I understand that the Leader of the House wishes to make an announcement about Business after the resumption.

I understand that some exception has been taken to the proposal that the Second Reading of the Widows' Pensions Bill should be taken on Tuesday, 29th October. In order to meet what are understood to be the wishes of the Opposition on this point, the Business for the first week after the reassembly of Parliament will be:

Tuesday, 29th October, Coast Protection Bill, Second Reading; Third Parties (Rights against Insurers) Bill, Second Reading; Collecting Charities (Regulation) Bill, Second Reading:

Wednesday, Unofficial Members' Motions, as announced.

Thursday, Widows' Pensions Bill, Second Reading, in order to enable the Opposition to formulate and put on the Paper any Amendments to the Second Reading. I think it is a reasonable request;

Friday, Widows' Pensions, Money Resolution, Committee; and, if time permits, commencement of the Committee stage of the Widows' Pensions Bill. That announcement, the House will remember I have said, is subject to the possibility of having to find time for a Resolution of the House on Russia.

On any day, if time permits, other orders will be taken.

rose—

This Motion deals only with the specific point of the date of reassembling after the Adjournment. This Motion must be taken first, and then we must get this out of the way and then take the Motion for the Adjournment.

I desire to call the attention of the House to a matter, or matters, of great gravity arising out of the resignation or dismissal of Lord Lloyd, and I hope—and those who sit behind me, and, I am sure, the whole House hopes, though I wait perhaps with a livelier hope than confidence—that the Foreign Secretary will be able to dispel the mists which closed round this subject 24 hours ago—mists which have only been thickened into fog by the Debate in another place, and, though I shall take no longer time than I deem to be necessary, as there are many subjects which Members wish to raise to-day, the importance of the matter must justify me in treating it in some detail, as this is a matter which closely concerns Parliament, and upon Parliament the ultimate responsibility must rest.

I think it well at the beginning to make clear the situation which existed up to the present moment. Hon. Members will remember that the old Turkish suzerainty over Egypt was terminated by the Great War in 1914, and Egypt was declared a British Protectorate. The announcement in due course was made to the Powers, and an Egyptian King was chosen. Shortly after the War, in 1922, a most important declaration of policy was made which has been the foundation of British policy from that day to this. I think the House should have the very brief points in that policy clear in their minds for the purpose of this discussion. The first point was that the British Protectorate in Egypt, which was set up in 1914, was terminated forthwith. Egypt was recognised as an independent sovereign State. Secondly, it was stated that as soon as the Egyptian Govt, passed an Act of Indemnity, with application to all inhabitants of Egypt, martial law, which had been proclaimed in the autumn of 1914, should be withdrawn. That happened. The Indemnity was proclaimed, and martial law ceased to exist. Then comes, perhaps, the most difficult part of this Declaration. There were certain matters, four of them absolutely reserved to the discretion of His Majesty's Government in Great Britain:

"until such time as it may be possible by free discussion and friendly accommodation on both sides to conclude agreements in regard thereto."

They were:

"1. The security of the communications of the British Empire in Egypt.

2. The defence of Egypt against all foreign aggression or interference, direct or indirect.

3. The protection of foreign interests in Egypt and the protection of minorities.

4. The Sudan.

Pending the conclusion of such agreements the status quo in all these matters shall remain intact."

There is no doubt, as I think was foreseen at the time, that a Declaration of that kind imposed a great responsibility on the statesmen both of this country and of Egypt, and more than a responsibility. It set them to an extraordinarily difficult task, and I can say—and I think that the Foreign Secretary will admit this readily—that ever since that time British Governments have earnestly endeavoured to interpret that Declaration in a liberal spirit, and efforts have been made both by the present Prime Minister and by the late Government to effect a settlement of these difficult outstanding questions, and to effect it in a liberal spirit. In the Autumn of 1927 a settlement was very nearly effected, and I think the House should consider for a moment what the Treaty which was negotiated between Sarwat Pasha on behalf of the Egyptian Government and His Majesty's Government at that time involved. The House will remember, because it is barely two years ago, that if the Treaty had been signed and ratified then, the Declaration of 1922 would have been superseded by the terms of the Treaty. The Treaty made a formal alliance, described as such, between Egypt and Great Britain. We promised, following the implicit terms of the Declaration, that we would give immediate help to Egypt if she were involved at any time in a defensive war. On the other hand, if good relations were imperilled between Egypt and any other country, Egypt would at once consult with us with a view to obtaining our help to dissipate such difficulties. Then it followed that, in view of the co-operation between the two armies in the event of Egypt having to defend herself, and to defend herself with our aid, the Egyptians undertook that their army should be trained on British lines, and, if they required instruction in military work of any kind, they would look to this country to provide the necessary assistance, and not to any foreign country. Reciprocally, in the event of our being at war, Egypt undertook to give us all the help that she could by allowing us to use all her ports, her aerodromes, and her transport.

Now we come to what was, of course, a very important and difficult part of the Treaty. Permission was given to Great Britain to keep such armed forces in Egypt as she thought necessary and desirable to preserve the lines of communication of her Empire, and in the annexe to that Treaty, the Egyptian Government undertook that lands and buildings then occupied—that is 1927—should be made subject to a Clause that comes later. It was stated specifically that the presence of the troops in no sense meant an occupation of Egypt, and in no sense prejudiced the sovereign rights of that country.

Germany and Belgium!

I do not think that that was the view of Sarwat Pasha. There was a Clause that at the end of ten years the question of localities was to be reconsidered. If Egypt and Great Britain were unable to agree, the matter was to be referred to the Council of the League of Nations. If the decision of the League of Nations was unsatisfactory to the Egyptian Government at that time, they had a right to bring the subject up at intervals of five years. There were other points dealing with capitulations, an undertaking by us to endeavour to secure the entry of Egypt into the League of Nations, and one or two minor questions. But, as the House knows, after negotiations had occupied the best part of three months, that Treaty failed, and it failed, I think, because of the part played by the extremists in Egypt. There is no doubt that they had hoped that, under some other Government, they might get far better terms for themselves even than in that Treaty. Yet they had little official grounds for believing that. There was nothing in the negotiations between the present Prime Minister and Sarwat Pasha which showed that he at that time was prepared to make any serious departure from the Declaration of 1922. The House will remember the draft despatch of the present Prime Minister, which was prepared in 1924, shortly before the fall of the Labour Government, in which he said:

"No British Government in the light of that experience"—

meaning the European War—

"can divest itself wholly, even in favour of an ally, of its interest in guarding such a vital link in British communications"—meaning, of course, the Suez Canal,

"Such a security must be a feature of any agreement come to between our two Governments, and I see no reason why accommodation is impossible, given goodwill. The effective co-operation of Great Britain and Egypt in protecting these communications might, in my view, have been ensured by the conclusion of a treaty of close alliance. The presence of a British force in Egypt"—

and I commend this to hon. Members who seemed amused at my earlier reference to it—

"provided for by such a treaty freely entered into by both parties on an equal footing would in no way be incompatible with Egyptian independence, whilst it would be an indication of the specially close and intimate relations between the two countries and their determination to co-operate in a matter of vital concern to both. It is not the wish of His Majesty's Government that this force should in any way interfere with the functions of the Egyptian Government or encroach upon Egyptian sovereignty, and I emphatically said so."

If those words mean what they say—and I have no doubt that they do—there is not a great deal between the views expressed there and the views expressed in the Treaty which unfortunately failed. At this point, we find ourselves, having failed in the attempt to make a treaty, falling back once more on the Declaration of 1922, and that stands to-day. It stood through the time of the Coalition Government, of Mr. Bonar Law's Government, of my first Government, of the Labour Government, and of my last Government, and for all we knew it stood until the other day.

Throughout the last four or five years, Lord Lloyd was the High Commissioner in Egypt and the servant of the British Government in that country. No one who has any knowledge of Egypt can ever doubt the difficulty and the responsibility of that position. I need not embroider that subject, but it is one of the most difficult posts to which an Englishman can be sent. He played his part in attempting to secure, under the directions of the late Government, a liberal settlement of our difficulties. [An HON. MEMBER: "Oh!"] Perhaps the hon. Member who seems to have special knowledge will enlighten us later. Lord Lloyd is of the type which, I am glad to think, is not uncommon among those men who represent our interests abroad. He is never afraid to speak his own mind, and I regard it as part of the duty of our representatives in positions like that to speak their minds freely to the Government at home. They have special knowledge, they are on the spot, but the responsibility rests with the Government at home. They are glad to have criticism in difficult circumstances; it is their duty to receive it; it is their duty, as it is the duty of their representatives to argue when occasions arise, on the merits of proposals, and if His Majesty's representative can convince the Government that their view is right, the question falls to the ground. If, on the other hand, His Majesty's Government decide that their view is right, then there are only two courses open to His Majesty's representative; he must either loyally carry out the instructions of the Government, or, if he regards the matter of sufficient importance, as a matter of principle, he must resign. There is no question about that whatever. That has been the practice of our representatives, it is now, and will, I hope, always continue to be so.

But now we come to the point which is of real vital interest to this House: Why did Lord Lloyd resign, or why was he dismissed? The two terms have been used interchangeably. For the purpose of my argument, I do not much mind which is used, because, after all, this question is far greater than the personality of Lord Lloyd or any other public servant, however distinguished. Did the Government desire his resignation because they did not want a public servant who would criticise their decision as he had criticised those of their predecessors? Did they wish a dummy in that position, or, in the alternative, is there some change of policy which they knew would lead immediately to Lord Lloyd's resignation, and did they think it would be simpler to get him cut of the way before that change of policy took place?

I am going to put one or two questions to the Foreign Secretary. I know the difficulties, but I do beg that he will be as candid with the House as he can, because there is nothing so detrimental to our interests and to peace as wild rumour. I want to know the truth, and then we know where we are. I want to know if the policy which has been the policy of successive Governments since 1922 has been changed, and, if so, in what respect. I want to know if the Government are contemplating making a new treaty with Egypt. If so, I want to know if they are in consultation with the Dominions, because any treaty with Egypt affects Australia and New Zealand as much as it affects us. I want to know, particularly, if in the event of their making, or contemplating, or having made, a new treaty, they are contemplating going beyond the concessions which we made in the treaty which failed to materialise in regard to the position of the soldiers in Egypt. If they are making any changes in that regard, I Want to know if they have consulted their military and naval advisers. If they have, and if they think fit to disregard that advice, they must take the full responsibility of what they are doing. I want to know one more thing, and that is, if negotiations have been going on, are going on or are completed, have those negotiations been carried out without the knowledge of the High Commissioner of Egypt? Those are very plain and very simple questions, and I hope we may have an equally plain and simple answer.

I would like to say this to the House, because there are many members of this House who are sitting in it for the first time, and it is sometimes difficult for those who have not been brought into contact with or had experience of what are generally termed foreign affairs, to realise that no action in the world on the part of a power like Great Britain, with her world-wide Empire, can take place in isolation. The results of any action of ours vibrate through the world from end to end, and any action in Egypt that contains within it the germ of disaster of any kind reacts swiftly and immediately all through the East and in the vital part of our own Dominions, in Australia and New Zealand. I would add this. Lord Lloyd is not the first distinguished servant of a Brtish Government in our history who has either resigned at a critical time or been compelled to resign. Many Governments in our history have come to hasty conclusions on matters in remote parts of the world, and often terrible events have followed later. But the responsibility of statesmen in this country, great as it always is, is peculiarly great, and the responsibility of Parliament is peculiarly great, in these matters of foreign affairs, because if disaster comes, if bloodshed comes, as it often has come in our history, the politician always escapes.

What about Churchill and Russia?

