House Of Commons
Thursday, 9th June, 1932.
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
Oral Answers To Questions
Unemployment
Seaside Resorts (Girls)
1.
asked the Minister of Labour if he will state what steps are being taken, in view of the coming holiday season, to enable girls who are sent by Employment Exchanges for work at the seaside resorts to get into touch, in case of need, with persons at those resorts capable of giving them advice and inquiring into their circumstances and complaints?
In accordance with established practice, each of these girls is given the names and addresses of members of social organisations or of members of the women's sub-committee of the local employment committee who are available for consultation and help outside Exchange hours. The hon. Member will find some further particulars in an article published in the April issue of the Ministry of Labour Gazette, page 127.
Will my right hon. Friend cause further inquiries to be made as to the conditions in North Wales, as there were many complaints concerning girls sent there last year?
If my hon. Friend will give me particulars of any complaints I will look into them.
Employment Exchange Procedure
3.
asked the Minister of Labour whether officials at Employment Exchanges are authorised to make arrangements with employers exclusively to employ men sent by the Exchange, refusing men applying direct; and whether Exchange officials are permitted to refuse a green card to men seeking jobs?
It is open to employers to arrange to engage their labour exclusively through the Employment Exchange, and a number of employers find it convenient and advantageous to make such an arrangement. The "green card" is an introduction from the Exchange to the prospective employer, and signifies that the person named on it has been selected by the Exchange for submission for a particular vacancy. My hon. and gallant Friend will see, therefore, that the card cannot be given to anyone who has not been so selected.
On what principle do they select men?
On the principle of suitability for the job.
How does the exchange know about suitability? Surely the foreman on the job knows best what type of man he wants. When a man applies direct why is he refused the job?
As I stated, some employers arrange to engage all their labour through the exchanges. An exchange, therefore, knows approximately what type of man is suitable for that employment. Of course, there is nothing at all which prevents a man from applying on his own account, if he thinks he can get a job. The system is devised really to help the man.
How about men engaged on relief work? Is the matter left in the hands of the exchange officials, who send the likeliest men for the job according to the time that they have been unemployed?
Where all labour is engaged through the exchange, the exchange does its best to select suitable men for the job.
Is it not the case that it was the original purpose of the employment exchange to find work for the unemployed?
That certainly was one of the purposes for which employment exchanges were instituted.
Do the exchanges encourage or discourage men from applying for work on their own account, and do they refuse a green card to men who have sought work on their own account?
The exchange will always encourage men to find jobs in any way they can.
Will my right hon. Friend look into the facts if I send them to him? I have the case of a man who was nine months out of a job. He applied direct to a firm and was refused the job, and was told to go to the exchange.
I wall gladly look into any case of that kind.
Is it not the fact that if a man gets employment he does not want a green card at all? If he goes to a foreman and gets a job, there is no need for a green card?
Drainage Scheme, Dundee (Grant)
10.
asked the Minister of Labour what reply he proposes to make to the request from the Dundee Town Council to receive a deputation on the subject of the grant in respect of a drainage scheme which is badly needed and would provide work for unemployed persons?
Arrangements have been made for the deputation to be received to-morrow on my behalf.
If there are representations how will the right hon. Gentleman receive them, sympathetically or otherwise?
I cannot answer until I have heard them. It depends on what they have to say.
London, Midland And Scottish Railway (Discharges)
11.
asked the Minister of Labour if he is aware that the steel department of the Crewe works of the London, Midland and Scottish Railway Company is to be closed; and what steps he proposes to take with reference to those employed who may be affected?
So far as I am aware no decision with regard to future operation of these works has been announced by the railway company.
12. Mr.
asked the Minister of Labour the number of persons thrown out of employment in each of the workshops closed during 1932 by the London, Midland and Scottish Railway Company; the towns in which the unemployed are situated; if he has received reports as to whether dismissals are imminent in any other part of the country in this connection and, if so, where; and the number likely to be thrown out of work?
I am not in possession of this information.
In view of the very large number of persons thrown out of work by the London, Midland and Scottish Railway Company, is it not possible for the Minister to say where they are located?
No, Sir. I should not be justified in asking the railway company what districts are included. It is not a matter within my province.
Does not the first part of my original question fall within the province of the Minister?
I do not think so. It is a matter on which I have no information and for which my Department has no responsibility.
In view of that very unsatisfactory reply, I beg to give notice that I shall take the first opportunity of raising the matter on the Adjournment.
Is not one of the reasons why the railway companies are in difficulties the political interference of this House?
Statistics
13.
asked the Minister of Labour the industries affected by increased unemployment during last month and the figures for each industry?
Statistics for 23rd May in respect of all the insured industries are not yet available. A complete analysis will be published in the issue of the Ministry of Labour Gazette for the current month on 18th instant.
Can the right hon. Gentleman give us an indication as to which were the chief industries affected?
A limited number of industries were mentioned in the announcement made at the time. The last unemployment figures were issued but of course, it was only a limited num- ber and represented only a rough calculation. The actual figures will appear in the next issue of the Ministry of Labour Gazette.
Will the right hon. Gentlemen inform the House when this boom in industry is coming along?
We should all like to know that.
| Administrative Divisions in which the numbers of unemployed persons on the registers of Employment Exchanges at 23rd May, 1932, showed an increase as compared with 25th April, 1932. | ||||||
| Division. | Increase (—) or decrease (—) | |||||
| Wholly Unemployed. | Temporarily Stopped. | Total. | ||||
| South Western | … | … | … | —1,539 | +3,193 | +1,654 |
| Midlands | … | … | … | —1,085 | + 10,635 | + 9,550 |
| North Eastern | … | … | … | +230 | + 25,876 | + 26,106 |
| Northwestern | … | … | … | —8,523 | +68,082 | +59,559 |
| Scotland | … | … | … | —2,202 | + 5,271 | + 3,069 |
Transitional Payments
2.
( for Mr. McGOVERN)
asked the Minister of Labour if he can state the number of male heads of households in Glasgow who have been deprived of benefit under the means test?
I regret that statistics giving the information desired are not available.
Wages And Working Conditions
4 and 5.
asked the Minister of Labour (1) if he will give the percentage increase in the average rate of wages of labourers in the non-trading services of the local authorities in the large towns in England and Wales as at May, 1932, as compared with a similar approximate date in 1914, or if the figures are not available in 1915; and the percentage increase in the cost of living at the nearest comparable dates;
(2) the percentage increase in the average rate of wages of labourers in the electricity supply industry in May, 1932, as compared with 1914, or 1915 if the figures are not available for 1914; and the percentage increase in the cost of living at the nearest comparable dates?
14.
asked the Minister of Labour the divisions in which the increase of unemployment has occurred during last month and the increased numbers for these divisions?
As the reply includes a number of figures I will, if I may, circulate a statement in the OFFICIAL REPORT.
Following is the statement:
6 and 7.
asked the Minister of Labour (1) the percentage increase in the average rate of wages of labourers in the building industry in May, 1932, as compared with 1914, or 1915 if the figures are not available for 1914; and the percentage increase in the cost of living at the nearest comparable dates;
(2) the percentage increase in the average rate of wages of labourers on the railways in May, 1932, as compared with 1914, or 1915 if the figures for 1914 are not available; and the percentage increase in the cost of living at the nearest comparable dates?As the reply includes a statistical table, I will circulate it, with the permission of my hon. Friends, in the OFFICIAL REPORT.
Following is the reply:
The information in my possession as to the wages actually paid in 1914 and in May, 1932, is not sufficient to provide a basis for exact calculations of the average percentage increases in the rates of wages of all the labourers employed in these industries and services. Some comparisons of rates of wages at August, 1914, and 31st December, 1931, in these and other industries, based on such information as is available, were published, with the necessary explanations and qualifications, in an article on pages 44 to 46 of the February issue of the "Ministry of Labour Gazette," and in the following table the figures given in that
| Industry. | Rates of wages. | Normal weekly hours of labour. | Percentage increase in | |||||
| July, 1914. | May, 1932. | July, 1914. | May, 1932. | Weekly rates of wages. | Hourly rates of wages. | |||
| Building. | Per hour. | Per hour. | ||||||
| (Unweighted average of recognised district rates of wages and normal hours of labourers in 39 large towns). | 6·6d. | 13·5d. | 49·2(a) | 44·6(a) | 86 | 105 | ||
| Local Authority: (non-trading) Services. | Per week. | Per week. | ||||||
| s. | d. | s. | d. | |||||
| (Unweighted average of the recognised rates of wages and normal hours of labourers in 28 large towns). | 26 | 9 | 51 | 4 | 51·8 | 46·7 | 92 | 113 |
| Electricity Supply Industry. | ||||||||
| (Unweighted average of the recognised rates of wages and normal hours of labourers in 51 large towns). | 26 | 7 | 53 | 0 | 53·8 | 47·0 | 99 | 128 |
| Railway Services. | ||||||||
| (Rates of wages in Industrial Areas, other than London) (b): | ||||||||
| Porters (Grade 2) | 19 | 2 | 40 | 0 | Not available | 48 | 109 | (d) |
| Goods Porters | 22 | 0 | 44 | 0(c) | 95 | |||
| Permanent-way Under-men. | 22 | 0 | 44 | 0(c) | 95 | |||
| (a) Average of summer and winter hours. | ||||||||
| (b) Information is not available as to the pre-war rates of wages of labourers in railway workshops or of the comparatively few men who are graded as "labourers" in the traffic grades. Particulars are given, therefore, in respect of typical lower-paid grades of worker. The rates quoted for July, 1914, are average rates, whilst those for May, 1932, are the agreed standard rates. Corresponding averages for 1914 are not available for London or for Rural Areas The rates quoted are exclusive of additional payments made in respect of overtime, Sunday duty, etc. | ||||||||
| (c) Rates of wages in excess of 40s. a week are subject to a deduction of 2½ per cent. with an additional reduction of 2.½ per cent. on the amount in excess of 40s. The rates quoted are subject to these deductions, which have been taken into account in the calculation of the percentage increases shown in weekly rates of wages. | ||||||||
| (d) The information which would be necessary to enable this percentage to be computed is not available; but the hours of labour were appreciably lower in May, 1932, than in 1914, and consequently the percentage increase in hourly rates of wages is considerably higher than that in weekly rates. | ||||||||
| At 30th April, 1932, the average increase in the cost of maintaining unchanged the pre-war standard of living of working-class families, as shown by the statistics compiled by the Ministry of Labour, was approximately 43 per cent, over the level of July, 1914. This is the latest figure at present available. | ||||||||
article as regards the classes of workpeople in respect of whom particulars are desired are brought up to 31st May, 1932. In view of the limitations of the available data, the figures should be regarded only as approximate indications of the relative position at the two dates.
9. The following question appeared upon the Order Paper in the name of Mr. THORNE: TO ask the Minister of Labour if he will have inquiries made into the hours, wages, and working conditions generally of employés engaged in London and the provinces?
Before this question is answered, Mr. Speaker, I want to point out that it has been altered. It included the word "cinema" originally. The ex-Member for Pontefract in April of last year put down a similar question and the word "cinema" was then taken out.
Particulars are regularly collected as to rates of wages, hours of labour, and working conditions in the principal industries, both in London and in the provinces, so far as determined by collective agreements, and a considerable amount of information on these subjects, derived from these agreements and from other sources, is published in the monthly issues of the "Ministry of Labour Gazette" and in other publications issued from time to time by the Ministry of Labour. In addition, special inquiries were made in 1924 and 1928 into the average earnings of workpeople in most of the principal industries, the results of which were published in the "Ministry of Labour Gazette" and a similar inquiry, relating to 1931, is at present in progress.
That is quite true, but what I wanted was particulars of the hours and conditions of employés working in cinemas, having regard to the Bill that is now under consideration?
I am very sorry, but I am not responsible.
With the word "cinema" taken out, the question has no sense. Information was wanted as to a particular matter.
Is there any possible explanation why the word "cinema" was struck out? We have had a general answer and not a reply to a particular question. On previous occasions, I have put similar questions, and they have been passed.
I have sent for the original manuscript of this question to see whether the word "cinema" was in it or not.
Later—
Earlier in the afternoon, the hon. Member for the Plaistow Division of West Ham (Mr. Thorne) made a complaint that the word "cinema" had been cut out of his Question, No. 9. I have sent for the manuscript of his question, and I find that the word "cinema" did not occur in that manuscript.
If that is so, I can only apologise.
New Industrial Undertakings
8.
asked the Minister of Labour if he can state the number of aliens admitted into this country since 1st January, 1932, who have been granted permission to work in any new factories established by foreign firms?
The latest available figures were given by my hon. Friend the Parliamentary Secretary to the Board of Trade in his reply to a question asked by the hon. Member for West Swansea (Mr. L. Jones) on 2nd June.
Is it not a fact that the figures given recently by the Parliamentary Secretary to the Board of Trade related to the total number of persons employed in factories established by foreign firms? What I want from the right hon. Gentleman are the figures in respect of aliens who have come to this country to work in those factories. Can he supply them?
I think that the very long answer given by my hon. Friend the Parliamentary Secretary covers that point, but, if it does not, I will try to get the information and either send it to the hon. Member or he can put down another question.
15.
asked the Secretary of State for the Home Department whether his inspectors have yet visited all the factories and workshops established by foreign firms in this country during recent months, with a view to seeing that the statutory obligations in relation to safety and any other conditions relating to employment are being carried out?
Yes, Sir, all such factories and workshops of which the Factory Department are aware have been visited by the inspectors, in many cases more than once. The district inspectors report that generally speaking the statutory obligations were observed and the occupiers were anxious to comply with the law. There have, however, been irregularities in some cases and in every such case steps have been or are being taken to secure compliance.
Is the right hon. Gentleman pleased with the Government policy which has produced these new factories?
That does not strictly arise out of this question. I only wish that the number employed bore some relation to the number of British people unemployed.
Road Accidents (Police Reports)
16.
asked the Home Secretary the latest regulations of the Commissioner of the Metropolitan Police with reference to the issue of police reports upon road accidents?
The Commissioner of Police of the Metropolis, with my approval, has issued a fresh Order to his force dealing with the revised procedure to be followed in answering applications from interested parties for information in connection with road accident cases. This has been issued following consideration of the whole question in consultation with representative Chief Officers of Police with the object of securing greater uniformity of procedure. I am sending my hon. Friend, and will place in the Library, copies of the memorandum now issued by the Commissioner's Office to applicants for particulars of a road accident.
Is it a fact that these new regulations impose a premium of £ 1 — 10s. for a report, and 10s. for an interview—to be paid before the proposed litigant can approach the police officer; and, in suitable cases, will the right hon. Gentlemen recommend remission of these charges to poor people.
No, Sir; I do not think the hon. Member is correct. He will see the particulars in this memo- randum. In all cases it is the practice and will continue to be the practice to waive the fee, or reduce the fee if any hardship is likely to be incurred by a poor applicant.
Is that observation included in the representations of the Commissioner?
The Commissioner is well aware of the fact, and it is the present practice. It is not inserted in the memorandum because that would be an invitation to every one to apply for the remission of the fees.
Therefore, this information is kept secret, and the unfortunate person has to find the police officer and make these payments before he can get justice.
Can the right hon. Gentlemen take similar steps to secure that reports will be furnished by the police in country districts also as there is great difficulty, at present, in cases of accidents, in securing police reports?
Yes, Sir; this action has been taken in consultation with the chief officers of the police throughout the country.
Are they acting?
I believe so.
Juvenile Offenders (Birching)
17.
asked the Home Secretary whether he is aware that cases have occurred in which magistrates have sentenced young boys who were first offenders to be birched; and whether he is prepared to take steps to prevent this in future?
I am aware that under Section 10 of the Summary Jurisdiction Act, 1879, a Court of Summary Jurisdiction is empowered in the case of an indictable offence tried summarily to order a child under 14 to be whipped by a police officer whether for a first or subsequent offence. In the Children and Young Persons Bill now before Parliament it is proposed to repeal this provision.
Education
Economies
18.
asked the President of the Board of Education if he can give the latest figure of the amount of the economies effected by his Department, disregarding those resulting from the Economy Act, 1931, since he took office?
It is not yet possible to say what will be the full financial effect of the economies carried out by the local education authorities and the Board of Education in recent months. In the day to day administration of the Board a close scrutiny is made of every proposal for new expenditure and the economies resulting from this process, while not capable of accurate assessment, are very considerable; but, apart from these and from the savings resulting from the Economy Act, 1931, the Board's Estimates for the current year provide for a reduction under other heads of £258,377 as compared with the previous year. The position is fully set out in paragraph 4 of the Memorandum on the Board's Estimates.
Will the hon. Gentleman reduce the medical staff from 21 to 11, which was its strength before the War, in view of the fact that there are fewer children on the register?
Perhaps the hon. Gentleman will give me notice of that question.
Can the hon. Gentleman explain why this reduction is such a very small percentage?
I did not quite catch the hon. Member's question.
Does the hon. Gentleman consider that a reduction of £250,000 in £50,000,000 is worth talking about?
The hon. Gentleman must realise that these economies are going on from day to day and it is not possible to state what the full amount will be in a year, but he may be interested to know that, from October, 1931, to May, 1932, the Board sanctioned, for all purposes, £7,250,000 less capital expenditure than in the corresponding months of the previous year, and that, in itself, involves an approximate annual saving in loan charges of about £435,000, to rates and taxes, in eight months.
Hay I now repeat the question which the hon. Gentleman did not hear?
I am afraid the hon. Gentleman is too late.
Secondary Schools (Cost)
20.
asked the President of the Board of Education the average annual aggregate cost to the Exchequer and local authorities of each secondary school scholar in England and Wales in 1914 and similarly in 1931?
Information is not available in respect of the actual years stated in the question; but for the years 1912–13 and 1930–31 the expenditure met from public funds per child in secondary schools maintained by local education authorities was £9 4s. and £22 respectively.
Can the hon. Gentleman say what is being done to cause this increase?
It mainly arises from the increase in the salaries paid to the teachers between those years.
When the hon. Gentleman publishes, as I understand he is going to publish, the figures of the economies effected in his Department, will he specifically deal with this matter and state for each item the cause of the increase?
The matter of these fees for secondary schools is being very carefully gone into at the present time, and, as I have said just now, the difference between these figures—£9 4s. in 1912–13 and £22 in 1930–31—is mainly due to the increase in the salaries paid to teachers between those dates.
Were not the teachers disgracefully underpaid before the War?
Will the hon. Gentleman explain what he means by "mainly" and, if I put down another question, will he give us a detailed analysis to show what has caused the increased cost of each item?
Teachers
21.
asked tie President of the Board of Education the average number of days per annum during which teachers in elementary schools receiving grants from public funds are engaged upon their duties in the schools?
Teachers in public elementary schools are engaged upon their duties for an average of about 208 days per annum.
Is it not a fact that teachers in elementary and secondary schools have a great deal of work to do in connection with their position outside school hours?
Commissions And Committees
24.
asked the Minister of Health when the Committee on Prevention of Damage by Thames Floods, appointed on 17th April, 1931, will present its report; and the cost of this committee to date?
The work of this committee has been suspended as a measure of economy, but I am considering with my right hon. Friend the Minister of Agriculture and Fisheries the question of its resumption. The cost of the committee to date is £55 10s.
25.
asked the Minister of Health when the Food Committee, appointed 14th May, 1931, will present its report; and the cost of this committee to date?
The work of this committee was suspended last autumn as a measure of economy. The cost of the committee to date is £46 5s. 4d.
Blind Persons (Public Assistance)
26.
asked the Minister of Health if, for the information of Members and to enable county and county borough authorities to practise reciprocity of treatment to adult blind persons who move from one place to another, he will give a statement showing up to 1st April, 1932, the number of county and county borough councils in England and Wales which have implemented their powers under the Local Government Act, 1929, Section 5, and have made a declaration under this Section regarding the Blind Persons Act, 1920; and showing what cash assistance additional to the statutory grant is paid to each adult blind person in such county or county borough areas as have made such declaration, and showing the county and county borough councils where additional assistance to necessitous adult blind persons is debited to public assistance and is shown in the returns of the relieving officers?
Up to the 1st April, 1932, 11 county councils and 37 county borough councils had made declarations under Section 5 of the Local Government Act, 1929, with regard to the domiciliary assistance of blind persons. The information available docs not enable me to answer the second and third parts of the question, and I do not think that the labour of obtaining and collating special returns from the local authorities would be justified. I do not clearly understand the reference to a statutory grant, but a considerable number of local authorities, in addition to those mentioned in the first part of the question, have undertaken to bring the income of unemployable blind persons up to a specified amount. The expenditure for this purpose is not debited to public assistance.
Beer (Gravity)
27.
asked the Minister of Health if he will consider the introduction of legislation to require the gravity of beer to be indicated on each cask sold and supplied and upon every invoice in relation thereto?
It seems to me that this is a matter for negotiation between the brewers and the retailers, and I cannot undertake to introduce legislation on the subject.
Is the right hon. Gentleman aware that this is the only commodity which is free from any statutory representation, and, in view of the high taxation now existing in the case of beer, will he see his way to undertake legislation to ensure that the buyer gets at least what he pays for and what is purported to be sold?
The hon. Member will agree that it is most unwise to impose limitations upon trade unless they are necessary in the general interest. I am not convinced that such a restriction is necessary at the present time.
Is it not a fact that for several years this was enforced by law and worked very satisfactorily, to the advantage of the consumer?
Housing
Statistics
28.
asked the Minister of Health the number of houses built in 1930 and 1931, respectively, that received State subsidy, and the number for which no subsidy or State assistance was given?
The number of houses built with State assistance in England and Wales in 1930 was 52,295, and in 1931 was 64,728. These figures do not include houses erected in replacement of houses demolished under improvement and reconstruction schemes confirmed prior to the passing of the Housing Act, 1930. The number of houses built without State assistance having a rateable value not exceeding £78 (or £105 in the Metropolitan area) was in the year ended 31st March, 1931, 128,728, and in the year ended 31st March, 1932, 130,903.
Rent Restriction
46.
asked the Prime Minister whether, in view of the urgency of legislation with regard to rent restriction, he will reconsider the desirability of prolonging the Session with a view to passing an agreed Bill on the subject?
I am afraid I cannot add anything to the statement made by my right hon. Friend the Lord President of the Council on the 2nd June with regard to the Business to be considered before the Summer Recess.
The Lord President of the Council said that the House would adjourn owing to Cabinet Ministers having to go to Ottawa, because the conference would deal with Empire and international affairs. I have put to the Prime Minister something that will only affect national affairs, that is, Britain itself, and surely the Minister of Health can pilot the Bill through—
HON. MEMBERS: Order!
Local Authorities, Durham (Exchequer Grants)
30.
asked the Minister of Health the sums paid to the local authorities in the administrative county of Durham under the Local Government Act, 1929, for the years 1930 and 1931, respectively?
The sums paid on account of Exchequer grants under Sections 89 and 91 of the Local Government Act, 1929, to the local authorities in the administrative county of Durham, amounted in the financial years 1930–31 and 1931–32 to £1,678,004 and £1,561,131, respectively.
National Finance
Monetary Policy
32.
asked the Chancellor of the Exchequer whether, in view of world exchange restrictions interfering with international trade, the Government will declare without delay their future monetary policy; and will he, at the Ottawa Conference, support the establishment of an Empire monetary policy based on eligible bills and gold and silver, and afterwards invite the countries who have gone off the Gold Standard system and linked their currencies to the pound sterling to join the Empire monetary group, so that an international conference may be called to agree upon an international monetary system?
In reply to the first part of the question, I am unable to add to my previous statements on the subject; and as regards the second part of the question, I would refer my hon. Friend to the reply given by my right hon. Friend the Financial Secretary to the hon. Member for Huddersfield (Mr. Mabane) on the 2nd June.
Will the right hon. Gentleman and the Government appreciate the gravity of the national and international financial position; and may I ask that in the interests of industry and the unemployed they will formulate a monetary policy?
Will the right hon. Gentleman say whether the House may be assured that in respect to both the Ottawa and the Lausanne Conferences the Government have a policy?
Yes.
National Savings Certificates
33.
asked the Chancellor of the Exchequer the approximate national liability in respect of War Savings Certificates as at 31st May last; and what is the approximate rate of interest being paid on national savings certificates?
The approximate amount of principal of savings certificates outstanding on the 31st May was £376,000,000. The amount of interest accrued but not yet paid cannot readily be calculated for an intermediate date in the year, but the figure for the 31st March last will in due course be published in the Finance Accounts. The rate of interest varies according to the period for which the certificate is held before being cashed; on the current series of certificates it is £4 2s. 9d. per cent. tax free if held for 10 years, but substantially less if encashment takes place before the 10 years' maturity.
Is it not a fact that the Government make a profit out of these certificates?
Import Duties (Pit Wood)
34.
asked the Chancellor of the Exchequer if he can give an estimate of the amount of revenue which would be obtainable from a 10 per cent. duty on all pit wood at present not coming under the existing scheme of Import Duties?
I am afraid I can only refer my Noble Friend to the answer which was given by my right hon. Friend the Financial Secretary to the same question on the 26th May.
How far would this proposal help the mining industry?
Would it not be much better to put a duty on pit wood, because they would then use steel, which would be much safer for the miners?
It would increase the cost.
It would diminish the cost.
Gold Purchases
36.
asked the Chancellor of the Exchequer whether any part or all of the £10,000,000 gold recently bought by the Bank has been bought for the Exchange Equalisation Account and with his authority?
No, Sir. It was purchased for the Issue Department.
May I ask the right hon. Gentleman, in the first place, whether we are to understand that it will not be transferred as a debit to the Exchange Equalisation Account when that account is set up, and, secondly, whether any loss on this gold transaction will be debited to the British taxpayer or to the Bank?
The answer to the first question is "No." With regard to the second question, there is no loss.
That is the case at present, but there may be, if America goes off gold. May I ask one more question? Is the right hon. Gentleman responsible for these purchases, or is the Director of the Bank of England responsible?
As I stated, it is a question for the Issue Department, and, therefore, the responsibility is not mine, but lies on the Bank.
And the loss?
40.
asked the Chancellor of the Exchequer the loss which the Treasury has incurred as a result of the recent purchases of gold made by the Bank of England?
No loss has been incurred.
Are not the Treasury bound to indemnify the Bank of England for the loss which they must make owing to their buying at a premium at the present time?
HON MEMBERS: Order!
Am I not entitled to an answer?
The reply was that there was no loss.
Allotments (Grant)
37.
asked the Chancellor of the Exchequer the amount which has been saved to the Treasury in the current financial year by the abolition of the grant towards the provision of allotments for the unemployed?
I have been asked to reply. The net expenditure in connection with the Government scheme for the provision of seeds, fertilisers, and implements for unemployed persons in England and Wales and in Scotland cultivating allotments for the cropping season of 1931 has been approximately £26,000, and assuming that the scheme had been continued this year on the same lines and to the same extent, it would have been necessary to have provided that sum in the Estimates this year. The decision that it was not possible on grounds of economy to continue the scheme this year, therefore, resulted in a saving of this amount.
Is not this economy doing more harm than good, and would it not be better to spend this money on providing allotments than on subsidising grand opera?
That is a matter of opinion.
Death Duties And Debt Redemption
39.
asked the Chancellor of the Exchequer what percentage of the the total national revenue during the 10 years 1922–31 was obtained from capital taxation in the form of Death Duties; and what percentage of the national expenditure was applied to the redemption of debt?
With my hon. Friend's permission, I will circulate the figures in the OFFICIAL REPORT.
Is it possible that there can be more than two figures in that reply?
It is not only possible, but it is so.
Following are the percentages required:
| Year. | Percentage of Total Revenue received from Death Duties | Percentage of Exchequer Issues applied to Debt Redemption. | |
| 1922 | … | 6·22 | 15·54 |
| 1923 | … | 6·90 | 11·20 |
| 1924 | … | 7·44 | 6·11 |
| 1925 | … | 7·54 | 6·05 |
| 1926 | … | 8·36 | 7·12 |
| 1927 | … | 9·17 | 7·75 |
| 1928 | … | 9·63 | 7·03 |
| 1929 | … | 9·79 | 5·76 |
| 1930 | … | 9·63 | 7·59 |
| 1931 | … | 7·63 | 3·82 |
Unpaid Taxation
51.
asked the Financial Secretary to the Treasury whether his attention has been called to a recent failure in the City of London in which the liabilities amounted to £34,864, including a claim on behalf of the Inland Revenue for unpaid Income and Super Tax, etc., amounting to £29,324, and the assets £59; will he say how long this Inland Revenue claim has been outstanding; and will he also give the total number of other unpaid demands on account of Income, Super, and Excess Profits Duty exceeding £1,000 which have been unpaid for more than three years and the total amount involved?
I am of course precluded from discussing the details of particular cases, but I may say as regards the case referred to in the question that I have satisfied myself that the Inland Revenue have taken every practicable step to recover the tax which was finally found to be due. I cannot undertake to furnish the information asked for in the second part of the question. An unjustifiable expenditure of time and labour would be involved in the preparation of such a return, which, in any event, would give a wholly misleading account of the progress of collection of these taxes.
Does it not appear from this case and other cases that a very long rope is given to some of these people, whereas other persons with much smaller means are dealt with far more severely? What is the reason for the leniency shown in cases where such large sums can be piled up?
Owing to the size and pressing weight of taxation, the State is practically a sleeping partner in a great number of concerns, and like other sleeping partners, it finds that its assets do not always meet the sums expected.
Is it not time they woke up?
United States (British Debt)
38.
asked the Chancellor of the Exchequer what is the rate of interest on our debt to the United States of America; whether it is the same as the rate of interest on that part of the debt postponed under the Hoover plan; and, if not, will he explain the reason for the difference?
The rate of interest payable under the agreement for the settlement of the British War Debt to the United States Government is 3 per cent. up to the 15th December, 1932, inclusive, and thereafter 3½ per cent. The rate of interest payable on the amount suspended under President Hoover's plan was fixed by the United States Congress at 4 per cent. I am not aware of the reason which led to the adoption of this particular rate of interest, but it is not unusual for the rate of interest upon postponed payments to be somewhat higher than that on payments normally made on the due dates.
Could the Chancellor of the Exchequer explain why he thought it desirable that the British Government should agree to a rate of interest higher in respect of the postponed debt than the rate of interest which was considered desirable in respect of the main debt, which was fixed by the Lord President of the Council?
I have already stated that it is not unusual for an arrangement of that kind to be made, and there are other arrangements of the kind in regard to our own debts.
Is it not a fact that in an earlier reply the right hon. Gentleman said that it was agreed to without any objection at all by the Government?
I did not say that it was agreed to. It is not a question of agreement. We were not asked to agree. We had no choice.
In view of the impracticability of paying these debts—
HON. MEMBERS: Order!
44.
asked the Financial Secretary to the Treasury the amount included in Britain's War Debt to the United States of America represented by guarantees given by us for material supplied direct to France on French account?
The British War debt to the United States Government contains no specific item of the kind referred to in the question. The position is that if we had not had to meet any calls for assistance from our allies, it would have been unnecessary for us to ask assistance from the United States Government.
72.
asked the Secretary of State for Foreign Affairs if he has any official knowledge of the intentions of France and Italy to sign the agreements relating to debts to the United States of America postponed under the Hoover plan; and, if so, will he give details?
I can add nothing to the reply given to my hon. Friend on 31st May last to the effect that all the other Governments concerned have agreed in principle to sign such agreements.
Does the hon. Gentleman expect to be in possession of more direct information within a reasonable time?
We have received no formal note, but we have no doubt whatever that the two countries referred to in the question do, in fact, propose to sign.
Have any inquiries been made?
There is no cause for any inquiry. We are quite satisfied.
Finance And Industry
45.
asked the Prime Minister if he can now state what action the Government have taken or intend to take to give effect to the recommendations of the Macmillan Report; and whether the new world economic conference comes under this category?
The principal recommendations in the Macmillan Committee's Report were not proposals for Government action, but suggestions as to the way in which the various monetary authorities of the world should act together with a view to maintaining the stability of international prices. The situation has changed in many respects since the committee reported, but the objective of His Majesty's Government in the recent conversations concerning a conference conform to the principles of international collaboration advocated by the committee.
The right hon. Gentleman said "concerning a conference"; does he mean the world conference?
That is so.
Government Departments
Luncheon Interval
48.
asked the Financial Secretary to the Treasury the normal lunch time of civil servants, including those on a seven-hour day and those working an eight-hour day, from the lowest to the highest grades; whether these lunch periods are agreed to in practice; and whether any exceptions to the official period for lunch are made and, if so, under what circumstances?
For the general administrative and clerical classes, and analogous departmental classes, the normal luncheon interval, irrespective of grade or length of working day, is three-quarters of an hour, with discretion to Heads of Departments to allow up to an hour in special cases of difficulty. For other classes varying rules, within the limits I have just mentioned, apply. The answer to the second part of the question is in the affirmative and to the third that this is a matter for Departmental discretion.
Salaries And Bonus
50.
asked the Financial Secretary to the Treasury the total amount of money paid in salaries, including bonus, to the Civil Services in April, 1914, and April, 1932, respectively; and to what extent the difference is due to an increase in the cost of living?
In April, 1914, the total salaries and wages bill (including overtime and allowances) of the non-industrial and industrial staffs of the Civil Service was at the rate of approximately £36¾ millions per annum.
That for April, 1932, was at the rate of approximately £84½ millions per annum. The increase in cost may be attributed to the additional staff required for the extra duties placed on the Civil Service since 1914, to compensation in respect of the increase in the cost of living, and to improvements in the basic remuneration of individual classes of civil servants under Awards of the Industrial Court, etc. I regret, however, that I am not in a position to make any accurate evaluation of these separate factors.Ministry Of Agriculture
53.
asked the Minister of Agriculture what proportion of the expenditure of the Ministry of Agriculture was allocated to salaries and travelling expenses of officials in 1931 and 1921, respectively?
Salaries and travelling expenses of officials, excluding industrial staff and officers paid by fees, accounted for 19.2 per cent. of the Ministry's expenditure in 1921 and for 20.9 per cent. in 1931. In 1921, the Ministry's expenditure included substantial sums in respect of war-time services and abnormally large sums in respect of foot-and-mouth disease, of which the. cost of officials formed a relatively small proportion.
Lausanne Conference (Agenda)
47.
asked the Prime Minister whether he can state what is the agenda for the Conference at Lausanne?
I would refer the hon. Member to the reply given by my hon. Friend the Under-Secretary of State for Foreign Affairs to the hon. and gallant Member for North-East Bethnal Green (Major Nathan) on the 30th May last.
Are we to understand from that reply that, although the Conference is to meet next week, no agenda has been drawn up?
Quite the opposite. My hon. Friend stated the terms of reference upon which the Conference would meet.
Agriculture
Emergency Customs Duties
52.
asked the Minister of Agriculture whether he is aware that the dates fixed under the Horticultural Products (Emergency Customs Duties) Act, 1931, for the import of plums, strawberries, gooseberries, turnips, and cauliflowers are unsuited to Scottish conditions; and whether he will now take steps to alter the dates to meet the Scottish growers' needs?
I would refer my hon. and gallant Friend to the reply I gave on 1st March to a similar question by my hon. and gallant Friend the Member for Midlothian and Peebles Southern (Captain Ramsay) of which I am sending him a copy.
Is the right hon. Gentleman aware that, unless steps are taken in this matter immediately, it will be too late altogether for this year?
Weed Elimination (Experiments)
55.
asked the Minister of Agriculture whether his Department has investigated the experiments at Jealott's Hill, Berkshire, aimed at freeing crops of weeds by spraying; what is the view of his Department on the result of these experiments; and whether, in case it is satisfied, it intends to assist in popularising their use?
I presume my Noble Friend refers to the experiment in the destruction of charlock in spring oats by spraying with dilute sulphuric acid. My Department is in touch with this experiment; but I am advised that it is desirable to await further results before announcing any opinion upon this method in comparison with others.
Imperial Economic Conference
54.
asked the Minister of Agriculture for what reason only five representatives of farming in England and Wales out of a total of twelve have been appointed to the advisory committee dealing with agricultural matters to be raised at the Ottawa Conference, in view of the fact that the proportion of Great Britain's agricultural output produced by England and Wales is approximately 80 per cent.?
My object in setting up the committee referred to by my hon. and gallant Friend was to provide the agricultural adviser for Ottawa, who is chairman of the committee, with a means of ascertaining the views of agriculturists from all parts of the United Kingdom on questions likely to arise at the Ottawa Conference. For that reason I took steps to ensure that the committee was as widely representative as possible, and I do not feel that the considerations referred to by my hon. and gallant Friend really arise.
Would it not be possible to include among the representatives a direct nominee of the dairy farming interests in the country as recommended by the British Dairy Farmers' Association?
I do not think that I can add to the personnel now, but there is no reason why the views of that body should not be heard by the committee, and I hope that that will be the case.
35.
( for Mr. SUMMERSBY)
asked the Chancellor of the Exchequer whether steps are being taken by his Department to evolve an Empire monetary policy for submission to the Ottawa Conference; if so, when work was commenced; what staff is engaged upon it; and whether the nature of the policy will be made public before the conference?
Questions of monetary policy as affecting the various parts of the Empire have constantly been before the Treasury, particularly in recent months, as part of their normal duties. His Majesty's Government will welcome a discussion of these important questions at the Ottawa Conference, but I do not consider that it would be desirable for me to give expression to any detailed views in advance of such discussion.
Is the right hon. Gentleman aware that the Australian Government are sending bankers as advisers to this Conference on the question of currency, and does the Government intend to do likewise?
I have no official information upon that point.
Trade And Commerce
Import Restrictions, Denmark
57.
asked the President of the Board of Trade what steps he is taking in respect to the increased embargoes against British imports recently instituted by Denmark?
The situation is being carefully watched and I am awaiting further information.
Are not these embargoes inevitable upon our putting duties upon Danish produce?
No, Sir; they are not inevitable.
Is not this the direct result of the Government's policy?
No, Sir; it has nothing to do with it.
Imported Typewriters
59.
asked the President of the Board of Trade the number of typewriters imported into this country from Canada during the year 1931; the number for the quarter ended 31st March, 1932; and the number for the months of April and May, 1932, respectively?
The number of complete typewriters imported into the United Kingdom and registered as consigned from Canada was 20 during 1931, 603 during the quarter ended 31st March, 1932, and 856 during April, 1932. The corresponding figure for May, 1932, is not yet available.
Can the right hon. Gentleman say whether those typewriters have come in duty free or not?
I am afraid I could not give that answer without notice.
Can the right hon. Gentleman tell us whether they are of purely Canadian manufacture?
I could not say without notice.
British Industries Fair
66.
asked the Secretary to the Overseas Trade Department what action it is now proposed to take with regard to carrying out the recommendation of Lord Chelmsford's committee that consideration should be given to the inclusion of an exhibit of industrial art as a regular feature of the British Industries Fair?
It has not yet been found possible owing to lack of funds for the purpose, to give effect to this recommendation.
Will the hon. Member arrange to get that decision before the next British Industries Fair is held?
That will be considered.
