House Of Commons
Monday, 17th December,1945
The House met at a Quarter past Two o'Clock
Prayers
[Mr. SPEAKER in the Chair]
Death Of A Member
I regret to have to inform the House of the death of George Arthur Griffiths, esquire, Member for the County of York, West Riding (Hemsworth Division), and I desire on behalf of the House to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.
Private Bills
The CHAIRMAN of WAYS and MEANS reported, That, in accordance with Standing Order 81, he had conferred with, the Chairman of Committees of the House of Lords, for the purpose of determining in which House of Parliament the respective Private Bills should be first considered, and they had determined that the Bills contained in the following List should originate in the House of Lords, namely:
Breconshire County Council.
Bromborough Dock.
City of London (Various Powers).
Clevedon and Yatton Gas.
Leicester Corporation.
London Midland and Scottish Railway.
London Necropolis.
Manchester Corporation.
Mid and South East Cheshire Water Board.
Nottingham Corporation.
Rotherham Corporation.
Rushden District Gas.
Tyne Tunnel.
EAST GRINSTEAD GAS AND WATER BILL
Lords Amendments considered, and agreed to.
Oral Answers To Questions
Trade And Commerce
Towels
1.
asked the President of the Board of Trade if he has now completed his inquiries into the alleged large stocks of towels held by wholesalers and retailers, in accordance with his letter to the hon. Member for Bucklow; and whether he is now able to announce an increase in the coupon values.
Yes, Sir. The information which I have obtained shows that stocks are not excessive. In the case of certain types of utility towels, however, I am arranging, in consultation with the Hairdressing Standing Committee, a scheme for the release of about 720,000 of these towels in 1946 against certificates issued by my Department and presented by hairdressers. The situation is not such as to warrant an increase in coupon values.
Is the right hon. and learned Gentleman aware that almost all the members of the trade feel that there are large stocks available, and would he make a further inquiry into this matter?
I have made inquiries and I am releasing 720,000 as a result.
Tullos Factory Aberdeen
2.
asked the President of the Board of Trade whether he will yet specify in detail the future of Tullos factory, Aberdeen, the complete use of which is necessary to diminish future unemployment in that city.
The Board of Trade is at present negotiating with industrialists who have applied for this factory, and it is hoped to make an announcement in the near future.
Is the Minister in a position to say how many workers continue to be employed in this factory?
Not until the negotiations are completed.
Can the Minister give any assurance that the number of workers who have been employed up to the present will not be decreased?
Obviously in view of my answer I cannot say anything further at the moment.
Industrial Development
3.
asked the President of the Board of Trade what steps he intends to take under his statutory powers to maintain and extend the industrial development of the city of Aberdeen.
I have no statutory powers to maintain and extend the industrial development of the City of Aberdeen, but, in pursuance of the Government's general policy, the Board of Trade will endeavour to assist and encourage industry in that district.
12.
asked the President of the Board of Trade if he has considered the establishment of new industry in Barton-on-Humber; and what steps are being taken, to provide industrial prospects for the juvenile population and to provide against unemployment which was experienced in this area prior to the war.
A proposal to this end is at present under consideration. My officers will take advantage of any opportunity offered to encourage the establishment of new industry in this district.
Us Exports (Eire)
4.
asked the President of the Board of Trade the value of U.S. exports of manufactures to Eire during the past six months, as compared with those from this country.
Exports to Eire of United Kingdom goods classified as wholly or mainly manufactured amounted to £6,140,000 in the six months April to September, 1945. The value of similar goods exported from the United States to Eire during this period was roughly £320,000.
Is the Minister aware that Dublin shops are full of American goods and that this represents a failure to capture a market on our doorstep?
I cannot see how that could be, as we exported 20 times more goods to Eire than America.
Will the Minister read his replies a little more slowly, so that we can hear them?
Carpet Factory, Creetown
5.
asked the President of the Board of Trade if he is now in a position to make a statement with regard to the granting of a licence for the proposed carpet factory at Creetown, Kirkcud brightshire.
My information is that the proposal to which the hon. Member refers has been dropped.
Is the President aware that the dropping is slightly due to the inordinate length of time it takes his Department to answer—over six weeks?
According to my information the dropping is for another reason.
Departmental Correspondence (Delays)
6.
asked the President of the Board of Trade if he is aware that business firms frequently experience a delay of three to four weeks in obtaining a reply to their letters from his Department; and if he will give instructions to his officials to speed up their replies.
Owing to the heavy pressure of work in my Department and to the shortage of staff, there is unfortunately some delay in answering letters. I am taking all possible steps to improve matters in this respect.
Could the right hon. and learned Member consider setting up a working party to investigate his Department?
There has, for a long time, been such a party.
Could the Minister issue a circular indicating which letters should be addressed to his regional offices and which to his head office, as that would save some delay?
If the hon. and gallant Gentleman will look at the "Board of Trade Journal" he will see that particulars are given of which matters are dealt with regionally.
Lace
7.
asked the President of the Board of Trade if he will now allow the sale of fancy lace and lace net in the home market.
No, Sir. The quantity of yarn that can be provided for the manufacture of fancy laces and lace net is still only small and is all required for export. Production on a limited scale of utility curtain net for the home market is now beginning, but it will be a few months before supplies are available in the shops.
Is the right hon. and learned Gentleman aware that women are utterly disgusted with this unnecessary austerity regulation and that men like to see women and children wearing a bit of lace?
I am quite aware of that, but I am also aware that exports are essential for this country.
Surplus Government Stores
8.
asked the President of the Board of Trade what organisations have been set up by his Department to deal with the disposal of Government surplus stores; and what value of goods have each disposed of, to a recent date.
The trading organisations which have been set up, or are used, by the Board of Trade to deal with the disposal of Government surplus stores and the value of goods which each has disposed of to the 30th November, are as follows:
| £ | |
| Surplus Textiles Corporation, Ltd. | 788,481 |
| Reconditioned and Salvaged Clothing Merchants' Association, Ltd. | 145,862 |
| British Overseas Cotton, Ltd. | 172,200 |
In addition, the Wool Industry Surplus Cloth Corporation, Ltd., has just started operations, and a Surplus Hardware Corporation is about to be registered.
Is the Minister satisfied with the present progress of the disposal of surplus Government stores?
I am never satisfied with anything, but this is going, I think, as well as can be expected.
Retail Trade Licensing (Discontinuance)
9.
asked the President of the Board of Trade if he is yet able to make a statement on the future of the retail shop licensing system.
Yes, Sir. With your permission and that of the hon. and gallant Gentleman, I will make a statement on this matter at the end of Questions.
Later—
After careful consideration, I have decided to bring the Location of Retail Businesses Order to an end and to close the Register of Withdrawn Traders on 31st December next.
The House will remember that my right hon. Friend, the Chancellor of the Exchequer, when he was at the Board of Trade, announced in December, 1943, that this licensing would be continued for a time after the end of the war in Europe and that, so long as it was continued, it would be used to facilitate the re-entry into retail trade of persons on the Register of Withdrawn Traders and the resettlement in civil life of selected disabled persons. It has not, I think, been fully appreciated by hon. Members that this policy was designed to help ex-traders as a class, and the war-disabled, and not ex-Servicemen as such. According to my information a minority only of these ex-traders are in the Forces, many are civilians transferred to other work, while there are a number of branches of large businesses. On the other hand, there are many ex-Servicemen whose interests we all desire to regard, who have been prevented by the policy laid down from setting up in retail trade because they are neither ex-traders nor war-disabled. Ex-traders as a class will have had six months in which to come forward in person or by proxy to take up their former businesses, and I consider that it would not be justifiable to hold the field for them any longer to the exclusion of ex-Service-men who desire to enter retail trade. Special steps will, however, be taken during the first three months of next year to continue to help the present priority class—ex-traders- and war-disabled persons. In particular, we shall do what we can to assist them to get building licences where these are necessary for the minimum repairs and alterations to fit their premises for the business proposed. We will also issue coupon floats to the war-disabled, in suitable cases, and to ex-traders who used to sell consumer goods which are now rationed and who desire to re-start their businesses in the sale of rationed goods. For these purposes, I am asking the local licensing committees to consider any such applications for building licences and to make recommendations upon them to the Ministry of Works and also to advise the appropriate Department of the Board of Trade on the issue of coupon floats. I must emphasise, however, that, while everything possible will be done to help the priority classes to get their shops sufficiently repaired to enable them to open their businesses during this period, there can be no absolute guarantee that labour and materials to carry out the actual work will be available in the period in any particular district. The grant of licences must be contingent upon other urgent demands for building labour in the area. During the operation of the Order, my Department have obtained the co-operation of supplies in assisting war-disabled new entrants to get supplies. I take this opportunity to thank those who have thus helped and to express the hope that they will continue to give such assistance as lies in their power to war-disabled persons who set up in the retail trade. While after 31st December it will thus be open to anyone to enter retail trade without a licence, it is right that I should warn ex-Servicemen and others to consider, before putting their money into a shop for the first time, that supplies will still be difficult for a considerable time to come, particularly for those with no former trade connections, and that they cannot rely, while labour and material shortages continue, on getting premises repaired, adapted or furnished, or on the grant of coupon floats to establish a trade in rationed goods. I wish to take this opportunity to express my thanks on behalf of the Government to the men and women of the local licensing committees who have voluntarily spent so much of their time and energies in the administration of this Order. The burden has been an ever-increasing one and the work, involving, as it has, decisions affecting the livelihood of their fellow men, has been of a particularly arduous character. I am sure that all sides of the House will join me in thanking the committees for their work and in expressing our sense of obligation for the very fair and conscientious way in which they have administered the policy laid down for them. Finally, I desire to make it clear that what I have said refers only to businesses covered by the L.R.B.O. and does not cover either food shops or catering establishments.Does the right hon. and learned Gentleman suggest that Service traders who are now out in the Far East have had a fair chance to reopen their businesses, and will he amplify what he means when he suggests that these men should be given some, special facilities within the next three months?
I think that, on balance— and, in all these matters, it must be a balance of justice—the balance of justice now falls in the direction of ending the Order. They have had six months, either themselves or by proxy, to make application. So far as the second part of the question is concerned, the facilities which, for the next three months, we are giving to this priority class, arc that we will assist them to get the necessary licences to adapt their premises and we will give them coupon floats, if necessary, to start their businesses.
While thanking the Minister for that reply, which, I am quite sure, will bring great satisfaction to many people in this country—not only those who wish to open shops, but also those who wish to be customers—I would like to ask him whether it means that a man who has been a greengrocer or who had a food shop before the war, or a man who has been wounded in the war, cannot now open a shop?
It does not mean that. I do not deal with food shops; the Minister of Food is responsible for them.
May I ask the President if he is aware of what happened after the last war, when many ex-Servicemen were cajoled into buying businesses of which they had no experience, with the result that they kept open for seven days a week but lost their all, and that we do not want that to happen again?
I quite agree with the hon. Member, and I hope all ex-Service-men will inquire very carefully before they embark upon such businesses.
As the grant of a licence by the Ministry of Works unfortunately does not mean that repairs can be done by anybody, will the Minister consult with the Minister of Works to see that these licences will have no time limit so that the men will be sure that, when labour and materials are available, they will be done?
Is the Minister aware that this statement will give universal satisfaction throughout the country and throughout this House, except to some hon. Gentlemen opposite—who looked to him with a morbid hope that he would exercise control for the sake of control?
Can the Minister say whether he has consulted the Minister of Food to see whether similar action will be taken by him?
I have consulted with the Minister of Food to see whether he had any objection to the action I was taking, but I have not ventured to suggest to him what he should do about his own responsibility.
Does the President's reply mean that traders who commenced trading during the period of the war will now have an allocation with respect to goods that are rationed, which they have been denied up to now?
No, this is only dealing with the question of opening new shops.
21.
asked the President of the Board of Trade if his attention has been called to the case of an ex-Serviceman, Mr. P. E. Jackson, whose application to sell plants and seeds at 14a, Lower Bridge Street, Canterbury, was rejected, without any explanation, by the local Price Control Committee, Tunbridge Wells, on 27th November; if he will state the reason for this rejection, and if he will cause the case to be reconsidered.
Under the existing policy, licences under the Location of Retail Businesses Order to open new businesses are granted in the main to two classes of persons, war-disabled and ex-traders who are eligible for inclusion in the Board's Register of Withdrawn Traders. Mr. Jackson did not, I understand, claim to be in either of these classes. The Local Licensing Committee therefore acted rightly in rejecting his application.
With regard to the last part of the Question, I would refer the hon. Member to the statement which I am making at the end of Question time today, in reply to Question No. 9.Will the right hon. and learned Gentleman bear in mind that there have been a great number of these cases of ex-Servicemen trying to get back into work and of his Department being rather difficult about it?
Perhaps the hon. and gallant Gentleman will await the statement which I shall make after Questions.
Children's Footwear
10.
asked the President of the Board of Trade if he will state the total number of children's boots and shoes made available to retailers during the months of September, October and November, 1945.
I am afraid that the only figures available are quarterly and relate to manufacturers' supplies. For July-September quarter, these figures are as follows: boys, 2.28 million, girls, 3 million, and infants, 2.8 million.
Can the right hon. and learned Gentleman say whether there has been any recent increase in this urgently needed commodity?
Not very marked.
Is the right hon. and learned Gentleman doing anything to improve the quality of the leather used for children's shoes?
We are getting the best leather we can import. We cannot improve much beyond that.
Dutch Commercial Debts
11.
asked the President of the Board of Trade if he is aware that large sums of money, lent to Dutch subjects by British subjects for commercial purposes, have been confiscated by the Germans from the persons concerned; and what steps he will take to recover these debts from the Dutch firms involved.
:This matter has been the subject of discussion with the Dutch Government, and I am sending the hon. Member a copy of the "Board of Trade Journal" for 24th November, 1945, which contains a full statement of the position.
Wool
13.
asked the President of the Board of Trade how much wool there is in the country; and if he will do all in his power to secure labour for the worsted and wool factories so that clothing for the home and export market may be manufactured.
Stocks in the hands of the Wool Control at 31st October were 600 million lbs. greasy weight. In addition, substantial quantities are in the hands of the trade. My Department and the Ministry of Labour are doing everything possible to assist the Wool textile industry to secure additional labour.
Does the right hon. and learned Gentleman know that warehouses in the Bradford district are bulging with wool, and the owners have to pay rental at great expense? He may think it is necessary to control a shortage, but why is it necessary to control an abundance?
The necessity arises from the fact that the allocation of the ultimate manufactured material, which is in short supply, has to be dealt with.
Does the Minister also realise that there are large orders awaiting export?
Certainly, and we have not yet the capacity or labour to cope with them.
Mistletoe
15.
asked the President of the Board of Trade for what reason an import licence for mistletoe for sale in this country during the forthcoming Christmas season has been given to one firm and refused to all others; and whether, in view of the fact that the grant of such a monopoly must tend to encourage undesirable practices, he will undertake that henceforward all such applications will be dealt with in consultation with the appropriate trade organisation, thus ensuring a fair deal for all traders involved.
16.
asked the President of the Board of Trade whether he is aware of the dissatisfaction of the fruit and flower trade about the decision of his Department to grant a licence to one firm only and to no others to import mistletoe during the present season from France; that this decision is unfair to the pre-war importers of French mistletoe and will result in unsatisfactory and uneven distribution of the small importation permitted; and what steps he proposes to arrange for a more equitable form of importation and distribution in similar cases in future.
In order that the mistletoe should arrive in time for our first postwar Christmas, licences were issued to the first two applicants, and these absorbed all the very small amount of foreign exchange available for this purpose.
Will the Minister make it clear that the words "undesirable practice," refer to the granting of monopoly, and not to the possible use to which mistletoe might be put?
Certainly, Sir.
Army Personnel(Shoes)
17.
asked the President of the Board of Trade if he will provide other ranks in the Army with coupons for the purchase of shoes in order that men can take advantage of the present War Office walking-out regulations.
No, Sir. While this suggestion has my sympathy, a concession on these lines is not possible so long as supplies of shoes are as short as they are at present.
Would the Minister consider consulting the Secretary of State for War to verify the facts? This refusal of special coupons for the purchase of shoes is very serious in the Forces and they cannot take advantage of these Regulations with regard to walking out.
I am well aware of the difficulties in purchasing shoes, but we cannot take them from civilians for that reason.
Industrial Premises, London (Evictions)
19.
asked the President of the Board of Trade whether he is aware that Telco, Limited, machine tool makers, of Gordon Square on the Bedford Estate, in spite of repeated protests, have been given notice to quit on 25th March next; and whether, in view of the fact that similar evictions of small industrial firms and commercial businesses are taking place all over the London area, he will consider taking the necessary powers to prevent such evictions during the transition period.
I would refer my hon. Friend to the reply I gave to him on 12th November.
Could I ask my right hon. and learned Friend how much more evidence he requires of these cases, happening all over London, before he makes any move?
There would have to be a very considerable volume of evidence before I could ask Parliament to legislate for this purpose.
24.
asked the President of the Board of Trade whether, in view of the increasing number of firms in the London area who have been, or are being, given notice to quit their existing premises, he will, in the interests of maintaining supplies and services, take powers tinder the Defence (General) Regulations, 1939, to protect these firms against eviction during the difficult period of transition to peacetime operations.
No, Sir. I have not sufficient evidence of the necessity.
May I ask my right hon. and learned Friend how much evidence he requires? A number of firms are suffering seriously from being turned out; how much evidence is necessary to get something done?
It would be necessary, I think, to show a widespread occurrence of this difficulty before we should take any action.
Is the Minister not aware that the only way to stop this practice of dog eating dog is for the Government to take over all the industries?
New Companies (Registry Of Titles)
20.
asked the President of the Board of Trade what is the average interval of time between application and provisional consent by the Registrar for the use of titles by new companies.
I regret to say there has been a delay of up to two months in the work of this office, owing to its location at Llandudno and the acute shortage of staff. Recently, it was arranged to bring the office back to London. Since then some of the work has been brought up to date, but a shortage of staff still persists. Every effort is being made to bring the staff up to full strength, so as to clear off arrears of work.
Could the right hon. and learned Gentleman say when the staff is coming to London?
It has come to London.
British Universities Press, Limited
22.
asked the President of the Board of Trade whether his attention has been called to advertisements in the Press announcing the flotation of a public limited company under the style of British Universities, Limited; and since this commercial concern has no connection with any British university, what steps he is taking to prevent the assumption by this company of a misleading title for financial gain.
Yes, Sir. British Universities Press Limited, registered in 1944, is a reconstruction and amalgamation of a group of companies, one of which, a private company of that name, was registered in 1938. I am advised that the powers conferred by the Companies Act, 1929, would not have enabled the Board of Trade or Registrar to prevent the registration of this company by the name in question. The Cohen Committee on Company Law Amendment have, however, made a recommendation on this subject which, when carried into effect, will enable the Department to refuse a name calculated to mislead the public
Would the right hon. and learned Gentleman be disposed to give a gratuitous opinion as to whether this is a case in which a "passing off" action would lie?
No, I would not b prepared to.
Leather
23.
asked the President of the Board of Trade if he is aware that instructions have been issued to chrome leather tanners to withhold 20 percent, of their output of chrome tanned upper leather from the shoe manufacturers from 1st December, 1945, to 28th February, 1946, because this quantity is required for U.N.R.R.A.; why this is done when the home market is so short of supplies of leather and shoe manufacturers are unable to supply the people with sufficient, shoes to maintain health; and what steps does he propose to take to enable shoe manufacturers to maintain necessary supplies of shoes for the home market.
:At the request of U.N.R.R.A., we have taken over certain hides belonging to them for tanning here, and we are consequently providing a corresponding quantity of leather for the liberated territories. This will, in total, be only 6percent, of the full chrome upper leather output of all kinds for civilian use. This arrangement will not diminish the supplies of upper leather available for the home market.
Bicycle Tyres And Tubes
25.
asked the President of the Board of Trade if he will state the present situation regarding inner tubes for bicycles for home use.
31.
asked the President of the Board of Trade if he is aware that there is a shortage of tubes and outer-covers of size 26 inch by 1⅜inch for bicycles; that this shortage affects a large number of wage-earners who rely on this means of transport to convey them to their place of employment; and what steps he is taking to relieve this shortage.
I would refer the hon. and gallant Members to the statement on the production of bicycle tyres and tubes given to my hon. Friend the Member for Taunton (Mr. Collins) on 11th October. The present position is substantially unchanged. Every endeavour is being made to secure additional labour for the existing tyre industry and increased production facilities are being provided as speedily as possible
Is the Minister aware that this shortage of tyres is causing great hardship to people who are forced to go to work on their bicycles, and will he do something to speed up the production of tyres?
I am quite aware of the inconvenience, which I much regret, and we are doing our best to increase production.
:Is my right hon. and learned Friend aware that workmen are losing a great deal of time because of the shortage of tubes and tyres for their bicycles which are the only means they have of getting to work? What does he propose to do, because many of their bicycles are laid up for want of new tyres?
I am quite aware of the difficulties, and we are doing our utmost to solve them.
Russia
26.
asked the President of the Board of Trade what are the impediments to the conclusion of a large- scale trade agreement between Britain and the U.S.S.R.
As I have previously stated, we are prepared to enter into such negotiation as soon as the Soviet Government are ready to do so.
27.
asked the President of the Board of Trade the extent of Britain's exports of machinery and machine tools to the U.S.S.R. during the first nine months of the years 1937, 1938 and 1945, respectively; and what were our imports of timber from the U.S.S.R. for these periods.
The value of the exports of machinery, including machine tools, of United Kingdom manufacture exported from this country to the U.S.S.R. in the first nine months of 1937, 1938 and 1945, amounted to £510,000, £1,961,000 and £9,808,000 respectively. The value of the timber imported into the United Kingdom from the U.S.S.R. during these periods was £6,778,000, £3,856,000 and £557,000.
Suspender Grips
28.
asked the President of the Board of Trade if he will state the amount of rubber saved during an average year by changing the grip on women's suspenders to metal; whether he is satisfied that this saving is essential having regard to the fact that the utility types of suspender now in compulsory use either fail to keep stockings up, or are effective at the expense of laddering the stocking; and if he will give instructions for the use of rubberised grips to be resumed.
Separate statistics of the materials used in suspender buttons or collets are not available. The manufacture of suspender collets in synthetic rubber has been allowed again since 23rd November.
Is the right hon. and learned Gentleman aware that what he is gaining on the—
Swings.
—he is losing on laddered stockings?
Elastic Braces
29.
asked the President of the Board of Trade when elastic braces are likely to be again available in the shops.
Production of braces containing elastic will be resumed as soon as elastic webbing can be made available, but this will not be for some time.
Book Cloth
32.
asked the President of the Board of Trade in view of his department's exhortations to the book trade to increase production for export and of his restitution of 65 percent. of their paper quota, what steps he is taking to increase their supply of book cloth from 50 percent. of their pre-war requirements.
I cannot take any such steps at the present time owing to the continuing shortage of cotton yarn.
Is the Minister aware that there is likely to be something in the nature of a book famine in the middle of next year, especially in educational books, owing to the failure to release more cotton yarn for the book trade?
The only remedy I can suggest is to use paper covers in the meanwhile.
Furniture
33.
asked the President of the Board of Trade if he will state the value of the furniture to be imported into this country under arrangements with Canada and Norway; and the value of our total imports of timber suitable for furniture during the past three months.
We hope to be able to import from Canada about £250,000 worth. I am not at present considering the importation of any furniture from Norway. During the last three months, we imported hardwoods to the value of £1¾ million and plywood to the value of about £2 million. A considerable proportion of both hardwoods and plywood would be suitable for furniture.
Is the right hon. and learned Gentleman satisfied with the policy of importing made-up furniture while furniture manufacturers in this country are being refused permission to make furniture because of the scarcity of materials?
Yes Sir. We cannot import the timber, but there are one or two pockets where we can get furniture, and, in order to relieve the needs of the civilian population of this country for furniture, I think we should do all we can to get it in immediate supply.
39.
asked the President of the Board of Trade if he will indicate an approximate date when the hon. Member for North Camberwell can expect an answer to his letter of 9th November last in respect of an application for dockets for utility furniture, etc., made by Mrs. Vallis, 16, Barkworth Road, S.E.16, who was allotted a prefabricated bungalow by her local authority last autumn.
:There have been certain complications about this case, but I will write to my hon. Friend about it this week
Blankets (Release For Europe)
34.
asked the President of the Board of Trade whether, out of his surplus war store of 2,000,000 blankets, he will now release the 750,000 which he is waiting for the trade to take up, so that they could be used for the needs of those in Germany and other countries, where great numbers of displaced persons and of the native population are actually freezing to death.
Of the 2,726,000 blankets which have been made available from surplus stocks, 1,476,000 have been allocated for dispatch to the Continent of Europe for liberated countries and displaced persons. The bulk of these have already been dispatched to the Continent, and shipment is proceeding as fast as the blankets can be sorted, packed and dispatched. The remainder of the surpluses are being made available for disposal to the general public in this country.
In view of the still enormous need on the Continent, could not some of the large quantity of blankets which are being held for future sale to the trade also be released?
I do not think it would be fair in the circumstances to take all surplus blankets and give them to people abroad.
Paper
35.
asked the President of the Board of Trade what paper supplies still exist in this country which were reserved for emergency war time purposes.
I am not aware of any appreciable supplies of such paper.
Utility Cloths
36.
asked the President of the Board of Trade whether he is aware that sub-standard utility cloths are taken out of the utility ranges and sold as general; that these imperfect goods are then sold at prices greatly in excess of the legitimate prices of perfect goods and become subject to purchase tax; and if he will stop this practice.
No, Sir, but if my hon. Friend will let me have details of any cases he has in mind, I shall be glad to look into them.
Motor Tyres (Sugar-Beet Areas)
37.
asked the President of the Board of Trade whether he is aware of the shortage of tyres for vehicles used for the haulage of sugar-beet in North Norfolk; and if he will make the supply available in that area and thus prevent a waste of this valuable crop.
121.
:asked the Minister of War Transport if he is aware of the shortage of motor-lorry tyres in East Anglia; and if he will arrange for additional supplies of such tyres to be made available in that area.
:Yes, Sir, and we are doing our best to direct available supplies to the sugar-beet area, but it would be of material assistance if users could give as much prior notice as possible of their demands to the Regional Tyre Officer.
Stationery
40.
asked the President of the Board of Trade what quantity of graph paper or other stationery has been imported from the U.S.A. since 30th May, 1945; how much such paper has been supplied for the use of Government departments; to what extent the necessity for this import has been caused by lack of supply of raw material or labour to manufacture in Britain; and whether he is taking action to ensure that the home producer will in future be put in a position to be able to supply all Government requirements
Small quantities of such paper, mostly of special types and to the value of about £250, have been so imported. Approximately half of these imports have been for Government use, and of types not produced in this country.
Is the right hon. and learned Gentleman aware that the paper used at Rothampstead Experimental Station appears to be of recent foreign importation?
That may be part of the £125 worth which has been imported on Government account.
Export Firms (List)
41.
asked the President of the Board of Trade whether he will undertake the preparation of a handbook of British firms working specially for export and will arrange for the widest distribution of this handbook through embassies, legations, consulates and tourist offices, in order that foreign firms may have no difficulty in ascertaining what British articles are immediately available and where they may be obtained.
No, Sir. The practical value of such a handbook would not be such as to warrant the cost and labour of its original compilation and constant revision.
:Is the right hon. and learned Gentleman aware that at present any firm which wishes to buy British goods has to get in touch with a very large number of firms before it can find out those which are prepared to export? Is he further aware that before the war the Austrian Government had an extraordinarily useful book of that sort, and would he, perhaps, consult with some Austrians who may be able to assist him in this matter?
:If persons will use the machinery which is available through the Department of Overseas Trade, they will find there are perfectly adequate methods of getting in touch with the right people.
India
Nursing Units
42.
asked the Under secretary of State for India how many members of British nursing units in India and Burma are engaged on nursing sick and wounded Indian soldiers at the present time.
:The number of nurses of the Queen Alexandra Imperial Military Nursing Service employed, against Indian Military Nursing Service vacancies, and therefore employed in nursing Indian soldiers in Indian and combined British and Indian hospitals, is 389.
In view of the urgency created by the serious shortage of nurses in this country, cannot the Minister return these women to the United Kingdom as soon as suitable Indian substitutes have been found?
:I would remind hon. Members that these nurses are being used mostly to nurse men who were wounded in action against our late enemy.
Elections
43.
asked the Under secretary of State for India, how many names of persons on the lists submitted By the trades unions in connection with the amendment of electoral rolls in Orissa did not appear on the lists submitted for the same purpose by factory owners.
I have no information, but will make inquiries and inform by hon. Friend of the result.
Rice
44.
asked the Under secretary of State for India whether India produces enough rice to meet the annual need, and, if not, what steps are being taken to put under cultivation the great areas of arable land that could be cultivated.
India is not self-sufficient in foodgrains, and in the years before the war it was necessary to import annually from abroad for the rice-consuming areas an average of over 1½million tons of rice. During the war, the Government of India and the Provincial Governments have taken all practicable steps to increase the production of rice and other foods, mainly by substituting food crops for other crops. The Provinces have plans for irrigation works which are expected to increase considerably the amount of land under cultivation. I would however point out that a high proportion of the uncultivated land in India, is, in fact, unsuitable for cultivation.
Is it not possible for India to be self-supporting in this respect?
:I should say that depended upon the amount of increase possible as a result of the projected improvements.
When will those improvements be instituted?
It is impossible for me to answer that precisely at this stage.
In view of the Minister's reply, can he explain why less land was under cultivation in Bihar in 1941 than was under cultivation there in 1921?
What progress is being made to get the production of rice going in Burma?
:I should like to see that question on the Paper.
Is the Minister aware that the steps which he has outlined are not those which are really necessary, and that what is wanted is an increase in agricultural efficiency? What steps is he taking in that direction?
:Again I must say that I am not in a position to answer the question without notice.
Defence Services (Reconstruction)
79.
asked the Undersecretary of State for India why, in view of the Government's intention to Indianise the Indian Army, the recently appointed chairman of the Recontruction Committee of the Defence Services of India is a British service lieutenant-general and not an Indian Army officer.
:General Willcox, who has wide experience of Indian conditions, was selected by the Commander-in-Chief as the best available officer for the appointment in question. There are two Indian Army members of the committee, one of whom, a brigadier, is an Indian.
Is my hon. and learned Friend aware that there is considerable resentment in the Indian Army because nearly all the high appointments in India have been given to British Service officers and not to officers in the Indian Army, either British officers in the Indian Army or even Indian officers in the Indian Army; and will he take steps to look into the matter and have this state of affairs altered?
I will look into what my hon. and gallant Friend represents, but as regards this particular appointment, I am satisfied that the Commander-in-Chief took the view that General Willcox was the best officer for this work.
Indian Army (Demobilisation)
80.
asked the Under-Secretary for India how soon men in release Group 22, serving in the Indian Army, are to be repatriated.
The Government of India have not yet reported what dates have been fixed for the release of Indian Army officers in Group 22, but inquiries are being made and I will communicate with my hon. Friend on receiving a reply.
:Is my hon. and learned Friend aware that these officers were originally told that they would be sent home in November and were then deferred another three months, and that many of them have now been for five years continuously on overseas service; and will he do something to equalise their treatment with that of officers in the British Army?
The policy is to seek to equalise the treatment of British officers serving in the Indian Army and officers in the British service; in the case of British Service officers in Group 22, the period of release fixed is 10th January to 24th January next year, and I hope the same rule will apply to officers in the Indian Army.
Famine Prevention (Bengal)
81.
asked the Undersecretary of State for India what special steps are being taken to avoid famines occurring in Bengal at times when monsoons are below the average.
The Government of Bengal are in a far better position to deal with any threat of famine than they were in 1943. In particular rationing of the population of over 4 million in Greater Calcutta has now been running smoothly for the past 18 months, and it is being gradually extended to other urban areas. Also the local government now hold considerable working stocks of rice and they have at their disposal the necessary transport and storage facilities to enable them to distribute these stocks to any area where a threat of shortage may exist.
If I put down the Question again, will the Minister give a more comprehensive answer, as he has given only a few high spots and has not explained the situation?
I shall be glad to give a full statement if the hon. Member will put down a Question.
Questions To Ministers (Armed Forces)
46
asked the Prime Minister whether he will answer Questions which affect all the Fighting Services equally; or if he will arrange for them to be answered by the Lord President of the Council on his behalf.
:No, Sir. There has for some years been a growing practice of putting down to the Prime Minister Questions relating to all three Services. In many cases these Questions are concerned with detailed matters of administration giving rise to supplementaries involving problems on which the Prime Minister is not, and cannot readily be, informed. On such Questions a fuller and more speedy reply can be given by Departmental Ministers who are directly concerned with these matters in the normal discharge of their administrative duties.
As my right hon. Friend the Secretary of State for War has a large interest in the majority of these Questions, I have arranged with the Service Ministers that all such Questions which do not specifically involve the responsibility of the Prime Minister as Minister of Defence should be answered by the Secretary of State for War. This will mean that Questions on high Defence policy, strategy and operations involving all three Services will be answered by the Prime Minister. Factual Questions and those involving detailed matters of administration will be answered by the Secretary of State for War. Questions of manpower relating to allocation, call-up and release should be addressed to my right hon. Friend the Minister of Labour.:Does the Prime Minister appreciate that the present system is unsatisfactory from the Members' point of view, firstly, because the Secretary of State for War really cannot answer on behalf of all three Services, and, secondly, because the War Office Question list is already overloaded?
:With regard to the first part of the supplementary question, I would answer that arrangements have been made, where a Question concerns the other Services, for the Secretary of State for War to get full information from those Departments. On the second supplementary, the real purpose of putting these Questions to the Prime Minister is to get an answer by what I would call an unfair advantage over other Members who put Questions down to the Secretary of State for War. It is true there are too many Questions to the Secretary of State for War on the Paper, as Mr. Speaker said the other day, relating to individual cases. The device of combining a Question which relates to one Service with Questions relating to others, in order to get it on by No. 45 or sooner, is to be deprecated.
Is the Prime Minister aware that the practice of putting down Questions on individual cases is growing only because there is no other way of getting answers from Ministers in a short space of time?
:I am not aware of that, but I am sure that hon. Members realise that there is an immense pressure at the present time on questions of demobilisation and on individual cases, and that it is impossible to return an answer at once.
Government Information Services(New Organisation)
47.
asked the Prime Minister whether he has any statement to make on the future of the Government Information Service.
:Yes, Sir. The Government have had under consideration the information services which should be maintained at home and overseas in peace. They are satisfied that, while these services should be on a substantially reduced scale as compared with wartime, they have an important and permanent part in the machinery of government under modern conditions. It is essential to good administration under a democratic system that the public shall be adequately informed about the many matters in which Government action directly impinges on their daily lives, and it is in particular important that a true and adequate picture of British policy, British institutions and the British way of life should be presented overseas.