The worst that can happen to the politician is loss of office; but the men who give their blood are generally those whose hands have had nothing to do with the laying of the train that led to the explosion. That being my view, my firm and convinced view, I say, as my last word, that if there be a new treaty in prospect involving changes and concessions beyond those made in the projected treaty of 1927, then the responsibility for it ought to rest upon Parliament, that we all ought to take our share in the examination of it and in the forming of our own conclusions. This is the more necessary in that no party to-day has a majority over the rest of the House of Commons. The responsibility ought to be corporate, and I ask the Government, if there be changes of the nature I have indicated in contemplation, or if such changes are being made, that this House and Parliament shall either approve or condemn before finality is reached.

The right hon. Gentleman has concluded his speech on a note that must appeal to all sections of the House, but may I be permitted to say that it is a little unfortunate that that note was not struck earlier in the proceedings during this week in this and another place. The right hon. Gentleman occupied a great deal of his time in outlining the policy which has been pursued by successive Governments since 1914, and I think I can say, straight away, that in the statement he made regarding the position since that date there is very little that we would take exception to. I think it has been a conspicuous part of the policy of each Government, including the Labour Government of 1924, to raise the relationship between Egypt and this country above party, and to keep always in mind the great responsibility that rested upon us as a British Empire and the British Commonwealth of Nations. The right hon. Gentleman gave testimony to the position we took up on these benches when we occupied them on a former occasion, and he referred to the statement—a very natural, frank and important statement—made in the year 1924 by the present Prime Minister. I think the present Prime Minister would probably be prepared to tell the House that the policy outlined in that statement remains his policy to-day.

The right hon. Gentleman spoke of a policy of goodwill. May I say that every move that we have made, and every move we contemplate making, to improve the relationship between Egypt and this country will be influenced by a spirit if goodwill? The right hon. Gentleman, after reciting the policy to which I have referred, made this very surprising statement, that it was the policy until the other day. I expected he would have gone on to show us where the change has taken place and where there has been any departure from that policy, but I am surprised that he sat down without doing anything of the kind and proceeded to another subject. I want to say most emphatically that there has been no change.

12 n.

I will now tell the House what we have done up to the present time. There is no secret about it. I answered a question in this House on the 10th July, in which I said:

"I have had a conversation with the Egyptian Prime Minister, in the course of which various aspects of Anglo-Egyptian relations were naturally touched upon. His Majesty's Government are prepared to give the whole question their most careful consideration, but I am not yet in a position to make any general statement."—[OFFICIAL REPORT, 10th July, 1929, col. 855, Vol. 229.]

That was our position on the 10th July. There has been a suggestion in the speech to which the House has just listened, and which was made more emphatically in another place, that we have been carrying on negotiations behind the back of the High Commissioner. I challenge that state- ment most emphatically. Who is to decide when a Government responsible to the country for its policy is to place its officials in possession of that policy, and when that policy has to be placed in possession of the officials? Is it to be placed in the possession of the officials before the Government has decided it? That is the position we are in. As I told the House in the replies I have just given, we had conversations with the Egyptian Prime Minister. He went away to Paris for some days, and when he came back he had a conversation with some of my officials, and they took down the various points. I at once asked for a Cabinet Committee to consider the whole question in the light of the statement that I read and I gave to the House on the 10th July, when I said most emphatically that we were prepared to give careful consideration to the whole question.

May I inform the House that the first meeting of that Cabinet Sub-Committee to consider these proposals with the intention of presenting a report to the Cabinet was held on Monday last, and I think that ought to dispose of the charge that we have been negotiating—at any rate, it appears that a new meaning has been given to the word "negotiating." We have merely listened to the Prime Minister of Egypt, and he is the Prime Minister to-day. If he comes to this country and asks to see the Foreign Secretary, and he sees him, and we discuss and talk over matters, as I informed the House we did, then we are not supposed to do that, and, if we do it, we are charged with carrying on negotiations behind the back of the High Commissioner. Moreover, I have some dates here. The High Commissioner during most of the time that has elapsed since I had a conversation with the Egyptian Prime Minister has either been away in Syria or travelling to this country. I hope therefore that the right hon. Gentlemen who have made so much of this and have gone even to the length of saying in one instance that he had heard a rumour and on that rumour he informed another place that we had signed—that the Government had actually signed—a treaty, and have made that statement merely on a rumour—

The right hon. Gentleman is not in order in referring to speeches made in another place in order to influence this House.

I think I heard a reference to something that has been said in another place. Perhaps it was the result of my being a little more direct than other speakers.

It is very difficult for us to discuss this matter except in relation to all the declarations made by Ministers. Would it be completely out of order to refer to the statement made in another place by the Secretary of State for the Colonies. It will be exceedingly difficult to elucidate the whole of the facts unless we can do so.

It would not be out of Order to make references to any statement of policy that had been declared in another place, but it would be entirely out of order to quote, or almost quote, as I have said, the speeches made and the kind of words used, in order to influence this House. Any references must be confined merely to statements of policy

Further on that point of Order. I want to ask whether it will be in order, seeing that you have allowed criticisms of policy, to refer to a criticism in the other House of the rumour that has been alluded to by a leading statesman there?

I have clearly laid down that references to statements of policy made in the other place would be in order, but it is a very long standing custom and rule in this House that direct references to speeches in this House, and quotations, should always be declared to be out of order in this House.

In order that this matter may be quite clear, may I ask you, Sir, if your ruling means that there may be references in this Debate to declarations made by Ministers in another place, but that there may not be any references to, speeches made by other Members of that other place?

I really think that the ruling I gave was quite clear.

I do not propose to pursue the matter. I want now to come to what engaged the attention of the right hon. Gentleman in the, second part of his speech, and that is the resignation, or, as I think he said, the dismissal, of Lord Lloyd. I want to give the House as briefly as I possibly can the history. Within a few days of my going to the Foreign Office, a communication was received from Lord Lloyd. I read that communication, and was very much struck by the language and what I believed to be the spirit which underlay it. I at once asked for papers to be handed to me going back during the greater part of the time that Lord Lloyd had been the High Commissioner, and I must say I could not but be impressed with the very wide divergence of view that was manifested in those papers—divergence of view between the position taken up by my predecessor in office and Lord Lloyd. May I say, in passing, that I most profoundly regret personally the absence of my predecessor to-day. In making that statement I am fully aware that he had no knowledge—I want to be perfectly fair, and I am not going to suggest that the right hon. Gentleman is away purposely—he had no knowledge, at the time that he left this country, that such a Debate was to be held. As I have said, I could not but be impressed with the wide divergence of view between my predecessor and Lord Lloyd.

I was very pleased to notice that the right hon. Gentleman in his speech said nothing about the laying of papers. I just want to say in passing that I think the right hon. Gentleman has acted wisely in not pressing for that. All the papers that would have to be laid would be papers in connection with his own Government. But I am under the necessity of taking from some of the papers the position as I have seen it over the last three or four years. I think I can say that there were four or five occasions when the difference of opinion between my predecessor—and I suppose to some extent his Government—and the High Commissioner were most marked, and I am going to ask the House to permit me to read several instances where this divergence of view has been so marked. The first one was in the early summer of 1926. The question arose as to whether His Majesty's Government should or should not oppose the resumption of office by Zaghloul. My predecessor was strongly in favour of nonintervention. Lord Lloyd, on the contrary, wished to prevent Zaghloul from becoming Prime Minister. After a lengthy telegraphic dispute, Lord Lloyd's view was accepted by the Cabinet. In the winter of 1926–1927, the question of British officials in the Egyptian service generally, and the State railways in particular, came to a head. Lord Lloyd wished to reverse the policy of the preceding years, and to insist rigidly on the retention of a large proportion of British officials, and, in the case of some departments, an actual increase in their number. [HON. MEMBERS: "Hear, hear!"] I think that some of the "Hear, hears" had better be deferred. My predecessor held that such a reversal of policy was unjustifiable in itself, and calculated to defeat its own object by generating ill-feeling. A very lengthy exchange of telegrams and despatches resulted in Lord Lloyd being overruled. [HON. MEMBERS: "Cheer now!"]

In the summer of 1927, there occurred what came to be known locally as the Army crisis. Lord Lloyd considered that the Egyptian Army was a grave threat to our position in Egypt. My predecessor did not believe in the seriousness of the danger, and was convinced that, if a clash were inevitable, our own attitude should be constructive and not merely negative. A protracted exchange of very long telegrams took place, and continued for some weeks. Finally the issue went to the Cabinet, who decided mainly in favour of Lord Lloyd. Battleships were despatched to Egyptian waters, but no conclusive solution was reached. In the spring of 1928, a further crisis occurred on the introduction of the Assemblies Bill. Lord Lloyd held that, unless the Bill was withdrawn, it would be necessary to dismiss Nahas Pasha's Government and dissolve Parliament. My predecessor informed Lord Lloyd that His Majesty's Government did not desire to tear up the Egyptian Constitution. Nahas Pasha postponed the Bill. His Majesty's Government had obviously secured their object. Lord Lloyd, however, still wished to proceed to extreme measures but was overruled, and the episode closed.

In the early Spring of this year the Egyptian Government sought the concurrence of my predecessor in the imposition of certain new taxes on British subjects in Egypt. Under the capitula- tions, these taxes could not be imposed without our consent. The taxes proposed were moderate and reasonable in themselves, and the Egyptian claim that they were fully justified on equitable grounds in imposing them was unanswerable. Lord Lloyd, however, strongly opposed any concession whatever in respect of most of them. After a telegraphic argument he was overruled. It was this controversy which led up to my predecessor issuing—this is most remarkable in my opinion—on the 28th day of May, two days before the General Election, to a Commissioner who had held office under the Government for four years, a complete restatement of the principles upon which the Government decided to conduct the relations between this country and Egypt. I leave it to the House to judge whether there had not been running through the last three or four years of the relationship between my predecessor and the High Commissioner, as these statements indicate, this divergence of opinion to which I referred at the beginning.

In addition to these five cases, numerous minor differences of opinion revealed themselves between the time of these major disputes to which I have referred. I ought to say that, during the early part of this year, things became so bad that the conduct of business became difficult, since on few, if any, points was Lord Lloyd able to accept the views of my predecessor, and vice versa. An examination of the papers clearly demonstrated that the policy of my predecessor was a minimum of interference in the internal affairs of Egypt. I want to say that very frankly. That run through the whole of the proceedings so far as my predecessor was concerned—a minimum degree of intervention in purely internal affairs in Egypt and a liberal interpretation of the declaration of 1922. What was Lord Lloyd's attitude to this? In numerous instances he is clearly out of sympathy with both these objects which I have stated. Having read these papers, having very carefully considered the position, believing that the policy of my Government and my policy, or my position in interpreting that policy, would not be less liberal or less generous in expressions of goodwill, I was faced with this dilemma. Could we contemplate a perpetuation of this stream of dissatisfaction, a stream of which it could be said normally it was restless, very frequently it was turbulent, never smooth and never clear? Could we, I say, as a new Government contemplate, after all the illustrations and instances I have given, going forward with the policy that we hoped eventually to submit to the House with any degree of confidence if this marked determination to misinterpret or ungenerously to apply, that characterised the views of the High Commissioner during the last four years, had to be continued? Therefore, I came to the conclusion that we could not do so.

It has been said that what we ought to have done was to give Lord Lloyd a trial, that we should have produced our policy and trusted him to carry it through to the satisfaction of the Government. Let us image for a moment that we had pursued that course, and that we had gone on, say, for a year. Would the opposition of right hon. Gentlemen and those behind the Front Bench have been any less? Would there not have been a, much greater justification for the suggestion that there was complete disagreement between the High Commissioners and ourselves and that we "fired" him because of that? I came to the conclusion that the best thing I could do was to intimate to Lord Lloyd that we were dissatisfied with the position that had obtained during three or four years. I made an intimation to Lord Lloyd to the following effect.