China (Consular Reports)
69.
asked the Secretary of State for Foreign Affairs when the next Consular Report will be published giving a general survey of conditions in China, and relating particularly to trade on the Yangtze River?
Consular reports regarding trade in China are no longer published. They have been superseded by reports on general economic conditions in China by the Commercial Counsellor. The question of a report for the current year is at present under consideration.
Is the hon. Gentleman aware that the last report is dated 1930 and that the Stationery Office state that it is now out of print?
Last year a very full report was issued by the special Economic Mission which went to China for the purpose, and that is why we are doubtful whether there is enough new information to justify a new report.
Manchuria (Evasion Of Import Duties)
71.
asked the, Secretary of State for Foreign Affairs if he is able to give information with reference to the smuggling and evasion of import duties on goods entering Manchuria from Japan; and what action he is taking to protect the interests of British subjects in the matter?
I would refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Farnham (Sir A. M. Samuel) yesterday, in which I explained the action which has been taken in this matter. The evasion of the import duties has not, so far as I am aware, been confined to goods of Japanese origin.
Post Office
Telephone Charges
60.
asked the Postmaster-General if, having regard to the profits of the Post Office, he is prepared to recommend a reduction in telephone rentals and charges with a view to assisting trade and commerce?
I would refer my hon. Friend to the reply I gave to a similar question asked by the hon. Member for Walthamstow, West (Mr. McEntee) on 18th April last.
Letter And Parcel Rates
61.
asked the Postmaster-General if, having regard to the profits of the Post Office, he is prepared to recommend an immediate reduction in respect oil letter and parcel postage with a view to assisting trade and commerce?
In present circumstances I can hold out no hope of any immediate reduction of the postage on letters or parcels.
In view of this profit of £9,000,000, is the right hon. Gentleman going to be in favour of increasing the wages of those connected with the postal service?
Is it not a fact that the profits on commercial account are really illusory?
I do not think the Chancellor of the Exchequer will think they are illusory.
But is it not a fact that nearly £5,000,000 of the Post Office profits is a notional amount, due from Government Departments, which will not go in cash into the Exchequer unless the cash is raised by additional taxation, and that consequently the total of £9,000,000 or £10,000,000 is an illusory profit?
Grand Opera (Government Grant)
62.
asked the Postmaster-General the amount which will be paid in the current financial year to the British Broadcasting Corporation for the purpose of subsidising grand opera?
The amount payable during the current financial year is £17,500.
Could not this money be transferred to the Ministry of Agriculture to provide allotments for the unemployed?
The hon. Member ought to have thought of that when the agreement came before the House last June.
Does not the right hon. Gentleman realise that this is a public scandal?
The hon. Member should also have thought of that last time.
Seriously—the right hon. Gentleman takes this as a joke—
No.
Well, I gather that, but, having regard—
We cannot have a Debate on this question.
Irish Free State (Import Duties)
63.
asked the Secretary of State for Dominion Affairs what additional Customs Duties have recently been imposed upon imports from the United Kingdom by the Irish Free State?
I am sending to my hon. Friend the particulars of the changes in the Irish Free State tariff for which he asks.
Has not this Dominion taken advantage of the period during which we have undertaken not to put on any duties against them to impose very heavy duties against us, and will the right hon. Gentleman bear that fact in mind whenever it may be appropriate to do so in the future?
I am sure my hon. Friend has conveyed the impression he desires to the House.
Is the right hon. Gentleman aware that the duties placed upon print affect trades in this country and that they are charging 2d. per copy upon imports into the Free State?
I am not only aware of, but I deplore, the tendency. The answer to my hon. Friend gives all the list. I myself have received representations from practically every industry complaining of the unfair treatment; but we are a Dominion, and I can do no other than merely convey the fact from one Dominion to another; but equally I can convey to them the advantages that accrue from our policy.
Was this matter touched on in the friendly talk the right hon. Gentleman had the other evening with Mr. De Valera?
We never got within a million miles of this.
Did I understand my right hon. Friend to say in his answer that we are a Dominion? Is the new appellation of His Majesty's Government in Great Britain "a Dominion"?
My reference to "a Dominion" was that the Irish Free State was a Dominion—[HON. MEMBERS: "No!"]—but let there be no misunderstanding, under the British Commonwealth of Nations that equally applies to us. [HON. MEMBERS: "No!"] My object was to make it clear that this Dominion had the power to do what I think is unfair—it is unfair to our British industrialists—but I made it perfectly clear that that is a matter for which they are responsible.
This is a very highly important constitutional matter. Is the new official designation of this country "a Dominion"?
The official designation is that we are all associated in what is called the British Commonwealth of Nations.
Surely we are not a Dominion!
West Hunwick Silica And Firebeick Company, Limited
64.
asked the Secretary for Mines if he is aware that the brickyard and colliery of the West Hunwick Silica and Firebrick Company, Limited, county Durham, is being closed owing to the quota being exhausted; whether he can state the amount of the quota compared with the total normal output; and if he has any information as to whether this company applied to the district committee for an increase of its quota and was refused?
The detailed administration of the Durham scheme is in the hands of the executive board, and I am unable to give the hon. Member the statistics for which he asks. The executive board informs me, however, that as recently as last week the standard tonnage of this colliery was increased. I think the hon. Member may take it that there is no ground for the suggestion that the works are about to close because the colliery is short of quota tonnage.
Is the Secretary for Mines aware that the managing director of this company has stated to the press that this colliery is being closed because of the quota; and if that is not true will he take steps to inform the managing director that he should not make such a statement?
I have seen the newspaper report to which the hon. Member refers, and I can only say that the information I have from the District Executive Board does not correspond with what is stated there.
May we hope to see the Minister of Mines following in the footsteps of the hon. Member for Spennymoor (Mr. Batey) in his rapid conversion to the evils of the quota system?
Tanganyika (Prospecting Licences)
65.
asked the Secretary of State for the Colonies if he can make a statement regarding the special prospecting licences, covering areas greater than 23 square miles, recently granted by the Government of Tanganyika territory and showing to whom these licences have been granted and for what purposes?
I am sending my hon. Friend copies of the Tanganyika Government Gazette giving particulars of two special prospecting licences, which have been granted this year.
Naval And Military Pensions And Grants
67.
asked the Minister of Pensions if he has considered the letter from the Stechford branch of the British Legion in Birmingham, wherein expression is given to the concern which is felt by the members lest the Ministry contemplate reducing the war service pensions; and will he cause assurances to be circulated that nothing of the kind is under consideration?
Yes, Sir, and last Monday I replied by sending this branch a copy of my earlier letter to the chairman of the British Legion to the effect that no proposal to reduce the rates of war pensions had been or was under consideration by the Government. This letter has already received wide Press publicity.
Will the Minister see that his answer gets even wider publicity?
I am very anxious that the needless anxiety which has been created should be allayed in the way the hon. and gallant Member has suggested.
Military Operations, India (Medal)
68.
asked the Secretary of State for India whether a medal will be granted to the troops who took part in the recent operations on the Khajuri and Akha Khel plains?
This question is still under consideration.
Bucharest (Samson Broazkin)
70.
asked the Secretary of State for Foreign Affairs whether he can obtain any information from His Majesty's Minister at Bucharest, or through the League of Nations, as to the torturing by the police of the Jew Samson Broazkin?
I have received no official confirmation of this allegation but my right hon. Friend is instructing His Majesty's Minister at Bucharest to furnish him with a report.
Does not the hon. Gentleman consider that the putting down of a question regarding the treatment of individual foreign nationals is a waste of money?
We have a joint responsibility for minorities in certain countries under the Peace Treaties.
Geneva Conferences (British Delegations)
73.
asked the Secretary of State for Foreign Affairs whether he can state the total amount for which thi3 country is liable in respect of members of delegations attending the Geneva Conferences from 1st January, 1932, to the nearest convenient date?
The expenditure on British delegations to conferences at Geneva for the period from 1st January, 1932, to 31st May, 1932, was approximately £18,000, of which some £17,000 is attributable to the Disarmament Confernece.
Can my hon. Friend say what is the average subsistence allowance per day for our Geneva delegates?
I cannot say without notice, but I know that it is small.
Mental Defectives (Committee Of Inquiry)
31.
( for Wing-Commander JAMES)
asked the Minister of Health when he proposes to appoint the committee to inquire into the sterilisation of mental defectives; and the composition and terms of reference of that committee?
The arrangements for the appointment of this committee have just been completed. It will consist of the following members:
- L. G. Brock, Esq., C.B. (Chairman),
- Wilfred Trotter, Esq., F.R.S., M.D.. M.S., F.R.C.S.,
- R. A. Fisher, Esq., Sc. D., F.R.S., F.R.A.S.,
- A. F. Tredgold, Esq., M.D., F.R.C.P., M.R.C.S., F. R. S. Ed.,
- Miss Ruth Darwin,
- E. W. Adams, Esq., O.B.E., M.D.,
- R. H. Crowley, Esq., M.D., F.R.C.P.,
- E. O. Lewis, Esq., M.A., D.Sc., M.R.C.S., L.R.C.P.,
"To examine and report on the information already available regarding the hereditary transmission and other causes of mental disorder and deficiency; to consider the value of sterilization as a preventive measure having regard to its physical, psychological, and social effects and to the experience of legislation in other countries permitting it; and to suggest what further inquiries might usefully be undertaken in this connection."
Are there any representatives of mental defectives on this Committee?
Is the right hon. Gentleman prepared to give us an assurance that in the event of legislation—
HON. MEMBERS: Order!
Bank Deposits And Loans (Interest)
41.
( for Mr. SUMMERSBY)
asked the Chancellor of the Exchequer whether, in view of the fact that banks are at the present time only allowing 1 per cent. interest on their deposits whilst charging 5½ to 6 per cent. to their borrowers, he will consider the advisability of appointing a council, on the same lines as the Food Council, to advise the Government as to what action it is necessary to take to protect the public?
As indicated in the answer given by my right hon. Friend the Financial Secretary to the hon. Member for Eccles (Mr. Potter) on the 23rd May, I should welcome any arrangement which would promote the widest possible extension of the benefits of cheap money, but I do not think that this question presents the facts accurately nor that the suggestion therein could be adopted.
Has my right hon. Friend any information as to whether or not, as a result of the answer of the Financial Secretary on the 23rd May, there has been some lightening of the burden of borrowed money on industry?
I have no information at this moment, but if my hon. Friend will put down a question I will give him an answer.
Business Of The House
Mr.
May I ask the Prime Minister what the business will be for next week.
On Monday and Tuesday the National Health Insurance and Contributory Pensions Bill, Committee stage; Hire Purchase and Small Debt (Scotland) Bill, Report and Third Reading.
Wednesday: Supply, Committee, The Ministry of Agriculture Vote. I understand that there is to be a general discussion on agriculture. Thursday: Supply, Committee, Dominions Office Vote. The Imperial Economic Conference at Ottawa, I understand, is to be the subject to be discussed. Friday: Supply, Committee. The Vote will be announced later. On any day, if there is time, other Orders will be taken.Can the right hon. Gentleman say whether he contemplates giving a day for the discussion of our relations with the Irish Free State?
There has been no demand for it. Supply, as my right hon. Friend knows, is in the hands of the Opposition.
Will the Prime Minister say whether the Agenda of the Ottawa Conference will be available to the House before the Debate takes place on Thursday next?
May I be allowed to say, on the question of a Debate on our relations with the Irish Free State, that we deliberately asked that Friday should be kept open, so that if it is considered desirable we should take that Debate on that day? We, on our side, only desire that the Debate should take place at the most convenient time.
That is so. Friday is available for that Debate. That is why no announcement has been made.
May I have an answer to my question as to whether the agenda of the Ottawa Conference will be available before the Debate takes place?
I understand that an answer was given yesterday that it is our desire to publish the agenda before the Debate, but we are still awaiting replies from Geneva.
I want to ask the Prime Minister, having regard to the controversial nature of the National Health Insurance and Contributory Pensions Bill, and having regard to the amount of detail involved in it, does the Prime Minister anticipate securing the Committee stage in two days without the suspension of the Eleven o'Clock Rule? The other point I want to ask is whether the Vote that will be put down for Thursday for the Dominions Office will permit a discussion on the Minister's salary, so that it will be possible to discuss on that day the activities of the Minister other than the preparations for the Imperial Economic Conference at Ottawa?
With reference to the second question, we shall put down whatever Vote is asked for by the Opposition, so that they may have a full opportunity for the discussion of anything they wish to be discussed. With reference to the business for Monday and Tuesday, we have put those two Bills on the Order Paper so that, if the first one is finished, we shall proceed with the Hire Purchase and Small Debt (Scotland) Bill. We must suspend the Eleven o'Clock Rule, but there is no intention of keeping the House inordinately late.
I know that the Prime Minister has not been able to be present, but there has been a tremendous taking up of time in this House—although all private Members' time has been taken away—by debate on non-controversial Measures by supporters of the Government, and now, when we come to a really controversial piece of legislation, we are being limited to less than two days for the Committee stage. I want to ask the Prime Minister if the Government propose to force this Measure through in two days by the suspension of the Eleven o'Clock Rule, or whether, if it is shown in the course of the two days that that is inadequate, other time will be made available?
My experience has always been that the supporters of a Government have been responsible for considerable waste of time, and I am not—[Interruption.]
Consumption of time.
Yes; the right hon. Gentleman is in a very helpful frame of mind; I withdraw the word "waste." It is not our intention to force the second Bill through by the mere suspension of the Eleven o'Clock Rule, but I think it is fair to ask the House to give us the Committee stage of the first Bill within two days.
Arising out of the right hon. Gentleman's previous answer, are we to understand that, provided the appropriate Vote is put down by the Opposition, there will be a full exposition by spokesmen of the Government of the policy of the Government at Ottawa, to which reference was made in an answer by the Chancellor of the Exchequer to-day, saying that they had a policy at Ottawa?
Before the right hon. Gentleman replies to that question, might I ask him whether he is aware that the Vote is put down specifically in order to have the fullest and most complete discussion of the proposed proceedings at the Ottawa Conference? We very much hope that we shall have a full explanation from the Government and a full discussion by Members of the House.
That is exactly why the Vote was put down.
Then the answer to my question is in the affirmative— there will be a full explanation?
Ordered,
"That the Proceedings on the Finance Bill have precedence this day of the Business of Supply."—(The Prime Minister.)
New Member Sworn
Bracewell Smith, Esquire, for the Borough of Camberwell (Dulwich Division).
Bills Reported
North Metropolitan Electric Power Supply Bill [ Lords],
London County Council (Money) Bill,
Port of London (Various Powers) Bill [ Lords],
Sidmouth Water Bill [ Lords],
Reported, with Amendments; Reports to lie upon the Table, and to be printed.
Message From The Lords
That they have agreed to,—
Amendments to—
Thames Conservancy Bill [ Lords], without Amendment.
Orders Of The Day
Finance Bill
As amended, further considered.
Clause 1—(Duties On Tea)
I beg to move to leave out the Clause.
I do not want to travel over the ground that has already been touched upon by various hon. Members on both sides of the House, but to-day we are dealing with a commodity which, in my opinion, is just as important as the commodity which was the subject of discussion yesterday. It is a beverage which is indulged in by practically every man, woman and child in this country. It is to be found in the homes of all types of persons, but particularly in the homes of the common people of this country, and for that reason I am very serious and earnest in my demand for the exclusion of this Clause. I am not going to participate in any detailed discussion or examination of the merits of tea as a food or as a beverage, but I want to say definitely that it does impinge to a very large extent upon the lives of the people. From these benches we have on previous occasions endeavoured to limit the duration of the duty, but the proposal was rejected. We endeavoured also to reduce the amount of the duty, and that proposal, too, was rejected, it being the desire of the Treasury that £4,000,000 or thereabouts should be found from this source. In this connection there occurs to my mind the statement of the right hon. Gentleman the Member for Epping (Mr. Churchill) that burdens are not hard to bear provided that they are distributed in a suitable and scientific manner; but, before I distribute this burden, I want to see that it is on the proper shoulders. I am concerned with the burden as a burden, and with the shoulders that are capable; of bearing it. I do not know if I have touched upon this point before, but I want to express the opinion that to place this burden upon a commodity of
Division No. 221.]
| AYES.
| [4.2 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Anstruther-Gray, W. J. | Balfour, Capt. Harold (I. of Thanet) |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Astbury, Lieut.-Com. Frederick Wolfe | Balniel, Lord |
| Agnew, Lieut.-Com. P. G. | Atholl, Duchess of | Barclay, Harvey, C. M. |
| Allen, William (Stoke-on-Trent) | Bailey, Eric Alfred George | Barton, Capt. Basil Kelsey |
| Amery, Rt. Hon. Leopold C. M. S. | Baldwin-Webb, Colonel J. | Beauchamp, Sir Brograve Campbell |
such importance in the homes of the people of this country is not a proper and scientific proceeding if you have the interests of the people at heart. I find, from figures published by the Commissioners of Inland Revenue, that in the 10 years prior to the publication of their report there has been a reduction of £615,000,000 in the income of the common people of this country, while from the same source we are informed that there has been an increase in the income derived from rent, interest and profits of no less than £308,000,000. If this country requires £4,000,000 for any purpose whatever, we are entitled to ask that it shall be obtained from the people who have increased their incomes by £308,000,000, and not from those whose incomes have been reduced by £615,000,000. It is for that reason that I speak strongly on the proposal to enter upon further taxation of this character.
I know it has been stated before, and I make no apology for again stating it as my opinion, that this is a direct effort, which I have no doubt will be successful, to take from the shoulders of the direct taxpayers burdens which they rightly should and can bear, and by indirect taxation to find the money from the people who are underpaid. I also recollect that when tariffs were introduced, under the guise of the Abnormal Importations Bill, we were told a good deal about luxuries which were not indulged in by the poor. Tea, however, is not a luxury. It is one of the common things on the tables of the people of this country. Therefore, I protest strongly against this duty, particularly as I have the honour to represent an organisation that has sales of £5,600,000 of tea a year going into the homes of people who can ill afford any greater burden being placed upon them.
I beg to second the Motion.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 294; Noes, 42.
| Beaumont, Hon. R.E.B. (Portsm'th, C.) | Goff, Sir Park | Mills, Major J. D. (New Forest) |
| Belt, Sir Alfred L. | Goodman, Colonel Albert W. | Milne, Charles |
| Betterton, Rt. Hon. Sir Henry B. | Graham, Fergus (Cumberland, N.) | Mitchell, Harold P.(Br'tf'd & Chisw'k) |
| Bevan, Stuart James (Holborn) | Grattan-Doyle, Sir Nicholas | Mitchell, Sir W. Lane (Streatham) |
| Birchall, Major Sir John Dearman | Graves, Marjorle | Morning, Adrian C. |
| Bird, Sir Robert B. (Wolverh'pton W.) | Grimston, R. V. | Morris-Jones, Dr. J. H. (Denbigh) |
| Boothby, Robert John Graham | Guinness, Thomas L. E. B. | Morrison, William Shepherd |
| Bossom, A. C. | Gunston, Captain D. W. | Moss, Captain H. J. |
| Boulton, W. W. | Guy, J. C. Morrison | Muirhead, Major A. J. |
| Bower, Lieut.-Com. Robert Tutton | Hacking, Rt. Hon. Douglas H. | Munro, Patrick |
| Bowyer, Capt. Sir George E. W. | Hamilton, Sir R.W.(Orkney & Z'tl'nd) | Nation, Brigadier-General J. J. H. |
| Boyce, H. Leslie | Hammersley, Samuel S. | Nicholson, Godfrey (Morpeth) |
| Braithwaite, J. G. (Hillsborough) | Hanbury, Cecil | Nicholson, Rt. Hn. W. G. (Petersf'ld) |
| Broadbent, Colonel John | Hanley, Dennis A. | North, Captain Edward T. |
| Brockiebank, C. E. R. | Hannon, Patrick Joseph Henry | Nunn, William |
| Browne, Captain A. C. | Harbord, Arthur | O'Neill, Rt. Hon. Sir Hugh |
| Buchan, John | Harris, Sir Percy | Ormiston, Thomas |
| Buchan-Hepburn, P. G. T. | Hartington, Marquess of | Ormsby-Gore, Rt. Hon. William G. A. |
| Burnett, John George | Hartland, George A. | Patrick, Colin M. |
| Butler, Richard Austen | Harvey, George (Lambeth, Kenningt'n) | Peake, Captain Osbert |
| Cadogan, Hon. Edward | Harvey, Major S. E. (Devon, Totnes) | Pearson, William G. |
| Caine, G. R. Hall | Haslam, Sir John (Bolton) | Perkins, Walter R. D. |
| Campbell, Edward Taswell (Bromley) | Hellgers, Captain F. F. A. | Petherick, M. |
| Caporn, Arthur Cecil | Hepworth, Joseph | Peto, Sir Basil E. (Devon, Barnstaple) |
| Castlereagh, Viscount | Hope, Sydney (Chester, Stalybridge) | Peto, Geoffrey K.(W'verh'pt'n, Blist'n) |
| Castle Stewart, Earl | Hornby, Frank | Pickering, Ernest K. |
| Cautley, Sir Henry S. | Horobin, Ian M. | Pickford, Hon. Mary Ada |
| Cayzer, Sir Charles (Chester, City) | Horsbrugh, Florence | Pick, Cecil F. |
| Cayzer, Maj. Sir H. R. (Prtsmth., S.) | Howitt, Dr. Alfred B. | Potter, John |
| Cazalet, Thelma (Islington, E.) | Hudson, Capt. A. U. M.(Hackney, N.) | Pownall, Sir Assheton |
| Cazalet, Capt. V. A. (Chippenham) | Hunter, Dr. Joseph (Dumfries) | Procter, Major Henry Adam |
| Chalmers, John Rutherford | Hunter, Capt. M. J. (Brigg) | Pybus, Percy John |
| Chamberlain, Rt. Hn. N. (Edgbaston) | Hunter-Weston, Lt.-Gen. Sir Aylmer | Ralkes, Henry V. A. M |
| Choriton, Alan Ernest Leofric | Hurd, Sir Percy | Ramsay, Alexander (W. Bromwich) |
| Chotzner, Alfred James | Hutchison, W. D. (Essex, Romf'd) | Ramsay, Capt. A. H. M. (Midlothian) |
| Christie, James Archibald | Jackson, Sir Henry (Wandsworth, C.) | Ramsay, T. B. W. (Western Isles) |
| Churchill, Rt. Hon. Winston Spencer | Jackson, J. C. (Heywood & Radcliffe) | Ramsbotham, Herwaid |
| Clydesdale, Marquess of | Jamieson, Douglas | Ramsden, E. |
| Cobb, Sir Cyril | Jesson, Major Thomas E. | Ray, Sir William |
| Cochrane, Commander Hon. A. D. | Joel Dudley J. Barnato | Rea, Walter Russell |
| Colfox, Major William Philip | Johnstone, Harcourt (S. Shields) | Reed. Arthur C. (Exeter) |
| Gonant, R. J. E. | Jones, Lewis (Swansea, West) | Reid, James S. C. (Stirilng) |
| Cook, Thomas A. | Ker, J. Campbell | Rentoul, Sir Gervals S. |
| Cooke, Douglas | Kerr, Hamilton W | Renwick, Major Gustav A. |
| Courtauld, Major John Sewell | Kimball, Lawrence | Reynolds, Col. Sir James Philip |
| Cranborne, Viscount | Knatchbull, Captain Hon. M. H. R. | Rhys, Hon. Charles Arthur U. |
| Craven-Ellis. William | Knight, Holford | Ropner, Colonel L. |
| Crooke, J. Smedley | Knox, Sir Alfred | Rosbotham, S. T. |
| Crookshank, Capt. H. C. (Gainsb'ro) | Law, Sir Alfred. | Ross, Ronald D. |
| Cruddas, Lieut.-Colonel Bernard | Law, Richard K. (Hull, S.W.) | Ross Taylor, Walter (Woodbridge) |
| Culverwell, Cyril Tom | Leech, Dr. J. W. | Ruggies-Brise, Colonel E. A. |
| Dalkeith, Earl of | Lees-Jones, John | Russell, Albert (Kirkcaldy) |
| Davies, Maj. Geo. F. (Somerset, Yeovil) | Leighton, Major B. E. P. | Russell, Hamer Field (Sheffield, B'tside) |
| Davison, sir William Henry | Lennox-Boyd, A. T. | Salmon, Major Isidore |
| Denman, Hon. R. D. | Liddall, Walter S. | Salt, Edward W. |
| Denville, Alfred | Lindsay, Noel Ker | Samuel, Sir Arthur Michael (F'nham) |
| Despencer-Robertson, Major J. A. F. | Llewellyn-Jones, Frederick | Samuel, Rt. Hon. Sir H. (Darwen) |
| Dickie, John P. | Lloyd, Geoffrey | Sandeman, Sir A. N. Stewart |
| Drewe, Cedric | Locker-Lampson, Rt. Hn. G.(Wd. Gr'n) | Sanderson, Sir Frank Barnard |
| Duncan, James A. L. (Kensington, N.) | Lockwood, John C. (Hackney, C.) | Scone, Lord |
| Dunglass, Lord | Loder, Captain J. de Vere | Selley, Harry R. |
| Eden, Robert Anthony | Lovat-Fraser, James Alexander | Shaw, Helen B. (Lanark, Bothwell) |
| Edmondson, Major A. J. | Lumley, Captain Lawrence R. | Shaw, Captain William T. (Fortar) |
| Elliot, Major Rt. Hon. Walter E. | Lyons, Abraham Montagu | Skelton, Archibald Noel |
| Ellis, Sir R. Geoffrey | Mabane, William | Smiles, Lieut.-Col. Sir Walter D. |
| Elliston, Captain George Sampson | McCorquodale, M. S. | Smith, Bracewell (Dulwich) |
| Elmley, Viscount | MacDonald, Rt. Hn. J. R. (Seaham) | Smith, R. W. (Ab'rd'n & Kinc'dine, C.) |
| Emmott, Charles E. G. C. | Macdonald. Capt. P. D. (I. of W.) | Smith-Carington, Neville W. |
| Emrys-Evans, P. V. | McEwen, Captain J. H. F. | Somervell, Donald Bradley |
| Essenhigh, Reginald Clare | McKie, John Hamilton | Soper, Richard |
| Evans, Capt. Ernest (Welsh Univ.) | McLean, Major Alan | Southby, Commander Archibald R. J. |
| Falle, Sir Bertram G. | McLean, Dr. W. H. (Tradeston) | Spears, Brigadier-General Edward L. |
| Fermoy, Lord | Macquisten, Frederick Alexander | Spencer, Captain Richard A. |
| Fielden, Edward Brocklehurst | Magnay, Thomas | Stanley, Hon. O. F. G. (Westmorland) |
| Flint, Abraham John | Maitland, Adam | Stourton, Hon. John J. |
| Foot, Dingle (Dundee) | Makins, Brigadier-General Ernest | Strauss, Edward A. |
| Foot, Isaac (Cornwall, Sodmin) | Ma, Edward Lancelot | Strickland, Captain W. F. |
| Fuller, Captain A. G. | Mander, Geoffrey le M. | Sueter, Rear-Admiral Murray F. |
| Ganzoni, Sir John | Manningham-Buller, Lt.-Col. Sir M. | Tate, Mavis Constance |
| George, Megan A. Lloyd (Anglesea) | Margesson, Capt. Henry David R. | Taylor, Vice-Admiral E.A.(P'dd"gt'n, S.) |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | Marsden, Commander Arthur | Thomas, Rt. Hon. J. H. (Derby) |
| Gledhill, Gilbert | Martin, Thomas B. | Thomas, James P. L. (Hereford) |
| Glossop, C. W. H. | Mayhew, Lieut.-Colonel John | Thomas, Major L. B. (King's Norton) |
| Gluckstein, Louis Halle | Merriman, Sir F. Boyd | Thomson, Sir Frederick Charles |
| Glyn, Major Ralph G. C. | Mills, Sir Frederick (Leyton, E.) | Titchfield, Major the Marquess of |
| Todd, Capt. A. J. K. (B'wick-on-T.) | Warrender, Sir Victor A. G. | Winterton, Rt. Hon. Earl |
| Todd, A. L. S. (Kingswinford) | Wayland, Sir William A. | Wood, Rt. Hon. Sir H. Kingsley |
| Touche, Gordon Cosmo | Weymouth, Viscount | Wood, Sir Murdoch McKenzie (Banff) |
| Tryon, Rt. Hon. George Clement | White, Henry Graham | Worthington, Dr. John V. |
| Turton, Robert Hugh | Williams, Charles (Devon, Torquay) | Young, Rt. Hon. Sir Hilton (S'v'noaks) |
| Vaughan-Morgan, Sir Kenyon | Williams, Herbert G. (Croydon, S.) | Young, Ernest J. (Middlesbrough, E.) |
| Wallace, John (Dunfermline) | Wills, Wilfrid D. | |
| Ward, Lt.-Col. Sir A. L. (Hull) | Wilson, Clyde T. (Wett Toxteth) | TELLERS FOR THE AYES.— |
| Ward, Irene Mary Bewick (Wallsend) | Windsor-Clive, Lieut.-Colonel George | Sir George Penny and Lord Erskine |
NOES.
| ||
| Attlee, Clement Richard | Hall, George H. (Merthyr Tydvil) | Mason, David M. (Edinburgh, E.) |
| Brown, C. W. E. (Notts., Mansfield) | Healy, Cahir | Maxton, James |
| Cocks, Frederick Seymour | Hicks, Ernest George | Parkinson, John Allen |
| Cove, William G. | Hirst, George Henry | Price, Gabriel |
| Cripps, Sir Stafford | Holdsworth, Herbert | Salter, Dr. Alfred |
| Daggar, George | Janner, Barnett | Thorne, William James |
| Davies, Rhys John (Westhoughton) | John, William | Tinker, John Joseph |
| Duncan, Charles (Derby, Claycross) | Jones, Morgan (Caerphilly) | Wedgwood, Rt. Hon. Josiah |
| Edwards, Charles | Kirkwood, David | Williams, David (Swansea, East) |
| Greenwood, Rt. Hon. Arthur | Lansbury, Rt. Hon. George | Williams, Edward John (Ogmore) |
| Grenfell, David Rees (Glamorgan) | Lawson, John James | Williams, Dr. John H. (Lianelly) |
| Griffiths, T. (Monmouth, Pontypool) | Leonard, William | Williams, Thomas (York, Don Valley) |
| Groves, Thomas E. | Logan, David Gilbert | |
| Grundy, Thomas W. | Lunn, William | TELLERS FOR THE NOES.— |
| Hall, F. (York, W.R., Normanton) | Maclean, Nell (Glasgow, Govan) | Mr. Duncan Graham and Mr. Gordon Macdonald. |
Clause 3—(Excise Duties On Sugar, Molasses, Etc)
I beg to move, in page 3, line 1G, at the end, to insert the words:
I have no desire to detain the House if the right hon. Gentleman will indicate that he is going to accept this Amendment. We were led to believe, in the Committee stage, that the right hon. Gentleman would reconsider the whole question of a guaranteed price, and, without having given a definite promise that the proposal would be accepted,, he did undertake to consider the question. If he is willing to accept the Amendment, I do not see any point in wasting the time of the House. Will he say whether he is willing to accept the Amendment?"Provided that this section shall not apply to sugar manufactured from homegrown beet unless the Commissioners of Customs and Excise are satisfied that the grower of such beet has been paid a price representing a rate not less than thirty-five shillings per ton, calculated in accordance with rules to be made by the Minister of Agriculture and Fisheries."
indicated dissent.
I should have thought that the right hon. Gentleman would have seen his way to accept the Amendment. I shall, therefore, have to restate the position. In 1931, when the Government subsidy was declining, the then Minister of Agriculture prolonged the payments, which enabled the acreage of sugar beet to be kept on a fairly stable basis, but in so doing he insisted that all the money received from the Exchequer should be paid to the producers of sugar beet, and all the possible avenues whereby the money might have flown in other directions were closed. The Anglo-Dutch group at that time were unwilling to come to an agreement. The other factories, however, came to an agreement with the Minister of Agriculture. The Anglo-Dutch group, therefore, remained outside the scheme. Farmers who could secure no guaranteed price refused to grow the normal quantities, with the result 'that at least one factory closed down this year owing to failure on the part of the producer of the beet to get a guaranteed price for his produce. The right hon. Gentleman may have been wise in extending this excess payment, but we cannot agree that, having extended it, he is correct in refraining from securing for the farmer a guaranteed price. They may repeat the statement that has been made twice already, that I believe 11 factories have guaranteed a price of 42s. a cwt. while in five other cases they have guaranteed 35s. plus a proportion of any profits that may accrue.
That is scarcely sufficient. It ought to be a cardinal principle in national finance that, where revenue is sought to bolster up a young, a middle aged, or an ancient industry, there should be a guarantee given by the recipients that the money will be used for the purpose for which it is diverted. In Clause 3 no such guarantee is forthcoming. The factory owners will receive the money and will use it, apparently, just as they wish. While they may be as good, bad or indifferent as most people—we do not wish to reflect upon them any more than upon anyone else—we feel that the principle is wholly wrong that this money, ostensibly provided for the grower of sugar-beet, is handed over to the factory owner, who need give no guarantee at all to the producer of any price that he is likely to obtain. There is another point that ought to be emphasised. The policy of the subsidy may or may not have been wise. That is not the dispute at the moment. But, if it is wise to maintain these factories in working order, it is certainly wise to see that the farmers have such a price guaranteed for their produce that they will enter into early contracts and cultivate the requisite quantity for the continuous working of all the factories. The farmers are no longer growing the amount of beet that they were growing one or two years since. If this policy is going to be continued, we shall have more factories closing down and the £30,000,000 or £35,000,000 which will have been expended on helping this juvenile industry will have been absolute waste and at the end of seven or eight years we shall be no further forward. For these reasons we are obliged to press the Amendment if the right hon. Gentleman is still unwilling to accept what we regard as a very reasonable proposition.I beg to move, as an Amendment to the proposed Amendment, in line 3, after the word "paid," to insert the words "by factories engaged in sharing profits with growers."
I am entirely in agreement with the hon. Gentleman in his contention that the factories should pay just as reason able a price to the grower, as the result of the subsidy, as they receive from the Government, but I am afraid that the price that he recommends is too low and that difficulties will arise when the growers go to negotiate with the factories next year. May I give a brief history of the negotiations and the position of sugar beet in the last few years? From 1924 to 1930 the same prices were paid by every factory in the country to the grower. In 1931 we found all the fac- tories except five, the Anglo-Dutch group, paying the same price, but the Anglo-Dutch group started an entirely new form of treatment of sugar beet, namely, profit-sharing. This year the position was absolutely chaotic. Four factories are paying 42s., nine are paying 40s. and the remainder, the Anglo-Dutch group, are again profit-sharing. It seems to me utterly wrong that, when the Government hand over subsidies to the factories, the factories should pay different prices when they are receiving the same money from the Government, and in some cases it is the rich factories that are paying the smaller figure. If my Amendment is accepted, it will be a direct encouragement to growers to enter into negotiation with the factories for the promotion and extension of profit-sharing. I believe that the whole future of the sugar beet industry must lie in profit-sharing between growers and factories. If my Amendment is not inserted, it will go forth to the world that Parliament thinks that 35s. is a reasonable minimum price to be paid to the grower of sugar beet, and minimums, unfortunately, in agriculture especially, have a habit of becoming maximums. Judging from my experience of sugar beet negotiations in the past, it will mean some very great difficulties when we go as growers to meet the factories again next year. Therefore, I ask the House to confine itself to my Amendment, which is merely designed to ensure a reason able minimum to start with for these growers who are willing and anxious to enter into profit-sharing with the factories.I beg to second the Amendment to the proposed Amendment.
May I. say a word as to the reason why we inserted the figure of 35s.? When the matter was discussed in Committee, the First Com missioner of Works said:
Later he said:"While it is desirable that there should be some minimum the question is whether in the variation of world prices it is not reasonable that the farmers and the factories should enter into profit-sharing arrangements, as it were."
It was as the result of that that we reduced the figure here to 35s., not because we felt that it was a proper price, but in order to incorporate into the Bill the acknowledgment, with which we under stood the Government were in agreement, that there should be some mention of a minimum price. In view of the fact that all the contracts have been settled for this year, it is obviously immaterial what the minimum price is which appears in this Bill, because it will regulate nothing, but we certainly thought the First Com missioner agreed with us that there should be an acknowledgement that, when the grant for this year was being made by the Government, it would only be made subject to compliance with certain conditions that would be laid down. It is too late this year to make the conditions effective, but this is a token figure that is put in order to show the determination of the Government and the House that, when they are disbursing money to the factories in this way, the suppliers to the factories should be safeguarded by this House and it should not be left entirely to the will of the factories to do as they like in the matter and, so long as that principle gets in, we do not really mind whether the words of the hon. and gallant Gentleman the Member for Bury St. Edmunds (Captain Heilgers) are there or not. What we are anxious to do is to preserve this principle of safe guarding the producer of such a commodity as this when the money is paid, not to the producer, but to the manufacturer, who purchases from the producer. We wish the producer to know that this House has his welfare at heart and that, when this is designed to help not the manufacturer of sugar but the production of sugar beet, this House must see to it that he gets a fair sum for his commodity."I want to be quite clear about this. I said that while it might be desirable that there should be some minimum price, it was a question whether it was not desirable, over and above that minimum price, that there should be a profit-sharing arrangement, and that this was a matter which should be inquired into."—[OFFICIAL REPORT, 23rd May, 1932; col. 114, Vol. 266.]
There are, of course, certain technical difficulties in the way of accepting this proposal, but I do not wish to found myself upon that. The First Commissioner of Works under took to look into the question with the Chancellor of the Exchequer. I am sure the hon. and learned Gentle- man does not suggest that there was any pledge to do more than merely look into it. On looking into it, one is met with the fundamental difficulty that it is no use controlling the price of beet unless you can also control the price of sugar. That is the fundamental difficulty. It is no use saying you will give such and such a price if you know that, unless you can give it all the way through, the fluctuations of the market will eventually govern the price that the producer gets, whatever the assistance given by the House in one form or another. The next thing is that the farmers have themselves complained that they do not wish a mini mum price in the Bill because it will come to appear a maximum price. It is true that the Amendment of my hon. and gallant Friend would have the undesirable effect that it would merely impose this minimum on factories which have entered into profit-sharing schemes and, therefore, would actually prejudice profit sharing.
The reason why I put the figure down was that the Anglo-Dutch group were making a guarantee of 35s. before they started profit sharing, and that is regarded at present as a reasonable sum with which to start.
My point was that my hon. and gallant Friend is only imposing the minimum on factories which, on his contention, are doing a very laudable thing. He is limiting factories which are doing a laudable thing and not limiting factories which are not doing a laudable thing and are not entering into profit-sharing arrangements. That illustrates the difficulties into which we are led as soon as we begin to insert figures and prices into Acts of Parliament. The proposal brought forward by the hon. Member for Don Valley (Mr. Williams) would have had the advantage as he indicated that it would fix a price of 35s., whereas in fact all the factories except four are paying 40s. There is no suggestion in his Amendment that there should be any limitation as regards profit sharing but merely that there should be a limiting figure of 35s., whereas all the other factories are paying 40s. That would merely have the effect that, if commodity prices continued downwards and the rates were not so high next year, the farmers would say, "We were getting that figure already."
