kirby, B. V.

  Taylor, R. J. (Morpeth)

  Burke, W. A.

  Lathan, G.

  Thurtle, E.

  Cape, T.

  Lawson, J. J.

  Tinker, J. J.

  Charleton, H. C.

  Leach,.W.

  Viant, S. P.

  Cocks, F. S.

  Lee, F.

  Walkden, A. G.

  Compton, J.

  Leslie, J. R.

  Watkins, F. C.

  Daggar, G.

  Logan, D. G.

  Watson, W. McL.

  Davies, R. J. (Westhoughton)

  Lunn, W.

  Welsh, J. C.

  Davies, S. O. (Merthyr)

  McGhee, H. G.

  Whiteley, W.

  Dunn, E. (Rother Valley)

  MacLaren, A.

  Wilkinson, Ellen

  Ede, J. C.

  MacNeill, Weir, L.

  Williams, D. (Swansea, E.)

  Edwards, Sir C. (Bedwellty)

  Markiew, E.

  Williams, E. J. (Ogmore)

  Fletcher, Lt.-Comdr. R. T. H.

  Maxton, J.

  Wilson, C H. (Attercliffe)

  Frankel, D.

  Milner, Major J.

  Windsor, W. (Hull, C.)

  Gardner, B. W.

  Morrison, R. C. (Tottenham, N.)

  Woods, G. S (Finsbury)

  Garro-Jones, G. M.

  Paling, W.

  Graham, D. M. (Hamilton)

  Parker, H. J. H.

  TELLERS FOR THE NOES.—

  Green, W. H. (Deptford)

  Parkinson, J. A.

  Mr. Mathers and Mr. John.

  Griffiths, G. A. (Hemsworth)

  Pethick-Lawrence, F. W.

  Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

  Bill committed to a Committee of the Whole House for Monday next.—[Captain Margesson.]

  MEMORIAL TO ADMIRAL OF THE FLEET EARL BEATTY.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]
  11.8 p.m.
  The PRIME MINISTER (Mr. Baldwin): I beg to move,
  "That an humble Address be presented to His Majesty, praying that His Majesty will give directions that a monument be erected at the public charge to the memory of the late Admiral of the Fleet Earl Beatty, as an expression of the admiration of this House for his illustrious naval career and its gratitude for his devoted services to the State, and to assure His Majesty that this House will make good the expenses attending the same."
  I move this Resolution in accordance with the desire expressed by the House in the Resolution which was carried unanimously in the earlier part of the week. For the information of the House I may say that, as on similar occasions, the estimated cost will probably be about £6,000 or £7,000, assuming that the memorial takes the form of a, statue. The passing of this Resolution by the House will confirm that action, and, when
  2016
  it has been reported, the necessary steps will be taken to consider, the form of the memorial to carry out the wishes of the House.
  Question put, and agreed to, nemine contradicente.
  Resolved,
  "That an humble Address be presented to His Majesty, praying that His Majesty will give directions that a monument be erected at the public charge to the memory of the late Admiral of the Fleet Earl Beatty, as an expression of the admiration of this House for his illustrious naval career and its gratitude for his devoted services to the State, and to assure His Majesty that this House will make good the expenses attending the same."
  Resolution to be reported upon Monday next.

  SUPPLY.
  [REPORT: 29TH APRIL.]
  Resolutions reported.

  SUPPLY.
    CIVIL ESTIMATES ANT ESTIMATES FOR REVENUE DEPARTMENTS, 1936.

      CLASS VII.
      1. "That a sum, not exceeding £191,055, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Expenditure in respect of Labour and Health Buildings, Great Britain."

      2. "That a sum, not exceeding £81,840, be granted to His Majesty, to complete

      2017
      the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Expenditure in respect of Public Buildings Overseas."

      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      11.12 p.m.
      Mr. KELLY: I wish to raise point in regard to the apportioning of the expenses for these buildings. Although I find it is included in the Act of 1935, and I believe it began under the Economy Bill of 1931, it seems a very strange procedure that a portion of the cost of these Employment Exchanges should be taken out of the. contributions paid for the purpose of benefit. I doubt very much whether those who have been burdened with the repayment of the heavy debt and by the taking away of their benefits during recent years realise that a portion of their contributions goes for the erection, of new exchanges.

  MIDWIVES [MONEY].
  Resolution reported,
  "That—

  (a) for the purpose of any Act of the present Session to amend the Midwives Acts, 1902 to 1926, it is expedient to authorise the payment out of moneys provided by Parliament—

  (i) to such local authorities (in this. Resolution referred to as 'authorities') as may be determined by the provisions of the said Act of the present Session (hereinafter referred to as 'the said Act') on which additional expenditure is imposed in respect of any year in the third fixed grant period by the provisions of the said Act requiring an authority to secure the provision of a service of domiciliary midwives which is adequate for the needs of the area of the authority, of a grant in respect of that year calculated to the nearest pound by multiplying half the amount of the said additional expenditure by the weighting factor and dividing the product by the aggregate weighting factor; and

  (ii) to every authority of an amount equal to one-half of the aggregate expenditure incurred by the authority in each financial year in paying, by way of compensation to midwives who surrender or are required to surrender their certificates in pursuance of the
  2018
  said Act, such sums as will be sufficient to provide compensation equal, in the case of midwives who are required to surrender their certificates, to five times, and in any other case to three times, the average net annual emoluments derived from their practices as midwives or maternity nurses during such Herod as may be provided in the said Act;

  (b) for the purpose of sub-paragraph (i) of the last foregoing, paragraph—

  (i) expenditure imposed as therein mentioned on an authority in respect of, any year shall be deemed to be additional if, and to the extent that, it is estimated to the satisfaction of the Minister of Health (in accordance with directions given by him as provided in the said Act) to exceed the expenditure incurred by that authority and any welfare councils as defined in the said Act in employing or providing for the employment of domiciliary midwives in the area of the authority in the financial year ended on the thirty-first day of March, nineteen hundred and thirty-six:

  Provided that the said directions shall require the amount of the expenditure imposed as aforesaid on an authority by reason of its employment of midwives to be estimated by reference to the estimated average net annual cost incurred by authorities in employing a midwife in pursuance of the said Act;

  (ii) the expression 'weighting factor' means, in the case of an authority being the council of a county or county district, the quotient obtained by dividing the weighted population of the county constituting or containing the area of the authority, as determined at the commencement of the said Act for the purpose of the apportionment of the General Exchequer Contribution, by the estimated population of that county as so determined, and in the case of an authority being the council of a county borough, the quotient obtained by dividing the weighted population of the borough as determined as aforesaid by the estimated population of the borough as so determined;

  (iii) the expression 'aggregate weighting factor' means the quotient obtained by dividing the aggregate weighted population of all the counties and county boroughs as determined as aforesaid by their aggregate estimated population as so determined;

  (c) in this Resolution the expressions 'fixed grant period' and 'General Exchequer Contribution' have the same meanings as in the Local Government Act, 1929."

  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.15 p.m.
  Mr. MICHAEL BEAUMONT: I desire on this Resolution to touch upon two

  2019
  points which were touched upon rather lightly on the Committee stage of the Resolution, and on the Second Reading of the Bill no doubt because of the disarming nature of the Minister at the time. On further consideration, I think that they are really extremely serious points. The first is the nature of the Resolution itself. It is far too comprehensive for a Money Resolution of a Bill of this kind. There are two main points upon which this Bill may be criticised. One is the question of the operating authority, and the other is that of compensation. As the Resolution was originally drawn both these points would have been excluded from discussion on the Committee stage of the Bill. I supported the Government on both, but they would have been ruled out of discussion in Committee. It is true—and we thank the right hon. Gentleman for the fact—that he withdrew the Resolution and substituted another one which will enable discussion on the question of the authority to take place in Committee, but no discussion can take place on the subject of compensation. On a Bill of this sort, the most controversial points should be decided by the Committee to which the Bill is referred. Otherwise, there is no point in having the Committee stage.
  It is entirely new practice, and one with regard to which you have expressed your disapproval, namely, having these complex Resolutions which freeze out discussion on Committee upon important points. It is entirely wrong.
  In the old days, even in the days of which I have knowledge, a very few lines were deemed adequate on a matter of this kind. All matters of principle were not raised on the Financial Resolution but on the Committee stage of the Bill. That was the original intention of the Rules of Procedure of the House and one to which we should adhere. There is no conceivable justification for this new procedure of complicated financial Resolution. There was some justification for the new Rules of Procedure. In those days it was possible so to cover an Order Paper with Amendments as to waste an enormous amount of time. The Rules of Procedure have been changed and Chairmen upstairs now have the same power of selecting Amendments as are possessed by you, Mr. Speaker. It is unnecessary that Stand-
  2020
  ing Committees should be deprived of their right to discuss the main principles of a Bill. If the Standing Committees are not to be allowed to discuss these matters there will have to be protracted debates on Financial Resolutions and that will satisfy nobody. I beg the Parliamentary Secretary and all the Members of the Government to press upon those who draw up Financial Resolution that they should be drawn in the widest possible terms so that this kind of point should not have to be discussed after 11 o'clock at night. I make no apology for detaining the House on this matter.
  I now turn to the point which this particular Financial Resolution is going to stultify, and I come back to the unfortunate word which occupied so much of the time of the House on Second Reading arid the Committee stage of the Financial Resolution—the word "net." I am informed that the word "net" has no legal significance. My learned Friends tell me that they could not define it in a Court of law. That being so, the compensation is to be based on a system which depends upon somebody's net earnings, the word "net" must be define I. No one can say what Ruling may be given by the Chairman in the Committee upstairs, but it seems probable, from all the information that I have been able to ascertain, that he may rule that only the very narrowest interpretation of the word will be allowed to be put into the Bill. I have taken the trouble, but I will not weary the House with the details, to get the exact figures of income and expenditure of a practising midwife who will come under the Bill. I have taken the word "net" in its various interpretations. The gross earnings are about £215 a year, the net average takings on a reasonable basis would generally be agreed to be about £130 a year, but owing to the fact that in this particular ease a move had to be made in order to bring her nearer to her work and new instruments had to be bought the additional expenditure incurred meant that the net earnings were brought down to £35 a year. There is the case of whether laundry bills incurred by a midwife should be regarded as expenditure for the purpose of arriving at the net income. I think it is the wish of the Government and of the House that they should not be regarded as expenditure. The Government and the House want

  2021
  to give a reasonably generous and broad interpretation of compensation in these cases but as the Financial Resolution is drawn, the Government will be precluded from giving an interpretation to the word that they and the House would wish to give. I would ask the Parliamentary Secretary specifically whether he can say that as the Financial Resolution is drawn he is certain that we shall be able to put a definition into the Bill in Committee which will enable us to give effect to the Government's declared intention. If he is not so convinced, is he prepared to withdraw the Financial Resolution and submit another which will enable us to give that interpretation?
  11.24 p.m.
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My hon. Friend has raised a question of great importance. Let me say, quite frankly, that on principle I agree that the Financial Resolution should be so widely drafted as not to exclude free discussion of the Bill, but I think there is a difference on the point of finance. The Financial Resolution should be so drafted as to carry out the main financial structure of the Bill. It would be improper if the basis of compensation in the Bill was different from that in the
  2022
  Financial Resolution. It is in accordance with precedent that what we do in the one we do in the other. We are following the ordinary practice of the House, and the Financial Resolution has been drawn as widely as possible. The hon. Member will realise that I cannot anticipate the Rulings of the Chairman of the Committee, but I should imagine that the fullest possible discussion will be possible on the Clause standing part. I do not wish to go into the question of the interpretation of the word "net" but I can assure the hon. Member that it has no legal significance. It has been frequently used, but no doubt we shall hear more about the matter from the hon. Member when the time comes.
  The remaining Orders were read, and postponed.

  MIDWIVES [MONEY].

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."—[Captain Margesson.]
    Adjourned accordingly at Twenty-eight Minutes after Eleven o'Clock.

  ITALY AND ABYSSINIA.
  ITALY AND ABYSSINIA.
UNEMPLOYMENT.
  SOUTHWARK.
  SOUTHWARK.
  SCHEDULED SPECIAL AREAS.
  SCHEDULED SPECIAL AREAS.
TRANSPORT.
  MOTOR VEHICLE DRIVERS (PROSECUTION).
  MOTOR VEHICLE DRIVERS (PROSECUTION).
  STONY STRATFORD-SHENLEY ROAD.
  STONY STRATFORD-SHENLEY ROAD.
NATIONAL HEALTH INSURANCE.
  DOCTORS' PRESCRIPTIONS.
  DOCTORS' PRESCRIPTIONS.
  OPHTHALMIC BENEFIT.
  OPHTHALMIC BENEFIT.
  VOLUNTARY HOSPITALS (ACCOMMODATION).
  VOLUNTARY HOSPITALS (ACCOMMODATION).
  RURAL SEWAGE DISPOSAL.
  RURAL SEWAGE DISPOSAL.
  PRISON ADMINISTRATION (PSYCHIATRIST).
  PRISON ADMINISTRATION (PSYCHIATRIST).
  LICENSING LAW (HOURS OF SALE).
  LICENSING LAW (HOURS OF SALE).
  AIR RAID PRECAUTIONS (POISON GAS).
  AIR RAID PRECAUTIONS (POISON GAS).
  MILITARY UNIFORMS (POLITICAL ORGANISATIONS).
  MILITARY UNIFORMS (POLITICAL ORGANISATIONS).
  MOTORING OFFENCES (POLICE COURT PROCEDURE).
  MOTORING OFFENCES (POLICE COURT PROCEDURE).
  NAVAL AND MILITARY PENSIONS AND GRANTS.
  NAVAL AND MILITARY PENSIONS AND GRANTS.
MERCANTILE MARINE.
  PAY, ACCOMMODATION AND FOOD.
  PAY, ACCOMMODATION AND FOOD.
  STATISTICS.
  STATISTICS.
  RICHMOND PARK.
  RICHMOND PARK.
  CUSTOMS AND EXCISE OFFICE, WHITEHAVEN.
  CUSTOMS AND EXCISE OFFICE, WHITEHAVEN.
  SLATES AND SETTS (IMPORTS).
  SLATES AND SETTS (IMPORTS).
  BUILDING BY-LAWS, GLASGOW.
  BUILDING BY-LAWS, GLASGOW.
  SUEZ CANAL (DIVIDENDS).
  SUEZ CANAL (DIVIDENDS).
  HERRING FISHERY BOARD.
  HERRING FISHERY BOARD.
EDUCATION.
  DEVON SCHOOLS.
  DEVON SCHOOLS.
  DEFECTIVE SCHOOLS.
  DEFECTIVE SCHOOLS.
  CORONATION OF KING EDWARD VIII.
  CORONATION OF KING EDWARD VIII.