In the short time at my disposal since taking office, I have endeavoured to review in their broad outlines the sequence of political events in Egypt since 1924. To be quite candid, I feel bound to tell you that I have been impressed by the divergence of outlook which has from time to time been apparent between my predecessor and your lordship. That this difference of outlook was perfectly sincere I do not for a moment doubt, but I confess that it appears to me so wide as to be unbridgeable. The success of my policy, which will certainly not be less liberal than that of my predecessor, will depend on the extent to which it may be interpreted with understanding and sympathy by His Majesty's representative. In the light of recent correspondence, I should be lacking in frankness did I not warn you that the possibility of your views being harmonised with those of either my predecessor or myself appears to me remote, and in these circumstances I should like to discuss the situation with you on your return."

Lord Lloyd arrived in this country this day week. I was prepared to give him an interview the following morning. He expressed a desire to see me on Tuesday morning. I saw him and in the frankest way we discussed the position with each other, may I say not only frankly, but in a friendly manner. After we had been together probably half-an-hour he handed me his resignation and asked me if I was prepared to reciprocate. As he was handing me a note couched in friendly terms, would I reciprocate. I had not then read the note. I said, "If you will hand me your note and allow me to read it, I shall then be prepared to express my opinion." I read his note, and I said "Yes, I shall reciprocate very fully." I handed to him a rough draft which I had made out, and he put up three suggestions, and I accepted them all. I am telling the House this as an indication of the desire that I had, if it were at all possible, that Lord Lloyd and myself should part company on the very best of terms. I have nothing personally against Lord Lloyd. He was in this House for many years, and we were on the most friendly terms.

I do not think that it would have been possible for au interview to have ended more friendly than the interview did between him and myself on Tuesday last. In leaving me he had only one suggestion to make. No, I think I ought to say he had two suggestions. He had one suggestion. Did I object to him showing the letters that we were just then exchanging to his leader—the right Hon. Gentleman who has just spoken—and I at once replied: "I have not the slightest objection." The next point was—and I say this in order again to indicate the friendly character of the interview—that in leaving, as he rose from his seat, he said: "Well, Mr. Henderson, I may yet be of some service." I think all went well until he had an interview with the right Hon. Gentleman the ex-Chancellor of the Exchequer, and I do not know what the House thinks of the change of attitude that has taken place. There was a friendly exchange of notes. Lord Lloyd on his own admission saw the ex-Chancellor of the Exchequer, and, I suppose, we had the result of it two days ago at Question time, when I was asked, not in a very friendly way, whether I had extorted the resignation from Lord Lloyd.

Did not the right Hon. Gentleman, in answer to that Question, inform the House that he had sent Lord Lloyd a telegram, the result of which would, in his opinion, have led anybody to terminate his appointment?

I do not think that that lays me open to the charge of being an extortionist. At any rate, I have read a paraphase of the telegram, and the House can judge for itself. I only want to say that I have tried to put before the House the position in which I was placed as a result of my reading of the position over the last three or four years. I have tried to show to the House that I think it would have been a mistake for us, whatever our policy may be—and, may I say, in order to satisfy the right hon. Gentleman, that whatever our policy is, it will not be put into operation until it has been submitted for the approval of the Egyptian people and until it has been submitted to this House for ratification. It seems to me, that if a Government is to be asked to go beyond that there is going to be an end of reasonable negotiations. [An HON. MEMBER: "What about the Dominions?"] I think the House has already been informed that we are taking no step such as will be involved in any new agreement or treaty without full consultation with the Dominions. I was placed in this very difficult position. If I had wanted to take the line of expediency, I could have done so. I could have avoided a disagreeable necessity, but I preferred to do my duty in the way I have done.

This Debate arises because of the challenge presented to the Government by the official Opposition and consequently in our view the right hon. Gentleman the Foreign Secretary is not unjustified in quoting the record of events which have passed between his predecessor and Lord Lloyd. At the same time, most of us must regard it as unfortunate that it should have been necessary to detail in the presence of all the world these differences of opinion which have taken place between the British Cabinet and one of its principal representatives abroad. The situation in Egypt has for many years past been almost continuously difficult and delicate, and I much fear that the proceedings in this House to-day will have tended to add to our future difficulties. All these facts must have been known to the Opposition; they must have had very prominently in their minds the many successive instances of friction and disagreement which have occurred, and if any untoward results may follow, somewhat damaging to Imperial interests, from such disclosure, I think in fairness the House will feel that the responsibility must rest with those who have issued this challenge.

The question was asked whether Lord Lloyd has been kept fully informed of the negotiations that have taken place. Consultation between a Government and one of its representatives is, of course, necessary in almost all circumstances, but it does presuppose that there should be a measure of mutual confidence, and that the Government should feel that there is an essential unity of purpose between themselves and the agent in question. In all ordinary cases a change of Government here ought not to involve a change of representatives abroad That is a matter of fundamental importance in the conduct of our vast and multifarious affairs throughout the various countries of the world. But a Government has the right to feel that its policy is sympathetically presented to those to whom the agent is accredited, and since it has to bear itself the brunt of any failure of its policy it must have the right to feel that when it adopts a policy it will be offered and pressed in a manner which is consonant with its own intentions. So far as this Debate has proceeded most of us who are wholly impartial in this matter must feel that the Government could not have had that assurance in this particular case, and unless what has been said is controverted in the later course of the Debate I think that is the general conclusion to which the House and the country will come.

The personal question is not really the most important question at issue to-day. This House is far more concerned to know whether there has been, or is contemplated, any serious change of policy in our relations with Egypt. I do not say at the outset that a change of procedure or method would necessarily be wrong. After all, negotiations have been proceeding for many years and have not hitherto been carried to success. There remain questions of great gravity and importance still unsettled, and any Government would be rendering a great service to the Empire if it succeeded in arriving at a friendly understanding with the Government and people of Egypt. The House is unanimous with respect to the four points which were reserved in 1922, and I understand that the Government maintains the position which the same right hon. Gentlemen took up when they were in office in 1924. The Foreign Secretary on behalf of the Prime Minister has reaffirmed the attitude which he adopted then, and in that course and in their negotiations they will be generally supported by the House of Commons. Before anything definite is done the House ought to know whether the Government also adheres in all points of substance to the provisions of the draft Treaty of 1927; the treaty which was entered into by the right hon. Gentleman the late Foreign Secretary and Sarwat Pasha, who was Prime Minister of Egypt.

If there is to be any change of a substantial character I feel, and feel strongly, that Parliament should be informed before it finds itself committed. There I am entirely in agreement with the right hon. Member for Bewdley (Mr. S. Baldwin) who said that the whole House should bear a common responsibility for any change that is made, for these matters are of vital importance to the whole Empire and a mistake once made would be exceedingly difficult to rectify. The Prime Minister has asked that this House should regard itself as a Council of State in dealing with great matters of policy and I, speaking on behalf of my hon. and right hon. Friends, said we would very readily respond to that appeal. This House ought to be informed and consulted before any definite commitment is made if it is a departure in any substantial degree from the policy hitherto adopted by this country. The right hon. Gentleman has said that the Egyptian people are to be consulted; that he would endeavour to secure that they should be consulted before any agreement is reached. It is difficult to know what form that consultation should take; but I will not press the right hon. Gentleman to-day on that matter. I know how difficult these negotiations are, and a question of that character could only be embarrassing. But if the Egyptian people are to be consulted before any decisive step is taken, the British people should also be consulted, as well as the Dominion Governments. The right hon. Gentleman has said that he would present any Measure to this House for ratification. I hardly think that is adequate to the circumstances of the case, but without detaining the House longer I want to make an earnest appeal that the Government should be slow to take any definite course without carrying with them the general body of opinion in this country as represented in the House of Commons.

After the speech which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) has delivered, and after the very clear and emphatic manner in which he expressed what I believe is the opinion of the majority of this House as to full Parliamentary discussion before final commitments are made, I can abridge what I was about to have said, and, indeed, I should not have risen at all were it not for the fact that I feel that the position in which matters have been left after the speech of the Secretary of State for Foreign Affairs, and also after the speech of the right hon. Member for Darwen, is in many respects unfair to Lord Lloyd. There are, of course, two questions at issue, the personal question of Lord Lloyd and his dismissal or resignation, and the general question of the future of Egypt.

I do not dispute the right of the executive Government to choose and change its agents when it requires to do so, but the fullest justification must be offered to Parliament for such changes. In attempting to give that justification to Parliament the Foreign Secretary has gone back over the last four years, and has disclosed the internal discussions which have taken place between the late Foreign Secretary and Lord Lloyd, between the Cabinet and the late Foreign Secretary, and generally has laid these matters, some of them touching extremely delicate points of policy, before the House, the public and the world. I think that the statement that he has made and read out, from the papers so assiduously and eagerly collected and placed at his disposal by those on whom he relies—[Interruption]. The right hon. Gentleman must begin by learning that he is not going to intimidate me. I say that the reading of those papers undoubtedly produced a wrong picture, a wrong impression of the actual relationship which no doubt existed between the parties concerned Lord Lloyd as the man on the spot, facing these difficulties, facing risks in Cairo, naturally had his point of view. The Government here, seeking their general policy of appeasement in these Egyptian and foreign affairs, had their point of view. Why should there not be a free interchange of views? What is there in the whole of this narration to show anything but a healthy, active and closely reasoned discussion proceeding between parties who in the end were unitedly agreed on every grave executive decision?

Does anyone quarrel with the explanation that my right hon. Friend the Member for Bewdley (Mr. S. Baldwin) gave of the duties of representatives of the Crown? They have the fullest freedom for putting forward their views. They put them forward fearlessly. They ought to put them forward fearlessly. Do you want to have puppets, people who sing the tunes that you are habituated to and that you think are popular? You want to know what they really think. You also want to know that when the Executive has reached its decision, the policy on which it has decided will be accepted and loyally carried out. Certainly nothing in the relationship of His Majesty's late Government with Lord Lloyd gave us the slightest ground to complain of the loyalty and fidelity with which he carried out his duties. Again and again he took the view, in the Egyptian atmosphere, which was not the same as the one taken here, but when a decision had been taken, sometimes in one sense or another, he instantly accepted the view which we took. So I say that, while I do not dispute at all that another Government may require a different agent, it is not necessary to reflect upon the official discharge of his duties by Lord Lloyd under the late Administration, nor to represent him in any unfavourable light in that respect.

1 p.m.

But I think that the Foreign Secretary, having made this statement to the House, has probably made it extremely difficult for our representatives in every part of the world to express their views with candour and with courage upon these matters, because they will never know that the mere fact that, however well they have done their duty, they have at some stage of discussion expressed a view which is not popular with a new Government which may come in—they will never know that that will not be brought up against them. But, as I say, the late Government had placed their confidence in Lord Lloyd. They knew perfectly well his qualities, and that he had a strong view in certain matters of Egyptian policy, in some cases a stronger view than that which the Government themselves were ready to carry out But, after all, let us pay some tribute to his work. What were the conditions under which Lord Lloyd went to Egypt The murder of the British Sirdar of the Egyptian Army had but recently taken place; a very grave state of disorder and anxiety prevailed throughout Egypt, and especially in Cairo; the foreign communities were in the deepest anxiety and looked to us for protection.

Lord Lloyd has been there for four years. It is true that there are many things in the present condition of Egyptian politics which no one would say are desirable in all respects, but those are not matters for which Lord Lloyd had responsibility; they are matters which arise out of that very independence and freedom to manage their own affairs which we have conceded again to the Egyptian people. As far as peace and order are concerned, as far as public confidence and security and tranquility throughout Egypt are concerned, Lord Lloyd's four years' tenure of office, in conditions so difficult and so varied, is a monument which no aspersions will diminish. I must say another word or two about Lord Lloyd. I have spoken of his relations with the late Government. I must say that I think there has been a certain streak of prejudice in the Foreign Office against Lord Lloyd—I can speak after four years of intimate knowledge of this matter—partly natural, some of it, very easy to understand. [HON. MEM-BERS: "Is that an attack on the Civil Service?"] I will say in this House whatever is in Order. [HON. MEMBERS: "Civil servants cannot reply."] But they have their Ministers to reply for them. I do say that there is a prejudice against one who is not a member of the Civil Service being placed in that position. A man of independent position who has been a Member of Parliament, a man who has access to the Ministers of the day in the Government of the day—such a man, I venture to affirm, is not entirely in accordance with the traditions and feelings of some of the great and powerful departments in this country; and I am bound to say that I noticed more than one instance of it during the last four years.