Surely the right hon. and gallant Gentleman does not suggest that this provision as regards the subsidy is to last for ever? It is only an annual fixation.
It is an annual fixation, but surely the hon. and learned Member will agree that a figure put in a Statute is apt to have an influence very far beyond the year in which it is inserted in the Statute?
Surely the 38s. a ton which is in the Statute did not enable the farmer to get 40s. this year?
4.30 p.m.
That is precisely what I contend it did not do. The 38s. had nothing to do with the price of 40s. We are dealing with the question of the trend of prices. If the trend of prices is against the farmer, he will get a lower return, and if the trend is in favour of the farmer he will not get a lower return. In the difficulty in which we find ourselves, we cannot be limited by putting prices in an Act of Parliament. We can give greater or less assistance to the industry, and we can trust as far as possible the industry to give a reasonable proportion of the assistance to the producer, but, if the House proceeds to fix prices by Act of Parliament, it will not succeed in its primary object, which is to encourage the growing of sugar-beet.
Surely the right hon. and gallant Gentleman must be aware that it is one of our main contentions that the fact that no guaranteed
Division No. 222.]
| AYES.
| [4.33 p.m.
|
| Adams, D. M. (Poplar, South) | Grundy, Thomas W. | Macdonald, Gordon (Ince) |
| Attlee, Clement Richard | Hall, F. (York, W.R., Normanton) | Maclean, Nell (Glasgow, Govan) |
| Bevan, Aneurin (Ebbw Vale) | Hall, George H. (Merthyr Tydvil) | Milner, Major James |
| Cape, Thomas | Healy, Cahir | Parkinson, John Allen |
| Cocks, Frederick Seymour | Hicks, Ernest George | Price, Gabriel |
| Cove, William G. | Hirst, George Henry | Salter, Dr. Alfred |
| Cripps, Sir Stafford | John, William | Thorne, William James |
| Daggar, George | Jones, J. J. (West Ham, Silvertown) | Tinker, John Joseph |
| Davies, Rhys John (Westhoughton) | Jones, Morgan (Caerphilly) | Williams, David (Swansea East) |
| Duncan, Charles (Derby, Claycross) | Kirkwood, David | Williams, Dr. John H. (Lianelly) |
| Edwards, Charles | Lansbury, Rt. Hon. George | Williams, Thomas (York, Don Valley) |
| George, Megan A. Lloyd (Anglesea) | Lawson, John James | |
| Greenwood, Rt. Hon. Arthur | Leonard, William | TELLERS FOR THE AYES.- |
| Grenfell, David Rees (Glamorgan) | Logan, David Gilbert | Mr. Groves and Mr. Duncan Graham. |
| Griffiths, T. (Monmouth, Pontypool) | Lunn, William |
NOES.
| ||
| Acland-Troyte, Lieut.-Colonel | Amery, Rt. Hon. Leopold C. M. S. | Atkinson, Cyril |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Anstruther-Gray, W. J. | Bailey, Eric Alfred George |
| Agnew, Lieut.-Com. P. G. | Aske, Sir Robert William | Baillie, sir Adrian W. M. |
| Albery, Irving James | Astbury, Lieut. Com. Frederick Wolfe | Baldwin, Rt. Hon. Stanley |
| Allen, William (Stoke-on-Trent) | Atholl, Duchess of | Baldwin-Webb, Colonel J. |
price was available last year caused the Kelham factory to go out of production this year? We want the farmer to know well in advance that a certain price is available, so that the output of sugar-beet will be large enough to maintain all factories in operation.
I do not think that it is possible to contend that it would have that effect. The main fact is that we are now dealing with a situation in which we are trying to found a new industry which is meeting with severe difficulties. Assistance is being given by the House, and it is being passed on to the various partners in the industry by various schemes. One set of factories is assisted by the guarantee of 40s. a ton, and another set of factories by a guarantee of 35s. a ton, plus a profit-sharing scheme. It would be most inadvisable to attempt to stereotype the position at this stage, and it would not secure the object which the hon. Member who moved the original Amendment, and my hon. and gallant Friend who moved the Amendment to the proposed Amendment have in view. I, therefore, ask them not to press their respective Amendments.
I beg to ask leave to withdraw the Amendment to the proposed Amendment.
Amendment to the proposed Amendment, by leave, withdrawn.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 41; Noes, 314.
| Balfour, Capt. Harold (I. of Thanet) | Gledhill, Gilbert | Macquisten, Frederick Alexander |
| Balniel, Lord | Glossop, C. W. H. | Magnay, Thomas |
| Barclay-Harvey, C. M. | Gluckstein, Louis Halle | Maitland, Adam |
| Barton, Capt. Basil Kelsey | Gtyn, Major Ralph G. C. | Makins, Brigadier-General Ernest |
| Beauchamp, Sir Brograve Campbell | Goff, Sir Park | Mallalieu, Edward Lancelot |
| Beaumont, Hon, R.E.B. (Portsm'th, C.) | Goodman, Colonel Albert W. | Manningham-Buller, Lt.-Col. Sir M. |
| Beit, Sir Alfred L. | Gower, Sir Robert | Margesson, Capt. Henry David R. |
| Betterton, Rt. Hon. Sir Henry B. | Graham, Fergus (Cumberland, N.) | Marsden, Commander Arthur |
| Birchall, Major Sir John Dearman | Grattan-Doyle, Sir Nicholas | Martin, Thomas B. |
| Bird, Sir Robert B.(Wolverh'pton W.) | Graves, Marjorie | Mason, David M. (Edinburgh, E.) |
| Boothby, Robert John Graham | Grimston, R. V. | May haw, Lieut.-Colonel John |
| Bossom, A. C. | Gritten, W. G. Howard | Merriman, Sir F. Boyd |
| Boulton, W. W. | Guinness, Thomas L. E. B. | Mills, Sir Frederick (Leyton, E.) |
| Bower, Lieut.-Com. Robert Tatton | Gunston, Captain D. W. | Mills, Major J. D. (New Forest) |
| Bowyer, Capt. Sir George E. W. | Guy, J. C. Morrison | Milne, Charles |
| Boyce, H. Leslie | Hacking, Rt. Hon. Douglas H. | Mitchell, Harold P.(Br'tf'd & Chisw'k) |
| Braithwaite, J. G. (Hillsborough) | Hamilton, Sir George (Ilford) | Mitchell, Sir W. Lane (Streatham) |
| Briant, Frank | Hamilton, Sir R. W.(Orkney & Ztl'nd) | Moreing, Adrian C. |
| Broadbent, Colonel John | Hammersley, Samuel S. | Morris-Jones, Dr. J. H. (Denbigh) |
| Brockiebank, C. E. R. | Hanbury, Cecil | Morrison, William Shepherd |
| Browne, Captain A. C. | Hanley, Dennis A. | Moss, Captain H. J. |
| Buchan, John | Hannon, Patrick Joseph Henry | Muirhead, Major A. J. |
| Buchan-Hepburn, P. G. T. | Harbord, Arthur | Munro, Patrick |
| Burnett, John George | Harris, Sir Percy | Nation, Brigadier-General J. J. H. |
| Cadogan, Hon. Edward | Hartington, Marquess of | Newton, Sir Douglas George C. |
| Caine, G. R. Hall. | Hartland, George A. | Nicholson, Godfrey (Morpeth) |
| Campbell, Edward Taswell (Bromley) | Harvey, George (Lambeth, Kenningt'n) | North, Captain Edward T. |
| Caporn, Arthur Cecll | Harvey, Major S. E. (Devon, Totnes) | Nunn, William |
| Castlereapgh, Viscount | Hailam, Henry (Lindsay, H'ncastle) | O'Neill, Rt. Hon. Sir Hugh |
| Castle Stewart, Earl | Haslam, Sir John (Bolton) | Ormiston, Thomas |
| Cautley, Sir Henry S. | Hellgers, Captain F. F. A. | Ormsby-Gore, Rt. Hon. William G. A. |
| Cayzer, Sir Charles (Chester, City) | Henderson, Sir Vivian L. (Cheimsf'd) | Palmer, Francis Noel |
| Cayzer, Maj. Sir H. R. (Prtsmth., S.) | Hepworth, Joseph | Patrick, Colin M. |
| Cazalet, Thelma (Islington, E.) | Holdsworth, Herbert | Peake, Captain Osbert |
| Cazalet, Capt. V. A. (Chippenham) | Hope, Sydney (Cheater, Stalybridge) | Pearson, William G. |
| Chalmers, John Rutherford | Hore-Belisha, Leslie | Penny, Sir George |
| Chamberlain, Rt. Hn. N. (Edgbaston) | Hornby, Frank | Perkins, Walter R. D. |
| Chapman, Sir Samuel (Edinburgh, S.) | Horobin, Ian M. | Petherick, M. |
| Chorlton, Alan Ernest Leofrie | Horsbnigh, Florence | Peto, Geoffrey K. (W'verh'pt'n, Blistn) |
| Chotzner, Alfred James | Howitt, Dr. Alfred B. | Pickering, Ernest H. |
| Christie, James Archibald | Hudson, Capt. A. U. M. (Hackney, N.) | Pickford, Hon. Mary Ada |
| Clydesdale, Marquess of | Hunter, Dr. Joseph (Dumfries) | Pike, Cecil F. |
| Cochrane, Commander Hon. A. D. | Hunter, Capt. M. J. (Brigg) | Potter, John |
| Colfox, Major William Philip | Hunter-Weston, Lt.-Gen. Sir Aylmer | Powell, Lieut.-Col. Evelyn G. H. |
| Conant, R. J. E. | Hurd, Sir Percy | Pownall, Sir Assheton |
| Cook, Thomas A. | Hutchison, W. D. (Essex, Romt'd) | Procter, Major Henry Adam |
| Courtauld, Major John Sewell | Jackson, Sir Henry (Wandsworth, C.) | Pybus, Percy John |
| Cranborne, viscount | Jackson, J. C. (Heywood & Radcliffe) | Ralkes, Henry V. A. M. |
| Craven-Ellis, William | Jamieson, Douglas | Ramsay, Alexander (W. Bromwich) |
| Crooke, J. Smedley | Janner, Barnett | Ramsay, Capt, A. H. M. (Midlothian) |
| Crookshank, Capt. H. C. (Gainsb'ro) | Jesson, Major Thomas E. | Ramsay, T. B. W. (Western Isles) |
| Crossley, A. C. | Joel, Dudley J. Barnato | Ramsdan, E. |
| Cruddas, Lieut.-Colonel Bernard | Jones, Lewis (Swansea, West) | Ray, Sir William |
| Culverwell, Cyril Tom | Ker, J. Campbell | Rea, Walter Russell |
| Dalkeith, Earl of | Kerr, Hamilton W. | Reed, Arthur C. (Exeter) |
| Davies, Maj. Geo. F. (Somerset, Yeovil) | Kimball, Lawrence | Reid, James S. C. (Stirling) |
| Davison, Sir William Henry | Kirkpatrick, William M. | Rentoul, Sir Gervals S. |
| Denman, Hon. R D. | Knatchbull, Captain Hon. M. H. R. | Renwick, Major Gustav A. |
| Danville, Alfred | Knox, Sir Alfred | Reynolds, Col. Sir James Philip |
| Despencer-Robertson, Major J. A. F. | Latham, Sir Herbert Paul | Rhys, Hon. Charles Arthur U. |
| Dickie, John P. | Law, Sir Alfred | Rosbotham, S. T. |
| Dixon, Rt. Hon. Herbert | Law, Richard K. (Hull, S.W.) | Ross, Ronald D. |
| Drewe, Cedric | Leech, Dr. J. W. | Ross Taylor, Walter (Woodbridge) |
| Duncan, lames A. L. (Kensington, N.) | Lees-Jonas, John | Ruggles-Brise, Colonel E. A. |
| Dunglass, Lord | Leighton, Major B. E. P. | Runge, Norah Cecil |
| Eden, Robert Anthony | Lennox-Boyd, A. T. | Russell, Albert (Kirkcaldy) |
| Edmondson, Major A. J. | Liddall, Walter S. | Russell, Alexander West (Tynemouth) |
| Elliot, Major Rt. Hon. Walter E. | Lindsay, Noel Ker | Russell, Hamer Field (Sheffield, B'tslde) |
| Ellis, Sir R. Geoffrey | Llewellin, Major John J. | Salmon, Major Isidore |
| Elliston, Captain George Sampson | Llewellyn-Jones, Frederick | Salt. Edward W. |
| Elmley, Viscount | Lloyd, Geoffrey | Samuel, Sir Arthur Michael (F'nham) |
| Emmott, Charles E. G. C. | Locker-Lampson, Rt. Hn. G. (Wd. Gr'n) | Samuel, Rt. Hon. Sir H. (Darwan) |
| Emrys-Evans, P. V. | Lockwood, John C. (Hackney, C.) | Sandeman, Sir A, N. Stewart |
| Essenhigh, Reginald Clare | Loder, Captain J. de Vere | Sanderson, Sir Frank Barnard |
| Evans, Capt. Ernest (Welsh Univ.) | Lovat-Fraser, James Alexander | Scone, Lord |
| Everard, W. Lindsay | Lumley, Captain Lawrence R. | Selley, Harry R. |
| Falle, Sir Bertram G. | Lyons, Abraham Montagu | Shaw, Helen B. (Lanark, Bothwelll |
| Fermoy, Lord | Mabane, William | Shaw, Captain William T. (Forfar) |
| Fielden, Edward Brocklehurst | McCorquodale, M. S. | Simmonds, Oliver Edwin |
| Flint, Abraham John | Macdonald, Capt. P. D. (I. of W.) | Skelton, Archibald Noel |
| Foot, Isaac (Cornwall, Bodmin) | McEwen, Captain J. H. F. | Smiles, Lieut.-Col. Sir Walter D. |
| Fraser, Captain Ian | McKie, John Hamilton | Smith, Bracewell (Dulwich) |
| Fuller, Captain A. G. | Maclay, Hon. Joseph Paton | Smith, R. W. (Aberd'n & Kinc'dlne, C.) |
| Ganzoni, Sir John | McLean, Major Alan | Smith-Carington, Neville W. |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | McLean, Dr. W. H. (Tradeston) | Somervell, Donald Bradley |
| Soper, Richard | Thomson, Sir Frederick Charles | Williams, Charles (Devon, Torquay) |
| Southby, Commander Archibald R. J. | Titchfield, Major the Marquess of | Williams. Herbert G. (Croydon, S.) |
| Spears, Brigadier-General Edward L. | Todd, Capt. A. J. K. (B'wick-on-T.) | Wills, Wilfrid D. |
| Spencer, Captain Richard A. | Todd, A. L. S. (Kingswinford) | Wilson, Clyde T. (West Toxteth) |
| Spender-Clay, Rt. Hon. Herbert H. | Touche, Gordon Cosmo | Windsor-Clive, Lieut.-Colonel George |
| Stanley, Hon. O. F. G. (Westmorland) | Tryon, Rt. Hon. George Clement | Winter-ton, Rt. Hon. Earl |
| Stones, James | Turton, Robert Hugh | Womersley, Walter James |
| Stourton, Hon. John J. | Vaughan-Morgan, Sir Kenyon | Wood, Rt. Hon. Sir H. Kingsley |
| Strauss, Edward A. | Wallace, John (Dunfermline) | Wood, sir Murdoch McKenzie (Banff) |
| Strickland, Captain W. F. | Ward, Lt.-Col. Sir A. L. (Hull) | Worthington, Dr. John V. |
| Stuart, Lord C. Crichton- | Ward, Irene Mary Bewick (Wallsend) | Young, Rt. Hon. Sir Hilton(S'v'noaks) |
| Sueter, Rear-Admiral Murray F. | Warrender, Sir Victor A. G. | Young, Ernest J. (Middlesbrough, E.) |
| Tate, Mavis Constance | Wedderburn, Henry James Serymgeour- | |
| Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.) | Weymouth, Viscount | TELLERS FOR THE NOES.— |
| Templeton, William P. | White, Henry Graham | Lord Erskine and Mr. Harcourt |
| Thomas, Major L. B. (King's Norton) | Whiteside, Borras Noel H. | Johnston |
Clause 5—(Additional And Substituted Customs Duties On Articles Made Wholly Or Partly Of Silk Or Artificial Silk)
Amendment made: In page 5, line 14, leave out the word "are," and insert instead thereof the word "were."—[ Major Elliot.]
Clause 7—(Power To Remove Goods From Schedule 1 Of 22 Geo 5 C 8)
I beg to move to leave out the Clause.
Clause 7 gives the Import Duties Advisory Committee power to recommend the taking from the Free List of any article which they may think desirable, and the Treasury may accept the recommendation if they so desire. We on the Labour benches look upon this proposal as a very serious departure from the ordinary Parliamentary procedure. It places great powers into the hands of a certain body of men who ought not to possess such powers. I can foresee that the Committee will be able to remove from the Free List those two important articles of food, meat and wheat. That may be necessary sometime. It may be that those articles will have to be taxed, but if and when that is done it ought to be done in the full light of discussion in the House of Commons. We ought not to take a great departure of that kind lightly or allow it to be covered up by any obscure methods. The Government may say that they would not be obscure, that these gentlemen will examine everything carefully, that they will be unbiased, and that they will lay their report before the Government and make recommendations with regard to the Free List. I do not doubt that, but I have been sent here to speak on behalf of a big constituency and when any matter of importance comes forward, although I am in a minority, I am expected to voice my opinion. If we pass Clause 7 I shall not be given that opportunity. One of the greatest rights of democracy will therefore be removed. Surely, every Member of Parliament must view with grave concern anything of that sort happening. If I am right in my contention and meat and wheat were excluded from the Free List, it would mean that many pledges given by hon. Members opposite would be broken. I do not think that any of them gave pledges that these articles of food would be taxed, or that they would agree to them being taxed. If, however, they think that the time has come for that to be done, then let us face the situation on the Floor of the House of Commons. That is the proper course to adopt. We want the matter to be thoroughly discussed before any such right is given. Reforms often spring from what the mass of the people consider are grave injustices that are being put upon their shoulders, and it may be that the National Government in asserting their power at a time like this may be doing something more drastic than the House of Commons or the people would desire. I therefore ask the Government to give the most careful consideration to this question before we agree to Clause 7.I beg to Second the Amendment.
We had a long discussion on this subject in Committee and we have not altered or modified our views as a result of that discussion. The whole ground was covered and we made our position so clear that it is not necessary to repeat our argument, but I want to press upon the House one important point. I understand that we are to disperse about the 18th July. That is only about six weeks distant. This Bill will in due course become an Act of Parliament and this delicate subject of taking articles out of the Free List will be handed over to the tender mercies of a committee of three. When we disperse a large percentage of Members of the Government will disperse far from this country. They will be in Canada, in Lausanne and almost in the four quarters of the globe, but the Treasury will still be in this country. I do not want to be pessimistic. I have considerable confidence in the committee of three, and I should think that three wise men when they survey the economic problem will think twice before they tax the food of the people and before they agree to take out of the Free List such important articles as meat and wheat. But we never know. Committees, do funny things.
These gentleman will have pressure brought to bear upon them by interests with great power. Unfortunately, the consumer in these discussions is very rarely represented or able to state his case, and I can foresee the possibility, it may be remote, of a recommendation coming to the Treasury from the Committee of three to take wheat and meat out of the Free List. We do not know when the House is going to meet again. It may not meet for many months. It may not "meet again this year. There is no compulsion that the House should meet again in 1932. Representatives of the Government may be so preoccupied that they may not think it necessary to call us together again this year. The Treasury meanwhile will be in full charge of the Government of the country with Ministers absent, the House in recess, and they might make one of these orders, subject to notice of 28 Parliamentary days. We may have this position, that for six months this Order, on the advice of this Committee, to remove from the Free List essential articles of diet, may be in operation without Parliament being able to say, "aye" or "nay," or to modify or reject the Older. We are entitled to demand an assurance that an Order will not be issued by the Treasury removing from the Free List such essential articles of food as meat and wheat while the House is in recess. These are not ordinary articles to be subjected to taxation. We had solemn pledges given not merely by Private Members of the House inexperienced perhaps and not realising the solemnity of their pledges, but pledges were given by important Members of the Government. The President of the Board of Trade admitted that, although he gave no pledges about tariffs, he did solemnly pledge himself in the ancient town of St. Ives not to agree to tax wheat and meat. I am the last one to question the reliability of the President of the Board of Trade. I have complete confidence in his integrity and character, but I would remind the House that this thing can be done by Order in Council. The President of the Board of Trade may be in Ottawa at the time and the Financial Secretary to the Treasury might be here giving effect to the recommendations of the committee of three set up by this House. He might say: "I am not responsible. This is not the result of my researches but the result of a recommendation by an independent tribunal set up by this House to decide a question of policy of this kind." I must object to the attitude of the right hon. and gallant Gentleman and the Parliamentary Secretary to the Board of Trade. If they do not want to listen, perhaps they will go out. They have been talking ever since I have been speaking.I have listened to every sentence of the speech of the hon. Baronet, and I can prove it to him. I was merely discussing with the Parliamentary Secretary to the Board of Trade the delightful prospect that the hon. Baronet was holding out for me of getting the President of the Board of Trade out to Canada and then proceeding to govern this country entirely on my own by Orders-in-Council.
I always have great admiration for the right hon. and gallant Member, and that admiration is immensely increased by the knowledge that he is able to listen with one ear and at the same time talk to his hon. Friend. I have always admired his genius. So long as he heard me and he can give me the assurance that I require, I shall be perfectly satisfied. On these two vital matters the House ought to realise that they are giving great power to the Committee of three, and we are entitled to know that the Financial Secretary will not spend his time at the end of a wire talking to his right hon. Friend in Ottawa. We ought to have an assurance that, considering the history of the last election and how vital these two essential articles of diet are, that in the Recess he will not enforce taxes on these articles by Order-in-Council. When the House is in Session it is another story. Parliament is supreme and Parliament is responsible. It may impose a tax on meat and wheat even at five o'clock in the morning, and we could not object to it on constitutional grounds. We ought, however, to have a guarantee that if we pass this Clause, the opportunity will not be taken to steal a march on Parliament and to impose these new taxes in the Recess, without adequate Parliamentary control.
The hon. Baronet has tried to make our flesh creep by describing all that might happen. It is unfortunate that he has not read with greater care the Import Duties Act and this Clause. We are not handing this matter over to the tender mercies of a Committee of three. They are only empowered to recommend. Recommend to whom? To the Treasury, which means the Chancellor of the Exchequer. The Treasury must consult with the appropriate Department. If he will refer to the Import Duties Act he will find that the appropriate Department in the case of certain foodstuffs is the Ministry of Agriculture and Fisheries so far as Eng land and Wales is concerned, and the Secretary of State for Scotland so far as Scotland is concerned. Therefore, three Cabinet Ministers are involved before an Order can be made. Having regard to these circumstances and having regard to the hon. Member's contemplation that some of these gentlemen will not be in the same part of the world at a precise time, the risk is not very serious. Let us assume that they put through a big Order of the kind that he contemplates. If the results were disastrous and a serious prejudice to the interest of the consumers, the position of those Ministers would be very grave when they had to meet Parliament, because they would meet Parliament with a certainty that the Order would be rejected, and not only would their position be imperilled, but the position of the Government of which they are Members might be imperilled. 'Therefore, the hon. Member is describing fears which have no justification. I regret that the hon. Baronet and the hon. Member for Leigh (Mr. Tinker) based their speeches solely on the assumption that the only articles that we are concerned with are wheat and meat. The Free List is a very much larger schedule of articles than wheat and meat.
I instanced those as being the most important from my point of view.
5.0 p.m.
This Amendment does not exist solely because of those. So far as the Government's immediate purpose is concerned I very much doubt if in their minds this Clause is related to either of those two commodities. It may very well be the case that if it is decided, as it conceivably might be decided, to take some steps in connection with meat and wheat, that those steps might be of a kind calling in due course for a Finance Bill. Those who were present when the Import Duties Bill was in its Report stage will remember that there were certain free list problems raised, but it was found to be out of Order to make the necessary Amendment then, and the Chancellor of the Exchequer gave an undertaking that it would appear in the Finance Bill. The hon. Member for Leigh says that this is a serious departure from ordinary Parliamentary procedure. It is an unusual departure but it does not re present a new departure. The Safeguarding of Industries Act of 1921 provided that duties could be imposed upon goods by administrative act, although they subsequently required confirmation by an affirmative Resolution of the House. Therefore, this is no new thing, although I realise that it is a bigger departure in detail though not in principle. The hon. Member also says that these things should not be covered up. Before any Order is made the committee have to make a recommendation and they sup port it with a report. In due course it comes before this House and we have a straight vote upon it. Nothing is covered up. There will be an effective Debate and the whole world will know the reasons for and against the proposal. He also says that we are taking away the rights of democracy. We are not taking away from this House the ultimate decision. This House will still remain the ultimate taxing authority of this country. It is unfortunate that the hon. Member should base his case on grounds which are so unsatisfactory.
Let me put forward the argument which I used at an earlier stage that if it is the position that you cannot take things out of the Free List it means that you are going to be reluctant to put things into it. At this moment the Advisory Committee is inquiring into six applications for transfer of goods now subject to the general ad valorem duty to the Free List. It may be desirable that some of these commodities should be temporarily in the Free List, but if it is to be difficult to take them out the committee will hesitate to put them in, and a temporary prejudice may be created merely because hon. Members are not prepared to give a sensible power to the committee, first to examine and, secondly, to recommend to the Government. The Government then acts upon the recommendation of the committee and finally Parliament confirms the Order. I hope the Amendment will be rejected.It is unnecessary and wearisome on Report stage to repeat the arguments which have been used during the earlier stages of a Bill, but I think that the hon. Member for South-West-Bethnal Green (Sir P. Harris) has addressed a question to the Financial Secretary to which he is entitled to a reply. The question is whether or not an assurance will be given by the Government that during the Recess in the autumn no attempt will be made to issue Orders-in-Council dealing with many of the foodstuffs contained in the Free List. It is most unfortunate that we have never had a chance of discussing the desirability or otherwise of taxing foodstuffs, meat and wheat. All our time has been spent in discussing machinery. The hon. Member for South Croydon (Mr. H. Williams) who is an authority on tariffs, could no doubt hold a most interesting and informative argument as to why wheat and meat should be taxed. We have never heard it. No single Member of the House has enlightened us as to the arguments for the taxation of wheat and meat.
Surely it would be out of order to enter into any such argument, yet the hon. Member charges us with not doing something which would be out of order. The opportunity will come when Parliament is asked to con firm an Order.
The Lord hath delivered the hon. Member into my hands. That is the case we are making. We say that the Government are obtaining the taxation of wheat and meat by a subterfuge, and that it is a cowardly way and a mean way of achieving this result when they have not the courage to argue the case before the House, Indeed, it is characteristic of Conservative politics for the last 12 years that they have tried to keep the taxation of foodstuffs out of elections entirely because the one experience they had was most unfortunate for the Protectionists. Now they say that we are not discussing the taxation of wheat and meat but a matter of machinery. To such an extent have Conservative Members and Members of the Government undermined the confidence and faith of the people in Parliamentary democracy that we cannot arouse even a tremor of indignation when we suggest that this is a violation of constitutional precedent. We on this side have ourselves taken part in undermining the reputation of the British House of Commons in this matter, but we are not and cannot be the ultimate custodians of Parliamentary democracy. The Conservative party must be its custodians. Now they are setting it aside in order that they may accomplish the taxation of foodstuffs, which would be electorally fatal for them if they asked for a mandate from the people.
The hon. Member for South Croydon says that the ultimate power rests in the hands of Parliament and that we shall have an opportunity of discussing it when Parliament assembles. The charge we make is that the House of Commons may be faced with an accomplished fact. The channels of trade may be diverted, re actions may have taken place in other countries, they may change their fiscal policy in accordance with the Orders in Council which are made, important and fundamental changes, not only an the temper of other countries towards us but in their fiscal policy may be made before the House of Commons has had an opportunity of considering the matter. That is the charge we make, and it is no use for the hon. Member to say that Parliament has the ultimate power. Par- liament, of course, has the ultimate power over everything, but we are objecting to the proposal to assemble a set of circumstances which will ultimately deter mine the limits within which Parliament will be able to move. There are more articles on the Free List the taxation of which will have most important reactions upon some of our industries. Take the taxation of wheat. A large proportion of our wheat and meat comes from the Argentine. Have the Government considered the repercussions on the export of British coal of the taxation of wheat and meat? Have they considered what markets for our export coal will be provided if the South American markets are taken away by the taxation of wheat and meat? If the argument holds good from the Government side that these taxes are levers and negotiating instruments then the Argentine ex porter of wheat and meat will adopt the same attitude, and in order to have this instrument and lever with which to negotiate they may set up import barriers against our exports to them. Is the coal trade to be made the Cinderella again of this fight? Is it to be sacrificed in order that you may get a reduction of taxation in the Argentine? We have already seen the most disastrous reactions in Europe. The British export coal trade has suffered grievously at the hands of this fiscal war. Is it to be hit still further? The situation is becoming quite desperate and if things go on South Wales and Durham will be practically ruined. This is not merely a matter of machinery, it affects the well being and livelihood of millions of our citizens, and we are entitled to ask the Government what their policy is. This Clause also includes pit props. Is it intended to put restrictions upon the importation of Russian timber? The pro vision of cheap raw material for the coal trade is vital to its efficiency. Is it in tended, for the sake of providing Canada with a market which she cannot supply, to put an embargo against Russian timber which has been a boon to our export coal trade? The export of timber from Russia has been of great advantage to the coal exporting districts. Is it in tended to use this as a means of making fiscal war against the Soviet Union. The Conservative party in the pursuit of their rabid Imperialism and extreme anti- Bolshevik bias may wish to inflict injury on Soviet Russia, but they cannot do it without also inflicting great injury on our own trade. We are entitled to ask the intentions of the Government. The Government say that they have no intentions; that they are perfectly innocent. It is exactly the same thing as saying that they are empty-minded. All they propose to do is to say to these three wise men, "We are leaving this entirely in your hands and whatever you recommend we will adopt." That is what the Government are saying. If the Government do not adopt the recommendations of this Committee they will deal a great blow at its prestige. The Government find them selves in a cleft stick. "They must either accept the recommendations of the Committee or they must say that they are unwise and injudicious, in which case they will deal a great blow at the Committee. I suggest that the Government are not entitled to pledge the House of Commons beforehand on these fundamental matters. There is one more thing I would like to urge. Everyone expects that by the autumn very important decisions will be reached at Ottawa, decisions of far-reaching effect upon the structure of the commercial life of this country and our relationships with the rest of the world. Our market for meat and wheat and for pit props will have a very important place in the new plan. This House ought to have a chance of reviewing that plan in all its aspects. Its decision ought not to be prejudiced in the slightest way; we ought to be able to consider the decisions at Ottawa in the light of the reactions upon our commercial life in every respect.The hon. Member is getting into next week.
One of the difficulties of the situation is that this House at pre sent is discussing a Clause which gives to the Treasury the right of recommending to the Advisory Committee—[HON. MEMBERS: "No."] The Clause is taking out of the Free List certain articles which might be made the subject of recommendations by the tariff Advisory Committee. Those articles are wheat and meat, amongst others. Orders might be made in the course of the summer months, and they might be in operation in the course of the summer months. That might gravely prejudice this House's opportunity of discussing what may be said at Ottawa. That is my proposition. It is one of the difficulties of the situation that we are unable to discuss any of these things in a realistic way, because we are merely discussing this machinery. I ask for a pledge from the Government benches now that in the course of the summer months no steps will be taken to apply import restrictions of any sort whatever upon these important articles, and that we shall have a chance of considering them in the light of whatever may happen at Ottawa.
That is a reasonable proposition. It seems to me that it should be an integral part of Government policy that these matters, which are matters of high policy, should be perfectly free to be discussed when we have the report of the Ottawa Conference. That is an important matter which I urge with every respect, and as to which we have not yet had a reply. How can you come to this House in the autumn and face the House with a plan half of which has already been accomplished? How can the House in the autumn be expected to take a reason able and realistic view of the whole of our commercial life when we shall have been pledged beforehand to many of the things which ought to have been an integral part of that policy? It is all very well for hon. Members opposite to say, "Ah, but this is the best of all Governments in the best of all possible worlds." But when the autumn comes and we find that grave decisions have been made and that power has been taken out of this House's hands to alter those decisions in any way, that will raise many protests that this Government, which has not yet distinguished itself by any far-sighted statesmanship, and in order that a piece of family history may be rounded off, has imposed tariffs on foodstuffs and has gravely prejudiced the welfare of the people of this country. It should be obvious that the consequence of having tampered in this stupid and awkward way with our fiscal machinery has already had such disastrous result in un employment and increased misery, that the Government ought to call a halt be fore taking further steps on the road to ruin.
I hope that the Government will not accede to the request of the hon. Member who has just spoken by giving any pledge of the kind that, he has requested. I would make one or two remarks about his speech. Several times in this Parliament the ton. Member has referred to undermining constitutional precedent, and I get a little bit impatient with him about it. I really think that unless we are prepared to undermine constitutional precedent in this country to some extent we shall never get any further at all. We have to alter the method of legislation in this country, and I am all for a bit of undermining constitutional precedent. So is the hon. Member. It is sheer hypocrisy for him to come here and score debating points against the Government by taunting them in this way.
I have not the slightest objection to scrapping the whole of constitutional machinery in the service of some far-sighted and well-thought-out plan, but no such plan is before us now.
The hon. Member reproached the Government. The whole tone of his voice was one of injured innocence. In effect he said, "How can you touch our blessed constitution?" If his argument did not mean that it meant nothing at all. For my part, as I have said, I am rather in favour of a little bit of judicious constitutional undermining. I am also in favour of Government by Order. I think it is not at all a bad plan, in times of emergency such as the present, and one of the best precedents that the present Government has set. I am strongly in favour of facing this House with accomplished facts in this matter. My only regret is that they have not faced us with a few more accomplished facts during the past few months. Again, what hypocrisy for the hon. Member to say, "How can you hold up a democratic Assembly and face it with accomplished facts? The Government ought to do nothing until, point by point and line by line, they have received sanction from this House." Parliament would never have got very far in the last 30 or 40 years if we proceeded by legislation on those lines.
Another point made by the hon. Member was about the taxation of meat and wheat. Quite frankly I say that I am strongly in favour of the taxation of both meat and wheat, and I regret the fact that there should have been substituted for a plain and straightforward import duty on wheat the very complicated quota system, which I think will prove rather more difficult to work out than is anticipated in some quarters. But that is a digression. With regard to this Free List, it is quite untrue to suggest that if we do put some of the articles which are at present upon the Free List into the zone of import duties, that will hamper and restrict us in any way in negotiating favourable trade agreements with foreign countries. I am convinced that the reverse will be the case, particularly in relation to the coal mining industry. After all, the one asset that we have left in this country, the one asset which retains its full value—it is one of the mo3t valuable assets possessed by any country in the world—is the home market. The point at which that market is most important is where raw materials and food stuffs are concerned. There you have the competition of the whole world to supply what still remains the most valuable single market in the world for the consumption of these raw materials. Particular reference has been made to the question of pit props coming from Russia. One speaker said that we must have these pit props as cheaply as possible to enable our mining industry to compete successfully with its rivals on the Continent. But has my hon. Friend considered the trade figures with Russia during the last six months, the last year or the last five years? Does he think that those trade figures can be justified from any economic point of view whatever? They are grossly unfavourable to this country. The Russian Government have built up a trade surplus of something like £20,000,000 per annum against this country over the last 10 years. I am one of those who believe in an expansion of Anglo-Russian trade. I have advocated it for years in this House. But I think it ought to be framed upon more or less approximately equal and fair terms. Pit props, I hope, will be taken out of the Free List. Here let me raise a subject which I have raised before in this House. Some of my constituents are trying their hardest to persuade the Soviet Govern- ment to save the herring fishing industry in Scotland by the purchase of herrings, and the Soviet Government are holding up the industry because they will not pay any price that the curers in this country can look at. The reason is that the Russians can get a worse and grosser and cheaper article from Norway. I want every possible weapon to be put into the hands of the Government in order to oblige the Soviet Government, in return for concessions in our home market, to purchase more machinery, more herrings and anything else you like, in this country. Only by such methods will you get a healthy and satisfactory Anglo-Russian trade.Would it not have been much more desirable for this country to have pledged its credit and to have raised its export trade with Russia, than to have lost so much in Germany?
I am not arguing that our policy has been very wise. I was glad to see that we had extended our export credits to Russia, but I do not see why we should deprive ourselves of the supreme weapon by which alone we can find our way back into the foreign markets of the world. We have a tariff. The point is that we should leave no chinks in the armour that we have put on, and which we have been compelled to put on by events in the world. Above all, we should use the tariff weapon to the best possible advantage for this country. That is what I think this Clause will achieve. With regard to the machinery of government which, I agree, is also raised, the hon. Member said it was of no importance. I hold that the question of the machinery of government in this country is of supreme importance. I believe that the proper procedure more and more in these rather intricate matters, where swift administrative action becomes necessary from time to time, is for this House to approve a principle, to approve a policy in general, for this House to accord to the Government of the day power to act, and when the Government has acted it is for the House to give its approval or sanction to the Government. It is because this Clause carries out that legislative machinery that I heartily support it.
5.30 p.m.
The hon. Member for East Aberdeen (Mr. Boothby) has de- livered a damning indictment of this Clause and of the principle which it contains. A little examination of his own argument will convince him of that fact. He emphasised, first, that this House should decide on principles and, secondly, that the Government should carry out those principles. This Clause fulfils neither purpose. This House has not a word to say on the principle of the taxation of foodstuffs nor has the Government. I sympathise with the hon. Member in his desire for rapidity of action. I hope that we shall be able to take advantage of these opportunities for rapidity of action, when the time comes and I agree that the constitutional party, which is sitting opposite, cannot very well blind them selves to the fact that the action which they are taking here is not entirely in accordance with their history. For us to do these things is different. No one can blame us because we have always recommended that these things should be done.
But have never done them.
Perhaps we have suffered from the same blindness to which reference has been made, but now, fortunately, we are no longer suffering in that respect and it may be that the time will come, and at no very distant date, when these precedents will be cited with some force from the other side of the House. Leaving aside the constitutional point and returning to the Clause, I submit that the strong argument against the Clause is that it relieves the Government and this House of the responsibility of decision. It deals with a matter as to which nobody can say that there was a definite decision by the country. People may argue as to what was said here and what was said there, but, as to a clear decision upon this question, nobody can deny the fact that there was no such decision.
