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Miscellaneous Financial Provisions Money

Volume 476: debated on Wednesday 28 June 1950

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Considered in Committee under Standing Order No. 84 (Money Committees).—[ King's Recommendation signified.]

[Major MILNER in the Chair]

Motion made, and Question proposed,

"That, for the purposes of any Act of the present Session to make further provision for a temporary increase in the Civil Contingencies Fund, to authorise loans to the Government of Northern Ireland, to give statutory authority for the payment out of moneys provided by Parliament of grants in respect of the expenses of police forces in England and Wales, and to wind up the Czecho-Slovak Financial Claims Fund, it is expedient to authorise—
  • (a) the issue out of the Consolidated Fund of any sums required—
  • (i) for increasing the capital of the Civil Contingencies Fund until the end of the year nineteen hundred and fifty-two by not more than one hundred and twenty-five million pounds; or
  • (ii) for advancing any sums by way of loan to the Government of Northern Ireland, so however that any sums so advanced and remaining unrepaid at any time shall not exceed fifteen million pounds;
  • (b) the raising under the National Loans Act, 1939, of any money required for the purpose of providing any sums to be issued as aforesaid;
  • (c) the payment into the Exchequer of sums repaid out of the Civil Contingencies Fund and sums paid by the Government of Northern Ireland in respect of advances to them, and the issue of such sums out of the Consolidated Fund, and the application of such sums, in so far as they represent principal in redemption or repayment of debt, and in so far as they represent interest in payment of interest otherwise falling to be paid out of the permanent annual charge for the National Debt;
  • (d) the payment out of moneys provided by Parliament of grants of such amounts as the Secretary of State may with the approval of the Treasury determine in respect of expenses incurred for the purposes of—
  • (i) any police force in England and Wales in respect of which grants out of such moneys have been made before the passing of the said Act of the present Session; or
  • (ii) any combined police force, county police force or borough police force established in England or Wales after the passing of the said Act."—[Mr. Jay.]
  • 5.5 p.m.

    The first item for which sums can be issued is

    "for increasing the capital of the Civil Contingencies Fund until the end of the year nineteen hundred and fifty-two by not more than one hundred and twenty-five milion pounds";
    The period is too long and the sum too large. The Committee will remember that in 1934—I think that was the date—when the Government advanced money out of this Fund to buy the Codex Sinaiticus from the Russian Government, they did not pay that money back within the year and there was considerable concern about it. The rule was then laid down that monies taken out of this Fund must be paid back within the year. That rule stood until we came to 1946 when the Government asked for five years in which they might make repayments into this Fund. They justified the period of five years on the ground that, as in the case of the Supplies and Services (Transitional Powers) Act, that was a reasonable period after the war for tidying things up.

    Here we are in 1950, five years after the war, and we are being asked to give the Government power to spend this money and not to repay it within less than 2½ years. I want to ask the Financial Secretary to tell us the reason why we have to give 2½ years? Whatever hon. Members may think about the size of the Civil Contingencies Fund, surely it is time to get back to the old system whereby the money must be repaid within the year.

    Three main reasons were given by the Government to justify so large a sum. In the first place, they said, there was the underestimating by Departments. It is quite clear that if a Department does underestimate, then it has to come to the House with a Supplementary Estimate which the House will vote, so that if the money has been borrowed it can be repaid to the Civil Contingencies Fund and, when this happens, there is no need for this provision to run until 1952. The second reason advanced for the size of the Fund requested in 1946 was that His Majesty's Government had to keep large balances abroad. I want to ask whether that reason has not very substantially disappeared. Do the Government anticipate having to go to this Fund in the future in order to build up large balances abroad? We should like to know what sort of sum out of the £125 million they think might be required for this purpose. It may be that military commitments in the East require the holding of balances. I do not know, but I think the Government ought to justify any request for money for this purpose made so long after the war.