Now, I come to the question to which the right hon. Gentleman has referred—Was Lord Lloyd treated with the courtesy which he deserved? The right hon. Gentleman read the telegram which was sent in regard to which he has stated that it was difficult for anyone not to have terminated his appointment after receiving such a telegram; or words to that effect. The right hon. Gentleman has told us that it was a very courteous interview. The right hon. Gentleman is always very courteous in his manner, and Lord Lloyd has a very agreeable manner, and I have no doubt that it was a courteous interview, although it dealt with a grave and sad business. I would ask the right hon. Gentleman whether he wishes the House to believe that that is all that has passed between Lord Lloyd and the representatives of the Department over which he presides. Does he really suggest that there was nothing between this telegram, asking Lord Lloyd to come home, and the letter which was presented to the right hon. Gentleman in his room at the Foreign Office? Does he suggest that that is so? Has he any knowledge of any other communications which have been made? I ask the right hon. Gentleman. [HON. MEMBERS: "Answer!"] The House will note the silence of the right hon. Gentleman.

I have asked the right hon. Gentleman whether he has any knowledge that any other communications have taken place. Even to that question he remains silent. Is he aware—[Interruption.]—I am choosing my words—with what sternness the demand was made upon Lord Lloyd to send in his resignation, and how clearly it was intimated to him that, unless he did so, he would be dismissed? Is the right hon. Gentleman aware of that? Is he aware of that? [HON. MEMBERS: "Are you?"] I have Lord Lloyd's statement to me. Lord Lloyd is my friend. He has served under the Government of which I was a Member. I have been, like the right hon. Gentleman, his colleague in the House of Commons for many years before the War, and during the War. So long as Lord Lloyd was a servant of the Government opposite, he made no communication of any sort or kind to me, or to anyone else. He kept himself entirely a servant of the Administration, but when he had resigned his appointment, when he had vacated his appointment, it is perfectly true that he did on that day come to see me. The right hon. Gentleman said that he had knowledge of that. He told Lord Lloyd that he had knowledge of it, and that he took steps to find out who it was that he went to see on that day. Is that really the proper way to treat a high official of the Crown who had just resigned?

On a point of Order. I never made any such statement. [HON. MEMBERS: "Withdraw!"]

Perhaps the right hon. Gentleman will say how it was that he knew.

If the right hon. Gentleman has got himself into a difficulty, I am not going to get him out.

I am in no difficulty at all. The right hon. Gentleman himself brought this point out. He chose to bring up, in his great position as Secretary of State for Foreign Affairs, an interview which had taken place between two private persons, and he used that for the purpose of influencing the debate. Therefore, in view of that, may I not ask him on what he based that statement? It was quite true, but on what did he base that statement?

I based it on the statement of Lord Lloyd, who told me that he had "seen Mr. Churchill."

Yes, but after he had heard from the right hon. Gentleman that he was in possession of that information. That is rather a clever shuffle. The point is not of importance, but it illustrates the manner in which this matter has been treated, and the sort of thing that is going on. The right hon. Gentleman says that he based himself on Lord Lloyd's statement to him, but it now appears that he had previously informed Lord Lloyd that he had the information. Let us apply that to the statement of the right hon. Gentleman that no negotiations were going on behind the back of Lord Lloyd. Is it true to say that? Discussions and negotiations were taking place. I am not allowed to mention names, but in another place a Minister of the Crown, yesterday, used the word "negotiations" repeatedly. He said that negotiations were in progress but, "We cannot communicate the progress of these negotiations until they have reached a further point." That was a public, official statement of a Minister of the Crown. Now, the right hon. Gentleman says that no negotiations were taking place; that there had been only two conversations, and the Cabinet committee had only just assembled. It is quite clear that something in the nature of negotiations were going on, and the High Commissioner was not, in fact, informed. It is usual in these matters of importance that when Governments at home begin discussions, they should, in the first place, tell their officer on the spot, while he remains their officer, that they are having discussions and proceeding with the business.

I do not think that the right hon. Gentleman has in any way disposed of the criticism which was made by my right hon. Friend the Leader of the Opposition, when he said that there had been negotiations behind the back of the High Com- missioner during the short period since the new Government came in. I say, taking together these negotiations, the telegram which was sent, with the deliberate intention to secure the resignation, the pressure which was put upon Lord Lloyd, apart from what we have been told by the right hon. Gentleman; taking all these three things together, I cannot think that Lord Lloyd has had from His Majesty's Government the treatment which his own perfectly frank and straightforward character and his conduct as High Commissioner in Egypt entitled him to expect. Governments may change their agents, and may choose their agents. Why have the present Government been so very anxious to change Lord Lloyd? It is because, undoubtedly, Lord Lloyd has stood for firmness in defence of British rights in Egypt. That is why he has been singled out and selected for early change.

The fact that a man who, undoubtedly, was identified with the successful assertion of lawful British rights in Egypt, has had to resign, will not he confined in effect only to Egypt, It will raise great difficulties and embarrassments there and elsewhere. This quick and sudden change will cause difficulties all over the British Empire. Administrators, great and small, will have an example before their eyes of the fate which overtakes, under the present Government, public officials and public servants if they stand up with some firmness and stiffness for British rights and interest, and refuse to lend themselves to sloppy surrender and retreat. That is why he was obnoxious, and that is why he has been removed, and I say that it is a very curious action for a minority Government to have taken, at the very time when the Prime Minister has been appealing for national cooperation and goodwill in the treatment of external affairs. It would have been much more prudent and wise to have continued to discuss these matters with Lord Lloyd, and when you had some fault to find with him yourselves, and when you had some grievance with him or some difference had arisen with him in your administration, then you would have had a perfectly good ground for choosing whatever agent you thought would carry out your policy, and it would not have been necessary to go back into the past and to put a completely wrong gloss upon the inevitable discussions, sometimes very keen, which take place behind the closed doors of Cabinets and Administrations.

I have said that much about Lord Lloyd, but I must ask a few questions on the infinitely graver matter of the policy in Egypt. The right hon. Gentleman did not give, I thought, a very precise answer to the questions which were put by the Leader of the Opposition. After all, this is not a matter which can be settled only by general phrases; it can only be settled by precise answers. In the Draft Treaty of 1927 which was discussed with Sarwat Pasha we made certain military proposals, and those proposals were the extreme limit to which we were prepared to go. They were the extreme limit, and only in return for a full acceptance with good will by the Egyptian Government. I want to ask the right hon. Gentleman whether his expression "no change of policy" means that he will not go further in the direction of removing the British troops from Cairo than was prescribed in the Articles of the Treaty discussed with Sarwat Pasha. I think we are entitled to an answer. I trust the Prime Minister will be speaking later in the Debate, and after all he has our interests in his hands in the next few months, and no doubt he will have the largest measure of national support behind him in negotiations in other spheres which he will be undertaking. I appeal to him to give us the maximum reassurance in his power, to let the House separate with the greatest sense of security, in matters about which we are so gravely concerned, and I ask him to answer the specific questions which were asked by my right hon. Friend: Was there any modification of the military provisions; had the Government consulted their military and expert authorities upon them; had they their agreement upon them, and other questions of that kind? May we have the answer to them?

Lastly, will the right hon. Gentleman respond directly to the appeal made to him by my right hon. Friend below the Gangway, and will he give the House an assurance, an absolute assurance, that the future relations of Britain and Egypt will not be compromised in any irrevocable sense by any decision or action which is taken by the Government before Parliament has reassembled? I think it is a fair request to make. I never wish to see the Executive unduly crippled, but considering that the right hon. Gentleman does not possess a Parliamentary majority—it is quite possible that on this Egyptian question he will be in possession of a majority; I do not prejudge it—I do say that, as he is not possessed of a normal Parliamentary majority, he ought to be doubly careful to make sure that he has a majority of the House behind him before, on a matter so controversial and grave as this, he takes irrevocable decisions. Therefore, I ask him to reassure the House that nothing will be settled which will have the effect of altering the present position in Egypt, altering the position adopted in the Sarwat Treaty, without our having had the fullest opportunity of discussing the whole of the proposals before any final decision is taken or signature appended.

I regretted it very much when notice was given to us that this subject was to be debated to-day. I did not regret that because I am less jealous of the rights of this House than are any hon. or right hon. Members opposite; I did not regret it because I wished more liberty for my colleagues in the Government and myself than other Governments which have gone before us had claimed and had received; I did not regret it because the subject of the resignation of a representative of His Majesty abroad was regarded by me at all as a subject that was not fit for discussion in this House; but I did regret it from the point of view of Egypt itself. Two speeches have been delivered to-day, one by the right hon. Member the Leader of the Opposition, the other by the right hon. Member for Darwen (Sir H. Samuel), to which no possible exception could be taken, but we have just listened to a speech the mischievous character of which it is impossible to exaggerate. The right hon. Gentleman the Member for Epping (Mr. Churchill), himself a Minister of the Crown, or a late Minister of the Crown, himself a Member of the Cabinet, himself the head of an important Department of State, has made one of the most unjustifiable attacks upon the Civil Service, and he has based that attack, not upon his own personal experience, but upon the most contemptible tittle tattle, which every man who is a Member of this House and who frequents clubs and such places could pick up by the armful. Not only that, but as this incident has happened—a very regrettable incident—if hon. Members opposite would confine their remarks to expressions of regret, they would find that there is no division in this House; but the right hon. Gentleman has used this most regrettable incident to proclaim to the representatives of the Crown in other parts of the world that it means that not a single one of them is going to be allowed to express their independent opinions in confidence, and, as it is their duty to do, to the Government in office. He knows very well that that suggestion is absolutely baseless.

I say that the right hon. Gentleman knew perfectly well that when we came into office we did not merely inherit the unsolved four points of reservation; he knew perfectly well that when his Government was investigating this problem, when it drafted proposals for dealing with it, his Government did not regard the observations of the High Commissioner in Egypt as the due and proper critical observations which every foreign representative is bound to make to his Government; he knew perfectly well that within two or three days of our coming into office, and when my right hon. Friend on my right had got, so to speak, into the saddle in the Foreign Office, it was not the Sarwat Treaty that he had to consider, it was not the situation of Mahmoud Pasha that he had to consider, it was not the relation between this country and Egypt that he had to consider; he knew perfectly well that one of the first points that my right hon. Friend would have placed in front of him, and upon which he would have to come to a decision, would be the continuance in office of the High Commissioner of Egypt. There is no bench in this House which is less surprised that action had to be taken in the matter than the Front Bench opposite.

I had no knowledge of any kind that there was any question of removal of Lord Lloyd when the late Administration left office.

That is a very convenient paraphrase of what I said. I said that there is no bench in this House that ought to be less surprised that action had to be taken in this matter. By that I do not say that the Front Opposition Bench is associated with us in any way whatever in the action that we did take I am not going to say anything about private or public conversations in that respect, but I do say that everyone on that Front Bench, those at least who were Members of the Cabinet, knew that that was a question which we should have before us, whatever the decision was that we came to. I prefer to leave it, so far as Lord Lloyd is concerned, there. The late High Commissioner went to Egypt in most difficult circumstances. He had a task imposed upon him when Sir Lee Stack met his death at the post of duty that was one of the most difficult that an administrator of the British Empire who was devoted enough to the public service to accept it could have undertaken. He did what he considered to be his best, but I do claim this—I believe that every responsible man in the three parties in this House will agree with me—that a Government administering the affairs of a colony, or dependency, or whatever you like to call it, must enjoy the comfort of full confidence in their representative, and my right hon. Friend is within his rights—that is all that this House is concerned with—in following precedent after precedent, not in view of his own personal experience of the High Commissioner. I dare say the right hon. Gentleman opposite, in pursuit of the extraordinary tactics he has been showing in the last three or four weeks, would have liked, if it had been possible for him, to have said that it was not on account of the past but on account of some friction with my right hon. Friend. That is mere pettifogging tactics. My right hon. Friend, not because the High Commissioner had come up against him, but on his perusal of the records, said "I cannot feel the confidence in the High Commissioner that I should like in anyone representing the Government."