Surely it is the duty of this House if a decision is to be come to on these matters to make that decision. By what right does this House try to shelter itself behind Sir George May and two of his colleagues? The hon. Member for South-West Bethnal Green (Sir P. Harris) said that they would "think twice" upon this question. I do not know which of them he thought would not think at all, because there are three of them. What is their thought in the way of a decision for the country? The hon. Member for South Croydon (Mr. H. G. Williams) says that they only recommend. I thought we had got rid of that fallacy. What is the object of setting up this commission? In order, we are told, to remove tariffs out side the area of politics. They are a judicial tribunal to decide these great issues without bringing them into the political arena. Does the hon. Member for South Croydon suggest that that is the object of setting up the Tariff Com mission, and that it is the policy of the Government to override their decision? The whole object of the Government is to have a decision made for them by somebody else. That is their avowed policy, and to say that this tariff commission only recommend is to rely upon words which have no meaning. It is perfectly clear what is the policy which lay behind the Import Duties Act and which lies behind this Clause. It is that these matters should be taken away from determination by the Government and the responsibility removed to the shoulders of this semi-judicial body. We object to the Government evading its responsibility in that way. If they think that the taxation of wheat and meat is right, let them do it, but let them take the responsibility and give the House an opportunity of criticising their action before it is done and not within 28 Parliamentary days after it has been done. I put to the Financial Secretary a specific question which has been asked already but has not yet been answered. Who is to decide the policy of this country as regards the taxation of food stuffs under Clause 7? Is it to be the Government or the tariff commission? I am. sure he will reply to me that if I read the Bill I would know that there was to be a recommendation by the tariff com mission upon which the Treasury would act after consultation with the appropriate Minister. But I want to know whether that appropriate Minister will consider that it is for him to decide upon that recommendation. Supposing the tariff commission do not make any recommendation on wheat and meat, but that the appropriate Minister thinks that there ought to be a tariff before the Ottawa Conference, is the Minister going to decide to refer it to the commission and ask them to put on the tariff? If not, it seems to me that the system of leaving it to the commission is going to take away from the Government completely the power of decision on the question of policy. If the tariff commission dig in their heels and say, "We do not propose to tax wheat and meat; we will take no instructions from the Government; we are a judicial body," then what are the Government going to do as regards Ottawa? It seems to me they would have to go to Ottawa and say, "We are very sorry; we have decided to turn this question over to a high judicial body of which Sir George May is the chairman. No one can doubt their sense and their integrity and they tell us that we must not tax wheat and meat. We should like to enter into an arangement with you but Sir George May is standing on our tail and we cannot advance an inch." Will that be the position? Will "the heavenly twins" on the Front Bench opposite tell us whether that is to be the position or whether the Government are going to say to Sir George May, "We are very sorry but we must have this tax on wheat and meat or we cannot negotiate at Ottawa"? As I say, I sympathise with the hon. Member for East Aberdeen but surely it is the Government which ought to tax wheat and meat and not the tariff commission. If the hon. Member were in command, if he had got rid of democracy and was making Orders every day, I am sure that he would not wait for Sir George May. Certainly not. But what I have pointed out shows the vice of this Clause, and that is why I say that the hon. Member's argument was a most complete indictment of the principle contained in the Clause.The speeches from the Front Opposition bench and from the minor Opposition on the other side remind me of an elderly couple who do not get on very well together and who are trying to make up their minds whether they want a motor car or not, and, who, if they ever do make up their minds on that point, can never decide whether they ought to use it or not. The hon. and learned Member for East Bristol (Sir S. Cripps) has told us how much he dislikes the fact that the Government, after consulting the House of Commons, desire the power to make rapid decisions. It is obviously necessary for two reasons that the Government should have power to make rapid decisions.
But they have not that power under the Clause. The whole point of the Clause is that the Government cannot come to a decision but have to wait for the recommendation of the Advisory Committee.
The point which I am trying to make is that under the Import Duties Act there was a Free List which could not be altered and this Clause provides the machinery to alter that Free List. That enables the Government to make decisions which may be come necessary for instance—I use this purely as an illustration—in the case of the Ottawa Conference or anything of that kind. We have heard again to-day the old statement which has been reiterated in this Parliament that this Clause relieves the House of Commons of the responsibility for decision, and also that there was no decision on this matter at the General Election. I thought that the result of that Election had been decisive enough to make most people sitting above the Gangway anxious to avoid any reference to it but what was the decision at the Election? It was to give the Government machinery to carry out its full policy and that is why it is better that the Government should have power to act on this matter. When they have acted they can come back and talk about it if necessary. We have full powers of discussion and full powers to talk about it and a lot of people in this House are too fond of talking. [HON. MEMBERS: "Oh!"] On this particular occasion some people appear as more or less reformed characters. I do not wish to see this Parliament merely giving powers for discussion. I do wish to see this Parliament giving Ministers full powers to carry out any orders which may be found desirable in these respects.
Following on the speech of the hon. Member for Torquay (Mr. C. Williams) and his statement about the General Election it ought to be stated emphatically that there is no Conservative Member who fought at the last Election who can prove that he told the electorate that he was in favour of the taxation of food.
On a point of Order. May I say that I did so and I can prove it to the hon. Member any time he likes.
The hon. Member must not interrupt on a point of Order to make a statement of that kind. It is not a point of Order.
The challenge has been made more than once in these Debates. The Prime Minister himself in many speeches during the Election denied that the National Government would have as part of their policy the taxation of food. I have been surprised at the right hon. Gentleman's absence from these Debates When we were discussing the Import Duties Act he denied that the policy of the Government was the taxation of food. He referred to the articles in the list as luxuries and denied that they were foods of the people. The Free List which we are discussing now includes wheat and meat. I do not deny that the Government stated emphatically that they were going to alter the tariff system and introduce a scientific tariff. Our protest is that the Government are not bold enough to bring in a definite Resolution to remove these things from the Free List and to test the feeling of this House and to take the votes on this important matter of hon. Members who, at some time, will have to face the electorate and give an account of their stewardship.
I should like to ask hon. Members who have spoken against this Amendment what would be the position if a free vote of the House were taken on whether wheat and meat should carry an import duty or not? How would hon. Members act in the Division Lobbies and how would they give an account of their stewardship to the electors? There are dozens in this House who dare not face the electorate now and advocate the taxation of wheat and meat. We have only had one real opportunity since the General Election of testing the feeling in an industrial centre and we beat this Government hollow and returned a. right hon. Gentleman to this side. Hon. Members of this House took a deep interest in deciding the articles that were to be placed on the Free List and there may be certain matters connected with the change in our fiscal policy which require examination by experts. But there are no experts in this land who understand more what a tariff on bread means than we who represent the ordinary working-men and women, whose wages are low, whose conditions are terrible, and who are having great difficulty in keeping body and soul together. We should like to meet the Government on this issue face to face, if they would be bold enough to bring the matter before this House and test it. We should like to know where the Government stand on this issue. But instead of that they say, "No, we will hand this question over to three men who have no responsibility to the electors and who have never been appointed by the electors of this country." The hon. Member who spoke from below the Gangway may be prepared to alter the traditions of our Government policy and hand over to people not democratically elected the right to deal with matters of high policy of this kind, but there are many of us who are not prepared, without a protest, to allow such matters to be decided by anybody except those who face the electors and are sent here to voice their opinions. I remember that when the Free List was being debated, by a tremendous vote of this House these articles were put on the Free List, less than six months ago. If anything has happened that has induced the Government to feel that these articles ought to be taken out of the Free List, why not manfully face the House and say so, rather than go by a back-door way and refer the question to three commissioners? We are told that the Government are not going to advise these gentlemen at all, but to leave the matter entirely to them, and the possibilities are that when, at the commencement of July, we go back to the people who have sent us here, with no duties for weeks and weeks, we may return when the House resumes and find that in our absence the judgment of those three men may have enforced taxation on wheat and meat. We have said from these benches that if we were to concede that the Government were entitled to examine industry from the point of view of tariffs, there has never been a. ease made out in this House, nor any attempt made by any Minister, to put a tax on wheat and meat. As a matter of fact, important Ministers during the early Debates on the Import Duties Bill stood there and sacredly declared, "I will not stand for the taxation of wheat and meat." Where are they now? They ought to have been here defending the right of this House to control this issue. If they are sincere and worthy of the offices which they hold in the Cabinet, they ought to be in favour of this Amendment to prevent anyone from removing these articles from the Free List except the Members of this House alone. We know that we may be defeated in the Division Lobby, but there will come a day when members of the Conservative party will regret that they are handing over the rights of this House to unappointed representatives outside. You are teaching us a lesson, and we shall probably copy it. There may be a time, there will be a time, when the Conservative party, who are ruling this Government which is termed the National Government, will lose power, and we on these benches will have power, and we shall copy them. [Interruption.] Do not complain if we do so, in quite a different direction, not in the taxation of the food of the poorest people in the land; but never complain if you find that there is a party taking charge of the nation's affairs and handing over constitutional rights willy-nilly, on purpose to save their own faces. In conclusion, I want to make my emphatic protest against articles of food, such as wheat and meat, being handed over to commissioners or anyone else outside this House. We think that these things are too sacred to hand over to anyone but the representatives who are responsible to the electors.There are probably few Members of this House who have availed themselves of the many opportunities of hearing the hon. Member for Torquay (Mr. C. Williams), who would not sympathise with his complaint against those Members who talk too often in this House, but his remarks on this Clause indicated clearly that he had not read it. His great argument in favour of the Clause was that he wanted the Government to have power to act immediately, but under this. Clause the Government have not got that power. The Government can only act upon the recom- mendation of the Advisory Committee, and I think we are entitled to ask the Government to reply to the question put by the late Solicitor-General. Suppose that the Advisory Committee do not make any recommendation in regard to any of these matters that may be submitted to them, are the Government prepared to face the responsibility of coming to a decision of their own, announcing it to the House, and asking the House to assent to such decision? It is a very important matter, and I should like to know what is the policy of the Government in the event of the Advisory Committee not taking the responsibility of making recommendations.
This Clause raises issues which are even more grave than the question of the taxation of wheat and meat. It is a Clause which raises a constitutional issue of the most vital importance. It is only a few months ago that this House was asked by the Government to pronounce its opinion upon what was called the Free List, and the House came to a decision with as much liberty as any House can have where Government Whips are concerned, but by that decision the House definitely pledged itself that there were certain things which ought to be put on the Free List, which meant that there were certain things which ought to be exempted from the particular duties with which we are now concerned. Yet within a few months the House is asked, not to reverse that decision, not to say, "We were wrong when we decided that certain things should be put on the Free List," but to say, "It will be for some committee to recommend as to whether we were right or wrong at the time." I want to register my emphatic protest against that sort of action. The hon. Member for East Aberdeen (Mr. Boothby), who, like many others, seems to be fond of using this bench when he wishes to intervene in the Debate—Has the hon. Member any prescriptive right to the bench, and does he object to my using it?
Not at all. I am only too delighted to see the hon. Member, and I hope he will use the seat a little more often and recognise the responsibility attaching to it. But the hon. Member said that he had no objection to undermining the constitution now and again. I have an objection to undermining the constitution in this respect, because the control of this House over taxation is probably, above anything else, the thing that has enabled the House of Commons to stand and defend the liberties of the common people of this country, and I think that this Clause, by handing over to a committee the power of putting on or taking off the Free List certain important articles, is a complete departure from the whole constitutional history and theory of this Parliament and this country. Not being a Conservative, but merely 8, Liberal, I believe in the constitution and am not prepared to undermine it without grave consideration of what I am undermining, and after listening to the speeches delivered in the House on this Amendment, I think it is about time that somebody made a protest against this procedure. It is contrary to constitutional practice to hand over to any committee, however distinguished its members may be—and I am not making any suggestion against either the character or the ability of its members—the powers delegated to them under this Clause.
I desire to intervene in the Debate as a result of the speech of the hon. Member for Hemsworth (Mr. Price), who raised the rather hackneyed issue of the right of those of us who represent industrial areas to support the Government in any action which may involve the taxation of foodstuffs. The hon. Member represents a division not very far away from mine, and it seemed to me that his speech contained two main fallacies. The first is, that he apparently still believes that his party represent in this country those whom he describes as the poorest of the poor. It never was true. They never have secured a majority of votes in this country, and at the last election the poorest of the poor showed exactly what they thought of them and of their record. The second fallacy is this, that the hon. Member's speech contained the thesis at least that he is a Member of a party which is opposed to the taxation of food. I know that the hon. Member, like myself, entered Parliament for the first time at the recent election, but I am quite certain that he has kept himself well informed in the past as to the activities of his party in this House, and he must know full well that they have succeeded in passing three Budgets containing food taxes of an oppressive character on the people of this country and that while they may have talked of a free breakfast table, they have never achieved it.
Let us once and for all tackle hon. Members opposite on the question of this mandate, this suggestion that the working classes in particular were bamboozled over the question of the taxation of food, that they did not realise that it was an issue at the election, and that it was never put before them. I had the honour of defeating a right hon. Gentleman who was not only a Minister in the recent Socialist Administration, but who was also the recognised head of the Co-operative movement in this country, an expert on the subject of foodstuffs if ever there was one, one who has spent his whole life dealing with the question of foodstuffs and their distribution. May I read to the House what the right hon. Gentleman said in his election address, firmly entrenched as he then was with a majority of nearly 11,000? This is what Mr. A. V. Alexander told his constituents in his election address:6.0 p.m. There is therefore no doubt as to the situation of the electorate in my division as the right hon. Gentleman put before them in such clear language that the taxation of food was a definite issue. [HON. MEMBERS: "What did you say? "] I will inform hon. Members. I said that I stood to support the National Government in taking any steps which they thought fit to restore the prosperity of the country, and when asked, as I frequently was at my meetings during the election, whether I would support a policy of the taxation of food, I said that I should support the Government in any action which they thought fit to take; if they saw fit to impose duties upon foodstuffs, it would be my duty to go into the Lobby and support them. I added, what has proved to be the case, that duties could be placed upon foodstuffs without raising prices to the consumer."We are entering a General Election in which the national emergency is being exploited to stampede the country into accepting the Tory policy of tariffs, including taxes on food."
The hon. Member will remember that the Lord President of the Council told the House the other day that Lord Snowden had rendered a great service at the last election in assisting in the return of Conservative Members. Lord Snowden said he did not regard the mandate for which the Prime Minister asked as a mandate for food taxes.
It is an honour to be interrupted by the future Chancellor of the Exchequer. So far as Lord Snowden's attitude to myself was concerned it happened that an elector wrote to him asking what action he ought to take and how his vote should be cast. The reply was published in the Press of the country. It was not complimentary to myself, but I will tell the hon. Member what it was. It was that in securing the defeat of my opponent they would at least succeed in returning a Member who would not run away when the country was faced with danger. In other words, the advice of Lord Snowden was, "I do not know what the other fellow is like, but you had better get rid of your present Member." I do not wish to detain the House with a tedious recital of the campaign in my division, but I do want to point out the very relevant fact that the issue of the taxation of foodstuffs was raised in the election by the prominence which hon. Members gave to the issue. I want to remind hon. Members also that they no more have a monopoly of the virtues of sympathy and humanity than they have a monopoly of seats in this House.
Out of the mouths of babes and sucklings cometh forth wisdom. We have just had one of the younger Members of the House trying to teach his grandmother to suck eggs. What we are trying to do is to say that Parliament shall be the deciding factor in all questions of taxation. I thought that that was recognised as a constitutional principle in the Mother of Parliaments, but evidently it has been forgotten. Pym and Hampden are dead as mummies, and the constitutional struggles of the past over the question of taxation are now being thrown overboard. A triumvirate of irresponsible people, however famous they may be, however expert they may be in paying out funeral benefit and making up mortality tables, are to decide for us when we are absent what kind of taxes shall be levied upon the people. In this House, the upholders of the Constitution, who have an unprecedented majority, get up and, although they denounce Lenin, Trotsky and the predecessors of the present Government in another country, now say that while Bolshevism is a horrible thing in Russia it is a beautiful thing in England, provided the Tories are behind it.
I agree with my hon. Friend the Member for Hemsworth (Mr. Price) when he said that chickens may come home to roost. The policy for which hon. Members are standing to-day may act as a boomerang, and they must not grumble when they are asked to take their gruel. The world does not move along stated lines, and to-day the world is in a state of flux. What are you going to Lausanne and Ottawa for? You are going to Ottawa to follow one policy and to Lausanne to follow another. The two are mutually contradictory, and they cannot be squared under the economic conditions which prevail to-day. You cannot satisfy the agrarians of Australia—I do not think that that has anything to do with this Clause.
I want to point out that we are being asked to hand over a blank cheque on the bank of futurity to three people whom we do not know. I have only seen their pictures in the papers, and, if their personal appearance is anything to go by, I would not trust them as far as I can see. I was sent here by my constituency with a large majority, in spite of the landslide, and I have as much right to form a judgment on how the people I represent shall be taxed as Sir George May. Hon. Members opposite are opponents of revolution, but this is one of the greatest revolutions that has taken place in the history of Great Britain. It is taxation without representation. Taxes are to come into existence before the House has a right to discuss them. I never believed when I read British history that the time would arrive when all the struggles of the past which were implemented by blood and tears would count for nothing, and that at the beginning of the 20th century we would come to the stage when a mere triumvirate of people, over whom we should have no real public control, would have the right to levy taxation on the people without an opportunity beforehand of Parliamentary discussion. Take advice from these people by all means; get all the expert advice you can. I believe in experts. There are three kinds of liars: Liars, adjectival liars, and experts. I would take advice from all of them, but their advice should not be acted upon without full discussion in Parliament.
Every Member of the House has always had the right to discuss taxation before it was levied, but now we are to get the right only after the taxation has been levied. Imagine the situation when these three Commissioners meet and decide that such and such a tax is necessary, although the House has already decided what shall be on the Free List. After the Advisory Committee has given this decision, will any Government go against it? I cannot see any Government doing so. The hon. Member for Hillsborough (Mr. Braithwaite) said that he told his electors that he was prepared to support the National Government. Did he tell them definitely that he was in favour of the taxation of the people's food? It was really a case of "Trust the National Government; open your mouth and shut your eyes, and see what I shall give you." The National Government is composed of Free Traders, Protectionists, nothingarians and people who are looking for jobs,, and their attitude is, "Trust us; you can depend upon it we shall be all right, and you will be all right because we shall be all right." The National Government was a national confidence trick played upon the people. If you want taxes on food, put them before the people and let us have a full discussion on them. We have already decided what items shall be on the Free List, and yet a few months after that decision we are told that the whole question is to go to three people, and that 615 Members of the House, who were elected by the people, are to surrender their rights. The taxation of the people is a constitutional matter. Every party has honoured it since 1377, and it has depended, not on Commissioners or individuals, but on the free expression of the representatives of the people. This is not merely a question of whether meat or wheat shall be taxed; it is a great constitutional issue, and those who support it will live to regret it.
My hon. Friend the Member for Ebbw Vale (Mr. A. Bevan), in the course of his wide-ranged speech, said that it was both wearisome and unnecessary to repeat criticisms of this Clause. The same adjectives are, of course, appropriate to any reply which is made, and I feel very conscious that the only duty I can discharge to the House is to remind hon. Members once again of the circumstances in which this Clause finds itself in the Bill, and the arguments by which the Clause is justified. Many hon. Members, and two in particular, have spoken of the horrors of taxes upon food. I tell them once again, as I have had to do before, that there is no proposal in this Clause to lay any tax upon food, and that when there is, there will be the proper occasion for them to vent their indignation. They can state their case then, with the actual suggestions of the Government before them—if such suggestions are made—and the Government will be in a position to reply, not speculatively, but in detail and realistically. Therefore, I think I am entitled to ask the House to dismiss any consideration of taxes upon food as if they were being actually proposed. They are not. They may be in future; but it has never yet been the custom of Governments to make public advertisement in advance of their intention to tax any particular commodity, and what Chancellors of the Exchequer have always refrained from doing cannot be expected of me.
May I try to put thus Clause in perspective? There is a Free List in the Import Duties Act. The Advisory Committee may recommend additions to that Free List, but may not recommend subtractions from it. That is not a logical position, but an. anomalous position, and we propose to rectify it, and to give symmetry to the Act. Surely symmetry is desirable on its own merits; and in giving that symmetry we are fulfilling an undertaking which was given by my right hon. Friend the Chancellor of the Exchequer. These bitter indictments which have been made to-day and were made in the course of other discussions on the Finance Bill are belated. When the Chancellor of the Exchequer told the House of Commons during the discussion of the Import Duties Bill that he in- tended to make this amendment in the law, no exception whatever was taken to it.Does the hon. Gentleman suggest that it would have been in order on that occasion to discuss an Amendment to the Finance Bill when that Amendment had been expressly ruled out of order in the Debate that was ensuing?
No, but there was a Third Reading stage and this matter was referred to upon the Third Reading. Besides in the course of a Debate upon the Free List itself, the Chancellor of the Exchequer, giving an explanation to the House of why he had been able to make alterations in that Free List said, "I have been able to grant these concessions now, which I was not originally prepared to grant, upon the understanding that the law will be amended, and that the Advisory Committee will be given the same freedom to recommend subtractions from the list as they now have to recommend additions to it." I know that my hon. and learned Friend who interrupted me will not dispute that, because the actual passages have been read to the House, and if he is still dissatisfied, I can read them again. This was done in pursuance of an understanding that we should make the present law symmetrical.
Then we are challenged upon the ground that we are adopting an unusual procedure. The procedure we now adopt is in complete harmony with the procedure under the Import Duties Act. There is an Advisory Committee; there is a recommendation; there is the power of the Treasury to accept it; there is an Order, if they do accept it; and there is the approval of the House of Commons, after 28 Parliamentary days, in order to give it sanction. If that is a breach of the constitution the proper time at which to take umbrage at it was when the Act was under discussion. What we are doing to-day is in complete harmony with what we did then. We are not proposing any different procedure; the constitutional innovation, if it be an innovation, has already been established. But what is the complaint? I listened to my hon. and learned Friend the ex-Solicitor-General. Is it his complaint that the Government are afraid of taking responsibility and are sheltering behind a committee, or is it that they are taking too much responsibility?I thought I had made it quite plain if the hon. Gentleman had listened to what I said.
It is because I listened that I am in confusion.
If the hon. Gentleman will read it in the OFFICIAL REPORT tomorrow I think he will see it is perfectly clear. The point I was making in reply to the hon. Member for East Aberdeen (Mr. Boothby) was that this House should decide on questions of policy as regards taxation, and that when the House has decided the Government should be able to act.
I am very much obliged. I have had to listen very closely to this Debate, and two criticisms have been made from the benches opposite, I think they were both in the same speech: one that we divested ourselves of a responsibility we should bear, and the other that we are assuming too much responsibility, and I say that those two charges cannot be consistent. To refer to the interruption just made by my hon. and learned Friend. He answered a speech which was delivered by my hon. Friend the Member for East Aberdeen (Mr. Boothby), who said that the Parliamentary habits of previous generations were antiquated and he desired to see a more expeditious procedure adopted by Governments, such a procedure in fact as this Government has adopted. The hon. and learned Gentleman then said, "I am in favour of Governments being able to take strong action."
Certainly!
I am glad the Government have the powerful support of my hon. and learned Friend, because we can take strong action. We have instituted avowedly an improvement in the procedure. We act by an Order; we act promptly; and if the hon. and learned Gentleman is in favour of Governments being in a position to take strong action, he ought not to be objecting to this Clause. It is quite true that before we adopted this procedure it had not been used, but during the short time it has been in operation I think it has given universal satisfaction. My hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) made premature criticisms of that committee, and said it would have no regard to the reorganisation of an industry and no regard to the consumer. He repeated the latter criticism this afternoon in. referring to taxes on food. He said they might recommend a tax on food without regard to the consumer. The committee has been in existence only a short time, and yet it has undertaken a complete reorganisation of the steel industry. I think that shows that the committee is acting with a due regard to its responsibilities.
We cannot allow that statement to go unchallenged. Sir George May and his friends, the members of the Advisory Committee, have no power to impose a reorganisation upon the steel industry, and have not, in fact, undertaken the reorganisation of the steel industry, but have merely offered a bribe to the steel industry that if they will—[Interruption.] This is an important matter. We cannot let such an inaccurate statement be made from the Government Bench. Sir George May has done no such thing. All he has done is invite the steel industry to set up committees to reorganise it, and if it does so he might bribe it with an Order.
I think, in the circumstances, it was hardly fair of my hon. Friend to interrupt me, for he has only said in his own inimitable way what I was trying to say with propriety. He speaks of a bribe offered by the Advisory Committee. I should prefer to say that the Advisory Committee tell the steel industry that if it is to enjoy the benefits of protection it must take steps to put itself in order. [HON. MEMBERS: "That is not what you said."] That is what my hon. Friend calls a bribe. I prefer to have it stated in the way I put it. I therefore claim, and I think it is generally acknowledged, that during the time they have been in office the Committee have acted circumspectly and with a due regard for their responsibilities, and the House is entitled to trust them. Apart from vesting this duty in a Committee there was no other way of removing the House of Commons and the Government from the kind of pressure we desired to avoid. Having regard to what had hap- pened in other countries, we took the course of establishing an Advisory Committee, and we shall listen to them. At the same time, no Chancellor of the Exchequer is inhibited from following the ordinary procedure of recommending any further taxes that he may think desirable for the purposes of revenue, or, indeed, for any other purposes.
Were that the first speech made by the hon. Gentleman in this House, I could understand not only hon. and right hon. Gentlemen sitting opposite taking note of it, but also hon. and right hon. Gentlemen sitting on these benches. But we have heard the hon. Member speak in these Debates before. Not long ago he told us about the large number of foreign firms which had established themselves in this country and were operating behind the Protection barrier. We have lived long enough to see what that has amounted to, and how much sincerity and reality there was in the hon. Member's statement on that occasion. I think the hon. Member ought to be reminded of these collossal figures—that there are 123 new firms, and that they have provided work for 2,800 people. Yorkshire will never be able to say an unkind word against this Government now that they have established among them five new firms employing 69 people.
I do not see that this has much to do with this Clause.
6.30. p.m.
I should regret it very much if I were to fall foul of your Ruling, and I want to come to the hon. Gentleman's statement on this occasion, when referring to a previous speech. He tells us once more that what the Government have done is merely to bring symmetry to their Customs Duty law. In one breath he tells us the Government have the power to act, and in the next breath that the Government have no power to act, because the committee have to make the recommendation and the Government are not in a position to act until they have received that recommendation. Really, the hon. Gentleman cannot have it both ways. The complaint of the Opposition has been from beginning to end that the Government have no power to act until the committee have handed in a recommendation. We are justified in saying that on a question so vital to our people and to our industries it is the Government itself and not these persons who ought to have the responsibility for operating the Customs Duties law. I would ask the hon. Gentleman whether, instead of attempting to educate Members sitting on these benches, he will tell us why the President of the Board of Trade is not replying to this Debate. Is it because the President of the Board of Trade stated definitely and specifically in this House that he would not be a party to the taxation of wheat and meat? Is it because the power is taken out of the right hon. Gentleman's hands that he now sends the hon. Gentleman to state the case? Moreover, is not the hon. Gentleman aware that not only have hon. Gentlemen sitting below the Gangway protested with us against this policy from the very first, but that on every occasion when a vote has been taken the Home Secretary and the President of the Board of Education have marched into the Lobby with the Opposition? Therefore, the righteous indignation of the hon. Gentleman is not quite so solid as it appears, for the Government themselves are not united on this policy, and if they are not united there is just the chance, we think, for honest politicians to be taking a better course. I do not want to carry the Debate on to any undue length, but I would urge upon the hon. Gentleman that when replying to a Debate such as this he should not attempt always to put the Opposition in a wrong position. From the first we have been protesting against handing over powers to individuals, whoever they may be, to impose taxation either upon the food of the people or upon the raw materials which form a vital part of the industrial life of the country.
We opposed this Resolution in the Customs Duties Bill itself, when the Chancellor introduced his Budget and indicated his intention, and on every available opportunity we have never hesitated to enter a protest against what
Division No. 223.]
| AYES.
| [6.34 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Balniel, Lord | Borodale, Viscount |
| Agnew, Lieut.-Com. P. G. | Barclay-Harvey, C. M. | Bossom, A. C. |
| Albery, Irving James | Barton, Capt. Basil Kelsey | Boulton, W. W. |
| Anstruther-Gray, W. J. | Bateman, A. L. | Bower, Lieut.-Com. Robert Tatton |
| Atholl, Duchess of | Beauchamp, Sir Brograve Campbell | Bowyer, Capt. Sir George E. W. |
| Atkinson, Cyril | Beaumont, Hon. R. E. B. (Portsm'th. C.) | Boyce, H. Leslie |
| Bailey, Eric Alfred George | Betterton, Rt. Hon. Sir Henry B. | Boyd-Carpenter, Sir Archibald |
| Baillie, Sir Adrian W. M. | Birchall, Major Sir John Dearman | Bracken, Brendan |
| Baldwin, Rt. Hon. Stanley | Bird, Ernest Roy (Yorks., Skipton) | Braithwaite, J. G. (Hillsborough) |
| Baldwin-Webb, Colonel J. | Bird, Sir Robert B. (Wolverh'pton, W.) | Broadbent, Colonel John |
| Balfour, George (Hampstead) | Boothby, Robert John Graham | Brockiebank, C. E. R. |
we conceive to be a constitutional departure which may or may not prove useful to-day or to-morrow. It may be an arguable point as to whether we ought to change the law and our Governmental methods at the present time. I am not one of those who would hold fast to the constitution if an emergency called for some alternative method to be employed, but as an hon. Friend behind me has already said, we must remember that what the Government are doing by handing over power to persons outside this Chamber some other future Government may do also.
A further protest I want to make is concerned with the fact that during the Summer Recess so many things may happen over which we shall have no sort of control. Anything that is done will be a fait accompli when Parliament reassembles, and the Government will be in a position to say: "The Committee made a recommendation and we were almost obliged to accept it; an Order was prepared, and it became operative." Hon. Members who came here before the election of the National Government talk about constitutional procedure and about opposing the Government, but the Lord President of the Council, the President of the Board of Trade and the Chancellor of the Exchequer would declare that if the Government were defeated it would be regarded as a vote of no confidence. The current of thought leads to the final conclusion that it is the committee who now will be in power, and that it is they alone who can act, since the Government have delegated almost the whole of their power to this committee to make a recommendation which can be acted upon. For those reasons, I am bound to say that I and my colleagues will persist in our present course.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 303; Noes, 58.
| Brown, Brig.-Gen. H. C.(Berks., Newb'y) | Guy, J. C. Morrison | Palmer, Francis Noel |
| Buchan-Hepburn, P. G. T. | Hacking, Rt. Hon. Douglas H. | Patrick, Colin M. |
| Burnett, John George | Hamilton, Sir George (liford) | Pearson, William G. |
| Butler, Richard Austen | Hanbury, Cecil | Penny, Sir George |
| Campbell, Edward Taswell (Bromley) | Hannon, Patrick Joseph Henry | Petherick, M. |
| Campbell, Rear-Adml. G.(Burnley) | Harbord, Arthur | Peto, Sir Basil E. (Devon, Barnstaple) |
| Caporn, Arthur Cecil | Hartland, George A. | Peto, Geoffrey K. (W'verh'pt'n, Bilst'n) |
| Carver, Major William H. | Harvey, George (Lambeth, Kenn'gt'n) | Pickford, Hon. Mary Ada |
| Castlereagh, Viscount | Haslam, Henry (Lindsay, H'ncastle) | Pike, Cecil F. |
| Cayzer, Sir Charles (Chester, City) | Haslam, sir John (Bolton) | Potter, John |
| Cayzer, Maj. Sir H. R. (Prtsmth., S.) | Heligers, Captain F. F. A. | Powell, Lieut.-Col. Evelyn G. H. |
| Cazalet, Thelma (Islington, E.) | Henderson, Sir Vivian L. (Chelmsford) | Pownall, Sir Assheton |
| Chalmers, John Rutherford | Hepworth, Joseph | Procter, Major Henry Adam |
| Chamberlain, Rt. Hon. Sir J. A.(Birm., W) | Hills, Major Rt. Hon. John Waller | Pybus, Percy John |
| Chamberlain, Rt. Hon. N. (Edgbaston) | Hope, Sydney (Chester, Stalybridge) | Ramsay, Capt. A. H. M. (Midlothian) |
| Chapman, sir Samuel (Edinburgh,S.) | Hore-Belisha, Leslie | Ramsay, T. B. w. (Western Isles) |
| Chotzner, Alfred James | Hornby, Frank | Ramsden, E. |
| Christie, James Archibald | Horobin, Ian M. | Ratcliffe, Arthur |
| Clayton, Dr. George C. | Horsbrugh, Florence | Ray, Sir William |
| Cobb, Sir Cyril | Howitt, Dr. Alfred B. | Reed, Arthur C. (Exeter) |
| Cochrane, Commander Hon. A. D. | Hudson, Robert Spear (Southport) | Reid, James S. C. (Stirling) |
| Colfox, Major William Philip | Hunter, Dr. Joseph (Dumfries) | Reid, William Allan (Derby) |
| Collins, Sir Godfrey | Hunter, Capt. M. J. (Brigg) | Rentoul, Sir Gervals S. |
| Colville, John | Hurd, Sir Percy | Renwick, Major Gustav A. |
| Conant, R. J. E. | Hurst, Sir Gerald B. | Reynolds, Col. Sir James Philip |
| Cook, Thomas A. | Jamieson, Douglas | Rhys, Hon. Charles Arthur U. |
| Cooke, Douglas | Joel, Dudley J. Barnato | Robinson, John Roland |
| Cranborne, Viscount | Johnston, J. W. (Clackmannan) | Ropner, Colonel L. |
| Craven-Ellis, William | Ker, J, Campbell | Rosbotham, S. T. |
| Croft, Brigadier-General Sir H. | Kimball, Lawrence | Ross, Ronald D. |
| Crooke, J. Smedley | Kirkpatrick, William M. | Ross Taylor, Walter (Woodbridge) |
| Crookshank, Capt. H. C. (Gainsb'ro) | Knatchbull, Captain Hon. M. H. R. | Ruggles-Brise, Colonel E. A. |
| Cruddas, Lieut.-Colonel Bernard | Knox, Sir Alfred | Runclman, Rt. Hon. Walter |
| Culverwell, Cyril Tom | Latham, Sir Herbert Paul | Runge, Norah Cecil |
| Davison, Sir William Henry | Law, Sir Alfred | Russell, Albert (Kirkcaldy) |
| Dawson, Sir Philip | Law, Richard K. (Hull, S.W.) | Russell, Alexander West (Tynemouth) |
| Denman, Hon. R. D. | Leech, Dr. J. W. | Russell, Hamer Field(Sheffield, B'tside) |
| Denville, Alfred | Leighton, Major B. E. P. | Salmon, Major Isidore |
| Despencer-Robertson, Major J. A. F. | Lennox-Boyd, A. T. | Salt, Edward W. |
| Dickie, John P. | Lewis, Oswald | Samuel, Sir Arthur Michael (F'nham) |
| Dixon, Rt. Hon. Herbert | Liddall, Walter S. | Samuel, Samuel (W'dsworth, Putney) |
| Donner, P. W. | Lindsay, Noel Ker | Sandeman, Sir A. N. Stewart |
| Drewe, Cedric | Lister, Rt. Hon. Sir Philip Cunliffe | Sanderson, Sir Frank Barnard |
| Dugdale, Captain Thomas Lionel | Llewellin, Major John J. | Scone, Lord |
| Duncan, James A. L. (Kensington, N.) | Liewellyn-Jones, Frederick | Selley, Harry R. |
| Dunglass. Lord | Lloyd, Geoffrey | Shakespeare, Geoffrey H. |
| Eden, Robert Anthony | Lockwood, John C. (Hackney, C.) | Shaw, Helen B. (Lanark, Bothwell) |
| Edmondson, Major A. J. | Loder, Captain J. de Vere | Shaw, Captain William T. (Forfar) |
| Elliot, Major Rt. Hon. Walter E. | Lovat-Fraser, James Alexander | Simmonds, Oliver Edwin |
| Ellis, Sir R. Geoffrey | Lumley, Captain Lawrence R. | Simon, Rt. Hon. Sir John |
| Elmley, Viscount | MacDonald, Rt. Hon. J. R. (Seaham) | Smiles, Lieut.-Col. Sir Walter D. |
| Emmott, Charles E. G. C, | MacDonald, Malcolm (Bassetlaw) | Smith, R. W. (Ab'rd'n & Kinc'dine, C.) |
| Emrys-Evans, P. V. | McEwen, Captain J. H. F. | Smith-Carington, Neville W. |
| Entwistle, Cyril Fullard | McKie, John Hamilton | Somervell, Donald Bradley |
| Erskine, Lord (Weston-super-Mare) | McLean, Major Alan | Somerville, Annesley A. (Windsor) |
| Essenhigh, Reginald Clare | McLean, Dr. W. H. (Tradeston) | Somerville, D. G. (Willesden, East) |
| Evans, Capt. Arthur (Cardiff, S.) | Macquisten, Frederick Alexander | Soper, Richard |
| Everard, W. Lindsay | Makins, Brigadier-General Ernest | Sotheron-Esteourt, Captain T. E. |
| Falle, Sir Bertram G. | Manningham-Buller, Lt.-Col. Sir M. | Southby, Commander Archibald R. J. |
| Fermoy, Lord | Margesson, Capt. Henry David R. | Spears, Brigadier-General Edward L. |
| Ford, Sir Patrick J. | Marsden, Commander Arthur | Spencer, Captain Richard A. |
| Fox, Sir Gilford | Martin, Thomas B. | Stanley, Lord (Lancaster, Fylde) |
| Fraser, Captain Ian | Mason, Col. Glyn K. (Croydon, N.) | Stanley, Hon. O. F. G. (Westmorland) |
| Fuller, Captain A. G. | Mayhew, Lieut.-Colonel John | Steel-Maitland. Rt. Hon. Sir Arthur |
| Ganzoni, Sir John | Merriman, Sir F. Boyd | Stones, James |
| Gault, Lieut.-Col. A. Hamilton | Mills, Major J. D. (New Forest) | Storey, Samuel |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | Milne, Charles | Strauss, Edward A. |
| Gledhill, Gilbert | Mitchell, Harold P.(Br'tf'd & Chisw'k) | Strickland, Captain W. F. |
| Glossop, C. W. H. | Mitchell, Sir W. Lane (Streatham) | Stuart, Lord C. Crichton. |
| Gluckstein Louis Halle | Molson, A. Hugh Eisdale | Sueter, Rear-Admiral Murray F. |
| Glyn, Major Ralph G. C. | Monsell, Rt. Hon. Sir B. Eyres | Sugden, Sir Wilfrid Hart |
| Goff, Sir Park | Moreing, Adrian C. | Sutcliffe, Harold |
| Goldie, Noel B. | Morris, John Patrick (Salford, N.) | Tate, Mavis Constance |
| Goodman, Colonel Albert W. | Morris, Owen Temple (Cardiff, E.) | Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.) |
| Gower, Sir Robert | Morrison, William Shepherd | Templeton, William P. |
| Graham, Fergus (Cumberland, N.) | Muirhead, Major A. J. | Thomas, Rt. Hon. J. H. (Derby) |
| Grattan-Doyle, Sir Nicholas | Munro, Patrick | Thomson, Sir Frederick Charles |
| Graves, Marjorie | Nation, Brigadier-General J. J. H. | Todd, Capt. A. J. K. (B'wick-on-T.) |
| Greaves-Lord, Sir Walter | Nicholson, Godfrey (Morpeth) | Touche, Gordon Cosmo |
| Grenfell, E. C. (City of London) | North, Captain Edward T. | Tryon, Rt. Hon. George Clement |
| Gretton, Colonel Rt. Hon. John | Nunn, William | Turton, Robert Hugh |
| Grimston, R. V. | O'Connor, Terence James | Vaughan-Morgan, Sir Kenyon |
| Gritten, W. G. Howard | O'Neill, Rt. Hon. Sir Hugh | Wallace, Captain D. E. (Hornsey) |
| Guinness, Thomas L. E. B. | Ormiston, Thomas | Ward, Lt.-Cot. Sir A. L. (Hull) |
| Gunston, Captain D. W. | Ormsby-Gore. Rt. Hon. William G. A. | Ward, Irene Mary Bewick (Wallsend) |
| Warrender, Sir Victor A. G. | Williams, Herbert G. (Croydon, S.) | Wood, Rt. Hon. Sir H. Kingsley |
| Wedderburn, Henry James Scrymgeour- | Wilson, Clyde T. (West Toxteth) | Worthington, Dr. John V. |
| Wells, Sydney Richard | Windsor-Clive, Lieut.-Colonel George | Young, Bt. Hon. Sir Hilton (S'v'noaks) |
| Weymouth, Viscount | Winterton, Rt. Hon. Earl | |
| Whiteside, Borras Noel H. | Wise, Alfred R. | TELLERS FOR THE AYES.— |
| Williams, Charles (Devon, Torquay) | Withers, Sir John James | Mr. Womersley and Major George Davies. |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Griffiths, T. (Monmouth, Pontypool) | Mason, David M. (Edinburgh, E.) |
| Aske, Sir Robert William | Grundy, Thomas W. | Milner, Major James |
| Attlee, Clement Richard | Hall, F. (York, W.R., Normanton) | Morris, Rhys Hopkin (Cardigan) |
| Batey, Joseph | Hall, George H. (Merthyr Tydvil) | Parkinson, John Allen |
| Bevan, Aneurin (Ebbw Vale) | Harris, Sir Percy | Pickering, Ernest H. |
| Briant, Frank | Hicks, Ernest George | Price, Gabriel |
| Cape, Thomas | Hirst, George Henry | Salter, Dr. Alfred |
| Cocks, Frederick Seymour | Holdsworth, Herbert | Thorne, William James |
| Cove, William G. | Janner, Barnett | Tinker, John Joseph |
| Cripps, Sir Stafford | John, William | Wedgwood, Rt. Hon. Josiah |
| Curry, A. C. | Jones, J. J. (West Ham, Silvertown) | White, Henry Graham |
| Daggar, George | Jones, Morgan (Caerphilly) | Williams, David (Swansea, East) |
| Davies, Rhys John (Westhoughton) | Kirkwood, David | Williams, Edward John (Ogmore) |
| Duncan, Charles (Derby, Claycross) | Lawson, John James | Williams, Dr. John H. (Lianelly) |
| Edwards, Charles | Leonard, William | Williams, Thomas (York, Don Valley) |
| Evans, Capt. Ernest (Welsh Univ.) | Logan, David Gilbert | Young, Ernest J. (Middlesbrough, E.) |
| Foot, Dingle (Dundee) | Lunn, William | |
| George, Megan A. Lloyd (Anglesea) | McKeag, William | TELLERS FOR THE NOES.— |
| Graham, D. M. (Lanark, Hamilton) | Maclay, Hon. Joseph Paton | Mr. Graves and Mr. Cordon |
| Greenwood, Rt. Hon. Arthur | Maclean, Nell (Glasgow, Govan) | Macdonald |
| Grenfell, David Rees (Glamorgan) | Mallalieu, Edward Lancelot | |
Clause 9—(Further Provision For Drawback Of Duties Under Part I Of 22 Geo 5 C 8)
All the Amendments which are on the Paper in the names of various hon. Members to Clause 9 are out of order, but I have accepted a manuscript Amendment from the hon. Lady the Member for Dundee (Miss Horsbrugh) to leave out the Clause in order that she may get an explanation as to the meaning of it.
