Government of Northern Ireland (Loan Guarantee) Bill.

– in the House of Commons on 5th July 1922.

Alert me about debates like this

Order for Second Beading read.

Photo of Mr John Baird Mr John Baird , Rugby

I beg to move, "That the Bill be now read a Second time."

The object of this Bill is very clearly set out in the White Paper, which is in the Vote Office, and which ends with the satisfactory announcement that it is not anticipated that any charge will be borne on the Exchequer in consequence of this Measure. The Bill really is designed to afford to the Government of Northern Ireland the credit of the British Exchequer, in order to raise a loan to the amount of £3,500,000. It is simply one of the steps which we are taking during the transition period to enable the Government of Ireland to get on its legs and to meet the heavy expenditure which is inseparable from a very difficult and exceptional period. For instance, money is required to enable the Northern Government to raise money for a local loans fund, and to raise money equally to meet the heavy demands for unemployment insurance. The amount that has been paid out is obviously in excess of the amount produced by the contributions of the employers and employed, and the Northern Government has, obviously, to find additional money. Then there are also the general purposes of Government. Those are the main objects for which the loan is required.

The amount has been settled by a consultation between the Treasury authorities here and the authorities of the Treasury of the Government of Northern Ireland. The issue will be made in consultation with the Bank of England, and the Government of Northern Ireland is called upon by this Bill to pass legislation to secure the interest and principal of their loan, and also to secure the repayment of any sum that may become payable in the event of our being called upon to make good the guarantee, but it is not anticipated, and there is no reason to anticipate, that we shall have to find any money. All that we are doing by this Bill is to afford, what I hope the House will agree is legitimate, assistance to Northern Ireland in a very difficult period to raise money for indispensable services. I hope the House will be satisfied with this brief explanation of the objects of the Bill and, taking this short statement of mine along with the Memorandum which has been issued and is now in the Vote Office, will give the Measure a Second Reading.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I am surprised that when we are discussing the Government of Northern Ireland (Loan Guarantee) Bill there is nobody present who deals with the Irish Office, and there are no Members representing Northern Ireland in the House. I am obliged to my hon. Friend for the speech he has made, which is already contained in effect in the White Paper, but what we are asked to do is this. It is quite true that he says it is not anticipated that any charge will, in fact, fall upon the Imperial Exchequer in respect of this guarantee, but that is only an anticipation, and we are asked to guarantee a sum of no less than £3,500,000. Before we do agree to that guarantee, I think we ought to have some assurance that the Northern Parliament in Ireland is going about its Business in a satisfactory way. For instance, there is a Sub-section here in which part of this money is to be used for unemployment insurance. I seem to remember that we have already given considerable sums of money to the Northern Irish Parliament in order to deal with current unemployment. If I remember rightly, a sum of money was given which was to be divided in a certain ratio between the Protestant unemployed in Belfast and other parts of Northern Ireland and the Roman Catholic section of the unemployed. This is also for unemployment insurance. Does that mean that under the agreement come to with regard to Northern Ireland the whole question of National Unemployment Insurance is now within the province of the Northern Parliament?

Photo of Mr John Baird Mr John Baird , Rugby

It is transferred, and this is carrying on the obligation imposed by the unemployment insurance. The other is an exceptional sum given to meet an exceptional situation.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I quite agree that we may have to give an exceptional grant of money to deal with unemployment in a proper manner. This, then, is to enable the scheme which I gather from my hon. Friend is one of the transferred powers of the Irish Parliament to deal with that section of the insurance scheme which covers unemployment. He has given us no details, and no indication at all as to why Northern Ireland, which we have always been told is the most prosperous part of Ireland, there is any particular necessity for this part of the scheme to be buttressed—

Photo of Mr John Baird Mr John Baird , Rugby

Buttressed in the same way as in England, where we have voted many millions to buttress the unemployment insurance scheme.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I was assuming that the same provision had already been made for Northern Ireland that obtains in this country. If this is for some exceptional reason and something beyond the normal, we are entitled to know the reason for it before we agree to granting the money. I note in this White Paper on the Estimate of probable expenditure, paragraph (a) tells us that loans to be raised are for public works, such as are in Great Britain financed from the local loans fund. That latter phrase is one which requires to be interpreted particularly. We had a Local Loans Bill in this House the other night. In paragraph (c) we are. told the money is for general government purposes. What are general government purposes? What are some of the purposes of the Northern Ireland Government? I do not want to enter into any controversial matter, but Northern Ireland is having its resources strained because of the commotion which obtains on the border between those who live on the North and those who live on the South of it. Are general government purposes purposes of government or are they extraneous purposes arising out of the present situation in Ireland? I do not think it is unreasonable to ask what are these circumstances? I do not want my hon. Friend to imagine for a moment that we are trying to place any difficulties in the way of agreeing to this loan, but I do not think we have had sufficient information. He ought not to ask for this £3,500,000 without telling us, roughly, for example, for what it is required and what these different items to which I have referred mean. Perhaps he will make his explanation a little more explicit before this Second Reading is agreed to and which we shall all be obliged.