On the matter of policy the right hon. Gentleman comes up and says "I want an assurance that the Government activities are going to be suspended until I am in my place." The Government activities, I can assure the right hon. Gentleman, will not be suspended. I assure the right hon. Gentleman that the Government are going to pursue an examination into this question of Egypt, and the considerations put forward by the right hon. Gentleman the Member for Darwen will be fully borne in mind; that nothing final can be done until this House has agreed to the ratification. The Government are going to make their suggestions. They are going to try this, that, and the other thing. In other words, I happen to know something about the Sarwat negotiations. I will follow exactly on the same lines. The right hon. Gentleman the Leader of the Opposition knows that the Sarwat Treaty was sent away to Egypt without the events taking place which the right, hon. Gentleman the Member for Epping desired to impose on us. We know our responsibility. We know our position here. We will do what we think the interests of this nation and the interests of Egypt require us to do, remembering all the time our responsibility to this House.

I have nothing to hide so far as the circumstances of the present moment are concerned. We are exploring the situation. The right hon. Gentleman says: Will I give him a pledge that we shall not go beyond the extreme of limit which he and his friends embodied in the Sarwat Treaty? Will he in his kindness give me an extra inch? Is a document accepted by the right hon. Gentleman going to be regarded as the very last word which any Government can ever say? Really, the right hon. Gentleman must open his eyes and see the absurdity of his suggestion.

I made that request, because the Foreign Secretary said that there would be no change in the policy, and I wanted to know whether that "no change" covered the definite military clauses which were embodied in the Sarwat Treaty?

The right hon. Gentleman must remember that the Sarwat Treaty was defended in certain quarters, because it was an adequate expression of the policy of 1924. Is my right hon. Friend not to be allowed to consider the Sarwat Draft Treaty in relation to the policy of 1924, which he himself has said to-day is still our policy? The right hon. Gentleman has not improved his position.

I will tell the House exactly what is going on. There are four reserved points. In connection with each one of those points, there have been many proposals as to how they should be handled. The question of the military occupation of Cairo in the Sarwat Treaty may be revised at the end of ten years, and then every five years afterwards, and they actually weaken this by saying that, if there is no agreement, it may be referred to an outside body. Is that the last word in securing our communications through Egypt? Really, if it is, we have come to a very sad impasse. Are there no other suggestions approved by the authorities, for securing our communications through Egypt except that? If the right hon. Gentleman or any of his colleagues have any doubt about that, I will tell them this: the whole matter, while I am talking and while he is listening, is being considered, because it has been referred to them already; it is being considered by the three heads of the Service Departments. Does that satisfy the right hon. Gentleman? Will the right hon. Gentleman take this from me, however unwilling he may be to do it, and however damaging it is going to be to the peculiar campaign which he is conducting? Will he take it from me that all other points of the same difficulty, and the same variety of possible solutions, are being treated in the same cautious, and the same careful way? Not until everything has been explored, and until the best proposal that can be made has been devised, will the instrument which is vital, which is living, and to which the Government will commit itself, make its appearance. May I appeal to the House not to do any further damage to Egypt, and to allow us to go on with other business.

Nobody can doubt that we have had this morning a Debate of the first importance, and I do not propose to add more than one or two words to what has already been said. Matters of such importance to the whole parliamentary and governmental system of our country should not be allowed to pass by those who are interested in the conduct of Governments without a word or two from the back benches on this side of the House. I am going to say one or two things which are not in complete agreement with certain words which have fallen from the ex-Chancellor of the Exchequer, and I want to state what, in my view, is the true cause of the anxiety which all who are interested in the proper conduct of public affairs have a right to feel in the action which the Foreign Secretary has taken. There can be no question that we are dealing in this matter of the dismissal of an important public servant with a topic of grave import to the conduct of government. Nobody can doubt that the whole question of the dismissal, or the enforced retirement, of agents in foreign countries is a matter of grave importance to the whole relationship between the Government at the centre and its representatives abroad. I have one serious criticism, above all others, to make of the action that has been taken. I cannot believe that it is right for a Cabinet, newly installed in office, to dismiss or to cause the resignation of a High Commissioner of Egypt, not upon their own experience, but upon the supposed experience of their predecessors.

I am not competent to enter into—[HON. MEMBERS: "Hear, hear!"] It is a pity that one cannot admit the limits of one's own knowledge without those comic "hear, hears!" from the other side. I am not competent to enter into the discussion which went on between Lord Lloyd and other administrations, but I am satisfied that here a large principle of the behaviour and the conduct of Cabinets is involved, namely, that if they, are going to dismiss their servants abroad, it must be upon their own experience and not upon the experience of others. So far as the Foreign Secretary has described his relations with Lord Lloyd, it appears that there was no direct discussion between the present Foreign Secretary—perhaps I may have the right hon. Gentleman's attention. [Laughter]. When the hon. Gentleman who laughs is an older Member, he will know that that is a courtesy which is freely given; at all events, it is a thing which all of us are agreed should be given, especially when a matter of grave public importance is being debated. This question is important, not only on its merits, but in relation to the whole conduct of public affairs. As far as I understand from the Foreign Secretary's account, he, as the new Foreign Secretary, had not discussed Egyptian policy, Egyptian conditions, and the facts of the Government of Egypt, with Lord Lloyd before he sent a telegram to Lord Lloyd clearly indicating his disapproval of his continuance in office.

I believe that it was highly improper to take any opinion but the opinion of his own experience, in coming to a decision of such importance, and one cannot in the face of such an incident as that but ask the Foreign Secretary why he did not wait until he knew from his own judgment that Lord Lloyd was not in such consonance with his policy as would enable the Government to have full confidence in him? Why should he not have waited until he had seen for himself the nature of Lord Lloyd's views upon topics which would have to be administered. This is a matter of real importance for future Governments, and the action which has been taken is a retrospective condemnation of Lord Lloyd upon facts which were not directly before the right hon. Gentleman while responsible for foreign affairs. The dismissal of an important public servant should not be undertaken by a Cabinet until they know, after they have had the responsibility of office, that he is not in consonance with their views. Out of the whole circumstances of this retirement, this is the large public issue which is involved. Is it not the duty of a new Cabinet not to rely upon past discussions between a previous Cabinet and their servants but to test for themselves and to judge for themselves the capacities of the public servants whom they find in office when they themselves come into power? If I may say so, I think this is a very unsuitable subject for public controversy. [An HON. MEMBER: "Then sit down!"] No, I do not propose to sit down. I think this is a matter which might well have been left without public controversy at all.

Hear, hear!

But the subject having been raised I do not think we can safely leave undiscussed and unanalysed what I regard as the grave impropriety of a new Cabinet, a new Foreign Secretary, accepting the evidence of a previous Cabinet and not judging from his own experience the fitness of their servants abroad. I am sure that such a thing is unsuitable and improper, and for this reason, that every public servant such as the late High Commissioner has a right, before he is dismissed by the responsible Government, to have an opportunity of showing his capacity and his power in the conduct of the business with which he has been charged. Lord Lloyd has been given no such opportunity by the Foreign Secretary. Lord Lloyd has not been dismissed because his relations with the present Cabinet have been unsatisfactory. The Foreign Minister has taken action upon the experiences of the past Cabinet, and has decided that the past Cabinet ought to have dismissed Lord Lloyd, and has dismissed him in their place. That is the criticism I venture to make. I would like to make it quite clear that that does not seem to me—I may be wrong, and if so I shall be corrected—to be the way to induce confidence in our agents abroad, that a Cabinet may dismiss them not upon their dealings with that Cabinet but on their dealings with another Cabinet.

Hear, hear!

May I, as a new Member, ask whether a speaker is entitled to say the same thing more than six times?

When the hon. Member is more familiar with this House he will know that my interventions in Debate, though fairly frequent, are nearly always very moderate in length. Nor do I think that on a matter of such grave public importance, and raising a point which has not yet been fully discussed in this House, I ought to be subject to the discourtesy of that kind of interruption. It is an interruption such as I should never have made myself, although I have had experience in three Parliaments. Will the House permit me to develop the line of thought which I am putting before hon. Members and regard the incident which has just occurred from the point of view of the agent abroad? He has been the confidential servant of the late Cabinet. That Cabinet has never hinted at the possibility of dismissing him on account of the representations he has made. That Cabinet falls, and a new Cabinet comes into power. Is that agent abroad to be under the fear that when a new Cabinet comes into power he may be dismissed for the representations he made to the previous Cabinet? Believe me, that is a totally unsound and untenable principle of relations between a Cabinet and their servants; and I believe that when this matter is fully thrashed out, when we have the time to regard this affair as a whole, when tempers have cooled and the whole matter has passed into the realm of history, this will be the criticism which is a matter of real seriousness—that the present Foreign Secretary accepted the advice given to his predecessor by Lord Lloyd as a case for dismissing him. Surely the Foreign Secretary would have been wiser to wait until he himself had had some personal discussion of Egyptian policies with the public servant whom he has dismissed.

I leave that point, no doubt to the intense gratification of the hon. Member opposite. There is only one other observation which I wish to make, and it is one which I would willingly leave unsaid. For my part, I wish here and now to dissociate myself entirely from the introduction into this House of any expression of the supposed views of the Civil Service as opposed to the supposed views of the Cabinet. I have never held office, and I do not suppose I ever shall hold office, but I am sufficiently conversant with the conduct of the public life of this country to know that the Civil Service deserves and the proper conduct of Parliament demands that the views of the Civil Service as opposed to the views of their political heads should never be brought into public discussion in this House. Speaking from these back benches, I say that, in my judgment, that is a rule which under no circumstances, under no provocation, under no excuse, should ever be contravened.

I have attempted to show to the House what, in my view, are two important points which have emerged from this debate. I think a grave mistake in method has been made, the effects of which will resound amongst the agencies and other offices which are held abroad by our representatives, and I should not have been doing justice to myself if I had not pointed it out. But, for my part, I propose to let what I regard as an error of method in this Government not interfere with what I ventured to to say during the Debate on the Address was the line which, as a humble back bencher, I proposed to follow. The line I propose to follow in this Parliament is to give honest, disinterested consideration to the proposals of the Government. The burden of public life in this country is not becoming lighter, it is becoming heavier. I have no doubt that this Government, like other Governments, will make mistakes of gigantic scope. [Interruption.] If so, then no question will arise as to the necessity of extreme criticism. Till that moment comes, I am prepared, speaking as an Opposition Member, to give the proposals of the Government such careful consideration as their high station requires, and only to oppose them when I think their proposals are definitely against the public interest.

I do not rise to continue the very interesting, if somewhat exciting, discussion which I have been listening to for the past two or three hours. I propose to call attention to a totally different matter, and, although I think it is one of equal, if not greater, gravity, I am of the opinion that the Chancellor of the Exchequer and I will be more likely to discuss this matter in an atmosphere of greater calm, and I shall be surprised if at the end of the discussion we do not find ourselves in agreement. I wish to deal with the Young Report on Reparations. I do so with much reluctance, but I am not taking up this question in order to embarrass the Chancellor of the Exchequer in any negotiations which may take place. On the contrary, I think this discussion may strengthen his hands when he comes to the very important conference which must take place at some time or other. I have read the Young Report, and it seemed to me so incredible that I read it a second and a third time, and each time I read it with feelings of amazement that such a report could be presented to the British Treasury as a fair settlement of the claims of Great Britain.