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Earl of Suffolk and Berkshire—Sat first in Parliament after the death of his father.

HEREFORD CORPORATION BILL.
Read 2a, and committed for Thursday next.
UCKFIELD WATER BILL.
Read 2a, and committed for Thursday next.
WREXHAM AND EAST DENBIGH SHIRE WATER BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
GLASGOW CORPORATION ORDER CONFIRMATION BILL. [H.L.]
Considered on Report (according to Order).
LONDON AND NORTH EASTERN RAILWAY ORDER CONFIRMATION BILL. [H.L.]
Considered on Report (according to Order).
EAST LOTHIAN COUNTY COUNCIL ORDER CONFIRMATION BILL.
Considered on Report (according to Order).
MINISTRY OF HEALTH PROVISIONAL ORDER (BRIDPORT JOINT HOSPITAL DISTRICT) BILL.
Read 3a, with the Amendments (according to Order), and passed, and returned to the Commons.

SUGAR INDUSTRY (REORGANISATION) BILL.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE BOARD OF EDUCATION (EARL DE LA WARR): My Lords, I beg to move

839
that this Bill be now read a second time. It raises two most important questions. The first is: Should the beet sugar industry continue to receive any assistance at all? In other words, should it be allowed to go on? The second question is: On what basis should the industry be organised if it is allowed to continue? Your Lordships are aware that the Majority Report of the Committee of Inquiry presided over by Sir Wilfrid Greene recommended that it should not be allowed to continue, but the Report went on to make recommendations as to the basis of its future organisation if the Government did not adopt that proposal. It was, of course, the duty of the Government to take into consideration many points which could not possibly come before the Committee. The reasons why the industry should continue: the ruin that its termination would bring to vast areas of agricultural Britain, the employment that would be lost, both directly and indirectly, the impossibility of producing and distributing alternative commodities which might be grown on no less than 400,000 acres of land employing over 40,000 men—all these and countless other considerations have been discussed by your Lordships a great many times and voted upon, and it would therefore be wearisome, if not disrespectful to your Lordships' House, were I to repeat them all.
I would, however, venture to make just two points. The first is that, now that there is hardly an industry in the country that is not receiving some sort of assistance from the State, whether it be in the form of tariff or subsidy, there is no ground whatsoever for making the charge that agriculture in general and the beet sugar industry in particular is receiving special consideration. If we take, for instance, a particular industry that is specially favoured by His Majesty's Opposition, the treatment of coal for its by-products, action on behalf of that industry is constantly being proposed by the official Left Party. That industry is at least as uneconomic as, if not even more so than, the beet sugar industry at the present moment. My second point is that those who found it in their hearts to support the giving of assistance to this industry in the past will find even stronger grounds for supporting the present scheme in this Bill.
840
Your Lordships will remember that it was the noble Viscount, Lord Snowden, who first announced on behalf of the then Labour Government the intention of His Majesty's Government to give support to this industry. Support was then to be given at the rate of no less than 21s. per cwt., to come down later to 14s. and then to approximately 7s. That Government did not actually introduce the legislation, because it did not remain in power, but the next Labour Government in 1929 was responsible not merely for carrying on that subsidy but actually for increasing it, and when—I think it was in 1930 or 1931—I appeared before your Lordships and asked your Lordships to increase The subsidy from 7s. 3d. per cwt. to 8s. 6d., I then had the honour of speaking on behalf of that very Party which at the moment is opposing this legislation—speaking on behalf of a Cabinet which contained as one of its most prominent members Mr. Alexander, and was loyally supported by Mr. Tom Williams, both of which gentlemen were recently engaged in leading the opposition to this Bill in another place. By 1935 the subsidy had again come down, from 8s. 6d. to 7s. 3d. The subsidy which we are proposing is at the rate of 5s. 3d. per cwt., but it is on a certain formula, and when that formula comes to be worked out this year it is likely to be rather at the rate of 4s. 9d. It is hoped, with the economies proposed in the Bill and for which provision is made, to bring that figure down yet lower.
This proposal that State assistance should be continued, but at a reduced rate, is a very important one. Equally important, however, if not more important, is the degree and the nature of the public control upon which we, as the National Government, are insisting as a condition of the enjoyment of this modified subsidy in a Bill which has been opposed, not by the reactionary Diehards supporting this Government, who are doubtless to be found in hordes sitting behind me, but by the official Labour Opposition. I cannot help thinking sometimes, as one who once had the honour of sitting with them, that if only the Opposition could spend just a little less time talking about Socialism and a little more in thinking and studying what is actually being done by this Government in terms of economic and industrial re-construction,

841
there might be a great deal more chance of their being taken seriously in this country.
This Bill is a most important Bill. It is important not merely to the agricultural industry; but its great and fundamental importance; is that it is part of that new structure in industry which the National Government are gradually building up. I stress this point partly because it is of general interest, but also because it would not be right to ask your Lordships to pass this measure simply as an item of agricultural relief, when at the same time you were in fact being asked to approve great and important new principles which are equally applicable to other industries. As I see it, this policy which we are pursuing is the peculiar British reply to conditions which in some countries are leading their Governments to fasten the iron hand of the State on all energy and enterprise, and which in other countries who are not facing the problem at all are leading to chaos and political strife. We are endeavouring by this type of legislation to bring some order into the complexities which are facing us in the modern industrial world. We are doing so by taking industries one by one and trying to deal with them according to the peculiar circumstances of each. Our interference as a Government is undertaken not in the spirit of imposing bureaucratic control on the enterprise of those who are responsible for the running of those industries, but, as an effort to put at their disposal all those resources of knowledge which of necessity must be in the hands of the Government alone.
In addition to the advice which is necessary if they are to work out these schemes of self-government in a way which will help themselves and be valuable to the country as a whole, we have to give them powers, powers which frequently enable them to set up monopolies in the most important foodstuffs in this courtly. With those powers and those monopolies must go the right of the State to impose public safeguards and control. That brings me to the particular and peculiar circumstances of the beet sugar industry. That industry has really, I think it is safe to say, passed its dynamic stage of development. We have got to the stage of consolidation. In this Bill, on the factory side, your
842
Lordships will find that we are proposing a form of organisation which is neither nationalisation, nor public utility, nor private enterprise; it really partakes of all three. On the growers' side—that is not in the Bill, because it can come into operation under legislation already in existence—we hope to see established a Marketing Board, and then, super-imposed on these two bodies, you will see that there is to be a Sugar Commission, whose task will be to co-ordinate the efforts of these two separate bodies. As I have ventured to say already, the principles of this Bill may well be applicable to other industries. They have already been applied to a very considerable extent in the electricity legislation, in the Railway Act of 1921, in various Acts for the regulation and reorganisation of the mining industry, and in our own Agricultural Marketing Acts of 1931 and 1933. Your Lordships will see, therefore, that it is really part of a normal development which has been taking place for the last ten years.
Your Lordships may wonder why I have wearied you with rather long general remarks not specifically applicable to this Bill which is before you, but it did seem to me that by giving a background of Government policy we might make it easier to deal with the actual provisions of the Bill at somewhat shorter length. If you will now turn to the Bill itself, you will see that the general policy which I have ventured to outline is embodied in its provisions. Its principal features are the continuance of State assistance to the industry, the setting up of a supervisory Sugar Commission, the amalgamation of the existing eighteen beet sugar factories into a single Corporation, and a scheme for providing a financial incentive—and this I will mention again when I come to it in the Bill—to the Corporation to attain the maximum economy and efficiency. If your Lordships will turn to Clauses 1 and 2 of the Bill, you will see that in those clauses are set up a Sugar Commission, and its powers and duties are there outlined. It is to be composed of a Chairman and not more than four other Commissioners, and its main duties will be to supervise the efforts of the Corporation and the Growers' Marketing Board, or such organisation as the growers may set up, and to act generally as, in a

843
sense, arbitrators, in the event of any disagreement between those two bodies.
In Clause 3 you will see that provision is made for the amalgamation of the eighteen existing factories into one Corporation. You will also see that compulsory powers are provided for bringing about that amalgamation, but it is the most earnest hope of the Government that those powers will not have to be used. Indeed, I can inform your Lordships that there is every chance they will not be used. Already you may have seen from the White Paper, issued on March 26, that definite arrangements are under discussion, and we have every hope that those arrangements will be able to go through. The capital of the proposed Corporation will be £5,000,000. Actually, the amount of the capital that has been invested in that industry is approximately £9,000,000. If it had been depreciated at the rate of 5 per cent. per annum it would have come down to about £6,000,000.
LORD STRABOLGI: Is that paid-up, or nominal, capital?
EARL DE LA WARE: It is the total money spent by the industry on fixed assets. On another basis of calculation we arrive at a figure of value of just over £4,750,000, but taking a round figure the figure finally negotiated was £5,000,000. As an additional public safeguard to any contained in the Bill, your Lordships will be glad to hear that the Treasury has been able to negotiate an arrangement with the companies whereby the Chairman of the Corporation is to be nominated by the Government, and the Government have been very fortunate in being able to obtain the services of Sir Francis Humphrys for that task. He has been engaged for a very long time now on the advisory tribunal, helping to work out a basis of agreement between the factories, and I need not remind your Lordships of his distinguished services to the State in the past in connection with the Government of India, as High Commissioner for Iraq, and as His Majesty's Ambassador in Baghdad.
Turning now to Clause 4, your Lordships will see that provision is there made for a Treasury guarantee for £1,000,000 loan which it may be necessary for the Corporation to raise for working capital and other purposes. It is hoped that it will not have to be quite
844
as much as £1,000,000. Nevertheless, that is the total that has been settled, and the reason why the Treasury is prepared to guarantee that sum is that, on the basis of assistance laid down in the Bill, the Treasury is going to save as a result of any economy made by the industry, so that if the industry is enabled by means of a Treasury guarantee to borrow money at a cheaper rate, that is all to the benefit of the taxpayer of the country. When we turn to Clause 5 your Lordships will see that it is there laid down that the factory Corporation is to negotiate the terms of a contract with the growers. I have already told your Lordships that there is hope of a Growers' Marketing Board. I think some of you will be interested to know how likely it is that the growers will form themselves into a board, and I can tell you what the position is.
Some time ago the representatives of the growers submitted to the Minister a scheme for a Marketing Board. That scheme has been referred back to them to be redrafted in the light of the provisions of this Bill. When it is re-submitted, it will be for the Minister to approve it or otherwise. If he approves it will have to be submitted to both Houses of Parliament for an affirmative Resolution, and if your Lordships and the other House pass that Resolution, then it will go back to the growers in the country for a poll. There is therefore, I think, every indication that the growers intend to put through a scheme, and I can only say here, that with which I am sure your Lordships will agree: that it is of the most vital importance to the smooth working of the machinery to be set up under this Bill that the growers should proceed with that scheme. In this clause there are certain other matters dealt with too. There is the question of price which is to be negotiated between the two bodies, the factories and the growers. Of course there is not time, or rather their organisations are not in existence, so it is impossible that the price should be negotiated this year. If your Lordships will turn to the Second Schedule you will see that the prices for 1936 are laid down.
Then reference is made to the "standard quantity"—a quantity equal to 560,000 tons of white sugar, which is referred to in Clause 32. There is a good deal of feeling on this question of

845
laying down a standard quantity which may be sold to the factories. It raises the whole question—a question on which there are very strong feelings—of the limitation of production. Actually, of course, it is the limitation of sales, but I think you will all admit that the one does really amount to the other. If I might speak quite personally, I feel very strongly with those who criticise any scheme for the limitation of production of a crop that can in any way be grown on an economic basis. But in this case let us realise what is being done. This beet sugar crop can only be grown in so far as the taxpayers pay out of their pockets a certain sum per ton produced. Therefore it is not really a question of the ordinary principle of the limitation of production here, but a question of limiting the liability of the taxpayer, and we have the right as a Parliament to say that we are prepared to help and to finance and subsidise a certain industry to a certain extent, but beyond that point we will not go. The machinery of this Bill then directs itself to trying as far as possible to make that limitation of liability. Accordingly an agreement will have to be come to between the various parties concerned as to the basis on which this task will be carried out. It will have to be on an acreage basis. It could not be on any other, because, as the scheme is to be administered under the Agricultural Marketing Act, there is in fact no provision. The tonnage is put at 560,000 tons, which is approximately 40,000 less than was grown in 1934–35.
LORD PHILLIMORE: 40,000?
EARL DE LA WARE: Yes, it was about 600,000, I believe, last year. Lord Phillimore, who has been good enough to send me certain points in which he is particularly interested, has raised two points as to the basis on which these contracts, which amount to quotas of production are to be allotted, and he has made two suggestions which are certainly very attractive. The first is that provision should be made to ensure that existing growers should be enabled to maintain their existing acreage. That obviously seems to be a just and right principle to lay down. But unfortunately my advisers do not see how that can be incorporated in the Bill, and for this reason. On what basis would we assess their existing acreage? Should it be on
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the basis, for instance, of last year? If it were to be, you would at once come up against the snag that the factories this year have laid down a rule, which is being enforced, that growers should not grow beet on land which was growing beet last year. That has meant that a great number of growers have in fact had their production disorganised, and therefore if we take last year undoubtedly it would work out with considerable injustice to a great number of growers. Then if we were to take the year before you would find that figures had already been scaled down in that year, but they were scaled down by the factories, and there was in fact a good deal of dissatisfaction at the basis on which they were scaled down. Therefore I would suggest to the noble Lord that, excellent as his principle is, the scheme is more likely to be administered according to the principles laid down if we leave the matter to negotiation between the two parties concerned, supervised by the Sugar Commission, rather than if we tried to tie their hands in this Bill.
I would really give the same answer to the noble Lord's second point—again it is a most attractive point and a very important one—namely, that small holders producing an acre or less than an acre of beet should be excepted from the scheme of limitation and to that extent allowed to grow as they wish. The only trouble there is that we all know, if we look into the figures of small holders' crops, that we might get tremendous variations of the acreage if we adopted the noble Lord's proposal. Remember this, that if you give everyone the right to grow an acre or less it would mean, let us say, that a grower with quite unsuitable land would put in for a contract, which could not be refused, but which in fact would displace some other grower who probably had very much more suitable land. Again, I would suggest to the noble Lord that his point, which is undoubtedly one that should be put before the Commission as worthy of their consideration, would be more likely to be carried out on a satisfactory basis if it were left to their judgment than if we tried to tie their hands in this piece of legislation. We really must make up our minds which scheme we are going for—whether we are going to try to run this sort of scheme entirely from Whitehall, or whether we