    The third reason is much the most important in the question of the size of the Fund. The Government say that the main difference between the post-war period and the period in between the wars, so far as the size of the Civil Contingencies Fund is concerned, arises from the trading activities of Government Departments. It is clear that if Government Departments are to buy in bulk then they will hold stocks and those stocks have to be financed. That was advanced by the previous Financial Secretary as the main reason why they were seeking so large a sum.

    What is the position in that connection today? I noticed in the Supplementary Estimates which we debated last March that, although there were very large Supplementary Estimates both for the Ministry of Food and the Ministry of Supply, those Ministries had taken nothing out of the Civil Contingencies Fund towards their over-spending. Is it anticipated that they will now want further large sums? This Committee should not allow the Government to take millions of pounds out of the Civil Contingencies Fund for the purpose of financing stocks unless, in exchange, they will give us a stock account at the end of the year.

    If it was a private business that was concerned there would be a balance sheet at the end of the year in which there would appear the auditor's valuation of the stock items, and it would be possible for the proprietors of the company to discover whether or not their directors were over-spending their capital and what had been the movements in the stocks. That is not so in the case of public money, and it ought to be. If the Government are to embark upon these very large trading operations they must give us the proper information about stocks.

    At Question Time today the Minister of Food refused to disclose his stock of chickens, saying it was not in the public interest to do so. That stock may well be financed with money out of the Civil Contingencies Fund. In answer to a supplementary question the Minister said that if domestic poultry breeders were disturbed by rumours of large stocks he would perhaps make a statement. But how about the taxpayers who put up the money for these chickens? Are they not entitled to have a statement about these huge sums at least once a year? The argument about public interest in regard to stocks of this kind is often taken too seriously. Hon. Members opposite are always talking about democratic control, but they have no democratic control over a Department which can borrow from this Fund huge sums and give them no stock account at the end of the year.

    We require some explanation of the reason for continuing this Fund at £125 million, and for 2½ years. The portion required to meet under-estimating by Departments ought not to be much bigger than it was before the war, allowing, of course, for the rise in prices, because recourse to a Supplementary Estimate is always possible. Before the war the relevant figure was £1,500,000, that is to say, about 0.15 per cent. of the Budget. If the same percentage was allowed today, the Budget being three and a half times what it was before the war, the Government would require no more than £5 million. Why should they want more than that for emergencies and for mistakes in Departmental Estimates?

    We all understand why there should be some provision to meet small items. In the case of such events as the Winnipeg floods it is quite proper that there should be a fund out of which assistance can immediately be given. I have looked through a series of items, some of which are quite reasonable. The Lord Chancellor received an advance—which has been repaid—to buy his robes when he assumed office, and that seems quite reasonable. There are the payments that occur from time to time for memorial services in Westminster Abbey or for public monuments, for which there has been no budgetary provision. I think we would all agree about the reasonable ness of making some provision to meet such items.

    The Committee should not, however, allow a Minister to under-estimate by £89 million the operation of an ordinary service of the Government such as the Health Service, and cover it up by taking this large sum of £54 million out of this fund, which was not intended for that purpose. I repeat that, judged by prewar standards, £5 million would be enough provision to make for underestimating. It must be a temptation to Departments to spend beyond the point to which they would otherwise go if there is a large fund into which they can dip and then think up their explanations after-wards. It is always wrong to leave money lying around I disagree entirely with the hon. Member for Chesterfield (Mr. Benson) that this is not an encouragement of expenditure, and that it would not help us to control expenditure if Departments had to come to the House more speedily with their Supplementary Estimates.

    How much do we need for building up balances abroad? I have no estimate, and I ask for one. Further, how much does the Treasury really think we need for these trading services and for their working capital? Is it not a fact that the spending Departments now have enormous working capital? Have they not, since the war, built up very large sums of money, and are those not sufficient for their operations? Without a great deal more explanation, I do not think we should allow the Government to have this huge sum for contingencies five years after the end of the war.