I beg to move, to leave out the Clause.
I do so in order that we may get some explanation as to the wording which to many of us seems very vague. I refer especially to the words goods "exported or shipped as stores." We should like to know if those stores would, in any way, concern fishing vessels and coasting steamers. At present, as hon. Members know, fishing vessels and coasting steamers are not allowed bonded stores as long as they are within home waters or the North Sea. Are these vessels to be able to take on any stores or equipment under the drawback the scheme for which is included in Clause 9? Will the terminclude also stores taken on by a ship going to a foreign port and taking on bonded stores under seal? If the ship were to take on stores such as rope for equipment, would it be allowed to use that rope before it is beyond the boundary of British waters? We believe that, unless these words are very carefully defined, this scheme of draw-back will militate against the trade in our home ports. It has been suggested that a British ship, in order to get the value of the draw-back on such equipment as rope, would have to buy British rope from a foreign port, because that rope had been exported under a draw-back and could then be bought under the drawback from that foreign port; while the foreign ship would buy stores under the draw-back in the home port. We should like to get, if possible, a definite statement as to what ship's stores will mean. We know that in a registered shipyard all the equipment will be put into the vessel. Will duty have to be paid on that equipment when it is taken off, or can such things as rope be taken as ship's stores? We are asking for this explanation because it will make a very great difference to many trades in this country, including the rope trade and the shipping industry, which are looking round to see whether they will have to buy their equipment in foreign ports if they are to be saved this extra expense. It has been made quite clear that the draw-back scheme will be extensively used, and we wish to know whether these articles will be regarded as bonded stores or whether they will be taken on in the ordinary way by the ship as stores."exported or shipped as stores"
I beg to second the Amendment.
One understands and respects the interest of the hon. Lady in this matter, representing, as she does, a constituency in which rope is made, and I will endeavour to satisfy her on the points which she has raised, or, at any rate, to answer her questions. The hon. Lady's first question was as to the definition of stores. Stores cover any goods or articles for use in a ship which are not actually fitted or built into the ship. I hope that the hon. Lady will be satisfied with that definition, because I think it covers completely the point raised in one of the Amendments that she has on the Paper relating to equipment.
The second point on which my hon. Friend has some doubt is as to whether this Clause, granting a draw-back, will apply to ships engaged in the coasting trade and in the fishing trade. In this case I cannot, I am afraid, give her an answer which will be agreeable to her. When a ship "goes foreign," as the saying is, it goes outside the jurisdiction of the country, and it is allowed to take on its voyage dutiable goods. When the ship comes into port, those goods—wines, spirits, tea, or whatever they may be— are sealed by the Customs official, and a close watch is kept upon those stores. That procedure could not, of course, be followed in the coasting trade or the fishing trade. If any vessels in those trades were allowed to take on board dutiable articles, it would necessitate increasing the Customs staff to such proportions as would enable them to make an accurate investigation of what each ship contained. The hon. Lady will, I hope, see that that would be quite impossible, and we do not intend to change the normal procedure in that respect. The home coasting trade is a trade completely within the jurisdiction of this country; indeed, it is a form of transport and the fishing industry is, similarly, conducted within the jurisdiction of this country. Where deep sea fishing is concerned, a vessel is considered to be "going foreign," and has the benefit of the draw-back. I think that I have answered all the questions that my hon. Friend has put to me. She has a partial satisfaction in receiving a satisfactory answer to her first question, and a partial dissatisfaction in the exclusion from draw-back of fishing and coasting vessels.May I ask the Parliamentary Secretary one question? Can a ship broach bonded stores, with the permission of the Customs, and draw out stores for the purpose of making good defects while she is in port?
The answer to that question is that the dutiable stores are either sealed, where that is appropriate, or an inventory is taken of them, and an account has to be rendered at the request of the Customs.
At the present time, in certain circumstances, permission may be obtained from the Customs to open the seals and extract dutiable stores which are on board. If the Board of Trade adhere to the regulations to which the Parliamentary Secretary has just referred, it will merely mean that ships can have on board stores which they might desire to use to make good some defect, but which they are unable to touch until they are outside territorial waters. What would actually happen would be that the shipowners would have on board, consigned under a bill of lading to their agents at the first foreign port, stores which, when the ship arrives at that port, they can use, and it seems to me to be rather absurd that all this procedure should be gone through, making no difference whatsoever to the Government with respect to revenue, in order to obtain, once the ship has passed out of territorial waters, that which might be urgently needed in the home port to make good defects.
I can only reply to my hon. and gallant Friend by the leave of the House. Ships are only allowed to broach sufficient stores for immediate use.
In view of the Parliamentary Secretary's explanation, I beg to ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 10—Exemption Of Certain Machinery From Duties Under 22 Geo 5 C 8)
All the Amendments to Clause 10 which are on the Paper are out of order.
Clause 11—(Penalty On Describing Fortified Wines As Spirits)
Amendment made: In page 9, line 43, at the end, insert the words:
"Provided that a person shall not be guilty of an offence under this Section by reason only that he has, at some time between the commencement of this Act and the first day of October, nineteen hundred and thirty-two, described any liquor by any such name or words as aforesaid either on, or on a label affixed to, the container of the liquor, or the wrapper, or other covering, or partial covering, of the container, or sold, offered for sale, or had in his possession for the purpose of sale any liquor so described, if he proves that containers, labels, wrappers, coverings, or partial coverings, identical in all respects (including the name or words thereon) with the container, label, wrapper, covering, or partial covering used in the case in question were in use before the fourth day of May, nineteen hundred and thirty-two, for the purpose of describing the liquor."—[Mr. Chamberlain.]
I beg to move, in page 10, line 2, to leave out from the word "name" to the word "which" in line 4.
Might we have an explanation of the reason for these Amendments?
Certainly. The first Amendment, which we have just passed, relates to the period of grace, which I think everyone will agree it is reasonable to allow. The next Amendment on the list—the one that is now under discussion—is the first of a series of drafting Amendments preparatory to a subsequent Amendment dealing with the question of port and sherry, and there is a further provision to deal with the question of cocktails, which might be brought under the operation of this Clause.
Amendment agreed to.
Further Amendments made: In page 10, line 7, after the word "shall," insert the words:
"(subject to the provisions of the next following Sub-section)."
In page 10, line 8, at the end, insert the words:
"(4) Notwithstanding anything in this Section—(a) the name 'port' or 'sherry' or the name of any other description of genuine wine; or (b) a name which before the fourth day of May, nineteen hundred and thirty-two, was used to describe a liquor containing vermouth and spirits, the quantity of vermouth being not less than the quantity of spirits computed at proof; shall not, for the purposes of this Section, be treated as being in itself calculated to give such an indication as aforesaid, whether it was or was not before the commencement of this Act used in association with a description calculated to give any such indication, and a person who has sold, offered for sale, or had in his possession for the purpose of sale any liquor described only by any such name as is mentioned in paragraph (a) of this Sub-section shall not be guilty of an offence under this Section by reason that the liquor has been described by 6ome other person (not being the agent or servant of the first-mentioned person) by that name in association with some other description calculated to give such an indication as aforesaid."—[Mr. Chamberlain.]
Clause 22—(Establishment Of Exchange Equalisation Account)
I beg to move to leave out the Clause.
When the Exchange Equalisation Account was originally introduced, it was hailed with unanimous approval and support by the House, but since that time a great change has come over the scene, and to-day I do not think it would receive either unanimous—On a point of Order. Would it be possible, Mr. Speaker, for you to indicate at this stage, for the convenience of the House, whether you are going to call any of the other Amendments to this Clause, or whether you desire to have a general debate now?
It was my intention to call the Amendment standing in the name of the Chancellor of the Exchequer —in page 15, line 12, to leave out from the word "which" to the end of line 15, and to insert instead thereof the words:
the Amendment standing in the name of the hon. Member for Caerphilly (Mr. Morgan Jones)—in page 16, line 7, to leave out the word "certify," and to insert instead thereof the words "report thereon"; the Amendment, also in the name of the hon. Member for Caerphilly —in page 16, line 8, to leave out from the word "Parliament" to the end of the Clause; and the Amendment standing in the name of the hon. and gallant Member for Gainsborough (Captain Crookshank) —in page 16, line 12, at the end, to insert the words:"the Commons House of Parliament resolve that the account is no longer required for the purpose for which it was established";
I think that it would be as well to take the general discussion on the Question, "That the words proposed to be left out stand part of the Bill.""Provided that nothing in this Act shall prevent the Comptroller and Auditor-General from rendering to the Public Accounts Committee of the Commons House of Parliament a report on the state of the account should he consider it to be in the public interest to do so."
Thank you very much.
Would it be possible to know whether any of the Amendments to the following Clause, Clause 23, will be called? If not, possibly some of the matters raised by those Amendments might be raised on Clause 22.
I understood you to say, Sir, that you desired that the general discussion on the subject should be taken when we discussed the Question, "That the words proposed to be left out stand part of the Bill." The point which I desire to raise is one that I should like to raise specially rather than in the general discussion, in view of the importance of its being raised before we came to the question of the Clause standing part.
That is rather a matter for the hon. Member himself to decide. He can raise his point in the discussion on the Question, "That the words proposed to be left out stand part of the Bill," or he can raise it on his Amendment.
It. would be preferable to my hon. Friends and myself to raise it as a special point, and to take a Division upon it, if that would be possible.
Certainly, that will be quite all right; but it is obvious that, on the Question, "That the words proposed to be left out stand part of the Bill," there must be a general discussion on the whole Clause.
Would you be good enough to give me an answer to my question as to whether the Amendments to the following Clause are likely to be called or not?
We had better discuss one Clause at a time. We had better confine ourselves strictly to Clause 22 at the moment, and then, when we come to Clause 23, discuss that Clause.
I only wanted to know whether the Amendments are going to be called, because, if they are not, some of the points might be raised on Clause 22.
They are going to be called.
7.0 p.m.
My Amendment is to leave out the Clause, and, consequently, to leave out the Exchange Equalisation Account. The attitude of the House and the country towards this scheme has been considerably modified during the last six weeks. When the scheme was originally introduced, it was thought that it could be used in order to reflate to the 1928 price level, but that long-range policy was, as the Financial Secretary to the Treasury made quite clear, not part of the scheme that the Government were introducing, and, consequently, any use of this Exchange Equalisation Account in order to depress sterling or to restore sterling to the Gold Standard was equally out of the question. There remained the other use to which this Fund was to be put. It was to be used to prevent fluctuations in sterling. While everyone is agreed that it is desirable to stop fluctuations in sterling, it has gradually become obvious that any attempt to check fluctuations might involve the Treasury in very serious losses. It is, unfortunately, impossible to decide whether a fall in sterling is a fluctuation or a trend. If it is a trend the Government would not use this Fund to stop it, but if it is a fluctuation, the Government would use it to stop that fluctuation. If we could distinguish between a trend and a fall which is merely a fluctuation we should all of us be millionaires, but it cannot be done. We cannot tell, so it comes to this, that the Government are to use this Fund of £160,000,000 in an attempt to do what so often bankrupts private individuals.
The risks involved to the taxpayer in the use of this Fund are very considerable. It is always legislators acting with the best intention who make the biggest blunders. We had the extraordinary beet sugar ramp, for instance, which has run us into £4,,000,000 or £5,000,000, done by both sides of the House with the best possible intentions, and yet with that inevitably disastrous result to the taxpayers. Now in this experiment, equally hastily adopted, the risks of loss are on the same scale. That is not merely the private wisdom of a private Member. City people and business interests are becoming seriously disturbed because what the Government propose to do under the Exchange Equalisation Account has already been done or been going on through the Issue Department of the Bank. We have had during the last two months efforts made to prevent fluctuations in sterling and to prevent what was described as a disastrous rise in sterling. We have had sterling being sold and the Bank going into the exchange business in an effort to prevent an undue rise. You cannot sell sterling unless you buy something with it, and we have seen large purchases made already. I am glad to hear they are not going to be transferred to the Exchange Equalisation Account, which inspires what I cannot describe as anything less than terror in the minds of people who are acquainted with the ease with which you can lose money by gambling on 'Change. The position has been made infinitely more difficult and has completely changed since the scheme was introduced, because everyone is now conscious that America is apparently going through precisely the same affair that we went through last year. They are endeavouring to inflate in America. They are not balancing their Budget in America.. They are faced with a £400,000,000 loan for reconstruction, and inevitably the result is that American dollars are becoming suspect in the eyes of people. Last year when we were driven off gold, the Bank of England and the Government did their very best to prop up gold by buying sterling. They were met very kindly by the bankers in Paris and America who lent us large sums of money. They lent us this money in foreign currency. They lent it in dollars and francs. We used those large borrowings for the purchase of sterling in order to keep sterling up. Those large sums, amounting to £130,000,000, vanished. We fired the last shot in the locker in an attempt to preserve dollar parity and the Gold Standard, and we had ultimately to pay back those foreign countries in the dollars and francs which we borrowed, at large additional expense to ourselves in sterling. Nowadays people will, I think, regret that we borrowed that £130,000,000 and used it in that particular way, but I am quite prepared to let bygones be bygones. What I want to point out is that now, apparently, in order to preserve sterling from fluctuation in relation to American dollars, we are doing for America what we tried to do for the currency of our own country. We are trying to prevent the dollar falling relatively to the pound; in other words, to prevent the pound rising relatively to the dollar. We are buying dollar exchange and gold. We are, no doubt, helping the creditor class in America by so doing. But why should not the Americans, if they want their dollars preserved at gold parity, do what the Bank of England and the British Government had to do last year, that is, borrow from us in sterling so that we can get back the full value of sterling? The difficulty at the present time is that we are buying dollars and gold with a prospect of very heavy loss. If America goes off gold, all those 30,000,000—or is it 60,000,000—dollars that the Bank has bought will depreciate. When we come to sell those dollars and that gold we shall get a much lower figure for them, whereas if we had said to America that we were quite prepared to lend them sterling, we should, at any rate, have enabled them to go on using that sterling to buy dollars, and if they had come off gold it would have been their loss, and not ours. As it is, we are pursuing that universally amiable policy which we have pursued ever since the War, of helping other people for nothing because we love them. We cannot go on doing that sort of thing, and if the fund is to be used by these methods that we have seen in the last two months then I say that the initiation of the Exchange Equalisation Account is going to be disastrous to this country without saving the dollar from going off gold. A sum of £150,000,000 will go nowhere in support of it. The Exchange Equalisation Account, unfortunately, does not say what you are going to exchange. You talk about stabilising sterling, but stabilising in terms of what? If it meant stabilising in terms of raw materials, there would be something to go on, but you do not say whether it means stabilising in terms of dollars or francs, or of some of the other hundred and one unsound currencies of Europe. What does stabilisation mean and why on earth has the Bank of England, with, I presume, the consent of the Treasury, been buying dollars, francs and gold in the last few weeks? It was £10,000,000, but this morning I see another £800,000 of gold has been bought. How long is it going on? I wonder whether it would be possible for the Chancellor to give the House any idea of what the loss would be if America joined the sterling convoy, with our commitments as they are at present? Perhaps we might have three figures—what the loss would be, with our present commitments, if America came down to sterling, what it would be if francs also came down to sterling, and, lastly, what it would be if gold went down to its trade value from its present fictitious level? It seems to me those are estimates which any careful Treasury must have in mind when the world is in the position it is in to-day. It is quite possible that America will stop on gold, but there is a chance and anybody who is gambling in that sort of finance ought to keep account of what his losses would be in certain circumstances, even if those circumstances are not regarded as very probable. I do think we might know what our commitments are to-day, with the purchase of dollars and francs and gold, and taking into account the £120,000,000 worth of gold already in this country. We ought to have from the Government some explanation of what they think has been at the back of the mind of the Bank of England in making these large purchases. They must know what the Bank has in mind. It is important that we and the country should know, because the Government themselves are going to take up the same business that the Bank has been conducting. It will be no longer the Issue Department of the Bank of England which will be involved; it will be the Exchange Equalisation Account. It is true that makes no difference to the British taxpayer who has to pay for losses in either case, but at any rate under the Exchange Equalisation Account the Treasury has a more direct say in the purchase and sales that are to go on. We really ought to have an explanation of what has been at the back of what is going on. I think it is the sort of feeling that we must support the dollar and American bankers. I think that has something to do with it. They helped us when we were in straits, and we are helping them now. It may be partly the fact that, if you have to sell sterling, what on earth are you to buy with the sterling that you sell? I cannot help thinking that there is also this determined intention on the part of the Bank, and I should fancy on the part of the Treasury, to increase our gold resources and to get back to gold. It seems so senseless to buy gold when we do not need it. When we went off gold we stopped the obligation to buy whatever gold was offered at a certain static price. Why do it now? You are still paying a very heavy price. On the £150,000,000 that we borrowed, presuming that it is used for this purpose, we have to pay interest. Any additions to the gold resources of the Bank of England bring in no interest at all. There may be another reason. Has the increase in the gold reserves which has been brought about within the last few months increased the credit issues by the Bank? Has it increased the amount of credit available in the country? I do not know. We might be told whether it has been used for that purpose. I do not think it will be a very useful way of increasing credit, and I do not think it is the best way, but it would be some sort of explanation of why they have been buying gold and dollar currency. I cannot help thinking that the whole mind of the Bank of England and of the Treasury is centred on a conversion scheme. They say, "We must secure here a large amount of gold and dollar currency or francs in order that, when we convert, we may have something to give to those people who desire to have cash instead of conversion." There are a large number of foreign holders of War Loan and many of them will refuse to convert on a 4 per cent. basis, and will want cash. We have certainly now enough gold and dollars to buy these people out. If that is so, I do not really see that there is any misfortune or any disaster to the country in saying so. After all, if you tell people, when you are going to convert, that you have ample resources to pay them out if they will not convert, it will give them greater security. They are much more likely to take their new War Loan at a lower rate if they know they can be paid out easily if they wish to take out the cash. To say that you are in a strong position to deal with the situation is half the battle in a conversion. We certainly are getting to a strong position, but I cannot for the life of me see why we should not pay these people out in sterling instead of in gold and foreign currency. If the Government are really anxious to restore prices to the 1928 level —that means to put sterling lower than it is to-day—there is no better way of doing it than by buying out the people who do not want to convert in sterling. You are getting rid of your sterling and you are getting something for it. You are reducing the debt. I have said before that the best way to depreciate the currency was to buy War Loan and pay for it in cash, or in credit, or in short-term loans. Here is an opportunity of doing it. There is no reason, if you want to get sterling lower, why you should not use your conversion as a means —an adventitious means if you like—of bringing about that end. It all comes back to this. Have the Government any plan in view? The Chancellor of the Exchequer and the Financial Secretary to the Treasury have both expressed a more or less platonic desire to get back to 1928 prices. I cannot help thinking that they are honest in that wish. They must think that it is the only chance for a recovery of trade. If they are really anxious to do that, why cannot they use their influence with the Bank of England to make these operations, whether it be by the Issue Department of the Bank or by the new Exchange Equalisation Fund—why cannot they use these transactions towards that end? I am afraid the real reason is that the Government cannot make up their mind. Has the Financial Secretary to the Treasury a plan? Is his desire to get wholesale prices back to the 1928 level an honest desire? There is no other way of restoring prices except by depressing sterling. On that we are all agreed. [An HON. MEMBER: "No!"] I should be glad to hear of any way of getting prices back to the 1928 level without depreciating sterling. When we talk of prices in sterling, it is prices up and sterling down. The prices of sterling are the exchange equivalent. If there is any other way of getting them up, let us hear it but, for goodness sake, let the Government make up their mind what they want and tell us what they want. If they say they do not want to get prices back, let the trade of the country know the worst. People keep going bankrupt one after the other. Those who can are grimly holding on in despair, looking for the Government to do something to raise prices. The Government can do something to raise prices, and all that we wait on is that the Government should make up their mind and should have a scheme. I believe they have consistently stopped thinking of it and have driven away the whole question till they have a conversion loan through. I am not at all certain that they have not missed the boat with their conversion loan. If there is to be conversion, let us have it as soon as possible coupled with a sane, honest method of doing what the whole trade of the country wants, a linking of currency and price levels which will restore trade. When this scheme was brought in, we all hoped that something of that sort was in the air, but we have all found that nothing of the sort can be done by these methods. Few of us have any further interest in this Exchange Equalisation Account, but we see in it more and more the risk of a very serious gamble in a business which is not the Bank's own business nor the business of the Treasury, a gamble which, owing to the natural good nature of the Englishman, is likely to lead us into intolerable losses, and it is only right that there should be a few voices raised in the House as a protest against an experiment of this nature which is not likely to do any good, and which may involve us in very heavy loss.Whenever this question comes up in Debate, it leads to Members appealing to the Government to make some statement as to the nature of their monetary policy. It appears to be very difficult for anyone to realise that this Exchange Account of £150,000,000 has been put up for no other object than merely the steadying of the sterling exchange. The Government at different times have given certain very definite indications of what their views on monetary policy are, but I do not remember up to the present that there has ever been made to the House any concrete, definite statement as to what kind of money policy they are pursuing. It has generally been explained that it is not considered wise to go into too much detail or to expose the nature of the plan that they have in mind. I cannot help feeling that that leads to a great deal of uncertainty for traders and I have always felt that, just as this country rallied to the Government when we went off the Gold Standard and everyone assisted to keep the boat steady, if we had some more definite policy, traders throughout the Empire would lend their assistance towards reaching the aim that the Government have in mind. It appears to me that they have not sufficient financial courage in the matter.
I have rather carefully searched their statements on the subject, and I have come to the conclusion that the Chancellor of the Exchequer is in no doubt as to the financial policy that he would pursue. I am going, for greater accuracy, to read a very few notes, which are based almost entirely on speeches made by him or on answers given to other speeches. This is the Chancellor's money policy as far as I can make out. It seems to me to be a good one, and I believe that it will meet with general approval from most people in the country and, if it is indeed his policy, I believe it will do nothing but good. I find that these are the indications that he has given: First, a return to some form of Gold Standard, not barring the possibility of a gold-cum-silver standard; secondly, that the eventual return will be at a figure below the previous gold standard parity; thirdly, that such a return to a metallic standard is not expected to take place in the near future; fourthly, it is intended to control fluctuations in sterling exchange with a view to bringing about a higher price level for commodities. I think the 1929 level was indicated.They said 1929 in the first place, and 1928 in the second.
7.30 p.m.
Fifthly, that every effort will be made to prevent violent fluctuations in sterling in the meantime; and sixthly, that, when the higher commodity price level has been attained, sterling exchange will be controlled with a view to the stability of commodity prices. That appears to me to be, from statements made by the Chancellor himself, the policy that he has in mind. It seems to me to be a sound and useful policy for this country to follow in the present circumstances, and I would appeal to my right hon. Friend, if that be so, that the policy should be made known to the country and that the aid of everyone in this country should be sought towards making it effective.
I do not intend to detain the House very long, because I think we have talked so much about the Exchange Equalisation Fund and obtained so little information from the Government that it is really a waste of time to ask for more. I was very much struck by the appeal of the right hon. and gallant Gentleman the Member for New-castle-under-Lyme (Colonel Wedgwood) to the Government to define their monetary policy. Their monetary policy, like the Peace of God, passes all understanding. The Chancellor of the Exchequer apparently devised this fund for the sole purpose of holding sterling down Meanwhile, by his orthodox sinking fund policy, and by the merciless taxation in his Budget, he is doing his very best to contradict this policy. It is almost preposterous to say we will hold sterling down by this fund when at the same time the right hon. Gentleman comes down to the House and says that we must, at all costs, balance the Bulget, and greatly strengthen the sinking fund, and thus make sterling higher. It appears to me that the Government have no monetary policy, just as they have very little policy upon anything else. They have gone into one of the most technical markets of the world to display the abilities which we have so greatly admired in the House of Commons. It really shocks one when one considers the technicalities of that market and the enormous risks which day by day must be run by those people who have given their lives to the subject to find some bureaucrats in Whitehall, with the aid of a few Ministers, rushing in where very wise men have not only feared to tread but have often found it very expensive so to do.
I appeal to the Government to make up their minds and to give us a little more information about their policy. It is really ridiculous at this stage to set up this fund and to wrap it in the greatest mystery and meet every criticism of that policy with the statement that we must keep this secret, because we have to deal with dreadful bears. The best bears of sterling in the world are probably certain Members of the Government including Cabinet Ministers. You have only to read their contradictory speeches in defence of the fund to realise that the whole thing is a monstrous gamble. We in this House time after time are solemnly enjoined to support economy. We are told time after time that we cannot afford to spend a penny on all sorts of worthy and deserving objects, and yet here the Government are launching out on a sort of Derby day finance scheme and justifying it by no reasons. They say that in two or three years' time they will condescend to tell us what they have done with the money. The Financial Secretary to the Treasury whose brilliant conduct of the financial Debates has been the admiration of this House is a Caledonian with a very strong respect for the bawbees, yet he has come up to that Box and has pounded it on several occasions and said, "Two or three years hence I will tell you how I have spent your money." The Chancellor of the Exchequer is here, fortunately fully recovered after his illness, and I hope that he will break the vow of silence which his colleagues imposed upon the Financial Secretary. I. hope that he will tell us exactly the principles which animated him when he established the fund. I hope that he will do something to explain the inconsistencies to which I have referred. What is the point of this fund? As I have already said, one cannot see what the Chancellor of the Exchequer's policy really is. He is apparently doing his best to hold sterling down by the aid of his mysterious £150,000,000 fund. And at the same time he is rushing around holding himself up as the exemplar of financial orthodoxy. He tells us that we must strengthen and guard our sinking funds and so preserve the pound he wishes to depress by this fund. He rebuked my right hon. Friend the Member for Epping (Mr. Churchill) for suggesting that £10,000,000 or so of our dollar balances should be applied to revenue purposes and he comes down this evening in defence of this £150,000,000 fund and asks us to vote this large sum without explanation to or examination by Members present, all of whom I think are pledged to economy. Therefore, I hope that the Chancellor of the Exchequer will in his inimitable fashion describe to us to-night how he proposes to expend the fund and what qualifications he and his colleagues possess for setting themselves up as cambists.I entirely agree with what has been said by the hon. Member for North Paddington (Mr. Bracken) with regard to the very serious departure from constitutional practice upon which the Government have entered in going into the exchange business. In my younger days I had some experience of a financial house, and I can confirm what the hon. Gentleman has just said— the house was an international house with branches in New York, Paris, Berlin and so forth—that such an occupation is the most scientific and highly skilled of any financial operation known. As he well points out—and I do not wish to reflect upon any one at the Treasury or upon the judgment of the Bank of England—however able they may be they cannot suddenly, without preparation, set out to secure and accomplish their purpose. I cannot believe that at the present time they are in possession of the necessary experience, and therefore I entirely agree with the hon. Member, and with the right hon. and gallant Gentleman who moved the omission of the Clause, that the probability is—and even the Chancellor of the Exchequer himself was very frank when he drew our attention to the conditions of the fund—that it would very probably result in loss.
I asked the Chancellor of the Exchequer to-day, as also did the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), if he would explain to the House the loss on the purchase of something like £11,000,000 of gold bullion which has recently taken place. The Chancellor of the Exchequer in reply said that there was no loss. Like the right hon. and gallant Gentleman, I cannot understand how, if you purchase gold bullion to-day, you can do so without paying a premium for it. Obviously, you must pay a pre- mium. Many Tariff Reformers in the House will agree with me when I say that they rejoiced in the depreciated exchange, because it tended to prevent imports from coming into this country, because it penalised imports. Equally, of course, it penalised the import of gold bullion. The depreciation of exchange raises the price by about 30 per cent. when you purchase anything from abroad. Your raw cotton, food, gold bullion or any other import, is increased in price. The right hon. Gentleman in reply says, "Ah, we have foreign currencies, francs, which we may exchange for this gold bullion." But in the purchase of those foreign currencies he must have had to pay a premium, because we have been long under the infliction of depreciated exchange. Still, whatever our views may be—and I do not wish to enter into that matter at this moment—let us at least face the facts frankly and honestly. I think that the right hon. Gentleman, and the Financial Secretary to the Treasury will agree with me, that if you are a purchaser to-day of gold bullion and you purchase it with foreign currency you have to pay a premium for it and, therefore, an increased amount of sterling to purchase the gold bullion. That means that there has been a loss incurred. I would call attention to what the Chancellor of the Exchequer said in his Budget speech. For the sake of greater accuracy I have possessed myself of the OFFICIAL REPORT, and I will quote two passages from his speech in which he explained to the House on that occasion the basis on which this fund was to be formed. He pointed out with regard to the Issue Department of the Bank of England that:He went on to explain to the House that:"Those of its assets which may consist of foreign currencies fluctuate in terms of. sterling; but so far as its assets consist of gold—including any gold that may hereafter be acquired—-the law requires the gold to be valued at the old par. Thus, the Issue Department cannot, with the exchange at 3.80, add £100 to its gold holding without showing an apparent loss of £28; and, in the same way, it cannot sell £100 of its gold holding without showing an apparent profit of £28."
That, I think, is very clear. The object of my supplementary question—and it is what I understood from the explanation of the Chancellor of the Exchequer when he introduced his Budget—was to ascertain if he meant that the Treasury is to indemnify the Bank of England when it is buying, as apparently it is to-day, gold bullion at a premium, and that the Treasury and the taxpayer have to make good the difference. If the right hon. and gallant Gentleman the Financial Secretary to the Treasury can explain any other way out I am sure hon. Members will be glad. We are seeking light and truth. I agree with what has been said by hon. Members on all sides of the House, whatever our views are, that the uncertainty is undoubtedly very bad for business. It must be detrimental to all extensions of business. Whatever our views may be, for heaven's sake let us have some certainty and know where we are, so that we can put—those of us who have opinions; and we may not all agree —our views and opinions into the common stock and so endeavour to get order out of the chaos which at present exists. Hon. Members will, I think, agree that I was one of the first to oppose this fund, and I agree with the right hon. and gallant Gentleman the Member for New-castle-under-Lyme, that as we get to understand the attitude of the Government we shall feel that it is a most serious departure in giving facilities to this or any other Government to borrow to the maximum of £150,000,000 for the purpose of attempting to achieve what I and the right hon. and gallant Gentleman believe to be an impossible action. My adherence to the Gold Standard is not a pedantic adherence. It is due to the fact that I have given a life study to the problem, and it seems to me to be the best-known standard. Some reference was made to it in a previous Debate when I felt very much inclined to intervene. It was referred to by the hon. Member for East Aberdeen (Mr. Boothby) and others who rather incited me to come in and share in the Debate, but on that occasion I restrained myself and left the field entirely to those hon. Gentlemen. One hon. Member suggested that instead of this fund we ought to have a standard based upon commodities. The right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood) agrees with me that this Exchange Equalisation Fund will not solve the problem, neither will a commodity standard, and for reasons which were well pointed out by an eminent authority who has always been regarded as a very sound economist, Ricardo. It would well repay us in the present generation to read the Debates that took place under similar circumstances over 100 years ago, when we emerged from the Napoleonic Wars. We went through a somewhat similar experience to that we are going through today, very similar speeches were made and many fallacies were advocated in this House. The suggestion was made that we should have a commodity standard. This is what Ricardo said:"In order that the account may at all times precisely balance on this basis, my proposals provide that at any time when a valuation on this basis shows a deficiency resources to the corresponding amount shall be passed from the Exchange Equalisation Account to the Issue Department of the Bank, and that when a surplus is shown that the converse operation shall take place."— [OFFICIAL REPORT, 19th April, 1932; col. 1427, Vol. 264.]
The same argument applies to bimetallism, which was referred to by the right hon. Member for Hillhead (Sir R. Home) and the right hon. Member for Sparkbrook (Mr. Amery) who wanted us to increase the use of silver. I believe in all sincerity that hon. Members in time will probably return to the old parity, but we have to contemplate some period of depreciated exchange. I agree with one hon. Member who said that we must have a monetary policy based upon a metallic standard, but he was not very definite about going back to the old parity. It is a moral obligation to get back if possible to the old parity. That was the basis on which the currency notes were issued and on which the provision was made that anyone holding notes could, during business hours, go to the Bank of England and obtain gold of a certain weight and fineness. To go back upon that is a species of repudiation. We have seen France repudiate, and Germany repudiate, but I hope that Great Britain will not repudiate. I am proud of the fact that we restored our currency over 100 years ago and I hope and believe that we shall restore our currency in this crisis. To-day the pound is worth about 15s. We have had a great fall in values. It is noteworthy that the fall in values which took place in 1919–20 preceded the contraction or so-called deflation. The idea, however, has been put about by the right hon. Member for Sparkbrook and others that the policy of deflation has been the cause of the fall in values. That is contrary to the facts, because the fall in values took place before the contraction. Another fallacy that prevails is that there was a too hasty return to the Gold Standard in 1925, and that that was the cause of our troubles. Anyone who looks at the figures regarding the currency notes and other notes that were issued will find that for the three years previous to the return to the Gold Standard in 1925 there was hardly a variation of £l, so near was the circulation during those three years. Therefore, those fallacies can be disposed of before we approach this question, and we may clear our minds of a great deal of rumour that is not to be relied upon. If we face the problem with a knowledge of the facts we shall come to a better understanding of what ought to be our policy. I believe that we shall in time come round to the policy which I advocate, and that it will tend to raise the gold prices of commodities. Some hon. Members may say: "How can you argue that a return to the old parity will raise the gold prices of commodities"? Perhaps I may briefly indicate how that will be brought about. It will be a long-term process in this sense that the fact of the restoration of London again as the monetary centre will improve our credit, it will enable the conversion of the National Debt to proceed apace, even at a less rate than 4 per cent., and it will encourage the foreign investors to come in and take a hand in the conversion. Obviously, if the foreign investor can be sure that it will pay him to purchase British Government stock and that Great Britain is again anchored to the Gold Standard, he will be more ready to subscribe to the conversion scheme. The great losses of the Bank of France took place when we went off the gold anchorage last October. We do not wish to repeat that. If we can replace our currency on a sound foundation our credit will improve, it will enable us to convert our debt and to save £30,000,000 a year, besides placing London once again in her right position as a financial centre, a position which she ought to occupy and which, geographically, she is better situated to occupy than any other capital, including Paris or New York. I do not think that either Paris or New York can compete with us, because they have not the men with the skill and knowledge which is possessed by the City of London. If we have that position again restored we shall have the field ready again for floatations of loans for the development of the Danubian Provinces and our own Colonies, also China, India and Peru. Every loan that is floated in London goes out in goods and services. That will increase employment and make again the wheels of industry go round. I believe, and I hope that hon. Members will do me the justice of believing that I am sincere, that on these lines our true remedy for prosperity in the future lies."If it should be conceded, which it cannot be, that the issuers of paper money would be willing to regulate the amount of their circulation by such a test, they would have no means of so doing; for when we consider that commodities are continually varying in value, as compared with each other, and that when such variation takes place it is impossible to ascertain which commodity has increased, which diminished in value, it must be allowed that such a test Would be of no use whatever."