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are going to appoint certain people to carry out the scheme and rely on their good sense. I suggest to the noble Lord that the machinery of the scheme that we are trying to adopt should be allowed to be carried through; but I would say this, that the Sugar Commission, which is responsible, has to give an annual Report to the Minister, and the Minister has to lay that Report before the Houses of Parliament. That means that the Minister has full Parliamentary responsibility for the administration of the scheme, and questions can be put to him on any occasion on its working.
Now we come to the portion of the Bill dealing with finance, Clauses 10 to 16. There are two other clauses, Clauses 8 and 9, which I ought to mention, but I will do that at a later stage. Clause 14 is really the main operative clause. The rate of assistance, as I have already said, is to be 5s. 3d., but as there has been a rise in the price of sugar already, that figure will, in fact, be 4s. 9d. I should like to draw the special attention of your Lordships to subsection (4) of Clause 14, because I have already told your Lordships that provision is made throughout this scheme for ensuring that any economies which are made will inure to to the Exchequer. That will mean that so far as we are able to improve the efficiency of the sugar industry, to that extent the industry will need less public assistance. That is a very excellent principle, but it has this disadvantage, that if the Exchequer is going to "snaffle" all economies there is not much incentive to the Corporation to achieve those economies. Accordingly, in Clause 14 (4) provision is made for ensuring that some of these economies do inure to the Corporation.
Perhaps I might at this point outline to your Lordships some of the economies that are already being made. I have already said that the subsidy was 7s. 3d., coming down to 4s. 9d. per cwt. That has meant an economy of not less than £1,500,000 to the Exchequer. Then the tonnage is being reduced from approximately 600,000 in 1934–35 to 560,000. That will mean an economy of £500,000. Then there are economies that may be made by the amalgamation of the factories into one Corporation. These economies will amount eventually to approximately £300,000—shall we say a quarter of a
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million? Then there is one last economy that is purely hypothetical, but for which it is not unreasonable to hope. That is the possibility of some rise in the price of sugar. It may seem a little optimistic perhaps, but your Lordships know that there is, in fact, no body of producers in any country in the world at the present moment producing sugar at a profit. It is therefore reasonable to hope that there may be some rise in the price of sugar; and in so far as the price of sugar does rise so will the rate of Exchequer assistance come down.
If I may jump from Clause 14 to Clause 18, a very important new principle is laid down in Clause 18. Your Lordships may remember that in Lord Bingley's Report on the fat stock industry the recommendation was made that the Marketing Board should be asked to co-operate in the efforts of the State in the matter of paying for research and education. In this Bill the first step is taken towards implementing that recommendation and, accordingly, provision is made for contributions from the factories Corporation and from the Sugar Beet Marketing Board towards a scheme for research and education. That scheme will be subject to supervision in order to see that there is no overlapping. It would obviously be undesirable for the State to be carrying out research and the Marketing Board and the factories Corporation to be carrying out a similar scheme.
Now I come to Clauses 7, 8, 9, and 19. These clauses deal with the refiners. Your Lordships will see that the Commission shall keep a register of refiners, and provision is made for an agreement to be come to between the refiners and the factories Corporation as to sharing out the white sugar market. If your Lordships turn to Clause 19, you will see that the Commission may license refiners, which is a very different thing from merely registering them. It means that in order to ensure full efficiency in the refining industry all refiners will have to be licensed. They will have to be able to prove their efficiency, and new entries to the industry will have to be approved by an appropriate body set up. But that can only be done if it is established that it is in the public interest. The scheme must be drafted by the Sugar Commission, it must be advertised, objections must be heard, and there must be an

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affirmative Resolution of both Houses of Parliament. Lastly, in Clause 23, provision is made for fair wages both on behalf of the Corporation and the refiners. Your Lordships will agree that when large sums of public money are to be paid out to assist this industry, it is only fair that we should ensure that those employed in the industry should have a fair share of what is being given.
This concludes my brief summary of the Bill. There may, of course, be many points which I have not mentioned and which will be brought up possibly at a later stage, but I think I have dealt on the whole with most of what I may call the Second Heading points. We shall have the Committee stage later, but it is important at the moment to keep in mind the main purpose of the Bill, which is to continue assistance to this industry and to reorganise it with a view to putting it on a sound footing. The Bill will keep in use some £5,000,000 of capital, and it will keep in use also very nearly 400,000 acres of land. It will keep in employment at least 40,000 men, and it will maintain a crop which has become of vital importance to great areas of agricultural England, a crop for which no one, however critical of this scheme, has been able to suggest any real substitute. The Government are determined that this industry shall continue. They are determined, that those engaged in the industry shall be sure of a fair reward. They are equally determined that they shall only grant that assistance after every attempt has been made to ensure efficiency and the public interest, both on behalf of the consumer and of the taxpayer.
LORD PHILLIMORE: Before the noble Earl sits down, may I ask him for a rather fuller reply to my third question which was: How far is the farmer's contract price related to the subsidy in any given year?
EAEL DE LA WARE: I am sorry I left that out entirely. The contract price for beet will be settled in future years before the rate of assistance for that year is prescribed, and it is hoped that in future the contracts will be issued in the autumn, so that the growers will know in good time how much acreage is expected by the factories and so that they can make the necessary arrangements for the preparation of the ground. In view, however, of what I call the incentive
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claim—that is the part of the Bill to which I referred for encouraging the Corporation and the factories to make economies—the prescribed rate of assistance for any year will not be able to be settled until the accounts of the Corporation for the preceding year are made up, say in April or May, and when the prescribed rate is being calculated one of the ingredients in that calculation will, of course, be the price of beet. But the original assessment of the price of beet will have to be made between the representatives of the growers and the Corporation or, in the event of any disagreement between those two bodies, by the Sugar Commission. Therefore, when that determination is made, and when that negotiation has been carried through, then the rate of assistance will be determined by the Treasury.
Moved, That the Bill be now read 2a.—(Earl De La Warr.)
LORD STRABOLGI: My Lords, I beg to offer a few observations on this Bill on behalf of the Opposition. These observations should really have been made by my noble friend Lord Noel-Buxton, who regrets that he is unable to be here. They will be brief because, among other reasons, I do not want to stand too long in the way of the debate to be initiated by my noble friend Lord Ponsonby, to deal with a situation which, in part, results from the same economic nationalism which is attempted in this Bill. Let me begin by stating quite plainly that I am an interested party. I am a shareholder in one of the companies affected by the Bill and already the value of my shares has risen on the London Stock Exchange. Nevertheless, though I am opposed to the Bill, if your Lordships divide upon it I do not propose to vote.
This Bill and what has led up to it are an example of the awful things that happen when an orthodox Free Trade economist strays from the narrow path of Cobdenite virtue while not following Socialist principles in the process. In 1924, as the noble Earl pointed out, Viscount Snowden allowed himself to be persuaded into subsidising, or promising to subsidise, beet sugar manufacture under private enterprise. Since then, up to May of last year, the unfortunate overburdened taxpayer of this country and the nine-tenths of the farmers who do not grow beet have had to find £40,300,000

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as subsidy. Of this sum only £15,400,000, I am informed, has gone into production costs and manufacturing costs, and there has been a trading margin, I am informed further, of £11,200,000, with the result that certain favoured companies have made very heavy profits indeed. I am told that three of what I may call the Dutch concerns paid 20 per cent. dividend in the four years from 1928 to 1931 as a result of the taxpayers' assistance. Now this Bill is introduced with its permanent monopoly and its permanent subsidy all under private enterprise. I really wonder that the noble Viscount, Lord Snowden, has not turned in his political grave and come here to see the result of his lapse.
I understand that the total annual consumption of sugar in this country is round about 2,000,000 tons. This Bill cuts production, as the noble Lord, Lord Phillimore, I gather, has already pointed out in his communications with the Under-Secretary, from 600,000 tons to 560,000 tons, so we shall be nothing like self-supporting in sugar as a result of this Bill, nor are we likely to be. The subsidy will be equal, I understand—the calculations are a somewhat complicated matter—to about 100 per cent. on the present price of sugar.
Now, about the employment given. In another place the Under-Secretary, Mr. Ramsbottom, on February 10, stated that 30,000 men were employed directly in this industry at a cost of £5,000,000, including the subsidy and the Excise abatement. This works out at over £3 per man per week; a subvention of £3 to keep one man in employment! But that is not the only assistance given to employment. Capital is to be assisted to be employed, and very remuneratively, too. I understand that the cash paid-up capital of the companies taken over was £4,550,954. There is some dispute about the definition of "capital." There apparently was some difference and the noble Earl who has introduced this Bill gave a capital valuation. I think he gave the figure of £4,500,000, or thereabouts, as the real assets. The Corporation will have a capital, guaranteed of course as to its profits by the subsidy, of £5,000,000 and a capital bonus immediately therefore of about 10 per cent. Why? Furthermore, the Treasury is creating, as we have heard, what is in fact a gilt-edged security on, I understand, a 4 per cent. basis, while trustee stocks, as your Lordships
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know, carry an interest of only 2½ or 3 per cent. to-day. In addition to that the companies participate in the extra dividend that it may be possible to pay up to one-third, so they have one-third in the equity as well. Is it difficult to understand why my Party is opposed to any such scheme?
As to what our policy would be, we would either taper off the subsidy gradually, until it disappeared, and leave the industry to get along as best it could; or we would make a public Corporation of the whole industry, a real public Corporation. If you are to tackle this matter properly, you should not only take over the factories at a fair valuation of cost but also the refineries. That is what we ought to do if we are really going in for sugar production in this country. If we are to grow beet for sugar, I do not see why we should not aim at producing the whole of our requirements; then, instead of having only 10 per cent. of the farmer growers in this country out of the total farmer growers benefiting, something like 30 per cent. would benefit. That would be a policy I could understand. It would be just as sensible to try and grow our own cotton in this country under glass as this ridiculous proposal of the Government. Needless to say my noble friends are opposed to it.
LORD HASTINGS: My Lords, before dealing precisely with the Bill which is before the House, I desire with your Lordships' kind permission to say a few-words on this the first appropriate opportunity which has offered upon a subject which is of the deepest interest to a large section of the members of your Lordships' House. We have just had a Bill of first-class agricultural importance introduced to your Lordships by the Parliamentary Secretary of the Board of Education. Why? Because for the first time in memory there is neither a Minister for Agriculture nor a Parliamentary Secretary to the Ministry of Agriculture with a seat in your Lordships' House. The House is well aware that in its personnel it happily includes elements which are fully representative and will be able to speak upon all the great questions of the day, but it still remains a fact that rural economy and agriculture has more representatives in this House than all the other subjects of interest put together. The circumstances

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are remarkable. I would not have believed it possible had it not happened, that there should be for the first time no spokesman for that Ministry in this House.
There is contained in this House persons well able to speak upon the practice as well as the science of agriculture, upon the administration of that great industry and upon its political aspect. The circumstances now prevent us from being able to engage upon the floor of this House in debates of the quality which the personnel of the House requires that they should be. Without any intention of any discourtesy to the Minister who has introduced the Bill I desire to make a protest. In the case of this Bill we know that the noble Earl's long service at the Ministry of Agriculture and his intimate acquaintance with this subject will ensure that the House will suffer no disadvantage—I gladly acknowledge that—but that in no way affects the principle which I am endeavouring to emphasise. The time must come, and come shortly, when the noble Earl, whose duties at the Ministry of Education will take him further and further out of touch with the Ministry of Agriculture, will be inadequate to represent before this House the topics which must arise and which we desire to discuss.
I say no more on the subject except to assert, as is the truth, that I speak not only for myself but for a large section of the House who have felt, and do feel, deeply on this question. It so happens that my noble friend the Leader of the House is engaged on an interesting domestic matter to-day. I wished he had been here, but he knew that I was going to say a few words on the subject. We must leave this matter to him and I feel sure that there is no one who, whether by personality or record of achievement, is better fitted to uphold both the rights and the dignity of this House. With that, my Lords, I leave it. At the request of the Minister who introduced the Bill I would add this further word, that he himself has left the House because of a domestic circumstance of great gravity to him. Most readily do I excuse him for not being here to listen to the further progress of this debate, and I feel certain that those noble Lords who follow me will do the same.
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Now, quite briefly, I will address myself to the subject of the Bill. I would like, if I may, to say how gratefully the agricultural industry as a whole and the sugar beet growing areas in particular have received this Bill. But it must not be understood for a moment that the Bill is going to pass entirely without criticism. In general principle it meets a request which has been pressed upon the Government—and not only this Government—for a term of years, that they should create an industry which can be stabilised and which agriculturists will know not to be subject to sudden abolition by the removal of the assistance under which alone it can be carried on. By those who do not live in the sugar beet growing areas there can, I think, never quite be realised the immense benefits which the sugar beet industry has brought to the people of the soil. To know that, with whatever limitations, this industry has not only been established but is to be continued, is of itself of immense benefit to all classes connected with agriculture not only in those districts but throughout England, because if those districts were unable any longer to engage upon this industry they would by force of circumstances be competing more strongly with other parts of England in the business by which those parts live.
But, having said that, and knowing that in saying it I am expressing the general sentiment of agriculture, I would add that I am personally disappointed with the Bill. The noble Earl, Lord De La Warr, referred in anticipation to what would unquestionably be put forward as the major objection to the Bill—the limitation of production which the Bill contains. The noble Earl advanced as a reason for it the perfectly sound one that Parliament had the right—I would have added also the duty—of limiting the amount of assistance which it could give to any industry, and I regret to acknowledge that there must consequentially follow a limitation in production. That must consequentially follow upon the limitation of subsidy in the circumstances under which this Bill is constructed. But the question arises as to whether this Bill is constructed aright. As the Bill is constructed I have little fault to find with any part of it, except on matters of detail which will arise on the Committee stage, but it is evident from the first to