In the view of the Government, the responsibility for the information policy of a Department must rest with its Minister, but there are various technical functions, notably on the production side, which it would be uneconomical to organise departmentally, and which can best be performed centrally as a common service. For this purpose we propose that departmental information services shall be supplemented by a central office performing certain common technical and production functions and making specialist services available to Departments for both, home and overseas purposes. To be effective, this office, like the Government information services generally, will need a highly qualified rather than a large staff. There must also be effective machinery for co-ordination, especially as far as overseas publicity is concerned. Neither of these purposes, however, requires a separate Minister exclusively concerned with information matters, and the Government have, therefore, decided to bring the Ministry of Information to an end. The Ministry of Information will, however, continue until the new organisation has been set up, and opportunities of transfer to the new services will be offered to members of the Ministry's staff with the requisite qualifications. Detailed arrangements are now being worked out and will be made public in due course. In conclusion, I think that, whatever opinions may be held about the future, the House generally would like me to take the present opportunity of placing on record appreciation of the services which the Ministry of Information has rendered since it was formed in 1939, and of the conspicuous success with which, after it emerged from its original teething troubles, it performed its important and difficult task during the war.:Could the Prime Minister now state to which Ministers hon. Members will address their Questions on general matters of information policy, when the new central organisation is established? Could he state also whether he is satisfied that the new central organisation can achieve the purposes which he set out so admirably in the first part of his answer?
:In reply to the second part of that question, I am satisfied that the new organisation will operate effectively. As regards Questions, they should be put to the Ministers concerned, rather than to one Minister solely concerned with information.
:Will the Prime Minister allow my hon. Friends and myself to associate, ourselves with the tribute that he has paid to the Ministry of Information? Could I ask for further information on the matter referred to by the hon. Member? What we want to know is which Minister will be responsible for the new central organisation which is being set up. Surely some Minister will be responsible?
I may be more precise about this matter later on, but the general idea is that there should not be a Ministry of Information but an information unit, which would be drawn upon by various Ministers for the information they want. As to whether there would be a Minister precisely in charge of that administration and on what Vote it would come, I would rather make a statement later.
Under the new scheme, who will answer for the B.B.C. in the House of Commons?
:That point is under consideration. My hon. Friend will remember that in peace time certain technical questions with regard to the B.B.C. were answered by the Postmaster-General. The B.B.C. Charter will come up for review, I think, next year and the question whether there should be any further Ministerial responsibility will be considered. The general rule has been that programmes should not be the subject of Question and answer in this House..
What is the impact of the Prime Minister's statement on the British Council, if any?
There is no direct impact, but the position of the British Council and generally of that kind of service is under consideration, and a statement will be made later on.
In view of the fact that the new organisation is to be concerned with internal publicity, what exactly will be the relations between it and the B.B.C? Can the right hon. Gentleman give us an assurance that the independence of the B.B.C. will be in no wise altered?.
I can give that assurance.
Can the Prime Minister say whether such information services as those in the United States, which Have done very good work under great difficulties during the war, will in future come under the new organisation or under the Foreign Office?
:Broadly speaking, those services will come under the Foreign Office, but the matter is under consideration. The general idea is that overseas information, which I think needs to be correlated not only with regard to foreign countries but also with regard to the Dominions and the Colonies, should be under the general supervision of the Foreign Office.
Overseas Trade Department (Reorganisation)
48.
asked the Prime Minister whether he has any statement to make about the future of the Overseas Trade Department.
I propose, with Mr. Speaker's permission, to make a statement at the end of Questions.
Later—
:In the light of the decision taken by the Coalition Government to create a unified Foreign Service, the Government have reviewed the responsibilities and mutual relations of the Departments principally concerned with the greatly increased effort to develop overseas trade which is now necessary for the country's well-being. Hitherto the Secretary of the Department of Overseas Trade has been responsible jointly to the Secretary of State for Foreign Affairs and the President of the Board of Trade. In future he will be known as the Secretary for Overseas Trade and will be directly responsible to the President of the Board of Trade. The Department of Overseas Trade will be integrated with the Board of Trade and all overseas work will be under the direction of the Secretary for Overseas Trade, but the latter will, of course, be subordinate to the President of the Board of Trade, who remains responsible for trade policy both internal and external.
Arrangements are being made for close co-ordination of the work for which the Secretary for Overseas Trade will be responsible with the Treasury, Foreign Office, the Dominions Office, and other Departments concerned with external economic policy. In particular, arrangements will be made for the training of members of the Foreign Service within the Board of Trade, for their making frequent visits to manufacturing and commercial centres in this country, and for rapid communication between them and the Board of Trade on commercial matters. The Trade Commissioner Service, operating in the Empire and Commonwealth will be administered directly by the Board of Trade in consultation as necessary with the Departments concerned with Empire matters. For the information of the House and the business community, I would like to say that the arrangements now announced are intended to improve the service which the Government can render to overseas trade. The Secretary for Overseas Trade will have under his immediate direction an organisation strengthened for this purpose and the area of his responsibility will be extended. Legislation will be necessary to give affect to these changes and will be laid before Parliament shortly.Has any arrangement been made for the President of the Board of Trade to meet his opposite number in Eire to discuss better trade relations?
:That does not arise out of this Question.
Will the Prime Minister take into consideration the great difficulty of getting good staff for the overseas secretariats? Will he continue the wartime practice of having temporary civil servants in these overseas services and make certain that the divorce between the Foreign Office and the Board of Trade does not result in the commercial secretaries being on a lower level than those of the Diplomatic Service?
:While I could not answer immediately with regard to the question of temporary civil servants, I entirely agree with the hon. Member in the importance of this service, and there must not be separate grades and a grade below, because it is of vital importance to the whole country.
Equal Pay (Royal Commission)
49.
asked the Prime Minister when it is anticipated that the Report of the Royal Commission on Equal Pay will be forthcoming.
45.
asked the Prime Minister if, as announced, the policy of the Government with regard to pay of women in industry is to be based on the findings of the Royal Commission considering that matter, he will suggest to the Commission that they endeavour to make a Report in the near future.
:I am informed that the Royal Commission cannot yet name a date when their Report will be ready. The Government are not, of course, committed in advance to accepting the Commission's findings.
:May I ask whether, without establishing any precedent, we might ask this Royal Commission to put a jerk in it?
I hope they will report as soon as they can.
Germany
Arms And Munitions Industries
50.
asked the Chancellor of the Duchy of Lancaster what steps are being taken, or will be taken, totally to dismantle all German arsenals, aircraft factories and naval dockyards; and whether all German industries capable of being used for the production of armaments and munitions will be controlled and, if necessary, closed down.
:It was agreed at the Potsdam Conference that all arms, ammunition and implements of war and all specialised facilities for their production in Germany should be held at the disposal of the Allies, or destroyed. This decision is being implemented in full by H.M. Government in the British Zone of Germany and good progress has been made. The answer to the second part of the Question is "Yes, Sir."
Is the right hon. Gentleman aware that it was the failure effectually to dismantle and close down these various establishments that was largely responsible for Germany being in a position to make war again in 1939, and will he accelerate the process of dealing with those places and with the German war potential?
I am afraid I cannot give an affirmative answer to the last part of the question, because the process is being accelerated as much as possible in present conditions.
Polish Displaced Persons
52.
asked the Chancellor of the Duchy of Lancaster whether the large numbers of Polish displaced persons who have been repatriated or are being assembled for repatriation in Germany are being sent back only with their consent or irrespective of their wishes; do they include men, women and children; and do they include Jewish persons.
Poles, including Jewish persons, in the British Zone in Germany are not repatriated against their wishes. Those who have gone back include men, women and children.
Is my hon. Friend sure that this is being fairly carried out, because my information is that many persons are being hustled into giving a dubious assent and cannot easily change it?
Full opportunities were given to all the Poles in the displaced persons camps to indicate whether or not they were prepared to return, and those who gave an affirmative reply are being returned. If there were any cases such as the hon. Lady suggests, they would, if brought to our notice, be inquired into.
Do those persons include Jewish persons?
The answer states "Poles, including Jewish persons."
Victims Of Persecution (Rations)
53.
asked the Chancellor of the Duchy of Lancaster whether he is now able to report on any arrangements for enabling German Jews or other German victims of Nazi persecution who have been freed from concentration camps or have emerged from hiding, to obtain rations in excess of those allowed to ordinary Germans; and, if so, will he explain the arrangements for enabling these victims to establish their claim.
Many German victims of Nazi persecution who have been freed from concentration camps, including German Jews, are being housed at displaced persons assembly centres where they receive preferential treatment in the matter of food and clothing. On discharge from assembly centres, survivors of concentration camps receive a ration equivalent to that of a medium heavy worker, but in the case of those who went back to their homes independently, the administrative difficulties of tracing them for the purpose of providing special treatment are formidable. The British authorities in Germany have the matter in hand and, while I am not in a position to give a definite assurance, I hope that it will be possible to overcome the difficulties.
Agriculture
Calfhood Vaccination
56.
asked the Minister of Agriculture whether he will extend the calfhood vaccination scheme against contagious abortion to all attested herds.
:No, Sir. I am afraid I cannot undertake to do so at present. The limiting factor is the supply of vaccine, and priority must be given to dairy herds in view of the need for more milk. I shall, however, be prepared to reconsider the matter as soon as supplies of vaccine can be increased.
Advisory Service
57.
asked the Minister of Agriculture whether he will allow married women to apply for appointments in the Agricultural Advisory Service.
Yes, Sir.
:Is the Minister aware that the form of application which has gone out in relation to these posts states that married women may not apply, and will he therefore change the form of application?
:I understand that married women both can make, and have made, applications.
:May I send the Minister a copy of the form, because it states in black and white that married women may not apply?
Yes, I should like to see a copy.
Training Schemes
58.
asked the Minister of Agriculture whether the rate of allowances payable to disabled agricultural trainees upon which an announcement was promised in the House of Commons on 14th June last, has yet been decided; and whether he will bear in mind the extra expenses incurred by these disabled men.
:The maintenance and other allowances payable to disabled persons in receipt of vocational training in agriculture, as in other occupations, under the provisions of the Disabled Persons (Employment) Act, 1944, have now been brought into line, with effect from 2nd July, 1945, with those of the Government's Vocational Training Scheme which were announced by the Minister of Labour and National Service in the House on 14th June last.
67.
asked the Minister of Agriculture if the Government's Farm Training Scheme is open to all suitable men in the Services who desire to enter agricultural employment or farm on their own account.
Yes, Sir, subject to the satisfaction of the broad conditions of eligibility applicable to all applicants for vocational training under the Government Scheme, as announced in the House by the Parliamentary Secretary to the Ministry of Labour and National Service on 6th April, 1944. I would refer the hon. Member to the reply I gave my hon. Friend the Member for Southall (Mr. Ayles) on this subject on 24th October last.
:Is the Minister satisfied with the working of these arrangements, which have so far allowed only a few-hundred men to be approved?
Yes, sir. I understand the Ministry of Labour interpret the conditions liberally in the case of men who desire to take up agricultural training.
76.
asked the Minister of Agriculture if he will issue a full statement of the Government's intentions with regard to the employment after training of those applicants for the Agricultural and Horticultural Training Scheme who prove satisfactory.
As indicated in the detailed announcement of the scheme which my Department issued to the Press on 5th June last, it is anticipated that many training employers will wish to give employment to trainees who have satisfactorily completed training with them, but in any case my Department, through the county agricultural executive committees will take all practicable steps to ensure that satisfactory trainees are found suitable employment on the land.
:Does not the right hon. Gentleman realise that when a man intends to take up agriculture for the rest of his life and hopes to make a livelihood from it, he should have some more security before he starts than the mere promise that everything possible that can be done will be done?
I can assure the hon. and gallant Gentleman that all the trainees who are proved to be satisfactory should have ample opportunities to engage in the industry for the rest of their lives.
Is the Minister making arrangements for these people to be granted smallholdings?
:I am afraid that the question of smallholdings does not arise out of this Question.
77.
asked the Minister of Agriculture if he is satisfied that the Agricultural and Horticultural Training Scheme in England and Wales, for non-disabled men and women released from war service, is attracting sufficient numbers of men and women; how many have applied; and if he has any such scheme for disabled ex-Servicemen.
Eight hundred and twenty-three had applied for agricultural and horticultural training under my Department's scheme up to 30th November. I am hopeful that there will be a substantial increase in the number of applicants for training as younger men and women are released from the Forces. Training under the scheme is available to disabled as well as non-disabled ex-Servicemen.
:Has the Minister any target figure for the next six months?
:Our target is just as many trainees as we can possibly get.
Class B Releases
59.
asked the Minister of Agriculture how many applications for the release of agricultural workers have been received by the Merioneth W.A.E.C.; how many have been supported and forwarded to his Department by the Committee; how many cases were recommended for release by his Department; and in how many cases release has actually been approved.
:Nine applications for Class B release of agricultural workers under the individual specialists scheme have been dealt with by the Merioneth- shire War Agricultural Executive Committee up to date; four of these have been forwarded to my Department, which recommended two to the appropriate authorities, who have approved release in both cases.
61 and 66.
asked the Minister of Agriculture (1) what particular conditions are to be applied to the Class B block release of agricultural workers from the services; in what way the scheme is expected to work; and if he will state the total number to be released by next harvest;
(2) what particular conditions are to be applied to Class B block releases of agricultural workers from the Services; whether it is estimated that these arrangements will produce the authorised number of agricultural workers to be released; and that these authorised numbers will be sufficient for next harvest.As the answer is somewhat long, I will circulate it in the OFFICIAL REPORT.
Following is the answer:
As announced by my right hon. Friend the Minister of Labour and National Service on 4th December, the Government have agreed to the inclusion under the Class B block release arrangements of up to 10,000 agricultural workers. Under the block release system the Service Departments are informed of the occupational classes in which men are required for release in Class B and also of the numbers authorised. The individual men are identified by the Service Departments by reference to their central records on which the men's pre-enlistment civilian occupations are recorded. The Service Departments select the appropriate number of men in the specified occupations in age and service order (excluding those whose release in Class A is imminent) and offer them release in Class B. Service men are, of course, entitled to refuse Class B release and wait their turn for release under Class A.
Under the block release system, applications for the release of individual workers cannot be entertained by the Agricultural Departments or Agricultural Executive Committees. The limited scheme for the release under Class B by nomination of individual specialists in agriculture (i.e. men required for posts of a managerial or supervising character) will be continued as at present. Class B block, release to produce the numbers authorised will be offered by the Service Departments to men classed as general farm worker, market garden worker, shepherd, cattleman, stockman, yardman, dairyman, carter, horseman, ploughman, tractor driver and farm labourer.
Save in exceptional circumstances, men who accept Class B release will be placed either with their previous employer or on another farm near their homes by the Local Office of the Ministry of Labour and National Service after consultation with agricultural executive committees. Every effort will be made to place the men on the farms to which they desire to return. Arrangements have also been made for the release in Class B by nomination of a few hundred rural craftsmen, e.g., blacksmiths, wheelwrights, saddlers, estate maintenance workers, etc., who are required for urgent work in connection with food production and whose age and service group is 50or less. Applications for such release should be made to the agricultural executive committee for the county in which the rural craftsman's business is situated. Applications supported by committees will be considered by the Agricultural Department concerned, who will recommend release, up to the authorised number, in cases which comply with the essential conditions, and pass them to the appropriate authorities.
I expect that the authorised number of agricultural workers to be released under these arrangements will be working on farms long before next harvest. In addition it is contemplated that a substantial number of experienced workers will return to the industry in the next few months on release in Class A. The Government will take all possible steps to ensure that the labour needed for the harvesting of the 1946 crops is available.
Appeal Tribunals (Minister's Veto)
62.
asked the Minister of Agriculture whether he will now make a statement to clarify the position in connection with the right of appeal by farmers, who have been dispossessed by the W.A.E.C., to the appeals tribunal, especially as regards this right to veto the recommendations made by the appeals tribunal
Whilst the final decision in each case must rest with me as the Minister in whom authority to dispossess has been vested under the Emergency legislation, I should naturally, save in quite exceptional circumstances, be prepared to act in accordance with the recommendations of the tribunal.
Does the right hon. Gentleman really mean to tell the House that he exercises the right of veto over the recommendation of the appeals tribunal?
:Yes, as I happen to be responsible to this House for those decisions.
How many times has the right been exercised?
:The tribunals have not yet commenced to operate.
Will it be exercised?
Fertilisers
63.
asked the Minister of Agriculture whether he will give an assurance to farmers that during the year 1946 there will be available adequate supplies of fertilisers and especially of potash and superphosphate.
Supplies of nitrogenous and of phosphatic fertilisers, including superphospate, for use during the first half of 1946 will be adequate to meet farmers' requirements for arable crops, but only a limited quantity of phosphate will be available for use on grassland, and there will continue to be a shortage of potash. As regards the second half of that year, the supply position of nitrogenous and phosphatic fertilisers should be satisfactory but I can give no assurance that the potash supply will by then have materially improved.
:Is the Minister doing anything to get more potash from Germany?
:As my hon. Friend knows full well, we get our main supplies from Germany and France, and there is little or no possibility of increasing supplies immediately.
Calves
64.
asked the Minister of Agriculture what steps the Government are taking for 1946 to encourage and ensure the rearing of calves and to prevent the excessive slaughter of calves and young heifers.
County war agricultural executive committees are actively impressing on farmers the importance of rearing more calves both in their own and the national interest. By arrangement with the Ministry of Food calves sent for slaughter which are considered suitable for rearing, and store cattle which would repay further feeding, are kept back and sold for those purposes wherever there are buyers. Where practicable, county committees purchase such calves for rearing on farms in their possession or for allocation to farmers.
Since there is still a great deal of slaughtering going on, would it be possible to increase that practice?
It is being practised in every county already.
Farm Occupancy, Cumberland (Consent)
65.
asked the Minister of Agriculture the number of cases in the county of Cumberland in which the purchaser of a farm has been given permission to occupy the farm, and in which permission has been refused, respectively.
My consent is required only in cases where a notice to quit has been served on the occupier of an agricultural holding purchased since 3rd September, 1939, or subject to a contract of sale made, since that date. Of the 29 such cases in Cumberland, consent has been given in 21 and refused in eight.
Prisoner-Of-War Labour
68.
asked the Minister of Agriculture if he will discourage the use of prisoner-of-war labour by farmers and W.A.E.C.s where other labour is available.
:I have impressed on county war agricultural executive committees the need, of which they are fully aware, for ensuring that prisoners-of-war are not supplied to farmers or used by committees themselves on work for which civilian labour is available.
:Is my right hon. Friend aware that farm workers are complaining bitterly that they are being dismissed in certain cases and that German prisoners are taking their places, and will he circularise the county committees informing them that this must stop?
:The county committees have already been circularised. If my hon. Friend will bring any individual cases to my notice, I will look into them.
:Is my right hon. Friend aware that there is labour available from some of the prisons of this country and it has proved extremely satisfactory to utilise these men, and will he give attention to the possibility of using more of them?
:I believe that the first part of my hon. Friend's question is strictly correct. The men have been proved useful.
Tillage Acreage
69.
asked the Minister of Agriculture if he will use his powers of direction to prevent arable land from tumbling down to grass and thus maintain as large a tillage-acreage as possible.
:As indicated in my recent statement on agricultural policy, for the time being while the serious world food shortage remains, measures, including the issue of directions, will be taken to control, when necessary, the laying down of grass, in order to meet the need for maintaining a large tillage acreage.
Is the Minister aware that it is more important to ensure that no undue strain is placed upon farmers in the way of putting too large an acreage under the plough?
:I think the hon. Member can take it for granted that we shall exercise discretion in this matter.
Prices And Wages
70.
asked the Minister of Agriculture, in view of the Government's decision to retain the Control of Engagement Order in respect of agricultural employment, while freeing nearly all other industries, whether he will now consider, in his annual review of prices, fixing such a level of prices as will enable agricultural workers to be paid wages at least equal to those paid in other industries.
:Prices of the principal agricultural products will be fixed by the Government, after the annual Febru- ary reviews, at a level appropriate, in the opinion of the Government, to achieve the purposes stated in the policy announcement of 15th November of which an important feature is the provision of adequate remuneration and decent living conditions for agricultural workers. The fixing of minimum rates of wages for agricultural workers in the United Kingdom has been entrusted by Parliament to independent bodies. It would be quite improper for Ministers to indicate to these bodies how they should carry out their statutory functions.
In the case of a substantial increase in wages being arranged by the Wages Board, will the prices already fixed be just from the point of view of meeting that requirement?
I am afraid I cannot add anything to the statement I made on 15th November.
Technical Staffs
71.
asked the Minister of Agriculture whether there are enough trained personnel available to fill the posts in the new Agricultural Advisory Service, to staff the County Agricultural Committees that will continue the work of the W.A.E.C's and also enable the development of the farm institutes and other educational and training establishments for the future workers and farmers in this country, or what steps he proposes to take to ensure that the farm institutes are adequately staffed.
I accept the implication of my hon. Friend's question that there is a shortage of men and women with the technical qualifications required for the Agricultural Education and Advisory Services on the scale ultimately contemplated. It is my intention, as far as possible, to secure a fair distribution of trained staff between the two services, and at the same time to ensure that the county committees can continue to carry out their duties efficiently. The steps necessary to this end will be considered at an early date when we shall have more complete information about the available supply of staff.
:Will the right hon. Gentleman not appoint fanners who have failed in their own particular work, and whose appointment would be very strongly resented in the agricultural industry?
If the hon. and gallant Member will look at the question again, I think he will find that farmers are not likely to be applicants for the Advisory Service.
:Can my right hon. Friend say what number of farm institutes will be established in the country?
:That is another question.
Animal Feedingstuffs
72.
asked the Minister of Agriculture whether he proposes, in 1946, to import a greater quantity of animal feedingstuffs into this country in the event of the Anglo-U.S.A. Loan Agreement being ratified.
:I have been asked to reply. A larger quantity of rationed animal feedingstuffs will be distributed in the next rationing year 1st May, 1946, to 30th April, 1947, than was issued in the same period 1945–46. This will necessitate a greater import, provided supplies can be secured. I am not aware that U.S.A. will be an exporter of animal feedingstuffs and it would be premature to anticipate supplies from that source.
Opencast Working (Restoration)
74.
asked the Minister of Agriculture whether he is satisfied that the top-soil removed through opencast working is being properly replaced and spread.
Yes, Sir.
:What steps does the Minister take to see that contractors do this work all over the country?
Each war agricultural executive committee appoints one person to make contact with the officer of the Ministry of Fuel and Power and between them they ascertain what the farmer desires as far as restoration is concerned, and they do their best between them to see that that desire is met.
:Does the Minister get reports at the Ministry from this subcommittee and is he in direct touch him- self, or is the matter left entirely to the local war agricultural committee and the local fuel and power committee?
:The hon. and gallant Gentleman will appreciate that the county committees are the Minister's agents and he must accept their guidance on these questions.
:Is the Minister aware that although the arrangements may be satisfactory in regard to coal workings, they are far less satisfactory in the case of gravel and clay? Will he look into that matter?
:If the Noble Lord will bring to my notice any case he has in mind, I will gladly look into it.
:What steps does the Minister propose to take with regard to sites where no attempt has been made to get the top soil ready to put back on the site?
:If the hon. Gentleman will bring to my notice any case of which he knows, I will have it looked into.
Potato Order
75.
asked the Minister of Agriculture what is the object of the levies imposed under the new Potato Order.
:I have been asked to reply. As this Order is due for discussion later today, I would ask the hon. Member to await the statement I hope to make then.
Fishing Industry (Surplus Government Properties)
73.
asked the Minister of Agriculture whether he has a list of piers, ships, boat-repairing sheds, ice plants and other structures which have been erected by the Service Departments in England and which might be of use to the fishing community; and whether he will see that these are not dismantled without consultation with the local authorities.
I have some information on the subject of the hon. and gallant Member's Question but I have no comprehensive lists. I am, however, in communication with the Service Departments with a view to ensuring that the various local fishing communities are given an opportunity to acquire any surplus properties that would be useful to them.
Dominions (Radio Advertising)
78.
asked the Under-Secretary of State for Dominion Affairs in which of the Dominions arrangements exist, or are being made, at the present time to enable a limited amount of advertising on the radio; and under what conditions in each case.
:I understand that advertising on the radio is now permitted in all the Dominions subject to various conditions. These conditions are somewhat lengthy and complicated and with the hon. Member's permission I will communicate them to him in writing.
:Will they be published in the Official Report?
:They are very long indeed and I am afraid that it will not be possible.
:Will the right hon. Gentleman please do that?
I am afraid it is impossible.
Burma (Far-Eastern Relief Fund)
82.
asked the Under-Secretary of State for Burma whether the Far-Eastern Relief Fund will be renamed the Far-Eastern and Burma Relief Fund.
:The Far-Eastern Relief Fund is an unofficial fund registered under the War Charities Act, and it is, therefore, not within the province of my Noble Friend to alter the title by which it has been known since its inception in 1942.
:As the Minister has already answered b number of questions about the Fund, and as Burma is not in the Far East—it is nowhere near the Far East— will he say how people from Burma are to know that they are eligible to draw relief from this Fund?
The difficulty is that people in the Netherlands East Indies are receiving assistance from this Fund and, therefore, it does not solve the problem by merely extending it to cover Burma.
Message From The Lords
That they agreed to:
Workmen's Compensation (Pneumoconiosis) Bill, without Amendment,
Building Materials and Housing Bill,
Elections and Jurors Bill, with Amendments,
Wallasey Corporation Bill, without Amendment.
Building Materials And Housing Bill
Lords Amendments to be considered Tomorrow, and to be printed. [Bill 56.]
Elections And Jurors Bill
Lords Amendments to be considered Tomorrow, and to be printed. [Bill 57.]
New Member Sworn
William John Irving, esquire, for the Borough of Tottenham (North Division).
Business Of The House
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[ The Prime Minister.]
Orders Of The Day
Bank Of England (Re-Committed) Bill
Considered in Committee.
[MAJOR MILNER IN THE CHAIR]
CLAUSE 1.—( Transfer of Bank stock to Treasury.)
3.30 p.m.
I beg to move, in page 2, line 1, leave out Subsection (3), and insert:
Subsection (3) provides that the Government stock which is to be given by way of compensation to the stockholders of the Bank of England shall be redeemed on 5th April, 1966, or at any time thereafter, at the Government's option, subject to three months' notice. My Amendment proposes that this stock should be redeemed on 5th April, 1966, without any option whatever. I think this is a desirable Amendment. There seems to me to be no reason why the Government should reserve a unilateral option which, of course, would only be exercised at a time when the current rate of interest on Government borrowing fell to something below 3 percent., and therefore a time which would obviously be unfavourable for the reinvestment of the proceeds of redemption. If the Chancellor had proposed a perpetual irredeemable stock, I should not have quarrelled with his proposal, but I appreciate that there is no precedent for the issue of such a stock, so far as I am aware, by the British Government and I certainly do not want to encourage the Chancellor to wander too far from precedent in these matters. Moreover, I think that a stock with a fixed date for redemption would be more popular in the open market, because a date for redemption tends to anchor the market price more or less within sight of par value, whatever may be the ebb and flow of interest rates for the time being. I hope the Chancellor, in replying to this Amendment, will not take the line that, as no petitions were made on behalf of the stockholders to the Select Committee, this Committee of the Whole House need no longer trouble about the matter of compensation. I feel that we have a special duty in respect of this stock, because the Bank of England stock was a trustee stock; it was authorised for the investment by trustees of trust funds under the Trustee Act. Counsel for the Government, before the Select Committee, sought to make a point upon that. He said:" (3) The Government stock shall be redeemed at par by the Treasury on the 5th day of April, 1966."
I think it was rather unreasonable to expect trustees holding Bank of England stock to decide at one week's notice— because that was all that was allowed for the presentation of petitions after the Second Reading of the Bill—to embark upon the very considerable expenditure of presenting a petition through learned counsel to the Select Committee. Therefore I do not think that point, that none of the stockholders presented a petition, is really one of great substance. Indeed, I think they were entitled to expect that the Governor of the Bank of England —who was the only witness to give evidence before the Select Committee—would perhaps have presented aspects of their case rather more prominently than he did the case for the Government." The stock is a well-known one—a trustee stock which is therefore, held to some considerable extent by persons who are not only entitled, but are bound by their duties under their trust to do all that they properly can to maintain their property interest. There is not one person present today to raise any point before you."
:Is it suggested that the Governor of the Bank of England presented the case for the Government? Are the words carefully chosen by the hon. Gentleman?
:Yes, certainly. He was the only witness called by the Government; he was the Government's witness. Therefore I think my comment was a fair one. There is one further point why I say that this Committee of the Whole House should look carefully at this transaction. This was not a negotiated arrangement. The terms proposed in the Bill are imposed The Financial Secretary made it perfectly clear on the Second Reading of the Bill, and on the Debate on the Money Resolution, that these terms are not based upon negotiation. That being so, I feel that this Committee has a duty to scrutinise the precise terms of the compensation.
:I support this Amendment from a rather different point of view. I think it is generally accepted that the Bank of England stock is, so far as I am aware, the only ordinary stock or share which has the status of a trustee stock. It is on this account that many investors have invested in this stock, because they felt by so doing they were purchasing a security which had the status of a trustee stock whilst owning the equity of the Bank of England. They felt, and they had cause to feel, that in the holding of this security they had a hedge against any possible inflation, since the dividend could at any future time be increased as an off set against the reduction in the purchasing power of the£.This sense of security is now lost to them. What does this Clause imply? Surely it implies that an amount of £400 in 3 percent. stock, is to be exchanged for £100 of Bank of England stock upon which holders are to receive 3 percent. until the year 1966. When that date arrives, it will be for the Chancellor of the Exchequer or his successor—probably it will be his successor as it is 20 years hence —
It will be the same Government.
:In any event it will be for the Chancellor of the Exchequer to decide whether the Government shall pay off this loan, or whether they will permit it to continue. The right hon. Gentleman has said that, if it suits the Government at that time, clearly they will—and it will be expedient so to do—repay the loan, but how unfair to the owners of that loan who may or may not at the time fixed, namely 21 years hence, be paid off at a time when the money market may possibly be on a 2 percent., or 2½ percent. basis. What, in effect, the right hon. Gentleman says is, "We will pay you 12 percent. per annum on every £100 of Bank of England stock for 21 years and, after the termination of that period, it will remain to be seen what we propose to do with you." This is a one-sided contract.
Let me put the other side of this picture. Assuming that the Government did not nationalise the Bank of England, it is, I think, reasonable to say that never would the stockholders have received less than 12 per cent. upon their money invested, and it would have been open to the Governors of the Bank of England to increase the dividend from time to time, and, if they were to distribute a larger proportion of their profits—they have been in a position, during the last 20 years, so to do—it is reasonable to assume that they will equally be in a position during the next 20 years to pay an increased dividend, if the Court of Directors desired. I base my argument in favour of this Amendment on the ground that it would, at least, give the holder of the stock a minimum of 3 percent. in perpetuity. I agree with my hon. Friend who moved this Amendment that had this Clause not provided for a definite date for redemption, had it been an irredeemable stock in the same way as 2½ percent. Consols, then I should have had nothing to say and would have supported the Clause as it stood, but for the reasons I have given, I support the Amendment.:This Amendment proposes to improve the terms of compensation from the point of view of the stockholder. In that respect those who have advocated it are "more royalist than the king." I can quite understand the hon. Gentleman not wishing me to rely upon this argument, but I am going to rely upon the argument that of the 17,000 and more stockholders of the Bank of England none-availed themselves of the opportunity furnished to them of petitioning against these terms. I would like to correct what the hon. Gentleman said about only a short time being available. They had 25 days in which to take any action they desired before the Select Committee. The Bill was presented on 11th October; it was not read a Second time until 29th October, therefore 18 days elapsed. Of course, they may have been banking on the Second Reading being defeated in this House, but, if so, they were political innocents—and innocence is no defence in law.
Innocence is no defence in law?
3.45 p.m.
The Chancellor of the Exchequer has made the amazing statement that innocence is no defence in law.
Am I in Order in asking whether he meant "ignorance? "Yes, Sir, I must be excused for a lapsus linguae. I should, of course, have said "ignorance," which we do sometimes associate with innocence, but not always. But, seriously, they had 25 days in which to take whatever measures seemed to them to be necessary.
I was referring to the Order of this House that all objections against the Bill should be presented within seven clear days after the Second Reading of the Bill. I think I was, therefore, quite entitled not to count the period until after the Second Reading.
:I should like to point out that a large number of the shareholders are small shareholders and that if any small shareholder had desired to lodge a petition, he could not have done so without incurring considerable expense, expense which might have been equal to the amount of his investment in the Bank.
:Let us take one point at a time. The point I was on was not the length or otherwise of the purse of the stockholder, but the length of time which he had, in order to initiate a petition if he had so desired. The prudent stockholder who felt outraged by the injustice of these terms would have done well to taken the first steps as soon as the Bill, which I am defending here, was presented on 11th October. I will indicate in a moment what actually happened after the Bill was presented on 11th October, which has a bearing on this Amendment; but for the moment I do not think it can be reasonably argued that too short a time was allowed for the presentation of a petition, and least of all that there was a great mass of seething indignation and a sense of injustice among the stockholders. At any rate, if there had been, they had other though less strictly legal opportunities of making known their views. They could have written letters either to their Members of Parliament, or to myself, or to the Governor of the Bank of England, or to any other person who they thought might help them in their dire need, but this has not happened on any appreciable scale. Speaking from memory, I received one letter—and one only. The Governor of the Bank of England, in evidence before the Select Com- mittee, said he had received only ten letters protesting against the terms and he went on to say that of those ten letters two were received from persons who had bought Bank stock after the Government bad announced that it was going to rationlise the Bank, and he went on to say that those two gentlemen, therefore, were evidently speculators and their letters were not to be taken too seriously. The Governor also indicated that several of the other persons who wrote were abusive. They charged the Government with confiscating their property and used other unmeasured language, but the Governor thought the reasonable replies which he had sent to all of them had satisfied most of them.
However that may be, ten, of whom two were speculators, is not a considerable volume of protest from among 17,000 stockholders. Members of Parliament are not slow to approach me or other Ministers when grievances, real or supposed, bear upon their constituents, and I do not recall one case in which a Member approached me on this subject or wrote to me passing on complaints from any of his constituents who might be shareholders. Therefore, I say there is really no evidence at all that the stockholders as a class were dissatisfied with these arrangements. I must make a comment, in passing, on the phrase used by the hon. Member who moved the Amendment in which he stated that the Governor of the Bank of England presented the case for the Government. He did not. The person who presented the case for the Government was Sir Cyril Radcliffe, and indeed, the Governor of the Bank, in order to remove any misapprehension that might have been felt on this point, used these words before the Select Committee:It is perfectly true that he was called by Sir Cyril Radcliffe, but all that that shows is that Sir Cyril Radcliffe took the view that his evidence would be of interest and value, and he was so right in that view that the Committee, having heard the Governor, did call no further witness. They said "What need have we of further witness? "I was afraid—well, I was not afraid, but I was apprehensive, in view of the pressure on my time—that the Committee would call me, but having heard the Governor of the Bank they decided that no other evidence should be called. The status of the Governor in this matter is clearly stated in his own words which I have read." Before I finish, Mr. Chairman, may I say this, that I am here as Governor of the Bank to give you all the information that I can. I am not a witness on behalf of the Treasury or on behalf of anybody else. I am here to give you all the information I can, and to help you in your consideration of this matter."