    5.15 p.m.

    I should like to refer in a moment or two to the line of argument which the hon. Member for Chippenham (Mr. Eccles) has been taking. First, however, I wish to draw the attention of the Committee to the form in which these accounts are provided. Before we went into Committee, and while the Bill was being considered on Second Reading, I raised a point of order, and drew attention to the fact that I had had difficulty in securing the current accounts of the Civil Contingencies Fund. I got them, and I was able to see that certain items which appeared in the accounts for 1948–49 also appeared in the accounts for 1947–48. There may be a perfectly simple explanation, but I should like to know what it is, because one must ask oneself the question, when is a contingency a contingency?

    Judging by these accounts a contingency is when the Treasury has forgotten to think about something. Let me take the item in the current account for Osborne. I do not know what contingency is represented by the expenditure of £2,470. I imagine that a lightning decision had not to be taken about that matter; it could have been thought about and decided and included in the Estimates. There is also the sum of £5,000 in connection with the Register House, Edinburgh.

    Apart from these alleged contingencies there is the question of the repetitive items, the Oxford and Asquith Memorial, the Jellicoe and Beatty Memorials and other such items. If one looks at the previous accounts it will be seen that those items were included in the 1947–48 accounts. Therefore, why should they not have been included in the Estimates of the Department concerned for the ensuing year? Why was there this repetition, because I do not see that those items could have represented contingencies. As I say, there may be some explanation, but I do not know what it is.

    I now turn to the reason why I disagree very strongly with what the hon. Member for Chippenham said. He drew a sort of parallel. He used the example of the wife who says, over the breakfast table, that she has seen a very nice hat and asks if she can buy it. We all know what our experiences are in such a situation. We say that the family purse will not permit it, and then we give in. The hon. Member drew the distinction between that situation and the case of the wife who greets one in the evening, when one is returning tired from work, with the news that she has bought a hat. That is an oversimplification of the problem. It is surely much more likely that over the breakfast table the wife will say that she would like to buy a certain hat that she has seen in Oxford Street. After some discussion one agrees to that, and then in the evening she meets one on one's return from work and says that as she was taking a bus via Bond Street she saw something rather nicer than the hat in Oxford Street and bought that, and hopes that one does not mind.

    That is the precise situation one finds in connection with certain services like the Health Service, in respect of which there is shown in the current account a contingency payment of £51 million. I disagree with the hon. Member for Chippenham in this: He launched an attack on the need for maintaining those large balances against payments necessary because of State trading. What he did not mention, as, I think he ought to have done, was that we must keep in reserve a balance to meet the contingencies of people who do, with justification, demand payment from the State fairly rapidly.

    The Minister of Health has been obliged, in the last two or three years, to conduct lengthy and troublesome negotiations with certain persons and bodies providing services under the National Health Service Act, and I think the Committee will remember that, in at least two cases, increased payments were demanded by certain bodies, who were interested in providing services under the Act, and that, after some trouble, the Minister agreed. Now, if those bodies had been obliged to wait for payment for many months nobody would have been quicker than Opposition Members to complain in the House that the Minister was withholding payment.

    My complaint is not that the Health Service costs so much, because I think that that would be out of order in this Debate; but that when the Minister found it was costing more than he estimated, he should have come to the House with a Supplementary Estimate and not borrowed a vast sum from the Civil Contingencies Fund.

    I took the hon. Member's point quite clearly; but the point is this: nobody knows better than he that it is not as easy as all that to secure the passage through the House of additional Estimates, and secure the necessary authority to make payments to outside bodies concerned. He knows it takes some time, and he will remember, I think, that Opposition Members have made bitter complaints—I shall not raise a particular case—that payments have been slow, and that the Government have not been speedy enough. This Fund provides the machinery necessary to make payments quickly, and in these days, I think, it is entirely the Government's right to ask the Committee to provide the necessary balance in hand.