Mr. FOOT:

In addition to the remarks made by the hon. Member who has just taken his seat, there are one or two questions I should like to out to the hon. Gentleman in charge of the Bill. In the White Paper which has been circulated it is stated that the loans will be raised as required by the Government of Northern Ireland for the following purposes: public works, unemployment insurance and genera] Government purposes. When we turn to the Bill which deals with the guarantee of the Treasury, the second Clause tells us that a guarantee cannot be given under the Act until the Government of Northern Ireland have satisfied the Treasury in certain particulars, and the grounds for satisfaction are set out. It is not, however, stated in the second Clause of the Bill whether the Treasury is to be satisfied as to the purposes for which this money is to be used. Will there be any power whatever to withhold the guarantee which this Bill proposes to give? Is the guarantee from the British Treasury dependent upon the money being used in the right direction? Certain discussions have arisen in this House as to financing the Parliament of Northern Ireland. Supposing that this House should disagree with any expenditure, will the guarantee now asked for be dependent at all upon our being satisfied about the expenditure of the money There is a difference between the White Paper and the Bill in that particular.

Photo of Mr John Baird Mr John Baird , Rugby

In reply to the inquiry of the hon. Member for Bodmin (Mr. Foot), I would remind him that the Government of Northern Ireland raises the money and spends it. I need hardly remind the hon. Member that Parliament conferred upon the Government of Northern Ireland power to carry on the Government of that country. We could not take these powers back again. We cannot interfere in the way in which Northern Ireland should manage her own business. AT that we seek to do by this Bill is to help the Northern Government to finance the ordinary work of government. The Government of Northern Ireland could raise money on its own security alone, but it is quite clear that the Government of Northern Ireland can get money more cheaply and its loans will be much more attractive if behind the security of the Northern Parliament we have the guarantee of the British Government. To say that we are to go through every item of expenditure under the guarantees is a position that I think would not be accepted by the Government of Northern Ireland nor would that Government ask for our guarantee on those terms. This is assistance temporary and not provided for by any other Act of Parliament to enable the Government of Northern Ireland to get over a difficult period.

Mr. FOOT:

The White Paper says that the money is to be raised for certain purposes. Can we be assured that the money guaranteed is to be used for the purposes stated?

Photo of Mr John Baird Mr John Baird , Rugby

Oh, certainly. What is given in this White Paper are examples of the purposes that it is impossible to specify: they are the purposes which are familiar to every Member of the House. These purposes will be before the Government of Northern Ireland, and when the money is to be voted by that Parliament the money will be obtained more cheaply because it will be obtained with the guarantee of the British Government behind it. The hon. Member for East Edinburgh (Mr. Hoģģe) asked some questions about local loans, but these are all for purposes which I should imagine are very familiar to my hon. Friend the Member for East Edinburgh, such as harbour works, sewage schemes, water works, and housing, works which are carried out by the local authorities, and for all these things money is required, and these, are the purposes for which the Central Government provide the money. Of course there must be some balance between the amount which they can raise by taxation and the amount which quite-legitimately can be raised by loan, and they will have the security of whatever the loan is spent upon to pay the interest on the debt. Surely my right hon. Friend does not contend that the system of local loans should not be applied in Ireland?

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

My point is that if the Government of Northern Ireland require money for local purposes like harbours, or for industrial undertakings, they ought to raise the money from their own people instead of coming over here.

Photo of Mr John Baird Mr John Baird , Rugby

Apparently the hon. Member objects to any guarantee at all. This loan is not going to cost anything, because the security which Northern Ireland is able to offer is ample, and therefore we shall never be, called upon to make good this guarantee. Under these circumstances, I am surprised to find my hon. Friend adopting the attitude he has done, and I hope I have satisfied him with regard to local loans.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

You have explained it, but you have not satisfied me.

Photo of Mr John Baird Mr John Baird , Rugby

So far as my information goes, there is not the slightest risk, and I cannot imagine my hon. Friend withholding his support from this proposal under these circumstances. I have been asked what is meant by general government purposes. This might mean police, or balancing the Budget, or a number of other things which cannot now be foreseen. When you run great enterprises like the government of a country, it is obvious that there must be periods when you must raise money by means of loans. When Northern Ireland requires a loan for the general purposes of government, we are prepared to guarantee that loan to the amount of £3,500,000.

As regards the expenditure contemplated for local purposes, the amount is estimated at £100,000, mostly required for housing, and £700,000 for unemployment insurance. With regard to unemployment, at the moment the great linen and shipbuilding industries in Northern Ireland are in an exceptionally bad condition, and it is not surprising that these sums are required. Under these circumstances, I think we should help Northern Ireland in the direction of guaranteeing this loan. As another example of the purpose for which this guarantee will be used, I may mention that the Northern Government are contemplating issuing saving certificates on the same lines as we do. When a man goes to purchase a Northern Ireland saving certificate, if besides the security of the Northern Ireland Government there is also the guarantee of the British Government, that will make such investments very much more attractive. It is anticipated that the guarantee will extend over several years. I hope the House will be good enough to give this Bill a Second Reading.

Bill committed to a Committee of the Whole House for To-morrow.—[Sir J, Baird.]