I think my comment was quite fair. When I said the Governor presented the case, of course I appreciated that he was a witness, and the only witness, but I think that anybody who has read through every word of his evidence, as I have twice, will feel that he showed a painful anxiety to assure the Select Committee that the terms were completely satisfactory from the point of view of the stockholders rather than to present certain aspects of the case such as, for instance, those I have been endeavouring to present this afternoon.
:I do not know why the epithet "painful" is used in this connection. I do not know to whom it was painful, except to people who felt pain at having certain truths clearly and intelligently exposed. Apart from that I do not know who suffered pain. Certainly the stockholders suffered no pain through any stage of these proceedings, and Sir Cyril Radcliffe said he thought it might well be that the terms were somewhat benevolent towards the stockholders. And so the market thought, if I may use language which personifies the market as being possessed of a brain.
What happened on nth October when the Bill was introduced? Bank stock rose sharply. The hon. Member for Sutton Coldfield (Sir J. Mellor) says he has read this evidence from end to end. He has, therefore, seen among other things, the chart showing the relative movements of Bank stock and Local Loans. For some time they moved practically together, but when the electors gave their verdict, so great was the confidence in His Majesty's new Government that Local Loans, being a Government stock, rose relative to Bank stock. Thereafter the difference slightly increased, due to very natural doubts in the minds of the stockholders and others as to the terms on which the Government would carry out its expressed intention to nationalise the Bank. But as soon as the Bill was published all those apprehensions disappeared. The market felt very happy and satisfied and Bank stock rose and passed above Local Loans stock and so remained, as is shown on this chart, up to the time the chart terminated. In these circumstances, if we had any second thoughts about these terms of compensation they would be that perhaps they are rather a shade too generous. But we left all this to be determined by the Select Committee appointed by this House, and the Select Committee have reported that they recommend no change in these terms, and I am prepared to stand by their recommendation. It is true that if 21 years hence the rate of interest should have fallen below 3 percent. it would be a very natural thing for any Chancellor of the Exchequer to convert this stock down—certainly it would—but meanwhile the stockholders will have their 3 percent. Stock, and if the rate of interest has fallen in the meantime that stock will have appreciated, and the stockholders will be able to sell it at a good price and reinvest somewhere else. I do not think it can be contended that they have been other than generously treated, and the proposal in the Amendment to give them a great further advantage is one which cannot be sustained on the evidence, and I therefore ask the Committee to reject the AmendmentI think the right hon. Gentleman was unwittingly putting a little too high the opportunities for the stockholders to protest when he prayed in aid the 18 days between the printing of the Bill and the Second Reading, because it was not until after the Second Reading that anybody knew what the subsequent procedure on this Bill would be, knew that it was going to be treated as a hybrid Bill, a very rare proceeding. I very much doubt— though I do not want to make this more than a point for the purpose of accuracy —whether any stockholders would naturally have assumed that that would be the procedure and would have set about drawing up petitions. In point of fact no one did, and so I do not think it matters very much one way or the other; but I would not like it to go forth that on future occasions the time must be counted to run from the actual printing of the Bill in the case of Bills which are not subject to the ordinary procedure of this House.
I do not want to press the point unduly, but I think all Parliamen- tarians knew that this was a hybrid Bill. A number of people outside who study our procedure knew, and I should have thought there was plenty of legal advice available. If any stockholder had felt terribly aggrieved and had spoken to his solicitors or to his stockbrokers, they would probably have been able to advise him. But I do not want to make too much of the point.
It was exactly because I did not want the Chancellor to make too much of the point that I put in that caveat. I hope he will remember not to talk too much about 20 years hence, because, in the words of a song on which he and I were brought up, twenty years hence we will all ' 'seem to the boys to be old fools."
Amendment negatived.
:As a matter of courtesy to the hon. Member for Sutton Coldfield (Sir J. Mellor) I should like to inform him that on further consideration of his next Amendment—in page 2, line 9, leave out "or greater "—Ihave decided not to select it.
Motion made, and Question proposed, "That the Clause stand part of the Bill."At this point I think it will be in Order for me to say how much I regret that this Clause omits any reference to the reserves of the Bank of England which are to be taken over. I do not want to take up much time, because this point was very adequately discussed on the Second Reading of the Bill, but I should have thought, in view of the opinions then expressed from more than one side of the House, that between Second Reading and now the Chancellor of the Exchequer would have thought fit to give some indication of what those reserves actually are. I do not intend to develop this, but only to make two points. One is that when the Bank of England is nationalised, it is not against the national interest to disclose what the reserves are.
I do not think any question of the reserves can arise on this Clause.
:The Clause has this very great omission. There are rumours that the reserves amount to £100 million.
4.0 p.m.
Is one not entitled to argue that the question of compensation is a most relevant factor in this matter?
:I do not think it is relevant on this occasion.
I do not intend to be more than a couple of minutes—
On a point of Order. It should be relevant, because this question arose on the Second Reading on 29th October when the Financial Secretary to the Treasury stated specifically, in answer to my inquiry about the reserves, that we would be able to ask this question as and when we dealt with this matter in Committee. Therefore the Government certainly envisaged the position of being asked to deal with it on the Committee stage.
:It might have been in Order in the Select Committee, but the hon. and gallant Gentleman cannot discuss it now.
The hon. Gentleman was quite definitely referring to the Committee here.
:The hon. Gentleman, if he will forgive my saying so, was probably wrong and fortunately or unfortunately I am the authority on the matter.
:There are rumours all over the country that the reserves are actually £100,000,000, and I think that it would be in the interests of the country that the actual amount should be published.
:Why?
:The facts may not be so bad as the rumour.
What is bad about it?
If the reserve is £100,000,000, the compensation is inadequate.
It is definitely not in Order now to go into these details.
Should I be in Order, if I asked this very simple question? Is it not the duty of hon. Members of this Committee to know whether His Majesty's Government are paying too much or too little? We do not know. However, I bow to your Ruling, Major Milner, and I will not develop this point, but I must protest, with all respect, at the inadequacy of the opportunity given to. us to raise this very important matter.
:As I understand the argument of the hon. Member who has just sat down, it is this: Not only is there some figure which we do not know, but it may turn out that the compensation which is being paid is too little.
Or too much.
:I doubt very much whether the hon. and gallant Member and his friends would be interested to raise much Debate in Committee on this point if they thought the Government were committed to paying too much. When we find that there are 17,000 stockholders, of whom only 11 all told have any complaint to make, and two of those are people who came into the field only in order to make a profit out of this transaction if they could—I should have thought that there was overwhelming evidence that, at any rate, the compensation was not too little. If one looks at the graph to which the right hon. Gentleman has referred one is tempted to regret very much that we did not have an Amendment down on this side of the Committee to reduce the amount of compensation which it is proposed to Pay.
I wish to raise one specific point on this Clause. Subsection (4) provides that after the appointed day, no dividends on Bank Stock shall be declared but, in lieu, the fixed half-yearly payment shall be made to the Treasury. That half-yearly payment is calculated to be exactly the equivalent of what the half-yearly dividend used to be. It is further provided that the fixed sum may be increased or diminished by agreement between the Bank of England and the Treasury. I am rather surprised that provision has been included to increase that sum for this reason: The whole basis of the Government's argument for keeping down the compensation to the level of the dividend, which used to be received by the Bank of England stockholders, was based on the conception that in no circumstances, if the Bank had continued under private ownership, would stockholders ever have received more than the dividend that they customarily received during the past 20 years. Whatever might be accumulated by way of assets, the stockholder would not enjoy participation in these assets by way of an increased dividend.
The case for the Government—if I may use this term without offence to the Chancellor of the Exchequer or Lord Catto—was clearly illustrated in Lord Catto's evidence. He said that any surplus which might be earned beyond what was sufficient to pay the customary dividend to the stockholders of the Bank of England would have been used, and always would have been used, first of all, to strengthen the reserves and, secondly, to provide an improved service for those who used the services of the Bank of England. I will give two examples. Counsel for the Government before the Select Committee repeated words which the Chancellor of the Exchequer had himself used on the Second Reading of the Bill in making this point. He referred to the words used by the Governor of the Bank in a broadcast in 1939 when he said:Previously Lord Cato said this:" In theory, the dividend paid on Bank stock can vary, just like that paid by any other company; who are proprietors when they come to realise that services, and not a larger dividend, is the first consideration. In fact, the dividend has been unchanged for many years."
I think that it is clear that the whole case of the Government for keeping down compensation to the level of the dividend customarily paid is based on that idea that there would have been no distribution by the Bank out of any accumulated surplus, but it would have been retained for strengthening the reserves and for improving the public services which it rendered. That being so, I think that it is quite unjustifiable that the Treasury should desire now in the terms of this Bill to have a right to extract more from the Bank than the Bank would have paid to the stockholders if it had continued under private enterprise."I do not think that the increase in the reserves would have affected the dividend in the future. Our object would have been service, as I have indicated a few minutes ago, and we would have reduced our charges for any service or we might have done a great many other things so as not to increase our earnings in any unreasonable manner."
:I would like to refer shortly to the question of non-disclosure. I am not criticizing the terms of compensation. I am convinced by the graph which we had on the report of the Select Committee, and I am glad to see that the Chancellor of the Exchequer has learnt from the hon. Member for Bath (Mr. Pitman) the value of graphs. The real point is that we ought to know what we are buying. I do not belong to Lord Rothschild's party, and so I think it is permissible to say a word of implied criticism of a noble banker. In his evidence, Lord Catto defended the non-disclosure for two reasons. The first was that it was customary to tell white lies when you were having amalgamation between banks—and, no doubt, black lies when having amalgamations between bucket shops. The second point was that it would not be in the national interest, because some people might think the reserves too high, and some might think them too low. Presumably the security of the Bank is the same as the Consolidated Fund, because, if not, there is no point in this Measure at all. That being so, the argument falls to the ground as another £50,000,000 or £100,000,000 of reserves really does not make any difference at all. I think that we ought to have some answer to this, and that the principle should be laid down that the State does not acquire anything without giving some idea of what it is acquiring.
:There is one point which I should like to raise. Clause 1 (4) provides for £873,000 being paid by the Bank of England to the Treasury half yearly in lieu of dividends. Can the Chancellor of the Exchequer inform me how this sum will be disposed of? Do I take it that the amount will be deducted from the profits earned by the Bank during that particular half year and the balance carried forward, as customary: and can he inform the House whether the profit and loss account of the Bank of England will in future be laid before Parliament?
:I would like to say one word about this question of the half annual or annual payment by the Bank to the Treasury under Clause 4. I would ask whether it should be a fixed sum or whether there should be a rise or fall. My own suspicion, and I am sure that of other hon. Members on this matter, is that the reason for these words put in the Clause is just the usual Treasury caution, when entering into a bargain either to pay or receive anything. They usually like to have it both ways. I mention this because counsel for the promoters in the Select Committee used words which made it very clear—I will not read them to the Chancellor of the Exchequer because he must be well aware of them—that it was in fact the intention of the Government to arrange a fixed payment which would not vary from year to year. It seems to me that is very desirable. The point has already been made that one of the objects of the Bill is to remove any idea of profit and to give the idea of service. Therefore, if there is any greater profit available for distribution, it clearly should go to reducing the charge of services or improving the conditions of the people who provide those services.
Logically it would be quite reasonable for the Chancellor to remove all the last words of the Clause. In practice, I do not think there is any danger of the right hon. Gentleman being advised by the Treasury to accept less than the amount stated in the Bill. There is, on the other hand, a very real danger of the Chancellor in his other capacity, as the Minister responsible for safeguarding the national revenue, finding it a very convenient means of getting a considerable sum, because nobody knows what the profits of the Bank are, and we all hope that as a result of this Measure they will be enormously increased. But we want them to be used for improving the services supplied by the Bank to the whole of the community, not for the benefit of the Treasury. 4.15 p.m. May I, as an illustration, quote what happened in the case of another service, the Post Office telephones? The telephone service provided by the Post Office is a public service. The hon. Member for Chesterfield (Mr. Benson) will remember that in evidence given before the Committee on Public Accounts earlier this year, it was disclosed that the surplus amounted to £37 million, of which £32 million was the direct result of what was admitted to be, in fact, taxation, so that the users of the telephones are paying over £30 million in taxation. The idea clearly was that that should be a service. There are reasons, perhaps, why the actual service that we have been receiv- ing is not as good as it was. I doubt whether the Postmaster-General would contend that those who pay rents for telephones, have been receiving the same service as that to which they were accustomed previously. It is wrong that public Departments which exist to give public services, should be regarded by the Chancellor as a source of revenue. There may be exceptions. The Post Office is a less unfortunate exception than the case we are discussing would be, because the only people who suffer in the case of the telephone service, are the actual users or renters of telephones. In the case of this Bill, if the costs of services rendered by the Bank through the financial community to the whole population are greater than they need be the whole population will suffer. That is the fair argument. I will not stress it any more. I have no doubt that the Chancellor will be able to explain or will agree to amend the Clause on the Report stage.This is a vital Clause in the Bill. It deals with compensation. [Laughter.] It is vital both to the existing holders and to the State, in which we are all taxpayers, and we all speak for our share of the representation of the country in this Committee. I cannot imagine that anyone can take exception to that statement. In the discussion on the last Amendment the right hon. Gentleman said this was generous compensation. I do not know why he should have taken that view today, because that is not the view he took on the Second Reading. What he said then was that the terms of the transfer of the Bank's stock or what were commonly called "the terms of compensation" were, in his view, on the one hand, fair to the shareholders, and, on the other hand, undoubtedly, a good bargain for the State. To speak of generous compensation is putting rather a gloss on that statement. As a matter of fact, there are some very interesting observations in the evidence of Lord Catto to the Select Committee on this very point. He referred to this particular statement of the Chancellor—he was good enough to say he did not remember now who made it. He said that there was some confusion, by reason of an expression used in the House of Commons that this was a good bargain for the Government, and he pointed out that in his view a good bargain did not mean a bad bargain for the other side and said —that in his opinion the price stated in the Bill was a fair and reasonable price for both sides. I hope that the word "generous" will now fade out of the picture.
My hon. Friends have reason to be slightly disappointed at the fact that nothing has been said about the reserves. Hon. Members who are interested in this matter will have read and I, as a Member of the Select Committee heard, the evidence given on the general problem of disclosing reserves in cases such as this. My hon. and gallant Friend who spoke earlier expressed the view that we ought to know what we are buying. The State should know what it is acquiring. The difficulty here is probably rather that the State, as personified by the Chancellor, knows perfectly well and that the rest of us do not know. If the right hon. Gentleman will not disclose it, as indeed the Governor was not prepared to disclose it to the Select Committee, I am not clear that we can do anything about it. There is no other means of finding out. If the Bank will not tell us, and the Chancellor will not tell us, we can merely register such disapproval as we feel in the matter, and realise that figures are available to the Chancellor and his advisers upon which they have been able to form a judgment and which cause him to consider that this is fair to the shareholders and a good bargain for the State. We are not in a position to judge that point. Therefore, I suppose, as in many matters of this kind, we have to accept the word of the Government that they think it right. I am in agreement with my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor) and my hon. Friend the Member for St. George's (Mr. Howard) on the words which we had hoped to delete if the Amendment had been called, as to why in certain circumstances there should be, in lieu of any dividend payments to the Treasury by the Bank, such sums "less or greater" than the 873,180 referred to in Clause 1 (4). If my hon. Friend is right in thinking that the words ".… or such less or greater sum …" is just a reference to a balancing figure, there may be no great harm in it. If it means that there is to be an attempt to secure agreement to the payment of greater sums than that specified from the Bank to the Treasury, there is some risk that the very services to the public rendered by the Bank—and it is claimed that this is one of the objects of the Bill— should be reduced for the benefit of the Treasury, that is, the taxpayers. My hon. Friend pointed out that there had been other examples of that sort of thing in the past. In our view, it would have been much better if the words "or greater" did not figure in this Clause. This possibility of varying sums being paid, might lead to a conflict of opinion and disputes between the Bank and the Treasury on what should be paid to the Treasury. I can imagine circumstances in which the Bank thought they should be able to hold more out of their annual profits than the Treasury thought fit, either to extend their services, or for some other purpose—it might even be to add to their reserves. It would be undesirable on the face of it that there should be disputes and trouble between these two great authorities on such a subject as that. It looks to us as though it would have been wiser to have fixed a sum neither greater nor less than that prescribed in Clause 1 (4). I hope, therefore, that the right hon. Gentleman will tell us quite frankly what he has in mind by putting these words into the Clause. For the rest, my hon. Friends, as they have already pointed out, are disappointed and aggrieved that the right hon. Gentleman so far—unless, of course, he is going to make some disclosure now—has not felt himself in a position to explain exactly what it is the State is taking over from the Bank through this Bill. So far as the whole compensation Clause is concerned, I hope that the right hon. Gentleman will realise that he has, up to now, defended the Bill on the basis of its being fair to the shareholders and good for the State and that he will not try to state that it is generous compensation in either direction.If the Chancellor is not going to inform us what are the reserves, will he say why he will not tell us, because after nationalisation the whole of the credit of the country will be behind a nationalised Bank of England and I cannot see that such information could possibly do any harm?
:That is the hon. and gallant Member's opinion. It is not the opinion of one whose opinion on this point I value a good deal more highly—the Governor of the Bank who said in the clearest terms:
" I would consider that any disclosure of those inner reserves would be greatly against the national interest.. …
Why?
:The place to ask "Why?" was in the Select Committee, when that witness was in the witness chair. I say, quite frankly, that had I been called, as it seemed I might have been called, before the Select Committee, I should have rested my refusal to disclose the reserves simply on the judgment of the Governor of the Bank of England, who, in my opinion, is in a better position to judge than anybody else, since he has had control of these matters, and is in a position to assess the effect which would be produced at home and abroad by any unwise disclosure. That seems good enough to me. I am not going to disclose them now for that simple and sufficient reason. I will repeat what I said before: I do not say that I know nothing whatever about this subject myself, but I will say that, in the light of what I know, though I am not prepared to disclose it publicly, this is a good bargain for the State. I said that before; I say it again. That should assure every patriotic person who would attach any credence to my word.
On the other matter which arises on this Clause, the question of the amount paid from the Bank to the Treasury under the new conditions, the position is very simple. It was the hon. Member for Ealing (Sir F. Sanderson) who asked how these sums would be disposed of. The Bank has hitherto paid the same amount regularly for the past 23 years, every half-year, as dividend on the stock. This same sum will continue to be paid, subject to the greater or less provision, with which I will deal in a moment, every half year, no longer to the shareholders but to His Majesty's Treasury. It will go into the general revenues of the country —it will not be ear-marked in any way—just like any other receipt from taxation, or any other source of public income. It will go into the general revenues and will be liable to be used for any purpose of public expenditure. But, of course, it does happen to be equal to the additional annual charge on the national debt that will be created through the creation of this new stock and, therefore, if one likes to make a notional equation, or a notional balance, between the two, that is quite legitimate so long as one does not imagine that this sum is followed through the Treasury and out to the payment of the holders of stock. The interest charged on that increment in the national debt is equal to the amount paid by the Bank to the Treasury in lieu of the dividend. 4.30 p.m. Coming to the question of "greater or less," it is to some extent the case, as the hon. Member for St. George's (Mr. Howard) suggested, that this is a flexibility provision. We want to have the possibility of variations. We are legislating for the long future. I do not know when it will again be necessary to pass a Bill relating to the Bank of England; it may be a very long time. We think this will operate very well and beneficially to the national interest and it will be just as well to be able to vary it one way or another so that if it seems in the national interest, both to the Treasury and, to the Bank of England either to raise or lower the amount, it can be done. I think it is a wise precaution to put in this degree of flexibility, but I hasten to add that I have no present intention of suggesting a variation. I have no reason to think that the Bank of England has any reason to suggest a variation but if it seemed to both the parties reasonable to alter it, it would be a pity if they were prevented from doing so by rigidity in the Statute. It is also perhaps just worth mentioning, since the hon. Member asked the question, that paragraph 14 of the First Schedule to the Bill makes it clear that the Bank will be entitled to deduct this payment from their profits. In regard to the question of a profit and loss account, it would be premature to consider this before the Bill has gone through. But when it has I will discuss with the Governor of the Bank of England what would be the most useful form for the laying of an annual Report which could, of course, be discussed in the House, on the operations of the Bank, and what would be the most convenient form that that should take. My approach to that would be that we desire to give the maximum of information about the operation of the Bank under the new conditions which will be consistent with the public interest and the reasonable requirement of discretion, and even of secrecy, on which point I would be disposed to be guided very much on what the Governor himself and the Bank thought. Subject to that, we would be prepared to lay a Report in Parliament, but its exact form I would not like to indicate at this stage.:I am very gratified with the latter part of the reply.
:The latter part of the reply may have been gratifying, but I want to register my protest against the continued refusal to disclose what the Government are acquiring. We are told by the Chancellor that he is not giving the information for two reasons, and the first is that Lord Catto would not give it. Of course, that is not a reason at all; it does not give any rational grounds on which we can act, and, in any event, Lord Catto is being made into the Chancellor's alter ego and he is to become a State servant. I do not think that be cause Lord Catto said that it was not a good thing, we should be bound by that. The Chancellor has told us we are getting a good bargain and that we ought to be satisfied with that. What is, and what is not, a good bargain, is always a matter of opinion, and our opinion might be different from that of the Chancellor. It is generally assumed that the public are acquiring some reserves of a considerable value, but I do not know. For all I know, we might be taking considerable liabilities—
:We have gone into that matter very fully, and it was before the Select Committee.
I was not on the Select Committee and if you, Major Milner, would allow me to continue my observations, this seems to be a matter of very considerable importance, because here there is a question of precedent. How do we know what is going to happen in the future, when the Government buy the railways, coal mines, or gas works? Are we to be told what we are getting or not? Is the Chancellor going to adopt this line and the Executive to set themselves above Parliament? The Executive are retaining for themselves some knowledge they are not prepared to disclose to Parliament. That does not surprise me; it is true National Socialism. For all we know this may be "The People's Car" all over again. How do we know? I do ask the Chancellor of the Exchequer to think this over and realise that the public are being asked to pay for this. They will bear the cost, and are entitled to know what they are going to get for it.
I desire to say only a few words on this subject. It seems to me that the amount of the reserves is largely irrelevant, because the dividend will be fixed and unalterable—[Hon. Members: "No."]—it has, in effect, been fixed in practice for many years. It is a rather remarkable thing that hon. Members opposite should ask the Chancellor of the Exchequer to disclose reserves, which big business men are never themselves prepared to disclose to their own shareholders, and which the governors of the Bank of England have never been prepared to disclose to their own stockholders.
:The hon. and gallant Member is missing a relevant point. The Bank of England is to be nationalised, and the whole of the finances of Britain will be behind the Bank of England, and it will be.a question of national policy. Disclosure could be made easily, whereas in the case of a private firm, there would be competitors and they would be giving secrets away in competition.
:The hon. and gallant Gentleman cannot make his speech again.
:I will bring my remarks to an end as quickly as possible. I seems to me that there is a perfect analogy here. In the past there have been directors from the party opposite—
rose —
I understand that the Chairman is anxious that I should bring my remarks to an end.
:The only point I want to put is that, hitherto, I have not been a stockholder in the Bank of England and have not been entitled to demand it, but now I understand I am to become one, and I want the information.
:It happens that my father was a stockholder, and on one occasion I said I would like to find out about this because I was interested in the Royal Mail Steam Packet Company and other companies, but, in fact, the reserves were not disclosed. Some of us are a little worried that there is a sort of hangover from wartime secrecy, which is perfectly understandable. I hope that, generally, the Chancellor will accept it as a principle, that if the Government decide to withhold information they should give the reason why they desire to withhold it.
:Before we part with this Clause I would like to put to the Chancellor a question suggested to me by the hon. and gallant Member for King's Norton (Captain Blackburn)—whom I would like to congratulate on a commendable attempt to get his stripes back, after his conduct on Thursday. The Chancellor quoted the evidence given by Lord Catto, before the Select Committee—a Governor who appears to enjoy the confidence of the Socialist Party to a considerably greater extent than did his predecessor, presumably because he is engaged in making the necessary transfer, and who declared himself against disclosing the reserves. What I want to put before the Chancellor of the Exchequer is whether that objection is based on the fact that, until the Bank of England becomes the property of the State, it is still a private firm. Once the transfer has been made and the Bank of England becomes the property of the nation will the right hon. Gentleman be able to disclose the figures?
I must say I think the Chancellor of the Exchequer is being very inconsistent. On the one hand he is refusing to disclose the extent of assets, and on the other he is wishing to reserve the right of the Treasury to take something greater by way of income from the Bank than is required to pay the interest on the stock. If on the one hand we look upon the Bank as a State institution I think we consider that the credit of the Bank can be neither higher nor lower than that of the State itself; and if that is the case what possible objection can there be to disclosing the extent of the assets?
I cannot allow the hon. Member to go into that again. Repetition is not admissible.
I am not pursuing that point.
It has already been covered by the hon. Member himself.
I am only drawing attention to the inconsistency of the stand the Chancellor has taken and the other aspect, of his desiring to be able to take more out of the Bank than has been customarily taken out of the Bank by the Bank of England stockholders in the past. If he looks upon the Bank as part of the State, that is one thing, but, if it is to be preserved as a separate entity, then, surely, the Chancellor ought not to demand the right to take out more from the Bank than the stockholders have done in the past.
May I take the opportunity of asking the Chancellor to give us two assurances, one of which he might wish to give us, and about the other I am less sanguine. The first is that in this matter of "greater or less," he will make a disclosure of what the distribution by the Bank is to the Treasury? It seems to me that just as the ordinary company discloses what its distribution is, so the Bank of England, with its one sole proprietor, should disclose to the world, for the benefit of depositors and others, what it is, and it seems to me that in the Charter of the Bank, the right hon. Gentleman should undertake that the information will be given.
I do not know whether 1 have correctly understood the question. The distribution to the shareholder is, of course, known now, and has been, invariable for a generation. The distribution, if that term is still used, which will be made to the Government as. the sole stockholder, will be the same except that it may be varied under the "greater or less" provision. If it is varied under the "greater or less" provision, that, of course, will be made public. It will appear in the Public Accounts as an item of revenue.
4.45 P.m.
:The other point about which I am not quite certain is this. Would the right hon. Gentleman give to the Committee an undertaking that the Bank will not be used as a means of indirect taxation, as the hon. Member for the St. George's Division of Westminster (Mr. Howard) has said, like the Post Office and the B.B.C.? The Chancellor indicated dissent. I was rather afraid that he might give no assurance.
:May I press the Chancellor on this question of the flexibility of the "greater or less" Clause, for two reasons? One is that in presenting his case, the counsel for the Government did state in specific terms before the Select Committee that the annual amount paid would be the same. There was no suggestion in his statement to the Select Committee of any rise or fall. The other point is this. I did not know it was in Order to refer to the First Schedule, but as the Chancellor did refer to it, I take it that it is in Order for a humble back bench Member to do the same. As I read paragraph 13 of the First Schedule, it is a direction that these sums are to be applied by the Treasury for the purpose of paying interest on the loan, which they are creating for the purchase of the stock. Therefore, there is a definite indication that this money is to be applied for a specific purpose, which would seem to suggest that it is illogical to have in another part of the Bill a rise and fall Clause.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
Clause 2.— (Court of directors of the Bank.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
Perhaps the Chancellor would be good enough to say something about the directorate of the Bank as it will be after the Bill becomes law. The Clause reduces the existing number of directors from 24 to 16, and it was understood from the evidence given that it had been the intention to make some reduction—whether or not exactly as great as this I do not know—on an appropriate occasion. Owing to the fact that the Bank works under a Charter, and charters are not very often amendable, this was left to an appropriate occasion. There seems to be no reason to take exception to that, if it was the view of the Bank, running its own business as a private institution, that the directorate was too large. We would be interested to know whether, in fact, the existing Court of Directors will be re-appointed when the change takes place, whether there are to be any changes, if the Chancellor is in a position to tell us anything about the kind of principles which would actuate him in the submissions which he will make to His Majesty with regard to the new Court, and whether the House of Commons at any stage will have any opportunity of expressing a view, or whether the right hon. Gentleman will undertake specifically to inform us of what is about to happen or what has just happened.
At present, of course, the existing proprietors have some say in the appointments in the Court of Directors. The present proprietors pass out of the picture, and the nation as represented in this House, takes their place. Will the House have any say or inherit any of the privileges in that direction which the existing proprietors have? I imagine that, at some stage, this will be—it must be—open to question in this House, and perhaps the Chancellor will be good enough to let us know what the Government have in mind in this respect. There are, of course, opportunities for discussing and debating these matters, but it may not always be a particularly suitable way of dealing with this problem any more than it is in respect of the many other appointments which are made by various Government Departments. Those are the questions which I want to put to the Chancellor if he feels able to reply; first what he is going to do about the existing Court of Directors; and secondly, what sort of appointments does he think, while he is in his present office, are likely to be made? Will they be representative appointments, will they be entirely on his own advice, or will he consult others, and so forth? Finally, I would like to know whether the House will have any opportunity of expressing any opinion and of asking questions, or, if necessary, having a discussion on the subject.There is one point I would like to raise with regard to the Court of Directors. Is any provision being made for the retirement of any members of the Court of Directors? Will a number automatically retire each year, or is it entirely in the hands of the Treasury to determine how long each member of the Court of Directors should continue to function?
:I am very glad to make a reply to these very reasonable questions. I did deal briefly with the point when I moved the Second Reading of the Bill, and I will refer in a moment to what I said then. With regard to the size of the Court, it is the case, as was said by Lord Catto in his evidence before the Select Committee, that it had been the view of the Bank itself for some time that 24 was rather a large number in addition to the Governor and the Deputy—26 in all. As Lord Catto informed the Select Committee, and as he informed me later, the Bank welcomed an opportunity of a reduction being made in the number of members. I do not sec any reason why this should not be said frankly to the Committee. When I began to study this matter, I thought that possibly 12 would be sufficient—12 plus the Governor and the Deputy—but, having discussed the matter with Lord Catto and others, it seemed that on the whole 16 would be about the right number; it would be less than exists now, but rather more than I, myself, originally had in mind. With a view to keeping the various Committees properly manned, it appeared that 16, together with the Governor and the Deputy Governor, was about right.
With regard to retirements, it is clearly laid down in the Second Schedule—and I think I indicated in my Second Reading Speech—that the retirements will be, to use a common expression, staggered. That is to say each year a certain number will fall due for retirement and when the scheme gets into working order there will be a regular four-yearly rotation; that is to say each of the 16 individual members of the Court other than the Governor and Deputy of whom I will speak in a moment, will be appointed for four years, and they will be in four groups of four, so that, each year, four will retire, and will be eligible for re-appointment. I do not want to make the thing too rigid, but I indicated that, generally speaking, it would not be the intention of the Government to appoint for the first time or to re-appoint any person who had passed the age of 66; that is to say, 70 would, in fact, be the retiring age. That will not be too rigid—there may be exceptional cases —but, broadly speaking, we would not make the appointments so that members of the Court would be over 70 years of age at any time. With regard to the initial stage, 16 directors will have to be appointed initially by His Majesty when the Bill passes into law; and those 16, as is shown in the Second Schedule to the Bill, will be appointed by His Majesty, in the first instance, in such a way that four of them will be appointed for one year only, four for two years, four for three years and four for four years. At the end of the first year, four will be eligible to retire and for re-appointment. They will be eligible, but not necessarily entitled to re-appointment. The Governor and the Deputy Governor will each be appointed for a term of five years, although the present Governor has indicated that he would not wish to continue for a longer period than would be required to get the new arrangement working smoothly, for the reason that he has expressed—and it is a pity that more old men do not express it more often—that it is time younger men were brought in.He is not an old man.
"Older" and "younger" are relative terms. I welcome that as a general approach to these matters, and 1 hope that as we all grow older, we shall remember this good example in business as well as in politics. The Cohen Committee drew attention to the deplorable longevity of directors in private enterprise, and urged that they should retire earlier. The Governor and Deputy-Governor are appointed for five years and are again eligible for re-appointment. As to the mode of appointment, and the extent of public information and discussion, here we shall follow the practice adopted in other cases of public boards of various kinds, for the appointment to be made by His Majesty. We were anxious, as I explained to the House, to give a rather better status to these appointments than they now have. We thought it might be a more dignified position if they were appointed by the Crown, rather than selected by the somewhat curious system which now prevails, and His Majesty will be consulted regarding these appointments. It is not intended that the House shall have an opportunity of discussing them before they are made. That would be a very unwelcome innovation. On the other hand, of course, the House can discuss them after they are made. Questions can be raised about them, but what will happen will be—and, of course, there will be no secret about who is appointed—that an announcement will be made that "His Majesty has been pleased to appoint "— and then will follow the names of 16 persons. It will then be open for the matter to be raised in Parliament.
It may be suggested that this or that is not right. I hope it will not be; I hope the appointments will command general approval. Before I myself reached a final view on the question of personnel, I should think it my duty, as Ministers commonly do in these matters, to consult with people who would have valuable opinions to offer, and I would be guided by such opinions. What I did say in the House during the Second Reading Debate was that we hoped to be able constantly to reinforce old experience with new blood, and that I do hope we shall be able to do. I hope that, with the gradual rotation of retirements, we shall aim at bringing in new people, often younger people, who will have a useful contribution to make. At the same time, it would be a very great mistake if I made—and it is not within my contemplation to make —anything approaching a clean sweep of existing people. A certain number should, obviously, continue because of their valuable experience, although, equally, there should be some new faces from the outside. As to who they should be, I went on to say in the Second Reading Debate:and I emphasised "varied "—" I wish to make it clear that it is not intended that there should be representation of any sectional interest whatever on the Court. No one will be entitled to say, ' I speak on behalf of this, that or the other section" of the community.' We shall advise His Majesty to place upon the Court persons of suitable and varied "—
5.0 p.m. I do not think at this stage I can usefully go further, but I attach importance to the last phrase of what I then said. This tendency has shown itself for a number of years in a gradual change in the composition of the Court. At one time it was almost a monopoly of the merchant bankers, and that was obviously a great mistake. Hardly anybody got a place on the Court unless he was in an inner ring of merchant bankers in the City. I will not go into the mistakes of the past, because some of them, no doubt, were due to the fact that this Court was composed in that much too narrow fashion. More recently the tendency has been to bring on to the Court people representing a variety of industrial knowledge. That has been wholly to the good, and it is that which we shall seek to continue. It would not be reasonable that I should go into further detail. I can only hope that when the names are announced they will command fairly general approval." ability and knowledge, and we shall seek in particular so to compose the Court as adequately to reflect industrial as well as financial experience."—[Official Report, 29th October, 1945; Vol. 415, c. 51.]