Whenever one rises to take part in a Debate on this subject one is rather terrified by having heard a great many speeches from people who know so much about it but who seem to differ so entirely from one another. I am always more in despair when I have listened to the hon. Member for East Edinburgh (Mr. D. Mason) than when I have listened to anyone else. He seems so extraordinarily academic. I picture him milking that kind of speech with the whole world crashing into bankruptcy around him. I do not think it would make any difference to the hon. Member. He would still go on telling us about the need for the return to the Gold Standard, and so on. Even on the Day of Judgment he would set forth his theories and we should find him saying: "Only wait a little bit and you will get back to happy times." We welcome the Government's proposal because it seems to us a definite breach with the old theories for which the hon. Member for East Edinburgh stands and which, to my mind, are so entirely out of date at the present time.
What has struck me as peculiar in this Debate is that we have had a union of extreme opposites. We have had the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood), an extraordinarily unorthodox person in everything, and we find him falling in with the hon. Member for East Edinburgh. We expected something eccentric from Paddington and also South Croydon, but with all these counsels we are in a difficulty. There is, however, one theme on which they all seem to agree, and that is that we ought to have a statement from the Government in regard to policy. It is unfortunate that, although we have had lucid speeches from the Chancellor of the Exchequer and the Financial Secretary to the Treasury has given us a great many admirable speeches, and we have had the occasional incursions of the hon. Member for Devonport (Mr. Hore-Belisha), again and again in the Debates on the Budget and the Finance Bill we have heard the appeal: "Can the Government tell us what they mean, and what is their policy"? That appeal does not come from these benches only but from below the Gangway, above the Gangway and on every side. Somehow or other the Government do not seem to have managed to "put it across." They do not seem to have convinced anybody as to what their policy really is. I should like to know whether they follow East Edinburgh, or Paddington, or Croydon or Coventry or any of these various orthodox or heterodox speakers. I always find myself puzzled when these experts talk. If I meet one expert and talk to him I can generally understand what he means. I may even think that I understand the whole situation, but when once I get into this controversy I begin to sympathise with the Chancellor of the Exchequer. Perhaps the right hon. Gentleman goes back to the Treasury and meets with the same sort of controversy that comes up here—these Gold Standard men, these inflationists, deflationists and reflationists, and perhaps he has not been long enough at the Treasury to sort them out. The point that impresses us on this Bill is that it is all very well to have an academic Debate and that it may be a beautiful work of art, but meanwhile the world is tumbling rapidly down. We understand that the Government hope to take a leading part in bringing about some sort of stability out of the chaos. They hope to bring about a world controversy. [Interruption.] Well, there will be controversy. They hope to have a conference on the whole question of trade and industry and prices, and they hope to get some kind of agreement, but I cannot make out what their policy is. The Chancellor of the Exchequer tells us very guardedly that he hopes to get a moderate reflation back to 1929 prices. We hear from all sides of the House that it is the general desire that there should be a rise in prices. It is generally thought that that would be a good thing and that it would stimulate trade. But when we come to the actions of the Government it is so different, because most of their actions hitherto have been to impede trade and to stop as far as they could international trade. At home their great aim seems to be to carry out what they call economy, which is only a form of deflation They seem to want to get less and less consumption and to bring everything to a standstill. I cannot understand a policy which at one time says that we must try to get trade busy and try to get some sort of inflation, a rise in prices, and to get people buying, and a policy which at the same time has an entirely different effect. 8.0 p.m. We welcome the Exchange Equalisation Account so far as it goes, because it seems to be a departure from the blind trust in Sir Montagu Norman which has gone on for the last 10 years and seems to suggest that we were not so far wrong when we suggested that perhaps the banks were not right. Only about nine months ago no one dared to say a word against the banks of this country, but now you see criticisms of the Bank of England in almost any financial newspaper, suggesting that it is not considered to be the safe institution it used to be. May be it would be better if we had the hon. Member for East Edinburgh and the hon. Member for Paddington, North in place of the Chancellor of the Exchequer and the Financial Secretary, but I doubt whether they would make a very happy team and get along together. But they say that they know all about these matters, they understand these difficult topics of currency, whereas the right hon. Gentleman opposite does not, and the Financial Secretary, with his Scottish outlook which makes him careful, is supposed not to understand them. Still I would rather trust the Chancellor of the Exchequer and Financial Secretary to manage our currency and exchange than the people who have been doing it for the last 10 years. They have put us absolutely in the soup. We on these benches welcome the introduction of the Exchange Equalisation Account. We think it is the beginning of an attempt to get some sort of policy into finance, but we say that you will have to go a great deal further and we would like to hear from the Chancellor of the Exchequer, not an eloquent disquisition on questions of currency but how he relates it to the question of the prosperity of this country. I do not think that we shall solve our problems by any sort of monetary jiggery pokery. We shall not help the masses up and down the country by some wonderful financial manipulation. I do not think we can. I do not believe that we can solve it in the way suggested by the hon. Member for East Edinburgh, who took us backwards not forwards. You will not get any improvement by going backwards. We must go forward. We should like to hear from the Chancellor of the Exchequer that he is going to give a lead. I believe it is true, it is stated in many financial newspapers and leading journals, that the world is looking to this country for a lead. We are not getting it at the present. The Chancellor of the Exchequer is at the moment the pilot of the leading ship in the sterling convoy, and we should like to know where he is going to lead that fleet. We have been told that it has been going through terrible storms, that it is taking emergency action; but as far as I can see it is now laying to. It never seems to have set any course, never seems to try to get anywhere. It is being blown backwards and forwards by the winds. This country and the world will not get out of our troubles without a clear idea as to our policy on this international exchange and currency problem, and you cannot get it by wrapping it up and talking about it in conferences. It is about time that this country, which has led the world in finance before, should state quite clearly what it means to do; what is the way out, and lead the world. It may be said that this should have been done long ago. We think that these steps should have been taken long ago, and that the Lausanne Conference should have been called long before. But whenever we have mentioned these matters it has always been said, "hush, hush you must not mention it," because you will at once scare away other countries. It may have been true then, although I doubt it, but the course which is right and safe is always the bold and open course. America is feeling the draught pretty badly just now and there is no doubt that every country in the world would welcome a strong lead. We may not expect to get it at this moment. The Chancellor of the Exchequer may not be able to give us his full policy, but we should as soon as possible give a lead to the world as to what we mean to do, the kind of basis we want for our exchange, whether it is a commodity basis or a gold basis. We want to lead the world; that is our appeal to the right hon. Gentleman.The hon. Member for Limehouse (Mr. Attlee) has once again appealed to the Government to inform the world at large in a bold and vigorous manner what precisely is the monetary policy which this country intends to pursue. By a slip of the tongue he suggested calling a world controversy upon this subject. That slip of the tongue may perhaps be a little nearer the truth. I cannot imagine a more unhelpful manner of bringing about some agreement in the world than that one country should lay down in a dogmatic manner, without having heard what may be said by any other country, what is the final policy to be pursued by the nations of the world in order to solve world troubles. If ever the time comes for this country to give a lead to the world such as the hon. Member suggests this is certainly not the time or the occasion upon which it should be done. We are engaged in discussing an Amendment to leave out Clause 22, in other words, to abolish the Exchange Equalisation Account, and I failed to discover from the speech of the hon. Member whether he was in favour or against the Amendment. He never even mentioned it, and he certainly gave us no indication as to whether he was rising to support or oppose it.
I did say that we on these benches welcome this particular provision in the Finance Bill as a step in the right direction.
Then I gather that the hon. Member is opposing the Amendment of the right hon. and gallant Gentleman?
Certainly.
I am much obliged, because I should imagine that there will hardly be more than one or two supporters of the right hon. and gallant Member in his proposal to abolish the Exchange Equalisation Account. I want to comment on one or two things which the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has said. The right hon. and gallant Gentleman said that the change in the situation has brought home to the majority of thinking and knowledgeable people the mistakes which had been made in raising credits and loans in attempting to maintain ourselves on the Gold Standard last August. I wonder whether the right hon. and gallant Member will find any support in this House for that view. I wonder whether it will be said that we could with propriety at that time, without making the slightest effort to defend sterling, have gone off gold and entailed these losses to those who trusted in the stability of sterling, which indeed were not altogether avoided but which we can say we did everything possible in our power to prevent. I do not think that the right hon. and gallant Member will get very much support for his view. Nor do I think it will be agreed that we could to-day in the present circumstances feel such confidence in the stability of sterling as to be able to abandon the proposal in Clause 22. The right hon. and gallant Member suggested that the working of the Account may involve us in heavy losses. In my speech on the Second Reading I stated that it was not possible to avoid the risk of losses on the fund but, on the other hand, that we had to consider its advantages, and I put it to all hon. Members that whatever criticism may be made upon the way in which the Account may be managed in future, whether it cannot be managed without suffering losses or whether it is managed in such a way as to make profits, there would have been still greater criticism if the Government had stood still and watched the exchange fluctuating wildly up and down, with all the consequent injury and damage to trade and industry without doing anything.
As a matter of fact, the course of sterling has been remarkably smooth. It has fluctuated to some extent but within comparatively small limits. Whatever criticism may be brought against the Government, it is certain that trade and industry generally are grateful for what has been done in avoiding greater fluctuations than those which have taken place. The right hon. and gallant Gentleman asked what the Bank had in mind in making purchases of gold, and he found a variety of possible reasons, hypothetical reasons, some of which were extraordinarily fantastic. If there are two ways of accounting for any action, one which is normal and natural and another which is extraordinary and fantastic, the right hon. and gallant Member has a natural preference for the latter of the two. His mind seems to be inclined that way. Is he not aware that the Macmillan Committee in their report, before we had gone off gold, indicated their view that our reserves of gold in this country were too low.We are now off gold.
When we are off gold it is still more desirable that our reserves should be increased from the low figure at which they stood. Normally, our reserves are about £150,000,000. They fell to £120,000,000, and have now been increased to £130,000,000. The right hon. and gallant Member asks whether there has been a corresponding increase in the note issue. There has; and consequently there has been an increase in credit available, and so far as that influences the course of monetary policy I should imagine that it is in accordance with his desires.
When he comes to speculate whether it is our policy to hoard bars of gold somewhere in the vaults of the Bank of England with a view to paying it out to any holders of War Loan who may refuse to accept terms in some hypothetical conversion scheme, I must assure him that he is penetrating into realms which are far removed from those of reality. The purchase of gold by the Bank of England has nothing to do with a possible or hypothetical conversion operation which may be considered in future.
Does that apply to foreign currency?
The hon. Member for North Paddington (Mr. Bracken) was very sarcastic about the suggestion that bureaucrats from Whitehall, together with a few ignorant Ministers, were going to enter upon the difficult and delicate processes of handling and controlling exchange. The hon. Member for North Paddington is a very faithful follower of his right hon. Friend the Member for Epping (Mr. Churchill), but he has not got his right hon. Friend's knowledge and has not got his wit. Really when he comes forward because he thinks that some reflection has been made on his right hon. Friend in connection with some heterodox suggestion of his, and suggests that that is the way in which the exchange is going to be controlled, he is only exposing his own ignorance. No one here suggests that the Chancellor of the Exchequer or the Financial Secretary is going to occupy his time from day to day in deciding how the Account shall be manipulated.
The working of the Account, of course, will be carried on by the Bank as agents of the Government. In the Bank there are experts in this matter who have as full knowledge as anyone else in the country. It is quite clear that you cannot, that no one can, not the greatest expert can operate an Account of this kind, with a certain knowledge of what is going to be the course of the future, without a possible risk on one side or the other. All we can say is that we believe that the existence of this fund and its operation are necessary for the purpose of steadying the value of sterling and of preventing it as far as possible from rising to undue heights or, it may be in future, from falling to undue depths. When hon. Members repeat over and over again that they do not believe the Government has a policy, and ask why the Government does not explain what is its policy, I must suggest to them that they had better follow the example of my hon. Friend the Member for Graves-end (Mr. Albery), who does not seem to have any difficulty an putting together, from various utterances of the Chancellor of the Exchequer, what seems to me to be an accurate account of the general considerations which have been in my mind from the first. The one correction which I wanted to make was that my hon. Friend appeared to me to be putting into my mouth statements as to what would happen in consequence of the operation and management of this Account, whereas perhaps I had rather stated aims than committed myself to saying that it would be possible on all occasions to achieve those aims.The right hon. Gentleman has made a very important statement. He does not suggest that this particular account is of the slightest use in achieving the ends that he has laid down? The plans that the right hon. Gentleman had are independent entirely of this Exchange Account?
I am not prepared to say that. I am not prepared to say how far the management of this Account might not conduce towards the achieving of the ends which my hon. Friend quoted as being those to which I had given expression from time to time. I do not say that they always can be completely achieved, but there may be occasions when, by the help of this Account, it may be possible to do something towards achieving those aims. The right hon. Gentleman was right when he said that we want to see wholesale prices rise. But do not let him confine his attention solely to sterling prices. We cannot get away from the fact that we must be affected by gold prices, and we must also remember that an alteration in sterling prices may affect gold prices. All these things have to be taken into account. It is not reasonable to ask that one should lay down in any detail beforehand the exact policy that one is going to follow from day to day. The general aims I have tried from time to time to express to the House. My hon. Friend the Member for Gravesend has shown that he has appreciated the sense of what I have tried to explain. But there must be left to the Government of the day, and to the agents of the Government acting under instructions, a discretion from time to time to see how it is possible to advance towards those aims. That is the best reply I can give to the right hon. Gentleman, and it may be taken at the same time as a reply to the hon. Member for Limehouse.
Would the right hon. Gentleman explain the losses on the purchase of gold bullion?
There cannot be a loss on one single transaction. There must be a purchase and a sale. Up to that point there can be no loss.
I think the Debate has achieved one great object, and that is that we have heard from the Chancellor of the Exchequer what is the main object of this Equalisation Fund. But if I may, I would impress upon the Government that there is a very genuine anxiety in the minds of business men, industrialists and experts in the City, as to whether or not we shall not make a very serious loss over this fund, and whether we are not trying to do exactly the same thing as we did when we tried to keep on the gold basis. We arranged for large foreign credits at that time. Those credits were exhausted and we had to go off gold, but we lost a very considerable sum in doing that. I think it was over £13,000,000. Are the Government not trying to do what other nations have tried to do, and what so many private individuals have tried to do, and that is to stop the working of economic-laws? We have pinned sterling at a price, and we have to pay for keeping it at that price. Take the example of every commodity that has been cornered, or that an attempt has been made to corner, in the history of the world. The individual has always suffered when the corners have been broken. It was tried with coffee.
Is there not very grave risk in dealing with this sum of money? It is a curious fact that the money brokers in the City to-day are extremely busy on the exchange account. But they even up their business every night at 5.30, or whenever their office closes. All their commitments are closed and they start again next morning. When the British Government handle this fund they have to carry it over; they have to take the risk overnight of what is to happen. Suppose that any serious disaster happens in any part of the world. Suppose that America decides to go off gold. Suppose that the worst happens in Germany, and she does not pay any reparations. Is there going to be a tremendous loss in the sums we hold of those currencies? Are we going to buy huge masses of American dollars, to find them depreciated over night and have to face the loss? That might happen also in the case of France. If there is European trouble, or difficulty with regard to reparations, we do not know what is going to happen to the franc. The British Government will be handling a very large sum in French francs. Are the Government not taking a risk which they ought not to take? Are they not trying to fight against the economic law of supply and demand in holding sterling to a price which may be the right price—on that I am not prepared to argue—but which may be the wrong price? If it is the wrong price the loss is going to be serious. It is a terribly difficult problem because at the price at which sterling is fixed just now, we are paying 30 per cent. more for all our raw materials and for all the foodstuffs which we bring into this country. I agree that on the other hand it gives us assistance in selling abroad. It is for the Government in their wisdom and in the wisdom of their experts to say what is the right price at which to pin sterling. I think that sterling ought to be allowed to take its natural course. If it goes further down that means, I know, that we shall have to pay more for our supplies of raw materials. On the other hand, it would give the manufacturers in this country a better opportunity of selling abroad. If sterling goes up, I do not think that we can make such a heavy loss, because we shall be buying our raw materials at a lower price, which may or may not compensate for the loss of the assistance now given in the selling of our goods abroad. I bow to the judgment of the Chancellor of the Exchequer on most matters, but I do not quite agree with one statement which he made to-night. He said that this was not the time to give the world a lead. He said that at this moment, when we were dealing with this Amendment, it was not opportune to disclose secrets. I think the Chancellor of the Exchequer has disclosed his programme or, rather, has Confirmed what the hon. Member for Gravesend (Mr. Albery) suggested was his programme— that this very large fund was for the purpose of stabilising or pinning sterling.I never suggested that the fund was for the purpose of pegging sterling; I said it was for the purpose of steadying sterling.
I accept at once the hon. Gentleman's statement, but I think that this is the time to give the world the lead. The world is looking to Great Britain for a lead. Half the world have gone off gold and gone on to sterling. Those who remain on gold are very worried and nervous about it. Those holding huge masses of gold do not quite know what they are going to do with it. In view of the fact that a conference has been or is about to be called, the Government ought to consider carefully whether this is not a very opportune moment at which to suggest a policy which might settle some of the difficulties of the world. International trade is crumbling. International business becomes less and less, and unemployment increases and still increases, and the only Power to which we can look in this emergency is Great Britain. I press the Chancellor of the Exchequer to reconsider that aspect of the matter, and to see if he, either by himself or through the Government, cannot give what is needed more than anything else to-day and that is a lead to the world.
I only intervene because of some remarks which have been made in the course of this Debate and particularly by the hon. Member for East Willesden (Mr. D. G. Somerville). I think everyone would wish the Government to give a lead at the right and proper time but we are bound to realise that a conference is shortly to take place in which the nations of the world are to take part, and we must ask ourselves: Is it wise or prudent to lay down any fixed course of action or to fix a figure at which it is wished to stabilise the pound before we have entered into negotiations with those other nations? Conditions in the various countries are so different and the policies of the nations have been so conflicting, and yet, at the same time, the need for common action is so great, that however determined a country may be to give a lead, that country in ordinary prudence ought not to commit itself beyond a certain point when it has before it within the next few weeks a conference with the other nations. The views of those other nations must be taken into account before we can fix the precise course which this country ought to follow. I should have thought that what the Chancellor of the Exchequer has said in reference to the speech of the hon. Member for Gravesend (Mr. Albery) was a sufficient indication of the views of the Government to satisfy anyone who wanted to know the kind of course that the Government would take. But in prudence the Government could not go further until they had been in consultation with the other countries and had ascertained the views of the other countries.
8.30 p.m. There are two other considerations which I would put to the House. The hon. Member for East Willesden made a point as to letting sterling take its course and I know the arguments which are used in favour of that policy or rather lack of policy. But there are two considerations to be borne in mind. Temporary fluctuations in sterling may take place quite rapidly and may be very considerable fluctuations. On the other hand there may be long-term movements coming like waves. Supposing that the cost of production in this country were to rise appreciably for instance? These movements are of different kinds and if, when the pound is off the gold standard, we were to let sterling take its course would it not mean that sterling would be subject to temporary movements of capital which might alter the exchange level within the space of 48 or 72 hours? I should have thought that it was precisely those movements which anyone who had the power would wish to "iron out" and prevent, from the point of view of their effect upon British industry. I have had some experience in the old days of fluctuations in currency. One of the greatest difficulties with which one had to contend in those days was the difficulty that a currency might run away with one in the actual course of the negotiations over a contract. I have known of a case of a currency appreciating almost 20 per cent.—You could always insure at six months.
Perhaps the hon. Member would wait for a moment. In the case with which I had to deal a currency appreciated 20 per cent. between the time when the contract-was arranged and the time when it was signed. No prudent person would have bought his exchange—at least not in the case in which I was concerned—until the contract had been not just provisionally arranged but actually signed. Not only in those cases but in many others is it of importance to keep the price of sterling as free from temporary fluctuations as possible and that is why I, for one, apart from any other considerations or criticisms, support the establishment of this Exchange Equalisation Account. No doubt you run a risk. No one can help running a risk if they want to carry out a business of this kind but it is not a gamble by any means. Far from it. It is one of the things which ought to be carried out in the interests of industry.
The hon. Member for Limehouse (Mr. Attlee) said that economy by a Government meant more and more deflation. I do not see that it need mean that. Economy by a Government means that money is left for the ordinary citizen to possess and spend which otherwise is taken for Government purposes, and from the point of view of industry, what is needed is not only the amount of money, but also that confidence which forms the velocity of credit as well. Prices are never the result of the amount of money alone; they are always the result of the combination of the amount of money and the velocity, the rapidity, with which it is used. The first is mechanical and the second psychological, and the more the Government at this time take from the ordinary public by taxation the more they diminish confidence still further below the point that it has passed. From that point of view, it seems to me that far from economy by the Government meaning more deflation, it is really one of the conditions under which confidence can be restored and thereby prices maintained and industry prosper once more.I should like to confine myself rather more narrowly to the Amendment and the substance of it than some of the speeches which have been delivered have done. The precedent was begun by the right hon. and gallant Gentleman moving the Amendment, in a speech which, coming from him, struck me as rather humorous, because logically it consisted of one long lament that we were now off the Gold Standard. Once we are off the Gold Standard, which gives us automatically some means of liquidating the international balances of payment, I suggest that there is no escape from the fact that the central banks must hold assets in one another's currencies. That inevitably means the risk of loss, so I do not think there is any substance in the objection to the policy of the Government that they are running a risk. That is inevitable.
Hon. Members who make that objection all dislike the Gold Standard. They want to have their cake and to eat it too. If they want us to have a currency which is not internationally linked with all other currencies by means of gold, and I am there somewhat inclined to agree with them, they must face the consequence that our own central bank must inevitably have assets in other currencies, which may mean loss. Nor, on the other hand, do I think it useful to follow, as other speakers have followed, the hon. Member for Gravesend (Mr. Albery) in widening this discussion into a general discussion of monetary policy, because as I ventured to point out in some earlier remarks on the subject, this fund can have either an inflationary effect, a deflationary effect, or no effect of the kind whatever. Therefore, it is not relevant, when we are considering an Amendment which deals exclusively with the Exchange Equalisation Account, to ask the Government, even if they were disposed to answer, for a statement on general monetary policy. I should like, therefore, to confine myself purely to this fund for the purpose for which it purports to be inaugurated, namely, for handling variations in the exchange value of sterling, and the first point that I wish to emphasise is this: Members in various parts of the House always seem to suppose that as soon as currency goes off gold it goes on to sterling. Would that it did! As a matter of fact, it is entirely inaccurate to say, as was said this afternoon, that something like half the world have gone on to sterling. What has happened is that so far nearly all those currencies which have gone off gold have relapsed into the chaos of unrelated and unregulated currencies from which we suffered shortly after the War, and the immediate relevance of that point to this discussion is that with regard to all those currencies this fund is irrelevant. With regard to those currencies which are definitely linked with sterling, such as the rupee, obviously the manipulative mechanism was already there and was operative. With regard to those currencies where dealings are quite unreal, this fund is of no service, and that covers unfortunately the majority of currencies to-day. Quotations are meaningless. Someone finds a Hungarian pengo under his blotter and sells it to some sanguine person in Zurich and calls it a quotation; it does not mean anything. You cannot in fact get your exchange in these currencies. Therefore, in regard to all these currencies, this fund is irrelevant. What follows from that? Surely this fund is really a gold exchange standard fund, with one important qualification. Really and truly, criticisms of recent purchases of gold hardly seem to suggest that those who make them quite appreciate what is the technical position at the present moment. This gold bugbear is becoming a nuisance in these controversies. The actual position with which anybody is faced in handling sterling exchange from the point of view of international trade to-day is almost, I think it is true to say, confined to one major point, that is to say, the ratio of sterling to gold. The dollar and the franc, whatever we may do, are, and are likely to remain, gold currencies. Much the biggest part of our trade, as far as it is not definitely with the two classes of currencies to which I have referred, is with gold, and therefore the policy which is to be carried out by those who are utilising this fund is really a gold exchange policy. That is entirely irrespective of whether we are going back to gold ourselves in the near future, in the far future, or never. As long as France and America are on the Gold Standard, it is true that the principal preoccupation of those who are in charge of our currency, in so far as it deals with international trade, is the buying and selling price of gold. There is one qualification in saying that this fund is a gold exchange standard fund similar to that which handles the rupee exchange, and that is that we have not, quite deliberately and quite rightly, tied ourselves to any fixed exchange ratio. While our business is to handle the sterling gold ratio, we have not tied ourselves to any particular value. From that, I venture to draw a conclusion on which I should like to know the views, on some occasion, of the Chancellor of the Exchequer, if they could be expressed. If the question is not indiscreet, it is this: If the principal business of this fund is precisely to determine from time to time the price of gold, as I have suggested, will it not be a most useful development to bear in mind as a possibility for the future; and if, as I think most Members of this House contemplate, this fund is inevitably to remain in existence for some time, so long, that is, as we are not on gold and America is, would it not be well to consider publicly stating from time to time, just as we do the Bank Rate, what are the sterling prices of gold at which the Bank is prepared to buy and sell? That would automatically get rid of the principal speculative activities, and it would avoid committing the country to all the dangers, of which we are well aware, of permanently going back to gold which is not in our control. But it would be far more effective than merely mysteriously endeavouring to exercise some control, unstated, over the price of gold in sterling; it would do that, even if the price had to be varied every week, still more if it could be held for weeks or months, and would get some at least of the advantages of both worlds. It would give us the advantage of a free market in gold by which small movements from time to time could be liquidated without tying ourselves permanently to a sterling gold ratio which might lead to serious industrial effects if the commodity value of gold in the United States and France were altered. There is another observation I would like to make on this fund viewed in its narrow aspect as an exchange fund. It seems rather curious to me that in all the Debates we have had on this subject no mention has been made of an institution which is vitally concerned in this matter. Again, if it is not indiscreet, I should like to know, if it is possible, the views of the Government on this matter. If I am right in arguing that we are really discussing the control of the gold sterling ratio, the institution to which I am referring is vitally concerned. It is the Bank for International Settlements. It is unfair to lay the whole burden of handling this ratio on the Bank of England. I am well aware that the Bank for International Settlements is not a Government institution, but the Bank of England has, of course, a representative on it and the Bank of England is our agent in this matter. Moreover, it is true that, unlike the Bank of England, the Bank for International Settlements is barred from operations in currencies in any country without that country's permission. That, however, would be no bar to any action such as I am suggesting because the policy of the Federal Reserve Board is entirely one with our own. I hope we can be assured that the action of the Exchange Equalisation Fund and the Bank of England together has been running in full accord with, and has the full support of, the Bank for International Settlements. I believe that if in this matter the Bank of England, the Bank for International Settlements, and the Federal Reserve Board act together, they can to a great extent control gold prices at their will, but neither can act alone.The hon. Member for Central Southwark (Mr. Horobin) explained that this Exchange Equalisation Fund can be used for the purpose of inflation or for deflation or for neither such purpose. He thereupon proceeded to deprecate the fact that this discussion had covered the whole field of monetary policy and said that he could not understand how any hon. Gentleman could really have had the effrontery to ask the Government for some statement of their general monetary policy. It seems to me that this is an admirable opportunity for discussing this question. The fact remains that the Debate has covered that very wide field, which is perhaps the most important of any field which comes within the ambit of the discussions of this House at the present time. I have long been convinced that Aberdeen is superior to Edinburgh. I would urge the Chancellor of the Exchequer, through any right hon. and gallant Friend the Financial Secretary, who is neutral in this matter, to direct his attention and his sympathies to the views that come from Aberdeen rather than those that come from Edinburgh. As I listened to what my hon. Friend the Member for East Edinburgh (Mr. D. Mason) described as his long-term argument in favour of our going back to the Gold Standard at the old parity, I could not help reflecting that the result of the policy which he advocated was a world lying in absolute ruins in the midst of plenty.
I cannot see really that there is any defence to be made at this juncture for a policy of going back to an uncontrolled international Gold Standard. It has been pointed out by many Members in this House and by people of repute that the condition of the survival of the capitalist system is a stable measuring rod of value. The reason that the Gold Standard broke down was that it did not afford to the nations of the world a stable measuring rod of value. Gold is still valued in terms of commodities, and that is the prime cause of our troubles. When, as the result of an international conference, we can persuade the nations of the world to co-operate with us in order to stabilise the value of gold in terms of commodities, I shall be prepared to go back to an international Gold Exchange Standard. Until that can be brought about, God help us from ever going back to the Gold Standard. The more one considers this Exchange Equalisation Account, the more one listens to speeches from the Front Government Bench, the more one is compelled to doubt its value. I doubt its use, and I suspect its dangers. If the events of last autumn proved anything, they seem to me to have proved that in the case of a real run, either for or against sterling, a fund of £150,000,000 would be absolutely no use whatever. How long did it take for the £80,000,000 that we borrowed to be absorbed when there was a real run against sterling? It was only a matter of days, and I believe that if there were a real determined run on the part of the rest of the world, either in favour of or away from sterling, and that run continued, as it might well do, for as long as a week or 10 days, this £150,000,000 would not be of the slightest use to stave it off one way or the other. The right hon. Member for Tamworth (Sir A. Steel-Maitland) said that it might be useful for ironing out small fluctuations in the exchange value of sterling. That may be so, but I doubt if it is necessary to set up an Exchange Equalisation Fund for that purpose.I do not know whether I said "small," but I meant temporary fluctuations, which might be very considerable.
I doubt if this fund could iron out a considerable fluctuation, but that of course is a matter of opinion. What I am really frightened of is that the Government, through the Bank of England, are in fact going into the exchange markets of the world to play about with the taxpayers' money in some of the most complicated, intricate and difficult exchange operations against some of the most expert operators. If they do, I am afraid they are going to burn their fingers, and without getting any real advantage for this country. The Chancellor of the Exchequer said, "Ah well, we have at the Bank of England experts in these matters of exchange and monetary policy who can hold their own with anybody." I can only say that the performance of the Bank of England on and off for the last 10 years has not justified hon. Members in having absolute confidence in the omniscience of its experts. They have certainly known how to be wrong from time to time, and if they make mistakes—and we are all fallible, even if we are connected with the Bank of England—in the handling of this fund in the exchange markets they will lose the taxpayers a good deal of money. For what purpose? And if they do lose it, we are not to be told anything about it.
That brings me to another point which makes me doubtful about the wisdom or value of setting up this Exchange Equalisation Fund. In a discussion about constitutional precedents I said earlier that I was all in favour of a little bit of constitutional undermining from time to time, but I am not sure that I am so much in favour of this financial undermining of the control of the House of Commons, and I think it is a dangerous precedent for this House to let go, as it will tomorrow, of about £150,000,000 as a contingent liability of the British taxpayers, without any further control over its use, not having been told how it is to be applied, or having been told only in the most hazy way, and without being vouchsafed either monthly or biannual information as to the state of the fund at any particular moment. I am not going into the Division Lobby in support of my right hon. Friend who moved this Amendment, and, in fact, I do not think he will get a Teller, because the official Opposition are apparently not in support of his Amendment, but I think it does afford an opportunity of expressing grave doubts as to the wisdom of the setting up of this fund. There is one point which has been brought out in this Debate on which I would like to ask the Financial Secretary a question or two. What is the reason for these continual purchases of gold by the Bank of England now? They are going on at the present time, and at an astonishing rate. I canot believe it is at all necessary from the point of view of this country, or desirable in world interests. If these purchases of gold by the Bank of England continue, this House will have a perfect right to ask the reasons for it, and to express some misgivings as to the policy which is being pursued by the Bank of England, for which this House, as has so often been pointed out, cannot divest itself of responsibility however much it would like to do so. There can be no doubt that this Exchange Equalisation Fund will be used for the purpose of purchasing gold if this policy is carried through—that is one of the reasons which has been set out—and why I am apprehensive about their results is this: If we earmark gold which we have purchased either in Paris or New York for our own purposes against a rainy day later on, or if we draw out gold from Paris or New York, we are aggravating the difficulties both of America and of France in trying to get a certain measure of internal inflation by contracting their basis for credit. We are intensifying world deflation at the same time by withdrawing to London so much gold from the basis of credit in the Paris and New York markets, or by earmarking it there at a time when we do not really require it so much as do America and France, who are contending with even greater difficulties than we are, particularly so in the case of the United States. I would like to know whether it is the policy of the Bank of England to continue purchases of gold, and, if so, what is the object of that policy? 9.0 p.m. That brings me to the last point I want to put to the Government. It is a point made in every speech delivered in these Debates, and it is, What are the general lines of the monetary policy of the Government? The Chancellor of the Exchequer, in a speech of supreme importance, seemed to me to implement the speech of the hon. Member for Gravesend (Mr. Albery) and to lay down in more or less general terms some admirable objectives. I wish we had had that statement from the right hon. Gentleman put more emphatically, put more clearly and upon a more important occasion than the present one, because, however much members of the Government may claim that their monetary and financial policy is known, or ought to be known, the fact remains that they have not made it clear to the mass of trading 'and commercial opinion either in this country or the rest of the world. It has not been sufficiently emphasised. There is an apparent lack of grip about the Government so far as monetary and financial policy is concerned, and if they have a policy it is all the more unfortunate that that impression should have been spread, not only in this country but in Europe and in the United States as well. The point I want to emphasise is that there need be no necessity for us even to give the impression that we are trying to dictate to the rest of the world. If we lay down pretty clearly the sort of financial and monetary policy we think we ought to pursue, I believe it would be of great assistance. I do not believe it would jeopardise the success of the forthcoming international conferences, as my hon. Friend the Member for Limehouse (Mr. Attlee) said. On the other hand, I believe, with my hon. Friend who sits behind me, that the world is waiting for nothing so much at the present time as a lead from this country on these particular matters, and that this country is more capable of giving a lead in monetary and financial policy at the present time than any other country. Even the policy of going back to the 1928–29 price level was very half-heartedly enunciated by my right hon. Friend the Financial Secretary to the Treasury, who does not usually flinch from making a bit of a splash when he is delivering a speech. If it is the intention of the Government to go back to the 1929 price level, that is a most tremendous thing. It should have been announced to a tense, expectant House, in answer to a Private Notice question at the end of questions, and blazoned in headlines in every newspaper in this country. That is the way; instead of mumbling a rather shamefaced admission to the Treasury Box, in reply to a Debate on some rather obscure Amendment on the Finance Bill. I think this Government is extraordinarily modest, unnecessarily so. They ought to blow their own trumpet, they ought to be convinced of their own rightness and ability to a far greater extent than they are. Either they are unnecessarily humble, or else they are so afraid of offending a colleague if they announce a policy of any sort that they do not desire to do so very clearly. Another point raised in the Debate to which I would like to draw my right hon. Friend's attention is the question of economy. I think there is the most frightful public muddle about economy in this country. The Government are in a muddle about it. There is no distinction between public economy and private economy, no distinction between productive expenditure and unproductive expenditure. If the right hon. Gentleman is going to use this Exchange Equalisation Fund as well as he can to raise prices to the 1929 level and to keep down the value of sterling that must involve, alongside that policy, a policy of credit expansion inside this country. We all agree, those who think that inflation is a desirable thing and those who are opposed to inflation, that if you are to get credit expansion you have to persuade the people to borrow, to expand and to carry through enterprises of various kinds. I believe that the Government will be forced to give a lead in this matter, and that they will be forced, within the next two years, to revise the whole of their policy with regard to public expenditure on productive works, re-equipment, slum clearance, agricultural development and transport. I believe that all that policy will have to be revised inside this country if we are to achieve the internal inflation and expansion, and the rise of prices that is more desirable than anything else. At the same time it must be coupled with far more ruthless economy in purely unproductive expenditure than has yet been contemplated by the present administration. These are two entirely separate and distinct things, and there is confusion in the public mind about them, and even more than the confusion between public and private expenditure. The right hon. Gentleman the Member for Billhead (Sir R. Home), speaking on this question of the Exchange Equalisation Account, said that a civilisation based upon a complicated system of credit would die if a spirit of hoarding prevailed. All the tremendous talk about dire sacrifices, tremendous taxation, more burdens and more ruthless economy in private expenditure does nothing but encourage that spirit of hoarding, and aggravate the problem with which we are trying to deal by means of this Exchange Equalisation Account. I am only pointing this out as part of a general plea for a clear statement of policy on the part of the Government. I am sure there is confusion on this matter of economy, and I am sure that there is confusion as to the ultimate objective of the Government. I would only repeat that if it is the policy of the Government to go back to the 1928–29 level, they will not have to encourage hoarding and private saving, but encourage productive expenditure in this country if they wish to carry through that policy. I am all for international conferences and co-operation of any sort or kind, but I would say that Lausanne may get so far, but it is very doubtful if it is going to solve the problem. Ottawa will probably help a great deal, but I do not see that we can, or that we ought, in this country, to rely entirely upon international action to get us out of our present difficulties within a very short time. We have to rely, to some extent, upon ourselves. That is why I deprecate the speeches of hon. Gentlemen who make out that there is nothing to be done in this country, and that there is no possible solution or hope of our getting out of our difficulties unless we can get France and the United States of America to agree with us on every point. I do not believe that that is true. I believe that this country can do a tremendous lot to help herself, and that is why some of us have been pressing, and will continue to press, for a distinct policy from His Majesty's Government. If we can give a lead to the world I am convinced, as the Chancellor of the Exchequer himself admitted, that sterling will influence gold, and that sterling prices may influence gold prices, and through a rise in sterling prices we may get a rise in gold prices, and that revival of trade which we all desire to see. it is falling prices which are the primary cause of our trouble at the present moment. That is admitted on all hands. If we can obtain international co-operation to raise prices, then do not let us leave any stone unturned to try to keep prices up in this country.I do not propose to go into the whole question of the monetary policy of this country, or to advise the Government on their methods of publicity, as has just been done by the hon. Member for East Aberdeen (Mr. Boothby). I must, however, take the opportunity of criticising one or two points in his speech which seemed to show very great mental agility. Not many hours ago in this House the hon. Member was saying how desirable it was to remove food taxes from the purview of this House in order that any operation might take place apart from Government action when necessary. Now he conies here protesting that the Exchange Equalisation Fund is to be removed from the control of this House. I would like to ask him why he approves in one case and not in the other. He would like to see independent action on food taxes, but not on the Foreign Exchange Account. That may explain why some people approve of food taxes being removed from this House, but in regard to other things they strongly object.