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the last page of this Bill that it is in a sense a surrender to the Treasury.
It is an acknowledgment that the case for the continued growing of sugar beet has been so strong that the Government of the day have felt bound to give way to the arguments advanced for that continuation. Having felt so constrained, they have set to work to discover how cheaply it can be done, and throughout the whole structure of the Bill there appears to my mind a restrictive policy, an endeavour to make the thing as little as it can be. The noble Earl, in introducing the Bill to your Lordships' House, made far more of the small demand that is made upon the taxpayer in general than of the advantages that it gave to agriculture. I am afraid that is not an angle of approach which would appeal to me. If it had been given to mo to have anything to do with the measure I should have rather looked at it from another standpoint. I should have asked myself, how much sugar ought we to grow in this country to be safe? Sugar is an essential article of diet for human life. The human frame cannot exist without sugar. We know that during the Great War the quantities of sugar which we were able to import were less than those which the population reasonably required. Do we know that in the next Great War we shall be able to import any sugar? It seems to me that the minimum requirement of this country in sugar should have been the foundation upon which this Bill was built. If we do come to a conclusion—it is a matter for experts—as to the quantity of sugar we require, then by all means let us go further and see how cheaply we can achieve that particular production. But the Bill has not been framed on those lines at all. It has not been framed with any greater intention than that of preventing sugar production from getting any bigger than it was and is now.
The advantages of growing sugar beet in this country are manifold, and one of the greatest of them is that no crop like sugar beet so well maintains the fertility of the soil. If you were to come, as one day you may, to the necessity of being able to grow intensively upon that soil in times of emergency, how thankful would you be if you could be certain that all the soil of Britain was in a high state of fertility. That is just the state
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in which the soil of Britain is not, and there is no crop like sugar beet for maintaining it in such a state. Additionally, there has always been the great social advantage of the crop, that it retains upon the soil a labouring population without whom you cannot do and who would not remain if you were not from time to time able to devise forms of cultivation of this character which, by the wages which they pay and the constant employment which they give, encourage people on the soil to stay upon it. Sad indeed would be the case of this country if its rural population were to be depleted ever more and more and you had no resource upon which to fall back in time of need.
The question of subsidising and encouraging the sugar beet industry goes beyond mere terms of money, and I am sorry that this Bill has not shown a greater vision than it has. Limitation of production can never be sound. There might be, it is true, such production of a particular commodity as went beyond any conceivable requirement; but so long as you have a margin between what you produce and what you consume, surely it cannot be right that the production of that item should be restricted in your own country. Though I admit that, from the standpoint of the sugar beet-growing areas, restriction of production is, in the present instance of limited subsidy, to the advantage of those areas; yet, regarding the matter less from the standpoint of the persons interested in the sugar beet grown and more from that wider view which all of us ought to take, I hold and proclaim that limitation of production is a cardinal sin to which I cannot be a party.
Within the four corners of this Bill are contained quite a number of inconsistencies. You limit production and yet you provide what will be a great fund for research. There are clauses in the Bill which positively discourage the grower from producing better crops than he now does. If he does produce them, he is going to be disabled from selling them. To what advantage will this research work be applied? Research can only be intended to teach the grower to grow better what he now grows, and to grow it to greater profit. Limitation of production on a tonnage basis makes an ambition of that kind futile. I regret

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that it should have been thought worth while to embody it. Though on the face of the Bill it may seem wise, it is of no effect. The noble Lord, Lord Strabolgi, dealt mostly with the financial clauses of the measure, which he criticised for what he conceived to be the over-generous gift to the manufacturing side of the beet sugar industry. We are all aware that certain groups on the manufacturing side of the industry have of recent years made profits which have made the growers' mouths water. But as growers we have never complained, for the reason that not until the factories are established on an absolutely certain financial basis may the growers be sure of a continued market for their product. Therefore, although financial criticisms of a perfectly just kind may be levelled against the proposals of this Bill, they will not come from the growers, because we recognise that our interests over a certain wide field are identical.
I think I have said quite enough on the subject of this Bill for a Second Reading purpose, to show that there is no intention on the part of agriculturists in any way to interfere with or retard the passage of the Bill. I have also shown, I hope, that there is much disappointment with the niggardliness of its structure, that it might have been a far greater measure than it is, and that, had it been a greater measure, it would have received a greater welcome. I thank you, my Lords, for your attention.
VISCOUNT BLEDISLOE: My Lords, there is no member of your Lordships' House who speaks upon agricultural topics to whom it is a greater pleasure—at any rate to me—to listen than the noble Lord who has just sat down, for he always speaks with full knowledge of his subject, with exceptional clarity, and with an eloquence which does not always distinguish some of us rustics from the countryside! I feel compelled to participate in this debate without, frankly, having mastered the details of this somewhat complicated Bill, first of all because I acted for a period of the Great War as Chairman of the Royal Commission on the sugar supply; and secondly because it was my experience to introduce on behalf of the Government in this House the British Sugar (Subsidy) Bill some eleven years ago.
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In the first capacity I realised that sugar is one of the most essential forms, possibly the most essential form of food in times of great emergency such as the Great War, and that its adequate supply from within our own borders affords, or should afford, a great measure of security to the country. There was one period during the summer of 1917 when two sugar ships were sunk by submarines in the course of three weeks, and we were faced with having a bare fortnight's supply of sugar in this country. I think your Lordships will agree with me when I say that, of all the food necessaries essential for the comfort of homes where children are to be found, sugar stands pre-eminently first. I therefore travelled a very long way with my noble friend when he suggested that, from the point of view of national security, it would be desirable to frame this Bill on the basis of what are the essential requirements of the country in time of emergency. As it is, I think I am right in saying that some thing like one-quarter of our sugar requirements—
LORD HASTINGS: Between one-quarter and one-third.
VISCOUNT BLEDISLOE: —something between one-quarter and one-third of our sugar requirements are raised upon our own soil. The noble Lord—and no one has done more than he has done to foster the development of this important industry in any part of England—has quite rightly emphasised the fact that, of all crops raised in any part of the world upon agricultural land, there is none that is more calculated to increase its fertility than that of sugar beet. And I go so far as to say that although I, very reluctantly, have to confess that the standard of fertility of British land has declined very considerably since the War, at any rate in those areas where sugar beet is mostly grown, as in East Anglia, the standard of achievement on the part of the arable farmers in the improvement of the fertility of the land has been raised, in my judgment, by at least 20 per cent.
The noble Earl, Lord De La Warr, has left the House, but I hope someone on the Front Bench is prepared to reply to our criticisms. Perhaps Lord Monsell will do so. The noble Earl incidentally made the remark in regard to subsidisation and protection generally, that the

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Government were taking industries one by one. I wish that instead of taking various branches of the agricultural industry one by one, they would develop a settled long-range plan, so that every essential branch of the agricultural industry may receive its due consideration; because what is the case to-day? Whether it is dairying or wheat production, or beet sugar production, the tendency is of course for farmers who are not engaged in a subsidised branch of the agricultural industry, in order to ensure a living for themselves, whether or not they themselves have the competence, and whether or not soil and climate are suitable for this particular enterprise, to go into a subsidised branch of the agricultural industry to the detriment of their land. It is happening particularly in the dairying industry, to-day, and without sharing the somewhat extreme views of Lord Strabolgi, I for my part most earnestly wish that, without any measure of nationalisation, the whole of our agricultural problems could be grasped by the Government as one great problem which should not be dealt with piecemeal.
What is exercising my mind in particular is this. I happen to live in an area in the West of England where excellent sugar beet can be grown but where we have no factory. I want to ask how is it going to be possible, if this Bill becomes law, for a new factory to be set up in such an area with any chance of its being able to stand upon its own legs, and serve the sugar beet requirements of that part of the country? And there is another thing which I am tempted to ask. First of all, I should like to say how utterly distasteful it is to me that the greatest industry of this country should require to be treated as mendicants, and require subsidisation from the Government at all. But I ask, more particularly with regard to this branch of the agricultural industry, where does the necessity come in? On the one hand Excise Duty is charged on the sugar raised in this country, and on the other hand a bounty or subsidy is provided, by way of balance, to those producing sugar, who have directly or indirectly to pay the Excise Duty. Why cannot one cancel the other and the industry stand upon its own legs as I have reason to believe any efficient producer of sugar beet can enable it to do to-day?
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However, I may be told that that is a matter for the House of Commons and not for your Lordships' House, and that it would be a breach of the Privilege of another place to introduce any Amendment to that effect. At any rate, if it is really necessary from a financial point of view to subsidise a branch of British industry, because there is some duty or extra burden like Excise upon that branch of industry, I do most sincerely ask why is it necessary to maintain that burden and thereby turn the producers in that industry into mendicants or the recipients of Government subsidisation?
I do not want to take up your Lordships' time further, except in order to refer to the remarks of the last speaker. I deprecate very strongly the fact that there is no longer any representative of the Ministry of Agriculture in this House. I think we can without egoism claim to give authoritative views with regard to agriculture at least as well as the members of another place. I would remind the noble Lord of this: My memory goes back to the year 1912, when I myself was a member of the House of Commons, and when I may confess I was instrumental in organising a deputation to the late Lord Oxford, then Mr. Asquith and Prime Minister, in order to protest to him against the non-representation in the House of Commons of the then Board of Agriculture by anyone other than an unofficial member sitting on the Front Bench. The House of Commons were then complaining, and to-day your Lordships are in a similar position, but at that time we were given clearly to understand that if a Parliamentary Secretary were inaugurated in connection with that Department, each of the two Houses would have its representative, in order officially to state the opinions of the Government with regard to the country's greatest industry. I, for my part, in general terms support the Bill, but I do most sincerely deprecate what the noble Lord has described as the limitation, possibly for all time, of the development of this most essential industry, as I believe there is none more essential to the security of the country and the improvement of our agricultural methods.
LORD RHAYADER: My Lords, I do not want to take up the time of your Lordships at any length this evening, for I have had previous opportunities of

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giving expression to my views on the subject of beet sugar, but I cannot allow this Bill to pass its Second Reading in this House without entering my protest against what I think is the most complete and most scandalous instance in history of a Protectionist ramp. This Bill, in my judgment, violates every sound economic principle. I do not want to take your Lordships through the whole story. It is very well known. It began when, in an unfortunate moment, Mr. Snowden, a member of the Labour Government and Chancellor of the Exchequer, thought he could help an infant industry by a subsidy for a few years, to enable beet sugar growing to get on its feet in this country. Even the great economist John Stuart Mill said that you might help an infant industry to get a start and Mr. Snowden in a weak moment opened the door for the Protectionists who have followed him.
It was laid down that the subsidy was to last for ten years only, on a diminishing scale. It lasted its ten years. Forty millions of public money was spent. The larger part of it went to the investors in the beet sugar factories, a smaller portion of it to the farmers. There was no scarcity of sugar. There was no pretence that you were going to get a crop which would enable you to have sugar when otherwise the country would get nothing. On the contrary, there was in the world a surplus of sugar. Sugar growing was not very profitable in the West Indies before beet sugar was subsidised in this country. The sugar growers in other parts of the world were not making very large profits. Well, the deed was done, the subsidy has been paid, and at the end of ten years we had an inquiry into the working of the system. The Greene Report went fully into all the circumstances and explained—what was really well known before the inquiry—that sugar beet was not a profitable crop in any country in the world, and that it could never be grown in this country without a Government subsidy. They therefore recommended that the subsidising should be brought to an end, and beet left to resume its former position in British agriculture.
It is not uninteresting to notice, by the way, the growth of this legend. Sugar beet, which was a rare crop in old days, has now become the stable foundation of British agriculture, and we are
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told by the supporters of this Bill that without this crop British agriculture must infallibly die away. Well, what has been the result? The Government have not accepted the recommendations of the Greene Report. On the contrary, they have set them on one side, and are now going permanently to subsidise the crop. As a result of their operations shipping has suffered enormously, and we are coming down to subsidised shipping for the loss of freights due to the setting up of a subsidised beet sugar industry. The West Indian sugar grower surely had competition enough in the world before, but a new rival was brought in, subsidised by Government money in this country. And now a permanent subsidy is to be given to it.
Thus, there are three things all of which are repugnant to any one with a sound financial economic sense. The first of them is that public money is to be used to set up a monopoly. That is one of the criticisms which have always been addressed by Free Traders to Protectionists—that you take the public money in order to bolster up particular interests. This is an extreme case of that policy. The sugar factories are to be all united together in a monopoly, so that no fresh rivals can arise without the utmost difficulty. I listened with great interest to the noble Viscount, Lord Bledisloe, whom we knew well in the House of Commons as an agricultural authority, pointing out that in his part of the country he sees no means by which a beet sugar factory can be successfully started. I believe the Bill sets up a quite firm monopoly in the interests of the shareholders in the present eighteen sugar beet factories. The refiners, of course, have had to be squared. Without a reconciliation of the interests of the refiners and the factory owners the scheme could not go through, and after long negotiations behind the scenes the sugar refiners and the factory owners have come to an agreement by which they will be able to share out the Government swag. I am using the plainest language I can find. I am afraid it will be something of a shock to refined cars, but the thing is a grotesque ramp.
Finally, this monopoly having been set up, it is to be used to limit production—another of the evil effects of a Protectionist policy. You set up a monopoly, you square the interests, pressure is put

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in all directions, then you limit production, and presently you are hoping, as the noble Earl told us to-day, for a rise in the price of sugar. Well, sugar is not dear, but the cheaper sugar is. The moment the Government pay a subsidy to grow sugar, naturally they want the price to go up, and the general community in this country are sacrificed in the interests of those whom the Government see fit to subsidise. Looking at the whole history of the thing, it would have paid the farmers a great deal better if you had handed over to them £2,000,000 a year not to grow sugar than to do what has been done over the last twelve years in regard to the sugar beet business.
And may I say this to Lord Hastings, to whom I always listen with the greatest interest on this question, both because of his knowledge, his eloquence, his power of putting his point, and I think I may add his realisation of the other man's point. I am sorry he is not quite contented with the Bill. It is a little hard after all these years that he should not get complete satisfaction. But he really is indulging in too great a hope when he says the matter is finally settled now and put on a permanent basis. This subsidy cannot be put on a permanent basis. When financial pressure becomes heavier in this country—and it is growing year by year—a future Government will undoubtedly have to ask itself: "Where can we economise? Where can we cut off wasteful expenditure?" And there is no waste in the whole record of Government waste at this moment comparable with the money which has been paid out to the beet sugar industry.
Lay not the flattering unction to your souls that this is going to last for ever. You had agriculture put in an even stronger position than this in 1920, when the guaranteed price of wheat was put into an Act of Parliament. That Act was repealed within a year of its passing when financial pressure came on the country. And so it will be with sugar beet. The subsidy should never have been paid. When pressure comes it will be taken off. I hope those who are interested in agriculture will realise that, and not believe that this exotic crop can be the stable foundation of agriculture in this country. I do not know if your Lordships are going to divide against the Bill. I should like to vote against it,
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but it does not matter. You have your majority, you do what you will, but I leave it on record that, of all the Protectionist deals I have seen in the course of an unhappy experience now lasting many years, this is far and away the worst, and for that sooner or later agriculture is going to have to pay.
LORD STONEHAVEN: My Lords, the noble Lord who has just addressed us said he was going to use the plainest language, and he referred I think to this measure as a Free Trade ramp.
NOBLE LORDS: Protectionist ramp!
LORD STONEHAVEN: I beg jour Lordships' pardon. I am going to follow his lead by suggesting that the views he has advocated are a marvellous example of what I may call Free Trade futility. The reason I say that is that the noble Lord ignored altogether the points made by my noble friend below me as to the advantage sugar beet cultivation has been to agriculture. It is no small thing to put 400,000 acres under a very productive and most beneficial crop, to provide work for something like 30,000 people in agriculture alone, to say nothing of the subsidiary advantages to transport, to coal-mining, and to the jute industry of Dundee.
LORD RHAYADER: I did not go into that side of the question because I dealt rather fully with it last year, and I wanted to save the time of the House. I am not oblivious of the considerations which the noble Lord is now urging.
LORD STONEHAVEN: I did not hear the noble Lord on the last occasion, and I was not aware he had dealt with the matter, but surely it is material to bring out the advantages of the case and not dwell merely on the other side. It gives a very one-sided impression if you do not indicate both sides. There is another question, and that is the question of national defence. Surely in the matter of national defence food is a very important item. I believe that during the War, in 1917, we spent in buying something like 1,300,000 tons of sugar not less than £32,000,000, and we were then going very short. In 1919, the year after the War, we spent in buying rather more sugar no less a sum than £52,000,000, and the Sugar Commission, as my noble friend will be able to say, on one occasion—I think in 1920—had to pay for