Can the Chancellor say anything about the salaries? Will they be left entirely to the Bank or will the Treasury come into the matter?
We shall leave that matter to the Bank, but no doubt the Bank will consult us. It will not be subject to Treasury rule in the sense that Civil Service salaries are.
Is the Chancellor of the Exchequer prepared to say anything about full-time directors? I understand that it is intended to continue that practice. There is a good deal to be said, in view of the key position such directors will hold, for their being appointed by the Government or the Chancellor of the Exchequer, but on the other hand, having regard to the function they will have to carry out, there is a good deal to be said for their appointment being left to the Court after appointment. Can we have some information on the matter?
Yes, Sir. The matter is mentioned in the Second Schedule. The intention is that, of the 16 members of the Court, in addition to the Governor and the Deputy Governor, not more than four directors should be full-time directors. That, in fact, continues the present arrangement. At present, the Governor and his Deputy are full-time, and so are four out of the 24 directors. The intention is that this number, out of the smaller Court, shall be continued under the new regime. As to who they shall be, I would prefer not; to make that point too precise and exact. I should like to leave all these arrangements to a co-operative working between the directorate and the Treasury by way of interchange of views. It is not envisaged that His Majesty will be advised to put as it were an asterisk against four names and say, "These are the full-time directors." We shall advise His Majesty to appoint 16 persons to be directors. No doubt we shall have a pretty shrewd idea, after consultation with the Bank, which of those persons will be continued in their functions as executive directors or, if they are not at present executive directors, should become so.
Does the Chancellor of the Exchequer mean that the Treasury will specify the full-time directors, or does he mean that the matter will be left to the Court when it is constituted? Is that it?
The right hon. and gallant Gentleman is asking questions to which it is just as well that I should not give too pedantic, precise and binding an answer. I have said that when His Majesty is asked to appoint 16 persons as directors it will not be indicated by any asterisk or mark in the announcement or appointment that any one lather than any other of those gentlemen will be full-time, executive directors; but it is laid down in the Schedule that not more than four shall be so appointed. I expect there will be friendly discussion between myself and the Governor, and that the matter will be decided in the light of that discussion. It will be a mistake to press this thing to too precise and sharp a point.
The right hon. Gentleman will find that we shall think this matter over. The point has not been raised before. We are moving into an entirely new field, and it might be that some of my hon. Friends would like to put down Amendments at a later stage. The Chancellor would not take exception to that?
No.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 3.—( Consequential provisions as to constitution and powers of the Bank.)
:I beg to move, in page 2, line 34, after "revoke," insert:
The original Charter, dated 1694, laid down certain Regulations and provisions. The supplementary Charter of 1892 followed, and there have been other changes dealing with the Constitution of the Bank of England. It was thought when this Clause was drafted, that it would be a cleaner and better job to revoke the whole of those Charters, but in going through them, and in the elaboration of the new Charter, it has been found that certain of the provisions are of such a character that it would be well to retain them. Because of that desire we now seek the approval of the Committee to this drafting Amendment." all or any of the provisions of."
:I do not quite understand this proposal. We were told quite definitely by the Chancellor's Counsel in the Select Committee that the Government's intention was that a new Charter should be granted. He stated:
The Chancellor then went on to say various things about that new Charter. I now understand from the Amendment which the hon. Gentleman has just moved, that that is not the intention. There are to be bits and pieces of the existing Charter revoked, and the Bank will be acting under an incomplete document. Instead of having one brand-new Charter, the existing Charter will be modified and altered. Some parts will be revoked and some parts will be unrevoked. Is that the intention? If so, it seems a most peculiar way of doing things. Surely it would be simpler to have a new Charter —or is the explanation that it takes so long to make a new Charter that these are temporary provisions with a view to having a proper Charter later?"It is intended that as soon as this Act becomes effective, a new Charter with more up-to-date provisions should be granted by the Crown to the Bank."
:The short answer is that we must keep so much of the original Charter going in order to keep the Bank incorporated. That was the intention of the Bill as drafted. Now it has been found that it may well be that other parts of the original Charter and subsequent enactments ought to be kept, such as provisions relating to the common seal, the holding of land, the constitution of the capital stock, and matters of that kind. In order, therefore, to give the Treasury sufficient elbow room, it is felt that this Amendment should be made, to allow, if necessary, further provisions relative to these matters to be kept going, as well as the original provision dealing with the incorporation of the Bank. That is all that these Amendments mean, no more and no less.
I quite understand that, but I cannot see why they should not be collected together and put into a new Charter. There need be no gap, because there has to be an appointed day'. Therefore, there is plenty of time. Contrary to the Government's previous intention, the Bill is not to become an Act until next year. The Government have all January in which to spend their time drawing up a new Charter so as to be ready for the appointed day. It is extremely slovenly to have bits and pieces of various Charters governing various functions of the Bank. Surely the proper thing to do is to have a new Charter, and to have it signed and sealed, and ready to come into effect on the appointed day. Up to the appointed day, the existing Charter would carry on the validity for all that was done.
:I appreciate what the right hon. and gallant Gentleman has said, but our advisers are of the opinion that in order to get continuity it will be as well to put these provisions into the new Charter. If they cover some of the same matters, all well and good. It is essential, in order to keep the peculiar and particular Constitution of the Bank going, that we should word the Clause in this way. We hope, therefore, that the Committee will accept the Amendment. There is no sinister design behind it at all.
There is still going to be a new Charter?
Yes, indeed. It is now being drafted, and it will come into operation on the appointed day.
:If it comes into operation on the appointed day, what possible reason can there be for the Amendment? It is not till the appointed day that any change is made at all and if there is to be a new Charter on the appointed day what is the reason for putting forward the Amendment?
It might be that the Charter will not come into operation on the appointed day. When the appointed day comes, although it appears to be the operative day for the Charter to be brought into operation, we have to keep continuity in this matter. There are certain provisions in the original Charter which we wish to perpetuate and carry
:Will the Financial Secretary explain the position under the new Charter which is to come into operation? If it comes into operation, will all the existing old Charters be wholly revoked? I am a very simple soul and find it very difficult that from time to time in this financial legislation one has to refer back. It appears that here is another case where we might clean up and have a fairly clear situation, but the proposal of the Financial Secretary would merely make it more complicated. Frankly, it suggests to my mind that the Treasury, for some reason, definitely attempt to make these things complicated. Can the Minister say whether, if and when the new Charter comes into being, all the existing Charters will be wholly revoked?
:here is a list of enactments to be repealed. The hon. Member will notice that in some instances the whole of the enactment is being repealed and in others only parts. Therefore, to that extent the provisions of previous enactments will be kept in being.
Is not the only possible explanation that the Charter will not be ready for the appointed day? On the other hand, the Financial Secretary said that it would be ready on the appointed day. Perhaps he was in error on that point.
No. The expectation is that it will be ready, but perhaps it will not, and in order to provide for every contingency this Amendment is put forward. I assure the Committee that we have nothing to hide in this matter and that although the explanation appears simple, it is the explanation.
Will the Government not make an effort to consolidate?
Amendment agreed to.
Further Amendment made: In page 2, line 37, leave out "such," and insert:
"so much of the said Charters as remains unrevoked and such other."—[Mr. Glenvil Hall.]
The following Amendment stood on the Order Paper, in the name of Lieut.-Commander Braithwaite: In page 2, line 38, leave out "charters," and insert "statutory instruments."
:May I suggest that it would be for the con- venience of the Committee if this Amendment and the two following Amendments were discussed together?
I should have informed the Committee that the first Amendment has not been selected, but the other two can be taken together.
They really hang together.
:A Charter is not a statutory instrument, and, therefore, the Amendment does not make sense.
The Amendment is to leave out "charters" and insert "statutory instruments." It is just because they are not the same that we have put down the Amendment. To say that you, Mr. Deputy-Chairman, are not selecting it, but that we may discuss the next two consequential Amendments, does not seem to me to put the discussion in Order.
:The Chairman has decided not to select the first, but the other two have been selected.
Of course, I cannot argue against the Chairman's Ruling, but I would ask most respectfully whether you do not realise, Mr. Beaumont, that the effect of the decision is that the executive Amendment has not been selected while the two consequential Amendments which, without the first one, make nonsense, have been selected.
:It has already been decided that the first one cannot be selected. The hon. and gallant Gentleman need not proceed with the other two, unless he wishes to.
I beg to move, in page 2, line 38, leave out "His Majesty," and insert "Order in Council."
The second Amendment which has been selected is in page 2, line 39, at the end, to insert the words on the Order Paper. I will do my best to convince the Government that it might be more workable and wise if on Report we could include something in the nature of the words of the first Amendment. Very briefly, my point is this. The present text of the Bill provides that the Bank shall be constituted and regulated by Royal Charter. Such procedure would do much to detract from the power of this House of Commons under the Constitution of the Bank, and it is, to put it mildly, a little unusual to constitute by Royal Charter what will, in fact, be a branch of the Executive Government. The Amendment I have moved, and the following one, which are consequential to the first, are very difficult to argue since the first has not been selected. The whole objective was to provide that the constitution and regulation of the Bank would be effected by Order in Council, subject to an affirmative Resolution of this House. It is an endeavour, as far as we can, to retain power in the House of Commons over this newly-constituted and nationalised Bank of England, to ensure that it should not be lifted entirely out of our purview, and that hon. Members should have opportunities of discussion, question and so on at the most frequent intervals. We submit that it is, in fact, a better machinery that we suggest in these Amendments, in substitution for the Royal Charter proposals.On a point of Order. Can you, Mr. Deputy-Chairman, kindly give a Ruling to the Committee as to whether it is, in fact, possible for charters to be given by Orders in Council, because, if not, the fact that the first of the three Amendments has not been selected makes it, if I may say so with respect, nonsense to discuss the second and third.
:Possibly the Committee is in a little difficulty, and I wonder whether my hon. Friend the Financial Secretary would consider looking at this Amendment before we come to the Report stage. As put down by the Opposition, these three Amendments all run together, and the two which have been called do not really make sense without the first, to which they are consequential. In those circumstances the only way of getting out of our present difficulty is to ask the Government if they would be so good as to give us an opportunity of considering it again on the Report stage.
I could not, of course, give that assurance, because we should have to resist this Amendment, however it was phrased. I do not know why the original Amendment has been ruled out of Order—
Not ruled out of Order—just not selected.
As I understand it, the words "statutory instruments" do not yet actually appear in an Act of Parliament as part of the law of the land. We are, therefore, somewhat in the dark as to what can be in the minds of the movers of these three Amendments which, quite frankly, do hang together, unless it is that they want the customary procedure to apply— that the Order or statutory instrument should be laid before the House and subjected to an affirmative or negative Resolution after 40 days. If that is what they have in mind, and if we are asked to consider that between now and Report Stage, I have to say that we cannot possibly give any promise of that kind, for the simple reason that this is a matter for the Bank to deal with. They will deal with these things in a sort of day-to-day procedure, and, therefore—
:Is not the hon. Gentleman answering the wrong Amendment? We are talking about the Charter, a term which we want to change into statutory instrument. [Hon. Members: "No.] It is the consequential Amendments in which the Order in Council appears. Surely the hon. Gentleman is not asking that the Order in Council or Charter will be dealt with by the Bank as a day to day affair. Will it not be dealt with by the Government?
Why is the right hon. Gentleman pressing his Amend-
| Division No. 53.] | AYES. | [5.24 p.m |
| Adams, Capt. Richard (Balham) | Bowden, Flg.-Offr. H. W. | Dalton, Rt. Hon. H. |
| Adams, W. T. (Hammersmith, South) | Bowles, F. G. (Nuneaton) | Davies, Edward (Burslem) |
| Adamson, Mrs. J. L. | Braddock, Mrs. E. M. (L'p'l, Exch'ge) | Davies, Ernest (Enfield) |
| Allen, Scholefield (Crewe) | Braddock, T. (Mitcham) | Davies, R. J. (Westhoughton) |
| Alpass, J. H. | Brook, D. (Halifax) | de Freitas, Geoffrey |
| Anderson, F. (Whitehaven) | Brooks, T. J. (Rothwell) | Diamond, J. |
| Attewell, H. C. | Brown, George (Belper) | Dobbie, W. |
| Austin, H. L. | Brown, T. J. (Ince) | Dodds, N. N. |
| Ayles, W. H. | Buchanan, G. | Douglas, F. C. R. |
| Ayrton Gould, Mrs. B. | Burden, T. W. | Dumpleton, C. W. |
| Bacon, Miss A. | Burke, W. A. | Dye, S. |
| Baird, Capt. J. | Byers, Lt.-Col. F. | Edelman, M. |
| Barnes, Rt. Hon. A. J, | Callaghan, James | Edwards, John (Blackburn) |
| Barstow, P. G. | Castle, Mrs. B. A. | Evans, E. (Lowestoft) |
| Barton, C. | Chamberlain, R. A. | Follick, M. |
| Battley, J. R. | Champion, A. J. | Freeman, Maj. J. (Watford) |
| Bechervaise, A. E. | Cluse, W. S. | Gaitskell, H. T. N. |
| Belcher, J. W. | Cocks, F. S | George, Lady M. Lloyd (Anglesey) |
| Benson, G. | Collick, P. | Gibbins, J. |
| Berry, H. | Collindridge, F. | Glanville, J. E. (Consett) |
| Beswick, Flt.-Lieut. F. | Colman, Miss G. M. | Goodrich, H. E. |
| Binns, J. | Cooper, Wing-Comdr. G. | Gordon-Walker, P. C. |
| Blackburn, Capt. A. R. | Corlett, Dr. J. | Grenfell, D. R |
| Blenkinsop, Capt. A. | Cove, W. G. | Grey, C. F. |
| Blyton, W. R. | Crossman, R. H. S. | Grierson, E. |
| Boardman, H. | Daggar, G. | Guest, Dr. L. Haden |
| Bottomley, A. G. | Daines, P. | Gunter, Capt. R. J. |
ment when we have already, in the earlier part of the Clause, accepted the word "charter"? If we change from "charter" in line 35 to "statutory instrument "in line 38, we shall make nonsense of the Clause. We should, in any case, have resisted the earlier Amendment.
May I point out to the hon. Gentleman that the part of the Clause which is already passed, where the word "charter" occurs, refers to revoking the Charter? We are supporting the revoking of the Charter and suggesting putting in its place a different kind of statutory instrument.
The right hon. Gentleman is wrong. We have already agreed to revoke only such parts of the Charter as necessary—the Charter remains. Therefore, we cannot have a Charter and a statutory instrument in this Clause, we must have one or the other as the basis of the Bank. Hon. Gentlemen opposite can only withdraw the Amendment.
Does the hon. and gallant Gentleman withdraw the Amendment?
Question put, "That the words ' His Majesty,' stand part of the Clause."
The Committee divided: Ayes, 231; Noes, 89.
| Guy, W. H | Mathers, G. | Smith, T. (Normanton) |
| Haire, Flt.-Lieut. J. (Wycombe) | Mayhew, C. P. | Snow, Capt. J. W. |
| Hall, W. G. (Colne Valley) | Middleton, Mrs. L. | Sorensen, R. W. |
| Hamilton, Lieut.-Col. R. | Mikardo, Ian | Soskice, Maj. Sir F. |
| Hannan, W. (Maryhill) | Mitchison, Maj. G. R. | Sparks, J. A. |
| Hastings, Dr. Somerville | Montague, F. | Stamford, W. |
| Haworth, J. | Morgan, Dr. H. B. | Steele, T. |
| Henderson, J. (Ardwick) | Morris, P. (Swansea, W.) | Stephen, C. |
| Herbison, Miss M. | Morris, Hopkin (Carmarthen) | Stewart, Capt. Michael (Fulham, E.) |
| Hicks, G. | Morrison, Rt. Hon. H. (Lewisham, E.) | Stubbs, A. E. |
| Hobson, C. R | Mort, D. L. | Summerskill, Dr. Edith |
| Holman, P. | Moyle, A. | Swingler, Capt. S. |
| Horabin, T. L. | Murray, J. D. | Symonds, Maj. A. L. |
| House, G. | Nayler, T. E. | Taylor, H. B. (Mansfield) |
| Hudson, J. H. (Ealing, W.) | Neal, H. (Claycross) | Taylor, R. J. (Morpeth) |
| Hughes, Hector (Aberdeen, N.) | Noel-Baker, Capt. F. E. (Brentford) | Taylor, Dr. S. (Barnet) |
| Hughes, Lt. H. D. (W'lverh'pton, W.) | Noel-Buxton, Lady | Thomas, Ivor (Keighley) |
| Hynd, H. (Hackney, C.) | O'Brien, T. | Thomas, John R. (Dover) |
| Hynd, J. B. (Attercliffe) | Oldfield, W. H. | Thorneycroft, H. (Manchester, C.) |
| Irving, W. J. | Paget, R. T. | Tiffany, S. |
| Jeger, Capt. G. (Winchester) | Paling, Will T. (Dewsbury) | Tolley, L. |
| Jeger, Dr. S. W. (St. Pancras, S.E.) | Pargiter, G. A. | Vcrnon, Maj. W. F. |
| Jones, D. T. (Hartlepools) | Parkin, Fit.-Lieut. B. T. | Viant, S. P. |
| Jones, P. Asterley | Paton, Mrs. F. (Rushcliffe) | Walkden, E. |
| Keenan, W. | Peart, Capt. T. F. | Wallace, G. D. (Chislehurst) |
| Kenyon, C. | Perrins, W. | Warbey, W. N. |
| Kinghorn, Sqn.-Ldr. E. | Popplewell, E. | Watkins, T. E. |
| Kinley, J. | Pritt, D. N. | Webb, M. (Bradford, C.) |
| Kirkwood, D. | Proctor, W. T. | Weitzman, D. |
| Lang, G. | Pryde, D. J. | Wells, P. L. (Faversham) |
| Lavers, S. | Pursey, Cmdr. H. | Wells, Maj. W. T. (Walsall) |
| Lee, F. (Hulme) | Randall, H. E. | White, H. (Derbyshire, N.E.) |
| Leonard, W. | Ranger, J. | Whiteley, Rt. Hon. W. |
| Leslie, J. R. | Rees-Williams, Lt.-Col. D. R. | Wigs, Col. G. E. C. |
| Levy, B, W. | Reeves, J. | Wilkes, Maj. L. |
| Lipson, D. L. | Reid, T. (Swindon) | Wilkins, W. A. |
| Lipton, Lt.-Col. M. | Rhodes, H. | Willey, F. T. (Sunderland) |
| Longden, F. | Robens, A. | Willey, O. G. (Cleveland) |
| McAdam, W. | Roberts, Goronwy (Caernarvonshire) | Williams, Rt. Hon. E. J. (Ogmore) |
| McAllister, G. | Rogers, G. H. R. | Williams, Rt. Hon. T. (Don Valley) |
| McEntee, V. La T. | Royle, C. | Williams, W. R. (Heston) |
| Mack, J. D. | Scott-Elliot, W. | Williamson, T. |
| Mackay, R. W. G. (Hull, N.W.) | Segal Sq.-Ldr. S. | Willis, E. |
| Maclean, N. (Govan) | Sharp, Lt.-Col. G. M. | Wilmot, Rt. Hon. J. |
| McLeavy, F. | Shawcross, Sir H. (St. Helens) | Woods, G. S. |
| Mainwaring. W. H. | Shurmer, P. | Yates, V. F. |
| Mallalieu, J. P. W. | Silverman, S. S. (Nelson) | Young, Sir R. (Newton) |
| Mann, Mrs. J. | Simmons, C. J. | Zilliacus, K. |
| Manning, C. (Camberwell, N.). | Skeffington-Lodge, Lt. T. C. | |
| Manning, Mrs. L. (Epping). | Skinnard, F. W. | TELLERS FOR THE AYES: |
| Marshall, F. (Brightside). | Smith, S. H. (Hull, S.W.) | Mr. Pearson and Captain Bing. |
| NOES | ||
| Agnew, Cmdr. P. G. | Galbraith, Cmdr. T. D. | Nutting, Anthony |
| Amory, D. Heathcoat | Gammans, L. D. | Orr-Ewing, I. L. |
| Anderson, Rt. Hn. Sir J. (Scot. Univ.) | George, Maj. Rt. Hn. G. Lloyd (P'ke) | Peake, Rt. Hon. O. |
| Assheton, Rt. Hon. R. | Grimston, R. V. | Peto, Brig. C. H. M. |
| Baldwin, A. E. | Hinchingbrooke, Viscount | Pitman, I. J. |
| Barlow, Sir J. | Hollis, Sqn.-Ldr. M. C. | Ponsonby, Col. C. E. |
| Baxter, A. B. | Hope, Lord J. | Poole, O. B. S. (Oswestry). |
| Beattie, F. (Cathcart) | Howard, Hon. A. | Raikes, H. V. |
| Birch, Lt.-Col. Nigel | Hurd, A. | Robinson, Wing-Cmdr. Roland |
| Bower, N. | Jeffreys, General Sir G. | Ropner, Col. L. |
| Boyd-Carpenter, Maj. J. A. | Kingsmill, Lt.-Col. W. H. | Sanderson, Sir F. |
| Bracken, Rt. Hon. Brendan | Legge-Bourke, Maj. E. A. H. | Savory, Prof. D. L. |
| Braithwaite, Lt.-Comdr. J. G. | Lindsay, Lt.-Col. M. (Solihull) | Shephard, S. (Newark) |
| Buchan-Hepburn, P. G. T. | Lloyd, Maj. Guy (Renfrew, E.) | Stanley, Rt. Hon. O. |
| Bullock, Capt. M. | Low, Brig. A. R. W. | Stoddart-Scott, Col. M. |
| Carson, E. | Lucas-Tooth, Sir H. | Stuart, Rt. Hon. J. |
| Clifton Brown, Lt.-Col. G. | MacAndrew, Col. Sir C. | Studholme, H. G. |
| Corbett, Lt.-Col. U. (Ludlow) | McKie, J. H. (Galloway) | Sutcliffe, H. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Macmillan, Rt. Hon. Harold | Taylor, C. S. (Eastbourne) |
| Cuthbert, W. N. | Marples, Capt. A. E. | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) |
| De la Bére, R. | Marsden, Capt. A. | Thornton-Kemsley, Col. C. N. |
| Dower, Lt.-Col. A. V. G. (Penrith) | Marshall, Comdr. D. (Bodmin). | Touche, G. C. |
| Dower, E. L. G. (Caithness) | Marshall, S. H. (Sutton). | Turton, R. H. |
| Drayson, Capt. G. B. | Mellor, Sir J. | Wakefield, Sir W. W. |
| Drewe, C. | Molson, A. H. E. | Walker-Smith, Lt.-Col. D. |
| Duthie, W. S. | Morrison, Maj. J. G. (Salisbury) | Wheatley, Col. M. J. |
| Eccles, D. M. | Morrison, Rt. Hn. W. S. (Cirencester) | White, Maj. J. B. (Canterbury) |
| Erroll, Col. F. J. | Neven-Spence, Major Sir B. | |
| Fletcher, W. (Bury) | Nicholson, G. | TELLERS FOR THE NOES: |
| Foster, J. G. (Northwich) | Nield, B. (Chester) | Sir Arthur Young and |
| Fox, Sqn.-Ldr. Sir G. | Noble, Comdr. A. H. P. | Major Mott-Radclyffe. |
| Clause, as amended, ordered to stand part of the Bill. | ||
Clause 4.—( Treasury directions to the Bank and relations of the Bank with other banks.)
5.33 P.m.
I beg to move, in page 3, line 3, at the end, insert:
The purpose of this Amendment is plain. It is an Amendment to which we attach considerable importance and with which, I think, there will be considerable sympathy in all parts of the Committee. I realise that, in view of the acquisition by the Government of the assets and business of the Bank of England, the business of the Bank must in future be run, as indeed it has been for the past 20 years, in consonance with the financial policy and economic views of the Government. I agree that in order to make certain of that, if you are going to legislate, there must be included some such provision as is included in Subsection (1) of this Clause, which enables the Treasury to give directions to the Bank of England and imposes upon the Bank the obligation to carry out those directions. I take it that the directions to which this Clause refers are, in the view of the Chancellor, designed to meet special cases, and do not refer to the day-to-day business which goes on between the Bank of England and the Treasury and where the Treasury may well express views with which the Bank agrees. This provision is inserted to deal with cases where there is a difference of opinion, where the ordinary negotiations have resulted in a failure to get the Bank of England to agree with the Treasury, and where, therefore, it is necessary to have some more formal step and some more formal power to be taken by the Treasury. I hope and believe that such occasions will be rare,.but I think it is right that if such occasions do occur, if there is a difference between the Treasury and the Bank, and if as a consequence the Chancellor of the Exchequer of the day has to issue a formal direction directing the Court of the Bank of England to do something which in fact it does not want to do and which it considers wrong, that direction should be laid before the House in order that the House may know that the difference has occurred and may judge whether the action of the Chancellor in the matter is one of which it can approve. I think that is fair to the House of Commons. If the Bank is to be a branch of the executive machine, as it is to be in future, the House is entitled to know if any major crisis of this kind threatens. Above all, I think it is fair to the Governor and the Court of Directors, because if they have to acquiesce in a course which is not the course they think right, but one that is dictated to them by the Government, it is only fair that the House and the country should know that that is the case, and that the Governor and the Court of Directors should not have to accept sub silentio responsibility for a course of action with which they are in complete disagreement. I cannot see any objection to this Amendment from the point of view of the Government. It does not ask that before the direction becomes effective, the House of Commons shall have to pass judgment upon it. Even if this Amendment is accepted, the direction will become effective at once, and it will cease to have effect only if, subsequently, the House of Commons, by a Prayer, annuls it. I feel that hon. Members on all sides of the Committee will be in favour of as much publicity as possible being given if any situation of the kind to which I have referred should arise, and for that reason I very much hope the Chancellor will find it possible to accept the Amendment." Provided that every such direction shall be laid before Parliament within seven days after it has been made, and if not so laid, shall be void; and if the Commons House of Parliament within a period of 40 days thereafter resolves that the direction be annulled, it shall cease to have effect, but without prejudice to anything previously done there under. In reckoning any period for the purpose of this Subsection, no account shall be taken of any time during which Parliament is dissolved or prorogued, or during which the Commons House of Parliament is adjourned for more than four days."
After reading carefully the Report of the Select Committee, it seems to me there are three stages contemplated in the relations of the Bank with the rest of the community. First, there is the request for information, and then, slightly more severe, the recommendation, and lastly, the direction. I take it that what is meant is that no direction would be given unless there was a very serious cause of conflict. I believe that during the next few years the Government's arrangements with regard to the Bank of England will work very adequately, and I think it will be extremely surprising if, under the direction of the right hon. Gentleman the Chancellor of the Exchequer, any direction is necessary to any financial institution. But, of course, the march of progress does not stop although hon. Members opposite sometimes talk as if it does. Very much legislation is recommended to us on the ground that the Minister recommending it has never hurt a fly and would be incapable of doing so. In many cases that may be true, but the way one his to look at the matter is to assume that the Prime Minister is the hon. Member for West Fife (Mr. Gallacher) and that he has a very shaky majority. If he had a real majority, it would be no good. If one studies the hon. Member's party in the House, I think one is forced to the conclusion that the Chancellor in the hon. Member's Government would be the hon. Member for Mile End (Mr. Piratin). It is sometimes said that the square mile is over represented in the direction of the Bank of England, but I think it undesirable that other parts of the East End should be over-represented. One might get a situation in which the Bank of England was given a direction that was unsuitable and the only chance of stopping such a direction being enforced would be that it should be dragged into the light of day. In legislating we should look well ahead, and not only at the eminent respectability which we are told we shall see for five years.
I can see the case for this Amendment, but I can also see more clearly the case against it. The right hon. Member for West Bristol (Mr. Stanley) said that the Bank would in future be a branch of the executive machine. That is the right hon. Gentleman's phrase and not mine, but I do not seriously quarrel with it. The Bank will not be a branch of the Civil Service, or be assimilated to Civil Service conditions of pay, and so forth, in any strict sense, but it will nevertheless, become part of the public services, using that term rather broadly to include the various public boards, many of which already exist, and others of which we are proposing to set up. I hope, frankly and sincerely, that as these new arrangements work themselves out in practice there will be understanding, co-operation and good relationships prevailing between those who from time to time hold high positions in the Treasury and those who hold respon sible positions in the Bank. It would be a pity to write into this Statute a suggestion that far from that being so, it might be the desire of those at the Bank to bring forth into the light of day and as it were themselves to require the discussion in the House of some matter which in fact had been the subject not perhaps of complete agreement in the discussions that had taken place within the executive machine and the governmental machine, resulting in the need to issue a direction.
I agree with the hon. and gallant Member for Flint (Lieut.-Colonel Birch) in that I do not contemplate that it will be necessary in practice for the Treasury to issue directions to the Bank in the forseeable future. Nevertheless, to make completely sure we have inserted this logical provision in the Bill, and the Opposition do not deny it is logical and desirable to have it. I can well imagine—I can go thus far in meeting the right hon. Gentleman, not in by accepting the Amendment, but by indicating to him how publicity might very well arise and the House might be able to discuss the matter of any direction and the reasons behind it—there may be occasions when there will be no objection to the Treasury's directions being made public and the Treasury may wish to ensure publicity. That could be arranged by question and answer on the subject involved. I do not take the view that if directions should have to be issued by the Treasury to the Bank, they should as a matter of principle be withheld from Parliamentary discussion, and indeed, very often Parliamentary discussion might be desired by the Government; but I can imagine that there might be occasions when—this is a case against there being any rigid provision as in the Amendment —it would be definitely against the public interest to have such discussion. The subject matter of the direction might be such that the public interest would be injuriously affected if it were debated in the House. Therefore, it would be the best course— I am anxious not to seem to rebuff the Amendment roughly, but to offer reasoned grounds against accepting it—to leave this matter to be determined, at any rate in the first stage of this new regime. Experience perhaps on this subject will accumulate and will tend in one direction or another. But I think it would be better not to enforce a rigid rule such as the right hon. Gentleman suggests, but to trust to the discrimination of Ministers and the good will of all those concerned, with, as I have said, the exception, that in certain cases, if directions were issued, it would be desirable that they should be known to the House and the public. But to lay down a rule that in all cases they should be laid on the Table of this House in this way would be a mistake.5.45 P.m.
For once I do not find myself entirely opposed to the Chancellor of the Exchequer, but I would like it to be clearly understood what appeared to be the object behind my right hon. and hon. Friends here. I humbly suggest that the Amendment is to meet the more serious cases of instructions of bankers to banks rather than instructions by the Treasury. The Chancellor has said once more, "Trust me," and I am the first person to say, "Of course, I do." No words are to be inserted in the Bill; he wants to see how this is going to work out. I think that that is reasonable and on this occasion I shall not go into the Lobby against him.
I agree with my hon. and gallant Friend that, although there is a case for publicity on this Amendment, it is not nearly so strong as the case when it is a direction given by the bank with the approval of the Treasury from outside. Therefore, I would not wish to press the Amendment and certainly the right hon. Gentleman, as far as he can speak for himself, has shown every sympathy. The trouble is that we on this side are getting a sort of vested interest in the right hon. Gentleman. He is giving so many personal pledges on what he will do while he is there, that the time will come when we shall have to stand by his side and resist any attempt of his hon. Friends to substitute someone else for him. Is it understood that, in fact, the question directed to the Chancellor as to whether a direction had been issued by the Treasury would be one the Chancellor would have to answer subject to the discretion a Minister of the Crown has always got of saying that it is not in the public interest to do so. Although I am ready, as everybody must be, to accede to the argument on matters which are not in the public interest to discuss, I cannot myself think of any such thing in connection with the Amendment. I would be very much obliged if the right hon. Gentleman would tell us that he had not meant the sort of action in which he might have to issue directions.
In reply to the first question, subject to the ruling of the Chair, as to what questions are proper to place on the Order Paper, I would be inclined to suggest, as far as my judgment goes, that the answer would be "Yes." It would be permissible to place questions on the Order Paper and thereafter to discuss questions of direction. I cannot give a considered answer on what is to some degree a legal matter, but, generally speaking, the answer would be "Yes." With regard to the second question, I can imagine there might be certain matters, if we were living in a period of international tension and difficulties either with regard to the peace of the world or to our own financial stability due to causes possibly outside our control, something going wrong in some other country with which we had close relationships—although we might have differences of view as to action to be taken in a critical situation, it might be the view of the Treasury and the Bank, that although they differed strongly in such a circumstance, it would be undesirable to draw public attention to the matter. I hope that that position will never arise, but it would not be difficult to name such circumstances.
Amendment negatived.
I beg to move, in page 3, line 13, at the end, insert:
This Amendment has been put down by my right hon. Friend the Chancellor of the Exchequer to implement a promise he gave during the course of his speech on Second Reading, when he said:" Provided that no such request or recommendations shall be made with respect to the affairs of any particular customer of a banker.''
This Amendment has been put down in furtherance of that promise and I hope that it will commend itself to the Committee. The right hon. Gentleman who sits for the Scottish Universities (Sir J. Anderson), in the course of his observations during the same Debate, said, that he thought it would be very difficult to find a form of words which would be suitable. I am glad to say that we think we have found a form of words and I hope that we have made them wide enough to do what we intend them to do. It will be noted that the operative words are:" I understand that there is some apprehension in some quarters lest the provisions of Clause 4, Subsection (3), should be used in order to compel the clearing banks to reveal through the Bank of England to the Treasury the private affairs of their clients or depositors. I do not know whether any hon. Member feels apprehension about that —apparently not—but it has been hinted outside, and I am anxious to deal with it. I can say at once that this apprehension is completely unfounded. It need rob no one of his sleep."—[OFFICIAL REPORT, 29th October; Vol. 415, c. 53.]
We thought that "affairs" was a better word than "transactions," being wider and capable of covering various kinds of work undertaken by a bank on behalf of a client, and we also thought that the word "particular" before the word "customer" was better than "individual," in that a particular customer, so we are advised, might mean not only an individual, but also a company or a corporation. Therefore, I hope the Committee will accept these words as fulfilling the pledge given by my right hon. Friend and will agree to the Amendment." the affairs of any particular customer of a banker."
I would like to say how much I appreciate the honouring of the pledge given by the right hon. Gentleman during the Second Reading Debate. I have no doubt that the Amendment meets all the points, but I would like an assurance from the Financial Secretary that it meets not only a request for private information, but also directions that might be given by a bank to a banker. We feel that the banker is the best judge of the individual, of his credit, whether he is an honest reputable man. He is far better able to judge than a high up State authority on questions of either granting a loan or withdrawing credit facilities.