I have no desire to criticise the very distinguished expert who represented us in this business. On the contrary, I think we were represented by one of the ablest economists in the world, but there he was in a position of isolation, largely due to the fact that a very able colleague of his had been stricken down in the middle of the negotiations. Our representative was pressed by other Powers, and most of them benefited by the sacrifices which we were called upon to make. Our representative seemed to be in the position of the juryman who after holding out against the opinion of his fellow jurymen for hours, days, and perhaps weeks, in the end had to accept the responsibility of being the one and only dissentient. The responsibility cannot be placed on our representative. The responsibility, in the first instance, rests with the Government and undoubtedly with this House. I want to say here and now that I earnestly trust the Chancellor of the Exchequer will use his great authority and influence to secure very substantial modifications in the scheme adopted by the Young experts before it is adopted by this House.

2.0 p.m.

I will give my reasons for that course. I do not object to a reduction in German payments; on the contrary, when the Dawes Report was before this House five years ago I said the figures were too high, and that I had no doubt a further reduction would have to be effected in due course. I do not think we have seen the last reduction, because every revision which has taken place up to the present has ended in a reduction, and I do not believe that this is the last. I am not objecting to the Young Report on the ground that it has reduced the contribution of Germany Germany's contribution is still a very heavy one. We shall find it difficult to raise a sum running up to £34,000,000 which we have to pay to America, and we are in a much better position that Germany. I think the Young contribution is very stern and severe.

My objection is that the whole of the sacrifices have been made practically at our expense, and, if there is to be any abatement in the German annuity, it should be distributed fairly. That is not the case; practically we have been called upon to foot the bill. The Chancellor of the Exchequer has already said that we cannot continue to pursue a policy of making sacrifices at the expense of our own people, or of bearing further financial burdens in order to help those who are better able to bear their own burdens. That is the statement which has been made by the Chancellor of the Exchequer in reference to reparations. I hope the right hon. Gentlemen will impress that view upon the Conference, and that he will be able to secure a very substantial improvement in the Young terms as far as we are concerned.

Let me summarise the alterations which have been effected in our position and to our detriment by the Young report. First of all, there is the reduction in the Spa percentages. I cannot give the exact figures, but perhaps the Chanceller of the Exchequer will inform us. It looks as though what is now proposed will mean a reduction of about £2,000,000. That is a reduction of £2,000,000 a year in our share which was fixed at the Conference at Spa between the Allies and Germany, and that was the proportion of German reparations allocated to us. My recollection is that it means a reduction of about 22 to 20 per cent.

Why should there be any reduction? On what ground has a reduction taken place? Were we receiving too much under the Spa agreement in proportion to the sacrifices which we made in the war? Under the Spa agreement, France was to receive 52 per cent. of the whole, and we were to receive 22 per cent. That means that France was to receive 2⅓ times as much as we were to receive, and I think that was an extremely generous settlement as far as France was concerned. I am not minimising the sacrifices France made in the War, but as a matter of fact neither in lives nor money were the sacrifices of France two and a half times more than our own. When you come to the question of devastation, our devastated areas are of a different character. Our devastation has been in our trade, and especially in our international trade. We have not yet recovered more than 80 per cent. of our great international trade at the present time. We ought to be, not merely 100 per cent. of what we were before the War, but about 120 per cent., taking the populations into account, and certainly we have not recovered more than 80 per cent. That means that since the War we have lost, at the very least, £3,000,000,000, of trade directly owing to the devastation of the War. We are repaying £34,000,000 a year, which will run up, I think, to £38,000,000, to America in respect of a War debt which we incurred really to finance the Allies. Had it not been for the obligations we incurred to finance the Allies in respect of food and munitions, it would have been quite unnecessary for us to have borrowed that £800,000,000, or whatever it was, from America, which, with arrears, has run up to about £1,000,000,000. I cannot see on what ground we can be called upon to assent to a decrease of the proportions which were laid down by agreement after a good deal of conference and consultation and examination by experts in the year 1920; but we are now invited to agree to a proportion that will reduce the sum of money which we shall receive in respect of reparations by £2,000,000 a year.

A much more serious thing, in my opinion, is what has happened about the division of the German annuity. For the first time the German annuity is to be divided into two categories, the conditional and the unconditional. The unconditional is to be paid whatever the state of trade may be in Germany. The conditional can be postponed for two years if the trade conditions in Germany are of such a character, or if her currency difficulties are of such a kind, that she cannot secure a sufficient number of foreign securities to enable her to pay the whole of her annuities. She is entitled to give 90 days' notice. She must pay the whole into the Reichsbank, but there is to be a postponement of the transfer. In the second year, she can even suspend payment to the Reichsbank to the extent of 50 per cent. In the third year a committee is to be set up to consider what is to be done with the arrears. It is of no use to us that our share has been paid into the Reichsbank; the whole question is, how we are to secure that share by means of the transfer. When the third year comes, Germany will be confronted with the payment of the whole of her annuity for that year, and something like £140,000,000 of arrears. Does anyone imagine that she can do that? She has just recovered—that is the hypothesis—from two years of severe trade depression, and the first year that she recovers she is called upon to pay, not merely the whole of her annuity, but the two years' arrears as well.

What is to be done with the unconditional payment? The unconditional payment is a payment of 660,000,000 gold marks, that is to say, £33,000,000. Germany must pay that whatever her trade conditions may be. The rest of the annuity, which comes to something like 1,400,000,000 gold marks, or roughly about £70,000,000, is conditional. Practically, we receive nothing of the unconditional payment. £25,000,000 goes straight to France. France has the first charge of £25,000,000 out of that £33,000,000. Italy has 42,000,000 gold marks; Italy has a guarantee of over £2,000,000. That leaves £6,000,000. Then you have the service of the Dawes Loan; so that practically nothing will come to us out of the uncondidional payment. If there is any depression in Germany, if Germany cannot purchase the necessary foreign securities in order to pay the unconditional part of the annuity, we shall be left out. We have to pay our £34,000,000 to America, and £38,000,000 later on. We made arrangements by which we are to receive from France and Italy and Germany seven payments which will make up that £34,000,000 or £38,000,000, but for two years that may be suspended, and, at the end of the two years, it is to be left to a Committee, on which we shall be one out of seven, to decide whether we are going to recover those arrears or not.

It is incredible to me how anybody could have signed this report. Not merely are we to be left for two years with nothing, but we may have such a revision at the end of two years that even then there will be a reduction. The £25,000,000 paid to France is about the best security in the world. We have absolutely none. Our payment will be precarious, doubtful; I have no doubt that the bulk of it will vanish. Why do I say that? Germany has only been enabled to pay her Dawes contributions by borrowing on a large scale and by keeping down her wages. Those two processes cannot be continued indefinitely, and the result will be that Germany sooner or later will be confronted with the aggregation of those huge borrowings for the purpose of paying these annuities, and there will be another revision; but when that comes France will be secure, and Italy will be secure as to her proportion of £2,000,000, or 42,000,000 gold marks. We shall be left the rest, which is precarious and vanishing; we shall be left with nothing but a £34,000,000 payment to America, which is secure enough. I do not think that in these circumstances our Government ought to append its signature to a report which is not merely a set-back to us, but a humiliation to us. I think it is one which no Government, in the interests of the taxpayers of this country and in the interests of fairness, ought to be called upon to sign. We used our credit with great generosity for the benefit of the whole of our Allies during the War. Agreements were made in which we were put down last. I cannot trust myself to say what I think of the way in which we have been treated in the whole of these arrangements, and I would rather not; I would rather state the facts as they are. But that is not all. There are certain safeguards, but I believe they will vanish. There is something to the effect that for the first deficiency France is to pay 500,000,000 too, but that is only for the first deficiency. I am hoping that at any rate the 20 per cent. will be safeguarded. In the main, however, we are left with nothing.

I am sorry that there is a third thing which is, I will not say more serious, but just as serious, and that is in regard to payments in kind. Under the Treaty of Versailles, which I had a hand in negotiating, there were payments in kind in respect of coal, and also in respect of some other things for about four or five years. I forget what the other things were at the moment—dyes, potash, and a few things of that kind. There were payments in kind in respect of coal for 10 years, because of the devastation of the Belgian and the French coalfields. I thought at the time that ten years was a very liberal limit. As a matter of fact, the French coal fields were not only restored but improved in less time than that. Under the Treaty of Versailles, payments in kind would have come to an end this year. Unfortunately, under the Dawes Report the ten year limit was taken away. I have been condemned, especially in the coalfields, for my share of the responsibility, but mine was a ten year limit. It would have come to an end this year and there would have been no payments in kind at all. I must remind hon. Members opposite that it was in 1924 that that limit was taken away. That is never stated in the coalfields. It is one of many things that I shall one day have to tell my friends the miners—the sort of things I have been blamed for, for which I had not the slightest responsibility.

However, that is another matter. I did not raise it for that purpose. I raised it for the purpose of seeing the effect of the Young Report. On the face of it, the Young Report is a limitation. It extends for ten years. There will be deliveries in kind for another ten years. The most serious thing there is that provision is made in the new regulations to permit the several Powers to dispose of some of their quota outside their own territory under suitable restrictions. That means that France and Italy can now get their quota of coal from Germany under reparations—not under the Treaty of Versailles but under the new regulations which have been made since. They need not consume it in their own territory. They can sell it outside for any price. There is no regulation at all in regard to that. In the Treaty of Versailles we had careful safeguards to prevent that coal from competing with British coal. As far as I can see, there is no restriction at all as to the price which these countries can charge when they are selling their surplus coal, which they get from Germany, in the markets of the world. What they want is the cash now. Italy does not need the coal to the same extent as formerly, because of her gigantic development of water power. Even her railways are independent of coal. The coal is to be sent to the Governments. The Governments do not require it, and they can sell it outside, as far as I can see from these provisions, without any restrictions. I hope the right hon. Gentleman will take very careful note of that.

Here is another point. When Germany postpones her transfers, as I read this report, she can make arrangements for liquidating the arrears and for further deliveries in kind. That is very serious for a country like ours which is an importing country. See what it means. The suspension of payments in kind is an act by Germany. She can give 90 days notice and can claim suspension for two years. She is passing through a period of depression. She has a surplus of goods. She can dispose of that surplus by way of reparations. She can pay her reparations, and liquidate her arrears, by getting rid of goods which she could not dispose of otherwise. That is a very serious thing that ought to be examined. I think it is quite capable of being manipulated in a way that would be disastrous for an exporting country like ours. I hope the Chancellor of the Exchequer will take very great care that a provision of that kind is not inserted. We seem by this Young Report to be hit all round. First of all the contribution we receive is to be reduced from 22 to 20 per cent., which means £2,000,000 a year. In the next place, the annuity of Germany is to be divided into two, one the unconditional one—where we receive nothing—and a conditional one which may be suspeuded for two years if Germany is in a had way, and there will be no guarantee that at the end of two years you will receive anything. We are hit hard there. Then come these provisions with regard to payments in kind which are the most injurious of all. Although there was an American Representative there, and for the first time there was a kind of linking up of debts with reparations, in the arrangements that were made I did not observe that, during the two years in which we were not to receive our share of reparations, there is any provision that America is not to receive her annual payment in respect of debt. America is represented on this body, which can at the end of seven years wipe out those arrears and leave her short of nothing. That consultative body cannot even consider the question of the repayment of the American debt.