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Mauritius sugar £90 per ton, and they bought 200,000 tons at that rate, paying £18,000,000 for what is considerably less than the amount we are now growing in this country. That is about one-third of the amount of the sugar crop in 1934–35. The cost of that crop to the country as a whole was £18,000,000, and of that amount £7,000,000 was paid to British, industries.
This measure may be repugnant to those who are upholders of sound financial and economic sense, but it represents a pretty good thing for the country both in peace and in war, and I suggest that from the practical point of view we would make a great mistake to follow the noble Lord in opposition to this Bill. There were two other points which the noble Lord made. He referred to the competition which this measure is introducing with the sugar growers in our Dominions and Colonies. We take every ounce of sugar that the Dominions and the Colonies produce; and, as regards shipping, if the noble Lord will consult the statistics he will find that so far from carrying less sugar, our shipping industry is carrying more sugar than ever before. This Bill is not perfect, but I consider it represents a great advance. Moreover, representing as it does a measure that was drawn up by the Socialist Party and first of all studied by Lord Noel-Buxton when he was Minister of Agriculture in the other House, and eventually introduced by the noble Viscount who leads this House, it may be regarded as a very good piece of national legislation, and I am sure it is in the national interests.
LORD PHILLIMORE: My Lords, I shall be brief, but I desire to associate myself in the first place with the protest made by my noble friend Lord Hastings as to the absence of any representative of the Ministry of Agriculture from the Front Bench in this House. It is quite clear that we want, not one representative, but a team of representatives of agriculture on the Front Bench if we are going to have many more Bills of this complicated kind. Your Lordships will observe that the noble Earl who introduced the Bill was careful to point out that Parliamentary control over this scheme was maintained through the Ministry of Agriculture. If Parliamentary control is to be maintained through the Ministry of Agriculture, it is surely very necessary that
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the Ministry of Agriculture should be represented in this House. If your Lordships' House is going to take its fair share in watching over this new scheme, it is absolutely necessary that persons who have the time to devote themselves to these questions should be represented on the Front Bench. No one knows better than I do the charm, courtesy, and competence of the noble Earl who now represents education in this House and speaks for agriculture. He has beaten me too many times in the Lobbies for me not to be able to recognise that he is one of the most competent "putters-up" of a case, if I may say so, of any of your Lordships in this House. But that is not enough. The man dealing with this complicated legislation must be able to give his whole time to it.
May I dwell for a moment on a personal matter? I interrupted the noble Earl to ask him a question, and I realise that my behaviour was eccentric and perhaps out of order. I should like to tell the House that I knew from private knowledge and consultation with the noble Earl that he had to leave the House owing to a necessary engagement, and I had come to a formal agreement with him that he should deal with certain points before he left which otherwise it would have been impossible properly to consider. I am not going to take up much time on this Bill. It is a difficult and complicated Bill, and its chief features were very well and very clearly explained by the noble Earl. The Bill is part of the new structure of industry which His Majesty's Government are gradually building up. It does behove us to watch very carefully how that structure is being built up and how each stone is being fitted in. When we were talking about the Cotton Spinning Industry Bill the other day, I pointed out that we were gradually committing ourselves to a piece-meal system of industrial organisation which involved us in some very startling and very anxious commitments. I pointed out then, and I point out again, that restriction is one of the principal features in this structure. In this ease it is limitation of production of wealth which could well be got out of the land if the farmers of England were only allowed the opportunity.
Your Lordships will have noticed that the noble Earl, in reply to my question,

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held out no hope that small holders would be allowed to cultivate even small patches of sugar beet and sell to the factories on contract. That is a very serious hindrance to the work of setting up small holdings which the Government, with another hand, has entrusted to another body of which I am a member. Sugar beet is essentially a small holder's crop. It is one requiring a great deal of manual labour and gives a reasonable return for that labour. The noble Earl who introduced the Bill did not, I think, appreciate that my suggestions were directed quite as much to the setting up of new small holdings as to existing small holdings, and if we are to take what he said as final it will be impossible on any new small holdings for the holder to grow sugar beet as a crop. You cut off one of the most valuable and suitable crops for a small holder that he can possibly have; yet you are anxious to take unemployed men from the distressed areas and establish them on the land. That is one of the consequences that follow from limitation of production.
Some of your Lordships may have noticed that I put down a long complicated Question about potatoes in regard to Mr. Rowley's case just before the holidays. The gist of that was that that particular landlord had had last year to pay a fine of £5 per acre, amounting to £250, in order to enable his tenant to grow fifty acres of potatoes, and that without that inducement he could not keep the tenant. In other words, he was fined for production. What followed? Potatoes were a short crop, and the Tariff Advisory Committee were asked to agree to reduce or knock off the tariff on main crop potatoes in order that more potatoes should flow into the country, whilst Mr. Rowley, whose case I was quoting, was prevented from growing them except under fine. The results of limitation of production are numerous, and hard to trace in some cases, but most important, and I do join with the noble Lord, Lord Hastings, in making our protest against that restriction. We could not ask, and we do not ask, for a penny more from public money. What I suggest is that that public money might have been allowed to be freely competed for by the farmers of this country.
Your Lordships will notice that very little has been said so far about the
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vastly important consequences of this Bill which deal with the quota agreement, and the refiners, and the licensing to refine. You will find there the other characteristic feature of this structure which is being gradually built up, and that is the imposition by Parliament of a monopoly on the trade. I will not go into that very big question to-night, but I do hope, when our minds are not so charged as they must be to-day with more important matters, Parliament will give very careful consideration to these important principles.
THE FIRST LORD OF THE ADMIBALTY (VISCOUNT MONSELL): My Lords, the noble Lords, Lord Hastings, Lord Bledisloe and now Lord Phillimore, have all made a complaint that a very important agricultural measure is introduced by a representative of the Board of Education. As First Lord of the Admiralty I find myself even further removed from the soil than the representative of education. For that reason, with your Lordships' permission, I shall not attempt to arouse the ire of noble Lords who have spoken on this subject by attempting to reply in detail to any of the criticisms that have been made, except to say that the undoubted feeling of your Lordships' House as to having a representative of the agricultural industry on the Front Bench here is, I think, a very strong one, and I shall represent it to the Leader of the House at the first opportunity. It may be that one of the reasons against having a representative of the Ministry of Agriculture will be that your Lordships' House has already such a galaxy of agricultural talent, as has been exemplified by the speeches that have been made to-day. Several points have been raised this afternoon that I think your Lordships will agree are Committee points. The noble Earl who moved this measure has been called to a sick bed, and, as your Lordships know, there will be a Committee stage on the Bill. The noble Earl will then reply in detail to all the criticisms that have been made this afternoon. In view of that I will now ask your Lordships to be good enough to give a Second Beading to this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ELECTRICITY SUPPLY (METERS) BILL.
Amendments reported (according to Order).
Clause 1:
Appointment of examiners, etc.
1.—(1) Not later than the appointed day the Electricity Commissioners shall appoint and thereafter keep appointed a sufficient number of competent and impartial persons as meter examiners who shall have such powers and duties as are conferred or imposed upon them by this Act in relation to meters, and such meter examiners shall comply with any directions given by the Electricity Commissioners as to the exercise and performance of their powers and duties.
(4) Subject as hereinafter provided, meter examiners appointed under this Act shall have the powers and duties in relation to meters which are conferred or imposed on electric inspectors by Sections thirty-six, fifty, fifty-one and fifty-seven of the Schedule of 1899 and such powers and duties shall cease to be exercised by electric inspectors accordingly, and the said Sections fifty, fifty-one and fifty-seven shall have effect in relation to meters as if references to a meter examiner appointed under this Act were substituted for references to an electric inspector:
Provided that this subsection shall, in its application to the Administrative County of London, have effect as if for the words "fifty-one and fifty-seven" in each place whore those words occur in this subsection, there were substituted the words "and fifty-one."
LORD ELTISLEY LORD ELTISLEY moved, in subsection (1), to leave out "have such powers and duties as are conferred or imposed upon them by this Act in relation to meters" and insert "be charged with the examination and certifying of meters used or intended to be used in connection with the supply of electricity by authorised undertakers." The noble Lord said: My Lords, this Amendment should be read with the first part of the Amendment to Clause 5, page 5, line 5, relating to the certifying and examination of meters which are hereby repealed. I beg to move.
Amendment moved—
Page 1, line 9, leave out from ("shall") to ("and") in line 11 and insert the said new words.—(Lord Eltisley.)
On Question, Amendment agreed to.
LORD ELTISLEY: My Lords, the next Amendment in my name is drafting. I beg to move.
Amendment moved—
Page 1, line 25, after ("officer") insert ("or servant").—(Lord Eltisley.)
On Question, Amendment agreed to.
LORD ELTISLEY LORD ELTISLEY moved, in subsection (4), to leave out "thirty-six." The noble Lord said: My Lords, this also is a drafting Amendment, and is consequent upon the first Amendment which has already-been carried. I beg to move.
Amendment moved—
Page 2, line 7, leave out ("thirty-six").—(Lord Eltisley.)
On Question, Amendment agreed to.
LORD ELTISLEY LORD ELTISLEY moved, in subsection (4), after "inspector," to insert "under the Special Order, to an electric inspector appointed under the Special Order or to an electric inspector." The noble Lord said: My Lords, this also is a drafting Amendment. The inspectors are appointed either by the Electricity Commissioners or by local authorities.
Amendment moved—
Page 2, line 13, after ("inspector") insert the said words.—(Lord Eltisley.)
On Question, Amendment agreed to.
Clause 2 [Apparatus for meter testing, etc.]:
LORD ELTISLEY: My Lords, the two Amendments down on the Paper in my name to Clause 2 are drafting. I beg to move.
Amendments moved—
Page 3, line 21, leave out ("them") and insert ("the parties")
leave out ("were") and insert ("are").—(Lord Eltisley.)
On Question, Amendments agreed to.
Clause 3:
Transitional provisions as to existing meters.
3.—(1) Subject as hereinafter provided, every meter to which this section applies shall be deemed for all purposes to be a proper meter for ascertaining the value of the supply, and the register of any such meter shall be evidence, but not conclusive evidence, of that value, and the Schedule of 1899 shall apply in relation to any such meter as aforesaid as if it were a certified meter within the meaning of that Schedule:
Provided that Section fifty-seven of the said Schedule shall not apply in relation to any meter to which this section applies.
(2) This section shall apply to every meter installed on the premises of an ordinary consumer for the purpose of ascertaining

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the value of the supply, being a meter which has been installed on those premises for that purpose before the appointed day (except any meter which is a certified meter within the meaning of the Schedule of 1899, or is the subject of a special agreement between the consumer and the undertakers), but shall cease to apply to any meter at the time when it is first disconnected and removed after the beginning of the appointed day, or at the expiration of ten years from the beginning of that day, whichever first occurs, except in so far as it may be material to adduce the reading of the register of the meter as evidence of the value of the supply in any previous period.
(3) In this section the expression "the value of the supply" has the same meaning as in the Schedule of 1899.
THE PARLIAMENTARY UNDER SECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH)THE PARLIAMENTARY UNDER SECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH) had an Amendment on the Paper to omit the words "but not conclusive evidence" from subsection (1). The noble Earl said: My Lords, instead of moving the Amendment which is down on the Paper in my name I should like to substitute for it the following Amendment: After the word "but," insert "save where the consumer has proceeded under subsection (2) of this section, and there is a final and binding decision under that subsection." I beg to move the Amendment in that form.
Amendment moved—
Page 4, line 1, after ("but") insert ("save Where the consumer has proceeded under subsection (2) of this section and there is a final and binding decision under that subsection").—(The Earl of Plymouth.)
On Question, Amendment agreed to.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved to insert after subsection (1):
"(2) Where any difference arises between any consumer and any authorised undertakers as to whether a meter to which this section applies (whether belonging to the consumer or to the undertakers) is or is not in proper order for correctly registering the value of the supply or as to whether that value has been correctly registered in any case by such a meter, then, if the consumer desires that the difference should be determined under this subsection, he may serve a written notice to that effect upon the undertakers, and in that event the difference shall be determined by such meter examiner appointed under this Act as may be designated by the Electricity Commissioners and the meter examiner may also direct by which of the parties the costs of and incidental to the proceedings before him shall be paid, and his decision shall be final and binding on all parties:
Provided that the preceding provisions of this section shall in their application to the Administrative County of London have effect as if for any reference in those provisions to a meter examiner appointed under this Act there were substituted a reference to an electric inspector within the meaning of the Schedule of 1899, or, where the local authority are the consumers, to an inspector appointed by the Electricity Commissioners."
The noble Earl said: My Lords, this Amendment requires a word or two of explanation but I will not detain your Lordships more than a minute or two. Under the existing law any consumer who desires to dispute the accuracy of his meter, provided the meter is, as the law assumes it to be, a properly certified meter, can apply to the Electricity Commissioners for the appointment of an electric inspector, who thereupon examines the meter and gives a decision which is final and binding on both the consumer and the supply undertaking. Similarly a supply undertaking which desires to dispute the accuracy of a meter can apply for the appointment of an inspector. Owing to the fact that a very large proportion of the meters installed in ordinary domestic consumers' premises have not in fact been certified, and therefore are not strictly meters at all, this right of the consumer to demand a simple and inexpensive test has become ineffectice. The present Bill deals with these uncertified meters and allows them to be admitted in evidence in any Court proceedings.
If this Bill became law as at present drafted, the position would be that any dispute with regard to these uncertified meters, whether raised by the consumer or by the undertaking, would have to be taken into Court. As far as the undertaking is concerned which is responsible for the installation of these uncertified meters, we think that this course is only right and proper, but it would appear reasonable that the consumer in whose house an uncertified meter has, through no fault of his own, been installed, should have the right to have this meter tested by an examiner if he so desires without prejudice to the right to take the dispute into Court. This Amendment gives to the consumer an option to demand that his meter shall be tested by an examiner instead of leaving him under the necessity of starting proceedings in Court. If an Amendment to this effect is not carried, many consumers who desire to