I would like to say a word about one point which was raised by the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland). He spoke about the difference between temporary fluctuations and the long-term movement in exchange. I do not know how, except from a historical retrospect, anybody can tell which movement is taking place at a particular time. If one could say to-night, "Some exchange movement is starting. This is a temporary fluctuation so we must operate with our Exchange Fund"; or on the other hand, "Oh, this is the beginning of a general tendency, so we must not operate with our Exchange Account," the matter would be comparatively easy. In actual practice, when a movement starts, it seems that one has to decide, without knowing whether it is a temporary movement or a long-term movement, as to whether one has to operate with the Ex- change Fund. If it turns out to be a long-term movement, the inevitable effect will be that the Exchange Fund, as the hon. Member for East Aberdeen has said, will be very rapidly exhausted. If we could distinguish between the two, I think there might be something to be said for what the Chancellor of the Exchequer suggested, which is that the fund will be merely used for the purpose of ironing out temporary fluctuations. What I should like the Financial Secretary to the Treasury to explain is how, on a given day, anybody in the world is going to tell that the movement which starts up or down is one which has to be "ironed out" by the foreign exchange fund, or one which has to be left alone because it is part of a long-term movement. That raises the whole point as regards the policy of the Government. The right hon. Gentleman the Member for Tamworth said that it could not be expected that the Government could make a declaration as to the point at which they would fix their exchange. I do not think anybody has asked them to do that. On the other hand, it is extremely important, unless they are going to lose this £150,000,000 by speculating against the long-term exchange movement, that they should have some definite view as to how they intend, in association with other people, to try to regulate the exchange against other countries. There is at the present time a violent effort being made in America to have a policy of expansion and thereby to raise prices. The Chancellor of the Exchequer has stated that this Government desires to see a gradual return to the price level of 1929, so far as it is practical. There at least you have two great countries with the same objective, and the more that the various countries can agree upon an objective, the less will be the liability for long-term fluctuations in exchange. Once one can get countries to agree to try to bring their exchanges to a certain point on the commodity level index, the danger of a long-term fluctuation, which is the real danger from which this foreign exchange fund suffers, will be diminished, and the foreign exchange fund will have become a useful method of bridging over periods in which it is not found possible for countries to move at the same speed to the desired objective. It would be of enormous assistance to America and to countries which are fixed to sterling at the present moment if a perfectly clear declaration were made by the Government that they were prepared in association with other countries who would join them, to work towards getting back commodity prices on their currency to 1929 level, not fixing them on a Gold Standard or linking them to gold, but with the object of getting currencies, all of which were kept stable on the 1929 level on a price index. I only give that as an example of the sort of declaration of policy which we are seeking. If some such objective could be, not in any way attempted to be forced on the world, but put forward by this country as a suggestion for a combined objective, I think there would be very much less danger of this £150,000,000 being lost by reason of a violent exchange movement between this country and other countries. It is that type of declaration of policy which we are asking. We are not asking for the fixing of a particular exchange value, but for an expression of an objective, and an encouragement and a request to other countries to associate themselves with us in that objective. We think that the Government of this country ought to give a lead in trying to get the world to travel along the road to that objective.In my opinion, the Government are making a grave mistake in entering into a business which they do not understand. The exchange business is very complicated. It is not carried on merely for the purpose of exchange, and in this development the Government appear to be ignoring that fact. The exchange business is carried on for the purpose, primarily, of the business world—for the purpose of paying for international purchases and financing international sales; and anything that the Government may do to restrict that business will certainly defeat the object which they have in view of stabilising the price of commodities. We have seen, in the short time for which the Government have been in office, that they are quite unable to achieve any of the supposed objects that they had in view. They have had no effect upon the exchange world. There were some few speculators who tried to make a certain amount of money, but only in a small way, by speculating in exchange, just as people speculate on the Stock Exchange or in the markets. We have seen the small fluctuations that have taken place in the last few weeks.
We have seen the American Exchange vary between about 3.65 and 3.73–3.71. We have seen the French exchange vary from about 85–86 to about 93. But at the present time there is certainly no speculation going on, and there is very little business in international finance. We have taken certain steps in this country, in response, I might say, to the accumulation of gold in France. They have been accumulating gold in France for political purposes, so that they could influence exchange as they liked. We have seen in America in the last few years an enormous accumulation of gold, also for political purposes, their object being primarily to try, if they could, to get all the gold in their hands for the purpose of political ambitions throughout the world. But we have not seen any success attach to any of those movements. We saw the. French, who had accumulated gold in the United States, withdraw that gold when they wanted to injure the United States. We in this country have considered it advisable to intervene in this fight that is going on, and in this Bill we are authorising the Government to raise a sum of £150,000,000, as and when required, for the purpose of speculating in exchange, and, as must follow, of speculating in other things, like the price of Stock Exchange securities, as to which suggestions have been made, but which I will not touch upon. We have seen the way in which the French have acted with their enormous surplus of gold. At the present moment we have in this country a credit for £150,000,000. In France they have actual gold at their disposal to the amount of some £600,000,000 or £700,000,000 to do what they like with; and we have seen the Americans accumulate an enormous amount of gold, anywhere between £800,000,000 and £1,000,000,000 sterling, which they have locked away to be used when the time arrives for political or other purposes. The American Legislature have just passed a vote to create a credit of £1,800,000,000 for the purpose of stabilis- ing American exchangee, as they say in their Bill, but for the purpose, no doubt, of frightening the world into submission to their wishes, whatever they may be. The primary use for exchange is, as I have already said, to pay for the international commerce of the world, which at one time came almost entirely to us. At the present time it is distributed in different parts of the world, but England does the bulk of it even now. When people are making shipments of various articles, foreign sellers generally prefer a London credit to a Continental or American credit, because they have been let down so often by those methods of payment. We are told, also, that the purpose of this proposal is to assist in stabilising the price of commodities. We are told that it is the wish of the Government to get the prices of raw materials and manufactured goods on a higher level. But I absolutely defy the Government to carry out that policy. I have been in business as a merchant banker for 60 years. As an instance of what has been happening, I may mention that the price of tin to-day is about £115 per ton. When I went into business, the average price of tin was from £35 to £45 a ton. It went up during the War to something like £225 a ton; since the War it has come down by 50 per cent., to about £115. You can take any commodity you like, and you will find that the results have been very similar. You cannot artificially put prices up and down at your own will. I have seen many firms ruined by trying to speculate in that way. So long as you go on buying, you can corner any article you like, but you cannot go on buying for ever. I remember that, when my own firm were agents for the Japanese Government in the sale of their camphor, which is quite a small article of commerce, Colonel North thought he could corner camphor because it was a small article, and he commenced buying. The price went up as long as he kept on buying, but the day he wanted to sell, when he had the stock of the world in his hands, he was ruined because there were no buyers, for everybody knew that the commodity would have to come down in price. It is impossible artificially to control the commodities which the world produces. If you take coal or any other article, you have seen the repetition, time after time, of people, who know nothing at all about the various trades, going to the bankruptcy court and paying for their inexperience because they would not learn by the experience of others. I warn the Government that if they try to carry out the ambitions of probably some outside friends, not entirely disinterested, or of officials who wish to create a position for themselves, and if they try to control everything, and especially the money market of the world, they are bound to come to grief, and the unfortunate taxpayer will have to pay the price. I think it was the last speaker who mentioned joining with America and France in regulating the monetary position. It was asserted that we should join with America to regularise or stabilise the price of commodities. I want to warn the Government again on this subject. Our interests are not identical. The United States are great producers not only of raw materials but of manufactured goods. They have their wheat and they would be delighted if they could double the price of it. They have their copper and they would be delighted if they could double the price of that They have their cotton, which is at a very low price at present, and they would accept any suggestion on the part of the British Government to put up prices. But what are you going to get in return? Will they take off their duties to enable us, after buying their cotton or their raw copper, to dispose of the products of those commodities in the United States? Our interests there are diametrically opposed to each other. It is the same with France. They have high tariff walls and certain products in regard to which they would be delighted to assist in putting up prices, but always at the expense of this country. We should have to pay, or rather the taxpayers would have to pay through the nose if they wanted to get anything out of it. The only thing that is likely to bring about a resumption of prosperity is for this country to rely upon itself. We in this country created an international market and we carried it on for years with the greatest success without any Government assistance. In fact, I go further. We carried it on successfully in spite of the interference of Governments, and I contend that we could still do so if the Government would have confidence in the people who have been capable of doing this for 100 years or 50 years, and if they would give them a free hand and assistance when asked for, and not interfere in every possible way with the free circulation of money and of merchandise, both manufactured and raw materials. 9.30 p.m. We have everything in our great Empire that we require and there are many countries which require our products and raw material more than we require theirs. I feel confident that now we have made a start with Protection we shall be capable, not only of holding our own, but of recovering lost ground both in finance and merchandise. The financial position of this country is thoroughly sound, and if the Government do not interfere, we shall retain and increase our power and our capacity and get over our difficulties. I implore the Government, before they interfere with everything and everybody and put the world into a chaotic situation, to consider that the people who have conducted the finance, commerce and industries of this country are capable of doing it now.Question, "That the words proposed to be left out, to the word 'and,' in line 10, stand part of the Bill," put, and agreed to.
I beg to move, in page 16, line 10, to leave out from the word "forthwith" to the end of line 15.
I have no desire to detain the House on this particular point because, as a result of the long discussion on the Committee stage, the Financial Secretary indicated that the Government would reconsider this Amendment on the Report stage, and it is with some gratification that I see there is an Amendment on the Order Paper, subsequent to this one, which virtually gives me and my hon. Friends all we want. The object of the Amendment was to remove the feeling that the Government were contemplating a return to the Gold Standard, and probably at some very early date. It is clear from the Debate which is just ended that there is considerable diversity of opinion in the House as to what policy the Government should pursue with regard to monetary affairs. It is perfectly plain, however, from the Debate on the pre- vious occasion, that the House is determined on one thing—that this country shall not return to the Gold Standard very soon. It has been said by the Financial Secretary that the Government have no intention whatever, as long as gold behaves as it is at present, of returning to the Gold Standard. We are glad to hear that, but, none the less, we ought to bear in mind that as long as sterling remains virtually pegged in terms of Gold Standard currency, we are on gold, as long, that is, as the dollar is on gold and sterling remains pegged at a value of 3.70 dollars to the pound, so long are we in effect on gold. There is one other point I want to make. We are anxious to prevent a return to the Gold Standard because we feel that it would mean a further depression of the general price level. Prices must rise, but it is not sufficient that prices should rise. They should remain stable at the price to which they have risen. We feel that the acceptance of the sense of the Amendment will assist towards that end and that this House and the country will give a sigh of relief that the Government has seen fit to remove these words which so many of us felt contemplated a return to the Gold Standard, which neither we nor the country desired.I beg to second the Amendment.
I look on the horizon as being extremely dark, as do many others, but I see a break in the clouds just the size of a man's hand. I believe that some Members of the Government and many other Members are beginning to appreciate that the financial policy that has been adopted during the last few years is very largely the cause of the depression in which the country finds itself. Many old houses are said to have had underground passages and perhaps this honourable House has an underground passage which leads to the Bank of England. Perhaps there is more easy access to those who represent banking interests than to those who represent the general needs of the commercial part of the country. It may be very desirable to return to 1928 and 1929 prices, but I would ask what effect that is going to have on consumers unless the policy is carried still further and unless sufficient money is put into circulation to enable people to buy the goods. No one will disagree when I say that the poor people, as we call them, have made big enough sacrifices already without having their commodities made dearer. The hope of everyone who is in touch with the commercial world lies in the fact that we are beginning to understand and appreciate that, unless the currency question is dealt with, and unless not only prices rise but more money is put into circulation, undreamt of and terrible events will happen. The illustration has been given of the shoemaker who is drawing unemployment pay while there are people with no shoes to their feet. I am afraid I have put the case very badly, but I am perfectly honest and sincere. There have been hundreds of business men who have built up very big and stable businesses who are to-day in their graves, dead of broken hearts through fighting against odds which no man can fight against. It is nonsense to say we must stabilise the pound unless more money is put into circulation in order that people may buy the goods.This Amendment is in substance the one that the hon. Member moved on an earlier stage of the Bill, and I then gave an undertaking that there was no desire on the part of the Government, either formally or by implication, to commit us to a return to the Gold Standard at a parity of 4 dollars 86. We should certainly accede to his request that we should do nothing of that kind, and for that reason the Amendment of the Chancellor of the Exchequer is cm the Paper for the purpose of securing that the words that might give rise to that suspicion should be moved out of the Clause.
Amendment, by leave, withdrawn.
Amendment made: In page 15, line 12, leave out from the word "which," to the end of line 15, and insert instead thereof the words:
"the Commons House of Parliament resolve that the Account is no longer required for the purpose for which it was established."—[Major Elliot.]
I beg to move, in page 16, line 7, to leave out the word "certify," and to insert instead thereof the words "report thereon."
I believe it is your desire, Sir, as it is certainly ours, that we also take the Amendment in my name in line 8, to leave out from the word "Parliament" to the end of the Clause, because they are both related. The point that we are anxious to safeguard concerns a cardinal principle which has been recognised in regard to all financial matters, namely, the degree of control which this House should exercise at all times over financial expenditure embarked upon on behalf of this House. For the purpose of exercising that vigilance which the House desires in regard to financial expenditure, there is in existence a Public Accounts Committee, which reviews the expenditure of the Government, not in regard to the current year but in regard to the previous year. For instance, this year the Public Accounts Committee is actually reviewing expenditure for the year ended March, 1931. In regard to the subject that we are now discussing, a matter of grave importance has arisen. There is in existence a Dollar Exchange Account. Whenever a financial year ends, the Comptroller and Auditor-General, who is a financial officer of the House, reports, and he has reported upon the state of the Dollar Exchange Account. If hon. Members will look at the Civil Appropriation Accounts for this year they will find, in the final passages of the report of the Auditor-General, an actual statement of the present state of the Dollar Exchange Account. What alarms us is that if the present proposals as now presented in the Bill remain unaltered, the Comptroller and Auditor-General will be precluded, as I understand the position, from giving even that measure of detailed account or report such as he has this year presented with regard to the Dollar Exchange Account, so that all that he will be told to do in future will be to certify that the Exchange Equalisation Account has been conducted in accordance with the purposes laid down in the Act bringing the Account into existence. That is, in our judgment, a very substantial and even a grave departure from the practice which has hitherto been observed. I do not propose to argue any further what has been argued so fully already as to the reasons for the existence of the Exchange Equalisation Account. That has been covered. But I am entitled to make the following observation. Hon. Members in all parts of the House have offered violent objection to the creation of this fund. They will, as good sportsmen, accept defeat in view of the decision of the House, but although defeated they are entitled to have a guarantee that the fears which they have apprehended in regard to the conduct of this fund shall be removed from time to time by the presentation of as full an account of the operation of the fund as is possible. As things are now, however grave their fears may be, there is no means whereby their fears can be removed except by the presentation of a mere bald certificate by the Accountant-General. I wish to make one observation on the position of the Accountant-General in this matter, because, as hon. Gentlemen know, I and many of my colleagues in the House are members of the Public Accounts Committee. It seems to be extremely unfair to the Accountant-General himself to put him into the position of merely having to report in that simple and limited way concerning the position of the fund. After all, he is the finance officer of the House of Commons. He is answerable to the Public Accounts Committee, speaking on behalf of the House of Commons, and if, therefore, a Member of the Public Accounts Committee at one of its meetings asks the Accountant-General the position of the fund, I am afraid that all that he will be able to say is: "I certify it as being used in accordance with the instrument setting up the fund, and more than that I must not say." It is a most unjust position into which to put him. It is unfair to him. He would, obviously, desire to place at the disposal of the Committee as full information as he has at his disposal, but he is limited in his functions. In accordance with this particular Sub-section he cannot give any other answer than that the fund has been used properly in accordance with the functions of the Act of Parliament. It is not only unjust to the Auditor-General as the finance officer of the House of Commons, but it is unjust also to the Public Accounts Committee, which is the body charged with the task of reviewing expenditure from time to time. Therefore, I suggest that some other provision over and above that which is contained in Sub-section (7) should be provided, so that all who are in agreement with the fund, and even those who are in disagreement with the fund, shall be guaranteed—I have heard the word used, and I shall use it without implying any bad faith—that no gambling of an irresponsible kind shall be indulged in connection with the fund. What would happen if the Amendment which I have moved were carried to-night? I have already indicated that at the present time, indeed this week, we have only just concluded our examination of the accounts of the Government for the year ended 31st March, 1931. If, therefore, we carried the Amendment, at the very earliest the accounts of this fund could not, in practice, be reviewed by the Public Accounts Committee until January, 1934, nine months after the end of the financial year. [Interruption.] The first full year's accounts of the fund will not come to an end until 31st March, and therefore it would not be reviewed until January, 1934, which is, perhaps, the more correct way of putting it. But if the Government still wanted to avoid too early a discussion, if January, were too early to review the year 1932–33, clearly they could, if they cared, put words into the Bill so as to provide that the full annual accounts were not presented to Parliament until after 31st March, 1934. But the fundamental question which the Government must answer is, What possible ground can there be for apprehending any danger from anywhere from the disclosure of accounts which have been closed nine months previously? What possible harm can there be in it? I have met hon. Members of all parties who are concerned in this matter, and they have discussed it with me, and all of them seemed to be agreed in that they did not see any reason for apprehending that any difficulty might arise from the disclosure nine months after the annual account has been closed. Therefore, the Government really must, if only to remove apprehensions of the misuse of the fund and to give confidence in regard to its proper use, give us rather more than is contained in the Sub-section, and it is in order to guarantee that that shall be done that I have moved the Amendment.As my hon. Friend the Member for Caerphilly (Mr. Morgan Jones), who is Chairman of the Public Accounts Committee, has said, this matter has been under consideration by the House on more than one occasion, and it has, I think, come down to a point at which there is no very great difference in the practical proposals which are before the House. That is to say, it is clear that in all parts of the House it is agreed that no disclosure should be made forthwith, and indeed that no publication of the state of these accounts at intervals, either weekly or monthly, could reasonably be required. That is the first proposal which was brought forward. It is therefore agreed on all sides that there is no reason to expect that the accounts should be examined until after the end of the financial year and the accounts have been made up, when they will be submitted to the Auditor-General. That is to say, that nothing whatever can take place before the 31st March next year at the earliest, and, as the Chairman of the Public Accounts Committee has said, they may not be examined until the end of that year, or possibly even later.
By the Public Accounts Committee.
By the Public Accounts Committee. It has been agreed that this Account shall be subject to audit by the Comptroller and Auditor-General, who shall report whether the Account has been used in accordance with the instrument setting it up. The Comptroller and Auditor-General is not solely an officer of this House, since he is appointed by the Crown. He is in the same position as a judge. He is in the position of reporting on this account for the benefit of a Committee of this House. It is proposed by the Government that the Comptroller and Auditor-General shall say whether the transactions in connection with the account have been in accordance with the provisions of this part of the Act. It is suggested that that will be unjust to the Comptroller and Auditor-General, since he may be asked to disclose certain things. I do not think it is unjust to him. I think the Comptroller and Auditor-General reporting to a Committee of this House will be quite in order and will not be doing anything unusual in rendering this report to a Committee of the House, under terms which the House as a whole assented to and laid down when the proposal came before them.
It is further suggested that it would be unjust to the Public Accounts Committee, since they would not be able to have essential facts which they would require in order to discharge their duty to this House. That also is not wholly true, since it is only a Committee of this House. Admittedly it is a great and important Committee, but as a Committee of this House it is governed by the instrument drawn up by the House as a whole and cannot reasonably be asked to go beyond the terms which were remitted to it under the Act which set up the body whose accounts it is examining. Therefore, it is not unjust to the Comptroller and Auditor-General or to the Public Accounts Committee. We are agreed that, in the first place, there should be an examination of the accounts by the Comptroller and Auditor-General, and, secondly, that no disclosure should take place before the 31st March. We are now at the narrow point when after that time there should be any further disclosure of the state of the account. The hon. Member for Caerphilly said that the Dollar Exchange Account was disclosed in considerable detail to the Public Accounts Committee. That is true, but that was a one-purpose account which dealt only with one currency and with a very limited purpose, that of paying remittances in settlement of the debt which we owed to the United States of America. The Exchange Equalisation Account, by hypothesis, is an account which may be operated in more than one currency and which may be operating both in buying and selling and under conditions which are more difficult to foresee than it was to foresee the straightforward course of an account whose business was merely to amass dollars for the purpose of transferring from time to time the whole of those dollars to the coffers of the United States Treasury. 10.0 p.m. Are we taking any risk and doing any damage to the traditions of this House or the control of this House by awaiting the results of nine months' work, until we see how we get on with the Exchange Equalisation Account, between now and the 31st March, 1933, at which time the account will be made up? I think we are not, and I think it is unwise for the House to press for a greater disclosure than is provided for in this instrument. Another opportunity will occur at a stage before any practical disclosure will have taken place, namely, the introduction of the next Finance Bill, when all these matters will be brought under review. At that time we can discuss the matter with the advantage of the knowledge of nine months' working of the Exchange Equalisation Account, which will be open to all of us, not in a scrutiny of the books of the account but in the working of the exchange from day to day. That will be the occasion on which we can review the working of the account in the light of experience. It may be said: "Yes, but as the account will have to be made up on the 31st March, the Comptroller and Auditor-General will not begin to examine them before that date, and they will not come before the Public Accounts Committee until perhaps the month of June, and by that time the Finance Bill may be through and Members will, have lost opportunities for criticising the Government if they are determined to continue to observe the policy of secrecy in connection with the fund." To meet that point I am perfectly willing to give a pledge to the House and to the hon. Member for Caerphilly, the Chairman of the Public Accounts Committee. First of all, the account will be made up on the 31st March next. The question of the publication of the year's result cannot arise Until after that date. Secondly, there is adequate Statutory authority for enabling it to be published with a report by the Comptroller and Auditor-General without making any Amendment in the existing Bill. If we find when the time comes that the accounts can be published, without detriment to the public interest, the Government undertake that they will certainly publish it, but if it seems necessary to them to withhold it from publication, they will before reaching a decision upon it consult with the hon. Member for Caerphilly, or whoever is at that time Chairman of the Public Accounts Committee, before the introduction of the Finance Bill, or at an early stage of its passage through the House. That seems to meet the point that there is a certain lack of confidence by the Government in the House of Commons as a whole. The Chairman of the Public Accounts Committee is not a servant of this House, and he is by tradition a Member of the Opposition. Therefore, to that extent the position of the Opposition is recognised. It will have the opportunity, which it may take if it desires, of criticising the Government for its action in this matter. By this means I propose to the House procedure which I think we can usefully ask the House to adopt between now and the introduction of the next Finance Bill. All that the Comptroller and Auditor-General is expected to do is to make a report upon the state of the account. The responsibility for disclosure or for withholding is taken by the Government, and the Government give the House an assurance that it will not take its decision until after it has taken the Chairman of the Public Accounts Committee into consultation and in plenty of time for him to convey the information to the Members of the Committee, so that they can criticise the action of the Government at the appropriate time, namely, during the passage of the Finance Bill. Therefore, I hope it will be possible for my hon. Friend not to press his Amendment.As this is not a party matter I hope the Financial Secretary will not take adversely the criticisms which I propose to make on the statement he has just made. I have carefully reviewed what he said during the Committee stage when he promised to consult the Chancellor of the Exchequer, and I cannot see that he has advanced very much. The Chancellor of the Exchequer might still be at Harrogate for all the change that I can see. I admit that this Account is far more complicated than the Dollar Exchange Account. In that case we were dealing with several sets of exchanges instead of one, but on the point of secrecy there is no difference. The reason for secrecy in the Dollar Exchange Account was that we should be able to buy dollars to the best advantage. It was no doubt an advantage that New York should not know at what particular moment London was buying dollars. As far as secrecy is concerned the circumstances are somewhat similar. As I understand, the Financial Secretary says that the Government are not going to put anything into this Finance Bill unless the House of Commons forces them because there will be ample opportunity for doing it next year when the Government know what has happened during the first nine months of the existence of the fund. It seems to me to be exactly the same thing as starting a public company and deciding that there shall be no audit for the first year until you know the result of the first year's working. You are going to wait and see as to whether you have made a profit or a loss, then it is quite time enough to decide whether to appoint auditors.
; The auditors are appointed in this Bill.
But he cannot do anything, he can only say that the money has been spent for the purposes laid down in the Bill. He cannot, as the Clause stands, make any report upon whether the money has been lost or not. The Financial Secretary says that the Comptroller and Auditor-General has statutory authority for publication if he thinks it can be done without detriment to the public interest. I should like to know where that statutory authority is given. Does the Financial Secretary mean that whether it is put into the Bill or not the Comptroller and Auditor-General can do what he likes, can report or not? All the information we have is the other way. I am sure that the hon. Member for Caerphilly (Mr. Morgan Jones) would not have made the speech he did unless he is certain about it. I hope that the Financial Secretary will tell us that it is absolutely certain that if the auditor thinks there is something in this account which should be reported he is able to do so.
If I said that I must have given a wrong impression. What I said was that there is adequate statutory authority for enabling it to be done, that is to say for publication with a report by the Comptroller and Auditor-General without any amendment of the existing Bill. That is what I said. It is possible for it to be published with the report of the Comptroller and Auditor-General without any amendment of this Bill. If the hon. and gallant Member says that the Comptroller and Auditor-General has the power to make this report without any instigation from anybody else and without any Amendment of the Bill that is not so. He has only power to make that report under the Act of 1921 if required to do so by the Treasury. He can only report upon it if asked to do so by the Treasury; and if not asked to do so he cannot so report.
That is not what we are after. We want him to report because the House of Commons wants him to report, not because the Treasury thinks it safe that he should report.
I want this to be quite clear. That is what I said. I am not in a position to give the hon. and gallant Member and the hon. Member for Caerphilly what they want without this Amendment; that I admit. I said that there should be a report about this matter, but I ask them not to press a fresh obligation on the auditor to make this report but to leave it to the discretion of the Government. That is my case.
It is not my case, I agree. I am sorry that I misrepresented the Financial Secretary. As I now understand it the Comptroller and Auditor-General may render a report if the Treasury asks him to do so. That is quite right, but the point we are trying to drive home, and which the Financial Secretary is not prepared to concede, is that he should make a report on the state of this account on the principle laid down by the President of the Board of Trade, who said that:
The President of the Board of Trade thereby admitted that it was not an unreasonable thing, not an impossible thing that this request should be conceded. Now there has been a reversal of form, as so often is the case in many fields, and the President of the Board of Trade gives way to the Financial Secretary, who ignores his statement. The President of the Board of Trade was quite prepared to say that there was a case, and all we are saying is that no case has been made out for withholding subsequent disclosure. No one is pressing for immediate disclosure, but the House of Commons is asking that when these sums of money are put at the disposal of the Government of the day, whatever their political complexion may be, for the handling of which they are ultimately responsible, it is only right and proper that the House of Commons should have a report from time to time through the properly constituted authority as to what has happened to the fund. The Financial Secretary says that it will be time enough to deal with this next year. I disagree. When you are setting up a fund is the time to make arrangements for dealing with it. There is nothing likely to happen to need an auditor's report unless it is something no one wants to give away, which we hope will not occur, but when the Financial Secretary says that it is a great concession on his part to offer at an early stage of the Debates next year, some time after the opening of the Budget, to consult with the hon. Member who happens to be Chairman of the Public Accounts Committee as to whether or not the accounts ought to be audited, I should say that it is putting that hon. Member, whoever he may be, in an impossible position. In order to strengthen that argument the Financial Secretary says that the Chairman of the Public Accounts Committee is a Member of the Opposition. I put it to him, if he was in Opposition and a Government came and said:" There has been a terrible collapse of this Exchange Equalisation Account; there is no money in it, and I have come to make this disclosure to you and ask you whether you think the House of Commons should be told—he would be in an awkward position, because presumably he would, in honour bound, be precluded from consulting even his own political friends. He would have to take a decision which the Government of to-day ought to take."The particulars of the operations of this Account a long time after the account is the utmost the House should ask for."
The hon. and gallant Member has admitted as right the statement I have given to the House. These are technical matters which it is difficult for anyone to grasp on first reading, but I do ask my hon. and gallant Friend to consider whether in fact the statement which I made bears any relation to what he has just said. He said that the Government of the day would throw upon the Chairman of the Public Accounts Committee the responsibility of deciding whether a disclosure was to take place or not. I said nothing of the kind. I said that if it is found that the Account can be published without detriment to the public interest the Government will certainly publish, it, but if on the other hand it seems to them necessary to with- hold or postpone publication they will before reaching a decision consult with the Chairman of the Public Accounts Committee. "They will before reaching a decision." The decision will be the Government's. They only consult with the Chairman of the Public Accounts Committee, giving him full information beforehand which will enable him to have an opportunity, which he would otherwise lack, of raising the matter. That is not throwing any responsibility on the Chairman of the Public Accounts Committee. It is giving him an opportunity to criticise the Government of the day.
My right hon. Friend and I will agree to differ on the interpretation of what he has read out. He was good enough to let me have the words of the declaration that he has made, and I said that I would consider them, and the result is not as favourable to them as he would like. I put it to him still that now he has said, "If they want to, the Government can publish." That is agreed. If they do not want to publish the responsibility is upon them not to publish, but they will give due notice to the Chairman of the Public Accounts Committee, who can do what? Raise it in the House of Commons. He could do that anyhow. It seems to me that really the Financial Secretary has with great gusto conceded absolutely nothing. The full and adequate discussion which could be raised could obviously be raised at any time, and the responsibility would be with the Government. The right hon. Gentleman admits that. Why does he drag in the Chairman of the Public Accounts Committee, an unofficial Member of this House? If I were in that position I should feel that I was put in a very false position by the Government of the day. I leave the hon. Member for Caerphilly (Mr. Morgan Jones) to answer for himself, because he happens to be Chairman of the Public Accounts Committee now.
The solution of the matter is so simple. It is to adopt this very good Amendment. I notice that it is in the form in which I put it down for the Committee stage. Hon. Members opposite know where to pick out the good things sometimes. After what the President of the Board of Trade said at an earlier stage I do not think that any harm could come to the Government by adopting the Amendment, because everyone who speaks on this sub- ject must be actuated by the gravest of responsibility. I hope the right hon. and gallant Gentleman will realise that in this matter nobody is trying to twist the tail of the Government. There will be, no doubt, plenty of opportunities for doing so if we require them. But we must all realise that this is an intensely serious matter. This is a sum of £150,000,000, and we are trying to safeguard it and to see that this account is audited in the interests of the House of Commons. I hope that the right hon. and gallant Gentleman will recognise that, even if some of us have to divide against him on this question, we do so because we feel that our point of view, and not his, is the right one.I have listened carefully to the speeches of the hon. Member for Caerphilly (Mr. Morgan Jones) and the hon. and gallant Member for Gainsborough (Captain Crookshank), both of whom are members of the Public Accounts Committee. As a previous chairman of that committee I wish to say that if a Financial Secretary of the Treasury, not a member of the party to which I happen to belong, came to me and put the question to me which has been suggested this evening, in regard to this account, I would not listen to him. I would not take the responsibility which has been suggested. Here is a sum of £150,000,000. I would not know how this account had been working. The whole system of the House of Commons is based upon the idea that the House is to have control of money matters, and the Conservative party should be the last party to lessen the power of the House of Commons to supervise what is being done with public funds.
I do not intend to embarrass the Government or to twist the Government's tail, as the hon. and gallant Member for Gainsborough has suggested, but I put this question to the Government. Whist harm can be done by divulging to the Public Accounts Committee, through the proper officer, what has been going on in connection with this fund? Why should the Government dig in their toes on this question? Nothing can be done to hurt the public weal because nine months will have elapsed since the transactions which are being dealt with in the account. We do not want to know even what the transactions are. I speak as a member of the Public Accounts Committee in saying we would not ask what the transactions were, whether they were in gold or in francs or in radium or in any other abstraction. All we should want to know is what had been done with the public money, and it would be our duty in the Public Accounts Committee to include in our report, without touching questions of policy at all, our opinions as to what had been going on in connection with the account. As has been said to-day, you can very easily lose on a sum of £150,000,000 in supporting exchanges. It will not be a case of dealing with one exchange alone, because the whole exchange stream of the world converges on London, and it is with that we shall have to deal. I am not going into the Lobby against the Government, but I am trying to advise them as to what I think I would do if I were still chairman of the Public Account Committee in the circumstances which have been suggested this evening. I certainly would not accept the responsibility which the Financial Secretary apparently would seek to put upon me. If he came to tell me that there had been any disaster in connection with this matter, I would say to him, "You ought to have told me of this long ago before the money had disappeared." I warn the Chancellor of the Exchequer and the Financial Secretary that they will be ill-advised if they do not meet us in some way on this question. As Members of the Public Accounts Committee we ought to be enabled to keep some kind of guiding eye on these matters. We are not irresponsible people who will "blab" in such a way as would do the country harm. It is more likely, since we are a secret committee, that we shall keep everything quiet and do nothing except what will help the operations of the fund, and what will be in the interests of the country. Although I have sat through practically the whole of this Debate, I do not know even now, nor does any member of the Public Accounts Committee how this account is going to be worked. I have not asked any questions, and I do not seek to have divulged anything which might do the country harm. I do not know whether this fund is to be used to buy dollars or francs or anything else, or whether it is to be made use of as a jackpot into which to put the profits that may be made out of the buying and selling of exchange, and out of which to take the money to meet losses which may have been incurred, or to support the exchange in order to keep it reasonably steady, so that we manufacturers may know what we are buying and selling. So much am I in the dark-I cannot speak for my hon. and gallant Friend on the right, but I do not believe that either he or the hon. Member for Caerphilly know any more than I do how the fund will work. It is all the more necessary, therefore, that the two right hon. Gentlemen representing the Treasury, without in any way giving way for the moment, should think how they can, without rendering it possible for any divulgence of what is going on, where the transactions are, who is carrying them on, at what time, or in what countries, allow one of the most important committees of this House to keep its watchful eye on the public purse, as (has always been the custom hitherto.I think there is very little in what the right hon. and gallant Gentleman has offered us, and I have looked to see what he was really giving us. The whole point of keeping a check on something is not to know when things go right, but to know when things go wrong, and here he is suggesting that if there is anything going wrong, the Government can refuse to have any disclosure made. If it is going all right, then the Committee can see it. I think the hon. and gallant Member for Gainsborough (Captain Crookshank) was right when he drew a comparison with the question of auditing a company's accounts. What would be the good of having a company's accounts audited if the chairman of the company could say whether or not the auditor should report, and whether or not the shareholders
Division No. 224.]
| AYES.
| [10.30 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Barclay-Harvey, C. M. | Brocklebank, C. E. R. |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Barrie, Sir Charles Coupar | Brown, Brig.-Gen. H. C.(Berks., Newb'y) |
| Agnew, Lieut.-Com. P. G. | Beaumont, Hon. R.E.B. (Portsm'th. C.) | Browne, Captain A. C. |
| Apsley, Lord | Birchall, Major Sir John Dearman | Buchan-Hepburn, P. G. T. |
| Aske, Sir Robert William | Bird, Ernest Roy (Yorks., Skipton) | Burgin, Dr. Edward Leslie |
| Astbury, Lieut.-Com. Frederick Wolfe | Bird, Sir Robert B. (Wolverh'pton W.) | Burnett, John George |
| Atholl, Duchess of | Borodale, Viscount | Butler, Richard Austen |
| Atkinson, Cyril | Bossom, A. C. | Butt, Sir Alfred |
| Bailey, Eric Alfred George | Boulton, W. W. | Campbell, Edward Taswell (Bromley) |
| Baldwin, Rt. Hon. Stanley | Bowyer, Capt. Sir George E. W. | Campbell, Rear-Adml. G. (Burnley) |
| Baldwin-Webb, Colonel J. | Braithwaite, J. G. (Hillsborough) | Caporn, Arthur Cecil |
| Balfour, Capt. Harold (I. of Thanet) | Broadbent, Colonel John | Carver, Major William H. |
should have any knowledge of the accounts? That would be very good for the Jabez Balfours and the Hatrys, but not for the shareholders, and I think my right hon. and gallant Friend is offering us nothing at all, because he is allowing to the possible delinquent the power of saying whether or not his transactions shall be disclosed.
I wish just to express my concurrence with the views of the hon. and gallant Member for Gainsborough (Captain Crookshank), and to say that I am entirely in accord with the very moderate suggestion of reporting on these accounts. It is a very mild proposal, and I hope the Chancellor of the Exchequer will see his way to agree to it.
By permission of the House, I would like to say a word in reply to the offer which the right hon. and gallant Gentleman opposite has made to me. I am not speaking on behalf of the Public Accounts Committee, but merely on my own behalf and on behalf of those on this side who are interested in public finance. I am obliged to the right hon. and gallant Gentleman for having tried to meet my point, but I regret that I am not able to accept his offer, because we feel that we must stand for the fundamental principle of publicity in regard to all financial transactions, especially when they are of such an extensive character as this fund involves. Perhaps the right hon. and gallant Gentleman gave a wrong impression concerning what he offered to me when he used the word "consult." Probably he meant notify rather than consult. That, I think, expresses what he intended rather more accurately than the word which he used.
Question put, "That the word 'certify' stand part of the Bill."