This seems to be a very one-sided transaction. The thing has been weighted against us in every direction and in every particular. I am not against reduction. On the contrary, in every conference I have attended my plea was always for a reduction of Germany's payments. I never believed that the great demand that has been made on Germany could be sustained, but as the right hon. Gentleman knows, when you go into a conference you have to give way here and there and you feel that you have carried the thing as far as you possibly can at a particular stage, but another conference will come later on when there will be a revision. That is all you can do in an international conference. Many a time have I communicated with the United States to beg them to bring the debts into a sort of ambit of the discussion about reparations. I made the appeal to President Wilson. I have here the letters that passed between us, but I do not think I will detain the House by reading some of the passages: I found the Americans very gentle, taking a very broad and munificent view on questions of reparations, but whenever you came to questions of debt you found them exceedingly hard, unyielding and unbending. In our proposals in 1922 we proposed to abandon every claim we had against any country in respect of debt owing to us. We offered to abandon, as the right hon. Gentleman knows, our claim to every penny of German reparations provided America was prepared to abandon her claim against us. It is a grave misfortune that a proposal of that kind was not carried. It would have meant wiping the slate, and it would have meant getting rid of all these burdens which are crippling industry and depressing wages throughout the whole of the year. As long as these huge claims for reparations and debts are on the shoulders and on the chest of Europe, you are bound to have harsh industrial conditions. Therefore, in 1922, we made that offer, that we were prepared to clean the whole slate. We had £3,000,000,000 due to us. [Interruption.] There was a war on in 1918. I had not forgotten that. The hon. Member means 1918.

The 1919 election.

I made it in correspondence which passed between ma and the President of the American Republic at that date, and I am quite prepared to publish that correspondence. I said "If we are to have a sort of abatement, let us have abatement all round." We were prepared in 1919 to have debts brought into account and to have a settlement which would have had the effect of wiping out all these obligations. I do not mean to say to relieve Germany altogether; certainly not. I have never taken that line. It was due that she should pay a very considerable sum of money in respect of the devastation which she caused by the War, and for which she was responsible. The proposal was made in 1922. That is seven years ago. [Interruption]. If the hon. Gentleman had been in the House he would, possibly, have made it before—and perhaps not. If he knew a little more about the subject he would realise things which he is incapable of comprehending at the present moment. I am not in the least urging any objection to reductions in the obligations of Germany. On the contrary, I say that these things can possibly be accomplished. I earnestly entreat the right hon. Gentleman—I am not sure that it is necessary to press him very hard upon it, because I have read the speech which he delivered in the City of London and which gave me great gratification—that he will consider once, and consider twice, before appending the signature of the Government to a document which would be so disastrous to this country.

I do not in the least complain that the right hon. Gentleman has raised this question. On the contrary, I think that it will be of service to those who have to conduct in what must in any case be very difficult circumstances, the consideration of this Report on behalf of this country. For a very great deal of what the right hon. Gentleman has said he has had no more sympathetic listener in the House of Commons than myself, but I am sure that hon. Members will realise that in speaking upon this subject today I am in a somewhat delicate and difficult position. Indeed, I feel a certain amount of hesitation in dealing with the matter, and I envy the right hon. Gentleman his position of greater freedom and less responsibility. The right hon. Gentleman has given such a very clear and full account of the main provisions of the Young Report that it is not necessary that I should follow that ground beyond, perhaps, illustrating one or two points by figures which are in my possession and to which the right hon Gentleman perhaps had not access.

I would like at the outset to make it clear that the Government are not in any way committed to the acceptance of the recommendations of that Report. Hon. Members will remember that this Committee had its genesis in conversations which took place at Geneva last September between certain foreign Ministers. The German Foreign Minister raised the question of the evacuation of the Rhineland, and in the conversations which followed, I understand some other Foreign Ministers tried to link that up with the question of Reparations. I believe that it had been the policy of the British Government up to that time not to admit, or not to accept, any direct relation between the evacuation of the Rhineland and the payment of Reparations.

However, as a result of the agreement which was reached at Geneva, and at which I think it ought to be mentioned no Finance Ministers were present, this Exports' Committee was set up. It is quite true that the members of that committee were appointed by the respective Governments, but in the case of Great Britain at any rate, they were not there directly as representatives of the Government. They were there as independent financial experts. My predecessor in office stated a few weeks ago quite firmly, and, I think, quite properly, that the Government did not regard themselves as bound to accept whatever conclusions the Experts' Committee might recommend. I am not aware that up to the present any of the Governments affected by this Report have formally accepted the Report, or rather I ought to say, any of the creditor Powers. I believe that the German Foreign Minister has stated that the German Government accepted it as a basis of a conference, but it is not within my knowledge that any of the creditor Powers have accepted the Report. On the contrary, I think that they all regard the proposals of the Report as being open to consideration and negotiation by that conference. We cannot assume, and it would be ridiculous to assume, that every Government is committed to accepting everything that a committee, constituted like this expert committee, might choose to recommend. There would be no need to have any conference if the Governments were compelled to accept the Report as it stands. All that would be necessary would be that post-cards would be exchanged between the different Governments notifying their acceptance, and then for certain technical experts to set to work and prepare the machinery for carrying it into effect. Having said so much about the genesis of the Experts' Committee, I will pass on to deal with other matters.

May I carry back the memories of hon. Members to an incident which happened during the sittings of this Committee about the beginning of May. The American Chairman of the Committee put forward a proposal before the Committee that the German annuities should be fixed at £110,000,000 a year for a period of 37 years, and with debt cover only for 22 years more, but we were expected to find the Dominions share of reparation. Hon. Members will not forget the indignation that the proposal aroused in this country. My right hon. Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) put a question to the then Chancellor of the Exchequer. The right hon. Gentleman said very boldly and firmly that the Government would not accept such a proposal, if it were finally embodied in the Report of the Experts Committee. There are degrees in everything and the difference between the proposal that was made then and rejected, and the proposals which finally appear in the experts report are differences of degree only.

As there may be Members of the House who did not hear the very clear analysis of the amount of the annuities and their distribution by the right hon. Gentleman the Member for Carnarvon Boroughs, may I in a word or two recapitulate what he said. I may preface my remarks under that head by saying that the Government are willing to agree to the amounts which have been proposed for the German annuities. We have no desire to increase the amount of the claims which Germany may be called upon to pay. That is the one point in the report on which I think there will be very general agreement. The scheme is that there shall be 36 annuities, starting at £85,000,000 and rising to £120,000,000, an average of £99,500,000, but outside that, or rather beyond that, there is war debt cover for the next 22 years between 1966 and 1988 and there the amounts begin at £85,000,000 and gradually fall to £45,000,000. As the right hon. Gentleman pointed out, of this average annuity of about £100,000,000, £33,000,000 is unconditional. That is to say, it is to be paid, I suppose, in any circumstances other than the complete bankruptcy of Germany, a thing which we do not anticipate. Therefore £33,000,000 out of the £100,000,000 is unconditional and the rest is postponable. I need add nothing to what the right hon. Gentleman has said in explanation of that. His explanation was accurate and clear. I may have a word or two to say later as to what the views of the Government are on the distinction between conditional and unconditional annuities. As the right hon. Gentleman says, France is allocated a large share of the unconditional annuities but has to provide a guarantee fund of £25,000,000, in case of the operation of the postponement provisions of the report. We are given no appreciable share of these unconditional payments but five-sixths of the free amount go to France and most of the rest to Italy. Our share of the annuity might be compared to the ordinary shares of a perhaps not very sound concern, whereas the unconditional payments might be regarded as first-class debentures. That is roughly the distinction between the two parts of the annuities. France, as the right hon. Gentleman said, gets five-sixths of these unconditional annuities and the reason, I understand, for this, was the desire of France to have first-class securities which they could commercialise or mobilise.

I come to that part which perhaps stirred the right hon. Gentleman to the greatest depths of fury—that is the distribution. The right hon. Gentleman said he wondered why these changes had been made in the percentage of distribution. If he will search—and I gather he has examined the report of the Experts Committee—he will find that there is no word of explanation and, as far as I know, none has ever been given. But, of course, nobody is better able to imagine what is the explanation than the right hon. Gentleman with his unique knowledge of international conferences. At Spa it was agreed that German reparations should be divided in accordance with certain percentages. That, I think, was in 1920. Since that time a large number of other conferences have been held for the consideration of this question, and I am not aware that the percentages which were fixed at Spa have ever been seriously called in question before. At the time when these percentages were fixed, Lord Bradbury said they represented a considerable sacrifice on the part of Great Britain for the benefit of the other creditor Powers. When we consider the revised distribution under the Experts' plan we ought to bear these facts in mind—that no explanation and no attempt at justification has been given for revising our percentages; that for eight or nine years all the creditor Powers have, without question, accepted the percentages agreed to at Spa as governing the distribution of any revised scheme of reparations or annuities. Perhaps the House would like me to work out what the reduction of our percentage means to this country. The right hon. Gentleman put it at £2,000,000. It is more than that. It works out at an average of £2,415,000 a year practically all of which goes to Italy and France but mainly to Italy. Of the £2,400,000 Italy gets £1,840,000. In regard to the distribution of the actual sum between the various creditor Powers, the right hon. Gentleman worked it out in percentages—

The loss is far greater if the conditional annuities are not paid?

I will come to that point later on. The right hon. Gentleman worked out the percentage and went on to refer to the difference between our share and the share of some other countries. But the difference will appear to be more striking if expressed in actual figures. If the full annuities are paid we shall get on average £17,300,000 a year or say something under £l8,000,000 a year. The Dominions, whose shares are not altered, get £2,660,000 on average. France gets £52,500,000 and Italy just under £11,000,000. As I said before, the sacrifice which Great Britain is called upon to make by the acceptance of this Report reduces our share of the annuities by just under £2,500,000 a year. This is another demand for a sacrifice on the part of this country.

What is our position? We are supposed to get from the conditional annuities and the debt payments of our former allies just enough to meet our future payments to America. Let us examine that. If we get all that we can expect under the proposals of this Report we shall get with the payments from our European debtors just enough to pay our future annual payments to America. There is no surplus for Great Britain. In the case of France there will be a surplus of £21,000,000 a year on an average after her debt payments have been met. All the other principal creditor Powers too will all have surpluses beyond their outgoings. Suppose we assume that the payments are regularly made and that thereby we are covered in our future payments to America. That does not give us the conditions laid down in the Balfour Note because there is already about £200,000,000 difference between what we have paid to America and what we have received from our Continental debtors, including Germany, in the way of payment in respect of war debts and reparations. If, therefore, the recommendations of this Committee were accepted, we should have to sacrifice £2,500,000 a year as a result of the changed distribution, and we should have to abandon all hope of ever getting anything towards that £200,000,000 of arrears to which I have just referred. If we could get our full Spa percentage it would go a little way to meeting that deficit of £200,000,000. We calculate that that £2,500,000 a year would be worth about £37,000,000 in capital value.

There is another point of considerable interest in the Report to which the right hon. Member did not refer, and it is this—that if the creditor Powers receive any relief in respect of their war debt liabilities to America, Germany gets two-thirds of it and the creditor Powers get one-quarter of it. The difference between two-thirds and one-quarter is to be invested and accumulated to help the payments during the last 22 years of the German annuities. I now come to what he said about deliveries in kind. May I offer one word of observation about what he said about the imposition of deliveries in kind in the Dawes scheme. The right hon. Gentleman has had a long experience of these matters and just after his reference to the deliveries in kind in the Dawes Report, he gave the explanation why from the British point of view that was incorporated in the Dawes scheme. He said that at these conferences you fight for days and weeks to get your point. You cannot get everything you like. You have to get a settlement, and when the scheme is finally evolved you accept it in every detail and you try to make the best of it. That is my answer. I do not know if I am making any breach of confidence after all these years if I say that we had a very big struggle in the Conference on the Dawes Report on that matter. We fought for a very long time to try to get out of deliveries in kind. For some reason or another we did not get the assistance from certain members of the delegations which we had expected. I do not mean British delegates. We realise, as the right hon. Member does, the seriousness of these questions for an exporting country like our own, and I can assure not only him but the House of Commons that what he said will not be lost sight of in the forthcoming deliberations, and anything we can do to ease the situation will certainly be done.