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have their meters tested would hesitate to start proceedings in Court and would instead accept the supply undertaking's contentions. With that explanation I hope your Lordships will be prepared to accept the Amendment.
Amendment moved—
Page 4, line 7, at end insert the said new subsection.—(The Earl of Plymouth.)
LORD ELTISLEY: My Lords, I welcome this Amendment. It gives further protection to the consumers.
On Question, Amendment agreed to.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH had given Notice of two Amendments to subsection (2), namely, to insert (a) after "as far as," and to add to the subsection the words:
"or
(b) the meter may be the subject of proceedings under subsection (2) of this section."
The noble Earl said: My Lords, I do not propose to move the next two Amendments on the Order Paper, but I want to substitute for them the following Amendment: On page 4, in line 20, leave out from "material" to the second "the" in line 21, and insert "for the purposes of any proceedings (including proceedings under subsection (2) of this section) to determine whether or not the meter has correctly registered." It is really a drafting Amendment.
Amendment moved—
Page 4, line 20, leave out from ("material") to the second ("the") in line 21 and insert ("for the purposes of any proceedings (including proceedings under subsection (2) of this section) to determine whether or not the meter has correctly registered").—(The Earl of Plymouth.)
On Question, Amendment agreed to.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved an Amendment to make subsection (3) read as follows:
"In this section the expression 'consumer' and 'the value of the supply' have respectively the same meanings as in the Schedule of 1899."
The noble Earl said: My Lords, this is also a drafting Amendment. I beg to move.
Amendment moved—
Page 4, line 23, leave out from the first ("the") to ("as") in line 24 and insert
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("expressions 'consumer' and 'the value of the supply' have respectively the same meanings).—(The Earl of Plymouth.)
On Question, Amendment agreed to.
Clause 4 [Definitions]:
LORD ELTISLEY: My Lords, my Amendment to this clause is simply a drafting Amendment. I beg to move.
Amendment moved—
Page 4, line 38, leave out ("the") and insert ("any").—(Lord Eltisley.)
On Question, Amendment agreed to.
Clause 5 [Short title, citation and extent]:
LORD ELTISLEY LORD ELTISLEY moved, after subsection (1), to insert:
"(2) In subsection (1) of Section thirty-six of the Schedule of 1899 the words 'the certifying and examination of meters' are hereby repealed, and so much of Section fifty-seven of the said Schedule as makes provision with respect to the appointment and functions of an inspector in a case where the local authority are the consumers shall cease to have effect except in relation to the Administrative County of London."
The noble Lord said: My Lords, under the Bill which we are now considering no local authority can appoint meter examiners. These appointments will be made by the Electricity Commissioners. Therefore this provision under the Act now becomes redundant. I beg to move.
Amendment moved—
Page 5, line 5, at end insert the said new subsection.—(Lord Eltisley.)
On Question, Amendment agreed to.

LEAGUE OF NATIONS.
LORD PONSONBY OF SHULBREDE LORD PONSONBY OF SHULBREDE rose to ask His Majesty's Government whether they are making preparations for proposals to the League of Nations for a thorough revision of the system of collective security in view of recent experiences; and to move for Papers. The noble Lord said: My Lords, it is rather late but I do not think that your Lordships will blame me for the lateness of the hour. Considering that the main subject of debate this afternoon has been agriculture I consider myself very fortunate to get in before dinner at all. I am not going to say that because of the lateness of the hour I am not going to detain your Lordships. I am going to

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detain your Lordships, because the subject that I have put on the Order Paper is one of paramount importance and it is to be discussed at a very critical moment. I do not want to blame any one, least of all the noble Earl, Lord Lucan, for the business being so arranged that the debate does not take place until such a late hour, but I feel sure it is a matter which many of your Lordships want to face and to discuss very fully before Monday next. If in my remarks I express views that are clearly out of harmony with those expressed by the spokesman of the Opposition in another place yesterday, it will be understood I am sure by your Lordships, that that is the reason I sit where I do now and do not sit where I sat formerly.
We are faced with one of the bitterest tragedies that history records. I am not here to-night in order to indulge in recriminations, but I am here in order to ask the Government to face the future with very full knowledge of the lessons which they must have learned in the past. I do not think it is impossible that the tragedy of Abyssinia and the terrible betrayal of this undeveloped nation may have driven home lessons which, if learned, may lead to the strengthening of the League of Nations by the final disillusionment of the theorists who have pressed for straining the League capacity in a way which has amazed those of us who have understood from the first how limited that capacity must be in the nature of things as they stand at present. We have been too near the brink to regard with any complacency the machinery so far devised for the prevention of war. The crisis is not over. We are already faced with another, and that will not be the last. I want to press on the Government that they should make up their minds that the best diplomacy is not to take crisis by crisis with a view to steering round difficult corners, but to lay plans now for dealing with these international conflicts in a way that will be far better than any method adopted hitherto.
The Government have been too late in nearly all the steps they have taken. I think they realise now that, once the momentum of war is started, there is nothing that can really check it. I think, and I hope, that they realise now that it was in April, 1935, at the Stresa Conference,
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that this question of Abyssinia should have been faced. I see it said in defence of the Government policy that they waited for Signor Mussolini to raise the question. Of course he was not going to raise the question, and the very fact that Great Britain and France also did not raise the question allowed him to suppose that he had more or less a free hand. It is only by nipping these difficulties in the bud and by tackling them at the earliest possible moment that there can be any sort of hope of preventing the calamities of which we have been witness during the last year.
Now, my Lords, may I put to the Government certain questions to which I hope they have learned the answers? Do they realise now, and do the supporters of the policy which they have been adopting realise now, that whatever dispute may arise between nations, amounting even to actual conflict, and however apparently unanimous the condemnation of any nation may be, yet, as in human affairs, sides will be taken, and even a condemned aggressor will have sympathisers and friends? It is no good our blaming other nations for placing self-interest first. Of course they do, and of course they are reluctant to make economic sacrifices in the future. It is no good blaming France for having divided and conflicting loyalties. France found herself, just having made friendly relations with Italy, just having drawn up instruments by which she and Italy were drawn together, faced with a conflicting loyalty and obligation under the Covenant of the League. It is all very well saying that it is clear what France's choice should have been; but statesmen faced with a dilemma of that sort are hesitant, and if they are hesitant, there is a division of opinion in the country and they cannot make up their minds.
We also have been accused of being actuated by self-interest. It may be unfair: I am not saying that if in certain circumstances British interests had not been involved in any sort of way, we should not have come forward in defence of the Covenant, but it is very difficult to think of any part of the world, in view of our far-flung power, in which we cannot be suspected of having interests which guide our motives. Therefore I hope the Government have faced up to the fact that in an incomplete League there must

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be nations who will stand aside, nations who will go no farther than a declaration, nations who will reluctantly do as little as they possibly can, and just a few who will come in whole-heartedly to the fullest extent. This is not a hypothetical supposition. I have said it before, and I am only saying it now after it has become a conclusion that has been reached by positive experience. This is where the Government, I think, are to blame. I do not agree at all that the Government did not take the lead; I think the Government took too much lead. I do not agree at all that the Government did not press for sanctions. They did. What I blame the Government for is having gone in for the policy of sanctions without any conviction. Not only that, but, although it was the most extreme case possible, they had doubt in their minds as to the possibility of sanctions.
I must just refer to the great speech of Sir Samuel Hoare at Geneva, because he realised and expressed a doubt then. He said:
"The obligations of the Covenant remain; their burden upon us has been increased manifold. But one thing is certain. If the burden is to be borne, it must be borne collectively. If risks for peace are to be run, they must be run by all. The security of the many cannot be ensured solely by the efforts of a few, however powerful they may be."
He would not have said that if he had not had grave doubts in his mind whether the other Powers were going to pull their full weight. The Prime Minister—I do not? want to quote him; I have quoted him so often—said that collective security in the present circumstances was an impossibility. He was right. Why, then, did not the Government have the courage to come out and say: "We do not believe, in the present situation, with a depleted League and national differences, that the full force of sanctions can be brought to bear against Italy, and we do believe that any attempt to do it incompletely and ineffectively is likely to cause very great danger to Europe." If they had done that, with their big majority and many of their own Party in favour of that policy, they would have saved a very great deal of the tragedy which we have seen.
The Government having never really-believed in the policy and yet having reluctantly gone on with it, sanctions such
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as have been imposed may have burdened the Italian people. The noble Earl who will reply for the Government has informed us that sanctions have to a certain extent been successful. My information is very different. At any rate sanctions have done nothing to stop the war. I would go farther, and I would say that sanctions have helped Signor Mussolini to consolidate his country in such a way as to win a rapid victory, which without sanctions he would not have done. That is just what he wanted. The disillusionment of the Italian people was always possible. The soldiers coming home from that sterile, devastated country would not bring good news to their families. But some exterior, international opposition—"the nations of the world," as he could declare,"against Italy"—that gave him just the impetus which allowed him to bring about his coup with such rapidity.
It is a matter of real surprise to me that in these circumstances there should be people who still continue to press for sanctions against Italy. What was the purpose of sanctions? To stop the war. We have not stopped the war. The war is now over. What is the purpose of sanctions now? To punish whom—the wretched Italian people who have been taken in? Sanctions are not going to touch Signor Mussolini; they are not going to affect the war, which is over. Just petulant vindictiveness, in order to prove that we want to go on and that we were not wrong in what we have done! Anything so foolish, anything so petty, anything so misguided as to suppose that sanctions against Italy are of any use whatsoever now cannot be imagined. No, my Lords; I hope the Government are sitting round a table to consider that Article 16 must be cut out of the Covenant of the League of Nations. Then have the Government learned that the nearer you get to parading force, to threatening force, the more dangerous the situation becomes? Of course, I have said from the very outset that you could never have economic sanctions unless you had force behind them, because if they are going to be effective there must be force in the background. So the Government found. Then began the movement of the Fleet in the Mediterranean, and then began public indignation in Italy against us as the main enemy, and then we got very near the brink where

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war would have been extended into Europe. Just as much as force is threatened or contemplated or prepared, so must the danger of the extension of war increase.
I know that in what I am going to say now I shall not get much support, but it is my firm belief that to feel pride in squadrons of aeroplanes, smart and sparkling regiments of infantry, and imposing lines of battleships may be natural enough, but to declare that international peace and national security are to be gained or maintained by such means is the purest and most unadulterated bunkum. Every man, ship, aeroplane, tank or bomb that you add, and that you spend your treasures upon, is bringing you nearer to the tragedy of war. I say that, not only of this country but of every country.
EARL STANHOPE: Including Abyssinia?
LORD PONSONBY OF SHULBREDE: Force as a factor in the regulation of world affairs is of no avail whatsoever. The threat of it and the preparation of it only brings you nearer to the danger-point. I often wish that that doctrine was preached by the great organisation that has the power to do it, the need to do it, and the right to do it. I mean the Established Church. In the absence of the most reverend Prelates I do not want to attack that institution. I should like very much to have seen the Bishop of Durham in his place. The Bishop of Durham ought not to be a Bishop; he ought to be an Air Marshal. I find that sane pacifist opinion is held more in the Services, in the fighting Services, than you would ever find it in the Church. Your Lordships will remember what the late Field-Marshal Lord Haig said of the Church. He said: "Your job is to make my job impossible." They have not done much in that direction.
Now I hope that the Government are realising that there must be a redefinition of collective security. I am sick of the phrase. You hear people talking of it on platforms as if it were some magic. We have had an example of it, and for heaven's sake do not let us attempt another one. It has been shown that it is neither collective, nor does it mean security. It is straining the League of Nations to attempt the impossible, and expecting too much of it. A man who
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over-estimates his strength becomes a weakling. I was glad to see in a recent debate that the noble Earl who is in charge of foreign affairs in this House said:
"…if the League is eventually to take its proper share in the affairs of the world and to attempt to stop aggression and to bring forward conciliation, every nation must take its part."
He also said:
"It is obvious that when the whole of this unfortunate struggle is at an end"—
it has come to an end since the noble Earl spoke—
"both the League and this country will have very carefully to consider the whole situation, and to decide upon what our future policy will be based."
All I can say is that I am very glad to hear the noble Earl express those views. I hope there will be no delay about it. There is a tendency in foreign affairs to think that you can do nothing in the intervals of crises. It is fatal to twiddle your thumbs between crises. I am not accusing the noble Earl of twiddling his thumbs, but we know that there is a good deal of thumb twiddling in Government offices.
EARL STANHOPE: Not in the Foreign Office.
LORD PONSONBY OF SHULBREDE: Not an hour should be wasted in putting forward proposals for bringing to an end this whole system which, up to now, has been called collective security. What has saved us so far from a European War? What prevents us, to-day, from thinking that war is coming? We do not think so. What is it that has prevented that? Not collective security. Not the flaunting of Article 16, not the parading of the Fleet in the Mediterranean, not the speeches of His Majesty's Government, not the handling of diplomacy by the Government. It is one of those small things which people overlook and take for granted, but it is a most significant thing, and one reason why I wanted a League of Nations to be brought into being. It is not Article 16, but Articles 3 and 4 of the Covenant, which nobody reads. They are the Articles which make meetings of the representatives of the nations automatic—meetings to which they all agree to come; conferences, whether in Geneva, in Paris or in London; the meeting together of men who want