We are very much obliged to the Chancellor of the Exchequer for having put down the Amendment. It certainly meets what we think was a difficulty in the Bill and I am glad that he has seen it in the same way as we did.
I am afraid that the Amendment troubles me to a degree and I would like the Financial Secretary to elucidate a point. The Chancellor of the Exchequer is invalidating any right he has to investigate undertakings or affairs of a particular customer. Therefore, I would ask how we can investigate the affairs of an arms manufacturer or of a monopolist, or of Mr. Rank in the films industry, or of an unscrupulous scoundrel, a black-marketeer who is amassing money and whose banking account does not disclose his activities. I wonder whether the Chancellor is not divesting himself of the power to examine with scrupulous care the activities of such cases as I have mentioned.
Amendment agreed to.
I beg to move, in page 3, line 13, at the end, insert:
This Amendment deals with the question whether there should be any directions for any class of customers. We have inserted that there should not be any request or recommendations made with regard to the affairs of a particular customer of the bank, but this is rather a larger issue. The Amendment is to prevent the issue of any directions limiting the freedom of any banker to give or withhold credit to or from any class of customer. During the Second Reading Debate my hon. and gallant Friend the Member for Glasgow, Central (Lieut.-Colonel Hutchison) pointed out—and I will quote his words—that:" Provided that the Bank shall not issue any direction which limits the freedom of any banker to give or withhold credit to or from any class of customer."
One could imagine circumstances in which the Chancellor of the day might wish to attack, for one reason or another, a class of customers and he could use this method of direction to the bank, authorising the Bank to issue directions to any bankers to that effect. It seems to me that that would be a very undesirable thing to do. as it would undermine a good deal of the confidence-which must exist between the ordinary banker and his customers, and I hope that, on consideration, the Treasury will say that this is a suitable Amendment to be inserted." Under the New Zealand Banking Act, and further, under the Commonwealth Bank Act of Australia, 1945, it is precluded that power should be given to the central bank to direct the joint stock banks or subsidiary banks to make advances or to refuse advances to any particular set of customers."— [Official Report, 29th October, 1945; Vol. 415, c. 128.]
6.0 p.m.
I am sorry, but we cannot accept this Amendment, for the reason that it would limit both the Treasury and the Bank far too much. What the right hon. and gallant Gentleman desires to do, of course, is to prevent any limitation being put on bankers' freedom to give or withhold credit to or from any class of customer—not any individual customer, but any particular class—and, if that had been in force during the war, it would have been a very great limitation on the Chancellor of the Exchequer. At the beginning of the war, Lord Simon wrote to the Governor of the Bank asking that the Bank should restrict its advances other than those connected with the direct needs of armaments production —and this included the winning of additional coal—and agriculture. Later on, during the war, the right hon. Gentleman the Member for Scottish Universities (Sir J. Anderson) also had occasion to writs to the Governor, and, I think, very properly, asking for the continued co-operation of the Bank, and also asking that unduly large advances should not be made for personal needs and that no facilities should be given for speculative buying or holding either of securities or stocks of commodities.
During the war?
During the war. It may well be that this happened during the war, but, knowing the Governor of the Bank as we do, and knowing that the Treasury would not use these powers unless it was absolutely necessary to do so it is true to say that what has happened in the past will continue in the future.. Therefore, to accept this Amendment would unduly limit and hamper the Governor and Court of the Bank, as well as the Treasury, and it is our view that this Amendment should, and must, be resisted.
I am bound to say that that reply of the Financial Secretary is entirely unsatisfactory from the point of view of anyone who wishes to see this scheme working smoothly, and, if I may say so with great respect, I thought his analogy particularly unfortunate when he had to run to wartime Chancellors for a precedent for what it is proposed to do in time of peace. One might almost read into his argument that this elaborate machinery had to be re- tained for fear of a future war, though I imagine that was not in his mind. Here is a point of real principle. What, after all, are the factors which govern bank loans? I do not know whether it is going to be altered under the new dispensation, but, hitherto, the granting of a loan is dependent on the credit-worthiness of the prospective borrower.
My object in rising is to put to the Financial Secretary one or two cases which I have very much in mind as the representative of an agricultural constituency. For years past, farmers have been able to get accommodation in the Spring time, in April and May, based upon the productivity of their land and the harvest prospects, and, for many years, farmers have gone to the local bank manager and got an advance, because the manager knew the land and knew what it was likely to produce, and was, therefore, able to give credit upon the harvest prospects. I admit that, to a certain extent, that system has been rather confined since the Big Five came into being and there came along the possibility of an inspector coming down from London and wanting to see what security was lodged, but, after all, the Big Five are only a form of monopoly, which we propose to make even worse under this Bill. One can envisage—I hope it will not happen—a certain tyranny on the part of the war agricultural executive committees, and, if there was some clash, the Treasury would be left with the power of this tremendous sanction of giving no credit. It may well be that the wording of this Amendment is capable of improvement, but I do want to suggest to the Chancellor and the Government, that, on a matter of principle, here is something which they would be very well advised to look at again. Between now and the Report stage, we might get a better form of words than that suggested here, but I hope we are going to have something more than that extremely adamant attitude by the Financial Secretary, who justifies his case on a wartime basis. All the evidence he could produce in resisting the Amendment was what Lord Simon had done and what the right hon. Gentleman the present Member for the City of London (Mr. Assheton) had done when he was Financial Secretary to the Treasury. Of course, in time of war, one has to divert credit into certain channels for the manufacture of armaments and so forth, but, surely, we are looking forward to entering an era when these things are not necessary and in which there will be the ordinary peaceful flow of commerce, and the restrictions placed under this Clause are odious to me and to many other hon. Members as well.I very much regret that the Financial Secretary so curtly turned down this Amendment. I should have thought that this was an Amendment couched in very mild language which the Financial Secretary might well have accepted. At any rate, he might have indicated that he was prepared to look at it again between now and the Report stage. We have not yet heard the hon. Gentleman's further reply to the hon. and gallant Member for Holderness (Lieut.-Commander Gurney Braithwaite), but the Financial Secretary, for precedent, had to resort to what the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson), when Chancellor of the Exchequer, did in the National Government during the war. Surely a purely wartime necessity is not to be urged in this Committee by any Financial Secretary as being necessary in the new era of expansion to which we are all looking forward.
The Financial Secretary said that it would not work. Hon. Members on this side well know that it will not work in the planned economy to which the Socialist Government are pledged, and I see the Chancellor is nodding his head to that. I want to emphasise what the hon. and gallant Member for Holderness said about the harm that will, almost certainly, be done to the agricultural community, if the Amendment is not accepted. The mover of this Amendment has drawn it in wide terms to see that no classes of the community shall be prejudiced in future in regard to perfectly legitimate loans being made to them from the banks. I am speaking of the agricultural community in Scotland, where, in the past, the banks have been very willing to lend, not merely to agriculturists, but to any individual or class of individuals without demanding the same security which has been demanded South of the Border. I agree with the hon. and gallant Member for Holderness that, if this Amendment is not accepted, and this very mild safeguard not put into the Bill, the interests of the agricultural community, Scottish as well as English, are likely to be seriously jeopardised, because they may not have the same ready facilities which have been forthcoming in the past. I know very well that, owing to the present state of affairs in agriculture, not many agriculturists are seeking overdrafts, but we can never be sure that, when the planned economy comes along, overdrafts or credits may not have to be sought by agriculturists. The Chancellor of the Exchequer seems to be quite comfortable. Perhaps he does not mind very much whether our agriculture languishes in future or not, but I very much hope that the Financial Secretary will have a little more to say than he had in his first reply to the right hon. and gallant Member for Gainsborough (Captain Crookshank) and will indicate that he will, at any rate, look into the matter again between now and the Report stage.I very much hope that the Financial Secretary will, upon consideration, give us a further and better answer. I confess that, when I heard him give the illustrations of wartime expedients, I felt that this Amendment was more important than I had at first thought it to be. Surely, if the circumstances are sufficiently grave to justify directions to bankers to discriminate in favour of or against particular classes of customer, there must be serious reasons in this case. Especially in view of the Measures presented by the Government for carrying into the transitional period certain emergency Measures required during the war, I do not think they ought to go further, and, in a permanent Act, introduce elements of this sort, which presuppose an emergency, and I hope that the Financial Secretary will, on consideration, accept the Amendment or give us a different answer.
This Amendment cannot be accepted because, in terms of principle—and the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) mentioned a principle—it is wrong. It is true that we do believe—the hon. Member for Galloway (Mr. McKie) has got it right this time—in a planned economy. This is one of the Measures to facilitate it.
That is why we are so worried on this side.
The hon. Member need not be. In principle, it is necessary that we should have the power, and these are only powers of last resort, because we do not normally anticipate that directions will arise in this context. We anticipate that, normally, there will be an exchange of views between the Treasury, the Bank of England, the joint stock banks and the clearing banks as to what is desirable in the national interest, and we anticipate that, generally speaking, agreement will easily be reached. Nevertheless, we must have these powers because it is essential that we should be able, in the last resort, to establish priorities in the disposal of short-term funds in the same manner as we shall, in a later Measure—which it would be out of order for me to discuss now, but which I hope to introduce when the House resumes—assure priorities of national interest in regard to long-term credit. We must have complementary powers in regard to short-term credit; and we must have power in the last resort to say, "This stands in front of that, in the national interest, therefore we desire that short-term credit should not be extended to this type but rather to that type of economic activity."
6.15 p.m. Far from desiring to see agriculture relapse into the terrible condition into which the hon. Gentleman said it was allowed to fall, when a Labour Administration was not in power, we desire to lift agriculture up, and give it a much better showing in the future than it has had in the past. It has been, of course, common ground for complaint among farmers that they did not always get reasonable credit facilities from the existing banking arrangements, and I would most certainly say that I cannot imagine in the operation of this Measure that we would ever issue a direction to the clearing banks requiring them to discriminate against agriculture and withhold credit from agriculturists. I cannot imagine that that would ever happen. Rather, I should think, the pressure would be the other way: but if directions were ever issued to the banks they would be issued for the purpose of withholding short term credit from lines of economic activity other than agriculture. Certainly I would never think that agriculture would fail under this heading to be other than a priority interest and a favoured claimant for short term advances. Similarly with the export trade. In my predecessor's communication he particularly requested the banks to give special consideration to advances connected with the export trade, and to that we shall most certainly adhere in these next years. This matter has been debated in various connections and, quite certainly, we must press forward with the export trade. It may well be necessary to ask that credit shall be directed towards the export business and towards agriculture, both on their own merits and in order to give us a substitute for needless imports in these days. So the export trade and agriculture would almost certainly be two of the favoured groups in any operation taking place under this Clause. On the other hand, are we to be denied the power, in the last resort, of advising the banks not to lend money for trashy, luxury trades with no export interest? Is that to be denied? Or to advance money for mere empty and useless speculation? Surely these are cases where it might be necessary, in the last resort, to enforce this procedure—in the last resort—and I repeat that my own anticipation is that a friendly exchange of view between all those concerned will make directions unnecessary. Reverting to the point made by the hon. and gallant Gentleman the Member for Holderness about principle, I say that upon principle we must have this Clause, and we cannot accept this Amendment, which would undermine the possibility of rational development in the public interest of the distribution of our available short term funds between various claimants. Therefore, I cannot give any undertaking at all to look at this again between now and the Report stage.The statement made by the right hon. Gentleman of his position seems to fall very short of covering all the ground which this Amendment covers. Let me put one or two possibilities which we are seeking to exclude, which I think even the right hon. Gentleman can hardly desire- to have power to do. The first thing we desire to exclude is that directions should be issued requiring bankers to give credit to a particular class of customers.
Farmers?
Let me put it this way. If that class of customer is creditworthy, I have never heard of a bank which was not willing to lend to him if the Bank of England will put that bank in funds to do so. It is in the control, I have always understood, of the Bank of England to increase the volume of credit in the country so that all creditworthy people can get credit, but what we want to prevent is a direction to a bank to lend money to somebody whom the bank thinks is not creditworthy and who is not able to repay. That is what I have in mind. Does the Chancellor really want to retain power to direct a particular bank to lend money to a class of customer whom that bank thinks will never be able to repay it? And suppose the bank turns out to be right at the end of the day. They are directed to lend their shareholders' money to a particular kind of customer against their will, knowing that it is a bad risk, and it turns out to be so. Then they go along to the Bank of England and the Treasury and say, "You have landed us in this loss, what will you do about it?" The Treasury and the Bank of England wash their hands of the whole thing, and say, "We are very sorry, you have just got to stand the loss which we have imposed upon you." That is perfectly possible under the Bill. If the right hon. Gentleman wishes to keep some method of allocating priorities —though I cannot see why it should be necessary—all he has to do is to increase the volume of credit, and anybody who deserves it will get it.
Many people who do not deserve it might get it.
I am coming to that, but the first thing I want to prevent is that the Treasury and the Bank of England should compel one of the banks to give credit to someone who is not worthy of it and will never be able to repay it. I hope the Chancellor will say something to indicate that in no circumstances will a direction of that kind be issued. That is the first point, that the credit-worthiness of the borrower must be left to the discretion of the bank, and no direction can ever be issued to overrule the bank in that respect.
Now I come to the other point which the right hon. Gentleman mentioned, withholding credit. Why should credit be withheld from any person who can convince the bank that he can repay and who is willing to enter into such an obligation? We all know that in a period of scarcity you withhold material and labour until there is plenty to go round, but credit will surely not be a scarce commodity which will need allocation in this country? Why should you withhold credit from people when you can stop undesirable activities by not giving them permits for material and the like? This will lead to the most disastrous consequences if you use this for economic reasons, which will very soon become political reasons. Is the Chancellor going to retain power to say, "A particular class of trader in a certain sphere is not a class of trader that a Socialist Government likes, another class of trader is the class of trader that a Socialist Government likes; therefore class A will be frozen to death because we shall direct the banks, in the interest of politics, that they are not to give any more credit to class A traders because they are not the kind of people we like in a Socialist State." Is that the proposal? That is what the Bill allows the Chancellor to do at the moment; that is what our Amendment would prevent him from doing. Let us be quite clear. Does the Government want to retain power to do that or not? If they want to retain some lesser power than that, surely the Chancellor will look at this matter before the Report Stage in order to obtain some method of limitation which will leave out the political use of the financial power and retain reasonable economic use? If, however, he tells us that in his ideology politics and finance are so closely intertwined that they cannot be separated, then I am bound to say that we must fight this to the death"Death" is right.
This is serious because it means that the Government will use their financial power purely for political ends, in order to destroy their political opponents. That is what they have power to do as the Bill stands, and I hope that the Chancellor does not really want that. I hope, therefore, that he will make it clear, in one form or another, that he does not want that power and, if possible, exclude it by words but, if he is not able to do that, at least exclude it by a perfectly clear undertaking at that Box on which
we can rely for the future. If the Chancellor, speaking for his party, gives some clear definition of the kind of thing he wants, then I think we can rely on him, and I hope he will give us some definition of that kind in order that we may know exactly what we have to face.I did not introduce political considerations; that was left to the right hon. and learned Gentleman. I did not say anything about excluding people on political grounds; I spoke of groups of people distinguished, not by whether they voted for or against His Majesty's Government or His Majesty's Caretaker Government at the Election, but by whether or not they stood in a high priority in the national interest. I gave one or two illustrations. I said that exports and agriculture stood high. Is that denied? Is that a political proposition? Only in a broad, non-Party sense. Exports and agriculture are both very important; they stand very high. I said that speculation stood very low. Is that denied? Perhaps all speculators voted for the Conservative Party.
rose—
I am not giving way at the moment. I am responding in the tone introduced for the first time by the right hon. and learned Gentleman. Until now we have held it on a high level of public interest. If however, he brings it down to a political level, we can beat him on that level as well. I say that speculators should stand at the end of the queue even if they belong to the Carlton Club. We are not provoked; I am replying in the same tone. On the other hand, those concerned with the export trade and with agriculture are entitled to stand well in front of the queue however they voted in the Election. Of course I can easily give an undertaking, readily and easily, that there is no intention to use this provision for the purpose of penalising people for their political opinions. What is contemplated in the last resort—and I repeat only in the last resort—is that we should be entitled to line up people according to the importance of the contribution which their economic activity will make to the national interest in the critical years that lie ahead of us.
Finally I make the point that these directions to the clearing banks are only made by the Bank of England as an initiating agent, and with the approval of the Treasury, and I cannot believe that the Bank of England would desire to penalise any group of persons for their political opinion or for the votes they cast. Therefore, I repeat that I am not prepared to look at it again in any sense of being prepared to consider any Amendment similar to this, and I shall ask the Committee, when the time comes, to resist the Amendment.The Chancellor of the Exchequer cannot mention one case where recommendations to the clearing banks have not been carried out. Perhaps he will cast back his mind to the period after the appalling mess which took place in this country when the Socialist Government were in power between 1929–1931—
In office, not in power.
6.30 p.m.
In power, in more senses than one, and mess in more senses than one—when a request was made to the clearing banks and to other bankers not to grant any facilities for new issues. On the information which I have received, and which, as far as I know, the right hon. Gentleman is not denying, they carried that out in the letter and in the spirit, and on every other occasion when recommendations have been made to the clearing banks they have co-operated in every way with the policy of the day; but there is one occasion when they would not co-operate, and that would be if the Government of the day should act in the way in which the Chancellor of the Exchequer said that he had not in mind, that is, If they acted from a political point of view and ordered the clearing banks either to grant loans or withhold loans for political doctrines or even for political and party views In the light of the past and of the reasonable and co-operative spirit always shown by the clearing banks, I cannot see that there is any necessity for this power whatsoever, and I am convinced that if the Chancellor ever found there was need for it he could very easily come here and get the requisite authority by explaining the necessity for it. For that reason, however much we may be pressed to get this Bill through quickly, I hope we shall take this Amendment to a Division.
The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) was clearly not altogether satisfied about the wording of the Amendment and his view was to some extent echoed by the hon. Member for Galloway (Mr. McKie), because they thought, I feel, that the wording was so wide and in some respects so vague that it might in fact invalidate the whole of the powers of the Bank under the Clause. One right hon. Gentleman who spoke in this Debate thought of "class of customer" as being a political class. Other hon. Members have thought of class as defined by industry. "Class" is an extremely wide word; it may mean almost anything. One might interpret "class of customer" to cover all customers who have current accounts, which would be a greater part of the customers. Another person might interpret "class of customer" as customers who have overdrafts, who would be all the customers, or very nearly all, affected by this Clause. Or one might even interpret "class of customer" to mean those customers who want credit anyway, who are the customers covered by the Clause. The hon. and gallant Member for Holderness may suggest that we should try to produce a better form of words, but I think it would be extremely difficult to find any other phrase which could not be criticised on precisely these grounds. For example, the right hon. and gallant Member for Gainsborough (Captain Crookshank) quoted statutes of the State Banks in other countries and found there the expression "sets of customers." I suggest that that is just as wide and vague as "class of customer." It therefore seems to me that any Clause worded along the lines proposed might completely inhibit the power of the Bank to issue recommendations and requests to the joint stock banks.
I am bound to say that we on this side regard this as a very serious matter indeed. The Chancellor's observations have revealed the underlying purposes of the Government in this Clause. The right hon. Gentleman made
| Division No. 54.] | AYES. | [6.40 p.m. |
| Amory, D. Heathcoat | Bower, N. | Bullock, Capt. M. |
| Assheton, Rt. Hon. R. | Boyd-Carpenter, Maj. J. A. | Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) |
| Baldwin, A. E. | Bracken, Rt. Hon. Brendan | Carson, E. |
| Barlow, Sir J. | Braithwaite, Lt-Comdr. J. G. | Clarke, Col. R. S. |
| Birch, Lt.-Col. Nigel | Buchan-Hapburn, P. G. T. | Clifton-Brown, Lt.-Col. G. |
t clear that he intends to take power through the Government to deal with the distribution of credit. When it came to answering the points made by my right hon. and learned Friend the Member for the Hillhead Division (Mr. J. S. C. Reid) he said that there was no intention on the part of the Government to use this in a political way. He illustrated it by saying he was going to make credit available for those in agriculture or the export trades irrespective of whether they had voted Socialist or Conservative. But that is not the point of my right hon. Friend's argument at all. Suppose that the Chancellor took the view, as he very well might as a Socialist, that small shopkeepers ought not to be encouraged but other competing forms of trading encouraged instead. He could easily give a direction to the bankers not to extend credits to small shopkeepers. Let me give another illustration: the State has invested a certain amount of money in British Restaurants. It might well suit the Government to suppress facilities for granting credits to other restaurants in order to let the British Restaurants do better business. That would be within the powers which the Chancellor is taking to-day, and we ought not to let such a Clause go through un-amended. The Amendment is a simple one, merely providing that the Bank
" shall not issue any direction which limits the freedom of any banker to give or withhold credit to or from any class of customer."
I suggest that that is an Amendment which the Committee ought to accept. If the Government wish to interfere with any legitimate form of trade let them come to the House, introduce legislation and say so..If they think it is in the interests of the nation that small shopkeepers shall be suppressed let them come down to the House and say so, but not take powers, by the indirect means of withholding credit, to do something which they are afraid to do by direct legislation. We must divide the Committee on this Amendment.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 92; Noes, 254
| Corbett, Lt.-Col. U. (Ludlow) | Linstead, H. N. | Raikes, H. V. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Lloyd, Maj. Guy (Renfrew, E.) | Reed, Sir S. (Aylesbury) |
| Cuthbert, W. N. | Low, Brig. A. R. W. | Reid, Rt. Hon. J. S. C. (Hillhead) |
| De la Bére, R. | Lucas-Tooth, Sir H. | Robinson, Wing-Cmdr. Roland |
| Dodds-Parker, Col. A. D. | MacAndrew, Col. Sir C. | Savory, Prof. D. L. |
| Dower, Lt.-Col. A. V. G. (Penrith) | McKie, J. H. (Galloway) | Shephard, S. (Newark) |
| Dower, E. L. G. (Caithness) | Macmillan, Rt. Hon. Harold | Smith, E. P. (Ashford) |
| Drayson, Capt. G. B. | Maitland, Comdr. J. W. | Stanley, Rt. Hon. O. |
| Duthie, W. S. | Manningham-Buller, R. E. | Stoddart-Scott, Col. M. |
| Eccles, D. M. | Marples, Capt. A. E. | Stuart, Rt. Hon. J. |
| Erroll, Col. F. J. | Marshall, Comdr. D. (Bodmin). | Studholme, H. G. |
| Fletcher, W. (Bury) | Marshall, S. H. (Sutton). | Sutcliffe, H. |
| Foster, J. G. (Northwich) | Maude, J. C. | Taylor, C. S. (Eastbourne) |
| Gammans, L. D. | Mellor, Sir J. | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) |
| George, Maj. Rt. Hn. G. Lloyd (P'ke) | Molson, A. H. E. | Thornton-Kemsley, Col. C. N. |
| Grimston, R. V. | Morrison, Maj J. G. (Salisbury) | Touche, G. C. |
| Hare, Lt.-Col. Hon. J. H. (W'dbridge) | Morrison. Rt. Hn. W. S. (Cirencester) | Turton, R. H. |
| Hollis, Sqn.-Ldr. M. C. | Mott-Radclyffe, Maj. C. E. | Vane, W. M. T. |
| Hope, Lord J. | Neven-Spence, Major Sir B. | Wakefield, Sir W. W |
| Howard, Hon. A. | Nicholson, G. | Walker-Smith, Lf.-Col D. |
| Hudson, Rt. Hon. R. S. (Southport) | Nield, B. (Chester) | Wheatley, Col. M. J. |
| Hurd, A. | Noble, Comdr. A. H. P. | White, Maj. J. B. (Canterbury) |
| Jeffreys, General Sir G. | Nutting, Anthony | Young, Sir A. S. L. (Partick) |
| Kingsmill, Lt.-Col. W. H. | Peake, Rt. Hon. O. | |
| Lancaster, Col. C. G. | Peto, Brig. C. H. M. | TELLERS FOR THE AYES: |
| Legge-Bourke, Maj. E. A. H. | Pitman, I. J. | Mr. Drewe and |
| Lindsay, Lt.-Col. M. (Solihull) | Poole, O. B. S. (Oswestry) | Commander Agnew. |
| NOES | ||
| Adams, Capt. Richard (Balham) | Crawley, Flt.-Lieut. A. | Jeger, Capt. G. (Winchester) |
| Adams, W. T. (Hammersmith, South) | Crossman, R. H. S. | Jeger, Dr. S. W. (St. Pancras, S.E.) |
| Adamson, Mrs. J. L | Daggar, G. | Jones, D. T. (Hartlepools) |
| Allen, Scholefield (Crewe) | Daines, P. | Jones, P. Asterley |
| Alpass, J. H. | Dalton, Rt. Hon. H. | Keenan, W. |
| Anderson, F. (Whitehaven) | Davies, Edward (Burslem) | Kenyon, C. |
| Attewell, H. C. | Davies, Ernest (Enfield) | Key, C. W. |
| Austin, H. L. | Davies, Haydn (St. Pancras, S.W.) | Kinghorn, Sqn.-Ldr. E. |
| Ayles, W. H. | Davies, R. J. (Westhoughton) | Kinley, J. |
| Aytton Gould, Mrs. B. | Deer, G. | Kirkwood, D. |
| Bacon, Miss A. | de Freitas, Geoffrey | Lang, G. |
| Baird, Capt. J. | Diamond, J. | Lavers, S. |
| Balfour, A. | Dobbie, W. | Lee, F. (Hulme) |
| Barnes, Rt. Hon. A. J. | Dodds, N. N. | Leslie, J. R. |
| Barstow, P. G. | Douglas, F. C. R. | Levy, B. W. |
| Barton, C. | Driberg, T. E. N. | Lindgren, G. S. |
| Battley, J. R. | Dumpleton, C. W. | Lipson, D. L. |
| Bechervaise, A. E. | Dye, S. | Lipton, Lt.-Col. M. |
| Belcher, J. W. | Edelman, M. | Longden, F. |
| Bellenger, F. J. | Edwards, John (Blackburn) | McAdam, W. |
| Berry, H. | Evans, E. (Lowestoft) | McAllister, G. |
| Beswick, Flt.-Lieut. F. | Fletcher, E. G. M. (Islington, E.) | McEntee, V. La T. |
| Bing, Capt. G. H. C. | Follick, M. | Mack, J. D. |
| Binns, J. | Freeman, Maj. J. (Watford) | McKay, J. (Wallsend) |
| Blackburn, Capt. A. R. | Gaitskell, H. T. N. | Maclean, N. (Govan) |
| Blenkinsop, Capt. A. | Gallacher, W. | McLeavy, F. |
| Blyton, W. R. | George, Lady M. Lloyd (Anglesey) | Mainwaring. W. H. |
| Boardman, H. | Gibbins, J. | Mallalieu, J. P. W. |
| Bottomley, A. G. | Gibson, C. W. | Mann, Mrs. J. |
| Bowden, Flg.-Offr. H. W. | Glanville, J. E. (Consett) | Manning, Mrs. L. (Epping). |
| Bowles, F. G. (Nuneaton) | Gooch, E. G. | Marshall, F. (Brightside). |
| Braddock, Mrs. E. M. (L'p'l, Exch'ge) | Goodrich, H. E. | Mathers, G. |
| Braddock, T. (Mitcham) | Gordon-Walker, P. C. | Mayhew, C. P. |
| Brook, D. (Halifax) | Grenfell, D. R. | Middleton, Mrs. L. |
| Brooks, T. J. (Rothwell) | Grey, C. F. | Mikardo, Ian |
| Brown, George (Belper) | Grierson, E. | Mitchison, Maj. G. R. |
| Brown, T. J. (Ince) | Guest, Dr. L. Haden | Montague, F. |
| Bruce, Maj. D. W. T. | Gunter, Capt. R. J. | Morgan, Dr. H. B. |
| Burden, T. W. | Haire, Flt.-Lieut. J. (Wycombe) | Morris, P. (Swansea, W.) |
| Burke, W. A. | Hall, W. G. (Colne Valley) | Morris, Hopkin (Carmarthen) |
| Byers, Lt.-Col. F. | Hamilton, Lieut.-Col. R. | Morrison, Rt. Hon. H. (Lewisham, E.) |
| Callaghan, James | Hannan, W. (Maryhill) | Mort, D. L. |
| Chamberlain, R. A. | Hastings, Dr. Somerville | Moyle, A. |
| Champion, A. J. | Haworth, J. | Murray, J. D. |
| Clitherow, R. | Herbison, Miss M. | Naylor, T. E. |
| Cluse, W. S | Hicks, G. | Neal, H (Claycross) |
| Cobb, F. A. | Hobson, C. R. | Nichol, Mrs. M. E. (Bradford, N.) |
| Cocks, F. S | Holman, P. | Noel-Baker, Capt. F. E. (Brentford) |
| Collick, P. | Horabin, T. L. | Noel-Buxton, Lady |
| Collindridge, F. | House, G. | O'Brien, T. |
| Colman, Miss G. M. | Hudson, J. H. (Ealing, W.) | Oldfield, W. H. |
| Cooper, Wing-Comdr. G. | Hughes, Hector (Aberdeen, N.) | Paget, R. T. |
| Corlett, Dr. J. | Hughes, Lt. H. D. (W'lverh'pton, W.) | Paling, Will T. (Dewsbury) |
| Corvedale, Viscount | Hynd, H. (Hackney, C.) | Palmer, A. M. F. |
| Cove, W. G. | Irving, W. J. | Pargiter, G. A. |
| Parkin, Fit.-Lieut. B. T. | Simmons, C. J. | Wadsworth, G. |
| Paton, Mrs. F. (Rushcliffe) | Skeffington, A. M. | Walkden, E. |
| Pearson, A. | Skeffington-Lodge, Lt. T. C. | Walker, G. H. |
| Peart, Capt. T. F. | Smith, Ellis (Stoke) | Warbey, W. N. |
| Perrins, W. | Smith, S. H. (Hull, S.W.) | Watkins, T. E. |
| Piratin, P. | Smith, T. (Normanton) | Webb, M. (Bradford, C.) |
| Popplewell, E. | Snow, Capt. J. W | Weitzman, D. |
| Pritt, D. N. | Solley, L. J. | Wells, P. L. (Faversham) |
| Proctor, W. T. | Sorensen, R. W. | Wells, Maj. W. T. (Walsall) |
| Pryde, D. J. | Soskice, Maj. Sir F. | White, C. F. (Derbyshire, W.) |
| Pursey, Cmdr. H. | Sparks, J. A | Whiteley, Rt. Hon. W. |
| Randall, H. E. | Stamford, W. | Wigg, Col. G. E. C. |
| Ranger, J. | Steele, T. | Wilkes, Maj. L. |
| Rees-Williams, Lt.-Col. D. R. | Stephen, C. | Wilkins, W. A. |
| Reeves, J. | Stubbs, A. E. | Willey, F. T. (Sunderland) |
| Reid, T. (Swindon) | Summerskill, Dr. Edith | Willey, O. G. (Cleveland) |
| Rhodes, H. | Swingler, Capt. S. | Williams, Rt. Hon. E. J. (Ogmore) |
| Robens, A. | Symonds, Maj. A. L. | Williams, W. R. (Heston) |
| Roberts, Sq.-Ldr. Emrys O. (M'rion'th) | Taylor, H. B. (Mansfield) | Williamson, T. |
| Roberts, Goronwy (Caernarvonshire) | Taylor, R. J. (Morpeth) | Willis, E. |
| Rogers, G. H. R. | Taylor, Dr. S. (Barnet) | Wills, Mrs. E. A. |
| Royle, C. | Thomas, I. O. (Wrekin) | Wilson, J. H. |
| Sargood, R. | Thomas, John R. (Dover) | Woods, G. S. |
| Scott-Elliot, W. | Thomas, George (Cardiff) | Wyatt, Maj. W. |
| Sharp, Lt.-Col. G. M. | Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) | Yates, V. F. |
| Shawcross, C. N. (Widnes) | Thorneycroft, H. (Manchester, C.) | Young, Sir R. (Newton) |
| Shinwell, Rt. Hon. E. | Tiffany, S. | Zilliacus, K. |
| Shurmer, P. | Tolley, L. | |
| Silkin, Rt. Hon. L. | Ungoed-Thomas, L. | TELLERS FOR THE NOES: |
| Silverman, J. (Erdington) | Vernon, Maj. W. F. | Mr. J. Henderson and |
| Silverman, S. S. (Nelson) | Viant, S. P. | Captain Michael Stewart. |
6.45 p.m.
I beg to move, in page 3, line 13, at end, insert:
This is the other side of the same picture. We were discussing on the last Amendment the principle of the limitation by the Treasury, through its powers of direction, of the issue of credit. Here we are discussing the case where the Bank may issue a direction requiring a banker to subscribe for stock or shares in some undertaking. I think that the Chancellor of the Exchequer should have very little difficulty in accepting this Amendment because it merely protects the commercial banks from interference in the day-to-day conduct of their ordinary business. I do not imagine that even the Chancellor would suggest that it is desirable to compel the banks to take up loans or shares in companies which they think commercially undesirable or at prices they cannot justify. If the Chancellor were to tell us that he does intend to give directions to commercial banks to take up loans, or shares in commercial undertakings, whether they want to or not, then I think he must tell us who is to bear the loss if in fact there are losses resulting from the directions. I can well imagine that if some such proviso as this is not put into the Bill we may very easily find a situation in the City where there is a great deal of pressure being exerted on banks to take up certain investments to suit the Government. I will not say more at this stage, because I feel certain that the Chancellor of the Exchequer will accept the Amendment. It is clearly a reasonable one, and one which we on this side of the House feel justified in pressing." Provided that the Bank shall not issue any direction which would require a banker to issue or to subscribe for share or purchase any asset or to sell any assets."
The right hon. Gentleman rightly stated that this Amendment is only the other side of the same picture. That being so, the same broad considerations apply. I must apologise to the Committee if I repeat arguments which I have used in relation to previous Amendments, but to a considerable extent the reasoning on both sides of the Committee tends to be much the same on a number of these broad matters. We cannot foresee all the circumstances of the future. I would emphatically repeat that there is no intention in the mind of the Government, nor, I am sure, would there be any intention in the minds of those responsible for the Bank of England, to ride rough shod over the views, or, in some cases, the apprehensions or doubts of the clearing banks with regard to the disposal of their resources generally, whether it be in short term credits, which we were discussing on the last Amendment, or whether in more long term investments or the lockup of their funds. Just as I did not feel able to accept the last Amendment, so I do not feel able to accept this one.