    I had not proposed to address the Committee on this Motion, but the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) is obviously in such distress at the position in which he thinks he finds himself, that I should like to allay his anxieties on that point. He rather suggested that Northern Ireland was practically bankrupt and was being maintained solely by allowances of money from this country. As a matter of fact, the contributions that Northern Ireland has made to the Treasury over a period of years are not far short of £200 million. It has been described by Mr. MacBride, the Foreign Secretary of the Irish Republic, whom no one has ever accused of being unduly prejudiced in favour of Ulstermen, as being the only solvent part of the United Kingdom. Its inhabitants are subjected to rationing in order to provide food for the constituents of the hon. Member for Stoke-on-Trent, South, among others—and for that they have got no thanks.

    At the same time, the hon. Member thinks that this is the appropriate time entirely to ignore the wishes of the inhabitants of Northern Ireland, and to make them subject to adjacent neutrals who live in the southern part of that country, and who are distinguished for being the only people who sincerely regretted the death of Hitler and the surrender of his German representatives. It is another example of the reasons why the Northern Ireland Labour Party pathetically passed a resolution banning any hon. Member opposite from speaking in Northern Ireland without their consent. The fearful disasters that would follow such a speech as that from the Northern Ireland Labour Party, are patent to anyone.

    I hope that the Financial Secretary, if he can spare a moment to say so, will explain to the hon. Member for Stoke-on-Trent, South, how there is a payment backwards and forwards, and how the net result is a substantial contribution by Northern Ireland to the Treasury.

    I take no objection to what the hon. Member has said, because he is entitled to his point of view, but I hope he will remember that I did say that payments were made.

    I accept the somewhat limited apologies of the hon. Member, but I think that if he made a further study of the whole matter his anxieties would be set at rest.

    This whole thing is purely a matter of a piece of financial machinery to allow us, who pay the same taxes as are paid in Great Britain, to have the same facilities for such loans as the loans that are made. The most important, to my mind, are the loans for the building of homes for the working classes, because Ulster was bombed a good deal worse than Stoke-on-Trent, and if this financial machinery were not available it would not be possible for building schemes, and so on, to be carried out in the way in which they are carried out in this country. It is merely, as I say, a piece of financial machinery, owing to the fact that there are two separate Ministries of Finance.

    My hon. Friend the Member for Antrim, South (Professor Savory) thanked the Government. Well, I do not know that they have done us more than justice. Justice, I grant, they have done, but I do think they are under an obligation to us, who pay the same taxes, to put us on all fours with the people of England, Scotland and Wales, from whom we never will be parted.

    While not objecting to the criticisms levelled by the hon. Member for Londonderry (Sir R. Ross), I must place it on record that his is the kind of superior tolerance which is causing so much of the trouble in the world. His are also the kind of ideas that have caused so much trouble between ordinary peoples for generations. It is the kind—

    Did the hon. Member not hear me say that we would not be parted from Great Britain? Could he be precise and say to what part of my speech he objects?

    I am complaining about the whole attitude of the hon. Member in his speech. He spoke about the contributions in the war. Well, I have my own concern about that, and I expressed it at the time. But surely, if we can discuss for two days the ideas that were expressed in the House about our resuming our relations with the Germans, it is reasonable to suggest that the time has arrived when we should apply the same approach when dealing with people who are our customers. It is quite obvious that the sort of attitude from which we have suffered for generations in this country, and in other parts of the world, is still the attitude of the hon. Member. In regard to our own ideas, we believe the time has arrived for improving our relations, and it was upon that basis that I made the contribution that I did.

    First, by way of comment on what my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis. Smith) said, I would assure him that Clause 2 of the Bill relates entirely to loans for capital expenditure by local authorities in Northern Ireland, and has nothing to do with the general financial relations between this country and Northern Ireland. Therefore, if I were to go into any wider questions than those of capital expenditure by local authorities, I should be out of order.