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to understand one another's point of view. There is nothing very spectacular about a round table. I know that fleets and armaments are much more popular, but I have great faith in a round table, especially in these days when events move so quickly. Here they have periodic meetings and are able to discuss together as representatives of their nations. It is that which has saved us from calamity.
Representative politicians, they may not be very wise or far-seeing, but they come together and they begin to understand one another's points of view. Claims, complaints, fears, jealousies must be faced and examined by these representatives of the nations. But here I hope I am going to press the Government to come to a decision. Do not let us have another Disarmament Conference. I have inveighed against the Disarmament Conference every time I could in this House, and again I was right. The rules for waging the next war are not going to be observed, but will be disregarded. Here you have seen, not some small undeveloped nation, but one of the great nations of Europe flouting the prohibition of poison gas. I say that the real danger with a nation intent on rapid victory, or a nation with its back to the wall, is that it is going to flout all these regulations which are drawn up by your Disarmament Conference. No, it is not the regulation of the weapons of war but the regulation of the desires and ambitions which make Governments want to use the weapons of war; that is what you have to get at. You have to get at the very basis of the whole trouble, and this must be the first concern of the League of Nations.
Before I sit down I am going to make a specific and constructive proposal. I read an article recently by the noble Viscount, Lord Cecil, and there was one sentence in it with which I was in complete agreement. He said:
"The existing Covenant of the League may be neither perfect nor complete, but unless a nation's word is its bond the most perfect Covenant cannot conceivably work satisfactorily."
I entirely agree. The question is how to make the nations accept their word as their bond. What is the trouble? The interpretation of these treaties. I remember very well in August, 1914, going to the House of Commons Library, climbing on a ladder, and taking from a dusty
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shelf the treaty guaranteeing the neutrality of Belgium, the treaty of 1839. And as I looked down I saw a queue of members all waiting for it—nobody knew what was in it—a treaty that was between seventy and eighty years old and was our stand-by to take us into the War. What do we see in the case of the Treaty of Versailles? Year by year pieces nibbled off it, disregarded by this nation and that nation, flouted by the other nations. Treaties are supposed to be drawn up rebus sic stantibus—the existing things being as they are. What we see in the world to-day—the existing state of things—does not continue for more than a few months, and yet these treaties gradually get their coats of dust over them and nations are blamed for having dishonoured their word. We all want to know what our obligations are and what the obligations of other nations are.
My proposal is this, therefore, that all treaties should be submitted—not on the appeal of one nation or another nation, but automatically and periodically—to a permanent department of the League of Nations for examination with a view to their being confirmed, revised or, if need be, discontinued. Revision is always shelved now because of the awkward problems that will arise, or it is demanded by some nation or other, or else a treaty is flouted by some nation or other. But this, which should be part of the duty of the League of Nations, would bring every treaty periodically—I think every two years or five years—under review in such a manner as to make everybody aware what the obligations of the various nations were. Until you get that you will not get what the noble Viscount desires, that a nation's word should be a nation's bond.
We must get at the root of the trouble, and we must not wait until these discarded, disregarded, infringed treaties cause trouble. We ought to know what the commitments of other nations are. To give an example. I wonder if anybody in your Lordships' House knows that in September, 1920, a treaty was signed for a military alliance between France and Belgium. That treaty was registered under the League of Nations, but its provisions have never been published. It would make our grandfathers in the early nineteenth century turn in their graves to think that the whole of the coast was completely under the

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domination of France. We are friends with France. In the whirligig of time we never know where our friendships and where our enmities may be. In 1887, when there was a danger of an attack by Germany against France, there was not the smallest fear or disturbed feeling in this country in case Germany should infringe Belgian neutrality. In 1914 it was the casus belli. These things are matters of expediency, matters of the circumstances of the moment. By my suggestion the League of Nations would undertake to make nations clearly aware of what their obligations are, and if there is any complaint to make it should be openly stated in order that revision of the treaty should be made.
I put it quite specifically. Add to Article 18 of the Covenant of the League of Nations, which is the Article under which treaties have to be registered by the League:
"All treaties thus registered shall automatically be subject to periodic examination every"—
I should say—
"two years by a Department of the League, established for this specific purpose, with a view to their confirmation, revision, alteration or discontinuance, on the agreement of the signatory Powers in each case concerned."
There must be an amendment of the Covenant of the League of Nations, and that is already provided for in Article 26. I hope that this suggestion of mine will be brought to the notice of the authorities by the noble Earl who will speak later. They will probably dismiss it and they will probably say: "Oh, this is just one of Ponsonby's notions." I hope that the noble Earl will then say: "Yes, but it is very curious that Ponsonby is almost invariably right." I hope others will join in this debate. I have gone on for longer than I intended, but I wanted to put these points. I think it is important that the opinions of so many noble Lords in this House who have great experience of foreign affairs should be expressed, and if it is too late to-night, as I fear it may be, I hope the Government will allow this debate to be continued on an early day next week. I beg to move.
Moved, that an humble Address be presented to His Majesty for Papers relating to any preparations for proposals to the League of Nations for a thorough revision of the system of collective security
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in view of recent experiences.—(Lord Ponsonby of Shulbrede).
TUB MARQUESS OF LOTHIAN: My Lords, I feel that your Lordships are grateful to the noble Lord for bringing forward this Motion to-night., because there is no subject upon which it is more important that we should clear our minds than the defects, such as they may be, found in the Covenant of the League of Nations, which for fifteen years or more has been accepted as the basis of British policy and Dominion policy in international affairs. I am glad that Lord Ponsonby has protested against the use of the words "collective security." I do not know who invented these words, but I have always felt they were a perversion of the underlying concept of the League of Nations, strengthening in every possible way the idea that it was fundamentally a League for coercion, and losing sight of the fact that in the original idea the Covenant was intended to be the means for altering situations which were out of date, and did not even rule out war as a method of bringing that about if no other method could be found. But I cannot agree with him when he says that force is of no avail in international affairs. I am afraid we have had only too clear an example in the last few months that force is of avail in international affairs. The real question is whether what the Covenant of the League of Nations, under Articles 10 and 16, provides is an effective method of dealing with the problem of uncontrolled force in the world.
I suggest—and it is the only main point I am going to make to-night, because it seems to me we have got to try to clear our minds as to where the root of the difficulty is—that the League as an idea has not broken down. I mean the idea of what I may call, not collective security, but collective diplomacy. What has broken down is the principle contained in Articles 10 and 16—that is to say, the assumption by the Members of the League of a universal, automatic, inescapable commitment to resist any alteration of the status quo anywhere which is attempted by force, by methods which, as the experience of the last few years has proved, can only be made effective by a resort to war. That is the core of the difficulty. It has always been, as I have felt, the central weakness of the Covenant, and it is the principle which

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has almost destroyed it, because no League of sovereign States can alter the status quo except by the consent of all the nations concerned, and collective action by sovereign States in the last resort can only be made effective by a resort to war; and because in a partial League any such resort to war, a police war, must risk extending a local conflict into a world war.
May I give some illustrations? The noble Viscount, Lord Cecil, will perhaps forgive me if I remind him of an episode which has probably escaped his memory, but in Paris at the time when the League of Nations Commission was holding its deliberations, Mr. Lloyd George, whom it is fashionable now to despise, asked the noble Viscount and General Smuts, who were the British representatives on that Commission, to come and have a discussion with him about the principles which were then emerging in the Covenant. He said, and a number of other people associated with him urged very strongly, that we should not attempt too ambitious a Covenant in the first instance; that the primary need was, as Lord Ponsonby said, to establish the habit and practice that all the nations of the world should sit round the table and see whether they could not mitigate one another's ignorance and prejudice and bring about agreed solutions of international problems—in other words, that the principle which has been so successful in the British Commonwealth of Nations, which contains none of these rigid, automatic, collective obligations, should be applied as the basic idea of this new, unexampled, and unparalleled experiment of making a League of all the nations with a view to preserving peace. I believe that was put about, but for reasons of which I am unaware it was disregarded, Articles 10 and 16 were embedded in the Covenant, and President Wilson, most unfortunately but most loyally, went about the United States saying that Article 10 was the heart of the Covenant.
I have been recently reading Senator Lodge's book on the history of the Senate and the League of Nations, and he says quite specifically—and I do not think there is any reason to dispute it—that Article 10 was the centre about which the whole controversy raged, because the Senate or a minority of the Senate—not a majority, but a sufficient minority to defeat the Treaty, which had to be
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accepted under the American Constitution by a two-thirds majority—were convinced that the only way in which a nation could live up to its obligations under Article 10 was by going to war. That conclusive argument was the argument, which, I think, was most effective in keeping the United States out of the League. Look at the Manchurian case. It was precisely the sort of obligation which we had signed under Article 10 which compelled all the Members of the League, when faced by that obligation, to begin to threaten in the kind of manner that they did threaten, though when it came to the point, for precisely the reason that has become clear recently, it was manifest they were not prepared to take their protest to the only point at which it could have been effective—namely, willingness to take action which would have resulted in war with Japan. Yet the same Articles, for these reasons, led to the withdrawal of Japan from the League.
Take the next case. Germany came into the League, and, as every noble Lord recognises, despite every effort, despite the loyal and energetic efforts of the noble Viscount, Lord Cecil, to bring about universal disarmament, it proved impossible to modify the Treaties of Peace sufficiently to give Germany the equality she had been promised in December, 1934. And when in October Germany was asked to wait another four years before any effective steps could be taken in that direction, and was told by M. Paul-Boncour that any steps would be dependent on the political conditions at the end of the four years, Herr Hitler left the League of Nations and left the Disarmament Conference and began that rearmament by which alone he believed he could recover the equality of position in the world to which he thought Germany as a great nation was entitled.
Now we have got to the Abyssinian crisis, and, if you consider the question, what was it that made Sir Samuel Hoare take the position he did on September 11? I think it was an honourable act, though as I said at the time I thought he was personally misguided, but he did see, as Mr. Eden and everyone else has stated, that he was faced with the question: Does our signature mean anything or not? Not "is it wise or unwise?" but "we have pledged ourselves to take these unlimited economic sanctions in the

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case of aggression. Are we going to default of our signature or are we not?" It was that appeal, that call to this country, which I think more than anything else united this country behind the policy of September 11, and united fifty other nations as well. But what happened? Economic sanctions were put on, but as everybody knows, and many people prophesied, owing to a partial League of Nations, economic sanctions were either ineffective or became effective so slowly as to fail to produce the result that we intended them to have.
Therefore we were faced from October or November onwards with either having, let us say, oil sanctions or the closing of the Suez Canal under League authority as the only effective method of forcing Italy to come to the Peace Conference table. But from the moment in which it became clear, as Signor Mussolini persistently threatened, that if oil sanctions were imposed or the Suez Canal closed he would regard it as an act of war, and would retaliate with acts of war, every single Member of the League began to retreat, because none of them would face the responsibility of putting their own countries into modern war for the sake of Abyssinian or any interest which did not seem to them vital to their own security and their own national interest. There was not a single nation which did not retreat, not a Dominion that did not retreat, and Mr. Eden was honest enough yesterday to tell the facts. He said, quite emphatically, that in his judgment closing the Canal must inevitably have led to war.
I will say a word or two about that later, but that was his judgment, and I think it was quite clearly the judgment of His Majesty's Government. He said the reason why they did not propose that was not because they were afraid of the consequences, but because of their horror of war, and a very legitimate horror, too, when you consider what modern war is and the way in which it may spread all over Europe. Further, I do not believe any other nation was prepared to contemplate war, but, if they were willing to make any further advance towards the risk, it would only be as a result of our undertaking a similar obligation to go to war all over Europe. That meant we had to undertake to go to war to defend Austria from remaining under the control of Mussolini, and defend every other
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frontier in Europe, and if we pressed the nations to run the risk of war in the case of Abyssinia, it was not an illegitimate answer for them to make that we should also undertake the liability to go to war in matters that affected them. That is why the Covenant and why the Abyssinian enterprise failed. It is because nobody would face the inevitable consequence of Article 16 when they came up against it. That is the reason, and to that extent we have led Abyssinia into expecting things which many people who had thought about these things before realised from the start it was extremely unlikely we should ever fulfil.
Moreover, this universal, unconditional obligation to take action, as modern experience shows, can only be made effective by war. We cannot possibly apply it in half the things to which under the Covenant we are still pledged to apply it. Are we going to undertake to do it to protect Russia, and Japan, if she comes back into the League, or Germany, or Austria, or Latvia, or Italy itself? It is an inconceivable obligation for any one country, or any small group of countries to undertake all over the world. Therefore, I think, as long as we append our signatures to Articles 10 and 16—however much certain people may argue that it is possible to slip out of them by legal interpretations, the principle underlying them is perfectly clear—as long as we believe ourselves, or let the rest of the world believe, we are bound by those Articles, we are in a dishonourable and equivocal position; and the sooner we make it clear to our own people and the nations of the world that we cannot be expected, and shall not attempt, to honour this universal obligation which, in the light of recent experiences, can only be fulfilled by action which may lead to war, the sooner shall we get out of the position in which we are to-day, and back to a situation in which diplomacy may once more tackle the real problems of the peace of the world.
I go further. I do not believe you can possibly get the League to revive until you do this thing. I believe the League will revive as soon as its main function is peace and not war. It may even recover universal membership. There have been some very remarkable letters in The Times. I do not say they matter very much, but Americans write and say:

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"If you can take Articles 10 and 16 out the people of the United States may come to look at this problem in a way quite different from the way in which they have looked at it hitherto." It is a straw and a small one, but I think it is symptomatic. Removal of compulsory sanctions would remove the fundamental objection in the United States to the League. I would not alter the Covenant in any other important respect. I believe that Article 11 is perfectly sound. When international problems occur which are serious and threaten the peace of the world, it is essential that the nations of the world should sit round a table and see what they can do to prevent it. But do not try to bind them beforehand by an automatic obligation which can only be fulfilled by going to war. They will not attend if you maintain that obligation. The only sound course is for them to sit down at a table without military commitment, and deal with a situation as it arises as we do inside the British Commonwealth of Nations, and do what they can agree to do in the light of the circumstances. I think all the provisions for delay, investigation and report and arbitration are perfectly sound, and certainly the provisions in Article 22 for international inspection of the way in which mandatory countries discharge their duties to colonial people are sound.
VISCOUNT ELIBANK: What about Article 12?
THE MARQUESS OF LOTHIAN: I cannot remember at the moment what Article 12 is.
VISCOUNT ELIBANK: Delaying the war for three months while the question is being discussed.
THE MARQUESS OF LOTHIAN: That is perfectly sound. What I object to is that we should all be bound to an obligation which can only be fulfilled by going to war, which can have no power to alter the status quo which we are bound to defend even at the price of war. Delay and investigation is one of the essential functions of the League of Nations and will be honoured by its genuine Members among themselves. When we excise this obligation I think the League may become a healthy organisation for the promotion of peace, and not what it has
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been in the last few months, an organisation for war—an organisation which, when you read the speeches of many of the champions of the League at this moment, has become an international movement busily inflaming the passions of war. Under such a League you will have to make other arrangements for regional security, but you still have the power to take collective action, and collective action which in certain cases may be decisive, when they can agree upon it in the light of the facts, but which will not be imposed on Members automatically. They will be able to consider how collective action may be made effective without the risk of war. The only point I want to make to your Lordships to-night is that until we remove this unlimited, universal, inescapable obligation to take action which now can only be fulfilled by war we shall be in a dishonourable and equivocal position, and the League will tend to perish and will be unable to revive.
LORD SNELL: My Lords, my noble friend Lord Ponsonby, I feel, rendered a public service by initiating this discussion in your Lordships' House to-day. I think, however, it must have been a surprise to him, and perhaps also an embarrassment to find himself being cheered so heartily from quarters of the House that do not usually pay him that compliment. I agree with him that the Government owe to the nation—a patriotic, a very patient and very disillusioned nation—some explanation of what they propose to do in the present circumstances. I believe that no such national humiliation has occurred in my time as that which we have gone through or are going through at the present moment. One speaks under a sense of moral defeat and an overwhelming sense of shame that wrong has once more triumphed in the world. But in spite of that I do not feel able to join in the chorus of depreciation of the League of Nations. The Labour Party believes, for good or for ill, that in the League of Nations we have the one body which in its present or in a better form is likely to give and ensure peace to the nations of the earth. I beg that we shall not indulge ourselves by exaggerating its faults, by underestimating its difficulties, by hampering its power to do its real work.