This Clause is deliberately drawn in very wide terms. We feel that what we require in order to ensure the smooth and effective working of the relationship between the Treasury, the Bank of England and the clearing banks in the future is that there should be a wide comprehensive general power, to be exercised only in the last resort. Once we begin to seek to narrow these powers down, to chip a little piece off here and a little piece off there, we get, instead of a wide approach to this matter, a rather arbitrary delimiting approach which is not going to make for the effective working of the scheme. I have made one very important exception in the terms of the Amendment which I put down, following the pledge which I gave earlier, which does, I hope, relieve the clearing banks, and the public generally who follow these matters, from what might have been a serious apprehension. Having made that one exception in the Amendment, which has been accepted by the Committee, I do not think that it is wise to make any further broad exceptions from the width of this general power. I would repeat that there is no intention in my mind—nor, I am sure, would such intention enter into the mind of any reasonable person in the future—that we should force the banks to invest their money in directions which appear to them to be seriously likely to involve them in grave losses, such as were contemplated in the speech of the right hon. Gentleman. We cannot well exclude the possibility that it may be desirable, in certain circumstances, to urge the banks to devote their resources to one or other form of investment, which it was felt by the Government and the Bank of England was necessary in the interests of a planned priority, with a view to securing full employment in the country and building up our export trade and other necessary elements in our economy. Therefore, I am sure that it will not be misunderstood in any serious circles where these matters are considered, if I ask the Committee to reject this Amendment on the ground that further delimitation of what is deliberately put here as a wide power, would be disadvantageous, rather than advantageous, to the pursuit of a policy which will command general assent in the years to come. There will be the fullest consideration of all these matters, and I will deal with this more definitely on the next Amendment. I am proposing to make a fuller statement on that Amendment following consultations which I have had with the Governor of the Bank of England and certain representatives of the clearing banks as to how Clause 4 (3) is to operate in the future. Therefore, I ask the Committee to allow me to postpone my general statement until then, and not to accept this Amendment.While awaiting the Chancellor's fuller statement, I think there is one point on this Amendment which arises now. It is quite true that this is the other side of the picture in relation to the last Amendment, but the arguments are not quite parallel. The last Amendment dealt with the control of money available to the Banks for loan purposes. The right hon. Gentleman assured us that his intention was to draw up a list of priorities under which money available for loans should be released. This Amendment deals with the Bank funds available for the purposes of shares or stocks. I am quite satisfied with regard to the Chancellor's intentions in this matter, but, as so often pointed out in this House, these matters are not settled by Chancellors or other Ministers coming to the House and making agreeable, soothing speeches on the subject of the Carlton Club or anything else. They are decided by what is in the Act, when the time comes for administration, and however benevolent and politically moral may be the intentions of the right hon. Gentleman, which I do not question for a moment, other Chancellors will follow him, and I doubt if they will read with care what he has said on this occasion. They will decide on the wording of the Act, and it is with a view to improving that wording that this Amendment has been put down. What I fear may be one of the consequences, if we allow the Clause to stand as it is, is that—now we are embarking upon a new economy, and many industries are going to be nationalised, and nationalisation will necessitate the raising of a considerable number of Government loans—the time may come when, owing to industrial austerity, there may be a certain drying up of normal profit investments. Thus loans may be offered and it may be difficult to get them over.
7.0 p.m.
There may be a shortage of public subscription and in order to carry out their proposals the Government may direct the bankers to invest a larger proportion of their surplus funds in this or that Government loan. The first duty of any bank—and I put this forward as a first principle to which no hon. Member could take exception—is to look after its customers' money. A person puts his money in the bank for safe custody, and the customer is entitled to know that his money will be there when he wants to draw it. That is perhaps painting a rather extreme picture, but I want to suggest that powers to compel banks to invest in this, that or the other security is entirely different from having a priority in relation to the money available for loan purposes. If only for that reason I hope that the Government will look at this again.
On the previous Amendment the hon. Member for Reading (Mr. Mikardo) commented upon something I had said about the wording of a previous Amendment. I was anxious to make the normal House of Commons point that when the Opposition puts down an Amendment we are not wedded to any particular form of words, if we can get the Government to agree to meet us on the Report stage with a form of words agreeable to them. They have the services of skilled draftsmen and learned law officers who can put the matter in a convenient form. This is a very different matter from that contained in the previous Amendment. The Chancellor is to speak to us later on on broader lines, but I trust he will reconsider his attitude towards this particular narrow point.
The Chancellor has emphasised the width of these powers. It is their very width and the fact that they are to be permanent in this Bill that causes us considerable anxiety. I do not propose to repeat on this Amendment the argument I put forward upon the last one, namely, that when powers are sought for emergency purposes we ought to have special legislation, not permanent legislation. That argument is equally applicable to this Amendment. If the Chancellor insists on importing into this Bill these powers of such a far reaching character, which I feel could only justly be intended to deal with an emergency situation, there ought to be some time limit placed upon their application. If a time limit were introduced, I think the Committee will be much more ready to accept the terms of the Bill as they now stand.
Before we take a Division on this Amendment, as I expect we shall because there seems to be a fundamental principle involved, there is a point which I hope the right hon. Gentleman will bear in mind, following on the argument. When clients of banks know that their funds can be ordered by the Bank, which is really the Government of the day, to be invested in certain securities, as is so clearly stated here, clients are bound to lose a considerable amount of confidence about where they are to put their savings. That is really a point which the Chancellor cannot avoid. Everyone of us wants our savings to be safe. If this Amendment is refused or defeated it will mean that the Government can utilise those savings in taking up or subscribing to shares, or for the purpose of buying an asset which they happen to wish to be bought. The other point, which is important—and this is an important Bill—is that this will infringe very largely the basis of company law. The directors of the bank are elected and are responsible to their shareholders. It seems to me that they will have two masters. Not only will they come under company law but also under the law as laid down in this Bill, and the other master will be the Government of the day. For those reasons I propose to support this particular Amendment in the Division lobby.
I shall certainly ask my hon. Friends to support this Amendment in the Lobby. It is one of great importance. The Chancellor has told us that he will make some sort of general statement about the relationship between the Bank and other banks, but that will not get away from the proposition which is in this new proviso. The proposition shortly is that it will be possible, unless words of this kind are inserted—my hon. and gallant Friend has said not necessarily these exact words, as we are not perfect draftsmen; we on this side cannot be—for the banks to be forced to subscribe to shares to which they do not wish to subscribe, or which they do not think suitable for their own business, or to purchase assets they do not want to have or which they think are unsuitable for them to hold. It would be possible for them to be forced to do that, which is a great infringement of the liberty of action of a bank in a business sense.
Every Member of this Committee will agree that if there are good, sensible, intelligent Labour men in charge of the business of the banks, there will be no investment for which the Chancellor asks that they will not be happy to agree to. If they are not happy
| Division No. 55.] | AYES. | [7.10 p.m. |
| Agnew, Cmdr. P. G. | Hope, Lord J. | Pitman, I. J. |
| Amory, D. Heathcoat | Howard, Hon. A. | Poole, O. B. S. (Oswestry). |
| Assheton, Rt. Hon. R. | Hudson, Rt. Hon. R. S. (Southport) | Raikes, H. V. |
| Baldwin, A. E. | Hulbert, N. J. | Reed, Sir S. (Aylesbury) |
| Barlow, Sir J. | Hurd, A. | Reid, Rt. Hon. J. S. C. (Hillhead) |
| Birch, Lt.-Col. Nigel | Jeffreys, General Sir G. | Roberts, Sq.-Ldr. Emrys O. (M'rion'th) |
| Bower, N. | Kingsmill, Lt.-Col. W. H. | Robinson, Wing-Cmdr. Roland |
| Boyd-Carpenter, Maj. J. A. | Lancaster, Col. C. G. | Ropner, Col. L. |
| Bracken, Rt. Hon. Brendan | Lindsay, Lt.-Col. M. (Solihull) | Savory, Prof. D. L. |
| Braithwaite, Lt.-Comdr. J. G. | Linstead, H. N. | Shephard, S. (Newark) |
| Buchan-Hepburn, P. G. T. | Lloyd, Maj. Guy (Renfrew, E.) | Shepherd, Lieut. W. S. (Bucklow) |
| Bullock, Capt. M. | Low, Brig. A. R. W. | Smith, E. P. (Ashford) |
| Carson, E. | Lucas-Tooth, Sir H. | Stanley, Rt. Hon. O. |
| Clarke, Col. R. S. | MacAndrew, Col. Sir C. | Stoddart-Scott, Col. M. |
| Clifton-Brown, Lt.-Col. G. | McKie, J. H. (Galloway) | Stuart, Rt. Hon. J. |
| Corbett, Lt.-Col. U. (Ludlow) | Macmillan, Rt. Hon. Harold | Suteliffe, H. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Maitland, Comdr. J. W. | Taylor, C. S. (Eastbourne) |
| Cuthbert, W. N. | Manningham-Buller, R. E. | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) |
| De la Bére, R. | Marshall, Comdr. D. (Bodmin). | Thornton-Kemsley, Col. C. N. |
| Dodds-Parker, Col. A. D. | Marshall, S. H. (Sutton). | Touche, G. C. |
| Dower, Lt.-Col. A. V. G. (Penrith) | Maude, J. C. | Turton, R. H. |
| Dower, E. L. G. (Caithness) | Mellor, Sir J. | Vane, W. M. T. |
| Drayson. Capt. G. B. | Molson, A. H. E. | Wadsworth, G. |
| Duthie, W. S. | Morris, Hopkin (Carmarthen) | Wakefield, Sir W. W. |
| Eccles, D. M. | Morrison, Rt. Hn. W. S. (Cirencester) | Walker-Smith, Lt.-Col. D. |
| Erroll, Col. F. J. | Mott-Radclyffe, Maj. C. E. | Wheatley, Col. M. J. |
| Fletcher, W. (Bury) | Neven-Spence, Major Sir B. | White, Maj. J. B. (Canterbury) |
| Foster, J. G. (Northwich) | Nicholson, G. | Willink, Rt. Hon. H. U. |
| Gammans, L. D. | Nield, B. (Chester) | York, C. |
| Glyn, Sir R. | Noble, Comdr. A. H. P. | Young, Sir A. S. L. (Partick) |
| Grimston, R. V. | Nutting, Anthony | |
| Hare, Lt.-Col. Hon. J. H. (W'dbridge) | Peake, Rt. Hon. O. | TELLERS FOR THE AYES: |
| Hollis, Sqn.-Ldr. M. C. | Peto, Brig. C. H. M. | Mr. Drewe and Mr. Studholme. |
| NOES. | ||
| Adams, Capt. Richard (Balham) | Boardman, H. | Corvedale, Viscount |
| Adams, W. T. (Hammersmith, South) | Bottomley, A. G. | Cove, W. G. |
| Adamson, Mrs. J. L. | Bowden, Flg.-Offr. H. W. | Crawley, Fit.-Lieut. A. |
| Allen, Scholefield (Crewe) | Bowles, F. G. (Nuneaton) | Crossman, R. H. S. |
| Alpass, J. H. | Braddock, Mrs. E. M. (L'p'l, Exch'ge) | Dagga |
| Anderson, F. (Whitehaven) | Braddock, T. (Mitcham) | Daines, P. |
| Attewell, H. C. | Brook, D. (Halifax) | Dalton, Rt. Hon. H. |
| Austin, H. L. | Brooks, T. J. (Rothwell) | Davies, Edward (Burslem) |
| Ayles, W. H. | Brown, George (Belper) | Davies, Ernest (Enfield) |
| Ayrton Gould, Mrs. B. | Brown, T. J. (Ince) | Davies, Haydn (St. Pancras, S.W.) |
| Bacon, Miss A. | Bruce, Maj. D. W. T. | Davies, R. J. (Westhoughton) |
| Baird, Capt. J. | Burden, T. W. | Deer, G. |
| Balfour, A. | Burke, W. A. | de Freitas, Geoffrey |
| Barstow, P. G. | Callaghan, James | Diamond, J. |
| Barton, C. | Chamberlain, R. A. | Dobbie, W. |
| Battley, J. R. | Champion, A. J. | Dodds, N. N. |
| Bechervaise, A. E. | Clitherow, R. | Douglas, F. C. R. |
| Bellenger, F. J. | Cluse, W. S. | Driberg, T. E. N. |
| Berry. H. | Cobb, F. A. | Dumpleton, C. W. |
| Beswick, Flt.-Lieut. F. | Cocks, F. S. | Dye, S. |
| Bing, Capt. G. H. C. | Collick, P. | Edelman, M. |
| Binns, J. | Collindridge, F. | Edwards, John (Blackburn) |
| Blackburn, Capt. A. R. | Colman, Miss G. M. | Evans, E. (Lowestoft) |
| Blenkinsop, Capt. A. | Cooper, Wing-Comdr. G. | Evans, S. N. (Wednesbury) |
| Blyton, W. R. | Corlett, Dr. J. | Fletcher, E. G. M. (Islington, E.) |
to do so the Chancellor will be able to see that they are a bunch of stick-in-the-mud Tories, and that the sooner we get rid of them the better.
As the hon. Member has made that point, will he promise that he and his party will do nothing to turn out these sensible, level-headed Socialist leaders, whom he is asking us to trust?
Question put, "That those words be there inserted."
The Committee divided: Ayes, 96; Noes, 249.
| Follick, M. | Mallalieu, J. P. W. | Skinnard, F. W. |
| Freeman, Maj. J. (Watford) | Mann, Mrs. J. | Smith, Ellis (Stoke) |
| Gaitskell, H. T. N. | Manning, Mrs. L. (Epping). | Smith, S. H. (Hull, S.W.) |
| Gallacher, W. | Marshall, F. (Brightside). | Smith, T. (Normanton) |
| Gibbins, J. | Mathers, G. | Snow, Capt. J. W. |
| Gibson, C. W. | Mayhew, C. P. | Solley, L. J. |
| Glanville, J. E. (Consett) | Messer, F. | Sorensen, R. W. |
| Gooch, E. G. | Middleton, Mrs. L. | Soskice, Maj. Sir F. |
| Goodrich, H. E. | Mitchison, Maj. G. R. | Sparks, J. A. |
| Gordon-Walker, P. C. | Morgan, Dr. H. B. | Stamford, W. |
| Grenfell, D. H | Morris, P. (Swansea, W.) | Steele, T. |
| Grey, C. F. | Mort, D. L. | Stephen, C. |
| Grierson, E. | Moyle, A | Stewart, Capt. Michael (Fulham, E.) |
| Guest, Dr. L. Haden | Murray, J. D. | Strachey, J. |
| Gunter, Capt. R. J. | Nally, W. | Stubbs, A. E. |
| Haire, Flt.-Lieut. J. (Wycombe) | Naylor, T. E. | Summerskill, Dr. Edith |
| Hall, W. G. (Colne Valley) | Neal, H. (Claycross) | Swingler, Capt. S. |
| Hamilton, Lieut.-Col. R. | Nichol, Mrs. M. E. (Bradford, N.) | Symonds, Maj. A. L. |
| Hannan, W. (Maryhill) | Noel-Baker, Capt. F. E. (Brentford) | Taylor, H. B. (Mansfield) |
| Hastings, Dr. Somerville | Noel-Buxton, Lady | Taylor, R. J. (Morpeth) |
| Haworth, J. | O'Brien, T. | Taylor, Dr. S. (Barnet) |
| Herbison, Miss M. | Oldfield, W. H. | Thomas, I. O. (Wrekin) |
| Hicks, G. | Oliver, G. H. | Thomas, John R. (Dover) |
| Hobson, C. R. | Paget, R. T. | Thomas, George (Cardiff) |
| Holman, P. | Paling, Will T. (Dewsbury) | Thomson, Rt. Hn. G. R. (Ed'b'gh, E ) |
| House, G. | Palmer, A. M. F. | Tiffany, S. |
| Hudson, J. H. (Ealing, W.) | Pargiter, G. A. | Tolley, L. |
| Hughes, Hector (Aberdeen, N.) | Parkin, Fit.-Lieut. B. T. | Ungoed-Thomas, L. |
| Hughes, Lt. H. D. (W'lverh'pton, W | Paton, Mrs. F. (Rushcliffe) | Vernon, Maj. W. F. |
| Irving, W. J. | Pearson, A. | Viant, S. P. |
| Janner, B. | Peart, Capt. T. F. | Walkden, E. |
| Jeger, Capt. G. (Winchester) | Perrins, W. | Walker, G. H. |
| Jeger, Dr. S. W. (St. Pancras, S.E.) | Piratin, P. | Warbey, W. N. |
| Jones, A. C. (Shipley) | Popplewell, E. | Watkins, T. E. |
| Jones, D. T. (Hartlepools) | Pritt, D. N. | Webb, M. (Bradford, C.) |
| Jones, P. Asterley | Proctor, W. T. | Weitzman, D. |
| Keenan, W. | Pryde, D. J. | Wells, P. L. (Faversham) |
| Kenyon, C. | Pursey, Cmdr. H. | Wells, Maj. W. T. (Walsall) |
| Key, C. W. | Randall, H. E. | White, H. (Derbyshire, N.E.) |
| Kinghorn, Sqn.-Ldr. E. | Ranger, J. | Whitley, Rt. Hon. W. |
| Kinley, J. | Rees-William, Lt.-Col. D. R. | Wigg, Col. G. E. C. |
| Lang, G. | Reeves, J. | Wilkes, Maj. L. |
| Lavers, S. | Reid, T. (Swindon) | Wilkins, W. A. |
| Lawson, Rt. Hon. J. J. | Rhodes, H. | Willey, F. T. (Sunderland) |
| Lee, F. (Hulme) | Robens, A. | Willey, O G. (Cleveland) |
| Leonard, W. | Roberts, Goronwy (Caernarvonshire) | Williams, Rt. Hon. E. J. (Ogmore) |
| Leslie, J. R. | Rogers, G. H. R. | Williams, W. R. (Heston) |
| Levy, B. W. | Royle, C. | Williamson, T. |
| Lindgren, G. S. | Sargood, R. | Willis, E. |
| Lipson, D. L. | Scott-Elliott, W. | Wills, Mrs. E. A. |
| Longden, F. | Sharp, Lt.-Cot. G. M. | Wilson, J. H. |
| McAdam, W. | Shawcross, C. N. (Widnes) | Woods, G. S. |
| McAllister, G. | Shawcross, Sir H. (St. Helens) | Wyatt, Maj. W. |
| McEntee, V. La T. | Shinwell, Rt. Hon. E. | Yates, V. F. |
| Mack, J. D. | Shurmer, P. | Young, Sir R. (Newton) |
| McKay, J. (Wallsend) | Silverman, J. (Erdington) | Zilliacus, K. |
| Maclean, N. (Govan) | Silverman, S. S. (Nelson) | |
| McLeavy, F. | Skeffington, A. M. | TELLERS FOR THE NOES: |
| Mainwaring. W. H. | Skeffington-Lodge, Lt. T. C. | Mr. J. Henderson and Mr. Simmons. |
7.18 p.m.
I beg to.move, in page 3, line 13, at end, insert:
This Amendment is one of considerable importance. The Chancellor has said, speaking to the last Amendment, that he could not foresee all the circumstances in the future, nor, of course, can anybody else, and it is for that reason that it seems to us to be of real importance that the House should have, in due course, information about what is done. The Bill, in Clause 4, Section 3, lays dawn that if the Treasury so authorises them, the Bank may"Provided that every direction hereunder by the Bank to any banker together with the relative Treasury authority shall be laid before the Commons House of Parliament within seven days after it has been made and if not so laid shall be void and if the Commons House of Parliament within a period of forty days thereafter resolves that it be annulled its hall cease to have effect but without prejudice to anything previously done thereunder. In reckoning any period for the purpose of this Subsection no account shall be taken of any time during which Parliament is dissolved or prorogued or daring which the Commons House of Parliament is adjourned for more than four days."
And we have learned, from the discussion which has arisen on the previous Amendments, the sort of things which might happen, because the Committee has rejected the provisos we hoped to insert to prevent their happening. For example, it will be possible—whether it is done or not is another matter—for directions to be given to banks to give credit to any classes of customers to whom otherwise they might not possibly wish to give credit. It would be possible for the banks to be directed to subscribe for shares for which they do not want to subscribe because they do not think they are suitable holdings. It would be possible for banks to be directed to purchase assets which they do not want to purchase. In other words, under the Bill as it now stands, they may be directed to do a heap of things which in their own judgment they think undesirable. Banks are, of course, in a trustee position, with regard to both their shareholders and their customers, and they feel that their trustee capacity is being gravely impaired by directions which they may receive. Therefore, in order to clear the banks themselves and to enable them to show both to their shareholders and their customers that they are being overridden and that it is a question of force majeure should these contingencies arise, we propose in this Amendment that any such directions by the Bank to any banker, together with the Treasury authority to do so, should be brought before this House. The Amendment is in quite a reasonably common form, namely, that if these directions are not made within seven days they should be void and that there should be a period during which this House should resolve that they should be annulled. It seems to us that some sort of safeguard of that kind is necessary from the point of view of the banks themselves, because in the circumstances I have indicated they are both innocent and possibly injured parties and, from the very special relationship which they inevitably have with both their share-holders and their depositors, it seems only reasonable that these people should know how it is that these, from their point of view, undesirable activities have arisen. It is all very well if, by the authorisation of the Treasury, the Bank of England tells them to do things that they do not want to do and which they think are wrong, to give credit where they do not want to give credit, to buy things they do not want to buy, and to subscribe for shares for which they do not want to subscribe, but it seems to us only reasonable that publicity should be given to that, and this House should have an opportunity of expressing its views as to whether or not the Treasury is authorising a bank to do something which is not desirable in the particular case. The Chancellor, as I say, made it clear that we cannot foresee the future, and it is because we cannot see into the future that it seems only right to us that some sort of safeguard of this kind should be inserted. I would be very interested to hear from the Chancellor any reasons which he might give to the contrary. As he knows better than anyone else, we are entering into an entirely new field of relationship between the Bank of England and the Treasury, and for that reason we think the time has come to make it clear in this Bill that this House should have an opportunity of having a look at these various proposals as they come along, more particularly as this House will be in a new relationship to the whole problem by reason of the very fact that the Bank has been taken over by the State." issue directions to any banker for the purpose of securing that effect is given to any such request or recommendation."
I am anxious to deal in a little more detail with this Amendment, because I think it is a convenient peg on which to hang certain observations with regard to the view of the Government as to how this new regime will work. I will, if I may, begin by dealing with the Amendment narrowly and then pass to rather broader considerations. The case against this Amendment as it is set down upon the Paper is substantially the same as the case I have endeavoured to state to the Committee against previous Amendments, namely that it introduces a certain element of restriction upon the wide powers deliberately sought by the Government under this Clause. But I desire to repeat what I said on an earlier Amendment. In many cases such directions would very properly be made public and would be the subject of debate in the House under one procedure or another. The question might be asked of me or of my successors whether or not such and such a direction had been issued; in such a case it would be the duty of myself or my successor to make reply, and if the reply were thought by the Opposition of the day or by any section of the House to be unsatisfactory it would be possible for the matter to be further pursued, in the extreme case with a Vote of Censure and in other cases on an Adjournment or on a Supply Day.
Let me make the point in passing that on a Supply Day in future when this Bill has become law it will be possible to raise matters relating to the operation of the provisions of this Bill which, as the right hon. and gallant Gentleman has rightly said, is a new departure in the relationship between the Treasury, the Bank of England and the Joint Stock Banks. Such matters will be properly debatable, as I understand, on a Treasury Supply Day in the future. That will be one of a number of Parliamentary opportunities which will arise. I think that is so. I do not think the right hon. and gallant Gentleman is disagreeing with that view. I want to get it quite clear, and I will be quite frank about it. There will be in addition an occasion for discussion of these matters— intermediate between a Vote of Censure, which is a very heavy weapon of Debate, and raising the matter on an Adjournment for half an hour or so—and it will also be possible to raise it on a Supply Day if a Treasury Vote is called for. I think— I will not say "very often" because I do not think such directions will be issued very often in the future, but in a high proportion of the small number of cases in which such directions may be issued it will be desired by all, including the Government of the day and the Chancellor of the day, that they shall be examined. On the other hand, there may be cases, as I ventured to suggest to the Committee on an earlier Amendment, in which it will be definitely against the public interest that such a matter should be ventilated at all. I refer to cases in which, owing to situations of tension threatening the peace of the world and this country's national security, or, short of that, situations in which difficult problems arise owing to the pursuit by other countries of economic or financial policies thought by us to be seriously threatening to our own arrangements, it is better that directions should be issued and we should keep rather quiet about them, at any rate for a period of time. So much by way of general recapitulation of the argument as to why I cannot advise the Committee to accept this Amendment. I now desire to state certain further observations as to how I think this will and should work. I hope that what I am about to say will be of some reassurance to any hon. Members who may be apprehensive as to the modus operandi of this Clause. Since I have held my present office I have been most anxious to introduce confident and co-operative relationships not only with those In charge of the Bank of England but with those in charge of the Joint Stock Banks. I have had a number of consultations with all the bank chairmen together. On other occasions the bank chairmen have sent, on their behalf, to see me one or two of their number. I would like to say that I have been very much impressed by their willingness to co-operate with the Government, and by the absence of party political ideas from their minds. Our conversations so far, although we may not have agreed 100 percent. on everything, have been to me most encouraging, and I have no doubt at all that with the chairmen of the joint stock banks co-operation is possible and very much desired by all concerned. It is desired by the Treasury, naturally, and by the Governor of the Bank of England and by the chairmen themselves. 7.30 p.m. A little while ago I had a conversation with the Governor of the Bank of England and with two representatives of the Clearing Bank, Mr. Colin Campbell, the Chairman of the National Provincial Bank, and Mr. Edwin Fisher, Chairman of Barclays, who have kept my overdraft for a great many years, and to whom therefore I feel a particular sense of recognition. Those two gentlemen had a conversation with me, together with the Governor, and we discussed the proceedings on the Bill. They asked me what view I took of various Amendments that had been put down, and I told them. I am not saying that at the end of the meeting there was a note of complete agreement on everything. That would be absurd. That is not how we discuss these things; but we exchanged ideas. I would like to tell the Committee what I told the two bank chairmen who represent the general body of clearing banks, in the presence of the Governor, as to how I intended to operate this Clause of the Bill, if the Bill passes into law. I told them how I thought any reasonable successor of mine would also desires to operate it. I first of all emphasised to them that I had put down the Amendments which the Committee have already accepted, with regard to the disclosure of the affairs of individuals, particular customers or clients; and that I think they welcomed. That, I hope, has removed a large part of the fear which in some quarters was entertained as to how the Bill might operate. I told them that I would tell the Committee—and I am now telling the Committee what I told them I would state in the House this week—that no direction would be issued by the Bank of England under this Subsection, with the approval of the Treasury, without the views of the representatives of the clearing banks being first ascertained. There should be no question of the clearing banks suddenly waking up to find that the Bank of England has put down some direction, with the approval of the Treasury, without the representatives of the clearing banks having been fully consulted. I assured them that if any such case ever arose—I repeat that this is a power of last resort, but if we reached the last resort and if we could not clear things by discussion among the various parties concerned—I undertook that the Treasury would not approve—because the Treasury has to approve, under the Clause—the issue of any direction to the clearing banks without the clearing banks having been consulted fully beforehand, and having had an opportunity not only to express their views to the Bank of England but to have a right of direct access to the Treasury and to the Chancellor of the Exchequer. The Bank of England is, and should be, the normal channel of communications between the Government and the clearing banks. It is administratively clumsy, inconvenient and time-wasting for the clearing banks always to come to the Chancellor of the Exchequer about their affairs. Normally they should proceed through the channel of the Bank of England. But in an abnormal situation such as we had under consideration—the issue of a direction by the Bank of England to the clearing banks—not only should the clearing banks in the first place be fully consulted, but they should have the right of direct access to the Treasury and to myself beforehand. I have pledged myself, so far as my term of office is concerned, that I shall always be glad to see representatives of the clearing banks, the Governor of the Bank of England also being present —that is proper and reasonable—if there should be any such issue, on which difference of opinion is likely to result on the need for a direction's being issued. I think that is not without importance. In the second place, with regard to publicity. Directions such as we are here contemplating would not normally, of themselves, and by their essential nature, fall within the scope of the Official Secrets Acts. I ask hon. Gentlemen opposite to note this point. I say "normally" because we must also consider an abnormal situation such as I have already described, where the safety of the country might be at stake; but normally, they would not fall within the Official Secrets Acts. Therefore it would not be wrong for a representative of the clearing banks who felt that he was liable to be served with a direction which he felt was most damaging to the interests of his bank—we hope this is purely theoretical and that the situation will not arise, but if it should arise—for him to express his views. He would not be bound to complete secrecy. He could express his views to those with whom he was in touch. That means that it would, normally, be possible for such a direction to be the subject of a Parliamentary Question in this House, either before or after the issue of the direction. To that extent, publicity is assured and the possibility of Debate is safeguarded to the same degree as I have already mentioned. A Parliamentary question might be asked about the direction intended to be issued. Following that direction, it would be possible for the various forms of Parliamentary Debate to be initiated, extending from the Vote of Censure to the Adjournment half hour. This. I hope, will be, in terms of constitutional theory, a not at all inadequate provision for due publicity. Moreover, I indicated to the representatives of the clearing banks that, of course, I could not bind my successors any more than they could bind their successors. I may perhaps be allowed to recall what I said during the Second Reading Debate to the hon. Member for Mile End (Mr. Piratin). Some people say, "What would happen if we had a Communist Chancellor of the Exchequer? "I would ask in reply," What would happen if we had a lot of Fascist or Mosleyite bank chairmen? "In that event it might be thought disadvantageous to have publicity. But we cannot foresee the future. I hope we may rule out certainly the latter and almost certainly the former. That being so, we can look at the thing in terms of practical prospect. I hope and believe that no successor of mine, even though at some distant date he might be drawn from the party opposite, would repudiate these undertakings which I have given, so far as my term of office is concerned, to the bank chairmen. 1 added that so far as I was concerned, I had no intention of using any direction under this Subsection in order to interfere with the daily work and routine of the banks. I have no desire to interfere with the daily work and routine either of the Bank of England or of the joint stock banks. After all, the powers we are taking in the Bill are general, and are designed to relate primarily to large issues of public policy and, I frankly state, to economic planning and the allocation of priorities in regard to the usage of long-term and short-term credit, and to various matters arising therefrom. I have related the discussions which I had, and the assurance which I gave to the representatives of the joint-stock banks that I would make this statement in the House. The right hon. Gentleman is quite right—we are entering into quite a new period in regard to many aspects of our national life. This Bill is designed to give the Government broad general powers to guide our craft, through perhaps stormy waters, to a goal which I am sure there would be general desire that we should reach, to a harbour into which every hon. Member would desire that we should enter, the harbour of full employment and widespread prosperity. There is no doubt that we should all desire that; the only dispute is as to whether we should have guidance or whether we should let the whole thing drift. We have had experience of drifting, and we think that now is the time when there should be a firm hand upon the tiller—a firm, but let us hope sympathetic, tolerant, intelligently guided hand. So long as I hold this office, I shall always wish to be fully informed of the views entertained in banking circles, particularly by persons who have had long experience in the conduct of banking business such as the two gentlemen I have already referred to, Mr. Colin Campbell and Mr. Edwin Fisher, who have been a long time at the job and who have an accumulated knowledge of economic and financial questions. I shall always wish to keep in touch with such men while I hold this office, and I am sure they approach the matter without any political bias or prejudice at all. I have no right to commit them; I have merely related what I said in my conversations with them. I do not seek to commit them, or to say that they entirely agreed with everything I said; but I hope that I was able to convince them that I want to play the game with them so long as they play the game with me, as I believe they will. This being so, I think it would be disadvantageous to insert this Amendment in the Bill. If I may revert for one moment to what I said earlier, there will be circumstances when the Treasury itself will desire that publicity should be given to directions under this subsection, and when it will take special steps to give publicity. There will be other cases where the Treasury will not wish to initiate publicity, but will have no objection to publicity being initiated by other means. I do not think the procedure proposed in this Amendment is convenient for the purpose. I noted with some interest that it is only the "Commons House of Parliament" before which these directions are to be laid and which is to have the power of rejection within 40 days. I do not know why the Conservative Party have put the House of Lords in Coventry. I thought that in these cases the Conservative Party always contended that if they lost the battle in the House of Commons they hoped to win it in the House of Lords, and I am surprised—It was assumed, possibly wrongly, that this would be certified as a Money Bill, therefore the other place would have no interest.
I think it was rather unkind to the Lords, who have been so kind to the Conservative Party; but I understand now. It will be for Mr. Speaker to express the view whether it is a Money Bill or not, but I understand now why the Lords were left out in the cold. But even on that view, I do not think it would be a convenient procedure. I would again ask the Committee to let this thing start under fair auspices, and I hope that, whatever may be said about the difficulty of binding the future, the Committee will agree that it is likely to start under fair auspices, in view of what I have said about the very friendly relations which now exist between those responsible for the conduct and policy of the clearing banks, the Bank of England and the Treasury. Let us start with good hope of co-operative effort directed to the public benefit, and if, later on, it should be found—contrary to all expectations— that these things go wrong, then let the Conservative Opposition of that time—far off in the future—raise the matter and see whether we can improve upon it then. Meanwhile, let it start, and do not let us diminish the generality of the powers contained in this Clause, or seek to introduce notes of potential dispute and disagreement which I seriously hope will never arise in practice.
7.45 P.m.
The right hon. Gentleman tells us that as a result of this Bill he hopes in future to have a firm hand on the tiller. What we are frightened of is that at the same time he will have a greedy hand in the till, and we want, as far as possible, to remove that temptation, if not from him at least from his successors. Certainly all of us on this side of the House have been extremely gratified by the glowing tribute the right hon. Gentleman has paid to those responsible for the clearing banks. He has described them as public-spirited men with whom he talked, if not with complete agreement, yet obviously with a considerable amount of mutual respect. He paid tribute to their complete lack of any feelings of party politics. What a difference between the description given of these same gentlemen by the right hon. Gentleman and his supporters when they talk outside this House!
The right hon. Gentleman has told us that in the course of his conversations he attempted to give the bankers two reassurances on the way in which the extremely wide—in fact unlimited—powers under this Clause are to be used. The first—and with this we would all agree—was that the powers of the Bank of England, after approval by the Treasury, should not be exercised except first of all after consultation between the Bank of England and the clearing banks, and then after consultation between the clearing banks and the Treasury—indeed, as he said, with the right of direct access to the Chancellor. That is a safeguard of considerable extent with which we all agree. I can, however, see no possible reason why that safeguard cannot be inserted in the Bill. We have now been told, a very great number of times, that of course these powers are very wide, that the Government never intend to use them, but still they must have them. Here is a case where there does not seem to me any difficulty at all to prevent the right hon. Gentleman putting down an Amendment on the next stage expressing this necessity for consultation. He does already provide—Is the right hon. Gentleman proposing an Amendment providing that it shall not be done without consultation with the joint stock banks?