There are, it seems to me, three main points in this Report which have very serious interest to us. The right hon. Gentleman dealt with all of them. I will put it like this. The British Government will raise no protest against, but will accept the scale of German annuities. On that we are all agreed. Now as to the question of distribution. It is very difficult indeed to choose one's words, but I might perhaps get out of my difficulty by saying that I am in agreement with what the right hon. Gentleman has said. In regard to deliveries in kind we could not agree, unless of course we were finally compelled to do so, to accept the proposals with regard to deliveries in kind which are embodied in the Report. We will, of course, have something to say in the Conference upon the distinction which has been made between the postponable and the unconditional annuities. That is a matter of the greatest importance.

And the fact that we have no share at all in the unconditional annuities.

That is a matter on which we shall certainly take into account the position described by the right hon. Gentleman. I am sure that the House will realise the very difficult position I am in, in dealing with these matters. The proposals do constitute a new demand for further sacrifices from this country. From the point of view of national finance our position is sufficiently serious already, and therefore we should maintain such rights as we have. Of course we are starting now a long way from the beginning. The mischief began, I think, with the issue of the Balfour Note, and it has been aggravated by the settlement with the United States, and by each subsequent war debt settlement which has taken place since. I am expressing my own view, and I think the view of the Government, when I say that the limit of concessions by this country has been reached.

On a previous occasion, I believe I used the word "quixotic" in a speech to which the right hon. Gentleman has referred. Our past sacrifices have been magnanimous, generous and quixotic. They have imposed a burden of £60,000,000 a year on our own people, which will remain even if we are able to get our payments to America covered by our share of the German annuities and the receipts from our continental debtors. France owed us £600,000,000, and yet she is to get £25,000,000 a year out of the unconditional annuities from Germany, and in the near future she will be getting altogether a surplus of £35,000,000 a year over her outgoings, while we are asked to take what is at any rate a risky cover for our debt payments. Italy owed us £560,000,000. Our settlement with her reduced this in effect to a present value of £78,000,000, and now by the transfer of part of our just share in the distribution of reparations it is proposed that her debt of £560,000,000 to this country should be effectively reduced to £48,000,000.

I think I am justified in the remarks that I made just now, that our generosity has reached its limit. I realise what a difficult task I have in approaching the problem. I can only say that I shall do my best to maintain the interests of this country in this matter. I have indicated to the House what our line will be. I do not know to what extent we shall succeed, but whatever the result of the conference may be, I can assure the House that there will be no further sacrifice or British interests which a determined man can prevent.

In the last Parliament, when the first proposals of the Young scheme were put forward, the right hon. Gentleman opposite indicated quite clearly that the proposals would not be accepted by the then Government. The final proposal of the Young Committee is even worse, so far as this country is concerned, than the proposal put forward some four months ago. It is not necessary for me to go into these proposals. They have been explained to this House clearly by both the right hon. Gentlemen who have just spoken. I can only add that, having gone through that Report, I would prefer the original proposal of the Young Committee to the one in which our reparations are classed among the conditional ones, while the Italians and the French secure their reparations unconditionally. That is a very dangerous position. The Chancellor of the Exchequer has been put in an exceptionally difficult position in this matter by his predecessors. He has told us that the Young Committee was originally set up on account of conversations at Geneva in regard to the evacuation of the Rhineland.

The terms of reference to the Young Committee were read out in this House. They dealt only with the limitations of the reparations to be paid by Germany. There was not a word about varying the distribution of these reparations once they were paid by Germany. Those were the terms of reference. We made it quite clear that our experts appointed on that Committee were independent experts, uninfluenced and undirected by the Treasury or the Government of this country. That policy, unfortunately, was not followed by the other countries that appointed experts on that Committee. The French, Italian and German experts were in constant touch with their Treasuries and Governments. Our Government ostentatiously denied, amidst cheers in this House, that they would use the slightest influence upon our experts sitting on that Committee. Unfortunately one of the experts changed during the process of the Committee, and Sir Josiah Stamp must now take nearly all the responsibility for the work on the Young Committee.

But the original mistake was made when our Government, washing their hands entirely of what was going on on that Committee, allowed the question of the distribution of the reparations to be opened up. Sir Josiah Stamp made a protest at the time, but he was not backed up from home, and the protest was overruled, and for the first time the question arose as to whether the Spa percentages of 1922 should be varied and varied against the interests of this country. Directly that was accepted you got the proposal that was put forward four months ago, which the Government of the day frankly told the Committee would not be accepted by this House if it were the report of the Committee.

Then came the final report of the Young Committee, which to my mind is worse financially, from the point of view of this country, than the report which was going to be made and which would have been made if the ex-Chancellor of the Exchequer had not said that it could not possibly be accepted. We have had from the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the Chancellor of the Exchequer descriptions of the Report, which must make it obvious to every Member of this House that it would be fatal for the British people to accept the Report in its present shape. The Chancellor of the Exchequer has laid it down that he will not make any further concession; but it is not clear from what he says whether he means that he will not make any further concessions than those embodied in the Report, or whether he means that he will not make any further concession from what the position was before that Report was presented. I hope he means that he will not allow the Report of the Young Commission to involve this country in making further concessions. He admitted that he was going into this conference to do his best. He can only do his best if he is prepared to face the issue of not accepting the Young Report.

What we ought to consider to-day is whether it is not our duty to say we would sooner have no Report than the Young Report. What would be the disaster to this country and to Germany if there was no agreement on the Young Report, and if the conference failed? I hope that everyone will agree that unless we are able to go into the conference saying: "We will not accept this Report at all," we are almost bound to accept a compromise which would injure the interests of this country. Suppose there is no Young Report, what happens? The Dawes scheme goes on, and the connection between the payment of reparations and the occupation of the Rhineland ceases to be binding. There is nothing to prevent this country evacuating the Rhineland, although the Dawes scheme continues. The evacuation of the Rhineland can go on whether the Young scheme for the distribution of reparations is accepted or not.

Everybody knows that the Dawes Scheme cannot go on indefinitely. A time must come when, if the Young Report is not accepted, the Dawes Scheme will break down or become impossible to work, and some other Committee has to be appointed to consider scaling down and rendering definite the obligations of Germany. When that comes about, I think we shall be in a stronger position if we no longer have troops in the Rhineland, to be used as a pawn for the coercion of Germany. The British taxpayers are likely to come out much better from some report in the future by a future expert committee if our experts on that committee have the advantage, which was enjoyed by the experts of every nation on the Young Committee, of constant communication with and co-operation from the Treasury and Government of this country. On the Young Committee our representatives have been hobbled all the time. They have been acting as independent experts, while all the other experts have been the agents of their Governments, fully advised of the intentions of their Governments, and fully coached in every way. When a new Experts Committee is appointed, which I hope to see a year or so hence, and it brings forward something in the nature of a revised new scheme, our agents on that committee will be in the best possible position to get the best terms for the taxpayers of this country, and will not be hampered as they have been in the past.

This is the only opportunity that this House can have of discussing something that may cost this country not £2,500,000 a year but anything up to £12,000,000 a year, with additional taxation for 60 years. This is the only opportunity we have to discuss it, and, whether or not we shall save that money, depends entirely on whether the Chancellor of the Exchequer goes into these proposed negotiations that commence on the 6th August able to say, "Sooner than sacrifice the interests of the British taxpayer, we will not have this Report at all." Unless he can do that, he is in a hopeless position to bargain for slight variations of the terms of that Report.

As one who has not hitherto addressed this House, may I crave the indulgence which is ever generously accorded to one in that position. It might be' thought, after the speech Of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), accepted, as I gather, by the Chancellor of the Exchequer and elaborated by him, that there would be little more to be said upon the question of this Young Report and the disadvantages which it foreshadows for the British taxpayer, but I rather gather that the Chancellor of the Exchequer himself welcomes this discussion, and that he feels, as was suggested by the right hon. and gallant Member for (Newcastle-under-Lyme (Colonel Wedgwood), that he will go into this Conference better armed as a result of the discussion here to-day and of the arguments that have been put at his disposal as a consequence. I want, as a humble student of foreign affairs, to detain the House for a very few moments with some reflections upon this reparations position. We have heard, and rightly, criticisms and comments upon this Young Report, which are of great value, and it is only right to infer that the whole reparations problem has been one of those features bequeathed to us by the cessation of hostilities, which has perhaps given rise to more problems than it has solved, and that any attempt to deal with a serious international position by a conference of experts meeting round a table is bound to be of advantage.

Although we find this Report distasteful, although unquestionably it suggests that we should accept sacrifices which the country is not minded to accept, we should treat it as a step forward in the sense that it is another indication by the creditor Powers of Germany that in dealing with an international problem, financial or otherwise, they are prepared to pool their experts' brains, to meet round a table, to settle their differences, and to find a way out. It is no blame to the experts if a problem at once political and financial should not be found immediately capable of solution. No one with experience of big business of an international character would imagine that there is anything simple in the settlement of such a problem as this of reparations. Has it not been proved that in the economic as well as in the moral world it is very often more blessed to give than to receive? Is not the whole argument centring round reparations in kind a long convincing proof of the truth of that old adage?

I wish, on behalf of those who sit on these benches, to express our wholehearted satisfaction with the statement that has been made this afternoon by the Chancellor of the Exchequer. We feel particularly grateful for those assurances that this House and the Government are in no way committed by this Report of the experts. We had no fear that it could have been otherwise, but such a very emphatic declaration gives us all a feeling of confidence that, we shall have all the different views represented in this forthcoming Conference and that nothing but good can result from the discussion. We then welcome the analysis that has been made across the Floor of this House of what is a complex and intricate argument, dealing in millions of figures of such a size that it is hard for the ordinary Member to follow their entire implications. The analysis that was made by the right hon. Member for Carnarvon Boroughs appeared to be so adequate in its character that the Chancellor of the Exchequer desired only to add to it some examples by way of figures, which indeed showed it to be under-stated rather than exaggerated in any form.

In one sense also the Young Report is an advance. The Dawes scheme was in fact a national receivership of Germany. It was perhaps the largest operation of a receivership as applied to another nation ever carried out. That scheme was breaking down. It had one inherent difficulty attached to it: there was never any incentive to Germany to pay her debt. As her prosperity increased, so her annuities were more heavily weighted, and there was no spur which would induce Germany to so put her house in order as to be able to face the future. I think that history will show that the restoration of Germany's credit and industry is one of the wonders of the world; and, in this regard, I was glad to hear the Chancellor of the Exchequer make reference to the fact that such progress as Germany has made has been largely on borrowed money. For every dollar that Germany has paid anyone, she has borrowed two. The figures are almost mathematically exact. That was a situation and a state of affairs that was not the concern of Germany alone, nor of any one country.

Perhaps the only excuse for a new Member intervening in such a Debate is that reparations is a matter that concerns the taxpayer of every country in the world, and none more than those living on the border line, not having surplus wealth, and being virtually concerned with the price of any article of which taxation forms a part. If the Young Report is a sign of an international attempt to deal with an international problem by conference and reason; if it means that by discussion in the Parliaments of the world terms are improved, then the experts will be the first to desire that improvement. Men of such character as Sir Josiah Stamp are only anxious for the best results from a difficult problem, and I feel confident that if as a result of the discussion this afternoon it is found that any country has unfairly suffered the experts will be glad to have it put right. I am struck by one, the difference in character of the unconditional and postponable annuities that has been brought out. If further comments as to the nature of the difference between those two classes of annuities were needed it would be only necessary to point to the fact that France receives five-sixths of one to show that she regards that annuity as of a different character to the other. I conclude by saying that if in any of these international matters we can get one step nearer the stage at which in regard to any of the penal clauses of the Versailles Treaty, we can, in the words of General Smuts, pass the sponge of oblivion over that aspect of the matter, then we will have reached one stage nearer the establishment of peace in Europe.