    In answer to the hon. Member for Chippenham (Mr. Eccles), who asked me several questions, I should, perhaps, first say a word about the rule that advances from the Civil Contingencies Fund should be paid in the year in which they are made. I think that the hon. Gentleman was there under a misapprehension. He suggested that, by the 1946 Act, it was possible for advances from the Civil Contingencies Fund not to be paid for five years. That, of course, is not the case.

    The individual advance to a Department has to be paid, in virtually every case, within the same financial year. What the 1946 Act did was to set a limit at the end of 1950 for the period in which the total advances outstanding at any one moment should not rise above the figure of £250 million. That was the significance of the year 1950 in that Act.

    5.30 p.m.

    The hon. Gentleman also asked for an estimate of the figure we expect the working balances abroad of the trading Departments to reach. I am afraid that it is not possible to give an estimate of that figure, because working balances at home as well as abroad are concerned, and we rest the case now, as indeed we rested it in 1946, on the need for working balances both at home and abroad. The trading Departments must, of course, at times build up large stocks, as the Ministry of Food did in the case of linseed oil at one point and then ran them down over a period. It is inevitable, I think, that they should have money available with which to do that.

    The hon. Gentleman then suggested that the need for working capital for the trading Departments could not have been the main reason for the use of the Civil Contingencies Fund, because he said that the Supplementary Estimates of the Ministry of Food and the Ministry of Supply had been relatively small in the last two years. That would not prove that they had not drawn to a considerable extent on the Civil Contingencies Fund. If they drew on that Fund for working capital and then paid it back out of their receipts later, it would be only their net expenditure for which they would require a Supplementary Estimate, and that would not necessarily correspond with the amount they had borrowed from the Civil Contingencies Fund.

    My hon. Friend the Member for Lichfield and Tamworth (Mr. Snow) asked about one or two small items in the last accounts of the Civil Contingencies Fund. He referred in particular to the entry under the heading of "Osborne" and another under the heading of the "Oxford and Asquith Memorial," and he asked how it was that identical items appeared in two successive years, and how those could be contingencies. I understand the answer is that by a tradition which was not started by this Government but has, nevertheless, been maintained by it, expenditure on memorials is normally carried by the Civil Contingencies Fund from year to year and is finally voted in the normal way in the year of completion. That is a curiosity rather than a normal procedure, but it is the answer to my hon. Friend's question.

    I do not wish to add very much, but I should like to say that I hope that by the Committee stage of the Bill the Financial Secretary will be able to give a more precise account of the need for this figure of £125 million. I have taken the trouble to look through the advances made during the last year. No doubt the Financial Secretary has done the same. He was rather obscure about what had been advanced to the Ministry of Food. It appears from the account that, in fact, £40 million was advanced to the Ministry of Food and £20 million repaid. What we shall want to know at a subsequent stage is how the Financial Secretary justifies this figure of £125 million. When the time comes I hope that he will give us a precise and detailed account of the reason. We do not just want a vague suggestion that money may be wanted for trading accounts or for Supplementary Estimates. We want to know more precisely what he thinks it will be needed for.

    I should also like him to consider, and to be ready to give a more complete answer on the next occasion to the question, why the Supplementary Estimate for the Health Departments, which run into this enormous figure, was not presented earlier. It must have been quite clear to the Department. In fact, it was quite clear early in the autumn that they were very much exceeding the amount of money which had been voted to them by this House. There was no need for the Supplementary Estimate to be postponed to so late a date; it could quite well have been brought in before Christmas. I do not know whether the Parliamentary Secretary to the Ministry of Health, who I see here, knew whether there was about to be a General Election, I certainly did not know. There was nothing to prevent his Department bringing in a Supplementary Estimate at an early date, as soon as they became aware that this great over-expenditure was taking place.

    Question put, and agreed to.

    Resolution to be reported Tomorrow.