I am suggesting that the right hon. Gentleman should put into legislative form the pledge he has given. He said that he could not bind his successors, and of course he could not, by a pledge given to the House as he gives it this evening; but by inserting it in the Bill he could at least give it statutory force, whoever his successor is, until the House of Commons is prepared to change it. I hope he will give us an assurance that on the next stage he will put down the necessary Amendment. The second assurance which the Chancellor gave filled me with a certain amount of anxiety, because he said it would not be in all cases that the Official Secrets Act would apply to a direction given by the Bank of England to, say, the Midland Bank. I cannot see how the Official Secrets Act could apply in any sense. Although I think the way provided in the Amendment is neater and tidier, because it gives the information immediately to the House instead of waiting for the private banker to approach a Member of Parliament and ask him to put a question, I had always counted on the fact that none of these directions to the banks could be secret, and that every recipient would be entitled to appeal to his Member of Parliament and get his Member of Parliament to raise the matter in the same way as any other matter can be raised. I was amazed to hear the right hon. Gentleman suggest that, even in a proportion of cases, the Official Secrets Act could apply to directions of this sort.
If it is the intention that the direction itself may contain, as one of its terms, a provision that it shall be kept secret, I should say that that would be quite outside the scope and purpose of the Clause, and I hope that as such it would be held to be ultra vires by any court. Unless the right hon. Gentleman the Chancellor can assure us, first, that he will at a later stage include some Amendment to carry out the right of consultation which he has promised, and secondly, that the Official Secrets Act does not apply in any case and that the recipients of these directions will always have the right of access to Members of Parliament for the purpose of raising the matter, we shall certainly have to divide the Committee.I want to give a warning about this Amendment. I am not against consultation on the question of these directions, but I can conceive that it might be necessary to give a direction before it was possible to have consultation and that the consultation would take place after the direction had been given. If there is inserted in the Bill a provision that no direction shall be given before there is consultation, that will bring about a very difficult situation and destroy the effect of much of the Measure. For instance, a clearing bank might be about to make an investment that would go right against the national interest, and it might be necessary for a direction to be given to that clearing bank straight away and for consultation to take place afterwards. To insert a provision that there must be consultation before there can be a direction would have a crippling effect on the Bill.
I think the Chancellor of the Exchequer is trying to meet some of the serious worries which hon. Members on this side have on this matter, but I am inclined to agree with my right hon. Friend the Member for West Bristol (Mr. Stanley) that the Chancellor's assurance will not be really effective unless a provision to that effect is inserted in the Bill. For that reason I support the Amendment. I suggest that the right hon. Gentleman is not being absolutely fair to the Committee. He said that, in addition to consultation with the clearing banks, the chairmen of those banks would be free to publish and make known the directions, and that hon. and right hon. Members would be able to raise those matters in the House. I would like to examine that question a bit further. The method of raising a matter in the House by question and answer is very limited. The method of raising matters in the old half an hour on the Adjournment is also extremely limited, and a vast number of hon. Members are constantly trying to obtain the Adjournment. The right hon. Gentleman said that it would always be possible to put down a Motion of Censure, but is it seriously suggested that we should put down a Motion of Censure simply because of one direction which we do not happen particularly to like? All the Motions of Censure that I have known in the House have been on very grave issues. [An Hon. Member: "What about the last one? "] The last Motion of Censure was an outstanding one, and it was one of the gravest Motions of Censure I have known, as I think time will show.
The Chancellor said that he had met two very charming bank chairmen, one of whom keeps his overdraft. I hope the right hon. Gentleman will be permitted to continue his overdraft, and perhaps even get further credit facilities as a result of his friendly conversations. The right hon. Gentleman said, "These two bankers came to see me and we all got on very nicely indeed." I cannot feel that the Chancellor is such a humble individual that he does not realise that if a lion lies down with a lamb, the lamb has got to get on with the lion or something will happen. The two points which the Chancellor has made have very genuinely met a great deal of doubt which existed in our minds, but I cannot help feeling that this last resort, the direction that may be given by the Treasury and the Bank of England to the clearing banks and which may be resisted by them, is bound to be on a major issue, because in all other cases they will obviously try to co-operate. There is bound to be cooperation, because otherwise the system will not work and the situation will become intolerable. For that reason, I maintain that the Amendment is a reasonable one, and I feel that on the very few occasions when the Bank of England will find it necessary to give directions to the clearing banks, the House should still keep its finger on the pulse of vital issues. If the Amendment is not adopted, I think we shall be giving away another link in the chain of democracy.The Chancellor has resisted this Amendment on the ground that it is a restriction upon the wide and general powers which he feels the Treasury and the Bank of England should have, but as far as I understand him, he objects only because he believes that it may involve the disclosure of some direction
which it would be contrary to the public interest to disclose. That is only likely to happen very rarely indeed.Very rarely.
8.0 p.m.
Therefore, I would make the suggestion that he might perhaps see his way to accept the Amendment, subject to the proviso that there should be an Amendment to the Amendment, providing that, if the Treasury certified, with regard to a particular direction, that it would be contrary to the public interest to disclose it, there should be no obligation to lay that direction before Parliament. In the ordinary course of events, the obligation to lay before Parliament should be there. I think that that would meet the objection which the Chancellor himself made to the Amendment and I hope very much that we may have his observations upon it.
I was glad to hear my right hon. Friend say that he did not propose to accept the Amendment and I hope that he is still of that opinion. I hope also that he will resist the blandishments of the right hon. Gentleman and not accept an Amendment along the lines suggested by him; not to make it a statutory obligation upon him or upon the Bank of England to have consultations prior to any direction coming into force. That would be a very wrong thing to do and would be a wholly ineffective point of view with regard to the objections of hon. and right hon. Gentlemen opposite. What they wish to see inserted in the Bill so as to have statutory obligations, is merely consultation. It is not agreement; it is not even suggested from that side that agreement should be necessary. If they were saying that such direction should not be operative or initiated without the agreement of the chairman of the joint stock banks, I could see some point in the further argument that that should be part of the Bill, but they are not saying that at all. It seems hopeless and derogatory to make that a statutory obligation which could not influence the course of events at all. If there were a difference of opinion between the joint stock banks and the Treasury, then the Treasury view would prevail, and that is the important thing. If that is so, there can be no point at all in making prior consultations a statutory obligation. The essential thing is that this is a fundamental chance in the economy of this country. The question is, Who is going to control large-scale credit in the future? Is it to be the financial institutions or the Treasury, responsible to this House, and, through this House, to the country? Are we to have a planned, purposeful economy or a haphazard economy in the country?
That is what the hon. Member calls it.
Certainly, that is precisely what we set out to do, and I am surprised that anyone should question it. I can understand that they may not approve of our purpose or of the idea that these things are controlled with a communal purpose at all. They do not agree with it, but I can understand it. I do not see why anyone should challenge that the Government have a purposeful economy and this purpose should be the purpose of the representatives of the people and not, as in the past, of uncontrolled, unrestricted private financial capitalists. If we are to have that—and we are—obviously, the ultimate control must be from the Treasury, and I understand that nobody challenges that. The only other point I wish to make is, that obviously in those circumstances the occasion of these directions will have considerable public importance and this House will ultimately be responsible for them. I take it, therefore, that in the vast majority of cases no question of financial concern should arise.
I would like my right hon. Friend, if he thinks it necessary, to dilate a little further on the point. I understood him to say, or to indicate, that it would only be on the rarest possible occasions that any question of any financial secrecy could arise. I apprehend that those circumstances might be circumstances of war or of a very high degree of international tension, which might, unfortunately, result in war. I take it, also, to mean that in circumstances that do not come within either of those categories, the Government would have no intention whatever of withholding sufficient from the House of Commons to enable hon. Members on either side to form their own view and exercise their own responsibility whether the directions were rightly made or not.
I intervene again only to reply to the two suggestions that were made from the Front Opposition bench. May I take them in reverse order for convenience—first, the question of publicity, by one means or another, and, possibly, on a Parliamentary. Debate on one of those directions? I entirely agree with what has been said on both sides of the Committee, last by my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) and before that by the right hon. Member for West Bristol (Mr. Stanley), that very rarely indeed would there be any ground of public interest which should prevent discussion in the House of Commons under one or other of the forms that we have been discussing— a Vote of Censure at one end and the half an hour Adjournment at the other extreme, and conveniently, on some Resolution or on a Supply Day. Rarely indeed would there be any ground of public interest obstructing such discussions.
I am very anxious—and I was when I was talking to Mr. Colin Campbell and Mr. Edwin Fisher—that there should be no misunderstanding about it, and I indicated to them, and I think they accepted the position, and I think I said it to the Committee, that only in very rare circumstances which, perhaps, might not arise if we enter a period of profound peace and of international co-operation would directions under this Clause not be properly and usefully debated in the House. But if we are to be frank with ourselves and face all the dangers of the future with open eyes, it may be that yet again this country will be either at war or so near to war that the very greatest precautions will need to be taken, so that public interest shall not be jeopardised by improper publicity. It was that which I had in mind in making the qualifications I made both in my discussion with representatives of the joint stock banks and in my statement on the matter to the Committee. Very rarely would it be the case, but, occasionally, unhappily, it might be the case that the public interest might properly be held to preclude such discussion, if, for example, the Official Secrets Act were relevant, but only in such case of war, the possibility of war or severely strained international situation. With exclusion made for such an extreme situation, there would not be any reason why these directions should not be discussed in the House. I hope I have satisfactorily dealt with that question. The other matter was whether we should insert in the Bill explicit provision for consultation with the joint stock banks before the issue of such directions. Under Clause 4(1), where there is provision as regard to the Bank of England, the Subsection states:As my hon. Friend pointed out, this refers to consultation and not necessarily agreement. If there was agreement, there would be no need for direction, and the cases of disagreement, I hope, will be very exceptional indeed. It is specifically laid down that there shall be such consultations. As I understand the right hon. Gentleman's proposal, it is that, in Subsection (3) of Clause 4, there should be inserted similar words regarding consultation with the Joint Stock Banks, or the spokesmen of the Joint Stock Banks, or some such words. I will certainly consider that, but I do not want to give a snap answer now. The only thought that occurs to me is that the wording of Clause 4, (1) covers the Governor of the Bank of England, who is a clearly definable person. In the case of the clearing banks, the position would be different, it is quite true, and two gentlemen came to see me the other day—two much respected gentlemen of long experience—and we shall have to be very careful in framing an Amendment to the Bill so as to make quite sure who was entitled to be consulted on behalf of the clearing banks. I should have to have a look at that. [An Hon. Member: "The chairman."] Well, it is a question who would have to be included. There is one chairman, I think, Mr. Colin Campbell, but, anyhow, I will look at it again. All I want to point out to the Committee now is that we must have a greater degree of precision in this case than in the case of the Bank of England, where there is only the one Governor. Here, there are a number of other banks involved, outside the Big Five, but I will look at it again in an attempt to get a form of words exactly parallel, so far as drafting is concerned, to the provision in Clause 4 (1) relating to the Bank of England regarding consultation, but not necessarily agreement. In spite of the cautionary words spoken by the hon. Member for Nelson and Colne, I think it might help to allay needless alarm—[Hon. Members: "It would."]—very well, it would." (1) The Treasury may from time to time give such directions to the Bank as, after consultation with the Governor of the Bank, they think necessary in the public interest."
8.15 p.m.
Not needless?
Anyhow, I will look at it, but I make no promise, and I will see if it is possible and wise to do that. Having done so, I am assuming that the Opposition will now let us have the Amendment.
I think my point was designed to meet the Chancellor's objection. It was simply this—the right hon. Gentleman could accept the Amendment, subject to the Treasury having the right to certify that the disclosure of a particular direction would be contrary to the public interest. The obligation to lay it before Parliament would then no longer arise. Otherwise, there would be the necessity to lay the direction before Parliament. I submit that that would be the ordinary course, and that the necessity for certification would only be very rare. In the ordinary course, laying the directions before Parliament involves no restriction of the Chancellor's powers whatever, except such as this House might think fit to impose by a majority. If the right hon. Gentleman accepted my proposal, there would be no restriction whatever, because, in the event of that exceptional and rare case arising, where there was a real reason to feel that the publication of the direction would be contrary to the public interest, certification could exclude it from the operations of the proviso.
| Division No. 56.] | AYES. | [8.20 p.m. |
| Agnew, Cmdr. P. G. | Eccles, D. M. | Maitland, Comdr. J. W. |
| Amory, D. Heathcoat | Erroll, Col. F. J. | Manningham-Buller, R. E. |
| Assheton, Rt. Hon. R. | Fletcher, W. (Bury) | Marshall, Comdr. D. (Bodmin). |
| Ba | Foster, J. G. (Northwich) | Marshall, S. H. (Sutton). |
| Barlow, Sir J. | Gammans, L. D. | Maude, J. C. |
| Birch, Lt.-Col. Nigel | Glyn, Sir R. | Mellor, Sir J. |
| Bower, N. | Grimston, R. V. | Molson, A. H. E. |
| Boyd-Carpenter, Maj. J. A. | Hare, Lt.-Col. Hon. J. H. (W'dbridge) | Morrison, Rt. Hn. W. S. (Cirencester) |
| Bracken, Rt. Hon. Brendan | Hollis, Sqn.-Ldr. M. C. | Mott-Radclyffe, Maj. C. E. |
| Braithwaite, Lt.-Comdr. J. G. | Hope, Lord J. | Neven Spence, Major Sir B. |
| Buchan-Hepburn, P, G. T. | Howard, Hon. A. | Nicholson, G. |
| Bullock, Capt. M. | Hudson, Rt. Hon. R. S. (Southport) | Nield, B. (Chester) |
| Carson, E. | Hulbert, N. J. | Noble, Comdr. A. H. P. |
| Clarke, Col. R. S. | Hurd, A. | Nutting, Anthony |
| Clifton-Brown, Lt-Col. G. | Jeffreys, General Sir G. | Peake, Rt. Hon. O. |
| Corbett, Lt.-Col. U. (Ludlow) | Kingsmill, Lt.-Col. W. H. | Peto, Brig. C. H. M. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Lancaster, Col. C. G. | Pitman, I. J. |
| Cuthbert, W. N, | Legge-Bourke, Maj. E. A. H. | Ponsonby, Col. C. E. |
| Dodds-Parker, Col. A. D. | Lindsay, Lt.-Col. M. (Solihull) | Poole, O. B. S. (Oswestry). |
| Dower, Lt.-Col. A. V. G. (Penrith) | Linstead, H. N. | Raikes, H. V. |
| Dower, E. L. G. (Caithness) | Low, Brig. A. R. W. | Reed, Sir S. (Aylesbury) |
| Drayson, Capt. G. B. | Lucas-Tooth, Sir H. | Reid, Rt. Hon. J. S. C. (Hillhead) |
| Drewe, C. | MacAndrew, Col. Sir C. | Ropner, Col. L. |
| Duthie, W. s. | Macmillan, Rt. Hon. Harold | Savory, Prof. D. L. |
I am anxious that the hon. Member should not think that I have not given thought to this matter, but this whole procedure, as indicated in this Amendment, is, I think, essentially undesirable. It creates an appearance of conflict in the suggestion made by the hon. Gentleman that the Treasury shall certify and that that certificate might then be called in question and an acrimonious discussion arise in regard to the joint stock banks, with whose interests this discussion is concerned. Although they might have objection in the first instance to the proposals made to them by the Bank of England, none the less the joint stock banks might well prefer that, the direction having been issued, the matter should not further be ventilated in the House. In other words, the proposal which the hon. Gentlemen have suggested might really stir up Debate and discussion where this was, broadly, not advisable, and I repeat that there will be plenty of scope, except in the very rare cases which I have mentioned, such as being in a war zone or near to the war zone, for the matter to be raised and debated, if it is seen to be desirable. If the people connected with the joint stock banks feel that it is really useful, there are many ways in which it can be ventilated in the House. In spite of the suggestion, I must resist the Amendment and ask the Committee to pass this Clause in its pristine form.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 91; Noes, 266.
| Shepherd, S. (Newark) | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) | White, Maj. J. B. (Canterbury) |
| Shepherd, Lieut. W. S. (Bucklow) | Thornton-Kemsley, Col. C. N. | Willink, Rt. Hon. H. U.. |
| Smith, E. P. (Ashtord) | Touche, G. C. | York, C |
| Stanley, Rt. Hon. O. | Turton, R. H. | |
| Stoddart- Scott, Col. M. | Vane, W. M. T. | TELLERS FOR THE AYES: |
| Stuart, Rt. Hon. J. | Wakefield, Sir W. W. | Sir Arthur Young and |
| Sutcliffe, H. | Walker-Smith, Lt.-Col. D. | Mr. Studholme. |
| Taylor, C. S. (Eastbourne) | Wheatley, Col. M.J. |
| NOES | ||
| Adams, Capt. Richard (Balham) | Edelman, M. | Marquand, H. A. |
| Adams, W. T. (Hammersmith, South) | Edwards, (Caerphilly) | Marshall, F. (Brightside). |
| Adamson, Mrs. J. L. | Edwards, W. J. (Whitechapel) | Mathers, G. |
| Allen, Scholefield (Crewe) | Evans, E. (Lowestoft) | Mayhew, C. P. |
| Alpass, J. H. | Evans, S. N. (Wednesbury) | Messer, F. |
| Anderson, F. (Whitehaven) | Farthing, W. J. | Middleton, Mrs. L |
| Attewell, H. C. | Fletcher, E. G. M. (Islington, E.) | Mitchison, Maj. G. R. |
| Austin, H. L. | Follick, M. | Morgan, Dr. H. B. |
| Ayles, W. H. | Freeman, Maj. J. (Watford) | Morris, P. (Swansea, W.) |
| Ayrton Gould, Mrs. B. | Gaitskell, H. T. N. | Morris, Hopkin (Carmarthen) |
| Bacon, Miss A. | Gallacher, W. | Mort, D. L. |
| Baird, Capt. J. | Gibbins, J. | Moyle, A. |
| Balfour, A. | Gibson, C. W. | Murray, J. D. |
| Barstow, P. G. | Glanville, J. E. (Consett) | Nally, W. |
| Barton, C. | Gooch, E. G. | Naylor, T. E. |
| Battley, J. R. | Goodrich, H. E. | Neal, H. (Claycross) |
| Bechervaise, A. E. | Gordon-Walker, P. C. | Nichol, Mrs. M. E. (Bradford, N.) |
| Belcher, J. W. | Greenwood, Rt. Hon. A. | Nicholls, H. R. (Stratford) |
| Bellenger, F. J. | Grenfell, D. R. | Noel-Buxton, Lady |
| Berry, H. | Grey, C. F. | O'Brien, T. |
| Beswick, Flt.-Lieut. F. | Grierson, E. | Oldfield, W. H. |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Griffiths, Rt. Hon. J. (Llanelly) | Oliver, G. H. |
| Bing, Capt. G. H. C. | Guest, Dr. L. Haden | Paget, R. T. |
| Binns, J. | Gunter, Capt. R. J. | Paling, Rt. Hon. Wilfred (Wentworth) |
| Blackburn, Capt. A. R. | Hall, W.G. (Colne Valley) | Paling, Will T. (Dewsbury) |
| Blyton, W. R. | Hamilton, Lieut.-Col. R. | Palmer, A. M. F. |
| Boardman, H. | Hannan, W. (Maryhill) | Pargiter, G. A. |
| Bottomley, A. G. | Hastings, Dr. Somerville | Parkin, Fit.-Lieut. B. T. |
| Bowden, Fig.-Offr. H. W. | Haworth, J. | Pearson, A. |
| Bowles, F. G. (Nunealon) | Henderson, J. (Ardwick) | Peart, Capt. T. F. |
| Braddock, Mrs. E. M. (L'p'l, Exchge) | Herbison, Miss M. | Perrins, W. |
| Braddock, T. (Mitcham) | Hewitson, Capt. M. | Piratin, P. |
| Brook, D. (Halifax) | Holman, P. | Platts-Mills, J. F. F. |
| Brooks, T. J. (Rothwell) | Horabin, T. L. | Poole, Major Cecil (Lichfield). |
| Brown, George (Belper) | House. G. | Popplewell, E. |
| Brown, T. J. (Ince) | Hudson, J. H. (Ealing, W.) | Pritt, D. N. |
| Bruce, Maj. D. W. T. | Hughes, Hector (Aberdeen, N.) | Proctor, W. T. |
| Buchanan, G. | Hughes, Lt. H. D. (W'lverh'pton, W.) | Pryde, D. J. |
| Burke, W. A. | Isaacs, Rt. Hon. G. A. | Pursey, Cmdr. H. |
| Butler, H. W. (Hackney, S.) | Irving, W. J. | Ranger, J. |
| Byers, Lt.-Col. F. | Janner, B. | Rees-Williams, Lt.-Col. D. R. |
| Callaghan, James | Jeger, Capt. G. (Winchester) | Reeves, J. |
| Chamberlain, R. A. | Jeger, Dr. S. W. (St. Pancras, S.E.) | Reid, T. (Swindon) |
| Champion, A. J. | Jones, A. C. (Shipley) | Rhodes, H. |
| Clitherew, R. | Jones, D. T. (Hartlepools) | Robens, A. |
| Cluse, W. S | Jones, P. Asterley | Roberts, Sq.-Ldr. Emrys O. (M'rion'th) |
| Cocks, F. S | Keenan, W. | Roberts, Goronwy (Caernarvonshire) |
| Collick, P. | Kenyon, C. | Rogers, G. H. R. |
| Collins, V. J. | Key, C. W. | Royle, C. |
| Colman, Miss G. M. | Kinghorn, Sqn.-Ldr. E. | Sargood, R. |
| Comyns, Dr. L. | Kinley, J. | Scott-Elliot, W. |
| Cooper, Wing-Comdr. G. | Lang, G. | Sharp, Lt.-Col. G. M. |
| Corlett, Dr. J. | Lavers, S. | Shawcross, C. N. (Widnes) |
| Corvedale, Viscount | Lawson, Rt. Hon. J. J. | Shawcross, Sir H. (St. Helens) |
| Cove, W. G. | Lee, F. (Hulme) | Shinwell, Rt. Hon. E. |
| Crossman, R. H. S. | Leslie, J. R. | Shurmer, P. |
| Daines, P. | Levy, B. W. | Silverman, J. (Erdington) |
| Dalton, Rt. Hon. H. | Lewis, A. W. J. (Upton) | Silverman, S. S. (Nelson) |
| Davies, Edward (Burslem) | Lindgren, G. S. | Simmons, C. J. |
| Davies, Clement (Montgomery) | Lipson, D. L. | Skeffington-Lodge, Lt. T. C. |
| Davies, Ernest (Enfield) | Lipton, Lt..-Col. M. | Skinnard, F. W. |
| Davies, Haydn (St. Pancras, S.W.) | Longden, F. | Smith, Ellis (Stoke) |
| Davies, R. J. (Westhoughton) | McAdam, W. | Smith, S. H. (Hull, S.W.) |
| Deer, G. | McAllister, G. | Smith, T. (Normanton) |
| de Freitas, Geoffrey | McEntee, V. La T. | Snow, Capt. J. W. |
| Delargy, Captain H. J. | McGhee, H. G. | Solley, L. J. |
| Diamond, J. | Mack, J. D. | Sorensen, R. W. |
| Dobbie, W. | McKay, J. (Wallsend) | Soskice, Maj. Sir F. |
| Dodds, N. N. | Maclean, N. (Govan) | Sparks, J. A. |
| Douglas, F. C. R. | McLeavy, F. | Stamford, W. |
| Driberg, T. E. N. | Mainwaring. W. H. | Steele, T. |
| Dugdale, J. (W- Bromwich) | Mallalieu, J. P. W. | Stephen, C. |
| Dumpleton, C. W. | Mann, Mrs. J. | Stewart, Capt. Michael (Fulham, E.) |
| Dye, S. | Manning, Mrs. L. (Epping). | Stubbs, A. E. |
| Summerskill, Dr. Edith | Walkden, E. | Williams, Rt. Hon. T. (Don Valley) |
| Symonds, Maj. A. L. | Walker, G. H. | Williams, W. R. (Heston) |
| Taylor, H. B. (Mansfield) | Watkins, T. E. | Williamson, T. |
| Taylor, R. J. (Morpeth) | Webb, M. (Bradford, C.) | Willis, E. |
| Taylor, Dr. S. (Barnet) | Weitzman, D. | Wills, Mrs. E. A. |
| Thomas, I. O. (Wrekin). | Wells, P. L. (Faversham) | Wilson, J. H. |
| Thomas, John R. (Dover) | Wells, Maj. W. T. (Walsall) | Woods, G. S. |
| Thomas, George (Cardiff) | White, H. (Derbyshire, N.E.) | Wyatt, Maj. W. |
| Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) | Whiteley, Rt. Hon. W. | Yates, V. F. |
| Tiffany, S. | Wigg, Col. G. E. C. | Young, Sir R. (Newton) |
| Tolley, L. | Wilcock, Group-Capt. C. A. B. | Younger, Maj. Hon. K. G. |
| Tomlinson, Rt. Hon. G. | Wilkes, Maj. L. | Zilliacus, K. |
| Ungoed-Thomas, L. | Wilkins, W. A. | |
| Vernon, Maj. W. F. | Wilkinson, Rt. Hon. Ellen | TELLERS FOR THE NOES: |
| Viant, S. P. | Willey, F. T. (Sunderland) | Mr. Collindridge and |
| Wadsworth, G. | Willey, O. G. (Cleveland) | and Captain Blenkinsop. |
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
8.30 p.m.
I was a little embarrassed at one stage by the friendship which seemed to be engendered between the two Front Benches, but I was glad to see the other side, in spite of the extremely generous offer made by my right hon. Friend, insisting on taking this matter to a Division. I would like to remind my right hon. Friend the Chancellor of the Exchequer that the right hon. Gentleman the Member for West Bristol (Mr. O. Stanley) spoke about this Clause as being extremely wide and, indeed, unlimited. My right hon. Friend has been willing to grant a certain concession and it seems to me that it has been granted in too wide a fashion. He has limited this Clause by the words:
The words "particular customer" would not merely cover an individual person like myself or other hon. Members; they most certainly ought to be directed against groups of persons, but they would, unfortunately, also cover big business corporations of all kinds, such as Imperial Chemical Industries or Lever Brothers. I would remind my right hon. Friend of the exact words, which he himself quoted, in the speech which he made on Second Reading, when he said that the object of this Clause was" Provided that no such request or recommendations shall be made with respect to the affairs of any particular customer of a banker."
If the operations of commercial banks are to be harmonised with industrial needs it is necessary that the Government should be able, by means of this Clause, to restrict the financial operations of mono- polies and cartels and other interests when those financial operations are clearly seen to be against the interest of the public as a whole, and in particular that the Government should have power to restrict the granting of credits to big business." to ensure that the operations of the other banks are harmonised with industrial needs." —[Official Report, 29th October, 1945; Vol. 415, c. 52.]
The hon. and gallant Member is getting out of Order. He is now discussing on the Clause what should have been discussed on the Amendment.
With respect, I am trying to make a submission as to this Clause as it now stands in the hope that between now and Report stage my right hon. Friend might be prepared to introduce an Amendment. I am not discussing that particular Amendment; I am merely trying to state what is the effect of this Clause as amended and relate it to the speech that my right hon. Friend made when he dealt with this Clause on Second Reading. As I understand it, that is in Order, and my right hon. Friend appreciates the point. The exact words that he himself used on Second Reading for the purpose of acceding to the points made by hon. Gentlemen opposite were these:
That is, the desire to make it plain that this Clause is not intended in any way to catch private persons or individuals who may be trying to "dodge the column," to use the right hon. Gentleman's phrase, either for evasions under the Income Tax Acts or in other respects. What I am asking my right hon. Friend to do, and it is, if I may say so, in line with what I think he once described as an "exhilarating experience" at Blackpool, is to consider between now and the Report stage whether he cannot so limit this Clause that it would still entitle the banks to issue directions in respect of monopolies, cartels or other big business or trade corporations with a capital say, exceeding £100,000. I feel sure my right hon. Friend knows perfectly well that the synthetic fury engendered from the benches opposite would be as nothing compared with the real fury that would be engendered among those who are his supporters if at any stage they thought that as a result of pressure opposite these monopolies, or cartels, or big business interests were allowed to slip through the mesh which my right hon. Friend has so carefully prepared. I would ask him to consider these suggestions between now and Report stage, and I feel sure that if he can give effect to them it will have a most heartening effect on the movement to which he and I are proud to belong." This Bill is not aimed at forcing disclosure of any confidential or private information in order to deal with those …who may be trying to ' dodge the column ' of honest citizens. If we want more powers to deal with that sort of person we shall take them under other Statutes. To make this plain I should be prepared … to propose an Amendment covering this particular point." —[Official Report, 29th October, 1945; Vol. 415, c. 53.]
May I say before the discussion of this Clause closes that we have no alternative but to vote against it because of its extreme width and unlimited nature? It is true that the right hon. Gentleman has been good enough to make the concession which he outlined earlier, but it is true also that he has not accepted any of our Amendments, provisos, which we put down and to which we attach great importance. Indeed, the Clause in our view is not really necessary. It is not necessary or essential for bringing the capital stock of the Bank into public ownership and for bringing the Bank under public control, which are the first two and the main objectives of this Bill. We had interesting evidence on the Select Committee from the Governor of the Bank indicating that up till now, at any rate, there has been no difficulty on his part in securing the assent of the joint stock banks to the policy which he and the Treasury and the Chancellor of the Exchequer of the day had thought necessary. Powers of persuasion had always in the past been effective, and there is no reason to suppose that those powers would not be equally effective in future. It is because of the extremely wide and unlimited nature of this Clause that we propose to divide the Committee against it.
My hon. and gallant Friend the Member for King's Norton (Captain Blackburn) has raised a very interesting point regarding the control of cartels and monopolies. In my view that is an important matter, and in the view of the Government it is an important matter, and before this Parliament has run its length we hope to introduce a Measure to deal with it. But not this Measure. I gave an undertaking that I would put in a provision in such terms as I have put down in the Amendment accepted by the Committee excluding from the scope of this Measure inquiry into the affairs of particular customers, and it would not be right for me to say that I would look at that again. I think that is right as it is, and as it has been accepted by the Committee, but it does not rule out dealing with the point which my hon. and gallant Friend has raised in another Statute. I am surprised at the ingratitude of my right hon. and gallant Friend opposite. I stretched out both arms to help him and to give him what he wanted; I said that I would look at the possibility of inserting the words "consultation with the joint stock banks "; and I am very much surprised and deeply grieved at the attitude of the right hon. and gallant Gentleman.
I, too, am a little bit uneasy about this Clause. I. do not want to take up the time of the Committee, because I know how anxious the general public are that this Bill should go through—I mean the supporters of hon. Members opposite, because they are all waiting for the great share-out when this Bill becomes law. We have heard this afternoon about this question of greater or less, and I feel apprehension that under this Clause the Government may wish to use powers which are going to limit the possibilities of the joint stock banks and divert their business to the Bank of England itself. The question was raised earlier whether the Bank of England is to be regarded as a revenue producer. Is it to be like the Post Office? Are we to expect to receive £10,000,000 a year for the National Exchequer from the Bank of England? If that is so, it is natural that action might be taken which would divert business that normally would go to the banks to the Bank of England, in particular in connection with the large sums of money that will have to be raised in the near future to finance this country's recovery. The Official Secrets Act has been mentioned this afternoon in connection with the Bank of England business, and the Chancellor himself a short while ago talked about national planning and the broad general part that would play. I do not like that term at all. I think this
| Division No. 57.] | AYES. | [8.42 p.m. |
| Adams, Capt. Richard (Balham) | Edelman, M. | Marshall, F. (Brightside) |
| Adams, W. T. (Hammersmith, South) | Edwards, N. (Caerphilly) | Mathers, G. |
| Adamson, Mrs. J. L. | Edwards, W. J. (Whitechapel) | Mayhew, C. P. |
| Allen, Scholefield (Crewe) | Evans, E. (Lowestoft) | Messer, F. |
| Alpass, J. H. | Evans, S. N. (Wednesbury) | Middleton, Mrs. L. |
| Anderson, F. (Whitehaven) | Farthing, W. J. | Mitchison, Maj. G. R. |
| Attewell, H. C. | Fletcher, E. G. M. (Islington, E.) | Morgan, Dr. H. B. |
| Austin, H. L. | Folliok, M. | Morris, P. (Swansea, W.) |
| Ayles, W. H. | Freeman, Maj. J. (Watford) | Mort, D. L. |
| Ayrton Gould, Mrs. B. | Gaitskell, H. T. N. | Moyle, A. |
| Bacon, Miss A. | Gallacher, W. | Murray, J. D. |
| Baird, Capt. J. | Gibbins, J. | Nally, W. |
| Balfour, A. | Gibson, C. W. | Naylor, T. E. |
| Barstow, P. G. | Glanville, J. E. (Consett) | Nichol, Mrs. M. E. (Bradford, N.) |
| Barton, C. | Gooch, E. G. | Nicholls, H. R. (Stratford) |
| Battley, J. R. | Goodrich, H. E. | Noel-Buxton, Lady |
| Bechervaise, A. E. | Gordon-Walker, P. C. | O'Brien, T. |
| Belcher, J. W. | Greenwood, Rt. Hon. A. | Oldfield, W. H. |
| Bellenger, F. J. | Grenfell, D. R. | Oliver, G. H. |
| Berry, H. | Grey, C. F. | Paget, R. T. |
| Beswick, Flt.-Lieut. F. | Grierson, E. | Paling, Rt. Hon. Wilfred (Wentworth) |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Griffiths, Rt. Hon. J. (Llanelly) | Paling, Will T. (Dewsbury) |
| Bing, Capt. G. H. C. | Guest, Dr. L. Haden | Palmer, A. M. F. |
| Binns, J. | Gunter, Capt. R. J | Pargiter, G. A. |
| Blackburn, Capt. A. R. | Hall, W. G. (Colne Valley) | Parkin, Flt.-Lieut. B. T. |
| Blyton, W. R. | Hamilton, Lieut.-Col. R. | Peart, Capt. T. F. |
| Boardman, H. | Hannan, W. (Maryhill) | Perrins, W. |
| Bottomley, A. G. | Hastings, Dr. Somerville | Piratin, P. |
| Bowden, Flg.-Offr. H. W. | Haworth, J. | Platts Mills, J. F. F. |
| Braddock, Mrs. E. M. (L'p'l, Exch'ge) | Henderson, A. (Kingswinford) | Poole, Major Cecil (Lichfield). |
| Braddock, T. (Mitcham) | Henderson, J. (Ardwick) | Popplewell, E. |
| Brook, D. (Halifax) | Herbison, Miss M. | Pritt, D. N. |
| Brooks, T. J. (Rothwell) | Hewitson, Capt. M. | Proctor, W. T. |
| Brown, George (Belper) | Holman, P. | Pryde, D. J. |
| Brown, T. J. (Ince) | House, G. | Pursey, Cmdr. H. |
| Bruce, Maj. D. W. T. | Hudson, J. H. (Ealing, W.) | Ranger, J. |
| Buchanan, G. | Hughes, Hector (Aberdeen, N.) | Rees-Williams, Lt.-Col. D. R. |
| Burke, W. A. | Hughes, Lt. H. D. (W'lverh'pion, W.) | Reeves, J. |
| Butler, H. W. (Hackney, S.) | Isaacs, Rt. Hon. G. A. | Reid, T. (Swindon) |
| Callaghan, James | Irving, W. J. | Rhodes, H. |
| Champion, A. J. | Janner, B. | Robens, A. |
| Clitherow, R. | Jeger, Capt. G. (Winchester) | Roberts, Sq.-Ldr. Emrys O. (M'rion'th) |
| Cluse, W. S. | Jeger, Dr. S. W. (St. Pancras, S.E.) | Roberts, Goronwy (Caernarvonshire) |
| Cocks, F. S. | Jones, D. T. (Hartlepools) | Rogers, G. H. R. |
| Coldrick, W. | Jones, P. Asterley | Royle, C |
| Collick, P. | Keenan, W. | Sargood, R. |
| Collindridge, F. | Kenyon, C. | Scott-Elliot, W. |
| Collins, V. J. | Kinghorn, Sqn.-Ldr. E. | Sharp, Lt.-Col. G. M. |
| Colman, Miss G. M. | Kinley, J. | Shawcross, C. N. (Widnes) |
| Comyns, Dr. L. | Lang, G. | Shawcross, Sir H. (St. Helens) |
| Cooper, Wing-Comdr. G. | Lavers, S. | Shinwell, Rt. Hon. E. |
| Cerlett, Dr. J. | Lawson, Rt. Hon. J. J. | Shurmer, P. |
| Corvedale, Viscount | Lee, F. (Hulme) | Silverman, J. (Erdington) |
| Cove, W. G. | Leslie, J. R. | Silverman, S. S. (Nelson) |
| Crossman, R. H. S. | Levy, B. W. | Simmons, C. J. |
| Daines, P. | Lewis, A. W. J. (Upton) | Skeffington-Lodge, Lt. T. C. |
| Dalton, Rt. Hon. H. | Lindgren, G. S. | Skinnard, F. W. |
| Davies, Edward (Burslem) | Lipson, D. L. | Smith, Ellis (Stoke) |
| Davies, Ernest (Enfield) | Lipton, Lt.-Col. M. | Smith, S. H. (Hull, S.W.) |
| Davies, Haydn (St. Pancras, S.W.) | Longden, F. | Smith, T. (Normanton) |
| Davies, R. J. (Westhoughton) | McAdam, W. | Snow, Capt. J. W. |
| Deer, G. | McAllisler, G. | Solley, L. J. |
| de Freitas, Geoffrey | McEntee, V. La T. | Sorensen, R. W. |
| Delargy, Captain H. J. | McGhee, H. G. | Soskice, Maj. Sir F. |
| Diamond, J. | Mack, J. D. | Sparks, J. A. |
| Dobbie, W. | McKie, J. H. (Galloway) | Stamford, W. |
| Dodds, N. N. | Maclean, N. (Govan) | Steele, T. |
| Douglas, F. C. R. | McLeavy, F. | Stephen, C. |
| Driberg, T. E. N. | Mainwaring. W. H. | Stewart, Capt. Michael (Fulham, E.) |
| Dugdale, J. (W. Bromwich) | Mallalieu, J. P. W. | Stubbs, A. E. |
| Dumpleton, C. W. | Mann, Mrs. J. | Summerskill, Dr. Edith |
| Dye, S. | Manning, Mrs. L. (Epping) | Swingler, Capt. S. |
Clause is far too broad and far too general and I shall vote against it.