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There has always been a section in this country that has depreciated the League. It has never liked the League. It has always tried to injure its reputation before our country. But let us remember that the League is a body of men. It was not fashioned in the kingdom of heaven. It was formed at a time of international strain, and, as I have said before, it would have been a miracle if the League had been perfectly equipped for the work it had to do. On the other hand, let us make this quite clear to our own minds, that it is not the idea of the League that is wrong; it is the fact that the nations of the earth have not been able to live up to the great opportunity that it presented. If the time has come when the qualifications of the League for the work that it is to do, the powers it is to have, are to be reconsidered, let that question be approached with some sense of obligation to what the League has already accomplished. We hear so much about its failures and very little indeed about what it has helped us to get over. We should start again if necessary and never give up until the idea itself has been proved wrong, rather than the achievements.
My noble friend behind me said that the war was over. I wish it were. I am not at all certain that the war is over. I am not surprised at what has happened in Abyssinia, because I realised, and I have said so previously in your Lordships' House, that in one form or another this last remaining native kingdom would become subject either to some capitalist country or to some capitalist enterprise. What one feared has taken place. But I cannot feel that His Majesty's Government have any right to feel satisfaction for their part in what has happened. I hope it is realised by your Lordships how, and to what extent, our interests are involved. The black races throughout the whole of Africa are now going through a period of deep resentment and distrust of the Power they have looked to for protection and for strength. I believe that a black revolt has been brought twenty-five or even fewer years nearer because of what has happened. All our work in Kenya, Tanganyika and elsewhere in trying to build up the ideal of self-government has been jeopardised, and we are faced with the possibility of a black Fascist army being created in Abyssinia, to the menace, the danger, the disaster
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of the black races throughout the world. These are things that His Majesty's Government should take into serious account.
There is a great deal that I had wished to say on this matter and it is only because I find myself unable to be present at the time when the debate may be resumed that I trouble your Lordships by speaking now, but I will cut most of what I desired to say. I would like to say this, that Abyssinia was encouraged to resist and then her powers of defence were hampered and every capitalist country profited from trade with her aggressor. We have sinned against the Abyssinian people in that we did not tell them at the beginning that the capitalist nations of the earth, in spite of all their words, would never let a moral obligation interfere with the more sacred business of making illicit profits out of supplying war materials. If we had said that, then the Negus would have known where he stood. I feel tempted to go into questions of sanctions, but in mercy I refrain at this hour. I will only say that I have no theoretical objection to sanctions. If sanctions would have stopped the war I would have imposed sanctions at once. My sole doubt about them was that I felt that you could never trust the capitalist Governments to be loyal to their word.
I just take the opportunity of saying that France may take what pride she can for her part in this miserable business, because I feel that upon her falls the greatest responsibility of all. One can only be satisfied that it was not the wish of the French people, as has been recently proved by an Election. The French Election, I think, shows what the French people feel, and the Peckham election shows what our own people would feel if they had the privilege of expressing it. I do not know whether your Lordships realise that yesterday M. Blum, the distinguished leader of the Left in France, and destined probably to control the policy of France for some time, said:
"Hereafter Great Britain may rely freely upon France to support the collective action of the League of Nations."
He went on:
"It is tragic that we have come too late to prevent the Italian conquest of Abyssinia but if the past was not in our hands, the future is."

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I hope His Majesty's Government will take note of this new France, and that they will advance to meet the new opportunities—or perhaps they will be too superior to have any contact with a wicked Socialist Government! But the opportunity is there, and the responsibility is there.
If it is necessary to go into the question of the revision of the League let it be undertaken, but always remember that if a revision is undertaken every effort will be made by the isolationists in this and other countries, by big business, by grasping Governments, to rob it of all authority, moral and otherwise, and to try to reduce it to the status of a mere secular prayer-meeting. I hope, in conclusion, to hear from the Government, when they reply, a little less about their own virtues and a little more about what they propose to do to deal with a situation for which their responsibility is as yet unassessed. I feel a debt of obligation to my noble friend for bringing the matter before your Lordships' House, and I very much hope that the Government will try to give the House more information than we have yet had.
LORD RENNELL: My Lords, the hour is late, but I understand that the discussion is to be prolonged for a short time yet. The question which has been asked of His Majesty's Government by my noble friend Lord Ponsonby covers practically the same ground as one which I submitted some three months, ago. The reply which I received on that occasion was not very encouraging, and I probably should not have reverted to the matter, because I had rather come to the conclusion that I have been regarded in authoritative quarters as a sort of Cassandra, ever since, in the autumn of 1934, I laid before the proper authority what I conceived to be convincing proof of the intended invasion of Abyssinia. If I were frankly to state to-day the reasons which give me such grave preoccupation at the present situation, I should only encourage that reputation of a Cassandra still further.
I welcome very much, however, the reopening of the question by Lord Ponsonby, with whom on foreign questions I often find myself in cordial agreement. If I rise to say a few words to-day, it is because I should like to carry the
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whole question rather farther, and to say what seems to me to be a preliminary basis for any really valuable revision of the League of Nations. Collective security is no doubt a consummation most eminently desirable, but to-day two questions seem to me to be quite unavoidable. One of them is whether the principle of collective security is practicable in application, in view of the spirit in which it has apparently been interpreted in certain quarters; and the other is whether that principle can still be redeemed from the failures of which recent experience has given abundant evidence.
The Covenant of the League has been understood to constitute Part I of the various Peace Treaties concluded after the War. Violations of one or of the other may therefore fairly be placed in the same category as violations of the principle of collective security. Hitherto Members of the League, present or past, have shown a much readier disposition, when their own interests became involved, to believe in forcible action than to respect their obligations to Treaty or to Covenant. Witness the experiences of Fiume, of Vilna, of Memel, of Corfu, of the occupation of the Ruhr, of the transformation of Manchuria, and, lastly of the invasion of Ethiopia. Witness again the evasion, except on the part of Great Britain, of the general undertaking given to disarm, which, after a series of compromise proposals had been unceremoniously rejected, drove Germany into a direct breach of the Peace Treaty.
These negative experiences lead me on to the further, more positive, question whether any nations have really gained advantage by the adoption of the principle So far as we are concerned it has been responsible for our unilateral disarmament and for thus indicating the line of least resistance to those who advocate dangerous living and are ready to take great risks. I imagine that the far-reaching consequences of our attitude must be providing some matter for reflection to-day for those who constantly insist on our giving to other countries an example which not one of them had the slightest intention of following. It has also entailed for us the sacrifice of old and valued friendships without achieving any other practical result. (I am not, of course, now discussing moral obligations but merely questions of fact.)

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France, a warm advocate of the principle when it seemed likely to be to her advantage, was quick to show how little faith she had in that aspect of it with which she was most chiefly concerned—namely, her own security—and sought additional guarantees in alliances which were contrary to the spirit in which the League was conceived. So little faith, indeed, had her statesmen in the virtue of the principle of collective security that they have recently completed the encirclement of Germany by contracting a military alliance with Russia, which may very possibly diminish France's own security. China can hardly be said to have gained by her membership, and of Ethiopia, who rested all her faith on the League, it is impossible to speak.
The States which suffered defeat in the War were admitted to the League, but only under conditions which, if the other nations did not implement their obligations to disarm, offered no assurance of equality or independence, since the stronger Powers denied to the weaker the means of national defence. The smaller nations which looked to the League as a guarantee for their existence have had their eyes opened and have realised the unforeseen entanglements in which they may become involved. They have had to renounce the rights of neutrals and make economic sacrifices for sanctions, for which it appears that we are to be asked to compensate them. This mention of sanctions brings me to speak for one moment of them here. The aim of sanctions was to terminate war if an act of aggression had brought it about in violation of the Covenant. Any attempt—if there has been one—to make sanctions a matter of international bargain would manifestly be in contradiction of the spirit of the League. Sanctions were intended to be a means of exercising pressure and not a punitive instrument. With the close of the military campaign it is to be hoped that the whole question of sanctions, which we have been told by the Prime Minister lead to war, will be shelved until the League, belief in the efficiency of which has been so rudely shaken, has been considerably revised.
The League as at present constituted has failed either to prevent or to terminate war, and it has failed in establishing faith in collective security. It has revealed how the national bias of its
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Members can be exercised to evade or procrastinate procedure on the lines laid down in the Articles of the Covenant. The very words "collective security" and the "framework of the League" seem to me at any rate to have lost all sense of reality. Nevertheless we, or some of us, continue to pronounce collective security to be the basis of our policy. Are we not nailing our colours to a mast which has been quite inadequately stepped to carry such a heavy sail? Yet, my Lords, while endeavouring to make it clear that the League as actually constituted offers no basis of collective security, I do not wish to convey the impression that I in any way despair of a revised League. On the contrary, I can conceive of a reconstituted League binding the peoples of the world together in a moral solidarity which would replace the prevailing spirit of mistrust and mutual suspicion. Therefore I give my earnest support to revision.
The League probably attempted too much, in view of the absence of any real spirit of collectivity. It seems, as Lord Lothian recently suggested in a remarkable letter, that American statesmen saw more clearly the dangers involved in subscribing to the present League than our people, whose sentimental enthusiasm overlooked so many of its implications and entanglements. Had the obligations of the United States to intervene been confined to the American Continent, they might have taken a different view about adhering to the League. That was one of several reasons for my putting forward here, some ten weeks ago, a plea for three League Councils in three Continents, while maintaining Geneva as an ultimate Court of Appeal—a suggestion which, if it was held in the Government reply to entail more difficulties than advantages, has nevertheless brought me many letters of approval from the Continent and some support from South American statesmen. As it seems hardly possible in the present day for any single Power to be so preponderatingly strong as to be able to impose peace, and to prevent aggression, as the Roman Empire succeeded in doing over several centuries, an alternative prospect may seem perhaps to open out for the most optimistic of us in a preponderatingly strong block of Powers working together in a spirit of comradeship and common interest.
In the last two or three minutes that I wish to detain your Lordships, I really

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want to get down to bedrock things. No one can fail to realise that the principal obstacle to European unity, and to a great extent to the efficacy and stability of the League of Nations as we have known it, has lain in that almost unconquerable spirit of mutual mistrust which separates France and Germany. If Great Britain, France and Germany could only be brought into line, and reciprocal confidence restored, we should have that preponderatingly strong solidarity in Europe which would ensure its economic revival and guarantee a western civilisation, which is the greatest inheritance of humanity. I refuse to believe that it cannot be achieved, that the prejudices of an evil historical tradition cannot be eliminated, and that a better foundation and securer corner-stone for a new and more practical League of Nations cannot be devised.
The people of this country, though with minds which perhaps work more slowly than those of some of their Continental neighbours, can generally be trusted to form sane and right judgments. They have, if I am not wholly mistaken in the appreciation I have formed of public opinion here in all classes, very definitely made up their minds that the proposals put forward by the Chancellor in Germany, as a basis for twenty-five years of peace and friendly co-operation, offer a great opportunity which it would be deplorable to reject. We have heard from the Leader of the Opposition of the new France. Those who have recently had the opportunity of visiting Germany have been greatly impressed by the democratisation of the country, and the new social unity of classes which the Chancellor has so zealously promoted. They have seen there very much to admire, and something also to envy. The people of this country are, I believe, ready to grasp the out-stretched hand. There is in France a great and growing number of people also who wish to live on terms of amity with Germany, in spite of the gospel of mistrust which others continue to preach.
There is hardly a man in Germany who does not desire it, and wants nothing from France but good will and economic co-operation. There may be elements
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there—I wish I did not think there were—whose interests are bound up with—I will not say war, but the maintenance of unrest and the spirit of fear. In France the people only want the assurance of peace. Our guarantee to France is inviolable. It arouses no misgiving in Germany, because she has no sinister intentions against her neighbour. It is not only in Europe that our interests are intimately bound up with those of France. My Lords, we have before us a very grave Asiatic question as well as a European one, which people in this country do not sufficiently regard or realise. France and Great Britain are responsible for vast areas in the centre of that Continent, and having these immense interests to defend in the coming time, they must needs stand together. Therefore, I believe that our country has a very great part to play as an intermediary, to effect that reconciliation which is indispensable to the peace and economic recovery of Europe, and I trust and must believe that His Majesty's Government are alive to the potentiality and the duty of laying the foundations of a solid block which will ensure the fabric of a revised and more practical League of Nations.
VISCOUNT CECIL OF CHELWOOD: My Lords, I beg to move that this debate be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

BUSINESS OF THE HOUSE.
LORD SNELL: Can the noble Lord opposite tell us when the debate will be resumed?
THE SECRETARY OF STATE FOR AIR (VISCOUNT SWINTON): My Lords, on Tuesday it is proposed to take the Committee stage of the Sugar Industry (Reorganisation) Bill, and to resume the present debate; on Wednesday, the Malta (Letters Patent) Bill in Committee and the Third Reading of Trial of Peers (Abolition of Privilege) Bill; and on Thursday the Committee stage of the Cotton Spinning Industry Bill.
House adjourned at twenty minutes before eight o'clock.