The House divided: Ayes, 277; Noes, 52.
| Castlereagh, Viscount | Horsbrugh, Florence | Ramsden, E. |
| Castle Stewart, Earl | Howard, Tom Forrest | Ratcliffe, Arthur |
| Cautley, Sir Henry S. | Hewitt, Dr. Alfred B. | Ray, Sir William |
| Cayzer, Sir Charles (Chester, City) | Hunter, Dr. Joseph (Dumfries) | Rea, Walter Russell |
| Cayzer, Maj. Sir H. R. (P'rtsm'th, S.) | James, Wing. Com. A. W. H. | Reed, Arthur C. (Exeter) |
| Cazalet, Thelma (Islington, E.) | Jamieson, Douglas | Reid, William Allan (Derby) |
| Cazalet, Capt. V. A. (Chippenham) | Johnston, J. W. (Clackmannan) | Remer, John R. |
| Chamberlain, Rt. Hon. N. (Edgbaston) | Johnstone, Harcourt (S. Shields) | Rentoul, Sir Gervals S. |
| Chorlton, Alan Ernest Leofric | Jones, Sir G. W. H. (Stoke New'gton) | Renwick, Major Gustav A. |
| Christie, James Archibald | Jones, Lewis (Swansea, West) | Reynolds, Col. Sir James Philip |
| Clarry, Reginald George | Ker, J Campbell | Rhys, Hon. Charles Arthur U. |
| Clayton, Dr. George C. | Kerr, Hamilton W. | Rosbotham, S. T. |
| Cochrane, Commander Hon. A. D. | Kimball, Lawrence | Ross, Ronald D. |
| Colfox, Major William Philip | Kirkpatrick, William M. | Ross Taylor, Walter (Woodbridge) |
| Conant, R. J. E. | Knatchbull, Captain Hon. M. H. R. | Ruggles-Brise, Colonel E. A. |
| Cook, Thomas A. | Knebworth, Viscount | Runge, Norah Cecil |
| Cooke, Douglas | Lambert, Rt. Hon. George | Russell, Albert (Kirkcaldy) |
| Courtauld, Major John Sewell | Law, Sir Alfred | Russell, Alexander West (Tynemouth) |
| Croft, Brigadier-General Sir H. | Law, Richard K. (Hull, S.W.) | Russell, Hamer Field (Shefid, B'tside) |
| Crooke, J. Smedley | Leech, Dr. J. W. | Salt, Edward W. |
| Croom-Johnson, R. P. | Lennox-Boyd, A. T. | Samuel, Sir Arthur Michael (F'nham) |
| Crossley, A. C. | Levy, Thomas | Samuel, Rt. Hon. Sir H. (Darwen) |
| Cruddas, Lieut.-Colonel Bernard | Liddall, Waiter S. | Samuel, Samuel (W'dsworth, Putney) |
| Culverwell, Cyril Tom | Lindsay, Noel Ker | Sandeman, Sir A. N. Stewart |
| Dalkeith, Earl of | Llewellin, Major John J. | Sanderson, Sir Frank Barnard |
| Dawson, Sir Philip | Liewellyn-Jones, Frederick | Savery, Samuel Servington |
| Denville, Alfred | Lloyd, Geoffrey | Scone, Lord |
| Despencer-Robertson. Major J. A. F. | Loder, Captain j. de Vere | Selley, Harry R. |
| Dickie, John p. | Lovat-Fraser, James Alexander | Shaw, Helen B. (Lanark, Bothwell) |
| Dixon, Rt. Hon. Herbert | Lumley, Captain Lawrence R. | Simmonds, Oliver Edwin |
| Dower, Captain A. V. G. | McCorquodale, M. S. | Skeiton, Archibald Noel |
| Drewe, Cedric | MacDonald, Malcolm (Bassetlaw) | Smiles, Lieut.-Col. Sir Walter D. |
| Dugdale, Captain Thomas Lionel | Macdonald, Sir Murdoch (Inverness) | Smith, R. W. (Ab'rd'n & Kinc'dine.C.) |
| Dunglass, Lord | McKie, John Hamilton | Smith-Carington, Neville W. |
| Eden, Robert Anthony | McLean, Major Alan | Somervell, Donald Bradley |
| Edmondson, Major A. J. | McLean, Dr. W. H. (Tradeston) | Somerville, D. G. (Willesden, East) |
| Elliot, Major Rt. Hon. Walter E. | Macquisten, Frederick Alexander | Soper, Richard |
| Ellis, Sir R. Geoffrey | Magnay, Thomas | Sotheron-Estcourt, Captain T. E. |
| Elmley, Viscount | Making, Brigadier-General Ernest | Southby, Commander Archibald R. J. |
| Emrys-Evans, P. V. | Manningham-Buller, Lt.-Col. Sir M. | Spencer, Captain Richard A. |
| Entwistle, Cyril Fullard | Margesson, Capt. Henry David R. | Spender-Clay, Rt. Hon. Herbert H. |
| Erskine, Lord (Weston-super-Mare) | Marsden, Commander Arthur | Steel-Maitland, Rt. Hon. Sir Arthur |
| Essenhigh, Reginald Clare | Martin, Thomas B. | Stones, James |
| Everard, W. Lindsay | May hew, Lieut.-Colonel John | Storey, Samuel |
| Fermoy, Lord | Merriman, Sir F. Boyd | Stourton, Hon. John J. |
| Foot, Isaac (Cornwall, Bodmin) | Mills, Sir Frederick (Leyton, E.) | Strauss, Edward A. |
| Ford, Sir Patrick J. | Milne, Charles | Strickland, Captain W. F. |
| Fox, Sir Gifford | Mitcheson, G. G. | Stuart, Hon. J. (Moray and Nairn) |
| Fuller, Captain A. G. | Moreing, Adrian C. | Stuart, Lord C. Crichton- |
| Ganzoni, Sir John | Morgan, Robert H. | Sueter, Rear-Admiral Murray F. |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | Morris, John Patrick (Salford, N.) | Sugden, Sir Wilfrid Hart |
| Gledhill, Gilbert | Morris, Owen Temple (Cardiff, E.) | Summersby, Charles H. |
| Glossop, C. W. H. | Morrison, William Shepherd | Sutcliffe, Harold |
| Gluckstein, Louis Halle | Moss, Captain H. J. | Taylor, Vice-Admiral E. A (P'dd'gt'n, S.) |
| Goff, Sir Park | Munro. Patrick | Templeton, William P. |
| Goldie, Noel B. | Nail, Sir Joseph | Thomas, James P. L. (Hereford) |
| Goodman, Colonel Albert W. | Nation, Brigadier-General J. J. H. | Thompson, Luke |
| Gower, Sir Robert | Nicholson, Godfrey (Morpeth) | Thomson, Sir Frederick Charles |
| Graham, Fergus (Cumberland, N.) | Nunn, William | Titchfield, Major the Marquess of |
| Grattan-Doyle, Sir Nicholas | O'Donovan, Dr. William James | Todd, Capt. A. J. K. (B'wick-on-T.) |
| Graves, Marjorie | Oman, Sir Charles William C. | Todd, A. L. S. (Kingswinford) |
| Greene, William P. C. | O'Neill, Rt. Hon. Sir Hugh | Touche, Gordon Cosmo |
| Grenfell, E. C. (City of London) | Ormiston, Thomas | Turton, Robert Hugh |
| Griffith, F. Kingsley (Middlesbro, W.) | Ormsby-Gore, Rt. Hon. William G. A. | Vaughan-Morgan, Sir Kenyon |
| Gritten, W. G. Howard | Palmer, Francis Noel | Ward, Lt.-Col. Sir A. L. (Hull) |
| Guinness, Thomas L. E. B. | Patrick, Colin M. | Ward, Irene Mary Bewick (Wallsend) |
| Gunston, Captain D. W. | Pearson, William G. | Warrender, Sir Victor A. G. |
| Guy, J. C. Morrison | Penny, Sir George | Wells, Sydney Richard |
| Hamilton, Sir George (Ilford) | Perkins, Walter R. D. | White, Henry Graham |
| Hannon, Patrick Joseph Henry | Petherick, M. | Whiteside, Borras Noel H. |
| Harbord, Arthur | Peto, Geoffrey K.(W'verh'pt'n, Bilst'n) | Williams, Herbert G. (Croydon, S.) |
| Hartington, Marquess of | Pickford, Hon. Mary Ada | Wills, Wilfrid D. |
| Hartland, George A. | Pike, Cecil F. | Wise, Alfred R. |
| Harvey, George (Lambeth, Kenningt'n) | Potter, John | Womersley, Walter James |
| Harvey, Major S. E. (Devon, Totnes) | Powell, Lieut.-Col. Evelyn G. H. | Wood, Sir Murdoch McKenzie (Banff) |
| Haslam, Henry (Lindsay, H'ncatle) | Pownail, Sir Assheton | Worthington, Dr. John V. |
| Haslam, Sir John (Bolton) | Procter, Major Henry Adam | Wragg, Herbert |
| Hellgers, Captain F. F. A. | Pybus, Percy John | |
| Henderson, Sir Vivian L. (Cheimsford) | Ramsay, Alexander (W. Bromwich) | TELLERS FOR THE AYES— |
| Hope, Sydney (Chatter, Stalybridge) | Ramsay, Capt. A. H. M. (Midlothian) | Mr. Shakespeare and Major George |
| Hore-Belisha, Leslie | Ramsay, T. B. W. (Western Isles) | Davies. |
| Hornby, Frank | Ramsbotham, Herwald |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Grundy, Thomas W. | Mallalieu, Edward Lancelot |
| Albery, Irving James | Hall, F. (York, W.R., Normanton) | Mason, David M. (Edinburgh, E.) |
| Attlee, Clement Richard | Hall, George H. (Merthyr Tydvil) | Morris, Rhys Hopkin (Cardigan) |
| Batey, Joseph | Harris, Sir Percy | Parkinson, John Allen |
| Bevan, Aneurin (Ebbw Vale) | Hicks, Ernest George | Peat, Charles U. |
| Boothby, Robert John Graham | Hirst, George Henry | Pickering, Ernest H. |
| Briant, Frank | Holdsworth, Herbert | Price, Gabriel |
| Cape, Thomas | Hutchison, W. D. (Essex, Romf'd) | Salter, Dr. Alfred |
| Cocks, Frederick Seymour | Jennings, Roland | Shaw, Captain William T. (Forfar) |
| Cripps, Sir Stafford | John, William | Tinker, John Joseph |
| Crookshank, Capt. H. C. (Gainsb'ro) | Jones, J. J. (West Ham, Silvertown) | Williams, David (Swansea, East) |
| Daggar, George | Jones, Morgan (Caerphilly) | Williams, Edward John (Ogmore) |
| Davies, Rhys John (Westhoughton) | Kirkwood, David | Williams, Dr. John H. (Llanelly) |
| Duncan, Charles (Derby, Claycross) | Lawson, John James | Williams, Thomas (York, Don Valley) |
| Edwards, Charles | Leighton, Major B. E. P. | |
| Foot, Dingle (Dundee) | Logan, David Gilbert | TELLERS FOR THE NOES.— |
| George, Megan A. Lloyd (Anglesea) | Lunn, William | Mr. Gordon Macdonald and Mr. |
| Greenwood, Rt. Hon. Arthur | Maclay, Hon. Joseph Paton | Duncan Graham. |
| Grenfell, David Rees (Glamorgan) | Maclean, Neil (Glasgow, Govan) | |
Clause 23—(Application Of Account, Transfers Thereto, Etc)
I beg to move, in page 16, line 25, to leave out from the word "Account," to the word "assets," in line 32, and to insert instead thereof the words "or for the purposes of the note issue, gold or."
The object of the Amendment is to correct what seems to be an obvious anomaly in our present treatment of gold, both for the purpose of valuation and for the purpose of the note issue, as compared with all other securities. As things stand, every other security that is held in the Issue Department is valued at its real value, whether it is a Government security of this country, a foreign security or a foreign currency. Only in the case of gold is this value reckoned, not at its real value, but at a purely fictitious value which has no other than a historical or sentimental significnce today. If the Bank holds £1,000,000 of dollar notes, that holding is reckoned as £1.000,000. Even £1,000,000 worth of American gold eagles are reckoned at £1,000,000. If the Bank melts those eagles into the same weight of bar gold, they are at once to be reduced, for the purpose of valuation, to something like £750,000. There seems no conceivable practical reason or justification for such a policy. When I brought this Amendment forward on the Committee stage, the hon. Member for Central Southwark (Mr. Horobin) suggested that the acceptance of my Amendment would mean that, whenever the exchange fluctuated, that fluctuation would be accentuated. That is to say, if sterling fell and gold rose, the amount of our note issue would be increased at the very moment when credit ought to be contracted in order to preserve sterling parity with gold. The Financial Secretary to the Treasury congratulated my hon. Friend the Member for Central Southwark for going to the very heart of the question and promptly went on to endorse that argument. If there were any force in that argument it would apply to gold currencies and gold securities, and not only to bar gold. If there were any force in it, then we ought to hold in the Issue Department all dollar notes and all foreign securities at the old par of exchange, and not merely bar gold. Every argument that the Financial Secretary used in regard to the Amendment would necessitate a revision of the Bill, in the sense that every foreign security should be held at the fictitious value of the old parity. In any case, the argument used by my two hon. Friends is based upon two misconceptions, the first of which is that our main and predominant object is to maintain a gold parity. That is not our object to-day. If it were, we should simply be on the Gold Standard at a slightly different rate from the old Gold Standard, but we should still be on the Gold Standard, subject to all the disadvantages involved in the maintenance of that standard. The Chancellor of the Exchequer has himself laid down that the object of our policy is to raise the price level in terms of sterling. That object is entirely incompatible with the idea of maintaining gold parity. Gold at this moment is continuously increasing in value; gold prices are falling. To maintain gold parity is to drag our prices down, and not to raise the price level; so that there is no force in that argument at all. On the contrary, the acceptance of my Amendment would make it easier to get away from gold parity and to achieve the object of raising the price level. The other misconception underlying the argument of my two hon. Friends is that the amount of gold held by the Bank is the only governing factor in the total note issue. That is not the case. It is true that the amount of gold governs the amount of notes held against the gold, but there is, in addition, the fiduciary issue, and there is no compulsion to raise the fiduciary issue to the maximum. The argument that my two hon. Friends have used is, if I may say so, exactly contrary. to the whole line of argument adopted by the Macmillan Committee. The Macmillan Committee pointed out that what we should aim at is a total maximum of currency suited to our needs, which they fixed provisionally at something like £400,000,000, and that, within that total, gold should be held as might be convenient, but that the total amount of currency should not be governed either way by the amount of gold held. If the gold was reduced, more securities would be held; if the gold was increased, less securities would be held. In other words, the argument of the Macmillan Committee was that the gold should be treated, for the purposes of our note issue, exactly like any other security on the market—as being convenient for the purpose of international exchange, but not as the basis of our domestic issue, and, therefore, not to held in any definite ratio to our domestic issue. The clear implication of that argument is that gold should be held as a commodity, at commodity value, and for the usefulness which, it has for international exchange purposes. It seems to me that, if you accept the principle of the Macmillan Committee, you cannot hold gold at any other value than its teal value. At this moment, when we are suffering from a terrible financial crisis due to the sterilisation of gold, and when our object is to raise the price level, nothing could be more contrary to our professed policy than the fact that we are. holding some £160,000,000 or £170,000,000 worth of gold and calling it £130,000,000, thereby sterilising £25,000,000 or £30,000,000 which is doing nothing whatever. If our currency to- day is sufficient, so much less securities should be held against the fiduciary issue. If it is not sufficient, we are deliberately braking back the process of reasonable inflation and the reasonable raising of the price level which we ought to seek. It seems to me that there can be no real justification for the policy now adopted except just the idea, the hope, the belief, that the present phase is transitory, and that before long we are coming back to the old gold standard at £3 17s. l0½d. to the ounce Troy. I wish that those who were responsible for giving advice in this matter were not, like Mrs. Gummidge, always thinking of the old un, but that they would try to get away from it and face the new position and our new monetary problems. What is being done now is a mistake from the point of view of the actual working of our currency policy, but I regard it as even more serious as an indication of a wrong state of mind. If we are to go to Ottawa to give a clear lead to the Empire on currency matters, I hold that we should not go trammelled with this kind of provision which definitely contracts our currency and sets up the old Gold Standard as the norm of our policy and the aim which we seek to achieve instead of the maintenance of a reasonable price level and of sterling stability at that price level.I beg to second the Amendment.
The right hon. Gentleman who moved it has said that if it were accepted it would enable the Government to get away from the old gold parity more easily. I wonder whether, in spite of all their declarations, the Government really are as anxious as all that to get away from the old gold parity? We are to some extent at second hand upon the Gold Exchange Standard now, and what some of us are afraid of is that this Exchange Equalisation Account will be used to shackle us still further to gold. I am in entire agreement with the right hon. Gentleman who has just spoken in maintaining that we ought to shake off gold altogether and get as far away from it as we possibly can in facing the problem of the future. I believe the Government would accept the Amendment especially as they have accepted the Amendment moved in Committee by the hon. Member for Hudders- field (Mr. Mabane), were they not so preoccupied with maintaining the exchange value of the pound sterling as against the commodity value which, to many of us, seems to be of such far greater importance. The right hon. Gentleman proposes under this Bill that gold held in the Department shall be taken, on the winding up of the Department, to be of the value of £3 17s. 10½d. for every ounce troy. All I ask is, why? Why enter into this wholly artificial position? Why not treat gold as a commodity? The hon. Member for Putney (Mr. S. Samuel) made a very interesting speech a little time back in which he proved quite conclusively that gold had its value as a commodity even though it was being cornered by the United States and France with disastrous results. I submit to the Chancellor of the Exchequer that if he could get away from that treatment of gold as a sort of specially sacred symbol and regard it, in dealing with the problems which confront him, as being in the light of a commodity pure and simple, there would be very much more hope of success at the conferences about to be held. I ask him very respectfully whether he can explain to the House why he proposes to fix this particular value for gold as against any other commodity?This Amendment has certain attractions for me, but for reasons not quite the same as those which animated the right hon. Gentleman who moved it. The Clause as it stands will involve some strange book-keeping—not quite double entry, but two columns in any event. If paragraph (a) is left out and certain additional words inserted, the book-keeping will become a little more strange, because whenever a valuation is held there will be rather a shock to the system. A large number of notes will have to be inserted or taken out of the system. The reason I am attracted to the proposal is because it will lead to bringing about what I desire to see brought about—a suggestion which has not so far been made in any of the innumerable currency Debates during the discussion of the Finance Bill, in which the inflationists have had the best hunting they have had for many years. No one has any definite proposals which anyone else can under- stand. I have a proposal which I understand and which I believe the rest of the House can understand, which at least gives it some merit. I believe, though the Chancellor of the Exchequer has not apparently reached that stage yet, the right policy to adopt is to resume the Gold Standard forthwith at the present value. So far as I am aware, no one else has suggested that, but I am perfectly serious in it and there are very sound reasons behind it. Those who have studied the American exchange rate since the Equalisation Fund was announced and who presume to some extent that the Bank of England is acting in anticipation of powers which it may receive are convinced that so far we have been using our powers not for the purpose of sustaining the exchange value of sterling but in order to prevent it from rising. In other words, there is at this moment a tendency for foreign deposits to come into the country, but in the worst conceivable form, in the form of book entries occurring simultaneously in this country and in other countries with every kind of risk arising from it.
If we went back to the Gold Standard, the result would be an enormous influx of funds into the country in a metallic form. We should break the dreadful gold monopoly that has existed in France and the United States—break up the maldistribution of gold—and now is the moment for us to resume control of the situation, and we are the only fit people to resume control of it. Therefore, I advocate this very seriously as a device for binding us to the rest of the world, not with bonds of elastic which are useless, but with bonds that are much firmer. It is urged by some of my inflationist friends that what we want to do is to inflate the currency in order to raise commodity prices. It is a debatable subject. Someone said to me, "If you cannot sell at present prices, would it be easier to sell if they were dearer?" That wants a little explaining away. What is the effect if we inflate—a rise of commodity prices? I believe nothing of the kind. You would merely depress gold prices in the rest of the world. What has been the amazing phenomenon that we have seen since the crisis? Everyone of us predicted that going off the Gold Standard would raise commodity prices. We had an increase of 3 or 4 per cent. during October and November. Since then there has been a progressive decline in prices. We are now back, roughly speaking, to the wholesale commodity level at the time of the departure from the Gold Standard and our going off the Gold Standard has had the effect of depressing gold prices everywhere else and is one of the causes of continuing the world depression. 11.0 p.m. If I am right in that, all the arguments that have been presented to the House on the subject of inflation by friends for whom I have the profoundest respect are wrong. If that is the case, I am putting forward a stage to which, in time, without doubt, the Chancellor of the Exchequer will come. His colleagues in the Bank of England are preserving our exchange rate at a certain level. Are we suddenly going to use our power to vary that enormously? It is doubtful; and within a period of time we shall come back to a new gold parity. There is a lot to be said for going back at once. One school of advocates say what we want to do is to lower the purchasing power of sterling, in other words to inflate commodity prices. There is another school of thought that says one of the most important things to do is to increase the purchasing power of silver. Those are two entirely diverse objects and we are told they will have desirable results in both cases. Either they believe in inflation or in deflation. It is strange to say it will benefit this country and the world if we inflate our currency, and, at the same time, say that it will improve the position of this country and of China and the rest of the world if we deflate the currency of China. I think that we ought to know where we are. The truth is that it is a matter of complete indifference at what level you return to the Gold Standard provided it is the level at which you are at the moment. [Interruption.] I am not in the least surprised that the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) should laugh, because he does not understand these things.I was only echoing the laughter of the Lord President of the Council.
But the hon. and learned Member is always behind the times. The Lord President of the Council was quite properly laughing at my previous remark. When I say that the parity at the moment is the right parity, I am serious. A large number of people think that because we are off sterling it acts as a tariff against imports and as a stimulus to exports. It is only transitory. When the whole exchange becomes more fixed, your commodity prices adjust themselves, and the tariff effect passes away. It is true to say, provided there is a state of confidence in our currency, that, whatever figure you have been at for a short period, is the appropriate figure at which to return to a metallic basis. I know that there is confidence in this country that this is the one place in which foreigners can invest their funds, but no one is going to do so unless he is certain that what he puts in at one rate of exchange he can take out at the same rate of exchange. Therefore, it is vital to get to a stable rate of exchange. Valuable as is the Equalisation Fund—it is a primary step to what I advocate—I believe that what I am advocating is better, and that the time is ripe for it.
I hope that the hon. Member for South Croydon (Mr. H. Williams) will not think that I am rude if I change the subject and talk about the Amendment. I was referred to by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), and therefore I make that my excuse for saying a few words. I do not pretend to be an expert upon these matters, but I have found some cause for disquiet in his speech, and in the speech of the hon. Gentleman who seconded the Amendment. Here, for the first time, we come to a matter which cannot be discussed in generalisations. It is a matter upon which certain definite technical knowledge is required, and I cannot help feeling that the real difficulties of a monetary policy arise after the stage at which we can all agree to be interminably rude to the Bank of England.
Upon this point I find myself in complete agreement with His Majesty's Government. It was first raised at a late hour some time ago, and I ventured to point out—and I was immediately supported in it by the Financial Secretary to the Treasury—that the right hon. Gentleman had made a complete misunder standing of the present law and its effect I was surprised that he had put his name to such an Amendment at that time. It is almost incredible and it fills me with great misgiving that, after having had several weeks to think about it, he who frequently addresses the House upon currency matters still, apparently, is not able to appreciate a point about which any thoughtful clerk in Threadneedle Street could put him right in five minutes. If we were re-writing the Gold Standard Acts—Who is this talking behind me?
I cannot claim to have that vested interest in currency matters which is shared by the hon. Member who has just spoken, or other hon. Members for Scottish constituencies, but I have the pleasure of knowing that in this matter I have the support of the Chancellor of the Exchequer and the Financial Secretary to the Treasury. Therefore, possibly the hon. Member for one of the Clydeside divisions may be wrong and we may be right. If we were re-writing the Gold Standard Acts as well as setting afoot this Exchange Equalisation Account, the observations of my right hon. Friend, although I submit they would be still inaccurate, might be plausible, but so long as the Gold Standard Act is the law of the land it is absurd for him to say that there is no difference between gold and securities in the Issue Department. Since the Gold Standard Act is the law of the land an increase in gold has an entirely different effect in the bank returns from an increase in securities. It does not matter what those securities are, whether they are foreign exchange or Government securities. As long, therefore, as the law of the land remains as it is, his Amendment would mean that every time the sterling exchange was rising and the value of gold therefore falling, if we had to revalue the gold in the Issue Department, the Bank of England would have to innate when we ought to deflate and deflate when it ought to inflate. When the sterling exchange is falling then is the time, presumably, when we ought not to carry on an expansive policy, but he would do precisely the reverse.
I am sorry to labour so elementary a point. I do not claim any patent in these remarks. There is nothing new about them. They are 100 years old but, unfortunately, they have not come to the notice of my right hon. Friend the Member for Sparkbrook. If he had his way the Bank of England would, unfortunately, be in the position of always having to put up the Bank Rate when it ought to put it down and to put it down when it ought to put it up. So much for the temporary situation, but there are permanent situations. This has nothing to do with going back to the Gold Standard. Supposing we all agreed to make up our minds that we were never going back to the Gold Standard. My right hon. Friend's suggestion would be exactly what we ought not to do, because so long as any of the assets of the Bank are in gold and so long as the fiduciary issue is fixed, his proposal would have the effect that I have described. I am sorry to appear to be laying down the law, but I am sure that the Chancellor of the Exchequer or the Financial Secretary will, as on the previous occasion, add the enormous weight of his advocacy to my feeble advocacy. I am sorry that I cannot help telling the right hon. Gentleman that he is wrong, because he is wrong.I feel a little uneasy in intervening in this Debate. I feel like the person in Glasgow, a returning reveller, who was found sitting in the middle of the street, and, when asked what he was doing there, said: "The city is spinning round quick, and I am just waiting until my own house comes past." It seems to me that some of my hon. Friends, if they will only wait in the same place, will not run any chance of missing the Chancellor of the Exchequer. It is not possible to accept the Amendment. The right hon. Member for Sparkbrook (Mr. and the hon. Member for East Aberdeen (Mr. Boothby) seem to spend more time in what I may call analysing the Chancellor of the Exchequer than in reading the terms of the Amendment. They seem to be suffering from a complex of gold. You have only to show them gold, and they get quite hot under the collar and excited about it. I would ask them to look at Sub-section (4) of this Clause which clearly indicates that:
That does not look as if we were hurrying in this matter, or intending to rush back to gold at the old par value. The right hon. Member for Sparkbrook has an Amendment to leave out Sub-section (1). I cannot understand why he wants to leave it out. There is no deflationary object in the Clause, or in these proposals. They do not permit the Government to return to the old par value; they do not take any steps towards it. In fact, we have chosen the value which is set down here, because it is a fixed value. The £3 17s. 10½d. per ounce is there. It is fixed. Why have we chosen that fixed value, as against the fluctuating value suggested by the right hon. Gentleman? Surely, if he thinks over his argument again, he will see that it is to help when sterling gets weaker and weaker. But suppose that sterling gets stronger and stronger. Suppose that a flight to the pound takes place and that it moves in the direction which would cause the right hon. Gentleman the most violent uneasiness, namely, steadily upwards. Suppose the value of sterling was forced up from 3.60 dollars to 4 dollars, and the Government might wish to revalue down again and expand the credit of the country. Under the Amendment, as the sterling value of gold in the Issue Department fell, the size of the note issue would fall by an equivalent amount, from £162,000,000 to £148,000,000. The effect of that would be to jam the exchange value of sterling up still higher and higher. That is the case, I have taken the best advice I could get, and it seems to me that it is self-evident."the amount by which the market value … of the gold then held in the Issue Department exceeds its fixed value shall be made good by the Department to the Account.
The Fiduciary Note Issue cannot be increased.
Division No. 225.]
| AYES.
| [11.18 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Boulton, W. W. | Chorlton, Alan Ernest Leofric |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Bowyer, Capt. Sir George E. W. | Christle, James Archibald |
| Agnew, Lieut.-Com. P. G. | Braithwaite, J. G. (Hillsborough) | Clarry, Reginald George |
| Albery, Irving James | Broadbent, Colonel John | Clayton, Dr. George C. |
| Apsley, Lord | Brockiebank, C. E. R. | Cochrane, Commander Hon. A. D. |
| Aske, Sir Robert William | Brown, Brig.-Gen. H. C.(Berks., Newb'y) | Colfox, Major William Philip |
| Atholl, Duchess of | Browne, Captain A. C. | Conant, R. J. E. |
| Bailey, Eric Alfred George | Buchan-Hepburn, P. G. T. | Cooke, Douglas |
| Baillie, Sir Adrian W. M. | Burgin, Dr. Edward Leslie | Courtauld, Major John Sewell |
| Baldwin, Rt. Hon. Stanley | Burnett, John George | Croft, Brigadier-General Sir H. |
| Baldwin-Webb, Colonel J. | Campbell, Edward Taswell (Bromley) | Crooks, J. Smedley |
| Balfour, Capt. Harold (I. of Thanet) | Campbell, Rear-Adml. G. (Burnley) | Crookshank, Capt. H. C. (Gainsb'ro) |
| Balniel, Lord | Caporn, Arthur Cecil | Crossley, A. C. |
| Barclay-Harvey, C. M. | Carver, Major William H. | Cruddas, Lieut.-Colonel Bernard |
| Barton, Capt. Basil Kelsey | Castiereagh, Viscount | Dalkeith, Earl of |
| Beaumont, Hon. R.E.B. (Portsm'th, C.) | Cayzer, Sir Charles (Chester, City) | Davies, Maj. Geo. F.(Somerset, Yeovil) |
| Bird, Ernest Roy (Yorks., Skipton) | Cayzer, Maj. Sir H. R. (Prtsmth., S.) | Dawson, Sir Philip |
| Bird, Sir Robert B. (Wolverh'pton W.) | Cazalet, Thelma (Islington, E.) | Dickle, John P. |
| Boothby, Robert John Graham | Cazalet, Capt. V. A. (Chippenham) | Dixon, Rt. Hon. Herbert |
| Borodale, Viscount. | Chamberlain, Rt. Hn. N. (Edgbaston) | Dower, Captain A. V. G. |
I am taking the facts as they are now and the conditions under which we are working. The effect of the Amendment in the case of a flight to the pound, which is not an impossible contingency, would be to jam sterling higher and higher. That does seem to me a conclusive argument against accepting the Amendment, and I ask my right hon. Friend not to press it.
Amendment negatived.
Clause 25—(Suspension Of Land Value Tax)
I beg to move, to leave out the Clause.
I content myself by saying that, in contrast with the last Amendment, this is a subject on which the House has knowledge. We protest against the abandonment of the proposal in the Act of 1931. We regard it as an act of injustice to the author of the proposal. Mr. Philip Snowden, now Lord Snowden, had a chequered and honourable career in this House and outside. The Clause in the Act of 1931 seemed to be a fitting monument to his life's endeavour. He has now been removed from the field of battle, and it seems almost an act of desecration to pull down the monument which he so richly deserved. We protest on his behalf and on behalf of the House, and we ask that this Clause be left out of the Bill.Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 275; Noes, 33.
| Dugdale, Captain Thomas Lionel | Lieweilln, Major John J. | Reid, William Allan (Derby) |
| Duncan, James A. L. (Kensington, N.) | Liewellyn-Jones, Frederick | Remer, John R. |
| Dunglass, Lord | Lloyd, Geoffrey | Rentoul, Sir Gervais S. |
| Eastwood, John Francis | Loder, Captain J. de Vere | Renwick, Major Gustav A. |
| Eden, Robert Anthony | Lovat-Frasar, James Alexander | Reynolds, Col. Sir James Philip |
| Edmondson, Major A. J. | Lumley, Captain Lawrence R. | Rosbotham, S. T. |
| Elliot, Major Rt. Hon. Walter E. | McCorquodale, M. S. | Ross, Ronald D. |
| Ellis, Sir R. Geoffrey | Macdonald, Sir Mardoch (Inverness) | Ross Taylor, Walter (Woodbridge) |
| Elliston, Captain George Sampson | Macdonald, Capt. P. D. (I. of W.) | Ruggles-Brise, Colonel E. A. |
| Elmley, Viscount | McKeag, William | Runge, Norah Cecil |
| Emrys-Evans, P. V. | McKie, John Hamilton | Russell, Albert (Kirkcaldy) |
| Entwistle, Cyril Fullard | Maclay, Hon. Joseph Paton | Russell, Alexander West (Tynemouth) |
| Essenhigh, Reginald Clare | McLean, Major Alan | Salt, Edward W. |
| Everard, W. Lindsay | McLean, Dr. W. H. (Tradeston) | Samuel, Sir Arthur Michael (F'nham) |
| Foot, Dingle (Dundee) | Macmillan, Maurice Harold | Samuel, Rt. Hon. Sir H. (Darwen) |
| Foot, Isaac (Cornwall, Bodmin) | Magnay, Thomas | Samuel, Samuel (W'dsworth, Putney) |
| Fox, Sir Gifford | Makins, Brigadier-General Ernest | Sandeman, Sir A. N. Stewart |
| Fraser, Captain Ian | Mallalieu, Edward Lancelot | Sanderson, Sir Frank Barnard |
| Fremantle, Sir Francis | Mander, Geoffrey le M. | Savery, Samuel Servington |
| Fuller, Captain A. G. | Manningham-Buller, Lt. Col. Sir M. | Scone, Lord |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | Margesson, Capt. Henry David R. | Selley, Harry R |
| Gledhill, Gilbert | Marsden, Commander Arthur | Shakespeare, Geoffrey H. |
| Glossop, C. W. H. | Martin, Thomas B. | Shaw, Helen B. (Lanark, Bothwell) |
| Gluckstein, Louis Halle | Mason, David M. (Edinburgh, E.) | Shaw, Captain William T. (Forfar) |
| Goff, Sir Park | Mayhew, Lieut.-Colonel John | Simmonds, Oliver Edwin |
| Goldie, Noel B. | Merriman, Sir F. Boyd | Skelton, Archibald Noel |
| Goodman, Colonel Albert W. | Mills, Sir Frederick (Leyton, E.) | Smith, R. W. (Ab'rd'n & Kinc'dine, C.) |
| Graham, Fergus (Cumberland, N.) | Mills, Major J. D. (New Forest) | Smith-Carington, Neville W. |
| Gravis, Marjorie | Milne, Charles | Somervell, Donald Bradley |
| Greene, William P. C. | Mitchell, Harold P.(Br'tf'd & Chisw'k) | Somerville, D. G. (Willesden, East) |
| Griffith, F. Kingsley (Middlesbro', W.) | Mitcheson, G. G. | Soper, Richard |
| Gritten, W. G. Howard | Molson, A. Hugh Eisdale | Sotneron-Estcourt, Captain T. E. |
| Guinness, Thomas L. E. B. | Moreing, Adrian C. | Southby, Commander Archibald R. J. |
| Gunston, Captain D. W. | Morgan, Robert H. | Spencer, Captain Richard A. |
| Guy, J. C. Morrison | Morris, John Patrick (Salford, N.) | Steel-Maitland, Rt. Hon. Sir Arthur |
| Hamilton, Sir George (Ilford) | Morris, Owen Temple (Cardiff, E.) | Stones, James |
| Hannon, Patrick Joseph Henry | Morrison, William Shepherd | Storey, Samuel |
| Harbord, Arthur | Moss, Captain H. J. | Stourton, Hon. John J. |
| Harris, Sir Percy | Munro, Patrick | Strauss, Edward A. |
| Hartington, Marquess of | Nail, Sir Joseph | Strickland, Captain W. F. |
| Hartland, George A. | Nation, Brigadier-General J. J. H. | Stuart, Hon. J. (Moray and Nairn) |
| Harvey, George (Lambeth, Kenn'gt'n) | Nicholson, Godfrey (Morpeth) | Stuart, Lord C. Crichton- |
| Haslam, Henry (Lindsay, H'ncastle) | Nunn, William | Sueter, Rear-Admiral Murray F. |
| Haslam, Sir John (Bolton) | O'Donovan, Dr. William James | Sugden, Sir Wilfrid Hart |
| Hellgers, Captain F. F. A. | Oman, Sir Charles William C. | Summersby, Charles H. |
| Hope, Sydney (Chester, Stalybridge) | O'Neill, Rt. Hon. sir Hugh | Sutcliffe, Harold |
| Hore-Belisha, Leslie | Ormiston, Thomas | Taylor, Vice-Admiral E.A.(P'dd'gt'n, S.) |
| Hornby, Frank | Ormsby-Gore, Rt. Hon. William G. A. | Templeton, William P. |
| Horsbrugh, Florence | Palmer, Francis Noel | Thomas, James P. L. (Hereford) |
| Howard, Tom Forrest | Patrick, Colin M. | Thompson, Luke |
| Howitt, Dr. Alfred B. | Pearson, William G. | Thomson. Sir Frederick Charles |
| Hudson, Capt. A. U. M. (Hackney, N.) | Peat, Charles U. | Titchfield, Major the Marquess of |
| Hunter. Dr. Joseph (Dumfries) | Penny, Sir George | Todd, Capt. A. J. K. (B'wick-on-T.) |
| Hutchison, W. D. (Essex, Romford) | Perkins, Walter R. D. | Todd, A. L. S. (Kingswinford) |
| Jackson, Sir Henry (Wandsworth, C.) | Petherick, M. | Touche, Gordon Cosmo |
| James, Wing-Com. A. W. H. | Peto, Geoffrey K.(W'verh'pt'n, Blist'n) | Turton, Robert Hugh |
| Jamieson, Douglas | Pickering,. Ernest H. | Vaughan-Morgan, Sir Kenyon |
| Jennings, Roland | Pickford, Hon. Mary Ada | Ward, Irene Mary Bewick (Wallsend) |
| Johnston, J. W. (Clackmannan) | Pike, Cecil F. | Wells, Sydney Richard |
| Jones, Lewis (Swansea, West) | Potter, John | Weymouth, viscount |
| Ker, J. Campbell | Powell, Lieut.-Col. Evelyn G. H. | Whiteside, Borras Noel H. |
| Kerr, Hamilton W. | Procter, Major Henry Adam | Williams, Charles (Devon, Torquay) |
| Kirkpatrick, William M. | Pybus, Percy John | Williams, Herbert G. (Croydon, S.) |
| Knatchbull, Captain Hon. M. H. R. | Raikes, Henry V. A. M. | Wills, Wilfrid D. |
| Knebworth, Viscount | Ramsay, Alexander (W. Bromwich) | Windsor-Clive, Lieut.-Colonel George |
| Law, Sir Alfred | Ramsay, Capt. A. H. M. (Midlothian) | Wise, Alfred R. |
| Law, Richard K. (Hull, S.W.) | Ramsay, T. B. W. (Wester Isles) | Womersley, Walter James |
| Leech, Dr. J. W. | Ramsbotham, Herwald | Worthington, Dr. John V. |
| Leighton, Major B. E. P. | Ramsden, E. | Wragg, Herbert |
| Lennox-Boyd, A. T. | Ratcilffe, Arthur | |
| Levy, Thomas | Ray, Sir William | TELLERS FOR THE AYES.— |
| Liddall, Walter S. | Rea, Walter Russell | Lieut.-Colonel Sir A. Lambert |
| Lindsay. Noel Ker | Reed, Arthur C. (Exeter) | Ward and Lord Erskine. |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Duncan. Charles (Derby, Claycross) | Hicks, Ernest George |
| Attlee, Clement Richard | Edwards, Charles | Hirst, George Henry |
| Batey, Joseph | George, Megan A. Lloyd (Angiesea) | John, William |
| Bevan, Aneurin (Ebbw Vale) | Greenwood, Rt. Hon. Arthur | Jones, J. J. (West Ham, Silvertown) |
| Cocks, Frederick Seymour | Grenfell, David Rees (Giamorgan) | Jones, Morgan (Caerphilly) |
| Cripps, Sir Stafford | Grundy, Thomas W. | Kirkwood, David |
| Daggar, George | Hall, F. (York, W.R., Normanton) | Lunn, William |
| Davies, Rhys John (Westhoughton) | Hall, George H, (Merthyr Tydvil) | Maclean, Nell (Glasgow, Govan) |
| Milner, Major James | Tinker, John Joseph | Williams, Thomas (York, Don Valley) |
| Parkinson, John Allen | Williams, David (Swansea, East) | |
| Price, Gabriel | Williams, Edward John (Ogmore) | TELLERS FOR THE NOES.— |
| Salter, Dr. Alfred | Williams, Dr. John H. (Lianelly) | Mr. Groves and Mr. Duncan Graham. |
Bill to be read the Third time To-morrow.
Gas Undertakings Acts, 1920 And 1929
Resolved,
"That the draft of a Special Order proposed to he made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the South Yorkshire and Derbyshire Gas Company, which was presented on the 12th day of May and published, be approved."—[Mr. Sore-Belisha.]
The remaining Orders were read, and postponed.
Adjournment
Resolved, "That this House do now adjourn."—[ Captain Margesson.]
Adjourned accordingly at Twenty-nine Minutes after Eleven o'Clock.