Question put, "That the Clause, as amended, stand part of the Bill."
The Committee divided: Ayes, 261; Noes, 80.
| Symonds, Maj. A. L. | Walker, G. H. | Williams, Rt. Hon. T. (Don Valley) |
| Taylor, H. B. (Mansfield) | Watkins, T. E. | Williams, W. R. (Heston) |
| Taylor, R. J. (Morpeth) | Webb, M. (Bradford, C.) | Williamson, T. |
| Taylor, Dr. S. (Barnet) | Weitzman, D. | Willis, E. |
| Thomas, I. O. (Wrekin) | Wells, P. L. (Faversham) | Wills, Mrs. E. A. |
| Thomas, John R. (Dover) | Wells, Maj. W. T. (Walsall) | Wilson, J. H. |
| Thomas, George (Cardiff) | White, H. (Derbyshire, N.E.) | Wise, Major F. J. |
| Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) | Whiteley, Rt. Hon. W. | Woods, G. S. |
| Thorneycroft, H. (Manchester, C.) | Wigg, Col. G. E. C. | Wyatt, Maj. W. |
| Tiffany, S. | Wilcock, Group-Capt. C. A. B. | Yates, V. F. |
| Tomlinson, Rt. Hon. G. | Wilkes, Maj. L. | Young, Sir R. (Newton) |
| Ungoed-Thomas, L. | Wilkins, W. A. | Younger, Maj. Hon. K. G. |
| Vernon, Maj. W. F. | Wilkinson, Rt. Hon. Ellen | Zilliacus, K. |
| Viant, S. P. | Willey, F. T. (Sunderland) | |
| Wadsworth, G. | Willey, O. G. (Cleveland) | TELLERS FOR THE AYES: |
| Walkden, E. | Williams, Rt. Hon. E. J. (Ogmore) | Mr. Pearson and Captain Blenkinsop. |
| NOES | ||
| Agnew, Cmdr. P. G. | Hollis, Sqn.-Ldr. M. C. | Poole, O. B. S. (Oswestry) |
| Amory, D. Heathcoat | Hope, Lord J. | Raikes, H. V. |
| Baldwin, A. E. | Howard, Hon. A. | Reed, Sir S. (Aylesbury) |
| Barlow, Sir J. | Hulbert, N. J. | Reid, Rt. Hon. J. S. C. (Hillhead) |
| Birch, Lt.-Col. Nigel | Hurd, A. | Ropner, Col. L. |
| Boyd-Carpenter, Maj. J. A. | Jeffreys, General Sir G. | Savory, Prof. D. L. |
| Braithwaite, Lt.-Comdr. J. G. | Legge-Bourke, Maj. E. A. H. | Shephard, S. (Newark) |
| Buchan-Hepburn, P. G. T. | Lindsay, Lt.-Col. M. (Solihull) | Shepherd, Lieut. W. S. (Bucklow) |
| Bullock, Capt. M. | Low, Brig. A. R. W. | Stanley, Rt. Hon. O. |
| Carson, E. | Lucas-Tooth, Sir H. | Stoddart-Scott, Col. M. |
| Clarke, Col. R. S. | MacAndrew, Col. Sir C. | Stuart, Rt, Hon. J. |
| Clifton-Brown, Lt.Col. G. | Macmillan, Rt. Hon. Harold | Studholme, H. G. |
| Corbett, Lt.-Col. U. (Ludlow) | Maitland, Comdr. J. W. | Sutcliffe, H. |
| Crookshank, Capt. Rt. Hon. H, F. C. | Manningham-Buller, R. E. | Taylor, C. S. (Eastbourne) |
| Cuthbert, W. N. | Marshall, Comdr. O. (Bodmin) | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) |
| Dodds-Parker, Col. A. D. | Maude, J. C. | Thornton-Kemsley, Col. C. N. |
| Dower, Lt. Col. A. V. G. (Penrith) | Mellor, Sir J. | Touche, G. C. |
| Dower, E. L. G. (Caithness) | Morrison, Rt. Hn. W. S. (Cirencester) | Turton, R. H. |
| Drayson, Capt. G. B. | Mott-Radclyffe, Maj. C. E. | Vane, W. M. T. |
| Duthie, W. S. | Neven-Spence, Major Sir B. | Wakefield, Sir W. W. |
| Eccles, D. M. | Nicholson, G. | Walker-Smith, Lt.-Col. D. |
| Erroll, Col. F. J. | Nield, B. (Chester) | Wheatley, Col. M. J. |
| Fletcher, W. (Bury) | Noble, Comdr. A. H. P. | White, Maj. J. B. (Canterbury) |
| Foster, J. G. (Northwich) | Nutting, Anthony | Willink, Rt. Hon. H. U. |
| Gammans, L. D. | Peake, Rt. Hon. O. | |
| Glyn, Sir R. | Peto, Brig. C. H. M. | TELLERS FOR THE NOES: |
| Grimston, R. V. | Pitman, I. J. | Sir Arthur Young and Mr. Drewe. |
| Hare, Lt.-Col. Hon. J. H. (W'dbridge) | Ponsonby, Col. C. E. | |
Clause, as amended, ordered to stand part of the Bill.
Clauses 5 and 6 ordered to stand part of the Bill.
First Schedule agreed to.
SECOND SCHEDULE.—( Supplemental provisions as to Court of Directors.)
I beg to move, in page 6, line 11, leave out from beginning, to '' or,'' and insert:
We seek here to delete the words:"Minister of the Crown, or a person serving in a Government Department in employment in respect of which remuneration is payable out of moneys provided by Parliament."
and to substitute the words proposed in this Amendment. This is little more than a drafting Amendment. Since the Bill was printed certain objections to these words have been raised. The words "office of profit under the Crown" are difficult to interpret, as Members of the Select Committee which has recently been sitting are only too well aware. That being so we have sought for words to take their place which are not open to the same ambiguity, which unfortunately we have discovered these particular words now have. We are informed that if the words in the printed Bill remain quite a number of otherwise qualified people might otherwise be disqualified. For instance, a lord lieutenant, a high sheriff or even an officer in the Territorial Army might be said to be a person holding an office of profit under the Crown. It may very well be that a director appointed to serve on the court might be a Territorial officer or possibly a high sheriff, or someone of that kind. Therefore my right hon. Friend suggests we should make the matter quite clear by deleting the words now in the Bill and putting in the words now on the Order Paper. If that were not done another difficulty might well arise about the Governor and the Deputy Governor. As the Schedule reads it says:"… person holding an office of profit under the Crown;"
It has been pointed out recently that the Governor and the Deputy Governor may themselves be holding an office of profit under the Crown, and we might find that they themselves were disqualified by the wording of this particular Schedule. For these reasons I ask the Committee to agree to this Amendment." … a person holding an office of profit …"
:This seems to be a perfectly reasonable Amendment in view of the difficulties that have lately emerged about offices of profit under the Crown. It is obvious that Ministers or civil servants should not be put upon the directorate or become the Governor or Deputy Governor. I do not know if the Chancellor feels inclined to say anything today of to arrange for a further statement to be made soon by the Government on this whole question. There was a committee of inquiry—I do not know whether it was a Select Committee or not —which produced a report raising the whole issue of offices of profit under the Crown. I have it in mind that the late Coalition Government made some statement that in due course the matter would be brought before Parliament. I would like to be quite clear on this: These words which are proposed for this particular case may not be the final definition which will have to take place of an office of profit under the Crown. I hope the Chancellor will be able to say that this is not necessarily to be treated as a precedent. While we accept it in these circumstances, we want to see the whole question solved, if it can be solved, on a far wider basis, and that the proper differentiation shall be made in future as to what is or what is not an office of profit. If we can have some assurance on the general question—I know it is very wide of this Bill—there is no objection to these words being inserted, so far as I am concerned.
I think that is reasonable; these difficulties are largely unforeseen difficulties of interpretation that have arisen lately. These words I am seeking to insert will, as the right hon. and gallant Gentleman says, clear up the matter so far as this Bill is concerned, but I readily assure him that this is not intended to be the final solution of the matter. My right hon. and learned Friend the Attorney-General tells me that he has the matter well in hand. The Government intend to take steps at a suitable moment in the New Year to seek to elucidate the whole matter on a broad basis, with a view to the definition of this, as it now seems, ambiguous phrase.
Amendment agreed to.
Schedule, as amended, agreed to.
Third Schedule agreed to.
Bill reported, with Amendments; as amended, to be considered upon Wednesday, and to be printed [Bill 58].
Emergency Powers (Defence) (Charges)
9.0 p.m.
I beg to move,
This subject is rather a dull one after the one the Committee has already been discussing. I do not think that potatoes can ever be exciting, but the Motion is one with which hon. Members are familiar. This Order is, in fact, similar to that approved by the House for the 1944 crop. It reimposes levies on certain potato sales which have applied during the last four years and is to ensure, as far as practicable, that all those interested in the sale of potatoes are dealt with equitably. It does, to some extent, redress the comparative trading advantages enjoyed by traders who do not use the normal wholesale channels. The Order imposes charges on sales of ware potatoes, that is, potatoes used for human consumption, with the exceptions set out in the Schedule, and the charges are at the following rates: On sales by licensed grower-salesmen, that is, growers licensed to sell direct to retailers and consumers, and on sales made through licensed auctioneers or under special licence; at is. per ton. On sales by licensed potato buyers—retailers licensed to buy direct from growers—at 2s. 6d. per ton. Not more than one charge shall be paid when potatoes pass through the hands of two licensees who are liable to pay. It must be remembered that these levies do not increase the price to the consumer. They are direct impositions on the licensees who are allowed to by-pass the normal wholesale channels. They are deducted from the subsidy due and paid into the Ministry of Food Potato Division Account. They are only collected on sales of main-crop potatoes from 1st December when the subsidy starts. The National Potato Advisory Committee, which is representative of all sections of the industry, has given its approval to the continuance of the levies and, therefore, we can, with confidence, ask the House to approve the Order." That the Potatoes (1945 Crop) (Charges) Order, 1945 (S.R. &., 1945, No. 1493), dated 27th November, 1945, made by the Treasury under Section 2 of the Emergency Powers (Defence) Act, 1939, a copy of which Order was presented on 3rd December, be approved."
Question put, and agreed to.
Elections
Motion made, and Question proposed.
"That a Select Committee be appointed to examine any cases which may be brought to their notice of Members of this House who may have been incapable of election to this House by reason of the fact that at the time of their election they held offices or places of profit under the Crown within the meaning of Section 24 of the Succession to the Crown Act, 1707; and to report whether any such Member was on that account incapable of election to this House, and, if so, what course should be adopted in any such case."—[ Mr. Mathers.]
9.4 p.m.
Are we not to have even a short explanation of this Order by the learned Attorney- General? There are some unusual points in it. I am informed that there is power taken for this Committee to sit during Adjournments of the House and that is, I think, a little unusual. There is also a provision that the quorum shall be—
This Motion is in sections. That will come on a later one.
9.5 p.m.
I regret to have to tell the House that several cases have come to light—there are, in fact, four—in which a question has arisen whether or not certain hon. Members may suffer disqualification from Membership owing to the holding of what may possibly be offices of profit within the meaning of the Statute of Anne. I apprehend that as the matter will have, in any event, to be referred to a Select Committee, it would be undesirable and, indeed, improper that I should invite the House to consider the details affecting these particular cases now, or that I should myself enter into any of the merits.
As an indication of the kind of problem which will have to be considered by the Select Committee, I may perhaps just say this. They will have to consider, for instance, whether the members of a panel, some but not all of whom may occasionally be recruited to form a quasi judicial tribunal, and when sitting as members of such a tribunal may receive more or less nominal remuneration in respect of the days on which they sit, are thereby disqualified from membership of the House owing to the holding of an office of profit under the Crown. That is one case. Another case is whether the writing of a formal letter of resignation after the date of the poll, but before the declaration of the result of the election, is effective to terminate the holding of such an office. Another case, again, is whether an oral arrangement made some considerable time before any question of an election arose, but not formally recorded or acted upon by the Government Department concerned, would be sufficient to terminate the holding of what otherwise might constitute an office of profit under the Crown. These are matters of considerable difficulty, and it would not be possible, nor I think would it be appropriate, for me to attempt to express any final opinion as to whether or not in these cases a disqualification has arisen. The House is itself the arbiter of its own constitution in these matters, and the House will have to consider in relation to each case that it takes into consideration, whether or not a disqualification has arisen. We therefore propose that this Select Committee should be established; and that the Committee should have power to settle the time of its own meetings, to consider such cases as may be referred to it, and to make such report as appears in the circumstances to be right. I should perhaps add that I am not unmindful of the undertaking which I gave earlier in the Session, that we would in due course consider the possibility of introducing legislation to simplify and clarify this very confused and perplexing branch of the law. We intend to do that, and I hope, at all events before the next election occurs, that this branch of the law will have been simplified in that way.Question put, and agreed to.
Ordered: "That Mr. Clement Davies, Mr. Grenfell, Sir Arnold Gridley, Dr. Haden Guest, Mr. Hector Hughes, General Sir George Jeffreys, Mr. Orr-Ewing, Mr. Sydney Silverman and Mr. Webb, be Members of the Committee.—[ Mr. Mathers.]
Motion made, and Question proposed,
" That the Committee have power to send for persons, papers and records; to sit notwithstanding any Adjournment of the House; and to report from time to time."—[Mr. Mathers.]
9.9 p.m.
:I am much obliged to the learned Attorney-General for his explanation of the setting-up of the Committee. The more particular question which I wished to address to him and which you, Mr. Deputy-Speaker, indicated would be better raised at this stage, was the rather unusual provision in a Motion of this character for the Committee to have power to sit, notwithstanding any Adjournment of the House. I cannot ever remember on a similar occasion such a power being taken, and perhaps the learned Attorney-General would tell us why it is necessary to treat this matter as one of such urgency that the Committee may have to sit during the Adjournment of the House.
I understand that, in point of fact, the Select Committee which, was appointed at the beginning of the Session to deal with a rather similar problem, was appointed under exactly similar terms of reference, and did sit during the Adjournment of the House in the early part of September. The matter is, of course, of some urgency. Hon. Members on both sides of the House will no doubt be anxious that the position should be clarified with the least possible delay, at least in regard to the four Members whose cases arise for consideration. I understand that the Committee will be able to sit this week before the Recess and will not then sit again until the House has met again.
Question put, and agreed to.
Ordered:
" That Three be the Quorum."—[ Mr. Mathers.]
National Insurance (Friendly Societies)
Motion made, and Question proposed, "That this House do now adjourn."— [ Mr. Mathers.]
9.12 p.m.
I desire to invite the attention of the House to the subject of friendly societies, with particular reference to the work which they have done and are doing in respect of national insurance. It is not my intention, if only for the very good reason that I understand that I should not be permitted to do so were it my intention, in any way to comment upon forthcoming legislation. It would seem that this is a convenient moment for the House to discuss this matter. Perhaps I might be permitted to say that its relevance and urgency have not been diminished in any way by the answer given on 22nd November by the Minister of National Insurance to a Question put to him by the hon. Member for Norman-ton (Mr. T. Smith). The House will recollect that, in reply to the hon. Member's Question, the Minister gave a perfectly clear statement that it was his intention to exclude the friendly societies from any participation in the future scheme of national insurance.
I approach this subject with the more confidence from the knowledge that the valuable work done by the friendly societies has been drawn to the attention of hon. Members opposite from a source far more authoritative than can be found on this side of the House. I will refresh their memory with certain words which will be familiar to some of them:Those words, which will no doubt bring a reminiscent echo into the minds of hon. Members opposite, arc part of the instructions issued to all Labour candidates at the last Election. I call them in aid, without any intention of transgressing any Rule of Order, but of giving an exposition, far more lucid and convincing than any I could give, of the very valuable work which is done by those societies. I am sure that that admirable exposition commands the loyalty of hon. Members opposite, just as no doubt, its exposition by hon. Members commanded a certain loyalty among some sections of their constituents." The Labour Party is of the view that, in our future social insurance scheme, the system of approved societies shall be abolished, with the exception of bona fide friendly societies and trade unions, who have a long and honourable record of work in both public and voluntary health insurance, and should be free to come in if they wish."
It being a quarter past Nine o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, "That this House do now adjourn."— [ Mr. R. J. Taylor.]
It may be of assistance to the House in considering this matter in all its aspects to bear in mind the facts with regard to these societies at the present moment. I am assured that the present membership of the societies is in the neighbourhood of 8,500,000—a very significant and important section of the population. In the latest year for which figures were available, they distributed in benefits something in excess of £13 million, and their total accumulated funds exceeded £146 million. That solid stake in our national affairs has been, as the House is well aware, the product of solid growth, and the figures, when contrasted with those for 1910, show that growth to have been steady and continuous. The amount of benefits paid in the last year for which figures were available is precisely double that of 1910; the membership has increased by 1,700,000, and the assets have increased by the appreciable amount of £96,000,000.
The societies—and I would emphasise this point—axe democratically-managed and operated societies, of a very wide variety, democratically controlled, which have been administering health insurance benefits for a very considerable number of years. At this particular moment it may not be wholly irrelevant to invite the attention of the House to the fact that, when the late Mr. Lloyd George was introducing his National Health Insurance Act, it was his original intention to exclude the friendly societies from participation in the scheme, but that, for reasons which it will perhaps be unnecessary to enter into, Mr. Lloyd George, when the Act came before the House, took another view and decided to include them. There is sometimes a value in historical precedent. It may assist the House in appreciating the very wide variety of these societies if I give one or two names, selected at random, of the societies whose fate may, it is possible, be decided in the near future. There is, for example—I quote from their annual Conference—the Hearts of Oak Benefit Society, of the Committee of which, I notice, the hon. Member for Southampton is a member; there is the Sheffield Equalised Independent Druids, the National Equalised Druids Friendly Society, the United Order of the Total Abstainent Sons of the Phoenix, there is —and this will perhaps appeal quite solidly to hon. Members opposite—the Northumberland and Durham Miners' Approved Society; the Sincere Second Burial Collecting Society, the Sincere and Humane Perseverance Approved Society and, which will no doubt appeal to certain other hon. Members, the Grand Independent Order of Loyal Caledonian Corks. These few extracts show the width, and variety of these societies, and how widely they are spread over the community. At this particular moment the vital question in connection with all of them which it is appropriate should be in the minds of hon. Members of this House, whatever pledges they may or may not have given, is the part which the societies have played in the administration of National Health Insurance. The fact that 45 percent. of the insured population have elected to have their benefits so administered is perhaps not without significance, and for this reason, that the agents of these societies, who, on the whole, go into the homes of the people and discuss these matters in a friendly and kindly manner, have had their work appreciated by the people with whom they deal, and many such people would be horrified at the idea of having to go and discuss intimate matters affecting their bodies and their health in some Government office before some Government official.On a point of Order, Mr. Deputy-Speaker. Is it in Order on the grounds of anticipation, for the hon. and gallant Member to bring up a matter which, as he says, may conceivably prejudice the futuree organisation of friendly societies?
:The hon. and gallant Member is in Order so far.
Further to the point of Order, may I submit to you, Sir, that the whole reason for having this discussion is that the future of the friendly societies is shortly to be discussed? Therefore I respectfully suggest that it is anticipation of legislation under Standing Order No. 9.
Perhaps the hon. Member will tell me what there is on the Order Paper which the hon. and gallant Member's speech might anticipate? I know of nothing.
I seek your guidance, Mr. Deputy-Speaker. Is it in Order for a matter to be discussed now which is clearly leading up to later legislation?
Perhaps the hon. Member will be good enough to leave the conduct of the Debate in my hands.
I regret if the possible relevance of my historical reminiscences should cause the hon. Member any inconvenience, and I do not propose to speculate about the causes of any undue sensitivity he may feel on the matter. Before the hon. Member's helpful intervention, the point I was attempting to make was that the administration of the national health benefit as it is and has been carried out in the homes of the people, is warmly appreciated by many millions of our fellow countrymen who dislike intensely the idea of any change in that state of affairs, and that, I submit, is a matter upon which public opinion is already abundantly clear.
One of the most valuable parts of the administration of national health benefit by the societies has been the link which that system provides between national insurance and voluntary insurance. It has been the case, and so far as it is possible to anticipate, it will always be the case, that a section of the higher paid and more prudent of our population will desire to augment by voluntary insurance any amount of benefit obtainable from national sources, and it has proved of manifest convenience in the working of such a system that both the voluntary and the State insurance should be administered through the same organisation. It is evident that a saving in expense and in trouble follows from one medical certificate serving to clarify and decide the payment of benefit from both sources, and were it at any time to be intended to change that system, it would surely strike a blow against the provision by individuals of voluntary insurance against sickness. I do not believe that any responsible person who is concerned with the welfare of our people would wish to do anything in any way to diminish the working of a system of voluntary insurance in addition to State insurance. In support of that, I would call in aid an authority whose opinion, not very long ago, it was almost an impertinence to question—Sir William Beveridge. Sir William Beveridge, at that time the Member for Berwick-upon-Tweed, but no longer the Member, on 3rd November, 1944, in column 1130 of the Official Report, said as follows:I call in aid the speeches made by hon. Members opposite denouncing any person who was so rash as to question the dicta of Sir William Beveridge, and I ask those hon. Members to recollect the observations which some of them, without any doubt, made upon that subject. I now call Sir William Beveridge in aid in support of the matters I have been attempting to lay before the House. There is only one other matter I would say. The question of the position of these societies is one of urgency and of relevancy, and I appeal to hon. Members opposite to search their consciences on the subject." I do not believe we can have industrial life offices in the administration of social insurance, and I do not see any reason for doing so in their present form, but we can and should keep the friendly societies as responsible agents. If voluntary insurance is to continue as well as compulsory insurance we must make it easy for people to insure, we must avoid that duplication and overlapping which otherwise would take place in the home of every person who joins friendly societies."—[Official Report, 3rd November, 1944; Vol. 404, c. 1130.]
9.28 p.m.
I wish to ask the Minister most earnestly to reconsider this matter. I know that the Circular is subject to different interpretations. I do not say that what it actually said mattered so much as its timing. When that Circular came out, whatever else it may have been understood to mean, I do not think it was understood by the friendly societies to mean that the Government were proposing to adopt the 1944 plan in toto, on the ground that there was not time to devise anything else. I personally feel that my honour with regard to the friendly societies is somewhat involved in this matter, and that may apply to some other hon. Members, and I ask the Minister to reconsider the matter.
9.29 p.m.
This is a very important matter and one which, obviously, cannot be fully or adequately discussed in the time available on the Adjournment. I will do my best in the time that is available to give the House the considerations which led me and the Government to the decision that we made. Perhaps I may be allowed to say a personal word? This is not the first time upon which I have spoken upon this matter in this House. I took part in the Beveridge Debate more than two years ago and in the Debate on the White Paper a year ago, and I gave, with my colleagues, most earnest consideration to this matter then. The view which I and the Government form now is also the view which I formed 12 months ago and two years ago, from which I have not departed. The hon. and gallant Member for Kingston-on-Thames (Major Boyd-Carpenter) called in aid 1911 and the late Earl Lloyd-George, and it is perfectly true that Mr. Lloyd George as he was in 1911, called in the services of the friendly societies, and, later on, as the result of Questions in this House, was obliged to call in the services of the insurance companies too, and the approved society system was set up.
When it was set up in 1911, the approved society system served the Government more than one purpose. For example, what had to be administered then was the new National Health Insurance Act, which provided for sickness and disablement benefits at certain rates, and also provided maternity benefits, and, by creating the system of approved societies and, making it possible for friendly societies and for the industrial life offices to become approved societies for the administration of the new benefits provided under the new Act, the Government of the day were enabled to avoid creating a machine of their own. In other words, and this is very important, the Government in 1911 were able to hand over the administration of health insurance completely to other bodies. Those are the circumstances in which the approved societies were created. They were made into independent financial units, and, as a result of that over 30 years, the approved society system has grown up and that system has had great advantages for the insured contributors, for the country and for the Government, and no word that I want to say detracts for one moment from the high appreciation which I and everybody has for the work of the friendly and approved societies. But the approved societies have one defect, which, I think, makes their retention as approved societies impossible in the type of scheme I have devised for the Government. They fail to provide equal benefits for equal contribution. These contributions are imposed by this House, and, when we impose equal contributions on men and women in this country, we have an obligation to see that the equal contribution which we compel them to pay provide equal benefits for all. The approved societies fail to do that. The approved societies provide minimum benefits for some sections of the population and additional benefits for others, and, by and large, they provide additional benefits for those among whom the incidence of sickness is least.On a point of Order. May I ask if the Minister is talking of friendly societies as distinct from approved societies?
I have to deal with both, and I say that, if the friendly societies have to go,' the approved societies must go. I have provided for that, and I think it is agreed on all sides of the House that such a system must go.—[Hon. Members: "No."]— I must ask what the hon. and gallant Member is pleading for—that the friendly societies or the others shall come in as approved societies in the existing system or not?
If the right hon. Gentleman challenges me, I can give him the answer in one sentence. My plea was for the inclusion of friendly societies to help to administer the scheme.
I must say that that is out of Order, because it involves legislation.
I wanted to get clear what was the proposal of the hon. and gallant Member regarding whether they should help us, and under what terms and conditions, in approved societies or in any other way. I can explain the position best by referring to 1911. The new scheme which I shall bring forward, in the form to which the Government is committed—
That requires legislation.
I do not think it is possible for me to explain why we made this decision unless I refer to the legislation.
There was no point about the speech.
Let me set out briefly what are the essential differences in structure between the new scheme and the existing scheme. The first is this: the new scheme will cover virtually the whole of the population—the whole of the population will be an insured population. Secondly, it will be a unified scheme— one contribution, one stamp, one fund. It will provide benefits—
On a point of Order, Mr. Speaker. As I understood your Ruling just now, when my hon. and gallant Friend the Member for Kingston-upon-Thames (Major Boyd-Carpenter) intervened, you ruled that we could not discuss the inclusion of friendly societies in the scheme. It now appears that the Minister is giving us a description of the new scheme, and I respectfully ask whether it is in Order.
The hon. Gentleman should not have put down a matter of this sort for discussion on the Adjournment. I was not here. I agree that the Minister is in a state of great difficulty.
I take your Ruling upon it, Mr. Speaker. I am indeed in very great difficulty. What I have decided, and what I announced to the House the other day, was that, when the new scheme came forward before this House, it would come upon the basis that all approved societies, including friendly societies, would be excluded. I have to explain why I and the Government have arrived at that decision. I cannot explain that decision unless I am allowed to relate it to the new scheme from which they are excluded. I ask your Ruling upon it, Sir.
I am not quite sure, but I rather feel myself that the matter having been raised like this, the right hon. Gentleman ought to say that the whole thing is out of Order and that he cannot reply, unless he feels strongly that some reply should be given.
Further to that point of Order. As the decision was announced in answer to a Question a few weeks ago, would it be in Order for the Minister to justify why he gave that answer?
Not without breaking the Rules of Order.
If I may deal with that point, Sir, I made the statement the other day—I made it clearly—announcing the decision of the Government without prejudicing the rights of Parliament when we come to discuss the matter, but I said it was essential that I should make an announcement then because it was desirable that certain negotiations should begin at once. Obviously, they could not begin before the announcement had been made in the House, but I made it perfectly clear that that announcement was made without prejudice to future discussion in the House. But I must say this if I may: this is an important matter and what I want to say about it involves references to legislation that is contemplated. I do not think I could do justice to the Government's case, certainly not to the friendly societies, unless I was free to discuss our decision and to relate it to the context of the new scheme which we are putting forward.
Yes, I think the right hon. Gentleman might do that, although we are breaking the Rule for the time being. The matter is one which should not have been brought up on the Adjournment.
Thank you very much, Mr. Speaker. In the five minutes that remain to me I will do my best to make the case briefly and shortly. Here is the position. The new scheme will bring in virtually everybody in the population. It will be a unified scheme with one contribution, one stamp, one fund. It will cover the whole of a wide series of benefits. It is, therefore, a comprehensive scheme and a unified scheme.
Let me come to what is the ground upon which we stand in this matter. The Government have to provide comprehensive machinery for the administration of this new scheme. They cannot possibly delegate this work to any other agency, for no other agency covers the whole of the insured population, and no other agency provides this wide variety of benefits. We shall have to create our own machinery, covering the whole of this country, by which and through which we shall administer the benefits provided under this new scheme to all those who will be compelled to contribute. We cannot, therefore, do what the Government did in 1911; we cannot delegate this work to some other body. Since we have to administer it ourselves, what we have to consider is this: is it desirable that we should, in addition to providing our own machinery for the administration of this scheme, have dual administration? That is clearly what it means. We must have our network of offices throughout the length and breadth of this country; that will be essential in order to administer these benefits for all the people covered by it—employed people, self-employed people, and everyone else. It is clear that we must do that. I therefore have to look at it from that standpoint—not whether I should find another agency that would be able to do this job for us, for no agency can. I have to realise that we shall have to provide our own comprehensive machinery and that if any other agency were brought in it would mean dual administration which would not be justified except on the soundest grounds. There are other reasons too. The suggestion has been made that the administration of some of these benefits should be delegated to the friendly societies as agents. This is a co-ordinated scheme providing benefits of various kinds, some of which are co-ordinated together. The hon. Member opposite has sat with me in Standing Committee A discussing the Industrial Injuries Bill, and in the consideration of that Bill I have indicated that at certain stages and in certain circumstances those who are entitled to industrial injuries' benefits will also be entitled to sickness benefits under the new proposals. It is a part of this scheme.Surely all those facts were known to the right hon. Gentleman and his party before the General Election.
:Yes, that is true, and reference has been made to a circular issued by the Labour Party, but more than one circular was issued, and I would ask hon. Members who are interested to read both together. I am in difficulties, speaking with only a minute or two left, but my point is that it is essential that these benefits shall be co-ordinated and they cannot be co-ordinated if their administration is separate, and clearly any proposal for bringing in an agent involves the separation of the administration of benefits, for example, sickness benefits and industrial injury benefits. Surely it is not proposed by the hon. Member that the friendly societies or approved societies or anybody else shall be brought in to administer the Industrial Injuries Bill and yet it is clear that its administration must be co-ordinated.
Will the right hon. Gentleman tell the House at what point the friendly societies have ever asked to administer the Industrial Injuries Bill?
I did not say they had. That was not my point. My point was that I had to administer both and coordinate both, my point was that both are in certain circumstances payable to the same recipient, and therefore it is essential that their administration should be in the same hands.
If the object of the right hon. Gentleman is to secure that there is no duplication, how can—
On a point of Order. Seeing that the whole of this discussion is grossly irregular, you, Mr. Speaker, having given permission to the Minister to make his statement as a special concession, should he not be allowed to make it without interruption?
As the Minister did not give way, the hon. and gallant Member cannot intervene.
The right hon. Gentleman gave way to me.
When the Minister is speaking the hon. and gallant Member cannot rise to his feet unless the Minister gives way.
Let me in the minute that is left to me say this. What I have to consider is not the interest of any section of this nation but the interest of the whole nation and the interest of the scheme. I am satisfied, and I have been all along, that a single comprehensive scheme needs a single comprehensive system of administration.
It being a Quarter to Ten o'Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.